II. Rent. The following account of the real nature of rent is given, quite accurately, by Professor Fawcett, at page 112 of the last edition of his Political Economy:—
"Every country has probably been subjugated, and grants of vanquished territory were the ordinary rewards which the conquering chief bestowed upon his more distinguished followers. Lands obtained by force had to be defended by force; and before law had asserted her supremacy, and property was made secure, no baron was able to retain his possessions, unless those who lived on his estates were prepared to defend them....9 As property became secure, and landlords felt that the power of the State would protect them in all the rights of property, every vestige of these feudal tenures was abolished, and the relation between landlord and tenant has thus become purely commercial. A landlord offers his land to any one who is willing to take it; he is anxious to receive the highest rent he can obtain. What are the principles which regulate the rent which may thus be paid?"
These principles the Professor goes on contentedly to investigate, never appearing to contemplate for an instant the possibility of the first principle in the whole business—the maintenance, by force, of the possession of land obtained by force, being ever called in question by any human mind. It is, nevertheless, the nearest task of our day to discover how far original theft may be justly encountered by reactionary theft, or whether reactionary theft be indeed theft at all; and farther, what, excluding either original or corrective theft, are the just conditions of the possession of land.
III. Debt. Long since, when, a mere boy, I used to sit silently listening to the conversation of the London merchants who, all of them good and sound men of business, were wont occasionally to meet round my father's dining-table; nothing used to surprise me more than the conviction openly expressed by some of the soundest and most cautious of them, that "if there were no National debt they would not know what to do with their money, or where to place it safely." At the 399th page of his Manual, you will find Professor Fawcett giving exactly the same statement.
"In our own country, this certainty against risk of loss is provided by the public funds;"
and again, as on the question of rent, the Professor proceeds, without appearing for an instant to be troubled by any misgiving that there may be an essential difference between the effects on national prosperity of a Government paying interest on money which it spent in fire works fifty years ago, and of a Government paying interest on money to be employed to-day on productive labour.
That difference, which the reader will find stated and examined at length, in §§ 127-129 of this volume, it is the business of economists, before approaching any other question relating to government, fully to explain. And the paragraphs to which I refer, contain, I believe, the only definite statement of it hitherto made.
The practical result of the absence of any such statement is, that capitalists, when they do not know what to do with their money, persuade the peasants, in various countries, that the said peasants want guns to shoot each other with. The peasants accordingly borrow guns, out of the manufacture of which the capitalists get a per-centage, and men of science much amusement and credit. Then the peasants shoot a certain number of each other, until they get tired; and burn each other's homes down in various places. Then they put the guns back into towers, arsenals, &c., in ornamental patterns; (and the victorious party put also some ragged flags in churches). And then the capitalists tax both, annually, ever afterwards, to pay interest on the loan of the guns and gunpowder. And that is what capitalists call "knowing what to do with their money;" and what commercial men in general call "practical" as opposed to "sentimental" Political Economy.
Eleven years ago, in the summer of 1860, perceiving then fully, (as Carlyle had done long before), what distress was about to come on the said populace of Europe through these errors of their teachers, I began to do the best I might, to combat them, in the series of papers for the Cornhill Magazine, since published under the title of Unto this Last. The editor of the Magazine was my friend, and ventured the insertion of the three first essays; but the outcry against them became then too strong for any editor to endure, and he wrote to me, with great discomfort to himself, and many apologies to me, that the Magazine must only admit one Economical Essay more.
I made, with his permission, the last one longer than the rest, and gave it blunt conclusion as well as I could—and so the book now stands; but, as I had taken not a little pains with the Essays, and knew that they contained better work than most of my former writings, and more important truths than all of them put together, this violent reprobation of them by the Cornhill public set me still more gravely thinking; and, after turning the matter hither and thither in my mind for two years more, I resolved to make it the central work of my life to write an exhaustive treatise on Political Economy. It would not have been begun, at that time, however, had not the editor of Fraser's Magazine written to me, saying that he believed there was something in my theories, and would risk the admission of what I chose to write on this dangerous subject; whereupon, cautiously, and at intervals, during the winter of 1862-63, I sent him, and he ventured to print, the preface of the intended work, divided into four chapters. Then, though the Editor had not wholly lost courage, the Publisher indignantly interfered; and the readers of Fraser, as those of the Cornhill, were protected, for that time, from farther disturbance on my part. Subsequently, loss of health, family distress, and various untoward chances, prevented my proceeding with the body of the book;—seven years have passed ineffectually; and I am now fain to reprint the Preface by itself, under the title which I intended for the whole.
