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diff --git a/old/fxcrl10.txt b/old/fxcrl10.txt new file mode 100644 index 0000000..a70de76 --- /dev/null +++ b/old/fxcrl10.txt @@ -0,0 +1,1424 @@ +The Project Gutenberg Etext of Effects of the Corn Laws, by Thomas Malthus +#2 in our series by Thomas Malthus + +Copyright laws are changing all over the world. Be sure to check the +copyright laws for your country before distributing this or any other +Project Gutenberg file. + +We encourage you to keep this file, exactly as it is, on your +own disk, thereby keeping an electronic path open for future +readers. Please do not remove this. + +This header should be the first thing seen when anyone starts to +view the etext. 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Hart +and may be reprinted only when these Etexts are free of all fees.] +[Project Gutenberg is a TradeMark and may not be used in any sales +of Project Gutenberg Etexts or other materials be they hardware or +software or any other related product without express permission.] + +*END THE SMALL PRINT! FOR PUBLIC DOMAIN ETEXTS*Ver.10/04/01*END* + + + + + + +Edited by Charles Aldarondo Aldarondo@yahoo.com + + + + + + +Observations on the Effects of the Corn Laws, and of a Rise or Fall +in the Price of Corn on the Agriculture and General Wealth of the +Country + +by the Rev. T.R. Malthus, Professor of Political Economy at the +East India College, Hertfordshire. + +London: Printed for J. Johnson and Co., St. Paul's Church-Yard. 1814. + + + + + + +Observations, &c. &c. + + + + + +A revision of the corn laws, it is understood, is immediately to +come under the consideration of the legislature. That the decision +on such a subject, should be founded on a correct and enlightened +view of the whole question, will be allowed to be of the utmost +importance, both with regard to the stability of the measures to be +adopted, and the effects to be expected from them. + +For an attempt to contribute to the stock of information necessary +to form such a decision, no apology can be necessary. It may seem +indeed probable, that but little further light can be thrown on a +subject, which, owing to the system adopted in this country, has +been so frequently the topic of discussion; but, after the best +consideration which I have been able to give it, I own, it appears +to me, that some important considerations have been neglected on +both sides of the question, and that the effects of the corn laws, +and of a rise or fall in the price of corn, on the agriculture and +general wealth of the state, have not yet been fully laid before the +public. + +If this be true, I cannot help attributing it in some degree to the +very peculiar argument brought forward by Dr Smith, in his +discussion of the bounty upon the exportation of corn. Those who are +conversant with the Wealth of nations, will be aware, that its great +author has, on this occasion, left entirely in the background the +broad, grand, and almost unanswerable arguments, which the general +principles of political economy furnish in abundance against all +systems of bounties and restrictions, and has only brought forwards, +in a prominent manner, one which, it is intended, should apply to +corn alone. It is not surprising that so high an authority should +have had the effect of attracting the attention of the advocates of +each side of the question, in an especial manner, to this particular +argument. Those who have maintained the same cause with Dr Smith, +have treated it nearly in the same way; and, though they may have +alluded to the other more general and legitimate arguments against +bounties and restrictions, have almost universally seemed to place +their chief reliance on the appropriate and particular argument +relating to the nature of corn. + +On the other hand, those who have taken the opposite side of the +question, if they have imagined that they had combated this +particular argument with success, have been too apt to consider the +point as determined, without much reference to the more weighty and +important arguments, which remained behind. + +Among the latter description of persons I must rank myself. I have +always thought, and still think, that this peculiar argument of Dr +Smith, is fundamentally erroneous, and that it cannot be maintained +without violating the great principles of supply and demand, and +contradicting the general spirit and scope of the reasonings, which +pervade the Wealth of nations. + +But I am most ready to confess, that, on a former occasion, when I +considered the corn laws, my attention was too much engrossed by +this one peculiar view of the subject, to give the other arguments, +which belong to it, their due weight. + +I am anxious to correct an error, of which I feel conscious. It is +not however my intention, on the present occasion, to express an +opinion on the general question. I shall only endeavour to state, +with the strictest impartiality, what appear to me to be the +advantages and disadvantages of each system, in the actual +circumstances of our present situation, and what are the specific +consequences, which may be expected to result from the adoption of +either. My main object is to assist in affording the materials for a +just and enlightened decision; and, whatever that decision may be, +to prevent disappointment, in the event of the effects of the +measure not being such as were previously contemplated. Nothing +would tend so powerfully to bring the general principles of +political economy into disrepute, and to prevent their spreading, as +their being supported upon any occasion by reasoning, which constant +and unequivocal experience should afterwards prove to be fallacious. + +We must begin, therefore, by an inquiry into the truth of Dr Smith's +argument, as we cannot with propriety proceed to the main question, +till this preliminary point is settled. + +The substance of his argument is, that corn is of so peculiar a +nature, that its real price cannot be raised by an increase of its +money price; and that, as it is clearly an increase of real price +alone which can encourage its production, the rise of money price, +occasioned by a bounty, can have no such effect. + +It is by no means intended to deny the powerful influence of the +price of corn upon the price of labour, on an average of a +considerable number of years; but that this influence is not such as +to prevent the movement of capital to, or from the land, which is +the precise point in question, will be made sufficiently evident by +a short inquiry into the manner in which labour is paid and brought +into the market, and by a consideration of the consequences to which +the assumption of Dr Smith's proposition would inevitably lead. + +In the first place, if we inquire into the expenditure of the +labouring classes of society, we shall find, that it by no means +consists wholly in food, and still less, of course, in mere bread or +grain. In looking over that mine of information, for everything +relating to prices and labour, Sir Frederick Morton Eden's work on +the poor, I find, that in a labourer's family of about an average +size, the articles of house rent, fuel, soap, candles, tea, sugar, +and clothing, are generally equal to the articles of bread or meal. +On a very rough estimate, the whole may be divided into five parts, +of which two consist of meal or bread, two of the articles above +mentioned, and one of meat, milk, butter, cheese, and potatoes. +These divisions are, of course, subject to considerable variations, +arising from the number of the family, and the amount of the +earnings. But if they merely approximate towards the truth, a rise +in the price of corn must be both slow and partial in its effects +upon labour. Meat, milk, butter, cheese, and potatoes are slowly +affected by the price of corn; house rent, bricks, stone, timber, +fuel, soap, candles, and clothing, still more slowly; and, as far as +some of them depend, in part or in the whole, upon foreign materials +(as is the case with leather, linen, cottons, soap, and candles), +they may be considered as independent of it; like the two remaining +articles of tea and sugar, which are by no means unimportant in +their amount. + +It is manifest therefore that the whole of the wages of labour can +never rise and fall in proportion to the variations in the price of +grain. And that the effect produced by these variations, whatever +may be its amount, must be very slow in its operation, is proved by +the manner in which the supply of labour takes place; a point, which +has been by no means sufficiently attended to. + +Every change in the prices of commodities, if left to find their +natural level, is occasioned by some change, actual or expected, in +the state of the demand or supply. The reason why the consumer pays +a tax upon any manufactured commodity, or an advance in the price of +any of its component parts, is because, if he cannot or will not pay +this advance of price, the commodity will not be supplied in the +same quantity as before; and the next year there will only be such a +proportion in the market, as is accommodated to the number of +persons who will consent to pay the tax. But, in the case of labour, +the operation of withdrawing the commodity is much slower and more +painful. Although the purchasers refuse to pay the advanced price, +the same supply will necessarily remain in the market, not only the +next year, but for some years to come. Consequently, if no increase +take place in the demand, and the advanced price of provisions be +not so great, as to make it obvious that the labourer cannot support +his family, it is probable, that he will continue to pay this +advance, till a relaxation in the rate of the increase of population +causes the market to be under-supplied with labour; and then, of +course, the competition among the purchasers will raise the price +above the proportion of the advance, in order to restore the supply. +In the same manner, if an advance in the price of labour has taken +place during two or three years of great scarcity, it is probable +that, on the return of plenty, the real recompense of labour will +continue higher than the usual average, till a too rapid increase of +population causes a competition among the labourers, and a +consequent diminution of the price of labour below the usual rate. + +This account of the manner in which the price of corn may be +expected to operate upon the price of labour, according to the laws +which regulate the progress of population, evidently shows, that +corn and labour rarely keep an even pace together; but must often be +separated at a sufficient distance and for a sufficient time, to +change the direction of capital. + +As a further confirmation of this truth, it may be useful to +consider, secondly, the consequences to which the assumption of Dr +Smith's proposition would inevitably lead. + +If we suppose, that the real price of corn is unchangeable, or not +capable of experiencing a relative increase or decrease of value, +compared with labour and other commodities, it will follow, that +agriculture is at once excluded from the operation of that +principle, so beautifully explained and illustrated by Dr Smith, by +which capital flows from one employment to another, according to the +various and necessarily fluctuating wants of society. It will follow, +that the growth of corn has, at all times, and in all countries, +proceeded with a uniform unvarying pace, occasioned only by the +equable increase of agricultural capital, and can never have been +accelerated, or retarded, by variations of demand. It will follow, +that if a country happened to be either overstocked or understocked +with corn, no motive of interest could exist for withdrawing capital +from agriculture, in the one case, or adding to it in the other, and +thus restoring the equilibrium between its different kinds of +produce. But these consequences, which would incontestably follow +from the doctrine, that the price of corn immediately and entirely +regulates the prices of labour and of all other commodities, are so +directly contrary to all experience, that the doctrine itself cannot +possibly be true; and we may be assured, that, whatever influence +the price of corn may have upon other commodities, it is neither so +immediate nor so complete, as to make this kind of produce an +exception to all others. + +That no such exception exists with regard to corn, is implied in all +the general reasonings of the Wealth of nations. Dr Smith evidently +felt this; and wherever, in consequence, he does not shift the +question from the exchangeable value of corn to its physical +properties, he speaks with an unusual want of precision, and +qualifies his positions by the expressions much, and in any +considerable degree. But it should be recollected, that, with these +qualifications, the argument is brought forward expressly for the +purpose of showing, that the rise of price, acknowledged to be +occasioned by a bounty, on its first establishment, is nominal and +not real. Now, what is meant to be distinctly asserted here is, that +a rise of price occasioned by a bounty upon the exportation or +restrictions upon the importation of corn, cannot be less real than +a rise of price to the same amount, occasioned by a course of bad +seasons, an increase of population, the rapid progress of commercial +wealth, or any other natural cause; and that, if Dr Smith's +argument, with its qualifications, be valid for the purpose for +which it is advanced, it applies equally to an increased price +occasioned by a natural demand. + +Let us suppose, for instance, an increase in the demand and the +price of corn, occasioned by an unusually prosperous state of our +manufactures and foreign commerce; a fact which has frequently come +within our own experience. According to the principles of supply and +demand, and the general principles of the Wealth of nations, such an +increase in the price of corn would give a decided stimulus to +agriculture; and a more than usual quantity of capital would be laid +out upon the land, as appears obviously to have been the case in +this country during the last twenty years. According to the peculiar +argument of Dr Smith, however, no such stimulus could have been +given to agriculture. The rise in the price of corn would have been +immediately followed by a proportionate rise in the price of labour +and of all other commodities; and, though the farmer and landlord +might have obtained, on an average, seventy five shillings a quarter +for their corn, instead of sixty, yet the farmer would not have been +enabled to cultivate better, nor the landlord to live better. And +thus it would appear, that agriculture is beyond the operation of +that principle, which distributes the capital of a nation according +to the varying profits of stock in different employments; and that +no increase of price can, at any time or in any country, materially +accelerate the growth of corn, or determine a greater quantity of +capital to agriculture. + +The experience of every person, who sees what is going forward on +the land, and the feelings and conduct both of farmers and +landlords, abundantly