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Sect. 4.

diminishing. The career of the human race would Book I.

Chap. vii. indeed have been melancholy, had the laws of nature been such, that as the numbers of nations increased, additional food must necessarily have been procured Efficiency by the sacrifice of additional labor; a sacrifice in- of Manuvolving in its consequences a fall in the rate of Labor. wages or profits, which no increase of intelligence, skill, and power, in the other branches of human industry could make amends for. But the supposed necessity of the sacrifice of additional labör to procure greater supplies, and the supposed effects of that sacrifice should it take effect, are each of them unfounded suppositions. The facts, happily, are all imaginary, on which the assumption rests, of an iron necessity dogging thus the progress of mankind, and depriving them ever of some portion of necessaries and comforts as their numbers expand. Should the produce of agriculture begin to lessen, the increased means and skill of civilized communities, we have seen, may enable them to spare the additional hands necessary to force the flagging powers of the earth, without leaving any class of the community worse supplied with wealth in any of its shapes.


Book 1. On the Fallaciousness of some supposed Indications of

Chap. vii.

Sect. 5. the decreasing Efficiency of agricultural Labor.

Supposed We hope to have shewn satisfactorily, first, that Decrease of there is no ground for supposing that additional Efficiency.

Sect. 5.

Book I. supplies of food for an increasing population, must Chap. vii.

necessarily be got at the expence of more labor.

And, secondly, should they be got at the expence Supposed of more labor, that it by no means follows that agricultural the producing classes must necessarily submit to Efficiency.

consume less either of food, or of any thing else. Still it has been admitted, that at some period in the existence of nations, there may be a rise of rents caused by a decrease in the returns to agricultural capital, and the opinions which have lately been prevalent, make it important to destroy every temptation to ascribe hastily to this unpopular cause, those successive additions to the revenues of the landed body, which other causes almost necessarily occasion during the prosperous career of nations : causes, the continual action of which, we have already observed to be in perfect harmony, and indeed closely connected with the progress of a people in wealth, and resources, and agricultural power, and skill. We must entreat then the further patience of the reader, while we shew that some indications which have been supposed to prove in the most unquestionable manner some actual decrease in the powers of agriculture, will turn out, on examination, to afford no such proof at all.

The circumstances usually referred to, with the most confidence, as indicating a decrease in the productive powers of agriculture, are first, a fall in the rate of profits; secondly, a rise in the relative' value of raw produce, compared with other domestic commodities; thirdly, a rise in the prices of raw produce, compared with the actual prices

in neighbouring countries of similar soil and cli- Boor I.

Chap. vii. mate, or compared with former prices at home, pro- 'Sect

. 5. vided, in the last case, the rise be greater than can

Supposed be accounted for by any fall which may have taken Decrease of

agricultural place in the value of the precious metals.


A fall of Profits is no Proof of the decreasing

Efficiency of agricultural Industry.

A decrease in the share of one of the producing classes, that is, a fall in the rate either of wages or of profits, is never necessarily the result of the diminished productive power of human industry in any of its branches.

If, when profits fall from 12 to 10 per cent. wages experience a corresponding rise, there can have been no decrease of productive power. As wages always engross the largest part of the produce, a moderate and almost insensible change in wages will bring about marked and considerable variations in the rate of profits quite independently of any alterations in the efficiency of agricultural or other industry. Let us suppose £100. to be employed in paying wages, returning £112., or a profit of 12 per cent. If wages rise from £100. to £102., that is, 2 per cent. only, then (the productive power of labor being stationary,) profits must fall from £12. on £100. advanced, to £10. on £102. advanced : or from 12 per cent. to something under 10 per cent. : there will have been a rise of onefiftieth in wages, and a resulting fall of one-sixth


Sect. 5.

Book I. in profits. And on the supposition here made, Chap. vii. that all the advances of the capitalist are in the

shape of wages, it is clear that a rise of 12 per Decrease of cent. in wages would not merely diminish the agricultural profits of the capitalist, but absorb them entirely.

In practice, however, a moderate rise of wages will not affect profits so seriously as in the instance here assumed, because all capital is not employed in paying wages, and the effects of fluctuations in the rate of wages are not confined to the profits on the wages themselves, but are spread over a larger body of profits, and are thus attenuated. If we suppose £500. to be employed in production, and of that sum only £100. to be advanced as the wages of labor; the profits of £500. at 12 per cent. will be £60. If the rate of profits in this case is to be reduced by a rise of wages to 10 per cent., that is, to a sum of £50., the rise of wages must be more considerable than in the instance before assumed. The sum advanced by the capitalist is £500.: the whole produce is £560. Let wages rise 10 per cent. and become £110.; the advance of the capitalist will then be £510., and, prices being stationary, his profit £50., which will be 10 per cent. within a small fraction. Supposing, therefore, the whole capital employed to be equal to five times the sum paid in wages (which is perhaps nearly the true proportion in England,) a rise of 10 per cent. in wages, that is, an addition of only 18. to every 108. before advanced to the laborer, will lower profits from 12 per cent. to 10 per cent., and such a moderate rise of wages might

is yary

produce, in fact, nearly all the difference observable Boox I.

Chap. vii. in the rates of profit current in the different states Sect. 5. of Europe.

In these calculations, we have supposed the pro- Depose of ductive power of the national industry stationary. agricultural

Efficiency. Were it ever really so, the influence on the rate of profit of fluctuations in the amount of wages, would strike all practical observers more forcibly than it now does; but in truth, the productive power of the national industry is rarely, or perhaps never, stationary; and while that

power ing, the results of its changes must often balance to a certain extent, and therefore disguise, the influence of alterations in the rate of wages on profits. Thus, if we suppose, as before, £100. expended wholly in wages, and paying 12 per cent. profit, the produce will be £112. But if the productive power of industry be so increased that, prices remaining the same, the return becomes £134. 88., then wages may rise to £120., and profits will not vary at all; they will still be 12 per cent. ; while wages have increased one-fifth, and the only change will be an addition to the mass of capital devoted to the advance of wages. While the productive powers of labor are varying, therefore, we may expect that the influence of fluctuations in the amount

i It will be shewn hereafter, that in a country replete with capital, as England is, it is always highly probable that the rate of wages will be sufficiently ahead of that rate in poorer countries, to produce a slight inferiority in the rate of profits in the richer country; though its productive power be the greatest and in a state of rapid increase.

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