Not discontentedly; being, at this time of life, resigned to the sense of failure; and also, because the preface is complete in itself as a body of definitions, which I now require for reference in the course of my Letters to Workmen; by which also, in time, I trust less formally to accomplish the chief purpose of Munera Pulveris, practically summed in the two paragraphs 27 and 28: namely, to examine the moral results and possible rectifications of the laws of distribution of wealth, which have prevailed hitherto without debate among men. Laws which ordinary economists assume to be inviolable, and which ordinary socialists imagine to be on the eve of total abrogation. But they are both alike deceived. The laws which at present regulate the possession of wealth are unjust, because the motives which provoke to its attainment are impure; but no socialism can effect their abrogation, unless it can abrogate also covetousness and pride, which it is by no means yet in the way of doing. Nor can the change be, in any case, to the extent that has been imagined. Extremes of luxury may be forbidden, and agony of penury relieved; but nature intends, and the utmost efforts of socialism will not hinder the fulfilment of her intention, that a provident person shall always be richer than a spendthrift; and an ingenious one more comfortable than a fool. But, indeed, the adjustment of the possession of the products of industry depends more on their nature than their quantity, and on wise determination therefore of the aims of industry.
A nation which desires true wealth, desires it moderately, and can therefore distribute it with kindness, and possess it with pleasure; but one which desires false wealth, desires it immoderately, and can neither dispense it with justice, nor enjoy it in peace.
Therefore, needing, constantly in my present work, to refer to the definitions of true and false wealth given in the following Essays, I republish them with careful revisal. They were written abroad; partly at Milan, partly during a winter residence on the south-eastern slope of the Mont Saléve, near Geneva; and sent to London in as legible MS. as I could write; but I never revised the press sheets, and have been obliged, accordingly, now to amend the text here and there, or correct it in unimportant particulars. Wherever any modification has involved change in the sense, it is enclosed in square brackets; and what few explanatory comments I have felt it necessary to add, have been indicated in the same manner. No explanatory comments, I regret to perceive, will suffice to remedy the mischief of my affected concentration of language, into the habit of which I fell by thinking too long over particular passages, in many and many a solitary walk towards the mountains of Bonneville or Annecy. But I never intended the book for anything else than a dictionary of reference, and that for earnest readers; who will, I have good hope, if they find what they want in it, forgive the affectedly curt expressions.
The Essays, as originally published, were, as I have just stated, four in number. I have now, more conveniently, divided the whole into six chapters; and (as I purpose throughout this edition of my works) numbered the paragraphs.
I inscribed the first volume of this series to the friend who aided me in chief sorrow. Let me inscribe the second to the friend and guide who has urged me to all chief labour, Thomas Carlyle.
I would that some better means were in my power of showing reverence to the man who alone, of all our masters of literature, has written, without thought of himself, what he knew it to be needful for the people of his time to hear, if the will to hear were in them: whom, therefore, as the time draws near when his task must be ended, Republican and Free-thoughted England assaults with impatient reproach; and out of the abyss of her cowardice in policy and dishonour in trade, sets the hacks of her literature to speak evil, grateful to her ears, of the Solitary Teacher who has asked her to be brave for the help of Man, and just, for the love of God.
Denmark Hill,25th November, 1871.
MUNERA PULVERIS
"Te maris et terræ numeroque carentis arenæ Mensorem cohibent, Archyta, Pulveris exigui prope litus parva Matinum Munera."
CHAPTER I
DEFINITIONS
1. As domestic economy regulates the acts and habits of a household, Political economy regulates those of a society or State, with reference to the means of its maintenance.
Political economy is neither an art nor a science; but a system of conduct and legislature, founded on the sciences, directing the arts, and impossible, except under certain conditions of moral culture.
2. The study which lately in England has been called Political Economy is in reality nothing more than the investigation of some accidental phenomena of modern commercial operations, nor has it been true in its investigation even of these. It has no connection whatever with political economy, as understood and treated of by the great thinkers of past ages; and as long as its unscholarly and undefined statements are allowed to pass under the same name, every word written on the subject by those thinkers—and chiefly the words of Plato, Xenophon, Cicero and Bacon—must be nearly useless to mankind. The reader must not, therefore, be surprised at the care and insistance with which I have retained the literal and earliest sense of all important terms used in these papers; for a word is usually well made at the time it is first wanted; its youngest meaning has in it the full strength of its youth: subsequent senses are commonly warped or weakened; and as all careful thinkers are sure to have used their words accurately, the first condition, in order to be able to avail our selves of their sayings at all, is firm definition of terms.