contradict this reasoning. + +Dr Smith was evidently led into this train of argument, from his +habit of considering labour as the standard measure of value, and +corn as the measure of labour. But, that corn is a very inaccurate +measure of labour, the history of our own country will amply +demonstrate; where labour, compared with corn, will be found to have +experienced very great and striking variations, not only from year +to year, but from century to century; and for ten, twenty, and +thirty years together;(1*) and that neither labour nor any other +commodity can be an accurate measure of real value in exchange, is +now considered as one of the most incontrovertible doctrines of +political economy, and indeed follows, as a necessary consequence, +from the very definition of value in exchange. But to allow that +corn regulates the prices of all commodities, is at once to erect it +into a standard measure of real value in exchange; and we must +either deny the truth of Dr Smith's argument, or acknowledge, that +what seems to be quite impossible is found to exist; and that a +given quantity of corn, notwithstanding the fluctuations to which +its supply and demand must be subject, and the fluctuations to which +the supply and demand of all the other commodities with which it is +compared must also be subject, will, on the average of a few years, +at all times and in all countries, purchase the same quantity of +labour and of the necessaries and conveniences of life. + +There are two obvious truths in political economy, which have not +infrequently been the sources of error. + +It is undoubtedly true, that corn might be just as successfully +cultivated, and as much capital might be laid out upon the land, at +the price of twenty shillings a quarter, as at the price of one +hundred shillings, provided that every commodity, both at home and +abroad, were precisely proportioned to the reduced scale. In the +same manner as it is strictly true, that the industry and capital of +a nation would be exactly the same (with the slight exception at +least of plate), if, in every exchange, both at home or abroad, one +shilling only were used, where five are used now. + +But to infer, from these truths, that any natural or artificial +causes, which should raise or lower the values of corn or silver, +might be considered as matters of indifference, would be an error of +the most serious magnitude. Practically, no material change can take +place in the value of either, without producing both lasting and +temporary effects, which have a most powerful influence on the +distribution of property, and on the demand and supply of particular +commodities. The discovery of the mines of America, during the time +that it raised the price of corn between three and four times, did +not nearly so much as double the price of labour; and, while it +permanently diminished the power of all fixed incomes, it gave a +prodigious increase of power to all landlords and capitalists. In a +similar manner, the fall in the price of corn, from whatever cause +it took place, which occurred towards the middle of the last +century, accompanied as it was by a rise, rather than a fall in the +price of labour, must have given a great relative check to the +employment of capital upon the land, and a great relative stimulus +to population; a state of things precisely calculated to produce the +reaction afterwards experienced, and to convert us from an exporting +to an importing nation. + +It is by no means sufficient for Dr Smith's argument, that the price +of corn should determine the price of labour under precisely the +same circumstances of supply and demand. To make it applicable to +his purpose, he must show, in addition, that a natural or artificial +rise in the price of corn, or in the value of silver, will make no +alteration in the state of property, and in the supply and demand +of corn and labour; a position which experience uniformly +contradicts. + +Nothing then can be more evident both from theory and experience, +than that the price of corn does not immediately and generally +regulate the prices of labour and all other commodities; and that +the real price of corn is capable of varying for periods of +sufficient length to give a decided stimulus or discouragement to +agriculture. It is, of course, only to a temporary encouragement or +discouragement, that any commodity, where the competition is free, +can be subjected. We may increase the capital employed either upon +the land or in the cotton manufacture, but it is impossible +permanently to raise the profits of farmers or particular +manufacturers above the level of other profits; and, after the +influx of a certain quantity of capital, they will necessarily be +equalized. Corn, in this respect, is subjected to the same laws as +other commodities, and the difference between them is by no means so +great as stated by Dr Smith. + +In discussing therefore the present question, we must lay aside the +peculiar argument relating to the nature of corn; and allowing that +it is possible to encourage cultivation by corn laws, we must direct +our chief attention to the question of the policy or impolicy of +such a system. + +While our great commercial prosperity continues, it is scarcely +possible that we should become again an exporting nation with regard +to corn. The bounty has long been a dead letter; and will probably +remain so. We may at present then confine our inquiry to the +restrictions upon the importation of foreign corn with a view to an +independent supply. + +The determination of the question, respecting the policy or impolicy +of continuing the corn laws, seems to depend upon the three +following points:-- + +First, Whether, upon the supposition of the most perfect freedom of +importation and exportation, it is probable that Great Britain and +Ireland would grow an independent supply of corn. + +Secondly, Whether an independent supply, if it do not come +naturally, is an object really desirable, and one which justifies +the interference of the legislature. + +And, Thirdly, If an independent supply be considered as such an +object, how far, and by what sacrifices, are restrictions upon +importation adapted to attain the end in view. + +Of the first point, it may be observed, that it cannot, in the +nature of things, be determined by general principles, but must +depend upon the size, soil, facilities of culture, and demand for +corn in the country in question. We know that it answers to almost +all small well-peopled states, to import their corn; and there is +every reason to suppose, that even a large landed nation, abounding +in a manufacturing population, and having cultivated all its good +soil, might find it cheaper to purchase a considerable part of its +corn in other countries, where the supply, compared with the +demand, was more abundant. If the intercourse between the different +parts of Europe were perfectly easy and perfectly free, it would be +by no means natural that one country should be employing a great +capital in the cultivation of poor lands, while at no great +distance, lands comparatively rich were lying very ill cultivated, +from the want of an effectual demand. The progress of agricultural +improvement ought naturally to proceed more equably. It is true +indeed that the accumulation of capital, skill, and population in +particular districts, might give some facilities of culture not +possessed by poorer nations; but such facilities could not be +expected to make up for great differences in the quality of the soil +and the expenses of cultivation. And