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diff --git a/38655-8.txt b/38655-8.txt new file mode 100644 index 0000000..f7b3451 --- /dev/null +++ b/38655-8.txt @@ -0,0 +1,23663 @@ +The Project Gutenberg EBook of Principles of Political Economy, Vol. II, by +William Roscher + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: Principles of Political Economy, Vol. II + +Author: William Roscher + +Translator: John J. Lalor + +Release Date: January 23, 2012 [EBook #38655] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK PRINCIPLES POLITICAL ECONOMY, VOL II *** + + + + +Produced by Frank van Drogen, Carol Brown, Gwen Adams, +Elizabeth Oscanyan, and the Online Distributed Proofreading +Team at https://www.pgdp.net. + + + + + +Transcriber's Note: A monospaced font will display the tables in this book +better than a variable-spaced font. + + + + + PRINCIPLES + + OF + + POLITICAL ECONOMY + + BY + + WILLIAM ROSCHER, + + PROFESSOR OF POLITICAL ECONOMY AT THE UNIVERSITY OF LEIPZIG, + CORRESPONDING MEMBER OF THE INSTITUTE OF FRANCE, PRIVY + COUNSELLOR TO HIS MAJESTY, THE KING OF SAXONY. + + FROM THE THIRTEENTH (1877) GERMAN EDITION. + + WITH ADDITIONAL CHAPTERS, FURNISHED BY THE AUTHOR, FOR THIS FIRST + ENGLISH AND AMERICAN EDITION, ON + + PAPER MONEY, INTERNATIONAL TRADE, AND THE + PROTECTIVE SYSTEM; + + AND A PRELIMINARY + + ESSAY ON THE HISTORICAL METHOD IN POLITICAL ECONOMY + + (From the French) + + BY L. WOLOWSKI, + + THE WHOLE TRANSLATED BY + + JOHN J. LALOR, A. M. + + VOL. II. + + [Illustration: Printer's Logo] + + NEW YORK: + HENRY HOLT & CO. + 1878. + + + Entered according to Act of Congress, in the year eighteen hundred + and seventy-eight, + + BY CALLAGHAN & CO., + In the office of the Librarian of Congress, at Washington, D. C. + + DAVID ATWOOD, STEREOTYPER AND PRINTER, MADISON, WIS. + + + + + TO + + WILLIAM H. GAYLORD, ESQ., + + _COUNSELOR AT LAW_, + OF CLEVELAND, OHIO, + + TO WHOSE BROTHERLY CARE IT IS LARGELY DUE THAT I LIVED TO + TRANSLATE THEM, + + THESE VOLUMES + + ARE AFFECTIONATELY INSCRIBED. + + + + +BOOK III. + +DISTRIBUTION OF GOODS. + + + + +CHAPTER 1. + +INCOME IN GENERAL. + + +SECTION CXLIV. + +RECEIPTS.--INCOME.--PRODUCE. + +The idea covered by the word receipts (_Einnahme_) embraces all the new +additions successively made to one's resources within a given period of +time.[144-1] Income, on the other hand, embraces only such receipts as +are the results of economic activity. (See §§ 2, 11.) Produce (_Ertrag_, +_produit_) is income, but not from the point of view of the person or +_subject_ engaged in a business of any kind, but from that of the +business itself, or of the _object_ with which the business is +concerned, and on which it, so to speak, acts. + +Income is made up of products, the results of labor and of the +employment and use of resources. These products, the producer may either +consume himself or exchange against other products, to satisfy a more +urgent want.[144-2] Hence, spite of the frequency with which we hear +such expressions as these: "the laborer eats the bread of his employer;" +"the capitalist lives by the sweat of the brow of labor;" or, again, a +manufacturer or business man "lives from the income of his +customers,"[144-3] they are entirely unwarranted. No man who manages his +own affairs well, or those of a household, lives on the capital or +income of another man; but every one lives on his own income, by the +things he has himself produced; although with every further development +of the division of labor, it becomes rarer that any one puts the +finishing stroke to his own products, and can satisfy himself by their +immediate consumption alone. Hence we should call nothing diverted or +derived income except that which has been gratuitously obtained from +another.[144-4] + + [Footnote 144-1: Including of course, gifts, inheritances, + lottery prizes, etc.] + + [Footnote 144-2: Thus the original income of the peasant + consists in his corn, of the miller in his flour, of the + baker in his bread, of the shoemaker in his shoes. The money + which circulates among all these and the purchaser, is only + the means of exchanging that part of their products which + they cannot themselves use, for other goods. Money, on the + other hand, was the original income of the producers of the + gold or silver it contains. Compare _Mirabeau_, Philosophie + rurale, 1763, ch. 3. _Adam Smith_, II, ch. 2. But + especially, see _J. B. Say_, Traité II, ch. 1, 5; and + _Sismondi_, N. P., I, 90, 376, in which it is correctly + said, that the quality which constitutes anything capital or + income does not inhere in the thing itself, but depends on + the person. Compare, however, I, 148; _Hermann_, Staatsw. + Untersuch. 297 ff., 33 seq.] + + [Footnote 144-3: A fundamental thought in _St. Chamans_, Du + Système d'Impôt, 1820. Nouvel Essai sur la Richesse des + Nations, 1824.] + + [Footnote 144-4: Thus, for instance, the support given by + the head of a family to the members thereof; also gifts, + alms, thefts. Even _A. L. Schlözer_, St. A., II, 487, will + allow that no one "eats the bread of another," but the + person who has received it from the latter by way of favor + and for nothing. In the case of a rented house, there is + only an exchange of objects of income. The person to whom it + is rented gives up a portion of his, and the renting party + the use of his house. Similarly, in the case of personal + services. Writers who maintain that only certain kinds of + useful labor are productive, must of course extend the + limits of diverted income much farther. See _Lotz_, + Handbuch, III, § 133; _Rau_, Lehrbuch, I, §§ 248, 251. + _Cantillon_ thinks that if no landowner spent more than his + income, it would be scarcely possible for any one else to + grow rich. (Nature du Commerce, 75.) According to _Stein_, + Lehrbuch, 347, every one gets his income from the income of + other people!] + + +SECTION CXLV. + +INCOME.--GROSS, FREE AND NET. + +In all _income_, we may distinguish a _gross_ amount, a _net_ amount and +a _free_ amount.[145-1] The gross income of a year, for instance, +consists of all the goods which have been newly produced within that +time. The net[145-2] income is that portion of the former which remains +after deducting the cost of production (§ 106), and which may therefore +be consumed without diminishing the original resources. Only the new +values incorporated in the new commodities make up the net income. +Evidently, a great portion of what is considered in one business the +cost of production is net income in a great many others; as for +instance, what the person engaged in one enterprise in production has +paid out in wages and interest on capital. By means of this outlay, a +portion of his circulating capital is drawn by others as income, and, on +the other hand, a portion of their original income is turned into a +portion of his circulating capital.[145-3] _Free_ income, I call that +portion of net income which remains available to the producer after his +indispensable wants have been satisfied. + +An accurate kind of book-keeping which keeps these three elements of +income separate is more generally practicable as civilization advances. +We might call it the _economic balance_. Where commerce is very thriving +it is even customary to provide by law that those classes who need it +especially should have this species of book-keeping. People in a lower +stage of cultivation, with their poetical nature, are unfriendly to such +calculations.[145-4] [145-5] And where natural-economy (_Naturalwirthschaft_) +or barter prevails, a book-keeping of this kind of any accuracy is scarcely +practicable. The ratio which net income bears to gross income is a very +important element to enable us to judge of the advantageousness of any +method of production. If every producer should succeed in consequence of +keeping his books in this manner, in determining exactly the cost to him of +each of his products, this would be an economic progress similar to that of +general spread of good chemical knowledge in the arts. On the amount of +_free_ income, on the other hand, depends all the higher enjoyment of life, +all rational beneficence, and the progressive enrichment of mankind.[145-6] + + [Footnote 145-1: Similarly in _Sismondi_, N. P., II, 330, + and _Rau_, Lehrbuch, I, § 71, a.] + + [Footnote 145-2: Called by _Hermann_, loc. cit., simply + income.] + + [Footnote 145-3: This truth _J. B. Say_ has exaggerated to + the extent of claiming that gross and net income are one and + the same so far as entire nations are concerned. (Traité, + II, ch. 5; Cours pratique, III, 14; IV, 74.) But the gross + profit of the entire production of any one year is much + greater than the simultaneous net income of all the + individuals engaged in it. This is accounted for by the fact + that in such production an amount of circulating capital is + invested which was saved from the net profit of previous + economic times. Compare _Storch_, Nationaleinkommen, 90 ff. + _Kermann_, loc. cit., 323 ff.] + + [Footnote 145-4: In the East, a valuation by one's self of + his property is considered a guilty kind of pride, usually + punished by the loss of one's possessions. (_Burckhardt_, + Travels in Arabia, I, 72 ff.) See _Samuel_, 24, on the + census made by David. The Egyptians, however, as may be + inferred from their monuments, must have very early and very + extensively felt the want of some kind of book-keeping such + as we have mentioned. A very accurate sort of book-keeping + among the more highly cultured Romans, with a daily + memorandum and a monthly book with entries from the former + (_adversaria-tabula expensi et accepti_). Compare _Cicero_, + pro Roscio, com. 2, 3; pro Cluent, 30; _Verr._, II, 1, 23, + 36. The Latin _putare_, from _putus_, pure, means: to make + an account clear, and therefore corresponds to the American + provincialism, "I reckon," i. e., I believe; and is a + remarkable proof of a rigid method of keeping accounts. The + Italian, or so-called double-entry method of book-keeping, + which gives the most accurate information on the profit from + every separate branch of business, became usual among the + nations of modern Europe whose civilization was the first to + ripen, about the end of the fifteenth century. Its invention + is ascribed to the monk Luca Paciolo di Borgo S. Sepolcro. + + In England, this kind of book-keeping is very gradually + coming into use even among farmers, while _Simond_, Voyage + en Angleterre, 2 ed., II, 64, _Dunoyer_, Liberté du Travail, + VIII, 5, say, "it would in France be considered as + ridiculous as the book-keeping of an apple vendor." In + Germany, there have been for some time past, manufactories + of commercial books. Besides, the remarkable difference + brought out by the income tax in England between the exact + statements made by large manufacturers, etc., and by those + engaged in industry on a medium or small scale, bears + evidence of the better way in which the former keep their + accounts, the cause and effect of their better business in + general. Compare _Knies_, in the Tübing. Zeitschr., 1854, + 513. On the best mode of determining income, see _Cazaux_, + Eléments d'Économie publique et privée, Livre, II. It is + especially necessary to keep an account of the increase or + diminution, even when accidental, of the value of the fixed + capital employed.] + + [Footnote 145-5: The Code de Commerce, I, art. 8, requires + that every merchant should keep a journal, paged and + approved by the authorities, showing the receipts and + disbursements of each day, on whatever account, and also the + monthly expenditures of his family. Besides, he is required + to make a yearly inventory of his debits and credits, + subscribe to it and preserve it. That such books were + excellent judicial evidence may be shown by Italian statutes + of the fourteenth century. (_Martens_, Ursprung des + Wechschrechts, 23.) Those of Germany even in 1449. + (_Hirsch_, Danziger Handelsgeschichte, 232.)] + + [Footnote 145-6: Importance of the so-called "transferring + to credit," where a business man considers his business as + an independent entity and as distinct from himself.] + + +SECTION CXLVI. + +NATIONAL INCOME.--ITS STATISTICAL IMPORTANCE. + +Among the most important[146-1] but also the most difficult objects of +statistics, that book-keeping of nations, is national income. In +estimating it, we may take our starting point from the goods which are +elements of income, or from the persons who receive them as +income.[146-2] + +In the former case the gross national income consists: + +A. Of the raw material newly obtained in the country. + +B. Of imports from foreign countries, including that which is secured by +piracy, as war-booty, contributions, etc. + +C. The increase of values which industry[146-3] and commerce add to the +first two classes up to the time of their final consumption. + +D. Services in the narrower sense and the produce (_Nutzungen_) of +capital in use. + +All these several elements, estimated at their average price in money, +which supposes that all purchases, especially those under the head D, +are made voluntarily[146-4] and at their natural price. + +To find the national net income, we must deduct the following items: + +A. All the material employed in production which yields no immediate +satisfaction to any personal want.[146-5] + +B. The exports which pay for the imports. + +C. The wear and tear of productive capital and capital in use. + +In the second case the net national income is to be calculated from the +following items: + +A. From the net income of all independent private businesses etc.[146-6] + +B. From the net income of the state, of municipalities, corporations and +institutions, derived from their own resources. + +C. Under the former heads must be taken into the account such parts of +property as have been immediately consumed and enjoyed.[146-7] + +D. Interest on debt must be added only on the side of the creditor, and +deducted from the income of the debtor; otherwise, _error dupli_. This +does not apply to taxes or church dues because the subjects of a good +state and members of a good church purchase thereby things which are +really new and of at least equal value to the outlay. Besides, in both +instances, it is necessary to calculate the number of men who live from +the national income, the average amount of their indispensable wants, +and the average price in money of the same, in order to determine the +_free_ national income by deducting the sum total of these average +wants, estimated at this average price.[146-8] [146-9] + + [Footnote 146-1: Not only to compare the happiness and power + of different nations with one another, but also for purposes + of taxation, the profitableness and innocuousness of which + suppose the most perfect adaptation to the income of the + whole people.] + + [Footnote 146-2: The former, in _Rau_, Lehrbuch, I, § 247; + the latter in _Hermann_, 308 ff. The former mode of + calculation gives us a means of judging of the comfort of + the people, their control of natural forces, etc.; the + second, of the relation of classes among the people. (_v. + Mangoldt_, Grundriss, 99. V. W. L., 316 ff.) Each member of + the nation produces his income only in the whole of the + nation's economy. Hence _Held_, Die Einkommensteuer, 1872, + 70, 77, would, but indeed only under very abstract fictions, + construct private income from the national, and not _vice + versa_.] + + [Footnote 146-3: On the average degree of this increase of + values in different industries, see _Chaptal_, De + l'Industrie française, II, passim. _Bolz_, Gewerbekalender + für, 1833, 111. No such scale can be lastingly valid, + because, for instance, almost all technic progress decreases + the appreciation of values through industry, and every + advance made by luxury raises the claims to refined quality + etc. See _Hildebrand_, Jahrbücher für Nat-Oek., 1863, 248 + ff.] + + [Footnote 146-4: Many items in Class D evade all + calculation. Thus, for instance, the numberless cases of + personal services which are enjoyed only by the doer + himself; also the greater number of products + (_Nutzungen_=usufruct) of capital in use for the consumption + of the owner himself. (Latent income.) Only, it may be, in + the case of dwelling houses, equipages, etc., that the + consumption by use can be estimated in accordance with the + analogy of similarly rented goods.] + + [Footnote 146-5: The principal materials consumed in + manufactures are of course not to be deducted here, because + the increase in their value was taken into account above.] + + [Footnote 146-6: When an artist who earns $10,000 per annum + appears in a country, the gross national income increases in + a way similar to that in which it increases when a new + commodity is found which would have a yearly increase of + value equal to $10,000 over and above that of the raw + material. Cost of production in the case of such a virtuoso + is scarcely to be alluded to. Nearly his entire income, with + the exception of his traveling expenses, etc., is net, and + the greater portion of it _free_. An income tax would affect + his hearers after as it did before, and in his income, find + a completely new object. _Per contra_, see Saggi economici, + I, 176 f.] + + [Footnote 146-7: For purposes of taxation, where a relative + valuation is more the question than an absolute one, it + would be sufficient to assume that every household consumed + clothing, utensils, etc., in proportion to the rest of their + income. Hence, these items might, unhesitatingly, be omitted + altogether.] + + [Footnote 146-8: Mathematically demonstrated by _Fuoco_, + Saggi economici, II, 102 ff.] + + [Footnote 146-9: The gross income of British Europe is + estimated by _Pebrer_, Histoire financière et statistique + générale de l'Empire Br., 1834, II, 90, at £514,823,059, + viz.: agriculture, £246,600,000; mining, 21,400,000; + manufactures, after deduction made of the raw material, + £148,050,000; internal and coast trade, £51,975,060; foreign + commerce and navigation, £34,398,059; banking, £4,500,000; + interest from foreign countries, £4,500,000. By _Moreau de + Jonnés_, Statist de la Gr. Br., 1837, I, 312, it is + estimated at 18,000,000,000 francs, from which, however, the + raw material used in industry is not deducted. The net + income of Great Britain was estimated by Pitt, in 1799, at + £135,000,000, of which £25,000,000 were received by + landowners for rent, £25,000,000 by farmers, £5,000,000 were + tithes, £3,000,000 from forests, canals, and mines, + £6,000,000 from houses, £15,000,000 from state funds, + £12,000,000 from foreign commerce, £28,000,000 from inland + commerce and manufactures, £3,000,000 from fine arts, + £80,000,000 from Scotland, £5,000,000 from foreign + countries. (_Gentz_, Histor. Journ., 1799, I, 183 ff.) + _Lowe_, England in its present Situation, 1822, p. 246, + speaks of 255,000,000. About 1860, the incomes subject to + taxation alone, that is, all above £100, amounted to + 335,000,000. The remainder was certainly worth one-half of + this. (Statist. Journ., 1864, 121.) _Baxter_, in 1867, + assumed it to be £825,000,000. Compare _L. Levi_, on + Taxation, 6. + + In France, about forty years ago, according to Chaptal, + Doudeauville, Balbi and others, about 6,500,000,000 francs + gross national income could be counted on. _Schnitzler_ + speaks of 7,000,000,000 francs (Creation de la Richesse en + France, 1842, I, 392), after deduction made of the raw + material of manufacture. According to _Wolowski_, + Statistique de la Fr., 1847, it was more than 12,000,000,000 + francs. _M. Chevalier_, Revue des deux Mondes, March 15, + 1848, has it 10,000,000,000 at most. In these four + estimates, only material products are taken into account. + _Ch. Dupin_ thinks the income per capita was, in 1730, = 108 + francs; in 1780, = 169; in 1830, = 269. _Cazeaux_, Eléments, + 163, estimated the net national income, in 1825, at + 5,000,000,000 francs; _Cochut_, in 1861, at 16,000,000,000. + (Revue des deux Mondes, XXXVII, 703.) + + In Spain, _Borrego_, Nationalreichthum, etc. Spaniens, 1834, + 33, estimated the income from agriculture at 2,284,000,000 + francs; from industry, etc., 361,000,000; commerce, + 124,000,000; from houses, 186,000,000; canals, streets etc., + 8,500,000; personal services, 75,000,000; money in + circulation (probably loaned capital), 85,000,000. + + In the United States, in 1840, the national income was + estimated at over $1,063,000,000; from agriculture, over + $654,000,000; from manufactures, nearly $240,000,000; + commerce, almost $80,000,000; mining, over $42,000,000; from + lumber (_Wäldern_), almost $17,000,000; and from the + fisheries, almost $12,000,000. The per capita amount of + income was $62. It was largest in Rhode Island--$110; in + Massachusetts it was $103; in Louisiana, $99; and in Iowa, + smallest, $27; in Michigan, it was $33. Compare _Tucker_, + Progress of the United States, 195 ff. The census of 1860 + assumes the national wealth, slaves not included, at + $14,183,000,000, that is $451 per capita, with a per capita + annual income of $112. According to _Czörnig_, the gross + income of Austria, from agriculture, the chase and + fisheries, in 1861, was 2,119,000,000 florins; from mining, + 41,000,000; from the industries, 1,200,000,000. In Prussia, + the net national income, not including the revenue from + state property, nor the income of the royal household, + seems, from the returns of the income and _class_ tax, to + have been about 2,458,000,000 thalers, in 1874. _Engel_, + Preuss. Statist. Ztschr., 1875, 133. The majority of the + above estimates are obviously unreliable.] + + +SECTION CXLVII. + +NATIONAL INCOME.--ITS STATISTICAL IMPORTANCE. +[CONTINUED.] + +The question frequently discussed, whether it is more advantageous to +increase the gross income or the net income[147-1] of a people, may be +readily answered with the assistance of our tripartite division. Since +economic production has no other object than the satisfaction of human +wants, the mere increase of the gross income of a people is a matter of +indifference. An increase of the net income puts a people in a condition +to increase either their numbers or their enjoyments. (See §§ 163 and +239.) The most desirable condition is where both these results are +produced. It is fortunate for a people when the _free_ income of the +nation increases by reason of the absolute or relative decrease of the +cost of production, which adds nothing to enjoyment. But it is +politically and morally to be lamented when it increases at the expense +of the satisfaction of man's necessary wants, especially if the majority +of the people deny themselves in this respect to produce that end. Sir +Thomas More called the sheep of his time, to make place for which so +many farm houses were razed to the ground, ravenous beasts, which +devoured men and laid waste city and country.[147-2] + + [Footnote 147-1: The greater number of writers, at bottom, + understand by this question only whether greater efforts + should be made to increase the wages of the lower classes or + the rent and rate of interest on capital paid to the higher. + (_Schmoller_, in the Tüb. Zeitschrift, 1863, 22.)] + + [Footnote 147-2: The difference between gross and net income + was introduced into the science principally by the + Physiocrates. _Vauban_ (1707) had no conception of it, and + thirty years later a French minister, in his instructions + concerning the levy of the _vingtièmes_, dimly seeing that + the aggregate amount of the harvest was not clear gain, + ordered, to obtain the latter, that the cost of reaping and + threshing should be deducted. (_Dupont_, Correspondence of + _J. B. Say_, 404, éd. Daire.) By _produit net_, _Quesnay_ + means the excess of original production over its cost, + considered from the personal point of view of the individual + landowner. This excess, it is claimed, can alone increase + the national wealth and alone support the "steril" class. + + The political and military bearing of this very clearly + recognized. (102 ff., éd Daire.) Hence _Quesnay_, favors it + in every way; by large farming instead of small, by stock + raising on a large scale, supplanting home labor by cheaper + foreign labor, by machinery and the employment of manual + labor, etc.; 91 ff., 200 ff., 274 ff. The elder _Mirabeau_ + teaches even that the goodness of a government or of a + constitution, and even national morality may be inferred + from the amount of the _produit net_. (Ph. rurale, ch. 5.) + _Stewart_, Principles, I, ch. 20. _Adam Smith_ gives greater + prominence to the gross income, and grades the principal + branches of national labor according as they increase the + gross product of the nation's economy. (II, chs. 1, 5.) + Similarly, _J. B. Say_, Traité, ch. 8, § 3; _Lauderdale_, + Inquiry, 142. + + _Ricardo_ thoroughly reacts against this view, and considers + it a matter of indifference whether a net product (interest + on capital and rent) of a given amount be obtained by the + labor of five or seven million other men, so long as only + five million can live on it. (Principles, ch. 26.) Similarly + _Ganilh_, Systèmes, I, 218 ff.; Théorie, II, 96. + Controverted by _Malthus_, Principles, II, § 6. _Buquoy_, + Theorie der Nat. Wirthsch., 1815, 310 ff. _Sismondi_ has + ridiculed this predilection for the net product which in + _Ricardo_ corresponds with what the Germans call free + product (_freien Ertrage_), and which, contrary to Ricardo's + own opinion, he calls Ricardo's ideal, saying that according + to him, nothing more was to be desired but that "the king + should remain alone on the island and, by turning a crank + forever, do all the work of England through the + instrumentality of automata." (N. P., II, 330 ff.) An entire + people should value only gross product. (I, 183.) In his + Etudes, Essai, II: Du Revenu Social, _Sismondi_ + distinguishes as elements of the gross national income: a, + pure capital, the return of outlay; b, that which is at once + both capital and income, and serves as family support + (capital as a necessarily remaining supply, income as the + product of the preceding year); c, net income, the excess of + production over consumption. + + The Socialists of our day would prefer to see the whole net + income of a people employed in the satisfaction of the + necessary wants of an ever increasing population. By this + procedure, as a natural consequence, we should witness first + the curtailing of the taxing power, of the funds for the + satisfaction of the more refined wants and of the saving of + capital, nor would it be long before even the existing + generation would experience the bitterness of this "living + from hand to mouth." After a time, even the possibility of + progress and even of mere increase of population would + cease. + + _Hermann_, Staatsw. Untersuch., 297 ff., has better than + almost any one else developed the theory of income, and he + lays most stress on the satisfaction of wants as the chief + aim of public economy. _Kröncke_, Das Steuerwesen, 1804, 381 + ff.; Grundsätze einer gerechten Besteuerung, 1819, 93 f., + may be considered the predecessor who prepared the way for + him. Compare the profound work of _Bernhardi_, Versuch einer + Kritik der Gründe die für grosses und kleines Grundeigenthum + angeführt werden, St. Petersburg, 1848. Many controversies + on this subject may be closed by a more accurate + understanding as to terms. Thus, for instance, when _Rau_, + Handbuch, embraces in the cost of production the necessary + maintenance of material-workmen, and of those engaged in the + labor of commerce; or when _Jacob_, Staatswissenschaft, § + 496, and _Storch_, Einkommen, 116 ff., even the necessary + support of every class useful to society, their valuation of + the gross national income is in only apparent conflict with + our doctrine on the subject.] + + +SECTION CXLVIII. + +THE TWO PHASES OF INCOME. + +In every income which has anything to do with other incomes, it is +necessary to distinguish its immediately productive side, and its profit +or acquisition side. It is necessary, in the first place, that all the +products made by private parties should, so to speak, be put into the +common treasury of the national economy, and that each should thence +draw his own private revenue. Justice requires that there should be a +perfect correlation between the two; that each should enjoy precisely +the quota of the national income to the production of which his person +or his property contributed. A just appreciation of the relative +productive power of the divers branches of labor constitutes one of the +chief bulwarks against the inroads of destructive socialistic theories. +The person who calls a good doctor or a good judge unproductive should, +to be consistent, call those who by their greater intelligence are +fitted to superintend agricultural and industrial enterprises +unproductive, also, as is done by the coarser socialists with their +apotheosis of mere manual labor. Unfortunately, such a settlement as is +above contemplated among the different factors of production, whose +owners are desirous to divide the common product among them, is possible +only where the factors of production are either of the same kind, or can +be reduced to a common denominator.[148-1] But if justice pure and +simple were meted out, no man could subsist. Love or charity must +supplement justice in order to assist those (and especially such as +without any fault of theirs) who are not able to produce anything, or +enough to supply those wants, for instance, children and the poor. + +As the net national income, following the three great factors of all +economic production, is divided into three great branches, rent, wages +and interest on capital, the net income from any private business may be +reduced to one or more of these branches.[148-2] The three great +branches of income may be considered with advantage from a great many +different points of view. We may inquire in the case of each of them: +concerning its absolute magnitude, its relation to the aggregate +national income, to the magnitude of the factor of production, of which +it constitutes the remuneration; by what number of men it is shared, and +what number of wants it satisfies.[148-3] Lastly, the difference between +the amount stipulated for, and the original amount of both rent and +wages, as well as the interest of capital, is of special importance. The +former consists in the price paid by the borrower for the use of the +factor of production to the owner; the latter in the immediate products +which the employment of the same productive power brings on one's own +account. Evidently, the original amount is, in the long run, the chief +element in the determination of the stipulated amount. While the former +depends more on the deeper and more durably effective elements of price, +especially the cost of production, the value in use and the paying +capacity of purchasers; the latter is conditioned more by the +superficial variations of supply and demand, and even by custom. For our +purposes, the former is by far the more important, but, at the same +time, by far the more difficult to perceive. + + [Footnote 148-1: This is possible between labor and capital, + at least in so far as a comparison can be instituted between + the sacrifice of human rest there is in labor and the + sacrifice of enjoyment in the building up of capital. But + the person who introduces an entirely unimproved piece of + land into the service of production, stands to the laborer + as well as to the capitalist in a relation which is entirely + incomparable with any other. (See § 156.) The doctrine of + former agriculturists, that one-half of the harvest was to + be ascribed to the soil and the other to the manure, would + not suffice here, even if it were correct. Compare _Fraas_, + Gesch. der Landbau- und Forstwissenschaft, 257. But in the + production of a calf, the coöperation of a bull and cow are + necessary. Yet no one is in condition to determine what + portion of the calf is to be accounted as belonging to + either. If the bull and cow belong to different owners, the + relation of supply and demand, and the deeper causes that + determine them, decide in what proportion the value of the + calf is to be divided among them.] + + [Footnote 148-2: Among the greatest services rendered by + _Adam Smith_ is, his complete demonstration, that any income + may be resolved into one or more of the three great branches + of the national income. (I, ch. 6.)] + + [Footnote 148-3: _Ricardo_ has not unfrequently bewildered + uncritical readers, by his habit--in which he is by no means + always consistent--of using the expressions higher and lower + wages, higher and lower profit of capital, to designate not + the absolute greatness of these branches of income, either + in money or in the wants of life, nor their greatness from a + personal point of view, but only their relative greatness as + compared with the aggregate income, the measure of the quota + of the aggregate product which is divided among workmen, + capitalists, etc. And yet, in the case of most economic + questions, this is without doubt the less interesting side. + Compare the polemic of _R. Jones_, On the Distribution of + Wealth, 1831, I, 288 ff.; _Senior_, Outlines, 142 seq.; + _Carey_, On the Rate of Wages, 1834, 24. Thus, according to + _Ricardo_, the increase of one branch is possible only at + the expense of another, while in the case of flourishing + nations, the three branches increase absolutely and + together. _Ricardo_, himself, was by no means unacquainted + with this, as may be seen from _Baumstark's_ German + translation of his work, pp. 37, 108 ff.] + + + + +CHAPTER II. + +THE RENT OF LAND. + + +SECTION CXLIX. + +THEORY OF RENT. + +Rent is that portion of the regular net product of a piece of land which +remains after deducting the wages of labor and the interest on the +capital usual in the country, incorporated into it.[149-1] Hence it is +the price paid for the using of the land itself, or for what Ricardo +calls the original inexhaustible forces of the soil which are capable of +being appropriated.[149-2] This price also depends, of course, on the +relation between demand and supply; the demand in turn, on the wants and +means of payment of buyers, but the supply by no means on cost of +production, which, from the definitions above given, is here +unthinkable. However, land has this in common with other means of +production, that its price is mainly determined by that of its products. + + [Footnote 149-1: According to _von Thünen_, Der isolirte + Staat. in Beziehung auf Landwirthschaft und Nat. Oek, 1850, + I, 14: "what remains of the revenue of an estate after + deducting the interest on all the objects of value which may + be separated from the soil." According to _Whately_, it is + surplus profit. The expression "regular product" supposes, + among other things, an average skillfulness of the economic + individual. Thus, for instance, the farm-rent of a piece of + land generally includes besides the real rent of the land, + interest on much capital which is more or less firmly fixed + in the soil. The importance of the latter may be + approximately determined from the fact that in the + electorate of Hesse, for instance, the value of all meadow + lands, woods, and agricultural lands is estimated at from + 205 to 206 millions of thalers, and the value of all the + houses at 100 millions. (_Hildebrand_, Statist. Mittheil. + über die volkswirthschaftlichen Zustände Kurhessens, 1852, + 37.) In the English income tax of 1843, the annual value of + all lands in Great Britain was estimated at over 45 millions + sterling, that of all houses at over 38 millions. However + the farm-rent of a piece of land does not by any means + always embrace the entire rent. A part of the rent is paid + to the state in the form of taxes, and another portion to + the payment of tithes. Short leasehold terms, frequent land + sales, the comparatively great difficulty of disengaging + capital invested in the cultivation of land, the union of + landed proprietor, capitalist and laborer in one person + easily obscure the law of rent.] + + [Footnote 149-2: The stores of immediate plant food in a + piece of land, of minerals in a mine, of salt in a salt + mine, etc., are subject to the law of rent only in so far as + they may be considered inexhaustible; that is, they are not, + strictly speaking, subject to it. Our definition applies all + the more to the capacity for cultivation, and of support or + bearing capacity mentioned in § 35; and hence it is easier + to follow the law of rent in the case of land used for + building purposes than for agriculture. When _v. Mangoldt_ + claims that the exhaustibility or inexhaustibility of the + soil has nothing to do with rent so long as it flows evenly + (_so lange sie eben fliesst_) he is in harmony with his own + general conception of rarity-premiums + (_Seltenheitsprämien_).] + + +SECTION CL. + +THEORY OF RENT. (CONTINUED.) + +Agricultural products of equal quantity and quality are produced on +pieces of land of unequal fertility, even when the same amount of skill +is displayed by the husbandman, with very different outlays of capital +and labor.[150-1] And yet the price of these products in the same market +is uniformly the same. This price must, on the supposition of free and +intelligent competition, be, in the long run, at least high enough to +cover the cost of production on even the worst soil (the margin of +cultivation according to Fawcett), which must be brought under +cultivation in order to satisfy the aggregate want. (See § 110.) This +worst land need yield no rent.[150-2] The better land which, with an +equal outlay of labor and capital, produces a greater yield, furnishes +an excess over the cost of production.[150-3] This excess is rent, +which, as a rule, is obviously higher in proportion as the difference in +fertility between the worst and the better land is greater. The person +who cultivates the land of a stranger may unhesitatingly turn this rent +over to the owner; since, notwithstanding his so doing, all that he has +himself contributed to production in labor and capital of his own, +returns to him entire in the product.[150-4] + +According to § 34, a continual increase in the amount of labor and +capital lavished on the fertilization of land, agricultural science +remaining the same, leads, sooner or later to this, that every new +addition of capital or labor becomes relatively less remunerative than +the preceding.[150-5] The worse the land is, the sooner is this point +reached. Hence, it necessarily happens that, with an increase in the +aggregate want of agricultural products, greater and greater amounts of +labor and capital are employed in the further fertilization of land, and +that there comes to be a greater difference between the fertility of the +worst and better lands, in consequence of which the rent of the latter +rises.[150-6] + + [Footnote 150-1: _Flotow_, Anleitung zur Abschätzung der + Grundstücke nach Klassen, 1820, 50 ff., estimates the cost + of production of a _scheffel_ of rye on land of the first + class, at scarcely 1½ thalers; on land of the tenth class, + at 3 thalers. In Hanover, it is estimated that about 60 per + cent. of the land devoted to gardening and agricultural + products produces only from 2 to 4 times the quantity of + seed sown; over 35 per cent. from 5 to 8 times, and 4.5 per + cent. from 9 to 12 times. (_Marcard_, Zur Beurtheilung des + Nat. Wohlstandes im Königreich Hanover, Tab. 3.) In Prussia, + the rates of net produce adopted by the central commission + in 1862 vary from 3 to 420 silver groschens per _morgen_, in + the case of agricultural land; from 6 to 420 in the case of + meadow land; in the case of pasturage, from 1 to 360. (_v. + Viebahn_, Statist. des Zollvereins, II, 966.) In England, + parliamentary investigations (1821) have shown that the best + land produces from 32 to 40, and the worst from 8 to 12 + bushels per acre of wheat. (Edinburgh Review, XL, 21.) As to + the influence of the elevation of land, the royal Saxon + commission for the assessment of the value of land, + estimated that the net product of an acre _of_ land at a + height above the level of the sea, + + In the case of 2d class land-- + Of 500 feet, 55 per cent. + Of 800 " 52-1/2 " + Of 1600 " 48 " + Of 2400 " 43.8 " + + In the case of 11th class land-- + 42.9 per cent. of the gross yield. + 39-1/2 " " " " + 34 " " " " + 26 " " " "] + + [Footnote 150-2: The English are very fond of assuming that + the worst land for the time being under cultivation pays no + rent. (_Ricardo_, Principles, II, 2.) This fact is + frequently obscured by the aggregation into one economic + whole of land that pays no rent and land that is able to pay + rent. (_John Stuart Mill_, Principles, II, ch. 16, § 3.) + True it is that there is a great deal of land which cannot + be farmed out, but which can be used only by its owners. + Compare _Salfeld_, in the Landwirthsch. Centralb., 1871, II, + 182 ff. On land near Wetzlar which, notwithstanding the high + price of land in the neighborhood, could not be farmed out + at auction, because no one was desirous to lease it, and + which was therefore turned over to the highest bidder for + the preceding piece, see _Stöckhardt_, Zeitschr. für + deutsche Landwirthe, 1861, 237. Where, however, all the land + has its own proprietors, the competition of farmers may + easily produce a rent for the worst land. It is a matter of + complete indifference to the theory of rent, whether the + worst land when possessed only by right of occupation or + used as pasturage for cattle previous to its cultivation, + had value or not. Compare _Nebenius_, Oeff. Credit, I, 29; + _Hermann_, Staatswirthsch. Unters., 170 seq.] + + [Footnote 150-3: The analogous gradation in mining may make + this clearer.] + + [Footnote 150-4: _Ricardo_ illustrated this by the following + example. An uncultivated tract of country is settled by a + small colony. As long as there is here an excess of land of + the best quality, and everyone may take possession of it + without paying anything therefor, no rent of the land which + is merely occupied is possible. But if all the first class + land is under cultivation--land which perhaps with the + employment of a small amount of capital yields 5 quarters an + acre per annum; and the increasing population necessitates + the cultivation of land of the second class, which with the + same outlay of capital yields only 4 quarters an acre per + annum, there arises a rent of 1 quarter an acre per annum + for land of the first class. For the price, 4 quarters is + now high enough to cover the cost of production per acre, + and it must be a matter of complete indifference (complete + indifference?) to a new comer whether he obtains 5 quarters + from land of the first class as a farmer and pays out 1 + quarter, or whether he harvests 4 quarters from second class + land as proprietor. If there is a further increase of + population, so that land of the third class also, which + yields only 3 quarters per acre per annum, must be brought + under cultivation, the price of corn rises again because the + cost of production has now to be covered by three quarters. + Land of the first class now pays a rent of 2 quarters and + second class land of 1 quarter. (Ch. 2.)] + + [Footnote 150-5: _von Thünen_, der isolirte Staat, II, I, + 179, estimates that a bed of manure 1/3 of an inch thick on + an acre of ground, increases the production by 1/2; that a + second 1/2 inch of manure increases the yield only by a + of + 5/8 corn; the third of 1/4 corn, etc. _Geyer_ is of opinion + that, in Saxony, land of the average quality will yield a + gross product of 60 thalers per acre, and 14 thalers net + product per acre, in case it is managed with the greatest + intelligence and the employment of a large amount of + capital; when managed in a very ordinary way, it would yield + 20 thalers gross, and 7-1/2 thalers net product. _Thünen_ + gives the following formula determining when it is more + advantageous to cultivate the old land with more + _intensiveness_ (higher farming) than to begin the + cultivation of new: As long as p - _a_q is less than + sqrt(ap), so long is an increase of the outlay of capital on + the same land more profitable than the cultivation of new + land, and _vice versa_. Here p = aggregate product obtained + by a workman in a year from the amount of capital used by + him; a = sum of his necessary yearly wants; _a_ = the + interest per annum of a capital = p; q = the amount of + capital given to assist the individual workman.] + + [Footnote 150-6: _Ricardo_ had, in every case in which + outlay of capital and labor of different degrees of + productiveness had to be used on the same land, to suppose a + price of the products = the cost of the least productive + outlay. See the tables in _Ricardo's_ work, On the Influence + of a low Price of Corn on the Profits of Stock, 1815, 14 + seq. _Schmoller_, on the other hand, rightly applies the + principle of united costs of production in as far as the + usual amount of profit of the producer is added to the cost + of the commodity with the highest cost of production. + Mittheilungen des Landwirthsch. Instituts zu Halle, 1865, + 128. Compare _supra_, §§ 106, 110.] + + +SECTION CLI. + +THEORY OF RENT.--LAND FAVORABLY SITUATED. + +The favorable situation of a piece of land operates, in almost every +politico-economical respect, in the same manner as its fertility.[151-1] +If a market, to be fully supplied, needs to be fed from a circuit of ten +miles, the price must be sufficient to make good not only the other cost +of production but the freight over ten miles. Here, therefore, all +producers living nearer to the market, who have to make a smaller outlay +for transportation and yet obtain the same market price for their +produce, make a profit exactly corresponding to the advantage of their +situation.[151-2] + +The situation of individual pieces of land relatively to farm buildings, +etc., operates in a similar way.[151-3] + + [Footnote 151-1: _L'éloignement équivaut à la stérilité._ + (_J. B. Say._) If we imagine with _A. Walker_ an entirely + uncultivated country, equally fertile in every part, settled + only on the coast, and divided into shares of equal breadth, + equally accessible at all points, so that every settler has + unlimited space to extend his possessions from the coast + into the interior, the shares situated in the middle of the + coast strip would be most eagerly sought after; since in its + vicinity, prospectively, all the institutions of the country + would come together. The colonist, therefore, who should + obtain that share as his, would, unquestionably, be in a + condition to pay a price for this preference, that is a + rent. (Science of Wealth, 296.)] + + [Footnote 151-2: It is a consequence both of their + difference of situation and of their fertility that in the + Himalaya the farmers low down on the sides pay 50 per cent. + of the gross product as farm-rent, and higher up, 20 per + cent. less. (_Ritter_, Erdkunde, III, 878.) Both influences + may be traced most accurately in East Friesland, and in + similar places: marsh land, sandy land, heath land, and high + moorland. + + Its situation influences especially the money rent of land, + and its quality the amount of produce. (_McCulloch_, + Principles, III, 5.)] + + [Footnote 151-3: We need only mention the hauling of the + crops and of manure. According to the instructions of the + royal Saxon commission, above mentioned, the cost is assumed + to be 10 per cent. higher for a distance of 250 rods, and 20 + per cent. higher for a distance of 500 rods.] + + +SECTION CLII. + +THE THEORY OF RENT. [CONTINUED.] + +From what we have said, it follows that the rent of the land of a +country is equal at least to the sum of all the differences between the +product of the least productive portions of capital which have been +necessarily laid out in the cultivation of the soil and the product of +the other portions more productively laid out by other husbandmen. It +may rise higher than this on account of a coalition among landowners or +immoderate competition among farmers, who may thereby be forced to +surrender a portion of their wages and interest on capital to the +former; but it can never lastingly fall below this amount. If the +landowners themselves were to surrender all claim to rent, the price of +agricultural products would not sink if the market was kept fully +supplied; and the excess obtained from the better land over and above +the cost of production would go, but only in the nature of a gift, to +the farmers, corn dealers and individual consumers.[152-1] Normal rent +is not to be explained by any mysterious or peculiar productiveness[152-2] +of the land that yields it, but on the contrary, by the fact that even +material forces unexhaustible in themselves, but which can be productive +only in combination with given parcels of land, uniformly oppose even +successively greater difficulties to every successive and additional +improvement.[152-3] + +Moreover, the capital which becomes a part of the land to such an extent +that it cannot be separated from it, and perhaps not even distinguished +from it at sight, such for instance as has been laid out for purposes of +drainage or in the purchase of material intended to modify the nature of +the soil, partakes of the character of the land itself, and its yield +obeys the laws of rent. How frequently it happens that such improvements +made by the farmer without the least assistance from the owner of the +land permanently contribute to an increase of the rent. (§ 181.)[152-4] + + [Footnote 152-1: Compare _J. Anderson_, An Inquiry into the + Nature of the Corn Laws, 1777. Extracts from the same in the + Edinburgh Review, LIV, 91 ff. On the other hand, _Buchanan_, + on Adam Smith, IV, 134, thinks that rent arises exclusively + from the monopoly of the owners, and that without it the + price of corn would be lower. It is certain, however, that + if the land of a country be considered as one great piece of + property, and under one great system of husbandry, the + products of the soil might be offered permanently at a price + corresponding to the average cost of production, on the + better and worse pieces of land. (_Umpfenback_, N. Oek., + 191.)] + + [Footnote 152-2: _Malthus_, On the Policy of restricting the + Importation of foreign Corn, 1815. Additions, 1817, to the + Essay on the Principle of Population, III, ch. 8-12; + Principles, 217 ff.] + + [Footnote 152-3: _Ricardo_ says that if air, water, + elasticity and steam were of different qualities, and might + be made objects of exclusive possession; and that if each + kind could be had only in a moderate supply, they would, + like land, produce a rent, according as they were brought + into use, one kind after another. In the class of natural + forces, also, the possession of a secret of production or of + inimitable skill, or a legal right to its exclusive use, may + produce something similar to rent. (_Senior_, Outlines, 91.) + _Hermann_, Staatswirthsch. Unters., 163 ff., had already + laid the foundation of this doctrine, and earlier yet, + _Canard,_ 17 seq., and _Hufeland_. I, 303 ff. See _supra_, § + 120. Hence _v. Mangoldt_ uses the word rent to designate all + rarity-premiums. _John Stuart Mill_, III, ch. 5, 4. + _Schäffle_ speaks of the universal existence of a surplus; + that is, of the factor of rent (Nat. Oek., I, Aufl., 140 + ff.), and has recently developed this into a theory + thoroughly systematic and detailed. (Nationalökonomische + Theorie der ausschliessenden Absatzverhältnisse, 1867.) + + According to him, rent is "the premium paid for the most + economic course taken in the interest of society in + general;" and hence he finds rent as much in superior labor + and in a very advantageous outlay of capital. Yet he grants, + that "exclusive custom (_Kundschaft_) on the basis of + natural advantages occurs only in the case of land-rent." + (59.) And even granting that he is right, that no rent is by + itself forever secure (74 seq.), and that much rent is a + premium paid for a search after and the appropriation of the + best land, divination of the best situations, etc. (60 ff., + 74 ff.), there still remains the great difference between + rent and the extra income from labor and capital; that here + the very transitory nature of the substratum, or basis, and + the personal merit of the recipient, is the rule, while in + the former case it is a rare exception. Willingly, + therefore, as I recognize the possibility and fruitfulness + of Schäffle's way of conceiving this subject (the latter, + especially, for monographic purposes), I prefer, so far as + the entire system is concerned, the keeping apart of the + three branches of income corresponding to the three factors + of production as has been usual since Adam Smith's time.] + + [Footnote 152-4: _John Stuart Mill_, ch. 16, § 5. An example + in _Fawcett_, Manual, 149 seq. This explains many objections + to Ricardo's laws, which are the result of misconception. + Thus, for instance, in _Schmalz_, Staatswirthschaftslehre, + I, 81, Quarterly Review, XXXVI, 412 ff. _Bastiat_, Harmonies + économiques, ch. 9, where rent is considered the interest on + the capital laid out in bringing land under cultivation and + improving it. If, however, we imagine an island to emerge + suddenly from the waves in the vicinity of Naples, in + consequence of an earthquake, no one can doubt that its land + would sell at a very high rate and pay a very good rent. And + yet no capital or labor has been laid out on it. A similar + lesson is taught by the fact, that, in Scotland, rocks which + are covered twice a day by the waves are leased for the sake + of the sea-weed left on them. (_Adam Smith_, Wealth of + Nations, I, ch. 11.) Also by the fact, that in Poulopinang, + a cavity in which many edible swallows' nests are found, + pays £500 a year rent. (Geogr. Ephemeriden, Oct., 1805, + 134.) However, _Bastiat_, abstractly speaking, is right when + he says, that every one by the importation of agricultural + products from quarters which pay no rent, and still more by + emigrating thither, may deprive the owners of land of the + tribute imminent in rent. + + But how would it be if the cost of transportation and + emigration amounted to more than the rent? The case + theoretically so important, in which all the land in the + world is supposed to have been appropriated as private + property, this writer, generally so lucid, treats in a + surprisingly blind way (275 ff). It is remarkable that _A. + Walker_, Science of Wealth, spite of his prejudices in favor + of Bastiat's doctrines on the gratuitous nature of all + natural forces, nevertheless follows, essentially, + _Ricardo's_ theory of rent, 294 ff. + + A much more vulgar error yet is, that rent is the result of + the capacity of the capital employed in the purchase of the + land to produce some interest Thus _Hamilton_, Reports to + the Congress on the Manufactures of the United States, 1793, + and _Canard_, Principes, sec. 5. Per _contra_, compare + _Turgot's_ view, _supra_, § 42, note 1. Even _Locke_, + Considerations on the Lowering of Interest, Works, II, 17 + ff., maintained the closest parallel between rent and + interest to be possible, with this difference only, that + money was all of a kind but pieces of land of different + degrees of fertility. Similarly _Sir D. North_, Discourse + upon Trade, 1791, with his parallel of landlord and + stocklord.] + + +SECTION CLIII. + +THEORY OF RENT. (CONTINUED.) + +Ricardo says that rent can never, not even in the slightest degree, +constitute an element in the price of corn. This is certainly not a very +happy way of expressing the truth, that a high rent is not the cause, +but the effect, of a relatively high price of corn.[153-1] Ricardo would +have been nearer right had he said that rent was not a component part of +the price of every portion of the supply of corn brought to market. + +Is rent an addition to national income? Ricardo (ch. 31) answers this +question in the negative, and says that it takes from the consumers what +it gives to the owners of the land, and that it increases only the value +in exchange of the national wealth.[153-2] It is evident that as thus +stated, the question is not properly put. Neither interest on capital +nor wages are any addition to a nation's income, but, like rent, only +forms of trade, by means of which that income is distributed among the +individuals constituting the nation. (§ 201.) + +The special kind of product obtained from a piece of land influences its +rent only in so far as the growth of that kind of product is exclusively +confined either by nature, privilege or prejudice to certain +land.[153-3] Adam Smith is of opinion that the rent of agricultural land +is ordinarily (!) one-third of the gross product; that of coal mines, +from one tenth to a maximum of one-fifth; of good lead and tin mines, +one sixth (with the dues paid the state of twenty-one and two-thirds per +cent.); of Peruvian silver mines, scarcely one-tenth; of gold mines, +one-twentieth. And he thinks that rent grows less certain for every +succeeding article.[153-4] + +So far as this is based on facts, it may be explained as follows: The +greater capacity an article has for transportation from one place to +another, the less important is advantage of situation, which is +generally one of the chief elements of rent. The more indispensable the +commodity is, the more readily is the consumer induced to pay a price +for it greater than the cost of production; that is, to pay a rent. This +again is enhanced by the difficulty of the preservation of the +commodity. Lastly, the more it is a mere product of nature,[153-5] the +more difficult it is to simultaneously employ several portions of +capital of different grades of productiveness in its production. + + [Footnote 153-1: To be met with in this form even in _Adam Smith_, + Wealth of Nations, I, ch. 11, pr. _John Stuart Mill_, Principles + II, ch. 16, § 6, thus states the matter: "Whoever cultivates land, + paying a rent for it, gets in return for his rent an instrument of + superior power to other instruments of the same kind for which no + rent is paid. The superiority of the instrument is in exact + proportion to the rent paid for it." According to _v. Jacob_, + Grundsätze der Nat. Oek., I, 187, rent constitutes a much larger + portion of the price of commodities than is generally supposed, in + as much as wages depend so largely on the price of the means of + subsistence. Per contra, _Baudrillart_, Manuel, 391 ff., who + maintains that rent is practically insignificant.] + + [Footnote 153-2: Similarly _Buchanan_, loc. cit., and _Sismondi_, + Richesse commerciale, I, 49. Compare contra, _Malthus_, Inquiry + into the Nature and Progress of Rent, 15. I would call attention + _en passant_ to the absurdity that there may be an increase in the + value in exchange of a nation's entire resources without any + increase in its value in use. (_Supra_, § 8.)] + + [Footnote 153-3: Thus _Adam Smith_ remarks that corn fields and + rice fields pay very different rents, because it is not always + possible to convert one into the other. (Wealth of Nat., I, ch. 11, + 1.) Compare the tabular statistical view of the rent of land used + for vineyards, gardens, meadows, pasturages, wood and farming + purposes, in _Rau_, Lehrbuch, I, § 218. For a general theory of the + rent of wooded land, see _Hermann_, Staatsw. Unters., 177 ff.; of + vineyards, 181 seq.] + + [Footnote 153-4: _Adam Smith_, Wealth of Nat., I, ch. 11, 3.] + + [Footnote 153-5: It is hereby rendered akin to those low stages of + civilization in which no rent is paid.] + + +SECTION CLIV. + +THEORY OF RENT. (CONTINUED.) + +As the purchase of a piece of land[154-1] is no more and no less than +its exchange against a portion of capital in the shape of money,[154-2] +its purchase price depends generally on the amount it will rent for as +compared with the interest on the capital to be given in exchange for +it. The rate of interest remaining the same, it rises and falls with its +rent. And _vice versa_, the rent remaining the same it rises and falls +inversely as the rate of interest.[154-3] A rise in the price of land is +not always a proof of the growing wealth of a people. It may proceed +from a depreciation of the value of money, or from a decrease of the +rate of interest caused by a decline in the number of loans which can be +advantageously placed. + +It is frequently said, that the price paid for land is greater than the +money-capital which yields an equal revenue.[154-4] This, abstraction +made of proletarian distress prices for small parcels of land and of the +political and social privileges of landowners, is accounted for by the +assumed greater security of the latter,[154-5] which, however, fares ill +enough in war times, and times of political disturbance. The fact itself +is found to exist, I think, only in economically progressive times, when +confidence prevails, and it is based on the pretty certain prospect that +the rate of interest will decline, while rents will rise.[154-6] + +It has been observed in Belgium, that the medium farm rent of land, in +quarters remarkable for any economic peculiarity whatever, pays an +interest lower, as compared with the purchase money, in proportion as +the country about is more thickly populated, and as its husbandry is +carried on by farmers instead of by owners.[154-7] This phenomenon is +doubtless correlated with these others, that the conditions just named +are pretty regularly attendant on a high state of civilization, and that +advanced civilization is attended uniformly by a decline in the rate of +interest. (175).[154-8] + + [Footnote 154-1: In every day language, people say of a man + who has purchased a piece of land, that he "put" as much + capital as is equal to the purchase price "into his land;" + or "laid out on it" as much. But this mode of expression is + as inaccurate as is this other: "the sun is rising," or "the + sun has gone down."] + + [Footnote 154-2: _Macleod_, who is not fond of the natural + mode of expression, maintains that the purchase price of a + piece of land is equal to the discounted value of the sum of + the values of all the future products to be obtained from + the land. (Elements, 75.)] + + [Footnote 154-3: C:i::L:r in which C = the capital, i = its + interest, L = the piece of land, and r = its rent.] + + [Footnote 154-4: There are traces to be found of the fact + among the ancient Greeks, that the farm-rent of landed + estates paid a smaller interest on the purchase money than + was otherwise usual in the country. _Isaeus de Hagn._, 42; + _Salmasius_, De Modo Usur., 848.] + + [Footnote 154-5: Thus even _North_ and _Locke_, loc. cit.; + _Cantillon_, Nature du Commerce, 294.] + + [Footnote 154-6: Compare _List_, Werke II, 173. In Belgium, + farm-rent per _hectare_ was, in 1830 = 57.25 francs, in 1835 + = 62.78, in 1840 = 70.44, in 1846 = 74.50, on an average. + This was at the rate of from 2.62 to 2.80, or an average of + 2.67 per cent. on the purchase money. If to this we add the + increase in the rise of land between 1830 and 1846, divided + by 16, the yearly revenue rises from 2.67 to 3.91 per cent., + that is pretty nearly the rate of interest on hypothecation, + and is higher or lower in the different provinces, as the + former is higher or lower. (_Heuschling_, Résumé du + Récensement général de 1846, 89.) In France, land paid but + from 2 to 3 per cent. on the purchase money; but both rents + and the price of land have doubled between 1794 and 1844. + (Journal des Econ., IX, 208.)] + + [Footnote 154-7: Moreover, whole countries may, because of + their great natural advantages, possess, so far as the + commerce of the entire world is concerned, something + analogous to rent. Thus, for instance, North America, + although here, this world-rent finds expression in the + national height of the wages of labor and of the rate of + interest, (_v. Bernhardi_, Versuch einer Kritik der Gründe + welche für grosses und kleines Grundeigenthum angeführt + werden, 1848, 294.)] + + [Footnote 154-8: Writers as old as _Culpeper_, A Tract + against the high Rate of Usurie, 1623, and _Sir J. Child_, + Discourse of Trade, p. 22 of the French translation, + observed the connection existing between a low rate of + interest, national wealth and a flourishing state of + commerce on the one hand, and a high price of the + necessaries of life and of land in the other. _Sir W. Petty_ + would estimate the rent of land as follows: If a calf + pasturing in an open meadow gains as much flesh in a given + time as is equal to the cost of the food of 50 men for a + day, and a workman, on the same land, in the same time, + produces food for 60 men, the rent of the land must be 50, + and the rate of wages 10. (Political Anatomy of Ireland, 62 + seq.; compare 54.) Besides, he accounts for the height of + rents by the density of the population exclusively, and he + would prefer to see both increase _ad infinitum_. (Several + Essays on Political Arithmetic, 147 ff.) + + The germs of the _Ricardo_ law of rent, in _Boisguillebert_: + the price of corn determines how far the cultivation may be + extended; by manuring the land, as much corn as desired may + be obtained, provided the cost of production is covered. + (Traité des Grains, II, ch. 2 ff.) There is a foreshowing of + the same law in the Physiocratic view that only in the + production of raw material is there a real excess over and + above the cost--_produit net_. Compare _Quesnay_, Probl., + économique, 177 ff. Sur les travaux des artisans. (Daire.) + _Auxiron_, Principes de tout Gouvernement, 1776, I, 126. + _Adam Smith_ came very near to the true principle in the + case of coal mines, but was hindered reaching it in other + cases by the false assumption that certain kinds of + agricultural production always yield a rent, while others do + so only under certain circumstances. Besides he always + considered the interest of capital fixed in the soil; + buildings, for instance, as part of the rent. (Wealth of + Nat., I, ch. 11.) Compare _Hume's_ Letter to Adam Smith; + _Burton's_ Life and Correspondence of Hume, II, 486; _von + Thünen_, Isolirter Staat., I, 15 ff. + + The most immediate predecessors of _Ricardo_, Principles, 2, + 3, 24, 31, are _Anderson_ (§ 152); _West_, Essay on the + Application of Capital to Land, 1815, and _Malthus_, Inquiry + into the Nature and Progress of Rent, 1815. See § 152. It is + wonderful how a theory which, in 1777, remained almost + untouched, was in 1815 etc., attacked and defended with the + greatest zeal, because it then affected the differences + between the moneyed and landed interest. Yet _Ricardo_ did + not take into account at all the rent-creating influence of + the situation of land in relation to the market, as well as + to the "farm-office" (_dem Wirthschaftshofe_). The influence + of the system of husbandry on rent, first thoroughly treated + by _von Thünen_, loc. cit. What has recently been urged + against _Ricardo_ by, for instance, _J. B. Say_, Traité, II, + ch. 9; _Sismondi_, N. P., III, ch. 12; _Jones_, Essay on the + Distribution of Wealth, 1831 (see Edinburg Review, LIV), + bears evidence either of a misunderstanding of the great + thinker, or else contains only modifications of some + individual abstract propositions of his, stated perhaps too + strictly. In judging _Ricardo_, it must not be forgotten, + that it was not his intention to write a text-book on the + science of Political Economy, but only to communicate to + those versed in it the result of his researches, in as brief + a manner as possible. Hence he writes so frequently making + certain assumptions; and his words are to be extended to + other cases only after due consideration, or rather + re-written to suit the changed case. + + _Baumstark_ very correctly says: "Rent rises, not because + new capital has been invested, but when the circumstances of + trade make a new addition to capital possible." + (Volkswirthschaftliche Erläuterungen über Ricardo's System, + 1838, 567.) _Fuoco's_ Nuova Teoria della Rendita, Saggi + economici, No. 1, is nothing but an Italian version of the + doctrines of Malthus and Ricardo. The greater number of + anti-Ricardo theories of rent have originated from the rapid + and apparently unlimited growth of national husbandry in + recent times. Thus it is a fundamental thought in + _Rodbertus_, Sociale Briefe, 1851, No. 3, that an increase + of the price of corn need not attend an increase of + population, either uniformly or necessarily. According to + _Carey_, The Past, the Present and the Future, ch. 1, 1848, + the most fertile land is last brought under cultivation, + because it is covered with swamps, forests, etc.; and + because it offers greater resistance to the work of the + agriculturist, by reason of its luxurious vegetation. The + more elevated lands are first cultivated which present fewer + obstacles to cultivation on account of their dryness, their + thinner crust, etc. Carey generalizes this and thinks he has + reversed the _Ricardo_ law of rent! He overlooks entirely + that _Ricardo_ speaks only of the original powers of the + soil. Now a swampy land which must be dried at the expense + of a great deal of labor, possesses less of these original + powers than a sandy soil which may be sown immediately. See + _Carey_, Essay on the Rate of Wages, 232 ff., and the + lengthy exposition of the same doctrine rank with inexact + natural science and unhistorical history in the same + author's Principles of Social Science, 1858, vol. I. + + There is this much truth, however, in Carey's error that, + with increasing economic progress, the superiority not only + of situation, relatively to the market, but also of natural + fertility, may of itself go over to other lands. Thus, for + instance, the ancient Slaves used clay soil everywhere as + pasturage, and cultivated the sandy soil, because their + pick-axes could overcome the resistance only of the latter. + _Langethal_, Geschicte der deutschen Landw., II, 66; + _Waitz_, Schlesw. Holstein, Gesch., I, 17. Similarly in + Australia: _Hearne_, Plutology, 1864. Compare, _Roscher_, + Nationalökonomik des Ackerbaues, § 34. The word fertility + should not be taken too exclusively in its present + agricultural sense. In a lower stage of civilization, the + facility of military defense or the _ut fons, ut nemus + placuit_--_Tacit._, Germ., 16--may have more weight. + + The chief difference in the theories of rent consists in + this: whether rent is considered a result of production or + only of distribution, and an equalization of gain. Compare + _Behrens_, Krit. Dogmengeschichte der Grundrente, 1868, 48.] + + +SECTION CLV. + +HISTORY OF RENT. + +In poor nations, and in those in a low stage of civilization, especially +where the population is sparse, rent is wont to be low. In Turkistan, +land is valued according to the capital invested in its +irrigation.[155-1] In the interior of Buenos Ayres, at the beginning of +the nineteenth century, landed estates were paid for in proportion to +the magnitude of the live stock on them, so that it seemed, at least, as +if the land was given for nothing, or simply thrown in with the +purchase. And only a short time since, an English acre in the same +country, fifteen _leguas_ from the capital, was worth from three to four +pence, and at a distance of fifty _leguas_, only two pence.[155-2] In +Russia, also, not long since, the valuation of landed estates was made, +not in proportion to the superficies, but according to the number of +souls, that is, of male serfs, a _remnant_ suggestive of the previous +situation when no rent was paid.[155-3] Where, in relatively uncivilized +medieval times, instances of the farming out or leasing of land occur, +farm-rents are so small that their payment can only be considered as a +mere recognition of the owner's continuing right of property. + +Under these circumstances, it is natural that great landowners, +especially in the lower stages of civilization, should exert an +especially great influence; and that their low tenants (_Hintersassen_) +are more dependent in proportion to the want of capital and the absence +of trade. Hence, these are wont to make up for the smallness of their +rent by great honors paid to their landlords, and great services, +especially military service.[155-4] Besides, the lords of the manor, in +almost every medieval period, have used their influence with the +government to cut down the wages of labor by serfdom and other similar +institutions, and the rate of interest on capital by prohibiting +interest, by usury laws, etc.; and thus, in both ways, to artificially +increase their own share of the national income. + + [Footnote 155-1: _A. Burnes_, Reise nach Bukhara, II, 238.] + + [Footnote 155-2: _W. Maccann_, Two Thousand Miles Ride + through the Argentine Provinces, London, 1853, I, 20; II, + 143. Ausland, 1843, No. 140. Frisian ancient documents in + which parcels of land are described as _terræ 20 animalium, + 48 animalium_, etc. _Lacomblet_, Urkundenbuch, I, 27. + _Kindlinger_, Münster Beitr., I, Urkundenbuch, 24.] + + [Footnote 155-3: The custom began to be more usual in Russia + also to say "so many _dessjatines_ and the peasantry + belonging thereto." This was especially so in the case of + very fertile land, as for instance in Orel. See _v. + Haxthausen_, Studien, II, 510. Formerly the bank loaned only + 250 per soul, afterwards up to 300 R. Bco. (II, 81). Spite + of this _v. Haxthausen_ thinks that rent would be illusory, + in Russia, in case agriculture was carried on with hired + workmen. (I, Vorrede, XIII.) _Carey's_ remark, "every one is + familiar with the fact that farms sell for little more than + the value of the improvements," may be true of the United + States (The Past, Present and Future, 60.)] + + [Footnote 155-4: This condition of things continued in the + highlands of Scotland until the suppression of the revolt of + 1745. The celebrated Cameron of Lochiel took the field with + 800 tenants, although the rent of the land was scarcely + £500. (_Senior_, Three Lectures on the Rate of Wages, 45.) + "Poor 12,000 pound sterling per annum nearly subverted the + constitution of these kingdoms!" (_Pennant._)] + + +SECTION CLVI. + +INFLUENCE OF ADVANCING CIVILIZATION ON RENT. + +Advancing civilization contributes in three different ways to raise +rents.[156-1] The growth of population necessitates either a more +_intensive_ agriculture (higher farming), or causes it to extend over +less fertile parcels of land, or parcels less advantageously +situated.[156-2] If the growth of population be attended by an increase +of capital, this happens in a still higher degree. The people now +consume, if not more, at least wheat of finer quality, more and better +fed live stock; the consequence of which is, that the demands made on +the land are increased. Lastly, if the population be gradually +concentrated in large cities, this fact also must contribute to raise +rents, because it requires a multitude of costly transportations of +agricultural produce and so increases the cost of production (up to the +time of consumption) on the less advantageously situated +land.[156-3] [156-4] + +As most of the symptoms of a higher civilization become apparent +earliest, and in the most striking manner, in large cities, so also a +rise in rents is first felt in them. The building of houses may be +considered as the most _intensive_ of all cultivation of land and that +which is most firmly fixed to the soil.[156-5] Rent has nowhere an +unsurpassable maximum any more than a necessary minimum. + + [Footnote 156-1: _Jung_, Lehrbuch der Cameralpraxis, 1790, + 182, has so little idea of this that he is of opinion that + farm-rent must grow ever smaller.] + + [Footnote 156-2: According to _Schmoller_, in the + Mittheilungen des landwirthschaftlich. Instituts zu Halle, + 1865, 112 seq., the average farm-rent of the Prussian + domains per _morgen_, and the population to the square mile, + amounted: + + ===============+============+============+============+========== + _District._ | _1849._ | _1864._ | _1849._ | _1858._ + ---------------+------------+------------+------------+---------- + | _Thalers._ | _Population_ + | | _per square mile_ + Königsberg, | 0.73 | 1.16 | 2076 | 2298 + Gumbinnen, | 0.59 | 0.76 | 2059 | 2249 + Danzig, | 1.02 | 1.51 | 2656 | 2926 + Marienwerder, | 0.63 | 1.06 | 1944 | 2135 + Posen, | 0.69 | 1.07 | 2789 | 2857 + Bromberg, | 0.69 | 1.10 | 2116 | 2322 + Stettin, | 1.07 | 1.73 | 2355 | 2614 + Cöslin, | 0.83 | 1.30 | 1735 | 1940 + Stralsund, | 0.95 | 1.50 | 2347 | 2549 + Breslau, | 1.19 | 1.45 | 4733 | 5034 + Liegnitz, | 1.17 | 1.75 | 3676 | 3763 + Oppeln, | 0.86 | 1.20 | 3973 | 4433 + Potsdam, | 1.08 | 1.59 | 3317 | 3640 + Frankfort, | 1.29 | 2.00 | 2446 | 2660 + Magdeburg, | 2.31 | 2.98 | 3290 | 3508 + Werseburg, | 2.35 | 3.03 | 3934 | 4270 + Erfurt, | 2.04 | 2.55 | 5621 | 5735 + Münster, | .... | 2.03 | 3192 | 3299 + Minden, | 2.48 | 2.62 | 4841 | 4808 + ===============+============+============+============+========== + + Compare the review of rents in the states of the Zollverein, + in _v. Viehbahn_, Statistik, II, 979. It is difficult to + compare different countries with one another in this + respect, because it is seldom certain whether the word rent + means exactly the same thing in them. Besides, it should not + be overlooked, how difficult it is to ascertain what rent, + in the strict sense of the term, as used by _Ricardo_, is.] + + [Footnote 156-3: Moreover, the rise of rents, in so far as + it depends on the greater cost of transportation to a + growing market, becomes progressively slower. The concentric + circles about that point increase in a greater ratio than + the radii.] + + [Footnote 156-4: As to the history of rents in England, a + comparison of the years from 1480 to 1484, with the most + recent times, shows that the amount of rent estimated in + money in agricultural districts, where no very great + "improvements" have been made, have increased as 1 to + 80-100, while the price of wheat has increased 12-fold and + wages 10-fold. (_Rogers_, in the Statist. Journal, 1864, + 77.) According to _Hume_, History of England, ch. 33, it + seems that rents under Henry VIII. were only 1/10 of those + usually paid in his time, while the price of commodities was + only 1/4 of the modern. _Davenant_, Works, II, 217, 221, + estimates the aggregate rent of land, houses and mines, at + the beginning of the seventeenth century, at £6,000,000; + about 1698, at £14,000,000; capitalized respectively at + £72,000,000 and £252,000,000. About 1714, _J. Bellers_, + Proposals for Employing the Poor, puts it at £15,000,000; + about 1726, _Erasm. Phillips_, State of the Nation in + Respect to Commerce etc., at £20,000,000; about 1771, _A. + Young_, at £16,000,000; about 1800, _Beeke_, Observations on + the Income-Tax, at £20,000,000; about 1804, _Wakefield_, + Essay on Political Economy, at £28,000,000; about 1838, + _McCulloch_, Statist., I, 535, at £29,500,000. The poor tax + in England and Wales, in 1841, was on a valuation of + £32,655,000. (_Porter_, Progress, VI, 2, 614); 1864-5, the + annual value of lands, £46,403,853 (Stat. Journal, 1869.) + Moreover, the income from houses, railroads, etc. (real + property other than lands), increased very much more than + that received from pieces of farming land; between 1845 and + 1864-5, the former by 392.8 per cent., and the latter by + 27.9 per cent. (_Hildebrand's_ Jahrbb., 1869, II, 383 seq.); + and the income tax of 1857 on £47,109,000. There was a still + more rapid growth of rent in Scotland. In 1770, it was only + £1,000,000-1,200,000: in 1795, £2,000,000; in 1842, + £5,586,000. (_McCulloch_, I, 576, ff.) In Ireland, about + 1776, it was only $900,000, according to _Petty_. (Political + Anatomy of Ireland, I, 113.) _A. Young_ assumed it to be + £6,000,000 in 1778; _Newenham_, View of Ireland, about 1808, + £15,000,000. In many parts of the Rosendale Forest in + Lancashire, the land is leased by the ell, at £121, and even + at £131 per acre; i. e., more than the whole forest of + 15,300 acres was rented for in the time of James I. In many + of the moorland portions of Lancashire, rent has risen in + 150 years, 1,500 and even 3,000 per cent. (Edinburg Rev., + 1843, Febr., 223.) + + The amount of rents in Prussia, _Krug_ assumed to be in + 1804, 50,000,000 thalers, and _von Viebahn_, Zollverein + Statistik, II, 974, in 1862, 116,500,000 thalers. _Lavergne_ + assumed the rents of France after 1850 to be 1,600,000,000 + francs (Revue des deux Mondes, Mars, 1868); and _Dutot_, + Journal des Economistes, Juin, 1870, in 1870, at + 2,000,000,000. In Norway, the capitalized value of all the + land was assessed at 13,000,000,000 thalers in specie, in + 1665; in 1802, at 25,500,000; in 1839, at 64,000,000 + thalers. _Blom_, Statistik von Norwegen, I, 145. The older + such estimates are, the more unreliable they are.] + + [Footnote 156-5: In Paris, in 1834, the square _toise_ = 37 + sq. feet, in the Rue Richelieu and Rue St. Honoré, cost + 1,500 to 2,000 francs; in Rue neuve Vivienne, 2,500 to 3,500 + francs; in 1857, from 200 to 500 francs per square meter, = + 10 sq. feet, was very usual. (_Wolowski_.) Before the gates + of Paris, the rent amounted to as high as 250 francs per + _hectare_; at Fontainebleau, to only from 30 to 40. (Journal + des Economistes, Mars, 1856, 337.) In Market Square, + Philadelphia, land was worth from 3,000 to 4,000 francs per + sq. _toise_, and in Wall Street, New York, about 4,000 + francs. (_M. Chevalier_, Letters sur l'Amérique, 1836, I, + 355.) In St. Petersburg, after 6 years, the house frequently + falls to the owner of the area. (_Storch._ by _Rau_, I, 248 + f.) In Manchester, the Custom House area cost from 10 to 12 + pounds sterling per square yard; in the center of the city, + as high of £40, that is, nearly £200,000 per acre. In + Liverpool, in the neighborhood of the Exchange and of Town + Hall, the cost is from 30 to 40 pounds sterling. (Athenæum, + Dec. 4, 1852.) In London, a corner building on London + street, erected for £70,000, with only three front windows, + pays a rental of £22,000. (Allg. Zeitung, 1 Febr., 1866.) + The villa at Misenum--a very beautiful location--which the + mother of the Gracchi bought for about 5,000 thalers, came + into the possession of L. Lucullus, consul in the year B. C. + 74, for about 33 times as much. _Mommsen_, Römisch. Gesch., + II, 382.] + + +SECTION CLVII. + +HISTORY OF RENT.--IMPROVEMENTS IN THE ART OF AGRICULTURE. + +Improvements in the art of agriculture which are confined to individual +husbandmen leave rent unaffected. They do not perceptibly lower the +price of agricultural products, and only effect an increase of the +reward of enterprise which is entirely personal to the more skillful +producers and does not attach to the ground itself. + +But how is it when these improvements become general throughout the +country? If population and consumption remain unchanged, the supply of +agricultural products will exceed the demand. This would compel farmers, +if there be no avenue open to exports, to curtail their production. The +least fertile and most disadvantageously situated parcels of land will +be abandoned to a greater or less extent, and the least productive +capital devoted to agriculture, withdrawn. In this way, rent goes down +both relatively and absolutely, although the owners of land may be able +to partially cover their loss by the gain which results to them as +consumers and capitalists.[157-1] (§ 186). After a time, however, and as +a consequence of the diminished price of corn, population and +consumption will increase, and entail an extension of agriculture and a +consequent rise in rents.[157-2] If it, relatively speaking, reaches the +same point as before, it still is absolutely much greater than before. +Let us suppose that there are three classes of land of equal extent in a +country, which for an equal outlay of capital produce 100,000, 80,000 +and 70,000 bushels yearly. The rent of the land here would be equal to +at least 40,000 bushels. If the yield of production now doubles, while +the demand for agricultural products also doubles, the aggregate harvest +will be 200,000 + 160,000 + 140,000 bushels, and consequently rent will +have risen to at least 80,000 bushels. But this increase of rent has +injured no one. If the population increases in a less degree than the +productiveness of the land, the consumer may, to a certain extent, gain +largely, and the landowner better his condition. However, great +agricultural improvements spread so gradually over a country, that, as a +rule, the demand for agricultural products can keep pace with the +increased supply. But even in this case, that transitory absolute +decline of rent may be avoided; and it cannot be claimed universally, as +it is by many who are satisfied with mumbling Ricardo's words after him, +that an increase of rent is possible only by an enhancement of the price +of the products of the soil. Where the development of a people's economy +is a normal one, the rent of land is wont to increase gradually, but at +the same time to constitute a diminishing quota of the entire national +income.[157-3] + +Improvements in milling,[157-4] and in the instruments of +transportation[157-5] adapted to agricultural products, and the +introduction of cheaper[157-6] food, have the same effect as +improvements of agricultural production. All such steps in advance +render an increase in population, or in the nation's resources, possible +without any corresponding increase in the amount paid to landowners as +tribute money.[157-7] + +The foregoing facts furnish us the data necessary to decide what +influence permanent soil improvements have on the rent of land.[157-8] +The improved parcels of land now grow more fertile. Their rentability +also increases, while that of the others becomes not only relatively but +absolutely less, if the demand remains unaltered. The whole is as if +capital had been transformed into fertile land, and this added to the +improved land. + + [Footnote 157-1: Since it has seemed absurd to many writers + to say that an improvement in the art of agriculture may + cause rents to decline (compare _Malthus_, Principles, I, + ch. 3, 8), _John Stuart Mill_, Principles, IV, ch. 3, § 4, + prefers to put the question thus: whether the landowner is + not injured by the improvement of the estates of other + people, although his own is included in the improvement. + Compare _Davenant_, Works, I, 361. And so the long + agricultural crisis through which Germany passed at the + beginning of the third decade of this century was produced + mainly by the great impulse given to agriculture (_Thaer_, + _Schuerz_ etc.), while population did not keep pace with it. + Similarly, at the same time, in England, _McCulloch_, Stat., + I, 557 ff. Of course, the less fertile pieces of land + declined even relatively most in price. From 1654 to 1663, + Switzerland experienced a severe agricultural crisis, + attended with oppressive cheapness of corn, a great decline + in the price of land, innumerable cases of insolvency, + revolts of the peasantry, emigration, etc. (_Meyer von + Knonau_, Handbuch d. schweiz. Gesch., II, 43.) The Swiss + had, precisely during the Thirty Years' War which spared + them, so extensively developed their agricultural interests, + that now that other countries began to compete with them, + they could not find a market large enough for their + products. For English instances of similar "agricultural + distress" in the seventeenth and eighteenth centuries, see + _Child_, Discourse on Trade, 73, 124 seq.; _Temple_, + Observations upon the U. P., ch. 6; _Tooke_, History of + Prices, I, 23 seq., 42. Even where there have been no + technic improvements, a series of unusually good harvests + may have the same results, of which there are many instances + scattered through _Tooke's_ first volume. + + There is great importance attached in England to the + difference between those agricultural reforms which save + land and those which effect a saving in capital and labor. + The latter, it is said, decrease the money rent of the + landowner by depreciating the price of corn, but leave the + corn-rent unaltered. The former, on the other hand, decrease + the rent both in money and corn, but the money rent in a + higher degree. (_Ricardo_, Principles, ch. 2; _J. S. Mill_, + Principles, IV, ch. 3, 4.)] + + [Footnote 157-2: When the demand for products of the soil + which minister to luxury, such as fat meat, milk, + vegetables, is increasing, a greater cheapness of the + necessary wheat may raise rent, for the reason that lands + are now cultivated which were not formerly tillable. Thus, + there is now land in Lancashire which could not formerly be + planted with corn, because the laborers would have consumed + more than the harvest yielded. Since the large imports of + the means of subsistence from Ireland these lands have been + transformed into artificial meadows, gardens, etc. + (_Torrens_, The Budget, 180 ff.) Compare _Adam Smith_, I, + 257, ed. Bas. _Banfield_ would misuse these facts to + overturn the theory of Ricardo. (Organization of Industry, + 1848, 49 ff.)] + + [Footnote 157-3: The French testamentary tax was on an + amount, + + In 1835, of 552 mill. francs moveable property + and 984 " immoveable. + In 1853, of 820 " francs moveable property + and 1,176 " immoveable. + In 1860, of 1,179 " francs moveable property + and 1,545 " immoveable. + + so that the preponderance of immoveable property constituted + a converging series of 78, 43, and 31 per cent. (_Parieu._) + In North America, with its great unoccupied territory, the + reverse is the case. The census of 1850 gave a moveable + property of 36 per cent.; that of 1860 of only 30 per cent. + According to _Dubost_, the rent of land in Algeria was 80 + per cent., a gross product of only 10-15 francs per + _hectare_; in Corsica, 66 per cent., a gross yield of from + 30-35 per cent.; in the Department du Nord, 17.5-24 per + cent., a gross yield of from 500-740 francs. (Journal des + Economistes, Juin, 1870, 336 ff.)] + + [Footnote 157-4: The repeated sifting of the bran (_mouture + économique_) had great influence in this respect. In France, + in the sixteenth century, a _setier_ of wheat gave only 144 + pounds of bread. In 1767, according to _Malouin_, L'Art du + Bonlanger, it gave 192 pounds. It now gives from 223 to 240 + pounds. The gain in barley is still greater; the _setier_ + gives 115 pounds of flour, formerly only 58. (_Roquefort_, + Histoire de la Vie Privée des Français, I, 72 ff. + _Beckmann_, Beitr. zur Gesch. der Erfind., II, 54.)] + + [Footnote 157-5: In the beginning of the eighteenth century, + the counties in the neighborhood of London addressed a + petition to Parliament against the extension of the building + of turnpike roads which caused their rents to decline, from + the competition of distant districts. (_Adam Smith_, Wealth + of Nat., I, ch. 11, 1.) Compare _Sir J. Stewart_, + Principles, I, ch. 10. Improvements in transportation which + affect the longest and shortest roads to a market in an + absolutely equal degree, as, for instance, the bridging of a + river very near the market, leave rent unaffected. (_von + Mangoldt_, V. W. L., 480.)] + + [Footnote 157-6: _Malthus_, Principles, 231 ff. If the + laboring class were to become satisfied with living on + potatoes instead of meat and bread as hitherto, rents would + immediately and greatly fall, since the necessities of the + people might then be obtained from a much smaller + superficies. But after a time, the consequent increase in + population might lead to a much higher rent than before; + since a great deal of land too unfertile for the cultivation + of corn might be sown with potatoes, and thus the limits of + cultivation be reached much later.] + + [Footnote 157-7: In France, between 1797 and 1847, the + average price of wheat did not rise at all. _Hipp. Passy_ + mentions pieces of land which produced scarcely 12 + hectolitres of wheat, but which now produce 20--an increased + yield of 170 francs, attended by an increase in the cost of + only 75 francs. (Journal des Economistes, 15 Oct., 1848.) + Moreover, it may be that a not unimportant part of modern + rises in the price of corn may be accounted for by the + better quality of the corn caused by higher farming. (_Inama + Sternbeg_, Gesch. der Preise, 10 seq.) Such facts, readily + explainable by _Ricardo's_ theory, remove the objection of + _Carey_, _Banfield_ and others, that the condition of the + classes who own no land has, since the middle ages, + unquestionably improved. Political Economy would be simply a + theory of human degradation and impoverishment, if the law + of rent was not counteracted by opposing causes. (_Roesler_, + Grundsätze, 210.) According to _Berens_, Krit. + Dogmengeschichte, 213, the actual highness of rent is to be + accounted for by the antagonism between the "soil-law + (_Bodengesetz_) of the limited power of vegetation," and the + "progress of civilization" (but surely only to the extent + that the latter improves the art of agriculture). Thus, too, + _John Stuart Mill_, Principles, I, ch. 12; II, ch. 11, 15 + seq.; III, ch. 4 seq.; IV, ch. 2 ff.] + + [Footnote 157-8: Thus, for instance, drainage works which, + where properly directed, have paid an interest of from 25 to + 70 per cent. per annum in England and Belgium on the capital + invested.] + + +SECTION CLVIII. + +HISTORY OF RENT.--IN PERIODS OF DECLINE. + +If a nation's economy be declining, in consequence of war for instance, +the disastrous influence hereof on rent may be retarded by a still +greater fall in wages or in the profit on capital. But it can be hardly +retarded beyond a certain point.[158-1] As a rule, the decline of rents +begins to be felt by the least fertile and least advantageously situated +land.[158-2] [158-3] + + [Footnote 158-1: "The falling of rents an infallible sign of + the decay of wealth." (_Locke._) In England, in 1450, land + was bought at "14 years' purchase;" i. e., with a capital = + 14 times the yearly rent paid, in 1470, at only "10 years' + purchase." (_Eden_, State of the Poor, III, App., I, XXXV.) + This was, doubtless, a consequence of the civil war raging + in the meantime. The American war (1775-82) depressed the + price of land in England to "23-1/4 years' purchase," + whereas it had previously stood at 32. (_A. Young._) The + rent of land, in many places in France, declined from 10,000 + to 2,000 livres, on account of the many wars during Louis + XIV.'s reign. (_Madame de Sévigné's_ Lettres, 25 Dec, 1689.) + Even in 1677, it was only one-half of its former amount + (_King_, Life of Locke, I, 129.) The whole Bekes county + (_comitat_) in Hungary was sold for 150,000 florins under + Charles VI.; after the unfortunate war with France. + (_Mailath_, Oesterreich, Gesch., IV, 523.) Compare + _Cantillon_, Nature du Commerce, 248. In Cologne, a new + house was sold in the spring of 1848 for 1,000 thalers, the + site of which alone had cost 3,000 thalers; and there are + six building lots which formerly cost over 3,000 thalers, + now valued at only 100 thalers. (_von Reden_, Statist. + Zeitschr., 1848, 366.) On the other hand, Napoleon's war + very much enhanced English rents (_Porter_, Progress of the + Nation, II, 1, 150 ff.), because it affected England's + national husbandry principally by hindering the importation + of the means of subsistence. (_Passy_, Journal des + Economistes, X, 354.)] + + [Footnote 158-2: Thus the price of lands, in Mecklenburg, + between 1817 and 1827, fell 30 to 40 per cent. in the least + fertile quarters; in the better, from 15 to 20 per cent. + (_von Thünen_, in _Jacob_, Tracts relating to the Corn + Trade, 40, 187.) _Per contra_, see Hundeshagen Landwirthsch. + Gewerbelehre, 1839, 64 seq., and _Carey_, Principles, I, + 354.] + + [Footnote 158-3: The average rent in England was, in 1815, + 17s. 3d. In the counties, it was highest in Middlesex, 38s. + 9d.; in Rutland, 38s. 2d.; Leicester, 27s. 3d.; lowest in + Westmoreland, 9s. 1d. In Wales, the average was 7s. 10d.; + highest in Anglesea, 19s.; lowest in Merioneth, 4s. 8d. In + Scotland the average was 5s. 1-1/2d.; highest, Midlothian, + 24s. 6-1/2d.; lowest, Highland Caithness, Cromarthy, + Inverness and Rosse, from 1s. 1d. to 1s. 5d.; Orkneys, + 8-1/2d.; Sutherland, 6d.; Shetlands, 3d. In Ireland, the + average was 12s. 9d.; highest in Dublin, 20s. 1-1/2d.; + lowest, Donegal, 6s. (_McCulloch_, Stat., I, 544 ff.; + Yearbook of general Information, 1843, 193.) In France, + _Chaptal_, De l'Industrie Fr., 1819, I, 209 ff., estimates + the average yield per _hectare_ at 28 francs; in the + Department of the Seine, 216; Nord, 69.56; Lower Seine, + 67.85; in the upper Alps, 6.2; in the lower Alps, 5.99: in + the Landes, 6.25. While in the Landes, only 20 francs a + _hectare_ are frequently paid, the purchase price in the + neighboring Medoc is sometimes 25,000 francs. (Journal des + Economistes, Jan. 15, 1851.) In Belgium, the average price + of agricultural land is 52.46; in East Flanders, 53.19; in + Namur, 29.24. (_Heuschling_, Statistique, 77.)] + + +SECTION CLIX. + +HISTORY OF RENT.--RENT AND THE GENERAL GOOD. + +We so frequently hear rent called the result of the monopoly[159-1] of +land, and an undeserved tribute paid by the whole people to landowners, +that it is high time we should call attention to the common advantage it +is to all. There is evidently danger that, with the rapid growth of +population, the mass of mankind should yield to the temptation of +gradually confining themselves to the satisfaction of coarse, palpable +wants; that all refined leisure, which makes life and the troubles that +attend it worth enduring, and which is the indispensable foundation of +all permanent progress and all higher activity, should be gradually +surrendered. (See § 145.) Here rent constitutes a species of reserve +fund, which grows greater in proportion as these dangers impend by +reason of the decline of wages and of the profit of capital, or +interest.[159-2] Besides, precisely in times when rent is high, the sale +and divisibility of landed estates act as a beneficent reaction against +the monopoly of land, which is always akin to the condition of things +created by rent. + +But it is of immeasurably greater importance that high rents deter the +people from abusing the soil in an anti-economic way; that they compel +men to settle about the centers of commerce, to improve the means of +transportation, and under certain circumstances to engage in the work of +colonization; while, otherwise, idleness would soon reconcile itself to +the heaping together of large swarms of men.[159-3] The anticipation of +rent may render possible the construction of railroads, which enable the +land to yield that very anticipated rent. + + [Footnote 159-1: "Rent is a tax levied by the landowners as + monopolists." (_Hopkins_, Great Britain for the last forty + Years, 1834.) For a very remarkable armed and successful + resistance of farmers in the state of New York to the claims + for rent of the Rensselaer family, represented by the + government, see _Wappäus_ Nord Amerika, 734.] + + [Footnote 159-2: _Malthus_, Additions to the Essay on + Population, 1817, III, ch. 10; compare also _Verri_, + Meditazioni, XXIV, 3. The Physiocrates call the landowners + _classe disponible_, since, as they may live without labor, + they are best adapted to military service, the civil + service, etc., either in person or by defraying the expenses + of those engaged in them. (_Turgot_, Sur la Formation etc., + § 15; Questions sur la Chine, 5.)] + + [Footnote 159-3: Well discussed by _Schäffle_, Theorie, 65, + 72, 83. _Malthus_ considers the capital and labor expended + in agriculture more productive than any other, because they + produce not only the usual interest and wages, but also + rent. If, therefore, the manufacturing and commercial profit + of a country = 12 per cent., and the profit of capital + employed in agriculture = 10 per cent., a corn law which + compelled the capital engaged in manufactures and commerce + to be devoted to agriculture would be productive of + advantage to the national husbandry in general, if the + increase in rent should amount to about 3 per cent. (On the + Effects of the Corn Laws and of a Rise or Fall in the Price + of Corn on the Agriculture and the general Wealth of the + Country, 1815. The Grounds of an Opinion on the Policy of + Restricting the Importation of Foreign Corn, 1815.) Compare + _supra_, § 55, and the detailed rectification in _Roscher_, + Nationalökonomik des Ackerbaues, etc., § 159 ff.] + + + + +CHAPTER III. + +WAGES. + + +SECTION CLX. + +THE PRICE OF COMMON LABOR. + +Like the price of every commodity, the immediate wages of common labor +is determined by the relation of the demand and supply of labor. Other +circumstances being the same, every great plague[160-1] or +emigration[160-2] is wont, by decreasing the supply, to increase the +wage's of labor; and a plague, the wages of the lowest kind of labor +most.[160-3] And so, the increased demand, in harvest time, is wont to +increase wages; and even day board during harvest time is wont to be +better.[160-4] [160-5] In winter the diminished demand lowers wages +again.[160-6] Among the most effective tricks of socialistic sophistry +is, unfortunately, to caricature the correct principle: "labor is a +commodity," into this other: "the laborer is a commodity." + +Moreover, common labor has this peculiarity, that those who have it to +supply are generally much more numerous than those who want it; while +the reverse is the case with most other commodities. Another important +peculiarity of the "commodity" labor, is, that it can seldom be bought, +without at the same time reducing the person of the seller to a species +of dependence. Thus, for instance, the seller cannot be in a place +different from that in which his commodity is. Hence a change in the +person, etc. of the buyer very readily necessitates in the workman a +radical change of life, and that the levelling adjustment of local +excess and want is rendered so difficult in the case of this +commodity.[160-7] Hence, it is that, if in the long run the exchange of +labor against wages is to be an equitable one (§ 110), the master of +labor must, so to speak, incorporate part of his own personality into +it, have a heart for faithful workmen and thus attach them to +himself.[160-8] + + [Footnote 160-1: High rate of Italian wages after the plague + in 1348, but also many complaints of the indolence and + dissoluteness of workmen. (_M. Villani_, I, 2 ff., 57 seq. + _Sismondi_, Gesch. der ital. Republiken in Mittelalter, VI, + 39.) In England, the same plague increased the wages of + threshers from an average of 1.7 d. in 1348, to 3.3 d. in + 1349. Mowers received, during the 90 years previous, 1/12 of + a quarter of wheat per acre; in 1371-1390, from 1/7 to 1/6. + The price of most of their wants was then from 1/8 to 1/12 + as high as in _A. Young's_ time, and wages 1/4 as high. + (_Rogers_, I, 306, 271, 691.) The great earthquake in + Calabria, in 1783, produced similar effects. (_Galanti_, N. + Beschreiburg von Neapel, I, 450.) Compare _Jesaias_, 13, 12. + On the other hand, depopulation caused by unfortunate wars + is not very favorable to the rate of wages; instance, + Prussia in 1453 ff., after the Polish struggle, and Germany, + after the Thirty Years' War.] + + [Footnote 160-2: How much it contributes to raise wages that + workmen can, in a credible way, threaten to move to other + places, is illustrated by the early high wages and personal + freedom of sailors. Compare _Eden_, State of the Poor, I, + 36. In consequence of the recent great emigration from + Ireland, the weekly wages of farm hands in that country was + 57.4 per cent. higher than in 1843-4. In Connaught, where + the emigration was largest, it was 87 per cent. higher. + (London Statist. Journ., 1862, 454.)] + + [Footnote 160-3: Compare _Rogers_, I, 276, and _passim_.] + + [Footnote 160-4: And this in proportion as the uncertainty + of the weather causes haste. In England, the harvest doubles + wages. (_Eden._) In East Friesland, it raises it from 8-10 + ggr. to 2 thalers sometimes (_Steltzner_); in the steppes of + southern Russia, from 12-15, to frequently 40-50 _kopeks_. + This explains why the country people who come into the + weekly market are anxious, during harvest time, to get rid + of their stocks as fast as possible. According to the + Statist. Journal, 1862, 434, 448, the average wages in + harvest and other times, amounted to: + + _In harvest time._ _Other times._ + In Scotland for males, 18s. 7d. 12s. 11-1/2d. + " " females, 11s. 4d. 5s. 7d. + In Ireland " males, 12s. 9d. 6s. 11-1/2d. + " " females, 8s. 3d. 3s. 9d. + " " males, 15s. 4d. 7s. 1-1/4d. + " " females, 7s. 1-3/4d. 3s. 11d. + + The reason why the wages of females rises more in harvest + time than the wages of males may be the same that in many + places in Ireland has made emigration more largely increase + the wages of women. (l. c., 454.) Every excess of workmen + depresses, and every scarcity of workmen enhances the wages + of the lowest strata relatively most.] + + [Footnote 160-5: The wages of English sailors was usually + 40-50 shillings a month. During the last naval war, it rose + to from 100 to 120, on account of the great demand created + by the English fleet. (_McCulloch_, On Taxation, 40.)] + + [Footnote 160-6: The winter wages of German agricultural + laborers varies between 6.1 and 20 silver groschens; summer + wages between 7.9 and 27.5 silver groschens. _Emminghaus_, + Allg. Gewerbelehre, 81, therefore, advises that in winter + the meal time of workmen in the fields should be postponed + to the end of the day, and winter wages then made less low + than at present.] + + [Footnote 160-7: _W. Thornton_, On Labour, its wrongful + Claims and rightful Dues, its actual, Present and possible + Future, 1869, II, ch. 1. _Harrison_, Fortnightly Review, + III, 50.] + + [Footnote 160-8: Just as the husband binds himself in + marriage. While in concubinage there is apparent equality, + it costs the woman a much greater sacrifice than the man.] + + +SECTION CLXI. + +WAGES OF LABOR.--THE MINIMUM OF WAGES. + +Human labor cannot, any more than any other commodity, be supplied, in +the long run, at a price below the cost of production.[161-1] [161-2] The +cost of production here embraces not only the necessary or customary +means of subsistence of the workman himself, but also of his family; +that is, of the coming generation of workmen. The number of the latter +depends essentially on the demand for labor. If this demand be such that +it may be satisfied by an average of six children to a family, the rate +of wages must be such as to support the workman himself and to cover the +cost of bringing up six children.[161-3] Where it is customary for the +wife and child, as well as for the father, to work for wages, the father +does not need to earn the entire support of the family, and hence +individual wages may be smaller.[161-4] But if it were to fall below the +cost mentioned above, it would not be long before increased mortality +and emigration, and a diminution of marriages and births would produce a +diminution of the supply; the result of which would be, if the demand +remained the same, a renewed rise of wages. + +Conversely, it would be more difficult for the rate of wages to be +maintained long much above that same cost, in proportion as the +gratification of the sexual appetite was more generally considered the +highest pleasure of sense, and the love of parents for their children as +the most natural human duty. As Adam Smith says, where there is a great +demand for men, there will always be a large supply of them.[161-5] + + [Footnote 161-1: Compare _Engel's_ beautiful lecture on the + cost of labor to itself (_Selbstkosten_ = _self-cost_), + Berlin, 1866.] + + [Footnote 161-2: _Wolkoff_ zealously and rightly argues, + that the minimum wages is not the _taux naturel_ of wages. + (Lectures, 118 ff., 284.) _von Thünen_ also divides wages + into two component parts--that which the workman must lay + out in his support in order to continue able to work, and + that which he receives for his actual exertion. (Isolirter + Staat., II, 1, 92 seq.)] + + [Footnote 161-3: _Gasparin_ distinguishes five periods in + the career of a workman generally: a, he is supported by his + parents; b, he supports himself and is in a condition to + save something; c, he marries, and supports his children + with trouble; d, the children are able to work, and the + father lives more comfortably; e, his strength and resources + decline. (_Villermé_, Tableau de l'État physique et moral + des Ouvriers, 1840, II, 387.)] + + [Footnote 161-4: _Cantillon_, Nature du Commerce, etc., + 1755, is of opinion that a day laborer, to bring up two + children until they are grown, needs about as much as he + does for his own support; and that his wife may, as a rule, + support herself by her own work. (42 ff.) In Germany, it is + estimated that, in the case of day laborers, a woman can + earn only from 1/3 to 1/2 of what her husband does; mainly + because she is so frequently incapacitated for work by + pregnancy, nursing, etc. (_Rau_, Lehrbuch, I, § 190.) In + France, in 1832, a man working in the fields earned, on an + average, 1-1/4 francs a day, the wife 3/4 of a franc (200 + days to the year), the three children 38/100 francs (250 + days to the year), an aggregate of 650 francs per annum. + (_Morogues._) In England, the average amount earned in the + country was for males, per annum, £27 17s.; (munications + relative to the Support and Maintenance of the Poor, 1834, + p. LXXXVIII.) The wife of an English field hand, without + children, earns 1/3 more than one with children. In the case + of mothers, a difference of fewer or more children is + unnoticeable in the effects on wages. (London Statist. + Journal, 1838, 182.) In the spinning factories in + Manchester, in 1834, children between 9 and 10 years of age + were paid, weekly, from 2s. 9d. to 2s. 10d.; between 10 and + 12, from 3s. 6d. to 3s. 7d.; between 12 and 14, from 5s. 8d. + to 5s. 9d.; between 14 and 16, from 7s. 5d. to 7s. 6d. + (Report of the Poor Commissioners, 204.) Those manufactures + which require great physical strength, like carpet and + sail-cloth weaving, and those carried on in the open air and + in all kinds of weather, allow of no such family competition + and debasement of wages. (_Senior_ in the Report of the + parliamentary Committee on Hand Weavers, 1841.)] + + [Footnote 161-5: Similarly, _J. Möser_, Patriot. Phant., I, + 40. _Adam Smith_ infers from the following symptoms in a + country that wages are higher there than the indispensable + minimum, viz.: if wages in summer are higher than in winter, + since it is seldom that enough is saved in summer to satisfy + the more numerous wants of winter; if wages vary less from + year to year and more from place to place than the means of + subsistence, it they are high even where the means of + subsistence are cheapest. (Wealth of Nat., I, ch. 8.)] + + +SECTION CLXII. + +COST OF PRODUCTION OF LABOR. + +The idea conveyed by the expression necessaries of life is, within +certain limits, a relative one. In warm countries, a workman's family +needs less clothing, shelter, fuel and even food[162-1] than in cold +countries. This difference becomes still more striking when the warm +countries possess absolutely cheaper food as, for instance, rice, +Turkish wheat, bananas etc. Here, evidently, other circumstances being +the same, the rate of wages may be lower.[162-2] The cultivation of the +potato has operated in the same direction; since an acre of land planted +with potatoes yields, on an average, twice as much food as the same acre +planted with rye.[162-3] In France, two-thirds of the population lived +almost without animal food, on chestnuts, Indian corn, and potatoes +(_Dupin_), while in England, malt, hops, sugar, brandy, tea, coffee, +tobacco, soap, newspapers, etc. are described as "articles chiefly used +by the laboring classes." (_Carey_.) + +The standard of decency of the working class also has great influence +here. The use of blouses in Paris has nothing repulsive, nor that of +wooden shoes in many of the provinces of France, nor the absence of +shoes in lower Italy; while the English workman considers leather shoes +indispensable, as he did only a short time ago a cloth coat. Compare +_infra_, § 214.[162-4] + + [Footnote 162-1: Explained since _Liebig's_ time by the fact + that a part of food is consumed to preserve animal heat: + means of respiration in contradistinction to means of + nutrition. Recent research has shown that in cold weather + more urea and also more carbonic acid are given off; hence + the means of supplying this deficit should be greater in + cold weather than in warm. This more rapid transformation is + wont, when nutrition is sufficient, to be accompanied by + more energetic activity. (_Moleschott_, Physiologie der + Nahrungsmittel, 1850, 47, 50, 83.)] + + [Footnote 162-2: This is opposed in part by the fact that a + hot climate induces indolence, and that therefore he needs a + greater incentive to overcome his disposition to idleness. + Thus, in the cooler parts of Mexico, the rate of wages was + 26 sous a day, in the warmer, 32 sous. (_Humboldt_, N. + Espagne, III, 103.)] + + [Footnote 162-3: According to _Engel_, Jahrbuch für Sachsen, + I, 419, on acres similarly situated and under similar + conditions, the lowest yielded: + + _Watery contents _Watery contents + included._ excluded._ + + Of wheat, 1,881 lbs. 1,680 lbs. + " rye, 1,549 " 1,404 " + " pease, 1,217 " 1,095 " + " potatoes, 21,029 " 5,257 " + + The dry substance of these products yielded: + + _Azotized _Mineral + Substance._ _Fecula._ Matter._ + + Wheat, 282 lbs. 879 lbs. 49 lbs. + Rye, 243 " 661 " 34 lbs. + Pease, 309 " 431 " 33 lbs. + Potatoes, 525 " 3,785 " 178 lbs. + + In Saxony, from 1838 to 1852, the average prices stood as + follows: + + _Of Rye._ _Of Wheat._ _Of Potatoes._ + + One lb. of dry substance, 1 1.28 .95 + One lb. of protein substance, 1 1.11 1.78 + One lb. of fecula, 1 1.14 0.72 + + (loc. cit.) The high price of protein in wheat depends + probably on the more agreeable appearance and pleasanter + taste of wheat flour; the still higher price of potato + protein on the exceedingly easy mode of its preparation.] + + [Footnote 162-4: As regards food alone, the cost of the + support of a plowman on Count Podewil's estate, reduced by + _Rau_, Lehrbuch, § 191, to the unit of rye, is annually + 1,655 lbs. of rye. According to _Koppe_, it is 1,952 lbs.; + to _Block_, 2,300 lbs.; to _Kleemann_, from 1,888 to 2,552 + lbs.; to _Möllenger_, 2,171 lbs. The first three estimate + the cost in meat at 78, 160 and 60 pounds. Compare _Block_, + Beitr. Z. Landgüterschätzungskunde, 1840, 6. Exhaustive + estimates for all Prussian governmental districts in _von + Reden_, Preussische Erwerbs, und Verkehrsstatistik, 1853, I, + 177 ff., according to which the requirement, per family, + varies between 71 thalers in Gumbinnen and 204 thalers in + Coblenz, the average being 105 thalers. According to more + recent accounts, a laborer's family in East Prussia, gangmen + not included, get along very well on 177 thalers per annum. + (_von der Goltz_, Ländl. Arbeiterfrage, 1872, 9 ff.) In + Mecklenburg, omitting _Hofgänger_, on 183 thalers. (Ann. + des. patr. Vereins, 1865, No. 26.) + + The necessary outlay of the family of an agricultural day + laborer in England, in 1762, was estimated as follows: for + bread and flour, £6 10s. per annum; for vegetables and + fruit, £1 1-2/3s.; for fuel, light and soap, 2-9-5/6s.; for + milk, butter and cheese, £1 1-6-5/6s.; for meat, £1 6s.; for + house-rent, 1-6s.; for clothing, bedding, etc., 2-16-1/3s.; + for salt, beer and colonial wares, 1-16-5/6s.; for medicine, + expenses attending confinement of wife, etc., 1-6-1/2s. (_J. + Wade_, History of the middle and working Classes, 1853, + 545.) Concerning 1796, compare _Sir F. M. Eden_, State of + the Poor, I, 660, 1823; _Lowe_, on the present Condition of + England. Compare on the receipts and expenses of ten working + families in and about Mühlhausen, the tables in the Journal + des Economistes, October, 1861, 50; and further + _Ducpétiaux_, Budgets économiques des Classes ouvrières en + Belgique, 1855. According to _Playfair_ in _Knop_, + Agriculturchemie, I, 810, ff., different classes of grown + men need daily food. + + ==================+=========+========+========+========+======== + GRAMMES. | _1._ | _2._ | _3._ | _4._ | _5._ + ------------------+---------+--------+--------+--------+-------- + Plastic material, | 56.70 | 70.87 | 119.07 | 155.92 | 184.27 + Fat, | 14.70 | 28.35 | 51.03 | 70.87 | 70.87 + Starch, | 340.20 | 340.20 | 530.15 | 567.00 | 567.00 + ==================+=========+========+========+========+======== + + Here 1 stands for a convalescent who can bear only enough to + preserve life; 2, the condition of rest; 3, moderate motion + of from 5 to 6 English miles' walk daily; 4, severe labor = + a walk of 20 English miles daily; 5, very severe labor = to + a day's walk of 14 English miles, with a load weighing 60 + lbs. If the fat be given in terms of starch, the aggregate + need of both substances in the case of 1 is 6.6 times as + great as the need of plastic substance; in the case of 2, 3, + 4, and 5, respectively 5.7, 5.2, 4.8 and 4.0 times as much. + + A Dutch soldier doing garrison duty receives daily, in times + of peace, 0.333 kilogrammes of wheat flour, 0.125 of meat, + 0.850 of potatoes, 0.250 of vegetables, containing in the + aggregate 60 grammes of albumen. In forts, where the service + is more severe, he receives 0.50 kilogrammes of wheat flour, + 0.06 of rice or groats, with an aggregate amount of 116 + grammes of albumen. (_Mulder_, Die Ernährung in ihrem + Zusammenhange mit dem Volksgeiste, übersetzt _von + Molecshott_, 1847, 58 seq.) According to the researches of + Dr. Smith, in order to avoid the diseases caused by hunger, + a man needs, on an average, to take 4,300 grains of carbon + and 200 grains of nitrogen in his daily food; a woman 3,900 + grains of carbon and 180 grains of nitrogen. In 1862, the + workmen in the famishing cotton industries of Lancashire + were actually reduced to just about this minimum. (_Marx_, + Kapital, I, 642.) Death from starvation occurs in all + vertebrates when the loss of weight of the body, produced by + a want of food, amounts to between two-fifths and one-half + of what it was at the beginning of the experiment. + (_Chossat_, Recherches expérimentales sur l'Inanition, 184, + 3.)] + + +SECTION CLXIII. + +WAGES OF LABOR.--POWER OF THE WORKING CLASSES +OVER THE RATE OF WAGES. + +In this way, the working classes hold in their own hands one of the +principal elements which determine the rate of wages; and it is wrong to +speak of an "iron law" which, under the control of supply and demand, +always reduces the average wages down to the means of subsistence.[163-1] +For the moment, indeed, not only individual workmen, but the whole +working class is master of the supply of its commodity only to a very +small extent; since, as a rule, the care for existence compels it to +carry, and that without interruption, its whole labor-power to market. +But it is true that the future supply depends on its own will; since, +with an increase or decrease in the size of the families of workingmen, +that supply increases or diminishes. If, therefore, by a favorable +combination of circumstances, wages have risen above the height of +urgent necessity, there are two ways open to the working class to take +advantage of that condition of things. The workman either raises his +standard of living, which means not only that his necessary wants are +better satisfied, his decencies increased and refined, but also and +chiefly, that the intellectual want of a good prospect in the future, +which so particularly distinguishes the honorable artisan from the +proletarian is taken into consideration. And it is just here that a +permanent workingmen's union, which should govern the whole class, might +exert the greatest influence. Their improved economic state can be +maintained only on condition that the laboring class shall create +families no larger than they hope to be able to support consistently +with their new wants.[163-2] + +Or, the laboring class continues to live on as before, from hand to +mouth, and employ their increased resources to gratify their sexual +appetite earlier and longer than before, thus soon leading to an +increase of population. + +The English took the former course in the second quarter of the last +century, when English national economy received a powerful impetus, and +the large demand for labor rapidly enhanced the rate of wages. The +Scotch did in like manner a generation later. The second alternative was +taken by the Irish, when the simultaneous spread of the cultivation of +the potato[163-3] and the union with England, at the beginning of the +nineteenth century, gave an extraordinary extension to their resources +of food. While the population of Great Britain, between 1720 and 1821, +did little more than double, the population of Ireland increased from +2,000,000 to nearly 7,000,000 between 1731 and 1821. No wonder, +therefore, that the average wages of labor was twenty to twenty-four +pence per day in the former, and in the latter only five pence. +(_MCCulloch._)[163-4] + +Naturally enough, this difference of choice by the two peoples is to be +explained by the difference in their previous circumstances. The Irish +people, robbed by violence of their own higher classes, and, therefore, +and on this account precisely, almost entirely destitute of a middle +class, had lost the check on increase they possessed in the middle ages, +without having as yet assimilated to themselves the checks which come +with a higher stage of culture. Their political, ecclesiastical and +social oppression allowed them no hope of rising by temporary sacrifices +and energetic efforts permanently to a better condition as citizens or +gentlemen. Only the free man cares for the future. Hence, the sexual +thoughtlessness and blind good nature, the original tendencies of the +Irish people, necessarily remained without anything to counterbalance +them. It always supposes a high degree of intelligence and +self-restraint among the lower classes, when an increase in the +thing-value, or the real value of wages, does not produce an increase in +the number of workmen, but in their well-being. The individual is too +apt to think that it matters little to the whole community whether he +brings children into the world or not, a species of egotism which has +done most injury to the interests in common of mankind. As a rule, it +requires a great and palpable enhancement of wages to make workmen, as a +class, raise their standard of living.[163-5] [163-6] + + [Footnote 163-1: Compare _Lassalle_, Antwortschreiben an das + Central Comite zur Berufung eines allg. deutschen + Arbeitercongresses, 1863, 15; also _Turgot_, sur la + Formation etc., § 6. When _Lassalle_ says that when a varied + standard of living has become a national habit it ceases to + be felt as an improvement, he says what is in a certain + sense true. But is the man to be pitied who, absolutely + speaking, is getting on well enough; relatively speaking, + better off than before; but who is only not better off than + other men?] + + [Footnote 163-2: A case in Holstein, in which, in the first + half of the eighteenth century, the serfs of a hard master + conspired together not to marry, and thus soon forced him to + sell his estate. (_Büsch_, Darstellung der Handlung, V, 3, + II.)] + + [Footnote 163-3: On the otherwise remarkable economic + advance in Ireland about 1750, see _Orrey_, Letters + concerning the Life and Writings of Swift, 1751, 127; + _Anderson_, Origin of Commerce, a., 1751.] + + [Footnote 163-4: Compare especially _Malthus_, Principles, + ch. 4, sec. 2. How little Adam Smith dreamt of this may be + best seen in I, 115, Bas. Recently, the average wages per + week amounted in England to 22-1/2s., in Scotland to + 20-1/2s., in Ireland to 14-3/4s. (_Levi_, Wages and Earnings + of the working Classes, 1866.)] + + [Footnote 163-5: Thus the unheard of long series of + excellent harvests in England, between 1715 and 1765, + contributed very largely to this favorable transformation. + Day wages expressed in wheat, between 1660 and 1719, + amounted on an average to only about 2/3 of a peck; between + 1720 and 1750, to an entire peck. In the fifteenth century, + a similar series of good harvests contributed very much to + the flourishing condition of the "yeomanry." Under Henry + VII., workmen earned from two to three times as much corn as + they did a century later. And so in France, the great + Revolution at the end of the eighteenth century, by setting + free a vast quantity of hitherto bound-up force, enhanced + the productiveness of the entire economy of the nation, and + made the division of the national income more nearly equal. + There is an essential connection here between the rapidity + of the transition and the facts, that the habits of + consumption of the working class received a powerful + impulse, and that population increased much less rapidly + than the national income. Compare _John Stuart Mill_, + Principles, II, ch. 11, 2. In our own days again, English + workmen had a splendid opportunity to raise their standard + of life. Emigration to Australia, etc. preponderated over + the natural increase of population to such an extent that, + in 1852, for instance, only 217,000 more human beings were + born in England and Wales than died, and 368,000 emigrated. + At the same time, exports increased: in 1849, they were + £63,000,000; in 1850 £71,000,000; about the end of 1853, + something like £90,000,000. + + This golden opportunity was used by the English laboring + classes to both largely multiply marriages and to enhance + the rate of wages. The number of marriages contracted in + England yearly, from 1843 to 1847, was 136,200; from 1853 to + 1857, 159,000. The number of births annually, from 1843 to + 1847, was 544,800; from 1853 to 1857, 640,400. And wages, in + a number of industries, rose, between 1839 and 1859, from + about 18 to 24 per cent. (Quarterly Review, July, 1860, 86), + while the prices of most of the necessaries of life + declined. That, in the same time, the condition of English + laborers was elevated, both intellectually and morally, is + proved by many facts cited in _Jones' and Ludlow's_ work on + the social and political condition of the laboring classes + in England. In Germany, the recent establishment of peace on + a firm footing and the French war contributions have given + the country an impulse which might be taken advantage of by + the laboring class with the happiest results if they would + accustom themselves to more worthy wants and at the same + time preserve their accustomed industry.] + + [Footnote 163-6: The cheapening of the necessaries of life, + experience shows, is more likely to lead to an increase of + population; that of luxuries, to a raising of the standard + of life or of comfort.] + + +SECTION CLXIV. + +WAGES.--COST OF PRODUCTION OF LABOR. + +As the cheapening of the means of subsistence, when the circle of wants +of the laboring class has not correspondingly increased, leads to a +decline of wages, so an enhancement of their price must, when wages are +already so low as only to be able to satisfy indispensable wants, +produce an increase in the rate of wages. The transition in the former +case is as pleasing as in the latter it is replete with the saddest +crises.[164-1] The slower the rise in the price of the means of +subsistence is, the more it is to be feared that the working classes +will seek to meet it, not by emigration or by a diminished number of +marriages, but by decreasing the measure of their wants, the +introduction of a poorer quality of food, etc.[164-2] + +However, all this is true only of permanent changes in the average price +of the means of subsistence, such as are produced, for instance, by the +development of agriculture, by taxation etc. Transitory fluctuations, +such as result, for instance, from a single good or bad harvest, cannot +have this result.[164-3] It is, in poor countries at least, one of the +worst effects of a bad harvest, that it tends to positively lower the +rate of wages. A multitude of persons who would otherwise be able to +purchase much labor are now deterred from doing so, by the enhancement +of the price of food.[164-4] On the other hand, the supply increases: +many men who before would not work even for money, see themselves now +compelled to do so. Those who have been workmen hitherto are compelled +by want to make still greater exertions.[164-5] + +In very cheap years, all this is naturally reversed.[164-6] + + [Footnote 164-1: According to _McCulloch_, Edition of _Adam + Smith_, 472, the food of a day laborer's family constitutes + between 40 and 60 per cent. of their entire support. In the + case of Prussian field hands, it is generally 54 per cent. + greatest in the province of Saxony, viz., 58 per cent. and + lowest in Posen, 43 per cent. Compare _Rau_, Lehrbuch, I, § + 191. This may serve as a point of departure, from which to + measure the influence of a given enhancement of the price of + corn. In opposition to _Buchanan_ (Edition of _Adam Smith_, + 1817, 59), who had denied the influence of the price of the + means of subsistence on the rate of wages, see _Ricardo_, + Principles, ch. 16.] + + [Footnote 164-2: How easily English farmers have accustomed + themselves to the consequences of momentary calamities, may + be seen from _John Stuart Mill_, Principles, II, ch. 11, 5 + seq.; _Thornton_, Population and its Remedy, 1846, passim. + _Malthus_, Principles, sec. 8, shows in opposition to + _Ricardo_, Principles, ch. 8, that it is not all one to the + laboring classes whether their wages rise while the price of + the means of subsistence remains the same, or whether the + rate of wages remaining nominally the same, the commodities + to be purchased decline in price. If for instance, + potato-food, physiologically considered, was just as good as + flesh-food and wheat bread, yet an unmarried workman or a + father with a number of children below the average would be + able to save less from the former for the reason that it + possesses less value in exchange. (Edinburg Rev., XII, 341.) + Thus, e. g., in Ireland, between _A. Young_ and _Newenham_ + (1778-1808), the rate of wages increased more than the price + of potatoes, but all other means of subsistence in a still + greater ratio. (_Newenham_, A view of Ireland, 1808.) + Compare _Malthus_, On the Policy of Restricting the + Importation of foreign Corn, 1815, 24 ff.; contra. + _Torrens_, on the Corn trade, 1820, 374 ff.] + + [Footnote 164-3: Compare _Garve_ in _MacFarlan_, On + Pauperism, 1785, 77. Thus, in the United States, the same + quantities of coffee, leather, pork, rice, salt, sugar, + cheese, tobacco, wool, etc., could be earned in 1836 by 23.5 + days' labor; in 1840, by 20.75; in 1843, by 14.8; in 1864, + by 34.6. (_Walker_, Science of Wealth, 256.)] + + [Footnote 164-4: The person who formerly consumed perhaps + four suits of clothes in a year now limits himself to two, + and forces the tailor to dismiss one journeyman. In Bavaria, + the dear times, 1846-47, and probably also the disturbances + of 1848-49, caused officials, pensioners, annuitants and + professional men to discharge one-tenth of the female + domestics they employed in 1840. (_Hermann_, Staatsw. + Unters, II, Aufl., 467.)] + + [Footnote 164-5: The labor of digging during the time of + scarcity in England was paid one-third of the price usually + paid in good years. (_Porter_, Progress of the Nation, III, + 14, 454.) On the Slavic portions of Silesia, see + _Hildebrand's_ Jahrb., 1872, I, 292. According to _Rogers_, + I, 227 ff., 315 ff., and the table of prices in the appendix + to _Eden_, State of the Poor, the price in England of a + quarter of wheat and a day's wages was, in-- + + 1287, 2s. 10-1/4d. 3d. + 1315, 14s. 10-7/8d. 3d. + 1316, 15s. 11-7/8d. 3-7/8d. + 1392, 3s. 2-5/8d. 5d. + 1407, 3s. 4d. 3d. + 1439, 8s.-26s. 8d. 4-1/2d. + 1466, 5s. 8d. 4-6d. + 1505, 6s. 8d. 4d. + 1575, 20s. 8d. + 1590, 21s. 3-6d. + 1600, 10d.] + + [Footnote 164-6: _Petty_, Several Essays on Political + Arithmetic, 133 ff. _Adam Smith_, Wealth of Nat., I, ch. 8. + _Ricardo_, Principles, ch. 9. In Hesse, in consequence of a + series of many rich harvests from 1240 to 1247, no servants + could be had at all, so that the nobility and clergy were + obliged to till their own lands. (_Anton_, Gesch. der + deutschen Landwirthschaft, 111, 209.)] + + +SECTION CLXV. + +WAGES.--THE DEMAND FOR LABOR. + +The demand for labor, as for every other commodity, depends, on the one +hand, on the value in use of it, and on the other, on the purchaser's +capacity to pay for it (his solvability), These two elements determine +the maximum limit of wages, as the means of support considered +indispensable by the workmen determine the minimum. There are +circumstances conceivable under which the rise in wages might entirely +eat up rents; but there must always be a portion of the national income +reserved to reward capital (its profit). If wages were to absorb the +latter also, the mere owner of capital would cease to have any interest +in the progress of production. Capital would then be withdrawn from +employment and consumed.[165-1] Obviously, no man engaged in any +enterprise can give more as wages to his workmen than their work is +worth to him.[165-2] Hence the additional product in any branch of +industry, due to the labor of the workman last employed, has a +controlling influence on the rate of the wages which can be paid to his +fellow workmen. If the additional products of the workmen successively +last employed constitute a diverging series,[165-3] the last term in the +series is the natural expression of the unsurpassable maximum of wages; +if they constitute a converging series, men the employer can pay the +last workman higher wages than the additional product due to him; +provided, however, that the reduction which is to be expected in the +case of the workmen previously employed to the same level still leaves +him a sufficiently high rate of profit.[165-4] Hence the growing skill +of a workman, in and of itself, makes an increase of his wages +possible;[165-5] while, conversely, if he can be replaced by capital, +which always relatively decreases the value in use of his labor, there +is a consequent pressure on his wages. + + [Footnote 165-1: _Storch_, Handbuch, I, 205 seq.] + + [Footnote 165-2: Higher wages promised, for instance, as a + reward for saving a human life or some other very precious + thing in great danger of being destroyed. In the case of + material production, labor is worth to the party engaged in + the enterprise, at most, as much as the price of the product + after the remaining cost of reproducing it is deducted.] + + [Footnote 165-3: Possibly in consequence of a better + division of labor or of some other advance made in the + technic arts.] + + [Footnote 165-4: Thus, for instance, in harvesting potatoes, + if, after they have been ploughed up, only those nearest the + surface are collected, a laborer can gather over thirty + Prussian _scheffels_ in a day. But the fuller and completer + the gathering of potatoes desired is, the smaller will be + the product of one workman and of one day's labor. If, + therefore, a man wants to gather even the last bushel in a + potato field of 100 square rods, so much labor would be + required to accomplish it that the workman would not gather + enough to feed him during his work, to say nothing of + supplying his other wants. Supposing that 100 _scheffels_ of + potatoes had grown on 100 square rods, and that of these + were harvested-- + + _When the number of _Then the additional yield + men employed in obtained by the + gathering them was_ last workman employed is_ + + 4, 80 scheffels, + 5, 86.6 " 6.6 scheffels. + 6, 91 " 4.4 " + 7, 94 " 3 " + 8, 96 " 2 " + + (_von Thünen_, Der isolirte Staat, II, 174 ff.)] + + [Footnote 165-5: In Manchester, in 1828, the wages paid for + spinning one pound of cotton yarn, No. 200, was 4s. 1d.; in + 1831, only from 2s. 5d. to 2s. 8d. But, in the former year, + the spinner worked with only 312 spools; in the latter, with + 648; so that his wages increased in the ratio of 1274 to + 1566. (_Senior_, Outlines.)] + + +SECTION CLXVI. + +WAGES.--PRICE OF COMMON LABOR. + +In the case of a commodity as universally desired as human labor is, the +idea of the purchasers' capacity to pay (solvability) must be nearly +commensurate with the national income, or to speak more correctly, with +the world's income.[166-1] In regard to the different kinds of labor, +and especially to common labor, it is evident that the different kinds +of consumption require very different quantities of them. Here, +therefore, we depend on the direction which national consumption takes, +and this in turn is most intimately related to the distribution of the +national income.[166-2] If all workmen were employed in nothing but the +production of articles consumed by workmen, the rate of wages would be +determined almost exclusively by the ratio between the number of the +working population and the amount of the national income. But, if this +were the case, landowners and capitalists would be obliged to live just +as workmen do, and their highest luxury would have to consist in feeding +idlers. (§ 226). The effect must be much the same, when the wealthy are +exceedingly frugal and employ their savings as rapidly as possible in +the employment of common home labor; while, on the other hand, the +exportation of wheat, wood, and other articles, which the working +classes consume, in exchange for diamonds, lace, champagne, diminishes +the efficient demand for common labor in a country.[166-3] + +The assumption frequently made, that the demand for labor depends on the +size of the national capital, is far from exact.[166-4] Thus, for +instance, every transformation of circulating into fixed capital, +especially when the labor used in effecting this transformation is +ended, diminishes the demand for other labor. That principle is not +unconditionally true, even in the case of circulating capital. Thus, for +instance, the rate of wages is wont to be raised by the transfer of +capital from such businesses as require little labor into such as +require much.[166-5] Only that part of circulating capital can have any +weight here which is intended, directly or indirectly, for the purchase +of labor and for the purchase of each kind of labor in particular.[166-6] +The capital of the employer is, by no means, the real source[166-7] of the +wages of even the workmen employed by him, It is only the immediate +reservoir through which wages are paid out, until the purchasers of the +commodities produced by that labor make good the advance, and thereby +encourage the undertaker to purchase additional labor. Correlated to this +is the fact, that other circumstances being the same, those workmen usually +receive the highest wages who have to do most immediately with the +consumer.[166-8] + + [Footnote 166-1: _Senior_ denies this. Let us suppose that + agriculture in Ireland employs on every 200 acres ten + working men's families, one-half of whom are used to satisfy + the aggregate wants of the working people, and the other + half in the production of wheat to be exported to England. + If now the English market requires meat and wool instead of + wheat, the Irish landowner will, perhaps, find it + advantageous, of the ten laboring families, to employ one in + stock raising, a second in obtaining food, etc. to support + the laborers, and to discharge all the others. If, then, the + increased net product is employed in the purchase of other + Irish labor, all goes on well enough; but if, instead of + this, the landowners should import articles of English + manufacture, the demand for labor in Ireland would doubtless + decrease, notwithstanding the increase of its income. + (Outlines, I, 154.) _Senior_ here overlooks two things: + first, that in the supposed case, if eight-ninths of Irish + laborers are thrown out of employment, spite of the + increased income of the owners of landed estates, Ireland's + national income is on the whole probably diminished (§ 146), + and secondly, that, possibly, the demand for labor in + England experiences a greater increase than the decrease in + Ireland; since, with the addition to the world-income, there + would be an increase in the world-demand for labor.] + + [Footnote 166-2: Compare _Hermann_, Staatswirthsch. + Untersuch., 280 ff. Earlier yet, _Malthus_, Principle of + Population, II, ch. 13.] + + [Footnote 166-3: Thus, _Thomas More_, Utopia, 96, 197, + thinks that if every one was industrious and engaged in only + really useful business, no one would need to fatigue himself + very much; while, as it is now, the few real laborers there + are wear themselves out in the service of the vanity of the + rich, are poorly fed and worked exceedingly hard.] + + [Footnote 166-4: _McCulloch_, Principles, 104, seq. 2d ed.] + + [Footnote 166-5: Thus, in France, during the continental + blockade, distant ocean commerce declined, and manufactures + flourished instead. (_Lotz_, Revision, III, 134.)] + + [Footnote 166-6: Thus, _Adam Smith_ divides "the funds + destined for the payment of wages" into two kinds: the + excess of employers' income over their own maintenance, and + the excess of their capital over the demands of their own + use of it. (Wealth of Nat, I, ch. 8.) _Senior_ considers it + a self-evident principle, that the rate of wages depends on + the size of the "fund for the maintenance of laborers + compared with the number of laborers to be maintained." + (Three Lectures on the Rate of Wages, 1830, Outlines, 153, + ff.) But what determines the quota of the aggregate national + wealth and national income that is to constitute this fund? + _Carey_, Rate of Wages, 1835, has a very exhaustive + commentary on _Senior_.] + + [Footnote 166-7: _Watts_, Statist. Journal, 1861, 500, + asserts altogether too generally that an "increase of profit + increases the future wages-fund, and consequently the demand + for laborers;" and that therefore every new machine useful + in manufactures must also be of use to the laboring class. + The employer engaged in any enterprise who has grown richer, + _can_ pay more wages, but whether he _will_ do it depends on + other causes, and even his ability to do it, in the long + run, on his customers. When _John Stuart Mill_, Principles, + I, ch. 5, 9, says that only the capital which comes into the + hands of labor before the completion of their work + contributes to their support, it is as if he were to explain + the phenomena of prices by demand and supply, and nothing + else, denying the influence of the cost of production, of + value in use, and of the deeper determining causes upon + them. (_Supra_, § 107, note 1.) Compare _Roesler_, Z. Kritik + der Lehre vom Arbeitslohn, 1861, 104 ff. In England, the + superstition which to a great extent attached to the idea + "wages-fund," was first questioned by _F. Longe_, Refutation + of the Wages-Fund Theory of modern Political Economy, 1866. + See also _Thornton_, On Labour, II, ch. 1. Even _John Stuart + Mill_ dropped his earlier erroneous views on this subject. + (Fortnightly Review, May and June, 1869.) Not, however, + without exaggeration, as is proved by his well-known saying, + that laborers needed capital but no capitalists. Still, even + here, he tenaciously holds that a rise in wages which + increases the price of some classes of commodities, must + decrease the aggregate demand for commodities. But better + paid workmen may now increase their demand for commodities + to the same extent that the purchasers of labor who do not + gain as much as before, or the consumers of the goods whose + price has been enhanced diminish theirs. (_Brentano_, in + Hildebrand's Jahrbb., 1871, 374.) Only, this increase need + not affect the very commodities influenced by the decrease.] + + [Footnote 166-8: Thus, the person who builds his own house + is wont to pay his workmen better than a contractor or + builder by profession; and the maker of the entire + manufactured article, as a rule, suffers less frequently + than the maker of only half of it. (_Hermann_, Staatsw. + Unters., II, Aufl., 471.)] + + +SECTION CLXVII. + +DIFFERENCE OF WAGES IN DIFFERENT BRANCHES OF LABOR. + +All the causes which make wages higher in some branches of labor; than +in others, may be divided into three great categories.[167-1] + +A. Rare personal acquirements. The supply of labor requiring rare +personal ability will always be limited.[167-2] Such labor must, +naturally, have great value in use, when a small supply of it is met by +a great demand.[167-3] It sometimes happens that a species of labor can +be utilized only by a small circle of persons who demand it. But the +wages for it is raised very high by the great solvability of those who +do demand it. How frequently it happens, for instance, that a minister +is paid a very high salary for the ability he possesses of making +complicated and dry affairs of state attractive to the personal taste of +his sovereign.[167-4] Here, particularly, the confidence which the +workman inspires by his skill and fidelity enters as an element. Without +this confidence, there are many kinds of business which would be crushed +out entirely by the control it would be necessary to subject them to, +and others would not be possible at all.[167-5] When, for instance, in a +large manufacturing establishment, understrappers, workmen, foremen, +subordinate superintendents, directors, etc., draw different salaries, +their pay, if equitably graduated, should be in harmony with the +principles laid down in § 148, The head of a manufacturing +establishment, for instance, who has organized a more perfect division +and coöperation of labor, himself, and by means of which ten men are +enabled to perform the work before performed by twenty, may equitably +retain, as the reward of his organizing power, a considerable amount of +what was previously paid out in wages. Louis Blanc's proposition, that +all should receive equal salaries is, as Bastiat remarks, equivalent to +the assertion that a yard of cloth manufactured by a lazy or unskillful +workman is worth as much as two yards manufactured by an industrious and +skillful one.[167-6] + +Such qualified labor, as is treated of here, may be most accurately +estimated, the quality of which supposes a certain cost of acquisition. +This cost may be considered as the outlay of so much capital, which, +with interest,[167-7] should come back to the workman in his wages. +Otherwise, others would be deterred from entering the same business by +the example of his loss. Here, especially, it is necessary to take into +account the long period of apprenticeship or tuition, and the large fees +paid for the same; and this, whether they depend on the natural +difficulties in the way of acquirement or on artificial obstacles +opposed to freedom of competition.[167-8] The influence of these +circumstances is particularly great in those kinds of labor which +require a "liberal" education.[167-9] Among the costs of production +proper, peculiar to this labor-force, must be included, also, the +necessary support of the workman, during the interval between the +completion of his studies and the beginning of his full reward.