3. By the "maintenance" of a State is to be understood the support of its population in healthy and happy life; and the increase of their numbers, so far as that increase is consistent with their happiness. It is not the object of political economy to increase the numbers of a nation at the cost of common health or comfort; nor to increase indefinitely the comfort of individuals, by sacrifice of surrounding lives, or possibilities of life.
4. The assumption which lies at the root of nearly all erroneous reasoning on political economy,—namely, that its object is to accumulate money or exchangeable property,—may be shown in a few words to be without foundation. For no economist would admit national economy to be legitimate which proposed to itself only the building of a pyramid of gold. He would declare the gold to be wasted, were it to remain in the monumental form, and would say it ought to be employed. But to what end? Either it must be used only to gain more gold, and build a larger pyramid, or for some purpose other than the gaining of gold. And this other purpose, however at first apprehended, will be found to resolve itself finally into the service of man;—that is to say, the extension, defence, or comfort of his life. The golden pyramid may perhaps be providently built, perhaps improvidently; but the wisdom or folly of the accumulation can only be determined by our having first clearly stated the aim of all economy, namely, the extension of life.
If the accumulation of money, or of exchangeable property, were a certain means of extending existence, it would be useless, in discussing economical questions, to fix our attention upon the more distant object—life—instead of the immediate one—money. But it is not so. Money may sometimes be accumulated at the cost of life, or by limitations of it; that is to say, either by hastening the deaths of men, or preventing their births. It is therefore necessary to keep clearly in view the ultimate object of economy; and to determine the expediency of minor operations with reference to that ulterior end.
5. It has been just stated that the object of political economy is the continuance not only of life, but of healthy and happy life. But all true happiness is both a consequence and cause of life: it is a sign of its vigor, and source of its continuance. All true suffering is in like manner a consequence and cause of death. I shall therefore, in future, use the word "Life" singly: but let it be understood to include in its signification the happiness and power of the entire human nature, body and soul.
6. That human nature, as its Creator made it, and maintains it wherever His laws are observed, is entirely harmonious. No physical error can be more profound, no moral error more dangerous, than that involved in the monkish doctrine of the opposition of body to soul. No soul can be perfect in an imperfect body: no body perfect without perfect soul. Every right action and true thought sets the seal of its beauty on person and face; every wrong action and foul thought its seal of distortion; and the various aspects of humanity might be read as plainly as a printed history, were it not that the impressions are so complex that it must always in some cases (and, in the present state of our knowledge, in all cases) be impossible to decipher them completely. Nevertheless, the face of a consistently just, and of a consistently unjust person, may always be rightly distinguished at a glance; and if the qualities are continued by descent through a generation or two, there arises a complete distinction of race. Both moral and physical qualities are communicated by descent, far more than they can be developed by education; (though both may be destroyed by want of education), and there is as yet no ascertained limit to the nobleness of person and mind which the human creature may attain, by persevering observance of the laws of God respecting its birth and training.
7. We must therefore yet farther define the aim of political economy to be "The multiplication of human life at the highest standard." It might at first seem questionable whether we should endeavour to maintain a small number of persons of the highest type of beauty and intelligence, or a larger number of an inferior class. But I shall be able to show in the sequel, that the way to maintain the largest number is first to aim at the highest standard. Determine the noblest type of man, and aim simply at maintaining the largest possible number of persons of that class, and it will be found that the largest possible number of every healthy subordinate class must necessarily be produced also.
8. The perfect type of manhood, as just stated, involves the perfections (whatever we may hereafter determine these to be) of his body, affections, and intelligence. The material things, therefore, which it is the object of political economy to produce and use, (or accumulate for use,) are things which serve either to sustain and comfort the body, or exercise rightly the affections and form the intelligence.10 Whatever truly serves either of these purposes is "useful" to man, wholesome, healthful, helpful, or holy. By seeking such things, man prolongs and increases his life upon the earth.
On the other hand, whatever does not serve either of these purposes,—much more whatever counteracts them,—is in like manner useless to man, unwholesome, unhelpful, or unholy; and by seeking such things man shortens and diminishes his life upon the earth.
9. And neither with respect to things useful or useless can man's estimate of them alter their nature. Certain substances being good for his food, and others noxious to him, what he thinks or wishes respecting them can neither change, nor prevent, their power. If he eats corn, he will live; if nightshade, he will die. If he produce or make good and beautiful things, they will Re-Create him; (note the solemnity and weight of the word); if bad and ugly things, they will "corrupt" or "break in pieces"—that is, in the exact degree of their power, Kill him. For every hour of labour, however enthusiastic or well intended, which he spends for that which is not bread, so much possibility of life is lost to him. His fancies, likings, beliefs, however brilliant, eager, or obstinate, are of no avail if they are set on a false object. Of all that he has laboured for, the eternal law of heaven and earth measures out to him for reward, to the utmost atom, that part which he ought to have laboured for, and withdraws from him (or enforces on him, it may be) inexorably, that part which he ought not to have laboured for until, on his summer threshing-floor, stands his heap of corn; little or much, not according to his labour, but to his discretion. No "commercial arrangements," no painting of surfaces, nor alloying of substances, will avail him a pennyweight. Nature asks of him calmly and inevitably, What have you found, or formed—the right thing or the wrong? By the right thing you shall live; by the wrong you shall die.