it is impossible to conceive +that under very great inequalities in the demand for corn in +different countries, occasioned by a very great difference in the +accumulation of mercantile and manufacturing capital and in the +number of large towns, an equalization of price could take place, +without the transfer of a part of the general supply of Europe, from +places where the demand was comparatively deficient, to those where +it was comparatively excessive. + +According to Oddy's European commerce, the Poles can afford to bring +their corn to Danzig at thirty two shillings a quarter. The Baltic +merchants are said to be of opinion that the price is not very +different at present; and there can be little doubt, that if the +corn growers in the neighbourhood of the Baltic could look forward +to a permanently open market in the British ports, they would raise +corn expressly for the purpose. The same observation is applicable +to America; and under such circumstances it would answer to both +countries, for many years to come, to afford us supplies of corn, in +much larger quantities than we have ever yet received from them. + +During the five years from 1804 to 1808, both inclusive, the bullion +price of corn was about seventy five shillings per quarter; yet, at +this price, it answered to us better to import some portion of our +supplies than to bring our land into such a state of cultivation as +to grow our own consumption. We have already shown how slowly and +partially the price of corn affects the price of labour and some of +the other expenses of cultivation. Is it credible then that if by +the freedom of importation the prices of corn were equalized, and +reduced to about forty five or fifty shillings a quarter, it could +answer to us to go on improving our agriculture with our increasing +population, or even to maintain our produce in its actual state? + +It is a great mistake to suppose that the effects of a fall in the +price of corn on cultivation may be fully compensated by a +diminution of rents. Rich land which yields a large net rent, may +indeed be kept up in its actual state, notwithstanding a fall in the +price of its produce: as a diminution of rent may be made entirely +to compensate this fall and all the additional expenses that belong +to a rich and highly taxed country. But in poor land, the fund of +rent will often be found quite insufficient for this purpose. There +is a good deal of land in this country of such a quality that the +expenses of its cultivation, together with the outgoings of poor +rates, tithes and taxes, will not allow the farmer to pay more than +a fifth or sixth of the value of the whole produce in the shape of +rent. If we were to suppose the prices of grain to fall from seventy +five shillings to fifty shillings the quarter, the whole of such a +rent would be absorbed, even if the price of the whole produce of +the farm did not fall in proportion to the price of grain, and +making some allowance for a fall in the price of labour. The regular +cultivation of such land for grain would of course be given up, and +any sort of pasture, however scanty, would be more beneficial both +to the landlord and farmer. + +But a diminution in the real price of corn is still more efficient, +in preventing the future improvement of land, than in throwing land, +which has been already improved, out of cultivation. In all +progressive countries, the average price of corn is never higher +than what is necessary to continue the average increase of produce. +And though, in much the greater part of the improved lands of most +countries, there is what the French economists call a disposable +produce, that is, a portion which might be taken away without +interfering with future production, yet, in reference to the whole +of the actual produce and the rate at which it is increasing, there +is no part of the price so disposable. In the employment of fresh +capital upon the land to provide for the wants of an increasing +population, whether this fresh capital be employed in bringing more +land under the plough or in improving land already in cultivation, +the main question always depends upon the expected returns of this +capital; and no part of the gross profits can be diminished without +diminishing the motive to this mode of employing it. Every +diminution of price not fully and immediately balanced by a +proportionate fall in all the necessary expenses of a farm, every +tax on the land, every tax on farming stock, every tax on the +necessaries of farmers, will tell in the computation; and if, after +all these outgoings are allowed for, the price of the produce will +not leave a fair remuneration for the capital employed, according to +the general rate of profits and a rent at least equal to the rent of +the land in its former state, no sufficient motive can exist to +undertake the projected improvement. + +It was a fatal mistake in the system of the Economists to consider +merely production and reproduction, and not the provision for an +increasing population, to which their territorial tax would have +raised the most formidable obstacles. + +On the whole then considering the present accumulation of +manufacturing population in this country, compared with any other in +Europe, the expenses attending enclosures, the price of labour and +the weight of taxes, few things seem less probable, than that Great +Britain should naturally grow an independent supply of corn; and +nothing can be more certain, than that if the prices of wheat in +Great Britain were reduced by free importation nearly to a level +with those of America and the continent, and if our manufacturing +prosperity were to continue increasing, it would incontestably +answer to us to support a part of our present population on foreign +corn, and nearly the whole probably of the increasing population, +which we may naturally expect to take place in the course of the +next twenty or twenty five years. + +The next question for consideration is, whether an independent +supply, if it do not come naturally, is an object really desirable +and one which justifies the interference of the legislature. + +The general principles of political economy teach us to buy all our +commodities where we can have them the cheapest; and perhaps there +is no general rule in the whole compass of the science to which +fewer justifiable exceptions can be found in practice. In the simple +view of present wealth, population, and power, three of the most +natural and just objects of national ambition, I can hardly imagine +an exception; as it is only by a strict adherence to this rule that +the capital of a country can ever be made to yield its greatest +amount of produce. + +It is justly stated by Dr Smith that by means of trade and +manufactures a country may enjoy a much greater quantity of +subsistence, and consequently may have a much greater population, +than what its own lands could afford. If Holland, Venice, and +Hamburg had declined a dependence upon foreign countries for their +support, they would always have remained perfectly inconsiderable +states, and never could have risen to that pitch of wealth, power, +and population, which distinguished the meridian of their career. + +Although the price of corn affects but slowly the price of labour, +and never regulates it wholly, yet it has unquestionably a powerful +influence upon it. A most perfect freedom of intercourse between +different nations in the article of corn, greatly contributes to an +equalization of prices and a level in the value of the precious +metals. And it must be allowed that a country