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Title: Principles of Political Economy, Vol. II
Author: Roscher, Wilhelm, 1817-1894
Language: English
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           PRINCIPLES

               OF

       POLITICAL ECONOMY

               BY

        WILLIAM ROSCHER,

  PROFESSOR OF POLITICAL ECONOMY AT THE UNIVERSITY OF LEIPZIG,
    CORRESPONDING MEMBER OF THE INSTITUTE OF FRANCE, PRIVY
       COUNSELLOR TO HIS MAJESTY, THE KING OF SAXONY.

  FROM THE THIRTEENTH (1877) GERMAN EDITION.

  WITH ADDITIONAL CHAPTERS, FURNISHED BY THE AUTHOR, FOR THIS FIRST
  ENGLISH AND AMERICAN EDITION, ON

  PAPER MONEY, INTERNATIONAL TRADE, AND THE
        PROTECTIVE SYSTEM;

        AND A PRELIMINARY

  ESSAY ON THE HISTORICAL METHOD IN POLITICAL ECONOMY

        (From the French)

         BY L. WOLOWSKI,

     THE WHOLE TRANSLATED BY

       JOHN J. LALOR, A. M.

            VOL. II.

  [Illustration: Printer's Logo]

           NEW YORK:
        HENRY HOLT & CO.
             1878.


  Entered according to Act of Congress, in the year eighteen hundred
  and seventy-eight,

       BY CALLAGHAN & CO.,
  In the office of the Librarian of Congress, at Washington, D. C.

  DAVID ATWOOD, STEREOTYPER AND PRINTER, MADISON, WIS.



              TO

     WILLIAM H. GAYLORD, ESQ.,

     _COUNSELOR AT LAW_,
       OF CLEVELAND, OHIO,

  TO WHOSE BROTHERLY CARE IT IS LARGELY DUE THAT I LIVED TO
        TRANSLATE THEM,

         THESE VOLUMES

  ARE AFFECTIONATELY INSCRIBED.



BOOK III.

DISTRIBUTION OF GOODS.



CHAPTER 1.

INCOME IN GENERAL.


SECTION CXLIV.

RECEIPTS.--INCOME.--PRODUCE.

The idea covered by the word receipts (_Einnahme_) embraces all the new
additions successively made to one's resources within a given period of
time.[144-1] Income, on the other hand, embraces only such receipts as
are the results of economic activity. (See §§ 2, 11.) Produce (_Ertrag_,
_produit_) is income, but not from the point of view of the person or
_subject_ engaged in a business of any kind, but from that of the
business itself, or of the _object_ with which the business is
concerned, and on which it, so to speak, acts.

Income is made up of products, the results of labor and of the
employment and use of resources. These products, the producer may either
consume himself or exchange against other products, to satisfy a more
urgent want.[144-2] Hence, spite of the frequency with which we hear
such expressions as these: "the laborer eats the bread of his employer;"
"the capitalist lives by the sweat of the brow of labor;" or, again, a
manufacturer or business man "lives from the income of his
customers,"[144-3] they are entirely unwarranted. No man who manages his
own affairs well, or those of a household, lives on the capital or
income of another man; but every one lives on his own income, by the
things he has himself produced; although with every further development
of the division of labor, it becomes rarer that any one puts the
finishing stroke to his own products, and can satisfy himself by their
immediate consumption alone. Hence we should call nothing diverted or
derived income except that which has been gratuitously obtained from
another.[144-4]

     [Footnote 144-1: Including of course, gifts, inheritances,
     lottery prizes, etc.]

     [Footnote 144-2: Thus the original income of the peasant
     consists in his corn, of the miller in his flour, of the
     baker in his bread, of the shoemaker in his shoes. The money
     which circulates among all these and the purchaser, is only
     the means of exchanging that part of their products which
     they cannot themselves use, for other goods. Money, on the
     other hand, was the original income of the producers of the
     gold or silver it contains. Compare _Mirabeau_, Philosophie
     rurale, 1763, ch. 3. _Adam Smith_, II, ch. 2. But
     especially, see _J. B. Say_, Traité II, ch. 1, 5; and
     _Sismondi_, N. P., I, 90, 376, in which it is correctly
     said, that the quality which constitutes anything capital or
     income does not inhere in the thing itself, but depends on
     the person. Compare, however, I, 148; _Hermann_, Staatsw.
     Untersuch. 297 ff., 33 seq.]