10. To thoughtless persons it seems otherwise. The world looks to them as if they could cozen it out of some ways and means of life. But they cannot cozen it: they can only cozen their neighbours. The world is not to be cheated of a grain; not so much as a breath of its air can be drawn surreptitiously. For every piece of wise work done, so much life is granted; for every piece of foolish work, nothing; for every piece of wicked work, so much death is allotted. This is as sure as the courses of day and night. But when the means of life are once produced, men, by their various struggles and industries of accumulation or exchange, may variously gather, waste, restrain, or distribute them; necessitating, in proportion to the waste or restraint, accurately, so much more death. The rate and range of additional death are measured by the rate and range of waste; and are inevitable;—the only question (determined mostly by fraud in peace, and force in war) is, Who is to die, and how?
11. Such being the everlasting law of human existence, the essential work of the political economist is to determine what are in reality useful or life-giving things, and by what degrees and kinds of labour they are attainable and distributable. This investigation divides itself under three great heads;—the studies, namely, of the phenomena, first, of Wealth; secondly, of Money; and thirdly, of Riches.
These terms are often used as synonymous, but they signify entirely different things. "Wealth" consists of things in themselves valuable; "Money," of documentary claims to the possession of such things; and "Riches" is a relative term, expressing the magnitude of the possessions of one person or society as compared with those of other persons or societies.
The study of Wealth is a province of natural science:—it deals with the essential properties of things.
The study of Money is a province of commercial science:—it deals with conditions of engagement and exchange.
The study of Riches is a province of moral science:—it deals with the due relations of men to each other in regard of material possessions; and with the just laws of their association for purposes of labour.
I shall in this first chapter shortly sketch out the range of subjects which will come before us as we follow these three branches of inquiry.
12. And first of Wealth, which, it has been said, consists of things essentially valuable. We now, therefore, need a definition of "value."
"Value" signifies the strength, or "availing" of anything towards the sustaining of life, and is always twofold; that is to say, primarily, intrinsic, and secondarily, effectual.
The reader must, by anticipation, be warned against confusing value with cost, or with price. Value is the life-giving power of anything; cost, the quantity of labour required to produce it; price, the quantity of labour which its possessor will take in exchange for it.11 Cost and price are commercial conditions, to be studied under the head of money.
13. Intrinsic value is the absolute power of anything to support life. A sheaf of wheat of given quality and weight has in it a measurable power of sustaining the substance of the body; a cubic foot of pure air, a fixed power of sustaining its warmth; and a cluster of flowers of given beauty a fixed power of enlivening or animating the senses and heart.
It does not in the least affect the intrinsic value of the wheat, the air, or the flowers, that men refuse or despise them. Used or not, their own power is in them, and that particular power is in nothing else.
14. But in order that this value of theirs may become effectual, a certain state is necessary in the recipient of it. The digesting, breathing, and perceiving functions must be perfect in the human creature before the food, air, or flowers can become of their full value to it. The production of effectual value, therefore, always involves two needs: first, the production of a thing essentially useful; then the production of the capacity to use it. Where the intrinsic value and acceptant capacity come together there is Effectual value, or wealth; where there is either no intrinsic value, or no acceptant capacity, there is no effectual value; that is to say, no wealth. A horse is no wealth to us if we cannot ride, nor a picture if we cannot see, nor can any noble thing be wealth, except to a noble person. As the aptness of the user increases, the effectual value of the thing used increases; and in its entirety can co-exist only with perfect skill of use, and fitness of nature.
15. Valuable material things may be conveniently referred to five heads:
(i.) Land, with its associated air, water, and organisms.
(ii.) Houses, furniture, and instruments.
(iii.) Stored or prepared food, medicine, and articles of bodily luxury, including clothing.
(iv.) Books.
(v.) Works of art.
The conditions of value in these things are briefly as follows:—
16. (i.) Land. Its value is twofold; first, as producing food and mechanical power; secondly, as an object of sight and thought, producing intellectual power.