[167-10] + +When a species of work requires special current expenses to be made in +order to its proper performance, these also should of course be made +good to the workman in his wages. Most intellectual labor, for instance, +requires quiet surroundings. The brain-worker cannot share his study +with his family, and, therefore should receive wages or remuneration +large enough in amount to enable him to arrange his dwelling +accordingly. A similar circumstance, only in a much higher degree, +enhances the price paid for diplomatic service. + + [Footnote 167-1: Excellent germs thereof in _Adam Smith_, + Wealth of Nat., I, ch. 10, 1. Earlier yet, in _Galiani_, + Della Moneta, I, 2. _Cantillon_, Nature du Commerce, 24 ff.] + + [Footnote 167-2: Even in the case of mere manual labor, for + instance, a skillful packer of goods is paid higher wages + than a mere day laborer; a sower better than a plowman or a + digger; a vintner, in general, better than an agricultural + laborer: in the Palatinate of the Rhine, in the ratio of + 36:24. Thus, almost anyone can paint a door or a house, + while an artist possesses a species of natural monopoly.] + + [Footnote 167-3: Thus, the Greek juggler, who understood how + to throw lintels from a certain distance through the eye of + a needle, was very appropriately rewarded by his king with a + bushel of lintels. On the other hand, the high fee paid for + an operation for cataract depends both on the great + importance of the eye which cannot be replaced in any way, + and on the rarity of the courage among doctors to pierce the + eye of a living man. Very remarkable achievements, which it + requires great education to understand, are generally paid + for at a very low rate. (_Stein_, Lehrbuch, 123.)] + + [Footnote 167-4: I need only recall _Richelieu_ and + _Mazarin_, the last of whom left an estate worth 200,000,000 + livres. (_Voltaire_, Siècle de Louis XIV., ch. 6.) In + Parisian industries, few workmen are as well paid as those + who are skilled in rapidly effecting changes of form. The + so-called _premières de modes_ frequently received more than + 1,800 francs a year, while the _apprêteuses_ received only + from 15 to 20 sous a day. (Revue des deux Mondes, Sept. 15, + 1850.) There are women there paid very well for making + pin-cushions, pen-wipers, etc., each one of a different + form; but as soon as any one form ceases to be a novelty, + the wages paid for making it sinks to a minimum. (_M. Mohl_, + Gewerbswissenschaftliche Reise durch Frankreich, 87.)] + + [Footnote 167-5: Jewelers, lawyers, statesmen, generals. + _Senior_ says that of the income of £4,000 which a lawyer or + a doctor draws, only £40 are wages for his labor; £3,000 are + a rent paid for the possession of extraordinary talent, or + for his good luck, and £960 as the interest on his + intellectual capital, which is also the chief element of + wealth. (Outline, 134.)] + + [Footnote 167-6: On the sad experience of the tailors' + association founded by Louis Blanc himself, at Clichy, and + in consequence of which they soon gave up paying equal wages + and returned to piece wages, see Journal des Economistes, + Mars, 1850, 349.] + + [Footnote 167-7: As the interest on land improvements + assumes the character of rent, so also does that of the + education of labor the character of wages. The rate of + interest usual in a country, and the average duration of the + life of the workman affect the capital thus invested as a + species of annuity.] + + [Footnote 167-8: Wages in the country are generally lower + than in the cities. In the electorate of Hesse, for + instance, on the supposition of steady employment, males, in + the country, received 69 thalers, 23 silver groschens a + year; females, 55 thalers, 9 silver groschens; in the + cities, on the other hand, males, 88 thalers, 23 silver + groschens, and females 61 thalers, 28 silver groschens. + (_Hildebrand_, statistische Mittheilungen, 101, 137.) And + so, according to _Colquhoun_, Treatise on Indigence, 1806, + the English agricultural laborers received, on an average, + £31 per annum, and manufacturing workmen, £55. The reason of + this is, besides the greater facility of learning how to + perform agricultural labor, the greater dearness of living + in cities, and in England also, because industry has + developed much more rapidly than agriculture.] + + [Footnote 167-9: The cost of bringing up a common laborer, + in England, according to _Senior_, is £40; a gentleman, + £2,040. (Outlines, 205.) The more expensive an education + which one acquires for its own sake and without any special + object beyond this in view, is, the less can the capital + laid out in it affect wages. (_von Mangoldt_, V. W. L., + 382.)] + + [Footnote 167-10: If the salaries of clergymen are, on an + average, lower than the income of a lawyer or a doctor, it + is partly because theological candidates are provided for + much earlier, and partly because of the lesser cost + attending the study of theology. Thus, at the end of the + eighteenth century, there were 350 students at the + University of Tubingen who are maintained gratis, on + foundation-money, and who had previously attended monastery + schools, free of charge. (_Nicolai_, Reisebescreibungen, XI, + 73.) The remarkable contrast between the high wages of the + Athenian sophists and the low wages of modern abbés, Adam + Smith accounts for principally by the many scholarships of + modern times. In Saxony, in 1850 etc., the outlay by the + state and of foundation-funds for the education of a student + amounted to an average of nearly 140 thalers. (_Engel._)] + + +SECTION CLXVIII. + +DIFFERENCE OF WAGES IN DIFFERENT BRANCHES OF LABOR. (CONTINUED.) + +B. The great economic risk of the work. When a branch of labor necessary +to a country is, notwithstanding, attended by many chances of failure to +the individual who devotes himself to it, a sufficient supply of the +labor can be relied on only in case that the danger attending it is +compensated for by a corresponding premium paid to success.[168-1] The +choice of a profession or avocation, Adam Smith has compared to a +lottery, in which the fortunate winners gain only what the unfortunate +have lost. The greater the prizes, the greater also the number of +blanks.[168-2] However, the surplus wages in risky kinds of labor are +not sufficient to constitute a full insurance premium. This is connected +with the vanity of men who, as a rule, over-estimate not only their +talent but their good fortune,[168-3] and especially in youth, when they +decide on the choice of a profession, etc. According to this, wages must +be specially low where even complete failure does not endanger the +living or the social position of the workman. Partly on this account are +the industries carried on by women so poorly remunerated;[168-4] as also +such work as is done by a large class of people to fill up their leisure +hours.[168-5] + +The prospect of frequent interruptions in any kind of labor must have +the same effect on the wages paid for it as its economic or business +risk.[168-6] Thus, for instance, a mason or roofer must earn at least +enough, during the days he can work, to enable him to live during the +time he is prevented working by bad weather. Hence, the highness of his +wages may, in some respects, be called an apparent one.[168-7] Wages +paid by the week more generally tend to equality than wages paid by the +day, and more so yet wages paid by the year, for then winter and summer +compensate the one for the other. When the workman must be ever ready to +perform his task, account must be taken not only of the number of hours +he is engaged, but also of fractions of his waiting hours, which must be +paid for likewise.[168-8] Two half days cost almost everywhere more than +one whole one. + +The number of holidays plays a very important part here. In Protestant +countries, the workman must, in about three hundred work days, earn +enough to live on for about sixty holidays as well. In Catholic +countries, before the time of Clement XIV., he had to earn enough in +addition to support himself for about one hundred and fifty holidays, on +ninety of which he performed no work whatever.[168-9] So large a number +of holidays produces a higher rate of wages or necessitates a low +standard of life among the working classes.[168-10] Something similar is +true of evening leisure and rest;[168-11] _i. e._, of the time when +labor ceases. + + [Footnote 168-1: The greater the preparatory cost of labor + is, the more difficult it is for workmen to go from one kind + of labor to another; but, at the same time, the more certain + it is that, without the inducement of a premium paid, there + will be no after increase or recruiting of labor-force.] + + [Footnote 168-2: Thus, for instance, in the country, where + doctors generally get along well enough, the most skillful + never obtains any very distinguished position. But, in large + cities, on the other hand, there is the greatest difference + between first-class physicians and obscure practitioners. + Great generals usually obtain a larger income and greater + influence than great admirals; and so it is that prizes in + the military lottery are greater, and there are therefore + more blanks than in the naval lottery. The common soldier is + almost everywhere worse paid than the common sailor. (_Adam + Smith._) To some extent, this depends on the prison-like + life of the seaman in times of service, and in the absence + of an attractive uniform. As to the extent that the lottery + comparison is defective, see _Macleod_, Elements, 215.] + + [Footnote 168-3: Who, otherwise, would have anything to do + with a lottery in which the mass of players were certain to + lose, and the keeper of it to gain? And this accounts for + the fact well known to all financiers, that the amount of + the budget remaining the same, a greater eagerness to enter + the military service of the country is inspired by endowing + the higher positions munificently--provided they are + attainable by all--and paying the lower ones in a very + niggardly way, than when the pay is made more uniform. + Something similar is to be observed in the ecclesiastical + service of the Roman and Protestant churches, inasmuch as + the former, considered from an economic point of view, + offers more magnificent prizes, but also more blanks, while + the latter divides its emoluments more equally.] + + [Footnote 168-4: As most seamstresses are, when the worst + comes to the worst, supported by their parents, connections + by marriage, brothers, etc., the condition of those who have + to live by their needle must be a pretty hard one. Who is + not familiar with the refrain to _Hood's_ celebrated song of + the shirt: "Oh God, that bread should be so dear, and flesh + and blood so cheap!" There is a "distressed needlewoman's + society" in London. They undoubtedly suffer from an + overcrowding of their avocation, yet their chief desire is + that the competition of all who do not live exclusively by + the labor of their hands should be prohibited; for instance, + that of seamstresses who are paid for their work outside of + factories. (Edinb. Rev., 1851, 24.) In Paris, in 1845, the + yearly earnings of women workers averaged 375 francs, their + yearly wants 500 francs. (Journal des Economistes, X, 250.) + This does not apply to female servants whose wages, + especially in highly cultured localities as the vicinity of + large cities (Holstein, Brandenburg), is very high. In + England, the wages of female domestics is frequently higher + than in the United States; and hence nearly two-thirds of + all English girls between fifteen and twenty-five years of + age serve as maids. _Browning_, Political and Domestic + Condition of Great Britain, 413; _Carey_, Rate of Wages, 92. + A remarkable indication that women thrive only in the + family. (Compare § 250.)] + + [Footnote 168-5: Thus, the darning of stockings in the sandy + parts of North Germany, in the Highlands of Scotland, in the + Faroe Islands, and formerly, even in the ante-rooms of the + Russian nobility. (_Schlözer_, Anfangsgründe der + Staatswirthsch, I, 126.) Flax spinning and linen weaving in + Westphalia and Ireland, and wool weaving in the East Indies. + Manufacturing industries must be in a very highly developed + condition, and machinery carried to a high degree of + perfection to compete in price with these accessory + industries. Cheapness of many products manufactured in + convents and monasteries.] + + [Footnote 168-6: Among these interruptions, may also be + reckoned the prospect the laborer has of being early + incapacitated for work, and thus of seeing himself cut off + from every other source of support. This is one of the + principal reasons why opera singers are generally better + paid than actors.] + + [Footnote 168-7: In Leipzig, in 1863, mason and carpenter + journeymen earned during the summer, from twenty silver + groschens to one thaler, ordinary garden workmen, 20 silver + groschens, while shoemaker journeymen did not make much more + than 3-1/2 thalers a week, and manual laborers, only from 10 + to 15 silver groschens a day. The masons of Paris have the + reputation of being the best patrons of the savings banks, + and, on that account, are more exposed to being attacked by + thieves than any other class. (_Frégier_, Des Classes + dangereuses, II, 3, 1.) High wages paid for threshing in + East Prussia, because, the workman during the winter can be + employed in very few different kinds of labor, and therefore + must earn his entire support by threshing. In Paris, of + 101,000 persons engaged in industry in 1860, 6,400 had to + calculate on no interruption of their work, the remaining + number, however, lost with a certain degree of regularity, + from 2 to 4 months a year. (Revue des deux Mondes, 15 Fév., + 1865.) If the interruption can be so accurately estimated in + advance that the workman may engage in some business for + himself during the interval, as for instance when the + workmen in the Bavarian breweries work during the summer as + masons, its influence on wages decreases. (_Storch_, + Handbuch, I, 192.) As to how, in Switzerland, since 1850, + the guaranty of full employment to masons in winter is + considered as an addition to the wages of summer, see + _Böhmert_, Arbeiterverhältnisse, I, 141.] + + [Footnote 168-8: _Commissionaires_, hack-drivers, + _Extraposthalter_ in Germany, porters, nurses, guides, + servants in watering places and countries visited by + tourists. A London porter gets at least a shilling an hour. + If employed by the day, he of course gets smaller wages. + Image venders, who travel from house to house, sell their + wares much lower at their own houses. The person who calls + them in from the street is obliged to pay them not only for + this one journey, but for several others which yielded them + no profit.] + + [Footnote 168-9: If we call the minimum daily need or the + absolute requirement of the workman = m, the rate of daily + wages in the former case must amount to at least m + m/6; in + the latter, on the other hand, to m + m/4. A Bavarian + holiday estimated at a _minus_ of much more than 1,000,000 + florins. (_Hermann_, II, Anfl., 192.)] + + [Footnote 168-10: _Von Sonnenfels_, Polit. Abhandlungen, + 1777, 332 ff.] + + [Footnote 168-11: In a part of Lower Bavaria, in which there + were 204 holidays in a year, among them the anniversaries of + the consecration of 40 churches in the country about, and a + feast day following each such anniversary, as well as + target-shooting festivals, the celebration begins at 4 + o'clock P. M. of the preceding day. (_Rau_, Lehrbuch, I, § + 193.)] + + +SECTION CLXIX. + +THE DISAGREEABLENESS OF CERTAIN CLASSES OF LABOR.--ITS EFFECT ON WAGES. + +C. Lastly, the personal disagreeableness of the work, which must be +compensated for by higher wages. The uncleanness of a coal-worker's +task, that of the chimney-sweep, and the repulsive labor of the butcher, +demand high compensation, while other branches of business, themselves +productive of pleasure, and therefore engaged in by many for pleasure's +sake only, yield relatively little to those who engage in them as a +regular industry.[169-1] + +To this category belong the kinds of labor which require extraordinary +effort,[169-2] or which put life or health in unusual jeopardy.[169-3] +But, indeed, when the danger attending any kind of work is made glorious +by the romantic light of honor, or by still higher motives, it ceases to +have any influence on wages.[169-4] On the other hand, the +disreputableness of a business in itself raises wages;[169-5] whereas, +scholars, poets, etc., leaving the charm inherent in their occupations +out of account, are for the most part remunerated only by the honor paid +them, and, not unfrequently, only by fame after they have gone +hence.[169-6] And yet their talents are so rare, the preparation so +laborious, the economic risk so great! Nor is there for the really +creative workman any such thing as evening rest. (_Riehl._) Common +intellectual labor is worse paid in our days than it was, comparatively +speaking, a generation ago; because the increased average education +makes it less burthensome to most people, and even seem positively +agreeable to many. It would, indeed, be a dangerous retrogressive step +towards barbarism, if it should come to such a pass, that labor +preponderantly intellectual should be permanently more poorly +remunerated than mere muscular labor.[169-7] [169-8] + + [Footnote 169-1: Thus the chase, fishing in rivers (compare + _Theocrit._, Idyll., 21), gardening, fine female manual + labor, and literature.] + + [Footnote 169-2: The high wages paid to mowers and threshers + may be accounted for on this ground (§ 160). In countries + that have a strong heavy soil, wages are frequently 20 per + cent. higher than under circumstances otherwise similar + where it is sandy or light. In Mexico, a digger gets about + twice the wages of an agricultural laborer. (_Senior_, On + the Value of Money, 56.)] + + [Footnote 169-3: Almost every trade predisposes to some + special disease. Compare _Halfort_, Enstehung, Verlauf und + Behandlung der Krankheiten der Künstler und + Gewerbetreibenden, 1845. _Livy_, Traité d'Hygiène publique + et privée, 1850, II, 755. It has been noticed, in Sheffield, + that thoughtless steel polishers look unfavorably on certain + new inventions intended to protect workmen against inhaling + small particles of stone and iron dust. They dread that if + these inventions come into general use, their wages would be + lowered in consequence; and prefer a short and merry life to + one longer and more quiet. + + In places in which nearly all kinds of work are dangerous, + the danger cannot of course relatively raise the wages of + anyone. Thus, in the Thuringian forest, the wages of the + haulers of wood are very low. (_Lotz_, Revision, III, 151.)] + + [Footnote 169-4: Missionaries! Besides the extremely small + wages paid to common soldiers (in the German infantry only + 36.5 thalers cash per annum, to which in Leipzig, for + instance, rations, etc., add about 34 thalers more) is an + outlay made by the government principally to effect a levy + of the tax of the compulsory labor that lies in + conscription. (_Knies._) In the volunteer system, the + difference between officers and men is wont to be much + smaller. Thus, _Gustav Wasa_ paid his German mercenaries as + follows: 6 marks a month to captains, five to lieutenants + and 4 to common soldiers. (_Geijer_, Schwed. Gesch., II, 125 + seq.) Similarly in the case of the Greek hired troops. + (_Böckh_, Staatshaushalt der Athener, I, 165 ff.) As to how + little at the outbreak of a war, soldier earnest money is + increased, and positions as officers most sought after, see + _Hermann_, II, Aufl., 479.] + + [Footnote 169-5: Thus, for instance, the skinning or flaying + of dead animals is comparatively well paid, to which the + rarity of the application of the work of executioners + contributes. (_J. Moser_, Patr. Ph., I, No. 34.) The high + wages of actors, singers, dancers, and especially of the + female members of the stage, depends principally on the + contempt with which they were formerly looked upon; + excommunicated by the Catholic church, and a scarcely milder + sentence passed upon them by the Protestant, until about the + middle of the eighteenth century. (_Schleiermacher_, + Christliche Sitte, 681.) Compare even _J. J. Rousseau_, + Lettre sur les Spectacles à Mr. d'Alembert sur son Article + Genève.] + + [Footnote 169-6: _Schiller's_ "Theilung der Erde." _Blanqui_ + says of the learned: "They are most frequently satisfied + with a citizen-crown, and think themselves remunerated when + justice has been done to their genius. Their magnanimity + impels them, to their own injury, to diffuse their knowledge + as rapidly as possible. Thus they are like the light of day + which no one pays for, but which all enjoy, without thanking + the giver as they ought." The reward of intellectual labor + is called an _honorarium_. (_Riehl_, Die Deutsche Arbeit, + 1861, 232.) According to _J. B. Say_, Traité, II, ch. 7, the + poor wages of savants depends on the fact that they take to + market, and all at once, a great quantity of what they + produce, which cannot even be used up.] + + [Footnote 169-7: In Switzerland, journeymen are often better + paid than the clerks kept by the greater tradesmen. + (_Böhmert_, Arbeiterverhältnisse, II, 168.) In England, + also, since 1850, the wages for "unskilled labor" has risen, + relatively, most. (_Tooke_, Hist. of Prices, VI, 177.) It + would be a frightful peril to our whole civilization if + school teachers and subordinate officials should be turned + into enemies of the entire existing state of things by + want.] + + [Footnote 169-8: The high wages paid to engineers on + railroads is accounted for by the wear, physical and mental, + their employment entails, and also by their unavoidable + expenses away from home; further, by the importance of the + interests confided to their trust. On the Leipzig-Dresden + Railway, locomotive engineers, for the most part previously + journeymen blacksmiths, earned 900 thalers a year. + Similarly, in the case of pilots. The high wages paid on + board ships engaged in the slave-trade arose from the + unhealthiness of the African coast, where formerly + one-sixteenth of the crew died yearly (Edinburg Rev., 480), + from the moral turpitude of the business, and from the + severe penalties under which it was afterwards prohibited. + On the other hand, the low wages paid to European mining + laborers is largely the consequence of the certainty of + being cared for in old age, of those so employed. Weavers' + wages are low because the facility of learning the trade + makes it possible for the business to be carried on at home; + and hence there is a comparatively great pressure to engage + in it. (_Baines_, History of the Cotton Manufacture, 485 + ff.) + + According to the first annual report of the poor law + commissioners (202), the weekly wages in Manchester of + hod-carriers was 12s.; of hand-weavers, 7-15s.; of diggers, + 10-15s.,; of pack-carriers, 14-15s.; of shoemakers, 15-16s.; + of machine-weavers, 13-16-5/6s.; of white-washers, 18s.; of + tailors, 18s.; of dyers, 15-20s.; of plasterers, 19-21s.; of + masons, 18-22s.; of tinsmiths, 22-24s.; of carpenters, 24s.; + of spinners, 20-25s.; of machinists, 26-30s.; of iron + founders and power-loom tenders, 28-30s. In Belgium, the + average daily wages for male labor was 1.18 francs for + agricultural laborers; for those engaged in industry, 1.48 + francs; in the manufacture of linen, 0.80 francs; of cotton, + 1.55; of woolens, 1.62; of silk, 1.25; of stockings, 1.14; + of glass, 2.58; of coal, 1.33. All according to the + Statistique générale de la B. In Athens, in the time of + Aristophanes, a pack-carrier earned 4 oboli a day; a street + sweeper, 3; a stone cutter on the public works, 6; a + carpenter, 5; for roofing houses and taking down + scaffoldings, each man, 6. The architects who superintended + the building of the temple of Polias, on the other hand, got + only 6 oboli per day, and the contractor 5. (_Böckh_, I, 165 + ff.) + + The Edictum Diocletiani of the year 301 after Christ + contains the following provisions in relation to wages, + besides "board:" shepherds, camel-drivers and muleteers, 20 + denarii; agricultural laborers, water-carriers, scavengers, + 25; bakers, masons, roofers, house-finishers and repairers + of the inside, lime burners, wheelwrights and common clay + moulders, 50; boatsmen, sailors, makers of marble or mosaic + floors, 60; wall painters, 70; clay moulders for statues, + 75; artistic painters, 150. (ed. _Mommsen_, cap. 7.) In + slave countries, the price of different slaves is to be + judged, mainly, by the above rules. Concerning the Greeks, + see _Böckh_, I, 95 ff. _St. John_, The Hellenes, III, 23 ff. + It is a characteristic fact that the Romans, after the + Syrian war, began to pay high prices for the hitherto much + despised kitchen slaves. (_Livy_, XXXIX, 6.) Remarkable + fixed prices for slaves by _Justinian_: Cod. VI, 43, 3; VII, + 7, 1, 5. Thus, in the Lex Burgundionum, tit. 10, the + compensation for the murder of a common laborer is fixed at + 30 solidi; of a carpenter, at 40; of a smith, at 50; of a + silversmith, at 100; of a goldsmith, at 150. Advanced + civilization is wont to raise the price of slaves who + perform work of a higher quality, just as it raises the + wages of labor of a higher quality.] + + +SECTION CLXX. + +RATE OF WAGES.--INFLUENCE OF CUSTOM. + +Custom always exerts a great influence where there is question of +choosing an avocation with the intention of devoting one's self to it +entirely and exclusively. There is a public opinion which fixes the +gradation of the different classes of labor and their appropriate +reward, which is slow to change, and which both determines, and is +determined by the relation of supply and demand. There is an equilibrium +between the pleasantness of work and the rate of wages only in the case +of such kinds of labor as are on the same social footing. It frequently +happens, however, that the most repulsive work has to be performed by +those who are forced to accept any pay and to be satisfied with +it.[170-1] There are many branches of labor those engaged in which still +form a kind of exclusive caste; and the pay of the higher branches is +maintained at a high rate, especially by the fact that the members of +the castes to which they belong are provident in their marriages. The +lower classes are not in a condition to meet the preparation necessary +to engage in such professions, even if they were certain of being +afterwards reimbursed with interest for the outlay.[170-2] One of the +chief causes of the lowness of wages paid to women is, that so few +branches of labor are traditionally open to them, that the few that are, +are intended to supply luxuries, and are, besides, for the most part, +over-crowded. The distribution of the aggregate wages earned by any +industry, among the higher and lower classes of workmen who coöperate in +it, depends very largely on their social position relatively to one +another.[170-3] [170-4] Here political forms and changes may exert the +greatest influence.[170-5] + +Thus, the artificial increase of the wages of masters effected by the +former guild-system was produced, to say the least, as much at the cost +of the journeymen and apprentices as of the public. And if, on the other +hand, it cannot be said that the most recent marked rise in wages, in so +many countries, is merely the consequence of the extension of the +parliamentary right of suffrage, certain it is that the two phenomena +are very closely related, and that both are at once the effect and the +cause of the intensified feeling of individuality and of the +consciousness of constituting a class in the community of the lower +strata of society. + + [Footnote 170-1: At least where the supply of labor in + general surpasses the demand. Compare _J. S. Mill_, + Principles, II, ch. 14, 3d ed. The dangerous industries in + which lead, quicksilver, arsenic, etc. are manipulated or + employed, should be and can be better paid than they + actually are. In the Bavarian Palatinate, stone-cutters + rarely reach their 45th year; and yet their wages are very + low, because of the comparative over-population of the + country. (_Rau_, _Haussen's_ Archiv., N. T. X., 228.) But + the lowness of wages here is certainly and mainly caused by + the little thought the workmen themselves give to + considerations of health.] + + [Footnote 170-2: The lower the rate of wages of any class + sinks, the more difficult it becomes for parents to devote + their children to another career.] + + [Footnote 170-3: In Paris, 24,463 workmen with less than 3 + francs daily; 157,216, with from 3 to 5; 10,393, with from 5 + to 20 and even 3 to 5 francs. It is remarkable, however, how + uniform the average wages in the different trades is: + _vêtements_, 3.33 francs; _fils et tissus_, 3.42; + _boisellerie_, _vannerie_, 3.44; _garçons boulangers_, + _bouchers_ 3.50; _arts chimiques et céramiques_ 3.71; + _bâtiments_, 3.81; _carosserie_, 3.86; _peaux et cuirs_, + 3.87; _ameublement_, 3.90; _articles de Paris_, 3.94; + _métaux communs,_ 3.98; _métaux précieux_, 4.17; + _imprimerie_, 4.18. (Journal des Economistes, Janv. 1853, + 111.)] + + [Footnote 170-4: How the Roman advocates were given to all + sorts of ostentation, and even borrowed costly rings in + order to raise their _honoraria_, see _Juvenal_, VII, 105, + ff.] + + [Footnote 170-5: The salaries paid to the employees in the + office of the minister of finance in France and the United + States were as follows: to the porter, 1,500 and 3,734 + francs; the lowest clerk, 1,000 to 1,800, and 5,420 francs; + to the head clerk, 3,200 to 3,600, and 8,672 francs; the + secretary general, 20,000 and 10,840 francs; to the + minister, 80,000 and 32,520 francs. (_Tocqueville_, + Démocratie aux États-Unis, II, 74.) In the treasury + department, at Washington, of 158 employees, only 6 received + less than $1,000 salary, but only 2 over $2,000. (_M. + Chevalier_, Lettres sur l'Amérique du Nord, II, 151, 456.) + Compare _Büsch_, Geldumlauf, IV, 34. In Russia, the wages of + the higher classes of laborers as compared with those paid + the commoner class is much higher than in Germany. + (_Kosegarten_, in _Haxthausen_, Studien, III, 583.) On the + other hand, in England, since 1850, the rate of wages for + unskilled labor has risen relatively more than any other. + (_Tooke_, Hist. of Prices, VI, 177.)] + + +SECTION CLXXI. + +HISTORY OF THE WAGES OF COMMON LABOR.--IN THE LOWER STAGES OF +CIVILIZATION. + +In very low stages of civilization, where there is scarcely any such +thing as rent, and where capital is extremely rare, the wages of labor, +notwithstanding its small amount absolutely speaking, must eat up the +greatest part of the product.[171-1] With every further advance, the +condition of the laboring class is modified, according as the natural +decline in this relative amount of their wages is outweighed or +counterbalanced, or neither outweighed nor counterbalanced, by the +increase in the aggregate product; in other words, in the national +income in general as compared with the number of workmen. + + [Footnote 171-1: _Adam Smith_, Wealth of Nat., I, ch. 8. + Thus in the case of nations of hunters. The wages of free + laborers in Russia, at the beginning of this century, were + so high that mowers, in the vicinity of Moscow, received a + good half of the corn mowed by them, (_von Schlözer_, + Aufangsgründe, I, 65.) As a rule, the natural relation of + the three branches of income is here postponed by the + intervention of slavery. (§ 76, 155.) But, for instance, + since the negroes have been emancipated, in the southern + states of the American Union, it has become necessary to + promise them one-half of the cotton crop as wages, and for + the employer to run all the risk of a bad harvest. (_R. + Somers_, The Southern States since the War, 1871.) On the + wretched pay of domestic servants in the middle ages, see + _Grimm_, D. Rechtsalterth., 357.] + + +SECTION CLXXII. + +HISTORY OF THE WAGES OF COMMON LABOR.--IN FLOURISHING TIMES. + +When, where a nation's economy[172-1] is growing and flourishing, +capital increases more rapidly than population, there is a search for +employment by capital still greater than the search for employment by +labor. The consequence is, of course, a decline in the rate of interest, +and a rise in the rate of the wages of labor, although the latter may be +compelled to surrender a part of its increase to rent, which also rises. +If simultaneously with these phenomena, there have been great advances +made in national productive skill, especially in the cultivation of +land; if, therefore, labor and the capital consumed have become more +prolific, the condition of the laboring class is improved in a two-fold +manner; the condition of capitalists needs, to say the least, grow no +worse, and the increase of rent paid to landowners may be +avoided.[172-2] + +This favorable development is most striking in the colonies of rich and +highly civilized parent countries, where the labor, capital and social +customs of an old and ripe civilization are found together with the +overflowing natural forces inherent in a virgin soil, engaged in the +work of economic production. Here the growth of national wealth is most +rapid; and the rate of wages is here wont to be highest.[172-3] With the +high rate of interest that obtains where capital is rapidly saved, and +with the low price of land, it is not a matter of difficulty for good +workmen to enter into the ranks of landowners and capitalists. In North +America, and especially in the western part,[172-4] it is very +frequently in the normal course of economic development for young people +to begin to work on wages, then to work on their own account, and +finally to become themselves employers of labor. + + [Footnote 172-1: Compare _Hermann_, Staatswirths. Unters., + 241 ff.; _J. S. Mill_, Principles, ch. 3. As to how _Carey_ + confounds the rise and fall of the productiveness of labor + with the rise and fall of wages, see _J. S. Mill's_ views in + _Lange_, 1866, 218 ff.] + + [Footnote 172-2: In England, wages from 1400 to 1420, + estimated in produce, were much higher than from 1500 to + 1533. (Statist. Journal, 1861, 544 ff.) Later, a quarter of + wheat was earned by day labor as follows: under Elizabeth, + in about 48 days; during the seventeenth century, in 43 + days; between 1700 and 1766, in 32 days; between 1815 and + 1848, in from 19 to at most 28-3/4 days. (_Hildebrand_, Nat. + Oek. der Gegenwart und Zukunft.) Since 1860, it has been + earned in about 14 days. About 1668, the wages paid to + English laborers and servants was one-third higher than + twenty years before. (_Sir J. Child_, Discourse on Trade, p. + 43 of the French translation.) _D. Defoe_, Giving Alms no + Charity, 1704, draws a much more favorable picture of the + time next succeeding. _Adam Smith_, Wealth of Nat., I, ch. + 8, shows how money-wages, in the eighteenth century, were + higher and the price of corn lower than in the seventeenth + century. Between 1737 and 1797, wages in most parts of + England, except in the immediate neighborhood of the great + cities, doubled. (_Eden_, I, 385.) In Scotland, about the + year 1817, the wages of married farm servants, expressed in + corn, were about 60 per cent. higher than in 1792. + (_Sinclair_, Grundgesetze des Ackerbaues, 105.) + + _Boisguillebert_, Traité des Grains, I, 2, estimates the + wages in France, for agricultural laborers, at least from 7 + to 8 sous, of present money, and at twice that amount in + harvest time. In 1697, laborers in Paris received from 40 to + 50 sous. (Détail de la France, I, ch. 1, ch. 7.) _Vauban_ + estimates wages in large cities at 22-1/2-45 sous; for + country manual laborers, at 18 sous; for agricultural + laborers, 12-13-1/5 sous. (Project d'une Dime royale, 89 + Daire.) On the other hand, _Chaptal_, De l'Industrie, Fr. I, + 245, 1819, speaks of an average wage--25 sous. _Dureau de la + Malle_, Economie polit. des Romains, I, 151, allows + agricultural laborers, in 80 departments of France, only + 20-25 sous. According to _Moreau de Joannés_, Journal des + Econ., Oct. 1850, the average wages of a French agricultural + family amounted per annum, in 1700, to 135 francs; in 1760, + to 126; in 1788, to 161; in 1813, to 400; in 1840, to 500 + francs. While _A. Young_, Travels in France, 1787-89, speaks + of wages of 20 sous a day; _Peuchet_, Statist. élémentaire, + 1805, 361, assumes it to be 30 sous, although the price of + corn was not much higher. Compare _Birkbeck_, Agricultural + Tour of France, 13, who is of opinion even, that French + laborers are better situated than the English (?). From 1830 + to 1848, wages decreased about 30 per cent. (_L. Faucher_, + Revue des deux Mondes, Avril, 1848.) _Levasseur_, Histoire + des Classes ouvrières en France, II, 1858. + + General data for whole countries are obviously very + doubtful. In Germany, for instance, economically active + places have witnessed an undoubted elevation of the + condition of the laboring classes. Thus, in Hamburg and + Lower Saxony, about the end of the eighteenth century + (_Büsch_, Geldumlauf, II, 56 ff.); while in Thuringia, in + 1556, a _sümmer_ of rye was earned by 7 summer days' labor, + and in 1830 ff. by 8. (_Lotz_, Handbuch, I, 404.) In Hessen, + also, there has been but a very small increase in wages. + _(Hildebrand,_ Nat. Oek., I, 190.) According to _von der + Goltz_, Ländliche Arbeiterfrage, 1872, 84 seq., wages in the + country during the last twenty or thirty years have + increased on an average, 50 per cent. at least; in Bavaria + about 100 per cent.; in the Rhine province, male wages, + about 100; female wages, from about 75 to 100 per cent. The + masterly investigations of the wages of typesetters in Jena + and Halle by _Strasburger_ in _Hildebrand's_ Jahrb., 1872, I + ff., show that from 1717 to 1848, there was scarcely any + change in them. A million m's was paid for in 1717-40 with + 26.93 Prussian _sheffels_ of rye; 1804-47 with from 24.80 to + 28.80. Since then, a remarkable rise; so that in 1871, up to + November, 76.26 was reached. The prices of food, dwellings, + fuel, clothing, such as is in demand by such laborers, rose + between 1850 and 1860, 16.7 per cent., and the wages for + 1,000 m's in the same period of time rose about 14.3 and + 43.7 per cent. In the industrious manufacturing vicinity of + Moscow, wages in 1815 were four times as high as in 1670, + while the means of subsistence rose relatively much less. + (_Storch_, I, 203.)] + + [Footnote 172-3: In the United States, the wages of + carpenters and masons, about the end of the last century, + were $0.62 and $0.75; in 1835, of the former from $1.12 to + $1.25, and for the latter from $1.37 to $1.50. In 1848, the + general wage was $0.75. The price of corn, in the meantime, + did not rise, and the price of manufactured articles was + much smaller. (_Carey_, Rate of Wages, 26 seq.; Past, + Present and Future, 154.) In New York, as far back as 1790, + wages were much higher (_Ebeling_, Geschichte und + Erdbeschreibung von Nordamerika, II, 917); and between 40 + and 50 years ago, a journeyman mason might earn over 700 + thalers per annum. Agricultural laborers, in 1835, got $9 a + month and their board, valued at $65 for the whole year. In + the vicinity of large cities, both were higher. (_Carey_, + 91.) The condition of the factory hands, in Lowell, is a + very good one. In 1839, more than 100 of them had over + $1,000 each in the savings banks, and pianos at their mess + places. (_Boz_, Notes on America, 1842.) Most of them could + save $1.50 a week. _Colton_, in his Public Economy (1849), + says that a workman would consider himself in a bad way if + he could not save half of his wages. Compare _Chevalier_, + Lettres sur l'Amérique, II, 174, 122, 19; I, 221 ff. + + Apprentices in the United States, in almost every instance, + begin to be paid wages as soon as their work begins to prove + useful. The work of half-grown children, who had not yet + left the parental roof, was so well paid that it was + estimated that a child earned for his parents, on the whole, + £100 more than he cost them. What an incentive to marriage! + (_Adam Smith_, Wealth of Nat., I, ch. 8.) In Canada, + agricultural laborers earn between £24 and £30 per annum and + their board. In and around Melbourne, agricultural laborers + got from 15 to 20 shillings a week and lodging; herdsmen, + £35 to £40 a year; girls, from £20 to £45 (Statist. Journal, + 1872, 387 ff.); female cooks, from £35 to £40; male cooks, + from £52 to £156. In hotels, girls, from £30 to £35; female + cooks, from £50 to £100; domestic servants, £39 to £52; + carpenters, masons, etc., 10 shillings a day; the best + tailors, from 60 to 75 shillings a week; shoemakers, from 40 + to 55 shillings; bakers, from 40 to 60 shillings a week. + (Statist. Journal, 1871, 396 seq.) In San Francisco, a short + time since, servant girls got $25 a month; Chinese, $1 a + day; common laborers, $2; skilled artisans, from $3 to $5. + (_Whymper_, Alaska, 299, 326.) The wages of a European + tradesman, in Rio Janeiro, was from I to 2 Spanish piasters + a day. (_Martius_, Reise, I, 131.) In the English West + Indies, a new-born negro was formerly worth £5. (_B. + Edwards_, History of the West Indies, II, 128.) The high + wages paid in young colonies are frequently made temporarily + still higher, by a large influx of capital in the shape of + money, brought by emigrants, and by government outlays. + Thus, in Van Diemen's land, for instance, in 1824, + carpenters, masons, etc. got 12 shillings a day; in 1830, + 10; in 1838, only from 6 to 7, although between 1830 and + 1838, the export trade of the island trebled while the + population scarcely doubled. (_Merivale_, On Colonies, II, + 225.)] + + [Footnote 172-4: As to how many workmen in the eastern part + of North America buy land in the west, and so threaten their + employers with immediate emigration, see _Brentano_, + Arbeitergilden, II, 131. However, in Massachusetts, women's + wages are in many instances so low that, considering the + dearness of the means of subsistence, it is almost + impossible to understand how they exist. (Statist. Journal, + 1872, 236 ff.)] + + +SECTION CLXXIII. + +HISTORY OF THE WAGES OF COMMON LABOR.--IN FLOURISHING NATIONS. + +A permanently[173-1] high rate of wages[173-2] is, both as cause and +effect, very intimately connected with a flourishing condition of +national life. It proves on the one hand, great productiveness of the +public economy of the people generally: prudence, self-respect and +self-control, even of the lowest classes, virtues, which, however, are +found, on the whole, only where political liberty exists, and where the +lowest classes are rightly valued by the higher.[173-3] On the other +hand, it produces a condition of the great majority of that portion of +the population who have to support themselves on the wages they receive, +worthy of human beings, a condition in which they can educate their +children, enjoy the present and provide for the future. Equality before +the law and participation in the affairs of government are empty +phrases, and even tend to inflame the passions, where the rate of wages +is not high. When the lower classes are dissatisfied, in highly +civilized countries, with the sensitiveness and mobility of the whole +national life, there can be no certainty of the freedom of the middle +classes or of the rule of the upper. Here, in other respects, also, the +philanthropy of employers harmonizes remarkably well with their +reasonable self-interest. According to § 40, only the well-paid workman +can accomplish anything really good, just as, conversely, only the good +workman is on the whole, and in the long run, well paid. This suggests +the physiological law, that where muscular activity is great, nutrition +must be great, likewise; and the rapid waste and repair of tissues +strengthens the muscles and gives tone to the whole physical life. With +a correct insight into the relations of things, antiquity described its +greatest worker, Herakles, as a great eater also. A well-paid workman, +who costs and accomplishes as much in a day as two bad ones, is cheaper +than they. He works much more cheerfully and faithfully, is, hence, more +easily superintended, is less frequently sick, and later +decrepid.[173-4] His childhood costs less, and his burial is not so +expensive. In cases of need, he can more easily bear the weight of +taxation or a temporary lowering of wages.[173-5] We might say of the +granting of holidays and of evening leisure something similar to what we +have said of the rate of wages. They are indispensable requisites to the +development of a desirable individuality in the working classes; and +when used for that purpose are certainly no detriment to the product of +labor or to employers.[173-6] [173-7] + +In consideration of all the blessings attending a high rate of wages, we +may well be induced to put up with a certain and frequently inconvenient +external defiance of the lower classes which is wont to accompany +it.[173-8] It teaches the upper classes many a moral lesson, and is +surely a lesser sin in the lower, than the cowardly, malicious crimes of +the oppressed. When wages are so low that they have to be supplemented +by begging or public charity, the effect on morality is the same as when +government officials, who cannot live on their salaries, resort to +bribery or embezzlement.[173-9] [173-10] + + [Footnote 173-1: A merely momentary rise in wages might be + the result of a great calamity, destructive of human life, + and might seduce workmen not intellectually prepared for it + into idleness. Compare _von Taube_, Beschreib. von Slavonien + etc., II, § 4.] + + [Footnote 173-2: On the necessity of _free_ wages, that is + of an excess over and above the costs of support and of + maintaining one's position, see _Roesler_, Grandsätze, 394.] + + [Footnote 173-3: _Dans aucune histoire on ne rencontre un + seul trait, qui prouve que l'aisance du peuple par le + travail a nui à son obéissance, (Forbonnais.)_ This is true + only of well governed countries. When, in England, about the + middle of the eighteenth century, a great improvement took + place in the condition of the laboring classes, + _Postlethwayt_ (Great Britain's commercial Interests, 1759) + was one of the first to recognize its general beneficial + character; also _Th. Mortimer_. (Elements of Commerce, + Politics and Finance, 1774, 82 ff.) _Benjamin Franklin_, + before the American revolution, was of opinion that high + wages made people lazy. (On the Price of Corn, 1776. On the + laboring Poor, 1768.) He afterwards, however, acknowledged + its generally good effect, and that even the products of + labor might be cheapened thereby. (On the Augmentation of + Wages, which will be occasioned in Europe by the American + Revolution. Works II, 435 ff.) See further, _Paoletti_, Veri + Mezzi di render felici le Società, ch. 15; _Ricardo_, + Principles, ch. 5; _Th. Brassey_, on Work and Wages, 1872. + _Umpfenbach_, Nat. Oek, 181, calls the costliness of labor to + the purchaser of labor, "givers' wages," their purchasing + power to the laborer himself, "receivers' wages," and is of + opinion, that as civilization advances, the former declines + and the latter rises.] + + [Footnote 173-4: When in the department of the Tarn flesh + food was introduced among journeymen smiths instead of mere + vegetable diet, the sanitary improvement that followed was + so great that the number of days lost by sickness in a year + decreased from 15 to 3. (_Moleschott_.)] + + [Footnote 173-5: In high stages of civilization, it is + always more profitable, the result being the same, to keep a + few well fed cattle than many poorly fed. (_Roscher_, + Nationalök. d. Ackerbaues, § 179.) _Infra_, § 231. When the + drainage of Oxford street in London was made while wages + were rising, it happened that the cubic foot of masonry work + at 10 shillings per day was cheaper than it was formerly at + 6 shillings per day. (_Brassey_, 68 ff.) _Senior_ calls it + an absurdity to consider the high wages paid in England as + an obstacle in the way of its successful competition with + other countries. Rather would he consider it as the + necessary result of the excellence of English labor. Thus, + in his Lectures on the mercantile Theory of Wealth, p. 76, + he says that if the English employ a part of their labor + injudiciously, they must pay it not in proportion to what it + really accomplishes, but to what it might do if well + employed. If a man calls in a doctor to cut his hair, he + must pay him as a doctor. If he puts a man to throwing silk + who might earn 3 ounces of silver a week spinning cotton, he + must pay him weekly 3 ounces of silver, although he may + deliver no more silk within that time than an Italian who + gets only 1-1/2 ounces.] + + [Footnote 173-6: Norfolk country workmen never worked more + than 10 hours a day except in harvest and seed time. But a + plowman there accomplished as much in 5 days as another in + 8. (_Marshall_, Rural Economy of N., 138.) In southwestern + Germany, the country working day is from 2 to 4 hours + shorter than in the northeast, and yet just as much is + accomplished in the former quarter. (_von der Goltz_, Ländl. + Arbeiterfrage, 88, 131.) Thus the coal diggers of South + Wales work 12 hours a day, those of Northumberland, 7; and + yet the same achievement is 25 per cent. dearer in case of + the former. In the construction of the Paris-Rouen Railroad, + the English achieved more than the French, although the + former worked from 6 A. M. to 5:30 P. M., and the latter + from 5 A. M. to 7 P. M. (_Brassey_, 144 ff.) Examples from + English manufactories in _Marx_, Kapital, I, 401 seq. In an + English factory the hours worked were 12, and afterwards, + 11. This caused the number of attendants of the evening + school to grow from 27 to 98. (_Horner._) _Dollfuss_, in + Mühlhausen, reduced the number of hours worked from 12 to + 11, and let the wages remain the same as before. The result + was besides a great saving made in fuel and light, a surplus + product of at least 1-2/3 per cent. Something similar + observed by _M. Chevalier_, Cours, I, 151. + + Hence _J. Möser_, Patr. Ph., III, 40, desired, on this + account, that work in the evening should be prohibited by + law. In England, not only the moral necessity, but also the + economic general utility of leisure time of workmen has been + defended, among others by _Postlethwayt_, Dictionary of + Trade and Commerce, I, prelim. Discourse, 1751. A beautiful + law, V Moses 24, 15. Only, care must be taken not to go to + the other extreme, which is still more detrimental to + personality. The North American ideal of 8 hours a day for + work, 8 for eating, sleeping, etc., and 8 for leisure, would + be injurious except to workmen intellectually very active. + But the provision to be met with in many states of the Union + and in the arsenal employ of the government, that in case of + doubt, the work day is to be tacitly assumed as of 8 hours, + has, it is said, correspondingly lowered wages. See _supra_, + § 168.] + + [Footnote 173-7: In India, where the institution of caste is + found, nearly half the year is made up of feast days, while + in rationalistic China there is no Sunday and very few + general holidays. (_Klemm_, A. Kulturgeschicht. VI, 425. + _Wray_, The practical Sugar Planter, 1849.) The + Judaic-Christian sanctification of the seventh day is a + happy medium between these two extremes. Recuperation and + collectedness get their due without its costing too much to + action. _Ora et labora!_ Compare _Sismondi_, N. P. II, ch. + 5. Which is best, traveling on foot, to drag along all the + time, or to walk decently and rest properly between times? + The rest of Sunday, even leaving the work of recuperation + and edification out of account, is necessary in the + interests of the family and of cleanliness. The French + _decadis_ accomplished materially even too little: _ils ont + à faire à deux ennemis, qui ne cèderont pas, la barbe et la + chemise blanche_. (_B. Constant._) Hence, an English prize + essay on the material advantages of Sunday found 1,045 + competitors among English working men. (Tübinger Zeitschr., + 1851, 363.)] + + [Footnote 173-8: Thus _Parkinson_, A Tour in America, + complains that with four servants in the house, he was + obliged to polish his own shoes, and with his wife and + children to milk the cows, while his people were still + asleep. Strange servants bringing a message, come in with + their hats on. All domestics are called mister or misses. + Servant maids are called "helps," and their masters, + "employers." If a person at a hotel asks for a laundress, he + is answered: "Yes, man, I will get a lady to wash your + clothes." Similarly in _Fowler_, Lights and Shadows,... + three Years' Experience in Australia. But, at the same time, + it is remarkable how seldom a native born white American + accepts a fee. On the other hand, Russia is the classic land + of fees. There is a popular story in that country to the + effect that when God divided the earth among the different + nations, they were all satisfied except the Russians, who + begged a little drink-money or fee in addition, (_von + Haxthausen_, Studien, I, 70.) Similarly in Egypt. (_Ebers_, + Durch Gosen zum Sinai, 1873, 31 seq.) The system of feeing + servants holds a middle place between the modern system of + paying for everything lawfully and the medieval system in + which people either rob, donate or beg.] + + [Footnote 173-9: Compare _Garve_ in _Macfarlan_, 90. The + wages of English wool workers in 1831 amounted to: + + _Tax per capita of the_ + _population for_ + _In_ _support of the poor._ + Leeds, 22--22-1/2s. 5s. 7d. + Gloucester, 13--15-1/4s. 8s. 8d. + Somerset, 16-3/4--19-3/4s. 8s. 9d. + Wilts, 13-7/12--15-5/12s. 16s. 6d. + + _Ure_, Philosophy of Manufactures, 476. After an + enthusiastic eulogy of high wages, _McCulloch_ remarks + especially that the English poor rates cost more than if the + laborers were obliged to provide for themselves by getting + higher wages. (Principles, III, 7.) Sad results of the + system which came into vogue in the South of England in + 1795, to supplement wages according to the price of corn and + the number of children. Previously the laboring classes + married only after the age of 25 and even at 35, and not + until they had saved from £40 to £50. After the above + mentioned system was adopted, even minors married. (Edinburg + Review, LIII, 4, 7.)] + + [Footnote 173-10: _Von Thünen_, Isolirte Staat., II, 1, 154, + gives the following formula as the expression of ideal + wages: sqrt(ap), in which a = the necessary requirement for + maintenance of the workmen, and p = the aggregate product of + his labor. _von Thünen_ attached so much importance to this + formula that he had it engraved on his tomb-stone. But even + if it were possible to reduce capital-generating labor and + wage-labor to a common denominator, it would not be possible + nor equitable to maintain the same dividing measure when + capital and labor contributed in very different amounts to + the production of the common product. An artist, for + instance, who could make costly vessels out of very cheap + clay and with cheap fuel would get too little by _von + Thünen's_ law; a mechanic who used a very efficient and + costly machine, too much. The fundamental defect in his + theory, _von Thünen_ himself seems to have obscurely felt. + Compare the letter in his Lebensbeschreibung, 1868, 239 and + _Roscher_, Geschichte der Nat. Oek., in Deutschland, 895 ff.] + + +SECTION CLXXIV. + +HISTORY OF THE WAGES OF COMMON LABOR.--IN DECLINING COUNTRIES AND TIMES. + +When, circumstances being otherwise unaltered, the aggregate income of a +nation decreases, the wages of labor are wont to be lower in proportion +as the points above mentioned, and which are unfavorable to the laborer +in his competition, appear.[174-1] The worse distribution, also, of the +national resources, when, instead of a numerous middle class, a few +over-rich people monopolize all that is to be possessed, diminishes the +wages of common labor and thus again produces a worse distribution than +before.[174-2] In a similar way, wages must decline when the mode of +life of the laboring class, or the quality of their work, has +deteriorated. Some of these causes may exist transitorily even among +otherwise flourishing nations; as, for instance, in war times,[174-3] or +when population for a while grows more rapidly than national wealth. But +among nations universally declining, they are all wont to meet, and one +strengthens the other.[174-4] One of the saddest symptoms of such a +condition is the low value here put upon the life and strength of +workmen. The cheapness of labor has indeed a charm for enterprising +spirits, which induces them to employ human labor even where machinery, +beasts, etc., would economically be better adapted to the performance of +the work.[174-5] Day-laborers are, on this account, more profitable to +persons of enterprise (_Unternehmer_=_undertaker_) because they can more +easily rid themselves of them. But such egotistic calculation should +have no place even in the case of actual slaves.[174-6] + +Besides, it not unfrequently happens, that the laboring class seek to +oppose the decline of wages by increasing their industry, shortening +their holidays and leisure, and by drawing their wives and children into +their work. This may, under certain circumstances, result in an increase +of the national income, and thus constitute a transition to the +restoration of high wages, especially if beforehand there was reason to +complain of the idleness of the working class. But if the other +circumstances of competition are unfavorable to the working class, if +especially they used their personally increased income to add to the +population, it would not be long before they fell back to their previous +state. In such case, the consequence is, that the same quantity of labor +has become cheaper; that all permanent profit falls to the capitalists +and landowners, and all that remains to the laboring class is only +greater toil, a sadder home-life, and sadder children. The danger of +such an issue is all the greater, because few things so much contribute +to reckless marriages and the thoughtless procreation of children, as +the industrial coöperation of wife and child.[174-7] [174-8] + + [Footnote 174-1: Hence _Adam Smith_ says that it is not the + richest countries in which wages are highest, but those + which are becoming rich most rapidly.] + + [Footnote 174-2: The classic lands of low wages and + pauperism are especially the East Indies and China. A + minister of Kienlong was punished after he had extorted + about 20,000,000 thalers. (_Barrow_, II, 149.) In the + confiscation of the well known _Keschen_, the authorities, + according to their own accounts, found 682 pounds of gold + and more than 6,000,000 pounds in silver. Considering the + colossal banquets of the rich, embracing several hundred + courses, of which _Meyen_, Reise um die Erde, II, 390, + describes an example, the wretched food of the poor is + doubly striking. Count _Görtz_ relates that in Canton, rats + and serpents are regularly exposed for sale. (Reise, 445.) + The lowness of wages appears from the fact--one of + many--that servants frequently get nothing but their board. + (_Haussmann_, Voyage en Chine, etc.) In the cities, + tradesmen with their tools run hither and thither about the + streets begging for employment in the most imploring manner. + Thousands live all their lives on rafts. Numberless + instances of infanticide from want of food, (§ 251.) The + influence of these circumstances on the morality of the + people is best illustrated by the fact that _Keschen_, when + he was ambassador to Thibet, preferred to confide his newly + collected treasures to the escort of the French missionaries + he persecuted rather than to the mandarins named by himself, + so much more highly did he estimate European than Chinese + honesty. (Edinburg Rev., 1851, 425 ff.) In the Chinese + picture-writing, the word happiness was designated by a + mouth well corked with rice. Chinese statisticians speak of + mouths (_Maul_) where ours treat of the number of heads or + souls. _Ritter_, Erdkunde, II, 1060. More favorable accounts + in _Plath_, Münch. Akad., 1873, 784, 788 seq. + + In the East Indies, a great many of the rejected castes live + on carrion, dead fish, noxious insects, and even the middle + class find wheat flour too dear, and therefore mix it with + peas, etc. (_Ritter_, VI, 1143.) It is said that Bengal, in + the famine of 1770, lost more than one-third of its + inhabitants. (_Mill_, History of British India, III, 432.) + Eloquent description of misery in _Rickard_, India, or Facts + submitted to illustrate the Character and Condition of the + native Inhabitants, II, London, 1832. An immense number of + badly paid servants of whom it may however be said that each + one accomplishes very little. The Pindaries may pass for an + extreme of Indian pauperism, corresponding to the + pirate-calamity during the later Roman Republic. (Quarterly + Review, XVIII, 466 ff.; _Ritter_, VI, 394 ff.)] + + [Footnote 174-3: Thus, in England, during the last great + war, wages rose less than the price of corn, and sank less + after it. About 1810, wages were nearly 100 per cent. higher + than in 1767; but, on the other hand, the price of wheat, + 115; of meat, 146; of butter, 130, and of cheese, 153 per + cent. (Edinburg Rev., XL., 28.) If it has some times been + observed that crime, communistic machinations and + revolutionary movements grow less frequent in times of war, + the fact is not to be ascribed necessarily to a better + condition of the laboring class. It might possibly be the + consequence of the strongest and wildest elements of the + laboring class finding some other career.] + + [Footnote 174-4: _Adam Smith_, loc. cit., on this point + describes China as a stationary country (according to _R. + Fortune_, Wanderings in China, 1847, 9, a decided decline + has been noticeable there for a long time), and Bengal as a + declining one. On the condition of wages among the Romans, + _Juvenal_, III, 21 ff., is one of the principal sources. + Hence the desire to emigrate because honest labor had no + longer any foothold (23 ff.). Poor dwellings of the laboring + class, dark, exposed to danger from fire (166, 190 ff., + 225), and yet comparatively dear (223 seq.). Numerous crowds + of robbers and beggars (302 ff.; IV, 116 ff.; V, 8; XIV, + 134). On beggary, see _Seneca_, Controv., V, 33. De + Element., II, 6. De Vita beata, 25 ff. _Martial_, V, 81, + XIV, 1, complains of the absence of outlook among the poorer + classes. _Horace_, too, is rich in passages which might be + appropriately cited in this connection. Characteristic + question of the nabobs, in _Petron._, 48, 5: What on earth + is that thing called a pauper?] + + [Footnote 174-5: Thus, in China, the East Indies, etc., + people travel in palanquins borne by men; in a multitude of + cases, Chinese commodities are carried in wheelbarrows; and + a great many roads are constructed, in reference not to + wagons, properly so-called, but to this species of vehicle. + How heartless the Chinese, who, before they save a drowning + man, first higgle about the reward, and take pleasure in + pestilence, famine, etc., because those who survive profit + by them. See _Finlaison_, Journey of the Mission to Siam, + 1826, 62 ff.] + + [Footnote 174-6: Hence _Menander_ (342-290 before Christ) + says it is better to be the slave of a good master than to + live wretched in freedom. (_Stoboeus_, Flor., 62, § 7. + _Meinecke_, Fr. com. Gr., IV, 274.) _Libanios_, too, (Tom., + 483, Reiske), in his "Blame of Poverty," represents slavery + as better cared for, and freer from worry. Horrible + contracts made even in Cæsar's time, from want, by freemen, + to become gladiator-slaves. _Cicero_, pro Roscio, Am. 6; + _Horat._, Serm., II, 7, 58 ff.; _Petron._, 117; _Seneca_, + Epist., 37. And so by Justinian, cases of declined freedom + are supposed. (L. 15, _Justin._, Cod., VII, 2.) "_Dans une + armée on estime bien moins un pionnier, qu'un cheval de + caisson, parce que le cheval est fort cher, et qu'on a le + pionier pour rien. La suppression de l'esclavage a fait + passer ce calcul de la guerre dans la vie commune._" + (_Linguet._)] + + [Footnote 174-7: _Sismondi_ is guilty, however, of a + philanthropic exaggeration when he says that the labor of + children is always fruitless to the laboring classes. (R. P. + I., 235.)] + + [Footnote 174-8: The bringing into juxtaposition of the + rates of wages in different countries is doubtless one of + the most important objects of comparative statistics. Only + it is necessary not to confine it to the money amount of + wages, but to make it embrace the prices of the principal + means of subsistence. Thus, in France, before the outbreak + of the French Revolution, a French workman earned a cwt. of + bread on an average of 10.5 days; one of meat in 36.8; an + English workman, in 10.4 and 25.3 days. (_A. Young._) In the + interior of Russia, a female weaver earns, in a day, almost + one Prussian _scheffel_ of rye, in Bielefeld, only about + one-tenth of a _scheffel_; a table-cloth weaver, in the + former place, 18 silver groschens, while the _scheffel_ + costs from 12 to 15 silver groschens. (_von Haxthausen_, + Studien, I, 119, 170.) According to _Humboldt_, the + money-wages paid in Mexico were twice as high, and the price + of corn two-thirds as dear, as in France. (N. Espagne, IV, + 9.) According to _Rau_, Lehrbuch, I, § 180, the procuration + of the following means of subsistence required in day labor + in: + + ==============+============+=========+========== + | | | | + |_Manchester.|_Hanover.|_Hanover.| + | | | | + | 1810-20_ | 1700_ | 1827_ | + --------------+------------+---------+---------- + Cwt. beef, | 26 | 33 | 35 | + " potatoes,| 1.85 | ---- | ---- | + " wheat, | 5.5 | ---- | ---- | + " rye, | ---- | 6.5 | 8.7 | + " butter, | 42.3 | 87 | 64 | + " sugar, | 96 | 181 | 128 | + ==============+============+=========+========== + |_Upper | | | + |Canada. |_Brandenburg.| Gratz. | + | | | | + | 1830_ | 1820-33_ |1826-45_ | + --------------|--------+-------------+---------- + Cwt. beef, | 6.6 | 34 | 36 | + " potatoes,| ---- | 1 | 2.68 | + " wheat, | 2 | 7.6 | 11 | + " rye, | 1.5 | 5.4 | 8.6 | + " butter, | 22 | 83 | 84 | + " sugar, | ---- | ---- | ---- | + ==============+============+=========+========== + + Estimated in silver, the East Indian laborer earns from £1 + to £2 a year; the English, £9 to £15; the North American, + £12 to £20. (_Senior._) _Hildebrand_, Nat-Oek., I, 195 ff., + assures us that the average rate of wages in Germany, in + 1848, amounted to 400 thalers a year; in England, to 300 + thalers; and that the prices of the means of subsistence in + the latter country were 1-1/2 times higher than in the + former. _Engel_, Ueber die arbeitenden Klassen in England, + 1845, shows only the dark side of a real picture, and is + silent on the other, and is well corrected by _Hildebrand_, + I, 170 ff. Excellent statistics in _Sir F. M. Eden_, State + of the Poor, I, 491-589. On the more recent times, compare + the Edinburgh Review, April, 1851, April, 1862; Quarterly + Rev., Oct., 1859, July, 1860. _Ludlow_ and _Jones_, loc. + cit. On the situation in France, see _Blanqui's_ report in + the Mémoires de l'Académie des Sciences morales et + politiques, II, 7. _Leplay_, Les Ouvriers des deux Mondes, + II, 1858. Very important are the "Reports from Her Majesty's + diplomatic and consular Agents abroad respecting the + Condition of the industrial Classes, and the Purchase-power + of money in foreign Countries." (1871.)] + + +SECTION CLXXV. + +WAGE POLICY.--SET PRICE OF LABOR. + +Among the artificial means employed to alter the existing rate of wages, +we may mention first, a rate of wages fixed by governmental authority. +These have, in many places, constituted an intermediate step between +serfdom and the free wage-system. In most cases, this measure was +intended in the interest of the upper classes to prevent the lower +obtaining the full advantage of their freedom under the favoring +circumstances of competition.[175-1] In later times, another cause has +frequently been added to this, viz.: by diminishing the cost of +production to increase foreign sales. (See § 106.) In the higher stages +of civilization, nations will scarcely look with favor on the diminution +of the rightful, for the most part, individually small gains of the most +numerous, the poorest and most care-worn class of the community.[175-2] +The purchasers of labor would, in consequence, be badly served, since +they would have lost the possibility of obtaining better workmen by +paying higher wages. Hence, there would, probably, be none but mediocre +labor to be found.[175-3] On the other hand, fixed rates which keep +within the limits described in § 114 are, under certain circumstances, +desirable. This is especially the case where the purchasers of labor on +the one hand, and the buyers of labor on the other, have formed +themselves into united groups, and where the rate fixed is only in the +nature a treaty of peace under governmental sanction, when a war over +prices had either broken out actually or there was danger to fear that +one would break out. It must not be forgotten, that thus far common +labor has scarcely had any thing similar to an "exchange."[175-4] + + [Footnote 175-1: The plague known as the black death of + 1348, which devastated the greater part of Europe, was + followed by many complaints on the part of the buyers of + labor, of the cupidity and malicious conspiracies of the + working classes. (See _supra_ § 160.) Fixed rates of wages + under Peter the Cruel of Castile, 1351; contemporaneously in + France, Ordonnances, II, 350, and in England, 25 Edw. III, + c. 2; 37 Edw. III, c. 3. In France, the wages of a thresher + were fixed at the one-twentieth or the one-thirtieth of a + _scheffel_, while in present Saxony it is from + one-fourteenth to one-twelfth. In England, under the same + ruler, who had seen his castle at Windsor built, not by day + laborers for wages, but by vassal masons, vassal carpenters, + etc., whom he got together from all parts of the kingdom. + That the rates might not be evaded, the succeeding king + forbade both the leaving of agriculture for industry and + change of domicile without the consent of a justice of the + peace. (12 Richard II., c. 3.) All such provisions were + little heeded in the 16th century. (_Rogers_, the Statist. + Journal, 1861, 544 ff.) + + Fixed rates of wages under Henry VII. and Henry VIII., in + the interest of workmen. (_Gneist_, Verwaltungsrecht, II, + Aufl., 461 ff.) The fact that in 5 Elizabeth, c. 4, another + attempt was made to fix the rate of wages by governmental + provisions, in which the person paying more than the sum + fixed was threatened with 10 days' imprisonment, and the + person receiving less with 12, was in part akin to the + English poor laws. If a poor man had the right to be + eventually employed and supported by the community, it was, + of course, necessary that the justice of the peace should be + able to determine at what wages anybody should be prepared + to work before he could say: I can find no work. Extended by + 2 James I., c. 6, to all kinds of work for which wages were + paid. (_Eden_, State of the Poor, V, 123 ff., 140.) The + buyers of labor in the eighteenth century frequently + complained that these fixed wages were more to the advantage + of workmen than of their masters. (_Brentano_, English + Guilds., ed. by _Toulmin Smith_, 1870, Prelim. CXCI.) + + In Germany, the depopulation caused by the Thirty Years' War + explains why, before and after the peace of Westphalia, so + many diets were concerned with fixing the rate of wages of + servants. Compare _Spittler_, Gesch., Hanovers, II, 175. + Among the most recent instances of English fixed rates of + wages, is 8 George III., for London tailors, and the + Spitalfields Act of 1773, for silk weavers who had, a short + time before, revolted. Also in New South Wales, about the + end of the last century, on account of the high rate of + colonial wages. (_Collins_, Account of the English Colonies + of New South Wales, 1798.) Later, _Mortimer_, Elements of + Politics, Commerce and Finance, 1174, 72, maintains fixed + rates of wages to be necessary. In Germany the imperial + decree of 1830, tit., 24, and again the ordinance of Sept. + 4, 1871, provide that each magistrate shall fix the rate of + wages in his own district. _Chr. Wolf_, Vernunftige Gedanken + vom gesellsch. Leben der Menschen, 1721, § 487, would have + the rates so fixed that the laborers might live decently and + work with pleasure.] + + [Footnote 175-2: Proposal for a fixed sale of wages in the + protocols of the Chamber of Lords of Nassau, 1821, 12.] + + [Footnote 175-3: The Spitalfields Act was repealed in 1824, + for the reason that the manufacturers themselves attributed + the stationary condition of their industries for a hundred + years to the fact that they were hampered by that act. + _Ricardo's_ and _Huskisson's_ prophecies, on this occasion, + fulfilled by the great impulse which the English silk + industries soon afterwards received.] + + [Footnote 175-4: Compare _Brentano_, Arbeitergilden der + Gegenwart, II, 288. However, fixed rates of wages equitably + arranged, in the establishment of which neither party has + been given an advantage over the other, have continued to + exist much longer than our distrustful and novelty-loving + age would think possible. Thus compositors' wages in London, + from 1785 to 1800, from 1800 to 1810, from 1810 to 1816, and + from 1816 to 1866, remained unaltered; those of London ship + builders, from 1824 to 1867; of London builders, from 1834 + to 1853, and from 1853 to 1865. (_Brentano_ II, 213. Compare + II, 250, 267 ff.)] + + +SECTION CLXXVI. + +WAGES-POLICY.--STRIKES. + +Where the wages-receiving class feel themselves to be a special class, +_vis-a-vis_ of the purchasers of their labor, they have frequently +endeavored, by the preconcerted suspension of labor upon a large scale, +to force their masters to pay them higher wages, or grant them some +other advantage.[176-1] It is hard to say whether such strikes have more +frequently failed or succeeded.[176-2] + +As a rule, a war over prices, carried on by such means, and without +force on either side, must generally issue in the victory of the richer +purchasers of labor.[176-3] The latter require the uninterrupted +continuation of labor for their convenience and profit; but the workmen +need it to live. It is but seldom that the workmen will be in a +condition to stop work for more than a few months, without feeling the +sting of hunger. The purchaser of labor can live longer on his capital; +and the victory here belongs to the party who, in the struggle, holds +out longest. Hence, a strike that lasts more than six weeks may, for +that reason alone, be considered a failure. The employers of labor, on +account of their smaller number and greater education, make their +counter-coalition much more secret and effective. How many instances +there are in which labor-saving machines have come into use more rapidly +than they otherwise would have come but for the influence of these +coalitions![176-4] + +On the other hand, it cannot be ignored that a host of workmen, by means +of an organization which provides them with a unity of will, such as the +heads of great enterprises naturally possess, must become much better +skilled in carrying on a struggle for higher wages. Where wages in +general tend to rise, but by force of custom, which is specially +powerful here (§ 170), are kept below their natural level, a strike may +very soon attain its end. And workmen are all the more to be wished +God-speed here in proportion as employers are slow to decide of their +own motion upon raising wages, and where, under certain +circumstances,[176-5] a single cold-hearted master might force all his +competitors to keep wages down. If even the entire working class should +follow the example of the strikers, so that all commodities, in so far +as they are products of labor, should grow dearer to an extent +corresponding to the rise in wages, there would still remain an +improvement of the condition of the working class at the cost of the +interest paid on capital and the profits of enterprise. It is, of +course, otherwise with the struggle of workmen against the natural +conditions which determine the rate of their wages (§§ 161-166) in which +they might, in turbulent times, possibly succeed[176-6] temporarily, but +would, in the long run, have to fail.[176-7] + +The working class will be best fortified in such a struggle for higher +wages when their organization is a permanent one, and when they have +taken care, during good times, to collect a certain amount of capital to +protect their members, during their cessation from work, against acute +want. This is the object of the trades-unions as they have grown up in +England, especially since the total decline of the guild system and of +governmental provisions relating to apprentices, fixed rates of +wages[176-8] etc. But it cannot be denied that these unions, although +democratic in form, often exercise a very despotic sway over their +members;[176-9] that they have, so far as the employers of labor are +concerned, and the non-union laborers, gone back to a number of +measures, outgrowths of the guild and embargo systems, which it was +fondly hoped had been forever banished by the freedom of +industry.[176-10] What many of the friends of this system hope it may +accomplish in the future, viz.: regulate the whole relation between +capital and labor, and thus, on the whole, control the entire public +economy of a people,[176-11] is, fortunately, all the more certainly a +chimera, as any national or universal approximation to this end would be +the most efficacious way to compel employers of labor to the formation +of corresponding and probably far superior opposing unions. +Notwithstanding this, however, I do not doubt that the recent +development of trades-unions in England is both a cause and an effect of +the rise in wages in the branches of industry in question, as well as of +the moral elevation of the condition of the working class which has +simultaneously taken place.[176-12] The mere possibility of a strike is +of itself calculated, in the determination of the rate of wages, to +procure for the equitable purchaser of labor the desirable preponderance +over the inequitable.[176-13] + + [Footnote 176-1: Even _Boisguillebert_, Traité des Grains, + was acquainted with instances of this kind in which from 600 + to 800 workmen simultaneously left their masters. There are + much earlier instances in Italy. Thus, in Sienna, in 1381 + and 1384, in which the nobility sided with the workmen. + (Rerum Ital. Scriptores, XV, 224, 294.) Strikes of + journeymen began to be much more frequent in Germany in the + guilds, from the time of the prospect of their becoming + masters themselves, and of their living in the family of the + masters had decreased. On similar strikes at Spires, in + 1351, at Hagenau in 1409, and Mainz in 1423, see _Mone's_, + Zeitschrift, XVII, 56; XIII, 155, and _Hegel,_ Strassb. + Chr., II, 1025. A remarkable strike of the Parisian book + printers under Francis I. (_Hildebrand's_ Jahrb., 1873, II, + 375 ff.) In so-called "home manufactures," where the + "manufacturer" is both orderer, preparer and seller, but + strikes are scarcely possible without much fixed capital. + The strike of the factory spinners in Lancashire in 1810 + caused 30,000 workmen to stop work for four months. + + Among the next following coalitions of labor, those of the + Glasgow weavers in 1812 and 1822 were very important. In the + latter, two workmen who would not participate with the + strikers were blinded with sulphuric acid. In 1818, great + strike by the Scotch miners. The Preston strike of 1853 + lasted 36 weeks. It is said that 6,200 male and 11,800 + female working people took part in it. (_Athenæum_, 30 + Sept., 1854.) Compare _Morrison_, Essay on the Relations + between Labor and Capital, 1854. For a history of Swiss + strikes, especially of the Zürich compositors' strike in + 1873, see _Böhmert_, Arbeiterverhältnisse, II, 287 ff. Comic + type of a strike of married women in _Aristophanes_, + Lysistrata. A practical one in Rome at the departure of the + plebeians for the holy mountains, 492 before Christ. + (_Livy_, II, 32,) then, on a small scale, on the removal of + the pipers after Tiberius, 311 before Christ. (_Liv._, IX, + 30.)] + + [Footnote 176-2: Instances of successful strikes: + Fortnightly Review, Nov. 1865. Similarly in Germany, in + 1865; but there, in truth, many strikes were only defensive + and intended to restore the former thing-value of the + declined money (Werke, XIII, 151). The English strikes, in + 1866 and 1867, failed nearly all, so that wages again + declined to their level in 1859, and in many places, to what + they had been in the crisis-year 1857. (Ausland, 16 April, + 1868.) As to how even in Victoria, strikes which opposed a + decline of wages from 16 to from 8 to 10 shillings a day + failed, after doing great injury, see Statist. Journ., 1861, + 129 ff.] + + [Footnote 176-3: The Preston strikers of 1853 got even from + their non-striking colleagues, £30,000. Had their masters + prevented this, the affair would have been terminated much + sooner. (Quart. Rev., Oct. 1859.) But employers are much + more frequently divided by rivalries than workmen, + especially in strikes against new machines or when a + manufacturer, who has too large a supply of goods on hand, + desires a strike himself. On account of their smaller + number, too, they are less in a condition to declare a + recusant colleague in disgrace. _Adam Smith's_ remark that + coalitions of capitalists are much more frequent than those + of workmen, only that much less is said of them, is hardly + applicable to our time. (Wealth of Nat., I, ch. 8, p. 100, + ed. Bas.) But, since the strike of the London builders in + 1859, capitalists have begun to form more general opposing + unions. On a very energetic one among the ship builders on + the Clyde, see _Count de Paris_, Les Associations ouvrières + en Angleterre, 1869, ch. 7. Examples on a smaller scale, + Edinburg Review, LXXXIX, 327 ff. On the other hand, a + "lock-out" on the part of capitalists is very difficult, + from the fact that it is impossible to prevent idle workmen + from being supported from the poor fund. Moreover, there can + be no greater folly than for the workmen to add insult to + their masters to their demand for higher wages, because then + the limits within which the latter are willing to continue + the business at all, are made much narrower, than they would + be on a merely economic estimate.] + + [Footnote 176-4: Thus the "iron man," by which a single + person can put from 1,500 to 3,000 spindles in motion; also + an improved plane-machine, by means of which several colors + can be printed at once. (_Ure_, Philosophy of Manufactures, + 366 ff.) Machines for riveting cauldrons. (_Dingler_, + Polytechnisches Journal, LXXV, 413.)] + + [Footnote 176-5: Compare the statements in the Statist. + Journal, 1867, 7.] + + [Footnote 176-6: Thus in several places in 1848, and in + Paris in 1789, where even the lackeys and apothecary clerks + formed such unions. (_Wachsmuth_, Gesch. Frankreichs im + Revolutionszeitalter, I, 178.) Similarly, frequently in + isolated factories.] + + [Footnote 176-7: _Thornton_ mentions six instances in which + strikes and strike-unions may permanently raise wages: a, + when those engaged in an enterprise have a virtual monopoly + in their own neighborhood; b, when the country has, for the + industry in question, great advantage over other lands; c, + when the demand for the product of the industry is necessary + on account of an increasing number and increasing capacity + to pay of customers; d, when the progress of the arts, + especially of machinery, makes the industry more productive; + e, when the rise in the rate of wages affects all branches + of industry to the same extent, and at the same time; f, + when the industry is carried on on so large a scale that it + yields greater profit, even while paying a smaller + percentage than other industries. (On Labour, III, ch. 4.) + It is easy to see that many of these conditions meet in the + building industries in large cities.] + + [Footnote 176-8: Compare _Brentano_ in the Preliminary Essay + to _T. Smith's_ English Guilds, ch. LXXII ff. The same + author's Die Arbeitergilden der Gegenwart Bd., I, 1871.] + + [Footnote 176-9: The greater number of strikes begin with a + small minority, generally of the best paid workmen, whom the + others follow unwillingly but blindly. (Edinb. Rev., 149, + 422.) The despotic power of the Unions over their members + depends principally on the fact that their treasury serves + not only to maintain strikes but at the same time as an + insurance fund for old age and sickness, and that every case + of disobedience of a member is punished by expulsion, i. e., + with the loss of everything he has contributed. Hence the + Quart. Rev., Oct., 1867, advises that these two purposes + which are so hard, technically speaking, to reconcile with + each other, should be required to be kept separate, + especially as most of the unions, considered as benevolent + associations, are really insolvent. (Edinb. Review, Oct., + 1867, 421 ff.) On the other hand, both the _Count of Paris_, + ch. 3, and _Thornton_ are favorable to the admixture of + humane and offensive objects in the trades-unions, because + the former contribute to make the latter milder. _Brentano_, + I, 153, has no great objection to the insolvency shown by + the books of the unions _vis-a-vis_ of their duties as + insurers, since, hitherto, the subscription of an + extraordinary sum has never failed to make up the deficit. A + strike is detrimental in proportion as the striking workmen + represent more of the previous preliminary operations that + go to finish a product; as when, for instance, the 50 or 60 + spinners in a factory strike, and in consequence, from 700 + to 800 other workmen are thrown out of employment and forced + into idleness against their will. What might not have been + the consequence of the great union of the coal miners of + Durham and Northumberland, the members of which numbered + 40,000 men, and stopped work from April to the beginning of + September, 1864, so that at last it became necessary to + carry Scotch coal to Newcastle! Compare _Engels_, Lage der + arbeitenden Klassen in England, 314 ff.] + + [Footnote 176-10: The English unions even forbid their + members to exceed the established time of work, or the + established task. Thus, for instance, a penalty of one + shilling for carrying at any time more than eight bricks in + the case of masons, and a similar penalty inflicted on the + person's companions who witness the violation of the rule + and do not report the guilty party. Equality of wages for + all members; piece-wages allowed only when the surplus + earned is divided among one's companions. Hence the complete + discouragement of all skill or industry above the average. + If an employer exceeds the prescribed number of apprentices; + if he engages workmen not belonging to the union; if he + introduces new machines, a strike is ordered. With all this + the severest exclusion respectively of one class of + tradesmen by the other. If a carpenter lays a few stones, a + strike immediately! (Quart. Rev., October, 1867, 363, 373.) + Rigid shutting out of the products of one district from + another. (Edinburg Rev., October, 1867, 431.) The poor + hand-weavers were thus prevented going from their + over-crowded trade into another. (_J. Stuart Mill_, + Principles, II, ch. 14, 6.) However, many trades-unions + still seem to be free from these degenerations, and the most + influential unions the most moderate in their proceedings. + (_Count de Paris_, ch. 8, 9; _Thornton_, III, ch. 2.) + _Brentano_ expressly assured us that such degeneration of + the unions in England is confined to the building + trades-unions. (I, 68, 188.)] + + [Footnote 176-11: "They have no notion of contenting + themselves with an equal voice in the settlement of labor + questions; they tell us plainly that what they aspire to is + to control the destinies of labor, ... to dictate, to be + able to arrange the conditions of employment at their own + discretion." (_Thornton_, III, ch. 1.) The membership of the + English trades-unions was estimated, at the Manchester + Congress, June, 1868, at 500,000 by some, and at 800,000 by + others. _Brentano_, II, 310, speaks of 960,000. Since 1830, + there have been frequent endeavors to effect a great + combination, with special organizations of the different + trades. During recent years, there have been even beginnings + of an international organization, although in Germany, for + instance, at the end of 1874, there were 345 trades-unions, + with a membership of over 21,000. (_M. Hirsch._) A formal + theory of workmen's unions to culminate in popular + representation, in _Dühring_, Arbeit und Kapital, 1866, + especially, p. 233; while the American _Walker_ accuses all + such combinations, which used compulsion on any one, of + moral high treason against republican institutions. (Science + of Wealth, 272.)] + + [Footnote 176-12: The former view, for instance, of _Harriet + Martineau_, "The tendence of strikes and sticks to produce + low wages" (1834) is now unconditionally shared only by few. + When _Sterling_ says that the momentary success of a strike + is followed by a two-fold reaction which restores the + natural equilibrium, viz.: increase of the number of workmen + and decrease of capital (Journal des Econ., 1870, 192), he + overlooks not only the length of the transition time which + would certainly be possible here, but also that an altered + standard of life of the workmen prevents the former, and one + of the capitalists the latter. The _Count of Paris_ and + _Thornton_ do not doubt that the elevation of the condition + of the English working classes, as proved by _Ludlow_ and + _Jones_, is to be ascribed, in part, to the effect of the + trades-unions. Many of the unions work against the + intemperance and quarrelsomeness of their members. The + people's charter of 1835, came from the London "workingmen's + association."] + + [Footnote 176-13: On the great utility of the arbitration + courts between masters and workingmen, by which the struggle + for wages is terminated in a peaceable manner and without + any interruption of work, see _Schäffle_, Kapitalismus and + Socialismus, 659. More minutely in _Thornton_, III., ch. 5. + _Faucher_, Vierteljahrsschr., 1869, III, 302, calls + attention to the fact that such "boards" may be abused to + oppress small manufacturers.] + + +SECTION CLXXVII. + +WAGES-POLICY.--STRIKES AND THE STATE. + +Should the state tolerate the existence of strikes or strike-unions? +Legislation in the past most frequently gave a negative answer to the +question, as well from a repugnance for high wages as for the self-help +of the masses.[177-1] But even leaving the above reasons out of +consideration, every strike is a severe injury to the national resources +in general,[177-2] one which causes that part especially to suffer from +which those engaged in the various enterprises and the working class +draw their income. And, even for the latter, the damage endured is so +great that it can be compensated for only by very permanently high +wages.[177-3] How many a weak man has been misled by a long cessation +from work during a strike, which ate up his savings, into lasting +idleness and a devil-may-care kind of life. When employers, through fear +of strikes, keep all large orders, etc. secret, the workmen are not in a +condition to forecast their prospects and condition even for the near +future. And in the end a dread of the frequent return of such +disturbances may cause capital to emigrate.[177-4] + +However, where there exists a very high degree of civilization, there is +a balance of reasons in favor of the non-intervention of +governments,[177-5] but only so long as the striking workmen are guilty +of no breach of contract and of no crime. Where every one may legally +throw up his employment, there is certainly no plausible legal objection +to all of them doing so at once, and then forming new engagements. +Coalitions of purchasers of labor for the purpose of lowering wages, +which are most frequent though noiselessly formed, the police power of +the state cannot prevent. If now it were attempted to keep the working +class alone from endeavoring to correspondingly raise their wages, the +impression would become general, and be entertained with right, that the +authorities were given to measuring with different standards. Where the +working classes so sensitively feel the influence of the government on +the state of their wages, they would be only too much inclined to charge +every chance pressure made by the circumstances of the times to the +account of the state, and thus burthen it with a totally unbearable +responsibility. Since 1824, freedom of competition has prevailed in this +matter on both sides in England.[177-6] The dark side of the picture +would be most easily brightened by a longer duration of contracts of +labor.[177-7] + +Whether the trades-unions, when they shall have happily withstood the +fermentative process now going on, shall be able to fill up the void +created by the downfall of the economically active corporations of the +latter part of the middle ages, we shall discuss in our future work, Die +Nationalökonomik des Gewerbfleisses. One of the chief conditions +precedent thereto is the strict justice of the state, which should +protect members of the unions from all tyranny by their leaders, and +from violations of the legal rights of non-members.[177-8] + + [Footnote 177-1: Thus even 34 Edw. III., c. 9. Journeymen + builders were forbidden by 3 Henry VI., c. 1, to form + conspiracies to enhance the rate of wages, under pain of + felony. Finally, 39 and 40 George III., c. 106, threatened + any one who, by mere persuasion, should induce a workman to + leave his master's service, etc., with 2 months in the + work-house, or 3 months' imprisonment. In France, as late as + June and September, 1791, all conspiracies to raise wages + were prohibited under penalty, the incentive to such + prohibition being the opposition to all _intérêts + intermédiaries_ between the _intérêts particulier_; and the + _intérêt general_ which is characteristic of the entire + revolution. Compare the law of 22 Germinal, 11. The German + Empire on the 16th of August, 1731, threatened journeymen + strikers even with death, "when accompanied by great + refractoriness and productive of real damage." (Art. 15.)] + + [Footnote 177-2: The strike of the spinners of Preston, to + compel equal wages with those of Bolton, lasted from October + to the end of December, 1836. The spinners got from their + treasury 5 shillings a week (previously 22-1/2 shillings + wages); twisters, 2 to 3 shillings; carders and weavers + lived on alms. In the middle of December, the funds of the + union were exhausted. Altogether, the workmen lost 400,000 + thalers; the manufacturers, over 250,000; and many merchants + failed. (_H. Ashworth_, Inquiry into the Origin and Results + of the Cotton Spinners' Strike.) The Preston strike of 1853 + cost the employers £165,000, the workmen, £357,000. + (Edinburgh Rev., July, 1854, 166.) The North-Stafford + puddlers' strike, in 1865, cost the workmen in wages alone + £320,000. Concerning 8 strikes that failed, mostly between + 1859 and 1861, which cost in the aggregate £1,570,000, of + which £1,353,000 were wages lost, see Statist. Journ., 1861, + 503. A great mortality of the children of workingmen + observed during strikes!] + + [Footnote 177-3: _Watts_ assumes that the strikers seek to + attain, on an average, an advance in their wages of five per + cent. Now, a week is about equivalent to two per cent. of + the year. If, therefore, a strike lasted one month, the + increase of wages it operates must last one and three-fifths + years to compensate the workmen for their loss. A strike + that lasts 12-1/2 months would require 20 years to effect + the same, and this does not include interest on lost wages. + (Statist. Journal, 1861, 501 ff.) However, it is possible + that the striking workingmen themselves should lose more + than they gained, but that, for the whole working class, the + gain should exceed the loss; since those who had not + participated in the strike would participate in the + increased wages. _Thornton_ is of opinion that employers + have won in most strikes, but surrendered in the intervals + between strikes, so that now English workmen receive + certainly £5,000,000 more in wages than they would be + getting were it not for the trades-unions. (III, ch. 3-4.)] + + [Footnote 177-4: By the Norwich strike, about the beginning + of the fourth decade of this century, what remained of the + industrial life of that city disappeared. (_Kohl_, Reise, + II, 363 ff.) Similarly in Dublin. (Quart. Rev., October, + 1859, 485 ff.) In Cork, the workingmen's union, in 1827, + allowed no strange workmen to join them, and, it is said, + committed twenty murders with a view to that end. The + builders demanded 4s. 1d. a day wages. This discouraged the + erection of new buildings, and it frequently happened that + they found employment only one day in two weeks. (Edinb. + Rev., XLVII, 212.) When workingmen struggle against a + natural decline of the rate of wages, they, of course, add + to their misfortune.] + + [Footnote 177-5: The grounds on which _Brentano_, following + _Ludlow_ and _Harrison_, justifies the intervention of the + state, have a very dangerous bearing, inasmuch as they do + not suppose, as a condition precedent, a perfectly wise and + impartial governmental authority.] + + [Footnote 177-6: 5 George IV., c. 95: "provided no violence + is used." Further, 6 George IV., c. 129, and 122 Vict., c. + 34. The law of 1871 declares the trades-unions lawful, + allows them the right of registration, and thus empowers + them to hold property. In France, the law of May 25, 1864, + alters articles 414 to 416 of the _Code pénal_ to the effect + that only such strikes shall be punished as happen _à l'aide + de violences, voies de fait, manoeuvres frauduleuses_; + also coalitions against the _libre exercise du travail à + l'aide d'amendes, défenses, proscriptions, interdictions_. + But these amendments were rendered rather inoperative by the + fact that meetings of more than 20 persons could be held + only by permission of the police.] + + [Footnote 177-7: As, for instance, the coal workers in the + north of England required a half year's service. So long as + the trades-unions consider themselves, by way of preference, + as instruments of war, it is conceivable how they oppose all + binding contracts for labor. So now among the German + journeymen book-printers, and so, also, for the most part, + in England. (_Brentano_, II, 108.) In quieter times, when + the trades-unions shall have become peace institutions, this + will be otherwise. We cannot even enjoy the bright side of + the freedom of birds without enduring its dark side! In + Switzerland, breaches of contract by railroad officers are + guarded against by their giving security beforehand; in + manufactures, by the holding back of from 3 to 14 days' + wages. (_Böhmert_, Arbeiterverhältnisse, II, 91, 388 ff.)] + + [Footnote 177-8: In Switzerland, the trades-unions have + shown themselves very powerful against the employers of + tradesmen, but rather powerless against manufacturing + employers, and thus materially increased the already + existing inferiority of the former. (_Böhmert_, II, 401.) + They may, however, by further successful development, + constitute the basis of a new smaller middle class, similar + to the tradesmen's guilds at the end of the middle ages; and + indeed by a new exclusiveness, in a downward direction. This + would be a bulwark against the destructive inroads of + socialism similar to that which the freed peasantry in + France were and still are. While this is also _Brentano's_ + view, _R. Meyer_, Emancipationskampf des vierten Standes, + 1874, I, 254 ff., calls the trades-unions a practical + preparation for socialism to which the English "morally went + over" in 1869 (I, 751); which indeed loses much of the + appearance of truth from the fact that _Marx_ (_Brentano_, + Arbeitergilden, II, 332) and the disciples of _Lassalle_ + (_Meyer_, I, 312) hold the trades-unions in contempt. _John + Stuart Mill_ approves of all trades-unions that seek to + effect the better remuneration of labor, and opposes all + which would bring the wages paid for good work and bad work + to the same level. (Principles, II, ch. 14, 6; V, ch. 10, + 5.) Compare _Tooke_, History of Prices, VI, 176. Reports of + the Commissioners appointed to inquire into the Organization + and Rules of Trades-Unions, 1857.] + + +SECTION CLXXVIII. + +WAGES-POLICY.--MINIMUM OF WAGES. + +The demand[178-1] so frequently heard recently, that the state should +guaranty an "equitable" minimum of wages, could be granted where the +natural rate of wages has fallen below that minimum, only on condition +that some of the working class in the distribution of the wages capital +(no longer sufficient in all the less profitable branches of business) +should go away entirely empty handed. Hence, as a rule, in addition to +that wages-guaranty, the guaranty of the right to labor is also +required. But as useful labor always finds purchasers (the word "useful" +being here employed in the sense of the entire economy of a people, and +understood in the light of the proper gradation of wants and the means +of satisfying them), such a right to labor means no more and no less +than that the state should force labor which no one can use, upon +others.[178-2] Something similar is true of Louis Blanc's proposition +that the rate of wages of the workmen should be determined and regulated +by their own votes and among themselves.[178-3] + +All such measures are injurious in proportion as they, by extending aid +and the amount of the minimum, go beyond the limits of benevolence, and +approach those of a community of goods. (§ 81 ff.) However, if they +would be lasting and not pull workmen rapidly down to the very depths of +universal and irremediable misery, these measures should be accompanied +by the bestowal of power on the guarantor to hold the further increase +of the human family within bounds.[178-4] + +The condition of workmen can be continued good or materially improved +only on condition that their numbers increase less rapidly than the +capital destined for wages. The latter increases usually and most surely +by savings. But only the middle classes are really saving. In England, +for instance, the national capital increases every year by at least +£50,000,000, while the working classes spend at least £60,000,000 in +tobacco and spirituous liquors, _i. e._, in numberless instances, only +for a momentary injurious enjoyment by the adult males of the class, one +in which their families have almost no share. According to this, every +compulsory rise in wages would be a taking away from the saving class +and a giving to a class that effect no savings. Is not this to act after +the manner of the savages who cut down a fruit tree in order more +conveniently to relish its fruit?[178-5] + +Benjamin Franklin calls out to workmen and says: If any one tells you +that you can become rich in any other way than through industry and +frugality, do not listen to him; he is a poisoner! And, in fact, only +those changes permanently improve the condition of the working classes +which are useful to the whole people: enhanced productiveness of every +branch of business in the country, increased capital, the growth (also +relative) of the industrial middle classes, the greater education, +strength of character, skill and fidelity in labor of workmen +themselves. Much especially depends upon their foresight and +self-control as regards bringing children into the world. Without this +latter virtue even the favorable circumstances would be soon trifled +away.[178-6] + + [Footnote 178-1: Compare, besides, the Prussian A. L. R., + II, 19, 2. In _Turgot_, _droit du travail_, and _droit au + travail_ are still confounded one with the other. Oeuvres + éd. _Daire_, II, 302 ff; especially 306. In such questions, + people generally think only of factory hands. But have not + writers just as good a _droit au travail_ to readers whom + the state should provide them with, lawyers to clients and + doctors to patients?] + + [Footnote 178-2: _L. Faucher_ calls the _droit au travail_ + worse than the equal and compulsory distribution of all + goods, because it lays hands on not only present products + but even on the productive forces. It supposes that + unlimited production is possible; that the state may + regulate the market at pleasure to serve its purposes; that, + in fact, the state can give without having first taken what + it gave. (Mélanges d'Economie politique, II, 148 ff.) The + French national assembly rejected the "right to labor" on + the 15th of September, 1848, by 596 ayes to 187 nays, after + the provisional government had proclaimed it, February 25. + Le Droit au Travail à l'Assemblée nationale avec des + Observations de _Faucher, Wolowski, Bastiat_ etc., by _J. + Garnier_, Paris, 1848.] + + [Footnote 178-3: _L. Blanc_, De L'Organization du Travail, + 1849.] + + [Footnote 178-4: "Every one has a right to live. We will + suppose this granted. But no one has a right to bring + creatures into life to be supported by other people. Whoever + means to stand upon the first of these rights must renounce + all pretension to the last.... Posterity will one day ask + with astonishment what sort of people it could be among whom + such preachers could find proselytes." (_J. S. Mill_, + Principles, II, ch. 12.)] + + [Footnote 178-5: Compare _Morrison_, loc. cit. Quarterly + Rev., Jan. 1872, 260. The English savings in the savings + banks, between 1839 and 1846, increased yearly in amount + only £1,408,630, and scarcely half of this came from + wages-workmen in the narrower sense of the term. What the + latter contribute to the fund for the old and sick is not + really productive capital but only individually deferred + consumption. Let us suppose that a man had an income of + $3,000 a year, of which he laid out yearly $2,000 ($1,000 + for wages, $1,000 for rent and interest on capital), and + that he capitalizes $1,000. If now this man were, either + through philanthropy or in furtherance of socialism, to + double the wages he paid, the result would not be + detrimental to the economic interests of the whole country + only on the supposition that working classes who received + the increased wages should either save what he is no longer + able to save, or that by inventions or greater personal + skill, etc., they should increase the national income.] + + [Footnote 178-6: According to _Hildebrand's_ Jahrbb., 1870, + I, 435, 193, North American workmen, the quality of work + being supposed the same, now accomplish from 20 to 30 per + cent. less than before 1860. Thus, in 1858, in New York, a + steam engine was manufactured for $23,000, in 2,323 work + days. In 1869, a similar one was built for $40,000 in 3,538 + days. In the former case, the manufacturer made a profit. In + the latter, he lost $5,000. + + _John Stuart Mill_, II, ch. 13. Against the + "philanthropists" who find it hard to preach to the poor, + the only efficacious means of improving their condition, + _Dunoyer_, L. du T., IV, ch. 10, says: The rich _do_ employ + it, although they have much less need of it! Even _Marlo_ + admits that a guaranty of the right to labor, without any + measures to limit population, would, in a short time, and + irredeemably lead the country to destruction. (Weltökonomie, + I, 2, 357.) _von Thünen_, der isolirte Staat., II, 1, 81 + ff., would take a leap out of the vicious circle that those + who live by the labor of their hands can produce no rise in + their wages, because they are too little educated to hold + their increase properly in check; and that, on the other + hand, they cannot give their children a decent education, + because their wages are too low; by suggesting that + educational institutions should be established by the state, + and that these should elevate the subsequent generation of + workmen intellectually.] + + + + +CHAPTER IV. + +INTEREST ON CAPITAL. + + +SECTION CLXXIX. + +THE RATE OF INTEREST IN GENERAL. + +Interest on capital,[179-1] or the price paid for the use of capital, +should not be confounded with the price of money (§ 42); although in +common life people so frequently complain of want of money where there +is only a want of capital, and sometimes even when there is a +superabundance of money.[179-2] This error is connected with the fact, +that for the sake of convenience, loans of capital are so often effected +in the form of money and that they are always at least estimated in +money; but neither of these things is essential. + +In reality, however, we as seldom meet with interest[179-3] pure and +simple, as we do with rent pure and simple. A person who works with his +own capital can, at best, by a comparison with others, determine where, +in the returns of his business, wages stop and interest begins.[179-4] +And even in the loaning of capital, it depends largely on supply and +demand, whether the creditor shall suffer a deduction in consequence of +the absence of care and labor attending his gain, and whether the +debtor, in order to get some capital at all, shall sacrifice a part of +the wages of his labor.[179-5] When Adam Smith assumes it to be the rule +that the "profit of stock" is about twice as great as the "interest of +money,"[179-6] it is evident that a considerable amount of what is +properly wages or profit of the employer (_Uhternekmer_ = undertaker) is +included in the former. + +Many businesses have the reputation of paying a very large interest on +the capital employed in them, when in reality they only pay the +undertaker of them wages unusually high as compared with the amount of +capital employed in them. Apothecaries, for instance, are called in some +places "ninety-niners," because it is said that they earn 99 per cent. +To discover the error, it would be sufficient to inquire the rate of +interest on the capital borrowed by the apothecary on hypothecation, for +instance, to enlarge his industry. But on the other hand, such a man who +has more than any other manufacturer to do with the most delicate +materials and with them in greater variety, requires proportionately +greater caution and knowledge. Besides, as the guardian of the health +and life of so many, and even as the comptroller of physicians, he +should be a man who inspired universal and unqualified confidence.[179-7] +By the rate of interest customary in a country, we mean the average rate of +the interest on money-capital employed safely and without trouble. + + [Footnote 179-1: In the case of fixed capital, we generally + speak of rent; in the case of circulating capital, of + interest. If interest be conceived as a fractional part of + the capital itself, the relation between the two is called + "the rate of interest," most generally expressed as a + percentage, and for one year.] + + [Footnote 179-2: In Russia, great depreciation of the + assignats, and yet the people complained of a "want of + money." (_Storch_, Handbuch, II, 15.) According to the San + Francisco correspondent of the Times, Jan. 31, 1850, one per + cent. a day discount was paid there! Compare _North_, + Discourse on Trade, 11 seq.] + + [Footnote 179-3: Gross interest and net interest + corresponding to the difference between gross product and + net product.] + + [Footnote 179-4: This is the natural rent of capital in + contradistinction to the stipulated rent. (_Rau_, Lehrbuch, + I, § 223.)] + + [Footnote 179-5: Thus, for instance, a so-called beginner + who is conscious of possessing great working capacity, but + who possesses for the time being little credit. _Tooke_, + Considerations on the State of the Currency, 1826, + distinguishes three kinds of capitalists: a, those who are + averse to running any risk whatever or incurring any + trouble, or are not able to incur any risk or trouble, for + whom every great increase of the sinking fund lowers the + rate of interest, and every war loan raises it; b, those who + will run no risk, but who are not averse to the trouble of + looking after their investments and of endeavoring to obtain + a higher rate of interest; c, such as, to obtain a higher + rate of interest, unhesitatingly risk something. Borrowers + he divides thus: a, those who employ the borrowed capital + and their own in such a way as to enable them to meet their + obligations and besides to earn a reasonable profit; b, + those who need others' capital to make up for the momentary + failure of the productiveness of their own; lastly c, + unproductive consumers.] + + [Footnote 179-6: Wealth of Nat., I, ch. 9. The gross product + of English cotton industry was, in 1832, estimated at + £32,000,000, viz: £8,000,000 worth of material, £20,000,000 + wages, £2,000,000 interest, £2,000,000 undertaker's profits. + (_Schön_, Nat. Oek, 104.)] + + [Footnote 179-7: _Adam Smith_, I, ch. 10, 1: where the + reasons why a shop-keeper in a small town apparently gets a + larger interest than one in a large city, and yet gets rich + less frequently, are developed. The high profit made from + industrial secrets, Adam Smith very correctly considers + wages (I, ch. 7). Why not also that made by inn-keepers? (I, + ch. 10, 1.) When the returns of a business differ according + to circumstances which depend on the person of the conductor + of the business himself, and may by him be transferred into + another business, etc.; when the competition in it is + determined by personal agreeableness or disagreeableness, it + is evident that the larger returns are to be ascribed rather + to the highness of wages than of the rate of interest. The + profit also which a second-hand hirer makes is wages. + (_Riedel_, Nat. Oek., 376.)] + + +SECTION CLXXX. + +RATE OF INTEREST IN GENERAL.--ITS LEVEL. + +Within the limits of the same national-economic territory, the different +employments of capital tend uniformly to pay the same rate of +interest.[180-1] If one branch of business were much more profitable +than another, it would be to the interest of the owners of capital to +allow it to flow into the former and out of the latter, until a level +was reached.[180-2] + +The most noticeable exception to this rule is only an apparent one. The +revenue (_Nutzung_) derived from the use of capital must not be +confounded with its partial restoration.[180-3] Thus, for instance, the +rent of a house, if the entire capital is not to be sooner or later +consumed entirely, must embrace, besides a payment for the use of the +house, a sum sufficient to defray the expenses of repairing it, and even +to effect a gradual accumulation of capital for the purpose of +rebuilding. The risk attending the investment of capital plays a very +large part and must be taken into special consideration. If the risk in +a business be so great that ten who engage in it succeed and ten fail, +the returns of the former, which are more than double those usual in the +country, in reality pay, when the ten who failed are taken into the +account, only the rate of interest customary in the country. The risk +may depend on the uncertainty of the person to whom the capital is +confided;[180-4] on the uncertainty of the branch of business in which +it is intended to employ it,[180-5] or on the uncertainty of the +commercial situation in general; but especially may it depend on the +uncertainty of the laws.[180-6] The temporary lying idle of capital, for +instance, in dwelling houses at bathing places during the winter season, +increases the rate of interest much more than it does the rate of wages +in the corresponding case of the lying idle of labor; for the reason +that there is something pleasurable in the repose of the latter. +(_Senior._) On the whole, the vanity of mankind has an effect upon the +rate of interest similar to that which it has on the rate of wages. (See +§ 168.) It causes the small chances of loss to be estimated below their +real value, and the extraordinary chances of gain above it.[180-7] + + [Footnote 180-1: Compare _Harris_, Essay on Money and Coins, + 13. _Per contra, Ganilh_, Dictionnaire analyt., 107. + According to _Hermann_, Staatsw. Untersuchungen, 147, a + product which withdraws an amount of capital = _a_ from the + immediate use of its owner for _n_ months must bring in in + its price a surplus, over and above the outlay of capital, + which would bear the same ratio to the profit from another + product which employed an amount of capital = _b_, _m_ + months, that _an_ bears to _bm_.] + + [Footnote 180-2: The class of bankers, etc. which precisely + in the higher stages of civilization is one so highly + developed, is called upon to adjust these differences.] + + [Footnote 180-3: Life annuities and annual revenues, _à + fonds perdu_.] + + [Footnote 180-4: Hence, for instance, good men engaged in + industrial pursuits who employ borrowed capital productively + pay lower interest than idlers who are suspected of desiring + only to spend it in dissipation. High house-rent usually + paid by proletarians.] + + [Footnote 180-5: Thus even in _Anderson's_ time, it was + necessary that the profit of one good year in the whale + fishery should compensate for the damage caused by six bad + ones. (Origin of Commerce, III, 184.) Slave-traders made + their calculations to lose from three to four out of five + expeditions. (Athenæum, May 6, 1848) Similarly in smuggling + and contraband. High rate of interest in gross adventure + trade and bottomry contracts, frequently 30 and even 50 per + cent.; in ancient Athens, for a simple voyage to the Black + Sea, 36 per cent., while the rate of interest customary in + the country was only from 12 to 18 per cent.; the interest + paid by rented houses only 8-1/7, and by land leases only 8 + per cent. (_Bockh_, Staatshaushalt der Athener, I, 175 ff.; + _Isaeus de Hagn._, Hered., 293) In Rome, before Justinian's + time, maritime interest was unlimited. (_Hudtwalker_, De + Foenore nautico Romano, 1810.) And so in the manufacture of + powder, the frequent explosion of the mills has to be taken + into account: in France and Austria, 16 per cent. per annum. + (_Hermann_, Principien, 119.) Here belong those new + enterprises which, when they succeed, pay a high profit. + _Thaer_, in reference to this insurance premium, says: if + the capital employed to purchase a landed estate yields 4 + per cent., the inventory (_Inventar_) should bring in at + least 6, and the working capital 12 per cent. (Ration. + Landwirthschaft.)] + + [Footnote 180-6: Compare _supra_, § 91; _infra_, §§ 184, + 188.] + + [Footnote 180-7: Thus _Friedr. Perthes_, in _Politz_, + Jarhbüchern, Jan., 1829, 42, thinks that the publication of + scientific books in Germany, since 1800, caused, on the + whole, a loss of capital. In the Canadian lumber trade, + also, speculators, in the aggregate, lost more than was + gained. Yet the business goes on because of its lottery + character. (_John Stuart Mill_, II, ch. 15, 4.) In + lotteries, it is certain that the aggregate of players lose. + So too in speculation in English stocks, on account of the + costs to be paid the state. In the case of frightful losses, + which may afford food for the imagination, the reverse is + found. Thus, for instance, in England, fire insurance, stamp + duties included, was paid for at a rate five times as high + as mathematical calculation showed it to be worth. + (_Senior_, Outlines, 212 ff.) Much here depends naturally on + national character, which, in England for instance, or in + the United States, is much more adventurous than in many + quiet regions of continental Europe.] + + +SECTION CLXXXI. + +RULE OF INTEREST IN GENERAL.--CAUSES OF DIFFERENT RATES. + +The real exceptions to the above rules are caused by a prevention of the +leveling influx and outflow of capital. Among nations in a low stage of +civilization, there is wont to be a multitude of legal impediments in +this respect. The existence of a difference of classes, of privileged +corporations, etc., not only restrains the transition of workmen, but +also of capital from one branch of industry to another. But even the +mere routine of capitalists, that blind distrust of everything new so +frequently characteristic of easily contented men, may produce the same +result.[181-1] In the higher stages of civilization, patents for +inventions and bank privileges, are causes of a lastingly higher rate of +interest than is usual in the country.[181-2] Finally, since in many +enterprises only a large amount of capital can be used at all, or at +least with most advantage, the aggregation of which from many small +sources is ordinarily much more difficult than the division of a large +one into small fractional parts; the rate of interest for very small +amounts of capital, and especially in the higher stages of civilization, +is usually lower than that of large amounts of capital. We need only +mention interest paid by savings-bank investments.[181-3] + +If circulating capital has been changed into fixed capital, its yield +will depend upon the price of the particular goods in the production of +which it has been made to serve. Compared with the cost of restoration +of fixed capital, this yield may, in a favorable case, constitute an +extraordinarily high rate of interest, in an unfavorable a very low one; +and the former of these two extremes has a greater chance of being +realized, in proportion as it is difficult to multiply fixed capital of +the same kind; the latter, the more exclusively it can be employed in +only one kind of production, and the longer time it takes to be used up +by wear.[181-4] When fixed and circulating capital coöperate in +production, the latter, because it can be more easily withdrawn, but +also more easily replaced, first takes out its own profit, that is the +profit usual in the country and leaves all the rest to the former. When +fixed capital is sold, practically no attention is paid to what it +originally cost. The purchaser pays only for the prospective revenue it +will yield, which he capitalizes at the rate of interest usual in the +country. The seller henceforth looks upon his gain as an accretion to +capital, his loss as a diminution of capital, and no longer as high or +low interest.[181-5] That accretion might be considered the wages, paid +once for all, for the intelligent labor which governed the original +investment of the capital, and _vice versa_. + + [Footnote 181-1: Thus the rate of interest in the Schappach + valley remained for a long time much lower than in the + vicinity, for the reason that the peasantry who had grown + rich through the lumber trade possessed notwithstanding + little of the spirit of enterprise. (_Rau_, Lehrbuch, I, § + 233.)] + + [Footnote 181-2: Here the law produces a species of + artificial fixation.] + + [Footnote 181-3: _Von Mangoldt_, Unternehmergewinn, 150.] + + [Footnote 181-4: In other words, the more fixed they are. + Thus, for instance, dwelling houses in declining cities, + canals, etc. which have been supplanted by better commercial + routes; or again, the shafts and stulms of a mine which has + been abandoned. When Versailles ceased to be a royal + residence, the value of inhabited houses sank to one-fourth + of what it had been. (_Zinkeisen_ in _Raumer's_ histor. + Taschenbuch, 1837, 426.) A rate of interest greater than + that usual in a country is seldom found where freedom of + competition prevails, since it is necessary there to + distinguish between rent and interest on capital. When in an + open city, the capital employed in the construction of + dwelling houses _detractis detrahendis_ pays 8 per cent., + while the rate of interest customary in the country is only + 4 per cent., the supply of houses will grow continually + greater. Only the difficulties in the way of transferring + capital from one business to another could here retard the + leveling process, which where the political prospect for + instance was bad, might last a long time--one of the + principal reasons why, in 1848, the rent of houses declined + much less than their purchase prices. The conjuncture was + not serious enough to prevent the increase of population; + but it entirely stopped the building of new houses. On the + other hand, a bridge or railroad company may maintain a high + rate of profit because competition cannot exist in the face + of the great expense such enterprises require; but + especially because the party who has here the advantage of + priority may lower the price of transportation to such a + point as to entirely discourage his rival. Compare + _Hermann_, Staatsw. Untersuchungen, 145 ff. Interesting + example of the London gas and water companies in _Senior_, + Outlines, 101.] + + [Footnote 181-5: Thus, for instance, Leipzig-Dresden + railroad stock cost originally 100 thalers per share, and + was taken at that rate. The yearly dividends amounted in + 1856 to 13 thalers; that is, 13 per cent. for the original + stockholders. But a person who on the 30th September, 1856, + paid 285 thalers for a share, received but an interest of + 4-1/2 per cent. on his capital. It is characteristic, how + _Serra_, Sulle Cause, etc., 1613, I, 9, calls the high and + the low rate of interest _prezzo basso e alto delle + entrate_.] + + +SECTION CLXXXII. + +VARIATIONS OF THE RATE OF DISCOUNT. + +The fact that in commerce, etc., the rate of interest on capital loaned +for short periods of time (discount) is subject to great fluctuations, +while the mortgage rate of interest, for instance, remains the same +throughout, depends on similar causes.[182-1] Yet there are +contingencies in trade which, when taken immediate advantage of, promise +enormous profits, but which may disappear within a month; risks of the +most dangerous kind which can be conjured only by the immediate aid of +capital. These are both sufficient grounds of a high rate of interest. +Again, there are times of the profoundest calm in the commercial world, +during which capitalists are perfectly willing to make loans at a low +rate of interest, provided they are sure to be able to get back their +capital with the first favorable breeze that blows. Agriculture is too +immovable to come opportunely to the assistance of capitalists, here as +a receiver and there as a loaner of capital. As the cycle of its +operations is gone through usually only in a series of years, sudden +influxes or outflows of capital would cause it the greatest +injury.[182-2] + + [Footnote 182-1: _Nebenius_, Oeff. Credit, I, 74 ff. Thus, + Hamburg discount towards the end of the last century + fluctuated between 2-1/2 and 12 per cent., while the capital + invested in agriculture brought an interest almost + invariably of 4 per cent. (_Büsch_, Geldumlauf, VI, 4, 19.) + At the same time, in Pennsylvania, the usual rate of + interest was 6 per cent. per annum, and the rate of discount + not unfrequently from 2 to 3 per cent. a month. (_Ebeling_ + Geschichte und Erdbeschreib. von Amerika, IV, 442.) During + the crisis of 1837, it happened that 1/4 per cent. a day was + paid. (_Rau_, Archiv. N. F. IV, 382.) In the Prussian ports, + during the crisis of 1810, it is said that in July the rate + of discount was 2-1/2 per cent. a month. (_Tooke_, Thoughts + and Details, I, 111.) In Hamburg and Frankfort the rate of + discount rose in the spring of 1848, but declined in June to + 2; until December it was 1-1/4, until the summer of 1849, + 3/4 per cent. (Tüb. Zeitschr., 1856, 95.) Rate of discount + in France, about 1798, at least 2 per cent. a month. + (_Büsch_, loc. cit., IV, 52.) Half a year previous, capital + employed in the purchase of land paid an interest of from 3 + to 4 per cent. Legal interest was 5 per cent.; discount, at + most, 6 per cent.; in very prosperous times 8-9, per cent. + (_Forbonnais_, Recherches et Considérations, I, 372.)] + + [Footnote 182-2: Remarkable case in _Cicero's_ time in which + bribery, carried on on a large scale, raised the rate of + discount from 4 to 8 per cent. _Cicero_ ad. Quint. M, 15; + ad. Att. IV, 15.] + + +SECTION CLXXXIII. + +EFFECT OF INCREASED DEMAND FOR LOANS. + +The price paid for the use of capital naturally depends on the relation +between the supply and demand, and especially of circulating capital. +The increase of the supply need no more unconditionally lower the rate +of interest than the price of any other commodity. If 50 hunters kill +1,000 deer yearly, and give 100 deer per annum as interest to the +capitalists who provided them with ammunition and rifles, a second +capitalist with an equal number of rifles and an equal amount of +ammunition may appear on the scene. If now 2,000 deer a year are killed, +the rate of profit of the capitalists will probably remain the same. But +if the woods are not rich enough in game for this, or the hunters not +numerous enough, too indolent, or too easily satisfied, the rate of +interest falls.[183-1] + +The difficulties in the way of the desired increase of capital are here +of great importance. The smaller the surplus over and above their +absolutely necessary wants, which the people produce, the less their +tendency to make savings, the less the inclination to capitalization; +and the less the security afforded by the law is, the higher must the +rate of interest be to induce people to face these difficulties. We may +very well transfer the idea of cost of production to this +condition.[183-2] + +The demand for capital depends, on the one hand, on the number and the +solvability of borrowers, especially of non-capitalists like landowners +and workmen; and, on the other hand, on the value in use of the capital +itself. Hence the growth of population is, other circumstances being the +same, a means to raise the rate of interest; because it infallibly +increases the competition of borrowers of capital, even if the increased +rate must take place at the expense of wages. The solvability or paying +capacity of the land-owning class as contrasted with the capitalists +can, in the last analysis, depend only on the extent and fertility of +their lands and on the quality of their agricultural husbandry; the +solvability or paying capacity of the working class, only on their skill +and industry. Where these have grown, an increase of the rate of +interest may be found in connection with an absolute growth of the rate +of wages and of rent, because the aggregate income of the nation has +become greater. + +The value in use of capital, which is more homogeneous in proportion as +it has the character of circulating capital (_res fungibiles_) is, in +most instances, synonymous with the skill of the working class, and the +richness of the natural forces connected with it. The deciding element, +therefore, is the yield of the least productive investment of capital +which must be made to employ all the capital seeking employment. This +least productive employment of capital must determine the rate of +interest customary in a country precisely as cost of production on the +most unfavorable land determines the price of corn (§§ 110, 150), and as +the result of the work of the laborer last employed does the rate of +wages. (§ 165.) + +What portion of the total national income, after deduction is made of +rent, shall go to the capitalists and what portion to the working class, +will depend mainly on whether the capitalists compete more greedily for +labor or the laboring classes for capital.[183-3] If, for instance, +capital should increase more rapidly than population, there must be a +relative increase in wages, and _vice versa_.[183-4] This is true +especially of that peculiar kind of higher wages which we shall (§ 145, +ff.) designate as the "undertaker's profit." The smaller the number of +persons engaged in enterprises is, in comparison with the number of +retired persons who live on their rents, incomes, etc., the smaller is +the portion of the so-called net profit of enterprise the latter must be +satisfied with in the shape of interest.[183-5] + + [Footnote 183-1: It is one of _Ricardo's_ (Principles, ch. + 21) chief merits, that he demonstrated the groundlessness of + the opinion that the mere increase of capital must, on + account of the competition of capitalists, lower the rate of + interest, as is assumed by _Adam Smith_, I, ch. 9, _J. B. + Say_, Traité, II, 8, and others. Compare also, _John Stuart + Mill_, Principles, IV, ch. IV, 1.] + + [Footnote 183-2: _Storch_, Handbuch, II, 20.] + + [Footnote 183-3: Frequent withdrawals of capital must, other + circumstances being the same, temporarily raise the rate of + interest. In the long run, however, the question is decided + by this: whether public opinion considers labor a greater + sacrifice than the saving of capital. Compare _Roesler_, + loc. cit., 8.] + + [Footnote 183-4: Compare _Hermann_, Staatsw. Unters., 240 + ff. Very much depends on whether the new increased + consumption (of workmen when wages are rising, of + capitalists when wages are declining) is of goods which are + mainly the product of large capital, large factories, etc., + or chiefly of common labor, (_von Mangoldt_, Grundriss, 155 + seq.) When _Adam Smith_ suggests that the relation between + wages and the profit of capital is determined by this: + whether there is a market demand for more work or more + commodities, for more "work to be done" or "work done" (I, + ch. 7), he is, spite of appearances, very unsatisfactory. + _Malthus_ distinguishes a restrictive principle of the rate + of interest, viz.: the return made to the least productive + agricultural capital, and a regulative one, viz.: the + reciprocal relation between demand and supply of capital and + labor. (Principles, ch. 5, sec. 4.) _Ricardo_, ch. 6, makes + the profit of capital at all times and in every country + depend on the quantity of labor which it is necessary to + expend on the land which pays no rent, in order to satisfy + the wants of workmen--a very correct theory. + + Only _Ricardo_ himself (ch. 21) and his school postulate + altogether too unconditionally that their wants would always + coincide with the minimum of maintenance or support. Thus, + for instance, _J. S. Mill_, Principles, IV, ch. 3, 4. + However, _Mill_ instead of _Ricardo's_ "wages" employs the + better expression, "cost of labor." _Senior_ teaches that + the distribution of the aggregate result between laborers + and capitalists depends on the anterior course of both + classes: on the value of the capital previously employed by + capitalists to produce the means of satisfying working men's + wants, and on the number of workmen which the previous + laboring population have brought into existence. (Outlines, + 188 ff.) Concerning _von Thünen's_ vain attempt at a general + formula, see _supra_, § 173. _Fourier's_ idea that 5/12 of + the product should be distributed among labor, 3/12 among + talent, and 4/12 among capital, is entirely baseless. (N. + Monde, 309 ff.) _Considérant_, Destinée sociale, 192 ff. As + early a writer as _H. Boden_, Fürstliche Machtkunst, 1700 + and 1740, 42, came strikingly near the truth. According to + him, a low rate of interest is produced by four + circumstances: surplus capital, a dearth of landed estates, + a want of credit and exact justice, and lastly, the heavy + taxation of capital.] + + [Footnote 183-5: Thus, in the last century, Spanish + capitalists loaned capital readily to sure commercial + companies, at from 2 to 3 per cent. per annum. (_Bourgoing,_ + Tableau de l'Espagne, I, 248.) The contemporary low rates of + interest in Hannover, _Büsch_, Geldumlauf, VI, 4, 12, + endeavors to explain by the absence of opportunities for + investment, as no one dared to loan to any extent on fiefs + or on the land of the peasantry, and because there was no + law governing bills of exchange, etc.] + + +SECTION CLXXXIV. + +HISTORY OF THE RATE OF INTEREST. + +Among barbarous nations, the loaning of capital is wont to happen so +seldom, and to be limited so strictly to near relations, that it does +not yet occur to any one to stipulate for a regular compensation +therefor.[184-1] But, however, when they pass from this state to +interest proper, the rate must be, of course, very high.[184-2] The +premium for insurance is here very great, the possibility and +inclination to accumulate capital exceedingly small. Even of the +existing supply of capital, a great part remains idle, because the +faculty and the institutions necessary to concentrate it and permit it +to flow are wanting. (§ 43.) The unskillfulness of labor is more than +overcome by the excess of fertile and naturally productive land, of rich +sites still unoccupied, the cream of which, as it were, needs only to be +culled. Population is indeed sparse, but the usually prevailing absence +of freedom of the lower classes prevents wages claiming the full benefit +of competition.[184-3] This last circumstance is especially +important.[184-4] For a given amount of the national income and of rent, +every depression of wages must obviously raise the rate of interest, and +every enhancement of wages lower it.[184-5] + + [Footnote 184-1: _Tacit._, Germ., 26; _Marculf_, Form., 18, + 25 ff., 35; _Savigny_, Ueber das altrömische Schuldrecht, in + the transactions of the Berlin Academy, 1833, 78 seq.] + + [Footnote 184-2: According to the Lex Visig., V, 5, § 8, the + maximum rate of interest allowed on loans of money was + 12-1/2 per cent., and on other _res fungibiles_, 50 per + cent. From the 12th to the 14th century, the Lombards and + the Jews in France and England took generally (?) 20 per + cent. a year. (_Anderson_, Origin of Commerce, _a._, 1300.) + Philip V. of France, in 1311, fixed the rate of interest at + the fairs in Champagne at 15 per cent. (a species of + discount) at most, and at a maximum everywhere of 20 per + cent. (Ordonnances de la France, I, 484, 494, 508.) The + legal rate of interest in Verona, in 1288, was fixed at a + maximum of 12-1/2 per cent.; in Modena, 1270, at 20 per + cent. (_Muratori_, Antiquitt. Ital., I, 894); in Bresica, + 1268, at 10 per cent. (_v. Raumer_, Geschichte der + Hohenstaufen, V, 395 ff.) Frederick II. wished to reduce it + to 10 per cent. for Naples, but failed. (_Bianchini_, Storia + delle Finanze di Nap., I, 299.) The tables of _Cibrario_, + Economia polit. del medio Evo., III, 380, for 1306-1399, + show for upper Italy interest to have been at 20, 15, 14, + 10, and also 5-1/2 per cent. About 1430 the Florentines, in + order to moderate the enormously high rate of interest, + called Jews to their city, and the latter promised not to + charge over 20 per cent. (_Cibrario_, III, 318.) In the + Rhine country, the Kowerzens, during the 14th century, took + from 60 to 70 per cent., for which they had, however, to pay + a heavy tax to the archbishop. (_Bodmann_, Rh. Alterthümer, + 716.) Of Jewish maximum rates of interest, in the 14th and + 15th centuries, see _Stobbe_, Juden in Deutschland während + des M. Alters, 103, 110, 234 seq.; _Hegel_, Strassb. Chr., + II, 977, 984. + + The rate of interest usual in these countries must not + however be calculated from the data furnished by these + usurious rates and fixed rates of interest, simply. In + Germany, the rate of interest promised by princes in the + 13th and 14th centuries was usually 10 per cent. The + Frankfort municipal loans made by Jews in the 14th century + bore interest at the rate of 9, 11-2/3, 13, 18, 26, and even + 45 per cent. (_Kriegk_, F.'s Bürgerzwiste, 343, 539.) The + rate of interest in the purchase of annuities continually + declined between 1300 and 1500, especially in the time of + the emancipation of manual laborers. Old Base documents + give, between 1284 and 1580, as the highest rate, 11-3/9, + and as the least, 5 per cent. The latter became more and + more usual later, especially in the sale of house-rents + (_Hauszins_), so that in 1841 all annuities (_Renten_) might + be canceled by a payment of their amounts multiplied by 20. + Until the beginning of the 15th century, in the city, the + rule was 6 to 7 per cent.; outside of it, 8 to 10 per cent. + (_Arnold_, Geschichte des Eigenthums in den deutschen + Städten, 222 seq., 227 seq.) According to the Bremen Jahrb. + of 1784, 164 seq., the rate of interest in the case of + _Handfesten,_ in 1295, = 10 per cent., gradually sank: in + the 15th century it was never over 6-2/3; after 1450, + generally 5; in 1511 only 4 per cent. In 1441 ff., in + Augsburg, people were satisfied with a business profit of + 7-2/3 per cent., while the usual rate of interest paid by + house-rent, etc. was 5 per cent. (_Hegel_, Augsb. Chr., II, + 134 seq., 157.) Handsome tables in the rate of interest in + the purchase of annuities for all Germany, from 1215 to + 1620, give as the rule, 7 to 10, scarcely ever over 15 per + cent., in _M. Neumann_, Geschichte des Wuchers, 266 ff. For + the upper Rhine, compare _Mone's_ Zeitschr., 26 ff. Among + the Fathers of the councils of Constance and Basil 5 per + cent. was considered equitable. Compare _F. Hammerlin_, + 1389-1457, De Emtione et Venditione unius pro viginti. + Russian interest at 40 per cent., according to the laws of + Jaroslaw (ob. 1054 after Christ). _Karamsin_, Russ. Gesch., + II, 47.] + + [Footnote 184-3: The high rate of interest in many countries + at present may be thus accounted for. In the United States, + during the last century, less than 8 per cent. was seldom + paid. (_Ebeling_, III, 152.) According to _M. Chevalier_, + Lettres sur l'Amérique du Nord, 1836, I, 59, the rate of + interest in Pennsylvania was 6, in New York, 7, in most of + the slave states, 8-9; in Louisiana, 10 per cent. In South + Australia (1850) it was, with full security, 15-20 per cent. + (_Reimer_, Südaustralien, 39.) In the West Indies, about the + end of the last century, a strong negro might produce a + revenue equal to one-fourth of his capital value. (_B. + Edwards_, History of the British West Indies, II, 129.) In + Brazil, the lowest rate of interest was at 9 per cent., and + 12-18 per cent. was nothing unusual. (_Wappäus_, M. and S. + Amerika, 1871, 1413.) In Cuba, for the government 10, for + private parties, 12 to 16 per cent. (_Humboldt_, Cuba, I, + 231.) In Potosi, in 1826, Temple got 30 per cent. interest + on chattel mortgage, and from 2 to 4 per cent. a month was + offered, while the rate of interest in Buenos Ayres amounted + to 15 per cent. per annum. (_Temple_, Travels, II, 217.) In + Russia, _Storch_, Handbuch, I, 262, speaks of 8-10 per cent. + According to _v. Haxthausen_, it was, in the interior, never + less than from 8 to 12 per cent. per annum; at Kiew and + Odessa, 1-1/4, 1-1/2 and 2 per cent. per month. (Studien, I, + 58, 467; II, 495.) In _Greece_, the rate of interest on + first mortgages is at least 10, on a second, 15-18 per cent. + (Ausland, 1843, No. 82.)] + + [Footnote 184-4: _Nebenius_, Oeff. Credit, I, 55.] + + [Footnote 184-5: Only in this particular instance is what + _Ricardo_ so frequently insists on true, viz: that the rate + of wages can be increased only at the expense of the profit + of capital, and _vice versa_.] + + +SECTION CLXXXV. + +HISTORY OF THE RATE OF INTEREST.--INFLUENCE OF AN ADVANCE IN +CIVILIZATION. + +With an advance in civilization, the rate of interest is wont to +decline.[185-1] [185-2] One of the chief causes of this phenomenon is the +necessity, as population and consumption increase, to employ capital in +the fertilization of less productive land, and in less profitable +investments.[185-3] An increase in the stock of money does not +necessarily depreciate the rate of interest. If this increase comes in +connection with a corresponding depreciation of the individual pieces of +metal, it cannot be said that the nation has thereby become richer in +capital. All that would be required in such case is only a greater +number of pounds of gold or silver, or more paper bills to represent the +same capital.[185-4] Only during the transition-period, during which the +depreciation of money is still incomplete, is the rate of interest wont +to be lowered; and all the more, since loaned capital is generally +offered and sought after in the form of money.[185-5] [185-6] + +The decline of the rate of interest generally shows itself earliest in +the large cities, which are everywhere the national organ, in which the +good and bad symptoms of later civilization may be soonest +observed.[185-7] + +Moreover, the condition of capitalists is not necessarily made worse by +a decline of the rate of interest. It is possible that, for a long time, +the increase of capital should continue more rapid than the decrease of +interest for each individual. (If, indeed, the aggregate interest of +capital should become absolutely smaller, there is always a pleasant +remedy available, viz.: to consume a part of the capital!) But, however, +a decline of the rate of interest is nearly always followed by increased +activity on the part of capitalists; and they come to the resolve to +retire later to enjoy the results of their previous labors. In Holland, +after the time of Louis XIV., no branch of business was wont to pay more +than from two to three per cent. In the case of the purchase of land, no +one calculated on more than two per cent. Hence it was scarcely possible +for small capitalists there to live on their interest; and the good +sense of the people so well adapted itself to this state of things that +to live in leisure on one's rents was considered a not entirely +honorable mode of existence.[185-8] The lower the rate of interest, the +larger, in highly civilized countries, is the stock on hand of cash apt +to become, for the reason that business men then hope to gain more by +the advantages of cash payments than by the saving of interest.[185-9] +[185-10] + + [Footnote 185-1: _Proudhon's_ idea, that this decline might + at last bring about a total abolition of interest, is based + on the same error as this other: that since a man may keep + diminishing his per diem quantum of food, he might finally + dispense with food altogether. _Proudhon's_ Banque du + Peuple--People's Bank--which, by gradually diminishing the + interest on its loans to the minimum cost of its + administration, should compel other capitalists to follow + its example.] + + [Footnote 185-2: Thus, in England, by virtue of 37 Henry + III., c. 9, the legal interest was = 10 per cent.; by 21 + James I, c. 17 = 8; about 1651 = 6 per cent. (confirmed in + 1660); by 12 Anne, ch. 16 = 5 per cent. In the time of + George II., where the security was good, only 3 per cent. + was, as a rule, paid. In France, the legal rate of interest, + at the beginning of the 16th century, was 1/10 of the + capital; after 1657, 1/12; 1601 (_Sully_), 1/16; 1634 + (_Richelieu_), 1/18; 1665 (_Colbert_), 1/20. Compare + _Forbonnais_ Recherches et Considérations, I, 48, 225, 385 + ff. It continued at this rate of 5 per cent. with short + interruptions until the revolution. (_Warnkönig_, Franz. + Staats. und Rechtsgeschichte, II, 588 seq.) + + The rates of interest in Russia, in the 16th century, had + already declined to 20 per cent. (_Herberstein_, Reise, 41 + ff.; _Karamsin_, Russ. Geschichte, VII, 169.) In Holland, in + 1623, it was estimated that land purchases paid 3 per cent.; + hypothecations, 4 to 6; deposits, 5 to 6; a flourishing + business, 10 per cent. Compare _Usselinx_ in _Laspeyres_, + Geschichte der volkswirthschaftl. Anschauungen der + Niederländer, 76. About 1660, the rate of interest usual in + Italy and Holland was at most 3 per cent. (in war times, 4); + in France, 7; in Scotland, 10; in Ireland, 12; in Spain, 10 + to 12; in Turkey, 20 per cent. (_Sir J. Child_, Discourse on + Trade, French translation, 75 ff.) Side by side with 6 per + cent. as the rate of interest in England, it was (a little + later) 10 in Ireland. _Petty_, Political Anatomy of Ireland, + 74. + + The same course of things is to be observed in ancient + times. In _Solon's_ time, and again in that of _Lysias_, it + was 18 per cent. (_Böckh_, Staatshaushalt der Athener, I, + 143 ff.) I am of opinion that the rate of interest declined + during this long interval, but rose again in consequence of + the Peloponnesian war. Among friends, in the time of + _Demosthenes_, 10 per cent. (adv. Onetor., I, 386.) + _Aristotle_, Rhet., III, 10, mentions 12 per cent., which + _Aeschines_, adv. Ctes., 104, and _Demosthenes_, adv. Aph., + I, 820, 824, call low. The rate of commercial interest in + Egypt (146 before Christ) seems to have been 12 per cent. + per annum. (_Letronne_, Recompense promise à celui, etc., + 1833, 7.) Contemporaneously in Rome, a similar rate of + interest must have been considered usurious. (_Cicero_, ad. + Att., I, 12.) Under the emperor _Claudius_, 6 per cent. + (_Columella_, De Re rust., III, 3.) _Justinian_ allowed _to + personae illustres_ 4 per cent. per annum. (L. 26 Cod., IV, + 32.)] + + [Footnote 185-3: A Huron with his bow and arrow kills 12 + pieces of game; the European, with a much better capital, + his rifle, only 5. Compare _v. Schözer_, Anfangsgründe, I, + 28. _Mallthus_, Principles, ch. 5. According to _Ricardo_, + ch. 6, the decline of the rate of interest because of the + necessity of carrying on agriculture under harder + conditions, must make all capital of which raw material + forms a part more valuable; while the possessors of + money-capital particularly find no indemnification. + _Wakefield_, England and America, 1853, accounts for it by + saying that production, besides the coöperation of capital + and labor, needs "a field of employment;" and _Bastiat_, + Harmonies, ch. 5, 13, by saying that with the advance of + civilization, the results of former services lose in value + as compared with later ones, because performed under less + favorable circumstances.] + + [Footnote 185-4: _D. Hume_, Discourses No. 4 On Interest. + Per contra, see _Locke_, Considerations of the Consequences + of the Lowering of Interest; _Law_, sur l'Usage des Monaies, + 1697 (Daire); and _Montesquieu_, Esprit des Lois XXII, 6. + _Cantillon_ draws a very nice distinction: If the increased + amount _of_ money in a state comes into the hands of + loaners, it will decrease the current rate by increasing the + number of loaners; but if it comes into the hands of + consumers, the rate rises, because now the demand _for_ + commodities is so much greater. (Nature du Commerce, 284.)] + + [Footnote 185-5: The reviews in the Göttingen G. Anz., 1777, + and of _von Iselin_, in the Ephemeriden der Menschheit, II, + 170 ff., 177, question _Adam Smith's_ (Wealth of Nat., II, + ch. 4) entirely too positive denial of the influence of the + American production of gold and silver on the diminution of + the rate of interest, a view which was shared also by + _Turgot_, Form. et Distr., § 78. See a beautiful comparison + between a declining of the prices of the currency which, + promotes production, with the phenomena attending the growth + of a tree, in _Schäffle_, N. Oek., II, Aufl., 249.] + + [Footnote 185-6: Thus the rate of interest in Rome fell from + 12 to 4 per cent. when Octavian suddenly threw the treasures + of conquered Egypt upon the market, and the price of + commodities only doubled. When later commerce had divided + this amount of money among the provinces, it rose again. + (_Sueton._, Oct., 41; _Dio C._, LI, 17, 21; Oros, IV, 19.) + _Law's_ emissions of paper, in colossal amounts, depressed + the rate of interest to 1-1/4 per cent. (_Dutot_, + Réflexions, 990--Daire.) But as soon as the paper money had + lost its value, the former condition returned. Similar + observations in Rio de Janeiro: _Spix_ und _Martius_, Reise, + I, 131.] + + [Footnote 185-7: While in Paris the capital safely invested + paid 2-1/2 to 3 per cent., 57 out of 61 _conseils généraux_ + declared, in 1845, that the rate of interest on + hypothecations, in their departments, was always over 5 per + cent.; 17 estimated it at an average of from 6 to 7 per + cent.; 12 at from 7 to 10; some said 12 and 15, and even 22 + per cent. in the case of small sums loaned for a short time. + (_Chegarny_, Rapport au Nom de la Commission de la Réforme + hypoth., 29 Avril, 1851.) In Russia, at the beginning of + this century, the rate of interest in the Baltic provinces + was 6 per cent.; in Moscow, 10; in Taurien, 25; in Astracan, + 30 per cent. (_v. Schlözer_, Anfangsgründe I, 102.) In 1750, + in Naples, the rate of interest was from 3 to 5 per cent., + in the provinces from 7 to 9 per cent. (_Guliani_, della + Moneta, IV, 1.) In Trajan's time in Rome, 6; in Bithynia, 12 + per cent. (_Plin._, Epist. VII, 18; X, 62.)] + + [Footnote 185-8: _Delacourt_ Aanwysing, 1669, I, 7. + _Temple_, Observations on the U. Provinces, ch. 6, Works L. + 1854. Even _Descartes_ says of Holland's _ubi nemo non + exercet mercaturam_. Compare per contra, _H. Grotius_, Jus + Belli et Pacis, II, 12, 22. Very large capitalists, in + _Smith's_ time, certainly lived generally on the interest of + their money: Richesse de Hollande, II, 172. In England, at + the present day, likewise, a vast number of persons who live + on the interest of their money, occasionally take part in + the speculation in commodities; which explains why so-called + commercial crises are incomparably more extensive there, and + reach incomparably deeper, than in Germany. Similarly, + according to _Conring_, De Commercii, 1666, c. 36, in Venice + and Genoa.] + + [Footnote 185-9: Hence the larger cash balances in England + at the present day, which, however, are not kept in the form + of coin, but of bank notes and bankers' deposits.] + + [Footnote 185-10: As to how every frugal capitalist works to + the injury of capitalists as a class, but to his own + advantage, by lowering the rate of interest and increasing + the rate of wages, see _Senior_, Outlines, 188 ff.] + + +SECTION CLXXXVI. + +HISTORY OF THE RATE OF INTEREST.