which possesses any +peculiar facilities for successful exertion in manufacturing +industry, can never make a full and complete use of its advantages; +unless the price of its labour and other commodities be reduced to +that level compared with other countries, which results from the +most perfect freedom of the corn trade. + +It has been sometimes urged as an argument in favour of the corn +laws, that the great sums which the country has had to pay for +foreign corn during the last twenty years must have been injurious +to her resources, and might have been saved by the improvement of +our agriculture at home. It might with just as much propriety be +urged that we lose every year by our forty millions worth of +imports, and that we should gain by diminishing these extravagant +purchases. Such a doctrine cannot be maintained without giving up +the first and most fundamental principles of all commercial +intercourse. No purchase is ever made, either at home or abroad, +unless that which is received is, in the estimate of the purchaser, +of more value than that which is given; and we may rest quite +assured, that we shall never buy corn or any other commodities +abroad, if we cannot by so doing supply our wants in a more +advantageous manner, and by a smaller quantity of capital, than if +we had attempted to raise these commodities at home. + +It may indeed occasionally happen that in an unfavourable season, +our exchanges with foreign countries may be affected by the +necessity of making unusually large purchases of corn; but this is +in itself an evil of the slightest consequence, which is soon +rectified, and in ordinary times is not more likely to happen, if +our average imports were two millions of quarters, than if, on an +average, we grew our own consumption. + +The unusual demand is in this case the sole cause of the evil, and +not the average amount imported. The habit on the part of foreigners +of supplying this amount, would on the contrary rather facilitate +than impede further supplies; and as all trade is ultimately a trade +of barter, and the power of purchasing cannot be permanently +extended without an extension of the power of selling, the foreign +countries which supplied us with corn would evidently have their +power of purchasing our commodities increased, and would thus +contribute more effectually to our commercial and manufacturing +prosperity. + +It has further been intimated by the friends of the corn laws, that +by growing our own consumption we shall keep the price of corn +within moderate bounds and to a certain degree steady. But this also +is an argument which is obviously not tenable; as in our actual +situation, it is only by keeping the price of corn up, very +considerably above the average of the rest of Europe, that we can +possibly be made to grow our own consumption. + +A bounty upon exportation in one country, may be considered, in some +degree, as a bounty upon production in Europe; and if the growing +price of corn in the country where the bounty is granted be not +higher than in others, such a premium might obviously after a time +have some tendency to create a temporary abundance of corn and a +consequent fall in its price. But restrictions upon importation +cannot have the slightest tendency of this kind. Their whole effect +is to stint the supply of the general market, and to raise, not to +lower, the price of corn. + +Nor is it in their nature permanently to secure what is of more +consequence, steadiness of prices. During the period indeed, in +which the country is obliged regularly to import some foreign grain, +a high duty upon it is effectual in steadily keeping up the price of +home corn, and giving a very decided stimulus to agriculture. But as +soon as the average supply becomes equal to the average consumption, +this steadiness ceases. A plentiful year will occasion a sudden +fall; and from the average price of the home produce being so much +higher than in the other markets of Europe, such a fall can be but +little relieved by exportation. It must be allowed, that a free +trade in corn would in all ordinary cases not only secure a cheaper, +but a more steady, supply of grain. + +To counterbalance these striking advantages of a free trade in corn, +what are the evils which are apprehended from it? + +It is alleged, first, that security is of still more importance than +wealth, and that a great country likely to excite the jealousy of +others, if it become dependent for the support of any +considerable portion of people upon foreign corn, exposes itself to +the risk of having its most essential supplies suddenly fail at the +time of its greatest need. That such a risk is not very great will +be readily allowed. It would be as much against the interest of +those nations which raised the superabundant supply as against the +one which wanted it, that the intercourse should at any time be +interrupted; and a rich country, which could afford to pay high for +its corn, would not be likely to starve, while there was any to be +purchased in the market of the commercial world. + +At the same time it should be observed that we have latterly seen +the most striking instances in all quarters, of governments acting +from passion rather than interest. And though the recurrence of such +a state of things is hardly to be expected, yet it must be allowed +that if anything resembling it should take place in future, when, +instead of very nearly growing our own consumption, we were indebted +to foreign countries for the support of two millions of our people, +the distresses which our manufacturers suffered in 1812 would be +nothing compared with the wide-wasting calamity which would be then +experienced. + +According to the returns made to Parliament in the course of the +last session, the quantity of grain and flour exported in 1811 +rather exceeded, than fell short of, what was imported; and in 1812, +although the average price of wheat was one hundred and twenty five +shillings the quarter, the balance of the importations of grain and +flour was only about one hundred thousand quarters. From 1805, +partly from the operation of the corn laws passed in 1804, but much +more from the difficulty and expense of importing corn in the actual +state of Europe and America, the price of grain had risen so high +and had given such a stimulus to our agriculture, that with the +powerful assistance of Ireland, we had been rapidly approaching to +the growth of an independent supply. Though the danger therefore may +not be great of depending for a considerable portion of our +subsistence upon foreign countries, yet it must be acknowledged that +nothing like an experiment has yet been made of the distresses that +might be produced, during a widely extended war, by the united +operation, of a great difficulty in finding a market for our +manufactures, accompanied by the absolute necessity of supplying +ourselves with a very large quantity of corn. + +2dly. It may be said, that an excessive proportion of manufacturing +population does not seem favourable to national quiet and happiness. +Independently of any difficulties respecting the import of corn, +variations in the channels of manufacturing industry and in the +facilities of obtaining a vent for its produce are perpetually +recurring. Not only during the last four or five years, but during +the whole course of the war, have the wages of manufacturing labour +been subject to great fluctuations. Sometimes they have been +excessively high, and at other times proportionably low; and even +during a peace they must always remain subject to the