     [Footnote 144-3: A fundamental thought in _St. Chamans_, Du
     Système d'Impôt, 1820. Nouvel Essai sur la Richesse des
     Nations, 1824.]

     [Footnote 144-4: Thus, for instance, the support given by
     the head of a family to the members thereof; also gifts,
     alms, thefts. Even _A. L. Schlözer_, St. A., II, 487, will
     allow that no one "eats the bread of another," but the
     person who has received it from the latter by way of favor
     and for nothing. In the case of a rented house, there is
     only an exchange of objects of income. The person to whom it
     is rented gives up a portion of his, and the renting party
     the use of his house. Similarly, in the case of personal
     services. Writers who maintain that only certain kinds of
     useful labor are productive, must of course extend the
     limits of diverted income much farther. See _Lotz_,
     Handbuch, III, § 133; _Rau_, Lehrbuch, I, §§ 248, 251.
     _Cantillon_ thinks that if no landowner spent more than his
     income, it would be scarcely possible for any one else to
     grow rich. (Nature du Commerce, 75.) According to _Stein_,
     Lehrbuch, 347, every one gets his income from the income of
     other people!]


SECTION CXLV.

INCOME.--GROSS, FREE AND NET.

In all _income_, we may distinguish a _gross_ amount, a _net_ amount and
a _free_ amount.[145-1] The gross income of a year, for instance,
consists of all the goods which have been newly produced within that
time. The net[145-2] income is that portion of the former which remains
after deducting the cost of production (§ 106), and which may therefore
be consumed without diminishing the original resources. Only the new
values incorporated in the new commodities make up the net income.
Evidently, a great portion of what is considered in one business the
cost of production is net income in a great many others; as for
instance, what the person engaged in one enterprise in production has
paid out in wages and interest on capital. By means of this outlay, a
portion of his circulating capital is drawn by others as income, and, on
the other hand, a portion of their original income is turned into a
portion of his circulating capital.[145-3] _Free_ income, I call that
portion of net income which remains available to the producer after his
indispensable wants have been satisfied.

An accurate kind of book-keeping which keeps these three elements of
income separate is more generally practicable as civilization advances.
We might call it the _economic balance_. Where commerce is very thriving
it is even customary to provide by law that those classes who need it
especially should have this species of book-keeping. People in a lower
stage of cultivation, with their poetical nature, are unfriendly to such
calculations.[145-4] [145-5] And where natural-economy (_Naturalwirthschaft_)
or barter prevails, a book-keeping of this kind of any accuracy is scarcely
practicable. The ratio which net income bears to gross income is a very
important element to enable us to judge of the advantageousness of any
method of production. If every producer should succeed in consequence of
keeping his books in this manner, in determining exactly the cost to him of
each of his products, this would be an economic progress similar to that of
general spread of good chemical knowledge in the arts. On the amount of
_free_ income, on the other hand, depends all the higher enjoyment of life,
all rational beneficence, and the progressive enrichment of mankind.[145-6]

     [Footnote 145-1: Similarly in _Sismondi_, N. P., II, 330,
     and _Rau_, Lehrbuch, I, § 71, a.]

     [Footnote 145-2: Called by _Hermann_, loc. cit., simply
     income.]

     [Footnote 145-3: This truth _J. B. Say_ has exaggerated to
     the extent of claiming that gross and net income are one and
     the same so far as entire nations are concerned. (Traité,
     II, ch. 5; Cours pratique, III, 14; IV, 74.) But the gross
     profit of the entire production of any one year is much
     greater than the simultaneous net income of all the
     individuals engaged in it. This is accounted for by the fact
     that in such production an amount of circulating capital is
     invested which was saved from the net profit of previous
     economic times. Compare _Storch_, Nationaleinkommen, 90 ff.
     _Kermann_, loc. cit., 323 ff.]