--CAUSES OF A HIGH RATE IN THRIVING +COMMERCIAL NATIONS. + +There are, however, even where a people's economy is in a flourishing +condition, many obstacles which cause the decline of the rate of +interest to take a retrogressive course, or which at least may delay it +for a time. + +To this category belong all the modifications of a nation's economy +alluded to in § 183.[186-1] Among them, therefore, is every extension of +the limits of productive land. Let us suppose a nation which, its +capital and labor remaining the same in every respect, should suddenly +double its territory. The less productive places where investments were +made in the old province are now abandoned, and labor and capital +emigrate to the new. The result is, of course, an increase of the +aggregate national income, and, at the same time, a decrease of rent. (§ +157.) Hence, the interest on capital and the wages of labor, taken +together, must greatly increase. Which of these two branches shall +profit most and longest by the increase will depend upon whether capital +or the number of workmen increases most rapidly.[186-2] A similar effect +must be produced when, by changes or modifications in the commercial +situation, in the tariff, etc., a nation is enabled to obtain the means +of subsistence at cheaper rates from more fertile and less settled +countries.[186-3] + +The introduction of better methods of production has very different +immediate consequences, according as these methods affect the +commodities which minister to the wants peculiar to workmen as a class, +or do not. Let us suppose, as a first case, that the cost of ordinary +clothing is reduced one half by reason of newly discovered material, +better machines, etc. As in the case of the whole people, so also in +that of the owners of capital as consumers, there is, in consequence, an +addition to their enjoyment of life. Their interest as well as their +capital, compared with clothing material, would have become more +valuable. But the relation between capital and interest, that is, the +rate of interest, could not be directly changed. (Compare _infra_, note +3.) Only when the working class employ their materially increased wages +to increase population; when in consequence hereof, their wages, +estimated in money, again decline beyond what it was before; when, +therefore, the price of a given quantity of labor declines, does the +rate of interest rise, although a portion of that which the workmen have +lost may be added to rent on account of the increased population?[186-4] +[186-5] If the applicability of the new method of production is confined to +articles of luxury used by the upper classes, for instance to fine lace, +the rate of interest usual in the country will be affected thereby only to +the extent that through the medium of commerce such products are exchanged +with foreign nations against commodities consumed by the working classes. +But there are very few improvements in production which have not led to a +greater cheapness of those things which satisfy the wants of the working +class; and this is especially clear in the improvements in the means of +transportation so usual in our day. + +However, the increase of fixed capital, such as machines, railroads, +etc., once they are completed, may, at first, cause a depression of the +rate of wages, as well as an enhancement of the rate of interest; the +former from the fact that a number of workmen is thereby, at least +temporarily, thrown out of employment; the latter because the conversion +of so much circulating into fixed capital must diminish the supply of +the former.[186-6] + +A second class of obstacles consists in the diminution of the supply of +capital. War, for instance, always causes such a destruction of capital, +and at the same time for the most part renders the reproduction of +capital more difficult to such a degree that the rate of interest is +wont to rise greatly.[186-7] Something similar is true of other great +catastrophes and of extravagance on a large scale.[186-8] Every state +loan, whether intended for direct consumption or to procure capital for +use (_Nutzkapitalien)_, decreases the supply of circulating capital +which most directly determines the market rate of interest.[186-9] [186-10] + + [Footnote 186-1: _Wolkoff_ very well shows that the economic + progress of mankind is effected partly by the improvement of + production, and partly by saving. The former increases the + rate of interest, the latter lowers it. (Lectures, 182, 189. + Compare _supra_, § 45.)] + + [Footnote 186-2: Thus the rate of interest in Russia rose, + after Catherine II. had conquered the provinces situated on + the Black Sea. (_Storch_, Handbuch, II, 34.) The same is + still more strikingly apparent in the judicious planting of + agricultural colonies.] + + [Footnote 186-3: Abolition of the English corn laws! Foreign + commerce when very advantageous, always adds to the + well-being of the people; to the rate of interest, however, + only to the extent that articles which are calculated to + satisfy the wants of the working class become cheaper in + consequence; and this in turn lowers the rate of wages. Let + us suppose that a country had hitherto purchased yearly + 10,000 barrels of wine for $1,000,000. It might now happen + that, in consequence of an advantageous commercial treaty, + for instance, the 10,000 barrels might be obtained for + $500,000. If, after this, wine-drinkers want to spend + $1,000,000 for wine as they did before, they of course + double their consumption of wine, but the rate of interest + remains unchanged. If, on the other hand, they leave their + consumption of wine where it was before and apply the saved + half million to effect an increased demand for home + products, the capital required for this production is set + free at the same time. Hence, the relation between the + supply and demand for capital has not changed, abstraction + made of certain difficulties in the transaction. Compare + _Ricardo_, Principles, ch. 7, rectifying _Adam Smith_, + Wealth of Nat., I, ch. 9.] + + [Footnote 186-4: An increase in the rate of interest caused + by a diminution in the rate of wages does not last long. + Capital now increases more rapidly, and the increase is + accompanied by an increased demand for labor. If, in the + mean time, workmen have become accustomed to a lower + standard of life, the increasing wages are followed by an + increase of population: then the necessity of having + recourse to the cultivation of land of a worse quality is an + additional cause of a decreasing rate of interest. (Edinb. + Rev., March, 1824, 26.)] + + [Footnote 186-5: According to this, it is easy to tell what + influence the increasing skill or activity of the working + class (for instance by a decrease in the number of holidays, + coöperation of wife and child) must have. Where there has + been no accompanying and corresponding elevation of the + standard of life, and of the want of the class, the gain + soon falls to the lot of the capitalists or landowners.] + + [Footnote 186-6: See the very clear but not entirely + complete discussion in _John Stuart Mill_, Principles, IV, + ch. 3 ff. When new railways, machines, etc., before they are + complete, simultaneously increase the rate of interest and + the rate of wages, and even sometimes rent, although they do + not immediately increase the national income in any way, the + phenomena are to be explained, not by a distribution of + income, but as the result of an advance of capital made.] + + [Footnote 186-7: Compare _supra_, § 184. The rise of the + rate of interest in Basil, between 1370 and 1393, _Arnold_ + (loc. cit.) accounts for by the wars and defeats of the + upper German cities. Similarly in Zürich, 1457. (_Joh. + Müller_, Schweizer Geschichte, IV, 211.) During the time + immediately following the Spanish war of succession, the + _usuriers les flus modérés_ in France got 12-15 per cent. a + year. (_Dutot_, Réflexions, 1866.) In Russia the rate of + interest, after the war of 1805-15, rose by 4-5 per cent. + (_Storch_, Handbuch, 35 seq.) Per contra, _Nebenius_, Oeff. + Credit., 70 seq.] + + [Footnote 186-8: Thus the Hamburg conflagration, combined + with the bad harvests of 1841, raised the rate of interest + in Mecklenburg for a long series of years. Similarly in + Würtemburg, the many bad harvests from 1845 to 1853, which + are said to have caused a deficiency of 50,000,000 florins. + (Tübinger Zeitschr., 1856, 568.)] + + [Footnote 186-9: In bad times, state loans are usually + effected at a disproportionally high rate of interest. This + also operates momentarily on the general rate of interest, + to the injury of persons engaged in business enterprises; + who, by the very fact of the withdrawal of so much capital, + become involved in an unfavorable competition. In the long + run, indeed, the high or low rates of interest paid by + national debts, in so far as the creditor cannot demand + reimbursement, has no influence on the rate of interest + usual in the country. Such debts as cannot be declared due + assume the character of stationary capital, the value in + exchange of which is determined by their yearly return, + capitalized at the rate of interest usual in the country. + (_Hermann_, Staatswirthschaftliche Untersuch., 223.)] + + [Footnote 186-10: The coöperation of most of the causes + above mentioned raised the English rate of interest which + had sunk to 3 per cent. to an average of 5, from about 1760 + to 1816. Thus _Gauss_, in a manuscript work which I have + used, relates that the fund for the support of professors' + widows in Göttingen was, in 1794, expected to pay only 3 per + cent. In 1799, the trustees observed that their capital + could often be safely invested at 4 per cent.; somewhat + later the rate of interest rose to 5 per cent., at which + point it remained for years. About 1843 ff. the rate of + interest in old Bavaria was only 4 per cent.; in more highly + cultured Rhenish Bavaria, 5 per cent.] + + +SECTION CLXXXVII. + +HISTORY OF THE RATE OF INTEREST.--EMIGRATION OF CAPITAL. + +Midway between these classes of obstacles lies the very usual proceeding +of highly civilized nations whose rate of interest is low, to transfer +their capital into countries with a higher rate of interest, where the +production of raw material is predominant.[187-1] This is most +thoroughly accomplished by the emigration for good of the capitalists +themselves; but also least frequently, because the natural attachment of +man to his native country is usually too powerful, among the well-to-do +classes, to be overcome by the attraction of a higher rate of interest. +Temporary settlements in foreign countries are by far more frequent. +Either the capitalist removes there himself, for a time, to return +enriched, at farthest, in his old age; or he establishes a permanent +branch of his business there, and superintends it through the agency of +a trusted representative. The inhabitants of northern Italy, during the +last centuries of the middle ages, maintained such establishments, not +only for the purpose of carrying on commerce in merchandise along the +shores of the Levant, but also the money trade in the principal +countries of the west.[187-2] Similarly, the Hanseatic cities +contemporaneously in the north and northeast of Europe; and, to-day, the +English in almost all the important seaport cities in the world.[187-3] +Such enterprises are always somewhat dangerous, especially in countries +but little advanced in civilization.[187-4] + +The best means to facilitate the migration of capital is credit. It is, +indeed, true, that in international trade, ordinary private loans are +seldom made. To make such loans would be to run too many risks; risks +through a want of knowledge of persons or circumstances, on account of +the difficulties in the way of continued supervision, and of being able +to assert and defend one's rights away from home.[187-5] Loans are much +more readily made to foreign states, to great corporations, or +joint-stock companies, whose condition is well-known; and which, by +reason of their perpetuity, have a deep and obvious interest in +maintaining an honorable reputation. The issuing of certificates of +stock, etc., has greatly facilitated international trade in +capital.[187-6] But the mode of loaning in foreign parts preferred is to +sell them commodities, and to require payment for them only after some +time has elapsed, of course, with interest. Purchases, on the contrary, +are paid for immediately, possibly even in advance.[187-7] The lower the +rate of interest in a country is, the longer and more cheaply can it +give credit to others; a new reason why the less civilized countries are +particularly fond of trading with the most civilized.[187-8] [187-9] + + [Footnote 187-1: _Nebenius_, Der öffentliche Credit, 83 ff. + After the end of the Napoleonic war, English capital flowed, + by way of preference, towards South America, afterwards + towards Spain and Portugal; after 1830, to North America; + after 1840, towards Germany and France, to be invested in + the construction of railways in the latter countries.] + + [Footnote 187-2: The inhabitants of Asti began in 1226 to + carry on the trade in money in trans-Alpine counties. In + 1256, _Louis IX_. ordered 150 Asti money-changers to be + thrown into prison, and he confiscated the money they had + loaned in France, to the amount of over 800,000 livres. They + were afterwards turned over to their enemy, the Count of + Savoy, as usurers. (_Muratori_, Scr. Rerum Ital., XI, 142 + seq.) About 1268, Louis IX. banished all money-changers of + Lombard or Cahors origin: they were allowed only three + months in which to collect their debts. (_Sismondi_, + Histoire des Fr., VIII, 112.) About 1277, again all Italian + money dealers were imprisoned, and 120,000 gold guldens + extorted from them. (_Giov. Villani_, VII, 52.) After the + Lombards had lost their freedom, the business passed into + the hands of the Florentines and of the inhabitants of + Lucca. (_Sismondi_, Gesch. der ital. Republiken, IV, 602; + _Dante_, Inferno, XXI, 38.) Great part played by the + brothers Franzesi as dealers in articles of luxury, and + loaners on pledge etc., at the court of Philip IV. They seem + to have instigated the persecution of other Italian money + dealers, in 1291, from jealousy. (_Sismondi_, Histoire des + Fr., VIII, 429 seq.) Great losses of the Florentines by the + English-French war in 1337: Edward III. remained in the debt + of his bankers Peruzzi and Bardi to the amounts respectively + of 135,000 and 184,000 marks sterling; so that they and many + others failed. France imprisoned all the Italian money + dealers, and compelled them to pay a large amount of + ransom-money. (_G. Villani_, XI, 71.) In 1376, the Pope who + was engaged in a struggle with Florence, called upon all + princes to despoil all Florentine merchants within their + jurisdiction of their wealth, and to sell them as slaves; + and France and England actually did so. (_Sismondi_, + Geschichte der ital. Republiken, V, 257 seq., VII, 74.)] + + [Footnote 187-3: Shortly before the French Revolution, Cadiz + had over 50 wholesale merchants against 30 retail, 30 + modistes and at least 100 tradesmen from France. + (_Bourgoing_, Tableau, III, 130.) Commercial colonies!] + + [Footnote 187-4: Thus even the emperor Paul of Russia caused + the property of English factors to be confiscated. The + galleons which Holland and England captured in the Spanish + war of succession belonged mostly to Amsterdam houses. + (_Ranke_, Franz. Gesch., IV, 226.) Even _Galiani_, Della + Moneta, IV, 3, thinks that, on this account, such commerce + is incompatible with the warlike spirit. It is certain, + however, that a government like the English would do well + not to permit a war with such countries as Russia or the + United States to break out too suddenly, that their subjects + might have time to collect all their outstanding dues. When, + in 1855, it was reported in London that all Russian drafts + were dishonored, people looked upon that fact as the surest + sign of coming war. English merchants had called in their + advances to Russia during the preceding economic period, and + refused to make new ones.] + + [Footnote 187-5: This of course disappears when the + borrowing country is dependent on the loaning country. Thus, + the Canton of Uri formerly prohibited the inhabitants of the + Livinerthal to borrow capital except from them. It is said + that, at the beginning of this century, the Uri capital then + loaned amounted to one-half a million florins, that is, an + average of 250 per householder. Now it is not over one-fifth + of that amount. (_Franscini_, Canton Tessin, 126.) Think + also of the plantation colonies! But even the East Indies + may be looked upon as a species of colony for England. Hence + _Fawcett_, Manual, 105, is rightly of the opinion that no + other country has the possibility of being as useful to the + East Indies as England. And in fact, the East Indian + railways obtained of their capital of £82,500,000, only a + very small part, £800,000, in India itself, a very small + proportion of which latter sum was subscribed by the native + population. (Ausland 24, Juli, 1869.)] + + [Footnote 187-6: What England is to-day, the Italian + commercial cities were in the 16th and 17th centuries, viz.: + the chief market for foreign loans. (Compare _Mun,_ + England's Treasure, 1664, ch. 4.) The Genovese loaned money + in foreign countries at 2 and 3 per cent. (_Montanari_, + Della Moneta, 1867, cap. 2.) It is said that the Dutch, in + 1778 invested 1,500 millions of livres in foreign national + debts, especially those of France and England. (Richesse de + Hollande, II, 178.) According to _J. G. Forster_, Schriften, + III, 335, in 1781 alone, in Europe, 800 millions loaned + capital. The Niederl. Jaerboek of 1789, p. 729, estimates + the amount of interest coming from abroad, English and + French not included, at from 50 to 60 millions of florins. + About 1844, according to official estimates, 1,000 million + florins in foreign loans, that is one-third of whole + national income. (Allgemeine Zeitung, 1844, No. 35.) Now, + Belgium, 300 million florins, in Austrian evidences of + indebtedness. (Quarterly Review, October, 1862, 402.) + According to _Baumstark_, Staatswissensch. Versuche über + Staatscredit, etc., 1833, 77, foreign nations, between 1818 + and 1825, borrowed in England £49,000,000; and, about the + same time, England participated in Russian, French and North + American loans to the extent of £55,500,000. It is said that + there were, in 1843, £25,000,000 English capital in the + canals, railroads and banks of the United States. (_Porter_, + Progress of the Nation, III, 4, 634.)] + + [Footnote 187-7: It is evident, from many of Demosthenes' + orations on private matters, that Athens was in the habit of + advancing the commercial capital needed by a great part of + the inhabitants of the Mediterranean coast. Many colonial + cities, Phaselis, for instance, had the very worst + reputation in this respect. They were virtually pirates as + regards Athens. (Adv. Lacrit., 931.) Here also it seems that + the goods taken for the loan had to be brought to Athens. + (941.) On the regular advances of Prussian merchants to + their Lithuanian and Polish vendors, in the 15th century, + while the former were forbidden even to buy on credit, see + _Hirsch_, Geschichte des Danziger Handels, 167, 177. In + Colbert's time, the Dutch gave 12 months credit in Europe. + (_J. De Wit_, Mémoires, 184.) In England, _Child_ perceives + a great advance in this: that in 1650, in all business in + the interior, there was a credit of 3 to 18 months given; + and in 1669, everything was paid for in cash. (Discourse on + Trade, 45.) Concerning previous times, see _W. Raleigh_, + Observations touching Trade and Commerce with the Hollander + and other nations, 1603. (Works, VIII, 951 ff.) In North + America, merchants in the interior frequently purchase their + goods of importers on 6 months credit. (_Tellkampf_, + Beiträge, I, 52.) In the West Indies, about the end of the + last century, the English gave a credit, generally, of from + 12 to 16 months. (_B. Edwards_, History of the British West + Indies, II, 383.) In Brazil, in the case of imports, 4, 8 + and even 12 months credit; payment in monthly installments, + and frequently even longer delay, without interest. In the + case of exports, when cash payments are not made, 1 per + cent. a month, (_v. Reden_, Garn und Leinenhandel, 332.) + Recently only about 40 per cent. of foreign advances are + made at 12 to 20 months, 60 per cent. at from 50 to 70 days. + (Tübing. Zeitschr., 1864, 517.) + + In Buenos Ayres, the producer or collector of export + articles required the price to be paid usually a long time + in advance (_habilitacion_), a very bold but necessary + procedure, on account of his poverty. (_Robertson_, Letters + on S. America, I, 174 ff.) In the corn trade in South + Russia, at least one-half of the purchase money was required + to be paid in advance, and even before shipment, the other + half as soon as the corn arrived in the harbor, and, hence, + sometimes, long before it was put on board. (_W. Jacob_, On + the Corn Trade of the Black Sea, 23.) Compare _Tooke_, View + of the Russian Empire, I, 339, Richesse de Hollande, II, 43, + _Storch_, Handbuch, II, 61 seq. Russia was, about 1770, a + credit-giving nation to the still poorer Persians. + (_Gmelin_, Reise, III, 413.) The Spaniards also, in their + American colonies, had always an expedition ready and + waiting, the payment for which was made on the arrival of + the second. (_Depons_, Voyage dans la Terre Firme, II, 368.) + Moreover, active commerce simply, especially when + circuitous, may be considered as in some way an + international loan; and thus it is that the favorable + "balance," by means of which claim-rights are obtained in + foreign countries, is secured.] + + [Footnote 187-8: Notwithstanding the gratitude of the United + States towards France, and spite of all the French + ambassador could do, the English immediately after the + conclusion of peace, attracted the greatest part of American + trade to themselves. (_Chaptal_, de l'Industrie Fr., I, + 103.) Countries with a low rate of interest have an + advantage in this respect, which grows after the manner of + compound interest, when the duration of the advance of + capital is prolonged. (_Senior_, Outlines, 195.)] + + [Footnote 187-9: How capitalists may, by the giving of + international credit, fall into an injurious habit, is shown + by the late and troublesome building up of the Dutch railway + system, while so many foreign railway enterprises were + provided with Dutch capital.] + + +SECTION CLXXXVIII. + +HISTORY OF THE RATE OF INTEREST.--EFFECT OF A LOW RATE ON STATIONARY +NATIONS. + +Beneficial as the spur of a low rate of interest is for countries +capable of development, it is a heavy drag on a stationary people, and +more so on those who have lost a portion of the field for the investment +of their capital by the competition of too powerful rivals.[188-1] A +real superabundance of capital is attended with cares and temptations +for the middle classes very similar to those caused by a so-called +over-population, especially to dishonesty and extravagance.[188-2] When +capital, population and the skillfulness of labor remaining the same, +continues to increase, the enlarged capital may very readily have every +succeeding year only the same return to divide among its owners, that +the smaller had in previous years.[188-3] Hence additional saving here +would produce no real enrichment of the people; and it might even happen +that the instinct to accumulate capital might in the future become +torpid to a greater degree than the capital itself had increased. In any +case, however, the decline of the rate of interest can continue only to +a certain point. There are numberless persons who would rather consume +their capital, or invest it in hazardous speculations than put it out at +interest at one per cent. a year.[188-4] At least, the tendency of a +decline in the rate of interest is, in the case of the richer, to +increase the amount of capital consumed as compared with productive +capital. The more moderate, sober and provident a people are, the lower +may the rate of interest decline without producing this effect. And so, +the more the capital of a nation is concentrated in the hands of a few; +because then the owners of capital are all the later forced to break in +upon it, for the sake of subsistence.[188-5] [188-6] + +Among nations which have totally declined, the rate of interest is wont +to reach a high point once more; the natural result of great losses of +capital and men, while, at the same time, the freedom of the lower +classes and the security of property have been either curtailed or lost. +The weakness of age is, in many respects, even in the case of nations, a +second childhood.[188-7] + + [Footnote 188-1: _Temple_, Works I, 102, assures us that the + Dutch in his time considered the payment of the principal of + a public debt a real misfortune: "they receive it with + tears, not knowing how to dispose of it to interest with + such safety and ease." On Italy, see _Bandini_ (ob. 1760), + Sopra le Maremme Sienese, 154 seq.; earlier _Montanari_, + Della Moneta, 57. In the England of the present time, small + capitalists especially belong to the so-called "uneasy" + classes.] + + [Footnote 188-2: Numberless bankrupts and unbounded + extravagance in Holland. (Richesse de Hollande, II, 168.) In + England, the hazardous enterprises of 1825 were very much + promoted by the action of the government which a short time + before reduced the interest on its state debt. (_Tooke_, + History of Prices, II, 148 ff.)] + + [Footnote 188-3: _J. S. Mill_, IV, ch. 4, 4. When _Ricardo_, + ch. 6, says that every increase of productive capital must + enhance the value in use, and still more the value in + exchange, of a nation's property, but under such + circumstances only to the advantage of the working class, + and still more of the land owning class, he at least + apparently presupposes an improvement, or increase of + labor.] + + [Footnote 188-4: Think only of the so-called commercial + crises, the speculation-rage preceding which is excited by + the lowness of the rate of interest, the destruction of + capital in which makes the rate of interest to retrograde + materially. However, this very decline is, in itself, only a + spur to speculation in evidences of national indebtedness, + stocks, etc., in commodities, only where, without such + speculation, a rise in prices was to be expected. Thus, for + instance, the great English periods of speculation: 1796 + ff., in colonial products; 1808 ff., in raw materials in + general; 1814, in articles of export, were times in which + there was not the slightest facility in obtaining credit. + (_Tooke_, History of Prices, III, 159.)] + + [Footnote 188-5: Between 1829 and 1849, the highest rate of + interest paid by English capital employed in cotton + industries was little over 2-1/2 per cent. (Edinb. Rev., + April, 1849, 429.)] + + [Footnote 188-6: As the symptoms of a condition are very + frequently mistaken for its cause, there have been many + writers who, blinded especially by the contemplation of + Holland, considered the lowness of the rate of interest as + the _causa causans_ of all wealth, and who promised really + magical results from its legislative regulation by the + state. Thus _Sir Thomas Culpeper_, A Tract against the high + Rate of Usury, 1623; continuation 1630; _Sir J. Child_, + Brief Observations concerning Trade and the Interest of + Money, 1668; Discourse of Trade, 1690. _Anderson_ (ob. + 1765), was of a similar opinion: Origin of Commerce, a. + 1601, 1651; and even _Ganilh_, Dictionnaire analytique, 99 + seq. (_Infra_, § 162.) Per _contra_, the anonymous essay, + Interest of Money mistaken, 1668, and _Locke_, + Considerations of the Consequences of the Lowering of + Interest and Raising the Value of Money, 1691. Most moderns + have considered the decline of the rate of interest an evil. + Thus, for instance, _Canard,_ Principes, ch. 5, who + uniformly makes this the starting point of a nation's + downfall. See also _McCulloch_, Principles, III, 8. + _Malthus_ draws a comparison between the saving of capital + and the generation of children: only a high rate of interest + makes the former really useful, and a high rate of wages the + latter. + + Even great destruction and disturbances of capital by war, + by loans to the state, for instance, are soon made good, + provided the sources of the saving of capital are not dried + up. (Principles, III, 370 ff., 401, ff.) _John Stuart Mill_ + expressly counsels rich and highly civilized nations not to + neglect beneficent enterprises, although economically + unproductive, because capital might be lost in them. The + result of such a loss would, under certain circumstances, + simply be that less capital would be exported or wasted in + speculation. (Principles, II, ch. 5, 1.) Similarly _Canard_, + who, therefore, compares state loans with blood-letting, as + a remedy for a plethoric disease. (Ch. 9.) _Turgot_ + confounded cause and effect when he compared a high rate of + interest to an inundation, below the level of which nothing + can be produced; and which, the lower it became, the more + dry ground there was for men to work on. (Sur la Formation, + etc., § 89.)] + + [Footnote 188-7: Rate of interest in Persia from 40 to 50 + per cent. a year. (Ausland, 1844, No. 208.) In Tripoli, + Christians and Jews alike loan the Arabs at the rate of 5 + per cent. a month; at least 1-1/2 or 2. (_Rohlfs_, von + Tripolis nach Alexandrien, 1871, I, 22.) In most of the East + Indian kingdoms, the rate of interest is so high for the + government itself that when the creditor, even without a + return of the capital, gets the interest only for a few + years, he is considered passably well indemnified. (_J. S. + Mill_, II, ch. 15, 2.) In China, 12 to 15 per cent.; 36 + nothing unheard of. (_Barrow_, China, 562.)] + + +SECTION CLXXXIX. + +INTEREST-POLICY.--LEGITIMATENESS OF INTEREST. + +The legitimateness of interest is based on two unquestionable grounds: +on the real productiveness of capital, and on the real abstinence from +enjoyment of it by one's self.[189-1] Let us suppose a nation of +fishermen with no private ownership in land and no capital, living naked +in caverns, on sea-fish which the ebb of the ocean has left in the +puddles along the shore, and which are caught only with the hand.[189-2] +All workmen here may be equal, and each catch and consume three fish a +day. Let us again suppose that some clever savage reduces his +consumption to two fish a day, for one hundred days, and uses the stock +of one hundred fish collected in this way to enable him to devote all +his strength and labor, during fifty days, to the construction of a boat +and a net. With the aid of this capital he, from the first, catches +thirty per day. What now will his fellow tribesmen, who are not capable +of such intelligent and systematic self control to do as he has done, +do? What will they offer him for the use of his capital? In discussing +this question both parties will very certainly consider not only the +fifty days' labor spent in the construction of the boat, etc., but also +the one hundred and fifty days during which its maker had to abstain +from his full ration of food. If the borrower, of the thirty fish which +may be caught daily with the aid of his capital, gives twenty-seven +away, his condition is at least no worse than it was at first. On the +other hand, the lender, if compensated only for the wear and tear of his +capital, would reap no profit whatever from his loan. The interest to be +paid will be fixed somewhere between these two extremes by the relation +between demand and supply. A loan which pays no interest is a donated +use of capital. (_Knies._)[189-3] Interest may be called the reward of +abstinence (_Senior_), in the same way as wages is called the reward of +industry.[189-4] With the abolition of interest, exchange would be +limited to the mere present, without any mediation between the past and +the future. A great number of services would bring no equivalent in +return, and, therefore, as a rule, never be performed. Most of the +charges commonly made in our day against the "tyranny of capital" are, +at bottom, only a complaint that capital is not inexhaustible; and even +those workmen who are obliged to pay most to capital would be much worse +off without it. + + [Footnote 189-1: The Greeks very appropriately call interest + tokos, i. e., that which is born. In the loaning of capital + productively invested, the creditor, in the interest + received, consumes the real produce of his property. If the + debtor has consumed the property unproductively, the + creditor indeed lives on the debtor's other returns or + supplies; which, however, without his intervention would + probably have been consumed by their owner.] + + [Footnote 189-2: We here, for the time being, make + abstraction of all entangling surrounding circumstances. + However, _Diodor._, III, 15 ff., and _Strabo_, XVI, 773, + describe a very similar condition of things among the + Ichthyographs; also _Hildebrand_, Reise, um die Erde, III, + 2, in China. In the Sudan, whole generations fetch water + every day from a distant town, instead of working for a few + weeks to dig a deep well nearer home. (_Barth_, Afr. Reise, + III, 297.)] + + [Footnote 189-3: The most recent relapse into the old error + of the unproductiveness of capital, viz.: that of _Karl + Marx_ (Das Kapital; Kritik der polit. Oekonomie, I, 167) is a + turning round and round of the author in the vicious circle + of his demonstration. If the value of every commodity + depends simply on the labor necessary to bring it into + existence, or on the time of labor required to produce it, + it is self-evident that the value of the capital consumed + for the purpose of its production, can at most be only + preserved in the new product, and that all the additional + value (_Mehrwerth_) of the latter should be ascribed to + labor. (172, and passim.) Hence, strictly speaking, the + capitalist who advances capital to workmen, is still bound + in duty to be grateful to the latter when the value of his + advance is preserved to him undiminished, (§ 173) and all + interest levied by him should be considered as a payment + towards the extinguishment of the capital [debt] itself. + (556.) Relying on such theories, many socialists admit + private property and even the right of inheritance to means + of enjoyment and use capital (_Gebrauchskapitalien_) + provided only that land and productive capital should pass + over into the "collective property" of society, with + compensation, however, to their former owners. Considering + the short duration of most goods used in enjoyment or + consumed, the evil consequences of a community of goods + mentioned in § 81, could not be avoided to any extent by + this means. + + How entirely fallacious the above assumption is, is seen + most strikingly in the case of such goods as cigars, wine, + cheese, etc., which, without the least addition of labor, by + merely postponing the consumption of them, obtain a much + larger value both in exchange and in use. Or, how would it + be possible, for instance, to reduce the value of a + hundred-year-old tree, over and above the cost of planting + it, to labor alone? Similarly, the fact that on a Chilian + _hacienda_, 25 per cent. of the cattle can be slaughtered + and no diminution of the herd take place. (_Wappäus_, M. und + S. Amerika, 784.) _Strassburger_ rightly inquires: if all + the profit of capital is based on a cheating of workmen by + capitalists, who is cheated in the case in which a + manufacturer without workmen earns more with an increased + capital than before with a small capital? (_Hildebrand's_ + Jahrb., I, 103.)] + + [Footnote 189-4: In a time full of nabobism and pauperism, + when some can, without the least abstinence, make immense + savings, and others none at all even with the greatest + abstinence, we may comprehend where the socialists find food + for their derision of the expression, "reward of + abstinence."] + + +SECTION CXC. + +INTEREST-POLICY.--AVERSION TO INTEREST. + +At the same time, there is a strong aversion to the taking of interest +prevalent among nations in a low stage of civilization. Industrial +enterprises of any importance do not as yet exist here at all, and +agriculture is most advantageously carried on by means of a great many +parcels of land, but with little capital. The purchase of land is so +rare, and hampered by legal restrictions to such a degree, that loans +for that purpose are almost unheard of. And just as seldom does it +happen, by reason of the superabundance of land, that the heir of a +landowner borrows capital to effect an adjustment with his co-heirs, and +thus enter alone into the possession of the estate. Here, as a rule, +only absolute want leads to loaning.[190-1] If, in addition to this, we +consider the natural height of the rate of wages in such times, the +small number and importance of the capitalist class (§ 201), the tardy +insight of man into the course and nature of economic production,[190-2] +it will not be hard to understand the odium attached in the middle age +of every nation to so-called interest-usury[190-3] (_Zinswucher_). + +Most religions, the Christian excepted (the universal religion!), have +been founded in the earlier stages of the nations who profess them, and +have there, at least outwardly, exercised their greatest influence. No +wonder, therefore, that so many religions have prohibited the taking of +interest. Thus, for instance, the Jewish which, indeed, allows interest +to be taken from foreigners, but raises loaning without interest among +Jews in their commerce with one another, to the dignity of a duty +binding on the conscience of the beneficent rich.[190-4] [190-5] +Similarly in the Koran.[190-6] The Fathers of the Church, also, on the +whole, look with disfavor on the taking of interest, relying upon +well-known passages in the Old Testament, and, in part, on misunderstood +expressions in the New.[190-7] This is especially true of the Fathers of +the Church from the beginning of the fourth century, when the Roman +empire was frightfully impoverished by the devastations of the +barbarians, and as a consequence the conditions as to interest which +prevail in the lowest stages of civilization had returned. Mercy towards +the poor usually occupies the foreground in the demonstrations of the +Fathers.[190-8] + + [Footnote 190-1: Distress-debts in contradistinction to + acquisition-debts. (_Schmalz_, Staatswirthsch. Lehre in + Briefen, I, 227.) Compare _Hesiod._, Opp., 647; also + _Herodot._, I, 138.] + + [Footnote 190-2: Thus _Aristotle_, calls the taking of + interest a gain against nature, since money is only a medium + of exchange, and cannot produce its like. (Polit., 3, 23, + Schn.) Similarly, _Plato_, De Legg., V, 742, and _Seneca_, + De Benef., VII, 10. Compare, however, _Tacit_., Annal, XIII, + 42 seq. As late a writer as _Forbonnais,_ 1754, accounts for + interest thus: Some people hoard their money instead of + spending it; hence a scarcity or want of money, and those + who need it are obliged, in order to draw it out, to promise + to pay interest. (Eléments de Commerce, II, 92 ff.)] + + [Footnote 190-3: Numerous disturbances on account of debt, + during the first centuries of the Roman Republic, until + finally (compare _Livy_, VII, 42), the taking of interest + was in the year 349 (?) before Christ, entirely prohibited. + (_Tacit._, Annal. VI, 16.) The public opinion in such + matters may be understood from the words of Cato: _majores + ita in legibus posuerunt, furem dupli condemnari, + foeneratorem quadrupli_. (De Re rust.) The _foenerari_ + compared with the _hominem occidere_. (_Cato_, in _Cicero_, + De Off., II, 25.) In the higher stages of civilization + little heed was paid to the law, in practice (compare + _Livy_, XXXV, 7; _Plut._, Cato, I, 21.), although the + democratic party always held fast to the legal perpetuation + of the prohibition of interest. (_Mommsen_, Römisch. Gesch., + III, 493.)] + + [Footnote 190-4: Exod., 22, 25; Levit., 25, 35 ff.; + Deuteron., 15, 7 seq.; 23, 19 seq.; Psalms, 15, 5; 109, 11; + 112, 5; Proverbs, 28, 8; Jerem., 15, 10; _Hes._, 18, 8. + After the return from exile, the prohibition was restored. + (Net. 5, 1 ff.) Was there, in the long duration of such + prescriptions, an educational measure having reference to + the peculiar fault towards which the Jewish national + character had a special tendency? In Josephus's time even, + usury practiced on one's country people was universally + despised (Antiq. Jud., IV, 8, 25.), and the Talmud continues + it. Compare _Michaelis_, De Mente ac Ratione Legis M. Usuram + prohibentis. In Russia, the orthodox Jews are wont to evade + the legal rate of interest by exacting one-half the profit, + and estimating it approximately in advance at a probable + sum. If, afterwards, the debtor declares under oath that he + made no profit, the creditor has no more to say; but then + the borrower would lose all credit in the future. (_Bonav. + Mayer_, Die Juden unserer Zeit, 1842, 13 seq.)] + + [Footnote 190-5: The Mosaic passages, however, only prohibit + the taking of interest from poor people of one's own + country.] + + [Footnote 190-6: The prohibition in the Koran, ch. 2, 30, is + regularly evaded in Persia, by deducting the proper amount + at the moment the loan is made. (_Chardin_, IV, 157 ff.) + Under the Mongolian rulers, it was done by way of + preference, by a fictitious sale for cash, at prices out of + all proportion. "Why cannot capitalists either buy land or + carry on trade?" asked Sultan Gazan, on an occasion when the + prohibition of interest was strongly insisted on. + (_d'Ohsson_, Histoire des Mongols, IV, 397.)] + + [Footnote 190-7: For instance, _Luke_, 6, 34 ff., where + interest is no more prohibited than in _Luke_, 14, 12 ff., + the mutual invitation of friends to a feast. Not less + groundless is the supposed allegorical allusion (_Matthew_, + 21, 12) to interest-creditors. Rather might an approval of + interest be inferred from _Matthew_, 25, 27.] + + [Footnote 190-8: _Origen_, for instance, would have the + creditor take no interest; but exhorts the debtor to return + double the amount unasked. (Homil., III, ad. Ps., § 37.) + Hence there is here no condemnation of interest, but only an + effort to transform all legal relations into relations of + love. Quite the reverse in _Lactant._, Instit., VI, 12; + _Basil_, ad. Matth., 5 ff.; _Ambrose_, De Off., III, 3; + _Chrysost._, ad. Matth. Hom., 56; Tim., VII, 373 ff. (Paris, + 1727); _Hieronym._, ad. Ezech., V, 367 c. (Francof, 1684); + _Augustin._, Epist., 54. Even _Cyprian_, 183, 318 (Paris, + 1726).] + + +SECTION CXCI. + +INTEREST-POLICY.--THE CANON LAW, etc. + +The canon law, from the first, endeavored to prevent contracts for +interest. We may even say that the prohibition of interest-usury is the +key-stone of the whole system of the political economy of the _Corpus +Juris Canonici_. The development of that law coincides, as to time, with +the senility of the Roman Empire and the childhood of modern +nations.[191-1] In the golden age of papal power, every +interest-creditor was refused the communion, the _testamenti factio_ and +the right of ecclesiastical burial. Proceedings at law could not be +instituted for the recovery of the principal debt until the creditor had +restored all the interest obtained. In the council of Vienna, in 1311, +it was declared heresy to defend the taking of interest. The universal +antipathy of the church towards the growing importance of the +_bourgeoisie_,[191-2] and the desire to give the spiritual courts an +extensive jurisdiction in litigated cases, may have contributed largely +to the adoption of these measures. In later medieval times, the secular +power offered its services to execute these laws;[191-3] and, to judge +of what public opinion in this matter was, we need only call to mind the +decided disapproval of interest by Dante, Luther and Shakespeare.[191-4] + +The _Weddeschat_, a species of pledge or loan on security, constituted +the transition from this state of things to the modern economic system +of interest. The _Weddeschat_ was a sale with a reserved right of +redemption, by which the debtor gave his creditor the use and enjoyment +of a piece of land a sort of interest in kind, but which he could at any +time recover back, by payment of the principal. This was not very +oppressive on the debtor, as he was the only party who could recall the +contract.[191-5] In a higher stage of civilization, indeed the +continuance of this species of land-pledge would be exceedingly +disadvantageous, since the momentary possessor of a piece of land which +might be bought back by another person at any time at a price fixed in +advance, would scarcely think of improving it.[191-6] + +And so, the introduction of rent-purchase (_Rentekauf_) was an important +step in advance: the incumbrancing of a piece of land which remained in +the possession of the debtor with an interest in kind paid to the +creditor. The latter could never claim anything further, while the +debtor and his heirs might redeem the land from this interest-incumbrance +by paying back the purchase money.[191-7] As the Pope, on the 19th of +January, 1569, renewed, in express terms, the prohibition of all interest +not based on rent-purchase, so did the police ordinances of the Empire, of +the sixteenth century, declare it to be the only lawful form of loaning at +interest; provided, always, that only the debtor could demand the +cancellation of the contract.[191-8] We find, however, that, on the whole, +at least Protestant countries had, before 1654, adopted the modern Roman +law relating to interest.[191-9] [191-10] + +However, the long persistence of the prohibition of the canon law in +relation to interest, even with the refuge afforded by the introduction +of the rent-purchase system, and of dormant partnerships (_Commanditen_) +etc., so common in the sixteenth century,[191-11] would be +unintelligible, if, contemporaneously, the Jews did not carry on an +important and somewhat free trade in capital,[191-12] precisely as the +Armenians, Hindoos and Jews do in the Mohammedan world of to-day. + + [Footnote 191-1: The apostolic canons and several decrees of + councils of the fourth century prohibit the taking of + interest by the clergy. A Spanish provincial council dared, + in 313, to extend the prohibition to the laity. Pope Leo I. + condemned the taking of interest by the laity also, but only + in the form of a moral law. (443.) The synod of + Constantinople (814) punished the violation of the + prohibition with excommunication. See _Thomas Aquin._ (ob. + 1274.) De Usuris, in the Quæstiones disputatae et quod + libetales. The canon law, however, always permitted + delay-interest (_Verzugszinsen_), and Gregory IX, allowed + _justa et moderata expensa et congruam satisfactionem + damnorum_ to be taken into account, (c. 17, X.) De Fora + Comp. II, 2. A tacit recognition of the productiveness of + capital is to be found in c. 7, X. De Donatt. inter. Virum. + cett. IV, 20; and the later schoolmen, _Antonin_ and + _Bernhardin_, (ob. 1459 and 144) are pretty clear on the + point. But _Albertus Magnus_ had already recognized the + _damnum emergens_ and _Thomas Aquinas_ the _lucrum cessans_ + as causes of interest. (Tübinger Zeitschr., 1869, 151, 159, + 161.) The essentially modern character of Roman law, which, + in the form it has finally assumed, is in harmony with a + high development of national economy, accounts for the fact + that the glosse of _Accursius_ relying on _Irnerius_ and + _Bulgarus_ entirely ignores the prohibition of interest. For + a similar reason, in the 16th century, _Donellus_ and + _Cujacius_ stand entirely on Roman ground. In the interval, + indeed, men like _Bartolus_ and _Baldus_ were not disquieted + by the canon law. (_Endemann_, Studien in der + Römisch-Canonischen Wirtchaftsund Rechtslehre, I, 18, 27 + seq. 61.) Compare the rich historical material in + _Salmasius_, De Usuris, 1638; De Modo Usurarum, 1639, and De + Mutuo, 1640.] + + [Footnote 191-2: _A. Thierry_, Lettres sur l'Histoire de + France, éd. 2., 248 ff.] + + [Footnote 191-3: Thus the emperor Basil, in the year 867, as + _Justinian_ had before him, forbade the further payment of + interest, once the amount already paid equaled the + principal. (L. 29 seq.; Cod. IV, 32, Nov., 121, 2.) Compare + Sachsenspiegel, I, 54. _Edward the Confessor_ is said to + have issued the first prohibition of interest. (_Anderson_, + Origin of Commerce, a. 1045.) _Edward III._ forbade all + interest as the ruin of commerce. (Idem a., 1341.) About + 1391, the lower House had its zeal aroused against the + "shameful vice of usury;" and again, in 1488, all interest + on money and all rent-purchases stipulated for on unlawful + conditions, were threatened with a fine of £20, the pillory, + and six months imprisonment. (_Anderson_, a., 1488.) In + France, the edict of Philip IV. of 1312. Compare + _Beaumanoir_, Coûtumes, ch. 67, des Usures, No. 2.] + + [Footnote 191-4: _Dante_, Inferno, XI, 106 ff., suggests + that interest-creditors had violated the command of _Moses_, + I, 3. _Macchiavelli_ seems to judge otherwise: Compare + Istoria Fior., VII, a, 1464; VIII, a, 1478. Very interesting + discussions on the legitimateness of the taking of interest + in 1353 seq., in which the Dominicans, up to the time of + _Savonarola_, defended the strictest opinion. (_M. Villan_, + III, 106.) _Luther_, Tract on Trade and Money, 1524, and + Sermon on Usury, 1519. Later still, _Luther_ became more + moderate. Thus, in his letter to the Danzig counsel, 1525, + in _Neumann_, Geschichte des Wuchers in Deutschland, 617 + ff., in which, for instance, he blames the forcible carrying + out of interest-prohibitions, draws a distinction between + rich and poor, etc. So, too, in his letter: An die + Pfarrherren, wider den Wucher zu predigen, 1540. + _Melanchthon_, Phil. moral., 137 ff., is also more moderate. + _Calvin_ was clearer in this matter, and no longer + recognized the canonical prohibition of interest. (Epistolæ + et Responsa, Hanov., 1597, epist. 383.) Similarly + _Zwinglius_, who will not praise interest, but considers it + a natural consequence of property (Opp. ed. Tugur., 1530, I, + 319 ff.), and even _Erasmus_, ad. Evang. Luc., 6, 44. Adagia + v. Usuræ nautt. In _Shakespeare_, compare Merchant of + Venice. _Bodinus_ also rejects on principle, even Roman + interest, which he held to be 1-1/2 per cent. a year: De + Republ., 1584, V. 2. Even the practical Dutch excluded the + so-called "table-keepers," from the communion up to 1657. + Compare the contests hereon in _Laspeyres_, Gesch. d. + volkswirthsch. Ansich. d. Niederl., 258 ff.] + + [Footnote 191-5: The mutual right of cancellation + (_Kündbarkeit_) in the case of these contracts during + periods poor in capital and credit, would easily have ruined + the debtor. Compare _J. Möser_, Patr. Ph., II, No. 18. Hence + municipal rights in the latter part of the middle ages, + which in many other respects are so antagonistic to Rome, + have seldom anything to object to its measures in this + matter.] + + [Footnote 191-6: A reason why, as _A. Strüver_ remarks, the + Church which was more a creditor than a debtor, never + approved the Weddeschat above mentioned.] + + [Footnote 191-7: The institution of rent-purchase + (_Rentekauf_) was already developed in the Hanse cities at + the beginning of the fourteenth century. (_Stobbe_, in the + Zeitschr. f. deutsches Recht, XIX, 189 ff.) About 1420, the + bishops of Silesia inquired of the Pope, whether such + contracts which had been the practice in Silesia for a + century were lawful. The answer was a favorable one, + although he left the rate of interest free in this + particular case (Extr. Com. III, 5, 1, 2); after _Alexander + IV._, however, as early as 1258, had instructed inquisitors + not to take part in litigations concerning usurious + contracts. Formerly all such contracts were prohibited in + express terms. (Decret. Greg., V. 19, 1, 2), although, in + France, the ordinances of Louis IX. and Louis X. (1254 and + 1315) had established fixed rates of interest therefor. + Between pledge and rent-purchase, the right of the (virtual) + loaner to expel the (virtual) borrower, which after fell + into disquietude, occupies, so to speak, a middle place. + (Compare _Eichhorn_, D. St.- und R.-Gesch., II, § 361, a + III, § 450.) It was decreed, in France, in 1565, that all + rent in kind should be converted into money rent. + (_Warnkönig_, Franz., St.- und R.-Gesch., II, 585 ff.)] + + [Footnote 191-8: Magnum Bullar. Roman., II, 295.] + + [Footnote 191-9: A Prussian law allowing interest even + without a contract of rent-purchase as far back as 1385. + (_Voigt_, Geschich. von Preussen, V, 467.) In Marseilles, in + 1406, a rate of interest of ten per cent. allowed. + (_Anderson_, Origin of Commerce, s. a.) Likewise in England, + 37 Henry VIII., c. 9. In Brandenburg, 1565, 6 per cent. + (_Mylius_, C. C., March, II, 1, 11.) A retrograde step by 5 + and 6 Edward VI., c. 20; by which all interest was again + prohibited. These laws had, practically, the effect of + increasing interest to 14 per cent., and were therefore + repealed in 1571. How unnatural the prohibition was is + apparent from the fact that by 4 and 5 Philip and Mary, c. + 2, the possessor of 1,000 marks was estimated equal to a + person with £200 annual income. In Denmark, the taking of + interest at 5 per cent. was allowed in 1554, since "although + it is contrary to God's command, yet [according to an + opinion given by _Melanchthon_] this commerce cannot be + entirely abolished." (_Kolderup-Rosenvinge's_ Dänische R. + G., in _Homeyer_, § 142.) Similar views of the elector + Augustus, 1583. (Cod. August 1, 139 ff.) + + The German Empire, in 1600, allowed the debtor to contract + that, in case of delay, the contract might be declared + annulled. In France, on the other hand, even during the 18th + century, nearly all loans were made in the form of + _rent-purchase_ (_Law_, Trade and Money, 127), and the + creditor could declare the contract void only in case the + debtor did not pay him the rent. (_Warnkönig_, Franz. R. G., + II, 585 ff.) For strictly Catholic countries, the prohibition + relating to the taking of interest still really remains. + However, _Leo X.'s_ bull, Inter multiplices, exempts the + so-called _monti di pietà_, and by this means put obstacles + in the way of saving, and promoted real usury. Of this last, + _Niebuhr_, Briefe, II, 399, adduces very striking instances + from the Pope's own temporal dominion. In the case of + pledge, even 12 per cent. per annum is required. (Rom im + Jahr, 1833, 163.) Yet, in 1830, the Poenitentiaria Romana + instructed the clergy, without, however, deciding the chief + question, not to disquiet people any longer in the + confessional who had taken interest. (_Guillaumin_, + Dictionnaire de l'Economie politique, art. usure.) On the + Russian Sect, _Staroverzen_, which still condemns the taking + of interest, see _Storch_, Handbuch, II, 19. By the Russian + government it was permitted very early. _Ewers_, Ältestes + Recht der R., 323 seq.] + + [Footnote 191-10: The first scientific defense of interest + is generally considered to be that of _Salmasius_, loc. cit. + Yet _Bacon_, Sermones fideles, C. 39 (after 1539), and at + bottom also _H. Grotius_, De Jure Belli et Pacis, 1626, + taught that it was lawful to take interest in so far as it + was not against the love due to one's neighbor (_Endemann_, + loc. cit., I, 62 ff.), and _Besold_, Quaestiones aliquot de + Usuris, 1598, was as near the truth as _Salmasius_. Compare + _supra_, note 4. How earnestly _North_ and _Locke_ labored + against the lowering of interest by governmental + interference, see _Roscher_, Z. Gesch. der engl. + Volkswirths., 90, 102 ff. The best writers, in strictly + Catholic countries, did violence to themselves in this + matter for a long time after. Thus _Galiani_, Della Moneta, + II, I seq.; and one cannot help being greatly surprised at + witnessing the subtleties which _Turgot_, Mémoire sur le + Prêt d'Argent, 1769, had to have recourse to, to prove the + clearest matters. Thus: at the moment of the loan, a sum of + money is exchanged against the mere promise of the other + party, which is certainly less valuable. [If it were not, + why should he borrow?] This difference must, therefore, be + made up in interest, etc. _Mirabeau_ even was a decided + opponent of interest. (Philos. rurale, ch. 6.) Compare, + however, the theological defense by _Viaixnes_, 1728, in the + Traité des Prêts de Commerce, Amsterdam, 1759, IV, 19 ff.] + + [Footnote 191-11: Of course, evaded in a thousand ways in + practical life. Thus, for instance, people gave wheat, other + commodities, and even uncoined gold and silver as loans, and + had what interest they pleased promised them. In alienating + the capital, they might stipulate _à fonds perdu_, as they + thought best. (Turgot, I, c. § 29.) When debtors had + promised under oath to make no complaint, the church ordered + that they should be helped officially. When the temporal + power showed itself lax, Alexander III. decreed that such + questions should be brought before the spiritual courts. + (Decret. Greg. V., tit. 19; 13 _Innocent_, Epist., VIII, 16; + X, 61.) In England, _Richard of Cornwall_ obtained a + monopoly of the whole loaning business. (_Matth. Paris_, ed. + 1694, 639: compare, also, 20 Henry III., 5.), from which + fact the existence of the custom of taking interest about + 1235, is apparent. Cases in which English kings borrowed and + promised payment back _cum damnis, expensis et interesse:_ + Anderson, Origin of Commerce, a. 1274, 1339.] + + [Footnote 191-12: Compare _Gioja_, Nuovo Prospetto, III, + 190. The canon law desired to put an interdict on their + taking interest also: Decret. Greg., V, tit. 19, 12, 18. + Frequently, also, a minimum of interest was provided for + them: Ordonnances de la Fr., L. 53 seq. II, 575. Receuil des + anciennes, Lois, I, 149, 152. John of France extended this + to four _deniers_ per _livre_ per week, that is, annually + 86-2/3 per cent.! (_J. B. Say_, Traité II, ch. 8.) In + Austria, in 1244, 174 per cent. allowed! (_Rizy_, Ueber + Zinstaxen und Wuchergesetze, 1859, 72 ff.)] + + +SECTION CXCII. + +INTEREST-POLICY.--GOVERNMENT INTERFERENCE.--FIXED RATES. + +Instead of the medieval prohibition of interest, most modern states have +established fixed rates of interest, the exceeding or evasion of which, +by contract or otherwise, is declared null and void, and is usually +punishable as usury.[192-1] If the fixing of the rate is intended to +depress the rate of interest customary in the country,[192-2] [192-3] it +uniformly fails of its object. If control were great enough, vigilant +and rigid enough, which is scarcely imaginable, to prevent all +violations of the law, it is certain that less capital would be loaned +than had been, for the reason that every owner of capital would be +largely interested in employing his capital in production of his own. +More capital, too, would go into foreign parts, and there would be less +saved by those not engaged in any enterprise of their own. All of this +would happen to the undoubted prejudice of the nation's entire +economy.[192-4] [192-5] + +If, on the other hand, the control by the government be not great +enough, the law would, in most cases, be evaded; especially as each +party, creditor as well as debtor, would find it to his advantage to +evade it. The latter, who otherwise would not be able to borrow at all, +is, as a rule, more in need of obtaining the loan, than the creditor is +to invest his capital. How easily, therefore, might he be induced to +bind himself by oath or by word of honor![192-6] He would, moreover, be +compelled to pay the creditor not only the natural interest and the +ordinary insurance premium, but also for the special risk he runs when +he violates the law threatening him with a severe penalty.[192-7] Hence +the last result is either a material enhancement of the difficulty of +obtaining loans or an enhancement of the rate of interest.[192-8] + + [Footnote 192-1: This is, historically, the second meaning + of the word usury, while in the middle ages, for instance in + England, under Elizabeth (_D. Hume_), the taking of any + interest whatever was called usury. Science should employ + this word only in the sense used in § 113.] + + [Footnote 192-2: In Switzerland, at the end of the 17th + century, not only were those punished who took more interest + than the law prescribed, but those who took less. (Compare + Rechtsquellen von Basel, Stadt und Land, 1865, Bd. II.)] + + [Footnote 192-3: Fixed rates of interest of this kind are to + be accounted for in part by a still continuing aversion of + the legislator for interest in general; in part, by the + opinion which prevails that precisely the most useful and + most productive classes might be elevated by an artificial + lowness of the rate of interest. (But most especially the + government itself, which borrows more than it lends.) When + Louis XIV. about 1665, lowered the rate of interest to 5 per + cent., he claimed in the preamble to his decree that it + would have the effect of promoting the welfare of landowners + and business men, and of preventing idleness. Similarly + _Sully_, Economies royales, L, XII. And so _J. Child_, + Discourse of Trade, 69 ff., says that every lowering of the + rate of interest, by law, produced a completely + corresponding increase of the national wealth. He says, + since the first reduction (?) of interest in 1545, the + national wealth increased six fold; since the last, in 1651, + the number of coaches increased a hundred fold; + chamber-maids wore now better clothes than ladies formerly; + on 'Change there were more persons with a fortune of £10,000 + than before with £1,000. Similarly _Culpeper_: compare + _Roscher_, Z. Geschichte der eng. Volkswirthsch., 57 ff. + Later, the French generally thought that a lowering of the + rate of interest would prove injurious to the _noblesse de + la robe_; hence even in 1634, parliament was opposed to it. + (_Forbonnais_, Recherches et Considérations, I, 48, 226.) + _Darjes_ says that information of all loans of capital + should be made to the police authorities, and that the + authorities might compel payment and the loaning of the + principal over again to parties in need of capital. (Erste + Gründe, 426 seq.) Something analogous practically provided + for by the Würtemberg _Landesordnungen_ of the 16th century. + (Compare also _von Schröder_, F. Schatz- und Rentkammer, + XXV, 3.)] + + [Footnote 192-4: Precisely a high rate of interest is a + powerful incentive to saving, and to the importation of + capital.] + + [Footnote 192-5: _Usurae palliatae_, interest taken out of + the capital, or stem-interest, called also money-usury in + contradistinction to patent interest-usury. To this category + belong the written acknowledgments of indebtedness to a + larger amount than that actually received; acknowledging it + in a higher kind of money than that in which the loan was + made; the compulsory taking by the debtor of commodities at + a disproportionately high price, in the place of money, or + at a disproportionately low one, by the creditor. See the + enumeration of such things in the police regulations of the + empire, 1530, art. 26, and 1548, art. 17. Thus, in Paris, + jewels are "sold" to students hard-pressed for money, which + immediately find their way to the _monts de piété_, and have + to be paid for some time after to the usurious "seller," at + a most exorbitant price. The person who loans $100 at 6 per + cent., and retains the interest for the next following year + from the date of the loan, takes in reality nearly 6.4 per + cent. Fraudulent accessory expenses of all kinds, _faux + frais_, expenses of registration, for prolongation, and + extinguishment, etc. Here belong, also, the provisions + introduced into contracts to make redemption more difficult, + the fixing of terms of payment in such a manner that the + debtor is almost forced to let them slip by--called "usury + in the conditions" in Austria. Remarkable instances from the + 16th century in _Vasco_, Usura libera, § 57 ff. Recently, + _Braun_ und _Wirth_, Die Zinswuchergesetze, 1856, 190 ff. In + view of the manifold business transactions behind which the + interest-usurer may take refuge, the complete prevention of + the latter would break the legs of commerce (loc. cit., 145 + ff.).] + + [Footnote 192-6: If the state, by annulling such promises, + should incite the people to violate them, it would be a + frightful step towards the demoralization of the nation: + "thus rewarding men for obtaining the property of others by + false promises, and then, not only refusing payment, but + invoking legal penalties on those who have helped them in + their need." (_J. S. Mill_, Principles, V, ch. 10, 2.) + Besides, the Austrian usury law of 1803 punishes the + borrower also as a spendthrift, and imprisons him for six + months (§ 18), or else it designates where he shall make his + domicile (_Ortsverweisung_). Modern loaning on drafts and + bills of exchange, the acceptance of which is forged with + the knowledge of the creditor, corresponds to what + _Plutarch_, Quaest., Gr., 53, relates of the Cretans, who + had, especially in later times, the worst possible + reputation for avarice and dishonesty. (_Polyb._, VI, 46. + _Paul_ to Titus, I, 12.)] + + [Footnote 192-7: He must insure him against the usury laws. + (_Adam Smith._) According to _Krug_, Staatsökonomie, the + usury laws should be called so because they promote usury, + not because they prevent it. Compare to some extent, + _Montesquieu_, Esprit des Lois, XXII, 18 ff.] + + [Footnote 192-8: When Catherine II. reduced the rate of + interest in Livonia, in 1785, from 6 to 5 per cent., it soon + became impossible, even on the best security, to borrow at + less than 7 per cent. (_Storch_, Handbuch, II, 26.) And so, + when in New York, in 1717, the rate of interest was reduced + to 6 per cent., it became necessary, the following year, to + raise it again to 8 per cent. The merchants, themselves, + petitioned that it might be so raised, because they found it + impossible to get any loans whatever. (_Ebeling_, Geschichte + und Erdbeschreib. von Nord Amerika, III, 152.) In Chili, the + legal rate of interest is 6 per cent., the actual rate, + however, never under 12 per cent., and frequently 18 to 24 + per cent. In Peru, on the other hand, the repeal of the + usury laws rapidly reduced the rate of interest from 50 to + 24 per cent., and finally to 12. (_Pöppig_, I, 118.)] + + +SECTION CXCIII. + +INTEREST-POLICY.--EFFORTS TO AVOID THE EVIL EFFECTS OF A FIXED RATE. + +It has been thought possible to avoid the evil effects of a fixed legal +rate of interest, by regulating it in such a way as to make it +coincident with the rate customary in the country.[193-1] But there are +numberless transactions in which an insurance premium, or premium for +risk or certain expenses of administration[193-2] on the part of the +loaner is inseparable from the true interest. Here, even the law which +entered most into detail could never properly provide for the infinite +gradations or shades of risk and trouble; and the rate in a great many +transactions would, therefore, be placed below the natural height. +Turgot long since observed that the value of a promise of future payment +is different not only for different persons, but at different times. +Thus, for instance, it is really less after there have been numerous +cases of bankruptcy than at other times.[193-3] If, now, it was desired +to fix the maximum rate of interest in such a way that it should equal +the rate customary in the country, where the security is good, the best +real property security for instance, the consequence would be, that +those persons who had no such guaranty to offer (leaving the loaning +"among brothers" out of the question) would either be unable to borrow +money at all, or, by evading the law, only at an artificially higher +rate. Hence the legislator causes injury where he wished to favor. This +has been observed in England in almost all past commercial +crises.[193-4] The man who makes it his business to loan his capital, on +short time and in small sums, undertakes a trade which the examination, +and the surveillance of a large number of small debtors, and the +necessity of reinvesting the many small sums paid him, render +exceedingly troublesome and disagreeable. Moreover, in loaning on short +terms of payment, there is always danger that his money may lie idle for +some length of time. These are reasons sufficient, why, in such cases, +when the whole compensation is denominated interest, a rate of interest +greater than usual in the country is equitable and even necessary. (§ +179.)[193-5] + +It has been frequently suggested that spendthrifts and adventurers +should be hindered using, or to speak more correctly, abusing the +nation's wealth by laws prohibiting the rate of interest at which they +might be expected to obtain credit; and this in the interest alike of +the creditors they might possibly find and in their own.[193-6] But +almost every inventor of genius, from Columbus to Stephenson, has been +obliged to be considered "an adventurer" for a time by "solid men." The +law limits him thus, and more especially during the critical period of +outlay which precedes the undoubted triumph of his idea, to his own +means or the gifts of others.[193-7] And how inadequate, as rule, are +both. The rich are as seldom discoverers, as discoverers are skillful +supplicants. And, as regards spendthrifts, they may ruin themselves in +so many thousands of ways, especially by buying or selling, and +unhindered by the state, that it is scarcely apparent why the one way of +borrowing should be legally closed to them.[193-8] How is it, if the law +itself drives them into the hands of a worse class of creditors, and +compels them to pay yet a higher rate of interest? Are they not simply +more rapidly ruined? States, themselves, have scarcely ever given any +heed to their own usury laws in borrowing or loaning.[193-9] + + [Footnote 193-1: In Austria, in 1803, in loaning on pledge, + 4 per cent.; in other loans and in the trade of merchants + with one another, 6 per cent. In France, since 1807, with + merchants, 6 per cent.; with others, 5. _Salmasins_, De Mono + Usur., c. 1, advises that the maximum should be fixed as + high as that usual in the most unfavorable cases. The + reduction from such rate, where possible, would regulate + itself.] + + [Footnote 193-2: _Petty_, Quantulumcunque concerning money, + 1682.] + + [Footnote 193-3: Sur le Prêt d'Argent, § 36.] + + [Footnote 193-4: How many merchants would have avoided + bankruptcy here if they had been allowed to borrow at 8 per + cent.! The established rate of 5 per cent. was certainly too + low, considering the great demand for capital and the want + of confidence at the moment, to permit capital to be loaned + at that rate. Many saw themselves compelled to sell their + merchandise or evidences of state indebtedness at a loss of + 30 per cent., in order to meet their obligations. But the + person who, to anticipate the receipts due in 6 months, for + instance, consents to suffer a loss of 30 per cent., pays, + in a certain sense, interest at the rate of 60 per cent. a + year. Compare _Tooke_, Considerations on the State of the + Currency, 60, and History of Prices, II, 163, on the Crisis + of 1825-26. Since the Bank, least of all, could exceed the + legal rate of interest, numberless applications were made to + it in times of war in order to obtain the difference between + the legal rate and the rate usual in the country. + (_Thornton_, Paper Credit of Great Britain, ch. 10.) + Prussia, November 27, 1857, suspended the usury laws for 3 + months, on account of the commercial crisis, except the + provisions relating to pawn-broker and minors.] + + [Footnote 193-5: _Turgot_ tells of Parisian "usurers" who + made weekly advances to the market women of la Halle, and + received for 3 livres, 2 sous interest; that is 173 per + cent. a year. The premium for insurance may have been very + high here. When such loaners were brought before the courts, + and they were sentenced to the galleys, the usual punishment + for usury, their debtors came and testified their gratitude + by begging for mercy to them! (Mémoire sur le Prêt d'Argent, + § 14, 31.) Compare _Cantillon_, Nature du Commerce, 276.] + + [Footnote 193-6: Thus, _Adam Smith_, Wealth of Nations, II, + ch. 4. Similarly, _Roesler_ Grundsätze, 495 ff. Compare, + _per contra_, _Jer. Bentham_, Defense of Usury: showing the + Impolicy of the present legal Restraints on the Terms of + pecuniary Bargains in Letters to a Friend. To which is added + a Letter to Adam Smith on the Discouragement imposed by the + above Restraints to the Progress of inventive Industry, + 1787; 3 ed., 1816.] + + [Footnote 193-7: The first steamboat in the United States + was, for a long time, called the "Fulton-folly!"] + + [Footnote 193-8: It is just as hard to see why only + money-capital should have a fixed rate of interest, and not + buildings, etc. likewise.] + + [Footnote 193-9: In Holland, the legal rate of interest was + lowered, in 1640, to 5 per cent., and in 1655 to 4; but not + since. (_Sir J. Child_, Discourse of Trade, 151.) Besides, + _Locke_, Considerations on the Lowering of Interest, Works, + III, 34, assures us that, in his time, a man in England + could make contracts for unlimited interest.] + + +SECTION CXCIV. + +INTEREST-POLICY.--REPEAL OF THE USURY LAWS. + +However, the complete repeal of the usury laws[194-1] has not under all +circumstances accomplished what it was supposed it would; and the state +should take great care, lest by an incautious framing of its laws, it +should put judges in such a position that they may be compelled to +coöperate in the execution of immoral contracts.[194-2] In the lowest +strata, so to speak, of the loaning business, the medieval condition +continues to exist (§ 190) after it has disappeared in the upper. Here, +the loan is effected scarcely ever for the purposes of production, but +most generally because of the most urgent necessity; and the debtor is +not in a condition, from want of education, and especially from his +ignorance of arithmetic, to estimate the magnitude of the burthen he has +undertaken. The business of loaning is, under such circumstances, +considered dishonorable, to some extent, by the public. And when a +business necessary in itself is held disreputable by public opinion, the +usual result is that bad men alone engage in it.[194-3] Real competition +which would but fix the natural price is wanting here in proportion as +the debtor is anxious for secrecy.[194-4] + +Abuses in this respect are best guarded against by the establishment of +government loan-institutions, and by the publicity of the administration +of justice to debtors.[194-5] Besides, every contract might be +prohibited the terms of which were such that an inexperienced borrower +could not from them obtain a clear conception of the burthen he accepts, +or which hindered him from paying the debt at a proper time.[194-6] + +Lastly, there should be a rate of legal interest fixed by the state to +be charged in such cases as interest is found to be in justice due, but +in which none is provided for by contract; and this rate should +approximate as nearly as possible to the rate usual in the +country.[194-7] [194-8] + + [Footnote 194-1: In 1787, Joseph II. abolished the penalties + for usury, but allowed the provisions denying a legal + remedy, in cases of usurious demand of over 4 per cent. for + hypothecations, 6 per cent. for bills and 5 per cent. for + other loans, to remain. Compare the prize essay by + _Günther_, Versuch einer vollständigen Untersuchung über + Wucher und Wuchergesetze, 1790; _v. Kees_, über die + Aufhebung der Wuchergesetze, 1791; _Vasco_, Usura libera, + 1792. The opposite view represented by _Ortes_, E. N., II, + 24, and _v. Sonnenfels_, Ueber Wucher und Wuchergesetze, + 1789, and zu Herrn _von Kees_, Abhandlung, etc., 1791. The + debates on the repeal of the usury laws in the French + Chamber of Deputies, after which _Lherbette's_ motion in + favor of their repeal was rejected. In France they were, + during the assignat-period of bewilderment virtually, and in + 1804-1807 expressly (C. C., Art. 1907), but only + provisionally repealed. In Würtemberg, all those having the + right to draw bills of exchange were exempted from them in + 1839. Since the law of 1848, governing bills of exchange, + gave all persons capable of contracting, the right to draw + bills of exchange, the usury laws have ceased to have any + existence; without much noise before and without much + complaint after. (A. Allgem. Ztg., 24 März, 1857.) Recent + complete or partial repeal of the usury laws: in England, in + 1854; in Denmark, in 1855; in Spain, in 1856; Sardinia, + Holland, Norway and Geneva, 1857; Oldenburg, 1858; Bremen, + 1859; in the kingdoms of Saxony and Sweden, in 1864; + Belgium, 1865; Prussia, the North German Confederation, and + to some extent Austria, in 1867.] + + [Footnote 194-2: Compare _F. X. Funck_, Zins und Wucher, + 1868, a moral theological treatise which rightly demands a + more rigid popular morality in relation to real usury, after + the repeal of the usury laws. The recent cases in which + courts have juridically acquitted usurers because they could + not do otherwise, but have branded them morally, are of very + questionable propriety, in view of the facility with which + high and usurious rates of interest may be confounded. _R. + Meyer_, Emancipationskampf, I, 78, advises that the + capitalist be allowed to ask whatever interest he wishes, + but that the state, as judge and executor of the laws, + should enforce payment only at a certain rate determined by + law.] + + [Footnote 194-3: Many laws seem to purposely permit this, + inasmuch as they allow a rate of interest, higher in + proportion as the position of the creditor is less + respectable. Thus, formerly, in some places, the Jews might + require higher interest than the Christians. Justinian + allows _personis illustribus_ only 4 per cent.; ordinary + private persons, 6 per cent.; money-changers, etc., 8 per + cent. (L. 26, Cod. IV, 32.) On the other hand, according to + the Indian legislation of Menu, the Brahman is obliged to + confine himself to 2, the warrior to 3, the _vaysya_ to 4, + the _sudra_ to 5 per cent. per month at most. (Cap. 8.)] + + [Footnote 194-4: _Turgot_ considered that only the _prêteurs + à la petite semaine_, pawnbrokers who loaned to hard-pressed + people on the confines of the middle class and artisans, and + the infamous characters who advanced money to the sons of + rich men to spend in dissipation, still passed for usurers. + Only the latter are injurious; not, however, because of the + high rate of interest they charge, but because they help in + a bad cause. (Sur le Prêt d'Argent, § 32.) According to + _Colquhoun_, Police of the Metropolis, 167, there are women + in London from whom the hucksteresses borrow 5 shillings + every day and return them every evening with 1/2 shilling + interest. Something analogous happens much more frequently + in the country, especially in the loaning in kind of + productive capital to poor persons. Thus, in Tessin, there + are many "iron cattle" which the borrower is obliged to + return at their original value, plus an interest of about 36 + per cent. (_Franscini_, C. Tessin, 152.) On the Rhine, + frequently as much as 200 per cent. a year, is stipulated + for in such contracts. _Morstadt_, der N. Oekonom. Heft., IX, + 727.] + + [Footnote 194-5: Compare _J. J. Becher_, Polit. Discurs, + 1668, 219; _v. Schröder_, F. Schatz- und Rentkammer, Bd. §§ + 123, 133 ff. The first _montes pictatis_ were expressly + intended to check the usury of the Jews. Thus, in Florence, + in 1495, after the expulsion of the Jews, voluntary + contributions were made to found a municipal loaning + establishment. Similarly, _Tiberius_, Tacit. Ann., VI, 16 + seq. _Count Soden_, Nat-Oek., IV, 57; V, 319, advises that + all contracts for interest should be recorded in a public + registry, under pain of their being held not actionable.] + + [Footnote 194-6: _Günther_, loc. cit., thinks that, in every + contract in which the rate of interest is masked, its real + rate should be expressed under penalty of invalidity. In + addition to this, he would have those who have attained + their majority put in full control of their fortune only + after they had undergone an examination. + + It seems opportune that the old prohibition against interest + on interest (_Cicero_, ad. Att., V, 21, and L, 26, Digest, + XIV, 6) and the provision that the interest should not be + permitted to be greater than the _alterum tantum_ (Digest, + l. c.) should be permitted to continue. (Digest, l. c.) Both + of these measures were first decreed by Lucullus, for the + protection of Asia Minor. Compare § 115. Florentine law, of + 1693, that interest in arrears, or that interest on interest + beyond 7 years, should not be added to the principal without + an express contract to that effect. (_Vasco_, Usura libera, + § 155.) In England, the usury laws were by 2 and 3 Victor., + c. 37, repealed, but only to the extent of excepting from + their provisions bills of not over 12 months, and money + loans not over £10. Compare _Rau_, Lehrbuch II, § 323.] + + [Footnote 194-7: Compare _Locke_, Considerations: Works, 10, + 32 ff. In Spain, the Council of State is required to + regulate the rate of legal interest yearly (law of 1856, + art. 8); a thing which, according to _Braun_, would be + better done in each individual case by the judges + themselves. (_Faucher's_ Vierteljahrsschrift, 1868, II, + 13.)] + + [Footnote 194-8: In Athens, the rate of interest in general + was voluntary from the time of Solon, who, however, did away + with slavery for debt. (Lysias adv. Theomn., 360.) Yet there + was a legal rate of interest of 18 per cent. for the case in + which a divorced husband delayed the return of his wife's + dowry. Compare _Böckh_, Staatshaushalt der Athener, I, 148.] + + + + +CHAPTER V. + +THE UNDERTAKER'S PROFIT. (_UNTERNEHMERLOHN._) + + +SECTION CXCV. + +THE REWARD OF ENTERPRISE. + +The essence of an enterprise or undertaking, in the politico-economical +sense of the word, consists in this, that the undertaking party engages +in production for the purpose of commerce, at his own risk. In the +earlier stages of a nation's economy, the production of consumers is, +naturally enough, limited chiefly by their own personal wants. Somewhat +later, when the division of labor has been further developed, the +workman produces at first, enough to meet occasional determinate +"orders;" and still later to meet them regularly and as a business. +Later yet, and in stages of civilization yet higher, especially when the +freedom of labor constantly grows, as it is wont to, here, and the +freedom of capital and trade becomes more extensive, enterprise plays a +part which grows more important as time rolls on, and is usually carried +on more at one's own risk.[195-1] This transition is a great advance, +inasmuch as the advantages of the coöperation of labor and of _use_ may +be utilized in a much higher degree by undertakers (_Unternehmer_) than +by producers who labor only to satisfy their own household wants, or to +meet "orders" already made. The awakening of latent wants, a matter of +the utmost importance to a people who would advance in civilization, is +something which can enter into the mind only of a man endowed with the +spirit of enterprise (an undertaker).[195-2] + +While most English political economists have confounded the personal +gain of the undertaker with the interest on the capital used by +him,[195-3] many German writers have called the "undertaker's earnings" +or profit a special, and fourth, branch of the national income, +coördinate with rent, wages, and the interest on capital.[195-4] Yet, +the net income of every undertaker is either the fruit of his own land +used for purposes of production and of his capital, in which case it is +subject to the usual laws of development of rent and interest; or, it +must be considered as wages paid for his labor.[195-5] These wages he +earns, as a rule, by organizing and inspecting the work, calculating the +chances of the whole enterprise; frequently by, at the same time, +keeping the books and acting as cashier; and, in the case of small +undertakings, as a common fellow-workman. (Tradesman, peasant). In every +case, however, even when he puts an agent paid by himself in his place, +he earns these wages from the fact that his name keeps the whole +enterprise together; and for the reason that, in the last +instance,[195-6] he has to bear the care and responsibility attending +it.[195-7] When a business goes wrong, the salaried director or foreman +may permit himself to be called on to engage in another; but the weary, +watchful nights belong to the undertaker or man of enterprise, alone; +and "how productive such nights frequently are!"[195-8] + +This profit of the undertaker is subject essentially to the same natural +law as wages in general are; only it differs in this from all other +branches of income, that it can never be stipulated for in advance. +Rather does it consist of the surplus which the product of the +undertaking affords over and above all the rent stipulated for in +advance or estimated at the rate usual in the country, the interest on +capital, and wages of common labor.[195-9] + + [Footnote 195-1: At first, usually imperfect enterprises in + which the shop-instruments, etc., are kept ready for present + orders; and then complete or perfect enterprises. (_v. + Mangoldt_, Volkswirthschaftslehre, 255.)] + + [Footnote 195-2: _v. Mangoldt_, Lehre vom Unternehmergewinn, + 1855, 49 ff. The same author shows, in his + Volkswirthschaftslehre, that it is better for the general + good that the risk should be borne by the producer than by + the consumer. In the case of the taking of orders, there is + danger only of a technic failure, but in enterprise proper, + there is possible also an economic miscarriage of the work, + even when successful from a technic point of view. But in + the case of the undertaker (man of enterprise), + responsibility is much more of an incentive, production much + more steady, and therefore much better able to exhaust all + means of help. Consumers are much more certain in their + steps, as regards price, etc., since they find what they + want ready made.] + + [Footnote 195-3: Thus _John Stuart Mill_, Principles, II, + ch. 15, 4, teaches with a certain amount of emphasis that + the "gross profits of stock" are different not so much in + the different branches in which capital is employed, as + according to the personal capacity of the capitalist himself + or of his agents. There are scarcely two producers who + produce at precisely the same cost, even when their products + are equal in quality, and equally cheap. Nor are there two + who turn over their capital in precisely the same time. + These "gross profits" uniformly fall into three classes: + reward for abstinence, indemnity for risk, remuneration for + the labor and skill required for superintendence. _Mill_ + complains that there is in English no expression + corresponding to the French _profit de l'entrepreneur_. [The + translator has taken the liberty to use the expression + "undertaker's profit," for what the French call the _profit + de l'entrepreneur_, and the Germans _Unternehmerlohn_, spite + of its funereal associations, and because Mill himself + employed it, although he recognized that it was not in good + usage.--TR.] (II, ch. 15, 1) _Adam Smith_ had the true + doctrine in germ (Wealth of Nat., I, ch. 6), but those who + came after him did little to develop it. Compare _Ricardo_, + Principles, ch. 6. 21. _Read_, Political Economy, 1829, 262 + ff., and _Senior_, Outlines, 130 seq., were the first to + divide profit into two parts: interest-rent (_Zinsrente_) + and industrial gain. Similarly, _Sismondi_, N. P., IV, ch. + 6. According to _A. Walker_, Science of Wealth, 1867, 253, + 285, "profits are wages received by the employer."] + + [Footnote 195-4: _Hufeland_, Grundlegung, I, 290 ff.; + _Schön_, Nat-Oek., 87, 112 ff.; _Riedel_, Nat-Oek., II, 7 ff.; + _von Thünen_, Der isolirte Staat, II, 1 80 ff.; _v. + Mangoldt_, Unternehmergewinn, 34 ff. The latter divides the + undertaker's profit (_profit de l'entrepreneur_) into the + following parts: + + A. Indemnity for risk. If this be only an indemnity exactly + corresponding to the risk, it cannot be looked upon at all + as net income, but only as an indemnification for capital. + If individual undertakers, favored by fortune, receive a + much larger indemnification than is necessary to cover their + losses, such indemnification is not income either, but an + extraordinary profit not unlike a lottery-gain, unless it be + called, perhaps, the reward of extraordinary courage + (_Eiselen_), i. e., wages. If, lastly, the indemnity is + uniformly somewhat larger than the risk, in order to + compensate for the continual feeling that one is running a + risk, it must be remembered that all remuneration for + present sacrifice, made directly for the sake of production, + is wont to be embraced under the name of wages. + + B. Wages and interest for the labor and capital utilized + only in one's own production, and which cannot be let. _v. + Mangoldt_ himself admits, that, in the long run, only + certain qualified labor belongs to this category. + + C. Undertaker's rent (_Unternekmerrente_) depending on the + rarity of undertakers (men of enterprise) compared with the + demand. This, therefore, is not a third component part, but + only one which adds to the other two, _Storch_, Handbuch, I, + 180, and _Rau_, Lehrbuch, I, § 237 ff., consider the profit + of the undertaker as an admixture of wages and interest. + Professor _J. Miscszewicz_ has given expression to an + interesting thought in opposition to myself: that credit is + a fourth factor of production (natural forces, labor and + capital being the other three) produced by the three older + factors, as capital by the two oldest. The undertaker's + profit he then considers the product of this fourth factor, + corresponding to rent, interest and wages.] + + [Footnote 195-5: Compare _Canard_, Principes, ch. 3; _J. B. + Say_, Traité, II, ch. 7, Cours pratique, V, 1-2, 7-9, + distinguishes three branches of income: rent, interest and + the profits of industry; and he divides the latter again + into the profits of the _savant_, the undertaker and + workmen, (_v. Jacob_, Grundsätze der Nat.-Oek., § 292; + _Lotz_, Handbuch, I, 471; _Schmalz_, + Staatswirthschaftslehre, I, 116; _Nebenius_, Oeff. Credit, + I, Aufl., 466.)] + + [Footnote 195-6: I need only call attention to the influence + that the mere name of a general sometimes exerts over the + achievements and sometimes even over the composition of his + army (Wallenstein!); and how important it sometimes is to + keep his death a secret. And so the mere name of a minister + of finance may facilitate loans, etc.] + + [Footnote 195-7: It is sufficient to mention the different + positions occupied by the shareholders and preferred + creditors of a joint-stock company.] + + [Footnote 195-8: Compare _von Thünen's_ Isolirter Statt, II, + 80 ff., and his Life, 1868, 96. _Meister muss sich immer + plagen!_ (_Schiller._) See a long catalogue of books on the + position of the undertaker in the principal different + branches of industry in _Steinlein_, Handbuch der + Volkswirthschaftslehre, I, 445 ff.] + + [Footnote 195-9: _Tantièmes_ occupy a middle place between + wages and the undertaker's profit; dividends a middle place + between undertaker's profit and the interest of capital. On + this is based _Rodbertus's_ view, that an increase of joint + stock companies raises _ceteris paribus_ the rate of + interest, and an increase of productive associations the + rate of wages, for the reason that in each instance, there + is some admixture of "undertaker's profit," or reward of + enterprise.] + + +SECTION CXCVI. + +UNDERTAKER'S PROFIT.--CIRCUMSTANCES ON WHICH IT DEPENDS. + +As the wages or reward of labor, in all instances, depends on the +circumstances mentioned in § 167 ff., so, also does the reward of +enterprise; in other words, the undertaker's profit or wages. It +depends, therefore: + +A. On the rarity of the personal qualities required in a business, which +qualities may be divided into technical and ethical qualities. Among the +latter are, especially, the capacity to inspire capitalists with +confidence and workmen with love for their task; the administrative +talent to systematize a great whole made up of men and to order it +properly, to keep it together by sternness of discipline in which +pedantry has no part, and by economy with no admixture of avarice; and +frequently endurance and even presence of mind. These ethical, +statesmanlike qualities are, take them all in all, a more indispensable +condition of high undertaker's profit than the technical are.[196-1] + +B. On the risk of the undertaking in which not only one's property, but +one's reputation, may be lost.[196-2] + +C. As to the disagreeableness of the undertaking or enterprise, we must +take into especial consideration the disinclination of capitalists in +general to assume the care and trouble of concerning themselves directly +with the employment of their capital. (§ 183.) The undertaker's profit +is, besides, lower in proportion as he needs to care less for the +profitable application of the different sources of production, and for +their preservation. Hence it is, in general, higher for the direction of +circulating than of fixed capital; in speculative trade and in wholesale +trade which extends to the whole world, than in retail trade and merely +local business.[196-3] + +It has, indeed, been remarked, that the undertaker's profit is, as a +rule, proportioned to the capital employed.[196-4] This may be true in +most cases, but only as the accidental compromise between opposing +forces. It is evident that the greater the enterprise is, the greater +may be the surplus over and above the compensation stipulated for in +advance of all the coöperating productive forces, and not only +absolutely but also relatively. We need only call to mind the successful +results attending the greater division of labor (§ 66) and the greater +division of use (_Gebrauchstheilung_) (§ 207); the greater facility of +using remains in production on a large scale, and the fact that all +purchases, and all obtaining of capital are made, when the items are +large, at cheaper rates, because of the more convenient conducting of +the business. + +This is true up to the point where the magnitude of the whole becomes so +great as to render the conducting of it difficult. Considered even +subjectively, the great undertaker, whose name and responsibility keep a +great many productive forces together, may demand a higher reward, +because there are so few persons competent to do the same. On the other +hand, it cannot be denied that a support in keeping with his position +may be called the amount of the cost of production of the undertaker's +labor. If this cost is once fixed by custom, it will, of course, be +relatively high in those branches of business which permit only of the +employment of a small capital.[196-5] + +In the higher stages of civilization, the undertaker's profit has, like +the rate of interest, a tendency to decline. This decline is, indeed, in +part, only an apparent one, caused by the decreased risk and the smaller +indemnity-premium. But it is, in part, a real one, produced by the +increased competition of undertakers.[196-6] The more intelligent +landowners and workmen become, the more readily do they acquire the +capacity and desire to use the productive forces peculiar to them in +undertakings of their own; and the number of retired persons who live +from their rents grows smaller with the decline of the rate of interest. +The strong competition of undertakers now leads to degeneration, and +undertakings or enterprises become usual in which the gains or losses +are subjective, and are destitute of all politico-economical +productiveness; for instance, the purchase of growing fruits, and +businesses carried on in "margins," or differences. It is self-evident +that the circumstances which retard the rate of interest, or turn it +retrograde, would have a similar effect on the undertaker's profit. (§ +186.) On the whole, a rapidly growing people meet with great gains and +losses, but the preponderance is in favor of the former. A stationary +people are wont to become more and more careful and cautious. A +declining people underestimate the chances of loss, although in their +case they tend more and more to preponderate over the chances of gain. +(_v. Mangoldt._) + + [Footnote 196-1: Thus _Arkwright_, by his talent for + organization principally, attained to royal wealth, while + _Hargreaves_, a greater inventive genius, from a technic + point of view, had to bear all the hardships of extreme + poverty.] + + [Footnote 196-2: An experienced Frenchman, _Godard_, + estimates that of 100 industrial enterprises attempted or + begun, 20 fail altogether before they have so much as taken + root; that from 50 to 60 vegetate for a time in continual + danger of failing altogether, and that, at the furthest, 10 + succeed well, but scarcely with an enduring success. + (Enquête commerciale de 1834, II, 233.)] + + [Footnote 196-3: Thus _Ganilh_, Théorie de l'Economie + politique I, p. 145, was of the opinion that in France's + foreign trade the profit was only 20, and in its internal + trade, scarcely 10 per cent. of the value put in + circulation.] + + [Footnote 196-4: _Hermann_ loc. cit. 208.] + + [Footnote 196-5: According to _Sinclair_, Grundgesetze des + Ackerbaues, 1821, the profit on capital of English farmers + was wont to be from 10 to 18 per cent. Only in very + remarkable cases, by persons in very favorable + circumstances, was from 15 to 20 per cent. earned; that is, + on the whole, less than in commerce and industry. In the + case of farmers of meadow land, 15 per cent. and even more + was not unusual; because there is a need of less outlay + here, but more mercantile speculation, especially in the + fattening of live stock. + + At the end of the last century English farmers expected 10 + per cent. profit on their capital. (_A. Young_, View of the + Agriculture of Suffolk, 1797, 25.) And so _Senior_ is of + opinion that, in the England of to-day, industrial + enterprises of £100,000 yield a profit of less than 10 per + cent. a year; those of £40,000, at least 12-1/2 per cent.; + those of from £10,000 to £20,000, 15 per cent.; smaller ones + 20 per cent. and even more. He makes mention of fruit + hucksters who earned over 20 per cent. a day; that is, over + 7,000 per cent. a year! (Outlines, 203 seq.) In Manchester, + manufacturers, according to the same authority, turned over + their capital twice a year at 5 per cent.; retail dealers, + three times a year at 3-1/2 per cent. (Ibid, 143.) + _Torrens_, The Budget (1844), 108, designates 7 per cent. as + the minimum profit which would induce an English capitalist + to engage in an enterprise of his own. According to _v. + Viebahn_, Statistik des Regierungsbezirks Düsseldorf, 836, + I, 180, the undertaker's profit, i. e., the surplus money of + the value of the manufactured articles, after deduction made + of the raw material and wages, in the Berg country, amounted + to, in 81 iron factories, 146,400 thalers; in 6 cotton + factories, to 21,200 thalers; in 15 cloth factories, to + 14,725 thalers; in 4 worsted factories, to 1,700 thalers; in + 4 brush factories, to 800 thalers; in 2 tobacco factories to + 10,220 thalers; in 2 paper factories, to 7,400 thalers; on + an average, 1,924 thalers; although many undertakers earned + only from 200 to 400 thalers, and some few from 5,000 to + 10,000 thalers.] + + [Footnote 196-6: This is, of course somewhat oppressive to + many individuals, and hence we find that in those countries + which are unquestionably making great advances in + civilization, there are so many complaints of alleged + growing impoverishment. Compare _Sam. Fortrey_, England's + Interest and Improvement, 1663; _R. Coke_, A Treatise + wherein is demonstrated that the Church and State of England + are in equal danger with the Trade of it, 1671. Britania + languens, showing the Grounds and Reasons of the Increase + and Decay of Land, etc., 1680. And per contra, England's + great Happiness, wherein is demonstrated that a great Part + of our Complaints are causeless, 1677. Analogous claims + might be shown to exist in Germany by a collection of almost + any number of opinions advanced during the last thirty + years.] + + +SECTION CXCVI (_a._). + +UNDERTAKER'S PROFIT.--HAVING THE "LEAD." + +The undertaker's profit is that branch of the national income in which +the greater number of new fortunes are made. If a landowner has a large +income, he generally considers himself obliged to make a correspondingly +large outlay, one in keeping with his position; and workmen who are not +undertakers themselves seldom have the means to make large savings. +Besides, undertakers stand between the purchasers of their products and +the lessors of the productive forces used by them in the peculiarly +favorable situation which I may describe by the expression: having, as +they say in card-playing, "the lead."[196a-1] When, in the struggle for +prices, one party occupies a position which enables him to observe every +change of circumstance much sooner than his opponent, the latter may +always suffer from the effects of erroneous prices. If, for instance, +the productiveness of business increases, even without any personal +merit of the individual undertakers themselves, it will always be some +time before the decline in the price of commodities and the rise in the +rate of interest take place, as a result of the increased competition of +undertakers, consequent upon the extraordinary rate of the undertaker's +profit. It is difficult, and even impossible in most instances for the +proprietors of the productive forces which they have rented out, to +immediately estimate accurately the profit made by undertakers. On the +other hand, the least enhancement of the price of the forces of +production is immediately felt by the undertakers, and causes them to +raise their prices. They just as quickly observe a decline of the prices +of the commodities, and know how to make others bear it by lowering +wages and the rate of interest.[196a-2] It should not be forgotten that +the persons most expert, far-seeing, active and expeditious in things +economic, belong to the undertaking class.[196a-3] [196a-4] + + [Footnote 196a-1: The same principle is effective in + intermediate commerce, and in the intervention of bankers + between government and state creditors.] + + [Footnote 196a-2: This is much less the case in rents, for + the reason that contracts here are made for a much longer + term. Hence, here the farmer has as much to fear as to hope + from a change of circumstances. Hence, too, we meet with a + farmer who has grown rich much more seldom than with a + manufacturer or a merchant.] + + [Footnote 196a-3: If an undertaker can cede his higher + reward to another and guaranty its continuance, the + circumstances which enable him to do this assume the nature + of fixed capital; for instance, the trade or _clientèle_ + secured by custom or privilege. If the undertaker has not + the power to dispose of it in this way, the increased profit + either disappears with his retirement from the business or + falls to the owner of the capital employed, and still more + to the land owner. Thus, for instance, how frequently it has + happened that a store, which has been largely resorted to by + the public, drawn thither by the business tact of the + lessee, has afterwards been rented by the owner at a higher + rent! (_Hermann_, loc. cit. 210.)] + + [Footnote 196a-4: _Lassalle's_ socialistic attacks on + Political Economy have been directed mainly against the + undertaker's profit or reward. Compare the work + "Bastiat-Schulze von Delitzsch, der ökonom. Julian oder + Kapital und Arbeit," 1863. By means of state credit, he + would have this branch of income turned over to common + labor. _Dühring_ also, Kapital und Arbeit 90, declaims not + so much against capital as against "the absolutism of + undertakers." _Schäffle_ D. Vierteljahrsschrift Nr. 106, II, + 223, objects to this, that undertakers give value in + exchange to unfinished products, a great service rendered + even to the laboring class, who otherwise would have to + resign the advantages of the division of labor. + + The undertaker's profit is precisely the part of the great + politico-economical tree from which further growth chiefly + takes place. To artificially arrest it, therefore, would be + to hasten the stationary state, and thus make general and + greater the pressure on workmen and capitalists, which it is + sought to remove locally. Hence _Roesler_, Grundsätze, 507 + ff., very appropriately calls the undertaker's profit the + premium paid by society to those who most effectually combat + the "law of rent." The importance of a good undertaker may + be clearly seen when a joint stock manufacturing company + pays a dividend of from 20 to 30 per cent., while one close + by, of the same kind, produces no profit whatever. But, at + the same time, the socialistic hatred of this branch of + income may be easily accounted for, in a time full of + stock-jobbing, which last never produces except a + pseudo-undertaker's profit.] + + + + +CHAPTER VI. + +CONCLUDING REMARKS ON THE THREE BRANCHES OF INCOME. + + +SECTION CXCVII. + +INFLUENCE OF THE BRANCHES OF INCOME ON THE PRICE OF COMMODITIES. + +We have seen, § 106, that the cost of production of a commodity, +considered from the point of view of individual economy, may be reduced +to the payment for the use of the requisite productive forces rented or +loaned to the producer. Hence every great variation in the relation of +the three branches of income to one another must produce a corresponding +variation in the price of commodities.[197-1] When, for instance, the +rate of wages increases because they absorb a larger part of the +national income, those commodities in the production of which human +labor, directly employed, is the chief factor, must become dearer as +compared with others. Whether this difference shall be felt principally +by the products of nature or of capital (compare § 46 seq.), depends on +the causes which brought about the enhancement of the rate of wages. +Thus, a large decrease of population, or emigration on a large scale, +will usually lower rent as well as the rate of interest;[197-2] an +extraordinary improvement made in the art of agriculture, only the +former; and an extraordinary increase of capital, only the latter. The +usual course of things, namely that the growth of population +necessitates a heavier draft on the resources of the soil, and thus +causes rents to go up, and makes labor dear, must have the effect of +raising the price of the products of labor and of natural forces, as +compared with the products of capital; and all the more as it causes the +rate of interest to suffer a positive decline. The products of +mechanical labor become relatively cheaper; and cheaper in proportion as +the producing machinery is more durable; therefore in proportion as, in +the price of the services it renders, mere interest preponderates over +compensation for its wear and tear.[197-3] + +Let us, for a moment, leave ground-rent out of the question entirely, +and suppose a nation's economy whose production is conducted by eleven +undertakers employed on different commodities. Let us suppose that +undertaker No. 1 uses machinery exclusively and employs only as many +workmen as are strictly necessary to look after it, that undertaker No. +2 has a somewhat larger number of workmen and a somewhat smaller amount +of fixed capital, etc.; and that this increase in the number of workmen +and decrease in the amount of fixed capital continues until we reach +undertaker No. 11, who employs all his capital in the payment of wages. +If now, the rate of wages were to rise, and the interest on capital to +fall in the same proportion, the commodities produced by undertaker No. +11 would rise most in price, and those of No. 1 decline most. In the +case of undertaker No. 6, the opposing influences would probably balance +each other, and if the producers of money belonged to this sixth class, +it would be very easy to get a view of the whole change in the +circumstances of production, in the money-price of the different +commodities.[197-4] + + [Footnote 197-1: Compare _Adam Smith_, I, ch. 7, fin. This + relative increase or decrease of one branch of income at the + expense or to the advantage of another, should be + distinguished from the absolute change of its amount which + does not affect the cost of production. Thus, for instance, + when the rent of land indeed increases, but in consequence + of a simultaneous improvement in agriculture, a decline in + the rate of interest, and an enhancement of the price of + wheat is avoided (§ 157). So, too, when individual wages + increase on account of the greater skill and energy of + labor, but the same quantity and quality of labor do not + become dearer (§ 172 seq.); and lastly, when the rate of + interest remaining unaltered, the receipts of capitalists + are increased by reason of an increase of their capital (§ + 185).] + + [Footnote 197-2: After the great plague in the 14th century + in England, when all the products of labor became dearer, + skins and wool fell largely in price: _Rogers_, I, § 400.] + + [Footnote 197-3: Anyone who carefully reads all the five + divisions of _Ricardo's_ first chapter will soon find that + this great thinker rightly understood the foregoing, + although the great abstractness and hypothetical nature of + his conclusions might easily lead the reader astray. The + proposition which closes the second part, and which has been + so frequently misunderstood by his disciples, can be + maintained only on the supposition that the prices of all + commodities hitherto have been made up of equal proportions + of rent, capital and wages. But think of Brussels lace and + South American skins!] + + [Footnote 197-4: Compare _J. Mill_, Anfangsgründe der polit. + Oekonomie, Jacob's translation, § 13 ff.; _McCulloch_, + Principles, III, 6. _Adam Smith_ was of opinion, that higher + wages enhanced the price of commodities in an arithmetical + ratio, a higher rate of interest in a geometrical one (I, + ch. 9). Similarly _Child_, Discourse of Trade, 38. This last + _Kraus_, Staatswirthschaft, better expresses by saying that + an increase in the rate of interest operates in the ratio of + the compounded interests.] + + +SECTION CXCVIII. + +REMEDY IN CASE ONE FACTOR OF PRODUCTION HAS BECOME DEARER. + +When one of the three branches of income has grown as compared with the +others; in other words, when the factor of production which it +represents has become relatively dearer, it is to the interest of the +undertaker and of the public, that it should be replaced where possible +by another and cheaper productive force. (§ 47.) On this depends the +advantageousness of _intensive_ agriculture (high farming) in every +higher stage of civilization. There land is dear and labor cheap. Hence, +efforts are made to get along with the least amount of land-surface, and +this minimum of land is made more productive by a number of expedients +in cultivation, by manuring it, by seed-corn, etc., of course also by +the employment of journeymen laborers, oxen, etc. And since the price of +land is intimately connected with the price of most raw material, +remains are here saved as much as possible, often with a great deal of +trouble.[198-1] In a lower stage of civilization, such savings would be +considered extravagance. As land is here cheap, and capital dear, it is +necessary to carry on the cultivation of land _extensively_; that is, +save in capital and labor, and allow the factor nature to perform the +most possible. The clearing up of untilled land, or the draining of +swampy land etc., would be frequently injurious here; for it would +require the use of a very large amount of capital to obtain land of +comparatively little value. + +In large cities, it is customary to build houses high in proportion to +the dearness of the land.[198-2] Thus, in England, where the rate of +interest is low and wages high, labor is readily supplanted by capital. +In countries like the East Indies or China, the reverse is the case. I +need only call attention to the palanquins used in Asia instead of +carriages; to the men who in South America carried ore down eighteen +hundred steps to the smelting furnaces,[198-3] and, on the other hand, +to the "elevators," so much in favor in England, which are used in +factories to carry people from one story to another inside to save them +the trouble of going up stairs.[198-4] + + [Footnote 198-1: The sickle instead of the scythe; careful + threshing by hand, and, where the rate of interest is low, + threshing by machinery instead of the treading out of the + sheaf by oxen. Thus in Paris the scraps from restaurants and + soap factories are made into stearin; and the remnants in + shawl factories in Vienna are sent to Belgium to be used by + cloth manufacturers.] + + [Footnote 198-2: Remarked in ancient times of Tyre, which + was situated on a small island, and, therefore, without the + possibility of horizontal extension. (_Strabo_, XVI, 757.)] + + [Footnote 198-3: _Humboldt_, N. Espagne II, ch. 5, II, ch. + 11.] + + [Footnote 198-4: Thus, in England, the safety of railroad + trains is not secured as in Germany by a multitude of + watchmen, etc.; but by solid barriers, by bridges at every + crossing, in other words, by capital.] + + +SECTION CXCIX. + +INFLUENCE OF FOREIGN TRADE. + +Foreign trade, that great means of coöperation of labor among different +nations, affords such a remedy in a very special manner. It very +frequently happens that the undertakers of one country, when a certain +factor of production seems too dear at home, borrow it elsewhere. Thus, +for instance, a country with a high rate of wages draws on another for +labor, and one with a high rate of interest on another for +capital.[199-1] We elsewhere consider such a course of things from the +standpoint of the supplying country, which in this way is healed of a +heavy plethora of some single factor of production which disturbs the +harmony of the whole. (§§ 187, 259, ff.). But, at the same time, the +supplied country, considered from a purely economic point of view, reaps +decided advantages therefrom. If, for instance, a Swiss confectioner +returns from Saint Petersburgh to his home, after having made a fortune +in an honest way, no one can say that Russia has grown poorer by the +amount of that fortune. This man made his own capital; if he were to +remain in Russia, its national economy would be richer than before his +immigration thither. Now, it is, at least, no poorer, and has in the +meantime had the advantage of the more skilled labor of the +foreigner.[199-2] And, so, when a capitalist living in Germany purchases +Hungarian land, the national income of Hungary is diminished by the +amount of the annual rent which now goes to Germany; but it receives an +equal amount in the interest on capital, provided the purchase was an +honorable one and the capital given in exchange for the land honestly +invested.[199-3] If Hungary, in general, had a superabundance of land +but a lack of capital, the economic advantage is undoubted.[199-4] + +These economic rules, indeed, are applicable only to the extent that +higher and national considerations do not in the interest of all, create +exceptions to them. "Is not the life more than meat, and the body than +raiment?" No rational people will allow certain services to be performed +for them preponderantly by foreigners, even when they can be performed +cheaper by the latter--the services of religion, of the army, of the +state, etc. The same is true of landownership; and all the truer in +proportion as political and legal rights of presentation and other forms +of patronage are attached to it. Lastly, hypothecation-debts which go +beyond certain limits, may entail the same consequences as the complete +alienation of the land;[199-5] and Raynal may have been, under certain +circumstances, right when he said, that to admit foreigners to subscribe +to the national debt was equivalent to ceding a province to them.[199-6] +It is obvious that a great power may do much in this relation that would +be a risk to a small state.[199-7] [199-8] + + [Footnote 199-1: "The transportation of productive capital + and industrial forces from one point where their services + are worse paid for, to another where they find a rich + reward, will not be apt to be made so long as the + equilibrium may be obtained [most frequently much more + easily] by the interchange of the products." (_Nebenius_, + Oeff. Credit, I, 48.) The repeal of the corn laws in England + certainly diminished the emigration of English capital.] + + [Footnote 199-2: For an official declaration of the + Brazilian state in this direction, see Novara Reise.] + + [Footnote 199-3: Basing himself hereon, _Petty_, Political + Anatomy of Ireland, 82 ff., questions the usual opinion, + that Ireland suffered so much from absenteeism. He says that + a prohibition of absenteeism carried out to its logical + conclusion would require every man to sit on the sod he had + tilled himself. _Carey_, On the Rate of Wages, 1835, 477, + calls English capitalists who draw interest from America, + absentees.] + + [Footnote 199-4: The older political economists have, as a + rule, ignored this law, and were wont to consider every + payment of money to a foreign country as injurious. Thus, + for instance, _Culpeper_, Tract against the high Rate of + Usury, 1623, 1640, disapproves all loans made from foreign + countries, because they draw more money in interest, and in + repayment of the principal out of the nation, than they + brought into it at first; and all the more, as the loan is + generally procured, not in the precious metals, but in + foreign goods, of which there is a superabundance in the + home country. Similarly _Child_, Discourse of Trade, 1690, + 79, who claims that the creditor was always fattened at the + expense of the debtor. Hence _v. Schröder_, Fürst, Schatz- + und Rentkammar, 141, advises that the capital borrowed in + foreign countries should be confiscated. Compare, also, _v. + Justi_, Staatswirthschaft, II, 461. And yet the very + simplest calculation shows, that if a man borrows $1,000 at + 5 per cent. and makes 10, he is doing a good business with + the borrowed capital. This _Locke_, Considerations, 9, + recognizes very clearly. Compare, also, _J. B. Say_, Traité, + II, ch. 10, and _Hermann_, Staatsw. Unters., 365 seq.] + + [Footnote 199-5: Think of the English creditors in Portugal + and the Genoese in Corsica (_Steuart_, Principles, II, ch. + 29.) Considered simply from an economic standpoint, the + Edinburg Review, XX, 358, very clearly demonstrates that + England should recruit her army from Ireland, where wages + are so much lower than in Great Britain. But how dangerous + in a political sense! In 1832, one-fourth of the stock of + the United States Bank was in the hands of foreigners, and + hence its opponents nick-named it the "British Bank." By the + rules of the principal bank in Philadelphia, in 1836, only + American citizens were allowed a vote in its proceedings. + Similarly in the case of the Bank of France. (_M. + Chevalier_, Lettres sur l'Amerique du N. I, 364.) It may be + remarked in general, that the older political economists + have based correct political views on false economic + principles, while the more modern ignore them entirely.] + + [Footnote 199-6: Compare _Montesquieu_, E. des Lois L, XXII, + 17; _Blackstone_, Commentaries, I, 320.] + + [Footnote 199-7: Thus Austria conceded, in 1854-55, a number + of railways to French capitalists, and always favored the + purchase of landed estates by small foreign princes. In the + latter case, Austrian influence abroad was much more + promoted by the measure than was foreign influence in + Austria.] + + [Footnote 199-8: Every nationality is not worth the + sacrificing of the highest economic advantage or profit to + it. Or, would it be preferable to leave the Hottentots and + Caffirs, poor, barbarous and heathenish?] + + +SECTION CC. + +INFLUENCE OF THE BRANCHES OF INCOME ON THE PRICE OF COMMODITIES. + +In relation to foreign trade, in the narrowest sense of the term, fears +were formerly very frequently expressed and are sometimes even now, +which in the last analysis are based on the assumption that one country +might be underbid by another in all branches of commodities.[200-1] This +is evidently absurd. Whoever wants to pay for foreign commodities can do +it only in goods of his own. When he pays for them with money, the money +is either the immediate product of his own husbandry (mining +countries!), or the mediate product obtained by the previous surrender +of products of his own. To receive from foreign countries all the +objects which one has need of, would be to receive them as a gift. + +It is just as absurd to fear that the three branches of income in the +same country's economy should be all relatively high at the same time, +and competition with foreign countries be thus made more difficult. Rent +and interest especially in this respect have to demean themselves in +ways diametrically opposed to each other.[200-2] When trade is entirely +free, every nation will engage at last in those branches of production +which require chiefly the productive forces which are cheapest in that +country; that is which the relatively low level of the corresponding +branch of income recommends to individual economy and enterprise. The +merely absolute and personal height of the three branches of income has, +as we have said, no direct influence on the price of commodities. In +this respect, all these may be higher in one country than in another. +Thus, for instance, English landowners, capitalists and workmen may be +all at the same time in a better economic condition respectively than +Polish landowners, capitalists and workmen, when the national income of +England stands to its area and population in general, in a much more +favorable ratio than the Polish.[200-3] + + [Footnote 200-1: Thus, _Forbonnais_, Eléments du Commerce I, + 73. _J. Moser_, Patr. Ph., I, No. 2.] + + [Footnote 200-2: For a thorough refutation of the error that + everything is dearer in England than in France, see Journ. + des Econ., Mai, 1854, 295 seq. A distinguished architect + assured me in 1858, that a person in London could build + about as much for £1 as for from 6 to 7 thalers in Berlin; + only the aggregate expense in both countries is made up of + elements very different in their relative proportions.] + + [Footnote 200-3: We very frequently hear that countries with + high wages must be outflanked in a neutral market by + countries with a low rate of wages. _Ricardo's_ disciples + reject this, because a decrease in the profit would put the + undertaker in a condition to bear the loss caused by the + high wages paid. See Report of the Select Committee on + Artisans and Machinery. _Senior_ ridicules such reasoning + very appropriately by inquiring: "Might not the loss enable + him to bear the loss?" Outlines, 146. And so _J. B. Say_ + thinks that wages are always lowest when undertakers are + earning nothing. The truth is rather this: a country with a + relatively high rate of wages cannot, in a neutral market, + offer those commodities the chief factors required for the + production of which is labor; but the comparatively low rate + of interest or low rents, or the lowness of both found in + connection therewith, must fit it to produce other + commodities very advantageously. If, therefore, the rate of + wages rises, the result will be to divert production and + exports into other channels than those in which they have + hitherto flowed. The old complaint of Saxon agriculturists, + that there is a lack of labor in the country, is certainly + very surprising in a nation as thickly populated as Saxony. + But the remedy proposed by the most experienced + practitioners consists chiefly in a higher rate of wages to + enable workmen to care for themselves in old age, the + introduction of the piece-work system and an increase of + agricultural machines. But it seems to me, that the whole + situation there points to the advantage of in part limiting + the large farming hitherto practiced to live-stock raising + and other branches in which labor may be spared, and in part + of replacing it, by small farming of plants which are + objects of trade. + + Many points belonging to this subject have been very well + discussed by _J. Tucker_, in his refutation of _Hume's_ + theory on the final and inevitable superiority of poor + countries over rich ones in industrial matters. (Four Tracts + on political and commercial Subjects, 1774, No. 1; _L. + Lauderdale_, Inquiry, 206.)] + + +SECTION CCI. + +HARMONY OF THE THREE BRANCHES OF INCOME.--INDIVIDUAL DIFFERENCE IN THEM. + +As national-economical civilization advances, the personal difference of +the three branches of income is wont to become more and more sharply +defined.[201-1] The struggle between landowners, farmers and workmen, +which Ricardo necessarily assumed, did not exist at all in the middle +ages; since landowners and farmers were then usually one and the same +person, and since workmen, either as slaves or peasants, were protected +against competition properly so called. And so in the industry of that +time, based on the trades or on domestic industry.[201-2] [201-3] + +When, later, the division of labor increases, all the differences of +men's aptitudes are turned to more advantage, and are more fully +developed. In the same proportion that a working class is developed, the +members of which are nothing but workmen, and can scarcely hope to +possess capital or land,[201-4] there grows up, side by side with it, a +class of mere capitalists, who come to obtain an ever-increasing +importance. + +Considered from a purely economic point of view, this transition has its +great advantages. How much must the existence of a special class of +capitalists facilitate the concentration of capital and the consequent +promotion of production, as well as its (capital's) price-leveling +influx and outflow! Even "idle" capitalists have this of good, that, +without them, no competent man, destitute of means could engage in any +independent enterprise. When, indeed, the gulf between these two classes +passes certain bounds, it may, politically and socially, become a great +evil. (§ 63.)[201-5] + + [Footnote 201-1: Among nations in their decline, rent and + interest fall into one possession again, because capitalists + here are wont to buy the land. (_Roscher_, Nationalökonomik + des Ackerbaues, § 140 ff.)] + + [Footnote 201-2: Related to this peculiarity of the middle + ages is the fact that the canon law looked with disfavor on + the personal separation of the three factors of production. + So also in the prohibition of the _Weddeschat_ referred to § + 161, instead of rent-purchase (_Rentekauf_), also by + extending the idea of partnership to a number of + transactions which are only forms of loan. (_Endemann_ in + _Hildebrand's_ Jahrb., 1863, 176 ff.) Antiquity also, with + the independence of its oikos, with its slavery, etc., had + not developed the difference between the three branches of + industry to any extent. _Rodbertus_, in _Hildebrand's_ + Jahrbb., 1865, I, 343.] + + [Footnote 201-3: If older writers, like _Steuart_, etc., + speak so little of capital, labor and rent, and so much of + city and country, it is not on account of ignorance simply. + The contrast between the latter was then much more important + than to-day, and that between the former much less + developed. When, indeed, _Colton_, Public Economy of the + United States, 1848, 155 ff., claims that because in America + the three branches of income do not exist in so separated a + condition as in Europe, therefore European Political Economy + and its theories are not applicable to America, he forgets + that science should not be simply a description or + impression made of the reality, but an analysis of it.] + + [Footnote 201-4: It is a very characteristic fact that, in + our days, when workmen are spoken of, it is generally day + laborers and tradesmen that are understood. In Prussia, in + 1804, 17.8 per cent. of the population earned their living + by letting out their labor; in 1846, 22.8 per cent. as + day-laborers, servants, journeymen, tradesmen and factory + hands. (_Dieterici._)] + + [Footnote 201-5: _Ricardo_, Principles, ch. 4, recognizes + the bright side as well as _Sismondi_, N. P., I, 268, or + _Buret_, De la Misère des Classes laborieuses en Angleterre + et en France, 1841, its dark side. _Sismondi_ thinks that + land and the capital employed in its cultivation are found + to the greatest disadvantage in the hands of the same + person. The existence of a thrifty peasant class (also of a + class of tradesmen) is one of the best means to prevent the + too wide separation of the three branches of income.] + + +SECTION CCII. + +HARMONY OF THE THREE BRANCHES OF INCOME.--NECESSITY OF THE FEELING OF A +COMMON INTEREST. + +Every class corresponding to a branch of the national income must live +with the consciousness that its interests coincide with the economic +interests of the whole nation. Whenever the entire national income +increases, each branch of it may increase without any injury to the +others, and, as a rule, does really increase.[202-1] But it is possible +that the land owning class may be specially dependent on the prosperity +of the whole people. How easy it is for workmen to emigrate; and how +much easier yet for capital! England, to-day, can scarcely carry on a +great war, in which it would not, at least at the beginning, have to +fight English capital.[202-2] Where the treasure is, the heart is also! +The land alone is immovable. It alone cannot be withdrawn from the +pressure of taxation or from the distress of war. It alone cannot flee +into foreign parts.[202-3] [202-4] At the same time, it cannot be denied +that the possibility of being able to carry one's fortune out of a +country in one's pocketbook and to be able to procure there with one's +money the same conveniences, customs, etc., to which one was accustomed +at home, is, under certain circumstances, an important element of +political and religious freedom. Moreover, the bright side and the dark +of every class of owners, especially the dread of all unnecessary and +also of all necessary change, must be common to rent and interest. +Hence, where there is a marked and well-defined separation of the +branches of income, it will be always considered a difficult but +unavoidable problem, how to enable mere labor to take an active part in +the affairs of the state.[202-5] + +In times when calm prevails (not, however, in transition-crises such as +are referred to in § 24), there is a public opinion concerning merit and +reward, we might say a public conscience, by which a definite relation +of the three branches of income to one another is declared equitable. +Every "fair-minded man" feels satisfied when this relation is realized, +and this feeling of satisfaction is one of the principal conditions +precedent to the prosperity of production; inasmuch as upon it depends +the participation (_Theilnahme_) of all owners of funds and forces. +Every deviation from this relation or proportion is, of course, a +misfortune,[202-6] but never so great as when it takes place at the +expense of the wages of labor. It should never be forgotten that rent is +an appropriation of the gifts of nature, and that interest is a further +fruit obtained by frugality from older labor already remunerated. +Besides, the rate of wages when high, generally adds to the efficiency +of labor, which cannot be claimed for interest or rent.[202-7] The best +means to preserve the harmony of the three branches of income is, +however, universal activity. "Rich or poor, strong or weak, the idler is +a knave." (_J. J. Rousseau._) + + [Footnote 202-1: The contrast between _Adam Smith_, at the + end of the first book, and _Ricardo_, ch. 24, in regard to + this point, is very characteristic of the times of those two + authors. According to _Smith_, the private interests of the + landowners and laborers run entirely parallel; only both + classes are easily deceived as to their own interests. + Capitalists understand their own interest very well, and + represent it with great energy; but their interest is in + opposition to the common good, in so far as their profit + among a poor and declining people is higher than among a + rich and flourishing one. _Ricardo_, on the other hand, + thinks that the interest of the landowners is opposed to + that of all others for the reason that they desire that the + cost of the production of wheat etc. should be as high as + possible. + + Related to this is the fact that, in _Adam Smith's_ time, + the new theory of rent remained almost unnoticed, but that + after 1815, it became rapidly popular. In a similar way, the + socialists of the present time are wont to charge the + undertaking class with opposing their own interests to those + of the whole people, meaning by the whole the majority. (§ + 196 a.)] + + [Footnote 202-2: Towards the end of the 14th century the + great Flemish merchants always sided with the absolutism of + France in opposition to their own _Artevelde_.] + + [Footnote 202-3: Hence it is, that in so many constitutions, + charters of cities, etc., the exercise of the higher rights + of citizenship is conditioned by the possession of a certain + quantity of land, and that landownership is considered as a + species of public function. + + I read, a short time ago, the life of a North-German + noblemen who, in 1813, had fought bravely against the + French, "although he was a man of large estates, and the + enemy might therefore very easily have laid hands on them." + If this "although" of his eulogist expressed the actual + feeling of large landed proprietors, a great many old + political institutions would have lost all foundation. + + _Ad. Müller_ was of opinion that the rights of + primogeniture, etc., might be an obstacle in the way of the + development of the net income of a nation's economy; but + that they gave to the state and to the national life the + warlike tone so necessary to them, etc. (Elemente, II, 90.)] + + [Footnote 202-4: "The Roman capitalists on whom Pompey + counted, left him in the lurch at the moment of danger, + because Cæsar destroyed only the constitution, but respected + their business relations." (_K. W. Nitsch._)] + + [Footnote 202-5: _Kosegarten_, Nat. Oek., 186, thinks that, + on account of the struggle between the labor interest and + the interest of capitalists, in our times, the "fourth + estate" is not as well represented by persons belonging to + the propertied classes as the constitutionalist party + thinks. And in fact, _Jarke_, Principienfragen, 1854, 197, + would have it represented by the government, in order to + prevent the struggle between rich and poor. See + _Cherbuliez_, Riche ou Pauvre, p. 242 seq.] + + [Footnote 202-6: _A. Walker_ shows, in a very happy manner, + how no misfortune, however great, whether it come from + heaven or from earth, in the shape of pestilence, drought, + flood or oppressive taxation, so rapidly and hopelessly + ruins a nation's economy as when the harmony which should + exist between capital and labor is disturbed by foul play or + legal frauds between labor or capital and their reward. (Sc. + of Wealth, 66.)] + + [Footnote 202-7: Compare _Lotz_, Revision, III, 322 ff., + 327, 334 ff. Handbuch, I, 511 ff. _Lafitte_, Sur la + Réduction de la Rente, 56. _Fuoco_ exaggerates this into the + principle: _che la distribuzione, e non la produzione, sia + la prima e principal operazione in economia_. (Saggi + economici, II, p. 44.)] + + + + +CHAPTER VII. + +DISTRIBUTION OF NATIONAL INCOME. + + +SECTION CCIII. + +EFFECT OF AN EQUAL DIVISION OF THE NATIONAL INCOME. + +The best distribution of the national income among a people is that +which enables them to enjoy the greatest amount and variety of real +goods, and permanently to produce real goods in an increasing quantity +and variety. + +If the income of a people were divided equally among all, each one would +indeed, be, to a very great extent, independent of all others. But then, +no one would care to devote himself to the coarser and less agreeable +occupations, and these would be either entirely neglected, or people +would have to take turns in engaging in them.[203-1] (§ 9.) And thus +would disappear one of the chief advantages of the division of labor, +viz: that the higher orders of talent are devoted to the higher orders +of labor. Besides, it is very doubtful, whether, under such +circumstances, there would still be any solvent (_zahlungsfähige_) +demand for the achievements of art. + +Nor would the saving of capital prosper, where such equality prevailed. +Most men consider the average outlay of their equals as an unavoidable +want, and save only to the extent that they possess more than others of +their class. If, therefore, every one had an equal income, no one would +consider himself in a condition to save.[203-2] The same consideration +would deter most men from every economic venture, and yet no great +progress is possible where no venture is made.[203-3] [203-4] + + [Footnote 203-1: According to _Schäffle_, System, II, 379 + ff., "the distribution of the social return of production + which conduces to the attainment of the highest measure of + civilization in the moral association of men and in all the + grades of that association, and thereby to the satisfaction + of all true human wants in the highest degree." Thus only + can a satisfactory line of demarkation be drawn between the + profit of capital and the wages of labor (384).] + + [Footnote 203-2: See _Aristoph._, Plut., 508 ff. Not taken + into consideration sufficiently by _Benjamin Franklin_, in + his eulogy of the equality of property: The internal State + of America, 1784.] + + [Footnote 203-3: The essential characteristic of the desert + is, according to _Ritter_, Erdkunde, I, 1019 seq., its + uniformity. No break in the horizontal plain, and hence no + condensation of atmospheric vapor into bodies of water of + any considerable size. The composition of the soil is + everywhere the same; nothing but masses of silex and salt, + hard and sharp. Lastly, extreme mobility of the surface, + which undulates with every wind, so that no plant can take + root in it. Nearly every feature in this picture finds its + analogon in the extreme political and economic equality of + men.] + + [Footnote 203-4: _Les supériorités, qui ne sont dues qu'à, + un usage plus intelligent et mieux réglé de nos facultés + naturelles, loin d'être un mal, sont un véritable bien. + C'est dans la plus grande prospérité, qui accompagne un plus + grand et plus heureux effort, qu'est le principe de tout + développement._ (_Dunoyer_, Liberté du Travail, IV, 9, 10.) + But, indeed, the rich man should never forget that society + "inasmuch as it permits the concentration of wealth in his + hands, expects that he will employ it to better advantage + than the mass of mankind would if that same wealth were + equally divided among them." (_Brentano._)] + + +SECTION CCIV. + +DISTRIBUTION OF NATIONAL INCOME.--MONEYED ARISTOCRACIES AND PAUPERISM. + +The extreme opposite of this, when the middle class disappears and the +whole nation falls into a few over-rich men and numberless proletarians, +we call the oligarchy of money, with pauperism as the reverse of the +medal. Such a social condition has all the hardship of an aristocracy +without its palliatives. As it is, as a rule, the offspring of a +degenerated democracy,[204-1] it cannot in form depart too widely from +the principle of equality. Only get rich, they cry to the famishing +poor; the law puts no obstacle in your way, and you shall immediately +share our position.[204-2] Here the uniformity and centralization of the +state, which are an abomination in the eyes of genuine aristocracy, are +carried to the extreme. Capital takes the place of men, and is valued +more than men. All life is made to depend on the state, that its +masters, the great money-men, may control it as they will. The falling +away of all restrictions on trade, and of all uncommercial +considerations relating to persons and circumstances, gives full play to +capital, and speculators seek to win all that can be won. And, indeed, +all colossal fortunes are generally made at the expense of others, +either with the assistance of the state-power or by speculation in the +fluctuations of values.[204-3] The dependence of proletarians on others +is here all the greater, because from a complete absence of capital and +land, so far as they are concerned, they are compelled, uninterruptedly, +to carry their entire labor-force to market; and also because the supply +of labor is made in masses embracing a large number of individuals, +while the demand for labor lies in the hands of very few, and may be +very readily and systematically concentrated.[204-4] So great and +one-sided a dependence is, for men too far removed from one another for +real mutual love, doubtless one of the greatest of moral temptations. It +is as easy a matter for the hopelessly poor to hate the law, as it is +for the over-rich to despise it.[204-5] Under such circumstances, the +contagious power of communism, the dangers of which to order and freedom +we have treated of in § So, is great. There is a dreadful lesson in the +fact of history, that six individuals owned one-half of the province of +Africa, _when Nero had them put to death_![204-6] Externally, a moneyed +oligarchy will always be a weak state. The great majority who have +nothing to lose take little interest in the perpetuation of its +political independence. They rather rejoice at the downfall of their +oppressors hitherto, and are cheered by the hope of obtaining a part of +the general plunder.[204-7] The rich, too, separated from the neglected +and propertyless masses of the nation, and rightly distrustful of them, +begin to forget their nationality, and to balance its advantages against +the sacrifices necessary to preserve it. But, a merely materialistic +calculation leads doubtless to the conclusion, that universal empire is +the most rational form of the state. The world-sovereignty of Rome was, +by no circumstance more promoted than by the struggles between the rich +and the poor, which devastated the _orbis terrarum_, and in which the +Romans generally sided with the property classes.