fluctuations +which arise from the caprices of taste and fashion, and the +competition of other countries. These fluctuations naturally tend to +generate discontent and tumult and the evils which accompany them; +and if to this we add, that the situation and employment of a +manufacturer and his family are even in their best state +unfavourable to health and virtue, it cannot appear desirable that a +very large proportion of the whole society should consist of +manufacturing labourers. Wealth, population and power are, after +all, only valuable, as they tend to improve, increase, and secure +the mass of human virtue and happiness. + +Yet though the condition of the individual employed in common +manufacturing labour is not by any means desirable, most of the +effects of manufactures and commerce on the general state of society +are in the highest degree beneficial. They infuse fresh life and +activity into all classes of the state, afford opportunities for the +inferior orders to rise by personal merit and exertion, and +stimulate the higher orders to depend for distinction upon other +grounds than mere rank and riches. They excite invention, encourage +science and the useful arts, spread intelligence and spirit, inspire +a taste for conveniences and comforts among the labouring classes; +and, above all, give a new and happier structure to society, by +increasing the proportion of the middle classes, that body on which +the liberty, public spirit, and good government of every country +must mainly depend. + +If we compare such a state of society with a state merely +agricultural, the general superiority of the former is +incontestable; but it does not follow that the manufacturing system +may not be carried to excess, and that beyond a certain point the +evils which accompany it may not increase further than its +advantages. The question, as applicable to this country, is not +whether a manufacturing state is to be preferred to one merely +agricultural but whether a country the most manufacturing of any +ever recorded in history, with an agriculture however as yet nearly +keeping pace with it, would be improved in its happiness, by a great +relative increase to its manufacturing population and relative check +to its agricultural population. + +Many of the questions both in morals and politics seem to be of the +nature of the problems de maximis and minimis in fluxions; in which +there is always a point where a certain effect is the greatest, +while on either side of this point it gradually diminishes. + +With a view to the permanent happiness and security from great +reverses of the lower classes of people in this country, I should +have little hesitation in thinking it desirable that its agriculture +should keep pace with its manufactures, even at the expense of +retarding in some degree the growth of manufactures; but it is a +different question, whether it is wise to break through a general +rule, and interrupt the natural course of things, in order to +produce and maintain such an equalization. + +3dly. It may be urged, that though a comparatively low value of +the precious metals, or a high nominal price of corn and labour, +tends rather to check commerce and manufactures, yet its effects are +permanently beneficial to those who live by the wages of labour. + +If the labourers in two countries were to earn the same quantity of +corn, yet in one of them the nominal price of this corn were twenty +five per cent higher than in the other, the condition of the +labourers where the price of corn was the highest, would be +decidedly the best. In the purchase of all commodities purely +foreign; in the purchase of those commodities, the raw materials of +which are wholly or in part foreign, and therefore influenced in a +great degree by foreign prices, and in the purchase of all home +commodities which are taxed, and not taxed ad valorem, they would +have an unquestionable advantage: and these articles altogether are +not inconsiderable even in the expenditure of a cottager. + +As one of the evils therefore attending the throwing open our ports, +it may be stated, that if the stimulus to population, from the +cheapness of grain, should in the course of twenty or twenty five +years reduce the earnings of the labourer to the same quantity of +corn as at present, at the same price as in the rest of Europe, the +condition of the lower classes of people in this country would be +deteriorated. And if they should not be so reduced, it is quite +clear that the encouragement to the growth of corn will not be fully +restored, even after the lapse of so long a period. + +4thly. It may be observed, that though it might by no means be +advisable to commence an artificial system of regulations in the +trade of corn; yet if, by such a system already established and +other concurring causes, the prices of corn and of many commodities +had been raised above the level of the rest of Europe, it becomes a +different question, whether it would be advisable to risk the +effects of so great and sudden a fall in the price of corn, as would +be the consequence of at once throwing open our ports. One of the +cases in which, according to Dr Smith, "it may be a matter of +deliberation how far it is proper to restore the free importation of +foreign goods after it has been for some time interrupted, is, when +particular manufactures, by means of high duties and prohibitions +upon all foreign goods which can come into competition with them, +have been so far extended as to employ a great multitude of +hands.(2*)" + +That the production of corn is not exempted from the operation of +this rule has already been shown; and there can be no doubt that the +interests of a large body of landholders and farmers, the former to +a certain extent permanently, and the latter temporarily, would be +deeply affected by such a change of policy. These persons too may +further urge, with much appearance of justice, that in being made to +suffer this injury, they would not be treated fairly and +impartially. By protecting duties of various kinds, an unnatural +quantity of capital is directed towards manufactures and commerce +and taken from the land; and while, on account of these duties, they +are obliged to purchase both home-made and foreign goods at a kind +of monopoly price, they would be obliged to sell their own at the +price of the most enlarged competition. It may fairly indeed be +said, that to restore the freedom of the corn trade, while +protecting duties on various other commodities are allowed to +remain, is not really to restore things to their natural level, but +to depress the cultivation of the land below other kinds of +industry. And though, even in this case, it might still be a +national advantage to purchase corn where it could be had the +cheapest; yet it must be allowed that the owners of property in land +would not be treated with impartial justice. + +If under all the circumstances of the case, it should appear +impolitic to check our agriculture; and so desirable to secure an +independent supply of corn, as to justify the continued interference +of the legislature for this purpose, the next question for our +consideration is; + +Fifthly, how far and by what sacrifices, restrictions upon the +importation of foreign corn are calculated to attain the end in +view. + +With regard to the mere practicability of effecting an independent +supply, it must certainly be allowed that foreign corn may be so +prohibited as completely to secure this object. A country with a +large territory, which determines never to import corn, except when +the