Its value, as a means of producing food and mechanical power, varies with its form (as mountain or plain), with its substance (in soil or mineral contents), and with its climate. All these conditions of intrinsic value must be known and complied with by the men who have to deal with it, in order to give effectual value; but at any given time and place, the intrinsic value is fixed: such and such a piece of land, with its associated lakes and seas, rightly treated in surface and substance, can produce precisely so much food and power, and no more.
The second element of value in land being its beauty, united with such conditions of space and form as are necessary for exercise, and for fullness of animal life, land of the highest value in these respects will be that lying in temperate climates, and boldly varied in form; removed from unhealthy or dangerous influences (as of miasm or volcano); and capable of sustaining a rich fauna and flora. Such land, carefully tended by the hand of man, so far as to remove from it unsightlinesses and evidences of decay, guarded from violence, and inhabited, under man's affectionate protection, by every kind of living creature that can occupy it in peace, is the most precious "property" that human beings can possess.
17. (ii.) Buildings, furniture, and instruments.
The value of buildings consists, first, in permanent strength, with convenience of form, of size, and of position; so as to render employment peaceful, social intercourse easy, temperature and air healthy. The advisable or possible magnitude of cities and mode of their distribution in squares, streets, courts, &c.; the relative value of sites of land, and the modes of structure which are healthiest and most permanent, have to be studied under this head.
The value of buildings consists secondly in historical association, and architectural beauty, of which we have to examine the influence on manners and life.
The value of instruments consists, first, in their power of shortening labour, or otherwise accomplishing what human strength unaided could not. The kinds of work which are severally best accomplished by hand or by machine;—the effect of machinery in gathering and multiplying population, and its influence on the minds and bodies of such population; together with the conceivable uses of machinery on a colossal scale in accomplishing mighty and useful works, hitherto unthought of, such as the deepening of large river channels;—changing the surface of mountainous districts;—irrigating tracts of desert in the torrid zone;—breaking up, and thus rendering capable of quicker fusion, edges of ice in the northern and southern Arctic seas, &c., so rendering parts of the earth habitable which hitherto have been lifeless, are to be studied under this head.
The value of instruments is, secondarily, in their aid to abstract sciences. The degree in which the multiplication of such instruments should be encouraged, so as to make them, if large, easy of access to numbers (as costly telescopes), or so cheap as that they might, in a serviceable form, become a common part of the furniture of households, is to be considered under this head.12
18. (iii.) Food, medicine, and articles of luxury. Under this head we shall have to examine the possible methods of obtaining pure food in such security and equality of supply as to avoid both waste and famine: then the economy of medicine and just range of sanitary law: finally the economy of luxury, partly an æsthetic and partly an ethical question.
19. (iv.) Books. The value of these consists,
First, in their power of preserving and communicating the knowledge of facts.
Secondly, in their power of exciting vital or noble emotion and intellectual action. They have also their corresponding negative powers of disguising and effacing the memory of facts, and killing the noble emotions, or exciting base ones. Under these two heads we have to consider the economical and educational value, positive and negative, of literature;—the means of producing and educating good authors, and the means and advisability of rendering good books generally accessible, and directing the reader's choice to them.
20. (v.) Works of art. The value of these is of the same nature as that of books; but the laws of their production and possible modes of distribution are very different, and require separate examination.
21. II.—Money. Under this head, we shall have to examine the laws of currency and exchange; of which I will note here the first principles.
Money has been inaccurately spoken of as merely a means of exchange. But it is far more than this. It is a documentary expression of legal claim. It is not wealth, but a documentary claim to wealth, being the sign of the relative quantities of it, or of the labour producing it, to which, at a given time, persons, or societies, are entitled.
If all the money in the world, notes and gold, were destroyed in an instant, it would leave the world neither richer nor poorer than it was. But it would leave the individual inhabitants of it in different relations.
Money is, therefore, correspondent in its nature to the title-deed of an estate. Though the deed be burned, the estate still exists, but the right to it has become disputable.
22. The real worth of money remains unchanged, as long as the proportion of the quantity of existing money to the quantity of existing wealth or available labour remains unchanged.
If the wealth increases, but not the money, the worth of the money increases; if the money increases, but not the wealth, the worth of the money diminishes.
23. Money, therefore, cannot be arbitrarily multiplied, any more than title-deeds can. So long as the existing wealth or available labour is not fully represented by the currency, the currency may be increased without diminution of the assigned worth of its pieces. But when the existing wealth, or available labour is once fully represented, every piece of money thrown into circulation diminishes the worth of every other existing piece, in the proportion it bears to the number of them, provided the new piece be received with equal credit; if not, the depreciation of worth takes place, according to the degree of its credit.