[204-8] [204-9] [204-10] +[204-11] However, the worst horrors of the contrast here described can +occur only in slave-countries. Compare _Roscher_, Nationalökonomik des +Ackerbaues, § 141. + + [Footnote 204-1: The more the lower classes degenerate into + the rabble, and the more the national sovereignty comes into + the hands of this rabble, the easier will it become for the + rich to buy up the State.] + + [Footnote 204-2: In the middle stages of the nation's + economy, such as are described in §§ 62, 66, 90, 207, in + which even the relative advantages of industry on a large + scale over industry on a small scale, are not much developed + the making political rights dependent on the possession of a + certain amount of property is certainly a means of promoting + equality. Hence, therefore, a reconciliation between the + differences of class created by birth, may be effected for a + long time here.] + + [Footnote 204-3: _Hermann_, Staatsw. Untersuchungen, II, + Aufl. 136.] + + [Footnote 204-4: _Necker_, Législation et Commerce des + Grains, 1775,1. passim. Compare _Bacon_, Serm fideles, 15, + 29, 34, 39.] + + [Footnote 204-5: _Schiller's_ terrible words: + + "_Etwas muss er sein eigen nennen, + Oder der Mensch wird morden und brennen._" + + --i. e., "Something must he call his own, or man will murder + and burn." + + It is one of _J. G. Fichte's_ fundamental thoughts that as + all property is based on mutual disclaimer, the person who + has nothing of his own, has disclaimed nothing, and + therefore reserves his original right to everything. + (Geschlossener Handelstaat., Werke, III, 400, 445.)] + + [Footnote 204-6: _Plin._, H. N., XVIII, 7.] + + [Footnote 204-7: How frequently this circumstance turned to + the advantage of the Germans during the migration of + nations! Compare _Salvian_, De Gubern, Dei, VII. Very + remarkable answer given by a Roman taken prisoner by Attila, + why it must be more agreeable to live among the Huns than in + the over-civilized Roman Empire: Prisci legatio, in + _Niebuhr_, Corp. histor. Byzant., I, 191 ff. And thus the + conquest of Constantinople by the crusaders, took place amid + the jubilation of the populace and of the country people: + _Nicetus_, Chron. Hist. Urbs capta, § 11, 340. This law of + nature becomes most apparent when one compares the + preponderating power of Rome against Carthage, with its + weakness against the Cimbri and Mithradates. May not + Hannibal have been to his own country a phenomenon like that + which Cæsar was afterwards to Rome? A healthy and united + Carthage he certainly could have held against Italy.] + + [Footnote 204-8: On the tendencies of the later times of the + Jewish monarchy toward an oligarchy of money, see _Amos_, 2, + 6 seq.; 6 1 ff.; 8, 5 ff.; _Micha_, 2; 2 _Isaias_, 5, 8 seq. + Compare _Nehem._ 5. While Exodus, 30 and 38, mentions over + 663,000 taxable men, the ten tribes comprising the kingdom + of Israel had only 60,000. XII Kings, 15, 19. _Ewald_, + Geschichte des Volkes Israel, II, 2, 320.] + + [Footnote 204-9: The spirit of the Grecian moneyed oligarchy + is best revealed by _Plato_, De Republ., VIII, and + _Aristotle_, Polit., III, VI, passim, the first of whom + considers the contrast between rich and poor as in itself + demoralizing (IV, 422). All that can be called by the name + of tradition, the political faith of a people, and the + national feeling of right, had, in the Grecian world, been + transformed into mere reasoning and concerned itself, with + frightful exclusiveness, to the contrast existing between + rich and poor. Compare _Aristot._, Pol., II, 4, 1, with + _Droysen_, Gesch. des Hellenismus, II, 496 etc., and the + citations from _Menander_ in _Stob._, Serm., LXXXIX, 503, in + which gold and silver are proclaimed almighty. It is a + remarkable proof of the _omne venalia esse_ in Greece that + _Thucydides_ (II, 65) lauds even _Pericles_, especially for + his incorruptibility. _Demosthenes_ says of his + contemporaries, that it excited envy when any one was + bribed, laughter when he confessed it; that he who was + convicted of it (bribery) was pardoned, and he who blamed + it, hated. (Phil., II, 121.) Compare the list in _Demosth._, + Pro. Cor., 324; _Pausan_, III, 10. In Athens, on the + occasion of the census-constitution imposed forcibly on the + state by _Antipater_, that in a population of 21,000 + citizens, only 9,000 had a property worth 2,000 drachmas or + more, that is, enough for a man to live on in the most + niggardly way, on the highest interest it would yield. If, + in addition to this, account be taken of the large number of + slaves, the small number of the property class is all the + more surprising, inasmuch as Lycurgus' financial + administration bears evidence that the people were in a + flourishing and comfortable condition; that afterwards, + peace for the most part prevailed, and that Alexander's + victories enabled Grecian commerce to make large gains. + Compare _Boeckh_, Staatsh. IV, 3, 9. + + In Sparta, the governing class finally numbered only 700 + families, 100 of which owned all the land, and 600 of which + were, therefore, only noble proletarians. It is well known + that the social attempts at reform by Agis and Kleomenes + only precipitated the downfall of the state. (_Plutarch_, + Agis and Kleomenes.) _Aratos_ owed a great part of the + consideration in which he was held to the reputation which + he obtained by protecting the property of the Sicyonian + exiles (_Thirlwall_, History of Greece, VIII, 167), while on + the other hand, men like _Agathocles and Nabis_ supported + their faction by persecution of the rich, new debtor-laws + and new division of land. (_Polyb._, XIII, 6, XVI, 13, XVII, + 17, XXVI, 2; _Livy_, XXXII, 38, 40, XXXIV, 31, XXXVIII, 34; + _Plutarch_, Cleom, 20.) _Livy_ expressly says that all the + _optimates_ were in favor of the Romans, and that the + multitude wanted _novare omnia_ (XXXV, 34). On the frightful + struggle between these opposite parties, on the revolutions + and counter revolutions, see also _Polyb._, XIII, 1, 2; + XVIII, 36 ff., XXX, 14; XXII, 21; XXXVIII, 2, 3; _Diodor._, + XIX, 6, 9; _Exc._, 587, 623; _Livy_, XLI, 25, XLII, 5; + Pausan, VII, 14. In Boeotia, no one was for 25 years, + chosen by the people for the higher offices, from whom they + did not expect a suspension of the administration of justice + in the matter of crimes and debts, as well as the spending + of the national treasure. (_Polyb._, XX, 14, 5, 6.) The + events at Corinth, before its conquest by the Romans, + forcibly remind one of the Paris Commune of 1871. This + decline had, as usual, begun earliest in the colonies: thus, + in Sicily, even in _Thucyd._, V, 4. Milesian struggle off + the ploutis and cheiromacha in _Plutarch_, Qu. Gr., 32; + _Athen._, XII, 524.] + + [Footnote 204-10: The disappearance of the middle class in + Rome, between the second and third Punic war, was brought + about chiefly by the great foreign conquests made by it. An + idea of the wealth which the governors of the provinces + might extort may be formed from this among other facts, that + Cicero originally demanded against Verres a fine of + 5,000,000 thalers. (_Cic._, in Verrem Div., 5.) Verres is + related to have said, that he would be satisfied if he could + retain the first year's booty; that during the second, he + collected for his defenders; and during the third, for his + judges! (_Cic._, in Verr., I, 14.) Even _Cicero_ became + richer within the space of one year, in Cilicia, where it + was well known he was not oppressive, by 110,000 thalers, + which sum does not include numerous presents, pictures, etc. + (_Drumann_, Gesch. Roms., VI, 384.) On the frightful + oppression and extortion practised by Brutus (!) in Asia, + see _Cicero_, ad. Att, V, 21; VI, 1. _Sallust_, in his + Jugurtha, has shown how such men waged war, and to what + extremes their well-deserved want might push them in his + Catiline. _Patricium scelus!_ Most of the senators were in + debt to Crassus; and this, together with his great political + insurance-activity and power in elections, criminal cases at + law, etc., it depended that he, for a time, figured beside + Cæsar and Pompey. + + The wealth of these important personages must, and that not + only relatively, have made the poor poorer and their luxury + excited the covetousness of the people; but especially the + great number of slaves they kept, combined with their + pasturage system of husbandry, which rapidly spread over all + of Italy after the provinces had emptied their granaries to + supply the wants of the sovereign people, must have made it + less and less possible for the proletarians to live by the + work of their hands. Previously, the lower classes of the + free born had been exempted from the military service, while + slaves were conscripted for the fleet. Now, all this was + changed; and thus was taken away one of the chief causes + which had made the labor of free day laborers more + advantageous on the larger estates. (_Nitzsch_, Gracchen, + 124 ff., 235 ff.) The spoils of war and conquest caused the + higher middle class to prefer to engage in the usurious + loaning of money rather than in industry which would much + more rapidly have formed a small middle class. (_Mommsen_, + R. G. I, 622 ff.) + + Hence, the _misera ac jejuna plebecula, concionalis hirudo + aerarii_, according to _Cicero_, ad Att., I, 16, 6. At a + time, when the Roman census showed a population of over + 1,500,000, Philippus, 104 before Christ, otherwise a + "moderate" man, could claim that there were not 2,000 + citizens who had any property. (_Cic._, de Off., II, 21.) + True, those few were in such a position, that Crassus would + allow that those only were rich, who could feed an army at + their own expense. (_Cicero_, Parad., VI, 61; _Plin._, H. + N., XXXIII, 47.) Concerning the colossal private fortunes + under some of the earlier imperators, see _Seneca_, De + Benef., II, 27; _Tacit_., Ann., XII, 53, XIII, 32; XIV, 35; + Dial. de Causis, 8, _Dio C._, LXIII, 2 seq. + + The clients of the time, that is the numerous poorly paid + idlers treated as things of little value, in the service of + the great, correspond, on a small scale, to the position of + the great crowd in relation to the emperor. Compare + _Friedländer_, Sittengeschichte Roms., I, 296 ff. As late as + the West-Gothic storm, there were many houses which drew + 4,000 pounds in gold, and about 1/3 as much in kind, from + their estates, per annum. (_Plut._, Bibl. Cod., 80, 63, + Bekk.) Goddess Pecunia Majestas divitiarum, in _Juvenal_, I, + 113. + + If we take the Roman proletariat in its wider extent, the + most frightful picture it presents is its slave-wars. Such a + war Sicily had shortly before the _tribunate_ of the elder + Gracchus, cost over a million (?) livres; and at the same + time there was a great uprising of slaves desolating Greece. + (_Athen._, VI, 83, 87 ff., 104.) A second war broke out in + the time of Cimbri. But the most frightful was that under + Spartacus, who collected 100,000 men, and the course of this + uprising will always remain a type of proletarian and slave + revolts. It originated among the most dangerous class of + slaves, most dangerous because best prepared for the + struggle, the gladiators, and among the immense _ergastula_, + where they were held together in large masses. It spread + with frightful rapidity, because the combustible material on + which it fed was everywhere to be found. It was conducted + with the most revolting cruelty. What the slaves demanded + before all else was vengeance, and what dread had a + gladiator of a death unaccompanied by torture? + + After the first successes of the slaves dissensions broke + out among them. Such hordes can nowhere long preserve a + higher object than the momentary gratification of their + passions--a fact which shields human society from their + rage. Piracy, also, is another side of this proletarian + system. It found its strongest aliment in the system of + spoliation practiced by the Romans in Asia Minor. The + oppressed along the whole coast, joined the pirates + "preferring to do violence rather than to suffer." + (_Appian_, B. Mithr., 92, _Dio C._, XXXII, 3.) The temples + and the wealthy Romans were in special danger. But the worst + feature in the horrible picture was that many of the great + shared in the spoils with the robbers. They bought slaves + and other booty from them at mock prices, even close by the + gates of Rome. (_Strabo_, XIV, 668 seq., _Dio C._, XXXVI, + 5.) Precisely as the slave-wars were looked upon with + pleasure by the poorer free men. Incendiarism was one of the + chief weapons of mutinous pauperism. (_Drumann_, IV, 282.) + The celebrated bacchanalian trial and the questions of + poisoning which followed it as a consequence (186 before + Christ) may be looked upon, in Rome, as the first marked + symptoms of the disruption between the oligarchy of money + and the proletariat. This put the morality of the higher + classes in a bad light, while, at the same time, a large + slave conspiracy in Apulia, which was not suppressed until + the year 185, exhibited the reverse of the picture. Cato, + the censor, endeavored to oppose this tendency by high + sumptuary taxes, and by establishing proletarian colonies. + At the same time we see the various parties among the + nobility uniting and the publicans joining them. (_Nitzsch_, + Gracchen, 124 ff.) The history of the last hundred years of + the Republic turns chiefly on the three great attempts made + by the proletariat to overthrow the citadel of the moneyed + oligarchy, under the Gracchi, under Marius and under Cæsar. + The last was permanently successful but entailed the loss of + the freedom of both parties. + + Among the pretty nearly useless remedies employed, besides + those described in § 79, I may mention the following also: + the great number of agrarian laws intended to lessen estates + of too great extent owned by one person, and to restore a + free peasant population, in the years 133, 123, 100, 91, 59 + before Christ; the law in Hannibal's time (_Livy_, XXI, 63) + that no senator should own a ship with a capacity of more + than 300 amphora; the provision (_Sueton._, Caes., 42) that + all great herd-owners should take at least one-third of + their shepherds from the ranks of freemen; the many laws _de + repetundis_, the first of which was promulgated 149 before + Christ, intended to protect the provinces against spoliation + by the governors; the L. Gabinia, 56 before Christ, which + prohibited the loaning by the provinces in Rome; lastly, a + rigid enforcement of police provisions against slaves, + especially against their bearing arms, which were carried to + such an extent, that slaves who had killed a boar with a + spear were crucified. (_Cicero_, in Verr., II, 3.) The chief + rule of every real oligarchy of money is, while they hold + the lower classes in general under their yoke with great + severity, to keep dangerous elements in good humor at the + expense of the state. Among these are especially the rabble + in large cities and the soldiery. Compare _Roscher_, + Betrachtungen über Socialismus und Communismus, 436, 437.] + + [Footnote 204-11: In medieval Italy, also, popular freedom + was lost through a moneyed oligarchy and a proletariat. + _Popolo grasso_ and _minuto_ (_bourgeoisie_--_peuple_) in + Florence. The former were reproached especially with the + breach of trust in the matter of the public moneys + (_Sismondi_, Gesch. der Ital. Republiken, II, 323, seq.), + which reminds one of the French cry, _corruption_ in 1847. + _Machiavelli_ gives a masterly description of the class + contrasts during the last quarter of the fourteenth century, + in his Istoria Fiorent., III, a. 1378, 4. The poor, whose + spokesmen recall the most desperate shibboleths of modern + socialists, dwell principally on this, that there is only + one important difference, that between rich and poor; that + all men are by nature entirely equal; that people get rich + only through deceit or violence; that the poor want revenge + etc. It is significant how, in Florence, the largest banker + finally became absolute despot, and that contemporaneously + in Genoa, the Bank of St. George, in a measure, absorbed the + state; the former supported by numerous loans made to + influential persons like Crassus (_Machiavelli_, Ist. Fior., + VII); the latter by the overstraining of the system of + national debt.] + + +SECTION CCV. + +DISTRIBUTION OF THE NATIONAL INCOME.--HEALTHY DISTRIBUTION. + +Hence a harmony of the large, medium and small incomes may be considered +the indispensable condition of the economic prosperity of a +people.[205-1] This prosperity is best secured when the medium-class +income prevails, when no citizen is so rich that he can buy the others, +and no one so poor that he might be compelled to sell himself. (_J. J. +Rousseau._)[205-2] Where there is not a numerous class of citizens who +have time enough to serve the state even gratis, as jurymen, overseers +of the poor, municipal officers, representatives of the people etc. +(compare § 63), and property enough to be independent of the whims and +caprices of others, and to maintain themselves and the state in times of +need, even the most excellent of constitutions must remain a dead +letter. Nor should there be an entire absence of large fortunes, and +even of inherited large fortunes. The changes of ministry which +accompany constitutional government are fully possible only when the +choice of men who would not lose their social position by a cessation of +their salaries as public functionaries is not altogether too +limited.[205-3] Thus the transaction of the most important political +business, especially that which relates to foreign affairs, requires a +peculiar elasticity of mind, and a capacity for routine on the grandest +scale, which with very rare exceptions, can be acquired only by +habituation to them from childhood, and which are lost as soon as the +care for food is felt. The bird's-eye-view of those who are born "great" +does not, by any means, embrace the whole truth of human things, but it +does a very important side of it. Among this class, as a rule, it is +easiest to find great party leaders, while leaders who have to be paid +by their party, generally become in the long run, mere party +tools.[205-4] It is true that it requires great intellectual and moral +power to resist the temptations which a brilliant hereditary condition +presents; temptations especially to idleness, to pride and debauchery. +For ordinary men, it is a moral and, in the end, an economic blessing, +that they have to eat their bread in the sweat of their brow,[205-5] and +that they can grow rich only by long-continued frugality.[205-6] +However, the distribution of the national income, and every change in +that same distribution, constitute one of the most important but at the +same time one of the most obscure departments of statistics.[205-7] When +inequality increases because the lower classes absolutely decline, there +is no use in talking any longer about the prosperity of the +nation.[205-8] It is different, of course, when only the higher classes +become, relatively speaking, higher yet. But even this latter kind of +inequality may operate disastrously, inasmuch as it nourishes the most +dangerous tendency of democracy, that of envy towards those who are +better off. + + [Footnote 205-1: _Verri_ Meditazioni, VI.] + + [Footnote 205-2: _Aristotle's_ view that, in a good state, + the middle class should preponderate. (Polit. IV, 6, Sch.) + _Sismondi_ says: _la richesse se réalise en jouissances; + mais la jouissance de l'homme riche ne s'accroît pas avec + ses richesses_. (Etudes sur l'Economie politique, 1837, I, + 15.)] + + [Footnote 205-3: If state offices were to be filled by + doctors or lawyers who live by their practice, after a time, + only those could be had who had no large practice to + sacrifice, that is, beginners or obscuranti.] + + [Footnote 205-4: Per contra, see _Bazard_, Doctrine de Saint + Simon, 323. But _Sismondi_ is certainly right: _nous ne + croyons point, que les hommes qui doivent servir à + l'humanité de flambeau naissent le plus souvent au sein de + la classe riche; mais elle seule les apprécie et a le loisir + de jouir de leurs travaux_. (Etudes, I, 174.)] + + [Footnote 205-5: To appreciate the demoralizing effects of + an income obtained without labor and without trouble on men + of small culture, we need only witness the bourgeoisie at + great watering places, pilgrimage places, seats of courts + and university cities supported largely by students. + Similarly at Mecca, Medina, Meschhed, Rome, etc. (_Ritter_, + Erdkunde VIII, 295 seq. IX, 32), and even in Palestine, + during the crusades, when the miserable Pullanes counted on + the tribute of the pilgrims. (_Wilken_, VII, 369, according + to _Jacob de Vitriaco_.)] + + [Footnote 205-6: A man with $100,000 a year has a much less + incentive to make savings than 100 men with $1,000 each per + annum, for the reason that his economic wants are already + all richly satisfied, and he can have little hope of + improving it by saving. (_von Mangoldt_, V. W. L., 141.)] + [Footnote 205-7: _Harrington's_ fundamental thought + (1611-1677, Works, 1700) is, that the nature of the + constitution of a state depends on the distribution of the + ownership of its land. "Balance of property!" Where, for + instance, one person owns all the land or the larger portion + of it, we have a despotism; where the distribution is more + equal, a democracy, etc. All real revolutions are based upon + a displacement of the centre of gravity of property, since + in the long run, superstructure and foundation can not be + out of harmony with each other. For this reason, agrarian + laws are the principal means to prevent revolutions. + (_Roscher_, Gesch. der English. Volkswirthschaftslehre, 53 + ff.) _Montesquieu_ also pays special attention to the + political consequences of the distribution of wealth. Thus, + for instance, in monarchies, the creation of large fortunes + should be promoted by the right of primogeniture; in + aristocracies, on the other hand, the great wealth of a few + nobles is as detrimental as that of extreme poverty. (Esprit + des Lois, V, 8, 9.)] + + [Footnote 205-8: The common assertion of the socialists, + that the inequality of property is frightfully on the + increase, is as far from being proved as is the opposite one + of _Hildebrand_, Nat. Oek. der Gegenwart und Zukunft, I, 245 + ff. According to _Macaulay_, Hist. of England, ch. 3, there + were, in England, in 1685, only about three (ducal) families + with an annual income of about £20,000 a year. The average + income of a lord amounted to £3,000; of a baronet, to £900; + of a member of the house of commons, to scarcely £800; and a + lawyer with £1,000 per annum was considered a very important + personage. At the same time, there were 160,000 families of + free peasants, that is more than 1/7 of the whole + population, whose average income amounted to from £60 to + £70. For the year 1821, _Marshall_, Digest of all Accounts, + etc., II, 1833, assumes, that there were 4,000 families with + over £5,000 yearly income; 52,000 families with from £1,500 + to £5,000; 386,000 families with from £200 to £1,000; + 2,500,000 families with less than £200. Compare, _per + contra_, the Edinburg Review, 1835. The income tax + statistics of 1847 show that 22 persons had an income of at + least £50,000 a year; 376 persons, from £10,000 to £50,000; + 788, from £5,000 to £10,000; 400, from £4,000 to £5,000; + 703, from £3,000 to £4,000; 1,483, from £2,000 to £3,000; + 5,234, from £1,000 to £2,000; 13,287, from £500 to £1,000; + 91,101, from £150 to £500. + + If we compare these numbers with the corresponding ones of + the income tax of 1812, the numbers of those who returned an + income of £150 to £500 increased 196 per cent.; of those + with an income of from £500 to £1,000, 148 per cent.; of + from £1,000 to £2,000, 148 per cent.; of from £2,000 to + £5,000, 118 per cent.; of from £5,000 and more, 189 per + cent.; while the population in general had increased by + about 60 per cent. Compare Athenæum, August, 1850; Edinburgh + Rev., April, 1857. Between 1848 and 1857, the development + was less favorable, so that the incomes of from £150 to £500 + subject to taxation, increased only 7 per cent.; those from + £500 to £1,000 about 9.56 per cent.; those from £10,000 to + £50,000, by 42.4, and those over £50,000, 142.1 per cent. + Between 1858 and 1864, the incomes derived from industry and + commerce, subject to taxation below £200, had increased + about 19.4 per cent.; those over £10,000, 59 per cent.; + while the aggregate amount of all taxed incomes in this + category increased 19 per cent. (Stat. Journal, 1865, 546.) + According to _Baxter_, The National Income of the United + Kingdom, 1868, there are now 8,500 persons with a yearly + income of £5,000 and more, who draw in the aggregate 15.6 + per cent. of the national British income, and on the average + nearly £15,000 each. There are, further, 48,800 persons with + a yearly income of from £1,000 to £5,000; 178,300 with from + £300 to £1,000; 1,026,400 with from £100 to £300; and + 1,497,000 with less than £100 a year from their property. In + addition to this, 10,961,000 workmen on wages, with an + aggregate income of £324,600,000. Compare §§ 172, 230. + + In France, the number of so-called _électeurs_, who paid + direct taxes to at least the amount of 200 francs was, in + 1831, 166,583, and increased uninterruptedly until 1845, + when it was 238,251, while the population had increased only + 8.5 per cent. + + In Prussia, the revenue from class-taxation up to 1840, + increased, unfortunately, in a smaller proportion than the + population: hence the lowest classes must have increased + relatively more than the others. (_Hoffmann_, Lehre von den + Steuern, 176 ff.) Between 1852 and 1873, according to the + statistical returns from class-taxation and of the + classified income tax, the growth of large incomes in the + provinces of old Prussia, seems to have been much more rapid + than that of the smaller ones. Thus, for every 100 + taxpayers, with an income of from 400 to 1,000 thalers, + there was an increase to 175.5; of from 1,000 to 1,600 + thalers, for every previous 100, 210.2; from 1,600 to 3,200 + thalers, 232.3; of from 3,200 to 6,000, 253.9; of from 6,000 + to 12,000 thalers, 324.8; of from 12,000 to 24,000, 470.6; + of from 24,000 to 52,000 thalers, 576.3; of from 52,000 to + 100,000 thalers, 568.4; of from 100,000 to 200,000 thalers, + 533.3; of over 200,000, 2,200. Hence, probably, a greater + growth towards the top, than the general increase in the + population will account for. + + This concentration of property took place most noticeably in + Berlin, where for instance, between 1853 and 1875 the + incomes of from 1,000 to 1,600 thalers increased 212.2 per + cent.; those from 24,000 to 52,000, 994.1 per cent. There + are now in the whole state 2.24 per cent. of the population + (including those dependent on them) subject to the income + tax; that is, estimated as having a yearly income of 1,000 + thalers. Of the remaining 97.76 per cent., more than a + quarter, and probably more than one-half, are as a class + free from taxation, because their income is presumably less + than 140 thalers (6,049,699 against 532,367, exempt for + other reasons and 4,850,791 belonging to classes subject to + taxation: these three numbers probably not including + dependents). Among the payers of an income tax, there are + 79,464 with an average income of 1,237 thalers per annum; + 41,366 with 2,171 thalers; 12,305 with 4,279 thalers; 4,030 + with 8,383 thalers; 1,655 with 16,527 thalers; 513 with + 32,428 thalers; 163 with 65,595 thalers; 39 with 137,692 + thalers; 21 with 427,142 thalers; and one with 1,700,000 + thalers per annum. (Preuss. statist. Ztschr., 1875, 116, + 132, 142, 145, 149.) As the reverse of this picture, we may + take the fact that, in 1870, of 1,047,974 cases of + guardianship, there were only 208,614 in which there was any + property to be looked after. (Justiz-Minist-Blatt, 1872, No. + 6.) + + The figures from Bremen are very favorable. The incomes + subject to taxation amounted, in 1847, to 71.6 thalers per + capita; in 1869, to 131.2. The incomes subject to taxation + in class No. 1, that is from 250 to 399 thalers, increased + 78 per cent.; in class No. 2, 400 to 499 thalers, 45 per + cent.; in class No. 3, 500 thalers and more, by 57 per cent. + The average income of the third class amounted, in 1847-50, + to 1,952 thalers; 1866-69, to 2,439 thalers. In 1848, there + were, of estates of over 3,000 thalers subject to taxation, + only 38 to every 1,000 inhabitants; in 1866, 49. (Jahrb. f. + amtl. Statistik Bremens, 1871, Heft 2, p. 185 seq.)] + + + + +BOOK IV. + +CONSUMPTION OF GOODS. + + + + +CHAPTER I. + +CONSUMPTION OF GOODS IN GENERAL. + + +SECTION CCVI. + +NATURE AND KINDS OF CONSUMPTION. + +As it is as little in the power of man to destroy matter as it is to +create it, we mean by the consumption of goods, in the broad sense of +the word, the abolition of or the doing away with an utility without any +regard to the question whether another higher utility takes its place; +in its narrower sense (consumption proper), a decrease of resources of +any kind. Consumption is the counterpart of production (§ 30), the top +of the tree of which production is the roots, and the circulation and +distribution of goods the trunk. (_A. Walker._) There is, also, what +Riedel calls immaterial consumption, as when a utility disappears, +either because the want itself to which it ministers disappears or +because views have changed as to the means to be employed towards its +satisfaction.[206-1] + + [Footnote 206-1: Diminutions of value, such, for instance, + as an almanac, a newspaper, etc., undergoes simply from the + appearance of the next years' etc.; of a shield or a part of + an officer's uniform with the initials of the reigning + sovereign, only because of the fact of a new succession to + the throne. A boot or a glove loses a great part of its + value when its mate is destroyed. (_Rau_, Lehrbuch, § 319.)] + + +SECTION CCVII. + +NATURE AND KIND OF CONSUMPTION.--THE MOST USUAL KIND. + +The commonest kind of consumption is that caused by the use of a thing, +or by the employing of it for the purpose of acquisition or of +enjoyment.[207-1] From time immemorial, enjoyment-consumption has been, +preponderantly, the affair of women, as acquisition-consumption has been +the business of men.[207-2] Other circumstances being equal, the degree +or extent of consumption by use (use-consumption) is determined by +national character. Thus, for instance, the cleanliness and love of +order characteristic of the Dutch have contributed greatly to the long +preservation in good condition of their dwellings and household +articles.[207-3] + +In the higher stages of civilization, the use of goods is wont to be +divided more and more into special branches, according to the different +peculiarities of the goods themselves, and of the different wants of +men; a course of things which is, both as cause and effect, intimately +related to the division of labor. I here speak of a principle of +_division of use_ (differentiation and specialization). Thus, for +instance, Lorenz Lange, in 1722, found only one kind of tea in the trade +between Russia and China; Müller, in 1750, found seven; Pallas, in 1772, +ten; and Erman, in 1829, about seven hundred.[207-4] As the number of +gradations of different kinds of the same goods increases with +civilization, there is, in times of war, a retrogression in this +respect, to a lower economic stage.[207-5] + +Opposed to this, we have the principle of the combination of use. There +are numberless kinds of goods which may serve a great many just as well +as they can one exclusive user; and this either successively or +simultaneously, inasmuch as there is no necessity why, with the +increasing use of the object, the size of the object itself should +increase in an equal proportion. (According to Marlo: wealth usable by +one; wealth usable by many; wealth usable by all.) Thus, for instance, a +public library may be incomparably more complete, and accessible in a +still higher degree than ten private libraries which together cost as +much as it did. And so, a restaurant-keeper may serve a hundred guests +at the same time, with a much greater table-variety, more to their +taste, and at a more convenient time, than if each person made the same +outlay for his private kitchen.[207-6] While formerly, only the great +could travel rapidly, combination of use has enabled even the lower +classes to do so in our own days. There is, doubtless, a dark side to +this picture, too. Combination of use requires frequently great +sacrifices of personal independence, which should not be underestimated +when they affect individuality of character, or threaten the intimacy +and closeness of family life. It is, however, a bad symptom when the +division of use increases without any corresponding combination of +use.[207-7] [207-8] + + [Footnote 207-1: We should also mention here destructive + consumption, where the defenders of a country destroy + buildings, supplies, etc., only that the enemy may not use + them.] + + [Footnote 207-2: Compare Die Lebensaufgabe der Hausfrau, + Leipzig, 1853; _von Stein_, Die Frau auf dem Gebiete der + National Oekonomie, 1875, and the beautiful remarks of + _Schäffle_, N. Oek., 166; and _Lotz_, Mikrokosmus, II, 370 + ff.] + + [Footnote 207-3: In Germany horses are said to last, on an + average, 18 years; in England 25; in France and Belgium, + only 12 years. (See for the proofs of this _Rau_, Handbuch + II, § 168.) The more civilized a people are, the less do + they completely destroy values by use; and the more do they + use their old linen, etc. as rags; their remains of food as + manure, etc. (_Roesler_, Grunds., 552.)] + + [Footnote 207-4: _Ritter_, Erdkunde, III, 209. Thus, the + French in the 13th century were acquainted with only three + kinds of cabbage; in the 16th, with six, about 1651, with + 12; they are now acquainted with more than 50; in the 16th + century they knew only 4 kinds of sorrel; in 1651, 7; about + 1574, only 4 kinds of lettuce; to-day they know over 50; + under Henry II., they were acquainted with 2 or 3 kinds of + melons; in the 17th century, with 7; now they are acquainted + with over 40. (_Roquefort_, Histoire de la Vie privée des + Fr., I, 179 ff.) Instead of the four kinds of pears + mentioned by de Serre (1600), there were, in 1651, about + 400. (I, 272.) Liebaud, 1570, knew only 19 kinds of grapes; + de Serre, 41. (_Roquefort_, III, 29 ff.) According to the + "Briefen eines Verstorbenen," IV, 390, the first + kitchen-gardener in London had 435 kinds of salad, 240 of + potatoes, and 261 of pease. + + And so precisely in ancient times. While the earlier Greeks + speak of but one oinos, even at the most sumptuous feasts + (compare, however, _Homer_, Il. XI, 641;) and while even in + the time of Demosthenes only very few kinds of wine were + known (_Becker_, Charicles, I, 455), _Pliny_, H. N. XIV, 13, + was acquainted with about 80. In this respect the moderns + have never returned to ancient simplicity; at least the + fabliau, La Bataille des Vins, introduces us to 47 kinds of + French wine in the 13th century. (Compare also _Wackernagel_ + in _Haupt's_ Zeitschrift für deutsches Alterth., VI. 261 + ff., and _Henderson_, History of ancient and modern Wines, + 1824.) The Lacedemonians, with their intentional persistence + in a lower stage of civilization, used the same garment in + winter and summer (_Xenoph._, De Rep. Laced., II, 4); while + the contemporaries of Athenæos (III, 78 ff.) were acquainted + with 72 kinds of bread. With what a delicate sense for good + living the Romans in Caesar's time had discovered the best + supply places for chickens, peacocks, cranes, thunny-fish, + muraena, oysters and other shell-fish, chestnuts, dates, + etc., may be seen in _Gellius_, N. A., VII, 16. Compare + _Athen._, XII, 540. + + In the middle age of Italy, the houses had almost always + three rooms: _domus_ (kitchen), _thalamus_, _solarium_. + (_Cibrario_, E. P. del medio Evo, III, 45.) The manors or + masters' houses built on the estates of Charlemagne had 3 + and 2 rooms, sometimes only 1, and sometimes 2 rooms and 2 + bedrooms. According to an old document of 895, a shed was + worth 5 sols, a well-built manor 12. (_Anthon_, Geschichte + der deutschen Landwirth., I, 249 ff., 311.) The Lex + Alamanorum, tit. 92, provided that a child, in order to be + considered capable of living, should have seen the roof and + four walls of the house! See an able essay, capable of being + still further developed, by _E. Herrmann,_ in which he + endeavors to explain the _division of use_ and of labor on + Darwin's hypothesis of the origin of species in the D. + Vierteljahrsschrift, Januar., 1867.] + + [Footnote 207-5: Thus, 1785-1795, the best Silesian wool + cost 60, the worst 26, thalers per cwt.; in 1805, on account + of the great demand for cloth to make military uniforms, the + former cost 78, the latter 50 thalers. (_Hoffmann_, + Nachlass, 114.)] + + [Footnote 207-6: The one large kitchen naturally requires + much less place, masonry, fuel, fewer utensils, etc., than + 100 small ones. Think of the relatively large savings + effected by the use of one oven kept always heated! Even the + Lacedemonians called their meal associations pheidtia, i. + e., save-meals. Dainties proper can be consumed only in very + small portions, but cannot well be prepared in such + quantities. A guest at a first class Parisian restaurant + has, at a moderate price, his choice of 12 _potâges_, _24 + hors d'oeuvres_, _15-20 entrées de boeuf_, _20 entrées + de mouton_, _30 entrées de volaille et gibier_, _15-20 + entrées de veau_, _12 de pâtisserie_, _24 de poisson_, _15 + de rôts_, _50 entremets_, _50 desserts_; and, in addition, + perhaps 60 kinds of French wine alone. What more can a + princely table offer in this respect? Compare + _Brillat-Savarin_, Physiologie du Goût, Médit., 28.] + + [Footnote 207-7: In Diocletian's time, there was purple silk + worth from 2-1/2 thalers to 250 thalers per pound. + (_Marquardt_, Röm. Privatalterthümer, II, 122.)] + + [Footnote 207-8: Concerning the application of the above + principle in industry and in the care of the poor, see + _infra_. The advantages afforded by consumption in common, + or the combination of use, have been enthusiastically dwelt + upon by _Fourier_, and the organization of his phalansteries + is based essentially on that principle. In these colossal + palaces, which, spite of all their magnificence, cost less + than the hundred huts of which they take the place, a ball + is given every evening, because it is cheaper to light one + large hall, in which all may congregate. The division of + use, or of consumption also, is here developed in a high + degree. When 12 persons eat at the same table they have 12 + different kinds of cheese, 12 different kinds of soup, etc. + Even little children are allowed to yield to the full to + their gluttonous propensities, since on them depends the + productive activity of the so-called _séries passionnées_. + Compare Nouveau Monde, 272. The Saint-Simonists also + characterize the _association universelle_ as the highest + goal of human development. (_Bazard_, Exposition, 144 ff.) + On the danger of this development to family life, see + _Sismondi_, Etudes I, 43.] + + +SECTION CCVIII. + +NATURE AND KINDS OF CONSUMPTION.--NOTIONAL CONSUMPTION. + +By the notional consumption (_Meinungsconsumtion_), as Storch calls it, +operated by a change of fashion, many goods lose their value, without as +much as suffering the least change of form or leaving the merchant's +shop. This kind of consumption, too, is exceedingly different in +different nations. Thus, in Germany, for instance, fashions are much +more persistent than in France.[208-1] In the most flourishing times of +Holland, only noblemen and officers changed with the fashions, while the +merchants and other people wore their clothes until they went to +pieces.[208-2] In the East, fashions in clothing are very +constant;[208-3] but the expensive custom there prevails, for a son, +instead of moving into the house occupied by his father, to let it go to +ruin, and to build a new one as a matter of preference. The same is true +even in the case of royal castles. Hence, in Persia, most of the cities +are half full of ruins, and are in time moved from one place to +another.[208-4] + +The national income of a country is, on the whole, much less affected by +a change of fashion than the separate incomes of its people. The same +whim which lowers the value of one commodity increases the value of +another; and what has ceased to be in fashion among the rich, becomes +accessible, properly speaking, to the poorer classes of the community +for the first time.[208-5] The want of varying his enjoyments is so +peculiar to man, and so intimately connected with his capacity for +progress, that it cannot in itself be blamed. But if this want be +immoderately yielded to, if the well-to-do should despise every article +which has not the charm of complete novelty, the advantages of the whole +pattern-system, by means of which the preparation of a large number of +articles from the same model at a relatively small cost, would be lost. +Besides, fashion, which makes production in large quantities, for the +satisfaction of wants that are variable and free, possible, frequently +means even a large saving in the cost of production.[208-6] + + [Footnote 208-1: The consequences of this are very important + to the character of French and German industry. + (_Junghanns_, Fortschritte des Zollvereins, I, 28, 51, 58.) + Rapidly as the Parisian fashions in dress make their way + into the provinces, their fashions in the matter of the + table are very slow to do so. (_Rocquefort_, Hist. de la Vie + privée des Fr., I, 88 seq.)] + + [Footnote 208-2: _Sir W. Temple._ Observations on the U. + Provinces, ch. 6.] + + [Footnote 208-3: As most persons adorn themselves for the + sake of the opposite sex, this invariability is caused by + the oriental separation of two sexes. Our manufacturers + would largely increase their market, if they could succeed + in civilizing the East in this respect. In Persia, shawls + are frequently inherited through many generations, and even + persons of distinction buy clothes which had been worn + before. (_Polak_, Persien, I, 153.) In China, the Minister + of Ceremonies rigidly provided what clothes should be worn + by all classes and under severe penalties. (_Davis_, The + Chinese, I, 352 seq.)] + + [Footnote 208-4: _Jaubert_, Voyage en Perse, 1821. While + cities like Seleucia, Ctesiphon, Almadin, Kufa, and even + Bagdad, were built from the ruins of Babylon.] + + [Footnote 208-5: In Moscow, merchants close their accounts + at Easter. Then begins a new cycle of fashions, after which + all that remains is sold at mock-prices. (_Kohl_, Reise, + 98.) In Paris, there are houses which buy up everything as + it begins to go out of fashion and then send it into the + provinces and to foreign parts. Thus, there are immense + amounts of old clothing shipped from France and England to + Ireland. Hence, the latter country can have no national + costume appropriate to the different classes; and the + traveler sees with regret, crowds of Irish going to work in + ragged frock-coats, short trowsers and old silk hats. In + Prussia, many of the peasantry, in the time of Frederick the + Great, wore the discarded uniforms of the soldiery.] + + [Footnote 208-6: _Schäffle_, N. Oek. _Hermann_, Staatsw. + Untersuchungen, II, Aufl., 100.] + + +SECTION CCIX. + +CONSUMPTION WHICH IS THE WORK OF NATURE. + +The least enjoyable of all consumption (_loss-consumption_) is that +which is the work of nature; and nature is certainly most consuming in +the tropics. During the rainy season, in the region of the upper Ganges, +mushrooms shoot up in every corner of the houses; books on shelves swell +to such an extent that three occupy the place previously occupied by +four; those left on the table get covered over with a coat of moss +one-eighth of an inch in thickness. The saltpetre that gathers on the +walls has to be removed every week in baskets, to keep it from eating +into the bricks. Numberless moths devour the clothing. Schomburgk found +that, in Guiana, iron instruments which lay on the ground during the +rainy season became entirely useless within a few days, that silver +coins oxydized, etc.; evidently a great obstacle in the way of the +employment of machinery. In summer, the soil of this same region, so +rich in roots, is so parched by the heat, that subterranean fires +sometimes cause the most frightful destruction. + +In Spanish America, there are so many termites and other destructive +insects that paper more than sixty years old is very seldom to be found +there.[209-1] + +The warmer portions of the temperate zone are naturally most favorable +to the preservation of stone monuments. Thus, for instance, in +Persepolis, where there has been no intentional destruction, the stones +lie so accurately superimposed the one on the other that the lines of +junction can frequently be not even seen. The amphitheatre of Pola has +lost in two thousand years only two lines from the angles of the +stones.[209-2] The Elgin marble statues would certainly have lasted +longer in Greece than they will in England. On the other hand, warm and +dry climates have a very peculiar and exceedingly frightful species of +nature-consumption in the locust plagues. The principal countries +affected by such consumption are Asiatic and African Arabistan, the land +of the Jordan and Euphrates, Asia Minor, parts of Northern India. On +Sinai, locust plagues occur, on an average, every four or five years; +but from 1811 to 1816, for instance, they destroyed everything each +year. Their course is in its effects like an advancing conflagration. It +turns the green country, frequently in a single day, into a brown +desert; and famine and pestilence follow in its path.[209-3] + +The colder regions of the temperate zone are exposed to danger and +damage from land-slides in their long series of mountains, and from +avalanches, from quicksands in many of their plains, from floods and the +total destruction of land along their coasts;[209-4] but, on the other +hand, they are, relatively speaking, freest from hurricanes, earthquakes +and volcanoes, the ravages of which no human art or foresight is +competent to cope with. From the point of view of civilization and of +politics there is here a great advantage. See § 36. The former maritime +power of Venice and of Holland is closely allied to the dangers with +which the sea continually threatened them, and which was a continual +spur to both. But, on the other hand, the danger from earthquakes which +always impends over South America and Farther India, must produce +consequences similar to those of anarchy or of despotism, because of the +uncertainty with which they surround all relations. See § 39.[209-5] + + [Footnote 209-1: _Ritter_, Erdkunde VI, 180 ff; _Schomburgk_ + in the Ausland, 1843, Nr. 274; _Humboldt_, Relation hist., + I, 306; Neuspanein, IV, 379; _Pöpping_, Reise, II, 197 ff., + 237 ff. The ant, even in Marcgrav's time, was called the + _rey do Brazil_.] + + [Footnote 209-2: _Ritter_, Erdkunde VIII, 895; _Burger_, + Reise in Oberitalien, I, 7. The monuments of Nubia have + suffered much less from the hand of time than those of Upper + Egypt, because the air of the plateau is drier. The effects + of climate have been most severely felt in Lower Egypt, + where the air is most moist. (_Ritter_, I, 336, 701.) In the + case of wood, on the other hand, dryness may be a great + agent of destruction. Thus, in Thibet, wooden pillars, + balconies, etc., have to be protected with woolen coverings + to keep them from splitting. (_Turner_, Gesandtsreise, + German translation, 393 ff.)] + + [Footnote 209-3: Compare _Ritter_, Erdkunde, VIII, 789-815, + especially the beautiful collection of passages from the + Bible bearing on the locust plague, 812 ff. _Pliny_, H. N., + XI, 85. _Volney_, Voyages en _Syrie_, I, 305. For account of + an invasion of locusts, which, in 1835, covered half a + square mile, four inches in thickness, see _v. Wrede_, R. in + Hadhrammaut, 202. It is estimated that, in England, the + destruction caused by rats, mice, insects, etc., amounts to + ten shillings an acre per year; i. e., to £10,000,000 per + annum. (_Dingler_, Polyt. Journal, XXX, 237.)] + + [Footnote 209-4: Origin of the gulf of Dollart in Friesland, + 2-1/2 square miles in area between 1177 and 1287; and of + Biesboch of 2 square miles in 1421. On the repeated + destruction of lands in Schleswig by inundations, see + _Thaarup_, Dänische Statistik, I, 180 seq. It is a + remarkable fact that in relation to the Mediterranean, + _Strabo_, VII, 293, considers all such accounts fables.] + + [Footnote 209-5: As to how the grandeur and + irresistibleness, etc. of this nature-consumption in the + tropics leads men to superstition and the indulgence of wild + fancies, see _Buckle_, History of Civilization in England, + 1859, I, 102 ff. Since the conquest of Chili, sixteen + earthquakes, which have destroyed large cities totally or in + part, have been recorded.] + + +SECTION CCX. + +NECESSITY OF CONSIDERING WHAT IS REALLY CONSUMED. + +Whenever there is question of consumption, it is necessary to examine +with rigid scrutiny, what it is that has been really consumed; that is, +that has lost in utility. The person, for instance, who pays twenty +dollars for a coat, has consumed that amount of capital only when the +coat has been worn out.[210-1] What is called the consumption of one's +income in advance is nothing but the consumption of a portion of capital +which the consuming party intends to make good from his future +income.[210-2] Fixed capital, too, can certainly be directly consumed; +for instance, when the owner of a house treats the entire rent he +receives from it as net income, makes no repairs, and no savings to put +up a new building at some future time. As a rule, however, the owner of +fixed capital must, in order to consume it, first exchange it against +circulating capital. Thus the prodigality and dissipation, especially of +courts of absolute princes, have found numerous defenders who have +claimed that they are uninjurious, provided only the money spent in +extravagance remained in the country.[210-3] The prodigality itself, +that is, the unnecessary destruction of wealth is not, on that account, +any the less disastrous.[210-4] If, for instance, there are fire-works +to the amount of 10,000 dollars, manufactured exclusively by the workmen +of the country, ordered for a gala day; the night before they are used +for purposes of display, the national wealth embraces two separate +amounts, aggregating 20,000 dollars; that is, 10,000 dollars in silver +and 10,000 in rockets, etc. The day after, the 10,000 in silver are +indeed still in existence, but of the 10,000 in rockets, etc., there is +nothing left. If the order had been made from a foreign country the +reverse would have been the case, the silver stores of the people would +have been diminished, but their supply of powder would remain intact. + +In a similar way, there is occasion given for the greatest +misunderstanding when people so frequently speak of producers and +consumers as if they were two different classes of people. Every man is +a consumer of many kinds of goods; but, at the same time, he is a +producer, unless he be a child, an invalid, a robber, a pick-pocket, +etc.[210-5] At the same time, Bastiat is right in saying that in case of +doubt when the interests of production and of consumption come in +conflict, the state, as the representative of the aggregate interest, +should range itself on the side of the latter. If we carry things on +both sides to their extremest consequences, the self-seeking desire of +consumers would lead to the utmost cheapness, that is, to universal +superfluity, and the self-seeking wish of producers to the utmost +dearness, that is, to universal want.[210-6] + + [Footnote 210-1: Compare _Mirabeau_, Philosophie rurale, ch. + 1; _Prittwitz_; Kunst reich zu werden, 474.] + + [Footnote 210-2: A very important principle for the + understanding of the real effects of the spending of a state + loan!] + + [Footnote 210-3: In this way _Voltaire_, Siècle de Louis + XIV., ch. 30, excuses for instance the extravagant (?) + buildings at Versailles; and in a very similar way Catharine + II. expressed herself in speaking to the Prince de Ligne: + Mémoires et Mélanges par le Prince de Ligne, 1827, II, 358. + _v. Schröder_ even thinks that the Prince might consume as + much and even more than "the entire capital" of the country + amounted to; only, he would have him "let it get quickly + among the people again." He is also in favor of the utmost + splendor in dress, provided the public see to it that + nothing was worn in the country which was not made in the + country. (Fürstl. Schatz- u. Rentkammer, 47, 172.) Similarly + even _Botero_, Della Ragion di Stato VII, 85; VIII, 191; and + recently _v. Struensee_, Abhandlungen I, 190. The principle + of Polycrates in _Herodotus_ is nearly to the same effect. + Compare, per contra, _Ferguson_, Hist. of Civil Society, V, + 5.] + + [Footnote 210-4: With the exception of the profit made by + the manufacturers.] + + [Footnote 210-5: Strikingly ignored by _Sismondi_, N. P., + IV, ch. II.] + + [Footnote 210-6: _Bastiat_, Sophismes économiques, 1847, ch. + IV. Everything which, in the long run, either promotes or + injures production, "steps over the producer and turns in + the end to the gain or loss of the consumer." Only for this + principle, inequality and dissensions among men would keep + growing perpetually. All that the systems of Saint Simonism + and communism contain that is relatively true is thus + realized.] + + +SECTION CCXI. + +NATURE AND KINDS OF CONSUMPTION.--PRODUCTIVE CONSUMPTION. + +There is no production possible without consumption. The embodiment of a +special utility into any substance is a limitation of its general +utility. Thus, for instance, when corn is baked into bread, it can no +longer be used for the manufacture of brandy or of starch.[211-1] + +When, therefore, consumption is a condition (outlay) to production it is +called productive (reproductive).[211-2] Here, indeed, the form of the +consumed goods is destroyed, but the value of the goods lives on in the +new product. + +There are different degrees of productiveness in consumption also. Thus, +to a scholar, his outlay for books in his own branch is immediately +productive; but nevertheless, books in departments of literature very +remote from his own, pleasure trips, etc. may serve as nutrition and as +a stimulus to his mind. According to § 52, we are compelled to consider +all consumption productive which constitutes a necessary means towards +the satisfaction of a real economic want. We may, indeed, distinguish +between productive consumption in aid of material goods, of personal +goods and useful relations; but in estimating the productiveness of +these different sorts of consumption we are concerned not so much with +the nature of the consumption as the results in relation to the nation's +wants. The powder that explodes when a powder magazine burns is consumed +unproductively; but the powder shot away in war may be productively +consumed just as that used to explode a mine may be unproductively +consumed; for instance, when the war is a just and victorious one and +the mining enterprise has failed.[211-3] + +The maintenance or support of those workmen whom they themselves +acknowledge to be productive is presumably accounted productive +consumption by all political economists. Why not, therefore, the cost of +supporting and educating our children, who, it is to be hoped, will grow +up later to be productive workmen. Man's labor-power is, doubtless, one +of the greatest of all economic goods. But without the means of +subsistence, it would die out in a few days. Hence we may, and even +without an atomistic enumeration of the individual services and products +of labor, consider the continued duration of that labor-power itself as +the continued duration of the value of the consumed means of +subsistence.[211-4] + + [Footnote 211-1: Even when air-dried bricks are made from + water and clay which cost nothing; when purely occupatory + work is done, and purely intellectual labor performed, some + consumption of the means of subsistence by the workmen is + always necessary.] + + [Footnote 211-2: Chrêmatistikai in contradistinction to + analôtikai, according to _Plato_, De Rep., VIII, 559. + Temporary consumption. (_Umpfenbach._)] + + [Footnote 211-3: _Storch_, Handbuch, II, 450.] + + [Footnote 211-4: Against the difference formerly usually + assumed between productive and unproductive consumption, see + _Jacob_, Grundsätze der Nat. Oek., II, 530. It is because of + a too narrow view that _Hermann_ (II, Aufl., 311), instead + of reproductive consumption, speaks of technic consumption.] + + +SECTION CCXII. + +UNPRODUCTIVE CONSUMPTION. + +Moreover, unproductive consumption embraces not only every economic +loss, every outlay for injurious purposes,[212-1] but also every +superfluous outlay for useful purposes.[212-2] Yet, not to err in our +classification here, it is necessary to possess the impartiality and +many-sidedness of the historian, which enable one to put himself in the +place of others and feel after them as they felt. The man, for instance, +who, in cities like Regensburg and especially Rome, sees numberless +churches often, so to speak, elbowing one another, cannot fail to +recognize the difference between the buildings of to-day for business, +political, educational and recreative purposes, and the medieval, for +the satisfaction of spiritual wants. The latter also may, in their own +sphere, and in their own time, have, as a rule, operated productively, +as the former operate, often enough, by way of exception unproductively; +as in the case of railway and canal speculations which have ended in +failure. It would be difficult to decide between the relative value of +the two kinds of wants, because the parties to the controversy do not, +for the most part, share the want (_Bedürfniss_) of their respective +opponents, frequently do not even understand it, and therefore despise +it. Thus, there are semi-barbarous nations, who can entertain that +respect for the laws which is necessary even from an economic point of +view only to the extent that they see the person whose duty it is to +cause them to be observed seated on a throne and surrounded by +impressive splendor. Hence, such splendor here could not be considered +merely unproductive consumption.[212-3] + +We must, moreover, remark in this place as we did above, § 54, that it +is easiest to pass the boundary line between productive and unproductive +consumption in personal services. In 1830, the expenses of the state, in +Spain, amounted to 897,000,000 of reals per annum; the outlay of +municipal corporations, to 410,000,000, and that for external purposes +of religion, 1,680,000,000. (_Borrego._) This is certainly no salutary +proportion; but it is scarcely evidence of a worse economic condition +than the fact that in Prussia it would require a basin one Prussian mile +in length, thirty-three and eight-tenths feet broad, and ten feet deep +to hold all the brandy drunk in the country (_Dieterici_); or this +other, that the British people spend yearly £68,000,000 sterling for +taxes and £100,000,000 yearly for spirituous liquors.[212-4] Berkeley +rightly says that the course practiced in Ireland, with its famishing +proletarian population, of exporting the means of subsistence and +exchanging them against delicate wines, etc., is as if a mother should +sell her children's bread to buy dainties and finery for herself with +the proceeds.[212-5] [212-6] + + [Footnote 212-1: Thus, for instance, food which spoils + unused, and food which is stolen and which puts a thief in a + condition to preserve his strength to steal still more.] + + [Footnote 212-2: So far _Senior_, Outlines, 66, is right: + the richer a nation or a man becomes, the greater does the + national or personal productive consumption become.] + + [Footnote 212-3: Such gigantic constructions as the palaces, + pyramids, etc. of Egypt, Mexico or Peru are a certain sign + of the oppression of the people by rulers, priests or + nobles. One of the Egyptian pyramids is said to have + occupied 360,000 men for twenty years. (_Diodor._, I, 63; + _Herodot._, II, 175; _Prescott_, History of Mexico, I, 153, + History of Peru, I, 18.)] + + [Footnote 212-4: Edinburg Rev., Apr., 1873, 399.] + + [Footnote 212-5: _Berkeley_, Querist, 168, 175, says that + the national wants should be the guiding rule of commerce, + and that besides, the most pressing wants of the majority + should be first considered.] + + [Footnote 212-6: _Ricardo_, Principles, p. 475, was of + opinion that an outlay of the national or of private income + in the payment of personal services increased the demand for + labor and the wages of labor in a higher degree than an + equal outlay for material things. The error at the + foundation of this is well refuted by _Senior_, Outlines, + 160 ff. + + The first to zealously advocate and treat the theory of + productive consumption was _J. B. Say_, Traité, III, ch. 2, + seq.; Cours pratique, II, 265. But the germs of the doctrine + are to be found in _Dutot_, Réflexions politiques sur le + Commerce et les Finances, 1738, 974, _éd_. Daire. His + distinctions are in part drawn with great accuracy. Thus he + says that, among others, a manufacturer of cloth, + productively consumes the results of his workmen, but that + the workmen themselves who exchange these results for bread, + consume the latter unproductively. _Say_ is guilty of the + inconsistency of claiming that only that consumption is + productive which contributes directly to the creation of + material exchangeable goods, spite of the fact that he gave + the productiveness of labor a much wider scope. _Rau_, + Lehrbuch, I, § 102 ff., 323 seq., is more consistent in so + far as he applies the same limitation in both cases. + (Compare also § 333, 336.) _Hermann_, Staatsw. + Untersuchungen, 170 seq., 231 ff., would prefer to see the + idea of productive consumption banished from the science, + for the reason that if the value of the thing alleged to be + consumed continues, there can be no such thing as its + consumption. But, I would rejoin: in a good national + economy, there would be, according to this, scarcely any + consumption whatever, because the aggregate value of that + which I have called above productive consumption is + unquestionably preserved, and continues in the aggregate + value of the national products. + + Productive consumption is ultimately a stage of production, + just as production itself is ultimately a means to an end, + consumption, and therefore a preparation for the latter. + Both ideas may be rigorously kept apart from each other, + just as the expenses and receipts of a private business man, + who makes a great portion of his outlay simply with the + intention of reaping receipts therefrom, may be. Every one + desires his production to be as large as possible, and his + productive consumption, so far it does not fail of its + object, as small as possible. _Riedel_ rightly says that the + theory of reproductive consumption serves Political Economy + as the bridge which closes the circle formed by the action + of production, distribution and consumption. (Nat. Oek. III, + 49.) One of the chief fore-runners of the view we advocate + was _McCulloch_, Principles, IV, 3 ff. _Gr. Soden_, Nat. + Oek., distinguishes economic consumption, un-economic and + anti-economic consumption. (Nat. Oek., I, 147.)] + + +SECTION CCXIII. + +EQUILIBRIUM BETWEEN PRODUCTION AND CONSUMPTION. + +In all cases economic production is a means to some kind of consumption +as its end.[213-1] The sharpest spur to productive activity is the +feeling of want.[213-2] "Want teaches art, want teaches prayer, blessed +want!" Well too has it been said: "Necessity is the mother of +invention!" Leaving mere animals out of consideration,[213-3] those men +who experience very few wants, with the exception of some rare and +highly intellectual natures, prefer rest to labor. Therefore, when +European merchants desire to engage in trade with a savage nation they +have uniformly to begin by sending them their nails, axes, +looking-glasses, brandy, etc., as gifts. Not until the savage has +experienced a new enjoyment does the want of continuing it make itself +felt; or is he prepared to produce for purposes of commerce.[213-4] In a +state of normal development, the complete and continuing satisfaction of +the coarser wants should constitute the foundation for the +higher.[213-5] + + [Footnote 213-1: We should not, indeed, say, on this + account, with _Adam Smith_, IV, ch. 8, that "consumption is + the sole end and purpose of all production," for labor and + saving, besides their economic object have a higher one, + imperishable and personal. Compare _Knies_, Polit. Oek. 129, + and _supra_, § 30.] + + [Footnote 213-2: According to _Sir F. M. Eden_, State of the + Poor, I, 254, it is one of the most unambiguous symptoms of + advanced civilization when families eat regularly at the + same table; so also sleeping in real beds. "Bed and board!" + It is said that the regularity of meal times was introduced + among the Greeks by Palamedes. _Athen._ I, 11, after + _Æschylus_.] + + [Footnote 213-3: Hibernating animals have supplies and + dwellings, that is something analogous to capital.] + + [Footnote 213-4: This advance is generally observed to be + introduced by the _jus fortioris_. _Steuart_, Principles I, + ch. 7. (Compare §§ 45-6-8.) In this way, the earliest + oriental despotisms have unwittingly been of great service + to mankind. What the sultan here accomplished with his few + favorites was done in the lower stages of civilization of + the west by the aristocracy of great vassals, in a manner + more worthy of human beings, and in a much more stable form. + (_J. S. Mill_, Principles I, 14 ff.)] + + [Footnote 213-5: _Banfield_, Organization of Industry, 1848, + 11.] + + +SECTION CCXIV. + +CAUSES OF AN INCREASE OF PRODUCTION. + +Only when wants increase does production increase also.[214-1] The old +maxim: _Si quem volueris esse divitem, non est quod augeas divitias, sed +minuas cupiditates (Seneca)_, would, if consistently carried out, have +thwarted the advance of civilization and frustrated the improvement of +man's condition. On the other hand, most political economists, without +more ado, assume that individuals, and still more nations, are wont to +extend the aggregate of their enjoyments just as far as there is a +possibility of satisfying their wants. But they forget here how great a +part is played in the world, as men are constituted, by the principle of +inertia.[214-2] At the first blush, what seems more natural than that +the less labor a people need employ to obtain the most indispensable +means of subsistence, the more time and taste would remain to them to +satisfy their more refined wants. According to this, we should expect to +discover a more refined civilization, especially, in intellectual +matters, in the earliest periods, when population is small, when land +exists in excess and is not yet exhausted. But, in reality, precisely +the reverse is the case. In the earliest stages of civilization +accessible to our observation, we find materialism prevailing in its +coarsest form, and life absorbed entirely by the lowest physical wants. +(Tropical lands.) Where bread grows on the trees, and one needs only to +reach out his hand and pluck it; where all one wants to cover his +nakedness is a few palm leaves, ordinary souls find no incentive to an +ant-like activity, or to a union among themselves for economic +purposes.[214-3] When a Mexican countryman earns enough to keep himself +and his family from absolute want by two days' labor in a week, he idles +away the other five. It never occurs to him that he might devote his +leisure time to putting his hut or his household furniture, etc., in +better shape. The necessity of foresight even is almost unknown; and in +the most luxuriantly fertile country in the world, a bad harvest +immediately leads to the most frightful famine. Humboldt was assured +that there was no hope of making the people more industrious except by +the destruction of the banana plantations.[214-4] But, indeed, there +would be little gained by such compulsory industry. To work for any +other end than satiation, it is necessary that man should feel wants +beyond the want created by mere hunger.[214-5] There are so many +conditions precedent (and mutually limiting one another) to a general +advance in civilization, that such an advance can, as a rule, take place +only very gradually. Let us suppose, for instance, a single Indian in +Mexico, perfectly willing to work six days in the week, and in this way +to cultivate a piece of land three times as great as his fellow Indians. +Where would he get the land? He would, for a time find no purchasers for +his surplus, and therefore not be in a condition to pay the landlord as +much as the latter hitherto received from the pasturage alone. Not until +cities are built and offer the rural population the products of industry +in exchange for theirs, can they be incited to, or become capable of +effecting a better cultivation of the land. This incentive and this +capacity, are inseparably connected with each other. Where the +agricultural population produce no real surplus, but after the fashion +of medieval times, produce everything they want themselves, and consume +all their own products with the exception of the part paid to the state +as a tax, there can scarcely be an industrial class, a commercial class, +or a class devoted to science, art, etc. And, conversely, it is only the +higher civilization which finds expression in the development of these +classes, that, by a more skillful guidance of the national labor, can +call forth its productiveness to an extent sufficient to yield a +considerable surplus of agricultural commodities over and above the most +immediate wants of the cultivators of the soil themselves. Hence, we +find that precisely in those countries which are most advanced in the +economic sense, there is relatively the smallest number of men engaged +in agriculture, and relatively the largest number in production of a +finer kind.[214-6] It is here as in private housekeeping: the poorer a +man is, the greater is the portion of his income which he is wont to lay +out for indispensable necessities.[214-7] [214-8] + + [Footnote 214-1: There is obviously here supposed besides + the want thus increased, a capacity for development. Thus, + for instance, the inhabitants of New Zealand brought with + them, in what concerns clothing, dwellings, etc., the + customs of a tropical into a colder country, and did not + understand how to oppose the rigor of the new climate, + except by building immoderately large fires, until they + became acquainted with European teachers. (Edinb. Review, + April, 1850, 466.)] + + [Footnote 214-2: Compare _R. S. Zachariä_, Vierzig Bücher + vom Staate, VII, 37. Men in the lower stages of civilization + cherish a greater contempt for those more advanced than they + are themselves visited with by the latter. Thus it was + customary for the Siberian hunting races to utter a + malediction: May your enemy live like a Tartar, and have the + folly to engage in the breeding of cattle. (_Abulghazi + Bahadur_, Histoire généalogique des Tartares.) Nomadic races + look upon the inhabitants of cities as for the most part + prisoners.] + + [Footnote 214-3: The "happy, contented negroes," as Lord + John Russel called them, work in Jamaica, on an average, + only one hour a day since their emancipation. (Colonial + Magazine, Nov. 1849, 458.) Egypt, India, etc., from time + immemorial, the classic lands of monkish laziness. Compare + _Hume_, Discourses, No. 1, on Commerce. On the other hand, + the person who has six months before him for which he must + labor and lay up a store, if he would not famish or freeze, + must necessarily be active and frugal; and there are other + virtues which go along with these. (_List_, System der + polit. Oek., I, 304.) According to _Humboldt_, the change of + seasons compels man to get accustomed to different kinds of + food, and thus fits him to migrate. The inhabitants of + tropical countries are, on the other hand, like + caterpillars, which cannot emigrate nor be made to emigrate, + on account of the uniform nature of their food.] + + [Footnote 214-4: _Humboldt_, N. Espagne, IV, ch. 9, II, ch. + 5. Similarly among the coarser Malayan tribes, the facility + with which fish is caught and the cheapness of sago are the + principal causes of their inertia and of their unprogressive + uncivilization. (_Crawfurd._)] + + [Footnote 214-5: _Le travail de la faim est toujours borné + comme elle. (Raynal.)_] + + [Footnote 214-6: Compare _Adam Smith_, I, ch. 11, 2; + _supra_, § 54. In Russia, nearly 80 per cent. of the + population live immediately from agriculture; in Great + Britain, in 1835, only 35; in 1821, only 33; in 1831, only + 31-1/2; in 1841, only 26 per cent. (_Porter._) According to + _Marshall_, there were, in 1831, in British Europe, + 1,116,000 persons who lived from their rents, etc. In + Ireland, there were, in 1831, over 65 per cent. of the + population engaged in agriculture (_Porter_); in 1841, even + 66 per cent.] + + [Footnote 214-7: In Paris, in 1834, the average income per + capita was estimated to be 1,029.9 francs, of which 46 + francs were paid out for service; 55.7 for education; 11.5 + for physicians' services, etc.; 7 on theatrical shows; 36 + for washing; 13.6 for public purposes. (_Dingler_, Polyt. + Journal, LIII, 464.) According to _Ducpétiaux_, Budgets + économiques des Classes ouvrières en Belgique, 1855, and + _Engel_, Sächs. Statist. Ztschr., 1857, 170, the + proportional percentage of family expenses for the following + articles of consumption is: + + =======================+========================================= + | EXPENSES OF + +--------------------+----------+--------- + | _a laborer's_ | _family_ |_a well-_ + | _family_ | _of the_ |_to-do_ + _Consumption Purpose._ | _in comfortable_ | _middle_ |_family._ + | _circumstances._ | _class._ | + +----------+---------+----------+--------- + | _In_ | _In_ | _In_ | _In_ + |_Belgium._|_Saxony._|_Saxony._ |_Saxony._ + | _per_ | _per_ | _per_ | _per_ + | _cent._ | _cent._ | _cent._ | _cent._ + -----------------------+----------+---------+----------+--------- + Food, | 61 \ | 62 \ | 55 \ | 50 \ + Clothing, | 15 } | 16 } 95 | 18 } 90 | 18 } 85 + Shelter, | 10 } 95 | 12 } | 12 } | 12 } + Heating and lighting, | 5 } | 5 / | 5 / | 5 / + Utensils and tools, | 4 / | | | + | | | | + Education, instruction,| 2 \ | 2 \ | 3.5 \ | 5.5 \ + Public security, | 1 } 5 | 1 } 5 | 2 } 10 | 3 } 15 + Sanitary purposes, | 1 } | 1 } | 2 } | 3 } + Personal services, | 1 / | 1 / | 2.5 / | 3.5 / + =======================+==========+=========+==========+========= + + Hence _Engel_ thinks that when the articles of food, + clothing, shelter, heating and lighting have become dearer + by 50 per cent., and other wants have not, and it is desired + to proportionately increase the salaries of officials, + salaries of 300, 600 and 1,000 thalers should be raised to + 427.5, 800 and 1,275 thalers respectively. (Preuss. Statist. + Zeitschr., 1875.) _E. Herrmann_, Pricipien der Wirthsch., + 106, estimates that in all Europe, 45.6 of all consumption + is for food, 13.2 for clothing, 5.7 for shelter, 4.6 for + furnishing, 5.3 for heating and lighting, 2.6 for tools and + utensils, 13.3 for public security, 6.6 for purposes of + recreation. Compare _Leplay_, Les Ouvriers Européens, 1855, + and _v. Prittwitz_, Kunst reich zu werden, 487 ff. The + expenses for shelter, service and sociability are specially + apt to increase with an increase of income.] + + [Footnote 214-8: The necessity of an equilibrium between + production and consumption was pretty clear to many of the + older political economists. Thus, for instance, _Petty_ + calls the coarse absence of the feeling of higher wants + among the Irish the chief cause of their idleness and + poverty. Similarly _Temple_, Observations on the N. + Provinces, ch. 6, in which Ireland and Holland are compared + in this relation. _North_, Discourses upon Trade, 14 seq.; + Potscr. _Roscher_, Zur Geschichte der english. + Volswirthschaftslehre, 83, 91, 127 ff. _Becher_, polit. + Discurs., 1668, 17 ff., was of opinion that the principal + cause keeping the three great estates together, the very + soul of their connection, was consumption. Hence the peasant + lived from the tradesman, and the tradesman from the + merchant. (_Boisguillebert_, Détail de la France, I, 4, II, + 9, 21.) According to _Berkeley_, Querist, No. 20, 107, the + awakening of wants is the most probable way to lead a people + to industry. And so _Hume_, loc. cit., _Forbonnais_, + Eléments du Commerce, I, 364. The Physiocrates were in favor + of active consumption. Thus _Quesnay_, Maximes générales, 21 + seq.; _Letrosne_, De l'Interêt social, I, 12. _La + reproduction et la consommation sont réciproquement la + mesure l'une de l'autre._ Some of them considered + consumption even as the chief thing (_Mirabeau_, Philosophie + rurale, ch. 1), which could never be too great. Further, + _Verri_, Meditazioni, I, 1-4. _Büsch_, Geldumlauf, III, 11 + ff. + + The moderns have frequently inequitably neglected the + doctrine of consumption. Thus it appears to be a very + characteristic fact that in _Adam Smith's_ great book, there + is no division bearing the title "consumption," and in the + Basel edition of 1801, that word does not occur in the + index. _Droz_ says that in reading the works of certain of + his followers, one might think that products were not made + for the sake of man, but man for their sake. But, on the + other hand, there came a strong reaction with _Lauderdale_, + Inquiry, ch. 5; _Sismondi_, N. Principes, L., II, passim; + _Ganilh_, Dictionnaire Analytique, 93 ff., 159 ff.; but + especially, and with important scientific discoveries, + _Malthus_, Principles, B. II. _St. Chamans_, Nouvel Essai + sur la Richesse des Nations, 1824, is an exaggerated + caricature of the theory of consumption. For instance, he + resolves the income of individuals into foreign demand or + the demand of strangers (29); considers the first condition + of public credit to lie in the making of outlay (32); and + even calls entirely idle consumers productive, for the + reason that they elevate by their demand a _utilité + possible_, to the dignity of a _utilité réelle_ (286 ff.) + The view advocated by Mirabeau, and referred to above, again + represented by _E. Solly_, Considerations on Political + Economy, 1814, and by _Weishaupt_, Ueb. die Staatsausgaben + und Auflagen, 1819. And so according to _Carey_, Principles, + ch. 35, § 6, the real difficulty does not lie in production, + but in finding a purchaser for the products. But he + overlooks the fact here that only the possessor of other + products can appear as a purchaser. From another side, most + socialists think almost exclusively of the wants of men, and + scarcely consider it worth their while to pay any attention + to the means of satisfying them.] + + +SECTION CCXV. + +NECESSITY OF THE PROPER SIMULTANEOUS DEVELOPMENT OF PRODUCTION AND +CONSUMPTION. + +Hence, one of the most essential conditions of a prosperous national +economy is that the development of consumption should keep equal pace +with that of production, and supply with demand.[215-1] The growth of a +nation's economy naturally depends on this: that production should +always be, so to speak, one step in advance of consumption, just as the +organism of the animal body grows from the fact that the secretions +always amount to something less than the amount of additional nutrition. +A preponderance of secretions would here be disease; but so would be a +too great preponderance of nutrition. Now, the politico-economical +disease which is produced by the lagging behind of consumption and by +the supply being much in advance of the demand, is called a commercial +(market) crisis. Its immediate consequence is, that for a great many +commodities produced, no purchasers can be found. The effect of this is +naturally to lower prices. The profit of capital and wages diminish. A +transition into another branch of production, not overcrowded, is either +not possible at all or is attended with care, great difficulties and +loss. It is very seldom that all these disadvantages are confined to the +one branch in which the disease had its original seat. For, since the +resources of the one class of producers have diminished, they cannot +purchase as much from others as usual. The most distant members of the +politico-economic body may be thereby affected.[215-2] + + [Footnote 215-1: _Boisguillebert_ lays the greatest weight + on the harmony of the different branches of commerce. + _L'équilibre l'unique conservateur de l'opulence générale_; + this depends on there being always as many sales as + purchases. The moment one link in the great chain suffers, + all the others sympathise. Hence he opposes all taxation of + commodities which would destroy this harmony. (Nature des + Richesses, ch. 4, 5, 6; Factum de la France, ch. 4; Tr. des + Grains I, 1.) _Canard_ Principes d'E. politique, ch. 6, + compares the relation between production and consumption in + national economy with that between arteries and veins in the + animal body. On the other hand, _Sismondi_, N. Principes I, + 381, describes the bewilderment and want which are wont to + arise when one wheel of the great politico-economical + machine turns round more rapidly than the others.] + + [Footnote 215-2: Thus, for instance, an occasional + stagnation of the cotton factories of Lancashire has + frequently the effect of "making all England seem like a + sick man twisting and turning on his bed of pain." (_L. + Faucher._)] + + +SECTION CCXVI. + +COMMERCIAL CRISES IN GENERAL.--A GENERAL GLUT. + +The greater number of such crises are doubtless special; that is, it is +only in some branches of trade that supply outweighs demand. Most +theorists deny the possibility of a general glut, although many +practitioners stubbornly maintain it.[216-1] J. B. Say relies upon the +principle that in the sale of products, as contradistinguished from +gifts, inheritances, etc., payment can always be made only in other +products. If, therefore, in one branch there be so much supplied that +the price declines; as a matter of course, the commodity wanted in +exchange will command all the more, and, therefore, have a better vent. +In the years 1812 and 1813, for instance, it was almost impossible to +find a market for dry goods and other similar products. Merchants +everywhere complained that nothing could be sold. At the same time, +however, corn, meat and colonial products were very dear, and, +therefore, paid a large profit to those who supplied them.[216-2] Every +producer who wants to sell anything brings a demand into the market +exactly corresponding to his supply. (_J. Mill._) Every seller is _ex vi +termini_ also a buyer; if, therefore production is doubled, purchasing +power is also doubled. (_J. S. Mill._) Supply and demand are in the last +analysis, really, only two different sides of one and the same +transaction. And as long as we see men badly fed, badly clothed, etc., +so long, strictly speaking, shall we be scarcely able to say that too +much food or too much clothing has been produced.[216-3] + + [Footnote 216-1: When those engaged in industrial pursuits + speak of a lasting and ever-growing over-production, they + have generally no other reason for their complaints than the + declining of the rate of interest and of the undertaker's + profit which always accompany an advance in civilization. + Compare _J. S. Mill_, Principles, III, ch. 14, 4. However, + the same author, I, 403, admits the possibility of something + similar to a general over-production.] + + [Footnote 216-2: _Say's_ celebrated Théorie des Débouchés, + called by McCulloch his chief merit, Traité, I, ch. 15. At + about the same time the same theory was developed by _J. + Mill_, Commerce defended, 1808. _Ricardo's_ express + adhesion, Principles, ch. 21. Important germs of the theory + may be traced much farther back: _Mélon_, Essai politique + sur le Commerce, 1734, ch. 2; _Tucker_, On the + Naturalization Bill, 13; Sketch of the Advance and Decline + of Nations, 1795, 182.] + + [Footnote 216-3: Precisely the same commercial crisis, that + of 1817 seq., which more than anything else led _Sismondi_ + to the conclusion that too much had been produced in all + branches of trade, may most readily be reduced to _Say's_ + theory. + + There was then a complaint, not only in Europe but also in + America, Hindoostan, South Africa and Australia, of the + unsaleableness of goods, overfull stores, etc.; but this, + when more closely examined, was found to be true only of + manufactured articles and raw material, of clothing and + objects of luxury; while the coarser means of subsistence + found an excellent market, and were sold even at the highest + prices. Hence, in this case, there was by no means any such + thing as over-production. The trouble was that in the + cultivation of corn and other similar products, too little + was produced. There was a bad harvest even in 1816. + + The most important authorities in favor of the possibility + of a general glut are _Sismondi_, N. Principes, IV, ch. 4, + and in the Revue encyclopédique, Mai, 1824: Sur la Balance + des Consommations avec les Productions. Opposed by Say in + the same periodical (Juilliet, 1824); where the controversy + was afterwards reopened in June and July, 1827, by + _Sismondi_ and _Dunoyer_. Compare Etudes, vol. I; _Ganilh_, + Théorie, II, 348 ff.; _Malthus_, Principles, II, ch. 1, 8. + Compare _Rau_, _Malthus_ and Say, über die Ursachen der + jetzigen Handelsstockung, 1821. _Malthus'_ views were + surpassed by _Chalmers_, On Political Economy in Connexion + with the moral State of Society, 1832. But even _Malthus_ + himself in his Definitions, ch. 10, No. 55, later, so + defined a "general glut" that there could be no longer + question of his holding to its universality. For an + impartial criticism, see especially _Hermann_, Staatsw. + Untersuchungen, 251, and _M. Chevalier_, Cours, 1, Leçon, + 3.] + + +SECTION CCXVII. + +COMMERCIAL CRISES IN GENERAL. + +All these allegations are undoubtedly true, in so far as the whole world +is considered one great economic system, and the aggregate of all goods, +including the medium of circulation, is borne in mind. The consolation +which might otherwise lie herein is made indeed to some extent +unrealizable by these conditions. It must not be forgotten in practice +that men are actuated by other motives than that of consuming as much as +possible.[217-1] As men are constituted, the full consciousness of this +possibility is not always found in connection with the mere power to do, +to say nothing of the will to do.[217-2] There are, everywhere, certain +consumption-customs corresponding with the distribution of the national +income. Every great and sudden change in the latter is therefore wont to +produce a great glut of the market.[217-3] The party who in such case +wins, is not wont to extend his consumption as rapidly as the loser has +to curtail his; partly for the reason that the former cannot calculate +his profit as accurately as the latter can his loss.[217-4] + +Thus laws, the barriers interposed by tariffs, etc., may hinder the +too-much of one country to flow over into the too-little of another. +England, for instance might be suffering from a flood of manufactured +articles and the United States from an oppressive depreciation in the +value of raw material; but the tariff-laws places a hermetic dike +between want on one side and superfluity on the other. Strong national +antipathies and great differences of taste stubbornly adhered to may +produce similar effects; for instance between the Chinese and Europeans. +Even separation in space, especially when added to by badness of the +means of transportation may be a sufficient hinderance especially when +transportation makes commodities so dear that parties do not care to +exchange. In such cases, it is certainly imaginable that there should be +at once a want of proper vent or demand for all commodities; provided, +we look upon each individual class of commodities the world over as one +whole, and admit the exception that in individual places, certain parts +of the whole more readily find a market because of the general crisis. + +Lastly, the mere introduction of trade by money destroys as it were the +use of the whole abstract theory.[217-5] So long as original barter +prevailed, supply and demand met face to face. But by the intervention +of money, the seller is placed in a condition to purchase only after a +time, that is, to postpone the other half of the exchange-transaction as +he wishes. Hence it follows that supply does not necessarily produce a +corresponding demand in the real market. And thus a general crisis may +be produced, especially by a sudden diminution of the medium of +circulation.[217-6] And so, many very abundant harvests, which have +produced a great decline in the value of raw material, and no less so a +too large fixation of capital which stops before its completion,[217-7] +may lead to general over-production. In a word, production does not +always carry with itself the guaranty that it shall find a proper +market, but only when it is developed in all directions, where it is +progressive and in harmony with the whole national economy. To use +Michel Chevalier's expression, the saliant angles of the one-half must +correspond to the re-entrant angles of the other, or confusion will +reign everywhere. Even in individual industrial enterprises, the proper +combination of the different kinds of labor employed in them is an +indispensable condition of success. Let us suppose a factory in which +there are separate workmen occupied with nothing but the manufacture of +ramrods. If these now exceed the proper limits of their production and +have manufactured perhaps ten times as many ramrods as can be used in a +year, can their colleagues, employed in the making of the locks or +butt-ends of the gun, profit by their outlay? Scarcely. There will be a +stagnation of the entire business, because part of its capital is +paralyzed, and all the workmen will suffer damage.[217-8] [217-9] + + [Footnote 217-1: As _Ferguson_, History of Civil Society, + says, the person who thinks that all violent passions are + produced by the influence of gain or loss, err as greatly as + the spectators of Othello's wrath who should attribute it to + the loss of the handkerchief.] + + [Footnote 217-2: If all the rich were suddenly to become + misers, live on bread and water, and go about in the + coarsest clothing, etc., it would not be long before all + commodities, the circulating medium excepted, would feel the + want of a proper market--all, including even the most + necessary means of subsistence, because a multitude of + former consumers, having no employment, would be obliged to + discontinue their demand. Over-production would be greater + yet if a great and general improvement in the industrial + arts or in the art of agriculture had gone before. Compare, + _Lauderdale_ Inquiry, 88. This author calls attention to the + fact that a market in which the middle class prevails must + put branches of production in operation very different from + those put in operation where there are only a few over-rich + people, and numberless utterly poor ones: England, the + United States--the East Indies, and France before the + Revolution. (Ch. 5, especially p. 358.)] + + [Footnote 217-3: If England, for instance, became bankrupt + as a nation, the country would not therefore become richer + or poorer. The national creditors would lose about + £28,000,000 per annum, but the taxpayers would save that sum + every year. Now, of the former, there are not 300,000 + families; of the latter there are at least 5,000,000. Hence, + the loss would there amount to £100 a family per annum, and + the gain here to not £6 per family. We may therefore assume + with certainty that the two items would not balance each + other as to consumption. The creditors of the nation, a + numerous, and hitherto a largely consuming class, now + impoverished, would be obliged to curtail their demand for + commodities of every kind to a frightful extent; while a + great many taxpayers would not feel justified in basing an + immediate increase of their demand on so small a saving. + Other revolutions, more political in character, may operate + in the same direction by despoiling a brilliant court, a + luxurious nobility or numerous official classes of their + former income.] + + [Footnote 217-4: The above truth has been exaggerated by + Malthus and his school into the principle that a numerous + class of "unproductive consumers," who consume more than + they produce, is indispensable to a flourishing national + economy. From this point of view, the magnitude of England's + debt especially has been made a subject of congratulation. + Compare _Malthus_, Principles, II, ch. 1, 9. Similarly + _Ortes_, E. N., III, 17, to whom even the _impostori + mezzani_ and _ladri_ seem to be a kind of necessity. (III, + 23.) _Chalmers_, Political Economy, III ff. If it was only + question of consumption here, all that would be needed would + be to throw away the commodities produced in excess. Those + writers forget that a consumer, to be desirable, should be + able to offer counter-values.] + + [Footnote 217-5: _Malthus_, Principles, II, ch. 1, 3.] + + [Footnote 217-6: Let us suppose a country which has been + used to effecting all its exchanges by means of + $100,000,000. All prices have been fixed, or have regulated + themselves accordingly. Let us now suppose that there has + been a sudden exportation of $10,000,000, and under such + circumstances as to delay the rapid filling up of the gap + thus created. In the long run, the demand of a country for a + circulation may be satisfied just as well with $90,000,000 + as with $100,000,000; only it is necessary in the first + instance that the circulation should be accelerated or that + the price of money should rise 10 per cent. But neither of + these accommodations is possible immediately. In the + beginning, sellers will refuse to part with their goods 10 + per cent. cheaper than they have been wont to. But so long + as those engaged in commercial transactions have not become + completely conscious of the revolution which has taken place + in prices, and do not act accordingly, there is evidently a + certain ebb in the channels of trade, and simultaneously in + all. Demand and supply are kept apart from each other by the + intervention of a generally prevailing error concerning the + real price of the medium of circulation, and there must be, + although only temporarily, buyers wanted by every seller, + except the seller of money. In a country with a paper + circulation, every great depreciation of the value of the + paper money not produced by a corresponding increase of the + same, may produce such results. _Say_ is wrong when he says + that a want of instruments of exchange may be always + remedied immediately and without difficulty.] + + [Footnote 217-7: Suppose a people, the country population of + which produce annually $100,000,000 in corn over and above + their own requirements, and thus open a market for those + engaged in industrial pursuits to the extent of + $100,000,000. And suppose that in consequence of three + plentiful harvests, and because of an inability to export, + the market should grow to be over-full, to such an extent + that the much greater stores of corn have now (§ 5, 103) a + much smaller value in exchange than usual. The latter may + have declined to $70,000,000. Hence the country people now + can buy from the cities only $70,000,000 of city wares. The + cities, therefore, suffer from over-production. That people + dispensing with the use of money should establish an + immediate trade between wheat and manufactured articles, in + which case the latter would exchange against a large + quantity of the former, is not practicable, because no one + can extend his consumption of corn beyond the capacity of + his stomach, and the storage of wheat with the intention of + selling it when the price advances is attended with the + greatest difficulties.] + + [Footnote 217-8: If, for instance, there are too many + railroads in process of construction, all other commodities + may in consequence lose in demand, and when the further + construction begins to be arrested on account of a + superfluity of roads, the new rail factories, etc. are + involved in the crisis.] + + [Footnote 217-9: On the special pathology and therapeutics + of this economic disease, compare _Roscher_, Die + Productionskrisen, mit besonderer Rücksicht auf die letzen + Jahrzente in the Gegenwart, Brockhaus, 1849, Bd., III, 721 + ff., and his Ansichten der Volkswirthschaft, 1861, 279 ff.] + + +SECTION CCXVIII + +PRODIGALITY AND FRUGALITY. + +Prodigality is less odious than avarice, less irreconcilable with +certain virtues, but incomparably more detrimental to a nation's +economy. The miser's treasures, even when they have been buried, may be +employed productively, at least, after his death; but prodigality +_destroys_ resources. So, too, avarice is a repulsive vice, extravagance +a seductive one. The practice of frugality[218-1] in every day life is +as far removed from one extreme as the other. It is the "daughter of +wisdom, the sister of temperance and the mother of freedom." Only with +its assistance can liberality be true, lasting and successful. It is, in +short, reason and virtue in their application to consumption.[218-2] +[218-3] + + [Footnote 218-1: Negatively: the principle of sparing; + positively: the principle of making the utmost use of + things. (_Schäffle_, Kapitalismus und Socialismus, 27.)] + + [Footnote 218-2: Admirable description of economy in _B. + Franklin's_ Pennsylvanian Almanac, How poor Rich. Saunders + got rich; also in _J. B. Say_, Traité, III, ch. 5. _Adam + Smith_, W. of N., II, ch. 3, endeavors to explain why it is + that, on the whole and on a large scale, the principle of + economy predominates over the seductions of extravagance. + This, however, is true only of progressive nations.] + + [Footnote 218-3: The Savior Himself in His miracles, the + highest pattern of economy: _Matth._, 14, 20; _Mark_, 6, 43; + 8, 8; _Luke_, 9, 17; _John_, 6, 12. That He did not intend + to prohibit thereby all noble luxury is shown by passages + such as _Matth._, 26, 6 ff.; _John_, 2, 10.] + + +SECTION CCXIX. + +EFFECT OF PRODIGALITY. + +Prodigality destroys goods which either were capital or might have +become capital. But, at the same time, it either directly or indirectly +increases the demand for commodities. Hence, for a time, it raises not +only the interest of capital, but the prices of many commodities. +Consumers naturally suffer in consequence; many producers make a profit +greater than that usual in the country until such time as the +equilibrium between supply and demand has been restored by an increase +of the supply of the coveted products. But the capital of spendthrifts +is wont to be suddenly exhausted; demand suddenly decreases, and +producers suffer a crisis. As Benjamin Franklin says, he who buys +superfluities will at last have to sell necessities. Thus the +extravagance of a court may contribute to the rapid prosperity of a +place of princely residence.[219-1] But it should not be forgotten that +all the food-sap artificially carried there had to be previously +withdrawn from the provinces. The clear loss caused by the destruction +of wealth should also be borne in mind.[219-2] [219-3] + + [Footnote 219-1: A rapid change of hands by money, as it is + called in every day life. See, _per contra_, _Tucker_, + Sermons, 31, 1774.] + + [Footnote 219-2: Only the superficial observer is apt to + notice this apparent prosperity of the capital much more + readily than the decline of the rest of the country, which + covers so much more territory. In like manner, many wars + have had the appearance of promoting industry, for the + reason that some branches grew largely in consequence of the + increased demand of the state; but they grew at the expense + of all others which had to meet the increased taxes. Compare + _Jacob_ in _Lowe_, England nach seinem gegenwartigen + Zustande, 1823, cap. 2, 3; _Nebenius_, Oeffentlicher Credit, + I, Aufl., 419 ff.; _Hermann_, department of the Seine, + amounted, in 1850, to 497,000,000 francs; in the department + of the Bouches du Rhone, to 39,000,000 francs; in 1855, on + the other hand, they were, on account of the war, + 887,000,000 francs and 141,000,000. (Journal des Econ., + Juil., 1857, 32 ff.)] + + [Footnote 219-3: The Journal des Economistes for March, + 1854, very clearly shows, in opposition to the + state-sophists who recommended extravagant balls, etc. as a + means of advancing industry, and who even advocated the + paying officials higher salaries on this account, and making + greater outlays by them compulsory, that such luxury when it + comes of itself may be a symptom of national wealth, but + that it is a very bad means to produce prosperity + artificially.] + + +SECTION CCXX. + +WHEN SAVING IS INJURIOUS. + +The act of saving, if the consumption omitted was a productive one, is +detrimental to the common good; because now a real want of the national +economy remains unsatisfied.[220-1] The effecting of savings by +curtailing unproductive consumption may embarrass those who had +calculated on its continuance. But its utility or damage to the whole +national economy will depend on the application or employment of what is +saved. Here two different cases are possible. + +A. It is stored up and remains idle. If this happens to a sum of money, +the number of instruments of exchange in commerce is diminished. Hence, +in consequence, there may be either a general fall in the price of +commodities, or some commodities may remain unsold; that is, according +to § 217, a commercial crisis of greater or smaller extent.[220-2] If it +be objects of immediate consumption that are stored up and lie idle, +articles of food or clothing, for instance, the price of such +commodities is wont to be raised by the new and unusual demand for them, +precisely as it is lowered afterwards when the stores are suddenly +opened and thrown upon the market.[220-3] + +B. If the saving effected be used to create fixed capital, there is as +much consumption of goods, the same support of employed workmen, the +same sale for industrial articles as in the previous unproductive +consumption; only, there the stream is usually conducted into other +channels. If a rich man now employs in house-building what he formerly +paid out to mistresses; masons, carpenters, etc. earn what was formerly +claimed by hair-dressers, milliners, etc.: there is less spent for +truffles and champagne and more for bread and meat. The last result is a +house which adds permanently either to personal enjoyment, or +permanently increases the material products of the nation's +economy.[220-4] And it is just so when the wealth saved is used as +circulating capital. Here, the wealth saved is consumed in a shorter or +longer time; and to superficial observers, this saving might seem like +destruction; but it is distinguished from the last by this, that it +always reproduces its full equivalent and more. However, the whole +quantity of goods brought into the market by such new capital cannot be +called its product. Only the use (_Nützung_) of the new capital can be +so called; that is the holding together or the development in some other +way of other forces which were already in existence until their +achievements are perfected and ready for sale.[220-5] [220-6] + + [Footnote 220-1: What evil influences such saving can have + may be seen from Prussian frugality in its military system + before 1806.] + + [Footnote 220-2: The custom of burying treasure is produced + by a want of security (compare _Montanari_, Delia Moneta, + 1683-87, 97 Cust.), and by an absence of the spirit which + leads to production. As _Burke_ says, where property is not + sacred, gold and silver fly back into the bosom of the earth + whence they came. Hence, in the middle ages, this custom was + frequent, and is yet, in most oriental despotic countries. + (_Montesquieu_, E. des L., XXII, 2.) And so in Arabia: _d'Arvieux_, + _Rosenmüller's_ translation, 61 seq. _Fontanier_, Voyage dans l'Inde + et dans le Golfe persique, 1644, I, 279. A Persian governor on his + death bed refused to give any information as to where he had buried + his treasure. His father had always murdered the slave who helped him + to bury his money or any part of it. (_Klemm_, Kulturgeschichte, VII, + 220.) In lower stages of civilization, it is a very usual luxury to + have one's treasures buried with the corpse. In relation to David's + grave, see _Joseph._, Ant. Jud., VII, 15,3, XIII, 8, 4; XVI, 7, 1. + Hence the orientals believe that _every_ unknown ruin hides a + treasure, that every unintelligible inscription is a talisman to + discover it by, and that every scientific traveler is a + treasure-digger, (_v. Wrede_, R. in Hadhramaut, 113, 182 and + _passim_.) Similarly in Sicily. (_Rehfues_, Neuester Zustand von S., + 1807, I, 99.) In the East Indies every circumstance that weakens + confidence in the power of the government increases the frequency of + treasure-burial, as was noticed, for instance, after the Afghan + defeat. Treasure-burial by the Spanish peasantry (_Borrego_, + translated by Rottenkamp, 81), in Ireland (_Wakefield_, Account of I. + I, 593), in the interior of Russia (_Storch_, Handbuch, I, 142), and + among the Laplanders. The custom was very much strengthened among the + latter when, in 1813, they lost 80 per cent. by the bankruptcy of the + state through its paper money. (_Brooke_, Winter in Lapland, 1829, + 119; compare _Blom_, Statistik von Norwegen, II, 205.) As during the + Thirty Years' War, so also in 1848, it is said that large amounts of + money were burned by the Silesian and Austrian peasantry. Much of it + is lost forever, but, on the whole, much treasure is wont to be found + where much is buried; governments there make it a regal right to + search for it.] + + [Footnote 220-3: If the hoarding takes place in a time of superfluity, + and the restitution of the stores in a time of want, there is of + course no detrimental disturbance, but on the contrary the consequence + is a beneficent equilibrium of prices. This is the fundamental idea in + the storage of wheat.] + + [Footnote 220-4: In the construction of national buildings, etc., we + have the following course of things: compulsory contributions made by + taxpayers, or an invitation to the national creditors to desist + somewhat from their usual amount of consumption, and to employ what is + saved in the building of canals, roads etc. In France, for instance, + after 1835, 100,000,000 francs per annum. (_M. Chevalier_, Cours, I, + 109.) The higher and middle classes of England saved, not without much + trouble, however, between 1844 and 1858, £134,500,000 in behalf of + railway construction. _Tooke-Newmarch_.] + + [Footnote 220-5: Such savings have sometimes been prescribed + by the state. In ancient Athens many prohibitions of + consumption in order to allow the productive capital to + first attain a certain height. Thus it was forbidden to + slaughter sheep until they had lambed, or before they were + shorn. (_Athen._, IX, 375, I. 9.) Similarly the old + prohibition of the exportation of figs. (Ibid., III, 74.) + Compare Petit. Leges. Atticae, V, 3. _Boeckh_, + Staatshaushaltung, I, 62 seq.] + + [Footnote 220-6: The process of the transformation of + savings from a money-income, in a money-economy + (_Geldwirthschaft_), into other products, more closely + analyzed in _v. Mangoldt_, V. W. L., 152 ff.] + + +SECTION CCXXI. + +LIMITS TO THE SAVING OF CAPITAL. + +It may be seen from the foregoing, that the mere saving of capital, if +the nation is to be really enriched thereby, has its limits. Every +consumer likes to extend his consumption-supply and his capital in use +(_Gebrauchskapitalien_); but not beyond a certain point.[221-1] Besides, +as trade becomes more flourishing, smaller stores answer the same +purpose. And no intelligent man can desire his productive capital +increased except up to the limit that he expects a larger market for his +enlarged production. What merchant or manufacturer is there who would +rejoice or consider himself enriched, if the number of his customers and +their desire to purchase remaining the same, he saw his stores of +unsaleable articles increase every year by several thousands? + +This is another difference between national resources or world resources +and private resources. The resources of a private person, which are only +a link in the whole chain of trade, and which are, therefore, estimated +at the value in exchange of their component parts should, indeed, always +be increased by savings made. (§ 8.) For even the most excessive +increase of supply in general, which largely lowers the price of a whole +class of commodities, will never reduce the price of individual +quantities of that commodity below zero, and scarcely to zero. It is +quite otherwise in the case of national or world resources which must be +estimated according to the value in use of their component parts. Every +utility supposes a want. Where, therefore, the want of a commodity has +not increased, and notwithstanding there is a continuing increase in the +supply, the only result must be a corresponding decrease in the utility +of each individual part.[221-2] + +If a people were to save all that remained to them over and above their +most urgent necessities, they would soon be obliged to seek a wider +market in foreign countries, or loan their capital there; but they would +make no advance whatever in higher culture nor add anything to the +gladness of life.[221-3] On the other hand, if they would not save at +all, they would be able to extend their enjoyments only at the expense +of their capital and of their future. Yet these two extremes find their +correctives in themselves. In the former case, a glut of the market +would soon produce an increased consumption and a diminished production; +in the latter the reverse. The ideal of progress demands that the +increased outlay with increased production should be made only for +worthy objects, and chiefly by the rich, while the middle and lower +classes should continue to make savings and thus contribute to wipe out +differences of fortune.[221-4] + + [Footnote 221-1: Up to this point, indeed, wants increase + with the means of their satisfaction. The man who has two + shirts always strives to get a dozen, while the person who + has none at all, very frequently does not care for even one. + And so the person who has silver spoons generally desires + also to possess silver candle-sticks and silver plates. On + Lucullus' 5,000 chlamydes, see _Horat._, Epist., I, 6, 40 + ff.] + + [Footnote 221-2: That consumption and saving are not two + opposites which exclude each other is one of _Adam Smith's_ + most beautiful discoveries. See Wealth of Nat., II, ch. 3. + But compare _Pinto_, Du Crédit et de la Circulation, 1771, + 335. Before his time most writers who were convinced of the + necessity of consumption were apologists of extravagance. + Thus _v. Schröder_, F. Schatz- und Rentkammer, 23 seq. 47, + 172. Louis XIV.'s saying: "A King gives alms when he makes + great outlays." According to _Montesquieu_, Esprit des Louis + VII., 4, the poor die of hunger when the rich curtail their + expenses. This view, which must have found great favor among + the imitators of Louis XIV. and Louis XV. was entertained to + some extent by the Physiocrates; for instance, _Quesnay_, + Maximes générales, 21 seq. Compare _Turgot_, Oeuvres, éd, + _Dare_, 424 ff. On the other hand, _Adam Smith_, loc. cit. + says that the spendthrift is a public enemy, and the person + who saves a public benefactor. _Lauderdale_, Inquiry, 219, + reacts so forcibly against the one-sidedness which this + involves that he believes no circumstance possible "which + could so far change the nature of things as to turn + parsimony into a means of increasing wealth." In his polemic + against Pitts' sinking fund as inopportune and excessive, he + assumes that all sums saved in that way are completely + withdrawn from the national demand. See per contra + _Hufeland_ n. Grundlegung I, 32, 238. _Sismondi_, N. P. II, + ch. 6, with his distinction between _production_ and + _revenu_, is more moderate; the former is converted into the + latter only in as much as it is "realized," that is, finds a + consumer who desires it, and pays for it. Now only can the + producer rely on anything; can he restore his productive + capital, estimate his profit, and use it in consumption, and + lastly begin the whole business over again.... A stationary + country must remain stationary in everything. It cannot + increase its capital and widen its market while its + aggregate want remains unaltered. (IV, ch. 1.)] + + [Footnote 221-3: Thus _John Stuart Mill_ thinks that the + American people derive from all their progress and all their + favorable circumstances only this advantage: "that the life + of the whole of one sex is devoted to dollar-hunting, and of + the other to breeding dollar-hunters." (IV, ch. 6, 2.) In + the popular edition of 1865, after the experience of the + American civil war, he materially modified this judgment.] + + [Footnote 221-4: _Storch_, Nationaleinkommen, 125 ff. That + there is at least not too much to be feared from the making + of too great savings is shown by _Hermann_, St. Untersuch., + 371 seq. On the other hand, there is less wealth destroyed + by spendthrifts than is generally supposed, for spendthrifts + are most frequently cheated by men who make savings + themselves. (_J. S. Mill_, Principles, I, ch. 5, 5.)] + + +SECTION CCXXII. + +SPENDTHRIFT NATIONS. + +As there are extravagant and frugal individuals, so also are there +extravagant and frugal nations. Thus, for instance, we must ascribe +great national frugality to the Swiss. In many well-to-do families in +that country, it is a principle acted upon to require the daughters to +look to the results of their white sewing, instead of giving them +pin-money; to gather up the crumbs after coffee parties in the presence +of the guests, and to make soup of them afterwards, etc. Sons are +generally neither supported nor helped to any great extent by their +parents in their lifetime, and are required to found their own homes. +They, therefore, grow rich from inheritance only late in years, when +they are accustomed to a retired and modest mode of life, and have +little desire, from mere convenience sake, to change it for another. And +so Temple informs us that it never occurs to the Dutch that their outlay +should equal their income; and when this is the case they consider that +they have spent the year in vain. Such a mode of life would cost a man +his reputation there as much as vicious excess does in other countries. +The greatest order and the most accurate calculation of all outlay in +advance is found in union with this; so that Temple assures us he never +heard of a public or private building which was not finished at the time +stipulated for in advance.[222-1] + +On the other hand, the Englishman lives rather luxuriantly. He is so +used to enjoying comparative abundance, that when English travelers see +the peasantry of the continent living in great frugality, they generally +attribute it to poverty and not to their disposition to make savings. If +England has grown rich, it is because of the colossal magnitude of its +production, which is still more luxuriant and abundant than its +consumption.[222-2] This contrast may be the effect in part of +nationality and climate;[222-3] but it is certainly the effect in part +also of a difference in the stage of civilization which these countries +have respectively reached. The elder Cato had a maxim that a widow +might, indeed, allow her fortune to diminish, but that it was a man's +duty to leave more behind him than he had inherited.[222-4] And how +prodigally did not the lords of the universe live in later times! + + [Footnote 222-1: _Temple_, Observations on the U. Provinces, + Works, I, 136, 138 seq., 179. _Roscher_, Geschichte der + engl. Volkswirthschaftsl., 129. Thus, for instance, the + Richesse de Hollande, I, 305, describes a rich town near + Amsterdam in which a man with an income of 120,000 florins a + year expended probably only 1,000 florins per annum on + himself.] + + [Footnote 222-2: As early a writer as _D. Defoe_, Giving + Alms no Charity! 1704, says: the English get estates; the + Dutch save them. An Englishman at that time with weekly + wages of 20 shillings just made ends meet; while a Dutchman + with the same grew rich, and left his children behind him in + very prosperous circumstances, etc. _L. Faucher_ draws a + similar contrast between his fellow countrymen and the + English. _Goethe's_ ingenuous observations (Werke, Bd., 23, + 246, ed. of 1840) in his Italian journey, show that the + Italians, too, know how to save. _Molti pochi fanno un + assai!_ And so in Bohemia, the Czechs have a good reputation + for frugality, sobriety, etc. as workmen. They are more + frugal than the Germans, although all the larger businesses + belong to Germans, because when the Czech has saved + something, he prefers to return to his village to putting + his savings in jeopardy by speculation.] + + [Footnote 222-3: Drunkenness a common vice of northern + people: thus in antiquity the Thracians (_Athen._, X, 42; + _Xenoph._, Exp. Cyri, VII, 3, 32), the Macedonians, for + instance, Philips (_Demosth._, Olynth., II, 23) and + Alexander's (_Plutarch_, Alex., 70; De Adulat, 13). To drink + like a Scythian, meant, among the Greeks, to drink like a + beast. (_Athen._, X, 427; _Herod._, VI, 84.) On North German + drunkenness in the 16th century, see _Seb. Münster_, + Cosmogr., 326, 730. _Kantzow_, Pomerania, II, 128.] + + [Footnote 222-4: _Plutarch_, Cato, I, 21.] + + +SECTION CCXXIII. + +THE MOST DETRIMENTAL KIND OF EXTRAVAGANCE. + +The kind of extravagance which it is most natural we should desire to +see put an end to, is that which procures enjoyment to no one. I need +call attention only to the excessive durability and solidity of certain +buildings. It is more economical to build a house that will last 60 +years for $10,000, than one which will last 400 years for $20,000; for +in 60 years the interest saved on the $10,000 would be enough to build +three such houses.[223-1] This is, of course, not applicable to houses +built as works of art, or only to produce an imposing effect. The object +the ancient Egyptians had in view in building their obelisks and +pyramids continues to be realized even in our day. + +I might also call attention to the premature casting away of things +used. Our national economy has saved incredible sums since rags have +been manufactured into paper. In Paris 4,000 persons make a living from +what they pick up in the streets.[223-2] + + [Footnote 223-1: Compare _Minard_, Notions élémentaires + d'Economie politique appliquée aux Travaux publics, 1850, 71 + ff. He calls to mind the many strong castles of the age of + chivalry, the Roman aqueducts, theaters, etc., which are + still in a good state of preservation, but which can be used + by no one; so many bridges too narrow for our purposes, and + so many roads too steep. The sluices at Dunkirk, made 12.60 + metres in width by Vauban, were made 16 meters wider in + 1822, and still are too narrow for Atlantic steamships. In + England, private individuals have well learned to take all + this into account. Compare _J. B. Say_, Cours pratique, + translated by Morstadt, I, 454 ff.] + + [Footnote 223-2: _Fregier_, Die gefährlichen Klassen, + translated 1840, I, 2, 38. In Yorkshire it is said that + woolen rags to the amount of £52,000,000 a year are + manufactured into useful articles. (_Tooke_, + Wool-Production, 196.) Compare The Use of Refuse: Quart. + Rev., April, 1868. On the ancient Greek ragpickers the + so-called spermologois, see _St. John_, The Hellenes, III, + 91; on the Roman _Centonariis_: _Cato_, R. R., 135; + _Columella_, R. R., I, 8, 9; _Marquardt_, II, 476, V, 2, + 187.] + + + + +CHAPTER II. + +LUXURY. + + +SECTION CCXXIV. + +LUXURY IN GENERAL. + +The idea conveyed by the word luxury is an essentially relative one. +Every individual calls all consumption with which he can dispense +himself, and every class that which seems not indispensable to +themselves, luxury. The same is true of every age and nation. Just as +young people ridicule every old fashion as pedantry, every new fashion +is censured by old people as luxury.[224-1] + +But (§ I) a higher civilization always finds expression in an increased +number and an increased urgency of satisfied wants. Yet, there is a +limit at which new or intensified wants cease to be an element of higher +civilization, and become elements of demoralization. Every immoral and +every unwise want exceeds this limit.[224-2] Immoral wants are not only +those the satisfaction of which wounds the conscience, but also those in +which the necessities of the soul are postponed to the affording of +superfluities to the body; and where the enjoyment of the few is +purchased at the expense of the wretchedness of the many. And not only +those are unwise or imprudent for which the voluntary outlay is greater +than one's income, but those also where the indispensable is made to +suffer for the dispensable. + +Thus it was in Athens, in the time of Demosthenes, when the festivities +of the year cost more than the maintenance of the fleet; when Euripides' +tragedies came dearer to the people than the Persian war in former +times. There was even a law passed (Ol. 107,4) prohibiting the +application of the dramatic fund to purposes of war under pain of +death.[224-3] + +In the history of any individual people, it may be shown with +approximate certainty at what point luxury exceeded its salutary limits. +But in the case of two different nations, it is quite possible that what +was criminal prodigality with the one, may have been a salutary +enjoyment of life with the other; in case their economic +(_wirthschaftlichen_) powers are different. Precisely as in the case of +individuals, where for instance, the daily drinking of table wine may be +simplicity in the rich and immoral luxury in the case of a poor father +of a family.[224-4] Healthy reason has this peculiarity, that where +people will not listen to it, it never hesitates to make itself felt. +(_Benjamin Franklin._)[224-5] + +However, the luxury of a period always throws itself, by way of +preference, on those branches of commodities which are cheapest. + + [Footnote 224-1: _Stuart_, Principles, II, ch. 30, + _Ferguson_, History of Civil Society, VI, 2. Thus + _Dandolus_, Chron. Venet., 247, tells of the wife of a doge + at Constantinople who was so given to luxury that she ate + with a golden fork instead of her fingers. But she was + punished for this outrage upon nature: her body began to + stink even while she was alive. In the introduction to + _Hollinshed's_ Chronicon, 1557, there is a bitter complaint + that, a short time previous, so many chimneys had been + erected in England, that so many earthen and tin dishes had + been introduced in the place of wooden ones. Another author + finds fault that oak was then used in building instead of + willow, and adds that formerly the men were of oak but now + of willow. _Slaney_, On rural Expenditure, 41. Compare + _Xenoph._, Cyrop., VIII, 8, 17.] + + [Footnote 224-2: Biblically determined: _Romans_, 13, 14.] + + [Footnote 224-3: _Plutarch_, De Gloria Athen., 348. + _Athen._, XIV, 623. Petit. Legg. Att., 385.] + + [Footnote 224-4: _Livy_, XXXIV, 6 ff.] + + [Footnote 224-5: Most writers who have treated of luxury at + all have generally confined themselves to inquiring whether + it was salutary or reprehensible. Aristippus and + Antisthenes, Diogenes, etc.; Epicureans and Stoics. The + latter were reproached with being bad citizens, because + their moderation in all things was a hindrance to trade. + (_Athen._, IV, 163.) The Aristotelian _Herakleides_ declared + luxury to be the principal means to inspire men with + noble-mindedness; inspired by luxury, the Athenians + conquered at Marathon. (_Athen._, XII, 512.) _Pliny_ was one + of the most violent opponents of luxury. See _Pliny_, N. N., + XXXIII, 1, 4, 13, and other places. The controversy has been + renewed by the moderns, especially since the beginning of + the 18th century, after luxury of every kind had previously + (for the most part on theological grounds, but also by + Hutten, for instance) been one-sidedly condemned. Among its + defenders were _Mandeville_, The Fable of the Bees, 1706, + who, however, calls everything a luxury which exceeds the + baldest necessities of life; _Voltaire_ in Le Mondain, the + Apologie du Luxe, and Sur L'Usage de la Vie; _Mélon_, Essai + politique sur le Commerce, ch. 9; _Hume_, Discourses, No. 2, + On Refinement in the Arts; _Dumont_, Théorie du Luxe, 1771; + _Filangieri_, Delle Leggi politiche ed economiche, II, 37; + and the majority of the Mercantile school and of the + Physiocrates. Among the opponents of luxury, _J. J. + Rousseau_ towers over almost all others. Further, _Fénélon_, + Télémaque, 1699, L. XXII; _Pinto_, Essai sur le Luxe, 1762. + + The reasons and counter-reasons advanced by those writers + apply not only to luxury but to the lights and shades of + high civilization in general. When a political economist + declares for or against luxury in general, he resembles a + doctor who should declare for or against the nerves in + general. There has been luxury in every country and in every + age. Among a healthy people, luxury is also healthy, an + essential element in the general health of the nation. Among + an unhealthy people luxury is a disease, and + disease-engendering. + + For an impartial examination of the question, see + _Ferguson_, History of Civil Society, towards the end; see + also _Beckmann_, in _Justis'_ Grundsätzen der Polizei, 1782, + § 308; _Rau_, Ueber den Luxus, 1817; _Roscher_, Ueber den + Luxus, in the Archiv der Politischen Oekonomie, 1843, and in + his Ansichten der Volkswirthschaft, 1861, 399 ff.] + + +SECTION CCXXV. + +THE HISTORY OF LUXURY.--IN THE MIDDLE AGES. + +During the middle ages, industry and commerce had made as yet but little +progress. Hence it was as difficult then for luxury to be ministered to +by fine furniture as by the products of foreign countries. Individual +ornamental pieces, especially arms and drinking cups,[225-1] were wont +to be the only articles of luxury. We have inventories of the domains of +Charlemagne from which we find that in one of them, the only articles of +linen owned were two bed-sheets, a table-cloth and a pocket +handkerchief.[225-2] Fashion is here very constant; because clothing was +comparatively dearer than at present. And so now in the East. In the +matter of dwellings, too, more regard was had to size and durability, +than to elegance and convenience. The palaces of Alfred the Great were +so frailly built that the walls had to be covered with curtains as a +protection against the wind, and the lights to be inclosed in +lanterns.[225-3] + +Hence the disposition to use the products of the home soil as articles +of luxury was all the greater, but more as to quantity than to +quality.[225-4] Since the knight could personally neither eat nor drink +a quantity beyond the capacity of his own stomach, he kept a numerous +suite to consume his surplus. It is well known what a great part was +played among the ancient Germans by their retinues of devoted servants +(_comitatus_), which many modern writers have looked upon as +constituting the real kernel of the migration of nations. + +In England, it was a maxim of state policy with Henry VII., whose reign +there terminated the middle age, to prohibit the great liveried suites +of the nobility (19 Henry VII., ch. 14) as Richard II., Henry IV. and +Edward IV. had already attempted to do. But even under James I., we find +ambassadors accompanied by a suite of 500 persons or 300 +noblemen.[225-5] + +The rich man welcomed every opportunity which enabled him to make others +share in a dazzling manner the magnitude of his superfluous wealth: +hence the numberless guests at weddings who were frequently entertained +for weeks.[225-6] These festivities are memorable not because of the +delicacies or great variety of the dishes, but because of their colossal +magnitude. Even William of Orange, 1561, entertained at his wedding +guests who had brought with them 5,647 horses; and he appeared himself +with a suite of 1,100 men on horseback. There were consumed on the +occasion 4,000 bushels of wheat, 8,000 of rye, 11,300 of oats, 3,600 +_eimers_ of wine, 1,600 barrels of beer.[225-7] In the ordinance of +Münden regulating weddings, promulgated in the year 1610, it is +provided, that, at a large wedding there should not be over 24 tables, +nor at a small one over 14, with 10 persons at each table.[225-8] + +The hospitality of the lower stages of civilization[225-9] must be +ascribed as well to this peculiar kind of luxury as to mere good nature. +Arabian chiefs have their noon-day table set in the street and welcome +every passer-by to it.[225-10] (_Pococke._) And so, distinguished +Indians keep an open cauldron on the fire cooking all the time, from +which every person who comes in may help himself. (_Catlin._) + +Compared with this luxury of the rich, the poverty found side by side +with it appears less oppressive. There is no great gap between the modes +of life of the different classes.[225-11] This is the golden age of +aristocracy, when no one questions its legitimateness. When, later, the +nobleman, instead of keeping so many servants, begins to buy costly +garments for himself, he, indeed, supports indirectly just as many and +even more men; but these owe him nothing. Besides, in this last kind of +luxury, it is very easily possible for him to go beyond his means, which +is scarcely ever the case in the former.[225-12] + + [Footnote 225-1: Here, as a rule, the value of the metal was + greater than the form-value; and hence the medieval + monasteries frequently made loans of silver vessels, where + of course, the form could not be taken into consideration. + On the other hand, in the case of the table service, + presented by the king of Portugal to Lord Wellington, the + metal cost £85,000 and the workmanship £86,000. (_Jacob_, + Gesch. der edlen Metalle, translated by Kleinschrod, II, 5.) + Compare _Hume_, History of England, ch. 44, App. 3. + Similarly under Louis XIV. (_Sismondi_, Hist. des Français, + XXVII, 45.) When Rome was highly civilized, C. Gracchus paid + for very good silver ware, 15 times the value of the metal, + and L. Crassus, (consul 95 before Christ) 18 times its + value. _Mommsen_, R. Gesch. II, 383.] + + [Footnote 225-2: _Specimen breviarii fiscalium Caroli + Magni_; compare _Anton_, Gesch. der deutschen Landwirthsch. + 244 ff.] + + [Footnote 225-3: _Turner_, History of the Anglo Saxons, VII, + ch. 6.] + + [Footnote 225-4: In _Homer_, the kings live on nothing but + meat, bread and wine: compare _Athen._, I, 8. In the + saga-poetry of Iceland, _H. Leo_ does not remember to have + heard any other food mentioned except oat-pap, milk, butter + and cheese, fish, the flesh of domestic animals, and beer. + (_Raumer's_ Taschenbuch, 1835, 491)] + + [Footnote 225-5: _Hume_, History of England, ch. 49, Append. + Similarly among all nations which have still preserved much + of the medieval. Thus the duke of Alba, about the end of the + last century, had not a single commodious hall in his + immense palace, but 400 rooms for his servants, since at + least all his old servants, and even their widows and + families, continued to live with him. In Madrid alone, he + paid £1,000 a month wages to his servants; and the son of + the duke, Medina-Celi, £4,000 per annum. (_Townsend_, II, + 155, 158.) In many palaces in Moscow, previous to 1812, + there were 1,000 and more servants, unskillful, clad for the + most part as peasants, badly fed, and with so little to do + that perhaps one had no service to perform but to fetch + drinking water at noon, and another in the evening. Even + poor noblemen kept 20 and 30 servants, (_v. Haxthausen_, + Studien, I, 59.) _Forster_, Werke, VII, 347, explains Polish + luxury in servants, by the poorness of the servants there: a + good German maid could do more than three Polish servants. + Thus, in Jamaica, it was customary to exempt from the + slave-tax persons who kept fewer than 7 negroes. (_B. + Edwards_, History of the W. Indies, I, 229.) Compare _Livy_, + XXXIX, 11. The luxury of using torch-bearers instead of + candelabra lasted until Louis XIV.'s time. (_Rocquefort_, + Hist. de la Vie privée des Français, III, 171.) Compare _W. + Scott_, Legend of Montrose, ch. 4.] + + [Footnote 225-6: A Hungarian magnate, under king Sigismund, + celebrated his son's wedding for a whole year. (_Fessler_, + Gesch. von Ungarn, IV, 1267.)] + + [Footnote 225-7: _Müller_, Annal. Saxon, 68. Several + examples in _Sckweinichen's_ Leben von Büsching, I, 320 seq. + _Krünitz_, Enclycopædie, Bd. 82, 84 ff. The wedding of the + niece of Ottakar II. in 1264, has long been considered a + most brilliant event in the history of medieval luxury. + (_Palacky_, Gesch. von Böhmen, II, 191 ff.) Even yet, in + Abyssinia, on the occasion of royal feasts, only meat and + bread are eaten and mead drunk; but not only the great, but + even common soldiers are entertained one after the other. + (Ausland, 1846, No. 79.) Magnificent as was the table of a + West Indian planter, it was in some respects very simple. A + large ox was slaughtered for the feast, and everything had + to be prepared from that: roast beef, beef steaks, beef + pies, stews, etc. (_Pinckard_, Notes on the W. Indies, II. + 100 ff.)] + + [Footnote 225-8: _Spittler_, Geschichte Hanovers, I, 381.] + + [Footnote 225-9: _Tacitus_, Germ., 21 Leg., says of the + Germans: _Convictibus et hospitiis non alia gens effusius + indulget. Quemcunque mortalium arcere tecto, nefas habetur. + Diem noctemque continuare potando, nulli probrum._] + + [Footnote 225-10: Entirely the same among the ancient + Romans: _Valer. Max._, II, 5. Compare per _contra_, + _Euripid._, Herc. fur., 304 seq.] + + [Footnote 225-11: Think of nomadic races especially, where + the rich can employ their wealth only to increase the number + of their partisans, for war purposes, etc.] + + [Footnote 225-12: _Ferguson_, Hist. of Civil Society, VI, 3; + _Adam Smith_, Wealth of Nat., IV, ch. 4. Compare _Contzen_, + Politicorum, 1629, 662. As to how in the lower stages of + civilization, guests are used to supply the place of the + post-office service, see _Humboldt_, Relation hist., II, + 61.] + + +SECTION CCXXVI. + +LUXURY IN BARBAROUS TIMES. + +The luxury of that uncivilized age shows itself for the most part on +particular occasions, and then all the more ostentatious, while in the +periods following it, it rather permeates the whole of life. Even J. +Möser excuses our forefathers for their mad celebration of their +_kirmesses_ and carnivals: _dulce est desipere in loco_, as Horace says, +and that they sometimes carried it to the extent of drowning +reason.[226-1] Among ourselves, the common man drinks brandy every day; +in Russia, seldom, but then, to the greatest excess.[226-2] The well +known peculiarity of feudal castles, that, besides one enormous hall, +they were wont to have very small and inconvenient rooms for every day +life, is accounted for in part by the great importance to them of festal +occasions, and in part by the cordiality of the life led in them, in +which lord and servants constituted one family. Nothing can be more +erroneous than to ascribe great temperance in general to people in a low +stage of civilization. Their simplicity is a consequence of their +ignorance rather than of their self-control. When nomadic races have +once tasted the cup of more delicate enjoyment, it is wont to hurry them +to destruction.[226-3] + + [Footnote 226-1: _Möser_, Patr. Ph. IV, 7. On the feast of + fools and the feast of asses of the middle ages, compare + _Dutillet_, Mémoire pour sevir à l'Histoire de la Fête des + Fous; _D. Sacchi_, Delle Feste popolari del medio Evo. + During the latter half of the 16th century, the first + Hannoverian minister received only 200 thalers salary and + pieces of clothing, while the wedding of a certain von + Saldern cost 5,600 thalers. (_Spittler_, Gesch. Hannovers, + I, 333.)] + + [Footnote 226-2: _v. Haxthausen_, Studien, II, 450, 513. + Thus, in 1631, of those who had died suddenly, there were + 957 who died of drunkenness. (_Bernouilli_, Populationistik, + 303.) According to _v. Lengefeldt_, Russland im 19. Jahrh., + 42, the number is now 1,474 to 1,911 per annum. On Poland, + see _Klebs_, Landeskulturgesetzgebung in Posen, 78. When the + South American Indians begin to drink, they do not stop + until they fall down senseless. (_Ulloa_, Noticias + Americanas, ch. 17.) The old Romans considered all + barbarians to be drunkards. (_Plato_, De Legg., I, 638.) In + eating, also, uncivilized people are extremely irregular. A + Jackute or Tunguse consumes 40 pounds of meat; three men + devour a whole reindeer at a meal. (_Cochrane_, Fussreise, + 156.) One ate in 24 hours the back quarter of a large ox, or + 1/2 a _pud_ of fat, and drank an equal quantity of melted + butter. (_Klemm_, Kulturgeschichte, III, 18.) Similarly + among hunting races. See _Klemm_, I, 243, 339; II, 13, 255. + On the South Sea Islanders, see _Hawkesworth_, III, 505; + _Forster_, I, 255.] + + [Footnote 226-3: Rapid degeneration of almost all barbaric + dynasties as soon as they have subjugated civilized + countries.] + + +SECTION CCXXVII. + +INFLUENCE OF THE CHURCH AND OF THE CITY. + +The change in this situation takes place first of all in the churches +and in the cities. The Church has passed through almost every stage of +development in advance of the State; and civilization, both in the good +and bad sense of the term, has become general, and gradually acclimated +in the rural districts, through the influence of the cities. In the +Church, the earliest art endeavored to reach the beautiful. There, we +first find music, painting, sculpture, foreign perfumes, incense and +variegated garments.[227-1] In the cities, growing industry introduces a +more attractive style of clothing and a more ornamental style of +household furniture. Commerce, beginning to thrive, raises foreign +commodities into wants,[227-2] and thus the old luxury of feudal times +is modified.[227-3] The large number of idle servants is diminished. All +the more refined pleasures are extended downward to wider circles of the +people. Instead of individual bards, rhapsodists, skalds and +minnesingers, we have the beginnings of the theater, and instead of +tournaments, the shooting matches. (_Freischiessen._) + +But it is remarkable how much earlier here pomp and splendor are +considered than convenience. The Spanish _romanceros_ of the 12th +century display wonderful splendor in their descriptions of the Cid, and +the trousseau of his daughters. But, on the other hand, the wife of +Charles VII. seems to have been the only French woman in the 15th +century who had more than two linen chemises. Even in the 16th century, +it frequently happened that a princess made a present to a prince of a +single shirt. At this time the German middle class were wont to sleep +naked.[227-4] + +Even now, half-civilized nations look more to the outward appearance of +commodities than to their intrinsic value. Thus, for instance, in +Russia, we find large numbers of porcelain services extravagantly +painted and gilded, awkward, the material of which is full of blisters; +damaskeened knives, gilt sad-irons and candle-snuffers with landscapes +engraved on them: but nothing fits into anything else; the angles are +vicious, the hinges lame, and the whole soon goes to pieces. And so, +among export merchants in Bremen, for instance, it is a rule, on all +their wares intended for America, to put a label made of very beautiful +paper, with their coat-of-arms or firm-name in real silver, and to do +the packing in as elegant a manner as possible.[227-5] Cloths intended +for America are usually exceedingly light, destitute of solidity, but +very well dressed. The cotton-printers who work for the African market +prefer to employ false but cheap and dazzling colors.[227-6] + + [Footnote 227-1: The use of window-glass in churches in + England dates from 674, in private houses from 1180. + (_Anderson_, Origin of Commerce, s. a.) Even in 1567, it was + so rare that during the absence of the lords from their + country seats, the panes were taken out and stored for safe + keeping. (_Eden_, State of the Poor, I, 77.) As to how + Scotland developed in this respect still later, see + _Buckle_, History of Civilization in England, II, 172.] + + [Footnote 227-2: In our day, at the breakfast of a German of + the middle class, may be found East Indian coffee, Chinese + tea, West Indian sugar, English cheese, Spanish wine, and + Russian caviar, without any surprising degree of luxury. + Compare _Gellius_, N. A., VII, 16.] + + [Footnote 227-3: In England, the transition is noticeable, + especially under Elizabeth: _Hume_ History, ch. 44, app. 3. + In France, under Louis XIV.; _Voltaire_, Siècle de Louis, + XIV., ch. 29.] + + [Footnote 227-4: Poesias Castellanas anteriores al Siglo XV; + Tom. I, 347, 327. _Roscher_, loc. cit. _J. Voight_, in + _Raumer's_ historischem Taschenbuche, 1831, 290; 1835, 324, + seq. Thus, one of Henry VIII's wives, in order to get salad, + had first to send for a gardener from Flanders; while at the + time, a single ship imported into England from 3,000 to + 4,000 pieces of clothing in gold brocade, satin or silk. + (_Anderson_, a. 1509, 1524, 4; Henry VIII, c. 6.)] + + [Footnote 227-5: Irish linen, worth from 30 to 35 shillings, + is often provided with a label which cost 5 shillings. + (_Kotelmann_, Statistische Uebersicht der landwirthschaftl. + und industriellen Verhältnisse von Oestereich und dem + Zollverein, 215.)] + + [Footnote 227-6: Compare _Kohl_, Reise in Deutschland, II, + 18, 250. _Roscher_, in the Göttinger Studien, 1845, II, 403, + ff. About 1777, _Büsch_ described the difference of goods + manufactured in England "for the continent and home + consumption," as being just the same as the difference now + between goods for Africa and goods for Europe. (Darstellung + der Handlung, Zusatz, 89.)] + + +SECTION CCXXVIII. + +HISTORY OF LUXURY IN HIGHLY CIVILIZED TIMES. + +The direction which luxury takes in times when civilization is advanced, +is towards the real, healthy and tasteful enjoyment of life, rather than +an inconvenient display. This tendency is exceedingly well expressed by +the English word _comfort_, and it is in modern England that the luxury +of the second period has found it happiest development. It is found side +by side with frugality; and it frequently even looks like a return to +the unaffected love of nature.[228-1] + +Thus, since Rousseau's time,[228-2] the so-called English gardens have +dropped the former Versailles-Harlem style. Thus, too, modern fashion +despises the awkward long wig, powdering etc.[228-3] Instead of garments +embroidered, or faced with fur or lace, and instead of the galloon hat +worn under Louis XIV. and Louis XV., the French revolution has +introduced the simple citizen frock-coat and the round silk hat. The +"exquisite" may even with these outshine others by the form he selects, +the material he wears, or by frequent change, but much less strikingly +than before.[228-4] Since every one, in the purchase of household +furniture, etc., looks more to its use than to the honor of being sole +possessor of an article or having something in advance of everybody +else, it becomes possible for industry to manufacture its products in +much larger quantities, and after the same model, and thus to furnish a +much better article for the same price.[228-5] Besides, more recent +industry has produced a multitude of cheap substitutes for costly +objects of luxury: plated silver-leafing, cotton-velvet goods, +etc.;[228-6] besides the many steel engravings, lithographs etc., which +have exerted so beneficent an influence on æsthetic education. + +In the England of our days, the houses are comparatively small, but +convenient and attractive, and the salutary luxury of spending the +pleasant season in the country very general.[228-7] The country-roads +are narrow but kept in excellent order and provided with good +inns.[228-8] More value is here attached to fine linen cloth than to +lace;[228-9] to a few but nourishing meat-dishes than to any number of +sauces and confections of continental kitchens.[228-10] Especially is +the luxury of cleanliness, with its morally and intellectually +beneficial results found only in well-to-do and highly cultured nations. +As formerly in Holland, so now in England, it is carried to the highest +point of development. In the latter country, the tax on soap is +considered a tax on an indispensable article.[228-11] The reverse is the +case in North America, if we can believe the most unprejudiced and +friendly observers.[228-12] The person who lives in a log-house must, to +feel at ease within his four walls, first satisfy a number of necessary +wants.[228-13] + + [Footnote 228-1: The reformation of the sixteenth century + had a remarkable tendency towards natural and manful + fashions, as contradistinguished from the immediately + preceding and the immediately following periods. Compare _J. + Falke_, Deutsche Trachten und Modenwelt, II, 1858.] + + [Footnote 228-2: _J. J. Rousseau_, N. Héloise, II, L. 11. + Compare _Keysler_, Reise, I, 695.] + + [Footnote 228-3: That a similar transition marked an epoch + in the history of Grecian morals was recognized even by + _Thucydides_, I, 6; compare _Asios_, in _Athen._, XII, 528.] + + [Footnote 228-4: It will always remain a want to own clothes + for every day wear and festal occasions. The frock coat + satisfies this want in the cheapest way. As soon as people + cease to distinguish clothing for festal occasions by the + cut, gold-embroidery, fur-facing, etc. will appear again, + which would necessarily prove a great hardship to the + propertyless classes of the educated, and even to the higher + classes.] + + [Footnote 228-5: On the striking contrast presented in this + respect by the English and French, and even Russian customs, + see _Storch_, Handbuch, II, 179 ff. _J. B. Say_, Cours + pratique, translated into German by _Morstadt_, I, 435 ff.; + Deutsche Vierteljahrsschrift, 1853, I, 182.] + + [Footnote 228-6: Paper-hangings, instead of costly gobelins + and leather hangings, were not known in France until after + 1760, nor in the rest of Europe until much later. Busts of + plaster were (_Martial_, IX, 17, and _Juvenal_, II, 4) usual + among those who were less well off.] + + [Footnote 228-7: Similarly even in _Giov. Villani_, XI, 93, + the villas of the highly cultured Florentines appear finer + than their city houses, while in Germany, at that time, even + the richest citizens lived only in the city.] + + [Footnote 228-8: Sidewalks in the cities, recommended by _J. + J. Rousseau_, as a popular convenience and as a safeguard + against the carriage-aristocracy.] + + [Footnote 228-9: In France, the luxury of lace was conquered + by Marie Antoinette, but still more effectually by the + Revolution. Previous to that time, many Parisians wore four + manchettes to each shirt. (_Palliser_, History of Lace, + 1865.)] + + [Footnote 228-10: During the middle ages, strongly seasoned + food, ragouts, etc., were more in favor than in even France + to-day; compare _Legrand d'Aussy et Roquefort_, Histoire de + la Vie priveé des Français, passim. The wine even, at that + time, used to be mixed with roots: _vin de romarin_, + _clairet_, _hippocras_, (_W. Wackernagel_, Kl. Schriften I, + 86, 7.) The French kitchen became simpler and more natural, + only after the middle of the 18th century. (_Roquefort_, + III, 343.)] + + [Footnote 228-11: The taxed consumption of soap amounted in + England in 1801 to 4.84 and in 1845, 9.65 pounds per capita. + (_Porter_, Progress of the Nation, V, 5, 579.) Soap-boiling + in London dates from 1520 only. Before that time, all white + soap was obtained from the continent. (_Howell_, + Londinopolis, 208.) _Erasmus_ charged that England, in his + time, was an exceedingly dirty country. The Italians, on the + other hand, were at that time greatly distinguished above + northern people, especially the Germans, by their + cleanliness. (_Buckhardt_, Kultur der Renaissance, 295.) The + Vienna river-baths after 1870, _Nicolai_, Reise, III, 17, + mentions as something deserving special note. The Leipzig + river-baths date from 1774.] + + [Footnote 228-12: _Birkbeck_, Notes on America, 39. Even in + New York, it is not very long since there were no common + sewers. Just as characteristic is the uncleanliness of the + South African _boers_ (_Mauch_, in _Petermann's_ + Mittheilungen, Ergänz-Heft, XXVII, 23), when compared with + the celebrated cleanliness of the old Dutch. + + Americans will certainly not agree with the "friendly + and unprejudiced" observers mentioned in the text; for + no one acquainted with genuine American home-life can + deny that cleanliness is an American characteristic. It + is only justice to the author to say that the above + note (12), so far as it relates to America, appeared in + the second edition of his work, and probably in the + first; and that he is not so much to be blamed for it + as the unfriendly and prejudiced, if not ignorant + observers. It may be said, however, that, from the use + of the word "log-house," in the context, the author + does not intend to apply this remark to the older + settlements.