price indicates a scarcity, will unquestionably in average years +supply its own wants. But a law passed with this view might be so +framed as to effect its object rather by a diminution of the people +than an increase of the corn: and even if constructed in the most +judicious manner, it can never be made entirely free from objections +of this kind. + +The evils which must always belong to restrictions upon the +importation of foreign corn, are the following: + +1. A certain waste of the national resources, by the employment of a +greater quantity of capital than is necessary for procuring the +quantity of corn required. + +2. A relative disadvantage in all foreign commercial transactions, +occasioned by the high comparative prices of corn and labour, and +the low value of silver, as far as they affect exportable +commodities. + +3. Some check to population, occasioned by a check to that abundance +of corn, and demand for manufacturing labours, which would be the +result of a perfect freedom of importation. + +4. The necessity of constant revision and interference, which +belongs to almost every artificial system. + +It is true, that during the last twenty years we have witnessed a +very great increase of population and of our exported commodities, +under a high price of corn and labour; but this must have happened +in spite of these high prices, not in consequence of them; and is to +be attributed chiefly to the unusual success of our inventions for +saving labour and the unusual monopoly of the commerce of Europe +which has been thrown into our hands by the war. When these +inventions spread and Europe recovers in some degree her industry +and capital, we may not find it so easy to support the competition. +The more strongly the natural state of the country directs it to the +purchase of foreign corn, the higher must be the protecting duty or +the price of importation, in order to secure an independent supply; +and the greater consequently will be the relative disadvantage which +we shall suffer in our commerce with other countries. This drawback +may, it is certain, ultimately be so great as to counterbalance the +effects of our extraordinary skill, capital and machinery. + +The whole, therefore, is evidently a question of contending +advantages and disadvantages; and, as interests of the highest +importance are concerned, the most mature deliberation is required +in its decision. + +In whichever way it is settled, some sacrifices must be submitted +to. Those who contend for the unrestrained admission of foreign +corn, must not imagine that the cheapness it will occasion will be +an unmixed good; and that it will give an additional stimulus to the +commerce and population of the country, while it leaves the present +state of agriculture and its future increase undisturbed. They must +be prepared to see a sudden stop put to the progress of our +cultivation, and even some diminution of its actual state; and they +must be ready to encounter the as yet untried risk, of making a +considerable proportion of our population dependent upon foreign +supplies of grain, and of exposing them to those vicissitudes and +changes in the channels of commerce to which manufacturing states +are of necessity subject. + +On the other hand, those who contend for a continuance and increase +of restrictions upon importation, must not imagine that the present +state of agriculture and its present rate of eminence can be +maintained without injuring other branches of the national industry. +It is certain that they will not only be injured, but that they will +be injured rather more than agriculture is benefited; and that a +determination at all events to keep up the prices of our corn might +involve us in a system of regulations, which, in the new state of +Europe which is expected, might not only retard in some degree, as +hitherto, the progress of our foreign commerce, but ultimately begin +to diminish it; in which case our agriculture itself would soon +suffer, in spite of all our efforts to prevent it. + +If, on weighing fairly the good to be obtained and the sacrifices to +be made for it, the legislature should determine to adhere to its +present policy of restrictions, it should be observed, in reference +to the mode of doing it, that the time chosen is by no means +favourable for the adoption of such a system of regulations as will +not need future alterations. The state of the currency must throw +the most formidable obstacles in the way of all arrangements +respecting the prices of importation. + +If we return to cash payments, while bullion continues of its +present value compared with corn, labour, and most other +commodities; little alteration will be required in the existing corn +laws. The bullion price of corn is now very considerably under sixty +three shillings, the price at which the high duty ceases according +to the Act of 1804. + +If our currency continues at its present nominal value, it will be +necessary to make very considerable alterations in the laws, or they +will be a mere dead letter and become entirely inefficient in +restraining the importation of foreign corn. + +If, on the other hand, we should return to our old standard, and at +the same time the value of bullion should fall from the restoration +of general confidence, and the ceasing of an extraordinary demand +for bullion; an intermediate sort of alteration will be necessary, +greater than in the case first mentioned, and less than in the +second. + +In this state of necessary uncertainty with regard to our currency, +it would be extremely impolitic to come to any final regulation, +founded on an average which would be essentially influenced by the +nominal prices of the last five years. + +To these considerations it may be added, that there are many reasons +to expect a more than usual abundance of corn in Europe during the +repose to which we may now look forward. Such an abundance(3*) took +place after the termination of the war of Louis XIV, and seems still +more probable now, if the late devastation of the human race and +interruption to industry should be succeeded by a peace of fifteen +or twenty years. + +The prospect of an abundance of this kind, may to some perhaps +appear to justify still greater efforts to prevent the introduction +of foreign corn; and to secure our agriculture from too sudden a +shock, it may be necessary to give it some protection. But if, under +such circumstances with regard to the price of corn in Europe, we +were to endeavour to retain the prices of the last five years, it is +scarcely possible to suppose that our foreign commerce would not in +a short time begin to languish. The difference between ninety +shillings a quarter and thirty two shillings a quarter, which is +said to be the price of the best wheat in France, is almost too +great for our capital and machinery to contend with. The wages of +labour in this country, though they have not risen in proportion to +the price of corn, have been beyond all doubt considerably +influenced by it. + +If the whole of the difference in the expense of raising corn in +this country and in the corn countries of Europe was occasioned by +taxation, and the precise amount of that taxation as affecting corn, +could be clearly ascertained; the simple and obvious way of +restoring things to their natural level and enabling us to grow +corn, as in a state of perfect freedom, would be to lay precisely +the same amount of tax on imported corn and grant the same amount in +a bounty upon exportation. Dr Smith observes, that when the +necessities of a state have obliged it to lay a