     [Footnote 145-4: In the East, a valuation by one's self of
     his property is considered a guilty kind of pride, usually
     punished by the loss of one's possessions. (_Burckhardt_,
     Travels in Arabia, I, 72 ff.) See _Samuel_, 24, on the
     census made by David. The Egyptians, however, as may be
     inferred from their monuments, must have very early and very
     extensively felt the want of some kind of book-keeping such
     as we have mentioned. A very accurate sort of book-keeping
     among the more highly cultured Romans, with a daily
     memorandum and a monthly book with entries from the former
     (_adversaria-tabula expensi et accepti_). Compare _Cicero_,
     pro Roscio, com. 2, 3; pro Cluent, 30; _Verr._, II, 1, 23,
     36. The Latin _putare_, from _putus_, pure, means: to make
     an account clear, and therefore corresponds to the American
     provincialism, "I reckon," i. e., I believe; and is a
     remarkable proof of a rigid method of keeping accounts. The
     Italian, or so-called double-entry method of book-keeping,
     which gives the most accurate information on the profit from
     every separate branch of business, became usual among the
     nations of modern Europe whose civilization was the first to
     ripen, about the end of the fifteenth century. Its invention
     is ascribed to the monk Luca Paciolo di Borgo S. Sepolcro.

     In England, this kind of book-keeping is very gradually
     coming into use even among farmers, while _Simond_, Voyage
     en Angleterre, 2 ed., II, 64, _Dunoyer_, Liberté du Travail,
     VIII, 5, say, "it would in France be considered as
     ridiculous as the book-keeping of an apple vendor." In
     Germany, there have been for some time past, manufactories
     of commercial books. Besides, the remarkable difference
     brought out by the income tax in England between the exact
     statements made by large manufacturers, etc., and by those
     engaged in industry on a medium or small scale, bears
     evidence of the better way in which the former keep their
     accounts, the cause and effect of their better business in
     general. Compare _Knies_, in the Tübing. Zeitschr., 1854,
     513. On the best mode of determining income, see _Cazaux_,
     Eléments d'Économie publique et privée, Livre, II. It is
     especially necessary to keep an account of the increase or
     diminution, even when accidental, of the value of the fixed
     capital employed.]

     [Footnote 145-5: The Code de Commerce, I, art. 8, requires
     that every merchant should keep a journal, paged and
     approved by the authorities, showing the receipts and
     disbursements of each day, on whatever account, and also the
     monthly expenditures of his family. Besides, he is required
     to make a yearly inventory of his debits and credits,
     subscribe to it and preserve it. That such books were
     excellent judicial evidence may be shown by Italian statutes
     of the fourteenth century. (_Martens_, Ursprung des
     Wechschrechts, 23.) Those of Germany even in 1449.
     (_Hirsch_, Danziger Handelsgeschichte, 232.)]

     [Footnote 145-6: Importance of the so-called "transferring
     to credit," where a business man considers his business as
     an independent entity and as distinct from himself.]


SECTION CXLVI.

NATIONAL INCOME.--ITS STATISTICAL IMPORTANCE.

Among the most important[146-1] but also the most difficult objects of
statistics, that book-keeping of nations, is national income. In
estimating it, we may take our starting point from the goods which are
elements of income, or from the persons who receive them as
income.[146-2]

In the former case the gross national income consists:

A. Of the raw material newly obtained in the country.

B. Of imports from foreign countries, including that which is secured by
piracy, as war-booty, contributions, etc.

C. The increase of values which industry[146-3] and commerce add to the
first two classes up to the time of their final consumption.

D. Services in the narrower sense and the produce (_Nutzungen_) of
capital in use.

All these several elements, estimated at their average price in money,
which supposes that all purchases, especially those under the head D,
are made voluntarily[146-4] and at their natural price.