--TRANSLATOR.] + + [Footnote 228-13: The most frightful uncleanliness prevails + among the inhabitants of polar countries, who never bathe, + because of the climate, avoid all ventilation, and because + of the leathern clothing which they smear with grease, etc. + The Tunguses consider the after-birth cooked or roasted as a + great delicacy. "Fathers and mothers wipe their children's + noses with their mouth, and gulp the secretion down." + (_Georgi_, Beschreib. aller Nationen des russ. Reiches, I, + 287.) Among the Koruks, the suitor rinses his mouth with his + sweetheart's water. (loc. cit., I, 349, 353.) Compare + _Klemm_, Kulturgeschichte, III, 24, 57. In warmer climates, + even less civilized nations are clean, for instance in the + East and South-Sea Islands, etc. All the more surprising is + the uncleanliness of the Hottentots and Bushmen, where the + natural color is observable only under the eyes, where the + tears produced by too much smoke has washed away the crust + of dirt which, with this exception, covers the whole body. + (_Klemm_, Kulturgeschichte, 333.) How long it takes for + cleanliness to become a national trait, may be inferred from + the history of water-closets, when, for instance, their + introduction into every house during the 16th and even the + 17th century, had to be provided for by law in Paris. + (_Beckmann_, Beiträge, II, 358 ff.) The Göttingen statutes + of 1342 had to expressly prohibit persons to _merdare_ in + public wine-cellars where persons ate and drank together. + (_Spittler_, Gesch. Hannovers, I, 57.) Similarly in the + courts of the German princes. On the other hand, + universality of water-closets in England to-day. + + In ancient times, too, the uncleanliness of the Spartans in + body and clothing was very surprising to the Athenians: + _Xenoph._, Resp. Laced., II, 4; _Plutarch_, Lycurg, 16. + _Just._, Lac., 5. Still more that of many barbarians, for + instance of the Illyrians: _Stobaeus_, V, 51, 132; _Gaisf. + Aelian._, V, H. IV, 1. The ancient Romans bathed only once a + week (_Seneca_, Epist., 86), while under the Empire, "the + baths embraced and filled up the whole life of man and all + his wishes." (_Gerlach._) Compare _Becker_, Gallus, II, 10 + ff.; _Lamprid_, V, Comm., 11.] + + +SECTION CCXXIX. + +EXTENT OF LUXURY IN HIGHLY CIVILIZED TIMES. + +The luxury of this second period fills the whole of life and permeates +every class of people. Hence we may most easily determine the degree of +development a people have attained by the quantity of commodities of a +finer quality which are, indeed, not indispensable to life, but which it +is desirable should be consumed on as extensive a scale as possible by +the nation, for the sake of the fullness of life and the +freshness[229-1] of life to which they minister. + +Thus, for instance, as civilization has advanced, there has been almost +everywhere a transition to a finer quality of the material of which +bread is made. The number of consumers of white bread in France in 1700, +was 33 per cent. of the population; in 1760, 40; in 1764, 39; in 1791, +37; in 1811, 42; in 1818, 45; in 1839, 60 per cent.[229-2] About 1758, +in England and Wales, 3,750,000 of people lived on wheat bread; on +barley bread, 739,000; on rye bread, 888,000; on oat bread, 623,000. The +cultured southeastern population had almost nothing but wheat bread, +while in the north and northwest, oat bread continued to be used a long +time; and in Wales only 10 per cent. of the population ate wheat bread. +This condition of things in England has since been much improved. But, +at the extremities of the Hebrides, nine-tenths of the population still +live on barley bread; and in Ireland it was estimated, in 1838, that +with 8,000,000 inhabitants, potatoes were the chief article of food of +5,000,000, and oat bread of 2,500,000.[229-3] + +And so, the consumption of meat in cities is uniformly much larger than +in the country. In the cities of the Prussian monarchy and subject to +the slaughter-house tax, it amounted in 1846, per capita: in East +Prussia, to 61 lbs.; in Pommerania, to 66; in Posen, to 70; in West +Prussia, to 71; in Saxony, to 75; in the Rhine Province, to 83; in +Silesia, to 86; in Brandenburg, to nearly 104; in Berlin alone, to 114: +an average in the whole country, however, of scarcely 40 lbs. per +capita. (_Dietrici._) In the kingdom of Saxony, the average consumption +of beef and pork was, shortly before 1866, about 50 lbs.; in Dresden +alone, 86.7; in Leipzig, 136.9 lbs.[229-4] The consumption of meat in +England is exceedingly great, so that, for instance, in several orphan +asylums in London, the daily meat ration amounts to an average of from +0.23 to 0.438 lbs. The meat-consumption of a well-to-do family, children +and servants included, Porter estimates at 370 lbs. per capita per +annum. The meat ration of soldiers in the field amounts in England to +676 grammes a day; in France, to 350.[229-5] + +The consumption of sugar in 1734, in England, was about 10 lbs. per +capita; in 1845, in the whole of the British Empire, 20-1/3 lbs.; in +1849, almost 25 lbs.; in 1865, over 34 lbs.; but it must not be +overlooked here, that in Ireland the consumption of sugar per capita was +scarcely over 8 lbs.[229-6] In the German Zollverein, the consumption of +sugar, in 1834, amounted to an average of 2-1/2 lbs. per capita; in +1865, to more than 9 lbs. In France, the consumption of the same article +rose from 1.33 kilogrammes, the average from 1817 to 1821, to 7.35 lbs. +in 1865.[229-7] The population of the Zollverein rose 25.8 per cent. +between 1834 and 1847, while the importation of coffee increased 117.5 +per cent.; of spices, 58.2; southern fruits, 34.5, and cocoa, 246.2 per +cent.[229-8] + +A great many of vegetables and fruits, which seem to us to be almost +indispensable articles of subsistence, have been cultivated only a short +time. Thus the English have been acquainted with artichokes, asparagus, +several kinds of beans, salad, etc. only since 1660.[229-9] Even in +France, the finer kinds of fruits have appeared on the tables of the +middle class only since the beginning of the last century. + +The per capita consumption of wool in England, about a generation ago, +amounted to about 4 lbs. a year; in Prussia to 1.67; of cloth, to 5.76 +and 2.17 ells; of leather, to 3.03 and 2.22 lbs. respectively.[229-10] +Of silk goods, England consumes half as much as the rest of all Europe, +and an Englishman from 5 to 6 times as much as a Frenchman, although +England does not produce a single pound of raw silk.[229-11] + + [Footnote 229-1: Thus, for instance, the modern enjoyments + of coffee, tea, newspapers, tobacco etc., promote + domesticity with which antiquity was so little acquainted. + _Zaccharia_, Vierzig Bücher, VI, 60.] + + [Footnote 229-2: The food of the French people has improved + also in point of quantity. At the beginning of the + eighteenth century, of cereals there were 472 liters per + capita, at present there are 541 liters; and in addition, + now, 240 liters of potatoes and vegetables more than then. + Compare _Moreau de Joannès_, Statistique de l'Agriculture de + la France, 1848, and the same writer's Statistique céréale + de la France, in the Journal des Economistes, 1842, Janv. On + the recent decrease or increase in the consumption of meat, + see the very different estimates of _M. Chevalier_, Cours., + I, 113 seq., and Journal des Economistes, Mars, 1856, 438 + ff.] + + [Footnote 229-3: _Ch. Smith_, Tracts on the Corn Trade, + 1758, 182. _Eden_, State of the Poor, I, 563, seq. In + _McCulloch_, Statist, I, 316, 466 ff., 548. Moreover, + _Rogers_ says that English workmen in the middle ages, for + the most part, consumed wheat bread. (Statist. Journal, + 1864, 73.) About the middle of the 13th century, only from + 11 to 12 _malters_ of wheat were produced on the estates of + the bishop of Osnabrück; about 470 of oats, 300 of rye, and + 120 of barley. (_J. Möser_, Osnabrück, Gesch., Werke, VII, + 2. 166.) Even beer was brewed from oats in the earlier part + of the middle ages. (_Guérard_, Polyptiques, I, 710 ff.) The + ancients, also, in their lower stages of civilization, lived + on barley bread by way of preference, and went over to wheat + only at a later period; compare _Plin._, H. N. XVIII, 14. + _Heracl._, Pont, fr. 2. _Athen._, IV., 137, 141. _Plutarch_, + Alcib., 23. As to how, in Rome, the transition from _far_ to + the much more costly _triticum_, was connected with the + extension of the hide of land from 2 to 7 _jugera_, see _M. + Voigt_ in the Rhein. Museum f. Philol., 1868.] + + [Footnote 229-4: To this, in Saxony, must be added about + from 6 to 7 pounds of veal and mutton. The recent increase + in the consumption of meat in Saxony is very encouraging: + 1840, about 30 lbs. of beef and pork per capita; 1851-57, 40 + lbs. (Sächs. Statist. Ztschr., 1867, 143 seq.) On the other + hand, _Schmoller_ estimated the consumption of meat in + general in Prussia, in 1802, at 33.8; in 1816, at 22.5; in + 1840, at 34.6; in 1867, at 34.9 lbs. (_Fühling_, N. Landw. + Zeitg., XIX; Jahrg. Heft., 9 seq.) Paris consumed, in 1850, + 145 pounds of butcher's meat per capita; in 1869, 194 + pounds. In the year of the revolution, 1848, the consumption + declined 45 per cent.; the consumption of wine in barrels, + 16 per cent.; in bottles, 44 per cent.; of sea-fish, 25 per + cent.; of oysters, 24 per cent.; of beer, 20 per cent.; of + eggs, 19 per cent.; of butter, 13 per cent.; of fowl, 6 per + cent. (_Cl. Juglar_, in the Journal des Economistes, March, + 1870.)] + + [Footnote 229-5: _Porter_, Progress of the Nation, V, 5, 591 + ff.; _Hildesheim_, Normaldiet, 52 ff. Well-known English + popular song: "Oh, the roast beef of old England" etc. Even + at the end of the 17th century one-half of the nation + partook of fresh meat scarcely once or twice a week; most of + that consumed was salted. (_Macaulay_, History of England, + ch. 3.) But even _Boisguillebert_, Traité des Grains, II, 7, + characterizes the English as great beer-drinkers and + meat-eaters, from the highest class to the lowest, while the + French consumed almost nothing but bread. Similarly _J. J. + Becher_, Physiologie, 1678, 202, 248, on the great + consumption of meat and sugar in England.] + + [Footnote 229-6: _Anderson_, Origin of Commerce, a. 1743; + _Porter_, Progress, V, 4, 350 ff.; Meidinger, 154 ff.; + Memorandum respecting British Commerce, etc., before and + since the Adoption of Free Trade, 1866. On men-of-war each + man gets 35-45 lbs. a year; in the poorhouse, old men + 22-3/4. (_Porter._)] + + [Footnote 229-7: In Henry IV.'s time, in France, sugar was + sold by the apothecaries by the ounce!] + + [Footnote 229-8: _Deiterici_, Statist. Uebersicht des + Verkehrs, etc. im Zollvereine, 4; Fortsetzung, 168 ff., 208, + 265, 599. Thus, in Great Britain, the population between + 1816 and 1828 grew, from 13-1/2 million to nearly 16 + million. On the other hand, consumption, when the average + from 1816 to 1819 is compared with that from 1824 to 1828, + increased in a much greater proportion: soap, from 67-3/4 to + 100 million pounds; coffee, from 7,850,000 to 12,540,000 + pounds; starch, from 3-1/5 to 6-1/3 million pounds. (Quart. + Rev., Nov., 1829, 518.) The consumption of tea per capita in + 1801 was 1.5 lbs., in 1871, 3.93 lbs. (Statist. Journ., + 1872, 243.) In the matter of illumination, a very beneficent + luxury has been obtained, inasmuch as, spite of the fact + that gas-light is so generally used in recent times, i. e., + since 1804, the consumption of oil has very much increased, + on account of the lamps now so much in favor; and that of + candles also has increased, relatively speaking, more + rapidly than the population. The illumination produced is + much richer now than formerly, a fact which, besides its + sanitary advantages, has had a good influence in diminishing + street robberies. (_Julius_, Gefängnisskunde, XXII.) During + the middle ages, candles were very dear; according to + _Rogers_ (I, 415) 1-1/3 to 2 shillings per pound.] + + [Footnote 229-9: Present state of England, 1683, III, 529; + compare _Storch_, Handbuch, II, 337 seq.] + + [Footnote 229-10: _Dieterici_, Statist. Uebersicht, 321 ff., + 363, 399.] + + [Footnote 229-11: _Bernouilli_, Technologie, II, 223. It is + a striking symptom of the wealth or ostentation of the later + period of the Empire that, according to _Ammian. Marcell_, + (XXIII, 258-ed. Paris, 1636) silk goods were a want even + among the lower classes, notwithstanding the fact that they + had to be imported from China.] + + +SECTION CCXXX. + +EQUALIZING TENDENCY OF LATER LUXURY. + +The whole social character of this luxury has something +equalizing[230-1] in it; but it supposes particularly that there is not +too marked a difference in the resources of the people. + +A proper gradation of national wants is best guarantied by a good +distribution of the national resources.[230-2] The more unequal the +latter is, the more is there spent on vain wants instead of on real +ones; and the more numerous are the instances of rapid and even immoral +consumption. Where there are only a few over-rich men, more foreign +products and products of capital are wont to be called for than home +products and productions of labor; and luxury especially despises all +those commodities manufactured in large institutions.[230-3] Every +change in the consumption-customs of a people, in this respect, should +be most carefully observed; thus, for instance, whether brandy is +exchanged for beer, tobacco for meat, cotton for cloth, or the +reverse.[230-4] + +One of the characteristics of this period is the endeavor to possess the +best quality of whatever is possessed at all, and to be satisfied with +less of it rather than purchase more of an inferior quality. This is, +essentially, to practice frugality, inasmuch as certain +production-services remain the same whether the commodity is of the best +or the worst quality, and that commodities of the best quality are more +superior to the worst in intrinsic goodness than they are in price. But +this course supposes a certain well-being already existing. + +In this period, also, the luxury of the state is wont to take the +direction of those enjoyments which are accessible to all.[230-5] + + [Footnote 230-1: Formerly the dress of citizens was a weak + imitation of the court costume: at present the reverse is + the case, and the court costume is only a heightening of the + citizen costume. Compare _Riehl_, Bürgerl. Gesellschaft, + 191.] + + [Footnote 230-2: _Helvetius_, De l'Homme, 1771. sec. VI, ch. + 5.] + + [Footnote 230-3: _J. B. Say_, Traité, II, 4; _Sismondi_, N. + P., IV, ch. 4. As early a writer as _Lauderdale_, Inquiry, + 358 ff., thought the social leveling of modern times would + promote English industry. In the East Indies, on the other + hand, only the most expensive watches, rifles, candelabras + etc. were sold, because the nabobs were the only persons who + created any demand for European commodities (312 ff.). _Adam + Smith_, Wealth of Nat., II, ch. 3, draws a very correct + distinction between the luxury of durable goods and that of + those which perish rapidly; the former is less calculated to + impoverish an individual or a whole nation; and hence it is + much more closely allied to frugality. Similarly even + _Isocrates_, ad Niccol., 19; _Livy_, XXIV, 7; _Plin._, H. + N., XIII, 4; _Mariana_, 1598, De Rege et Regis Institutione, + III, 10; _Sir W. Temple_, Works, I, 140 seq., who found this + better kind of luxury in Holland: _Berkeley_, Querist, No. + 296 ff.] + + [Footnote 230-4: _Schmoller_, loc. cit., considers it no + favorable symptom, that in Prussia, between 1802 and 1867, + the per capita consumption of milk decreased and that of + wool increased. According to _L. Levi_, the consumption of + brandy in England decreased from 1854 and 1870, from 1.13 to + 1.01 gallons per capita; but, on the other hand, the + consumption of malt increased from 1.45 to 1.84 bushels, and + the consumption of wine from 0.23 to 0.45 gallons. The + number of licenses to retail spirituous liquors was, in + 1830, 6.30 per thousand of the population; in 1860-69, only + 5.57. (Statist. Journal, 1872, 32 ff.)] + + [Footnote 230-5: Compare _Cicero_, pro Murena, 36. The + Athenians under Pericles, in times of peace, spent more than + one-third of their state-income on plastic and architectural + works of art. The annual state-income amounted to 1,000 + talents (_Xenoph._, Exp. Cyri, VII, 1, 27), while the + propylea alone cost, within 5 years, 2,012 talents. + (_Böckh_, Staatsh., I, 283.) On the other hand, + _Demosthenes_ complains of the shabbiness of public + buildings, and the magnificence of private ones in his time. + (adv. Aristocr., 689, Syntax., 174 seq.) + + _Demetrius Phalereus_ blames even Pericles, on account of + his extravagance on the propylea, although Lycurgus had + been, not long before, addicted to luxury after the manner + of Pericles. (_Cicero_, De Off., II, 17.)] + + +SECTION CCXXXI. + +THE ADVANTAGES OF LUXURY. + +The favorable results which many writers ascribe to luxury in general +are true evidently only of this period. And thus luxury, inasmuch as it +is a spur to emulation, promotes production in general; just as the +awarding of prizes in a school, although they can be carried away only +by a few, excites the activity of all its attendants. A nation which +begins to consume sugar will, as a rule, unless it surrenders some +previous enjoyment, increase its production.[231-1] In countries where +there is little or no legal security, in which, therefore, people must +keep shy of making public the good condition they are in, this +praise-worthy side of luxury is for the most part wanting.[231-2] + +All rational luxury constitutes a species of reserve fund for a future +day of need. This is especially true of these luxuries which take the +form of capital in use (_Nutzkapitalien_.) Where it is customary for +every peasant girl to wear a gold head-dress,[231-3] and every +apprentice a medal, a penny for a rainy day is always laid by among the +lower classes. The luxury which is rapidly consumed has a tendency in +the same direction. Where the majority of the population live on +potatoes, as in Ireland, where, therefore, they are reduced to the +smallest allowance of the means of subsistence, there is no refuge in +case of a bad harvest. A people on the other hand, who live on wheat +bread may go over to rye bread, and a people who live on rye bread to +potatoes. The corn that in good years is consumed in the making of +brandy may, in bad years, be baked into bread.[231-4] And the oats +consumed by horses kept as luxuries may serve as food for man. +Pleasure-gardens (_Lustgärten_) may be considered as a kind of last +resort for a whole people in case of want of land.[231-5] [231-6] + + [Footnote 231-1: Compare _Benjamin Franklin's_ charming + story, Works I, 134 ff.; ed. Robinson. _Colbert_ recommended + luxury chiefly on account of its service to production.] + + [Footnote 231-2: Turkish magnates who keep several + magnificent equipages ride to the sultan's in a very bad + one. Risa Pascha, when at the height of his power, had his + house near a villa of the sultan painted in the plainest and + most unsightly manner possible. The walls of a park in + Constantinople painted half in red and half in blue, to give + it the appearance of being two _gardens_. (Alg. Zeitung, 16 + Juli, 1849.) In Saxony, between 1847 and 1850, the number of + luxury horses diminished from 6.11 to 5.64 per cent. of the + total number of horses in the kingdom. (_Engel_, Jahrbuch, + I, 305.) In the same country there were coined in 1848 over + 64,000 silver marks, derived from other sources than the + mines. (_Engel_, Statis. Zeitschr. I, 85.) In England, on + the other hand, the number of four-wheeled carriages + increased more than 60 per cent. between 1821 and 1841, + while the population increased only 30 per cent. (_Porter_, + Progress, V, 3, 540.)] + + [Footnote 231-3: Such a head-dress may very easily be worth + 300 guldens in Friesland. Gold crosses worn by the peasant + women about Paris. (_Turgot_, Lettre sur la Liberté du + Commerce des Grains.)] + + [Footnote 231-4: So far it is of some significance, that + nearly all not uncivilized nations use their principal + article of food to prepare drinks that are luxuries. Thus, + the Indians use rice, the Mexicans mais, the Africans the + ignam-root. It is said that in ancient Egypt, beer-brewing + was introduced by Osiris. (_Diodor._, I, 34.) Compare + _Jeremy Bentham_, Traité de Législation, I, 160. _Malthus_, + Principle of Population, I, ch. 12; IV, ch. 11.] + + [Footnote 231-5: While in thinly populated North America, + space permits the beautiful luxury in cemeteries of + ornamenting surroundings of each grave separately (_Gr. + Görtz_, Reise, 24), the Chinese garden-style seeks to effect + a saving in every respect. In keeping with this is the fact + that animal food has there been almost abolished. Compare, + besides, _Verri_, Meditazioni, XXVI, 3.] + + [Footnote 231-6: _Garve_ thinks that luxury, when it takes + the direction of a great many trifles, little conveniences, + etc., has the effect of distracting the people. Here there + are few men of towering ambition or of inextinguishable + revenge, but at the same time, few entirely unselfish and + incorruptible patriots. (_Versuche_, I, 232.)] + + +SECTION CCXXXII. + +LUXURY IN DECLINING NATIONS. + +In declining nations, luxury assumes an imprudent and immoral character. +Enormous sums are expended for insignificant enjoyments. It may even be +said that costly consumption is carried on there for its own sake. The +beautiful and the true enjoyment of life makes place for the monstrous +and the effeminate. + +Rome, in the earlier part of the empire, affords us an example of such +luxury on the most extensive scale.[232-1] Nero paid three hundred +talents for a murrhine vase. The two acres (_Morgen_) of land which +sufficed to the ancient citizens for a farm (_Acker_) were not now +enough to make a fish-pond for imperial slaves. The sums carried by the +exiles with them, to cover their traveling expenses and to live on for a +time, were now greater than the fortunes of the most distinguished +citizens had been in former times.[232-2] There was such a struggle +among the people to surpass one another in procuring the freshest +sea-fish that, at last, they would taste only such as they had seen +alive on the table. We have the most exalted descriptions of the +beautiful changes of color undergone by the dying fish; and a special +infusion was invented to enable the epicure better to enjoy the +spectacle.[232-3] Of the transparent garments of his time, Seneca says +that they neither protected the body nor covered the nakedness of +nature. People kept herds of sheep dyed in purple, although their +natural white must have been much more agreeable to any one with an eye +for the tasteful.[232-4] Not only on the roofs of houses were fish-ponds +to be seen, but gardens even hanging on towers, and which must have been +as small, ugly and inconvenient as they were costly.[232-5] Especially +characteristic of the time was the custom of dissolving pearls in wine, +not to make it more palatable, but more expensive.[232-6] The emperor +Caligula, from simple caprice, caused mountains to be built up and cut +away: _nihil tam efficere concupiscebat, quam, quod posse effici +negaretur_.[232-7] This is the real maxim of the third period of luxury! +People changed their dress at table, inconvenient as it was to do so, +occasionally as often as eleven times. Perfumes were mixed with the wine +that was drunk, much as it spoiled its taste, only that the drinkers +might emit sweet odors from every pore. There were many so used to being +waited on by slaves that they required to be reminded by them at what +times they should eat and when they should sleep. It is related of one +who affected superiority over others in this respect, that he was +carried from his bath and placed on a cushion, when he asked his +attendant: "Am I sitting down now?"[232-8] It is no wonder, indeed, that +an Apicius should reach out for the poisoned cup when his fortune had +dwindled to only _centies sestertium_, _i. e._, to more than half a +million thalers.[232-9] + +In this last period, the coarse debauchery of the earlier periods is +added to the refined. Swarms of servants, retinues of gladiators who +might be even politically dangerous,[232-10] monster banquets, at which +Cæsar, for instance, entertained the whole Roman people, colossal +palaces such as Nero's _aurea domus_, which constituted a real city; +annoying ostentation in dress[232-11] again becomes the order of the +day. The more despotic a state becomes, the more is the craving for +momentary enjoyment wont to grow; and for the same reason that great +plagues diminish frugality and morality.[232-12] + + [Footnote 232-1: _Meierotto_, Sitten und Lebensart des + Römer, II, 1776; _Boettiger_, Sabina, II, 1803; + _Friedländer_, Darstellungen aus der Sittengeschichte Roms, + Bd. III, 1868; which latter work has been written with the + aid of all that modern science can afford.] + + [Footnote 232-2: _Plin._, H. N., XXXVII, 7; XVIII, 2; + _Seneca_, Quaest. Natur., I, 17; Consol. ad. Helviam, 12.] + + [Footnote 232-3: _Seneca_, Quaest. Natur., III, 18; _Plin._, + H. N., IX, 30.] + + [Footnote 232-4: _Seneca_, De Benef., VII, 9; _Plin._, N. + N., VIII, 74.] + + [Footnote 232-5: _Valer. Max._, IX, 1; _Seneca_, Epist, 122. + Thus Hortensius sprinkled his trees with wine. _Macrob._, + Sat., III, 13.] + + [Footnote 232-6: Besides Cleopatra, Caligula especially did + this frequently. Compare also _Horat._, Serm., II, 3, 239 + ff. Similarly, the luxury of the actor Aesopus, when he + placed a dish worth 6,000 _louis d'or_ before his guests, + consisting entirely of birds which had been taught to sing + or speak. _Pliny_, H. N., X, 72. Compare _Horat._, loc. + cit., 345.] + + [Footnote 232-7: _Sueton._., Caligula, 37. _Hoc est luxuriae + propositum, gaudere perversis. Seneca_., Epist., 122. + According to the same letter of Seneca, the luxury of Nero's + time had its source rather in vanity than in sensuality and + gluttony.] + + [Footnote 232-8: _Martial_, V, 79; _Plin_., H. N. XIII, 5. + _Seneca_, De Brev. Vitæ. I, 12.] + + [Footnote 232-9: _Seneca_, Cons. ad Helviam 10, _Martial_, + III, 22.] + + [Footnote 232-10: Hence, early limited by law. _Sueton._. + Caes. 10. Augustus limited the exiles to taking 20 slaves + with them: _Dio Cass._ VII, 27. Special value attached to + dwarfs, buffoons, hermaphrodites, eunuchs, precisely as + among the moderns in the times of the degenerated absolutist + courts, the luxury of which is closely allied in many + respects to that of declining nations.] + + [Footnote 232-11: Caligula's wife wore, on ordinary + occasions, 40,000,000 sesterces worth of ornaments. _Plin._ + H. N. IX, 58.] + + [Footnote 232-12: _Gibbon_, History of the Decline and Fall + of the Roman Empire, ch. 27. What a parallel between this + later Roman luxury and the literary taste represented for + instance by Seneca! + + Let any one who would embrace the three periods of luxury in + one view, compare the funeral ceremonies of the Greek age of + chivalry (_Homer_, Il.), with those in _Thucyd._ (II, 34, + ff.), _Demosth._ (Lept., 499 seq.), and the interment of + Alexander the Great and, of his friend Hephaestion + (_Diodor._, XVII, 115, XVIII, 26 ff.) Sullas (Serv. ad + _Virgil_, Æneid VI, 861. _Plutarch_, Sulla, 38), and that of + the wife of the emperor Nero (_Plin._, H. N. XII, 41). + _Roscher_, loc. cit. 66 ff.] + + +SECTION CCXXXIII. + +LUXURY-POLICY. + +Sumptuary laws (_die Luxusgesetzgebung_) have been aimed, at all times, +principally at the outlay for clothing, for the table and for +funerals.[233-1] In most nations the policy of luxury has its beginning +in the transition from the first to the second period of luxury above +described.[233-2] The extravagant feasts, which remain of the first +period, seem vulgar to the new public opinion which is created. On the +other hand, the conveniences of life, the universality, the refinement +and variety of enjoyments characteristic of the second period are not +acceptable to the austerity of old men, and are put down as effeminacy. +In this period the bourgeoisie generally begin to rise in importance, +and the feudal aristocracy to decay. The higher classes see the lower +approximate to them in display, with jealous eyes. And, hence, dress is +wont to be graded in strict accordance with the differences of +class.[233-3] But these laws must be regarded as emanating from the +tendency, which prevails in these times, of the state to act as the +guardian of its wards, its subjects. The authority of the state waxes +strong in such periods; and with the first consciousness of its power, +it seeks to draw many things into its sphere, which it afterwards +surrenders. + + [Footnote 233-1: Which of these three kinds of luxury + specially preponderated has always depended on the + peculiarities of national character. Thus, among the ancient + Romans, it was the second; among the French, the first. In + Germany the prohibitions relating to "toasts," or drinking + one another's health have played a great part. Thus the + well-known Cologne reformation of 1837. Compare _Seb. + Münster_, Cosmogr., 326.] + + [Footnote 233-2: In Greece, _Lycurgus'_ legislation seems to + have contained the first prohibition relating to luxury. No + one should own a house or household article which had been + made with a finer implement than an ax or a saw; and no + Spartan cook should use any other spice than salt and + vinegar. (_Plut._, De Sanitate, 12; _Lycurg._, 13. On + Periander, see _Ephorus_, ed. _Marx_, fr. 106. _Heracb._, + Pont. ed.; _Köhler_, fr. 5; _Diog. Laert._, I, 96 ff.) The + luxury-prohibitions of Solon were aimed especially at the + female passion for dress and the pomp of funerals. Those who + had the surveillance of the sex watched also over the luxury + of banquets. _Athen._, VI, 245; _Demosth._ in _Macart._, + 1070. In Rome, there were laws regulating the pomp of and + display at funerals, dating from the time of the Kings; but + especially are such laws to be found in the twelve tables. + Lex Oppia de Cultu Mulierum in the year 215 before Christ. A + very interesting debate concerning the abolition of this law + in _Livy_, XXXIV, 1 ff. About 189, prohibition of several + foreign articles of luxury. _Plin._, H. N., XIII, 5, XIV, + 16. Measures of Cato the censor. (_Livy_, XXXIX, 44.) First + law relating to the table, L. Orchia, in the year 187; + afterwards L. Fannia, 161, L. Didia, 143 before Christ. + (_Macrob._, Sat. V, 13; _Gellius_, N. A., II, 24. _Plin._, + H. N., X, 7.) After a long pause, sumptuary laws relating to + food, funerals and games of chance, constitute an important + part of Sulla's legislation.] + + [Footnote 233-3: _Latus clavus_ of the Roman senators; + _annulus_ of the knights. In the latter middle age, the + knights were wont to be allowed to wear gold, and esquires + only silver; the former, damask; the latter, satin or + taffeta; but when the esquires also used damask, velvet was + reserved for the knights alone. _St. Palaye_, Das + Ritterwesen, by _Klüber_, IV, 107; II, 153 seq. But towards + the end of the middle ages many sumptuary laws were enacted + in cities by plebeian jealousy of the rich. The Venetian + sumptuary laws were passed on account of the anxiety of the + state that some rich men might shine above the rest of the + oligarchs.] + + +SECTION CCXXXIV. + +HISTORY OF SUMPTUARY LAWS. + +As in Italy, Frederick II., in Aragon, Iago I., in 1234, in England, +Edward III., by 37, Edward III., c. 8 ff., so in France Philip IV. was +the first who busied himself seriously with sumptuary legislation;[234-1] +that is the same king who had introduced in so many things the modern +political life into France. (For instance, the ordinance of 1294, +regulating apparel and the luxury of the table.) In the 14th century, we +find sumptuary laws directed mainly against expense for furs, and in the +16th mainly against that for articles of gold and silver. From the +descriptions left us in such laws of the prohibited luxuries, we may learn +as much of the history of technology and of fashion, as we may of the +history of classes from the gradation of the things permitted. The fines +imposed for violations of these laws, under Philip IV. went for the most +part to the territorial lord; and in the 16th and 17th centuries to the +foundation of charitable institutions. The state, as a rule, took no share +of them; doubtless to avoid the odium which might attach to this kind of +revenue. + +Beginning with the end of the 16th century, the sumptuary laws of France +relating to the luxuries permitted to the several classes of the people +disappear. The legislator ceases to be guided by moral considerations +and begins to be influenced by reasons partaking of a commercial and +police character; and here we may very clearly demonstrate the origin of +the so-called mercantile or protective system. Thus, in the declaration +of Louis XIV. dated December 12, 1644, we find a complaint, that not +only does the importation of foreign articles of luxury threaten to rob +France of all its gold and silver, but also that the home manufacture of +gold cloth, etc., which at Lyons alone ate up 10,000 livres a week, had +the same effect. Under Colbert, in 1672, it was specially provided for, +in the prohibition of coarser silver ware, that all such ware should be +brought to the mint.[234-2] In the edict of 1660, the king even says +that he has in view especially the higher classes, officers, courtiers, +etc., in whom it was his duty to be most deeply interested. To preserve +the latter from impoverishment was the main object of the law. + +Under Louis XV. all sumptuary laws were practically a dead +letter.[234-3] Their enforcement is, indeed, exceedingly difficult, as +it is always harder to superintend consumption than production. The +latter is carried on in definite localities, not unfrequently even in +the open air. The former is carried on in the secrecy of a thousand +homes. Besides, sumptuary laws have very often the effect to make the +forbidden fruit all the sweeter. Where they are based on a difference of +class, not only the passion for pleasure, but the vanity of the lower +classes is an incentive to their violation.[234-4] Spite of the severity +of the penalties attached to the violation of these laws, of redoubled +measures of control, which are dreadful burdens on the intercourse +between man and man,[234-5] the French government has been compelled to +admit, after almost every internal commotion, and almost every external +war, that its sumptuary laws fell into disuse. + + [Footnote 234-1: Ordonnances de France, I, 324, 531. Worms + law of 1220. (_Riehl_, Pfälzer, 246.) Braunschweig law of + 1228, that at weddings there should not be over 12 plates + nor more than three musicians. (_Rehtmeyer_, Chron., 466.) + Danish sumptuary law of 1269. First law regulating dress in + Prussia in 1269. (_Voigt_, Gesch. von Preussen, V, 97.) On + Henry II., see _v. Raumer_, Hohenstaufen, VI, 585. Some of + the earlier restrictions on luxury, such as that of 190 in + England and France, against scarlet ermine, etc., may have + been related to the religious fervor of the crusades. _St. + Louis_, during the whole period of his crusades wore no + articles of luxury.] + + [Footnote 234-2: The English prohibition against the wearing + of silk on hats, caps, stockings etc. (1 and 2 Phil. and + Mary, ch. 2.) was promulgated with the intention of + promoting the home manufacture of wool. And so _Sully_, + Economics, L, XII, XVI, was in favor of laws regulating + outlay mainly from "mercantilistic" reasons, that the + country might not be impoverished by the purchase of foreign + expensive articles. The police ordinance of the Empire of + 1548, tit. 9, desired to guard against both the "excessive" + exportation of money and the obliteration of class + differences; that of 1530, tit. 9, and the Austrian police + ordinance of Ferdinand I. had only the second object in + view. (_Mailath_, Gesch., von Oesterreich, II, 169 ff.) How, + in Denmark, prohibitions of luxury grew very soon into + prohibitions of imports with a protective intention, see in + _Thaarup_, Dänische Statistik, I, 521 seq. On the + mercantilistic object of the greater number of prohibitions + of coffee, in the 18th century, see _Dohm_, über + Kaffeegesetzgebung, in the D. Museum, Bd., II, St. 8, No. + 4.] + + [Footnote 234-3: _Des Essart_, Dictionnaire universel de + Police, VI, 146. In Great Britain, the Scotch luxury-law of + 1621 is the last. (_Anderson_, Origin of Commerce, a. 1621.) + In Germany, there were some such laws until the end of the + 18th century; and the laws regulating mourning have lasted + longest. Compare that of Frederick the Great of 1777, the + Bamberg and Wurzberg laws of 1784, in _Schlözer_, + Staatsanzeigen, IX, 460; fol. 141 ff. There are many men who + have no desire to go to any heavy expense in mourning, but + do not dare to give expression thereto in certain cases, and + therefore look with favor on a law to which they may appeal + as an excuse.] + + [Footnote 234-4: Compare _N. Montaigne_, 1580, Essais, I, + 63. A striking instance in antiquity: _Macrob._, II, 13; + most recently in _Lotz_, Revision, I, 407.] + + [Footnote 234-5: Compare especially the French sumptuary law + of 1567. Zaleucos went so far in his severity as to punish + with death the drinking of unmixed wine, without the + prescription of a physician. (_Athen._, IX, 429.) The effort + has sometimes been made to enlist the feeling of honor of + the people in the controlling of luxury. Thus old Zaleucos + forbade the wearing of gold rings or Milesian cloth unless + the wearer desired to commit adultery, or to be guilty of + sins against nature (_Diodor._, XII, 21); but such laws are + scarcely attended with success.] + + +SECTION CCXXXV. + +DIFFICULTY OF ENFORCING SUMPTUARY LAWS. + +The impossibility of enforcing sumptuary laws has been most strikingly +observed, where it has been attempted to suppress the consumption of +popular delicacies in the first stages of their spread among the people. +Thus, an effort was made in this direction in the sixteenth century, as +regards brandy; in the seventeenth, as regards tobacco; in the +eighteenth, as regards coffee; all which three articles were first +allowed to be used only as medicines.[235-1] When governments discovered +after some time the fruitlessness of the efforts, they gave up the +prohibition of these luxuries and substituted taxes on them +instead.[235-2] Thus an effort was made to combine a moral and a fiscal +end. But it should not be lost sight of that the lower these taxes are, +the greater the revenue they bring in; that is, the less the moral end +is attained, the more is the fiscal end. Even Cato took this course. His +office of censor, which united the highest moral superintendence with +the highest financial guidance, must of itself have led him in this +direction.[235-3] In modern times the most important excises and +financial duties of entry have been evolved out of sumptuary laws. Even +the Turks, after having long tried to prohibit tobacco-smoking in vain, +afterwards found in the duties they imposed on that plant a rich source +of income. That such taxes are among the best imposed, where they do not +lead to frauds on the government, become excessive, or diminish +consumption to too great an extent, is universally conceded. + +Beyond this there is, on the whole, little left of the old police +regulations relating to luxury. Thus, governmental consent is, in most +countries, required for the establishment of places where liquors are +sold at retail, for the maintenance of public places of amusement, for +shooting festivals, fairs, etc.; and this consent should not be too +freely granted. The police power prescribes certain hours at which +drinking places shall be closed. Games of chance are wont to be either +entirely prohibited or restricted to certain places and times (bathing +places), or are reserved as the exclusive right of certain institutions, +especially state institutions. The object of this is, on the one hand, +to facilitate their supervision, and on the other, to diminish the +number of seductive occasions. Here, too, belongs the appointment of +guardians to spendthrifts, which is generally done on the motion of the +family by the courts; but which, indeed, occurs too seldom to have any +great influence on the national resources, or on national morals.[235-4] + + [Footnote 235-1: Hessian law that only apothecaries should + retail brandy, 1530. English tobacco laws of 1604; _Rymer_, + Foedera, XVI, 601. Papal excommunication fulminated in + 1624, against all who took snuff in church, and repeated in + 1690. A Turkish law of 1610 provided that all smokers should + have the pipe broken against their nose. A Russian law of + 1634, prohibiting smoking under penalty of death. In + Switzerland, even in the 17th century, no one could smoke + except in secret. Coffee had a hard struggle even in its + native place. (_Ritter_, Erdkunde, XIII, 574 ff.) Prohibited + in Turkey in 1633, under pain of death. _v. Hammer_, + Osmanische Staatsverwaltung, I, 75. In 1769, coffee was + still prohibited in Basel, and was allowed to be sold by + apothecaries only, and as medicine. (_Burkhardt_, C. Basel, + I, 68.) Hanoverian prohibition of the coffee trade in the + rural districts in 1780: _Schlözer_, Briefwechsel, VIII, 123 + ff.] + + [Footnote 235-2: According to _v. Seckendorff_, + Christenstaat, 1685, 435 seq., a decidedly unchristian + change.] + + [Footnote 235-3: _Livy_, XXXIX, 44. In Athens, too, the + highest police board in the matter of luxury was the + areopagus, which was at the same time a high financial + court. Sully transformed the prohibition of luxury in regard + to banquets into a tax on delicacies. Similarly, in regard + to funeral-luxuries, at an earlier date. (_Cicero_, ad. + Att., XII, 35.)] + + [Footnote 235-4: Customary even in the early Roman republic, + and adjudged _exemplo furioso_. (_Ulpian_, in L. 1 Digest, + XXVII, 10.) The immediate knights of the empire were in this + respect very severe towards those of their own order. See + _Kerner_, Reichsrittersch. Staatsrecht, II, 381 ff. _Sully_ + ordered the parliaments to warn spendthrifts, to punish them + and place them under guardianship. (Economies royales, L, + XXVI.) According to _Montesquieu_, it is a genuine + aristocratic maxim to hold the nobility to a punctual + payment of their debts. (Esprit des Lois, V, 8.)] + + +SECTION CCXXXVI. + +EXPEDIENCY OF SUMPTUARY LAWS. + +To judge of the salutariness of sumptuary laws, we must keep the above +three social periods in view throughout. At the close of the first +period, every law which restricts the excesses of the immediately +succeeding age (the middle age) is useful because it promotes the noble +luxury of the second period.[236-1] And so, in the third period, +legislation may at least operate to drive the most immoral and most +odious forms of vice under cover, and thus to diminish their contagious +seduction. It is a matter of significance that, in Rome, the most +estimable of the emperors always endeavored to restrict luxury.[236-2] +But too much should not be expected of such laws. _Intra animum medendum +est; nos pudor in melius mutet._[236-3] It is at least necessary, that +the example given in high places should lend its positive aid, as did +that of Vespasian, for instance, who thus really opposed a certain +barrier to the disastrous flood of Roman luxury.[236-4] + +But a strong and flourishing nation has no need of such leading +strings.[236-5] Where an excrescence has to be extirpated, the people +can use the knife themselves. I need call attention only to the +temperance societies of modern times (Boston, 1803), which spite of all +their exaggeration[236-6] may have a very beneficial effect on the +morally weak by the solemn nature of the pledge, and the control their +members mutually exercise over one another. It is estimated that, of all +who enter them, in the British Empire, at least 50 per cent. remain true +to the pledge. In Ireland the government had endeavored for a long time +to preserve the country from the ravages of alcohol by the imposition of +the highest taxes and the severest penalties for smuggling. Every +workman in an illegal distillery was transported for seven years, and +every town in which such a one was found was subjected to a heavy fine. +But all in vain. Only numberless acts of violence were now added to +beastly drunkenness. On the other hand, the temperance societies of the +country decreased the consumption of brandy between 1838 and 1842, from +12,296,000 gallons to 5,290,000 gallons. The excise on brandy decreased +£750,000; but many other taxable articles yielded so much larger a +revenue, that the aggregate government income there increased about +£91,000.[236-7] [236-8] The Puritanical laws which some of the United +States of North America have passed prohibiting all sales of spirituous +liquors except for ecclesiastical, medical or chemical purposes, have +been found impossible of enforcement.[236-9] [236-10] + + [Footnote 236-1: Commendable laws relating to luxury in + Florence in the beginning of the 15th century. The outlay + for dress, for the table, for servants and equipages was + limited; but, on the other hand, it was entirely + unrestricted for churches, palaces, libraries, and works of + art. The consequences of this legislation are felt even in + our day. (_Sismondi_, Gesch. der Ital. Freistaaten im M. A., + VIII, 261. Compare _Machiavelli_, Istor. Fior., VII, a., + 1472.)] + + [Footnote 236-2: Thus Nerva (_Xiphilin._, exc. Dionis, + LXVIII, 2); Hadrian (_Spartian V. Hadrian_, 22); Antoninus + Pius (Capitol, 12); Marcus Aurelius (Capitol, 27); Pertinax + (Capitol, 9); Severus Alexander (_Lamprid_, 4); Aurelian + (_Lamprid_, 49); Tacitus (_Vopisc_, 10 seq).] + + [Footnote 236-3: Extracted from the remarkable speech made + by the personally frugal Tiberius (_Sueton._, Tib., 34) + against sumptuary laws: _Tacit._, Annal., III, 52 ff. + Compare, however, IV, 63.] + + [Footnote 236-4: _Tacit._, Ann., III, 55: but the + differences in fortune had, at the same time, become less + glaring. Henry IV. also dressed very simply for example's + sake, as did also Sully, and ridiculed those _qui portaient + leurs moulins et leur bois de haute-futaie sur leurs dos_. + (_Péréfixe_, Histoire du Roi Henry le grand, 208.)] + + [Footnote 236-5: The gross luxuries of drunkenness and + gluttony are a direct consequence of universal grossness, + and disappear of themselves when higher wants and means of + satisfying them are introduced. (_v. Buch_, Reise durch + Norwegen und Lappland, 1810, I, 166; II, 112 ff.)] + + [Footnote 236-6: While, formerly, they cared only to abstain + from spirits, the so-called "total abstinence" has prevailed + since 1832. Most teetotallers compare moderate drinking to + moderate lying or moderate stealing; they even declare the + moderate drinker worse than the drunkard, because his + example is more apt to lead others astray, and he is harder + to convert. (But, Psalm, 104, 15!) The coat of arms of the + English temperance societies is a hand holding a hammer in + the act of breaking a bottle. (Temperance poetry!)] + + [Footnote 236-7: _McCulloch_, On Taxation, 342 ff. Speech of + _O'Connell_ in the House of Commons, 27 May 1842. The more + serious crimes decreased 1840-44, as compared with the + average number during the five previous years by 28, and the + most grievous by 50 per cent. (_Rau_, Lehrbuch, II, § 331.) + Recently, the first enthusiasm awakened by Father Matthew + has somewhat declined, and the consumption of brandy + therefore increased. Yet, in the whole United Kingdom in + 1853, only 30,164,000 gallons were taxed; in 1835, + 31,400,000; although the population had in the meantime + increased from 10 to 11 per cent. In 1834, there were in the + United States 7,000 temperance societies with a membership + of 1,250,000. The members of these societies are sometimes + paid higher wages in factories; and ships which allow no + alcohol on board are insured at a premium of five per cent. + less. (_Baird_, History of the Temperance Societies in the + United States, 1837.)] + + [Footnote 236-8: In the princedom of Osnabrück, the number + of distilleries was noticeably diminished under the + influence of the temperance societies; but the consumption + of beer was rapidly increased twenty-fold. (Hannoverisches + Magazin, 1843, 51. _Böttcher_, Gesch. der M. V. in der + Norddeutschen Bundestaaten, 1841.)] + + [Footnote 236-9: Even in 1838, Massachusetts had begun to + restrict the sale at retail. The agitation for the + suppression of the liquor shops begins in 1841. According to + the Maine law of 1851, a government officer alone had the + right to sell liquor, and only for the purposes mentioned in + the text. The manufacture or importation of liquor for + private use was left free to all. A severe system of + house-searching, imprisonment and inquisitorial proceedings + in order to enforce the law. Similarly in Vermont, Rhode + Island, Massachusetts and Michigan. (Edinburg Rev., July, + 1854.) There are, however, numberless instances related in + which the law has been violated unpunished since 1856, and + still more since 1872. See _R. Russell_, North America, its + Agriculture and Climate, and Edinburg Rev., April, 1873, + 404.] + + [Footnote 236-10: From the foregoing, it is intelligible why + most modern writers, even those otherwise opposed to luxury, + are not favorably inclined towards sumptuary laws. "It is + the highest impertinence and presumption in kings and + ministers, to pretend to watch over the economy of private + people and to restrain their expense, either by sumptuary + laws or by prohibiting the importation of foreign luxuries. + They are themselves always, and without any exception (?) + the greatest spendthrifts in the society. If their own + extravagance does not ruin the state, that of their subjects + never will." (_Adam Smith_, I, ch. 3.) Compare _Rau_, + Lehrbuch II, § 358 ff. _R. Mohl_, Polizeiwissenschaft, II, + 434 ff. + + _Montesquieu's_ opinion that in monarchies luxury is + necessary to preserve the difference of class but that in + republics it is a cause of decline, is very peculiar. In the + latter, therefore, luxury should be restricted in every way: + agrarian laws should modify the too great difference in + property and sumptuary laws restrain the too glaring + manifestations of extravagance. (Esprit des Lois, VII, 4.) + As an auxiliary to the history of sumptuary laws, compare + _Boxmann_, De Legibus Romanorum sumptuarias, 1816. _Sempere + y Guarinos,_ Historia del Luxo y de las Leyes sumtuarias de + Espana, II, 1788; _Vertot_, Sur l'Establissement des Lois + somptuaires parmi les Français, in the Mémoires de + l'Academie des Inscr., VI, 737 seq, besides the sections on + the subject in _Delamarre_, Traité de la Police, 1772 ff.; + _Penning_, De Luxu et Legibus sumtuariis, 1826. + (_Holland._)] + + + + +CHAPTER III. + +INSURANCE IN GENERAL. + + +SECTION CCXXXVII. + +INSURANCE IN GENERAL. + +The idea of societies for mutual assistance intended to divide the loss +caused by destructive accidents which one person would not be able to +recover from among a great many is very ancient. The insurance of their +members against causes of impoverishment was one of the principal +elements[237-1] of the strength of the medieval communities (_Gemeinden +und Körperschaften._) If we compare these insurance institutions of the +middle ages with those of the present, we discover the well-known +difference between a _corporation_ and an _association_. There the +members stand to one another in the relation of _persons_ who, +therefore, seek to guaranty their entire life in the one combination; +here, they appear only as the representatives of limited portions of +capital confronted with a definite risk, the average of which may be +accurately determined. Hence, the former are of small extent, mostly +local; the latter may extend over whole continents, and even over the +whole earth. The former have uniformly equal members; the latter embrace +men of the most different classes. While the former, therefore, simply +govern themselves, often only on the occasion of their festive +gatherings, the latter need a precise charter, an artificial tariff and +a board of officers. + +As the absolute monarchical police-state constitutes, generally, the +bridge between the middle ages and modern times, so too the transition +from the medieval to the modern system of insurance has been frequently +introduced by state insurance.[237-2] [237-3] This was very natural at a +time when the guilds of the middle ages had lost their importance, and +private industry was not ripe enough to supply the void left by them. +The government of a country, far in advance intellectually of the +majority of its subjects, may, by force, induce them to participate in +the beneficent effects of insurance, and immediately provide +institutions extensive enough to guaranty real safety. While it may be +called a rule that mature private industry satisfies wants more rapidly, +in greater variety, and more cheaply than state industry; in the case of +insurance against accidents, especially of insurance against fire, there +are many peculiarities found which would make the entire cessation of +the immediate action of the state in this sphere, or its limitation +simply to a legislative and police supervision of insurance, seem a +misfortune. A dwelling is one of the most universal and urgent of wants, +and indeed a governing one in all the rest of the arrangements of life. +If it be destroyed, it is especially difficult to find a substitute for +it, or to restore it. And to the poorest class of those who need +insurance, private insurance will, perhaps, be never properly +accessible.[237-4] If German fire insurance and the German system of +fire prevention be so superior to the English and North American, etc., +one of the principal causes is that German governmental institutions so +powerfully participate in it.[237-5] + + [Footnote 237-1: The Icelandic _repps_ consisting as a rule + of 20 citizens subject to taxation, who mutually insured one + another against the death of cattle (to the extent of at + least one-fourth the value), and against damage from fire. + After every fire three chambers of each house were replaced; + so also the loss of clothing and of the means of + subsistence, but not other goods or articles of display. + (_Dahlmann_, Danisch Gesch., II, 281 ff.) Scandinavian + parish-duty, (_Gemeindepflicht),_ of assistance in case of + damage by fire: _Wilda_, Gesch. des deutschen Strafrechts, + I, 142. Similarly Capitul. a. 779 in _Pertz_, Leges, I, 37. + This matter plays an important part in the guilds out of + which a large portion of the ancient cities were evolved: + compare _Wilda_, Gildenwesen in M. Alter. 123.] + + [Footnote 237-2: Proposed national fire insurance + (_Landesbrandversicherung_) in which for the time being + several villages should form a company, the surplus of which + was to go to the ærarian, and the deficit to be made up by + the same: _Georg Obrecht_, Fünf unterschiedliche Secreta, + Strasburg, 1617, No. 3. A similar proposition made on + financial grounds in 1609, and rejected in Oldenburg. + (_Beckmann_, Beitr. zur Gesch. der Erfind, I, 219 ff.) The + idea sometimes suggested in our day, of making the system of + insurance a government prerogative, arises as much from the + passion for centralization as from socialistic tendencies. + Compare the Belgian Bulletin de la Commission de Statist. + IV, 210, and _Oberländer_, Die Feuerversicherungsanstalten + vor der Ständeversammlung des k. Sachsen, 1857.] + + [Footnote 237-3: Maritime insurance is much older than + insurance against risks on land; the Dutch institutions of + Charles V.'s time seem to have existed long before. + (Richesse de Hollande, I, 81 ff.) On Flemish, Portuguese and + Italian maritime insurance in the 14th century, see + _Sartorius_, Gesch. der Hanse, I, 215; _Schäfer_, Portug. + Gesch. II, 103 ff., and _F. Bald. Pegolotti_, Tratato della + Mercatura in Della decima, etc., della Moneta e della + Mercatura dei Fiorentini, 1765. The class engaged in + maritime commerce are indeed especially and early rich in + capital, speculative and calculating.] + + [Footnote 237-4: In Berlin, in 1871, the movable property of + 30.4 per cent. of all dwellings was insured; but with this + great difference, that of the smallest (without any heatable + rooms) only 5.3 per cent. were insured; while of dwellings + having 5-7 heatable rooms, 84 per cent. had taken this + precaution. (_Schwabe_, Volkszahlung von 1871, 169) But it + should not be forgotten that private insurance, especially + when speculative, is not in favor of having much to do with + persons of small means, while public institutions are, for + the most part, obliged to reject no proposition for + insurance in their own line, except when coming from a few + manufacturing quarters especially exposed to fire.] + + [Footnote 237-5: Outside of Germany, public fire insurance + is to be still found only in German Austria, in Denmark, + Switzerland and Scandinavia. The Germans had, in 1871, an + insurance-sum of 5,908,760,000 thalers, while the mutual + private insurance companies had about 1,435,000,000 (of + which, at most, 200,000,000 to 300,000,000 were on immovable + property), and joint-stock insurance companies, after + deducting re-insurance (_Rückversicherung_), about + 7,000,000,000. (Mittheilungen der öff. F. V. Anstalten, + 1874, 84 ff.) Between 1865 and 1870, it was estimated that + the per capita insurance of the population was: in Saxony, + 407 thalers; in Würtemberg, 410; in Baden, 365; in Prussia, + 332; in Switzerland, 425. On the other hand, in the much + wealthier British Empire, only 325 per capita; in North + America, 215. (loc. cit., 92.) Even in the case of + joint-stock insurance companies, the average receipts of + premiums (1867-70) were, in Germany, 2 per 1,000 of the + insurance-sums; in the United Kingdom, 4.06 per 1,000; in + the United States, 10.77; and the damage respectively 1.25, + 2.28, 5.92 per 1,000 of the insurance-sum. (loc. cit., 93.)] + + +SECTION CCXXXVII (_a_). + +INSURANCE IN GENERAL.--MUTUAL AND SPECULATIVE INSTITUTIONS. + +All insurance institutions fall into two classes: + +A. Mutual insurance companies, in which the insured are also as a +society the insurers, and share the aggregate damage, of a year, for +instance, among themselves. + +B. Speculative institutions, in which a party, generally a joint-stock +company, in consideration of a certain definite compensation (premium +agreed upon and paid in advance), assumes the risk.[237a-1] + +So far as security is concerned, no absolute preference can be accorded +to either of these classes. Mutual insurance companies require to extend +their business very largely[237a-2] to be able to meet great damage. And +even where the liability of the members is unlimited, care must be taken +to distinguish between the legally and the actually possible.[237a-3] +The joint capital of a well organized[237a-4] premium-association +affords, in this respect sufficient security from the first, but the +ratio between its security-fund and the amount of its assumed +liabilities becomes less favorable as the business is extended, in case +the fund itself is not enlarged.[237a-5] Mutual insurance may accomplish +something analogous to that accomplished by a joint-stock fund by +collecting a reserve of yearly dues in advance, thus modifying the +burdensome vacillation of the amount payable each year.[237a-6] +Experience, however, teaches, that the strongest form of mutual +insurance, that supported either by municipalities or by the state, has +been able to meet extraordinary damage from fire much better than +premium-institutions, which are too quickly left in the lurch by the +stockholders when the damage is greater than the amount of the stock +subscribed. So also loss from fire caused by war or riots is for the +most part and on principle, excluded by speculative insurance +institutions.[237a-7] + +In point of cheapness to the insured, mutual insurance seems to have the +advantage, since it contemplates no profit.[237a-8] From a +national-economical point of view, also, it is very much of a question, +whether the active competition of premium institutions, in a sphere +which affords little room for industry proper, is more of a spur to make +them "puff up" their claims (_Reclamen_) or to the simplification of +their administration.[237a-9] However, premium-institutions are more +easily capable of extending the circle of their business;[237a-10] which +of itself decreases the general expenses and strengthens their insuring +power. Premium-insurance supposes a greater development of capitalistic +speculation than does mutual insurance. But, even in the highest stages +of civilization, the competition of some mutual insurance companies is +desirable to protect the insured from a too high rate of profit to the +insurers.[237a-11] [237a-12] And since the principle of mutual insurance +has so little attraction for capitalists in a time like that in which we +live that it can be maintained perhaps only by the support of the state +or of municipalities, we may consider the desirableness of the state's +continuing to participate in some way in the matter of insurance as +established. + + [Footnote 237a-1: We might, however, improperly add another + class, that of self-insurance, which lies in the proper + distribution of a large capital over a great many points. + When, for instance, a large state insures its buildings, + this seems a superfluous outlay of public money for the + benefit of private associations. Or does England insure its + ships? On this account, in Prussia, the insurance of + post-offices which Frederick William favored, has recently + been done away with. (_Stephan_, Gesch. der Preuss. Post, + 195, 803.)] + + [Footnote 237a-2: According to _Brüggemann_ (D. Allg. Ztg., + 1849, No., 75 ff.), 100 million thalers of an insurance-sum. + Actual American legislation prescribes in the case of mutual + insurance a minimum number of members of from 200 to 400, a + minimum amount of annual premiums of from $25,000 to + $200,000, of cash payments on the annual premium of from 10 + to 40 per cent. of cash-paid yearly premiums, $5,000 to + $40,000; and a maximum amount of premium notes made by a + member of $500. (Compare Mittheilungen, 26 ff.)] + + [Footnote 237a-3: Hence several mutual companies limit + themselves to a maximum liability. Thus, for instance, the + Gotha Fire Insurance Company requires from each member a + bond that in case of necessity, four times the amount of the + presumptive contribution paid in advance shall be paid + after; in Altona, six times the yearly premium is the + maximum.] + + [Footnote 237a-4: In France, every premium-insurance-company + has to be approved by the government (Cod. de Comm., art + 37), and the approval is not given until 1/5 of the + joint-stock capital has been deposited. (_Block_, Dictionn. + de l'administration, Fr. 153.) Many recent American laws + require that the shares of insurance companies should be + registered with the name of the owner.] + + [Footnote 237a-5: The Aix-Munich Fire Insurance Association + raised its joint-stock capital after the Hamburg fire from 1 + to 3 million thalers.] + + [Footnote 237a-6: Usually so that the regular yearly + contribution is higher than the average damage and cost of + administration; this excess is then returned in the form of + a dividend, either immediately at the close of the yearly + account, or which is still safer, after several years. In + the Stuttgart private insurance company, the reserve must + amount to one per cent. of the amount insured, before the + premium-surplus is returned. The Gotha fire insurance + company, between 1821 and 1842, paid back an average of 46 + per cent.; and even in 1842, after the Hamburg + conflagration, there was an after-payment of only 98 per + cent. necessary. This collection in advance of a fund for + extraordinary losses is more secure than borrowing in case + of need, and paying back in good years. Thus, the Baden + Landes-Brandkasse had a debt in 1837 of 800,000 florins. + (_Rau_, in the Archiv., III, 320 ff.) In a mutual insurance + company, where entrance and exit are free, this would be + scarcely possible.] + + [Footnote 237a-7: Nearly three-fourths of the public + insurance institutions insure also against fire caused by + war (Mitth., 1874, 85), a matter of importance even as war + is waged in our own days, since in 1870-71, the damage from + fire by the Franco-Prussian war in France was estimated at + 141,000,000 francs. (Mitth., 1873, 33.)] + + [Footnote 237a-8: In Prussia, the mutual fire insurance + companies, in 1865 and 1866 had an administration outlay of + 0.24 and 0.22 per 1,000 of the amount insured; the premium + insurance companies of 0.80 and 0.96; the latter doubtless + including large assessments for common purposes. (Preuss. + Statist. Ztschr., 1868, 269.) In all Germany, the outlay for + administration is, for public institutions, 4 per cent. of + the contributions; for premium institutions, inclusive of + their dividends, 37.1 per cent.; for the more important + French private institutions, even 68.8 per cent. (Mitth., + 1874, 89, 92.)] + + [Footnote 237a-9: German public fire insurance institutions + generally have a territory of their own, in which that + institution is the only one of the kind. On the other hand, + the premium institutions in the whole empire keep about + 80,000 agents, i. e., a number 50 times as large as the + number of officers of the former, (loc. cit. 90.)] + + [Footnote 237a-10: Mutual insurance companies, as they have + extended, have sometimes split up into several; for + instance, the insurance companies against damage by hail at + Lübeck, Güstrow, Schwedt and Griefswald, daughters of that + at New Brandenburg.] + + [Footnote 237a-11: The founder of the Mutual Fire Insurance + Company of Gotha expressed the hope that in it, it would be + possible to insure 60 per cent. cheaper than was customary + in the joint stock companies of the time. In the system of + agricultural _Einzelhöfe_ in Germany, small mutual insurance + companies are possible, and insurance then may be very + cheap.] + + [Footnote 237a-12: On the premium associations, _Bernoulli_ + Ueber die Vorzüge der gegenseitige Brandasscuranzen vor + Prämiengesellschaften, 1827. _Per contra_, _Masius_, Lehre + der Versicherung und Statische Nachweisung aller V. + Anstalten in Deutschland, 1846. In Prussia, premium + associations are growing more rapidly than mutual: the per + capita amount on the whole population insured in the former + against damage from fire in 1861 was 116.6 thalers; in 1866, + 154.2; in 1869, 176.6; in the latter in 1861, 103.5; 1866, + 124.3; 1869, 154.3 thalers. (_Engel_, Statist. Zeitschr., + 1868, 268 ff.; 1871, 284 ff.) In France, in the former, in + 1857, almost 36 milliards of francs; in the latter, in 1864, + 13 milliards. (Mitth., 1871, 51.)] + + +SECTION CCXXXVII (_b_). + +INSURANCE IN GENERAL.--ECONOMIC ADVANTAGES OF INSURANCE. + +The national-economic advantage of insurance consists in this, that the +damage which is divided among many, and which, therefore, is felt but +lightly by each one, is probably made up for, not by an inroad upon the +body of still existing original resources, but by savings made from +income. This, indeed, is unconditionally true only of such damage as +does not depend at all on the will of man, such as, for instance, the +damage caused by hail. On the other hand, there is especially in +maritime[237b-1] and fire insurance,[237b-2] a great temptation to +culpable and even criminal destruction; to the latter, when the object +insured is estimated at too high a value. (Speculation-fires!) And it is +difficult to say whether this drawback or that advantage is the greater. +But, on the other hand, every kind of insurance is attended by good +consequences to the credit of a people. It is of advantage to personal +credit, since it prevents sudden impoverishment; but it is by far more +advantageous to real-credit (_Realcredit_ = _material credit_) the +pledges of which, while their forms may be destroyed, it preserves the +value of; that is their economic essence. This last is most clearly +manifest in the case of public insurance institutions, with compulsory +participation; while in the case of entirely voluntary insurance, the +creditor can never be certain that his debtor has not neglected +something necessary. The aggregate danger is less than the sum of +individual dangers, for the reason that it is more certain, and that +uncertainty of itself is an element of danger.[237b-3] [237b-4] + + [Footnote 237b-1: Even in Demosthenes' oration against + Zenothemis, we may see how easily the analogy of maritime + insurance may lead to criminal destruction of property. + Similar cases mentioned by _Pegolotti_ before the middle of + the 14th century. (Delia Decima dei Fiorentini, III, 132.)] + + [Footnote 237b-2: French experience teaches that during a + commercial crisis there are more fires in mercantile + magazines than at other times; while in times when sugar is + a drug in the market, etc., many sugar factories are burned. + (Dictionnaire de l'Econ. polit, I, 88.) The style of our + house-building and fire-extinguishing institutions is wont + to improve with economic culture. Hence, for instance, in + Mecklenburg, 1651 to 1799, cities burned down, in whole or + in greatest part, 72 times; 1800 to 1850, only once. + (_Boll_, Gesch., von Mecklenb., II, 618 ff.) However, in + many countries the damage caused by fire has largely + increased: in Baden, for instance, by 100,000 florins a + year. Insurance capital, 1809 to 1818, 65 fl.; 1819 to 1828, + 128 fl.; 1829 to 1836, 152 fl. (_Rau_, Archiv, III, 322.) + Similarly in Switzerland. In Bavaria, of every 10,000 + buildings insured, in 1856-60, there were 4.6 fires per + annum; 1861-65, 5.04; 1866-69, 8.67. (Preuss. Statist. + Ztschr., 1871, 315.) + + In Saxony, in 1849-53, there was one fire in every 290 + buildings; 1854-58, in every 201; 1859-63, in every 180. Of + these fires, 68 per cent. of the whole number were from + known causes, i. e., 36.4 per cent. from incendiarism; 28.5 + per cent. from negligence. (Sächs, Statist. Ztschr., 1866, + 106, 115.) Even in antiquity, similar evil consequences + attended the generosity which gratuitously compensated + damage by fire. Compare _Juvenal_, III, 215 ff.; _Martial_, + III, 52. In England, of every 128 cases of damage by fire of + "farming stock," 49 were caused by incendiaries, for the + most part actuated by revenge. Hence, there, a notice is + posted on insured buildings by the insurance companies which + runs: "this farm is insured; the fire office will be the + only sufferer in the event of a fire." In London, of every + seven fires among the small trading class, one is estimated + to have been the work of an incendiary, and of all fires at + least one-third (Athenæum, 2, Nov., 1867), if not one-half + (Mitth., 1879, 100). One of the largest English fire + insurance companies estimates that the introduction of the + lucifer match has caused it a damage of £10,000 per annum. + Of 9,345 fires, 932 were ascribed to gas, 89 to certain, and + 76 to doubtful, incendiarism, 127 to lucifer matches, 8 to + storms, 100 to negligence, 80 to drunkenness, 2,511 to the + catching fire of curtains, 1,178 to candles, 1,555 to + chimneys, 494 to stoves, 1,323 to unknown causes. (Quart. + Rev., Dec, 1854, 14 ff.) Fires originate from criminal + (_dolose_) causes most frequently when a new stage in the + politico-economical development of a people is reached, + which renders the buildings put up in a former and lower + stage of development insufficient.] + + [Footnote 237b-3: A Prussian fire insurance regulation, as + far back as 1720, expressly says: "everybody scruples to + make the least loan on pledged houses in towns." "Every care + shall be taken to make the least possible amount of loans in + cities." (_Jacobi_, in _Engel's_ Zeitschr., 1862, 122.) + _Leib_, Dritte Periode, etc., 1708, cites a proverb to the + effect that, in Hamburg, "no house takes fire;" that is, at + a time that its fire-fund-system (_Brandkassenwesen_) had as + yet found few imitators, _v. Justi's_ proposition to combine + the insurance of houses against fire with a loaning-bank for + houses. (Polizeiwissenschaft, 1756, I, § 7, 8 ff.) In + Russia, in 1815, the loaning bank was the only fire + insurance company, which however assumed risks only on stone + houses at three-fourths of their value in consideration of + 15 per 1,000 annual premium. (_Rau_, Lehrbuch, I, 229.)] + + [Footnote 237b-4: _Spittler_, Politik., 441, objects to + insurance that it diminishes benevolence and approximates to + communism, thus hitting the dark side of all very high + civilization.] + + +SECTION CCXXXVII (_c_). + +FIRE INSURANCE. + +The present system of fire insurance has been introduced in many places by +the establishment of so-called domanial fire-guilds (_Domanial-Brandgilden_), +by which the country population on crown-lands bound themselves to mutually +assist one another by furnishing thatch, and horse and hand power in the +rebuilding of burned houses. Whatever was wanting after this was made up by +gratuitous supplies of wood from the public forests, by the granting of +governmental fire-licenses to beg (_begging letters_), by permission to +have collections made in the churches[237c-1] etc. The next step was +generally the establishment of public insurance (_Landes-Assecuranz_) only +for houses,[237c-2] but with compulsory membership. This compulsion was +justified by the continuing interest of the state in the payment of the +house-tax, as well as by the interest of the eventual owner of the estate, +and of hypothecation-creditors.[237c-3] [237c-4] The insurance of moveable +property is much more recent, both by reason of the nature of the property +itself, which becomes of importance only at a later date, and also on +account of the much greater difficulty of carrying on such +insurance.[237c-5] The thought of making this species of insurance +compulsory, or of turning it over to the state, has seldom been suggested. + + [Footnote 237c-1: Thus in Austria, even after the middle of + the 18th century: _Schopf_, L. W. des öst. Kaiserstaates, I, + p. 175. In the mandate of the electorate of Saxony of Dec. + 7, 1715; but the fire-fund (_Feuerkasse_) of 1729 depended + on voluntary but regular collections, besides which it + obtained certain contributions from the state and the + church. Those who gave nothing, however, were threatened + with getting nothing, or very little, in case of fire. + Parties desiring to rebuild massively had especially much to + expect. (Cod. August Forst., I, 538.) The charters of the + oldest German _Landesbrandkassen_ contain a provision that, + in future, no further fire-collections shall be allowed.] + + [Footnote 237c-2: The English Hand-in-Hand Fire Office for + houses, founded in 1696; the Union Fire O., for houses and + movable property, in 1714: both mutual institutions. The + premium-institution, the Sun Fire Office, 1710 + (_Frankenberg_, Europ. Herold, 1705, II, 181), mentions fire + insurance as a special characteristic of England. But we may + trace fire insurance on buildings and harvest supplies in + the low countries about the Vistula in Prussia, even as far + back as 1623. (_Jacobi_, loc. cit., 131.) Brandenburg + fire-fund, 1705, with voluntary admittance of all houses, + and fixed relation between the yearly contribution and the + insurance capital. If a fire happened, the fund repaired the + damage caused to the fullest extent its means allowed. + (_Mylius_, Corp. Const. March. V., I, 174 seq.) Even in + 1706, it became necessary to prohibit speaking ill of the + institution. It was, therefore, abolished later. The first + Würtemberg private fire insurance company, 1754, founded on + similar principles, and which was still existing in 1760, + had a like fate (_Bergius_, Polizei und Camerelmagazin, III, + 40 ff.), but it was exchanged in 1773 for a mutual public + company. In Berlin a mutual insurance company in 1718 + (_Bergius_, Cameralistenbibliothek, 151); in Denmark, 1830 + (_Thaarup_, Dän. Statist., II, 173 seq.); in Silesia, 1742; + Calenberg-Grubenhagen, 1750; in Baden, 1758; in Kurmark, + 1765; in Hildesheim, 1765; in Hesse-Darmstadt, 1777. In + France, the Parisian institution of 1745 is considered the + oldest. (_Beckmann_, Beitr. z. Gesch. d. Erfindd., I, 218.)] + + [Footnote 237c-3: In Galenberg-Grubenhagen only the + _Bauerhöfe_ subject to the common burthens were obliged to + enter, in Hildesheim, all houses subject to taxation; in + Darmstadt all house-owners who were allowed only a _dominium + utile_. In Kurmark, the subjects of the estate might be + compelled to enter by their lords, but could not be kept + out. Of Prussian companies in 1846, entrance was compulsory + only in those of East Prussia and Posen. In Würtemberg + compulsion since 1773; confirmed in 1853. Also in Zurich, + Jan. 24, 1832; in Schaffhausen Nov. 27, 1835. In Berne, only + for state, municipal and mortgaged houses; for the latter + only so far as it was not expressly left to the creditor. + Introduced into Baden in 1807, after most of the parishes + (_Gemeinden_) had voluntarily accepted it; confirmed in + 1840. The provision that at least no judicial hypothecation + should be made on an un-insured house is found in the + Darmstadt law of 1777, § 13, and in that of Mainz of 1780, + art. I, § 15. _Rau_, Lehrbuch, II, § 25 a., finds compulsion + in the case of property in common and in that of property + belonging to other persons very appropriate. It is a matter + worthy of thought, that, in cities like Berlin, Breslau, + Thorn and Stettin, compulsory fire insurance is still + retained. In Upper Silesia, the abolition of compulsory + provisions has had for effect to cause 52 per cent. of all + buildings to be insured. (Press Zeitschr, 1867, 329).] + + [Footnote 237c-4: Question of introducing state insurance + into Hungary. As a cultured land, and one rich in capital, + is better adapted to insurance, it would be folly to + "emancipate" ones self from Trieste, etc. in this respect. + But, on the other hand, only state-insurance can attract the + Hungarians and make them feel universally the want of + insurance. A reconciliation of these opposing views might be + effected by compelling the peasantry to insure their farm + houses, and allowing complete liberty in the cities and with + reference to movable property.] + + [Footnote 237c-5: Even _Bergins_, Polizei und Cameralmag., + III, 80, 1768 ff., doubts the possibility of the insurance + of movable property. Insurance of movable property of the + Evangelical clergy in the electorate of Mark, in which, + however, only movable property of the value of 400 thalers + is considered. But by this provision the changeableness of + the object, which so facilitates fraud, was done away with. + Hamburg joint-stock company for the insurance of movable + property, 1779. Electorate of Saxony fire-fund for movable + property, 1784-1818, which, however, made good, as a rule, + only 25 per cent. of the damage caused. In Prussia, in 1814, + there were only 12 insurance companies in which movable + property could be insured. In the aggregate even they were + but of little extent, and had generally a partnership, + guild, or communal basis. (_Jacobi_, loc. cit, 123.) On the + other hand, in 1869, there were in all the mutual insurance + companies, 530,600,000 thalers worth of movable property + insured, besides 2,814,800,000 thalers worth of immovable + property, and 366,100,000 thalers worth of property of a + mixed nature, partly movable and partly immovable. (Preuss. + Statist. Zeitschr., 1876, 298.)] + + +SECTION CCXXXVII (_d_). + +REQUISITES OF A GOOD SYSTEM OF FIRE INSURANCE. + +Among the chief requisites of a good fire insurance system are the +following: + +A. The adoption in insuring of measures for the prevention of criminal +abuse on the part of the insured. No one should be benefited by the +burning of his insured goods.[237d-1] Hence, the rates of insurance +should be rigidly fixed according to the real value in exchange.[237d-2] +In the case of houses, the value of the incombustible elements of value +should be deducted; also the value of the ground and the value it +possesses from being advantageously situated, etc. The simultaneous +insurance of the same object in several companies without proper notice +being given should be unconditionally prohibited.[237d-3] The control of +all this may be greatly facilitated by requiring foreign insurance +companies to obtain a special permit to carry on their business in the +country, and to allow them to effect insurance only through responsible +home agents.[237d-4] Most insurance companies exclude from insurance +personal property which may be easily secreted, such, for instance, as +jewels, cash money, valuable documents, etc. + +B. There should be a just proportion between the insurance premium and +the risk. This depends not only on the style of building of the houses +themselves and of those in the neighborhood,[237d-5] on the situation, +the too great intricacy (_Complicirung_) of which extends the ravages of +fire, as its too great isolation makes assistance difficult;[237d-6] but +also on the nature of the business carried on in them,[237d-7] and on +the condition of the local development of fire police. Highly cultured +places, especially large cities, are really much less exposed to damage +from fire. To not take this into account would be not only to +compulsorily dole out charity to the poorer classes of the people, and +to the less cultivated portions of the country,[237d-8] but it would +indirectly put an obstacle in the way of a transition to the massive +construction of houses, and of good, that is, as a rule, of costly +fire-extinguishing institutions.[237d-9] On the other hand, +administration must be rendered much more difficult by the taking of +risks of many degrees of danger, especially as it is scarcely possible, +for a long time, to even hope for a statistically unassailable basis of +a tariff graded in exact accordance with the risk.[237d-10] If those +objects especially exposed to danger should be excluded altogether, the +common utility of the institution would be largely diminished; and the +insured least exposed to danger would nevertheless have to complain of a +relatively too high contribution.[237d-11] If every peculiar class of +risks were to be treated as one whole, the insuring principle itself +would suffer.[237d-12] Where the nation or municipality engages in the +business of compulsory insurance, its too rigid system of rate-fixing +has something inequitable in it, inasmuch as it makes the most provident +housekeeper suffer from the danger from fire of his neighbor's +establishment, a gas factory, for instance. + +C. The certainty of compensation for damage suffered. The government +should see to it that the institution does not promise more than it can +perform with its joint-stock capital and by means of its +premiums.[237d-13] The good will of foreign institutions to keep their +promises to the letter is best assured by requiring them as a condition +precedent of carrying on their business in a country, to bind themselves +to litigate only in the home courts. They protect themselves against the +risk of very large insurances by the system of re-insurance, by +transferring a portion of the premium as well as of the risk to one or +more other insurance companies.[237d-14] + +D. In all highly cultured quarters, the almost entirely voluntary +fire-extinguishing system, in which the people turned out in a body to +battle with the flames, made way for the fire-militia system; and if the +latter should make place for what we may designate as a standing +fire-army which is most easily attained in connection with the +fire-insurance system, we should reach the ideal of such a system, +especially if the business of insurance was in the hands of the state or +of the municipality. Such a system would be in accordance with the +principle of the division of labor, and, also, with the fact that +usually the most vital interest is the greatest spur to action.[237d-15] + + [Footnote 237d-1: The former almost unrestricted liberty of + the American system of insurance has recently been + curtailed, in most of the states, by a rigid governmental + superintendence, by special insurance boards with power to + permit companies to engage in the business of insurance, and + endowed with the right of imposing proper penalties, but of + declaring the privilege forfeited at the end of any year. + Compare _Brämer_ in III, Ergänzungshefte der Preuss. + Statist. Ztschr. und Mitth., 1871, No. 1.] + + [Footnote 237d-2: The first fire insurance provisions or + regulations paid little attention to the danger of + over-valuation. Similarly _v. Justi_, Abh. von der Macht, + Glückseligkeit, etc., eines Staats. 1860, 81. Also + _Krünitz_, Oekonom. Encyclopædie, 1788, XIII, considers it + improbable that any one would have his home insured at a + higher than its real value. On the other hand, there were + formerly bitter complaints made in the United States that + the agents, on whom the determination of the rate of premium + and the control of the insurance-sum depended chiefly, were + led to make over-valuations in furtherance of their own + interests. (Mitth., 1871, 3; 1874, 95.)] + + [Footnote 237d-3: If the valuation were made to depend on + the purchase price or on the cost of replacing or restoring + the damaged property, even this would be some temptation to + not entirely upright men. Hence the Baden law of 1840 + expressly provides that instead of this, the selling price + shall be the basis; the law of 1852, § 17, the medium cost + of the combustible parts, after deduction made of the + diminution in value caused by age. The fixing of premiums in + the case of houses should be repeated from time to time on + account of wear. According to the Calenb. Grubenh. law of + 1823, § 21, every 10 years. According to the Baden law of + 1852, § 28, 33, and the Württemberg law of 1853, § 12, the + city council should examine annually in what cases a new + valuation was necessary. The more certainly over-insurance + is avoided, the less need is there of the superintendence + policy adapted to a rather barbarous state of insurance, + that only a part of the value shall be made good. The + Phoenix fire insurance company in Baden for the insurance + of movable property has reserved the right to investigate at + any time and to satisfy itself as to the value of the + insured object, and to lower the amount insured in + accordance with its own opinion. The provision that the + valuation shall be made by the authorities of the place, or + that it shall be approved by them is frequently found. In + Saxony, for instance (law of Nov. 14, 1835), the Leipzig + city council gives its approval when it finds the amount + insured in keeping with the means of the insured, and + entertains no suspicions as to his honesty. To what a bad + state of things a less liberal course leads, see in + _Masius_, loc. cit., 85. This indeed is only difficult in + large cities. It is also to be considered that it is not so + much the many small amounts, but the few large ones that are + dangerous to insurance. The Prussian scheme wanted to give + up the police superintendence of insurance, but to punish + over-insurance of more than 5 per cent. of the common value, + by imposing a fine equal to the amount of over-insurance on + the insured, the agents, and on the conductors of the + business. (_Jacobi_, in II. Ergänzhefte der Preuss. Statist. + Ztschr., 1869.) The provision that the amount paid as + damages for a burned house shall be immediately employed in + rebuilding, is to be explained in part by requisite A; in + part also by the same police-guardianship against presumed + negligence which introduced compulsory insurance.] + + [Footnote 237d-4: Compare _Brügemann_, Die Mobiliar V. in + Preussen nach dem G. von 1837.] + + [Footnote 237d-5: _Oberländer_, loc. cit. 108, calls + insurance without classification of risks, a "mutual + benevolent institution;" and one rigidly classified + according to the probable period of burning, "an institution + for the making of advances" (_Vorschuss-Anstalt._) In Baden, + even in 1737, there was no difference made between a massive + building and a wooden hut with a straw roof in the Black + forest. (_Rau_, Archiv., III, 324.) Here, there was in 1844 + to 1849, an average damage by fire in houses with brick + roofs of 1,302 florins, with thatch roofs of 1,786 florins, + with shingle roofs of 2,292 florins, to say nothing of the + greater frequency of such damage in each succeeding class. + (_Rau_, Lehrbuch, II, 1, § 26, a.) In Württemberg, before + 1843, the owners of insured personal property, in houses + with thatch roofs, had, in the same time, received 22 per + 1,000 compensation for damage; in houses with brick roofs, + from 8 to 9 per 1,000. (_Rau_, loc. cit.) In 17 German + insurance companies, between 1866 and 1869, massive + buildings with hard roofs paid 1,003,000 thalers and + received 612,000 thalers; the not massive with hard roofs + paid 1,544,000 thalers and received 1,339,000; houses with + soft roofs paid 2,420,000 and received 2,792,000. (Preuss, + Statist. Zeitschr. 1861, 327.) Similar observations made in + Berne during 23 years.] + + [Footnote 237d-6: While in most English insurance companies, + there are only three classes: common, hazardous, and doubly + hazardous, in Rhenish Prussian insurance companies, there + are seven, according to the style of building, and in each + class two subdivisions, according to the location.] + + [Footnote 237d-7: According to an English average of 15 + years, there is some damage from fire yearly in the + following classes of buildings and on the following + percentages: + + _Of the whole number_. + Match factories, 30.00 + Lodging houses, 16.5 + Hat makers, 7.7 + Cloth makers, 2.6 + Candle makers, 3.8 + Smiths, 2.4 + Carpenters, 2.2 + Oil and color dealers, 1.5 + Book dealers, 1.1 + Coffee houses, 1.2 + Beer houses, 1.3 + Bakeries, 0.75 + Wine dealers, 0.61 + Small dealers in spices, 0.34 + Eating houses, 0.86 + + (Quart. Rev., 1854, 23.) There is indeed a difference in the + intensity of these fires. For instance, in inns, there have + been a great many; but the damage has been for the most part + insignificant.] + + [Footnote 237d-8: In Paris the houses insured had a value of + 2,370,000,000 francs, but the damage from fire amounted to + only 0.016 per 1,000! (Dictionn. d'Econ. politique, I, 89.) + On an average, the premiums in France amount to 0.85 per + 1,000. In Prussia, 1867-69 on an average: in the province of + Prussia, 9.46 per 1,000; Posen, 3.75; Brandenburg, Berlin + not included, 2.82; Pomerania, 2.52; Westphalia, 2.15; + Schleswig-Holstein, 2.09; Hanover, 1.99; Silesia, 1.68; + Saxony, 1.47; Hesse-Nassau, 1.46; the Rhine country, 1.34; + Sigmaringen, 0.56; city of Berlin, 0.28 per 1,000. (Preuss. + Statist. Zeitschr., 1871, 289.) How largely a higher + civilization tends to arrest the spread of fire by the + reason of the great facilities of rendering assistance is + shown by the fact that for 100 buildings totally consumed in + Posen, in 1837-40, there were 13.4 only injured: in 1866-69, + 32 were injured for 100 totally consumed. In Prussian + Saxony, 1839-44, 34; 1867-69, 57. (loc. cit., 329.) In + Baden, the district called the _Seekreis_ got from the + fire-fund, in 1845-49, 80 per cent. more than it contributed + to it; the middle Rhine district contributed 37 per cent. + more than it received. The Bavarian Reza district, 1828-29, + received only 11.4 per cent. for damages, and paid 19 per + cent. of all premiums; the Lower Danube district, 10 and 8.8 + per cent. (_Rau_, Lehrbuch, II, § 28, 26.) The city of + Leipzig contributed from 1/19 to 1/17 of the insurance paid, + 1864-68, to the insurance companies taking risks on real + property in the kingdom of Saxony, and received back only + from 1/662 to 1/114, although its fire extinguishing + institutions cost, in 1870, 26,182 thalers. (Official.)] + + [Footnote 237d-9: Even premium-institutions have frequently + very different rates for the same risk, according as they + fear greater or less competition, or desire to recommend + themselves in a new place, etc. Hence the tricks of the + trade with which most of them surround their tariff.] + + [Footnote 237d-10: In Würtemberg, theaters, powder mills, + places where brick and lime are burned, porcelain factories, + iron-works, etc. cannot be insured at all. In + Calenb-Grubenh. and Bremen-Verden, shingle-roofed houses can + be insured only at 2/3 of their real value.] + + [Footnote 237d-11: Thus, for instance, in the electorate of + Mark, each of the four classes of houses bears its own loss + alone. To the fourth class, for instance, belong smithies, + brick factories, and buildings with steam engines, etc. The + Baden law of 1852 puts the same burthen in the same place, + upon houses exposed to danger in a greater or lesser degree; + but provides for 4 classes (_Gemeindeclassen_) with + different rates of contribution, and assigns each _Gemeinde_ + every year, according to the relative magnitude of the + losses of the previous year, to one of those classes. How + risky it is for large cities to confine their insurance, + because of the ordinarily small amount of damage to them + from fire, only to insurance institutions of their own, is + shown by the case of Hamburg in the year 1842, where three + joint stock insurance companies could pay only from 75 to 80 + per cent., and the Bieber Mutual Insurance Company, only 20 + per cent.] + + [Footnote 237d-12: In the case of buildings, the greater + risk is generally calculated by correspondingly multiplying + the insurance-value, but in case of damage by fire, it is + simply made good.] + + [Footnote 237d-13: In the insurance companies specified by + _Masius_, loc. cit., 176, the aggregate amount of their + insurance, stood to the amount necessary to cover it, by + means of receipts from premiums, reserve, and joint-stock + capital: + + In the Leipzig Fire Insurance Company, as 100:1.87 + In the Trieste Fire Insurance Company, as 100:1.80 + In the Elberfeld Fire Insurance Company, as 100:1.19 + In the Aix-Munich Fire Insurance Company, as 100:1.15 + In the Cologne Colonia Fire Insurance Company, as 100:2.44 + In the Karlsruhe Phoenix Fire Insurance Company, as 100:3.7 + In the Berlin Fire insurance Company, as 100:6.3 + In the Gotha, about as 100:2.6 + (including the four fold after payment note) + + In the same companies the amount of damage and of expense + for the last preceding year were, on every 100 thalers, of + insurance, 46 pfennigs (1/300 thalers), 44, 29, 48, 67, 55, + 35, 42; an average of 45, that is 1-1/2 per 1,000. Besides, + much depends on the degree to which the joint-stock capital + can be applied. Thus, for instance, in Berlin, on every + 1,000 thalers 200 are paid in cash, and a note + (_Solawechsel_) given for the rest, payable in two months + after notice. Where the unpaid remaining stock is but a mere + book-debt, and may even be evaded by disclaiming the stock + itself, it of course affords very little security.] + + [Footnote 237d-14: Compare _Volz._ Tübinger Zeitschr. 1847, + 349 ff.] + + [Footnote 237d-15: The preparatory steps towards this ideal + were taken long ago. Thus, for instance, the + personal-property insurance companies have offered premiums + for special merit in extinguishing fires (Calenb.-Grubenh., + 1814, § 35), saving things from a burning house is looked + after by the agents of personal property insurance + companies; compensation is almost universally made not only + for the damage done by fire, but also that caused while the + fire is being extinguished. The excellent fire-extinguishing + institutions of England are maintained by the common action + of the insurance companies. There have been complaints, + however, that they have shown a preference for insured + objects. (Mitth., 1874, 113.)] + + + + +BOOK V. + +ON POPULATION. + + + + +CHAPTER I. + +THEORY OF POPULATION. + + +SECTION CCXXXVIII. + +INCREASE OF POPULATION IN GENERAL. + +That amid the thousand dangers which threaten the existence of the +individual the species may endure, the Creator has endowed every class +of organic beings with such reproductive power, and so much pleasure in +propagating their kind, that if the action of these were entirely +unrestricted, it would soon fill up the earth.[238-1] In the case of the +human race, also, the physiological possibility of propagation has very +wide limits.[238-2] It would be nothing extraordinary that a healthy +pair, living in wedlock from the 20th to the 42nd year of the woman's +life, that is, during the whole time of her full capacity to bear +children, should rear six children to the age of puberty. This would, +therefore, suffice to treble the population in a single generation; +provided that all who had grown up should marry. According to +Euler,[238-3] when the births were 5 per cent. and the deaths 2 per +cent., the population doubled in not quite 24 years; when the increase +was 2-1/2 per annum, in 28 years; when 2, in 35 years, and when 1-1/2 +per cent. in 47 years. + +The United States furnish us with a striking illustration of this +doctrine, and on the grandest scale. There the natural increase of the +white population, from 1790 to 1840, was 400.4 per cent.; that is in the +first decade 33.9 per cent. of the population in 1790; in the second +33.1, in the third 32.1, in the fourth 30.9, in the fifth 29.6 per +cent.[238-4] [238-5] + + [Footnote 238-1: Thus, for instance, the sturgeon can, + according to _Leuckart_, produce 3,000,000 eggs in a year. + According to _Burdach_, the posterity of a pair of rabbits + may be over 1,000,000 in four years; and that of a + plant-louse, according to _Bonnet_, over a 1,000,000,000 in + a few weeks. The prolificacy of a species of animals is wont + to be greater in proportion as the structure-material + (_Bildungsmaterial_) saved within a given time during the + course of individual life, is greater, and as material wants + during the embryonic period are limited; also + (teleologically), in proportion as to the danger the + individual is exposed to. Compare _Leuckart_ in _R. + Wagner's_ physiolog. Wörterbuch, Art. Zeugung. + Teleologically, _Bastiat_ says: _cette surabondance parait + calculée partout en raison inverse de la sensibilité, de + l'intelligence et de la force avec laquelle chaque espèce + résiste à la déstruction_. (Harmonies, ch. 16.)] + + [Footnote 238-2: The researches of modern physiology make it + probable that an ovum is detached from the ovaries at each + period of healthy menstruation. (_Bischoff_, Beweis der von + der Begattung unabhängigen periodischen Reifung und Lösung + der Eier bei den Säugethieren und Menschen, 1844.) It is + hardly possible to ascertain how many of these ova are + capable of fecundation. Among the animals, on which the + greater number of accurate observations have been made, that + is in the case of horses, it has been found that, in the two + districts of Prussia most favorably conditioned, of 100 + mares that had been lined, 63.3 became pregnant, and 53.5 + gave birth to live foals; in the rest of the Prussian + monarchy, the births were only 46 per cent. Compare + _Schubert_, Staatskunde, VII, 1, 98. In the Belgian _haras_ + (places for breeding horses), between 1841 and 1850, about + 30 per cent. of the "leaps" proved fruitful, from 2 to 3 per + cent. aborted, the rest were either probably or certainly + unfruitful. (_Horn._, Statist. Gemälde, 171.) In the human + species, also, the great number of first-born generated in + the first weeks of marriage, bears witness to a high degree + of procreative susceptibility. + + On the other hand, the healthy male semen ejected during a + single act of coition contains innumerable germs, a very few + of which are sufficient to produce fecundation. (_Leuckart_, + loc. cit, 907.) According to _Oesterlen_, Handbuch der + medicischen Statistik, 1865, 196, from 10 to 20 per cent. of + all marriages were childless. In the United Kingdom, _Farr_, + report on the Census of 1851, estimated that in a population + of 27,511,000, there were 1,000,000 childless families, when + the term is allowed to embrace widows and widowers as well + as married couples.] + + [Footnote 238-3: See the exhaustive table in _Euler_, + Mémoires de l'Académie de Berlin 1756, in _Süssmilch_, + Göttl. Ordnung, I, § 160. Bridge has constructed the + following formula: + + Log. A = Log. P + n x Log.(1+(m-b)/mb). Here P stands for + the actually existing population, 1/m = the ratio between + the annual mortality and the number of the living, 1/b, the + ratio of the number of annual births to the number of the + living, n the number of years, A, the population at the end + of three years, the quantity sought for.] + + [Footnote 238-4: _Tucker_, Progress of the United States, + 89, ff. 98. Here deduction is already made of immigrants and + their posterity, who after subtracting the loss by + emigration back to the old country, amounted to over + 1,000,000. It probably amounted to more yet. If, as + _Wappäus_ does (Bevölekerungsstatistik, 1859, I, 93, 122 + ff.), we calculate the rate of increase per annum, we have + an average during the first decade of 2.89, during the + second of 2.83, the third of 2.74, the fourth of 2.52, the + seventh of 2.39, the eighth (1860-70) of probably 2.25 per + cent. On the still greater ratio of increase in earlier + times, see _Price_, Observations on reversionary Payments, + 1769, 4 ed. 1783, I, 282 seq., I, 260. + + It was nothing unheard of to see an old man with a living + posterity of 100. (_Franklin_, Observations concerning the + Increase of Mankind, and the Peopling of New Countries, + 1751.) It is said that in the region about Contendas, in + Brazil, there were on from 70 to 80 births a mortality of + from 3 to 4 per annum (how long?), and an unfortunate birth + (_unglücklichen_) was scarcely ever heard of. Mothers 20 + years of age had from 8 to 10 children; and one woman in the + fifties had a posterity of 204 living persons. (_Spix und + Martius_, Reise III, 525).] + + [Footnote 238-5: Immense increase of the Israelites in + Egypt. (Genesis 46, 27; Numbers, 1.)] + + +SECTION CCXXXIX. + +LIMITS TO THE INCREASE OF POPULATION. + +There is certainly one limit which the increase of no organic being can +exceed: the limit of the necessary means of subsistence. But, so far as +the human race is concerned, this notion is somewhat more extensive, +inasmuch as it embraces besides food, also clothing, shelter, fuel, and +a great many other goods which are not, indeed, necessary to life, but +which are so considered.[239-1] We may illustrate the matter by a simple +example in the rule of division. If we take the aggregate of the means +of subsistence as a dividend, the number of mankind as divisor; then the +average share of each is the quotient. Where two of these quantities are +given, the third may be found. Only when the dividend has largely +increased can the divisor and quotient increase at the same time +(prosperous increase of population). If, however, the quotient remains +unchanged, the increase of the divisor can take place only at the +expense of the quotient (proletarian increase of population).[239-2] +Hence it is to be expected that the quantity of the means of subsistence +being given and also the requirement of each individual, the number of +births and the number of deaths should condition each other. Where, for +instance, the number of church livings has not been increased, only as +many candidates can marry as clergymen who held such livings have died. +The greater the average age of the latter is, the later do the former +marry, in the average, and _vice versa_. And so, in the case of whole +nations, when their economic consumption and production remain +unaltered.[239-3] A basin entirely filled with water can be made to +contain more only in case it is either increased itself, or a means is +found to compress its contents. Otherwise as much must flow out on the +one side as is poured in on the other. + +And so, everything else remaining stationary, the fruitfulness of +marriages must, at least in the long run, be in the inverse ratio of +their frequency. (See § 247.)[239-4] [239-5] + + [Footnote 239-1: When it is known that, in the Hebrides, + one-third of all the labor of the people has to be employed + in procuring combustible material (_McCulloch_, Statist. + Account, I, 319), it will no longer excite surprise that, + according to Scotch statistics, some parishes increase in + population after coal has been found in them, and others + decrease when their turf-beds are exhausted.] + + [Footnote 239-2: Compare _Isaias_, 9:3. According to + _Courcelle-Seneuil_, Traité théorique et pratique d'Economie + politique, I, 1858, the _chiffre nécessaire de la population + égal à la somme des revenus de la société diminuée de la + somme des inégalités de consommation et divisée par le + minimum de consommation_: P=(R-J)/M.] + + [Footnote 239-3: Thus _Süssmilch_, Göttliche Ordnung in den + Veränderungen des menschlichen Geschlechts, 1st ed., 1742, + 4th ed., 1775, I, 126 ff., assumes that one marriage a year + takes place, on from every 107 to every 113 persons living. + On the other hand, 22 Dutch towns gave an average of 1 in + every 64. This abnormal proportion is very correctly + ascribed by _Malthus_, Principles of Population, II, ch. 4, + to the great mortality of those towns: viz., a death for + every 22 or 23 persons living, while the average is 1:36. + The Swiss, _Müret_, (in the Mémoires de la Société + économique de Berne, 1766, I, 15 ff.), could not help + wondering that the villages with the largest average + duration of life should be those in which there were fewest + births. "So much life-power and yet so few procreative + resources!" Here too, _Malthus_, II, ch. 5, solved the + enigma. The question was concerned with Alpine villages with + an almost stationary cow-herd business: no one married until + one cow-herd cottage had become free; and precisely because + the tenants lived so long, the new comers obtained their + places so late. Compare _d'Ivernois_, Enquête sur les Causes + patentes et occultes de la faible Proportion de Naissances à + Montreux: yearly 1:46, of the persons living, while the + average in all Switzerland was 1:28. + + In France according to _Quételet_, Sur l'Homme, 1835, I, 83 + ff., there was: + + ===============+===================+============+================ + | _One marriage_ | _Children_ | _One death_ + _In_ | _a year_ | _to a_ | _yearly _ + | _for every_ | _marriage_ | _for every_ + ---------------+-------------------+------------+---------------- + 4 Departments |110-120 inhabitants| 3.79 |35.4 inhabitants + 15 " |120-130 " | 3.79 |39.2 " + 23 " |130-140 " | 4.17 |39.0 " + 18 " |140-150 " | 4.36 |40.6 " + 10 " |150-160 " | 4.43 |40.3 " + 9 " |160-170 " | 4.48 |42.7 " + 6 " |170 and more " | 4.48 |46.4 " + ================================================================= + + The two departments of Orne and Finisterre present a very + glaring contrast: in the former, one birth per annum on + every 44.8 (1851 = 51.6), a marriage on every 147.5, a death + on every 52.4 (1851 = 54.1) living persons; in the latter, + on the contrary, on every 26 (1851 = 29.8), 113.9 and 30.4 + (1851 = 34.2). In Namur, the proportions were 30.1, 141, + 51.8; in Zeeland, 21.9, 113.2, 28.5. (_Quételet_, I, 142.) + The Mexican province, Guanaxuato, presents the most + frightful extreme: one birth per annum on every 16.08 of the + population living, and one death in every 19.7. (_Quételet_, + I, 110.)] + + [Footnote 239-4: Compare even _Steuart_, Principles, I, ch. + 13. _Sadler_, Law of Population, 1830, II, 514: + + =======================================+=============+=========== + |_Marriages_ |_Children_ + | _per annum_ |_on every_ + | _on every_ | _100_ + | _10,000_ |_Marriages_ + |_inhabitants_| + ---------------------------------------+-------------+----------- + + In the purely Flemish provinces | | + of Belgium | 128 | 481 + In the purely Wallonic provinces | | + of Belgium | 139 | 448 + In the mixed provinces of Belgium | 152 | 425 + In Holland | 148 | 476 + In Lombardy | 166 | 489 + In Bohemia | 173 | 413 + In the kingdom of Saxony | 170 | 410 + =======================================+=============+===========] + + [Footnote 239-5: Compare _Horn_, Bevölkerungswissenschaftliche + Studien, I, 162 ff., 191, 252 ff. In most countries, there + is a much larger number of children to a marriage in the + rural districts than in the cities; but at the same time, + marriages are much less frequent there. In Saxony, however, + where the cities show a greater marital productiveness, the + rural districts present a large number of marriages. Of the + 10 countries compared by _Wappäus_, II, 481 ff., only + Prussia and Schleswig are exceptions to the rule.] + + +SECTION CCXL. + +INFLUENCE OF AN INCREASE OF THE MEANS OF SUBSISTENCE. + +The sexual instinct and the love for children are incentives of such +universality and power, that an increase of the means of subsistence is +uniformly followed by an increase in the numbers of mankind. _Partout, +où deux personnes peuvent vivre commodément, il se fait un mariage._ +(_Montesquieu._) Thus after a good harvest, the number of marriages and +births is wont to considerably increase; and conversely to diminish +after bad harvests.[240-1] [240-2] [240-3] In the former case, it is +rather hope than actual possession which constitutes the incentive to +the founding of new families. Hence the greatest increase is not found +in connection with the absolutely lowest price of corn, but with those +prices which present the most striking contrast to those of a previous +bad year.[240-4] + +The introduction of the potato has promoted the rapid increase of +population in most countries. Thus, the population of Ireland in 1695, +was only 1,034,000; in 1654, when the cultivation of the potato became +somewhat more common it was 2,372,000; in 1805, 5,395,000; in 1823, +6,801,827; in 1841, 8,175,000. In 1851, after the fearful spread of the +potato-rot it fell again to 6,515,000.[240-5] In general, every new or +increasing branch of industry, as soon as it yields a real net product +is wont to invite an increase of population. Machines, however, have not +this effect only when they operate to produce rather a more unequal +division of the national income than an absolute increase of that +income.[240-6] + + [Footnote 240-1: That rich food directly increased + prolificacy is proved from the fact that, for instance, our + domestic animals are much more prolific than wild ones of + the same species. Compare _Villermé_, in the Journ. des + Economistes VI, 400 ff. The months richest in conceptions + fall universally in the spring, and again in the pleasant + season immediately following the harvest. On the other hand, + during the seasons of fast in the Catholic church the number + of cases of conception is below the average. (Jour. des + Econ., 1857, 808).] + + [Footnote 240-2: Thus the annual mean number of marriages + amounted to: + + ============================================= + | _Between 1841_ | _In 1847_ + | _and 1850._ | _alone._ + --------------+----------------+------------- + In Saxony, | 15,505 | 14,220 + In Holland, | 22,352 | 19,280 + In Belgium, | 28,968 | 24,145 + In France, | 280,330 | 249,797 + ============================================= + + _Horn_, loc. cit. I, 167. In the governmental district + (_Regierungsbezirke_) of Düsseldorf, there was in the years + of scarcity, 1817 and 1818, one marriage for every 134 and + 137 souls; on the other hand, in 1834 and 1835, in every 103 + and 105. (_Viebahn_, I, 120 seq.) In England, the variations + in the yearly price of corn are reflected in the variations + in the number of yearly marriages. Thus, in 1800, 114 + shillings per quarter; 1801, 122 shillings; 1802 (Peace of + Amiens), 70 shillings; 1803, 58 shillings. The number of + marriages in the four years respectively was 69,851, 67,288, + 90,396, 94,379. (_Porter_, Progress of the Nation, III, ch. + 14, 453.) + + Similarly in Germany, in 1851, the conclusion of peace + increased the number of marriages, and the scarcity of 1817 + diminished it. In Prussia, in 1816, there was one marriage + for every 88.1 of the population; in 1828, for every 121.4; + in 1834 (origin of the great Zollverein), for every 104; in + 1855, for every 136.4; in 1858 (hope of a new era), in every + 105.9. (_v. Viebahn_, Statistik des Zollvereins II, 206.) + + In Austria, the price of rye was: + + ============================================== + | _Per Metze._ | _No. of_ + | | _Marriages._ + ----------+--------------+-------------------- + In 1851, | 2.47 florins | 336,800 + In 1852, | 2.11 " | 316,800 + In 1853, | 3.38 " | 283,400 + In 1854, | 4.36 " | 258,000 + In 1855, | 4.43 " | 245,400 (_Czörnig._) + ============================================== + + On Sweden, see Wargentin in _Malthus_, II, ch. 2. + + The decreased number of births in consequence of a bad + harvest, and _vice versa_, appears of course only during the + following calendar year. Thus, in 1847, as compared with the + average of the years 1844 and 1845, there were fewer + children born in England by 4 per 1,000, in Saxony by 7 per + 1,000, in Lombardy by 59, in France by 63, in Prussia by 82, + in Belgium by 122, in Holland by 159 per 1,000. (_Horn_, I, + 239 ff.) In Germany, the conscription-years corresponding to + the scarcity time, 1816-17, gave a _minus_ of 25 per cent. + in many places below the average. (_Bernouilli_, + Populationistik, 219.) In the case of marriage, the relative + increase or decrease is still more characteristic, so far as + our purpose is concerned, than the absolute increase or + decrease. Thus in Belgium, for instance, against 1,000 + marriages dissolved by death, there were, in 1846, only 971 + new ones contracted, and in 1847 only 747; while in 1850 + there were 1,500. The falling off in Flanders alone was + still greater. Thus, in 1847, there were only 447 marriages + contracted for 1,000 dissolved. (_Horn_, I, 170 ff.) + However, _Berg_, using Sweden as an illustration, rightly + calls attention to the fact, that the variations in the + number of marriages and births is determined in part by the + number of adults, that is, of the number of births 20 and + more years before. Compare _Engel's_ Statist. Zeitschr., + 1869, 7.] + + [Footnote 240-3: Sometimes, a sudden increase in the + frequency of marriages may have very accidental and + transitory causes. Thus, for instance, in France in 1813, + when the unmarried were so largely conscripted, the number + of marriages rose to 387,000, whereas the average of the + five previous years was 229,000. (_Bernouilli_, + Populationistik, 103.)] + + [Footnote 240-4: Thus, for instance, in nearly all countries + affected by the movement of 1848, there were, during the + last months of that year, an unusually large number of + conceptions. (_Horn_., I, 241 seq.) According to + _Dieterici_, Abh. der Berliner Akademie, 1855, 321 ff., + there was one birth a year for the number of persons living. + + ======================================================== + | _Ten years' average._ | _1849 alone._ + ------------+----------------------------+-------------- + In France, | 36.19 | 35.79 + In Tuscany, | 24.42 | 22.82 + In Saxony, | 24.51 | 23.08 + In Prussia, | 25.5 | 23.62 + ======================================================== + + The great majority of men at that time believed all they + liked to believe.] + + [Footnote 240-5: _Marshall_, Digest of all Accounts, I, 15. + _Porter_, I, ch. I, 9.] + + [Footnote 240-6: _Wallace_, in this respect, places industry + far behind agriculture. (On the Numbers of mankind in + ancient and modern Times.) The county of Lancashire had, in + 1760, that is shortly before the introduction of the great + machine industry, 297,000 inhabitants; in 1801, 672,000; in + 1831, 1,336,000; in 1861, 2,490,000. Saxony has, in almost + every place, a relatively large number of births in + proportion as in any locality, commerce and industry + preponderate over agriculture, and _vice versa_. See + _Engel_, Bewegung der Bevölkerung im K. Sachsen, 1854. But + this should not be generalized into a universal law. For + instance, Prussia and Posen have an average number of births + greater than that of the Rhine country and Westphalia. (_v. + Viebahn_, Statistik des L. V, II, 222.)] + + +SECTION CCXLI. + +EFFECT OF WARS ON POPULATION. + +We may now understand why it is that only those wars which are +accompanied by a diminution of the sources of the means of support +decrease population. The loss in the numbers of mankind produced by +wars, hardships, etc., would, as a rule, be readily made up for by +increased procreation.[241-1] Thus, for instance, in Holland, the long +Spanish war permitted an increase of the population for the reason that +the national wealth increased at the same time; while the short war with +Cromwell, which curtailed commerce, caused 3,000 houses in Amsterdam +alone to remain empty.[241-2] In England and Wales, the population +increased during the most frightful war of modern times, from 8,540,000 +in 1790, to over 12,000,000 in 1821; in France, from, probably, +26,000,000 or 27,000,000 in 1791, to 29,217,000 in 1817. England, +indeed, was itself never the seat of war, and its commerce was increased +by the war in some directions as much as it was diminished by it in +others. France's own territory was devastated only in the first and in +the last years of the war. But the Revolution had, on the whole, once +the storms of the Reign of Terror were over, not only more equally +divided the means of subsistence in France, but it had developed them in +a higher degree.[241-3] [241-4] + +It cannot even be unconditionally predicated of emigration, that it +hinders the increase of population. As soon as people have begun to +calculate upon emigration, as a resort for themselves in case of +distress, or upon the emigration of others, by which they would be left +a larger field for action at home, a number of marriages is contracted +and a number of children born; which would otherwise not have been the +case. Most men, especially when young and enamoured, hope for the +realization of all their wishes. Favorable chances, open to a great +number of men alike and which every one thinks himself competent to +calculate, are commonly over-estimated by the majority.[241-5] (See § +259.) + + [Footnote 241-1: The war of 1870-71 cost Germany 44,890 + lives. (Preuss. Statist. Ztschr., 1872, 293.) This number is + not quite 20 per cent. of the excess of births (794,206) + over deaths (563,065) in Prussia in the year 1865. On the + other hand, in from 1856 to 1861 there were 10,000 cases of + murder and manslaughter in all Europe, Turkey excepted. + (_Hausner_, Vergl. Statistik, I, 145.) About the end of the + last century, it was estimated that about 1,000,000 children + were born annually in France. (_Necker_, Administration des + Finances, I, 256.) Of these, about 600,000 outlived their + 18th year. (_Peuschet_, Essai de Statistique, 31.) There + were, annually, about 220,000 marriages. Hence the number of + the unmarried was increased annually by 80,000 young men, + who, according to _Peucshet_ (32), amounted to over + 1,450,000. According to this, the number of recruits, per + annum, might amount to hundreds of thousands without causing + any appreciable diminution in the number of births and + marriages. Compare _Malthus_, Principle of Population, II, + ch. 6. On the other hand, long continued wars have the + effect of keeping the men physically strongest from + marriage, and so to deteriorate the race.] + + [Footnote 241-2: Richesse de Hollande, I, 149. During the + Amsterdam commercial crisis, from 1795 to 1814, there were + for every 4 births an average of 7 deaths. So that the + population, in 1795, was still 217,000, and in 1815, only + 180,000. (_Bickes_, Bewegung der Bevölkerung Anhang, 28.)] + + [Footnote 241-3: On the other hand, the population of East + Prussia, between 1807 and 1815 diminished 14 per cent. (_v. + Haxthausen_, Ländl. Verfassung der Preuss. Monarchie, I, + 93.) The battles of the Seven Years' War are said to have + consumed 120,000 Russians, 140,000 Austrians, 200,000 + Frenchmen, 160,000 Englishmen, Hanoverians, etc., 25,000 + Swedes, 28,000 of the troops of the empire, and 180,000 + Prussians. Yet the population of Prussia fell off 1,500,000. + (_Frédéric_, Oeuvres posthumes, IV, 414; Preuss. Gesch. + Friedrich's M., II, 349.) During the Thirty Years' War, the + population of Bohemia fell from 3,000,000 to 780,000. + (_Mailath_, Gesch. von Oesterr, III, 455.) Württemberg, + according to the military recruiting lists had a population, + in 1622, of 300,000 inhabitants. (_Spittler_, Werke, XII, + 34.) In 1641, the population was only 48,000; according to a + promotion-speech of _J. B. Andreä_. But between 1628 and + 1650, more than 58,000,000 florins were lost by war + contributions, and about 60,000,000 florins by plunder; + about 36,000 private houses were in ruins. (_Spittler_, + Württ. Gesch., 254.) On Alsace, Freisingen and Göttingen, + see _Londorp_, Bellum sexenn., II, 563; _Zschocke_, + Bayerische Geschichte, III, 302; _Spittler_, Hanov. Gesch., + II, 37 ff., 114. On Germany generally, see _R. F. Hanser_, + Deutschland nach dem dreissigjährigen Kriege, 1862. However, + many estimates of the diminution of the population are + exaggerated, because it has not been considered that a great + part of the men who disappeared in one place fled to + another, for the time being more secure. Compare _Kius_ in + _Hildebrand's_ Jahrb., 1870, I ff. + + The population of Massachusetts increased 8,310 yearly, + before the War of Independence; during the war, only 1,161, + although the enemy scarcely ever entered the country. + (_Ebeling_, Gesch. und Erdbeschreib. der V. Staaten I, 236.) + Russia had a mortality during the war years, 1853-55, of + 2,272,000, 2,148,000, and 2,541,000; in the years of peace + previous, 2,000,000 at most.] + + [Footnote 241-4: Besides the mere loss of men, war operates + destructively on production, since it affects especially the + most productive classes as to age, while pestilence, famine, + etc., carry off children, old people, and the feeble. Hence, + a people's public economy recovers more readily from the + last named misfortune than from war.] + + [Footnote 241-5: Compare _Giov. Botero_, Della Cause della + Grandezza della Città, L. II, and Ragion di Stato, VIII, 95; + where colonization is compared to the swarming of bees. _W. + Raleigh_, Discourse of War in general, Works VIII. 257 ff. + Similarly _Child_, Discourse of Trade, 371 ff. _Ustariz_, + Teoria y Practica del Commercio, 1724, ch. 4. _Franklin_, + Observations on the Increase of Mankind, which reminds one + of the continued growth of polyps.] + + +SECTION CCXLII. + +COUNTER TENDENCIES TO THE INCREASE OF POPULATION. + +The extension of economic production is always a labor; the surrender of +one's ordinary means of subsistence to new comers, a sacrifice; but, on +the other hand, the procreation of children is a pleasure. Hence it +seems to be incontestably true that the powers of increase of +population, considered from an entirely sensuous point of view, tend to +go beyond the bounds of the field of food. Malthus gave expression to +this fact by saying that population had a tendency to increase in a +geometrical progression, but the means of subsistence, even under the +most favorable conditions, only in an arithmetical progression.[242-1] +If the word "tendency" be correctly understood in the sense in which +Malthus employed it, so that the reality appears as the product of +several and partly opposite tendencies,[242-2] the first half of his +allegation can scarcely be contested.[242-3] If a father has three sons, +and each of the three three in turn, the love of procreation and the +power of procreation, all being in the normal condition of health, are +precisely three times as great in the second generation as in the first, +and nine times as great in the third, etc. The second half of Malthus's +principle is more open to doubt. If it be true, as has been asserted, +that man's means of subsistence consist solely of animals and plants, +and these, as well as man, increase in a geometrical ratio, and usually +even with a much larger multiplier, yet it is here, surprisingly enough, +overlooked that their natural increase is interrupted by the consumption +of them by man. On the other hand, it is true that even raw material, by +means of more skillful technic processes (§ 134, 157), and the values by +which man ennobles them, may always increase in a greater ratio than a +merely arithmetical one. (§ 33).[242-4] But, that, in the long run, the +means of subsistence should keep pace with the extreme of sensuous +desire and of physiological power, is utterly incredible. Hence, the +latter tendency is limited by others. + +A. And indeed, firstly, by repressive counter-tendencies. As soon as +there is a larger population in existence than can be supported, the +surplus population must yield to a mournful necessity; in a favorable +case, to that of emigration, but usually to hunger, disease and misery +generally. + +"The earth," says Sismondi, "again swallows the children she cannot +support." It is the weakest especially who are elbowed off the bridge of +life, over which we pass from birth to the normal death from old age, +because there is not room enough on it for all. Hence the frightful +mortality among the poorer classes and in childhood. Now it is the +absence of a healthy habitation,[242-5] or of proper clothing, or, in +the case of children, of rational superintendence[242-6] which sows the +germs of a thousand diseases; and now the absence of proper care, rest +etc., which intensifies these diseases. Every bad harvest is wont, when +its consequences are not alleviated by a high and healthy civilization, +to increase mortality. (§ 246, 9). Thus, in Sweden, during the second +half of the 18th century, the average yearly mortality was = 1:39-40. On +the other hand, in the bad year 1771 = 1:35.7; 1772 = 1:26.7, and in +1773, as an after consequence, 1:19.3. In this last, although it was a +fertile year, there were only 48 births to every 100 deaths.[242-7] +Among nations low down in civilization, the repressive counter tendency +may assume a very violent character. How many cases of murder, human +sacrifice, and even war, have been occasioned by over-population and +famine. + +B. Secondly, by preventive counter tendencies.[242-8] The person who +believes himself unable to support children refrains from begetting +them. This, we may call one of the most natural of duties. We might even +say that the person who begets a child which he knows he is not in a +condition to support, is guilty of a grievous sin against civil society, +and of a still more grevious one against his poor child. Strange! To +beget a child with countless wants, with an immortal soul! That is +certainly an act the most pregnant with consequences which any ordinary +man can perform in his life; and yet how thoughtlessly it is performed +by the majority! + +This counter-tendency is to be found only in the case of man. Plants and +animals yield to the sexual instinct regardless of everything.[242-9] +Where there is no question whatever of having food enough to support +children, as is the case with the better-to-do classes, the dread of +losing the decencies of life, or of "losing caste," acts as a +preventive[242-10] [242-11] to the founding a family, or increasing the +numbers of one. Unfortunately, abstinence from the procreation of +children may be exercised not only in accordance with the moral +law,[242-12] but also, in contravention of it.[242-13] There is a +necessary connection between human reason and human freedom and the +possibility of misusing them. And it is certainly the inevitable fate of +man either to place a morally rational check on the sexual impulse, or +to be forcibly held within the limits of the means of subsistence, since +they cannot be over-stepped by him--through the agency of vice and +misery.[242-14] [242-15] + + [Footnote 242-1: Principle of Population, I, ch. I. Adam + Smith also implicitly held the view that the demand for the + means of subsistence is always in advance of them. Wealth of + Nat., I, ch. II, pref. and P. I.] + + [Footnote 242-2: This may be represented by what physicists + call the "parallelogram of forces." Compare _Senior_, + Outlines, 47. _Malthus'_ own explanation of "tendency," in + his letter at the end of _Senior_, Two Lectures on + Population, 1829.] + + [Footnote 242-3: On the inaccuracy of the expression, + "geometrical progression," in the present case, see _Moser_, + Gesetze des Lebensdauer, 1839, 132.] + + [Footnote 242-4: _Weyland_, Principles of Population and + Production, 1816, 25 ff.] + + [Footnote 242-5: In Paris the mortality is greater in the + _arrondissements_ in proportion to their poverty, of which + the relative numbers of untaxed dwellings afford a + criterion. According to this, between 1822 and 1826, + + ========================================================= + _The | _Had a yearly mortality | _Locations + Arrondissement_| of 1 in every_ | non imposées._ + ---------------+-------------------------+--------------- + II, | 71 of population. | 0.07 + III, | 67 " | 0.11 + I, | 66 " | 0.11 + IV, | 62 " | 0.15 + XI, | 61 " | 0.19 + VI, | 58 " | 0.21 + V, | 64 " | 0.22 + VII, | 59 " | 0.22 + X, | 49 " | 0.23 + IX, | 50 " | 0.31 + VIII, | 46 " | 0.32 + XII, | 44 " | 0.38 + ========================================================= + + _Villermé_, in the Journal des Econ., Novbr. 1853. The + average house-rent in _arrondissement_ II, amounted to 605 + francs per annum; in III, to 426; in I, to 498; in IX, to + 172; in VIII, to 173; in XII, to 148 francs. Doctor Holland + divided all the streets in Manchester into three classes, + and each class, in turn, into three sub-classes, according + to the qualities of the dwellings. The yearly mortality in I + a was 1:51; in I b = 1:45; I c = 36; II a = 1:55; II b = + 1:38; III c = 1:25. (Report of Inquiry into the State of + large Towns and Populous Districts, 1843.)] + + [Footnote 242-6: In Prussia, the Jewish population, between + 1822 and 1840, increased 34-1/2 per cent.; the Christians + only 28-1/2 per cent.; although among the Jews there was + only one marriage a year in every 139, and one birth in + every 28; among the Christians, in every 112 and 25. This is + accounted for, mainly by the favorable circumstances that + Jewish mothers leave their homes seldomer to work outside, + and thereby devote more attention, even in the lower + classes, to the care of their children.] + + [Footnote 242-7: _Wappäus_, Allg. Bevölkerungsstatistik, I, + 315. In Thurgau, in 1815, the mortality was = 2,143, in 1817 + = 3,440; in Luzerne, in 1820 = 1,543, in 1817 = 3,511. + (_Bernouilli_, Populationistik, 219.) And so in London + between 1601 and 1800, when the five dearest and five + cheapest years of each decade are taken together, the + aggregate mortality in the dearest was 1,971,076, in the + cheapest, 1,830,835. (_Farr_, in the Statist. Journal, 1846, + 163 ff.) The rule did not apply to the time 1801-1820; but + it did again to the time 1821-1840 (l. c., 174). Compare + _Messance_, Recherches sur la Population, 311; _Roscher_, + Kornhandel und Theuerungspolitik, 54 ff. When scarcity + continues a longer time, the mortality sometimes decreases + on account of the largely diminished number of small + children. In Lancashire, the number of deaths during the + commercial crisis, 1846-47, was 36 per cent. greater than + the average of the three last preceding years; in 1857-8 it + was 11.9 per cent. greater. (_Ausland_, 1862, No. 44.)] + + [Footnote 242-8: _Malthus_ uses the word "preventive check," + while he calls the repressive counter-tendencies "positive." + _R. Mohl_, Polizeiwissenschaft, I, 88, speaks of preventive + and destructive causes. Anteriorly and subsequently + operating causes. (_Knapp_).] + + [Footnote 242-9: Hence the infinite productiveness of + irrational organisms is limited only by their mutual + struggle for the means of support. That which cannot live + there dies. "In this case there can be no artificial + increase of food, and no prudential restraint from + marriage." (_Darwin_, Origin of species, 4 ed. 1866, 73.) + Compare _B. Franklin_, Observations concerning the Increase + of Mankind, § 21. _Lamennais_, indeed, asserts that no plant + and no animal takes away food from any other; that the earth + has room for all!] + + [Footnote 242-10: The rule that population tends to extend + everywhere as far as the means of subsistence will permit, + _Sismondi_, N. Principes, VII, ch. 3, has taken occasion to + ridicule, basing himself on the example of the Montmorency + family. This family has, notoriously, always lived in + superabundance, and is, notwithstanding, on the verge of + extinction. _Sismondi_ here forgets the relativity of the + idea "means of subsistence." Persons occupying an exalted + social position not only think that they want more in this + respect, but they are wont in forming marriage contracts to + use the greatest and frequently exaggerated caution. Hence + it is that families of this rank become, relatively + speaking, frequently extinct; and, moreover, such a fact is + here most frequently taken notice of. _Sadler_, Law of + Population, 1830, infers from the frequent extinction of + English noble families, that wealth leads to sterility; and, + on the other hand, poverty (but not famine!) to prolificacy; + and _Doubleday's_ (True Law of Population, 12 ff.) + suggestion, in explanation hereof, that over-fed animals and + over-manured plants are sterile, as ably refuted in the + Edinburg Rev., LI. It is there shown that the marriages of + the English peers are fruitful above the average; that their + extinction is partly due to the fact that the younger sons + seldom married, and that hence there is a lack of collateral + relations. But, in great part, such extinction is only + apparent; since such a family is said to be extinct when + only the male stem is extinct. The French nobility, from the + 9th to the 11th century, continually increased in number. + After this, the succession of females and cases of + extinction became more frequent, because the nobility, in + order to keep their estates together, began to not desire + many sons. _Sismondi_, Hist. des Français, V, 182. Compare + _Benoiston de Châteauneuf_, De la Durée des Familles nobles + en France, in the proceedings of the Académie des Sciences + morales et politiques, II, 792 ff. Besides, between 1611 and + 1819, 763 English baronet families became actually extinct, + 653 continued to exist, and 139 had been raised to the + peerage; an average of from 3 to 4 peer families became + extinct yearly. (Statist. Journal, 1869, 224.) There were, + about 1569 2,219 Venetian _nobili_; in 1581, 1,843 (_Daru_, + VI, 240 ff.); in Addison's time (1705), only 1,500. On the + decrease of the Roman patricians, see _Dionys._, Hal., I, + 85; _Tacit._, Ann., XI, 25; on that of the Spartan knights: + _Clinton_, Fasti Hellenici, II, 407 ff.; of the _ehrbaren + Geschlechter_, at Nürnberg: _Hegel_, N. Stadtchroniken, + 1862, 214. Compare, also, Westminster Rev., Oct., 1849.] + + [Footnote 242-11: How, in England, not only many + distinguished persons, but also their servants, are kept + from marriage in this way, because they are sure of not + being able to satisfy the wants of their bachelorhood as + fathers of families, see in _Malthus_, P. of P., II, ch. 8. + A description of the general misery which would result if + all men consumed only that which was physically + indispensable, in _Senior_, Outlines, 39.] + + [Footnote 242-12: See _Bastiat's_ beautiful words, in which + he characterizes the holy ignorance of children, the modesty + of young maidens, the severity of public opinion, etc., as a + law of limitation: (Harmonies, 437 seq.)] + + [Footnote 242-13: Compare _Proudhon_, Contradictions, ch. + 13.] + + [Footnote 242-14: That want of employment or of business has + rather a preventive tendency, see _Malthus_, Principle of + Population, VII, ch. 14.] + + [Footnote 242-15: _Malthus_, P. of P., II, ch. 13. I + formerly called this natural law by the name of the + investigator who earned the largest share of scientific + merit in connection therewith. It cannot, indeed, be said, + that he was the first to observe it. Compare even + _Machiavelli_, Discorsi (between 1515 and 1518), II, 5. And + so _Giovanni Botero_ taught that the number of the + population depended not so much on the number of + _congiungimenti_ so much as on the rearing of children. + (Ragion di Stato, 1592, VII, 93 ff.) The _virtù generativa + degli uomini_, which is always the same, is found face to + face with the _virtù nutritiva delle citta_. The former + would continue to operate _ad infinitum_, if the latter did + not limit it. The larger a city is, the more difficult it is + to provide it with the means of subsistence. In the last + instance, the slave-sales of Guinea, the cannibalism of the + Indians, the robber-system of the Arabians and the Tartars, + the migration of nations, crimes, litigation, etc., are + traced back to the narrowness of the means of subsistence. + (Delle Cause della Grandezza delle Città, 1598, Libr. III.) + Sir Walter Raleigh (ob. 1618), was of opinion that the earth + would not only be full but overflowing with human beings + were it not that hunger, pestilence, crime, war, abstinence + welcome sterility, etc. did away with the surplus + population. (History of the World, I, ch. 8, 4. Discourse of + war: Works, VII, 257 ff.) According to _Child_, Discourse of + Trade, 371 ff., 149, the population is always in proportion + to the amount of employment. + + If England could employ only 100 men while 150 were reared, + 50 would have to emigrate or perish; and so, too, + conversely, occasional vacancies would soon be filled. + Similarly _Davenaut_, Works II, 233, 185; who, however, in + the practical application of this law of nature, adopts the + error of his contemporary, G. King, the statistician, + according to whom the population of England would increase + to 11,000,000 (II, 176) only after 600 years. _Benjamin + Franklin's_ Observations Concerning the Increase of Mankind, + Peopling of new Countries, etc., 1751, are very good. + Franklin here shows that the same tables of mortality do not + apply to town and country, nor to old nations and new ones. + The nation increases more rapidly in proportion as it is + easy to contract marriage. Hence the increase is smallest in + luxurious cities and thickly populated countries. Other + circumstances, being equal, hunting nations require the + largest quantity of land for the purpose of subsistence, and + industrial nations least. In Europe, there was a marriage in + every 100 of the population per annum; in America, on every + 50; 4 children to a marriage in the former, and 8 in the + latter. + + Population diminishes as a consequence of subjugation, bad + government, the introduction of slavery, loss of territory, + loss of trade and food. He who promotes the opposite + advantages may well be called the "father of his country." + Further, _D. Hume_, Of the Populousness of the Ancient + Nations: Discourses No. 10. _Per contra, Wallace_, On the + Numbers of Mankind in Ancient and Modern Times, in which the + superior populousness of antiquity is maintained, 1753. + _Wallace_ relied chiefly on the more equable distribution of + land, and the smaller luxury of the ancient nations. + _Herbert_, Essai sur le Police des Grains (1755), 319 ff. + Les Intérêts de la France mal entendus, par un Citoyen + (Amsterd., 1757), I, 197. + + _Steuart_ threw light especially on the connection between + mortality and the number of marriages (Principles, I, 13); + and he claims, with the utmost confidence, that only the + want of the means of subsistence, using the expression in + its broadest sense (I, 15), can put a limit to the increase + of population (I, 14). He calls wrongful procreation + (_falsche Zeugung_) the chief cause of pauperism (II, 1), + and his views on public charity have a strong Malthusian + complexion (I, 14). Compare further _A. Young_, Political + Arithmetics (1774), I, ch. 7. _Townsend_, Dissertation on + the Poor Laws (1786), makes a happy use of the example of + the Island of Juan Fernandez, in which a colony of goats was + developed, first alone, and afterwards in a struggle with a + colony of dogs, to illustrate the laws of the development of + population as limited by the supply of food. Compare the + same author's Journey through Spain, II, 8 seq.; 358 ff., + III, 107. _G. M. Ortes_, Riflessioni sulla Popolazione, + delle Nazione per rapporto all'Economia nazionale, 1790, + ascribes geometrical progression to the increase of + population (cap. I) precisely as in the case of other + animals; only, in the case of the latter, a limit is put to + their increase by _forza_, and in the case of man, by + _ragione_. When the population of a country has attained its + proper development, celibacy is as necessary in order to + keep it so as marriage. Otherwise the door would be opened + to extreme pauperism, to the debauchery of the "venus vaga," + to eunuchism and polygamy (4). Strangely enough, _Ortes_ + asserts that no people are richer per capita than any other. + The distribution of wealth among the apparently richer, + operates to make individuals heap wealth together in greater + quantities (8). + + _Malthus_ himself wrote his classical work under the + influence of a very intelligible reaction (1st ed., 1798; 2d + ed., 1803). For a whole generation, the European public had + had no other view broached but that the tree of human kind + might keep on growing even until it reached the heavens, if + care were only taken to manure the ground, to water the + roots and prune the branches according to the latest + world-improving recipes. _Malthus_, in opposition thereto, + called attention to the limits placed by nature to the + number of mankind. He demonstrated that it was not merely + arbitrary laws which opposed the Utopian happiness of all, + but in part the niggardliness of nature; and in greater part + the passions and sins of men themselves. If he sometimes + described the limits as narrower than they really are, and + if an occasional coarse expression escaped him, we need not + wonder. His polemic was well founded, and he was at the time + still a young man (born 1766, ob. 1834). He modified much in + the later editions of his work. For instance, he stopped the + unsavory sentence in which he says that a man born into the + world already occupied, whose family cannot support him, and + whose labor society does not need, has not the smallest + right to demand the smallest particle of food, and is really + superfluous in the world; that there is no place for him at + the great banquet of nature; that nature bids him go hence + and does not hesitate herself to execute the command. _P. + Leroux_ in a small pamphlet in answer to _Malthus_, quotes + this sentence at least forty times. Moreover, _Möser_, who + certainly is not considered a misanthrope, was not only + acquainted with the Malthusian law, but develops it in + words, and with consequences which strongly recall the very + words which raised such a storm against _Malthus_. Compare + Patr. Phant. I, 42; II, 1; IV, 15 (against vaccination); V, + 26. + + The opinions of political economists in our own day are, as + might be expected, divided on some of Malthus' expressions + and on his practical counsels. He has indeed but few such + one-sided followers as _Th. Chalmers_, On Political Economy + in Connexion with the moral State and moral Prospects of + Society, 1832. Malthus' fundamental views, however, are + truly scientific. (Ktêma es aei!) Compare _Baudrillart_, + Manuel, 424 seq., and _A Walker_, Science of Wealth, who + strangely enough (452) opposes Malthus, and yet is (458) + virtually of the same opinion. Even the better class of + socialists base themselves on the same view, without, + however, thanking Malthus for it. Thus for instance, _K. + Marlo_, System der Weltökonomie (1848, 52), passim. For an + excellent history of the theory of population, see _R. + Mohl_, Gesch. und Literatur der Staatswissenschaften, III, + 409 ff. (1858).] + + +SECTION CCXLIII. + +OPPONENTS OF MALTHUS. + +Of Malthus' opponents, John Stuart Mill has said, that a confused notion +of the causes which, at most times and places, keep the actual increase +of mankind so far behind their capacity for increase, has every now and +then given birth to some ephemeral theory, speedily forgotten; as if the +law of the increase of population were a different one under different +circumstances, and as if the fecundity of the human species, by direct +divine decree, was in keeping with the wants of society for the time +being.[243-1] + +The majority of such theories are based, on the proof that Malthus' +description of one stage of civilization is not true of another, +although the great discoverer, who, with his admirable many-sidedness, +had investigated the law of population in and throughout all the stages +of civilization, had, as a rule, himself given due weight to all of +this. The objection of unwarranted generalization applies to Malthus +much less than to the majority of his opponents. Since, for instance, in +young colonies, even the natural forces, which are in themselves limited +or exhaustible, afford a wide field of operation for a long time; many +American writers have supposed that labor alone was the source of +wealth, and that, to say the least, wealth should increase in the same +ratio as mankind; and even in a still greater ratio, since the division +of labor grows easier as population increases in density.[243-2] But +here it is forgotten that in every instance of economic production, +there are many factors engaged, each one of which can take the place of +another only up to a certain point. There are others, especially Grahame +and Carey,[243-3] who allude to the possibility of emigration, which is +still so far from being exhausted. But Malthus had nothing to say of the +impossibility of emigration. He spoke only of the great difficulties in +its way. (III. ch. 4.) There are many writers who would wish simply to +ship emigrants off, like a great many doctors who send their patients +away to die! (§ 259 ff.) When Sadler says that human prolificacy, +circumstances remaining the same, is inversely as the density of +population, he uses, to say the least, a very inaccurate mode of +expression.[243-4] The grain of truth hidden in this assertion does +certainly not come from Gray's theory, that in the higher stages of +civilization, the better living usual is a hinderance to the increase of +population, and that the prevailing influence of large cities increases +mortality;[243-5] but from influences, or, to speak more correctly, from +free human considerations, on which no one has thrown so much light as +Malthus. And indeed, where is the man who has better understood or more +warmly recommended the "aristocratic" impulse which should, in well +ordered civil society, hold the sexual instinct in equilibrium?[243-6] +Malthus himself pleasantly derides his opponents, who, to explain how +the same rifle, charged with the same powder and provided with the same +ball, produces an effect varying with the nature of the object at which +it is fired, prefer, instead of calculating the force of resistance of +the latter, to take refuge in a mysterious faculty by virtue of which +the powder has a different explosive force, according to the greater or +less resistance the ball meets when it strikes.[243-7] The peculiarity +of Godwin's polemics may be inferred from the fact that he considered it +very doubtful whether the population of England had increased during the +four preceding generations; and that he traces the increase of the +population of the United States to the influence of emigration almost +exclusively, and allows the desertion of whole English regiments in 1812 +ff. to play a part in accounting for that increase.[243-8] + +Malthus has been accused of rejoicing over the evils which are wont to +decimate surplus population; but the same charge might be brought +against those physicians who trace the diseases back to the causes that +produce them. He has also been branded as the enemy of the lower +classes, spite of the fact that he is the very first who took a +scientific interest in their prosperity.[243-9] As John Stuart Mill has +said, the idea that all human progress must at last end in misery was so +far from Malthus' mind, that it can be thoroughly combated only by +carrying Malthus' principles into practice.