tax upon a home +commodity, a duty of equal amount upon the same kind of commodity +when imported from abroad, only tends to restore the level of +industry which had necessarily been disturbed by the tax. + +But the fact is that the whole difference of price does not by any +means arise solely from taxation. A part of it, and I should think, +no inconsiderable part, is occasioned by the necessity of yearly +cultivating and improving more poor land, to provide for the demands +of an increasing population; which land must of course require more +labour and dressing, and expense of all kinds in its cultivation. +The growing price of corn therefore, independently of all taxation, +is probably higher than in the rest of Europe; and this circumstance +not only increases the sacrifice that must be made for an +independent supply, but enhances the difficulty of framing a +legislative provision to secure it. + +When the former very high duties upon the importation of foreign +grain were imposed, accompanied by the grant of a bounty, the +growing price of corn in this country was not higher than in the +rest of Europe; and the stimulus given to agriculture by these laws +aided by other favourable circumstances occasioned so redundant a +growth, that the average price of corn was not affected by the +prices of importation. Almost the only sacrifice made in this case +was the small rise of price occasioned by the bounty on its first +establishment, which, after it had increased operated as a stimulus +to cultivation, terminated in a period of cheapness. + +If we were to attempt to pursue the same system in a very different +state of the country, by raising the importation prices and the +bounty in proportion to the fall in the value of money, the effects +of the measure might bear very little resemblance to those which +took place before. Since 1740 Great Britain has added nearly four +millions and a half to her population, and with the addition of +Ireland probably eight millions, a greater proportion I believe than +in any other country in Europe; and from the structure of our +society and the great increase of the middle classes, the demands +for the products of pasture have probably been augmented in a still +greater proportion. Under these circumstances it is scarcely +conceivable that any effects could make us again export corn to the +same comparative extent as in the middle of the last century. An +increase of the bounty in proportion to the fall in the value of +money, would certainly not be sufficient; and probably nothing could +accomplish it but such an excessive premium upon exportation, as +would at once stop the progress of the population and foreign +commerce of the country, in order to let the produce of corn get +before it. + +In the present state of things then we must necessarily give up the +idea of creating a large average surplus. And yet very high duties +upon importation, operating alone, are peculiarly liable to occasion +great fluctuations of price. It has been already stated, that after +they have succeeded in producing an independent supply by steady +high prices, an abundant crop which cannot be relieved by +exportation, must occasion a very sudden fall.(4*) Should this +continue a second or third year, it would unquestionably discourage +cultivation, and the country would again become partially dependent. +The necessity of importing foreign corn would of course again raise +the price of importation, and the same causes might make a similar +fall and a subsequent rise recur; and thus prices would tend to +vibrate between the high prices occasioned by the high duties on +importation and the low prices occasioned by a glut which could not +be relieved by exportation. + +It is under these difficulties that the parliament is called upon to +legislate. On account of the deliberation which the subject +naturally requires, but more particularly on account of the present +uncertain state of the currency, it would be desirable to delay any +final regulation. Should it however be determined to proceed +immediately to a revision of the present laws, in order to render +them more efficacious, there would be some obvious advantages, both +as a temporary and permanent measure, in giving to the restrictions +the form of a constant duty upon foreign corn, not to act as a +prohibition, but as a protecting, and at the same time, profitable +tax. And with a view to prevent the great fall that might be +occasioned by a glut, under the circumstances before adverted to, +but not to create an average surplus, the old bounty might be +continued, and allowed to operate in the same way as the duty at all +times, except in extreme cases. + +These regulations would be extremely simple and obvious in their +operations, would give greater certainty to the foreign grower, +afford a profitable tax to the government, and would be less +affected even by the expected improvement of the currency, than high +importation prices founded upon any past average.(5*) + +NOTES: + +1. From the reign of Edward III to the reign of Henry VII, a day's +earnings, in corn, rose from a pack to near half a bushel, and from +Henry VII to the end of Elizabeth, it fell from near half a bushel +to little more than half a peck. + +2. Wealth of Nations, b. iv, c. 2, p. 202. + +3. The cheapness of corn, during the first half of the last century, +was rather oddly mistaken by Dr. Smith for a rise in the value of +silver. That it was owing to peculiar abundance was obvious, from +all other commodities rising instead of falling. + +4. The sudden fall of the price of corn this year seems to be a case +precisely to point. It should be recollected however that quantity +always in some degree balances cheapness. + +5. Since sending the above to the press I have heard of the new +resolutions that are to be proposed. The machinery seems to be a +little complicated, but if it will work easily and well, they are +greatly preferable to those which were suggested last year. + +To the free exportation asked, no rational objection can of course +be made, though its efficiency in the present state of things may be +doubted. With regard to the duties, if any be imposed, there must +always be a queston of degree. The principal objection which I see to +the present scale, is that with an average price of corn in the +actual state of the currency, there will be a pretty strong +competition of foreign grain; whereas with an average price on the +restoration of the currency, foreign competition will be absolutely +and entirely excluded. + + + +[Transcriber's note: The sentence + +It is alleged, first, that security is of still more importance than +wealth, and that a great country likely to excite the jealousy of +others, if it become dependent for the support of any +considerable portion of people upon foreign corn, exposes itself to +the risk of having its most essential supplies suddenly fail at the +time of its greatest need. + +originally read: + +It is alleged, first, that security is of still more importance than +wealth, and that a great country likely to excite the jealousy of +others, if its it become dependent for the support of any +considerable portion of people upon foreign corn, exposes itself to +the risk of having its most essential supplies suddenly fail at the +time of its greatest need. + + +This was probably a printer's error.] + + + +End of Project Gutenberg's Effects of the Corn Laws, by Thomas Malthus + diff --git a/old/fxcrl10.zip b/old/fxcrl10.zip Binary files differnew file mode 100644 index 0000000..91dce52 --- /dev/null +++ b/old/fxcrl10.zip |