[243-10] + + [Footnote 243-1: _J. S. Mill_, Principles I, ch. 10.] + + [Footnote 243-2: _Everett_, New ideas on population, with + remarks on the theories of Malthus and Goodwin, 1823. + Similarly _Carey_, Principles of Social Science, I, 88 ff., + who, with a "natural philosophical" generalization, shows + that the more the matter existing on the earth takes the + form of men, the greater becomes the power of the latter to + give direction to natural forces with an ever accelerated + movement. So also _Fontenay_, in the Journal des + Economistes, Oct., 1850, says: _un nombre de travailleurs + doublé produit plus du double et ne consomme pas le double + de ce que produisaient et consommaient les travailleurs de + l'époque précédente_. Even _Bastiat_ inclines to the same + over-estimation of one factor of production. He promises in + the introduction to his Harmonies économiques to prove the + proposition: _toutes choses égales d'ailleurs, la densité + croissante de population équivaut à une facilité croissante + de production_. (Absolutely it is true, but whether + relatively, quære.)] + + [Footnote 243-3: _Grahame_, Inquiry into the Principle of + Population, 1816; _Carey_, Rate of Wages, 236 ff.] + + [Footnote 243-4: Varies inversely as their numbers: _M. Th. + Sadler_, The Law of Population, a treatise in Disproof of + the Superfecundity of human Beings, and developing the real + Principles of their Increase, III, 1830. There were, for + instance-- + + =================================================== + | _Inhabitants_ | _Number of_ + | _per English_ | _children to a_ + | _sq. mile_ | _marriage_ + ------------------+---------------+---------------- + The Cape | 1 | 5.48 + The United States | 4 | 5.22 + Russia in Europe | 23 | 4.94 + Denmark | 73 | 4.98 + Prussia | 100 | 4.70 + France | 150 | 4.22 + England | 160 | 3.66 + =================================================== + + Most of these figures are very uncertain; and even if they + were true, they would afford a very bad proof of his + assertion. Besides, _Sadler_ was one of those extreme tories + who resorted almost to Jacobin measures in opposition to the + reforms advocated by Huskisson, Peel and Wellington. Like + Sadler, _A. Guillard_, Eléments de Statistique humaine ou + Démographie comparée, 1855. But, for instance, in Saxony, + population has for a long time increased most rapidly, in + those places where it is already densest. Compare _Engel,_ + loc. cit. The five German kingdoms and Mecklenburg-Strelitz + hold the same relative rank, on a ten-year average, in + relation to the number of births that they do to density of + population, (_v. Viehbahn_, Statistik des Z. V., II, 321 + seq.)] + + [Footnote 243-5: _Gray_, The Happiness of States, or an + Inquiry concerning Population, 1875. _Weyland_, Principles + of Population and Production, 1816, had already ascribed to + industry in itself a tendency to make the increase of + Population less rapid!] + + [Footnote 243-6: Compare _Rossi_, Cours d'Economie + politique, I, 303 ff.] + + [Footnote 243-7: _Malthus_, Principle of Population, V, ch. + 3. Thus _J. B. Say_ asks those population-mystics: if in + thickly populated countries the power of procreation + diminishes of itself, how comes it that even here the + extraordinary voids made by pestilence, etc. are so rapidly + filled up?] + + [Footnote 243-8: _Godwin_, Inquiry concerning the Power of + Increase in the Numbers of Mankind, III, 1821; III, ch. IV. + Compare the same socialistic writer's essay: Inquiry + concerning public Justice (II, 1793), which in part provoked + Malthus' book. _David Booth_ (in Godwin's first book) had + the misfortune to ridicule Malthus by comparing his law with + the law of gravitation, which he said did not freely operate + in nature and was undemonstrable in space void of air! From + a better point of view, Bastiat says of Malthus' traducers, + that they might as well blame Newton when they were injured + by a fall.] + + [Footnote 243-9: Principle of Population, III, ch. 13. His + moral severity in other respects is apparent especially in + IV, ch. 13, towards the end.] + + [Footnote 243-10: Every good family takes care of their + children even before their birth. How far from practical is + the view that the means of subsistence come as a matter of + course, provided only that men are here before them!] + + + + +CHAPTER II. + +HISTORY OF POPULATION. + + + + +SECTION CCXLIV. + +HISTORY OF POPULATION.--UNCIVILIZED TIMES. + +In the case of those wild tribes which can only use the forces of nature +by way of occupation, the small extent of the field of food is filled up +by even a very sparse population. And the principal means by which +population is there limited are the following: the overburthening and +ill treatment of the women,[244-1] by which the simultaneous rearing of +several small children is rendered impossible;[244-2] the inordinately +long time that children are kept at the breast;[244-3] the wide-spread +practice of abortion;[244-4] numerous cases of murder, especially of the +old and weak;[244-5] everlasting war carried on by hunting nations to +extend their hunting territory, found in conjunction with cannibalism in +many tribes.[244-6] Besides, nations of hunters are frequently decimated +by famine and pestilence, the latter generally a consequence of +never-ending alternation between gluttony and famine.[244-7] + +Most negro nations live in such a state of legal insecurity that it is +impossible for a higher civilization with its attendant increase of the +means of subsistence to take root among them. At the same time, their +sexual impulses are very strong.[244-8] Here the slave-trade constituted +the chief preventive of over-population. If this traffic were suppressed +simply and no care taken through the instrumentality of commerce and of +missions to improve the moral and economical condition of the negroes, +the only probable but questionable gain would be that the prisoners made +in the numberless wars generated by famine would be murdered instead of +being sold. + +Nomadic races, with their universal chivalry, are wont to treat their +women well enough to enable them bear children without any great +hardship.[244-9] But the mere use of natural pasturage can never be +carried to great intensity. The transition to agriculture with its +greater yield of food but with the diminished freedom by which it is +accompanied is a thing to which these warlike men are so averse that it +directs the surplus population by the way of emigration into neighboring +civilized countries, where they either obtain victory, booty and +supremacy, or are rapidly subjugated. Such migrations are a standing +chapter in the history of all Asiatic kingdoms; they for a long time +disturb declining civilized states, finally conquering them, and begin +the same cycle in the new kingdom.[244-10] Where nomadic races see +themselves cut off from such migrations their marriages are wont to be +unfruitful.[244-11] + + [Footnote 244-1: In New Holland they are beaten by their + husbands even on the day of their confinement. Their heads + are sometimes covered with countless scars. _Collins_ says + that for mere pity one might wish a young woman there death + rather than marriage. (Account of N. S. Wales, 560 ff.) + South American Indian women actually kill their daughters, + with a view of improving the condition of women. (_Azara_, + Reisen in S. Amerika, II, 63.) How the women among the + aboriginal inhabitants of North America were oppressed is + best illustrated by the absence of ornaments among the + women, while the men were very gaudily decked, and carried + small hand-mirrors with them. (_Prinz Neuwied_, N. A. Reise, + II, 108 seq.) The early decay of female beauty among all + barbarous nations is related to the ill-treatment they + receive.] + + [Footnote 244-2: The custom of killing one of twins + immediately after birth or of burying a child at the breast + with its mother, prevails extensively among savage nations. + On New Holland, see _Collins_, 362; on North America, + Lettres édifiantes, IX, 140; on the Hottentots, _Kolb_, I, + 144.] + + [Footnote 244-3: In many Indian tribes, children are kept at + the breast until their fifth year. (_Klemm_, + Kulturgeschichte I, 236; II, 85.) Among the Greenlanders, + until the third or fourth year (_Klemm_, I, 208); among the + Laplanders and Tonguses, likewise (_Klemm_, III, 57); among + the Mongols and Kalmucks, longer yet. (_Klemm_, III, 171.)] + + [Footnote 244-4: The New Hollanders have a special word to + express the killing of the foetus by pressure. + (_Collins._) Among certain of the Brazilian tribes, this is + performed by every woman until her 30th year; and in many + more the custom prevails for a woman when she becomes + pregnant to fast, or to be frequently bled. (_Spix und + Martius_, Reise, I, 261.) Compare _Azara._, II, 79.] + + [Footnote 244-5: On the Bushmen, see _Barrow_, Journey in + Africa, 379 ff.; on the Hottentots, among whom even the + wealthy aged are killed by exposure, see _Kolb_, Caput bonæ + Spei, 1719, I, 321; on the Scandinavian, old Germans, + Wendes, Prussians, _Grimm_, D. Rechtsalterthümer, 486 ff.; + on the most ancient Romans, _Cicero_, pro Rosc. Amer, 35, + and Festus v. Depontani, Sexagenarios; on Ceos, _Strabo_, X, + 486; on the ancient Indians, _Herodot._, III, 38, 99; on the + Massagetes, _Herodot._, I, 216; on the Caspians, _Strabo_, + XI, 517, 520. Touching picture of an old man abandoned in + the desert, unable to follow his tribe compelled to emigrate + for want of food: _Catlin_, N. American Indians, I, 216 ff. + We here see how the killing of helpless old people may be + considered a blessing among many nations. Death is also + sometimes desired by reason of superstition. For instance, + the Figians think that after death they will continue to + live of the same age as that at which they died. + (_Williams_, Figi and the Figians, I, 183.) The Germans who + died of disease did not get to Walhalla! (_W. Wackernagel_, + Kl. Schriften, I, 16.)] + + [Footnote 244-6: On the frightful cannibalism practiced on + the upper Nile, see _Schweinfurth_ in _Petermann's_ geogr. + Mettheilungen, IV, 138, seq. Australian women seldom outlive + their 30th year. _Lubbock_, Prehistoric Times, 449. Many are + eaten by the men as soon as they begin to get old. + (Transactions of the Ethnolog. Society, New Series, III, + 248.) A chief of Figi Islands who died recently had eaten + 872 men in his lifetime. _Lawry_, Visit to the Friendly and + Fejee Islands, 1850. Even the more highly civilized Mexicans + had preserved this abomination. According to _Gomara_, + Cronica de la N. Espana, 229, there were here from 20,000 to + 25,000 human sacrifices a year; according to _Torquemada_, + Indiana, VII, 21, even 20,000 children a year. _B. Diaz_, on + the other hand, puts the number down at 2,500 only. Compare + _Klemm_, Kulturgeschichte, V, 103, 207, 216.] + + [Footnote 244-7: The usual coldness, so much spoken of, of + the Indians, seems to have an economic rather than a + physiological cause. At least, it has also been observed + among the Hottentots. (_Levillant_, Voyage, I, 12 seq.), and + under favorable economic conditions the Indians have + sometimes increased very rapidly. (Lettres édifiantes, VIII, + 243.) Whether the practice in vogue among the Botocuds to + carry the organ of generation continually in a rather narrow + envelope, or that among the Patachos of lacing the foreskin + with the tendrils of a plant, is not a "preventive check," + quære. Compare _Prinz Neuwied_, Bras. Reise, II, 10; I, + 226.] + + [Footnote 244-8: On the gold coast, people become fathers in + their 12th year even, and mothers at 10. (_Ritter_, + Erdkunde, I, 313.) In the whole of the Soudan the climate is + so exciting that the intercourse of the sexes is said to be + a "physical necessity," and an unmarried man of eighteen is + universally despised. But, indeed, the individual is little + valued in Africa, on account of the great prolificacy of the + African race. (_Ritter_, I, 385.)] + + [Footnote 244-9: _Herodot._, IV, 26.] + + [Footnote 244-10: Compare _Machiavelli_, at the beginning of + his Istoria Fiorentina. The migration of the Germani is + accounted for simply by the family and marriage relations of + the Germans, which necessarily favored prolificacy: _Severa + matrimonia ... singulis uxoribus contenti sunt ... septae + pudicitia ... paucissima adulteria ... publicatae pudicitiae + nulla venia ... nemo vitia ridet ... numerum liberorum + finire, flagitium habetur ... sua quemque mater uberibus + alit ... sera juverum Venus eoque inexhausta pubertas ... + quanto plus propinquorum, tanto gratiosior senectus._ + _Tacit._, Germ., 14. Entirely similar in character were the + migrations of the Normans, which lasted just as long as the + resistance to the countries they would invade, seemed to + them a matter of less difficulty than the transition to a + higher civilization in their own country. _Malthus_ has + corrected the extravagant notions concerning the former + density of population in the North--the _vagina nationum_, + according to Jornandes! (_Malthus_, I, ch. 6.) Compare, + however, _Friedrich M._, in Antimachiavel, ch. 21, and the + later view: Ouevres, IX, 196.] + + [Footnote 244-11: Among the Bedouins even three children are + considered a large family; and they even complain of that + number. (_Burckhardt._)] + + +SECTION CCXLV. + +INFLUENCE OF A COMMUNITY OF WOMEN AND POLYGAMY. + +Most barbarous nations live very unchaste;[245-1] so that, as Tacitus +observes, the ancient Germans were a brilliant exception to the +rule.[245-2] Vices of unchastity always limit the otherwise natural +increase of population. Premature enjoyment exhausts the sources of +fruitfulness in the case of many.[245-3] The life of the child conceived +in sin is generally little valued by its parents. Hence the numerous +instances of exposure and infanticide.[245-4] We have already seen how +closely, psychologically speaking, a community of goods is allied to a +community of women. (§ 85.) And, indeed, in the lower stages of +civilization, we find as close an approximation to the latter as to the +former; and it is difficult to believe that, among men living in a state +of nudity, the marriage of one man to one woman could properly +exist.[245-5] But it is as little possible to reconcile a community of +women with density of population as great national wealth with a +community of goods. Any one acquainted with the condition and capacities +of new born children knows that the weak little flame easily goes out +when not nursed by family care.[245-6] + +Polygamy also is a hinderance to the increase of population. Abstract +physiology must, indeed, admit that a man may, even without any danger +to his health, generate more children than a woman can bear.[245-7] But, +in reality, the simultaneous enjoyment of several women leads to excess +and early exhaustion;[245-8] and if one of them is married after the +other, the older who might still bear children for a long time are +neglected by the man.[245-9] Monogamy is, doubtless, the Creator's law, +since only in monogamous countries can we expect to find the intimate +union of family life, the beauties of social intercourse and free +citizenship.[245-10] "God made them male and female."[245-11] And yet in +all countries with which we are statistically acquainted, there is a +somewhat larger number of boys than of girls born;[245-12] but this +excess is removed by the time that puberty sets in, by reason of the +greater mortality of boys. Only extraordinary conditions which thin the +ranks of males, such as war and emigration, leave a preponderance of the +number of women.[245-13] Hence, among barbarous nations, who live in +everlasting strife (§§ 67, 70), polygamy is very generally established. +Men are seldom deterred therefrom by a solicitude concerning what they +shall eat, since the women are treated as slaves, and rather support the +men than are supported by them.[245-14] But in the civilized countries +of the east, the polygamy of the great may actually lead to the +compulsory singleness of many of the lower classes, as a species of +compensation.[245-15] The monstrous institution of eunuchism, which has +existed time out of mind in the east, is a consequence of this condition +of things as well as of the natural jealousy of the harem.[245-16] + + [Footnote 245-1: Impurity of the Kamtschatdales, bordering + on a community of women. (_Klemm_, Kulturgeschichte, I, 287 + ff., 350 ff.; II, 206, 297 seq.) On Lapland, see _Klemm_, + III, 55. In their purely nomadic period, even the Getes, + afterwards remarkable for their noble character (_Horat._, + Carm., III, 24), have had very loose relations of the sexes. + (_Menander_, in _Strabo_, VII, 297.)] + + [Footnote 245-2: Very unlike the Celts: _Strabo_, IV, 199. + But the Germans even at the time when the compensation + system alone prevailed, imposed a disgraceful death on the + _corpore infames. (Tacit._, Germ., 12.) In keeping with this + purity of the Germans was the deep gravity and the genuine + heartiness of their ancient nuptial ceremonies. (_Tacit._, + Germ., 18.) Similarly, in England throughout the middle + ages. (_Lappenberg_, Engl., Gesch. I, 596.) Great moral + severity of the Scandinavians (_Weinhold_, Altnord. Leben, + 255), so that the gratification of the sexual appetite + outside of marriage was punishable with death. (_Adam + Brem._, IV, 6, 21.)] + + [Footnote 245-3: Abuse of young girls in New Holland + (_Collins_, 563); among the American aborigines + (_Charlevoix_, Histoire de la N. France, III, 304; Lettres + édifiantes, VII, 20 ff.); among the negroes (_Buffon_, + Histoire naturelle de l'Homme, VI, 255).] + + [Footnote 245-4: Infanticide in Kamtschatka, _Klemm_, I, + 349.] + + [Footnote 245-5: In most mythical histories, the + institutions of property and of marriage are ascribed to the + same name (Menes Cecrops, the Athenian Thesmophories.) Among + the Indian tribes of Terra Firma, the exchange of wives and + the _jus primæ noctis_ of the chiefs are very common. + (_Depons_ Voyage, I, 304, ff.) In North America, the Indians + are very eager to rent out their wives for a glass of + brandy. (_Prinz Neuwied_, N. A. Reise, I, 572 seq.) Compare + _Lewis_ and _Clarke_, Travels to the Source of the Missouri + and the Pacific Ocean, 1804-1806. Almost always on entering + a higher age-class it is one of the principal conditions to + leave one's wife for a time to the more distinguished. On + feast days, prayer days, etc., the women give themselves + publicly up to vice; and this can be commuted only by a + gift. (_Prinz Neuwied_, I, 129 ff., 272.) Community of women + in California. (_Bagert_, Nachrichten von der Halbinsel C. + 1772.) In many of the South Sea Islands, the youth of the + higher classes were wont to form themselves into so-called + _arreyo-societies_, the object of which was the most + unlimited intercourse of the sexes (a pair being united + generally only from 2 to 3 days), and the murder of the new + born children. The girls principally were murdered, and + hence the missionaries at Otaheite (New Cytheria) found only + 1/5 as many women as men. _Chaque femme semble être la femme + de tous les hommes chaque homme le mari de toutes les + femmes._ (_Marchand_, I, 122.) The many governing queens + here are characteristic. Compare _Forster_, Reise II, 100, + 128; _Kotzebue_, Reise, III, 119; European Magazine, June, + 1806; _Reybaud_, Voyages, et marines, 128, and the + quotations in _Klemm_, Kulturgesch., IV, 307. + + Similar customs are found among the nomads. The Bedouins + dissolve their marriages so easily that a man forty-five + years old had 50 wives; family secrets are a thing unknown + there. (_Burckhardt_, Notes on the Bedouins, 64; Travels + app. II, 448; _Ritter_, Erdkunde, XII, 205, 211, 983.) On + the Libyans, see _Herodot._, IV, 168, 172, 186, 180: on the + Massagetes, _Herodot._, I, 216; on the Taprobanes, _Diod._, + II, 58; on the Troglodytes, _Pomp, Mella._, I, 8, + _Agatharch_, 30. Community of women among the ancient + Britons, _Caesar_, B. G. V, 14 seq.; also among the naked, + tatooed Caledonians, _Dio Cass._, LXXVI, 12; probably also + among the cannibal Irish. _Strabo_, IV, 201. Great laxity of + the marriage tie in Moelmud's laws of Wales, (_Palgrave_, + Rise and Progress of the English Commonwealth, I, 458 ff.) + in which country a species of tenure in common of land and + servants was customary. (_Wachsmuth_, Europ. Sittengesch. + II, 225.) In Russia, in very ancient times, only the Polanes + had real marriages. (_Nestor v. Schlözer_, I, 125 seq.) + Something very analogous even among the Spartans: same + education for boys and girls, admittance for men to the + female gymnasiums; marriage in the form of an abduction, and + afterwards fornication. (_Xenoph._, De rep. Laced. I, 6: + _Plutarch_, Lycurg. 15.) Adultery tolerated by law in + countless cases. (_Xenoph._, II, 7 ff.; _St. John_, The + Hellenes, I, 394.) History of the origin of the so-called + Partheniæ; _Strabo_, VI, 279. (_Supra_, § 83.) The custom + which prevails among so many barbarous nations to designate + one's progeny by the name of the mother, _Sanchoniathan_ + traces to the licentiousness of women. (p. 16, Orell.) + Traces of this also in Egypt: _Schmidt_, Papyrusurkunden, + 321 ff. Avunculus means little grand-father. Many proofs + which _Peschel_, Völkerkunde, 243 seq. explains otherwise, + but which seem to me to point to an original community of + wives.] + + [Footnote 245-6: The relation existing between the so-called + organization of labor (§ 82) and a community of wealth is + repeated in the relation of a community of wives to the + situation in Dahomey, where every man has to purchase his + wife from the king. _Gumprecht_, Afrika, 196. Similarly + among the Incas: _Prescott_, Hist. of Peru, I, 159. Even the + sale of wives is a step in advance as compared with a + community of wives (§ 67 seq).] + + [Footnote 245-7: It is said that a German prince of the 18th + century had 352 natural children. (_Dohm_, Denkwürdigkeiten, + IV, 67.) Feth Ali, shah of Persia, had made 49 of his own + sons provincial governors, and he had besides 140 daughters. + (_Ker Porter_, II, 508.)] + + [Footnote 245-8: Turkish married men are frequently impotent + at the age of 30. (_Volney_, Voyage dans la Turquie, II, + 445.) Similarly in Arabia. (_Niebuhr,_ Beschreibung, 74.) + The use of aphrodisiac means very wide-spread in the East. + According to _Niebuhr_ (76), monogamous marriages produced + absolutely more children than polygamous. Compare _G. + Botero_, Ragion di Stato, VIII, 93 ff.; _Montesquieu_, + Lettres Persanes, N., 114; _Süssmilch_, Göttl. Ordnung, I, + Kap., 11. On the other hand, _Th. L. Lau_, Aufrichtiger + Vorschlag von ... Einrichtung der Intraden (1719), 6, + recommends the allowing of polygamy as a means of increasing + population.] + + [Footnote 245-9: Rehoboam had 18 wives and 60 concubines, + and only 88 children (II Chron., 11, 21); that is not much + more than one child by each.] + + [Footnote 245-10: The high esteem for woman requisite to + true love seems to be almost irreconcilable with polygamy. + The wife stands to the husband in the relation of a + mistress; and, in reference to the latter, fidelity has + scarcely any meaning. The husband also has no confidence in + his wife; and hence the seclusion of the harem. But the + domestic tyrant is easily made the slave of a higher power. + And what becomes of fraternal love with the half-brother + feeling of children of different mothers?] + + [Footnote 245-11: Genesis 1, 27; 5, 12; 7, 13.] + + [Footnote 245-12: Compare _J. Graunt_, Natural and Political + Observations on the Bills of Mortality (1662). During the + course of the 19th century, according to averages made from + long series of years, there were, for every 1,000 girls born + alive in Lombardy, 1,070 boys; in Bohemia, 1,062; in France, + 1,058; in Holland, 1,057; in Saxony, 1,056; in Belgium, + 1,052; in England, 1,050; in Prussia, 1,048. On the whole, + the ratio in 70,000,000 children born alive was as 100 : + 105.83. The excess of males over females in bastards is + smaller than in the case of legitimate children, in towns + than in the country. Everything considered, the number of + boys born seems to be greater than the number of girls in + proportion as the father is in advance of his wife in years. + Compare _Sadler_, Law of Population, II, 343. _Hofacker_, + Ueber die Eigenschaften die sich vererben, 51 ff. _Wappäus_, + Allg. Bevölkerungstatistik, II, 151, 160 ff., 306 ff. _Per + contra_, we have _Legoyt's_ supposition that the number of + boys born is greater in proportion as the parents are more + nearly of an age: Statistique comparée, 500.] + + [Footnote 245-13: According to the censuses between 1856 and + 1861, there are for every 1,000 men in Belgium 994 women; in + Austria, 1,004; in Prussia, 1,004; in France, 1,001; in + England, 1,039; in Holland, 1,038. The majority of the + latter seems to have diminished everywhere the greater the + distance in time from the most recent great wars; and to + belong only to those age-classes which were coeval with + those wars. (Preuss. amtliche Tabellen für 1849, I, 292.) In + the United States there were, 1800-1844, for every 1,000 + women, 1,033-1,050 men; mainly accounted for by large + immigration. Between 1819 and 1855 the immigration was + 2,713,391 men and 1,720,305 women. (_W. Bromwell_, History + of Immigration to the United States, New York, 1856.) In + Switzerland, among the population belonging to the cantons, + there were for every 1,000 men, 1,038 women; among the + foreign Swiss, 970; among foreigners, 650. (_Bernouilli_, + Populationistik, 31.) Compare _Horn_, loc. cit., I, 105 ff., + who supposes a natural principle of equilibrium: the greater + the preponderance of the number of women, the more does it + happen that only the younger women are married; the greater + consequently the difference between the ages of the married + couple, and the more probable the birth of boys, and _vice + versa_. (115 ff.)] + + [Footnote 245-14: Compare _Catlin_, N. American Indians, I, + 118 ff. Even Strabo believed that among the Median + mountaineers each man had five wives! (XI, 526.)] + + [Footnote 245-15: Concerning Solomon's 700 wives and 300 + concubines, see I Kings, 11, 3; according to the Canticle of + Canticles, only 60 wives and 80 concubines. According to + _Mirkhond_ and _Khondemir_, there was in the place in which + the Sassand shah resided, 3,000 women of the harem and + 12,000 female slaves. Polygamy among the latter class is + seldom possible or thought of. Of 2,800 Moslems in Bombay, + only 100 lived in polygamy, and only 5 had three wives each. + (_Ritter_, Erdkunde, 1088.) I lay no weight here on the + assertion so frequently repeated of travelers in the east, + that more girls than boys are born there; for the reason + that there is there no real statistics, and that the infidel + travelers can be permitted few glimpses into the secrecy of + family life. _Lady Sheil_ indeed assures us that in Persia + itself the opinion prevails that there are a great many more + women than men. Glimpses of Life and Manners in Persia, + 1855. Similar pretense among the Mormons.] + + [Footnote 245-16: We find, even on Egyptian temples, + pictures representing the castration of prisoners. _Franck_, + in the Mémoires sur l'Egypte, IV, 126. On Babylon, see + _Hellanicus_, apud. Donat. ad Terent. Eunuch., I, 2, 87. + This province, besides Assyria (the ancient seat of sultan + glory), delivered 500 castrated boys per annum to the king + of Persia. (_Herodot._, III, 92.) Of the califs, Soliman is + said to be the first (at the beginning of the 8th century) + who had his harem superintended by eunuchs; a very sensual + master who frequently changed his wives. (_Reiske Z. + Abulfeda_, I, 109 ff.; _Weil_, Gesch. der Kalifen, I, 573.) + At an audience which the calif Moktadir gave to a Byzantine + ambassador, there appeared 4,000 white and 3,000 black + eunuchs. (_Rehm._, Gesch. des Mittelalters, I, 2, 32.) In + the harems of the present Persian persons of rank, there are + usually from 6 to 8 eunuchs. _Rosenmüller_, Altes und Neues + Morgenland, IV, 290. In Upper Egypt, the castration of + handsome boys by monks (!) is a regular trade. About 2 per + cent. die in consequence of the operation, the others rise + in consequence in price from 200-300 to 1,000 piasters. + (_Ritter_, Erdkunde, I, 548.) In the Frankish middle age, + the merchants of Verdun castrated persons to sell them in + Spain. Compare _Liutprand_, Hist., VI, 3, in _Muratori_, + Script. Rerum Ital., II, 1, 470.] + + +SECTION CCXLVI. + +HISTORY OF POPULATION.--IN HIGHLY CIVILIZED TIMES. + +The conditions of population among mature and flourishing nations is +characterized by this, that the moral and rational preventive tendencies +counter to over-population decidedly preponderate. Here so much value is +attached to the life, and to the healthy and comfortable life of human +beings already in existence that even the majority of the lower classes +take care to bring no more children into the world than can be properly +supported, nor to bring them into being in advance of food. Here, too, +mortality is relatively small, which when population is stationary is +found in connection with a higher average duration of human life.[246-1] +While among savage and semi-savage nations, travelers are struck by no +phenomenon as much as by the total absence of old men,[246-2] in most +European nations the average duration of life has, during the last +centuries, seemed to noticeably increase. In France, for instance, +between 1771 and 1780, on a population of 29,000,000 at most, there were +as many deaths as on 35,000,000 between 1844 and 1853.[246-3] In Sweden, +the classic land of statistics relating to population, mortality from +1749 to 1855 had diminished 0.107 per cent. per annum.[246-4] [246-5] + +No reasonable man considers mere living the highest good; but, from an +average prolongation of life, we may with great probability infer an +improvement in the means of subsistence, in hygienic measures, etc., +even for the lower classes, who everywhere constitute the great majority +of the population. _Aisance est vitalité!_--at least on the supposition +that morality remains the same.[246-6] How great may not have been the +effect, for instance, of the healthier mode of the building of modern +cities, of the disappearance of the greater number of fortifications +etc., the more rational character of the healing art, the extension of +vaccination,[246-7] the hygienic measures adopted by governments,[246-8] +the better care of the poor and especially the asylums for small +children! The modern system of agriculture and of the corn trade make +famines less destructive of life.[246-9] (§ 115). The modern +quarantine-system has protected us entirely against a number of plagues; +and the worst epidemics of our day cannot be compared with those of +earlier periods or in less civilized countries. In the second half of +the 17th century, it was estimated in London that a plague would occur +once in every 20 years, each of which swept away one-fifth of the entire +population.[246-10] And in that very city the annual mortality between +1740 and 1750 varied three-fifths, during the second half of the 18th +century only one-third, during the 19th century only one-fifth in the +same decade; a clear proof of the diminished fatality of +epidemics.[246-11] [246-12] + + [Footnote 246-1: The so-called _Populationistikers_ are wont + to distinguish between the average and probable duration of + life (_vie moyenne--vie probable_); and understand by the + former the number of years which, on an average, have been + accorded to one deceased; by the latter, the number of years + after the expiration of which one-half of a given number of + human beings have disappeared. If _x_ deceased persons have + lived an aggregate of _s_ years, their average duration of + life = _s_/_x_. In the case of a whole people, indeed, even + the many-years' average of the duration of life of those + deceased expresses the true average duration of life only + when (a rare case) the aggregate population remains + stationary. For, when the population is increasing, the + average age of the deceased is smaller than the average + duration of life, and, when population is decreasing, + larger. In the saddest case of all, when there are no births + whatever, and the nation is gradually dying out, there would + be an increase from year to year of the average age. In all + such cases, strictly speaking, only the actual observation + and following up of those born, until they die; can afford a + safe result. This is _Hermann's_ method, introduced into + Bavaria since 1835. Compare the XIII. and XVII. numbers of + the official Bavarian statistics with _G. Meyer's_ criticism + in _Hildebrand's_ Jahrbüchern, 1867, I. And indeed _Hopf_, + Preuss. Statist. Zeitschr., says that a complete table of + mortality can be made, according to the best method, only + after centuries of observation. + + Compare _Kopf_, in the 3d edition of _Kolb's_ Handbuch der + Statistik, and the solid works of _G. F. Knapp_, Ueber die + Ermittelung der Sterblichkeit (1868) and Die Sterblichkeit + in Sachsen (1869). _Price's_ mode of calculation of which + _Deparcieux_ is the real author, which divides the number of + the living by the arithmetical mean of the number of births + and deaths is not only inaccurate (_Meyer_, loc. cit., 43 + ff.) but erroneous in principle, since it allows two + countries of equal population to be the same, the one of + which has 120,000 births and a mortality of 80,000, and the + other, on the contrary, 80,000 births and a mortality of + 120,000. _Engel_ recommends as the measure of real vitality + the ratio between the "living years" and the "dead years," + meaning by the former the sum of the years which those still + living have lived through, and by the latter the sum of the + years lived through by those who have died within a given + period. (Preuss. Statist. Zeitschr., 1861, 348 ff.) But the + inference which may be drawn from a high or a low average of + life is altogether ambiguous. A high average may as well be + produced by a great mortality among children as by a + favorable mortality among those of mature age; and a low + average as well by a relatively small number of births as by + a relatively short duration of life. (_Meyer_, loc. cit., + 23, 24.)] + + [Footnote 246-2: On the aborigines of America, see Lettres + édifiantes, VII, 317 ff. _Cook,_ Third Voyage, III, ch. 2. + _La Pérouse_, Voyage, ch. 9. _Robertson_, Hist. of America + B., IV. _Raynal_, Histoire des Indes L., XV. On the African + negroes: _M. Park_, ch. 1. They are said to manifest the + symptoms of old age at 40, and very seldom to live to be + over 55 or 60 years of age.] + + [Footnote 246-3: _Necker_, De l'Administration des Finances + de la France, 1784, I, 205 ff., gives for 1771-80 the + average number of births, per annum, 940,935; of deaths, + 818,391; the population at 24,229,000. _Legoyt_, Statist. + Comp., estimates the last, in 1784, at at least 26,748,843, + probably even at 28,718,000. During the period, 1844-53, + 35,000,000 to 36,000,000 Frenchmen had only about as many + births (956,317) and deaths (815,723) as a much smaller + population before the Revolution--the latter numbers, + according to official estimation, omitting the + still-born--which _Necker_ also scarcely took into + consideration. _C'est la différence entre un peuple de + prolétaires et une nation, dont les deux tiers jouissent des + bienfaits de la propriété. (Moreau de Jonnès)._ In France, + there was one death, in 1784, on every 30 living; in 1801, + on every 35.8 living; in 1834-5, on every 38 living; in + 1844, on every 39.9 living; in 1855-57 (average), on every + 41.1 living; in 1860-65 (average), on every 43.7 living. It + is also probable, that the average duration of life in + France increased from the fact that, from 1800 to 1807, the + number of persons subject to conscription was only 45 per + cent. of the whole corresponding number of births; but that + from 1822 to 1825 it was 61 per cent. (_Bernoulli_, + Populationistik, 452.) On Paris alone, see _Villermé_, + Mémoire lu à l'Académie des Sciences, 29 Nov., 1824. Compare + _supra_, § 10.] + + [Footnote 246-4: _Wappäus_, Allg. Bevölkerungsstatistik. In + Prussia, in the less cultured provinces (the eastern), the + mortality and number of births is greatest; but in the whole + country the relative mortality seems to have remained + stationary since 1748. (_Engel_, Preuss. Statist. Zeitschr., + 1861, 336 seq.) And even the average age of the deceased + decreased even between 1820 and 1860 (344 ff.) In Berlin + alone, the arithmetical mean of the number of births and + deaths shows no improvement, at least (loc. cit. 1862, + 195).] + + [Footnote 246-5: In Geneva, where there have been almost + uninterrupted tables of mortality, giving the age at the + time of death, the average duration of life during the 2d + half of the 16th century is estimated at 21-1/6 years; + during the 17th century, at 25-3/4 years; from 1701 to 1750, + at 32-7/12 years; from 1750 to 1800, at 34-1/2 years; from + 1814 to 1833, at 40-2/3 years. Compare _Mallet_, Recherches + historiques et statistiques sur la Population de Genève, + 1837, 98 ff., 104 ff., and _Bernouilli_, Schweiz, Archiv., + II, 77; _per contra, d'Ivernois_, sur la Mortalité + proportionelle des peuples considérée comme Mesure de leur + Aisance et Civilization, 1833, 12 ff. But little can be + inferred from this, on account of the large immigration, of + adults for the most part. Geneva is said to have had, in the + 16th century, never much more than 13,000 inhabitants; at + the end of the 17th century it had 17,000; in 1789, 26,000; + between 1695 and 1795 there was an increase of 6,000 at + least from abroad. (_Bernouilli_, Populationistik, 369 seq.) + Compare _Wappäus_ in the Götting. Gesellsch. der Wissensch. + Bd., VIII, 1860, who, however, as well as _Neison_, + Contributions to Vital Statistics, VI ff., is too skeptical + as regards modern progress in vitality.] + + [Footnote 246-6: Higher civilization, indeed, instead of + leading to higher vitality, may lead to immoderate toil and + immoderate enjoyment. (_Schäffle_, in the D. + Vierteljahrsschrift, April, 1862, 340.) _Engel_ says that, + in general, life is more intense in our day, and hence leads + to a more rapid exhaustion of individual life-force. + (Preuss. Statist. Ztschr., 1862, 53.) According to English + experience of the well-fed classes, those have the greatest + duration of life who otherwise live in modest circumstances. + Thus, for instance, clergymen thirty years of age have still + an average expectation of life of 39.49 years; members of + the learned professions, 38.86; country gentlemen, 40.22; + members of the aristocracy, 37.31; princes of the blood, + only 34.04; sovereigns, only 27.16 (Statist. Journal, 1859, + 356 ff.); while agricultural laborers, who have sufficient + means and intelligence to participate in the so-called + friendly societies, have an expectation of life of 40.6 + years after their thirtieth year. (_Neison_, loc. cit.) On + the whole, it seems to be in harmony with the democratic + leveling tendencies of our own age, that the better care of + children and of the sick has lengthened short lives, and + that the unrest of the times has shortened the long lives, + although the level of the general average continually rises, + notwithstanding. Thus, in Geneva, the proportion of those + who outlived their thirtieth year was: in the 16th century, + after 1549, 29.87; in the 17th century, 37.29; in the 18th + century, 49.39; in the 19th century, until 1833, 58.85 per + cent. of the number of births. On the other hand, the + expectation of life of those who had attained their 80th + year, was in these four centuries respectively 6.22, 5.87, + 4.40 and 3.84 years. (_Mallet_, l. c., and Statist. Journal, + 1851, 316 ff.) In keeping with this is, that according to + _Guy's_ researches, the average duration of life of the + English peerage and baronetage was, in 1500-1550, 71.27 + years; 1550-1600, 68.25 years; 1600-1650, 63.95 years; + 1650-1700, 62.40 years; 1700-1745, 64.13 years. (Statist. + Journal, 1845, 74.) However, we may most directly infer a + favorable condition of things from the diminished mortality + of children, for the reason that this, far more directly + than the mortality of adults, is conditioned by the quality + of food. The younger a child is, the more exclusively is its + life-force the product of these two factors: the physical + constitution of its parents and the care bestowed upon it. + Compare _F. J. Neumann_, Die Gestaltung der mittleren + Lebensdauer in Preussen, 1865, 26 ff. In Prussia, in + 1751-60, only 312 in 1,000 outlived their tenth year; in + 1861-70, 633 in 1,000. Yet, since 1856, the mortality of + children has again begun to increase. (_Knapp_, + Mittheilungen des Statist. Bureaus, VIII, p. 8.)] + + [Footnote 246-7: _Duvillard_, Analyse ou Tableau de + l'Influence da la petite Vérole, 1806, is of opinion that + before vaccination only 4 per cent. of those over 30 years + of age were spared by the small-pox; that two-thirds of all + new-born children were attacked by the disease sooner or + later, and that from one-eighth to one-seventh of those + attacked died; and of small children even one-third. Hence, + in many countries, the average duration of life was + increased 3-1/2 years by reason of vaccination. In London, + between 1770 and 1779, of 1,000 deaths, 102 were caused by + the small-pox; in from 1830 to 1836, only 25 in 1,000. + (_Porter_, Progress of the Nation, I, 1, 39.) In Berlin, + between 1792 and 1801, 4,999 persons died of the small-pox; + between 1812 and 1822, only 555. (_Casper._) That this is + really a consequence of vaccination is proved by the facts + of the Chemnitz small-pox epidemic of 1870-71, during which, + in four of the streets principally visited by it, 9 per + cent. were taken ill. Of 4,375 persons who had been + vaccinated, 2.12 per cent. were attacked; of 644 who were + not vaccinated, 54.38 per cent. Of those attacked, 2.1 per + cent. of the former and 11.3 per cent. of the latter died. + (Leipzig Tageblatt, 5 Mai, 1871.)] + + [Footnote 246-8: Among the earliest institutions of medical + police are the following: the Swedish Collegium medicum + under Charles XI; the Prussian, 1724; the Danish, 1740; the + quarantine law of Louis XIV., of 1683; the Parisian bureau + of nurses, 1715; lying-in establishments since 1728; French + institutions for the saving of drowned persons, 1740; + English institutions for the saving of persons in cases of + apparent death, 1744; bathing largely promoted by government + since the eighteenth century; prohibition by Maria Theresa + of burial in churches and of locating cemeteries too near + dwelling houses, in 1778. Even _Thomasius_, De Jure + Principum circa Sepultur., § 8, had advised this; and, in + Italy, _Fr. Patricius_, De Inst. Republ. V, 10. On ancient + medical police, see _Pyls_ Repertorium für öffentliche und + gerichtliche Arzneiwissenschaft, II 167, ff. III, 1 ff.] + + [Footnote 246-9: In France, the number of deaths in the + cheap years, 1816 and 1819, amounted to an average of + 755,877; of the dear years, 1817 and 1818, to an average of + 750,065. (Ann. d'Economie politique, 1847, 333.) Thus, the + same scarcity in Pomerania increased its otherwise smaller + mortality relatively less than in Posen. (_Hildebrand's_ + Jahrbb. 1872, I, 292.) It is a good sign that in Altenburg, + between 1835 and 1864, the variation in the price of corn + had no influence on its mortality, although the number of + marriages and of births was conditioned by it. (_v. Scheel_ + in _Hildebrand's_ Jahrbb., 1866, I, 161 ff.)] + + [Footnote 246-10: _Sir W. Petty_, Several Essays, 31 seq. + Great regularity of epidemics in the tropical world: + _Humboldt_, N. Espagne, II, 5. The great plague in the + middle of the 14th century is said to have destroyed 2/3 of + the population of Norway, of Upland, 5/6; in the mountain + districts of Wermeland only 1 boy and 2 girls were left. + (_Geijer_, Schwed. Gesch., I, 186.) According to _Sismondi_, + Gesch. der Italien. Republiken, VI, 27, 3/5 of the whole + population of Europe died at that time. How the cholera + would have raged among our forefathers in the middle ages! + Certainly, as it does now in the East Indies; since, when of + those really attacked by the disease among ourselves so many + die, we cannot attribute our small number of deaths from + cholera to the smaller intensity of the disease or to the + greater skill of our doctors, but chiefly to the better + nourishment of our people, to their better dwellings and + greater cleanliness. Compare _Heberden_, On the Increase and + Decrease of Disease, 1801.] + + [Footnote 246-11: _Bernouilli_, Populationistik, 363, seq. + Whether, on this account, we can infer the increased health + of the people, is very much doubted by the aged _laudatores + temporis acti_. They would have us believe that it is + possible that the prolongation of the average of human life + is to be explained by taking into account the case of + numerous valetudinarians who formerly died early, but who + are _now_ preserved to drag out a miserable existence. The + relative number of those who have died of old age did not + noticeably increase between 1816 and 1860 either in Berlin + or in the Prussian state. (_Engel_, Zeitschr., 1862, 222.) + Compare, per contra, _Marx_, Ueber die Abnahme der + Krankheiten durch die Zunahme der Civilization: transactions + of the Göttinger Gesellschaft der Wissenschaften, + 1842--44,43, ff. The extreme limit of the decrease of + mortality, where there are no other causes of death but + inevitable weakness of childhood and age, _J. G. Hoffmann_ + thinks would be one death per annum for every 52-53 living, + and _Wappäus_, one in 57-58. (Allg. Bevölkerungstatistik, I, + 231, 340); (_Schäffle_, System, I, 571); according to + Capeland observations, one for every fifty.] + + [Footnote 246-12: This much, however, is clear, that the + life insurance companies of the present day cannot rely on + the calculations made in earlier stages of civilization; on + _Süssmilch's_, for instance; and just as little on those of + the old Romans in L. Digest. ad Leg. Falcidiam. Compare + _Schmelzer_, De Probabilitate Vitae ejusque Usu forensi, + 1788.] + + +SECTION CCXLVII. + +HISTORY OF POPULATION.--NUMBER OF BIRTHS AND DEATHS. + +There is found to be in most states, where a decrease in mortality has +been observed, a diminished number of births likewise.[247-1] This, +indeed, happens necessarily only in the case in which the means of +subsistence either do not increase at all, or in a less degree than +mortality has decreased. Thus, towards the end of the 18th century, +Norway was the country where the increase and decrease of the population +were most remarkable for their smallness. There was only one death +between 1775 and 1784 for every 48 living persons; but, at the same +time, only one marriage for every 130 living.[247-2] The organization of +labor was so little developed among the Norwegians, especially in the +absence of important cities, the industries of which might have been +able to absorb the surplus population, that almost every one of its +inhabitants was in a condition to calculate in advance whether or not he +would have enough to support a family. A person born in the country +remained generally in his native village all his life. To found a family +he had either to own a peasant's estate himself or wait until one of the +day laborer's huts (_Kathe_), of which there were several attached to +each such estate, was vacant. A too large family would certainly have +died of hunger in the winter time. The clear sober sense of the people +recognized this fact, and all the farm houses of the peasants were +without any appreciable injury to morality filled with unmarried +servants of both sexes who were, indeed, supplied with clothes and food +but who at the same time were indolent and incapable of +advancement.[247-3] Where a nation's economy is rapidly advancing, there +is no necessity why the most natural and when properly directed the most +beneficent human impulse should be sacrificed to a higher average +duration of life. But if this must be, when the distribution of the +national resources is pretty nearly equal, it is not so much the number +of marriages as the average fruitfulness of marriages that will +diminish; that is as many persons as before may enter the married state +but most of them are obliged either to postpone doing so until a later +age, which places a greater interval between generation and generation, +and causes the number of those living at any one time to decrease; or +they cease to procreate children at an earlier period in their married +life. The latter is found especially in France.[247-4] [247-5] But, on +the other hand, where the distribution of the national resources is very +unequal, the rich may afterwards as well as before continue to follow +out their inclination to marry at as early a day and age as they wish; +but the less fortunate must remain unmarried through life. Here, +therefore, the average number of children to a marriage does not +diminish; but the aggregate number of marriages does.[247-6] If the +relative frequency of marriages in most European countries has +diminished during the last century, the cause has been in part directly +the long duration of life of married couples. Hence, we are not always +warranted in consequence, to infer a diminished number of existing +marriages.[247-7] + +In many countries, it has been recently observed that the average number +of persons to a family is a decreasing one. Thus for, instance, in 1840, +in Holland, there were to every hundred families 497 persons, in 1850, +only 481; in Saxony, in 1832, 460; in 1840, only 443; in Bavaria, in +1827, 480, in 1846, only 448. In cities also the average size of +families is usually smaller than in the country.[247-8] This is +intimately connected with this other fact that in the higher stages of +civilization a larger number of independent households consists of +single persons in contradistinction to married couples.[247-9] [247-10] + + [Footnote 247-1: In France there was one child born alive, + + In 1801-1805, on every 30.9 living. + In 1806-1810, " 31.6 " + In 1811-1815, " 41.5 " + In 1816-1820, " 31.6 " + In 1821-1825, " 32.1 " + In 1826-1830, " 33.0 " + In 1831-1836, " 34.0 " + In 1846-1850, " 37.8 " + In 1851-1854, " 37.88 " + In 1860-1864, " 37.56 "] + + [Footnote 247-2: _Malthus_, Principle of Population, II, ch. + 1. In Denmark, at the same time, 1 in 37 and 114. + (_Thaarup_, Dänische Statistik., II, 1, 4.)] + + [Footnote 247-3: In modern times, the intellectual and legal + conditions which existed in Norway have been loosened to a + great extent, and population in that country has, in + consequence, made rapid advances. In 1769 the population was + only 723,000; in 1855, it was 1,490,000. But the above + customs for the most part continue still. Between 1831 and + 1835, there was one marriage a year for every 138 living + persons. The relative number of marriages is smaller than + before. In 1769, there were, in every 1,000,376 married + persons; in 1801, 347; in 1825, 345; in 1835, 322. In 1805, + there were only 63 illegitimate births to every 1,000 + births; in 1835, the proportion was 71.5 in every 1,000. + (_Blom_, Statistik Con N., II, 168, 173.)] + + [Footnote 247-4: In England, there were, in 1838-47, of + every 1,000 contracting marriage, 94 who had not yet + completed their 21st year; in Belgium, 1840-50, only 54; but + the famine year, 1846-47, noticeably lowered the relative + number of minors in both countries. There were married-- + + Column Head Key: A - _In Belgium 1841-50._ + B - _In the purely Flemish provinces._ + C - _In the purely Wallonic provinces. + D - _Sweden 1831-35._ + ============================================================== + | A | B | C | D + -------------+-------+-------+-------+------------------------ + | per | per | per | + | 1,000 | 1,000 | 1,000 | + Before their + 21st year | 56 | 32 | 74 |{ 359 per 1,000 males. + From 22 to | | | |{ + 25 years | 219 | 181 | 259 |{ 463 per 1,000 females. + + From 26 to | | | |{458 males, 387 females, + 35 years | 503 | 511 | 490 |{ per 1,000. + + From 36 to | | | | + 45 years | 161 | 191 | 129 |{ 183 per 1,000 males. + After their | | | |{ + 45th year | 61 | 75 | 48 |{ 150 per 1,000 females. + ============================================================== + + But it must not be overlooked here, that the Flemish + provinces of Belgium had been for a long time in a sad + economic condition. (_Horn_, Studien, I, 75 ff.) No less + characteristic of the well-being of a people and their + providence in entering into the married state is the + relative age at which they contract marriage. If we divide + ages into four classes (up to the 30th year, between 31 and + 45, between 46 and 60, and after 60), we find, for instance, + that from 1841 to 1845, there were in West Flanders 585 per + 1,000 marriages between persons of the same age-class, 305 + in which the husband, and 110 in which the wife belonged to + an older class; in Namur, on the other hand, 683, 234 and + 83. In dear years, the relative number of marriages between + persons belonging to different age-classes, and the relative + difference in age of parties to the marriage contract + increases. + + And so, the frequency of second marriages of widows and + widowers is no favorable symptom of the facility of founding + a family. Naturally every woman prefers a man who was never + married before to a widower; and every man a maiden to a + widow; but where there is a want of room to establish a new + household, the possession of such one by a widower may + readily preponderate over all counter considerations. Thus, + for instance, in the Flemish provinces of Belgium, of 1,000 + widowers, from 365 to 395 marry again; in the Wallonic, only + from 293 to 308. Of 1,000 brides, 98 are widows in West + Flanders, and in Namur, 41. A similar proportion in Bavaria + between the Palatinate and the hither-districts. (_Hermann_, + Bewegung der Bevölkerung in Bayern, p. 14.) The less the + frequency of marriage in general, the greater is the + relative probability of second marriage for widows and + widowers; and hence, in years of scarcity, the latter + relatively increase. (_Horn_, Studien, I, 201 ff.) Sometimes + this increase is absolute: in Austria, during the cheap year + 1852, there were 231,900 marriages between persons never + before married, and 85,000 in which at least one of the + contracting parties had been married before. On the other + hand, during the dear year 1855, there were only 156,000 of + the former and 89,000 of the latter. Something analogous, + observed in antiquity. (_Pausan._, II, 21, 8; X, 38, 6; + _Propert._, II, 11, 36.) _Tacitus_, Germ., 19, describes the + moral feelings of the ancient Germans as averse to the + second marriage of widows, and he apparently approves it.] + + [Footnote 247-5: In 19 European countries, with an aggregate + population of 121,000,000, the number of the married + amounted to an average of 34.88 per cent. of the whole + population. France is at the head with 38.94 per cent. + (1866), even 40.5. In these countries, of all adults, there + is a percentage of 65.98 who marry. France is here, also, at + the head, with a percentage of 73.58. And the number of the + unmarried has continually decreased in post-revolutionary + France. In 1806, there were only 35.84 per cent. of the + population married. (_Wappäus_, A. Bevölk erungsstatistik, + II, 219, 223, 229.) In relation also to the frequency of + first marriages and of marriage at the proper age, France is + the best situated country. (_Haushofer_, Lehr- und Handbuch + der Statistik, 40 ff.) But at the same time, in what + concerns the fruitfulness of marriage, it is the farthest + behind; and since 1780 prolificacy has continually decreased + there. Thus, 1800-1815, 3.93 legitimate children to a + marriage; 1856-60, only 3.03; 1861-6, again 3.08. (_Legoyt_ + in the Journal des Econ. Oct. 1870, 28.) How little this + depends upon physiological causes may be inferred from the + fact that _Strabo_ commends the women of the Gallic race for + their peculiar adaptability to bearing and rearing children. + (IV, 178, 196.) The "prudential checks" must play a + principal part in producing a low birth rate. (Statist. + Journal, 1866, 262), as we find in France + + ============================================================ + | _Yearly per 100_ | + | _inhabitants._ | _Women who marry_ + _In_ +------------------------+ _before their 25th_ + |_Marriages._| _Births._ | _year_. + --------------+------------+-----------+-------------------- + Brittany, | 7.0 | 29.8 | 42.7 per cent. + Adour, | 6.9 | 25.0 | 47.3 " + Lower Garonne,| 8.3 | 22.0 | 59.7 " + Upper Seine | 8.0 | 23.7 | 60.0 " + ============================================================ + + That, however, the shorter duration and smaller fruitfulness + of marriage by no means necessarily accompany one another, + France also proves, since it possesses the longer average + duration of marriage: 26.4 years against 20.7 in Prussia. + (_Wappäus_, II, 311, 315.)] + + [Footnote 247-6: The proportion of the married to the whole + population declined in Prussia from 35.09 in 1816, to 33.09 + per cent. in 1852; in Sweden, from 36.41 in 1751 to 32.59 + per cent. in 1855; in Norway, from 37.60 per cent. in 1769 + to 32.21 per cent. in 1855; in Saxony, from 35.52 per cent. + in 1834, to 34.98 per cent. in 1849. (_Wappäus_, II, 229.) + If all who are at least 20 years of age be considered + competent to marry, there are of every 1,000 thus competent + in Belgium, 520 actually married; in the Flemish provinces + alone, 489; in the most favorably situated Wallonic, 554. + (_Horn_, Bevölk. Studien, I, 139 ff.) In Rome, under + Augustus, the proportion was much less satisfactory. In the + higher classes, a large majority did not marry at all. + (_Dio. Cass._, I, VI, 1.)] + + [Footnote 247-7: In Halle, in 1700, there was one marriage + for every 77 of the population; in 1715, for every 99; in + 1735, for every 140; in 1755, for every 167. In Leipzig, in + 1620, there was one for every 82; 1741-1756, for every 118; + 1868, for every 92.8. In Augsburg, 1510, one in 86; in 1610, + in 108; in 1660, in every 101; in 1750, in every 123. The + provinces of Magdeburg, Halberstadt, Cleve, Mark, Munden, + Brandenburg, Pomerania and Prussia had, about the end of the + seventeenth century, one marriage per annum for every 76-95 + of the population; the Prussian monarchy, 1822-1828, one + marriage for every 109-121. Compare _Sussmilch_ Göttl. + Ordnung, I., 131, ff., _Schubert_ Staatskunde des preuss. + Staates I., 364. In France, 1801-1805, there was one + marriage per annum in every 137 living; in 1821-5, for every + 129; in 1831-35, for every 127; in 1842-51, for every + 125.39; in 1860, for every 124.7.] + + [Footnote 247-8: In Prussia, in 1849, there were in every + one hundred families in the cities, 492 individuals; in the + country, 512. In Belgium, in 1846, 459 and 497 respectively. + (_Horn_, Bevölk. Studien, I, 88, ff.) In France, in 1853, in + the cities, 358; in Paris alone, 299. In the Zollverein, the + number of individuals in a family increased in 1852-55, 5.81 + per cent.; the population only 3.02 per cent.; the + population of those over fourteen years of age, by 4.41 per + cent.; of minors by 1.02 per cent. Only in Saxony and the + cities of Hanover was the reverse the case. (_v. Viebahn_, + II, 278, seq.)] + + [Footnote 247-9: Thus, for instance, in Belgium, for every + 100 households, there are 74 marriages; in the cities of + Belgium, 70; in the Belgian country parishes, 75; in Prussia + in 1849, 84. (_Horn_, I, 93 seq.) It is estimated that in + Prussia, only 3 per cent. of the adult population live + outside of the family. (_Viebahn_, II, 273.)] + + [Footnote 247-10: It is strange that _Süssmilch_, Göttl. + Ordnung, I, § 13, considers mortality an unalterable law, + while he fully recognizes the social grounds which caused + the frequency and prolificacy of marriages to vary (I, § 56, + 99).] + + +SECTION CCXLVIII. + +HISTORY OF POPULATION.--NUMBER OF BIRTHS AND DEATHS. + +So far as the mere number of the population is concerned, it is +obviously a matter of indifference whether there are annually 1,000 +births and 800 deaths, or 2,000 births and 1,800 deaths. But we see in +the former an element of higher civilization,[248-1] especially, on +account of the conditions which determine it. It can occur only where +even the most numerous, that is the lower class, feel other wants than +those of the mere means of existence and of the satisfaction of the +sexual instinct: wants, duties which probably could not be satisfied in +a state of marriage thoughtlessly entered into; where the virtues both +of foresight and self-control are very generally practiced. + +And then let us consider the consequences. The efficacy of the +repressive hinderances to over-population either consists in immoral +acts or easily leads to immorality. Until a "surplus" child has died, +what a series of troubles for good parents, and what a chain of evil +deeds for bad ones, to say nothing of the poor child itself. + +Further, every man, no matter how short or long his life, requires a +large advance of capital and trouble which he has later to return to +society through the activity of his riper years. If he dies before his +maturity, this advance has been made in vain. The more, therefore, the +population of a country, in order to maintain itself within the bounds +of its field of food, has to calculate on the death of children, the +greater is this loss.[248-2] Hence, from a national-economic point of +view, it is to be considered a great advance, that in England in 1780, +there was one death among its people under 20 years of age in every 76 +of the population, in 1801, in every 96, in 1830, in every 124, in 1833, +one only in every 137. (_Porter._) Lastly, the longer the average +duration of life of a child the greater, other circumstances remaining +the same, the number of grown people as compared with that of the +children; but grown people are, as a rule, independent, capable of +self-defense, economically productive, competent to discharge all the +rights and duties of citizenship, while children are dependent, +incapable of self-defense, unproductive, immature. Only he who knows the +relative numbers of the different age-classes of a nation can draw +fruitful conclusions from the data per capita relating to taxation, from +the statistics of crime, suicides, illegitimate births, of +school-children, etc., or judge correctly of a locality's military +contingent.[248-3] [248-4] Here, indeed, it should not be overlooked that +in the highest age-classes, human beings return in many respects to the +helplessness of childhood. Yet, as a rule, to reach a good old age is +generally considered a personal good fortune; and the existence of a +great many aged persons in a country, if not in itself an advantageous +element in its economy, may, nevertheless, be called a pleasing +symptom.[248-5] On an average there is only one person over sixty to +every twelve under fifteen years of age. (_J. G. Hoffmann._) We may, +hence, readily measure what an advantage France possesses in this, that +in 1861, in every 1,000 inhabitants, only 273 were under fifteen years +of age, 524 between sixteen and fifty, the most vigorous years of life, +and 203 over fifty years old. The average age of the French population +was 31.06 years against 27.22 in Sardinia and 25.32 in Ireland. + +However, a positively unfavorable conclusion from a relatively large +number of children in a nation should not be drawn except in the case of +a people the limits of whose field of food cannot be extended. (§ 239.) +Where the nation's economy has a rapid growth, as for instance in young +colonies, the comparatively easy rearing of children which there +obtains, without any corresponding mortality, is not so much considered +a burthen[248-6] as a symptom of their good fortune and even a positive +good.[248-7] On the other hand, of the Belgian provinces, for instance, +suffering Flanders had relatively the smallest number of children, +because it had the largest child-mortality.[248-8] + +Almost all the signs which, according to the above paragraphs, +distinguish a higher stage of civilization from a lower, may be shown +within the limits of the same age and nation to characterize the upper +classes as compared with the lower. We may even claim that the greater +foresight and self-control of the former in the matter of marriage and +in the procreation of children, since the abolition of the greater +number of legal advantages of class, are by far the most important of +the elements constituting their superiority over the latter. The word +proletariat, from _proles_, means first of all, having many children +(_Vielkinderei_)! + + [Footnote 248-1: _J. Möser_ did not even dream of this. + Patr. Phant., I, 15.] + + [Footnote 248-2: _Rossi_, Cours d'Economie politique, I, + 371, estimates the cost of bringing up a child to its 16th + year at a minimum of 1,000 francs. Hence, a country with + 1,000,000 births annually, in which only 50 per cent. reach + that age, would lose 500,000,000 francs per annum. However, + over one-third of the children in question die in the first + years of childhood, and the rest do not reach on an average + their 16th year, but die between the age of 7 and 8: + _Bernouilli_, Populationistik, 259. _Engel_ estimates + Saxony's "man-capital" at 4 times the value of all the land + in the country, and at 10 times the value of all movable + property. (Sächs., Statist. Zeitschr., 1855, No. 9. Preuss. + Statist. Zeitschr., 1861, 324.) One of the chief advocates + of the view that there is an investment of capital in every + child is _Chadwick_ in the opening address delivered by him + before an English learned society at Cambridge: Statist. + Journal, Dec., 1862. Lancashire alone pays a penalty per + annum for preventable deaths of £4,000,000, for the funeral + and medical expenses; to say nothing of the capital lost + (506).] + + [Footnote 248-3: _Bernouilli_, Populationistik, 51 ff. + _Quetelet_, Recherches statist. sur le Royaume des Pays-Bas, + 1827, 1, 9, and Du Système social, 1848, 176 ff., specially + called attention to the important differences in this + relation, between the productive and unproductive years of + life. Thus it should not be forgotten, when reading of the + greater mortality of the poor quarters of Paris, that + strangers who are for the most part in the vigorous years of + life, live there least of all.] + + [Footnote 248-4: In Russia, it seems that only 36 per cent. + of all those born outlive their 20th year; in England, 55 + per cent. (_Porter_, Progress, ch. I, 29.) The Russian + peasants are said to have from 10 to 12 children, only about + one-third of whom grow to maturity, (_v. Haxthausen_, I, + 128.) In the United States, the population was in 1820 + divided into two nearly equal parts as to age, the 16th year + of age forming the dividing point; in England the same was + the case, only the dividing point was 20 years of age. + (_Tucker_, Progress of the United States, 16, 63.)] + + [Footnote 248-5: There were in + + --------------------------------------------------------------- + |_Years._|_From 0 to_ |_From 16 to_ | _Over 50_ + | | _15 years_ | _50 years_ | _years_ + | | _of age._ | _of age._ | _of age._ + --------------------------------------------------------------- + | | Per 1,000 | Per 1,000 | Per 1,000 + | | of the pop.| of the pop. | of the pop. + | | | | + Belgium, | 1846 | 323 | 509 | 168 + Prussia, | 1849 | 370 | 504 | 126 + Great Britain,| 1851 | 354 | 504 | 142 + Holland, | 1849 | 333 | 509 | 158 + Saxony, | 1840 | 339 | 505 | 156 + Sweden, | 1850 | 328 | 511 | 161 + --------------------------------------------------------------- + + In Great Britain, the census of 1851 gave 596,030 persons + over 70 years of age; 9,847, over 90; 2,038, over 95; 319, + over 100 years of age. (Athen., 12 Aug., 1854.) In France, + in 1851, there were 1,319,960 persons seventy years of age + and over. In the United States the population of-- + + ---------------------------------------------------------------- + | _Per English_ | _Relative number of + | _square mile._ | _children under ten + | | _years._ + ---------------------------------------------------------------- + | 1800 | 1840 | 1800 | 1840 + ------------------------|--------------------------------------- + | | | per cent. | per cent. + New England, | 19.2 | 34.8 | 63.5 | 51.1 + The Middle States, | 15.3 | 43.6 | 70.7 | 55.7 + The Southern States, | 8.9 | 15.9 | 73.0 | 67.8 + The Southwestern States,| 1.3 | 13.7 | 77.6 | 75.5 + The Northwestern States,| 2.3 | 25.5 | 84.9 | 73.8 + ---------------------------------------------------------------- + + In the whole Union, in 1830, the age classes up to 20 years + embraced 56.12 per cent. of the population; in 1840, 54.62 + per cent; in 1850, 51.85 per cent. Compare _Horn_, Bevölk. + Studien, I, 126; _Wappäus_, A. Bevölk. Stat., II, 44, 125 + ff., 88; _Tucker_, Progress of the United States, 105.] + + [Footnote 248-6: As _Wappäus_ says that in America an equal + number of adults must work for at least a third larger + number of children than in Europe: "a much more unfavorable + situation, so far as production-force is concerned." (A. + Bevölk. St., II, 44.)] + + [Footnote 248-7: _Horn_, I, 127 ff. The Becoming is not only + more pleasant than the Having become, but it may even stand + higher in so far as the latter consists only in being + resigned to further development.] + + [Footnote 248-8: _Les mendiants sont dans le cas des peuples + naissants_ etc. _Montesquieu_, E. der Lois, LXXIII, 11. In + England and Wales in 1851-60, there died yearly before their + sixth year, 7.24 per cent. of all male children born, but in + the families of peers, only 2.22 per cent. (Stat. Journal, + Sept., 1865.) If we grade the quarters of the city of Berlin + according to the well-being of their inhabitants, we find + that in the lower, the number of married men between 18 and + 25 years is successively greater 1.1, 1.4, 2.4 and 3.4 per + cent. (_Schwabe_, Völkszählung von, 1871, 24.)] + + +SECTION CCXLIX. + +HISTORY OF POPULATION.--IN PERIODS OF DECLINE. + +Nations involved in political and religious decline are wont to lose the +moral foundation of the situation last described. Here, therefore, +again, both the repressive (which are almost always immoral) tendencies +counter to over-population, and the viciously preventive occupy the most +prominent place. We may most completely observe this spectacle among the +heathen nations of later antiquity. But, unfortunately, even among +modern nations, we find some analogies to the ancient, to which the +political economist may point with the finger of warning. "For unto +every one that hath shall be given, and he shall have abundance; but +from him that hath not shall be taken away even that which he hath." +This universally applicable truth explains the fact that all successive +acts of immorality, the more frequently they occur the less severely are +they branded by public opinion. + +A. We are not warranted, from the relative[249-1] number of illegitimate +births, to draw too direct an inference in relation to the morality of a +people. Where, for instance, as in the kingdom of Saxony, the annual +frequency of marriage was 0.017 of the population, every illegitimate +birth bears evidence of a greater absence of self control than in +Bavaria, where, on every one thousand living, there were only thirteen +marriages a year.[249-2] In many quarters, where the economic relations +are very stable, and where peasant estates (_geschlossene Bauergüter_) +are subject to a species of entailing, where consequently the son can +engage in marriage only after the death of the father, illegitimate +children are in great part legitimatized by subsequent marriage at a +later time, and meanwhile brought up in the family of the mother like +legitimate children.[249-3] Evidently the guilty inconstancy creative of +ephemeral _liaisons_, and the neglect of the children born of them, do +not here produce the sad effects which they are wont to in the large +cities, where illegitimate relations are made and dissolved with +shocking rapidity. However, births are seldom heard of in the case of +ruined debauchees. + +At the same time, the frequency of illegitimate births is always an +evidence that the rightful founding of a home is made difficult[249-4] +by the economic condition of the police provisions of a country; and +that the moral force of the people does not suffice to resist the +temptation[249-5] which such condition and provisions suppose. In the +latter respect, this phenomenon may be considered, not only as a symptom +but also as a cause: since bastards are generally very badly brought up. +A large parthenic population is always an element of great danger in a +state.[249-6] The frequency of illegitimate children must, however, be +designated as a tendency counter to over-population, for the reason that +still-born births and early deaths occur much more frequently among them +than among legitimate children.[249-7] + +B. The trade of the women of the town is indeed an exceedingly old +one.[249-8] But this evil assumes large dimensions only where a large +class of men and women have no prospect to marry at all, or only late in +life; especially when, at the same time, families have become +unaccustomed to keeping together for life.[249-9] Prostitution may be +considered a counterpoise to over-population, not only because of the +polyandry it involves, but also of the infecundity of its +victims.[249-10] Even the diseases which it propagates are not without +importance in this regard. The love of change and impatience of +restraint which it produces keeps many a man who, economically +considered, might very well engage in marriage, in a state of criminal +celibacy.[249-11] This moral poisoning of the nation's blood is more +pernicious in proportion as vice is decked with the charms of +intellect,[249-12] and reflected in literature and art.[249-13] When +Phryne had wealth enough to project the rebuilding of Thebes, and +boldness enough to ask to be allowed to put this inscription on its +walls: "Alexander destroyed them, but Phryne, the hetæra, rebuilt them," +not only the dignity but the nationality of Greece was gasping for the +last time for breath.[249-14] [249-15] + +C. I know no sadder picture in all history than the wide diffusion and +even sovereignty which unnatural vice possessed among the declining +nations of antiquity. Egypt and Syria seem to have been the original +seat of this moral plague.[249-16] In Greece, there was a time noted for +the brilliancy of its literature and art, when the poetic fancy, in its +dreams of love, pictured to itself only the forms of beautiful boys; and +that this love was generally an impure one, there is, unfortunately, no +room to doubt.[249-17] In more ancient Rome, it was most severely +punished;[249-18] but afterwards, again, it seemed reprehensible to a +Tibullus only when it was bought with money.[249-19] Even under Cæsar, a +censor could threaten an ædile with a charge of sodomy; the latter +reciprocate the threat, and think it witty to invite a man like Cicero +to assist at the curious argument which such a case might call forth, +before a pretor with a reputation of being guilty of the same +vice.[249-20] When the horrible deeds of which Tiberius was guilty are +known, we cannot consider them capable of exaggeration. But Tiberius, at +least, sought secrecy, while Nero, Commodus and Heliogabalus felt a +special delight in the publicity of their shame.[249-21] [249-22] [249-23] + + [Footnote 249-1: The ratio between the number of + illegitimate births and legitimate, so generally brought + forward, leads to no correct conclusions whatever. The ratio + between the number of illegitimate births, on the other + hand, and marriageable men and women, especially of those + who are yet unmarried, may afford a basis for valuable + inferences. Compare _Hoffmann_, in the Preuss. + Staatszeitung, 1837, No. 18. In Prussia, nearly 75 per cent. + of all women between 17 and 75 are married. (_v. Viehbahn_, + II, 189.)] + + [Footnote 249-2: In Bavaria, not only was the frequency of + marriage surprisingly small (one marriage a year in every + 151.59 inhabitants, while the average in 14 European + countries was 1 in 123.9), but marriage was there contracted + at a surprisingly advanced age. Of 10,000 of both sexes + engaging in marriage, there were, in Bavaria, only 2,081 25 + years of age and less, while in England, there were 5,528. + Compare _Wappäus_, A. Bevölk. Statistik, II, 241, 270.] + + [Footnote 249-3: In Oldenburg, it is estimated that 48 per + cent. of its illegitimate children are legitimatized _per + subsequens matrimonium_ (_Rau-Hanssen_ Archiv. N. F., I, 7), + in the agricultural districts of Nassau even 70 per cent. + (_Faucher's_ Vierteljahrsschrift, 1864, II, 19), in the whole + of Bavaria, 15 per cent.; in the Palatinate, 29.7 per cent. + (_Hermann_, Bewegung der Bevolkerung, 20); in the Kingdom of + Saxony, 1865, at least 21 per cent. (Statist. Zeitschr. + 1868, 184.) In France 10 per cent. of the marriages + contracted legitimatize children. (_Legoyt_, Stat. Comp., + 501); in Saxony, 1865, 11.7; in Bavaria up to 1852, about + 1/8 of the marriages belonged to this category; 1858-61, + 1/7; 1861-64, nearly 1/6. Compare Heft XII, of the official + statistics. In the manufacturing towns of France, especially + the border ones, a large number of the children of female + operatives and of males having their domicile in foreign + parts, are legitimatized by marriage: thus in Mühlhausen, + 23.7 per cent. Recherches statist. sur M., 1843, 62.] + + [Footnote 249-4: In Mecklenburg-Schwerin there was one + marriage + _1841._ + On domanial lands, on every 137 of population. + On manor " " 145 " + On monastery " " 163 " + In the cities " " 115 " + _1850._ + On domanial lands, on every 149 of population. + On manor " " 269 " + On monastery " " 175 " + In the cities " " 104 " + + The number of illegitimate births stood to the aggregate + number of births in 1800, as 1:16; in 1851, as 1:4.5; in + 1850-55, as 1:4.8; in 1856-59, as 1:5.04; in 1865, as 1:4.0; + in 1866, as 1:4.8; in 1867, as 1:5.33; in 1868, as 1:6.0; in + 1869, as 1:7.2; in 1870, as 1:7.08, In 260 localities, in + 1851, 1/3 and more of the aggregate number of births were + illegitimate; in 209, 1/2 and more, and in 79 the entire + number! The small improvement afterwards made was probably + due in great part to emigration, which from 1850 to 1859 + must have amounted to 45,000. How relative the idea of + over-population even in this respect is, is shown by the + small number of illegitimate births in very densely + populated parts of England--Lancashire, Middlesex, Warwick, + Stafford, West York--while districts as thinly populated as + North York, Salop, Cumberland, Westmoreland, have very many + illegitimate births. The number increases in the best + educated districts, where their "education" begins to cause + them to make "prudent" and long delays in marrying. + (_Lumley_, Statistics of Illegitimacy: Statist. Journal, + 1862.)] + + [Footnote 249-5: Strikingly more favorable influence of the + _ecclesia pressa_. In Prussia, in 1855, the Evangelicals had + 12.3 legitimate births for one illegitimate; the Catholics + 19.4, the Jews 36.7, the Mennonites 211.5. (_v. Viebahn_, + II, 226.)] + + [Footnote 249-6: The relative number of illegitimate births + in many nations of to-day is unfortunately an increasing + one. In France, in 1801, only 4.6 per cent. of all live + births were illegitimate; in 1811, 6.09; in 1821, 7.07; in + 1830, 7.2; in 1857, 7.5; 1861-65, 7.56 per cent. The German + especially must confess with deep shame that the southern + half of the fatherland presents a very unfavorable picture + in this respect. Can a nation be free when its capital, + Vienna (1853-56), counts on an average 10,330 illegitimate + and 11,099 legitimate births? Compare _Stein-Wappäus_, + Handbuch der Geogr., IV, 1, 193. According to observations + made between 1850 and 1860, in England between 1845 and + 1860, there were in Holland for every 1,000 legitimate + births 44 illegitimate, in Spain 59, in England and Wales + 71, in France 80, in Belgium 86, in Prussia 91, in Norway + 96, in Sweden 96, in Austria 98, in Hanover 114, in Saxony + 182, in Bavaria 279. (Statist. Journ., 1868, 153.) Compare + _Wappäus_, A. Bevölk. Stat., II, 387. In Russia, according + to _v. Lengefeld_, 36.9; in the electorate of Mark, 1724-31, + 1 in 18. (_Süssmilch_, I, § 239.) During the 17th century it + is estimated that the ratio of illegitimate to legitimate + births in Merseburg was as 1:22-30, in Quedlinburg as + 1:23-24, in Erfurt as 1:13-1/2. (From the Kirchenbücher in + _Tholuck's_ Kircliches Leben, etc., I, 315 seq.) In Berlin + in 1640, only 1-2 per cent. of illegitimate births. + (_König_, Berlin, I, 235.) In Leipzig, 1696-1700, 3 per + cent.; 1861-65, 20 per cent. _Knapp_, Mitth. des. Leipz. + Statist. Bureaus, VI, p. X.] + + [Footnote 249-7: Thus, in 1811-20, the still-born births in + Berlin, Breslau and Königsberg amounted to five per cent. of + the legitimate, and to eight per cent. of the illegitimate; + in the country places in Prussia, to 2-3/4 and 4-3/4 per + cent. Of 384 illegitimate children born in Stettin in 1864, + 45 were still-born and 279 died in their first year. (_v. + Oettingen_, Moralstatistik, 879.) In the whole monarchy, + 1857-58, three to 4 per cent. of legitimate children died at + birth, and 5 to 6 per cent. of the illegitimate; while + during the first year of their age 18-19 per cent. of the + former, and 34-36 per cent. of the latter, died (_v. + Viebahn_, II, 235). In France, in 1841-54, of the legitimate + births, an average of 4 per cent., and of illegitimate 7 per + cent., was still-born; and the probability of death during + the first year of life was 2.12 times as great for an + illegitimate child as for one born in lawful wedlock. + (_Legoyt._) After the first year the proportion changes.] + + [Footnote 249-8: Genesis, 38; Joshua, 1, ff.; Judges, 16, 1, + ff. It must not here be overlooked that the Canaanites + possessed a much higher degree of economic culture than the + contemporary Jews. In Athens, Solon seems to have + established brothels to protect virtuous women. (_Athen._, + XIII, 59.) In France, as early a ruler as Charlemagne took + severe measures against prostitution. (_Delamarre_, Traité + de Police, I, 489.) Compare L. Visigoth., III, 4, 17, 5.] + + [Footnote 249-9: Travelers are wont to be the first to make + use of prostitution. I need only mention the extremely + licentious worship of Aphrodite (Aschera) which the + Phoenicians spread on every side: in Cypria, Cytherae, Eryx, + etc. Connected with this was the mercenary character of the + Babylonian women (_Herodot._, I, 199); similarly in Byblos + (_Lucian_, De dea Syria, 6); Eryx (_Strabo_, VI, 272: + _Diod._, IV, 83), in Cypria; (_Herodot._, I, 105, 199); + Cytheria (_Pausan._, I, 14); Athenian prostitutes in Piräeus + and very early Ionian in Naucratis. (_Herodot._, II, 135.) + In all the oases on the grand highways of the caravans, the + women have a very bad reputation. Temporary marriages of + merchants in Yarkand, Augila, etc. (_Ritter_, Erdkunde, I, + 999, 1011, 1013, II, 360; VII, 472; XIII, 414.) It is + remarkable how the legislation of German cities at the very + beginning of their rise was directed against male bawds and + prostitutes; at times with great severity, the death penalty + being provided for against the former and exile against the + latter, while the earlier legislation of the people was + directed only against rape. (_Spittler_, Gesch. Hannovers, + I, 57 ff.)] + + [Footnote 249-10: Conception in the case of women of the + town is indeed not a thing unheard of, but abortion + generally takes place or is produced; their confinement is + extremely dangerous, and nearly all the children born of + them die in the first year of their life. (_Parent Du + Châtelet_, Prostitution de Paris, 1836, I, ch. 3.)] + + [Footnote 249-11: In the time of Demosthenes, even the more + rigid were wont to say that people kept hetæras for + pleasure, concubines to take better care of them, wives for + the procreation of children and as housekeepers. (adv. + Neæram., 1386.)] + + [Footnote 249-12: In Greece as well as in Rome, only slaves, + freedmen and strangers sold their bodies for hire; but under + the Emperors, prostitution ascended even into the higher + classes. (_Tacit._, Ann. II, 85; _Sueton._, Tiber, 35; + _Calig._,41; _Martial_, IV, 81.) Concerning the Empress + Messalina, see _Juvenal_, VI, 117 ff. Address of + Heliogabalus to the assembled courtesans of the capital, + whom the Emperor harrangued as _commilitones_. (_Lamprid_, + V.; Heliogabali, 26.) In Cicero's time, even a man of such + exalted position as M. Coelius was paid for cohabitation + with Clodia, and even moved into her house. (_Drumann_, + Gesch. Roms., II, 377.) Even in Socrates' time, the hetæras + at Athens were probably better educated than wives: Compare + _Xenophon_, Memorabilia, III, 11.] + + [Footnote 249-13: On the Pornographs of antiquity, see + _Athen._, XIII, 21. Even _Aristophanes_ was acquainted with + some of the species. (Ranæ, 13, 10 ff.) Compare _Aristot._, + Polit., III, 17. _Martial_, XII, 43, 96. Of modern nations, + Italy seems to have been the first to produce such poison + flowers: _Antonius Panormita_ (ob. 1471); _Petrus Aretinus_ + (ob. 1556). Of the disastrous influence on morals, during + his time, of obscene pictures, _Propert_, II, 5, complains. + It is dreadfully characteristic that even a Parrhasios + painted wanton deeds of shame. (_Sueton._, Tiber, 44), and + that Praxiteles did not disdain to glorify the triumph of a + _meretrix gaudens_ over a _flens matrona_. (_Plin._, H. N., + XXXIV, 19.) But indeed also Giulio Romano!] + + [Footnote 249-14: Compare _Jacobs'_ Vermischte Schriften, + IV, 311 ff.: _Murr_, Die Mediceische Venus und Phryne, + 1804.] + + [Footnote 249-15: The number of registered prostitutes in + Paris, in 1832, amounted to 3,558; in 1854, to 4,620 + (_Parent Du Châtelet_, ch. 1, 2); in 1870, to 3,656. These + figures are evidently much below the real ones. Compare the + extracts from the abundant, but, in particulars, very + unreliable literature on the great sin of great cities, in + _v. Oettingen_, Moralstatistik, 452 ff. According to the + Journal des Econ., Juin, 1870, 378 ff., there was an + aggregate of 120,000 _femmes, qui ne vivent que de + galanterie_.] + + [Footnote 249-16: _Nequitias tellus scit dare nulla magis_, + says _Martial_, of Egypt. Worship of Isis, in Rome: + _Juvenal_, VI, 488 ff. See, further, _Herodot._, II, 46, 89; + _Strabo_, XVII, 802. On Syria, see Genesis, 19, 4 ff., 9 + seq.; Leviticus, 18, 22 seq., 20, 13, 15. The _cunnilingere_ + of Phoenician origin. (_Heysch_, _v._ skylax.) Frightful + frequency of the _fellare_ and _irrumare_ in Tarsis: _Dio + Chrysost._, Orat, 33. The Scythians also seem to have + learned the nousos thêleia (pederasty?) in Syria: + _Herodot._, I, 105. Similarly during the crusades.] + + [Footnote 249-17: Compare _Becker_, Charicles, I, 347 ff. + _Æschines_ condemns this vice only when one prostitutes + himself for money (in Timarch., 137). _Lysias_, adv. Simon, + unhesitatingly speaks to a court about a contract for hire + for purposes of pederasty. Compare _Æschin._, l. c., 159, + 119, where such a contract is formally sued on. Industrial + tax on pederastic brothels. (_Æschin._. I, c. R.) + _Aristophanes_ alludes to obscenity still more shameful: + Equitt., 280 ff.; Vespp., 1274 ff., 1347; Pax., 885; Ranæ, + 1349.] + + [Footnote 249-18: _Valer. Max._, VI, 1, 7, 9 ff. The Lex + Julia treats it only as _stuprum_: L. 34, § 1. Digest, 48, + 5; Paulli Sentt. receptt., II, 26, 13. Permitted later until + Philip's time, in consideration of a license-fee. _Aurel. + Vict._, Caes., 28. Earliest traces of this vice in the year + 321 before Christ. (_Suidas_, v. Gaios Laitôrios.) Later, it + caused much scandal when the great Marcellus accused the + ædile Scatinus of making shameful advances to his son. + (_Plutarch_, Marcell., 2.)] + + [Footnote 249-19: _Tibull_, I, 4. Even the "severe" + _Juvenal_ was not entirely disinclined to pederasty, and + _Martial_ does not hesitate to boast of his own pederasty + and onanism. (II, 43, XI, 43, 58, 73, XII, 97.)] + + [Footnote 249-20: _Cicero_, ad. Div., VIII, 12, 14.] + + [Footnote 249-21: _Sueton._, Tiber, 43 ff.; Nero, 27 ff. + _Tacit._, Ann., VI, 1; Lamprid. Commod., 5, 10 seq.; Heliog. + passim. On the _greges exoletorum_, see also _Dio Cass._, + LXII, 28; LXIII, 13; _Tacit._, Ann., XV, 37. _Tatian_, ad + Graecos, p. 100. Even Trajan, the best of the Roman + emperors, held similar ones. (Ael. Spartian, V, Hadr., 2.) + Trade in the prostitution of children at the breast. + (_Martial_, IX, 9.) The collection of nearly all the obscene + passages in the ancient classics elucidated with a shameful + knowledge of the subject in the additions to _F. C. + Forberg's_ edition of the Hermaphroditus of _Antonius + Panormita_, 1824.] + + [Footnote 249-22: How long this moral corruption lasted may + be inferred from the glaring contrast between the purity of + the Vandals at the time of the migration of nations. Compare + _Salvian_, De Gubern. Dei, VII, passim.] + + [Footnote 249-23: In keeping with the vicious counter + tendencies described in this section, is the increasing + frequency of the rape of children in France. The average + number of cases between 1826 and 1830 was 136; between 1841 + and 1845, 346; between 1856 and 1859, 692. Infanticide also + increased between 1826 and 1860, 119 per cent. (_Legoyt_, + Stat. comparée, 394.)] + + +SECTION CCL. + +INFLUENCE OF THE PROFANATION OF MARRIAGE ON POPULATION. + +D. In the preceding paragraphs, we treated of the wild shoots of the +tree of population. But the roots of the tree are still more directly +attacked by all those influences which diminish the sacredness of the +marriage bond. It is obvious how heartless _marriages de +convenance_,[250-1] inconsiderate divorces and frequent adulteries +mutually promote one another. And the period of Roman decline also is +the classic period of this evil. I need only cite the political +speculation in which Caesar gave his only daughter to the much older +Pompey, or the case of Octavia, who when pregnant was compelled to marry +the libertine Antonius.[250-2] Instead of the Lucretias and Virginias of +older and better times, we now find women of whom it was said: _non +consulum numero, sed maritorum annos suos computant_.[250-3] In the +numerous class of young people who live without the prospect of any +married happiness of their own, we find a multitude of dangerous persons +who ruin the married happiness of others, especially where marriage has +been contracted between persons too widely separated by years. +_Corrumpere et corrumpi sæculum vocatur._ (_Tacitus_).[250-4] It is easy +to understand how all this must have diminished the desire of men to +marry. Even Metellus Macedonicus (131 before Christ) had declared +marriage to be a necessary evil.[250-5] [250-6] + +In such ages young girls are kept subject to a convent-like discipline, +that their reputation may be protected and that they may be able to get +husbands; but once married they are wont to be all the more lawless. In +a pure moral atmosphere, precisely the opposite course obtains.[250-7] + +And so it has been frequently observed, that among declining nations the +social differences between the two sexes are first obliterated and +afterwards even the intellectual differences. The more masculine the +women become, the more effeminate become the men. It is no good symptom +when there are almost as many female writers and female rulers as there +are male. Such was the case, for instance, in the Hellenistic kingdoms, +and in the age of the Cæsars.[250-8] What to-day is called by many the +emancipation of woman would ultimately end in the dissolution of the +family, and, if carried out, render poor service to the majority of +women. If man and woman were placed entirely on the same level, and if +in the competition between the two sexes nothing but an actual +superiority should decide, it is to be feared that woman would soon be +relegated to a condition as hard as that in which she is found among all +barbarous nations. It is precisely family life and higher civilization +that have emancipated woman. Those theorizers who, led astray by the +dark side of higher civilization, preach a community of goods, generally +contemplate in their simultaneous recommendation of the emancipation of +woman a more or less developed form of a community of wives. The grounds +of the two institutions are very similar. The use of property and +marriage is condemned because there is evidence of so much abuse of +both. Men despair of making the advantages that accompany them +accessible to all, and hence would refuse them to every one; they would +improve the world without asking men to make a sacrifice of their evil +desires. The result, also, would be about the same in both cases. (§ +81.) So far would prostitution and illegitimacy be from disappearing +that every woman would be a woman of the town and every child a bastard. +There would, indeed, be a frightful hinderance under such circumstances +to the increase of population. The whole world would be, so to speak, +one vast foundling asylum.[250-9] + +But there is another sense to the expression emancipation of woman. It +should not be ignored that, in fully peopled countries, there is urgent +need of a certain reform in the social condition of woman. The less the +probability of marriage for a large part of the young women of a country +becomes, the more uncertain the refuge which home with its slackened +bonds offers them for old age, the more readily should the legal or +traditional barriers which exclude women from so many callings to which +they are naturally adapted be done away with.[250-10] This is only a +continuation of the course of things which has led to the abolition of +the old guardianship of the sex. It may be unavoidable not to go much +farther sometimes; but such a necessity is a lamentable one.[250-11] The +best division of labor is that which makes the woman the glory of her +household, only it is unfortunately frequently impossible. + + [Footnote 250-1: This expression is applicable only in times + of higher civilization where individual disposition of self + is considered the most essential want. During the middle + ages, when the family tie is yet so strong, the contract of + marriage was generally formed by the family; but this was + not, as a rule, felt a restraint. In France, at the present + time, of 1,000 men who marry before their 20th year, 30.8 + marry women from 35 to 50 years of age, and 4.8 who marry + women over 50 years of age. (_Wappäus_, A. Bevölkerung. + Stat. II, 291.)] + + [Footnote 250-2: _Propertius_ bitterly complains of the + corruption prevalent in love affairs in his time. (III, 12.) + In the Hellenic world, also, among the successors of + Alexander the Great, there was a revoltingly large number of + _marriages de convenance_, so that even the old Seleucos + took to wife the grand-daughter of his competitor Antegonos, + Lysimachos the daughter of Ptolemy etc. _Dante's_ lament + over the anxiety of fathers to whom daughters are born + concerning their future dowry: Paradiso, XV, 103. Florentine + law of 1509, against large dowries: _Machiavelli_, Lett. + fam., 60. In the United States, marriage dowries are of + little importance. (_Graf Görtz_, Reise um die Welt, 116.) + + [Footnote 250-3: _Seneca_, de Benef., III, 16--a frightful + chapter. Also, I, 9. _Juvenal_ speaks of ladies who in five + years had married eight men (IV, 229, seq.), and _Jerome_ + saw a woman buried by her 23d husband, who himself had had + 21 wives, one after another, (ad. Ageruch, I, 908.) The + first instance of a formal divorce _diffareatio_ is said to + have occurred in the year 523, after the building of the + city (_Gellius_, IV, 3), a clear proof that the Romulian + description of marriage, as koinônia hapantôn hierôn kai + chrêmatôn (Dionys., A. R. II., 25), was long a true one. The + old manus-marriage certainly supposes great confidence of + the wife and her parents in the fidelity of the husband, + while the marriage law of the time of the emperors relating + to estates never lost sight of the possibility of divorce. + The facility of obtaining amicable divorces (the most + dangerous of all) appears from the gifts allowed, _divorti + causa_, in L., 11, 12, 13, 60, 61, 62; Dig., XXIV, 1. In + Greece, we meet with the characteristic contrast, that, in + earlier times, wives were bought, but that later, large + dowries had to be insured to them or the risk of divorce at + pleasure be assumed. (_Hermann_, Privataltherthümer, § 30.) + How women themselves married again, even on the day of their + divorce, see _Demosth._, adv. Onet., 873; adv. Eubul., 1311. + On Palestine, see Gospel of _John_, 4, 17 ff. Concerning + present Egypt, where prostitution is carried on especially + by cast-off wives, see _Wachenhusen_, vom ägypt, armen Mann, + II, 139. During the great French revolution, divorces were + so easily obtained that but little was wanted to make a + community of wives. (Vierzig Bücher, IV, 205; Handbuch des + französischen Civilrechts, § 450.) The more divorces there + are in a Prussian province, the more illegitimate births + also. Thus, for instance, Brandenburg, 1860-64, had 1,721 + divorces, and one illegitimate birth for every 7.8 + legitimate (max.). Rhenish Prussia, four divorces and one + illegitimate birth for every 25.4 legitimate (min.). In the + cities of Saxony, it is estimated there are, for every + 10,000 inhabitants, 36 divorced persons; in the country, + only 19 (_Haushofer_, Statistik, 487 seq.); in Württemberg, + 20; Thuringia, 33; all Prussia, 19; Berlin, 83. (_Schwabe_, + Volkszählung von, 1867 p. XLV.)] + + [Footnote 250-4: _Cicero_, in his speech for Cluentius, + gives us a picture of the depth to which families in his + time had fallen through avarice, lust, etc., which it makes + one shudder to contemplate. Moreover, of the numerous + families mentioned in _Drumann's_ history, there are + exceedingly few which, either actively or passively had not + had some share in some odious scandal. Concerning even Cato, + see _Plutarch_, Cato, II, 25. Messalina's systematic + patronage of adultery: _Dio Cass._, LX, 18.] + + [Footnote 250-5: _Gellius_, I, 6. In Greece, the same + symptoms appear clearly enough, even in _Aristophanes_: + compare especially his Thesmophoriazusae. The frequently + cited woman-hatred of Euripides is part and parcel hereof; + also the fact that since Socrates' time, the most celebrated + Grecian scholars lived in celibacy. (_Athen._, XIII, 6 seq.; + _Plin._, H. N., XXXV, 10.) Compare Theophrast in Hieronym. + adv. Jovin, I, 47, and _Antipater_, in _Stobæus_, Serm., + LXVII, 25.] + + [Footnote 250-6: In modern Italy, the monstrosity known as + cicisbeism had not assumed any great proportions before the + 17th century, in consequence of the bad custom which + permitted no woman to appear in public without such + attendant, and ridiculed the husband for accompanying his + own. In the time of the republics, the conventual seclusion + of girls and the duenna system were not yet customary. + (_Sismondi_, Gesch. der Italiennischen Republiken, XVI, 251, + ff., 498, ff.) Adultery punished with death in many cities + of medieval Italy: for instance, the Jus Municipale + Vicentinum, 135. Concerning the Spanish cicisbeos, who + evince as much shamelessness as fidelity, see _Townsend_, + Journey, II, 142, ff. _Bourgoing_, Tableau, II, 308, ff. The + so-called _cortejos_ are generally young clerics or young + officers.] + + [Footnote 250-7: A young American woman says to Mrs. Butler: + "We enjoy ourselves before marriage, but in your country + girls marry to obtain a greater degree of freedom, and + indulge in the pleasures and dissipations of society." While + the young girls are always to be met with in the streets, + wives are to be found always in the kitchen. (_Mrs. Butler_, + American Journal, II, 183.) Compare _Beaumont_, Marie ou + l'Esclavage aux États-Unis, I, 25 ff. 349. The opposite + extreme in Italy, where, therefore, too favorable an + inference should not be drawn from the small number of + illegitimate births. Morally considered, one act of adultery + outweighs 10 _stupra!_ Even in the age of the renaissance, + the free intercourse of young girls in England and the + Netherlands made a favorable impression on Italian + travelers; _Bandello_, Nov., II, 42; IV, 27. + + Similar contrast in antiquity between Ionian and Dorian + women. Wives were more rigidly excluded from entering + gymnasia for males in Sparta than young girls. (_Pausan._, + V, 6, 5; VI, 20, 6; _Plato_, De Legg., VII, 805; _Xenoph._, + De Rep. Laced., I.) Compare _K. O. Müller_, Dorier, II, 276 + ff.] + + [Footnote 250-8: _Plato_, De Legg., VI, 774, and + _Aristotle_, Polit., II, 6; V, 9, 6; VI, 2, 12, complain of + the too great supremacy of women in their day. Colossal land + ownership of Lacedemonian women. (_Aristot._, Polit., II, 6, + 11.) And yet even Plato advises that women be allowed to + participate in the gymnasia, in the assemblies and to hold + public office, etc. They were indeed different from men, but + not as regards those qualities which fit for ruling. (De + Rep., V, 451 ff.; De Legg., VI, 780; VII, 806.) That the + Roman courtesans wore the male toga and were therefore + called togatæ. _Horat._, Serm., I, 2, 63 ff., 80 ff.; + _Martial_, VI, 64, recalls certain caricatures of very + recent times; for instance, Bakunius' demand that both sexes + should wear the same kind of dress. (_R. Meyer_, + Emancipationskampf des 4 Standes, I, 43.) Later, concerning + wifish men, see _Apuleius_, Metam., VIII; _Salvian_, Gubern. + Dei VII. We are led to a related subject in noticing that in + England of persons charged with serious crimes there were 10 + women to 30 men; in Russia only 10 women to 81 men. (_v. + Oettingen_, 758.) As _Riehl_ remarks, Famille 15, the + undeniable _consensus gentium_, that the costume of men + should differ from that of women, is an equally undeniable + protest against this species of emancipation. I would add + that, as among ourselves in the earliest years of childhood, + so also among lowly civilized peoples, the difference in + costumes of the sexes is least apparent. (_Tacit._, Germ., + 17; Plan. Carpin., Voyage en Tartarie; Add. éd., Bergeron, + art. 2.) Even the physical difference is smaller there + (_Waitz_, Anthropologie der Naturvölker, I, 76), especially + in the size of the pelvis. (_Peschel_, Völkerkunde, 81, + 86.)] + + [Footnote 250-9: Even _Plato_ complains of the unnatural + relations of the sexes to one another, and would instead + have the unions of couples of short duration introduced, and + complete community of children under the direction of the + state. (De Rep., V.) The Stoic Chrysippos approves the + procreation of children by parent and child, brother and + sister. (_Diog. Laert._, VII. 188.) In the time of Epictetus + (Fr. 53, ed. Duebner), the Roman women liked to read Plato's + republic, because in his community of wives they found an + excuse for their own course. The Anabaptists appealed to + Christ's saying that he who would not lose what he loved + could not be his disciple. Thus the women should sacrifice + their honor and suffer shame for Christ's sake. Publicans + and prostitutes were fitter for heaven than honorable wives, + etc. (_Hagen_, Deutschlands Verhältnisse im + Reformationszeitalter, III, 221.) + + In our days, the theory inimical to the family is based + rather on misconceived ideas of freedom and science. The + Christian mortification of the flesh is, it is said, + one-sidedness; and that the flesh no less than the spirit is + of God. Hence it is that Saint Simonism would reconcile the + two, and "emancipate" the flesh. (_Enfantin_, Economie + politique, 2d ed., 1832.) _Fourier_, in his Harmonie, allows + each woman to have one _époux_ and two children by him; one + _géniteur_ and one child by him; one _favori_ and as many + _amants_ with no legal rights as she wishes. His "harmonic" + world he would protect against over-population by four + organic measures: the _régime gastrosophique_, the object of + which is by first-class food to oppose fecundity; _la vigeur + des femmes_, because sickly women have most children; + _l'exercise intégral_, since by the exercise of all the + organs of the body the organs of generation are latest + developed; lastly the _moeurs phanérogames_, the minuter + description of which _Fourier's_ disciples omitted in the + later editions. (_N. Monde_, 377, ff.) _Fourier_ was of + opinion that only one-eighth of the mothers should be + occupied with the bringing up of the children, and that a + child's own parents were least adapted to bringing it up, as + is proved by the natural aversion of the child to mind the + advice or obey the injunctions of its own parents. (186 ff.) + If all were left free to choose their employment, two-thirds + of all men would devote themselves to the sciences, and + one-third of all women; the fine arts would be cultivated by + one-third of the men and two-thirds of the women. In + agriculture, two-thirds of the men and one-third of the + women would take to large farming, and to small farming + one-third of the men and two-thirds of the women. + + The Communistic Journal, L'Humanitaire, is in favor of a + community of wives proper, while _Cabet_ leaves the question + an open one. Compare, besides, _Godwin_ on Political + Justice, 1793, VIII, ch. 8. In beautiful contrast to this + are _J. G. Fichte's_ (compare, _supra_, § 2) views on + marriage and the family in the appendix to his Naturrecht, + although he, too, would largely facilitate divorce.] + + [Footnote 250-10: _J. Bentham_, Traité de Législation, II, + 237, seq., says that it is scarcely decent for men to engage + in the toy trade, the millinery business, in the making of + ladies' dresses, shoes, etc. Compare _M. Wolstoncraft_, + Rettung der Rechte des Weibes, translated by Salzmann, 1793; + _v. Hippel_, über die bürgerliche Verbesserung der Weiber, + 1792. Rich in remarks on the woman question are _K. Marlo_, + System der Weltökonomie, and _Schäffle_, Kapitalismus und + Socialismus, 444 ff., who, for the most part, supports him. + Compare _Josephine Butler_, Woman's Work and Woman's + Culture: a Series of Essays, 1792; _Leroy-Beaulieu_, Le + Travail des Femmes au. 19, siècle, 1873. Between 1867 and + 1871, the number of men dependent on their own action in + Berlin, increased 22.9 per cent.; of women dependent on + their own labor, 36.6 per cent. (_Schwabe_, Volkszählung, + 1871, 84.)] + + [Footnote 250-11: _J. S. Mill_, on the other hand, rejoices + over the great economic independence of women, and expects + from it especially a decrease in the number of thoughtless + marriages. (Principles, IV, ch. 7, 3. Compare by the same + author, The Subjection of Women, 1869.) I need only mention + the dramatic art and the factory proletariat, where the + independence in question obtains and indeed with very + different results! It is very characteristic of the time, + that _Homer_(Il., XII, 433) considered the spinning for + wages as despicable, while _Socrates_, in the mournful + period following the Peloponnesian war, earnestly counsels + that free women without fortune should employ themselves + with home industries. (_Xenoph._, Memor., II, 7.) It is in + keeping with this that during the time of scarcity after the + Peloponnesian war even female citizens hired themselves out + as nurses. (_Demosth._, adv. Eubul., 1309, 1313.) The + frequency of such engagements has, in many respects, causes + related to these which produce a frequency of illegitimate + births.] + + +SECTION CCLI. + +POLYANDRY.--EXPOSURE OF CHILDREN. + +In some of the countries of farther Asia, the immoral tendencies counter +to over-population which with us take the direction of illegitimate +births and acts of adultery, assume the guise of formal institutions +established by law. I need only cite the polyandry of East India, Thibet +and other mountainous regions of Asia, which is indeed modified somewhat +by the fact that, as a rule, only several brothers have one wife in +common.[251-1] + +That unnatural institution is, in many localities, based on this, that a +great many of the newly born female children are killed or at least sold +in foreign parts after they have grown.[251-2] In addition to this, we +have the very great encouragement given to celibacy in the Himalayas, so +that only monks can attain to a higher education and to the higher +honors.[251-3] In many parts of the East Indies, we find a legally +recognized community of wives, which is but slightly modified[251-4] by +the difference of caste; and almost everywhere, that looseness of +general morality which usually characterizes declining nations.[251-5] + +China is, as a rule, considered the classic land of child-exposure. And +a writer of the country, who is considered one of the principal +authorities against the exposure of children, actually claims that it is +reprehensible only when one has property enough to support them. The +murder of daughters he especially reprobates as "a struggle against the +harmony of nature; the more a father performs this act, the more +daughters are born to him; and no one has ever heard that the birth of +sons was promoted in this way."[251-6] Moreover, the exposure of +children in the later periods of antiquity played an important part. In +Athens, the right of a father to expose his child was recognized by law. +Even a Socrates accounts it one of the occasional duties of midwives to +expose children.[251-7] Considered from a moral point of view, Aristotle +has nothing to say against abortion.[251-8] In Rome, a very ancient law, +which was still in existence in 475 before Christ, made it the duty of +every citizen to have and to bring up children.[251-9] It was very +different in the time of the emperors,[251-10] and until Christianity, +made the religion of the state, caused a legal prohibition against the +exposure of children to be passed.[251-11] [251-12] + + [Footnote 251-1: _Turner_, Embassy to Thibet, II, 349, tells + of five brothers who lived satisfied thus under one roof. + (_Jacquemont_, Voyage en Inde, 402.) In Ladakh, all the + children are ascribed to the eldest brother, to whom also + the property belongs; all the younger brothers are his + servants and may be expelled the house by him. (_Neumann_, + Ausland, 1866, No. 16 seq.) In Bissahir, on the other hand, + the eldest child belongs to the eldest brother, the second + to the second, etc. Here the wife is bought by all the + brothers together and treated precisely as a slave. + (_Ritter_, Erdkunde, III, 752.) In Bhutan, the men move into + the house of the woman, who is frequently old, and who + before marriage, and up to her 25th or 30th year, has + generally lived very lawlessly. (_Ritter_, IV, 195.) Among + the Garos, the wife may leave the man at pleasure and not + lose her property or her children, while her husband by her + rejection of him loses both. (_Ritter_, V, 403.) Even in + Mahabarata, polyandry occurs among the Northern Indians. + Similarly, among the Indo-Germanic tribes in Middle Asia + (_Ritter_, VII, 608); according to Chinese sources in + ancient Tokharestan (_Ritter_, VII, 699), and among the + Sabæans (_Strabo_, XVI, 768). Even in ancient Sparta. + (_Polyb._, XII, 6.)] + + [Footnote 251-2: In lower Nerbudda, the poisoning of new + born female children was very common about the beginning of + this century. In Kutch, people prefer to marry persons from + foreign countries, and murder their own daughters. + (_Ritter_, VI, 623, 1054.) Similarly, even in the Indian + Arcadia, the land of the Nilgherrys (V, 1035 seq.). In + Cashmir, all the beautiful girls are sold in the Punjab and + in India from their eighth year upwards. (VII, 78.) + Similarly in the Caucasus and in the mountainous region of + Badakschan. (VII, 798 ff.) _v. Haxthausen_, Transkaukasia, + 1856, I, ch. 1, tells how the Russians captured a vessel + carrying Circassian slaves into Turkey. They left them their + choice, to go back home, marry in Russia, or to continue + their journey to Constantinople. They all unhesitatingly + chose the last! There is an echo of something analogous even + in the Semiramis saga.] + + [Footnote 251-3: In many parts of Thibet and Rhutan the + fourth son, and in some places the half of the young men, + become lamas. (_Ritter_, Erdkunde, IV, 149, 206.)] + + [Footnote 251-4: Among the Garos and Nairs, as well as among + the Cossyahs, in Northwestern Farther India, the children + have no father, but consider their brothers on the mother's + side their nearest male relatives. Inheritance also takes + this direction. (_J. Mill_, History of British India, I, 395 + seq. _Buchanan_, Journey through Mysore, II, 411 seq. + _Ritter_, V, 390 seq., 753.) Similarly, among the Lycians: + _Herodot._, I, 173. Whether the peculiar custom of many old + German people, of which _Tacitus_, Germ., 20, makes mention, + does not point to an original community of wives, _quære_.] + + [Footnote 251-5: Even the most debauched European is a + pattern of modesty compared with the Indians themselves. + (Edinb. Rev., XX, 484.) On the frightful development of + unnatural as well as natural crimes against chastity among + the Chinese, see _G. Schlegel_, in the memoirs of the + Genoostchap van Kunsten en Wetenschappen in Batavia, Band. + XXXII, and Ausland, Januar., 1868.] + + [Footnote 251-6: According to _J. Bowring's_ official + report: Athenæum, 17 Nov., 1855. That the exposure of + children is allowed by law in China, and that many poor + couples marry with the intention of exposing them, is + unquestionable. But the reports concerning the extent of the + evil differ materially. The Jesuits estimated that in Pekin + alone from 2,000 to 3,000 children were exposed in the + streets. To this must be added the many thrown into the + water or smothered in a bath-tub immediately after birth. + Compare Lettres édif., XVI, 394 ff.; _Barrow_, 166 ff. The + street-foundlings were picked up by the police and placed in + wagons, living and dead together, and cast into one pit in a + part of the city. Other accounts are much more favorable: + thus that of _Ellis_, Voyage, ch. 7, who was there in 1816, + and of _Timkowski_, Reise, II, 359. Compare the quotations + in _Klemm_, Kulturgeschichte, VI, 212.] + + [Footnote 251-7: _Petit_, Legg. Att., 144. Compare _Becker_, + Charicles, I, 21 ff.; _Plato_, Theæt., 150 ff. In Plato's + state, a system of exposure on a large scale is one of the + most essential foundations of the whole. (De Re., V, 461.)] + + [Footnote 251-8: Aristotle advised that males should not + marry before their 37th year, and that at least after their + 55th year they should bring no more children into the world. + No family was allowed to have more than a definite number of + children. (Polit., VII, 14.) There are even yet pictures of + Venus trampling an embryo under foot. (_R. O. Müller_, + Denkmäler der alten Kunst, II, No. 265.) Compare, _per + contra_, _Stobaeus_, Serm., LXXIV, 91; LXXI, 15.] + + [Footnote 251-9: _Dionys. Hal._, Ant. Rom., IX, 22.] + + [Footnote 251-10: _Plutarch_, De Amore Prol., 2, Minut. + Felix Octav., 30. That it seemed entirely right, when + persons had "enough" children, to put the others to death, + is proved by the catastrophe in _Longus'_ idyllic romance, + IV, 24, 35. Even men like _Seneca_ (Contr., IX, 26; X, 33) + and _Tacitus_ (Ann., III, 25 ff.) were actually in favor of + the right of exposing children. On the frequency of + artificial abortion, see _Juvenal_, VI, 594. Semi-castration + of young slaves for libidinous women who did not want to + bear children. (_Juvenal_, VI, 371 ff.; _Martial_, I, V67.)] + + [Footnote 251-11: Under Constantine the Great, 315 after + Christ. _Theod._, Cod., XI, 27, 1] + + [Footnote 251-12: It is an unfortunate fact that many modern + nations approximate more closely to this abomination of the + ancients than is generally supposed. The infrequency of + illegitimate children in Romanic southern nations is offset + by the enormous number of exposures almost after the manner + of the Chinese. See the tables in _v. Oettingen_, Anhang, + 95. In Milan, between 1780 and 1789, there were, in the + aggregate, 9,954 children abandoned; between 1840 and 1849, + 39,436. (_v. Oettingen_, 587.) On abortion in North America, + and the numberless bold advertisements of doctors there that + they are ready to remove all impediments to menstruation + "from whatever cause," see _v. Oettingen_, 523, and Allg. + Zeitung, 1867, No. 309. It would be a very mournful sign of + the times if the work: Principles of Social Science, or + physical, sexual and natural Religion; an Exposition of the + real Cause and Cure of the three great Evils of Society, + Pauperism, Prostitution and Celibacy, by a Doctor of + Medicine (Berlin, 1871), were really a translation of an + alleged English original. It is throughout atheistic, + materialistic and immoral, concerned only with one + fundamental idea: to instruct women how to prevent + conception!] + + +SECTION CCLII. + +POSITIVE DECREASE OF POPULATION. + +The way of vice is steep. Where the aversion to the sacrifices and to +the limitations of liberty imposed by marriage, has permeated the great +body of the people; where, indeed, the immoral tendencies counter to +population described in § 249 ff. have been largely developed, they very +readily cease to be mere checks, and population may positively decline. +While in the case of fresh and vigorous nations, the mere loss of men +caused by wars, pestilence, etc., is very easily made up;[252-1] that +reproductive power may here be too much enfeebled to fill up the gap +again. It has happened more than once that the decline of a period has +been frightfully promoted by great plagues, which have swept away in +whole masses the remnants of a former and better generation.[252-2] The +return of the relatively small population of its childhood to a nation +in its senility cannot be ascribed exclusively to a decrease in its +means of subsistence and to a less advantageous distribution of +them.[252-3] [252-4] The depopulation, however, of Greece and Rome in +their decline might be hard to understand were it not for the slavery of +the lower class.[252-5] + + [Footnote 252-1: It is said that the plague which, in 1709 + and 1710, decimated Prussia and Lithuanian, carried away + one-third of the inhabitants, and even one-half of those at + Dantzig. While previously the number of marriages annually + was, on an average, 6,082, it rose in 1711 to 12,028. In + 1712 it was 6,267, and sank some years afterwards on account + of the decrease in population, to 5,000. (_Süssmilch_, + Göttl. Ordnung, I, Tab. 21.) Similar effects of the plague at + Marseilles, 1720. (_Messance_, Recherches sur la Population, + 766.) In Russia, too, it was observed after the devastation + produced by the black death in 1347 and the succeeding + years, that the population again increased at an + extraordinarily rapid rate; and that an unusual number of + twins and triplets were born (?). (_Karamsin_, Russ. Gesch., + IV, 230.) Compare _Dalin_ Schwed. Gesch., 11,384; + _Montfaucon_, Monuments de la Monarchie Française, I, 282.] + + [Footnote 252-2: I would mention the Athenian pestilence + during the last years or Pericles; the Roman in the _orbis + terrarum_, between 250 and 265 B.C., which is said to have + destroyed one-half of the population of Alexandria. + (_Gibbon_, Hist. of the Roman Empire, ch. 10.) It also made + frightful ravages, intellectually, on the nationality of the + Romans. (_Niebuhr._) Thus, in England, the black death + contributed very largely to cause the disappearance of the + medieval spirit. (_Rogers._) Of great political importance + was the pestilence of Bagdad, which, in 1831, carried off + 2/3 of the inhabitants. All national bonds seemed dissolved, + robbers ruled the country; the army of the powerful Doud + Pascha was carried off entirely, and his whole political + system, constructed after the model of that of Mehemet-Ali, + fell into ruin. Compare _Anth. Groves_, Missionary Journal + of a Residence at Bagdad, 1832.] + + [Footnote 252-3: Among the Maoris, the number of sterile + women is 9 times as great as the average in Europe. Compare + Reise der Novara, III, 129.] + + [Footnote 252-4: The decreasing number of English Quakers, + among whom, in 1680-89, there occurred 2,598 marriages, and + in 1840-49 only 659, finds expression in the unfrequency of + marriage, a comparatively small number of women and a small + number of children, all in conjunction with a small + mortality. (Statist. Journ., 1859, 208 ff.) There is no + reason to have recourse here to vice as a cause, and + scarcely to physiological reasons for an explanation, + because these phenomena are accounted for in great part by + the fact that adult males so frequently leave the sect.] + + [Footnote 252-5: In this respect, however, there is a great + difference between bondage and slavery. As early a writer as + _Polybius_ speaks of the depopulation of Greece. (_Polyb._, + II, 55; XXXVII, 4.) He looks for the cause in this, that in + every family, for luxury's sake, either no children whatever + were wanted, or at most from one to two, that the latter + might be left rich. (Exc. Vat., 448.) Very remarkable, + _Seneca_, Cons. ad. Marc, 19. Further, _Cicero_, ad. Div., + II, 5. _Strabo_, VII, 501; VIII, 595; IX, 617, 629. + _Pausan._, VII, 18; VIII, 7; X, 4; _Dio Chr._, VII, 34, 121; + XXXIII, 25. _Plutarch_ claimed that Hellas could, in his + time, number scarcely 3,000 hoplites, while in the time of + Themistocles, Megalis alone had put as many in the field. + (De Defectu Orac., S.) Antium and Tarentum similarly + declined under Nero. (_Tacit_., Ann., XIV, 27.) The + depopulation even of the capital, which began under + Tiberius, is apparent from _Tacit._, Ann., IV, 4, 27. + National beauty also declined with the nation's + populousness. _Æschines_ saw a great many beautiful youths + in Athens (adv. Timarch., 31); _Cotta_, only very few + (_Cicero_, de Nat. Deorum, I, 28); _Dio Chrysostomus_, + almost none at all (Orat., XXI). On the necessary lowering + of the military standard of measure, see _Theod._, Cod., + VII, 13, 3, _Verget_, de Re milit., I, 5. The depopulation + of the later _orbis terrarum_ is confirmed by the easiness + of the new division of land with the German conquerors. + Compare _Gaupp_, Die Germanischen Niederlassungen und + Landtheilungen (1845), passim.] + + + + +CHAPTER III. + +POPULATION-POLICY. + + +SECTION CCLIII. + +DENSE POPULATION.--OVER-POPULATION. + +The nation's economy attains its full development wherever the greatest +number of human beings simultaneously find the fullest satisfaction of +their wants. + +A dense population is not only a symptom of the existence of great +productive forces carried to a high point of utilization;[253-1] but is +itself a productive force,[253-2] and of the utmost importance as a spur +and as an auxiliary to the utilization of all other forces. The new is +always attractive, by reason of its newness; but at the same time, we +hold to the old too precisely because of its age: and the force of +inertia would always turn the scales in favor of the latter. This +inertia, both physical and mental is so general, that perhaps the +majority of mankind would continue forever satisfied with their +traditional field of occupation and with their traditional circle of +food, were it not that an impulse as powerful and universal as the +sexual and that of the love of children compelled them to extend the +limits of both. That man might subdue the whole earth it was necessary +that the Creator should make the tendency of man to multiply his kind +more powerful than the original production-tendency of his earliest +home. The unknown far-away deters as much as it attracts.[253-3] It is +easy to see how the division and combination of labor become uniformly +easier as population increases in density. Think only of large cities as +compared with the country.[253-4] "Under-populated"[253-5] countries, +which might easily support a large number of human beings, and which, +notwithstanding have for a long period of time had only few inhabitants, +are on this account abodes of poverty, regions where education and +progress are unknown. While, therefore, it cannot be questioned that a +nation under otherwise equal circumstances is more powerful and +flourishing in proportion as its population embraces a large number of +vigorous, well-to-do, educated and happy human beings, the last +mentioned attributes should not be left out of consideration. + +The possibility of over-population is contested by a great many +theorizers (§ 243); and, indeed, the complaints on this score are in +most cases only a baseless pretext of the inertia which feels the +pressure of the population without being helped and spurred thereby to +an increase of the means of subsistence. This inertia itself, especially +when it governs a whole nation, is a fact which cannot be ignored. +Over-population, as I use the term, exists whenever the disproportion +between the population and the means of subsistence operates in such +away that the average portion of the latter which falls to the share of +each is oppressively small, whether the effect produced thereby +manifests itself in a surprisingly large mortality, or in the limitation +of marriages and of the procreation of children carried to the point of +hardship. Over-population of this kind is, as a rule, curable by +extending the limits of the field of food, either as a result of the +advance of civilization at home, or by emigration. + +That the whole earth should be incurably over-peopled is an exceedingly +remote contingency.[253-6] But where, within a smaller circle, by reason +of the great stupidity or weakness of mankind, or by the too great power +of circumstances, over-population cannot act as a spur to new activity, +it is indeed one of the most serious and most dangerous political +diseases.[253-7] The immoderate competition of workmen involves the +majority of the nation in misery, not only materially but also morally; +one of the most dangerous temptations, for the rich to a contempt for +human kind, for the poor to envy, dishonesty and prostitution. In every +suffocating crowd, the animal part of man is wont to obtain the victory +over the intellectual. Precisely the simplest, most universal and most +necessary relations are most radically and disastrously affected by the +difficulty or impossibility of contracting marriage, and the sore +solicitude for the future of one's children.[253-8] + + [Footnote 253-1: A map of Europe, which would show the + density of population by the intensity of shade, would be + darkest in the vicinity of the lines between Sicily and + Scotland, between Paris and Saxony, and grow lighter in + proportion to the distance from their point of intersection. + Italy is the country with the earliest highly developed + national economy of modern times, and England that which + possesses the most highly cultivated national economy; as + the Rhine is, from the standpoint of civilization, the most + important river in Europe. It is remarkable, in this + connection, how slowly population increased in all European + countries during the 18th century, and how rapidly after the + beginning of the 19th, and especially since 1825. According + to _Dieterici_ (Berliner Akademie, 16 Mai, 1850), the + population increased annually per geographical square mile: + + =========================================================== + _In_ |_1700-1800._|_1800-1825._|_1824-1846._ + ---------------------+------------+-----------+------------ + | BY | BY | BY + France | 4 | 16 | 32 + Naples, | 15 | 18 | 49 + Piedmont, | 6 | 8 | 50 + Lombardy, | 19 | 40 | 80 + England and Wales, | 16 | 42 | 136 + Scotland, | 3 | 16 | 34 + Ireland, | 17 | 80 | 77 + Holland, | 13 | 14 | 95 + Belgium, | 15 | 44 | 136 + Prussia, | 7 | 17 | 68 + Hanover, | 6 | 12 | 32 + Württemberg, | 17 | 12 | 56 + Bohemia, | 16 | 27 | 73 + ===========================================================] + + [Footnote 253-2: "The useful rearing of children the most + productive of all outlay." (_Roesler._)] + + [Footnote 253-3: Compare _J. Harrington_ (ob. 1677), + Prerogative of a popular Government, I, ch. II; _Sir J. + Stewart_, Principles, I, ch. 18; _Malthus_, Principle of + Population, IV, ch. 1; _McCulloch_ very happily shows how + seldom those who can live comfortably without it are + extraordinarily active. The Malthusian law prevents this + ever becoming the condition of the majority. Precisely + during those years that man is most capable of labor, there + is a prospect of a great increase of outlay, in case one + does not remain single, which would inevitably degrade every + one, a few over-rich excepted, who had not taken care to + provide for a corresponding increase of income. Were it not + for this, human progress would become slower and slower, for + the reason that the _dura necessitas_ would be felt less and + less.] + + [Footnote 253-4: According to _Purves_, Principles of + Population, 1818, 456, there were, in England (London not + included): + + Column Head Key A: _In the seven most densely populated counties._ + B: _In the seven counties of average population. + C: _In the five most sparsely populated counties. + + | A | B | C + ----------------------------+-----------+---------+--------- + Inhabitants per | | | + geographical sq. mile, | 4,904 | 2,229 | 1,061 + One man with £60 income | | | + in every |34 inhab'ts| 37 | 77 + One man with £200 income | | | + in every | 193 " | 199 | 472 + Aggregate of all incomes | | | + over £200 per square mile,| £25,118 | £12,676 | £2,441 + ----------------------------+-----------+---------+--------- + + Compare _Rau_, Lehrbuch, II, § 13. Something analogous has + frequently been observed as to taxation capacity. Thus, for + instance, the Hessian provinces paid in direct taxation and + taxation on wines, liquors, etc.; and the density of the + population was in the ratio-- + + In Rhenish Hessen, 100 100. + In Starkenburg, 65 64. + In Upper Hessen, 64 59. + + (_Rau_, Lehrbuch, III, § 280.) In many European countries, + the population has for a long period of time, and in a + comfortable way, increased most rapidly where it has been + densest. Thus, for instance, the kingdom of Saxony was, in + 1837, the most densely populated of all the monarchical + states of Germany (6,076 inhabitants per square mile), + Hanover (2,416) and Mecklenburg-Schwerin (2,004) were among + the most sparsely peopled. And yet the annual increase of + population between 1837 and 1858 was greatest in Saxony + (1.36 per cent.) while Hanover (0.44) and + Mecklenburg-Schwerin (0.59) stood very low in this respect. + In very thinly populated countries, nature permits even the + civilized man to deteriorate: thus the French in Canada, the + Spaniard in the valley of the La Plata.] + + [Footnote 253-5: This excellent expression seems to have + been first used by _Gerstner_, Grundlehren der + Staatsverwaltung, 1864, II, 1, 176 ff. It must indeed be + distinguished from a rapidly growing, but for the time + being, a sparsely settled country. A nation with an equal + population on a larger surface is, frequently in the + immediate present weaker than another in which the + population is more dense; but it has the advantage of a + greater possibility of growth in the future. Think of the + electorates of Saxe and of Brandenburg in the sixteenth + century. Just as _Thaer_, Landwirthschaftliche Gewerbelehre, + § 149, advises that a mere annuitant should, values being + the same, rather purchase a smaller fertile estate; a very + able husbandman the reverse.] + + [Footnote 253-6: We need only call to mind such facts as for + instance that the United States wealth of coal is 22 times + as great as that of Great Britain. (_Rogers_, The Coal + Formation and a Description of the Coal Fields of North + America and Great Britain, 1858.) In addition to this, only + about 16 per cent. of the combustible material is really + used in the way furnaces are now generally filled, only 10 + per cent. in foundry furnaces, and from 14 to 15 per cent. + in the transportation of passengers on railways. The Falls + of Niagara afford a water-power equal to 2/3 of all the + steam engines which existed, a short time since, in the + whole world. (_E. Hermann_, Principien der Wirthschaft, + 1873, p. 49, 153, 243.) But that single families, houses, + branches of business, etc. may be over-peopled, and the + impoverishing disproportion between numbers and the means of + subsistence not be susceptible of immediate removal by the + unaided power of the crowded circle, cannot be questioned.] + + [Footnote 253-7: _Aristotle_ had recognized the possibility + of over-population. (Polit., II, 4, 3, 7, 4; VII, 4, 5; VII, + 14.) _Schmitthenner_, Staatswisensschaften, I, distinguishes + between relative and absolute over-population: the former is + remediable by intellectual and especially by political + development, while the latter borders on the extreme + physical and possible limits of the means of subsistence. + _W. Thornton_, Over-population and its Remedy, 1849, 9, + considers a country in English circumstances over-populated + when a man between twenty and seventy years of age is not in + a condition to support, by means of his wages, 1-1/4 persons + in need of assistance (children under 10, women over 60, and + men over 70 years of age).] + + [Footnote 253-8: Thus, for instance, in war, one million of + peasants are infinitely more powerful, especially in case of + a protracted defensive war, than two millions of + proletarians. Alaric's saying: "thick-growing grass is most + easily mowed."] + + +SECTION CCLIV. + +THE IDEAL OF POPULATION. + +Hence it was not an erroneous policy that most governments have sought +to promote the increase of population in undeveloped nations. So far as +the influence of the acts of government can reach, such a course must +tend to the earlier maturity of a people's economy. Much more +questionable are positive provisions by government intended to hinder +the further increase of population in a country already supposed to be +fully peopled; if for no other reason, because even the deepest, most +varied and extensive knowledge can scarcely ever predict with certainty +that no further extension of the field of food is possible under the +spur of momentary over-population; and also because questions of +population reach so far into the life and tenderest feelings of the +individual that a government which has regard for the personal freedom +of its subjects, instead of promoting or hindering marriage, emigration +etc. by police regulations, cannot but limit itself to a statistical +knowledge and legislative regulation of these relations.[254-1] [254-2] + +Whether the population of a country increase in a well-to-do or +proletarian manner; whether, therefore, the state should rejoice or +lament over such increase, may generally be inferred with some certainty +from the other conditions of the country's economy, especially from the +height of the rate of wages and from the consumption of the nation (§ +230). Thus, for instance, the population of England, between 1815 and +1847, increased 47 per cent.; but during the same period the value of +its exports increased 63 per cent.; the tonnage of its merchant marine, +55 per cent.; the amount yielded by the tax on legacies, and therefore +moveable property, by 93 per cent.; the value of immoveable property by +78 per cent. Wherever in agriculture the ancient system of triennial +rotation (_Dreifelder-system_ = _three-field system_) has been exchanged +for the so-called English system, not only is a greater number of men +supported, but, as a rule, each is more abundantly provided for.[254-3] +The construction of new houses is an especially good symptom, because a +habitation is a want which governs many others, and which, at the same +time, may be much curtailed in case of need. Only, there should be no +thoughtless building speculations, the existence or absence of which may +readily be inferred from the ratio between the rent of houses and the +rate of interest usual in the country. In England and Wales there was, +in 1801, one house to every 5.7 inhabitants; in 1821, to every 5.8; in +1841, to every 5.4; in 1861, to every 5.39; in 1871, to every +5.35.[254-4] + +The taking of the census at regular intervals in accordance with the +principles of modern science, and with the apparatus of modern art, is +one of the chief means to enable us to form a correct judgment of the +health of the national life and of the goodness of the state.[254-5] + + [Footnote 254-1: Compare _R. Mohl_, Polizeiwissenschaft, I, + § 15.] + + [Footnote 254-2: There may be observed a regular ebb and + flow in the opinions of theorizers on this subject. During + the latter, great enthusiasm is manifested over the increase + of population, which is considered an unqualified benefit; + later, over-population gives rise to uneasiness. Not many + had as much insight as Henry IV.: _la force et la richesse + des rois consistent dans le nombre et dans l'opulence des + sujets_. (Edict., in _Wolowski_ in the Mémoires de l'Acad. + des Sciences morales et politiques, 1855.) Thus, for + instance, _Luther_, in his sermons on the married state, + advises all young men to marry at 20, and all young women at + from 15 to 18 years of age. The person who fails to marry + because he cannot support a family has no real confidence in + God. God will not allow those who obey his command to want + the necessaries of life. Werke by _Irmischer_, XX, 77 ff. In + England, great dread of depopulation under the first two + Tudors: 4 Henry VII., c. 19; 3 Henry VIII., c. 8. _J. + Bodinus_, De Rep., VI, is charmed with the Lex Julia et + Papia Poppæa. Its repeal was immediately followed by the + greatest looseness of morals and by depopulation. + + On the other hand, a great dread of over-population + prevailed among English political economists at the end of + the sixteenth and the beginning of the seventeenth century. + They recommended their colonial projects by saying that they + desired to avert this danger. Thus, for instance, _Raleigh_, + History of the World, I, ch. 4; _Bacon_, Sermones fid., 15, + 33, and his essay, De Colonies in Hiberniam deducendis. + Compare _Roscher_, Zur Geschichte der englischen + Volkswirthschaftslehre, 24, 26, 31, 34, 42. Similarly, at + the end of the fifteenth century, in highly developed Italy, + which had become stationary. According to _F. Patricius_ (De + Inst. Republ., VI, 4; VII, 12): _incolarum multitudo + periculosa est in omni populo_. Since _Colbert's_ time, the + opposite opinion has become the prevailing one. The densest + population had been observed in the wealthiest and + relatively the most powerful countries, and people thought + they had here sufficient data for a wide generalization. The + thought of military conscription by degrees obtained weight + in this connection. Thus, _Saavedra Faxardo_, Idea Principis + christiano-politici (1649), Symb. 66; _De la Court_, + Aanwysing (1699), I, 9. _Sir W. Temple_, says that the + fundamental cause of all commerce and wealth lies in a dense + population, which compels men to the practice of industry + and frugality. (Works, I, 162 ff., 171, III, 2.) _Imperii + potentia ex civium numero astimanda est._ (_Spinoza_, Tract, + politicus, VII, 18.) + + Thus _Petty_ says that 1,000 acres which can support 1,000 + men are better than 10,000 which do the same thing. He would + give Scotland and Ireland up entirely, and have the + inhabitants settle in England. In this way all combination + for common purposes would be facilitated. (Several Essays, + 107 seq., 147 ff.) Peter the Great is said to have + entertained a similar view: Oeuvres de Frédéric le Grand, + II, 23. More moderate is _Child_, Discourse of Trade, 298, + and still more so in 368 ff.; _Locke_, Works, I, 73 ff.; II, + 3, 6, 191. In Germany, _v. Seckendorff_ advises that great + establishments for children should be erected, in which + orphans and even the children of poor parents should be + brought up at the expense of the state, simply with the + object of increasing the number of healthy men. (Teutscher + Fürstenstaat, ed. 1678, 203, Add. 179.) _Becher_, Polit. + Discours, 21, would have murderers punished because they + detract from population, although he elsewhere in his + definition of a city, "a nourishing populous community," is + no blind enthusiast over-population. According to _v. + Horneck_; Oesterreich über Alles, 1684, 29 ff., the third + fundamental rule of public economy is the greatest possible + increase and employment of men. _Vera regni potestas in + hominem numero consistit; ubi enim sunt homines, ibi + substantiæ et vires._ (_Leibnitz_, ed., Dutens, IV, 2, 502.) + According to _Vauban_, Dîme royale, 150, Daire, no child can + be born of a subject by which the king is not a gainer. + Compare 46,145. Numbers of People the greatest riches. + (_Law_, Trade and Money, 209.) Similarly, Law's disciple + _Mélon_, Essai politique sur le Commerce, ch. I, 3. The + number of people is both means and motive to industry + (_Berkeley_, Works, II, 187) and hence the public are + interested in nothing so much as in the production of + competent citizens. (Querist, Nr., 206.) _Süssmilch_, Göttl. + Ordnung, I, Kap. 10; Oeuvres de Frédéric M. IV, 4; VI, 82. + + About the middle of the 18th century, we find a whole school + of political thinkers who decide every question from the + standpoint of the influence of the solution on the increase + of population. (Excellently refuted by _Schlözer,_ + Anfangsgründe, II, 15 ff.) Thus especially _Tucker_, + Important Questions, IV, 11; V, 5; VII, 4; VIII, 5. Four + Tracts, 70. _Forbonnais_, Finances de France, I, 351, who + considered it one of the principal objects of a good + industrial policy to employ the greatest possible number of + men. _Necker_, Sur le Commerce et la Législation des Grains, + 1776. _v. Sonnenfels_, Grundsätze der Polizei, Handlung und + Finanz (1765), in which the principle of population is + called the highest principle of all four sciences of the + state (I, § 25 ff.). These writers understand the "balance + of trade" in such a way, that a nation always operates most + advantageously which gives employment to the largest number + of men with its export articles, (_v. Sonnenfels_, II, § 210 + ff., 354 ff.) _v. Justi_, Staatswissenschaft, I, 160 ff., + says plainly that a country can never have too many men. + According to _Darjes_, Erste Gründe, 379, "even the increase + of beggars brings something into the treasury by means of + the excise tax which they pay." Compare, also, _J. J. + Rousseau_, Contrat Social, III, 9; _Galiani_, Della Moneta, + II, 4; _Verri_, Opuscoli, 325; _Filangieri_, Leggi Politiche + ed Economiche, II, 2; _Paley_, Moral and Political + Philosophy, III, ch. 11. On similar grounds, _A. Young_ + laments that the increase of proletarians is greatly + hindered by the English poor laws. (In later writings it is + somewhat different: compare Travels in France, I, ch. 12.) + How deeply such ideas had penetrated public opinion is + apparent from the opening words of the Vicar of Wakefield, + as well as from the declaration of _Pitt_ in parliament in + 1796, that a man who had enriched his country with a number + of children had a claim upon its assistance to educate them. + Much more correctly, _Voltaire_, Dict. Philosophique, art. + Population, sect. 2. + + The reaction which attained its height in the Malthusians + proper, set in with the Physiocrates and _Steuart: Quesnay_, + Maximes générales, No. 26; _Mirabeau_, Phil. rurale, ch. 8, + and Ami des Hommes (1762), VIII, 84. Similarly, _J. J. + Reinhard_, who calls Baden over peopled "for its present + system of agriculture." (Vermischte Schriften, 1760, I, 1 + ff.; II, Varr.) _Möser_ Patr. Phant., I, 33, 42; II, 1; IV, + 15; V, 26. Also Minister _v. Stein_: Leben von Pertz, V, 72; + VI, 539, 887, 1184. Compare _supra_, § 242. Of certain + modern economists, it may be said that they deplore and + condemn the birth of every child for whose support there has + not been established a life long annuity in advance. A + remarkable but unsuccessful attempt is made by _Ch. Périn_, + De la Richesse dans les Sociétés Chrêtiennes, at the end of + the first volume, to reconcile the opposing views. Périn + reproaches the Malthusians, and especially _Dunoyer_ and _J. + S. Mill_, with the advocacy of _l'onanisme conjugal_, and + thus desiring to restore the old heathen situation. Only the + Church holds the proper mean between defect and excess, + inasmuch as it permits complete continency or the + procreation of children regardless of circumstances to its + members; while, on the other hand, it, by celibacy and by + the inculcation of industry, frugality, etc., guards against + over-population. (How well the Roman Church has succeeded in + this is best proved by the Roman Compagna!) + + In Greece, too, in its first economic periods, especially at + the time that the first colonies were sent out, great fears + were expressed of over-population. _Hesiod_ weighs the + advantages and disadvantages of the married state against + one another with great thoroughness. (Theog., 600 ff.) In + the Cypria, even the Trojan war was explained by a divine + decree, emitted with the intention of removing + over-population.] + + [Footnote 254-3: _A. Young_, Political Arithmetik, 160 ff. + In the United States, in ten years, the increase of wealth + to that of population, was as 61:33. (_Tucker_, Progress of + the United States, 202 ff.) As a good measure for the + well-being of the masses, _J. J. Neumann_ recommends the + relative number attending higher schools, also that of + shoemakers, tailors, etc., because the magnitude of the + consumption of wool, leather, etc., can scarcely be directly + ascertained. (_Hildebrand's_ Jahrbb., 1872, I, 283, 294.)] + + [Footnote 254-4: Statist. Journ., 1861, 251. In Liverpool, + between 1831 and 1841, the population increased 40 per + cent., and the number of houses 24 per cent., on account of + the large immigration of Irish proletarians. (Edinb. Rev. + LXXX, 80.) According to _Fregier_, les Classes dangereuses, + the number of good buildings continually increased under + Louis Philippe, and that of the worst lodging houses + continually diminished. In Prussia, between 1819 and 1858, + the population increased 60.8 per cent., the number of + houses, 30.1 per cent.; but the insurance-value of the + houses seems to have increased in a still greater + proportion, (_v. Viebahn_, Zollverein's Statist., II, 291, + ff., 299.) According to _Horn_, Bevölk. Studien, I, 62, ff., + there are to every 100 persons in France, 20 dwelling + houses; in Belgium, 19; in Great Britain, 18; in Holland, + 16; in Austria, 14; in Prussia, 12. Too much should not be + inferred from this mere table, as, for instance, in English + cities, a house is, on an average, smaller than in the + Prussian. A French house has, on an average, only 5-1/2 + windows and doors; a Belgian house, on the other hand, 3-1/2 + rooms. And so, in villages, it is found that there are + uniformly fewer persons to a house than in cities, + especially large ones. In Belgium, for instance, the cities + have to every 100 inhabitants, 66 rooms, the country only + 62. In the largest parishes of France (over 5,000 + inhabitants), the number of doors and windows is on the + average almost six times as great as in the smallest (under + 5,000 inhabitants); but only 4 times as many persons live in + them. (_Horn_, loc. cit. I, 76 ff.)] + + [Footnote 254-5: It was very well remarked, even of the + Servian census: _ut omnia patrimonii, dignitatis, ætatis, + artium officiorumque discrimina in tabulas referrentur, ac + sic maxima civitas minimæ domus diligentia contineretur ... + ut ipsa se nosset respublica_. (_Florus_, I, 6, 8.)] + + +SECTION CCLV. + +MEANS OF PROMOTING POPULATION. + +The following are the principal means which have been used to +artificially promote the increase of population: + +A. Making marriage and the procreation of children obligatory by direct +command. Among almost all medieval nations so strong is the family +feeling, that it seems to men to be a sacred duty to keep their family +from becoming extinct. Where a person is not in a condition physically +to fulfill this duty, the law supplies a means of accomplishing it by +juridical substitution[255-1] at least. Most national religions[255-2] +operate in the same direction, as well as the influence of political +law-givers, who fully share in the contempt for willful old bachelors +and sterile women, which runs through the national feeling of all +medieval times.[255-3] In addition to this, there are the positive +rewards offered for large families of children.[255-4] Even Colbert, in +1666, decreed that whoever married before his 20th year should be exempt +from taxation until his 25th; that anyone who had 10 legitimate children +living, not priests, should be exempt from taxation for all time;[255-5] +that a nobleman having 10 children living should receive a pension of +1,000 livres, and one having 12, 2,000 livres. Persons not belonging to +the nobility were to receive one-half of this, and to be released from +all municipal burthens.[255-6] Such premiums are, indeed, entirely +superfluous. No nobleman would desire 12 children simply to obtain a +pension of 2,000 livres! Colbert himself abandoned this system of +premiums shortly before his death.[255-7] [255-8] + +In the case of morally degenerated nations, in which an aversion to the +married state had gained ground, efforts have sometimes been made to +work against it by means of new premiums. Thus, especially in Rome, +since the times of Cæsar and Augustus, although with poor success. It +little becomes one who is himself a great adulterer to preach the sixth +commandment.[255-9] + + [Footnote 255-1: In Sparta, impotent husbands were obliged + to allow another man to have access to their young wives. + (_Xenoph._, De Rep. Laced., I. _Plutarch_, Lycurg., 15.) + Compare _J. Grimm_, Weisthümer, III, 42. Great importance of + adoption in Roman law.] + + [Footnote 255-2: Thus, the Indian laws of Menu, concerned + principally with the necessity of sacrifices to assure + parents an existence after death. Similarly, Zoroaster and + Mohammed. In the Bible the periods should be accurately + distinguished: I Moses, 2, 18; V Moses, 26, 5; Judges, 10, + 4; 13, 14; Proverbs, 14, 28; 17, 6, and the Preacher, 4, 8 + apparently agree; also I Corinth., 7, written under + essentially different circumstances but precisely on this + account not in contradiction with those passages of the Old + Testament.] + + [Footnote 255-3: Genesis, 30, 23. In Sparta, willful + bachelorhood was almost infamous. (_Plutarch_, Lycurg., 15.) + In Athens, a person might be charged with _agamy_ as with a + crime. (_Pollux_, VIII, 40.) Concerning the ancient + censorial punishments inflicted on those who had no children + and the rewards of prolificacy, see _Valer. Max._, II, 9, 1; + _Livy_, XLV, 15; _Gellius_, I, 6: V, 19. Festus v. Uxorium. + Many German cities made marriage a qualification for the + holding of certain public offices, etc. In some places, the + public treasury was made the heir of bachelors, a custom not + abolished in Hanover until 1732. Compare _Ludewig_, on the + Hagestolziatu (1727), but also _Selchow_, Elem. Juris Germ., + § 290. On the fines imposed on old bachelors in Spain, + during the middle ages, see _Gans_, Erbrecht, III, 401 seq. + Recently recommended very strongly by _Hermes_, Sophiens + Reise (3 aufl.), I, 660.] + + [Footnote 255-4: Yearly rewards for _polytekny_ in Persia: + _Herodot._, I 136. In Sparta, a father with three children + was relieved of guard duty; and one with four, of all public + burthens. (_Aristot._, Polit., II, 6, 13. _Aclian_, V. H., + VI, 6.) Between 1816 and 1823, 250 fathers received the + royal gift made to godchildren at their christening in the + district of Oppeln, for the seventh son. (_v. Zedlitz_, + Staatskräfte der preuss. Monarchie, I, 285.) The king of + Hannover paid annually about 900 thalers in such gifts. + _Lehzen_, Hannovers Staatshaushalt, II, 346.] + + [Footnote 255-5: Children who had fallen in the service of + their country were considered as still living. Precisely + similar laws had existed in Spain from 1623 (_de Laet_, + Hispania Cap., 4); in Savoy from 1648 (_Keysslers_, Reise, + I, 209).] + + [Footnote 255-6: Russian law which required the serf master + to emancipate his male serfs who were not married by their + 20th year, and female serfs not married by their 18th. He + could not charge them with desertion in such case, even + where combined with theft. (_Karamsin_, Russ. Gesch., XI, + 59.) An ancient Prussian law provides that the country + people shall marry at the age of 25. Corpus Const., March, + V, 3, 148, 274.] + + [Footnote 255-7: Lettres, etc. de Colbert, _éd_. Clément, + II, 68, 120. _Voltaire_, Siècle de Louis XIV. ch. 29, + bitterly complains of this; and also _Berkeley_, Works, II, + 187, and _Forbonnais_, Finances de France, I, 391. On the + other hand, _Ferguson_, Hist, of Civil Society, III, 4, + asks: what fuel can the statesman add to the fires of youth? + Similarly, _Franklin_, Observations, etc. It should not be + forgotten that the taxes necessary to supply the so-called + marriage-fund, intended to enable poor couples to marry at + the expense of the state, make marriage more difficult for + other couples. (_Krug_, Staats-Oek., 31.)] + + [Footnote 255-8: Frederick the Great limited the mourning + time of widowers to 3 months and of widows to 9. His + abolition of ecclesiastical punishment for those who had + fallen, and his prohibition of censuring them under penalty + of fine, was based as much on his population policy as on + philanthropic grounds. (Preuss. Geschichte, Friedrich's M., + II, 337.) Similarly in Sweden: _Schlözer_, V. W., V, 43. In + Iceland, after a great plague, even in the last century, it + was provided that it should be no disgrace to a young woman + to have as many as six illegitimate children. (_Zacchariä_, + Vierzig Bücher vom Staate, II, 112.) The marshal of Saxony + wished, in the interest of the recruiting of the army, that + marriages should be contracted only for a term of five + years. (Rêveries de Maurice, etc., 345.) The sterile women + of Egypt visit the Tantah, a place of pilgrimage and + fair-town, where, under the cloak of religion, they give + themselves up to unbridled and promiscuous intercourse. + (_Wachenhufen_, vom ägypt. armen Mann, II, 151 ff.)] + + [Footnote 255-9: Even in the year 131 B. C., the censor + Metellus demanded that citizens should, for political + reasons be compelled to marry. (_Livy_, LIX, _Sueton._, Oct. + 89.) _Aes uxorium_ for bachelors. (_Valer. Max._, II, 9, I.) + Cæsar distributed land by way of preference among those who + had three or more children. (_Sueton._, Cæs. 20.) Augustus' + celebrated Lex Julia et Papia Poppæa sought to urge even + widows to marry again in opposition to the moral public + conscience. (Partly augendo ærario: _Tacit._, Ann., III, + 25.) _Dio Cass._, LVI, 1 ff. Trajan did more yet, inasmuch + as he gave great assistance to impoverished parents, even of + the highest classes, to enable them to educate their + children. _Sub te liberos tollere libet, expedit!_ (_Plin._, + Paneg., 26.) Of what little assistance all this really was, + _Tacitus_, Ann., III, 25, IV, 16, and _Plin._, Epist. IV, + 15, bear witness. If, under the Cæsars, the damage done to + the childless in the case of inheritance was a frequent + motive of divorce (_Friedländer_, Sittengeschichte I, 389), + the L. Julia, in fact, operated in a direction contrary to + that in which it was intended to work.] + + +SECTION CCLVI. + +IMMIGRATION. + +B. Calling for immigrants. This is a means all the more in favor, +inasmuch as it provides the country not only with new-born children, but +with mature men, who frequently, when they come from thickly peopled and +highly civilized countries, promote the industries of the country of +their adoption, and become the teachers of a higher civilization. I need +only mention the inhabitants of the Low Countries, who in the twelfth +century settled as agriculturists in Northern Germany,[256-1] and in the +fourteenth and sixteenth centuries in England, as artisans; the German +miners and inhabitants of cities, who, during the middle ages, colonized +Hungary, Transylvania[256-2] and Poland,[256-3] and the French +Huguenots, who fled to the Independent Protestant countries. Nearly all +the remarkable Russian princes since Ivan III. have endeavored in this +way to induce Germans to settle in Russia, and, for the same reason, +Peter the Great refused to give up his Swedish prisoners of war.[256-4] +The great Prussian rulers have cultivated the policy of immigration on +an extensive scale, and thus maintained the original character of their +parent provinces as the colonial land of the German people.[256-5] [256-6] + +Such immigrants have been generally accorded a release from taxation and +from military duty for a number of years; a proper measure since the +state thereby only surrendered an advantage temporarily which it +otherwise would not have possessed at all. Where the land of the state +receiving the immigrants was still almost valueless, it has frequently +been made over in parcels to well-to-do colonists without +consideration.[256-7] Assistance exceeding these limits is a very +questionable boon. It should not be forgotten that the influx of men who +bring no capital whatever with them, and who are not good workmen, is of +no advantage. Nor are they always the best elements of a people who +emigrate. They are very frequently men who, through their own fault, did +not prosper at home, and who come to the new country, with all their old +faults.[256-8] This is, of course not true of those who emigrate from +their attachment to some great principle; for instance, it is not true +of those who emigrate in search of freedom of conscience. These may +become, provided they are in harmony with their new environment, a +support and ornament to their adopted country.[256-9] But there is +always danger that they may not be able to adapt themselves to their new +economic relations, and that thus they may in consequence succumb to the +pressure of circumstances.[256-10] + +Oriental despotisms have frequently endeavored to assure themselves the +possession of newly conquered countries by transporting its most +vigorous inhabitants in whole masses to a distant part of their old +empire. Thus, the Jews were carried into Assyria and Babylon; the +Eretrians into Persia; the inhabitants of Caffa by Mohammed II.; the +Armenians by Abbas the Great. The Russians, too, undertook a similar +transportation of people under the Ivans.[256-11] + +C. The prohibition of emigration, which, in the case of serfs, vassals +and state-villeins, it seems natural enough, was very usual in periods +of absolute monarchical power. Thus, for instance, Frederick William I. +forbade the emigration of Prussian peasants under penalty of death. +Whoever captured an emigrant received a reward of two hundred +thalers.[256-12] The public opinion of modern times is very decidedly +opposed to this compulsion, which would make the state a prison.[256-13] +"A really excessive population would still find an exit to escape, +namely, through the gates of death." (_J. B. Say._) The statesman, on +the other hand, who opposes the withdrawal of political or +ecclesiastical malcontents should take care, lest he act like the +physician who prevents the discharge of diseased matter from the sick +body, and causes it to take its seat in some vital organ.[256-14] Hence, +even where emigration is considered detrimental to the country, no +governmental condition should be attached to it, except that the person +desiring to emigrate should give timely notice of his intention, and +receive his passport only after it has been shown that he has discharged +all his military duties, paid his taxes and his debts.[256-15] [256-16] + +The severe penalties imposed in Athens on emigration, after the defeat +at Chæronea, when general discouragement threatened the state with total +dissolution, belong to an entirely different mode of thought.[256-17] + + [Footnote 256-1: _v. Wersebe_, Ueber die Niederlandischen + Kolonien in Deutschland, II, 1826.] + + [Footnote 256-2: The immigration of the so-called Saxons + into Transylvania began between 1141 and 1161, in + consequence of the great inundations in the Netherlands. + Compare _Schlözer_, Kritische Sammlungen zur Gesch. der + Deutschen in Siebenb., 1795.] + + [Footnote 256-3: In Poland, a multitude of German colonists + established themselves during the thirteenth century on the + domains of the crown and of the church. As a rule, they + obtained the land in consideration of moderate services and + rents, which, however, did not begin to run until after + eight years, nor until after thirty for uncleared land. In + addition to this, they were governed by the German law, and + their communal authorities were for the most part German. + (_Roepell_, Gesch. von Polen, I, 572 ff.)] + + [Footnote 256-4: Later, the ambassador of Peter the Great + endeavored to attract into Russia the Swedes, whom the + Russian invasion had prevented from continuing the operation + of their mines, saw mills, etc. (_Schlosser_, Gesch. des 18 + Jahrhund., I, 205.) Catherine's colonization, especially on + the Volga and in. Southern Russia, 1765 and 1783. About + 1830, the number of the colonists was estimated at 130,000, + mostly Germans.] + + [Footnote 256-5: It is estimated that Frederick William I. + spent 5,000,000 thalers in establishing colonists. Up to + 1728, 20,000 new families were received into Prussia alone. + _Stenzel_, Preuss. Gesch. III, 412 ff. Frederick the Great + endeavored above all to retain in the country the strangers + who came there periodically. Thus, the harvesters of + Vogtland, in the neighborhood of Magdeburg, and the Vogtland + masons in the suburbs of the capital (1752). Compare _v. + Lamotte_ Abhandlungen, 1793, 160 ff. He is said to have + settled 42,600 families, mostly foreigners, in 539 villas + and hamlets. Besides, the population of Prussia, between + 1823 and 1840, increased by 751,749 immigrants, without any + positive favors shown them (_Hoffmann_, Kleine Schriften, 5 + ff.), and the greater part of these were not very poor.] + + [Footnote 256-6: In antiquity, nothing so much contributed + to the rise of Athens and Rome as their reception of noble + refugees during its earlier periods.] + + [Footnote 256-7: In Russia, the Emperor Alexander, in 1803, + promised the colonists a full release from taxation during + ten years, a reduction of taxation for ten more, and freedom + from civil and military service for all time; besides 60 + _dessatines_ of land per family gratis, an advance of 300 + rubles for housebuilding, etc. and money to enable them to + maintain themselves until their first harvest. The provision + relating to Poland (1833) was much less favorable: + importation of movable property free of duty, freedom from + military duty and from taxation for six years, and perpetual + quit rents (_Erbzinsgüter_) to agriculturists who owned a + certain amount of capital. Brazil promised immigrants, in + 1820, land and ten years' freedom from taxation. Compare + _Jahn_, Beiträge, z. Einwanderung und Kolonisation in Br. + (1874), 37 ff. Hungary, in 1723, accorded settlers freedom + from taxation for six years and artisans for fifteen years. + (_Mailath_, Oesterreichische Gesch., IV, 525.) The ordinance + of 1858 affords too little security for non-Catholics and is + not adapted to farmers, but only to purchasers.] + + [Footnote 256-8: Many of Frederick the Great's colonists + turned out very badly. They were attracted only by the + premiums offered, and they became dissolute after they had + consumed them. Many of them thought that they were to be of + use only by giving children to the state (_Meissner_, Leben + des Herrn v. Brenkenhof, 1782), and that the land donated + them was to be cultivated by others at the expense of the + state! _Dohm_ mentions villages of colonists which had to a + great extent changed hands four times in 20 years. Whether + the king would not have better attained his object had he + employed the younger sons of Prussian peasants as colonists, + _quære_. (_Dohm_, Denkwürdigkeiten, IV, 390 ff.) Even + _Süssmilch_ says: "A native subject is, in most cases and + for most purposes, better than two colonists." (Göttl. + Ordnung, I, 14, 275.) Compare the work: Wie dem Bauernstande + Freiheit und Eigenthum verschafft werden könne, 1769, 16. + Every family of colonists in South and new East Prussia is + said to have cost the state 1,500 thalers. (_Weber_, + Lehrbuch der polit. Oekonomie, 1806, II, 172); but according + to _Büsching_ (Beiträge z. Regierungsgeschichte Friedrichs, + II, 239), only 400 thalers. _J. Möser_ is strongly opposed + to the encouragement of immigration by direct appeals to it. + (P. Ph., I, 60.) According to _Bülau_, + Staatswirthschaftslehre, 24, only those immigrants are + welcome who are attracted to the country by the whole + character of its national institutions and circumstances. It + is a different matter when, for instance, the government in + New South Wales permits the colonists, by the payment of + very moderate contributions, to have their workmen, friends + and relations come after them from England in ships owned by + the government. Between 1832 and 1858, £1,700,000 were paid + out for such transportation. (Novara-Reise, III, 53.)] + + [Footnote 256-9: Dutch Remonstrants since 1619 in Schleswig; + Huguenots established since 1685, in Prussia, to the number + of about 11,000; Waldenses in Prussia since 1686; natives of + Salzburg and of the Palatinate in Prussia. For a state which + is the representative of a religious or political principle, + it may be a matter of honor, and then certainly useful, to + afford an asylum to persons, adherents of that principle.] + + [Footnote 256-10: On the German colonists whom Olavides + settled in Spain, in 1768 etc., see _Schlözer's_ + Briefwechsel, 1779, IV, 587 ff. See adv.: Ueber Sitten, + Temperament etc., Spaniens von einem reisenden Beobachter in + den J., 1777 und 1778, Leipzig, 1781, p. 260, ff.] + + [Footnote 256-11: Canale Crimea, III, 346 ff. _Karamsin_, + Russ. Geschichte, VIII, 97, 424.] + + [Footnote 256-12: Ordinance of 1721. Compare _Wolf's_ + Vernünftige Gedanken, § 483, who at that time highly + disapproved of such compulsion. Quite the reverse, the + Prussian Landrecht, II, Tit. 17, § 133 ff. On the other + hand, in Spires, in 1765 and 1784, persons of good conduct, + good workmen and others of sufficient means, were forbidden + to emigrate. Prohibition under pain of death, in Spanish + Milan; Novæ Constitut., 29, 145. The work: Les Intérêts de + la France maletendus (1752), 258, advocates the prohibition + of emigration as a species of _les majesté_.] + + [Footnote 256-13: _Beccaria_, Dei Delitti e delle Pene, + 1765, cap. 52. Similarly, _Mirabeau_, in his congratulatory + letter to Fred. Wil. II., and _Benjamin Franklin_, On a + proposed Act for preventing Emigration: Works, IV, 458 ff. + The Dutch were very early advocates of freedom of + emigration. Compare _U. Huber_, De Jure Civit., 1672, II, 4; + _Pufendorff_, Jus. Natur. (1672), VIII, 11. Theorizers + otherwise the most opposite in their views are here agreed. + _Jeremy Bentham_ says that properly speaking a prohibition + against emigration should begin with the words: We, who do + not understand the art of making our subjects happy; in + consideration that if we should allow them to take flight, + they would all betake themselves to strange and better + governed countries, etc. Des Récompenses et des Peines, II, + 310. But also _K. L. v. Haller_, Restauration der + Staatswissenschaft, I, 429 ff., 508, demands most + strenuously that there should be freedom of emigration, for + the reason that every man, without prejudice to any one + else, might seek the state constitution which he wanted, _J. + Tucker_ entirely approved the English law prohibiting the + emigration of workmen. Compare also _J. Bodin_, De Republ., + I, 6.] + + [Footnote 256-14: English prohibition of emigration under + Charles I., 1637. _Rymer_, Foedera XX, 143. The story that + Cromwell and Hampden were thus detained in the country may + be false, however. (_Bancroft_, History of the United + States, I, 445.) Earlier prohibition of emigration of the + Norwegian king in relation to Iceland. (_Schlegel_, Grâgas, + Comment Crit. p. XV.) In ancient Greece, the restriction of + emigration by foreign powers contributed very largely to the + democratization of the mother country. Something similar is + impending over Germany if the present emigration towards + North America should be much weakened by a change of + circumstances there.] + + [Footnote 256-15: Many governments require proof that the + person emigrating will be admitted into his contemplated new + home, and that he has the means to cover the expenses of the + journey. The threat of not receiving back returning + emigrants has very little effect, for the reason that it is + the most thoughtless who at the moment of emigration + entertain the most rose-colored hopes.] + + [Footnote 256-16: I shall treat of the so-called after-tax + (_Nachsteuer_) in the fourth volume of my System.] + + [Footnote 256-17: Compare _Lycurg_., adv., Leocrat. _Cæsar_ + forbade all persons of senatorial rank to emigrate out of + Italy; other persons between 20 and 40 years of age were not + to remain absent over three consecutive years at most. For + the same reason, the time of military service was shortened. + (_Mommsen_, R. G., III, 491.)] + + +SECTION CCLVII. + +SANITARY POLICE. + +D. Hygienic measures and the improvement of the sanitary police of a +country are of the utmost importance, not only to increase the number of +inhabitants, but also to produce the conditions of population described +in § 246.[257-1] + +E. It is the indispensable condition precedent of all the measures which +we have examined, if they would attain their end, that the means of +subsistence of the people should be increased or at least more equally +divided among them. Where this has been done the increase of population +will, as a rule, take care of itself; where it has not, the artificially +increased procreation of children can only produce new victims for the +angel of death. A merely more equable distribution can, however, improve +the condition of the people only in exceedingly rare cases. (§ 204). As +a rule, the diseases which it is attempted to thus cure grow worse, or +they at least increase in extent. (§ 80, ff., 250.) It is quite +different, of course, when the more equable distribution coincides with +an absolute growth of the nation's economy. We shall see, later, that, +for instance, the freedom of land alienation and of industrial pursuits, +when not accompanied by an important advance in the corresponding +branches of economy may do more harm than good; but that under favorable +circumstances a multitude of dormant forces are thereby awakened, and +that then the national-economical dividend may be increased much more +than the divisor. (§ 239. _Roscher_, Nationalökonomik des Ackerbaues, § +99, 139 ff.) + + [Footnote 257-1: _Bacon_ in his History of Life and Death, + or of the Prolongation of Life, hopes the better physicians + "will not employ their times wholly in the sordidness of + cures, neither be honoured for necessities only; but that + they will become coadjutors and instruments of the divine + omnipotence and clemence in prolonging and renewing the life + of man."] + + +SECTION CCLVIII. + +MEANS OF LIMITING THE INCREASE OF POPULATION. + +A. The means which consists in rendering marriage less easy by +legislation is surrounded with peculiar difficulties in densely +populated countries, which are always highly civilized. The state would +have here to swim against the stream, and it would be generally a much +less difficult task to enlarge the field of food. If there remained from +a former period any inducements held out to promote marriage, it is self +evident that they should now be discontinued. A voluntary bachelor must +now no longer be considered as a man who permits one more woman to +become an old maid, but as one who facilitates marriage to another +couple.[258-1] On the other hand, it should not be forgotten that, for +men, generally, marriage is not only an occasion of increased outlay, +but also an incentive to increased activity and greater economy.[258-2] +Many states have endeavored to condition the founding of a family by +requiring evidence that the father has a prospect of being able to +support one.[258-3] Distinguished theorizers accede to this condition, +inasmuch as they deny the right of over-population.[258-4] But, +unfortunately, it is impossible, except in a few extreme cases, to +assert or deny a prospect of being able to support a family.[258-5] How +easily is the most remunerative power of labor destroyed by physical or +mental disease. Scarcely less subject to change is the so-called certain +opportunity of acquisition afforded by a profession or a trade, when it +is not guarantied by the possession of considerable capital or of landed +property, or by some legal privilege. The amount of property required by +many laws is so small that it alone would suffice to support the family +only for a few years.[258-6] And yet it has been generally provided that +the proof of such a property gave one an unconditional right to +establish a domicile and to marry. It is only where this is wanting that +special consent is required. But who shall exercise this right of +consent? The parish, perhaps, because on it the impoverished family +would fall as a burthen. But it is to be feared that the course of +procedure here would be too severe. Local narrow-heartedness might +refuse the right of domicile to skillful and industrious candidates, who +are in the best situation to maintain a family, but whose competition +the older members of the parish might dread.[258-7] Hence, in most +countries, the parish is treated as a party, on whose protest against +the marriage the state itself decides[258-8] If the state authorities +were to give the immediate decisions in such cases, we might expect, in +ordinary times, a liberality which would frustrate the object of the +law; but sometimes, also, considerable chicanery on grounds of so-called +higher police. + +Where there still exist classes and corporations with real independence, +the members of which still attach a real value to the body, the matter +takes care of itself. The journeyman, for instance, voluntarily retards +his marriage until he has become a master workman, and once he has +attained that degree, he "works the golden mine of his trade."[258-9] +But wherever a numerous proletariat exists, the individuals of which +have no better future to expect, whatever their present sacrifices and +self-denial, and who know nothing of class-wants or class-honor, +prohibitions of marriage are severely felt, and are far from being well +enforced.[258-10] The rule which excites least opposition is the fixing +of a normal age for marriage, under which males should not be allowed to +undertake its engagements.[258-11] Of all privileges those attaching to +age are viewed with least aversion. Something similar is effected in +most countries to-day by military conscription, which, on this account, +in young countries, has a very restrictive effect on the increase of +population.[258-12] The best means against thoughtless marriages +certainly consists in increasing the measure of individual wants (§ +163); assuming, of course, that the added wants are proper and +worthy.[258-13] There is always the consideration that all limitation of +marriage, even voluntary self-limitation, by decreasing or postponing +marriage, may prove disastrous to morals. It should, however, not be +forgotten that there are other sins besides impurity, and that complete +poverty constitutes one of the worst of temptations. Especially is it +not the angel guardian of chastity.[258-14] + +In England[258-15] and France, all governmental hinderances to marriage +have long since ceased, and in Prussia, at least all general police +hinderances; and we can by no means say that the consequences have been +evil. On the other hand, no favorable results as to their influence on +pauperism can be shown statistically from the restrictive laws of +Württemberg. Rather do statistics point here to the unfavorable probable +result of an increase of illegitimate births.[258-16] According to the +law of the North German Confederation of 1868, the contract of marriage, +except in the case of soldiers, officials, clergymen and teachers, is so +free, so far as police influence is concerned, that even actual poverty +is no impediment.[258-17] [258-18] [258-19] + + [Footnote 258-1: In Ireland, the unsalaried condition of the + Catholic clergy who depended entirely on marriage fees (as + high as £20 being paid by poor farmers. Quart. Rev. No. + 289), baptismal fees, burial fees, etc., operated as an + artificial stimulus to the increase of population under the + most unfavorable conditions. See § 254.] + + [Footnote 258-2: It is very noteworthy in this connection + that married people commit relatively fewer crimes than + single persons. Thus, for instance, in Prussia, in 1861, of + every 1,000 unmarried men over 16 years of age, 1.18 were + sent to the house of correction; of every 1,000 married men, + only 0.59; of every 1,000 divorced, 13.71! (Preuss. Statist. + Zeitschr., 1864, 318 seq.) In Austria, 1858-59, there was one + person under sentence in every 203 unmarried persons, in + every 669 married, and in every 1,053 widows and widowers. + Of the married, there was a larger proportion of criminals + among the childless than among those with children (49.8 per + cent. against 42.6 per cent.). Compare _v. Oettingen_, + Moralstatistik, 759. This evidence is all the stronger + since, circumstances being otherwise the same, fathers of + families are harder pressed by cares for food than single + persons.] + + [Footnote 258-3: In Würtemberg, the authorities were for the + first time enjoined in 1633, to dissuade people from + untimely marriages; in 1712 the consent of the authorities + to a marriage was made dependent on the evidence of a + religious education and the capacity to support a family. + Between 1807 and 1828, all restrictions on marriage because + of incapacity to support a family were removed. According to + the Bavarian Penal Code of 1751 (I, 11, § 7), persons who + had married without governmental authorization, and who + could not afterwards support themselves except by begging, + were sentenced to at least one year in the workhouse and to + be whipped once a week. Only a short time ago scarcely any + one in Bavaria had a real and unquestionable right to marry. + (_Braun_, Zwangscölibat für Mittellose in _Faucher's_ + Vierteljahrsschrift, 1867, IV, 8.) Austrian law relating to + the proof of the certainty of maintaining one's self by + one's trade etc: 12 Jan., 1815; 4 Sept., 1825.] + + [Footnote 258-4: _R. Mohl_, in the 3d edition of his + Polizeiwissenschaft, I, 152 ff., requires proof of the + possession of a sufficiency of food, at least of the means + to begin house-keeping. According to _Marlo_, Weltökonomie, + III, 84 ff., and _Schäffle_, Kapitalismus und Socialismus, + 689 ff., the compulsory insurance of widow and children + should precede marriage.] + + [Footnote 258-5: Thus the Württemberg law of 1833 prohibits + the marriage of those who are under prosecution on account + of repeated thefts, fraud, or carrying on the trade of a + beggar; also all such as have been criminally punished + within the two next preceding years, and all who within the + three next preceding years have received alms from the + public treasury, except in cases of misfortune, of the + causes of which they were innocent. The Bavarian law of + April 16, 1868, gives the parish a right of veto. According + to the royal Saxon ordinance of 1840, male recipients of + alms are permitted to marry only when their marriage makes + an important amelioration of their circumstances probable, + and does away with the necessity of public assistance in the + future.] + + [Footnote 258-6: During Iceland's middle age, prohibition of + marriage for all who did not possess at least from 100 + ounces of silver or 600 ells _vadhmal_. (_K. Maurer_, + Island, 443 seq.) In Bavaria (July 1, 1831), the right of + domicile is made to depend on a landownership free of debt, + and a _steuersimplum_ of from 1 to 2 florins (in towns more) + in country parishes; on the real (reales) right of carrying + on a trade, or on a personal trade-concession sufficient for + support. A tax of 1 florin in 1852 meant about 1,200 florins + worth of property. In other cases it depended on whether the + parish recognized the existence "complete and permanent of + the means of livelihood." Here good repute and the + possession of a considerable savings bank deposit were to be + particularly considered. In cases of competition, discharged + soldiers who had served out their term, and good servants of + 15 years service were to be preferred. In Württemberg (1833) + a sufficient guaranty that a person contemplating marriage + possessed the means of support was: the personal capacity to + exercise a liberal art or to follow a scientific career, to + engage in commerce or agriculture, or some branch of + industry, or follow a trade, with sufficient income + therefrom to support a family; or the possession of a + property, according to locality, of 1,000, 800 or 600 + florins. The law of May 5, 1852, was more exacting, and + required, besides personal competency, evidence that one's + calling yielded a sufficient income, as well as of an amount + of property free of debt, of the value of from 150 to 200 + florins. In Baden (1831) a property considered sufficient to + insure the means of livelihood amounted in the four largest + cities to 1,000 florins, in 10 smaller ones to 600; in the + remaining communities to 300 florins. In the electorate of + Hesse, the amount (1834) was from 150 thalers (for small + country communities) to 1,000 thalers. (Kassel.) An + irreproachable character is required by many laws (in + Württemburg, since 1832, the good reputation of both + parties), and the community is empowered to dispense with + the other material conditions. Long-continued savings-bank + deposit speaks well for the parties' competency to support a + family, because it bears testimony to an excellent economic + disposition.] + + [Footnote 258-7: Remarkable instance in _Rau_, Lehrbuch, II, + § 15 a., note b.] + + [Footnote 258-8: In Bavaria, in 1808, the decision reserved + to the royal boards of police.] + + [Footnote 258-9: Those callings in which a certain _esprit + de corps_ prevails such as that, for instance, of officials + and officers, submit willingly to restrictions on marriage + authoritatively imposed. The Catholic clergy submit even to + a full prohibition of marriage. Such measures uniformly + strengthen the isolation of the class from the nation as a + whole. It is well known that, during the middle ages, + theological views on the meritoriousness of all self-denial + made voluntary celibacy very common. The Franciscan order + counted at one time 150,000 monks and 28,000 nuns, the + so-called members of the third order, or penitents, not + included. (_Helyot_, Gesch. der Kloster und Ritterorden, V, + 33.) The severity of the laws relating to fasting might + also, according to _Villermé_, be regarded as a "preventive + check." Compare _supra_, § 240, note I.] + + [Footnote 258-10: The Prussian law authorizing parents and + guardians to put an interdict on marriages, because of a + want of the necessary means, of vicious habits, disease, + etc., may constitute a check in very good families and + families of the middle class, but scarcely so in proletarian + circles.] + + [Footnote 258-11: Besides Württemberg, Baden also prescribed + 25 years; in Saxony and Hessen-Darmstadt, 21 sufficed; in + Prussia even 18. _Schäffle_ advocates a minimum age of 25 + years for males and 22 years for women (loc. cit.). + Similarly, _Mohl_, loc. cit.] + + [Footnote 258-12: Why, hitherto, in Sweden, by way of + exception, military service promoted early marriage, see + _Wappäus_, Bevölkerungsstatistik, II, 357. In France, on the + other hand, the increase of population since 1815 has been + almost exactly in the inverse ratio of the strength of the + military levy. Acad. des Sc. Morales et Polit., 1867, II, + 159.] + + [Footnote 258-13: _Malthus_, Principle of Population, 10, + ch. 13.] + + [Footnote 258-14: _Malthus_, Principle of Population, IV, + ch. 4, 5. It is a great error to suppose that the number of + immoral acts increases and decreases with the frequency of + temptation. In Ireland, farmers very frequently keep their + men servants and maid servants even after the latter have + married. But the very facility with which a fall is + legalized, increases very largely the number of reckless + marriages. (_Meidinger_, Reise, II, 187 seq.) In the country + about Göttingen also, where the people marry much earlier on + an average than in that about Calenberg, illegitimate births + are much more frequent.] + + [Footnote 258-15: Even no other legal obstacle which could + make marriage more difficult occurred to _Malthus_, except + that which consists in the refusal of public assistance + after the expiration of a fixed period of time. (Principle + of Population, IV, ch. 8; V, ch. 2.)] + + [Footnote 258-16: See the tables in the Tübinger + Zeitschrift, 1868, 624 ff. Thus, formerly, in Rhenish + Bavaria, where there was complete liberty allowed in this + matter, the poor rates compared with the population, were + only 34.6 per cent. of the average in the rest of Bavaria; + and the number of illegitimate births was not so unfavorable + by one-half. (_Rivet_, in the Archiv der polit. Oekonomie, N. + F., I, 39.) The Bavarian law of the 16th of April, 1868, + which provides that the community or parish can object to a + person's marriage only on account of unpaid parish taxes or + poor rates (art. 36) largely increased the number of + marriages and diminished the illegitimate births; in the + first year to 22.2 per cent., in the second to 17, and in + 1873 to 13.2 per cent. (Allg. luth Kirchenztg., 12 März, + 1875.) According to official statement, this law did more to + improve the condition of workmen in the towns than any other + cause. Compare _Thudichum_, Ueber unzulässige Beschränkungen + des Rechts der Verehelichung, 1868. Per contra, _E. + Schübler_, Ueber Niederlassung und Verehelichung in den + verschiedenen deutschen Staaten, 1855.] + + [Footnote 258-17: _Reinhold_ has recommended the direct + limitation of the procreation of children by the process of + _infibulation_ practiced on boys fourteen years of age and + continued until they arrive at a marriageable age or are + able to support illegitimate children. An der Uebervolkerung + in Mitteleuropa, 1827. Ueber die Population und Industrié, + oder Beweis dass die Bevölkerung in hoch kultivieren Landern + stets den Gewerbfleiss übereile, 1828. Ueber das menschliche + Elend, welches durch Missbrauch der Zeugung herbeigeführt + wird, 1828. Das Gleichgewicht der Bevölkerung als Grundlage + der Wohlfahrt, 1829. The ancients proceeded sometimes in a + similar way in the case of slave actors: _Juvenal_, VI, 73. + Compare _Winckelmann_, Antichi inediti, Tav. 188.] + + [Footnote 258-18: The obstacles formerly placed in many + countries in the way of the marriage of Jews of allowing + only the first-born to marry, and this only when a vacancy + occurred in the number of families by death (Austria), was + not based on a solicitude about population, but on + religio-national intolerance, in part also on commercial + police grounds.] + + [Footnote 258-19: _Fisher_, Gesch. des deutschen Handels + (1785 ff.), still considers war as a remedy for + over-population, but _M. Wirth_, Grundzüge der N. Oek., + rightly remarks that war destroys not so much children, + women and the infirm as the most productive of the male + population, and immense amounts of capital.] + + +SECTION CCLIX. + +EFFECTS OF EMIGRATION. + +B. It is sufficiently evident that emigration from an over-populated +country[259-1] may be attended with good consequences, especially when +it takes place in organized bodies.[259-2] There is little danger that +one who knows how to work and pray will go to the bad in a young +agricultural colony. In a wilderness which has not yet been cleared, the +greater number of proletarian vices spontaneously disappear. There is +here no opportunity for jealousy or theft; little for intemperance, the +gaming table, licentiousness or quarrelsomeness. Here labor is a +necessity, and the rewards of industry and saving soon take a palpable +shape. As the emigrant, in such a situation, can scarcely help marrying, +children far from being a burthen, soon become companions to their +parents in their solitude and, later, helpmates in business. The +colonist belonging to the lower middle class is most certain of +improving his condition. It may, indeed, require many and toilsome years +before he can feel comfortable himself; but his children who would +probably have led a proletarian life in the mother country may calculate +with certainty on future well-being. The father's small capital which +the outlay for education alone would have exhausted at home, here +becomes the seed of a number of prosperous households.[259-3] It is +otherwise with the mass of the people who remain at home. (Compare § +241.)[259-4] It is a matter of much more difficulty than is generally +supposed by those who have not made a study of the matter, that the +yearly emigration from countries like Germany should counterbalance the +excess of births over deaths.[259-5] It is not to be supposed that men +who are really useless at home should be of any service in the colonies. +How violently have not English colonies opposed the advent of settlers +from the poorhouses of the mother country. The classes which are +readiest to emigrate: idlers, fickle characters, fathers of families +with altogether too many children, artisans who by a revolution in +industry have lost the means of making a livelihood, are precisely those +who find it most difficult to obtain employment on the other side of the +water.[259-6] Most colonies refuse to receive persons over forty years +of age at their own expense. But a young man intellectually and +physically able to work, can always make his way even in the old world; +only the weaker succumb under the pressure of over-population. Lastly, +it should be considered what an amount of capital is required for +purposes of emigration and settlement. If emigrants, on the average, +take more capital with them than is estimated to be the _per capita_ +amount of capital possessed by those remaining at home,[259-7] the +consequence would be that, as a result of this very successful +emigration, the ratio of consumers to the amount of capital in the +country would become more and more unfavorable. The emigrating portion +of the country might experience the advantage of this, but the great +mass of the population remaining at home would become poorer in capital +and in vigorous men,[259-8] and richer in the comparatively needy. The +comfortless contrast between colossal wealth and beggarly want could +only be thereby increased, since it is almost exclusively the lower +middle class who emigrate to agricultural colonies. The over-rich, as a +rule, will not, and proletarians can not, go thither.[259-9] [259-10] + + [Footnote 259-1: Compare _R. Mohl_, in the Tübinger + Zeitschrift für Staatswissenschaft, 1847, 320 ff.; + _Roscher_, Nationalökonomische Ansichten über die Deutsche + Auswanderung in the Deutschen Viertejahrsschrift, 1848, No. + 43, 96 ff., the same author's Kolonien, Kolonialpolitik und + Auswanderung, 2 Aufl., 1856, 342 ff.; _J. Fröbel_, Die + Deutsche Auswanderung und ihre Kulturhistorische Bedeutung, + 1858.] + + [Footnote 259-2: Unfortunately, emigration in groups has + recently become very rare, whereas, during the middle ages, + it took place preponderantly, first in armies and then in + communities.] + + [Footnote 259-3: According to parliamentary investigations, + the Irish laborer in Australia, Canada, etc., improves in a + few years to such an extent that he can scarcely be + distinguished from the Anglo-Saxon. He becomes industrious, + self-reliant etc. (Edinb. Rev., 1950, 25.) In North America, + however, the Irish seldom become really well off, or occupy + a position of consequence in society. (_Görtz_, Reise, 88.)] + + [Footnote 259-4: _E. G. Wakefield_, in other respects so + intelligent a writer on the theory of colonization, is of + opinion that every nation might, by giving a proper + direction to emigration, establish such a density of + population as it desired. Thus, for instance, if there were + 10,000 marriages contracted every year in a country, and it + was provided that each of these 10,000 couples should be + sent to some colony immediately after marriage, the whole + mother country would become extinct in from 60 to 70 years. + This extreme is of course not desired by any one; but the + way to be followed in order to attain a desirable limit is + hereby pointed out. That emigration has in so few instances + checked the advance of population, Wakefield accounts for by + the fact that the means furnished to emigration have to a + certain extent been wasted, and that old men, children, + etc., who either had no influence on population as yet, or + could have no more in future, constituted a large proportion + of those who left the country. (England and America.) + + Evidently an important consideration is here omitted, viz.: + that there is no such a thing as a normal year of marriages, + etc. If, for instance, all males were to wait until their + 30th year, and all females until their 20th, to enter the + married state, and that the government were to send all + competent persons as soon as they had reached this age to + America, what would be the consequence? Numberless + situations affording the means of supporting a family would + be vacant, and a number of young men of 29 and of young + women of 19 would be induced to marry, etc. The number of + children to a marriage in England in 1838-44 was 4.13; + 1845-49, 3.96; 1850-54, 3.26; 1855-59, 4.15. (Journal des. + Econ., Oct., 1861.)] + + [Footnote 259-5: _Benjamin Franklin_, in 1751, estimated the + aggregate number of English inhabitants in the North + American colonies at 1,000,000, of whom only 80,000 had + immigrated into the country. Hence, from 1790 to 1840, the + United States, the promised land of European emigrants, + received only about 1,500,000 emigrants. From 1820 to 1859, + the number (according to _Bromwell_ and _Hübner_) was + 4,509,612; according to a report of the New York Chamber of + Commerce (1874), 9,054,132 since 1824. An annual immigration + of 100,000 was reached for the first time in 1842. According + to the census of 1870, there were in the United States + 5,567,229 persons born in foreign countries, of which number + 1,690,410 were born in Germany, 1,855,827 in Ireland, and + 5,550,904 in England. The aggregate emigration from the + British empire, which unquestionably possesses most colonies + and the largest marine, was, on an average, between 1825 and + 1835, only about 55,000; 1836 to 1845, over 80,000; in 1845 + alone, over 93,000, while the yearly excess of births over + deaths between 1841 and 1848, according to _Porter_, was in + England and Wales alone, on an average, 169,000. During the + succeeding years emigration received an extraordinary + stimulus (which changed the proportion) in the influence of + the discovery of the Californian and Australian mines, and + in the Irish famine. Hence the emigration was, at least, in + + ================================ + _in_ | _Persons._ + -------------------+------------ + 1847, | 258,000 + 1848, | 248,000 + 1849, | 299,000 + 1850, | 280,000 + 1852, (maxim.) | 368,000 + 1853, | 329,000 + 1855, | 176,000 + 1857, | 212,000 + 1858-60, (average)| 96,000 + 1862, | 121,000 + 1863, | 223,000 + 1865, | 181,000 + 1867, | 105,161 + 1870, | 202,511 + 1871, | 174,930 + ================================ + + while the excess of births over deaths (in Great Britain + alone) amounted, in 1856, to 309,000. Between 1815 and 1870, + there emigrated from the United Kingdom to the United + States, 4,472,672 persons; to the British North American + Colonies, 1,391,771; to Australia, 988,423; to other points, + 160,771; an aggregate of 7,013,637. (Statist. Journal, 1872, + 115.) On the other hand, between 1861 and 1871, 543,015 + persons either returned or immigrated to the United Kingdom. + It is estimated, (according to _Hübner's_ Jahrb. der + Volkswirthschaft und Statistik, 263 ff.; VIII, 222, and the + Rudolst. Auswandererzeitung) that in no year before 1844 + were there more than 33,000 emigrants from Germany. On the + other hand, in + + ==================================== + _in_ | _At least._ + -------------------+-----------++--- + 1844, | 43,000 + 1845, | 67,000 + 1846,- | 94,000 + 1847, | 109,000 + 1848,- | 81,000 + 1849, | 89,000 + 1850,- | 82,000 + 1851, | 112,000 + 1852, | 162,000 + 1853, | 156,000 + 1854, (maxim.) | 250,000 + 1855. | 81,000 + 1856. | 98,000 + 1857, | 115,000 + 1858-61, (average)| 4,620 + 1866, | 137,000 + 1867, | 151,000 + | + By Hamburg and | + Bremen alone-- | + 1867-71, (average)|33,355 & 48,296 + 1872, |57,621 & 66,919 + 1873, |51,432 & 48,608 + 1874, |24,093 & 17,913 + ==================================== + + while the natural increase of population in Prussia alone + (1843-55) amounted to almost 150,000 per annum; in the + kingdom of Saxony (1834-49), to over 18,000; in + Austro-Germany and the five German kingdoms together, + 305,000. (_Wappäus_, Bevölkerungsstatistik, I, 133.) In New + York alone, in 1852, 118,600 Germans arrived; in 1853, + 119,500; in 1854, over 178,000. That, at present, emigration + is, on the whole, so much more frequent than formerly, is + accounted for by the largely improved means of + communication. However, it was estimated a century ago, that + Europe sent at least 100,000 persons per annum to the East + and West Indies. Between 1700 and 1719, an aggregate of + 105,972 persons emigrated to the Dutch East Indies; between + 1747 and 1766, 162,598. (_Saalfeld_, Gesch. des Holländ. + Ostindiens, II, 189.) It should not be ignored, however, + that the readiness to forsake the fatherland, which only a + short time ago was so usual in Germany (in England, it + prevails chiefly among the Irish), justified the greatest + solicitude for the roots of German national life. How little + Germany really suffers from over-population, is shown + especially by the circumstance that, for instance, in + Prussia, it is precisely the most densely populated + districts to which immigration is largest. Compare _v. + Viebahn_, Zollverein. Statist, II, 242. + + According to _C. Negri_, about 40,000 Italians emigrate + every year at present; and it is said that there are, in + Turkey, Egypt and Tunis, 70,000; in Peru, 14,000, and in + Buenos Ayres, 84,000 Italians living. (I, Jahresbericht der + Hamburg, geogr. Gesellsch., 1874.) In other Romanic and + Slavic countries emigration is as yet insignificant. On the + other hand, there were, in 1870, 214,574 native + Scandinavians in the United States.] + + [Footnote 259-6: While the most active demand for labor, for + instance, existed in Australia generally, three government + ships carrying emigrants arrived: one with English + agricultural laborers, the second with former factory hands, + the third with Irish. The agricultural laborers found places + very rapidly a few days after their arrival; the factory + hands did only tolerably well, while of the poor Irish not + one-half could find anything to do, and became a burthen on + the benevolence of the public. (_Merivale_, Lectures on + Colonization and Colonies, II, 30 ff.)] + + [Footnote 259-7: It is estimated that the first 21,200 + settlers of New England brought about $1,000,000 with them. + (_Bancroft_, Hist. of the United States.) The 50,000 + emigrants who came to Quebec in 1832 were estimated to be + worth $3,000,000. It is thought that German emigrants to + America, bring with them, on an average, 280 thalers, to + which must be added 40 thalers passage money. This seems + very high, while German estimates are generally too low, + because no emigrant has any interest to overestimate his + property, but frequently to underestimate it. Thus, for + instance, in 1848-49, 8,780 persons emigrated from Prussia + with 1,713,370 thalers of property, i. e., 195 thalers each. + (Amtl. Tabellen, f., 1849, I, 290.) It is said that between + 1844 and 1851, 45,300 persons emigrated from Bavaria with + governmental consent, and that they carried with them + property to the amount of 19,233,000 florins; that is, 424 + florins each. (Beiträge zur Statistik des Kgr. Bayern, III, + 322 seq.) Here the average amount of means carried away by + emigrants seems to decrease; a sign that the mass of those + emigrating come from successively lower strata of the + population. (_Hermann_, Bewegung der Bevölk., 26 seq.) + + A still smaller amount of capital would suffice for the + purpose of emigration itself. Persons who settled in Canada + (1823) cost the English nation £22 per capita, which amount + provided them with cows, seeds, agricultural implements, + help in building, and food for twelve months. According to + the Edinburg Rev., Dec., 1826, only £15, 4s. were necessary + for the same purpose. If it be borne in mind that many of + these settlers afterwards caused five times as many + relatives to come over at their own expense, the necessary + outlay per capita would seem very small indeed; frequently + not more than one year's maintenance in the poorhouse would + have cost. Almost £1,000,000 are sent every year from the + United States through banks and emigration bureaus, by + emigrants, to the United Kingdom, to bring over their + relatives. (Statist. Journal, 1872, 386.)] + + [Footnote 259-8: It is said that in Mecklenburg agricultural + labor has much deteriorated because the strong men emigrate + and because the old and children remain at home. + (_Bassewitz-Schumacher_, Comm. Bericht über die Verhältnisse + der ländl. Arbeiterklassen, 1873.)] + + [Footnote 259-9: _J. S. Mill_, indeed, thinks that even + where there is a larger emigration of capital than of men, + the combined pressure which both exert on the natural forces + of the country emigrated from must become less. (Principles, + IV, ch. 5, 1.) Compare _Hermann_, loc. cit. 28 ff. _Hermann_ + also shows very clearly how emigrants to America would + frequently like to return; but the expense of returning + deters them from the undertaking, and they manage to get + along by great effort, which, however, would have afforded + them a livelihood if they had remained at home. Staatsw. + Unters. II, Aufl. 480.] + + [Footnote 259-10: Against real over-population, the + emigration of women would be much more effective than that + of men; and yet the emigration of the latter occurs much + less frequently in large numbers. Thus, between 1853 and + 1858, 3,694 males emigrated from Saxony and only 2,609 + females. Between 1866 and 1874, there were 1,754,231 male + immigrants to the United States, and only 1,147,446 females. + According to _Rümelin_ (Allg. Ztg., December, 1865), the + large emigration from Württemberg produced by the years of + scarcity--1850 ff.--left such a preponderance of women that + 1/6 of all the young women who have reached a marriageable + age at present, would remain unmarried, even if all the + marriageable young men were to engage in matrimony. Thus + negative emigration does very little to cure the social + disease of involuntary celibacy.] + + +SECTION CCLX. + +COLONIST EMIGRATION. + +All these dangers disappear when the portion of the nation which has +emigrated continues economically connected with the body of the nation +remaining at home. (Colonizing emigration.) Here emigration not only +provides "elbow room" in the mother country, but there arises at the +same time an increased demand for manufactured articles, an increased +supply of raw material, by means of which an absolute growth of +population is made possible.[260-1] England has hitherto enjoyed these +advantages to the fullest extent, Germany scarcely at all. German +emigrants to Russia, America, Australia, or Algiers, were, together with +all they have and are, for the most part lost to their fatherland. They +become the customers and suppliers of foreign countries, and frequently +enough the competitors and even enemies of Germany.[260-2] [260-3] + +It might be very different if the stream of German emigration was +directed towards German colonies for instance, as happened in later +medieval times, towards the fertile but thinly populated parts of +Hungary, towards the provinces of Austria and Prussia; perhaps, as List +wished, towards those parts of Turkey which, God willing, shall yet +constitute the inheritance of the German people. Thus, through the +instrumentality of emigration, might a new Germany arise, which would +directly or indirectly and necessarily ally itself to the old, +politically, and at the same time constitute the surest bulwark against +the danger from Slavic power. + +Politico-economically, this country might be utilized by Germany as the +United States uses the Mississippi valley and the Far West, especially +as concerns the exclusiveness of the use. It is true, that emigrants +could be invited to these quarters in good conscience only when the soil +had been prepared for them. They should find there, on their arrival, +complete legal security, especially for the landed property to be +acquired by them; likewise, at least, full personal, religious, and also +commercial freedom.[260-4] + +It may be asked, whether there are places in the other quarters of the +world adapted to German colonization in the higher sense of the word. +These should of course be countries adapted to agriculture as practiced +by the Germans,[260-5] with an easily accessible coast and provided in +the interior with navigable streams. Here the Germans should be able not +only to live together in large numbers, but the rest of the population +should be inferior to them in political training and in national +feeling. Otherwise, there would in time be danger of their losing the +German character and feeling.[260-6] The difficulty of establishing +German colonies in the southern temperate parts of Chili and Brazil +would be aggravated by the very same causes which prevented the creation +of a German navy for centuries; and they would almost certainly have to +calculate on the jealousy of all other colonial powers and of the United +States.[260-7] We should not forget that from Raleigh's time to the +present, almost every speculation having for its object the founding of +a colony, whether originating with individual capitalists or with +joint-stock companies, has been, considered from a mercantile point of +view, a failure. The fruits of new colonization are generally reaped in +the succeeding generation; and such delay is scarcely in harmony with +the ideas of our own times. Almost every settlement has had its critical +period when the settlers almost despaired. This produced less harm in +the 17th century; for they were for the most part compelled to +persevere. In our day, they would probably disband and go in search of +an easier life in colonies already existing. And yet, Germany must make +haste if it would not soon see the last appropriate locality occupied by +other and more resolute nations.[260-8] [260-9] + + [Footnote 260-1: As _Torrens_ shows there is no kind of + trade that so much promotes production, or which is so + capable of growth as the exchange of the means of + subsistence and raw materials against manufactured articles. + The Budget: On Commercial and Colonial Policy, 1841 ff.] + + [Footnote 260-2: Care should be taken not to allow one's + self to be misled here by relative numbers. In the United + States, the amount of imports was, from-- + + =========================================================== + |_The British_| _France._ | _Germany without_ + | _Empire._ | | _Austria._ + ------------+-------------+-------------+------------------ + 1840-41, | $51,000,000 | $24,000,000 | $2,450,000 + 1849-50, | 85,000,000 | 27,600,000 | 8,780,000 + 1859-60, | 138,600,000 | 43,200,000 | 18,500,000 + =========================================================== + + Hence, absolutely, the German exports increased in 19 years + only about $16,000,000; the French (without any emigration), + over $19,000,000; the English, more than five times the + German. Of the 30,633 emigrants who sailed from Bremen in + 1874, only 72 did not go to the United States. (D. Ausw. + Ztg., 5 Jul., 1875.) The total exports of the United Kingdom + to its colonies amounted, 1840-44, to an average value of + £7,833,000; 1865-69, to £27,146,000; while those to foreign + countries amounted, during the same periods of time, to only + from £28,871,000 to £93,558,000. English colonial trade + amounted, in 1866, to £6 2s. per capita of the colonial + population; the trade with the East Indies, to only 9s. 7d. + per capita of the East Indian population. (Statist. Journal, + 1872, 123 ff.)] + + [Footnote 260-3: There has hitherto been little to rejoice + over in the condition of German emigrants. The greater + number of them had received so little education that they + were by no means in a way to oppose the weapons of attack of + Anglo-Americans. The glorious literature of their old home + scarcely existed for them. Almost the only national + peculiarity which they held to with any tenacity was the + disposition to a want of union among themselves. Hence they + were necessarily de-Germanized in a few generations, after a + toilsome and quarrelsome period of transition. How seldom, + even in Ohio, did German names occur in the list of public + officials, while in New York the number of German names on + the poor list is very considerable. The situation, however, + seems to have improved in modern times, and the national + coherency and political power of the mother country have + gone hand in hand with the revival of attachment on the part + of the emigrants to the land of their nativity. How + beautifully was this attachment manifested during the + Franco-Prussian war in 1870-71!] + + [Footnote 260-4: Compare _Fr. List_, in the D. + Vierteljahrsschrift, 1842, No. IV. _Dieterici_, über Aus- + und Einwanderungen, 1847, 18.] + + [Footnote 260-5: No Mosquito-coast!] + + [Footnote 260-6: How tenaciously have the Germans held to + their nationality in Transylvania and the Baltic provinces, + and how rapidly they lost it in Pennsylvania!] + + [Footnote 260-7: On emigration to Brazil, see _v. Tschudi's_ + report of Oct. 6 to the Swiss parliament, 1860.] + + [Footnote 260-8: Think only of the project of the Belgian + East Indian Company, which Austria could not carry out at + the beginning of the preceding century. Proposition by + _Fröbel_ (loc. cit., 87 ff.) that England and Prussia should + together found a German colony in the valley of the La + Plata, to which _Wappäus_ rightly objects, that there are + few places there in which peasant emigrants would like to + acquire land. (Mittel- und Südamerika, 1866, 1027.)] + + [Footnote 260-9: Compare _Wappäus_, Deutsche Auswanderung + und Kolonisation, 1846.] + + +SECTION CCLXI. + +STATE AID TO EMIGRANTS. + +The inquiry, What can the state reasonably do for emigration, must, of +course, receive a very different answer according as there is question +of merely negative (§ 259) or colonizing emigration (§ 262). To give the +latter a proper impulse requires so great an outlay of capital and labor +that it can be made only by the state; and in Germany, on a large scale, +only by a union of several states. We must not here deceive ourselves. +Emigrants will go uniformly where they have the nearest prospect of a +comfortable future. Whether in emigrating they shall continue their +connection with their old home, or whether their children shall be +completely denationalized is a matter with which very few emigrants +concern themselves; and considering the amount of education they +generally possess, this need excite no surprise. Hence, if Germany would +unite its departing children in a colony permanently German, and +therefore new,[261-1] it would be necessary for it to offer them, at its +own expense, at least the same advantages which they would find in older +and fully established colonies. He who would reap should not endeavor to +evade the sacrifice incident to the sowing.[261-2] Even great sacrifices +in this direction would certainly be richly rewarded if properly made. +Probably the outlay would never be directly returned to the national +treasury; but there is all the more reason, on this account, that there +should be an indirect return by the increase of duties and other +indirect taxes. + +On the other hand, the costly assistance of the state in the case of +merely negative emigration would, as a rule, be folly. Who would compel +the children of the great national family, who necessarily or +voluntarily remain faithful to the paternal roof, to pay tribute to +those who turn their backs on the old home for ever? The wealthy +especially who remain in the country have to put up with the +disadvantage of paying higher wages for labor. + +Simple humanity requires that the state should not be blind to the +movement of emigration, nor abandon it to all the risks of improvident +liberty. Hence it should endeavor to remove the ignorance prevailing on +questions of emigration. It should require personal and other guaranties +that emigration agents are not simply dealers in men, and that the +contracts made with ship-owners by emigrants are really performed. It +should exercise a strict superintendence over the mode of transportation +of emigrants, and see to it that its consuls accredited to America, etc. +assist them by word and deed.[261-3] The legislation of Bremen is a +model in this respect, and has contributed largely to make that port a +principal outlet for German emigration.[261-4] The provisions of the +laws of October 1, 1832, of July 14, 1854, of July 9, 1866, etc., +embrace among others the following: Only a citizen of Bremen, of good +repute, and who has given security to the amount of five thousand +thalers, shall be entitled to receive and contract with emigrants for +passage; to each passenger shall be allotted a space of at least twelve +square feet of surface and six feet high; provision shall be made for +the longest possible time of passage; for instance, for thirteen weeks +for a voyage northerly from the equator. At the same time, the +ship-owner is required to give security that in case of accident to the +vessel, disabling it in such a way as to unfit it to continue the +journey, he shall return the fare of all passengers saved, and pay them +an additional sum of from twenty to forty thalers, according to the +length of the passage, to cover the cost of salvage, to support +themselves for the time being, and enable them to continue their +journey. The entire matter is controlled by a rigid system of +ship-investigation, and is under the superintendence of a board of +officers, made up of senators and members of the chamber of +commerce.[261-5] Among English provisions[261-6] particularly worthy of +imitation is that which requires the government agents in Canada, etc. +to furnish information gratis to emigrants. But to keep their clients +from the practice of idling about, so ruinous to themselves, the agents +refuse aid to all emigrants who, without sufficient reason, remain over +eight days in the harbor. + + [Footnote 261-1: Much might be gained if German emigrants to + the United States would concentrate themselves in one state, + and thus soon make it a German state. For many reasons + Wisconsin is best adapted to such a purpose.] + + [Footnote 261-2: Provision made to put the colonists in + possession of lands well explored and surveyed, to have the + preliminary labor performed by persons already + acclimated--labor which is the most injurious to health, the + clearing of the land, the construction of + buildings--purchasing the agricultural implements at + wholesale, etc.] + + [Footnote 261-3: _v. Gessler_ (Tübinger Zeitschr., 1862, 398 + ff.), recommends the establishment of an "asylum" in the + neighborhood of the locality where the emigrants are likely + to settle. In this asylum they might, during the time + immediately following their arrival, find shelter, food, + medicines, etc., and all the implements necessary to a + settler, at cost. The institution might be established + either by the home government, by a humanitarian emigration + society, or by a land company in the colony itself.] + + [Footnote 261-4: There passed + + ================================================================ + | _In 1854._ | _In 1867._ + ------------------------+-------------------|------------------- + Through Bremen, | 76,875 emigrants. | 73,971 emigrants. + Through Hamburg, | 50,819 " | 42,845 " + (Of these directly only | 32,310) " | (38,170) " + Through Havre, | 95,849 " | 22,753 " + Through Antwerp, | 25,843 " | 12,086 " + Through other ports, | 2,50 " | + ================================================================ + + The trade of Bremen has, as the result of this + transportation of emigrants, grown just as that of the + Italian sea coast cities by the transportation of the + crusaders in the Middle Ages. Here, as in so many other + cases, genuine philanthropy, in the long run, moves nearly + parallel with real economic advantage. And in fact, the + Statuta civitatis Messiliæ of 1228 (IV, 24 seq., 28, 30) + contain provisions in relation to the crusaders which + forcibly remind one of the modern Bremen laws. Similarly in + Venice: Compare _Depping_, Histoire du Commerce entre le + Levant et l'Europe, 284; II, 313 seq.] + + [Footnote 261-5: Similar provisions in Hamburg, June 3, + 1850, revised February 26, 1855; in France, January 15, + 1855; in the United States of America, March 2, 1855. + Compare _Hübner_, Statistisches Jahrbuch, 1856, 289 ff. + However, there were serious complaints, a short time since, + concerning German emigrant transportation, especially of the + treatment of women: Novara-Reise, III, 49 ff. Ausland, 1863, + No. 8. One of the principal wants is that emigration agents + should be held responsible for detaining their clients a + long time and at a heavy expense, in places of embarkation.] + + [Footnote 261-6: Compare _McCulloch_, Commercial Dictionary, + v. Colonies, 9 George, IV., ch. 21. The law of June 30, + 1852, carries solicitude for the lot of emigrants very far. + It embraces 91 articles and 11 additions. Everything is most + minutely provided for, even the form of the passage ticket. + The old law of 1803, drawn up in accordance with the advice + of the Scotch Highland Society, was apparently devised in + the interest of the emigrants; but it contained a multitude + of minute requirements suggested by a desire on the part of + the advisers to restrict emigration. Hence it was, in + practice, by consent of both parties, always evaded. Compare + _Lord Selkirk_, Observations on the present State of the + Highlands of Scotland, with a View of the Causes and + probable Consequences of Emigration (1805). Edinburgh R., + December, 1826, 61; January, 1828.] + + +SECTION CCLXII. + +EMIGRATION AND PAUPERISM. + +As a very rare exception, an emigration suddenly undertaken, well +directed and on a very large scale, may be made to constitute the +efficient means preparatory to the abolition of pauperism. Where, for +instance, by reason of the subdivision of the land into extremely small +parcels, farming on a diminutive scale has come to preponderate; where +the popular home-industries have been reduced to a miserable condition +by the immoderate competition of great foreign manufacturers and +machinery, the hopelessness of the situation consists principally in +this: that every improvement made must be preceded by a concentration of +the forces of labor, and their combination with the powers of capital; +which for the moment renders a great number of those who have been +laborers hitherto entirely superfluous. That is, to raise the level of +the whole public economy and provide a decent livelihood for 10,000 men, +it would be necessary to condemn another 10,000 to death from +starvation! Most political doctors recoil at the thought of this +transition-crisis. They content themselves with palliatives which, in +the end, cost much and afford no help. The simplest remedy here would +evidently be to cause those workmen who have become superfluous to +emigrate at the expense of the state. Next, the necessary economic +reforms should be carried out at home and the return of the evil +prevented by rigid legislation. The more sudden this emigration is, the +nearer it comes to taking place, so to speak, all at once, the less +possible it is that the increase of population should keep even pace +with it. The condition of the proletarians who remained at home could +not fail to have a favorable influence in this respect; for nothing +leads men so much into contracting reckless marriages as the total +absence of any prospect of amelioration of their condition in the +future.[262-1] [262-2] + + [Footnote 262-1: Many of the most competent thinkers have + designated such emigration as the only remedy for the + over-population of Ireland. Compare _Torrens_, The Budget, + passim; _J. S. Mill_, Principles, II, ch. 10; Edinburg Rev., + January, 1850. _Lord Palmerston_ retained the wealthiest + farmers on his estates who were intending to emigrate, by + causing the poor ones to emigrate at his own expense. The + independent emigration of the Irish at their own expense + which has been going on for some years, might become an + incalculable gain to the English nation. By the poor law, 4 + and 5 William IV., c. 76, the English parishes are + authorized, with the approval of the central poor board, to + assist emigration to the extent of £10 per capita. Between + 1849 and 1853, they assisted 1,826 poor persons on an + average per annum, who received for that purpose £10,352. + (_Kries_, Engl. Armenpflege, 1863, 30.)] + + [Footnote 262-2: It is an interesting thought of _R. von + Mokl_, Polizeiwissenschaft, I, 130, that real + over-population, when no one was willing to emigrate of his + own accord, might be remedied by a species of + emigration-conscription of young adults by the drawing of + lots, the right of substitution, etc. The ancient Italians + sometimes realized this idea by the _ver sacrum_. Similarly + in many cases of Greek emigration, by the worship of Apollo: + Compare _W. H. Roscher_, Apollon und Mars (1873), 82 ff.] + + +SECTION CCLXII (_a_). + +TEMPORARY EMIGRATION. + +Besides definitive emigration, temporary emigration deserves special +consideration. If the wages of labor are much lower in one locality than +in another which is easily accessible,[262a-1] the workmen of the former +place resolve much more readily on periodical migrations thither than on +permanent settlements in the place. It is especially the difficult work +of harvesting, where farmers are pressed for time,[262a-2] and that of +house-building,[262a-3] which are undertaken by these birds of passage; +and mountainous regions, with their limited agriculture, their late +crops and their longing look into the far-off which is found united with +a deep-rooted attachment to home, are the places whence they +come.[262a-4] When their home is distinguished in certain branches of +labor, they are wont to carry these with them abroad, and in such case +their sojourn away from home is generally longer.[262a-5] The shorter +and the more vagabond-like their migration, the less apt is it to be an +economic blessing to the wanderers themselves.[262a-6] There must +necessarily result, as a consequence, a species of equalization between +the rates of wages in the country receiving and the country furnishing +them.[262a-7] This may be a great national misfortune for the latter, +inasmuch as its working class may thus be forced to a lower standard of +life, and all their providence and self-control in the founding of a +family be made fruitless by the arrival of less capable +foreigners.[262a-8] The hatred existing among the members of a higher +class for parvenus from a lower corresponds in this respect to the +mutual hatred of two countries for the natives of the other, (_v. +Mangoldt_.) Considered from the point of view of the country furnishing +these migratory classes, temporary emigration has this advantage over +definitive emigration, that the persons leaving the country always +maintain their economic connection with their home.[262a-9] The most +striking example of this is afforded by those merchants, ship-owners, +etc. who are, so to speak, pioneers in foreign markets for Switzerland +and Bremen. Only there is always danger of a crisis when the usual flow +is suddenly checked.[262a-10] + + [Footnote 262a-1: The locust-like emigration from Ireland to + England takes three principal directions: from Dublin to + Liverpool, from Cork to Bristol, from the North-East to + Scotland. This even before 1835. (_Berkeley_, Querist, Nr., + 526 ff.) Great increase since the fare has been reduced on + the steamers to from 4 to 6 pence. (Edinburg Rev., XLV, 54 + ff.; XLVII, 236 ff.)] + + [Footnote 262a-2: Thus mowers emigrate from Württemberg and + the Odenwald into the valley of the Rhine; inhabitants of + the Alps into the South German plains, and the inhabitants + of the sandy and healthy localities into the Hanoverian + marshes and Holland; inhabitants of the Brabant into France. + Many go from Waesland, 5 and 6 miles distant from Holland, + to sow a field manured and plowed by the owner with flax, + and afterwards to weed and harvest it, etc., and at their + own expense. (_Schwerz_, Belg. Landwirthschaft, II, 105.) + Even in the sixteenth century, 20,000 Frenchmen went every + year to Spain in harvest time. (_Boden_, Responsio ad + Paradoxa, 49.) Migration of the East-goers (_Ostgeher_) from + Wartebruch as far as Poland and Russia (_Frühling_, N. + Landwirthsch., Ztg., 1870, 451 ff.) Galicians go into the + Polish plains, and Poles into the Prussian low country (_v. + Haxthausen_, Ländl. Verfassung, I, 99); Russians from the + populous district of Oreland Poltawa etc. into the Southern + steppes (_Kohl_, Reise, II, 118), and also out of Northern + woody districts to Jaroslay, where they give themselves to + the cultivation of the fields (_v. Haxthausen_, Studien, V, + 198); Gallegos into the Portuguese wine region; inhabitants + of the Abruzzi into the Roman Campagna (_Galiani_, Della + Moneta, V, 4); Calabrians to Naples. In Tuscany, almost the + entire cultivation of the unhealthy plains is done by the + inhabitants of the mountains. Even in Africa migrations by + the _fulahs_ into the plains before them (_Ritter_, + Erdkunde, I, 349); of the inhabitants of the cataracts of + the Nile into Lower Egypt, where they remain from six to + eight years, and where they are in great favor because of + their honesty as gate-keepers and pack-carriers. + (_Burckhardt_, Travels, 147.)] + + [Footnote 262a-3: In Paris, a great many masons and + carpenters from Lothringen and Limousin, who return after + from 6 to 7 months. The number of these migratory building + workmen is estimated at over 40,000. (_Wolowski._) Thus + thousands of brick makers migrate from Vicentini and Friaul + into Austria and Hungary; from the vicinity of lakes Como + and Lugan, masons have been spread over all Italy, and this, + it is said, has been going on a thousand years, (_v. + Rumohr_, Reise in die Lombardei, 135 ff.) Yearly migration + of about 3,000 brick finishers from Lippe-Detmold, which is + very opportunely directed by the government. (_F. G. + Schulze_, Nat. Oek., 606.)] + + [Footnote 262a-4: In the Apennines, almost every valley has + its own migration-district. Thus the Modeneses go to + Corsica, and the Parmesanes to England. The migration from + the German Tyrol amounts yearly to between 16,000 and 17,000 + men. (_v. Reden_, Zeitschrift für Statistik, 1848, 522.) In + the Canton of Tessin, over 11,000 passes are given for this + purpose yearly; that is, to more than 10 per cent. of the + entire population. The majority go to Upper Italy, but some + go to Russia. The cheese-makers, pack-carriers and dealers + in chestnuts, migrate from fall to spring; masons, glaziers, + etc. in summer.] + + [Footnote 262a-5: Savoyards as "shoe-blacks" etc. in Paris + (_L. Faucher_, La Colonie des S. à Paris); Portuguese, as + peddlers and pack-carriers in large cities in Brazil + (_Jahn_, Beitr., 33); Gallegos in the large cities of Spain + and Portugal as water-carriers; Bergamasks, in Milan and + Genoa as pack-servants, where they constitute a kind of + guild; the inhabitants about Lake Orta (south of the Lago + Maggiore) as waiters, and hence the inns there are very + good; Bohemian musicians, who carry on quite a different + business at home during the winter; Grisons, as + confectioners all over Europe. Many villages obtain from + this source 20,000 florins. (_Röder und Tscharner_, C. + Graübundten, I, 337.) There are at this time about three + million people from China, and almost exclusively from the + conquered and oppressed province of Fokien, in Farther + India, where they execute the finer kinds of labor. + (_Ritter_, Erdkunde, IV, 787 ff.)] + + [Footnote 262a-6: In Tessin, the fields are tilled, and + badly enough, by old men, women etc. The men spend in the + taverns and in all kinds of vice what they saved during the + working season (_Franscini_, C. Tessen, 156 ff.) Those who + migrate from the vicinity of Osnabrück into Holland are said + to bring back with them yearly about 100,000 thalers; but + their abstinence from warm food, their bivouacking etc., to + which they have recourse for the sake of frugality, lays the + germs of numberless diseases. (_J. Möser_, P. Ph, I, 14 ff.) + There are serious complaints of the demoralization of women + produced in England by the gang-system, in which roving + workmen, mostly Irish, are employed under a gang master to + perform contract work. (_L. Faucher_, Etudes sur l'Angleterre, + 2, ed. I, 383, ff.)] + + [Footnote 262a-7: Hence, for instance, Osnabrück complained + bitterly of the migration to Holland, because it raised the + wages of servants. However, the absolute freedom of removal + from one place to another produces not only a leveling of + wages, but also an absolute rise of the rate of wages, as + may be seen by contrasting it with the _glebae adscriptio_. + Compare _supra_, § 160.] + + [Footnote 262a-8: Great danger to the national life of the + English people by immigration from Ireland. The Irish + laborers, bare-footed and ragged, restricting themselves to + potatoes and whisky, have carried their disgusting habit of + living in cellars, and of congregating several families + together into one room, even with pigs as companions, over + to England. (_Th. Carlyle_, On Chartism, 28 ff.; _G. C. + Lewis_, The Condition of the Irish in England.) It is said + that, in 1819, in London alone, there were over 70,000 + Irish; in 1826, over 119,000. (Edinb. Rev. XLVII.) Even _J. + S. Mill_ would have no hesitation to prohibit this + emigration to prevent the economic contagion spreading to + English workmen. (Principles, I, ch. 14, 6.) Fortunately now + Irish emigration has taken the direction of America, where + there is more room. Whether in future Chinese emigration may + not greatly endanger the condition of the lower classes, + first in America and Australia, and then indirectly in + Europe, _quære_. It is estimated that between 1856 and 1859, + 78,817 Chinese emigrated to the United States. In Australia, + to deter them from immigration, a tax of £10 per capita has + been imposed on their entry into the country. (_Fawcett_, + Manual, 107.)] + + [Footnote 262a-9: Of the East Indian coolies who had gone to + Demarara, 469 returned in September, 1869, after having + saved in five years, £11.235. (_Appun_, Unter den Troppen, + II, 34).] + + [Footnote 262a-10: The Grisons had, during the 17th century, + accustomed themselves to living some time in the Venetian + territory as shoemakers, 1,000 at a time. The blow was all + the more severe when Venice, in 1766, expelled all the + families. Since that time most of the Grison confectionaries + in the principal cities of Europe have had their origin. + (_Röder und Tcharner_, C. Graudbundten, I, 56.) The practice + of engaging mercenaries as troops was of great assistance, + especially in the interior of Switzerland. During the war of + 1690 ff., there were nearly 36,000 Swiss hirelings in the + French army. Shortly before 1789, even during the period of + peace in France, Italy, Spain and Holland, their number may + be estimated to have been at least 30,000. (_Meyer v. + Knonau_, Gesch. der Schweiz. Eidgenossenschaft, II, 104, + 464.) No wonder, therefore, that the cessation of the Swiss + guards caused a frightful crisis. Expulsion of the + Tessinians from Lombardy, 1853.] + + +SECTION CCLXIII. + +CONCLUSION. + +That the economy of no nation can continue to grow _ad infinitum_ is, in +general, as easy to believe[263-1] as it is difficult to point out with +a specification of particulars what are the limits which cannot be +exceeded. This would be possible first in the case of agriculture. Here +there are points beyond which every man practically versed in the art +can see, that an increase of the gross product must be attended by an +absolute decrease in the net product.[263-2] But even supposing that a +people had reached this point in their entire agriculture, they might +still carry on industries, commerce, perform personal services for other +nations, and obtain remuneration therefor in the means of subsistence +and manufactured articles. If our nation has once entered on this path, +it is evident that every improvement of its industry, every advance made +by foreign countries in the production of raw material, manufactures and +the consumption of services must result in a growth of our economy. +David Hume was of opinion that industrial preponderance was in a +necessary and continual state of transition from one country to another. +A very highly developed state of industry made a country rich in money +but enhanced the price of the means of subsistence, and the rate of +wages; until finally it became impossible for it to compete in the +markets of the world with cheaper countries, and industry, in +consequence, emigrated to these.[263-3] But it is easy to see how all +such limits are extended by the modern improvements in transportation, +and the consequent facilitation of importation; and how much the remedy +mentioned in § 198 has gained in importance by the modern advances made +in machinery and the preponderance in so many respects of machine over +hand labor.[263-4] + +But here it is necessary to distinguish between the "applied" and only +practical political economy, and "pure political economy." (§ 217.) A +development thus continued would be attended with great difficulty even +if the whole world constituted one great empire. We need only mention +Austria, where some provinces have remained in a very backward, almost +medieval condition, while others have for a long time manifested the +symptoms of over-population. How much more in different states. An +uncivilized nation will frequently not care to increase its consumption +of our manufactures, if to do so it becomes necessary to carry on its +agriculture more industriously. Another nation that has already tasted +of the fruit of the tree of economic knowledge may not be satisfied with +the mere production of raw material forever. In time it may want to +carry on commerce and industry itself, and hence consider the breaking +of its commercial course with us as a species of emancipation from us. +And, further, how if other highly cultivated nations should compete with +us in the markets of countries which produce merely raw material? if +such rivals should wage war in which each party should harm his +adversary for the mere love of doing harm, and not unfrequently in +opposition to its own economic interests? I know of no period the +development of which has not been attended by such disturbances, and +hence they cannot be said to be entirely unnatural.[263-5] + +And even at home and among highly civilized nations, there are wont to +be many obstacles to advancement on this road of progress. Every great +economic change is connected as cause and effect, with a variety of +political, social and other reformations which are never accomplished +without great hardship and hesitation.[263-6] Where the division of +labor has been developed to any extent, the formerly existing +circumstances which must be surrendered for the sake of progress are +generally synonymous with the interests of some class. This class +opposes the improvement, and a struggle becomes necessary to carry it +out. But under certain circumstances, a long delay in effecting a +necessary reform may paralyse or poison the minds of the people to such +an extent that they may afterwards have neither the will nor the power +to successfully advance. This is the most important exception to the +rule laid down in § 24. The happier the ethnographic and social +composition of a people, the better the national spirit, the more +skillful the form of its constitution, the less frequently will it +happen.[263-7] All this is true especially of over-population and the +plethora[263-8] of capital which so easily injure the morality of a +people. New inventions also, by means of which the limits of the +possibility of production may be incalculably extended can be expected +only from nations where there is no intellectual decline.[263-9] + + [Footnote 263-1: There are, indeed, different opinions on + this matter, and they were preponderant during the second + half of the eighteenth century. Compare _Condorcet_, Tableau + historique, des Progrès de l'Esprit humain, especially + Epoque X, in which he treats of future progress. + Nevertheless, he obscurely alludes (Oeuvres, VIII, 350) to + a time when no further increase of population should take + place. _Malthus_, Principle of Population, III, ch. 1, + thoroughly demonstrates that in regard to the great + prolongation of human life which he foresaw, the idea of the + indefinite and that of the infinite were confounded with + each other. + + In that young and vigorous country, the United States of + America, we find a popular school which, to say the least, + hints at the principle of infinite growth. Thus, for + instance, _Peshine Smith_ (Manual of Political Economy, New + York, 1853) teaches that the means of subsistence consumed + at the place of production are not destroyed, but may return + just as much to the soil in the form of manure as they had + previously drawn from it (ch. 1). Capital has a tendency to + increase more rapidly than population (ch. 6). The rate of + wages has a tendency to increase with the increase of + population (ch. 5). Mechanical progress increases the value + of human labor and causes that of capital to decline + relatively (ch. 3). He reverses, with _Carey_, Ricardo's law + of rent (ch. 2). + + _Carey_, also, relying on the assumption that more fertile + land is brought under cultivation as civilization advances, + allows us to see no limits whatever to this growth. (Past, + Present and Future, ch. 3.) Still more clearly is the + principle of unlimited and continually accelerated growth + laid down in his Principles of Social Science, I, 270. + _Carey_ illustrates this principle by means of the example + of the continually accelerated motion of a falling body, + without noticing the practical _ad absurdum deductio_ + involved in it, that at the end of the thousandth second a + falling body reaches a velocity of 1,000,000 feet. (loc. + cit., 204.) But even in England, at present, we find such + thoughts at times. _Banfield_, for instance, can scarcely + understand how the relative rates of wages, interest and + rent can decrease, except by an increase of their absolute + amounts. See his Organization of Industry, passim. And so + _v. Prittwitz_ entertains the most rosy-colored hopes. He + has no doubt that all governments which are still bad will + see the error of their ways and correct them. (Kunst reich + zu werden, 79.) + + The growth of capital and even of human wealth in general is + capable of indefinite increase (81). The rate of interest + would sink almost to zero if so much capital were + accumulated that no "undertakers" could be found who care to + use it (305). Large farming will entirely cease in the + future (307), and when the system of railroads is entirely + completed, the whole earth will present the appearance of + one immense park (29). He would allay all fear concerning + the exhaustion of combustible material by pointing out the + possibility consequent upon improved means of communication, + that a great many of the inhabitants of the colder regions + of the earth might migrate in winter to a warmer climate + (21). At the same time, artesian wells might be made to + bring to the surface the internal heat of the earth, or + metallic plates connected with the wings of a windmill, + might be made to generate heat by their friction on one + another (22). See the same author's Andeutungen über + künftige Fortschritte und die Gränz en der Civilization, 21 + Aufl., 1855.] + + [Footnote 263-2: According to § 165, we might say: where the + product of the workman last employed is not sufficient to + meet his own wants. Thus _J. B. Say_ says that only that can + be considered a product, the utility of which is at least + equal to its cost. He makes use of the example where a three + days' journey is necessary to obtain the food requisite for + one. As the limits of production he gives the following: too + few human wants; too costly methods of production; too high + taxes, natural obstacles created by infertility or too great + distance. (Traite I, ch. 15. Cours pratique, I, 349.)] + + [Footnote 263-3: _D. Hume_, Discourses, No. 3, On Money.] + + [Footnote 263-4: England is especially well situated in this + respect, in consequence of its excellent commercial position + and its surplus of the principal auxiliary products, such as + coal, iron, etc. Should the coal-beds of such a + manufacturing country be ever entirely exhausted, it is + scarcely possible to see, from our present point of view, + how the most rapid and most frightful decline of its + national economy could be averted! Compare the opening + address before the British Association, by Armstrong, at + Newcastle (1863), who prophecies the exhaustion of the + English coal-beds in 212 years at the rate at which coal had + been consumed during the eight preceding years. According to + the report of the royal committee on the coal question + (1871, vol. III), Great Britain has still attainable + deposits, that is 4,000 feet deep, 90,207,000,000 tons of + coal in its coal beds already known; and in beds not yet + worked, 56,273,000,000 tons. Compare, also, _Jevons_, The + Coal Question (1866). It is estimated that the most + productive French coal-field will be exhausted in 100 years. + (_M. Chevalier_, Rapport du Jury international de 1867, + 57.)] + + [Footnote 263-5: Even _J. S. Mill's_ views on the + probability of perpetual peace on earth are altogether too + rosy: Principles III, ch. 17, 5. This is still truer of + _Buckle_. History of Civilization, I, ch. 4. In the modern + state-system of Europe, there is wont to be in each + generation, a peaceful half and a warlike one, which follow + each other as ebb and flow. I need only mention the + preponderance of peace between 1714 and 1740, between 1763 + and 1793, and between 1815 and 1853. It happens frequently + that at the close of the period of peace, intelligent and + noble but unhistorical and therefore short-sighted minds + begin to dream of perpetual peace. Even a man like _Dohm_ + (Ueber die bürgerliche Verbesserung der Juden, 227 seq.) + expected, in 1785, that considering the size and quality of + armies, and the mutual knowledge of all countries of one + another, that instead of actually waging war, nations might + send to each other well authenticated statements of the + strength, for instance, of their navies and of the sums + necessary to maintain them for a number of years.] + + [Footnote 263-6: The Mongols saw the abandonment of their + nomadic life in so gloomy a light that they seriously + thought of turning all China with its countless human beings + into pasture-land! (_Gibbon_, History of the Roman Empire, + ch. 34.)] + + [Footnote 263-7: It is a fact characteristic of the history + of England, that Norman supremacy and afterwards bondage + were wiped out so gradually that contemporary historians + have nothing to say of the transformation. (_Macaulay_, + History of England, ch. 1.) Repeal of the corn laws + _vis-a-vis_ of the most recent industrial advance of the + country.] + + [Footnote 263-8: Even _Ricardo_ says that in a highly + civilized country the continual making of savings is by no + means desirable. Carried to an extreme, saving would lead to + the equal poverty of all. (Principles, ch. 5.)] + + [Footnote 264-9: The _Beccaria_, Economia publica I, 3, 31, + teaches that the limits of population are to be found at the + point where agriculture cannot be made to yield an + additional increase of products, and where foreign countries + do not offer any more a counter value of their products in + exchange for the manufactured articles and the services to + be furnished them. Similarly, _Büsch_, Geldumlauf III, 7; + otherwise, indeed, V, 15, in which, in opposition to _Adam + Smith_, it is claimed that the work to be performed by one + nation for others has no limits which cannot be exceeded. + _Steuart's_ theory of the limits to the production of every + commercial nation: Principles, I, ch. 18. _Lauderdale_, + Inquiry, ch. 5, 274 ff., says categorically, that all wealth + which is produced by the transformation of raw material + depends on the production of such raw material, and of the + means of subsistence necessary for the support of the labor + employed in such transformation. Excellent investigations by + _Malthus_ in the additions (1817) to the Essay on the + Principles of Population, II, ch. 9-13. Compare _Roscher_ + Nationalöcon. des Ackerbaues, § 162. As early a writer as + _Mirabeau_, Philosophie rurale, ch. X, was of opinion that a + country whose industries were on as large a scale as those + of Holland, dispersed its people indeed over the whole + earth, made them independent at home, but almost destroyed + their nationality.] + + +SECTION CCLXIV. + +THE DECLINE OF NATIONS. + +That, after a whole nation has reached the zenith of its prosperity, it +is subject to old age and to decline, and cannot avoid them, is in +general, a proposition susceptible neither of proof nor +refutation.[264-1] This uncertainty is practically very useful, for were +it otherwise, mediocre statesmen might become either discouraged or +indifferent. However, we should not assume, as so many do,[264-2] +without proof, the earthly immortality of nations, provided only they +observe a proper diet; nor call the science of the physiology or +medicine of nations a chimera, simply because it confesses that it knows +of no preventive against such old age. It has doubtless been the fate of +many nations to die, that is, not precisely to be destroyed--just as in +the physical world, not a particle of matter is lost--but to see their +former national personality disappear, and themselves continue to exist +only as component parts of some other nation.[264-3] This phenomenon, +indeed, finds its analogon in every thing that is human, but seems to +contradict a law of nature which very widely prevails, viz.: that it is +easier to advance in a certain direction in proportion to the distance +gone over in it already.[264-4] + +The problem of decline, however, is solved by the enervating influence +of possession and power, an influence which only a select few among men +can escape. And yet to every external advance there must be a +corresponding advance of the interior man, else there is a fall great in +proportion to the height before attained. The greater number take their +ease once they have attained the object of their ambition. I need only +cite the example of the posterity of those men who have grown rich by +unusual exertion. Success itself generates vanity and a feeling of false +security, the latter especially, inasmuch as that is expected from the +whole community, from the state for instance, from others generally, +which should be the fruits of one's own vigilance and one's own +endeavors. It should not be forgotten that the nation is made up of +individuals.[264-5] + +In addition to this there is the striving after the new for the sake of +novelty; a striving promotive of progress in itself, and without which +the full development of the forces of civilization would probably not be +possible. But if the genius of no nation is possessed of infinite +capacities, it must happen, at last, that, in case the best has been +attained, and the demand for novelty continues, men will go over to that +which is worse. Even very great competition has here a dangerous +influence, since it raises the great mass of the incompetent to the +dignity of judges, and endeavors to seduce them by illicit means; in the +arts, for instance, sensuousness is made to take the place of the +feeling of the beautiful.[264-6] + +There is, further the process of undeceiving, inseparable from the +prosecution of any ideal purpose. Such ideals have always very much of +human weakness in them. The great crowd of ordinary men follow, as a +rule, their material interests. Only occasionally do they rise to the +height of ideal things; and here we discover the brightest points in +history. Later there comes uniformly a period of disenchantment and of +exhaustion after the debauch is over. When all the ideals accessible to +the nation have been destroyed or outlived, nothing can be done to +awaken the masses from their slumber, or induce them to shake off their +inactivity. + +As a rule, the influences which have accelerated a nation's progress and +brought it to the apogee of its social existence end in precipitating +its ruin by their further action. Every direction which humanity takes +has almost always something of evil in it, is limited in its very +nature, and cannot stand its extremest consequences.[264-7] All earthly +existence bears in itself, from the first, the germs of its decay. + +However, to calm the feeling of human liberty, we may boldly assert that +there never was a nation remarkable for its religiousness and morality +which declined so long as it preserved these highest of all goods; but +then no nation outlived their possession. + + [Footnote 264-1: Even in the case of individuals, that death + is necessary is not susceptible of absolute demonstration; + but no one doubts it, because of the experience so + frequently repeated; an experience, however, which cannot be + had in the same degree in the case of whole nations.] + + [Footnote 264-2: Remarkable controversy between _Hume_ and + _Tucker_. The former had charged the latter with holding the + opinion that industry and wealth must necessarily continue + to advance indefinitely; and yet all things had in them the + germs of decay. _Tucker_, on the other hand, remarked that + all he wished to say was that no one could point out where + progress must necessarily cease. All political bodies like + all natural bodies might decay; but it is not necessary that + they should. With good laws and morality they would become + more vigorous with increasing age. A great deal depended + here on the more general distribution of property, on the + assurance that industry would meet with its reward, and on + the removal of the principal defects in the English + electoral system. (Four Tracts, 477 seq. Two Sermons, 30.) + Most political economists are of the same opinion; thus + _McCulloch_, Principles, II, 3. See, however, the last two + sections in _Ferguson_, History of civil Society.] + + [Footnote 264-3: We assume that a new nation has arisen, + when, after the disappearance of an earlier and high + civilization, combined with the taking up of new + ethnographic elements, we perceive anew the easily + recognizable symptoms of youthful immaturity.] + + [Footnote 264-4: Expressed in the domain of religion in the + words of the Savior: _Matth._, 25, 29. But at the same time + the equally well-known expression in _Luke_, 12, 48, must be + fulfilled. Compare _H. Brocher_, L'Economie monétaire, 1871, + 25 ff.] + + [Footnote 264-5: Schools of art are generally ruined by + mannerism. Of the two great means of education in art, the + study of nature and the study of classic models, the latter + is the easier, and the former is readily neglected for it. + Then there is the endeavor to flatter the master, which is + most effectually done by imitating his faults; and the fact + that pretending connoisseurs are most cheaply satisfied by + mannerism.] + + [Footnote 264-6: There is a peculiar charm, very productive + in itself, attaching to the cultivation of a field which has + been but little cultivated, and which, therefore, has the + advantage of promising something new. On the other hand, the + decline of almost all literatures begins with this, that + writers and readers no longer think out completely the forms + of speech, modes of expression, etc. to which they have + become used, as their original creators did; a great + temptation to have recourse to a more and more spicy + literary style. _J. S. Mill_ considers the stationary state + (Principles, IV, ch. 6) a very pleasant one to contemplate, + but he overlooks the very important fact, that as men are + constituted it uniformly introduces national decline.] + + [Footnote 264-7: Great rulers, of whom it is said that they + conquered the world by following out their own ideas to + their ultimate consequences, would most certainly have lost + the world by reason of the same logic if they had continued + it only fifty years longer. What would have become of + Alexander the Great and Charlemagne if they had lived one + generation more?] + + +SECTION CCLXV. + +CONCLUSION. + +All the separate nations which have lived side by side, or followed one +another, are embraced under the general name, humanity. Who would deny +the existence of a point, viewed from which humanity might be seen to +constitute one great whole; all the variations and differences in its +life only one great plan, one wonderful sovereign decree of the divine +will, grandly and wonderfully executed by God? Or who is so bold as to +say that he stands on this point himself? Theologians should be the last +to do it, since even the apostle Paul calls God's ways inscrutable. So +long as we do not even know whether we live in one of the first or one +of the last decades of humanity, every system of universal history in +which each nation and period is made to take its place in due +subordination to its superiors, can be only a castle in the air; and it +is a matter of indifference whether the basis of the system is +philosophical, socialistic, or natural-philosophical.[265-1] + +The usual error into which the builders of such history fall, is that +they consider the peculiarities of certain stages of civilization, which +may be shown to exist among all nations in the corresponding period of +their history as the national peculiarity of the single people with +whose history they are, for the time being, concerned. They deduce +wonderful consequences, from the premises they laid down, but which our +increasing acquaintance with other nations immediately shows to be +unfounded. + +There is, however, a number of facts really peculiar to a people which +make up the national character, and which may give to an observer +endowed with an imaginative mind, an inkling to the special vocation in +the economy of providence of a particular people. That a positive system +can be constructed from the material of such facts, I do not, indeed, +think. But they are at least a safeguard against false systems, against +the improper application of analogies, against the idle, fatalistic +exaggeration of the maxim: "nothing new under the sun!" It had almost +become the fashion to compare our present with the period of decline of +the Greek and Roman republics. Frightful parallel, in which the greatest +and most undoubted differences were frequently overlooked for smaller +and certainly questionable similarities. Is not the abolition of +slavery, which has been accomplished among all the most important +nations of the present, something new and of great import from a moral +and economic point of view?[265-2] Can the national wealth, which +depends on labor and frugality, be in any way compared with that which +was based on plunder? And so, no one can calculate the benefits which +may be reaped by posterity from the mere continuation of the scientific +and especially natural-philosophical results obtained by former +generations. The discovery of the whole earth soon to be completed, and +its probable consequence, the civilization of all nations of any +importance, must remove the danger to which all the civilized nations of +antiquity eventually succumbed, namely, destruction by entirely +barbarous hordes. Nor should the significance of the state-system of +Europe, which might be extended soon enough into a state-system +embracing the world, be under-estimated. Macedonia would not so readily +have subjugated the Hellenes and the Persians if the great powers of the +west, Rome and Carthage, had intervened at the right time. And there, +too, is Christianity, whose means of grace are at hand for every one at +all times, for his complete moral regeneration. + +In one word, the usual argument with which the "man of experience" meets +the man of inventive genius, that there never was anything of the like +seen before, may suffice in thousands and thousands of cases; but it +affords no strict proof. It is the province of genius to compel rules to +extend their limits. But science should never forget that self-denial is +necessary to the discovery of truth.[265-3] + + [Footnote 265-1: I mean here, especially, the attempt so + frequently made (by _Herder_, for instance) to draw a + parallel between the periods of universal history and the + age at different times of the individual, or with the + seasons. If there were a great many humanities between which + we might institute a comparison, we might accomplish + something with the analogy, but----!] + + [Footnote 265-2: However, even such a man as Minister + _Stein_, thinks that a laboriously acquired wealth may + affect a people's morality injuriously. "The striving after + wealth is the striving for the possession of the means of + satisfying chiefly sensuous wants. This striving may + suppress all nobler feelings, whether it find expression in + violence or industry." Contrariwise, it is possible that + some of the noblest of human qualities may be found side by + side with the forcible acquisition of wealth, viz.: courage, + patriotism. (_Pertz_, Leben Steins, II, 466.)] + + [Footnote 265-3: Compare my discourse on the relation of + Political Economy to classic antiquity in the transactions + of the royal Saxon Academy of Sciences, May, 1849; also many + excellent remarks in _Knies_, Polit. Oekonomie. _Chr. J. + Kraus_, has zealously discussed the question whether the + development of humanity turns about eternally in a circle, + or whether it forever advances to a progressively better + future. He strongly advocates the latter view, and on + grounds which appeal both to the head and to the heart. + (Vermischte Schriften, III, 146 ff.; IV, 277 ff.)] + + + + +APPENDIX II. + +INTERNATIONAL TRADE. + + + + +INTERNATIONAL TRADE. + + +SECTION I. + +THE MERCANTILE SYSTEM. + +The principal peculiarities of the so-called mercantile system depend on +a five-fold over-estimation: of the density of population, of the +quantity of money, of foreign commerce, of the industries concerned with +the transformation of materials (_Verarbeitungsgewerbe_), and of the +guardianship of the state over private industry.[A2-1-1] All these +tendencies are very intelligible, and almost self-evident, in a +sovereign city-economy (_Stadtwirthschaft_) as opposed to the governed +and worked-out (_ausgebeuteten_) country districts; as they are found +even in the city-republics of later medieval times. But they are also +natural in whole national economies, during that period of youthful and +rapid growth in which the increasing density of population continues +still, for a long time, to be really only a spur and an assistance, and +in which, therefore, there can be no expression of anxiety concerning +over-population; in which the new and rapidly growing division of labor +draws attention particularly to the market-side of all businesses and to +the circulation of goods; in which the progress from trade by barter to +trade by money necessarily makes the volume of money needed even +relatively greater; but especially are they natural in that world-period +in which foreign trade suddenly increased enormously in consequence of +the discovery of the whole earth; when the citizen classes of the people +assumed immense importance as compared with the landed and clerical +aristocracy, and when, in the internal affairs of state absolute +monarchy, and in foreign politics, the system of equilibrium, through +the instrumentality of the great compact-formation of states prevailed. + +All these tendencies are most intimately connected with one another. If +precious metal-money be really the essence of national wealth,[A2-1-2] a +people who possess no gold and silver mines themselves;[A2-1-3] for +instance, Italy, France and England, can become richer only through +foreign trade,[A2-1-4] by means of a favorable balance produced by a +preponderance of their exports over their imports; and only inasmuch as +this excess is balanced by a payment in money from foreign parts. And +so, too, in foreign trade, one nation can gain only what another nation +has lost.[A2-1-5] Gain is promoted not only by direct obstacles placed +in the way of the exportation of the precious metals, but still more by +the value-enhancement of the exported commodities, and by the +value-diminution of the imported commodities.[A2-1-6] And as commodities +which have undergone the process of transformation are, on an average, +more valuable than raw materials, the state can best carry out this +policy by import duties, import prohibitions, and export premiums on +manufactured articles, as well as by export duties, export prohibitions +and import premiums on raw materials.[A2-1-7] This is extremely +necessary against those nations who are superior to others in culture, +wealth, the cheapness of labor and capital; and hence the envy of the +mercantilists was directed chiefly against Holland, and after Colbert's +time also against France.[A2-1-8] Such commodities as are not at all +adapted to the nature of a country, because of its climate, for +instance, the nation should produce at least in colonies of its own, +that it might, in this way, emancipate itself from foreign +countries.[A2-1-9] As the clear distinction drawn to-day between money +and capital has asserted itself only since Hume's time, the notion that +prevailed for centuries, that much money, much trade and a large +population mutually conditioned one another, was a very natural +one.[A2-1-10] + +The younger and more refined conception of the mercantile system is +distinguished from the coarse Midas-believing one, by two tendencies +especially: + +A. By the more thorough consideration of the balance of trade and the +consequent limitation of the traditional supposition, that the excess of +exports over imports would be always made up in cash money.[A2-1-11] + +B. By the extension of the field of view, so that not only the direct +but also the indirect and more remote effects of international trade +were taken into consideration.[A2-1-12] + +A certain over-estimation of the circulation of goods continued to +characterize even the latest adherents of the mercantile +system.[A2-1-13] Yet the caricature drawn by the tradition of more +recent text-books, of the mercantilists, is true only of the inferior +ones among them.[A2-1-14] The most distinguished of them, +Botero,[A2-1-15] for instance, approximate more closely to the science +of the present day than is usually supposed. + + [Footnote A2-1-1: Compare _Roscher_, Geschichte der + Nationalökonomik in Deutschland, I, 228 ff.] + + [Footnote A2-1-2: Even the remarkable Florentine pamphlet of + 1454 (_Jablonowski's_ prize essay of 1878, app. Beilage, 4) + complains of the decrease of industry principally on account + of the diminution of money caused thereby. "Wealth is + money," says _Ernestine_, essay of 1530, on the coin, and + explains the smaller wealth of the silver-country, Saxony, + as compared with England, France, Burgundy and Lombardy, by + the greater exportation of commodities of these countries, + by means of which they draw the silver of Saxony to + themselves. (_Roscher_, Geschichte, I, 103.) _Bornitz_, + Theorie wie sich der Staat diesen _nervus rerum_ in grösster + Menge verschafft: De Nummis (1608), II, 4, 6, 8. _A. Serra_, + Sulle Cause, che possono far abbondare un Regno di Monete + (1613), places excess of gold and silver and poverty as + diametrical opposites, at the head of his work. _Hörnigk_, + Oesterreich über Alles, wann es nur will (1684), says that + it is "better to give two dollars which remain in the + country for a commodity, than only one dollar which goes out + of the country" (ch. 9). According to _Schröder_, Fürstliche + Schatz- und Rentkammer (1686), the export of commodities is + a blessing only "when we can turn them into silver through + our neighbors." (LXX, 12.) Even _Locke_ held similar views + (Considerations of the Consequences of the Lowering of + Interest, 1691. Further Considerations concerning Raising + the Value of Money, 1698). On _Davenant's_ inconsistency in + this respect, compare _Roscher_, Geschichte der Englischen + Volkswirthschaftslehre, 110 ff. The quantity of money + remaining the same, a country grows neither richer nor + poorer (Christ. Wolff, Vernünftige Gedanken vom + gesellschaftlichen Leben, 1721, § 476). _J. Gee_, Trade and + Navigation of Great Britain considered (1730), bewails the + folly of those to whom "money is a commodity like other + things, and also think themselves never the poorer for what + the nation daily exports," (p. 11). _Justi_, von Manufacturen + und Fabriken (1759 seq.), considers it the principal object + of industry simply to prevent the outflow of money. + Similarly, _Pfeifer_, Polizeiwissenschaft (1779), II, 286. + Even Frederick the Great considered it "true and obvious" + that "a purse out of which money is taken every day, and + into which nothing is put in turn, must soon become empty." + (Oeuvres, VI, 77).] + + [Footnote A2-1-3: The thirst for gold which, in the + sixteenth and seventeenth centuries, drove so many emigrants + to the western Eldorado, reminds one, by reason of its + enthusiasm, of the crusades to the Holy Land. The striving + after the making of gold which the emperors Rudolph II., + Ferdinand III., Leopold I., Frederick I. of Prussia, + Christian IV. of Denmark, Christian II. and Augustus the + Strong of Saxony, Heinrich Julius of Braunschweig, Frederick + of Würtemberg, harbored, and also the Silesian and + Brandenburg princes even during the Hussite war (_Riedel_, + Cod. Dipl. Brandenb., II, 4, 151), was, to a great extent, + misplaced philosophy; men went in search of the _materia + universalissima_, the _spiritus universalis_, from which all + that is receives its _esse et fieri_, the universal elixir, + at once the life-power of man, the universal medicine and + maturing principle of natural bodies. (_Roscher's_ Gesch., + I, 230.)] + + [Footnote A2-1-4: _Schröder_ justifies the little estimation + in which he holds internal commerce by saying that "a + country may indeed grow and become powerful by its means, + but cannot gain in wealth;" just as a dress embroidered with + pearls is not made more costly by taking the pearls from the + cuffs and putting them upon the cape. (F. Schatz- und + Rentkammer, XXIX, 3.) According to the Fredrickian + theorizer, _Philippi_, "internal trade scarcely deserves the + name of commerce." (Vergröss. Staat, 1759, ch. 6.) _Sir J. + Steuart_ still teaches that an isolated state may, indeed, + be happy, but that it can grow rich only through foreign + trade and mining. (Principles, II, ch, 13.) The same + fundamental thought finds expression in the title of _Th. + Mun's_ celebrated book: England's Treasure by Forraign + Trade, or the Balance of our Forraign Trade is the Rule of + our Treasure (1664).] + + [Footnote A2-1-5: _Il est claire qu'un pays ne peut gagner, + sans qu'un autre perde, et qu'il ne peut vaincre sans faire + des malheureux_ (_Voltaire_, Dict. phil., art. Patrie). Even + _Verri_ was, in his earlier period, of the opinion: _ogni + vantaggio di una nazione net commercio porta un danno ad un + altra nazione; lo studio del commercio è una vera guerra_ + (Opuscoli, 335).] + + [Footnote A2-1-6: Even in 1761, the learned _Mably_ could + say: _la défense de transporter les espèces d'or et d'argent + est générale dans tous les états de l'Europe ... il n'y a + point de voie moins sensée_ (Droit public, II, 365).] + + [Footnote A2-1-7: The obstacles placed in the way of + importation by governments originated, in great part, from + views entertained on sumptuary legislation; in that of + exportation, from a desire to prevent a scarcity of certain + articles, as may be clearly seen in _Patricius_ (De Inst. + Reipublic., V, 10, I, 8), and even in _Sully_ (Mémoires, XI, + XII, XIII, but especially XII), _Bornitz_, _Besold_, _Klock_ + and _v. Seckendorf_. (Compare _Roscher_, Gesch., I, 191, + 202, 215, 247.) But the mercantilistic germs show themselves + even in _Hutten_ and _Luther_. (_Roscher_, I, 44, 63.) The + advance made between the police ordinance of the empire of + 1530 and that of 1548, is very remarkable in this respect. + The mercantile theory of duties appears very systematically + elaborated even in _J. Bodinus_, De Republica, 1577, VI, 2; + in Germany in _Hörnigk_, Oesterreich über Alles, ch. 9.] + + [Footnote A2-1-8: The English jealousy of Holland is + represented especially by _Sir W. Raleigh_ (?), Observations + touching Trade and Commerce with the Hollander and other + nations, 1603, Works, III, 31 ff.; _Sir J. Child_, A new + Discourse of Trade (1690), and _Sir W. Temple_, Observations + upon the U. Provinces (1672). Compare _Roscher_, Z. Gesch. + der englischen V. W. Lehre, p. 31 ff., 125 ff. The English + jealousy of France: _Sam. Fortrey_, England's Interest and + Improvement (1663). _R. Coke_, A Treatise, wherein is + demonstrated that the Church and State of England are in + equal Danger with its Trade (1671), and the anonymous, + Britannia languens (1680). _Per contra_, especially the + work: England's Greatest Happiness, wherein it is + demonstrated that a great Part of our Complaints is + causeless (1677). Here we find chapters with the title: To + export Money our great Advantage; the French Trade a + profitable Trade; Multitudes of Traders a great Advantage. + _Petty_ gave the best solution to the question in dispute, + in his posthumous Political Arithmetic concerning the Value + of Lands, etc. _Hörnigk_ would enlist his service in the + cause of the jealousy against France, immediately after the + disgraceful defeats which Germany in 1680 ff. suffered in + the midst of peace, by Louis XIV. Concerning smaller works + of the same period and in the same direction, see + _Roscher's_ Gesch., I, 299 seq.] + + [Footnote A2-1-9: Even _Peter Martyr_ considered the + colonization of countries which yielded the same products as + the mother country of no advantage (Ocean, Dec., VIII, 10). + On Spanish maps the most flourishing portions of America at + present are designated as _tierras de ningun provecho_. And + the English for a long time, ascribed value to their New + England possessions, so far as the mother country was + concerned, only to the extent it was possible to provide the + West Indies from that quarter with corn, meat and wood. + (_Roscher_, Kolonien, p. 262.)] + + [Footnote A2-1-10: Compare _Botero_, Ragion di Stato (1591); + _Law_, Money and Trade (1705), p. 19 ff.; and _Verri_, + Opuscoli, pp. 325, 333. Meditazioni (1771), cap. 19.] + + [Footnote A2-1-11: Thus _Child_, spite of all his esteem for + the discoverers of the balance-problem, calls attention to + cases in which exports suffer so much waste (_Abgang_), or + imports are sold so advantageously, that an apparently + favorable balance made a people poorer, and an apparently + unfavorable one, richer. From the value of the imported + commodities the self-earned freight has to be deducted. + Countries like Ireland, many colonies, etc., have a + preponderance of exportations, because they, by means of the + same, pay a rent to absent capitalists or to landowners. (p. + 312 ff.)] + + [Footnote A2-1-12: _Mun_ admits that, for instance, the East + Indian trade makes England richer, although it causes the + exportation of much English money. But the exporter of money + who, in exchange for it, brings back reëxportable + commodities, should be compared to the sower. (Ch. 4.) + Similarly, _C. Roberts_, The Treasure of Trafficke (1641), + and even _A. Serra_, III, 2. According to _Child_, the loss + in the East Indian trade is compensated for chiefly by this, + that England obtains there the saltpeter it needs to satisfy + its demand, and that the ships engaged in that trade are + peculiarly well fitted for war. (l. c.) _Saavedra Faxardo_, + for similar reasons, declared the discovery of America to be + a misfortune. (Idea Principis Christiani politici, 1649, + Symb., 68 seq.)] + + [Footnote A2-1-13: Thus _Law_, _Dutot_, _Darjes_ and + _Büsch_. Even the violent opponent of the mercantile system, + _Boisguillebert_, could not entirely escape this view. + Compare vol. I, § 96.] + + [Footnote A2-1-14: This is true, especially of the + protectionist weekly paper: British Merchant or Commerce + preserved (1713 ff.), in the contest with the weekly Tory + paper edited by _Defoe_: Mercator or Commerce retrieved, + which Charles King systematized and published anew in 1721. + Later _Ulloa_: Noticias Americanas (1772), cap. 12. _Adam + Smith_ also concedes that many of the best writers on + commerce, at the beginning of their books, allow that the + wealth of a country consists not only in gold and silver, + but also in goods of every description; but that further on + they tend more and more to forget this qualification of the + meaning of wealth. (W. of N., IV, ch. 1.) Hence it is that, + in recent text-books, so many are now called adherents and + now opponents of the mercantile system.] + + [Footnote A2-1-15: Even _Colbert_ says: nothing is more + precious in a state than the labor of men (Lettres, + Instructions et Mémoires de C. publiés par P. Clement, 1861 + ff., II, 105). The great trade with foreign countries and + the small trade in the interior contribute equally to the + welfare of nations. (II, 548.) I would not hesitate to do + away with all privileges, the moment I found that greater or + as great advantages attended their abolition. (II, 694.) His + duty-system of 1664 was a simplification, but also an + important diminution of his earlier chaotic tariff. (II, 787 + ff.)] + + +SECTION II. + +REACTION AGAINST THE MERCANTILE SYSTEM. + +The reaction against the mercantile theory of the balance of trade, +which reached its height in Adam Smith, was based principally upon the +following considerations: + +A. Precious-metal-money is a commodity like all other commodities, and +therefore useful only for certain purposes. It is as little to the +wealth-interest of a people, by means of a continually favorable +balance, to import infinite quantities of the precious metals, as it is +to its power-interest, by means of its commercial policy, to accumulate +infinite stores of powder. The person who possesses other exchangeable +goods will be as well able, in case of need, to obtain gold and silver +therewith as to obtain powder.[A2-2-1] We part with no capital when we +export the precious metals and import other commodities instead; we +simply exchange thereby one form of capital for another.[A2-2-2] The +notion that the gain in trade is coincident with the balance of account +paid in cash, is just as palpably false in the trade among nations as in +trade among private persons.[A2-2-3] It would be a decided hardship to +most men, if they were to receive payment at once in money for all that +they possessed: and the nation is made up of individuals.[A2-2-4] And +even the reasons which make payments in cash more uniformly desirable, +in the case of private persons not engaged in mercantile pursuits, cease +in the case of whole nations.[A2-2-5] + +B. But a continual over-balance (_Ueberbilanz_) is not at all possible. +Every relative increase of the amount of money must enhance the price of +commodities, lower the value of money, and thus produce an exportation +of money until a restoration of the level with other countries.[A2-2-6] +The prohibitions of the exportation of money, so often resorted to, can +avail nothing, because the precious metals are among the specifically +most valuable goods; and because it is easier yet to smuggle them out of +a country than to smuggle them into it.[A2-2-7] + +C. The signs by which the mercantile system supposed it could estimate +the favorableness of the balance of trade are essentially +deceptive.[A2-2-8] We cannot, for instance, from the course of exchange, +determine whether the payments made by us to foreign countries have been +made for purchases, to absentees, etc., or as loans; and yet, according +to the mercantilists, the latter are as useful to us as the former are +injurious.[A2-2-9] And even the most accurate tariff-record +(_Zollregister_) of the exportation and importation of commodities +affords no guaranty[A2-2-10] that, in many instances, the rendering of +the counter-value may not remain absent, by reason of bankruptcy, +shipwreck, or the emigration of property.[A2-2-11] + +D. Every act of exchange is advantageous only because through it a +greater value is received than the one parted with was. (?) Fortunately, +in normal trade, where both parties satisfy a real want, and neither +party is deceived, this is actually the case on both sides.[A2-2-12] In +accordance with all this,[A2-2-13] Baudrillart is of opinion that the +whole theory of the balance of trade no longer exists. + + [Footnote A2-2-1: Even _Petty_ and _North_, with their deep + insight into the nature and functions of money, could not + possibly entertain the mercantile theory of the balance of + trade. _Petty_ considers the exportation of money useful, + even when commodities are brought back in exchange for it, + and which are of greater value in the interior than the + exported money. (Quantulumcunque concerning Money, 1682.) + According to _North_, no one is richer simply because he has + his property in the form of gold and silver plate, etc.; he + is even poorer, because he allows his goods to lie in that + shape unproductive. Hence the importation of money is, in + itself, not more advantageous than the importation of logs + of wood; at most, the difference that, in case of excess, it + would be easier to get rid of the money than of the wood, is + of importance. Therefore, a state need never care very + anxiously for its supplies of money. A rich nation will + never suffer from a want of money. (Discourses upon Trade, + 1691, pp. 11, 17.) According to _Berkeley_ (Querist, 1735, + pp. 566 ff.), there is no greater error than to measure the + wealth of a nation by its gold and silver. It is to the + interest of a people to keep their money or to send it off + according as its industry is thereby promoted. _Quesnay_ + declares it to be impossible that the exports of a country + should be permanently greater than its imports: _tout achat + est vente et toute vente est achat_. + + _Adam Smith_ (W. of N., IV, 1) compares the Spanish + discoverers who inquired on every island, first of all, for + gold, to the Mongolians, whom _Rubruquis_ (c. 32) was + obliged to give information to concerning the cattle of + France: "of the two, perhaps the Tartar nation was the + nearest to the truth." Precious-metal-money may be even more + easily dispensed with than most other commodities, since, in + case of necessity, it can, by reason of its greater + transportability be readily obtained from without, and can + also be supplied by exchange and by credit. "Money makes but + a small part of the national capital and always the most + unprofitable part of it.... Money necessarily runs after + goods, but goods do not always or necessarily run after + money." _J. B. Say_ calls the exportation of money more + advantageous than that of other commodities, because the + former is of use, not through its physical qualities, but + only through its value, and the value of the money which + remains behind correspondingly rises by reason of the + exportation. (Traité, I, ch. 17.) Compare especially + _Bastiat_, Maudit Argent, 1849.] + + [Footnote A2-2-2: Against _Ganilh_, Théorie de l'Economie + politique, II, 200.] + + [Footnote A2-2-3: Even _Mun_ had, in every balance of trade, + distinguished three persons who participated in it; the + merchant might lose when the nation in general gained, and + _vice versa_; the king, with his duties, always gained. (Ch. + 7.) The British Merchant (p. 23) maintained even, that when + the merchant himself gains nothing and takes his + back-freight (_Rückfracht_) in money, his country gains the + whole amount thereof.] + + [Footnote A2-2-4: "Every individual is continually exerting + himself to find out the most advantageous employment for + whatever capital he can command. It is his own advantage, + indeed, and not that of the society, which he has in view. + But the study of his own advantage, naturally, or rather + necessarily, leads him to prefer that employment which is + most advantageous to the society." (_Ad. Smith_, W. of N., + IV, ch. 2.)] + + [Footnote A2-2-5: For the reason that money, in + international trade, for the most part, loses its character + as money, and appears more as a commodity. Exhaustively in + _Adam Smith_ and _J. B. Say_, l. c. The English state paid, + during the French war of the Revolution, in subsidies to + foreign countries, £44,800,000; and yet, up to the end of + 1797, imperial loans and the payments of private individuals + included, not as much as one million in cash went out of the + country. (_Rose_, Brief Examination into the Increase of the + Revenue of Great Britain, 1799.) When France paid the five + milliards to Germany, the plus value of English exportation + to Germany above the English importation thence rose from + 274,000,000 (1869) to 478,000,000 (1872), and the increase + in the amount of French from 39,400,000 (1869) to + 131,700,000 (1873). The entire German under-balance + (_Unterbilanz_), _Soetbeer_ (loc. cit.) estimates at + 878,000,000 of marks.] + + [Footnote A2-2-6: Emphasized especially by _David Hume_ who + calls attention to the seeking of its level by water. + (Discourses: On the Balance of Trade.) _J. B. Say_ speaks of + carriages, the increase of which over and above the need of + them must infallibly produce a reëxportation of them. + (Traité, I, ch. 17.)] + + [Footnote A2-2-7: With all the severity of its export + prohibitions, Spain, for centuries, served as a medium to + conduct the streams of American silver to the other parts of + Europe. As to how Spain, during the last third of the 18th + century, was overflowed by copper money, see _Campomanes_, + Educación popular, IV, 272.] + + [Footnote A2-2-8: _von. Schröder_, F. Schatz- und + Rentkammer, XXVII, has a very ingenuous faith in the rate of + exchange and a tariff-record (_Zollregister_); while _Child_ + had a much better insight into the defects of these two + criteria. (Disc. of Trade, p. 312 ff.) Compare _Steuart_, + Principles, III, 2, ch. 2.] + + [Footnote A2-2-9: Compare § 199. It was a discovery of + _Locke's_, that borrowing from foreign countries was + advantageous in all those instances in which the inland + borrower earned more than the amount of his interest by + means of the loan. (Considerations, p. 9.)] + + [Footnote A2-2-10: _Ségur_, Mémoires, II, 298, tells how the + Russian officers of custom were bribed by English merchants + to represent the Russian imports from England _under_, and + the exports to England _above_ the true value. In addition + to this, smuggling was carried on!] + + [Footnote A2-2-11: _J. B. Say_ calculates from the English + tariff-record (_Zollregister_), from the beginning of the + 18th century to 1798, an excess of exports over imports of + £347,000,000; and yet the highest estimates of the amount of + money actually in England, according to _Pitt_ and _Price_, + gave only £47,000,000. (Traité, I, IV, 17.) The Russian + lists of exports and imports from 1742 to 1797, show a + favorable balance of 250,000,000 rubles; to which must be + added 88,000,000 rubles taken from the mines during the same + time. But it is notorious that the stores of money + diminished. _Storch_, Gemälde des russischen Reiches, XI, + 12.] + + [Footnote A2-2-12: Manuel, 310. _F. B. W. Herrmann_ (Münch. + gelehrte Anz. XXV, 540) also declares the whole theory of + the balance of trade wrong. According to _Brauner_, Was sind + Maut und Zollanstalten (1816), 51, it is "a mere fancy."] + + [Footnote A2-2-13: Recognized even by _Ch. Davenant_, On the + probable methods of making a People Gainers in the Balance + of Trade (Works, II, p. 11).] + + +SECTION III. + +FURTHER REACTION AGAINST THE MERCANTILE SYSTEM. + +Simultaneously with this opposition, the theory of the international +balance of trade underwent important refinements, a new and improved +edition, so to speak, of old Colbertism.[A2-3-1] Each school is wont to +estimate the favorableness of the balance according to the preponderance +of that which they consider the most important element in a nation's +economy. Thus the population-enthusiasts, after the middle of the 18th +century, distinguished the "balance of advantage" from the "merely +numerical:" the former is favorable to the country which, by means of +its exports, employs and feeds the greatest number of men; the latter to +the country with a preponderating importation of money. And they call +the former much more important than the latter.[A2-3-2] The great +advance which this view constitutes over the old system lies chiefly in +two points: that the number and employment of men are evidently, so far +as the whole national economy and national life are concerned, a much +more important element than the quantity of money in a country; and +further, that now, at least, the possibility of a simultaneous profit on +both sides is admitted.[A2-3-3] The best writer in this direction, Jos. +Tucker, is among the great-grand-parents of the Manchester theory of +to-day! + +A further advance was made by men who introduced the higher notions of +nationality and of the stages of civilization into the theory of +international trade. Thus, at about the same time, the socialistic J. G. +Fichte, with his shut-in commercial state, and the romantic reactionary, +Ad. Müller, with his organic whole of national economy.[A2-3-4] Finally, +Fr. List,[A2-3-5] with his "National system of Political Economy," and +his severe subordination of the mere "agricultural state" to the +"agricultural, manufacturing and commercial state," acknowledges the +favorableness of the balance in the nation which by means of the +exportation of manufactured articles, the importation of the means of +subsistence and of articles to be manufactured, demonstrates and +promotes its higher stage of civilization.[A2-3-6] + + [Footnote A2-3-1: Compare _Mengotti_: Il Colbertismo (prize + essay of the Georgofili at Florence), 1791. If, with _H. + Leo_, we were to designate the whole period from the issue + of the struggles of the Reformation to the preparations of + the French Revolution as the "age of the mercantile system," + _Colbert_ would be a very appropriate type of it.] + + [Footnote A2-3-2: Compare § 254. Here belong _Forbonnais, + Necker, Tucker_ (Important Questions, IV, 11; V, 5; VII, 4; + VIII, 5. Four Tracts, 1774, I, p. 36); _Justi_ in his middle + period (_Roscher_, Gesch. der N. O. in Deutschland, I, 451 + ff.); but especially _Sonnenfels_ (politische Abhandlungen, + 1777, Nr. 1), who sees the best sign of a favorable balance + in the increase of population. (Grundsätze, II, 333.) When + Austria, for 2,500,000, purchases diamonds _of_ Portugal, + and sells Portugal linen to the amount of 2,000,000, it has + the numerical balance against it, but obtains the "balance + of advantage." (II, 329 seq.) With an admixture of + physiocratism, this doctrine appears in _Cantillon_, Nature + du Commerce, 1755, p. 298 ff.; with an admixture of free + trade, in _Büsch_, Geldumlanf, V, 12.] + + [Footnote A2-3-3: _Justi_, Chimäre des Gleichgewichts der + Handlung und Schiffahrt (1759), supposes a gain on both + sides in all commerce between nations. Hence, no nation can + attain to a flourishing trade in any way except it be to the + advantage of those with which it has to do. (p. 14 ff., 43.) + Here, it may be presumed, _Hume's_ Essay, On the Jealousy of + Trade, exercised an influence. _Sonnenfels_ distinguishes, + in foreign trade, five grades of advantage: 1, most + advantageous, when finished commodities are exported and + cash money is imported; 2, when finished commodities are + exchanged for raw materials; 3, finished commodities against + finished commodities; 4, raw material against raw material; + 5, raw material against finished commodities. (Grundsätze, + II, 202.)] + + [Footnote A2-3-4: It is as necessary that every nation + should constitute a separate commercial body as that it + should be a separate political and juridical body. The + person who asks: why should I not have commodities in all + the perfection in which they are made in foreign countries? + might as well ask: why am I not completely a foreigner? + (_Fichte_, Geschloss. Handelstaat, 1800: Werke, III, 476, + 411.) _Ad. Müller_ compares universal freedom of trade to a + universal empire, which will ever remain a chimera. + (Elemente der Staatskunst, 1809, I, 283.)] + + [Footnote A2-3-5: _List_ (Werke, II, 31 ff.) had, after + 1818, recognized that a _passive_ balance for whole nations + was possible, if they were not able to cover their wants, + supplied from abroad and then consumed, by their income, but + were obliged to make inroads on their national capital.] + + [Footnote A2-3-6: _Ch. Ganilh_, who expects a real + enrichment of a nation only from foreign trade (Dictionnaire + de l'E. P., 1826, p. 131), ascribes the most favorable + balance to the nation that exchanges dear labor against + cheap; that is, principally to a nation of tradesmen as + contradistinguished from a nation of agriculturists. + (Theorie de l'E. P., 1822, II, 239 ff.)] + + +SECTION IV. + +PARTIAL TRUTH OF THE MERCANTILE SYSTEM. + +But even among the successors of Hume and Smith, a deeper insight into, +so to speak, the physics of money and of international trade must have +led to the recognition of many a truth which the mercantile system had, +indeed, badly formulated, insufficiently proved, but which it had, +nevertheless, an inkling of. And, indeed, how frequently it happens that +the progress of science proceeds from one one-sidedness, through another +opposed but higher one-sidedness, to the all-sidedness which knows no +prejudice! + +A. Precious-metal-money is, indeed, a commodity, but of all commodities, +the most current, the most many-sided in its utility, the most +economically energetic, and at the same time of peculiarly great +durability.[A2-4-1] Money-capital, far from being the least useful +portion of a nation's capital, is rather one of its most important +parts; and especially in the higher stages of civilization, where the +division of labor has been most largely developed, is it peculiarly +productive and indispensable.[A2-4-2] Here it is really more likely that +the possessor of commodities may be wanting the wished for money, than +that the possessor of money should be wanting in the wished for +commodities. And, hence, the numerous half mystic expressions of the +magical power of money, which have passed into literature from the +common usage of the people, can be, by no means, considered mere errors. + +B. Just as little, can the impossibility of the preponderant importation +of money for a long time, be asserted. Hume's rigid theory of a level, +by no means, exactly corresponds with the reality. The precious metal +which is, indeed, imported, but which does not subsequently enter into +the circulation, need exert no influence whatever on the prices of +commodities in general; and may, therefore, remain permanently in the +country. Think only of the articles made of the precious metals, which +minister to luxury,[A2-4-3] of buried private treasure, of the treasures +of the state, which are idly stored up; as well as of a portion at least +of most cash on hand.[A2-4-4] From the other side, also, the +over-balance or under-balance (_Ueber-oder Unterbilanz_) of a country may +continue, a very long time, when its internal trade with its money-need +is, in the first case, an increasing, and in the last, a decreasing one. +So far, the preponderance of the importation of money may be called a +favorable sign and the preponderance of the exportation of money an +unfavorable one. And the person who thinks that a permanent +preponderance of exports or imports is not at all possible in the way of +commerce, overlooks the possibility of a very extensive national +indebtedness.[A2-4-5] + +C. But a distinction should be made between the _balance of payments_ +and the _balance of trade_ in the narrower sense of the +expression.[A2-4-6] In the case of the latter, to be complete, it is +necessary to carry to the credit side of the account: 1, The exports of +commodities; 2, the profit made by parties at home by realizing on +(_Realisierung_) the exports in foreign countries; 3, the freight-profit +made by parties at home on exports and imports, as well as in foreign +carrying trade (_Zwischenverkehr_); 4, the sale of inland ships in +foreign countries; 5, premiums and compensation for damage on account of +maritime insurance from foreign countries. On the debit side, on the +other hand, the corresponding items when foreigners have received from +the home country, as in the case of imports, etc. To obtain the general +payment-balance, we have still, in addition, on the credit side: 1, The +profit from home participation in enterprises in foreign countries and +the transfers of capital originating therefrom; 2, the interest and +repayments of money-capital loaned in foreign countries; 3, the sale of +stocks (_Effecten_) to foreign countries as well as new loans to which +the home country makes in foreign parts; 4, remittances from foreign +countries to foreigners sojourning in the home country, and money +brought with them by travelers and emigrants; 5, inheritances, pensions +and extraordinary payments from foreign countries. Then, too, on the +debit-side, belong the corresponding counter-items.[A2-4-7] If we, in +this way, take a survey of the whole world, we shall perceive a treble +current of the precious metals. The first and most regular goes, in long +lines, from mining countries, over to the commercial countries of the +world, and distributes the newly acquired gold and silver as commodities +according to the wants of the coinage, of manufactures, etc. The second +oscillates, as it were, in short waves from country to country, in order +to adjust the _plus_ or _minus_ for the time being of payment-balances. +Lastly, regular sudden currents, with slow subsequent counter-currents, +when single economic districts require to make extraordinary drafts or +shipments of the precious metals, by reason of bad harvests, war, a +disturbed double standard, etc. + +D. Since international indebtedness has so much increased, precisely the +richest nations may have the greatest regular excess of exports over +imports; partly because of the great amount of capital, etc., which they +possess in foreign countries; partly because of the great development of +their system of credit in the interior, by means of which they find +substitutes for so great a part of the metallic currency.[A2-4-8] + + [Footnote A2-4-1: _Locke_, Civil Government (1691), § 49, + seq., emphasizes this durability of the value-preserving + metallic money, in opposition to the perishable articles of + consumption, as a principal element in the development of + private property and of economic civilization. But even + _Petty_ ascribes to the precious metals a higher quality as + wealth than to any other commodity, for the reason that they + are less perishable, and possess value always and + everywhere. Hence, he esteems foreign trade more highly than + inland trade, and would have those businesses which import + the precious metals protected more than others against + taxation. (Several Essays, 1682, p. 113, 126, 159.) _Adam + Smith_ also recognizes this, at least so far as intermediate + trade is concerned. (W. of N., IV, ch. 6.)] + + [Footnote A2-4-2: Even _Rau_, in his additions to _Storch_ + (1820), p. 397, concedes the peculiarly charming, vivifying + power, which money possesses to an extent greater than any + other commodity. Well distinguished whether the money-want + of a country is already fully satisfied or not. (Ansichten + der Volkswirthschaft, 1821, p. 157.) _Carey_ exaggerates + when he calls money the cause of the movement in society, + out of which force is produced, what coal is to the + locomotive, or food to the animal body (Principles of Social + Science, ch. XXXII, 5), or the only want of life for which + there is a universal demand. (Ch. XXXIII, 1.) But he rightly + calls it the "instrument of association." Excellent + demonstration, as to how, at the sudden outbreak of a war, + of a revolution, etc., all those who have money on hand, + even when they had previously obtained it while peace still + prevailed, in the form of a loan, are in an infinitely + better position than the owners of the otherwise most useful + commodities. (Ch. XXXVII, 12.) Earlier yet, _P. Kaufmann_ + placed the "principal character of money" in this, that it + was "most perfect property (_Vermögen_);" and he calls its + quality as a commodity, philosophically considered, in + question; and judges the balance of trade according to this, + that in commodities, interest-yielding as well as dead + capital is exported, but in money-capital, which is always + gain-engendering. (Untersuchungen im Gebiete der politischen + Oekonomie, 1829, I, 4, 74, 80.)] + + [Footnote A2-4-3: In England, _Patterson_ estimates the + regular additional importation (_Mehreinfuhr_) of money at + from four to five millions sterling, of which the greater + part is devoted to purposes of luxury. (Statist. Jrl., 1870, + 217.)] + + [Footnote A2-4-4: _Fullarton's_ view (Regulation of + Currencies, 1844) suffers from exaggeration. _Knies_, Geld + and Credit, II, 285, very well shows that the "hoards" are + by no means mere idle stores, and that, therefore, their + void produced by the exportation of money must be soon + filled up again. _Adam Smith_, even, may be considered a + predecessor of _Fullarton_. (W. of N., ch. 2, p. 250, Bas.)] + + [Footnote A2-4-5: Even _Büsch_ (Werke, XIII, 26) says that + the under-balance (_Unterbilanz_) of the Scotch vis-a-vis of + England was for a long time made up in two ways, by the + marriage of wealthy English heiresses and by Scotch + bankrupts. Thus the troops, who, in the 17th century, were + traded over to France, and in the 18th, to England by German + princes, brought the money, in part, back again, which was + exported by the unfavorable balance. According to _List_, + the exported metals, after they have risen in price with us, + flow back to us again; not, however, as exchangeable + articles, but in the form of a loan, by which it is made + possible for us to dispose of them again, and again to + receive them in this shape. (Werke, II, 37.)] + + [Footnote A2-4-6: Thus even _J. Steuart_, Principles, IV, 2, + ch. 8.] + + [Footnote A2-4-7: Compare _Soetbeer_ in _Hirth's_ Annalen + des deutschen Reiches, 1875, p. 731 ff.] + + [Footnote A2-4-8: British Europe had from 1854 to 1863, a + yearly surplus amount (_Mehrbetrag_) of imports of at least + 266, and at most 1190 millions of marks, in the average, 764 + millions; from 1864 to 1873, of at least 802 millions, and + at most 1388 millions, an average of 1104 millions; whereas, + on the other hand, Australia, besides its great exportation + of gold, exhibits a great excess of exports of commodities + over imports. France, too, from 1867 to 1869, had attained + to an average surplus importation (_Mehreinfuhr_) of 211 + million marks; which is related to the fact that, according + to _L. Say_, it received about from 600 to 700 million + francs a year in interest from foreign countries; and that + from 200 to 300 million francs were expended by foreigners, + etc., traveling in France. Similarly, in the case of + governing countries vis-a-vis of their dependencies; whence + even the old mercantilists entertained no doubt of the + enrichment of the former. Thus France, in 1787 ff., had a + yearly importation of 613 million livres, and an exportation + of 448 millions, because the colonies sent to France 150 + millions more than they drew therefrom. (_Chaptal_, De + l'Industrie, Fr., I, 134.) Hungary, from 1831 to 1840, had a + yearly exportation of 46 million florins to Austria, and an + importation of only 30 millions. (_List_, Zollvereinsblatt. + 1843, No. 49) Algiers drew from France in 1844 to the amount + of 83 million francs, and found a market there for only 8 + millions (Moniteur), which no one will consider an + enrichment of France. The great preponderance of French + exports in 1831, 1848 and 1849, of Austrian, between 1874 + and 1876, a sign of diminished purchasing capacity! When + England, in March, 1877, imported to the amount of + £35,230,000, and exported to the amount of £16,921,000 + (against £27,451,000 and £17,739,000 in March, 1876), the + Economist sees therein a sign that many outstanding debts + were called in.] + + +SECTION V. + +THE ADVANTAGES OF INTERNATIONAL TRADE. + +The truth that no exportation is permanently possible without +importation, and that, in international trade, also, both sides better +their condition, was clear to the Italians in the fifteenth century, and +in the sixteenth and seventeenth centuries to the Netherlanders.[A2-5-1] + +Every nation can, through its instrumentality, for the first time, +acquire not only those commodities which nature entirely refuses to it, +but such also which it can itself produce only at a great cost.[A2-5-2] +And here it is not so much the absolute costs of production as the +comparative which are decisive.[A2-5-3] The country A may be superior to +the country B in all kinds of productiveness; but when this superiority +for the group of commodities _x_ amounts to only 50 per cent., and for +the group _y_, on the other hand, to 100 per cent., it is to the +interest of A, which possesses only a limited quantity of the factors of +production, to produce a surplus of the commodities _y_, and to exchange +that surplus against what it wants of _x_.[A2-5-4] B, also, would +willingly agree to this, even if it were not to get the commodities _y_ +entirely as cheap as A might supply them, but still decidedly cheaper +than their production would cost in B itself. But, if both parties +derive advantage from international trade, there is no necessity +whatever that this advantage should be equally great on both sides. As +in every struggle over prices, the gain here also is greatest on the +side of the nation whose desire to hold fast to their own commodities is +farthest from being outweighed by the want of the foreign commodity, and +which, at the same time, employs most productively the equivalent +received in imports in exchange for its exports.[A2-5-5] Yet, in +estimating this productiveness, it is necessary to take the whole +national life into consideration.[A2-5-6] + +The international distribution of the precious metals is subject to the +same law. These, also, are procured most cheaply by the nation which, +directly or indirectly (by the production of counter values wished for +by the whole world), employs the most productive economic activity upon +them, and at the same time (it may be by especially well developed +credit), is in the least urgent need of them.[A2-5-7] Therefore, on the +whole, their value in exchange is wont to be lowest among the richest +and most highly cultivated nations.[A2-5-8] Such a relative cheapness of +gold and silver is not only a symptom of economic power, but considering +the preëminent energy of these very commodities, at the same time, a +means to procure most foreign commodities with a smaller expenditure of +one's own forces.[A2-5-9] Hence, a great change in the distribution, +hitherto usual, of the precious metals, produced, possibly, by great +advances made in production here, or by an increase in consumption +there, or by means of commercial prohibitions, etc., may be just as +advantageous to the country which receives more as hurtful for the +country which pays more;[A2-5-10] and both, all the more as the +revolution in prices enhances the most productive elements of the nation +there, and here the most unproductive.[A2-5-11] Hence, even when it +cannot, in general, be said that one branch of commerce, carried on in a +normal manner, should necessarily remain behind another in economic +productiveness, those which have nothing to fear from a disturbance of +their balance by the measures of foreign states are distinguished by the +greatest security, and those are capable of the greatest growth which +exchange articles to be manufactured (_Fabrikanden_), and the means of +subsistence against ordinary manufactured articles.[A2-5-12] [A2-5-13] + + [Footnote A2-5-1: _M. Sanudo_, in Muratori Scriptores, XXII, + 950 ff., and the Netherland decree of February 3, 1501, in + the Journal des Economistes, XIII, 304. Then, _Salmasins_, + de Usuris (1638), p. 197. _Child_, _Becher_ and _Temple_ had + all made their studies in Holland. Compare, besides, even + _Plato_, De Rep., II, 371.] + + [Footnote A2-5-2: _J. S. Mill_ rightly calls it a remnant of + the mercantile system that _Adam Smith_ still saw the + principal utility of foreign trade in the market for the + home production which is thereby increased. But this utility + is to be looked for not so much in what is exported as in + what is imported. (Principles, II, ch. 17, 4.)] + + [Footnote A2-5-3: Compare _v. Mangoldt_, Grundriss der V. W. + L., 185 ff. By the English, the discovery of this truth is + attributed to _Ricardo_, Principles, ch. 7. Compare the + further development in _J. Mill_, Elements (1821), III, 4, + 13 seq.; _Torrens_, The Budget (1844) and _J. S. Mill_, + Essays on some unsettled Principles of Political Economy + (1844), No. 1, and Principles, III, ch. 18 ff. But even + _Jacob_, Grundsätze der Polizeigesetzgebung (1809, p. 546 + ff.), was acquainted with the truth that generally both + sides gained, but the one party, possibly more than the + other. According to _Lotz_, Revision (1811), I, 161, the + gain and loss of each party rises and falls in proportion to + the difference between the degrees of value which each + party, so far as he is himself concerned, attaches to the + goods given and the goods received. And even _Cantillon_, + Nature du Commerce (1155), p. 226, 369 ff., had a + presentiment of the reason why countries having a low value + in exchange of money can continue notwithstanding to sell in + foreign countries. And so, too, _Hume_, Essays (1752), On + Interest, who, without looking through the spectacles of the + mercantile system, perceived that countries with a + flourishing trade must necessarily draw much gold and silver + to themselves. Recently, _Cairnes_ has shown by practical + examples that Australia imports Irish butter and Norwegian + wood, and the Barbadians meat and flour from New York, + although both might themselves produce such articles + cheaper. (Essays, etc., 1873. Leading Principles, 1874, p. + 379.)] + + [Footnote A2-5-4: Thus a Kaulbach might more expertly + ornament his own door and window frames than an ordinary + room-painter, but does not do so, because he can employ his + time to better advantage.] + + [Footnote A2-5-5: Even _Law_, Money and Trade, p. 31, was of + opinion, that when a nation consumes its imports which are + greater than its exports, it grows poorer, not in + consequence of the importation, but of the consumption. + _Quesnay_ calls attention to the _plus on moins de profit + qui résulte des marchandises mêmes que l'on a vendues et de + celles que l'on a achetées. Souvent la perte est pour la + nation qui reçoit un surplus en argent, et cette perte se + trouve au préjudice de la distribution et de réproduction + des revenus_. (Max. génér., 24.)] + + [Footnote A2-5-6: _Rau_ distinguishes principally whether + importation brings articles of luxury or means of + acquisition (_Erwerbstamm_) into the country. (Ansichten der + V. W., 163.) Similarly, _de Cazcaux_, Eléments d'Economie + privée et publique (1825), p. 188 ff. _Schmitthenner_, Zwölf + Bücher vom Staate (1839), I, 497. "A favorable balance of + trade does not make a people richer because they receive the + metals for other values, but because they produce and sell + more than they purchase and consume; the result of which + naturally is that the difference must consist in values + capable of being capitalized." Kaufmann draws a distinction + according as the imported goods come into the country in the + form of dead or interest-bearing capital. He illustrates his + view by the case of a peasant who sells his seed-corn in + order to purchase a finer hat with the proceeds. + (Untersuchungen, I, 96, 81 seq.)] + + [Footnote A2-5-7: International trade makes imported + commodities cheaper and exported commodities dearer, but the + aggregate of consumers gain more in the former case than + they lose in the latter, because they now enjoy the + blessings of the international division of labor. But, even + with this general enrichment, single classes of the people, + and even the majority, may have to suffer; as, for instance, + when in the exchange of corn against iron, the cheapening of + the iron profits the people less than the consequent + dearness of corn injures them. (_Fawcett_, Manual, 391.)] + + [Footnote A2-5-8: "Gold and silver are by the competition of + commerce distributed in such proportions amongst the + different countries of the world as to accommodate + themselves to the natural traffic which would take place if + no such metals existed and the trade between countries were + purely a trade of barter." (_Ricardo_, Principles, ch. 7.) + In most direct opposition to the mercantile system, he + represents the distribution of the precious metals to be not + the cause but the effect of national wealth. A nation + rapidly growing in wealth will obtain and keep a larger + quota of the general supply of gold and silver. (The high + Price of Bullion, 1810.) On the other hand, it depends on + the one-sided abstraction with which _Ricardo_ loves to + pursue certain assumptions, that every exportation of money + is made to signify a peculiar cheapness of money, and _vice + versa_. (Opposed by _Malthus_, Edinb. Rev., Febr., 1811.) + _Carey's_ frequently repeated assertion, that gold and + silver always flow towards those markets where they are + cheapest (Principles of S. Science, I, 150, and passim), + confounds cause and effect.] + + [Footnote A2-5-9: Compare § 126, and even _Kaufmann_, + Untersuchungen, I, 75 seq.] + + [Footnote A2-5-10: Let us suppose that, hitherto, the + English had supplied their demand for wine from France, and + paid therefor in commodities made of steel; and that now + France prohibits the importation of the latter and requires + gold instead. If the English take this gold out of their own + circulation, the value in exchange of the gold which remains + to them rises; the prices of all commodities fall, state + debts and private debts become more oppressive, etc. If, to + avoid this, they send their steel wares, which France has + rejected, to California, to obtain gold there in exchange, + they find that California has as much of steel wares as it + requires, and that it can be induced to extend its + consumption of them only by a corresponding lowering of + their price. But if, on the other hand, the gold which has + flowed towards France has produced a rise in the price of + commodities, and a decrease in the exportation of + commodities; and has then flowed out of the country, to + Germany for instance; England may in consequence be placed + in a position to effect its payments for French wine with + the gold which its manufactured articles have been exchanged + against in Germany. But all this always supposes that the + prices of commodities have fallen in England and risen in + other countries; that is, a changed and, so far as England + is concerned, an unfavorable distribution of the precious + metals--which is found in connection with a relatively + decreased productiveness of English labor. The English cost + of production may yet continue to be covered, + notwithstanding; but, when it has been diminished by a + lowering of wages, interest, etc., the national wealth + suffers in consequence. Compare _Torrens_, Budget, p. 50 + ff., who precisely on this bases the greater security of + trade between the mother country and its colonies; and which + also found expression in the Peel reform plan of 1842 ff. + _Adam Smith_ approximated to this view when he ascribed a + more favorable balance to the country which paid for its + imports with its own instead of with foreign products. (W. + of N., IV, ch. 3-2, p. 329, Bas.)] + + [Footnote A2-5-11: Compare § 141. Strongly emphasized by + _List_, Werke II, 31, 36 seq. 48, 137.] + + [Footnote A2-5-12: _Torrens_ imagines an English + manufacturer who employs raw material = 100 quarters of corn + and manufactured wares = 100 bales of cloth (the quarter of + corn and the bale of cloth supposed to be of equal value) + and whose product = 240 bales in value; and compares him + with an American agriculturist who, by means of the same + outlay of capital, harvests 240 quarters of corn. The trade + between them restores to each not only his outlay, with + twenty per cent. profit, but puts them in a position to + repeat their production on a larger scale. Only the quantity + of fertile land can put a limit to this growth; for corn and + cloth help produce each other, and the cheapness of the one + promotes the cheapness of the other, which can not, by any + means, be said, for instance, of the exchange between + vanilla and satin. (Budget, p. 268 ff.) Compare _Roscher_, + Colonien, p. 277 ff.] + + [Footnote A2-5-13: The important controversy concerning + absenteeism may be answered in accordance with the + principles laid down in this chapter. The mercantile system + considered the rent sent to absentee landlords or + capitalists as a tribute paid to foreign countries; but + certainly improperly, as such rent is only the fruit of + their property which the owners might have consumed in their + own country, without giving any one a particle of it. + Besides, these rents are not sent in cash to foreign + countries, but in the form of those commodities to the + exportation of which the country is peculiarly well adapted. + Let us suppose, for instance, that the Irish absentees had + all left the country at once. The tradesmen, personal + servants, etc., to whom they had hitherto furnished + employment would be greatly embarrassed to find a market for + their services, etc., but the producers of linen and meat + would have largely increased their exports, because an + entirely new demand for their products would have arisen + through the farmers of the absentees. The reverse would + necessarily happen if all absentees were suddenly called + home. Absenteeism which has lasted a long time injures no + one economically. Many, recently, laud it even, because it + permits every nation to devote their energies to the + branches of production for which they are best qualified: + Paris, for instance, to theatrical and luxury wares. The + savings made by the English absentees on the continent, + where things are cheaper, turn eventually to the advantage + of England. (Thus, even _Petty_: Political Anatomy of + Ireland, p. 81 ff. _Foster_, On the Principle of Commercial + Exchanges between Great Britain and Ireland, 1804, p. 76 ff. + Edinb. Rev., 1827. _F. B. Hermann_, Staatswirthschaftl. + Untersuchungen, 355, 363 ff. _Per contra_, especially, + Discourse of Trade and Coyn, 1697, p. 99. _M. Prior_, List + of the Absenters of Ireland, 1730. _A. Young_; Tour in + Ireland, 1780. _Sir J. Sinclair_, Hist. of the Public + Revenue, 1804, III, 192 seq. _Lady Morgan_, On Absenteeism, + 1825.) An aversion for absenteeism plays a chief part in all + Carey's writings. Thus, even in his Rate of Wages, 45 ff. + + On medieval complaints concerning the absenteeism of + monasteries: _Bodmann_, Rheingauische Alterthümer, 751. From + a higher point of view, it cannot, indeed, be ignored that + absenteeism, largely developed, cripples the organic whole + of national life. The most highly cultured and influential + classes become estranged from their country, the great mass + remaining behind coarser, economic production more + one-sided, and all social contrasts more sharply defined. + Disturbances in Rome, when Diocletian removed his residence + from there; the decline of the Netherlands, very much + promoted by the discontent which Philip II.'s departure for + Spain produced. It was estimated, however, in 1697, that the + English absentees caused a gain to France of £200,000 per + annum. (Discourse of Trade, p. 93.) It is said that about + 1833, 80,000 Englishmen traveled on the continent, and + consumed £12,000,000 there. (_Rau._) According to + _Brückner_, the Russians who travel in foreign countries + take 20,000,000 rubles a year out of the country with them. + (_Hildebrand's_ Jahrb., 1863, 59.) That the countries which + receive these travelers receive no very great benefit from + them, see in _J. B. Say_, Cours pratique. In Paris, there + were, even in 1797, so many strangers who so enhanced the + rents paid for _maisons garnies_ that their expulsion was + proposed. (_A. Schmidt_, Pariser Zustände, III, 78.)] + + +SECTION VI. + +INTERNATIONAL COMMERCIAL TREATIES. + +All international commercial treaties have this object in common: to +moderate the impediments to trade which arise from the differences and +even from the enmities of states. According to time and character, they +fall into three groups: + +A. _Medieval_, where a barbarous state for the first time promises +foreign merchants in general legal security, without which regular trade +is unthinkable. Such treaties, where their provisions are not a matter +of course, must be certainly considered as a salutary advance; and they +may, under certain circumstances, be necessary even to-day.[A2-6-1] + +B. _Mercantilistic_ treaties, which close, perhaps, even a bloody +commercial war carried on against a rival,[A2-6-2] or which by a closer +connection with a state, whose rivalry is not so much feared, are +intended to moderate the worst consequences of a general +seclusion.[A2-6-3] Consistently carried out, and without any regard for +consequences, the mercantile system really means a war of each state +against all others, and it is no mere accident that after the cessation +of the wars of religion (1648) and before the beginning of the war of +the French revolution (1792), commercial wars occupy the foreground. +Such economic alliances as are entered into in these treaties generally +unite states which, by reason of the very different nature of their land +and their different national culture, are adapted to production of very +different kinds, and which, at the same time, have a common political +interest.[A2-6-4] Each party here agrees with the other to give a +preference to its subjects in trade, to not exceed certain maxima of +duties, etc.[A2-6-5] + +The art of the negotiator was employed to overreach the other +contractant in relation to the balance of trade.[A2-6-6] It was +considered a special matter of congratulation to induce a less highly +developed nation to abandon the traditional means employed to +artificially elevate its industries. Hence it is, that such friendly +treaties frequently contained the germs of the bitterest enmity.[A2-6-7] +A popular remnant of this second group has been noticeable even in +recent times, when in diplomatic negotiations concerning the reciprocal +modification of duties, it was considered an overreaching and even as an +outrage, in case one state made more "concessions" than it +received:[A2-6-8] evidently, a confusion of the producers of the +industry in question with the whole nation. + +C. _Free-trade_ treaties, intended to pave the way to the general +freedom of trade.[A2-6-9] Two provisions especially are characteristic +here: putting the subjects of the other party on an equal footing with +those of the home country in what relates to the ship-duties, +etc.;[A2-6-10] and the promise that the products of the other party, as +regards import duties, shall be treated like those of the most favored +nation.[A2-6-11] [A2-6-12] Whether this preparation for the universal +freedom of trade is better made through the medium of an international +treaty or of national legislation cannot be answered generally.[A2-6-13] +Besides, in our day, the preference of one foreign nation would be +easily evaded through the perfection of the modern means of +communication. + + [Footnote A2-6-1: The treaty of commerce between England and + Morocco, of the 9th of December, 1856, specially covenants + that the countrymen of a debtor shall not be held + responsible for debts in the creation of which they had no + part; that between England and Mexico, in 1826, guaranties, + among other things, that prices shall be freely determined + between buyers and sellers (art. 8), freedom from compulsory + loans, and from forced conscription for military duty (10), + the exercise of one's religion, and the inviolability of + graves (13); things which were not yet matters of course in + Mexico! Similar agreements between Spain and England in + 1667; between Spain and Holland in 1648 and 1713; and even + in 1786, between England and France. Commercial treaties of + this kind are found very early and very frequently among the + ancients. Compare the Arcadian-Ægean in _Pausan_, VIII, 5, + 5, which strongly recalls the Russo-English trade over + Archangel; further, Corp. Inscr. Gr., II, No. 1793, 2053 b + and c, 2056, 2447 b, 2675-78, 3523. That in the suburbs of + Jerusalem, from Solomon to Josias, places where Astarte etc. + was worshipped, were maintained unhindered, depends, it is + said, on commercial treaties with the Phoenicians, + Moabites, Ammonites. (_Movers_, Phönikier, III, 1, 121 ff., + 206 seq.)] + + [Footnote A2-6-2: The two commercial treaties between Rome + and Carthage, 348 and 306 before Christ (_Polyb._, III, 22 + ff.), are a clear proof that, in the interval, the + mercantile superiority of Carthage had increased. While the + Romans in 348 had still the right, under certain + limitations, to carry on trade in Sardinia and Africa, it + was in 306 entirely denied them.] + + [Footnote A2-6-3: As guild-privileges make annual fairs + (_Jahrmärkte_) and governmental fixed prices necessary.] + + [Footnote A2-6-4: Commercial treaty of the Venetians with + the Latin empire in Constantinople, of the Genoese with the + Greek after its restoration; in which, for instance, it was + promised to the former, that no citizen of a state at war + with Venice, should be permitted to sojourn in the Byzantine + empire; to the latter, that they alone of all foreigners + should enjoy freedom from taxation, and, with the Pisans, + navigate the Black Sea. As long as the Dutch were the + hereditary foes of Spain, they were much favored in France. + Commercial treaty of 1596, putting them on an equal footing + with the French; and which, considering their superiority at + the time, was necessarily of greater advantage to them than + to the French. _Colbert's_ step to destroy this + preponderance is coincident with the changed foreign policy. + (Richesse de Hollande, I, 127.) In the peace of Nijmegen, + again (art. 6 seq.), France tried to separate the Dutch from + their allies by the restoration of their former rights. In + the Spanish war of succession, France entered into a treaty + with the arch-duke, Charles, that a common commission should + fix the duties on English commodities, transfer the trade + with America to an English-Spanish company, but that the + French should be excluded therefrom. (_Ranke_, Franz. + Gesch., IV, 257.)] + + [Footnote A2-6-5: The king of Bosporos had the rights of + citizenship in Athens, and enjoyed that of freedom from + taxation of his property there. In consideration of this, + the Athenians were released from his corn export duties of + 1/30. (_Isocr._, Trapez., § 71. _Demosth._, Lept., p. 476 + ff.) Commercial treaty of Justinian with Ethiopia: the + latter was to afford aid against the Persians, in return for + which Byzantium promised to supply its requirement of silk + no longer from Persia, but from Ethiopia. Commercial treaty + between Florence and England, 1490: England promised to + permit all the wool destined for Italy, except a small + quantity intended for Venice only, to go over Pisa, and as a + rule, not through foreigners. Florence, on the other hand, + was to receive English wool only through English ships. + (_Rymer_, Foedera, XII, 390 seq. Decima dei Fiorentini, II, + 288 ff.)] + + [Footnote A2-6-6: The difficulties of such negotiations + described by an experienced politician (probably _Eden_): + Historical and Political Remarks on the Tariff of the French + Treaty, 1787.] + + [Footnote A2-6-7: The Methuen treaty (1703) was considered + an English master-piece, because Portugal had actually + exported a great deal of Brazilian gold to England. _Pombal_ + said, in 1759: "Through unexampled stupidity, we permit + ourselves to be clothed, etc. England robs us every year, by + its industry, of the products of our mines.... A severe + prohibition of the exportation of gold from Portugal might + overthrow England." (_Schäfer_, Portug. Gesch., V, 494 ff.) + And yet the treaty only says that Portugal withdraws its + prohibition of English woolen wares, and restores the former + duties (15 per cent.), while England continues to permit + Portuguese wine to pay a duty 1/3 less than French wines! + Singular doctrine of _Adam Smith_ (W. of N., IV, ch. 6), and + still more of _McCulloch_ (Comm. Dict., v. Commercial + Treaties), that this commercial treaty was unfavorable to + England and very favorable to Portugal, although, in fact, + later a duty of only about 3 per cent. was imposed here on + English commodities. (_Büsch_, Werke, II, 62.) The + English-French commercial treaty of 1786 introduces in the + place of the former prohibition, duties of 10, 12 and 15 per + cent. for a number of industrial products. The French soon + came to believe that they had been taken advantage of here. + _A. Young_ found the desire very general in the north of + France, to get rid of the Eden treaty even through a war. + (Travels in France, I, 73.) Many of the _cahiers_ of the + third estate demand that no treaty of commerce should be + entered into without previous consultation with the + industries interested. (Acad. des Sc. morales et polit., + 1865, III, 214.) But in England, also, bitter complaints of + the opposition, to which Pitt replied, that commercial + treaties between agricultural and industrial countries + result to the advantage of the latter, independent of the + fact that England obtained a new market of 24,000,000, and + France of only 8,000,000 persons. Compare the extracts in + _Lauderdale_, Inquiry, App., 14. Forcade: Revue des deux + Mondes, 1843.] + + [Footnote A2-6-8: Urged very largely in southern Germany + against the Prussian-French commercial treaty of 1862. But + is it really an "advantage" for France to have in the + interior more toiling (_Plackereien_) for inlanders as well + as for foreigners? Or that its consumers must pay high taxes + to the producers of certain wares?] + + [Footnote A2-6-9: Seldom in antiquity. Compare, however, + Inscr. Gr., II, No. 256, and the reciprocal granting of the + rights of citizenship of Athens and Rhodes. (_Livy_, XXXI, + 15.) Among the moderns, Flanders followed free-trade + principles similar to those followed later by Holland, at + the beginning of the fourteenth century; for instance, it + refused to gratify France by breaking off its trade with + Scotland. (_Rymer_, Foedera, II, 388.) Florence, in 1490, + promised the English, that in all treaties to be entered + into with others, it would permit it to enter. In the + French-Florentine commercial treaty of 1494, it is + stipulated with the Florentines that their ships _Gallica + esse intelligantur_ and their merchants _tanquam veri et + naturales Galli_ etc. (Decima, II, 308.) Swedish treaty with + Stralsund, 1574, that every privilege granted to a Baltic + city should also be, of itself, to the advantage of + Stralsund. Mutual equal treatment of subjects promised + between Portugal and England, 1642; Portugal and Holland, + 1661; mutual treatment on the basis of the most favored + nation: between England and Portugal, 1642; Holland and + Spain, in the peace of Utrecht; Spain and Portugal, 1713; + Spain and Tuscany, 1731; England and Russia, 1734. But how + far such principles were removed from the beginning of the + eighteenth century is shown by the speech from the throne of + the 28th of January, 1727, of George I., in which the + Austro-Spanish treaty of 1725, that placed the subjects of + Austria in the colonial empire of Spain on an equal footing + with the English and Dutch, is described as a violation of + the dearest interests of England, and in which it is said + that England must defend its own unquestionable right + against the covenant entered into to violate public faith + and the most solemn treaties; that it might be that Spain + thought of subjecting England once more to the popish + pretender. Even in 1713, it was one of the principal points + in controversy between the Tories and Whigs, whether, in a + commercial treaty with France, the latter should be accorded + the rights of the most favored nations. Compare _Daniel + Defoe_, A Plan of the English Commerce, and _per contra_, + The British Merchant.] + + [Footnote A2-6-10: English treaties with Prussia, 1824; the + Hanse cities, 1825; with Sweden, 1826; France, 1826 (England + removed the limitations still retained without compensation, + in 1839); Naples, 1845; Sardinia, Holland and Belgium, 1851. + Prussian treaties with Russia, 1825; Naples, 1847; Holland, + 1851. French with Bolivia, 1834; Holland, 1846 (in which + reciprocity is extended even to the navigation of rivers); + Denmark, 1842; Venezuela, Equador and Sardinia, 1843; Russia + and Chili, 1846; Belgium, 1849; and Portugal, 1853.] + + [Footnote A2-6-11: Marking an epoch in this respect are the + treaties of the United States with Holland (Oct. 8, 1782), + Sweden (April 3, 1783), Frederick the Great (Sept. 10, + 1785), and England (Oct. 28, 1795); recently that entered + into by Napoleon III. with England in 1860, and with the + Zollverein in 1862.] + + [Footnote A2-6-12: The expression "most favored" is not + always strictly construed. Thus, for instance, France + granted the right of coast-sailing proper (_cabotage_) only + to Spain. States frequently promise only: _s'appliquer + réciproquement toute faveur en matière de commerce et de + navigation qu'ils accorderaient à un autre état gratuitement + ou avec compensation_.] + + [Footnote A2-6-13: Napoleon III. had a preference for + commercial treaties, because these, as acts of foreign + politics, lay in the plenitude of his imperial power (art. 6 + of the constitution of 1852; senatus consultum of Dec. 23, + 1852), while in legislation, his free trade tendencies were + limited by popular representation. And so also Prussia, by + its commercial treaty with him (1862), was actually freed + from the hindrances which the free veto of the + Zollverein-conferences would have opposed to its reform. + Opposition to the treaty-form because too binding. + (_Chaptal_, De l'Industrie Française, II, 242 ff.) The + free-trade party lauds it precisely on this account. See the + report of the Leipzig Chamber of Commerce for 1874-75, p. + 41.] + + + + +APPENDIX III. + +THE INDUSTRIAL PROTECTIVE SYSTEM AND INTERNATIONAL FREE TRADE. + + + + +THE INDUSTRIAL PROTECTIVE SYSTEM AND INTERNATIONAL FREE TRADE. + + +SECTION I. + +PROXIMATE ECONOMIC EFFECTS OF THE INDUSTRIAL PROTECTIVE SYSTEM. + +That the principal measures which the mercantile system recommended, +artificially to increase a nation's wealth, could not produce the +immediate effects expected of them, has been shown, especially from the +natural history of money. Their proximate economic consequences +necessarily consisted in this, that they diverted the existing +productive forces of the nation from their places of application +(_Verwendungsplätzen_) hitherto, to others which the government thought +more advantageous. + +A. If home producers are in a condition to offer their commodities as +good and as cheap as foreigners, all protection of the former by import +duties, or even by prohibitions, is superfluous. The home producer has, +as a rule, not only the advantage of the smaller cost of freight to the +place of consumption,[A3-1-1] but that of being earlier informed, +because of his proximity to consumers, of a change in their +tastes.[A3-1-2] If, indeed, foreigners could supply us better and +cheaper, and if they are kept from supplying our market only by +artificial means, the state compels our consumers to a sacrifice of +enjoyment;[A3-1-3] and such a sacrifice as is not fully compensated for +by the profit made by the favored producers in any manner. The latter +are generally soon compelled by home competition to arrange their prices +in accordance with the rate of profit usual in the country. If they had +no "protection" they would simply employ their productive forces in +other branches of production; and in those in which they were equal or +even superior to foreign competitors. By means of the products thus +obtained, the people might then get in exchange all those commodities +from foreign countries, the production of which it is, according to the +laws of the division of labor, better to leave to foreign +countries.[A3-1-4] Since one nation can lastingly pay another nation +only with its own products, any limitation of imports must, under +otherwise equal circumstances, be attended by a corresponding limitation +of exports.[A3-1-5] Directly, therefore, these hindrances to importation +produce no increase, but only a change in the direction (_Umlenkung_) of +the national forces of capital and labor; an increase, only in case that +foreign producers are thereby caused to transfer their productive forces +within our limits;[A3-1-6] which may certainly be considered the +greatest triumph of the protective system. Hence it is absurd when an +equal extension of "protection" to all the branches of a nation's +economy is demanded, as it is so frequently, in the name of justice. +There is here no real protection whatever, analogous, for instance, to +the protection afforded by the judge, but a favor which can be accorded +to no one without injuring some one else.[A3-1-7] + + [Footnote A3-1-1: It is of course different in the working + (_Verarbeitung_) of foreign raw material. Much also depends + on the situation of the industrial provinces. For instance, + manufactured articles can reach the interior of Spain and + the Western states of the American Union only after they + have passed the industrial coast-regions of both countries. + In Russia, on the other hand, the center is the principal + industrial region; and hence the coast may be actually + nearer to foreign than to home manufacturers. Similarly, in + France, at least for iron and coal. Compare _Adam Smith_, W. + of N., II, p. 279 Bas.] + + [Footnote A3-1-2: People would, however, have to calculate + on the foolish luxury which despises the home product + because "it came from no great distance." World-supremacy of + Paris fashions! A manufacturer of excellent German + _Schaumwein_ (foaming wine) complained to me, in 1861, that, + after suffering heavy losses, he was compelled by his + customers to adopt French labels. Here, a wise prince may + have a favorable influence by his example. Louis XIV. + himself insisted, when his mother died, that the court + should use only French articles of mourning. _Gee_, Trade + and Navigation, p. 46. Augustus I., of Saxony, always wore + home cloth. (_Weisse_, Museum für Sächsische Geschichte, II, + 2, 109.) Similar requirements by the prince of Orange (1749) + of all officials: Richesse de Hollande, II, 317. Dutch + executioners were dressed in calico. (Discourse of Trade, + Coyn, etc., 1697.) American popular stipulations not to wear + foreign articles of luxury. (_Ebeling_, Geschichte und + Erdbeschreibung, II, 481.) Rhode Island tailors placed the + working wages for home stuffs much lower than for foreign. + (II, 149.)] + + [Footnote A3-1-3: _Prince Smith_ calls protective duties + scarcity-duties (_Theuerungszölle_). Because of this + increased dearness of the "protected" commodities, consumers + can no longer pay for as many other home commodities. If the + industry was previously in existence, the protective duty + imposed is wont to enhance the price, not only of the + foreign commodity, but also of the home commodity.] + + [Footnote A3-1-4: If, for instance, the English had never + had a protective tariff on silk, nor the French a protective + tariff on iron, the former would probably get all the silk + commodities they want from France and pay for them in iron + ware. In this way, both nations would be well off in what + concerns the relation between the cost of production and the + satisfaction of wants. _Say_ calls protective duties a fight + against nature, in which we take pains to refuse a part of + the gifts which nature offers us. He leaves himself open to + the charge of exaggeration, however, when he compares a + nation that wants to produce everything itself to a + shoemaker who wanted to be tailor, carpenter, to build + houses and cultivate a farm also. Although no nation is + all-sided, yet every nation is a great deal more-sided than + an individual.] + + [Footnote A3-1-5: Whoever keeps a people from purchasing in + the cheapest market, thereby prevents their selling in the + dearest. (_McCulloch._) It was no mere desire of revenge + that induced Holland, in the 17th century, to threaten the + Poles, in case the enhancement of their duties continued in + Danzig and Pillau, they would supply their corn-want from + Russia, (_Boxhorn_, Varii Tractat. polit., p. 240.) Thus the + tariff-measures adopted by France against the German cattle + trade and the Swedish iron trade promoted the growth of the + Crefeld silk manufacture, and lessened the exportation of + French wine to Sweden. When, in 1809, England heavily taxed + Norwegian wood, in favor of Canada, the Norwegians began, + instead of purchasing English manufactured articles, to + supply themselves from Hamburg, Altona and France. (_Blom_, + Norwegen, I, 257.)] + + [Footnote A3-1-6: _Fr. List_ assumed altogether too + unconditionally such an effect from import duties to be the + rule. The more developed the self-confidence of a nation is, + the more vigorous the life of its industries, the more + many-sided the commerce of its people; the less disposed are + its industrial classes to give up their home and carry their + market with them. But, for instance, Swiss labor and, still + more, Swiss capital have been induced by the tariff-systems + of the great neighboring countries to settle in Mühlhausen, + Baden and Voralberg, or at least to establish branch houses + in these places. Similarly, Neumark cloth makers were + induced to emigrate to Russia, and Nürnberg industrial + workmen to Austria (_Roth_, Geschichte des Nürnbergen + Handels, II, 170) etc. Compare _Burkhardt_, c. Basel, I, 74; + _Böhmert_, Arbeiterverhältnisse der Schweiz, I, 16 seq.; II, + 17.] + + [Footnote A3-1-7: Compare _Alby_ in the Revue des deux + Mondes, Oct., 1869, and, _per contra_, Cairnes, Principles, + p. 458. The misfortunes of war or internal disquiet have + frequently driven away the best labor-forces of an old + industrial state, and thus powerfully promoted a young + protective system in the neighborhood. Reception of + Byzantine silk-weavers in Venice, during the crusade to + Constantinople, of Flemish wool-weavers in England, under + Edward III. (_Rymer_, Foedera, III, 1, 23) and Elizabeth; of + Huguenot industrial workmen under the great elector, etc. + The growth of the Zurich silk industry by the settlement + there of expelled Protestants from Locarno. + + England, indeed, had, up to 1849, protective duties both for + industry and agriculture. But the protective duties were of + no real importance, except in the case of the latter, + because the greater part of England's industrial products + were superior to foreign competition without the help of + protective duties. Something similar is true of most duties + on raw material in the United States.] + + +SECTION II. + +EFFECT OF EXPORT DUTIES, etc., ON RAW MATERIAL.--EXPORT PREMIUMS. + +B. Export duties on raw material, and prohibitions of the exportation of +raw material, lower the price of such articles, by preventing the +competition of foreign buyers.[A3-2-1] To this loss of the producers of +raw material, there is, in the long run, no corresponding gain to the +manufacturers. Rather will there be, when freedom of competition +prevails at home, an increased flow of the forces of production to the +favored branch, because of its rate of profit, which is greater than +that usual in the country, and a corresponding flow from the injured +branch, until such time as the level of profit usual in the country is +restored.[A3-2-2] Hence here, also, the final result is only a change of +the direction, not a direct increase of the productive forces.[A3-2-3] + +C. In the case of export-premiums, it is necessary to distinguish +between the mere refunding back of the taxes which have been paid on the +assumption of a home consumption which has not taken place (drawbacks), +and the actual making of donations because of the exportation of goods +(bounties). The former produces no result except to maintain the +possibility of a production which would otherwise have been prevented by +the tax. The latter, on the contrary, compels all those who are subject +to taxation to make a donation to one particular class of persons +engaged in industry.[A3-2-4] Moreover, all consumers are compelled to +pay a higher price for the commodity to the extent that the market +price, inclusive of the premium to be obtained abroad, is higher than +the home market price hitherto usual. But, as the cost of production has +not increased, this profit of the producers, which is greater than that +usual in the country, must induce other productive forces to enter into +the favored branch; so that here, also, the lasting result is not a +higher rate of profit of the individuals engaged in the industry, but an +extension of the industry itself. Foreign countries chiefly reap the +greatest advantage from this course, since they obtain the commodities +at gift-prices.[A3-2-5] The premiums paid, not for exportation, but for +the production of a commodity, have a meaning akin to this.[A3-2-6] +Either the industry could not maintain itself without premiums, in which +case the state encourages a losing production,--and the more there is +produced the greater is the loss to the national economy;--or the +industry might exist without the payment of premiums, and then the newly +increased profit would lead to an extension of the industry. Exportation +would follow, and all the effects of export-premiums appear.[A3-2-7] + + [Footnote A3-2-1: Rags in Silesia dearer than in Bohemia by + the full amount of the Austrian export duties (Gutachten + über die Erneuerung der Handelsverträge; 1876, p. 9). When + the English export-prohibitions were extended to Scotland, + the price of Scotch wool fell about 50 per cent. (_A. + Smith_, W. of N., IV, ch. 8.) In the case of foreign raw + material, the reëxportation of which is prevented, the + object of such prohibitions may be largely frustrated. When + England, to promote its dyeing industries, left the + importation of colors entirely free, but allowed their + exportation only under heavy duties (8 George I., c. 15), + the importers provided the market always with somewhat less + than the amount required, and thus raised the price.] + + [Footnote A3-2-2: Export hindrances have been continued + longest in favor of manufacturing industries + (_Verarbeitungsindustrie_), in the case of such commodities + as are not intentionally produced, such as rags, ashes, + etc., but which are collected only as the remains of some + other kind of production or consumption. "Negative + production," according to _Stilling_, Grundsätze der + Staatswirthschaft, 803, because it is desirable to produce + as little as possible of such raw material. But the dearer + rags, for instance, are, the more carefully are they + collected.] + + [Footnote A3-2-3: When the French prohibition of the + exportation of hemp was extended to Alsace, its production + decreased from 60,000 to 40,000 cwt. (_Schwerz_, + Landwirthschaft des Nieder-Elsasses, 378 ff.) Frederick the + Great soon carried his prohibition of the exportation of raw + wool to such an extent as to prohibit the exportation even + of unshorn sheep, and to punish the dropping of a sheepfold + by a fine of 1,000 ducats. (Preuss. Gesch. Friedrichs III., + 42.) Here, also, belong prohibitions relating to the + exportation of corn, which force considerable capital, etc. + into industry. The prohibition of the exportation of corn in + England, and the permitting of the exportation of cattle, + wool, etc., was one of the principal causes why there were + so many complaints at the time of the turning of land used + for tillage into pasturage-land. When, in 1666, the + exportation of Irish cattle to England was prohibited, it + produced, at the outset, great need in Ireland, but + afterwards a flourishing condition of Irish industry. + (_Hume_, History of England, ch. 64.)] + + [Footnote A3-2-4: The effect must be very much the same when + the right of buying up all the raw material of a certain + district is granted to one factory exclusively. The elector, + Augustus of Saxony, did this frequently. Compare _Falke_, + Gesch. des Kurf., A. v. S., 190-212, 345.] + + [Footnote A3-2-5: As to how, by means of German drawbacks + (_Rückzölle_) it is possible for beet-sugar to be offered at + a cheaper rate in Brazil than home cane-sugar, see + _Wappäus_, Brazilien, 1830. The French export-premiums for + sugar amounted, in 1856, to over 8,000,000 francs. Frenchmen + subject to taxation were obliged to pay this amount, and + thus add to the already increasing price which they had to + pay for that article. (Journ. des Econom., Juill., 1857.) In + England, in 1742, the export-premiums for linen were + defrayed by enhanced entry-duties on cambrics. (15 and 16 + George II., c. 29.)] + + [Footnote A3-2-6: As to how English export-premiums + sometimes made English commodities cheaper in Germany than + in England, see _Büsch_, Werke, XIII, 82. There are, indeed, + gifts which may ruin the receiver of them, as, for instance, + when one gets his rival intoxicated at his expense before + the decisive solicitation. _Timeo Danaos et dona ferentes_ + (cited by Fox and Burke against the Eden treaty: _Hansard_, + Parl. History, 1787, Jan. p. 402, 488).] + + [Footnote A3-2-7: It is said that Maria Theresa paid + 1,500,000 florins a year for this purpose. (_Sonnenfels_, + Grundsätze, II, p. 179.) England, between 1806 and 1813, + altogether, £6,512,170. _Colquhoun_, Wohlstand, Macht, etc., + Tieck's translation, I, 251.] + + +SECTION III. + +THE FREE-TRADE SCHOOL. + +From what has been said, we may understand why the so-called free-trade +school, with its atomistic over-valuation of the individual and the +moment, rejects all those measures of the industrial protective +system.[A3-3-1] As such measures really injure the oppressed portions of +the people more than they help the favored classes, their introduction, +it is said, uniformly depends on this, that single classes of producers +understand their private interests better than others, and are better +organized than other producers and especially better than consumers, to +take care of their interests.[A3-3-2] Adam Smith approves import +hindrances for the purpose of artificially promoting an industry only in +two cases: + +A. When military safety demands it. Hence he calls the English +navigation act, that great prohibitive and protective law intended to +advance the merchant marine, the wisest perhaps of all English +commercial regulations, although he clearly saw that it compelled +England to sell her own commodities cheaper and buy foreign commodities +dearer.[A3-3-3] + +B. When the import duty is no more than sufficient to balance the tax +imposed on the corresponding home product. Smith rightly remarks that a +universally heavier taxation by the home country, but which affected all +branches of its production equally, operated like diminished natural +fertility, and hence does not make any equalizing tax for foreign trade +necessary. + +The person who has only a modest opinion of the power of his own reason, +and therefore a just one of the reason of other men and other times, +will not believe that a system like the industrial protective system +which the greatest theorizers and practitioners favored for centuries, +and which governed all highly developed countries in certain periods of +their national life, proceeded entirely from error and deception. It +really served, in its own time, a great and regularly occurring want; +and the error consisted only in this, that, partly through improper +generalization by doctrinarians and partly by the avarice of the +privileged classes and the inertia of statesmen, the conditioned and +transitory was looked upon as something absolute.[A3-3-4] + + [Footnote A3-3-1: _P. de la Court_, in his freedom of trade, + has in view not the interest of consumers--and least of all + of the whole world--but the interest of the commercial + class. Compare Tüb. Ztschr., 1862, p. 273. Similarly, + _Child_, Discourse of Trade, 1690; whereas _D. North_, + Discourses upon Trade (1690), may be called a free-trader in + the sense in which the expression is used to-day. No nation + has yet grown rich by state-measures; but peace, thrift and + freedom, and nothing else, procure wealth. (Postscr.) + _Davenant_ also zealously opposes the craving of a people to + produce everything themselves, to want only to sell, etc. He + considered very few laws on commerce a sign of a flourishing + condition of trade. (Works, I, 99, 104 ff.; V, 379 ff., 387 + seq.) _Fénélon's_ antipathy for import and export duties in + Telémaque, a part of his general opposition to the _siècle + de Louis XIV_. The view of the Physiocrates (_La police du + commerce interiéur et extérieur la plus sure, la plus + exacte, la plus profitable à la nation et à l'état consiste + dans la pleine liberté de la concurrence_: _Quesnay_, + Maximes générales, No. 25) is directly connected with their + deepest fundamental notions of _produit net_ and _impôt + unique_. _Turgot_ vindicates the interests of workmen + against protective duties, for whom no compensation is + possible, where one industry gains by its being favored in + the same way that it loses when another is favored. (Sur la + Marque de Fer, I, p. 376 ff., Daire.) "Those who cry so + loudly for protective duties are partly thoughtless persons + who wish to avoid the consequences of bad speculations, and + in part shrewd persons who would like to earn during the + first years a rate of profit higher than that usual in the + country." (_Rossi._) _Bastiat_ ridicules the advocates of a + protective tariff by the petition of the lamplighters, lamp + manufacturers, etc., that to advance their industry, and + indirectly almost all others, the mighty foreign competition + of the sun might be removed from all houses. (Sophismes + écon., ch. 7.) To him, the protective system is precisely + the system of want; freedom of trade, the system of + superabundance. Political economy would have fulfilled its + practical calling, if, by means of universal freedom of + trade, it had done away with all that is left of that system + which excludes foreign commodities because they are cheap, + that is, because they include _une grande proportion + d'utilité gratuite_. (Harmonies, p. 174, 306.) _Cobden's_ + pet expression: "Free trade, the international law of the + Almighty!" (Polit. Writings, II, 110.) _K. S. Zachariä_ + calls the protective system a step introductory to communism + (Staatsw. Abh., 100), because it nearly always leads to + over-population and _List's_ system, a politico-economical + absurdity. (Vierzig Bücher vom Staate, VII, pp. 23, 92.)] + + [Footnote A3-3-2: Among the many frequently wonderful + speeches by which persons engaged in industry are wont to + support their motion for protective duties, etc., the + following are particularly characteristic. The long struggle + of English manufactures against the East Indian Company, + since the later portion of the seventeenth century. Compare + _Pollexfen_, England and East India inconsistent in their + Manufactures (1697), against which _Davenant_, at the + solicitation of the company, wrote his Essay on the E. I. + Trade (1697). Prohibition of East Indian commodities, 11 and + 12 Will. III., ch. 10. The struggle did not stop until the + middle of the eighteenth century, when India was outflanked + by English machines. When Pitt, in 1785, labored for the + abolition of the tariff-barriers against Ireland, English + manufacturers, and among others Robert Peel, declared that + they would be forced in consequence to transfer a part of + their manufactories to Ireland! (_McCulloch_, Literature of + Political Economy, p. 55.) _Say_ tells of a proposition made + by the hat-makers of Marseilles to prohibit foreign straw + hats (1. c).] + + [Footnote A3-3-3: W. of N., IV, ch. 2. According to _Roger + Coke_, England's Improvement (1675), ship-building in + England became dearer in a few years by about one-third, on + account of the navigation act; and the wages of sailors + advanced to such an extent that England lost its Russian and + Greenland trade almost entirely, and the Dutch obtained the + control of it. This _J. Child_, Discourse of Trade, admits, + but still calls the navigation act the _magna charta + maritima_. Similarly, _Davenant_, Works, I, 397. Here the + relation of the cost to the immediate product can as little + decide as it can against the exercise of troops or the + construction of forts. _Adam Smith_ allows the same reasons + to apply to export premiums for sail-cloth and gunpowder + (IV, ch. 5). Recently, however, _Bülau_ + (Staatswirthschaftlehre, 339; Staat und Industrie, 220 + seq.;) has argued against all these exceptions of Adam + Smith.] + + [Footnote A3-3-4: _Schleiermacher_ (Christ. Sitte, 476) + calls the polemics which can see nothing but error in a + refuted theory, immoral.] + + +SECTION IV. + +FURTHER EDUCATIONAL EFFECTS OF THE INDUSTRIAL PROTECTIVE SYSTEM. + +The sacrifices which the protective system directly imposes on the +national wealth consist in products, fewer of which with an equal +straining (_Anstrengung_) of the productive forces of the country, are +produced and enjoyed, than free trade would procure. But it is possible +by its means to build up (_bilden_) new productive forces, to awaken +slumbering ones from their sleep, which, in the long run, may be of much +greater value than those sacrifices. Who would say that the cheapest +education is always the most advantageous?[A3-4-1] Only by the +development of industry also, does the nation's economy become +mature.[A3-4-2] The merely agricultural state can attain neither to the +same population nor the same energy of capital, to say nothing of the +same skillfulness of labor, as the mixed agricultural and industrial +state; nor can it employ its natural forces so completely to +advantage.[A3-4-3] How many beds of coal, waterfalls, hours of +leisure,[A3-4-4] and how much aptitude for the arts of industry, can be +turned to scarcely any account in a merely agricultural state? If, +therefore, the protective system could materially promote a national +industry, or if it made such industry possible, for the first time, the +sacrifice connected therewith, in the beginning, should be considered +like the sacrifice of seed made by the sower;[A3-4-5] but this can be +justified only on the three following conditions: that the seed is +capable of germination; that the soil be fertile and properly +cultivated, and the season favorable.[A3-4-6] [A3-4-7] + + [Footnote A3-4-1: _List_, Nationales System der polit. + Oekonomie, kap. 12, contrasts two owners of estates, each of + whom has five sons, and can save 1,000 thalers a year. The + one brings his sons up as tillers of the ground (_Bauern_ = + peasants) and puts his savings out at interest. The other, + on the contrary, has two of his sons educated as _rational_ + (_rationelle_) agriculturists, and the others as intelligent + industrial workers, and at a cost which prevents the + possibility of his accumulating any more capital. Which of + the two has cared better for the standing, wealth, etc. of + his posterity; the adherent of the "theory of exchangeable + values" or the adherent of the doctrine of "the productive + forces?"] + + [Footnote A3-4-2: The rent of the land of Gr. Botton, in + Lancashire, was estimated in 1692 at £169 per annum; in + 1841, at £93,916. (_H. Ashworth._)] + + [Footnote A3-4-3: The pottery district of Staffordshire was + formerly considered very unfertile. It was industry that + first showed how the rich and varied beds of clay at the + surface, and the wealth of coal under them, could be fully + utilized.] + + [Footnote A3-4-4: Blind free-traders always like to assume + that every man capable of working always busies himself; + whereas idleness frequently excuses the wasting of its time, + by the plea that a remunerative market of the possible new + products is improbable, or at least uncertain. Compare _J. + Möser_, P. Ph., I, 4. _Kröncke_, Steuerwesen (1804), 324, + 328 seq., and even the first German reviewers of Adam Smith + in _Roscher_, Gesch. der N. Oek. in Deutschland, II, 599.] + + [Footnote A3-4-5: _List_ calls attention to the case of the + stenographic apprentice who writes more slowly for a time + than he was wont to formerly.] + + [Footnote A3-4-6: Let us suppose that a country had hitherto + produced $10,000,000 worth of corn, and that of this amount + it had sent $1,000,000 worth into foreign countries as a + counter-value for foreign manufactured articles. It now, by + means of a protective tariff, establishes home manufactures, + through the instrumentality of which a coal bed or water + fall is turned to account. The workmen in the manufactories + henceforth consume what was formerly exported. Of course + such a change is not effected without loss; but this loss + ceases as soon as the home industry becomes the equal of the + foreign industry which was crowded out. And then the forces + which have been made useful in the meantime appear as clear + gain. _List_ not unfrequently called special attention to + the fact that a consumption of 70,000 persons engaged in + home industries means as much to German agriculture as all + that it exported to England from 1833 to 1836. + (Zollvereinsblatt, 1843, No. 5.)] + + [Footnote A3-4-7: _Adam Smith's_ free-trade doctrine has + always been contradicted in Germany. Even in 1777, his first + great reviewer, _Feder_, says that many foreign commodities + can be dispensed with without damage; and that industries + which indemnify the undertakers of them only after a time + but which are then very useful to the community in general, + would not be begun always without special favor shown them. + (_Roscher_, Geschichte der National Oekonomie, II, p. 599.) + _Kröncke_, Steuerwesen, 324 ff., speaks of attempts towards + the education of industries by taxation-favors: "If of ten, + only one succeeds, even that is to be considered a great + gain." But modern protectionists base themselves chiefly on + their interest in the independence of the country, precisely + as the free-traders do on that of individual freedom. _Ad. + Müller_, with his organic way of comprehending things, + opposes the assumption of a merely mercantile world-market, + in which all the merchants engaged in foreign trade + constitute a species of republic. (_Quesnay._) He also + rejects on national grounds the universal freedom of trade + as well as the universal empire akin to it; although as a + means of opposing it, he suggests not so much a protective + tariff as the intellectual cultivation of nationality in + general. (Elemente der Staatskunst, 1809, II, 290, III, 215, + II, 240, 258.) According to _Sörgel_ (Memorial an den + Kurfürst v. Sachsen, 1801,) commercial constraint + (_Handelszwang_), by means of export and import duties, is + useful in the childhood of manufactures, afterwards + injurious, because the powerful incentive to perfection is + wanting where no competition is to be feared (67). _P. + Kaufmann_, the opponent of Smith's balance-theory, demands + moderate protection against the otherwise irresistible + advantages to already developed industrial nations. + (Untersuchungen, 1829, I, 98 ff.) The principal advocate in + this direction is _Fr. List_, with a great deal of sense for + the historical, but with little historical erudition; and + after the manner of an intelligent journalist, he reproaches + the free-trade school with baseless cosmopolitanism, deadly + materialism, and disorganizing individualism. He + distinguishes in the development of nations five different + stages: hunter-life, shepherd-life, agriculture, the + agricultural-manufacturing period, the + agricultural-manufacturing-commercial period; and he demands + that the state should lend its assistance in the transition + from the third to the fourth stage, in the nursing or + planting of manufacturing forces in connection, throughout, + with the enfeebling of feudalism and bureaucracy, the + increase of the middle class, with the power of public + opinion, especially of the press, the strengthening of the + national consciousness from within and without. Compare + _Roscher's_ review in the Gött. gelehrten A. 1842, No. 118 + ff. As to how List resembles, and differs from Ad. Müller, + see _Roscher_, Gesch. der N. O., II, 975 ff.; _von Thünen's_ + independent defense of a protective tariff; Isolirter Staat, + II, 2, 81, 92 ff., 98; Leben, p. 255 seq. The socialist + _Marlo_ (Weltökonomie, I, ch. 9, 10) distinguishes common + products (_Gemeinprodukte_) which may be obtained equally + well in every properly developed country, and peculiar + products (_Sonderprodukte_), like coffee, wine, etc. With + respect to the former, he agrees with List; in regard to the + latter, with Smith. A protective tariff exerts a constraint + on consumers, compelling them to abridge their enjoyments + somewhat, and to employ these now in the procuring of + instruments of production, in the exercise of skill needed + in production and the accumulation of capital. At the same + time foreigners should be kept from utilizing home natural + forces, and where possible, home manufactures should be + helped to utilize foreign natural forces. _Marlo_, indeed, + assumes, as one-sidedly as the followers of Smith do the + contrary, that without the tariff the workmen in question + would not be employed at all; but he is right in this, that + the most fruitful employment of the forces of labor, and the + keeping of them most completely busy, mutually replace each + other. In France, even _Ferrier_, Du Gouvernement considéré + dans ses Rapports avec le Commerce (1808), had defended the + Napoleonic continental system. See _Ganilh_, the French + List, Theorie de l'Economie politique (1822), who grades the + branches of a nation's economy in a way the reverse of Adam + Smith, and finds the protective system necessary for the + less developed nations, to the end that they may not be + confined to the most disadvantageous employments of capital + (II, p. 192 ff.). Especially is a greater population made + possible in this way (248 ff.). Similarly, _Suzanne_, + Principes de l'E. polit., 1826. Further, _H. Richelot_, + List's translator. _M. Chevalier_, who recommends free trade + for France in our day so strongly, approves the system of + Cromwell and Colbert for their own time, and for a long time + afterwards (Examen du Système commercial, 1851, ch. 7): a + view which _Périn_ says is now shared by "all serious + writers." (Richesse dans les Sociétés Chrétiennes, 1861, I, + p. 510.) _Demesnil-Marigny_, Les libres Échangistes et les + Protectionistes conciliés (1860), bases his protective + system on this, chiefly, that it may greatly enhance the + money-value of a nation's resources to the detriment of + other nations, especially by the transformation of + agricultural labor, estimated in money, into the much more + productive labor of industry. The value in use of all the + national resources is doubtless greatest where full freedom + of trade obtains. In Russia, _Cancrin_ demands that every + nation should be to some extent independent in respect to + all the chief wants to the production of which it has at + least a middle (_mittlere_) opportunity; especially as all + civilization, even the higher development of agriculture, + must proceed from the cities. (Weltreichthum, 1821, 109 ff. + Oekonomie der menschlichen Gesellschaften, 1845, 10, 235 ff.) + America's most distinguished protectionist is _Hamilton_, + Report on the Subject of Manufactures presented to the House + of Representatives, December 5, 1791. _Jefferson's_ saying, + that the industry should settle by the side of agriculture, + leads us to _Carey_, who repeats the same idea with wearying + unwearisomeness; at first for the reason that the "machine + of exchange" should not be allowed to become too costly; but + afterwards rather from the Liebig endeavor to prevent the + exhaustion of the soil. He describes, indeed, how the East + Indian producer and consumer of cotton are united with one + another by a pontoon bridge which leads over England. + (Principles of Social Science, I, 378.) A good soil and good + harbors are the greatest misfortune for a country like + Carolina if free trade prevails, because it is turned into + an agricultural country (I, 373). The people who, after the + manner of the Irish, gradually export their soil, will end + by exporting themselves. _Carey_ would force colonies to + demean themselves like old countries from the first. If corn + be worth 25 cents in Iowa, and in Liverpool $1, for which 20 + ells of calico are brought back, the Iowa farmer receives of + this quantity about 4 ells. Hence it would be no injury to + him were he to supply his want of cotton from a neighbor who + produced it at a cost four times as great as the Englishmen. + Analogies drawn from natural history, as, for instance, that + every organism, the lower it is in the scale of existence, + the greater is the homogeneity of its several parts; also a + deep aversion for centralization, and hatred of England, + coöperate in _Carey's_ recommendation of the protective + system, often called in the United States the "American + system," in opposition to the "British," advocated by + Webster against Calhoun and Clay against Jackson. _John + Stuart Mill_, Principles, V, ch. 10, 1, allows a protective + tariff temporarily, "in hopes of naturalizing a foreign + industry in itself perfectly suitable to the circumstances + of the country." Peel's colleague, G. Smythe, said, in 1847, + at Canterbury, that as an American (citizen of a young + country) or as a Frenchman (citizen of an old country with + its industry undeveloped), he would be a protectionist. + (Colton, Public Economy, p. 81.) Even _Huskisson_ admitted, + in 1826, that England in the seventeenth century had been + very much advanced by its protective system; and that he + would continue to vote even now for its maintenance, if + there were no reprisals to fear.] + + +SECTION V. + +PROTECTION AS A POLICY. + +A. So long as a nation is, indeed, politically independent, but +economically in a very low stage, it is best served by entire freedom of +trade with the outside world; because such freedom causes the influences +of the incentives, wants, and the means of satisfaction of a higher +civilization to be soonest felt in the country. + +B. The further advance which consists in the development of home +industries by the country itself, may, indeed, be rendered exceedingly +difficult by the unrestricted competition of foreign industries, which +are already developed. The carriers on of industry in an old industrial +country have a superiority over those in the new, in the amount of +capital, the lowness of the rate of interest, the skill of undertakers +(_Unternehmer_) and workmen, generally, also in the consideration in +which the whole country hold industry, and the interest they take in +it;[A3-5-1] while in the country which has hitherto been merely +agricultural, it happens only too frequently that industry is +undervalued, and that young industrial talent is, as a consequence, +forced to emigrate. How frequently it has happened that England by +keeping down her prices for a time has strangled her foreign +rivals.[A3-5-2] Even on the supposition of equal natural capacity, the +struggle between the two industries would come to a close similar to +that between a boy of buoyant spirits and an athletically developed man. +What then is to be said of the cases in which the more highly developed +nation is at the same time possessed of the more favorable natural +advantages, such, for instance, as England possesses over Russia in her +incomparable situation in relation to the trade of the world, and which +gives her for all distant countries, without any active commerce, a +monopoly-like advantage; farther, her magnificent harbors, streams, her +well-situated wealth in iron and coal, etc. The advantages of mere +priority weigh most heavily, when the great development of all means of +transportation almost does away with the natural protection afforded by +remoteness; and when, at the same time, a certain universality of +fashion, which, as a rule, is governed by the most highly developed +nations, causes national and local differences of taste, which could be +satisfied only by national or local production, to become +obsolete.[A3-5-3] Under such circumstances, it would be possible, that a +whole nation might be made continually to act the part of an +agricultural district (_plattes Land_), to one earlier developed, +leaving to the latter, almost exclusively, the life of the city and of +industry.[A3-5-4] A wisely conducted protective system might act as a +preventive against this evil, the temporary sacrifices which such a +system necessitates being justifiable where some of the factors of +industrial production unquestionably exist but remain unused, because +others, on account of the mere posteriority of the nation, cannot be +built up. The abusive term "hot-house plant" should not be used where +there is question only of transitory protection, and where there is the +full intention to surrender the grown tree to all the wind, rain and +sunshine of free competition, and where it is foreseen that it shall be +so surrendered.[A3-5-5] [A3-5-6] The want of a certain economic +many-sidedness which must be given to a nation manifests itself in a +particularly urgent manner in times of protracted war. Here the error of +so many free-traders, that different states should comport themselves +towards one another as the different provinces of the same state do, is +most clearly refuted.[A3-5-7] + +C. No less important is the political side of the question. Since the +protective system forces capital and labor away from the production of +raw material and into industry, it exerts a great influence on the +relations of the classes or estates of a country to one another. The +immense preponderance possessed in medieval times by the nobility, +agriculture, the country in general as contradistinguished from the +city, by the aristocratic and conservative elements, is curtailed in +favor of the bourgeoisie, of industry, of the cities generally, and of +the democratic and progressive elements. If when the history of a nation +is at its highest point, there is supposed a certain equilibrium of the +different elements, all of which are equally necessary to the prime of a +nation's life, this height is now attained sooner than it would +otherwise be. It is no mere accident that in almost every instance, +those monarchs who humbled the medieval nobility and introduced the +modern era, also established a protective system.[A3-5-8] + +D. However, such an education of industry can be attempted with proper +success only on a large scale, that is, on a national basis. The least +hazardous (_unbedenklich_) measure of the system, import-duties supposes +a relatively short boundary line, such as only a great country, even +where its formation is the most favorable imaginable, can +possess.[A3-5-9] The greater the tariff territory (_Zollgebiet_), the +less one-sided is its natural capacity wont to be, the sooner may an +active competition in its interior be built up, while the foreign market +always suffers from uncertainty. Hence all tariff-unions (_Zollverein_) +between related states are to be recommended not only as financially but +also as economically advantageous. Between states not related and of +equal power, so far-reaching a reciprocity, embracing nearly the whole +of economic policy, can scarcely be established; and it would be still +harder for it to continue long. If the states not related are of very +unequal power, the probable consequence would be the early absorption of +the weaker by the stronger.[A3-5-10] [A3-5-11] + + [Footnote A3-5-1: What an advantage it has been to English + industry and commerce that the state here so long considered + it a matter of honor to have its subjects well represented + in foreign countries, to extend their market, etc.] + + [Footnote A3-5-2: _Hume_, in the parliamentary session of + 1828, uses the expression "strangulate," to convey this + idea. As early as 1815, Brougham said: "It was well worth + while to incur a loss on the exportation of English + manufactures in order to stifle in the cradle the foreign + manufactures." The report of the House of Commons on the + condition of the mining district (1854) speaks of the great + losses, frequently in from three to four years, of £300,000 + to £400,000, which the employers of labor voluntarily + underwent, in order to control foreign markets. "The large + capitals of this country are the great instruments of + warfare against the competing capital of foreign countries, + and are the most essential instruments now remaining by + which our manufacturing supremacy can be maintained."] + + [Footnote A3-5-3: Before the development of the machinery + system, also, the preponderance of the greatest industrial + power could not be nearly as oppressive as later; especially + as in highly developed commercial countries, the wages of + labor are always high. (_List_, Zollvereinsblatt, 1843, No. + 44, 1845, No. 5, ff.)] + + [Footnote A3-5-4: "Shall the forester wait until the wind in + the course of centuries carries the seed from one place to + another, and the barren heath is converted into a dense + wood?" (_List_, Gesammelte Schriften, III, 123 seq.) When + the Romans had conquered an industrial country, its + industries began generally to flourish better, because of + the greater market opened to them; whereas, those which had + no industries before, continued, for the most part, to + remain producers of the raw material after the conquest, + also. Related to this is the phenomenon, that the provinces + not favored by nature, were much less backward in the middle + ages than they are to-day. Compare the description of the + misery of Mitchelstown, after the Earl of Kingston had + ceased to consume £40,000 there: _Inglis_, Journey through + Ireland, 1835, I, 142. The royal commission appointed to + investigate the misery of Spessart in 1852, show that the + home-made clothing had gone out of use there, and that the + wooden shoes, so well adapted to wooded countries, had been + changed for leather ones. This becoming acquainted with + foreign wants in a region not adapted to industries, without + a large market, greatly increased the distress. As soon as + such a region becomes an independent state, a productive + system would suggest itself.] + + [Footnote A3-5-5: _List_ very well remarks that otherwise + most of our fruit trees, vines, domestic animals would be + "hot-house plants." And even men are brought up in the + hot-house of the nursery, the school, etc. + (Zollvereinsblatt, 1843, No. 36.)] + + [Footnote A3-5-6: That a posterior people would never be in + a condition to establish industries of their own, where full + freedom of trade prevails, I do not by any means assert. + Compare the list of industries which attained to so + flourishing a condition without the aid of a protective + tariff, that they were able to supply foreign markets, in + _Rau_, Lehrbuch, II, § 206, a. But when Switzerland is so + frequently cited as an illustration in this connection (_J. + Bowring_, On the Commerce and Manufactures of Switzerland, + 1836), people forget the many favorable circumstances of + another kind which coöperated here to elevate industry; a + neutrality of three hundred years, during the French + Huguenot War, the Thirty Years' War, the Wars of Louis XIV., + and as a consequence of this, no military budgets, few taxes + and state debts, etc. In addition to this, at an earlier + period, the many mercenary troops, and afterwards the + foreign travelers.] + + [Footnote A3-5-7: As free trade in Holland's best period was + more an international law than a politico-economical system, + so, afterwards, the Dutch protective system grew out of war + prohibitions; and, in times of peace, the newly established + industry was not abandoned. At last, in the time of its + decline, all industries, with a strange logic, sought + protection, even the most ancient one, the one whose growth + was the most natural, the fisheries. (_Laspeyres_, Gesch. + der volksw. Ansch., 134 ff., 146, 159.) The United States, + during the war of 1812, with England, doubled their + protective duties. (_A. Young_, Report on the Customs-tariff + Legislation of the U. S., 1874.)] + + [Footnote A3-5-8: Hence, we should not judge the Russian and + the American systems of industrial protection, for instance, + by the same rule. In Russia, it may be necessary to + strengthen artificially the still weak bourgeoisie, and to + awaken numberless slumbering forces and opportunities by + encouragement of their use by state measures. Here, also, + the absolute ruler is called upon, and accustomed to educate + his people. In the United States, on the other hand, there + is no nobility; the whole nation belongs to the class of + burghers, and even the cultivators of the land are raisers + of corn, cattle traders, land speculators etc. Considering + the universal activity and laborious energy of the people, + it is to be expected that every really profitable + opportunity will be turned to account in such a country, + without any suggestion or assistance from the state. Here, + therefore, _A. Walker's_ saying is true: America should + produce no iron, not because it does not know how, because + it has not sufficient capital, because the nature of the + country is not adapted to it, or because it has no natural + protection, but "because we can do better." (Sc. of W., 94 + seq.) Since a democracy cannot, properly speaking, educate + the people, the protective duties of the United States are, + for the most part, only attempts by one part of the people, + who claim to be the whole, to prey upon the other parts.] + + [Footnote A3-5-9: If we suppose three countries, each in the + form of a square: A = 1 sq. m., B = 100 sq. m., C = 10,000 + sq. m.; there is in A for every mile of boundary 1/4 sq. m. + of inland country; in B, 2-1/2 in C, 25.] + + [Footnote A3-5-10: Towards the close of the middle ages, the + vigorous commercial policy of Venice, for instance, towards + Greece, or the Mohammedan power, was thwarted by other + Italian cities, Genoa, Pisa, and later, by Florence + especially.] + + [Footnote A3-5-11: Why most of the reasons above advanced do + not apply to a corresponding "protection" of agriculture by + duties on corn, see _Roscher_, Nationalökonomik des + Ackerbaues, § 159 ff.] + + +SECTION VI. + +WHY THE PROTECTIVE SYSTEM WAS ADOPTED. + +This explains why so many nations in the periods of transition between +their medieval age and their higher stages of civilization, adopted the +industrial protective system.[A3-6-1] [A3-6-2] [A3-6-3] [A3-6-4] [A3-6-5] +[A3-6-6] + + [Footnote A3-6-1: The fact that among the ancients there was + so little thought bestowed on the protection of industry is + related to the comparative insignificance of their industry. + Compare _Roscher_, Ansichten der Volkswirthschaft, 3 ed., + 1878, vol. 1, p. 23 ff. It occasionally happened in the east + that workers in metal, especially the makers of metallic + weapons, were dragged out of the country. I _Sam._, 13, 19; + II _Kings_, 24, 14 ff.; _Jerem._, 24, 1, 29, 2. Among the + Jews, certain costly products were subjected to export + prohibitions for fear that the heathen might use them for + purposes of sacrifice. (_Mischna_, De Cultu peregr., § 6.) + Persian law, that the king should consume only home + products: _Athen._, V, p. 372; XIV, p. c. 62. The Athenians + went farthest in reducing such provisions to a system. Solon + had strictly prohibited the exportation of all raw material + save oil (_Plutarch_, Sol., 24), and a complaint was allowed + against any one who scoffed at a citizen because of the + industry he carried on in the market. (_Demosth._, adv. + Eubul., p. 1308.) The exportation of corn was always + prohibited; also that of the principal materials used in + ship-building. In war, prohibitions of the exportation of + weapons; importation from enemy countries also prohibited. + No Athenian was permitted to loan money on ships which did + not bring a return cargo to Athens (_Demosth._ adv. Lacrit., + p. 941), nor carry wheat to any place but Athens. (_Böckh._, + Staatsh. der Ath., I, 73 ff.) In Argos and Ægina, the + importation of Athenian clay commodities and articles of + adornment, prohibited. (_Herodot._, V, 88; Athen., IV, 13; + XI, 60.) + + The Athenians imposed a duty of two per cent. both on + imports and exports. Similarly, in Rome, where the higher + duties imposed on many articles of luxury served an + ethico-political purpose. We have, besides, accounts of + prohibitions of the exportation of money: _Cicero_, pro + Flacco, 28 (L., 2, Cod. Just., IV, 63). Plato's advice to + prohibit the importation of luxuries and the exportation of + the means of subsistence (_De Legg._) on ethico-political + considerations; and the Byzantine prohibition of the + exportation of certain articles of display from court + vanity. (Porph. Decaerim, p. 271 ff. Reiske.)] + + [Footnote A3-6-2: In Italy's best period, the protective + system bears a specifically municipal complexion; in + democracies, a guild-complexion; the former especially + because of the many differential duties in favor of the + capital. + + A very highly-developed protective system in Florence. The + exportation of the means of subsistence forbidden (Della + Decima, II, 13), and so likewise the importation of finished + cloths. (Stat Flor., 1415, V, p. 3; Rubr., 32, 39, 41, 43, + 45.) In the streets devoted to the woolen industries, it was + not permitted to give the manufacturers notice to quit their + dwellings, nor to increase their rent, unless the + connoisseurs in the industry had admitted a higher rate of + profit. (Decima, II, 88.) In order to promote the silk + industry, the importation of silk-worms and of the mulberry + leaf was freed from the payment of duties in 1423, the + exportation of raw silk, cocoons and of the mulberry leaf + forbidden in 1443; and in 1440, every countryman was + commanded to plant mulberry trees. (Decima, II, 115.) When + Pisa was subdued, the Florentines reserved to themselves all + the wholesale trade, and prohibited there all silk and + woolen industries. (_Sismondi_, Gesch. der italienischen + Republic, XII, 171.) It was a principle followed by Milan in + its best period, to exempt manufacturers from taxation. + Yearly subsidies, accorded about 1442, to Florentine + silk-manufacturers, who immigrated; in 1493, a species of + _expropriation_, in case of houses which a neighbor needed + for manufacturing purposes. (_Verri_, Mem. Storiche, p. 62.) + Bolognese prohibition of the exportation of manuscripts, + because they wanted to monopolize science. (_Cibrario_, E. + polit. del. medio. Evo., III, 166.) Even in the seventeenth + century, a city like Urbino forbade the exportation of + cattle, wheat, wood, wool, skins, coal, as well as the + importation of cloth, with the exception of the very + costliest kinds. (Constitut. Due. Urbin., I, p. 388 ff., 422 + ff.)] + + [Footnote A3-6-3: In England, since the fourteenth century, + all genuinely national and popular kings always bore it in + mind both to secure emancipation from the Hanseates, to + invite foreigners skilled in industry to the country (the + Flemings since 1331, although the English people disliked to + see them come; _Rymer_, Foedd., IV, 496) and to adopt + protective measures, especially when they had reason to rely + on the bourgeoisie. (_Pauli_, Gesch. von England, V, 372.) + The precursors of the navigation act, 1381, 1390, 1440. + (_Anderson_, Origin of Commerce.) The prohibition of + exporting raw wool (1337, II Edw. III., c. 1 ff.) lasted + only one year. Wool remained a long time still so much of a + chief staple commodity that in 1354, for instance, £277,000 + worth were exported; of all other commodities taken + together, only £16,400. (_Anderson._) On the other hand, the + prohibition to import foreign stuffs (1337), for instance, + was repeated in 1399, and the prohibition to export woolen + yarn and unfulled cloths in 1376, 1467, 1488. The statutes + of employment operated very generally. The statutes provided + that foreign merchants should employ the English money they + received only to purchase English commodities, and their + hosts, with whom they were obliged to live, had to become + security therefor. Thus, in 1390, 4 Henry IV., c. 15, and 15 + Henry IV., c. 9; 18 Henry VI., c. 4, 1477. Prohibitions of + the exportation of money, 1335, 1344, 1381. Even in the case + of payment by the bishops to the pope, the exportation of + money was forbidden in 1391, 1406, 1414. Henry VIII. (3 + Henry VIII., c. 1) threatened the exportation of money with + the penalty of double payment. Even in 1455, the importation + of all finished silk wares was prohibited for five years. + See a long list of similar prohibitions in _Anderson_. The + prohibitions relating to the exporting of raw materials, and + especially wool, were exceedingly strict in Elizabeth's + time, and stricter yet in the seventeenth century. The + penalty of death was attached to their violation, and + producers subjected to the most burthensome control. + Moderated especially by 8 Geo. I., c. 15. In the eighteenth + century we again find a series of import-premiums for raw + material from the English colonies. Compare _Adam Smith_, + IV, ch. 8.] + + [Footnote A3-6-4: _Sismondi_, Histoire des Français, XIX, + 126, considers as the beginning of the French industrial + protective system, the edict of 1572, by which, with a view + of promoting the woolen, hemp and linen manufactures, the + exportation of the raw material and the importation of the + finished commodities are prohibited. (_Isambert_, Recueil, + XIV, p. 241.) Yet even Philip IV., in 1302, had prohibited + the exportation of the precious metals, of corn, wine and + other means of subsistence. (Ordonn., I, 351, 372.) About + 1332, the decision of the question whether the exportation + of wool also should be forbidden was made to depend on who + offered the most, the raw-producers or those engaged in + industry. (_Sismondi_, X, 67 seq.) The third estate not + unfrequently asked for protective measures from the + parliaments: thus, in 1484, a prohibition against the + importation of cloth and silk stuffs, and against the + exportation of money (_Sismondi_, XIV, 673), claims which + went much further in 1614, when freedom of trade, reform of + the guilds, etc., were desired. Opposition of Sully to the + industrial-political measures of Henry IV., whose + prohibition of foreign and gold stuffs lasted scarcely one + year. (_Forbonnais_, Finances de Fr., c. 44.) The edict of + 1664, which, for the first time, created a boundary + tariff-system for the greater part of France, with the + removal of numerous export and import duties of the several + provinces, and the abolition even of the duty-liberties of + the King's court, marks an epoch. The introduction in which + Colbert lets the King speak of his services to the + taxation-system, the marine, colonies, etc., in which he + describes the chaos of those earlier duties, and + demonstrates their desirability of doing away with them, is + very interesting. Colbert, inconsistently enough, allowed a + number of export duties for industrial products to remain, + that he might not alienate any domanial rights. + (_Forbonnais_, I, 352.) The tariff, then very moderate, was, + in 1677, doubled in part, and even trebled, which provoked + retaliation, and led to the war of 1672. Hence, in 1678, the + tariff of 1664 was, for the most part, restored. Colbert + entirely prohibited these commodities, which were still + imported, spite of the tariff: thus, Venetian mirrors and + laces in 1669 and 1671. Among his characteristic measures + are the export-premiums for salt-meats which went to the + colonies in order to draw this business away from Holland to + France. (_Forbonnais_, I, 465.) He caused the transit + between Portugal and Flanders to be made through France by + providing that it should be carried on by means of royal + ships at any price. (_Forbonnais_, I, 438.) Compare + _Clement_, Histoire de la vie et de l'Administration de C. + (1846). _Jonbleau_, Études sur C. ou Exposition du Système + d'Économie Politique suivi de 1661 à 1683 (II, 1856). + Lettres, Instructions et Mémoires de C. publiés par Clément + (1861 ff.).] + + [Footnote A3-6-5: In Germany, the tariff projects of the + empire of 1522, contemplated no protection, inasmuch as + imports and exports were equally taxed, but the importation + of the most necessary means of subsistence was left free. + Prohibition of the exportation of the precious metals in + 1524; of the exportation of raw wool _mit grossen Haufen_ + (R. P. O., of 1548, art. 21; 1566, and in the R. P. O. of + 1577, limited to the pleasure of the several districts). + Hence, in Brandenburg, 1572 and 1578, the Saxons, + Pommeranians and Mecklenburghers were prohibited to export + wool and to import cloth, in retaliation. Individual states + had much earlier adopted protective measures: Göttingen, in + 1430, prohibited the exportation of yarn, and in 1438, the + wearing of foreign woolen stuffs. (_Havemann_, Gesch. von + Braunschweig und Luneburg, I, 780 seq.) Hanseatic politics + recall in many respects the Venetian. After 1426, the sale + of Prussian ships to non-Hanseates was made as difficult as + possible; and in 1433, the importation of Spanish wool was + prohibited in order to compel the payment of debts by Spain. + (_Hirsch_, Gesch. des Danziger, H. 87, 268.) Prohibition of + the exportation of the precious metals to Russia at the end + of the thirteenth century. _Sartorius_, II, 444, 453, III, + 191. The elector, Augustus of Saxony, forbade the + exportation of corn, wool, hemp and flax (Cod. Aug. I., + 1414). The Bavarian L. O., of 1553, prohibits generally the + sale of corn, cattle, malt, tallow, leather or other + _Plennwerthe_ to foreigners; which prohibition was, in 1557, + limited to cattle, malt, tallow, wool and yarn. + + The protective system received its most important + development in Prussia. Prohibition by the margrave, about + the end of the thirteenth century, of the exportation of + woolen yarn. (_Stengel_, Pr. Gesch., I, 84.) In the + privilege accorded to the weavers of woolen wares, in 1414, + the importation of the less important cloths is forbidden + for two years. (_Droysen_, Preuss. Gesch. I, 323.) The + prohibition of the exportation of wool of 1582 assigns as a + reason of the prohibition, that the numerous leading weavers + should not be ruined for the sake of a few unmarried + journeymen and sellers. (_Mylius_, C. C. M., V, 2, 207.) In + the prohibitions of 1611 and 1629, the domains, the estates + of prelates and knights were exempted; similarly, in Saxony, + 1613-1626; which is one of the many symptoms of the then + growing _Junkerthum_. The great elector, who attached, both + in war and peace, great value to the possession of coasts, + men-of-war and colonies, forbade, for instance, the + importation of copper and brass wares (1654), of glass + (1658), of steel and iron (1666), of tin (1687); farther, + the exportation of wool (1644), leather (1669), skins and + furs (1678), silver (1683), rags (1685). Home commodities + were, for the most part, stamped with the elector's arms, + and all which were not so stamped were prohibited. The + prohibition was generally preceded by a notice that the + elector had himself established or improved a manufactory, + or that the guilds (_Innungen_) had entered complaints + against foreign competition. Not till 1682 did the idea + occur to impose a moderate excise on the home product to be + favored, and a much higher duty on the foreign one; thus in + the case of sugar. (_Mylius_, IV, 3, 2, 16.) Frederick I. + continued this system especially for the forty-three + branches of industry hitherto unknown, and the introduction + of which was contemporaneous with the reception of the + Huguenots. (_Stengel_, 3, 48, 208.) Frederick William I., in + 1719 and 1723, threatened the exportation of wool, under + certain circumstances, with death. (_Mylius_, V, 2, 4, 64, + 80.) The severity with which he insisted that his officials + and officers should wear only home cloth is characteristic; + and the fact that in 1719 he threatened tailors who worked + foreign cloth, with heavy money fines and the loss of their + guild-rights. At the same time all workers in wool were + freed from military duty, and capitalists who had loaned + money to wool manufacturers were given a preference (1729). + Frederick the Great, who continued nearly all this, + prohibited the exportation of Silesian yarn, with the + exception of the very coarsest and finest, as well as of + that which had been bleached. Its exportation was allowed to + Bohemia only, because from here the linen went back again to + Silesia to be bleached and sold there. (_Mirabeau_, De la + Monarchie Pruss., II, 54.)] + + [Footnote A3-6-6: Important beginnings of a protective + system in Sweden, under Gustavus Wasa, and again under + Charles IX., the violent opponent of the supremacy of the + nobility (_Geijer_, Schwed. Gesch. II, 118 ff., 346); while + Christian II., of Denmark, failed in all such endeavors. The + founder of the Russian industrial protection was Peter the + Great, who was in complete accordance with the native + theorist, _I. Possoschkow_: Compare _Brückner_, in the + Baltische Monatschrift, Bd. VI (1862), and VI (1863). Spain + first adopted a real protective system under the Bourbons. + The export prohibitions issued mostly at the request of the + cortes between 1550 and 1560 (_Ranke_, Fürsten und Völker, + I, 400 ff.) must be considered as a remnant of the medieval + scarcity-policy, induced principally by a misunderstood + depreciation of the precious metals.] + + +SECTION VII. + +HOW LONG IS PROTECTION JUSTIFIABLE? + +All rational education keeps in view as its object, the subsequent +independence of the pupil. If it desired to continue its guardianship, +the payment of fees, etc., until an advanced age, it would thereby +demonstrate either the pupil's want of capacity or the absurdity of its +methods. The industrial protective system also can be justified as an +educational measure only on the assumption that it may be gradually +dispensed with; that is, that, by its means, there may be a prospect of +attaining to freedom of trade.[A3-7-1] In the case of all highly +civilized nations, the presumption is in favor of freedom of trade, both +at home and abroad, and in such nations, the desire for a protective +system must be looked upon as a symptom of disease.[A3-7-2] [A3-7-3] It +is true, that recently the inferiority of young countries, even when +inhabited by a very active and highly educated people, is greatly +enhanced by the improvement of the means of communication. But this is +richly compensated for by the simultaneous instinct towards emigration, +both of capital and workmen from over-full, highly industrial countries; +whereas, the prohibitions by the state, that extreme of exportation +embargoes, formerly so frequently resorted to, it is no longer possible +to carry out.[A3-7-4] [A3-7-5] Now the young country has the advantage of +being able immediately to use the newest processes of labor, etc., +without being hindered by the existence there of earlier imperfect +apparatus. It is certain that international freedom of trade must be of +advantage to a people's nationality the moment they have attained to the +maturity of manhood, for the reason that they are thereby forced to make +the most of that which is peculiar to them. Care must be taken not to +confound many-sidedness with all-sidedness.[A3-7-6] The best "protection +of national labor" might consist in this, that all products should be +really individually characteristic (artistic), all individuals really +national, and national also in their tastes as consumers. This ideal has +been pretty closely approximated to by the French in respect to +fashionable commodities, so that they will hardly purchase such from +abroad, even without a protective tariff; and the cultured of most +nations in respect to works of art. Here, too, it is worth considering, +that even the most national of poets, when they are great enough to rise +to the height of the universally human, possess the greatest +universality.[A3-7-7] + + [Footnote A3-7-1: _Colbert_ advised the companies in Lyons + to consider the privileges granted them only as crutches, by + means of which they might learn to walk the soonest + possible, it being the intention afterwards to do away with + them. (Journ. des Econom., Mai, 1854, p. 277.) Thiers said, + in the chamber of deputies, in 1834: _Employé comme + représailles, le tarif est funeste; Comme faveur, il est + abusif; Comme encouragement à une industrie exotique, qui + n'est pas importable il est impuissant et inutile. Employé + pour protéger un produit, qui a chance de réussir, il est + bon; mais il est bon temporairement, il doit finer quand + l'education de l'industrie est finie, quand elle est + adulte._ _Schmitthenner_, Zwölf Bücher vom Staate, I, 657 + ff., admits that full freedom of trade between England and + Germany would be advantageous to the world in general; but + that England might here secure the entire gain even at the + cost of Germany, in part. _Schmitthenner's_ view is + distinguished from that of _List's_, against which + _Schmitthenner_ zealously seeks to maintain the priority of + his own (II, 365), disadvantageously enough, by this, that + it contains no pledge of subsequent freedom of trade. + _List_, on the contrary, considers universal freedom of + trade, not only as the ideal, but also as the object which + is to be striven for by temporary limitations on trade; an + object, indeed, attainable only where there are a great many + nations highly developed and in an equal degree, just as + perpetual peace supposes a plurality of states equal in + power. Ges. Schr., II, 35; III, 194. Compare, on this point, + _Hildebrand_, N. O. der Gegenwart und Zukunft, I, 87. That + _Carey_ advocates a perpetual protective tariff is connected + with his absolute inability to conceive the Malthusian law + of population. (_Held_, Carey's Socialwissenschaft und das + Merkantilsystem, 1866, p. 166.) + + Thus, for instance, the prohibition of foreign cloths in + Florence begins in 1393, that is, at a time when the + protected industry had long been developed, so that its + products were exported on a great scale, but when it began + to fear the young, vigorous, competition of the Flemings.] + + [Footnote A3-7-2: How frequently it happened in the + conquests of the French revolution or of Napoleon, or when + the Zollverein was extended, that two territories, now + united to each other, feared an outflanking of their + industries, each by the other, whose competition was + formerly excluded; and that, afterwards, the abolition of + the barriers to trade worked advantageously to both parties! + (_Dunoyer_, Liberté du Travail, VII, ch. 3.) The Belgian + manufacture of (coarse) porcelain flourished under Napoleon, + spite of the competition of Sèvres. It declined after the + separation from France, notwithstanding protective duties of + 20 per cent. (_Briavoinne_, Industrie Belge, II, 483.) The + French cotton manufacturers feared, in 1791, that the + incorporation of Mülhausen would necessarily produce their + downfall.] + + [Footnote A3-7-3: In Venice, the relations of a workman who + had emigrated and refused to return home were imprisoned. If + this was of no avail, the emigrant was to be put to death. + (_Daru_, Hist. de V., III, 90.) It is said that this was + still the practice in 1754. (Acad. des Sc. mor. et polit., + 1866, I, 132.) Florence, in 1419, threatened its subjects + who carried on the brocade or silk industry, in foreign + countries, with death. Similarly, when the Nürnberg + Rothgiessers were prohibited, under pain of the house of + correction, showing their mills to a stranger. (_Roth_, + Gesch. des N. Handles, III, 176.) In Belgium, enticing + manufacturers of bone lace to emigrate was made punishable. + Austrian prohibition for glass-makers, in 1752; for + scythe-makers, in 1781. Colbert also approved of the + imprisonment of manufacturers desirous to emigrate. + (Lettres, etc., II, 568 ff.) By 5 Geo. I., ch. 28, and 23 + Geo. II., ch. 13, the soliciting of an artificer to emigrate + to foreign countries is punished by one year's imprisonment + and £500 fine; and even workmen who do not respond to a call + home within six months lose all their reachable property in + England, and their capacity to inherit there. Every emigrant + had to certify that he was no artificer. The only effect of + this law was that the emigration of artificers to the United + States was made by the way of Canada; the poorer ones, at + most, were kept back by the cost of this circuitous route. + Hence the law was repealed in 1825. Compare Edinb. Rev., + XXXIX, p. 341 ff.] + + [Footnote A3-7-4: The first English prohibition of the + exportation of machinery was made in reference to the Lee + stocking frame, in 1696, the second in 1750; whereupon + others followed very rapidly after 1774. As late as 1825, + prohibitions of the exportation of a large number of + machines and of parts of machines were still in force; but + the Board of Trade might dispense with them. Here it was + considered whether a greater disadvantage was caused to the + industries by permitting the exportation, or to the + manufacturers of the machines by prohibiting it. _Porter_, + Progress, I, 318 ff., recommends full freedom of exportation + especially for the reason that Englishmen can now procure + all new machines, and sell the old ones to foreign + countries. On the other hand, a French manufacturer + purchased old machines _parce que sous le système prohibitif + je gagnerai encore de l'argent avec ces metiers_. (_Rau_, + Lehrbuch, II, § 209.) Similar cases in the United States. + _Cairnes_, Principles, p. 485.] + + [Footnote A3-7-5: _Bandrillart_, Manuel, p. 299. Every + nation needs, in order to become fully mature, an industry + of some magnitude. But it may just as well be the silk + industry as the cotton which shall lead to this maturity; + and when the nation has much greater natural capacity for + the former than for the latter, it would do well to reach + its object by the shortest course.] + + [Footnote A3-7-6: _Riehl_, die deutsche Arbeit, p. 102 ff., + 107. Shakespeare, the most English of Englishmen, and yet + the most universal of poets! During the last centuries of + the middle ages most nations had come to have national and + even local costumes which were in strong contrast with the + universality of fashions during the age of chivalry. This + must have greatly contributed to the advancement of + industry, even before the introduction of the state + protective system.] + + [Footnote A3-7-7: How much more convenient it is for the + statesman, when he does not need to give any thought to the + education of industry, is shown, especially by the great + difficulty of striking precisely the proper height of a + protective tariff. If too low, it fails of its object; and + so, likewise, if too high; because then, in a very + unpedagogical way, it lulls one into a lazy security. And + how impossible it is to make the tariff vary with every + variation in the cost of production, in price, etc.; as List + desired it should, not, however, without a good deal of + variation in his own views. (_Roscher_, Gesch. der N. O., + II, 989 seq.) How greatly would not List have been obliged + to limit his assumptions, if he had lived to see the + universal exposition of 1862, at which English connoisseurs + expressed their pleasure that England had not remained + behind France and Germany in locomotive building? (Ausland, + 19 Oct., 1862.) Hence _Schäffle_ opposes all protective + duties as an educational measure, because the "protected" + classes, by means of diets (_Landtage_), newspapers, etc. so + greatly influence legislation; that is, the educator is + influenced by the pupil! (System, 409 ff.) The usual + calculation of the cost for home undertakers (_Unternehmer_) + can always only strike the average, and hence it is too high + for some and too low for others. (_Rau_, Lehrbuch, II, § + 214.) It frequently occurs that large manufacturers already + existing desire a low protective tariff to facilitate their + competition with foreign countries, possible even without + such tariff, but not high enough to encourage others to + compete with them at home.] + + +SECTION VIII. + +INDUSTRIAL-PROTECTIVE POLICY IN PARTICULAR. + +If it be once established generally that an industry is to be +artificially promoted, and if there be question only of a choice between +the different measures to be adopted to thus promote it, +moderate[A3-8-1] import duties are not only the most equable, least +subject to abuse, but also attended by the greatest number of secondary +advantages. Here the sacrifice is imposed on all the consumers of the +"protected" commodity, that is, on the entire people, to the extent that +they come in contact with the commodity in question. Export duties on +raw materials, on the other hand, compel one single class of the people +to make sacrifices in order to advance the favored industry.[A3-8-2] +Export premiums for commodities on which labor has been expended are +distinguished from import duties as the offensive from the defensive: +the former promote the artificial trade, the trade which has gone beyond +its natural basis, the latter curtail it. + +Premiums, advances without interest, gifts of machinery etc., to persons +engaged in industry would operate very usefully under an omniscient +government.[A3-8-3] But they generally fall to the lot not of the most +skillful manufacturers, but of the most acceptable supplicants, who now +are doubly dangerous to the former as competitors.[A3-8-4] The same is +true to a still greater extent of monopolies granted to undertakings +which it is intended to promote.[A3-8-5] They require, at least, to be +vigilantly superintended in case of sale from one person to another; +otherwise the individual to whom they were first granted is very apt to +withdraw with the capitalized value of the privilege accorded, and his +successors, loaded with a heavy debt in the nature of a mortgage, to +derive no advantage from it.[A3-8-6] + +Further, import duties, besides the fiscal advantage which they afford, +have the police advantage that they may, like quarantine provisions, +prevent somewhat the inroads of many economic diseases: thus, for +instance, gluts of the market, and still more, the severe chronic +disease of ruinously low wages.[A3-8-7] But only very moderate hopes +from protective duties should be entertained in all such respects as +these.[A3-8-8] + +Prohibition proper operates, as a rule, very disastrously.[A3-8-9] It +spoils those engaged in industry by a feeling of too great security +(mortals' chiefest enemy: Shakespeare). It may even lead to complete +monopoly, when the industry requires very large means and the country is +small. The inducement to smuggling is peculiarly great here. But even +duties, so high that they far exceed the insurance premium of smuggling, +can be of very little advantage either to industry or to the exchequer. +They can only promote the smuggling trade. However, the repeal of an +import prohibition or the abolition of a tariff approaching to a +prohibition should be announced long enough in advance to enable the +capital invested in the protected industry to be withdrawn without too +heavy a loss. + + [Footnote A3-8-1: In general, _Mäser_ was in favor of + _Colbert_, and opposed to _Mirabeau_. (P. Ph. II, 26.) He + ridicules the prohibitions of the exportation of raw + material by saying that not only flax-seed, flax-yarn, but + also the linen, must remain in the country. As Raphael Mengs + once ennobled four ells of linen to a value of 10,000 + ducats, a hundred Mengs should be sent for, to the end that + all the linen should be exported painted. (v. 25.)] + + [Footnote A3-8-2: _Rau_, Lehrbuch, II, § 214, would prefer + to tolerate state premiums (politically so dangerous), + rather than protective duties, because, in the case of the + former, the magnitude of the assumed sacrifice may be + exactly estimated in advance. Similarly, _Bastiat_, + Sophismes, ch. 5.] + + [Footnote A3-8-3: Many striking examples in _List's_ + Zollvereinsblatt, 1843, No. 47.] + + [Footnote A3-8-4: Under _Colbert_, the granting of a + monopoly had frequently no effect but to ruin an already + existing rural industry in the interest of a city + manufactory. Thus, in the case of lace, in Bourges and + Alençon, and soap in the south, etc. The upshot of the + matter in some places was simply that the carriers on of + industry on a small scale were allowed to carry on their + industries in consideration of a payment made to the owners + of the privilege. (Journ. des Econ., 1857, II, 290.) The + King of Denmark bought back, in 1756, at a high price, + industrial privileges which his predecessors had granted + gratis. (_Justi_, Polizeiwissensch., § 444.) The Colbert + monopoly of the Hollander v. Robais (1665), who was the + first to manufacture fine cloths in France, was not + abolished until 1767. (Encycl. Mech. Arts et Manuf., II, + 345.)] + + [Footnote A3-8-5: Thus, for instance, in 1863, the + apothecary shops of the governmental district of Breslau had + a value of 2,791,227 thalers, of which the land and + inventories of stock were only 29 per cent. The concessions + represented 71 per cent. The sick, in the entire state of + Prussia, were obliged to contribute 1,780,000 thalers a year + to compensate these monopolists. Compare _Brefeld_, Die + Apotheken, Schutz oder Freiheit? (1863).] + + [Footnote A3-8-6: _Hermann_, in his review of Dönniges' + System des freien Handels und der Schützzölle (Münch. G. A. + Sept. und Octbr., 1847) calls attention to the point that a + decrease of the cost of production, by merely lowering + wages, is no gain to the national resources, but only an + altered distribution of them, for the most part a very + unfavorable one. But when a nation is advancing on this + road, it may strengthen its exportation by such means, as it + might granting export premiums at the expense of the + workmen. This would lead, on the supposition of entire + freedom of trade, to a corresponding depression of the lower + classes in other countries; and against such contagion a + protective tariff may operate in a manner similar to the + quarantine. This is much exaggerated by _Colton_, Public + Economy of the United States (1849), p. 65, 178. America + needs a protective tariff more than any other nation, + because of its dear workmen and capital. In Europe, the + upper classes rob labor of its product, while in America, + labor itself enjoys its products. Free trade would lower + America to the level of Europe.] + + [Footnote A3-8-7: Severe crisis in the woolen industries of + America in 1874 ff., spite of an enormously high protective + tariff. The financial utility of a protective tariff can be + scarcely great, because the intention of the tariff to + permit as little as possible to be imported, and of the tax + to levy as much as possible, are irreconcilable.] + + [Footnote A3-8-8: Frederick II., in 1766, forbade the + importation of 490 different commodities which, up to that + time, had only paid high duties. (_Mirabeau_, Monarchie, + Pr., II, 168.) In 1835, France still had 58 import and 25 + export prohibitions. + + They might, by way of exception, become necessary, in case a + foreign state should desire to make our protective duties + illusory by export premiums. But the exportation of Prussian + cotton stuffs, for instance, has increased, with a moderate + tariff, much more than the Austrian, with full prohibition. + The English silk manufactures were, so long as the + prohibition continued, inferior to the French, even in + respect to the machinery system. (_McCulloch_, Statist., I, + 681.)] + + [Footnote A3-8-9: In the case of circulating capital this is + generally done rapidly. The machines would have worn out, + and care is taken not to renew them. Buildings also can, for + the most part, serve other purposes. The most difficult + thing of all is for the masses of men, gathered together at + the principal seats of industry, artificially created, to + distribute themselves. Between the two rules: "No leap, but + gradual transition," and "cut the dog's tail off at once, + not piecemeal," the right mean is struck in the abolition of + a prohibitive protection, when, what it is intended to do, + is announced long in advance without maintaining vain hopes, + and a long space of time is left to enable people to make + their arrangements accordingly. This plan was followed in a + model manner in reference to the English silk prohibition, + under Huskisson. It was announced as early as 1824 that + protective duties of 30 per cent. would on the 5th of July, + 1826, take the place of the prohibition. The duty on raw + silk was immediately reduced from 4 sh. to 3d. per pound, + and after a time, even to 1d., which so increased the demand + that the number of spindles rapidly increased from 780,000 + to 1,180,000. During the 10 years from 1824, the importation + of raw and twisted silk amounted to about 1,941,000 pounds, + and in the 10 years after, to 4,164,000 pounds. The English + exports of silk wares had before 1824 a value of £350,000 to + £380,000; in 1830, of over £521,000; in 1854, of almost + £1,700,000; in 1863, of £3,147,000. Compare _Porter_, + Progress, I, 255 ff. On the other hand, Austria was + over-hasty when it went over from the prohibition of foreign + silk stuffs to duties of 180 florins per cwt. (Oest. + Weltausstellungsbericht von 1867, IV, 140.)] + + +SECTION IX. + +WHAT INDUSTRIES ONLY SHOULD BE FAVORED. + +That as a rule only such industries should be favored which, by reason +of the natural capacities of the country and of the people, have a good +prospect of being able soon to dispense with the favors accorded, would +be self-evident were it not for the fact that it has been ignored a +thousand times in practice.[A3-9-1] It is especially necessary to take +the natural station (_Standort_)[A3-9-2] as well as the natural +succession of the different branches of industry into consideration. +Half manufactured articles of foreign raw material should not be +protected until the entire manufactured article has completely outgrown +protection; which condition manifests itself most clearly by a strong, +independent exportation of the article.[A3-9-3] The celebrated tariff +controversy between the cotton spinners and the weavers in the +Zollverein was probably without any conscious plan, but certainly to the +well-being of German industry, settled essentially in accordance with +these principles. In such struggles of the different stages of a branch +of production with one another, it is necessary not only mechanically to +weigh the number of workmen, the amount of capital, etc., on both sides, +but also organically the capacity for development and the influence of +both sides on the entire national life.[A3-9-4] Half-manufactured +articles of a very superior quality should not be kept away, since by +promoting commodities of the first quality they have an educational +influence on the whole industry. Thus, in the case of the duties on +iron, it should not be forgotten, that they enhance the price of all +instruments of industry.[A3-9-5] Just as objectionable are protective +duties for machines or for intellectual elements of training.[A3-9-6] + + [Footnote A3-9-1: _Torrens_ calls an industry which can, in + the long run, bear no competition: "A parasitical formation, + wanting the vital energies while permitted to remain, and + yet requiring for its removal a painful operation." (Budget, + p. 49.) Especially frequent in the case of + luxury--industries in which the court was interested. The + oysters which were sent for to Venice under Leopold I., in + order to stock the artificial beds in the garden of the + president of the Exchequer reached Vienna, dead. (_Mailath_, + Gesch., IV, 384.) As to how Elizabeth, and Catharine II. in + Russia, desired to compel the cultivation of silk, and + caused the peasantry to be levied like recruits for that + purpose; as to how the latter petitioned against it in a + thousand ways, and endeavored to destroy the silk worms, + mulberry trees, etc., see _Pallas_, Reise durch das südliche + Russland, I, 154 ff. Frederick II.'s silk-protection is + characterized mainly by the order for church-inspectors to + keep tables (_Tabellen_) concerning it, and to look after + clergymen's and teachers' knowledge of the cultivation of + silk. Tragico-comic endeavors of the Shah Nasreddin to + establish manufactories in Persia: _Pollak_, Persien, II, + 138 ff. One of the principal effects of the Mexican + protective system, since 1827, was the establishing of + manufactories on the coast only to cover up smuggling. + (_Wappäus_, Mexiko, 83 ff.)] + + [Footnote A3-9-2: When Holland stunted its bleach-yards by + high duties on linen, an industry in which it must always + remain behind many other nations, was favored at the expense + of another for which it possesses incomparable advantages.] + + [Footnote A3-9-3: Even before _Colbert's_ time, French + jewelry was prepared from Italian gold wire, and exported in + great quantities. The mere rumor that it was contemplated to + impose heavy duties on gold wire, provoked plans for the + removal of the industry from Geneva to Avignon. + (_Farbonnais_, F. de Fr., I, 275.) When France protects its + raw silk, it makes the purchase of raw material in Italy + cheaper to all its competitors.] + + [Footnote A3-9-4: According to _L. Kühne_ (Preuss. + Staatszeitung, 17 Decbr., 1842), the cotton yarn consumption + of Germany amounted to 561,000 cwt. per annum, of which the + home spin-houses yielded 194,000 cwt. Weaving employed + 311,500 workmen with 32,250,000 thalers wages, spinning only + 16,300 workmen with a little over 1,000,000 thalers wages. + Even if the entire yarn-want (_Garnbedarf_) were spun in the + interior, yet spinning would stand to weaving only as 1:5 in + the number of workmen, and as 1:8 in the amount of wages. + Hence the tariff of the Zollverein defended by Prussia, + placed the tariff on tissues (_Gewebe_) 25 times as high as + on yarn, while their prices stood to each other as 1:3-4. + _List_ (Zollvereinsblatt, 1844, No. 40 ff.) objected that + only by spinning industries of its own could Germany's + cotton-tissue industries become independent; since it was a + very different thing to procure the material to be worked + from the many mutually competing cotton countries, rather + than from an intermediate hand; and indeed, from the most + powerful industrial country of the world. (Compare, however, + _Faucher's_ Vierteljahrsschrift, 1863, Bd. I.) Besides, + there is the great importance of the spinning industries, in + order to come into immediate connection with America, the + most rapidly growing market, to influence Holland, and also + to advance navigation and the manufacture of machinery. In + opposition to _Kühne's_ calculation, _List_ says: A man who + lost eyes, ears, fingers and toes, would undergo only a + small loss of weight.] + + [Footnote A3-9-5: Special calculations on this matter in + _Junghanns_, Fortschritt des Zollvereins (1849), I, 179.] + + [Footnote A3-9-6: Frederick II. threatened the prosecution + of one's studies at a foreign university with a lifelong + exclusion from all civil and ecclesiastical offices; and, in + the case of the nobility, even with the confiscation of + their property. (_Mylius_, C. C. M. _Contin_, IV, 191, + Noviem C. C., I, 97.)] + + + + +INDEX TO NAMES OF AUTHORS + +CITED IN THE PRINCIPLES. + +[The references are to the sections.] + + +A. + +Académie française, 42. + +Agricola, 116, 120. + +Ahrens, 16, 77. + +Algarotti, 49. + +Anacharsis, 116. + +Anaxagoras, 38. + +Anderson, A. (Origin of Commerce), 188. + +Anderson, J. (Nature of Corn Laws), 152, 154. + +Anonymous, authors of: + + ---- Britannia languens, 123, 196. + ---- Discourse of Trade, Coyn and Paper-Credit, 48, 50, 90, 108, 123. + ---- England's great Happiness, 196. + ---- Interest of Money mistaken, 188. + ---- Paying old Debts without new Taxes, 49. + ---- Virginia's Verger, 9. + ---- (W. S.) Compendious or brief Examination of certain ordinary + Complaints, 137. + +Antisthenes, 225. + +Antoninus, 191. + +Arbuthnot, 135. + +Aretin, v., II, 118. + +Aristippos, 225. + +Aristophanes, 79, 202. + +Aristotle, 1, 2, 5, 9, 14, 36, 38, 43, 49, 57, 63, 69, 70, 75, 79, 81, +100, 107, 116, 117, 190, 205, 250, 251, 253. + +Arnd, 20. + +Arnold, 184. + +Asgill, 49. + +Augustinis, de, 51. + +Auxiron, 154. + + +B. + +Babbage, 57, 58, 106. + +Baboeuf, 79, 81. + +Bacon, 13, 21, 24, 50, 55, 98, 108, 114, 191, 204, 254. + +Bandini, 123, 188. + +Banfield, 115, 157, 205, 263. + +Bastiat, 2, 5, 9, 31, 35, 42, 54, 58, 81, 82, 84, 87, 97, 116, 117, 152, +167, 185, 210, 238, 242, 243. + +Baudrillart, 21, 242. + +Baumstark, 20, 154. + +Bazard, 11, 53, 67, 84, 86, 90, 97, 205, 207. + +Beaumont, de, 250. + +Beccaria, 19, 49, 57, 79, 125, 126, 140, 256, 263. + +Becher, J. J., 98, 114, 214, 254. + +Beckmann, J., 225. + +Bentham, J., 12, 71, 193, 232, 250, 256. + +Berg, v., 76. + +Berkeley, 9, 47, 57, 95, 116, 123, 212, 214, 231, 254, 255. + +Bernhardi, v., 147, 154. + +Bernhardinus, 191. + +Bernoulli, 3, 246, 248. + +Besold, 137, 191. + +Bible, 11, 16, 36, 41, 63, 69, 81, 84, 190, 202, 204, 218, 225, 239, +245, 255, 264. + +Biel, 22, 116, 120. + +Blackstone, 42, 86 87, 199. + +Blanc, L., 81, 82, 98, 167, 178. + +Blanqui, 169. + +Böckh, 135, 137. + +Boden, 183. + +Bodin, J., 37, 137, 254. + +Bodz-Reymond, 97. + +Boisguillebert, 1, 9, 12, 49, 96, 97, 100, 111, 117, 123, 154, 214, 215. + +Booth, 243. + +Bornitz, 3, 114. + +Bossuet, 77, 191. + +Botero, G., 9, 210, 241, 242, 245. + +Boussingault, 32, 34. + +Boxhorn, 39, 94. + +Brentano, 166, 175, 176, 177. + +Bridge, 238. + +Brissot, 77. + +Broggia, 9, 116. + +Buat, 16. + +Buchanan, 152, 153, 154, 164. + +Buckle, 209, 263. + +Bülau, 17, 97. + +Buonarotti, 79. + +Buquoy, Count, 22, 34, 129, 147. + +Burke, 11, 220; II, 5, 106, 140, 155. + +Büsch, 2, 9, 42, 95, 96, 117, 123, 126, 170, 183, 263. + + +C. + +Cabanis, 37. + +Cabet, 79, 82, 250. + +Cæsar, Jul., 16. + +Calvin, 49, 79, 114, 191. + +Campanella, 79. + +Canard, 22, 42, 47, 95, 101, 106, 123, 152, 188, 195, 215. + +Cancrin, Count, 64, 98. + +Cantillon, 47, 49, 90, 98, 106, 123, 126, 128, 137, 144, 154, 161, 167, +185, 193. + +Carey, 5, 42, 148, 154, 155, 157, 166, 172, 199, 214, 243, 253, 263. + +Carli, 137. + +Casper, 246. + +Cato, Cens., 43, 190, 222. + +Cazaux, 22, 127, 145. + +Celtes, 41. + +Cervantes, 55. + +Chadwick, 218, 248. + +Chalmers, Th., 216, 217, 242. + +Cherbuliez, 202. + +Chevalier, M., 11, 40, 66, 70, 89, 97, 116, 120, 121, 124, 128, 129, +136, 137, 139, 142, 143, 173, 199, 216, 217, 220. + +Child, Sir J., 42, 97, 98, 114, 123, 154, 157, 188, 192, 193, 197, 199, +241, 242, 254. + +Chrysippos, 250. + +Cibrario, 17, 137. + +Cicero, 9, 46, 49, 75, 100. + +Cieszkowsky, 89. + +Clemens, Rom., 81. + +Cleonard, 54. + +Cliquot de Blervache, 108. + +Cobden, R., 98. + +Coke, R., 196. + +Colbert, 232, 255. + +Colton, 12, 25, 42, 116, 201. + +Columella, 40, 59, 71. + +Comte, Ch., 37, 71. + +Condillac, 21, 49, 107, 129. + +Condorcet, 263. + +Considérant, 51, 88, 183. + +Constant, B., 168. + +Contzen, Ad., 49, 226. + +Cooper, Th., 12. + +Corpus Juris civilis, 69, 83, 117, 201. + +Corpus Juris canonici, 41. + +Corvaja, 82. + +Cournot, 22. + +Court, P. de la, 94, 97, 98, 108, 114, 185, 254. + +Culpeper, Sir Th., 154, 188, 192, 199. + + +D. + +Dankwardt, 16, 56. + +Dante, 191, 250. + +Darjes, 19, 76, 96, 106, 192, 254. + +Darwin, 242. + +Davanzati, 116, 123. + +Davenant, 9, 10, 21, 97, 103, 116, 124, 157, 242, 254. + +Decker, Sir M., 10, 41. + +Defoe, D., 222. + +Demosthenes, 21, 42, 43, 89, 231. + +Diderot, 57. + +Dietzel, C., 42, 90. + +Diogenes, 225. + +Dithmar, 19. + +Dohm, 49, 263. + +Doubleday, 242. + +Drobisch, 13, 129. + +Droz, 46, 92, 214. + +Dufau, 18. + +Dumont, 225. + +Dunoyer, 16, 17, 21, 26, 38, 42, 50, 54, 111, 145, 178, 203, 216, 242. + +Dupont de Nemours, 5, 97, 108, 147. + +Duport, St. Clair, 139. + +Dutot, 96, 100, 116, 212. + + +E. + +Eden, Sir F. M., 57, 140, 213. + +Edinburgh Review, 116, 154, 176, 242. + +Eiselen, 51, 95, 195. + +Enfantin, 250. + +Engel, 161, 162, 214, 240, 243, 246, 248. + +Epicharmos, 47. + +Erasmus, 41, 79, 191. + +Euler, 238. + +Euripides, 37, 226. + +Everett, 243. + + +F. + +Fallati, 18, 21. + +Faucher, J., 1. + +Faucher, L., 178, 215. + +Faust, M., 137. + +Faxardo, Saavedra, 9, 254. + +Fénélon, 225. + +Ferguson, 11, 16, 21, 44, 50, 63, 115, 210, 217, 224, 225, 226, 255. + +Fichte, J. G., 12, 82, 97, 123, 129, 204, 250. + +Filangieri, 225, 254. + +Fix, 4. + +Fleetwood, 143. + +Forbonnais, 68, 97, 116, 123, 173, 190, 200, 214, 254, 255. + +Forster, 79. + +Fortrey, Sam, 196. + +Fourier, Ch., 51, 66, 81, 85, 97, 183, 207, 250. + +Fox, 77. + +Franklin, B., 12, 33, 41, 42, 49, 71, 89, 97, 98, 107, 116, 128, 173, +178, 203, 218, 219, 225, 232, 241, 242, 255. + +Frégier, 223. + +Friedländer, 4. + +Friedrich II. (Emperor), 49, 83. + +Friedrich, M., 16, 114, 244, 254. + +Fullarton, 123, 125. + +Fuoco, 11, 22, 121, 146, 154, 202. + + +G. + +Galiani, 8, 9, 42, 47, 98, 100, 104, 116, 120, 126, 128, 129, 140, 142, +167, 187, 197. + +Gallatin, 136. + +Ganilh, 12, 42, 51, 52, 55, 116, 123, 147, 180, 188, 196, 214, 216. + +Garcilasso, de la Vega, 9. + +Garnier, 16, 50, 137. + +Garve, 30, 50, 52, 99, 115, 173, 231. + +Gasparin, 161. + +Gavard, 17. + +Gee, 116. + +Geiler v. Kaisersberg, 39. + +Genovesi, 4, 16, 64, 97, 102, 123. + +Gerstner, 253. + +Gessler, 261. + +Gibbon, 234. + +Gioja, 2, 30, 42, 47, 51, 64, 191. + +Gobbi, 32. + +Godwin, 243, 250, 254. + +Goethe, 11, 25, 36. + +Goldsmith, 254. + +Gournay, 49, 108. + +Graham, 243. + +Graswinckel, 87. + +Gratian, 47. + +Graumann, 125. + +Graunt, 245. + +Gray, 243. + +Gregorius Tolosan, 48, 55. + +Grotius, H., 77, 87, 187, 191. + +Guérard, 143. + +Günther, 194. + + +H. + +Hackluyt, 9. + +Haller, K. L. v., 14, 256. + +Hamann, 117. + +Hamilton, 90, 152. + +Hanssen, 40, 126, 139, 140, 144. + +Harless, 81. + +Harrington, J., 98, 205, 253. + +Harris, 47, 57, 128, 180. + +Hegel, 3. + +Held, 146. + +Helferich, 86, 137. + +Helvétius, 11, 38, 231. + +Herakleides, 225. + +Herbart, 16, 22. + +Herbert, 101, 142. + +Herber, J. G. v., 265. + +Hermann, F. B. W., 1, 2, 3, 11, 17, 42, 43, 44, 45, 50, 51, 101, 103, +106, 108, 110, 113, 115, 118, 129, 137, 142, 144, 145, 146, 147, 150, +152, 153, 154, 166, 172, 180, 181, 183, 186, 196, 196a, 199, 204, 208, +211, 212, 216, 219, 231, 246, 259. + +Herodotus, 37. + +Herrmann, E., 101, 207. + +Heuschling, 154. + +Hildebrand, B., 5, 13, 18, 79, 90, 146, 205. + +Hippokrates, 37. + +Hobbes, 42, 47, 50, 77, 107, 116, 118. + +Hoffmann, J. G., 97, 117, 119, 159, 205, 246, 249. + +Homer, 71, 250. + +Hood, 168. + +Hopkins, 159. + +Horn, 245, 247, 248, 254. + +Horneck, v. 19, 114, 116, 254. + +Howlett, 39. + +Hufeland, 2, 5, 12, 13, 46, 51, 59, 66, 87, 106, 107, 111, 118, 152, +195, 221. + +Hugo, G., 24, 69, 81. + +Humboldt, A. v., 32, 36, 61, 98, 106, 136, 139, 214. + +Hume, D., 11, 36, 42, 47, 50, 71, 96, 98, 116, 117, 121, 123, 125, 126, +137, 154, 185, 200, 214, 225, 242, 263, 264. + +Hutcheson, 5, 11. + +Hutton, U. v., 225. + + +I. + +Iambulos, 79. + +Isokrates, 57, 231. + +Ivernois, Sir F. d', 239, 246. + + +J. + +Jacob, W., 120, 135, 137. + +Jakob, H. L. v., 16, 49, 71, 106, 107, 127, 128, 147, 153, 195, 217, +219. + +Jarke, 202. + +Jevons, 22, 129. + +Johnson, S., 93. + +Jones, R., 148, 154. + +Jselin, 67. + +Jung, 76, 156; II, 53, 101, 173. + +Justi, v., 9, 17, 116, 199, 237, 254. + + +K. + +Kant, 11, 87. + +Kauffmann, 3, 9, 126. + +Kautz, 29. + +Kees, v. 194. + +King, Ch., 48. + +King, G., 103. + +King, Lord, 124. + +Knapp, 246. + +Knies, 4, 5, 6, 7, 11, 18, 28, 42, 89, 95, 107, 116, 117, 139, 169, 189, +213, 265. + +Kosegarten, 117, 202. + +Kraus, 17, 128, 137, 197, 265. + +Krause, 170. + +Kröncke, 22, 147. + +Krug, L., 192, 254. + +Kudler, 49, 128. + + +L. + +Lafitte, 202. + +Lang, 22. + +Laspeyres, 129. + +Lassalle, 45, 84, 163, 196a. + +Lau, 245. + +Lauderdale, Lord, 8, 9, 50, 51, 99, 103, 104, 106, 117, 128, 132, 147, +200, 214, 217, 221, 231, 263. + +Lavergne, L. de, 139. + +Law, 42, 96, 101, 107, 115, 116, 117, 121, 123, 127, 254. + +Legoyt, 245. + +Leib, 48, 237b. + +Leibnitz, 13, 114, 140, 254. + +Leopoldt, II, 87, 145. + +Leplay, 65. + +Letronne, 137, 214. + +Libanios, 174. + +Liebig, J. v., 162. + +Linguet, 69, 174. + +List, Fr., 45, 46, 50, 64, 98, 154, 260. + +Liverpool, Lord, 118, 120, 142. + +Livy, 231. + +Locke, J., 5, 42, 47, 77, 100, 107, 116, 123, 129, 152, 154, 158, 188, +191, 193, 194, 199, 254. + +Lotz, 5, 17, 20, 49, 50, 98, 99, 100, 115, 123, 128, 144, 166, 169, 195, +202. + +Louis XIV., 221. + +Lowe, 129, 219. + +Lueder, 37, 50, 117. + +Luther, M., 41, 49, 57, 114, 128, 191, 254. + + +M. + +Mably, 79, 81. + +Macculloch, 21, 40, 42, 43, 47, 50, 93, 107, 112, 113, 151, 164, 166, +173, 188, 197, 212, 253, 264. + +Machiavelli, 21, 191, 238, 242, 244. + +Macleod, 89, 90, 107, 115, 123, 154. + +Macpherson, 143. + +Malthus, 3, 9, 33, 42, 43, 50, 55, 79, 80, 98, 100, 107, 111, 112, 128, +129, 147, 152, 153, 157, 159, 163, 164, 166, 183, 185, 188, 205, 214, +216, 217, 239, 241, 242, 243, 244, 247, 258, 263. + +Malthusians, 217, 254. + +Mandeville, 11, 57, 225. + +Mangoldt, v., 6, 16, 22, 30, 43, 51, 53, 59, 63, 71, 106, 129, 146, 149, +153, 157, 167, 177, 181, 195, 205, 220. + +Mariana, 100, 114, 231. + +Marlo, K., 71, 79, 178, 207, 242, 250, 251, 258. + +Martineau, H., 176. + +Marx, K., 22, 42, 47, 107, 189. + +Masius, 237. + +Massie, 42. + +Melanchthon, 79, 100, 191. + +Mélon, 42, 90, 91, 97, 123, 225, 254. + +Menander, 174. + +Mendelsohn, 77. + +Menger, 2, 5, 101, 112. + +Mengotti, 50. + +Mercier de la Rivière, 22. + +Mercantilists, 9, 47, 48, 96, 97, 116, 121, 126, 225, 236, 254; new, +116. + +Merivale, 172. + +Meyer, G., 246. + +Michaelis, 135. + +Mill, J., 47, 126, 216. + +Mill, J. S., 5, 20, 22, 34, 38, 40, 42, 46, 51, 74, 79, 88, 90, 97, 106, +107, 111, 113, 121, 126, 150, 152, 153, 157, 163, 164, 166, 170, 172, +176, 177, 178, 180, 183, 186, 188, 192, 195, 197, 213, 216, 221, 243, +250, 259, 262, 264. + +Minard, 223. + +Mirabeau, Marq. de, 95, 97, 98, 117, 144, 147, 191, 210, 214, 254, 263. + +Mirabeau, Son, 256. + +Mischler, 1. + +Mittermaier, 94. + +Mohl, R., 242, 253, 258, 259, 262. + +Moleschott, 162. + +Moncada, 137. + +Montaigne, M., 98, 236. + +Montanari, 100, 116, 123, 125, 127, 188, 220. + +Montchrêtien de Vatteville, 9, 16, 48, 57. + +Montecuccoli, 16. + +Montesquieu, 37, 77, 89, 95, 116, 118, 123, 185, 192, 199, 205, 220, +221, 237, 238, 240, 248. + +Moreau de Jonnès, 18. + +Morelly, 79. + +Morhof, 19. + +Moritz (Marschall von Sachsen), 255. + +Morrison, 176, 178. + +Mortimer, Th., 173, 175; II, 53. + +Morus, Th., 79, 98, 117, 147, 166. + +Möser, J., 42, 63, 69, 91, 117, 161, 169, 173, 191, 200, 226, 242, 248, +254, 256. + +Müller, Ad., 3, 5, 11, 12, 22, 28, 42, 50, 55, 64, 116, 117, 120, 202. + +Mun, Th., 48, 116. + +Muret, 239. + +Murhard, K., 52. + + +N. + +Nau, 19. + +Nebenius, 89, 120, 137, 150, 182, 184, 186, 187, 195, 199, 219. + +Necker, 103, 163, 204, 254. + +Neri, P., 100, 118, 120. + +Neumann, F. J., 6, 16, 100, 246. + +Newmarch, 137. + +Niebuhr, B. G., 92. + +North, Sir D., 9, 12, 47, 48, 97, 98, 114, 116, 121, 123, 152, 154, 179, +191. + + +O. + +Obrecht, 237a; + +II, 164. + +Oppenheim, 116. + +Oresmius, 116, 120. + +Ortes, 16, 34, 38, 117, 194, 217, 242. + +Owen, R., 66, 128. + + +P. + +Pagnini, 100, 137. + +Paley, 50, 254. + +Palmieri, 9. + +Paoletti, 173. + +Paris, Comte de, 176. + +Patricius, 48, 246, 254. + +Paucton, 143. + +Paullus, Jul., 116. + +Perikles, 231. + +Périn, 11, 254. + +Petty, Sir W., 16, 47, 48, 57, 107, 116, 123, 127, 129, 154, 164, 193, +214, 254. + +Philemon, 69. + +Physiocrates, 5, 8, 47, 49, 97, 101, 106, 128, 147, 154, 159, 214, 221, +225, 254. + +(Pinto), 90, 98, 123, 221, 225. + +Pitt, 254. + +Plato, 9, 12, 21, 23, 42, 57, 61, 62, 79, 116, 190, 211, 250, 251. + +---- Eryxias, 116. + +Plinius (Major), 71, 79, 117, 120, 225, 231. + +Plotinos, 79. + +Plutarch, 73. + +Pölitz, 17; II, 194. + +Pollexfen, 9. + +Porter, 129, 205. + +Postlethwayt, 173. + +Price, 238. + +Prittwitz, v., 17, 51, 214, 263. + +Proudhon, 5, 66, 70, 77, 81, 82, 85, 97, 185. + +Puchta, G. F., 11, 14. + +Purves, 253. + + +Q. + +Quesnay, 42, 44, 47, 49, 98, 101, 116, 121, 123, 125, 137, 147, 154, +214, 221, 254. + +Quételet, 18, 248. + + +R. + +Rae, 45, 59. + +Raleigh, Sir W., 140, 241, 252, 254. + +Rau, K. H., 3, 5, 6, 9, 20, 22, 33, 38, 42, 43, 49, 50, 58, 64, 101, +106, 109, 110, 111, 112, 116, 118, 120, 129, 131, 137, 143, 144, 145, +146, 147, 153, 156, 161, 166, 168, 179, 181, 194, 195, 208, 212, 216, +225, 253. + +Raumer, F. v., 49. + +Raynal, 49, 62, 214. + +Read, 195. + +Reformers, 47. + +Reitemeyer, 135. + +Reybaud, 78, 79. + +Ricardo, 1, 5, 22, 43, 44, 66, 90, 106, 107, 109, 111, 126, 129, 147, +148, 150, 151, 152, 153, 154, 157, 164, 173, 175, 183, 184, 185, 186, +188, 195, 197, 201, 202, 212, 216, 263. + +Ricardo's School, 47, 128, 157, 183, 197, 200. + +Richelieu, 16. + +Riedel, 16, 31, 65, 106, 118, 179, 195; II, 139, 187. + +Riehl, 41, 56, 169, 230. + +Ritter, K., 37. + +Rivet, 258. + +Rodbertus, 97, 135, 154, 201. + +Roesler, 90, 157, 173, 193, 195, 207. + +Rossi, 9, 42, 46, 243, 248. + +Rössig, 19. + +Rousseau, J. J., 16, 57, 62, 79, 169, 202, 205, 229, 254. + +Rümelin, 18. + + +S. + +Sadler, Th., 239, 242, 243, 245. + +St. Chamans, 8, 90, 116, 123, 144, 214. + +St. Just, 79. + +St. Simon, 54, 70, 80, 84, 86, 90. + +St. Simonists, 54, 70, 80, 84, 86, 90. + +Sallustius, 14, 21. + +Salmasius, 89, 97, 114, 116, 191, 193. + +Sartorius, 29, 128. + +Say, J. B., 1, 12, 16, 20, 22, 42, 43, 47, 50, 51, 53, 55, 58, 71, 87, +90, 98, 104, 106, 108, 115, 129, 137, 144, 145, 147, 151, 154, 169, 183, +195, 199, 200, 212, 216, 218, 223, 231, 243, 256, 263. + +Say, L., 4, 9. + +Scaruffii, 134. + +Schäffle, 1, 2, 3, 4, 12, 30, 42, 43, 44, 47, 79, 89, 102, 110, 114, +117, 129, 152, 159, 176, 196a, 207, 208, 218, 246, 250, 251, 258. + +Schiller, Fr., 30, 169, 204. + +Schleiermacher, 16, 55, 63. + +Schlettwein, 128, 145. + +Schlazer, U. L. v., 18, 144. + +Schlözer, Chr. v., 42, 116, 117, 128, 168, 185, 254. + +Schmalz, 17, 19, 152, 195. + +Schmitthenner, 42, 44, 50, 54, 95, 99, 108, 116, 117, 121, 224, 253. + +Schmoller, 42, 147. + +Schön, J., 11, 50, 97, 195. + +Schröder, v., 9, 19, 42, 53, 54, 90, 116, 199, 210, 221. + +Schulze, F. G., 20, 69, 96. + +Schüz, 11. + +Scialoja, 13, 17, 38, 41, 51. + +Seckendorff, B. L. v., 19, 114, 116, 237, 254. + +Seneca, L., 51, 69, 79, 100, 190, 214. + +Seneca, M., 251. + +Senior, 2, 22, 33, 34, 40, 46, 58, 102, 110, 112, 115, 121, 126, 129, +130, 142, 143, 148, 152, 155, 161, 165, 166, 167, 169, 173, 180, 181, +183, 185, 187, 189, 195, 200, 212, 242. + +Serra, 33, 48, 181. + +Shakespeare, 191. + +Shuckburgh, 132, 137. + +Sismondi, 12, 22, 44, 50, 54, 55, 93, 97, 98, 106, 109, 117, 123, 128, +144, 145, 147, 153, 154, 168, 174, 195, 201, 210, 214, 215, 216, 221, +231, 242. + +Smith, Ad., 1, 2, 5, 11, 12, 20, 39, 40, 42, 44, 47, 48, 49, 52, 55, 57, +58, 59, 66, 71, 81, 91, 97, 98, 104, 106, 107, 111, 112, 113, 116, 117, +119, 120, 121, 123, 125, 128, 129, 130, 131, 134, 135, 137, 144, 147, +148, 153, 154, 157, 161, 163, 164, 166, 167, 168, 171, 172, 174, 176, +179, 183, 185, 186, 192, 193, 195, 197, 202, 213, 214, 218, 221, 226, +236, 238, 242. + +Smith, Th., 116, 137. + +Socialists, 6, 9, 12, 22, 53, 62, 66, 81, 82, 85, 88, 97, 117, 147, 148, +202, 205, 214, 242, 254, 265. + +Soden, Graf, 16, 51, 92, 129, 194, 212. + +Soetbeer, 138. + +Socrates, 9, 71, 100, 250, 251. + +Solera, 120. + +Solly, 214. + +Sonnenfels, v., 160, 194, 254. + +Spinoza, 88, 254. + +Spittler, 81. + +Stahl, F. J., 24, 78. + +Stein, K. v., 254, 265. + +Stein, L. v., 14, 16, 46, 79, 98, 207. + +Steinlein, 30, 47, 61. + +Steuart, Sir J., 16, 20, 25, 34, 42, 71, 100, 104, 117, 123, 127, 134, +137, 147, 157, 199, 201, 213, 224, 239, 242, 253, 254, 263. + +Stoics, 72. + +Storch, H., 2, 3, 5, 7, 8, 10, 17, 27, 46, 50, 53, 55, 62, 71, 91, 96, +106, 115, 116, 117, 120, 145, 147, 165. + +Strabo, 37, 61. + +Struensee, v., 90, 96, 119, 210. + +Süssmilch, 239, 245, 247, 254, 256. + + +T. + +Tacitus, 41, 238, 250, 251. + +Temple, Sir W., 41, 57, 98, 104, 115, 157, 185, 188, 214, 222, 231, 254. + +Tengoborsky, 40, 139. + +Thaer, 69, 112, 129, 131. + +Thiers, 77. + +Thomas, Aquin, 21, 49, 57, 191. + +Thomasius, Chr., 19, 114. + +Thornton, H., 101, 123, 125, 193. + +Thornton, W., 164, 166, 176, 253. + +Thucydides, Pref., 16, 36, 63, 229. + +Thünen, v., 22, 106, 117, 149, 151, 154, 158, 161, 165, 173, 178, 183, +195. + +Tocqueville, 71. + +Tooke, Th., 100, 103, 104, 107, 108, 109, 112, 113, 123, 128, 137, 139, +157, 179, 188, 193. + +Torrens, 9, 58, 107, 126, 130, 157, 164, 260, 262. + +Townsend, 242. + +Tucker (Progress of the U. S.), 71. + +Tucker, J., 1, 16, 54, 57, 97, 98, 102, 130, 200, 216, 219, 254, 256, +262. + +Turgot, 5, 9, 37, 42, 47, 49, 57, 70, 71, 90, 92, 95, 115, 116, 117, +152, 159, 163, 178, 188, 191, 193, 194, 221, 232. + +Twiss, 121. + + +U. + +Ulloa, 116. + +Umpfenbach, 39, 82, 152, 173. + +Ure, 173, 176. + +Ustariz, 241. + + +V. + +Varro, 71. + +Vasco, 192, 194. + +Vauban, 9, 78, 147, 254. + +Vaughan, R., 107. + +Verri, 8, 9, 16, 42, 49, 55, 97, 98, 100, 101, 116, 123, 159, 205, 214, +232, 254. + +Viaaxnes, 191. + +Villegardelle, 81. + +Virgilius, 117. + +Voltaire, 11, 98, 210, 225, 254, 255. + + +W. + +Wagner, Ad., 13, 90. + +Wakefield, D., 51, 64, 89. + +Wakefield, E. G., 130, 185, 259. + +Walker, A., 151, 152, 176, 195, 202, 206, 242. + +Wallace, 242. + +Wappäus, 246, 248. + +Watts, 176. + +Weinhold, 258. + +Weishaupt, 214. + +Wells, 10. + +West, 154. + +Weyland, 242, 243. + +Whately, 17, 21, 110, 149. + +Wirth, M., 185. + +Wit, J. de, 92, 108. + +Wolf, Chr. v., 175, 256. + +Wolkoff, 35, 42, 43, 161, 186. + +Woodward, 88. + + +X. + +Xenophon, 9, 21, 57, 98, 100, 116. + + +Y. + +Young, A., 32, 40, 42, 110, 137, 143, 242, 254. + + +Z. + +Zachariä, K. S., 29, 37, 83, 87, 97, 128, 214, 229. + +Zeno, 98. + +Zincke, 49. + +Zwinglius, 191. + + + + +DAVID ATWOOD, STEREOTYPER AND PRINTER, MADISON, WIS. + + + +Transcriber's Notes: + +Footnotes were moved to the end of the section to which they pertain. +Because footnote numbers in the original begin at '1' for each section, +the section number has been added before the footnote number, e.g. the +first footnote in section 156 appears as: [156-1]. + +In the Index to Names of Authors, references to sections 1 - 143 pertain +to Volume 1. See https://www.gutenberg.org/ebooks/27698. + +The square root symbol is indicated by 'sqrt' followed by the figure in +parentheses. + +In Footnote 174-8, the year '1700' in column B is as printed in the +original, but may be a typo for '1800.' Column header codes were added to +the tables in Footnotes 247-4 and 253-4 so that the tables would fit the +page in standard view. + +Punctuation, including accents in French and Spanish, was standardized. +Hyphenated words were standardized. For consistency with the remaining +text, an umlaut was added to 'coöperate.' Duplicate words, e.g. 'the the,' +were removed. Obsolete and alternative spellings were retained. + + Other changes: + Section Footnote Alteration + 145 - 'praticable' to 'practicable' + 145 4 - 'higly' to 'highly' + 146 1 - 'innocousness' to 'innocuousness' + 154 7 - 'analagous' to 'analogous' + 156 2 - 'diffcult' to 'difficult' and header added to right + columns of table for clarity + 161 4 - beginning of word, line 12 is missing. + 162 'CXLII' to 'CLXII' + 163 'themslves' to 'themselves' + 164 5 - 'Sclavic' to 'Slavic' + 167 8 - 'Hildebraud' to 'Hildebrand' + 169 8 - '80' to '0.80' francs + 174 2 - 'collossal' to 'colossal' + 175 1 - 'domicil' to 'domicile' + 176 1 - 'Spiers' to 'Spires' ('Speyer' in German) + 177 4 - 'Eninb.' to 'Edinb.' + 177 8 - 'tradesmens'' to 'tradesmen's' + 178 5 - 'anterest' to 'interest' + 183 4 - added '5' to '5/12'; numerator is blank in the original. + 184 3 - 'Haudbuch' to 'Handbuch' + 185 2 - 'Peleponnesian' to 'Peloponnesian' + 186 9 - 'Staatswirthschatliche' to 'Staatswirthschaftliche' + 191 10 - 'Samalsius' to 'Salmasius' + 192 3 - 'analagous' to 'analogous' + 193 - 'exceeedingly' to 'exceedingly' + 194 1 - 'Confedration' to 'Confederation' + 205 6 - 'anuum' to 'annum' + 205 8 - in last paragraph, added decimal to '131.2' + 207 4 - 'capaple' to 'capable' + 207 8 - 'passsionnées' to 'passionnées' + 208 4 - anchor missing in original; placed in likely position. + 212 - 'pnrposes' to 'purposes' + 213 1 - 'Smilh' to 'Smith' + 213 3 - 'analagous' to 'analogous' + 214 - 'civlization' to 'civilization' + 214 8 - 'carricature' to 'caricature' and + 'rêciprocquement' to 'réciproquement' + 217 - 'but' to 'butt' ... butt-ends of the gun ... + 219 2 - 'partment' to 'department' + 220 5 - 'Similarlly' to 'Similarly' + 221 2 - 'Lois' to 'Louis' + 224 - 'itfelf' to 'itself' + 228 13 - 'childrens'' to 'children's' + 230 3 - 'candalabras' to 'candelabras' + 231 1 - 'accounr' to 'account' + 232 - 'palateable' to 'palatable' + 232 5 - anchor missing in original; placed in likely position. + 234 3 - 'as' to 'an' ... as an excuse. + 235 - 'in stead' to 'instead' + 237 2 - 'ærarium' to 'ærarian' + 237a 5 - 'capiital' to 'capital' + 237b 2 - 'chimnies' to 'chimneys' + 237c 2 - 'Silesea' to 'Silesia' + 237d 6 - 'Rheinish' to 'Rhenish' + 238 1 - 'Teleogically' to 'Teleologically' + 238 1 - 'Worterbuche' to 'Wörterbuch' + 239 2 - 'sociétié' to 'société' and 'diviseé' to 'divisée' + 239 3 - 'Enquéte ... occulte' to 'Enquête ... occultes' + 240 - 'uniformily' to 'uniformly' + 242 - 'incontestibly' to 'incontestably' + 242 - 'grevious' to 'grievous' + 242 5 - 'imposees' to 'imposées' + 242 10 - 'Chateanneuf' to 'Châteauneuf' + 242 10 - 'Familes' to 'Familles' + 242 15 - 'Reflessioni ... Populazione' to + 'Riflessioni ... Popolazione' + 243 7 - 'extraordinay' to 'extraordinary' + 244 5 - 'Germanans' to 'Germans' + 244 6 - 'civtilzed' to 'civilized' + 245 5 - added 'of' to phrase '... one of the principal ...' + 245 8 - 'Persannes' to 'Persanes' + 245 12 - 'Prussaia' to 'Prussia' + 246 11 - 'Gessellschaft' to 'Gesellschaft' + 247 7 - 'Pommeranian' to 'Pomeranian' + 248 8 - 'geater' to 'greater' + 249 3 - 'legitamatized' to 'legitimatized' + 249 7 - 'Vicbahn' to 'Viebahn' + 249 10 - 'Chatelet' to 'Châtelet' + 249 14 - 'Mediceinische' to 'Mediceische' + 249 15 - 'Duchatelet' to Du Châtelet' + 250 3 - 'frauzösischen' to 'französischen' + 250 4 - 'Plutatch' to 'Plutarch' + 250 5 - 'Thesmophoriazasuses' to 'Thesmophoriazusae' + 250 7 - 'rennaissance' to 'renaissance' + 250 7 - 'Pausam.' to 'Pausan.' + 250 10 - 'Weltjkonomie' to 'Weltökonomie' + 251 - 'p lyandry' to 'polyandry' + 251 2 - 'transkaukasia' to 'Transkaukasia' + 252 1 - 'Litthuanian' to 'Lithuanian' + 253 - 'earlist' to 'earliest' and 'manifest' to 'manifests' + 253 1 - 'Akadamie' to 'Akademie' + 253 7 - 'Schmithenner' to 'Schmitthenner' + 254 2 - 'Politche' to 'Politiche' + 254 4 - 'Phillippe' to 'Philippe' + 256 8 - 'Freidrichs' to 'Friedrichs' + 256 9 - 'Salsburg' to 'Salzburg' + 256 10 - 'end' to 'und' + 256 12 - 'Spiers' to 'Spires' + 258 17 - 'Un' to 'An'; 'Milleleuropa' to 'Mitteleuropa'; and + 'kultivirten' to 'kultivieren' + 259 5 - 'Sclavic' to 'Slavic' + 262 2 - 'Appollo' to 'Apollo' + 262a 4 - 'Appenines' to 'Apennines' + 262a 6 - 'bivouacing' to 'bivouacking' + 263 1 - 'histoirique' to 'historique' + 264 2 - 'controvery' to 'controversy' + Apx 2 1 - 'ausgebeuteteten' to 'ausgebeuteten' + 2 1 3 - 'univesrsalissima' to 'universalissima' + 2 1 5 - 'commerzio' to 'commercio' + 2 2 12 - 'Mauth' to 'Maut' + 2 4 - 'Realisirung' to 'Realisierung' + 2 4 3 - 'Menreinfuhr' to 'Mehreinfuhr' + 2 5 5 - 'an' to 'au' + 2 6 1 - 'Astarta' to 'Astarte' + 2 6 4 - 'Nymweg' to 'Nijmegen' + 3 4 7 - 'resourcess' to 'resources' + 3 7 1 - 'repressailles' to 'représailles' and + 'Mercantilsystem' to 'Merkantilsystem' + Index 'Obrecht, 238a' to 'Obrecht, 237a' + + + + + +End of the Project Gutenberg EBook of Principles of Political Economy, Vol. +II, by William Roscher + +*** END OF THIS PROJECT GUTENBERG EBOOK PRINCIPLES POLITICAL ECONOMY, VOL II *** + +***** This file should be named 38655-8.txt or 38655-8.zip ***** +This and all associated files of various formats will be found in: + https://www.gutenberg.org/3/8/6/5/38655/ + +Produced by Frank van Drogen, Carol Brown, Gwen Adams, +Elizabeth Oscanyan, and the Online Distributed Proofreading +Team at https://www.pgdp.net. + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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