To find the national net income, we must deduct the following items:

A. All the material employed in production which yields no immediate
satisfaction to any personal want.[146-5]

B. The exports which pay for the imports.

C. The wear and tear of productive capital and capital in use.

In the second case the net national income is to be calculated from the
following items:

A. From the net income of all independent private businesses etc.[146-6]

B. From the net income of the state, of municipalities, corporations and
institutions, derived from their own resources.

C. Under the former heads must be taken into the account such parts of
property as have been immediately consumed and enjoyed.[146-7]

D. Interest on debt must be added only on the side of the creditor, and
deducted from the income of the debtor; otherwise, _error dupli_. This
does not apply to taxes or church dues because the subjects of a good
state and members of a good church purchase thereby things which are
really new and of at least equal value to the outlay. Besides, in both
instances, it is necessary to calculate the number of men who live from
the national income, the average amount of their indispensable wants,
and the average price in money of the same, in order to determine the
_free_ national income by deducting the sum total of these average
wants, estimated at this average price.[146-8] [146-9]

     [Footnote 146-1: Not only to compare the happiness and power
     of different nations with one another, but also for purposes
     of taxation, the profitableness and innocuousness of which
     suppose the most perfect adaptation to the income of the
     whole people.]

     [Footnote 146-2: The former, in _Rau_, Lehrbuch, I, § 247;
     the latter in _Hermann_, 308 ff. The former mode of
     calculation gives us a means of judging of the comfort of
     the people, their control of natural forces, etc.; the
     second, of the relation of classes among the people. (_v.
     Mangoldt_, Grundriss, 99. V. W. L., 316 ff.) Each member of
     the nation produces his income only in the whole of the
     nation's economy. Hence _Held_, Die Einkommensteuer, 1872,
     70, 77, would, but indeed only under very abstract fictions,
     construct private income from the national, and not _vice
     versa_.]

     [Footnote 146-3: On the average degree of this increase of
     values in different industries, see _Chaptal_, De
     l'Industrie française, II, passim. _Bolz_, Gewerbekalender
     für, 1833, 111. No such scale can be lastingly valid,
     because, for instance, almost all technic progress decreases
     the appreciation of values through industry, and every
     advance made by luxury raises the claims to refined quality
     etc. See _Hildebrand_, Jahrbücher für Nat-Oek., 1863, 248
     ff.]

     [Footnote 146-4: Many items in Class D evade all
     calculation. Thus, for instance, the numberless cases of
     personal services which are enjoyed only by the doer
     himself; also the greater number of products
     (_Nutzungen_=usufruct) of capital in use for the consumption
     of the owner himself. (Latent income.) Only, it may be, in
     the case of dwelling houses, equipages, etc., that the
     consumption by use can be estimated in accordance with the
     analogy of similarly rented goods.]

     [Footnote 146-5: The principal materials consumed in
     manufactures are of course not to be deducted here, because
     the increase in their value was taken into account above.]

     [Footnote 146-6: When an artist who earns $10,000 per annum
     appears in a country, the gross national income increases in
     a way similar to that in which it increases when a new
     commodity is found which would have a yearly increase of
     value equal to $10,000 over and above that of the raw
     material. Cost of production in the case of such a virtuoso
     is scarcely to be alluded to. Nearly his entire income, with
     the exception of his traveling expenses, etc., is net, and
     the greater portion of it _free_. An income tax would affect
     his hearers after as it did before, and in his income, find
     a completely new object. _Per contra_, see Saggi economici,
     I, 176 f.]

     [Footnote 146-7: For purposes of taxation, where a relative
     valuation is more the question than an absolute one, it
     would be sufficient to assume that every household consumed
     clothing, utensils, etc., in proportion to the rest of their
     income. Hence, these items might, unhesitatingly, be omitted
     altogether.]

     [Footnote 146-8: Mathematically demonstrated by _Fuoco_,
     Saggi economici, II, 102 ff.]

     [Footnote 146-9: The gross income of British Europe is
     estimated by _Pebrer_, Histoire financière et statistique
     générale de l'Empire Br., 1834, II, 90, at £514,823,059,
     viz.: agriculture, £246,600,000; mining, 21,400,000;
     manufactures, after deduction made of the raw material,
     £148,050,000; internal and coast trade, £51,975,060; foreign
     commerce and navigation, £34,398,059; banking, £4,500,000;
     interest from foreign countries, £4,500,000. By _Moreau de
     Jonnés_, Statist de la Gr. Br., 1837, I, 312, it is
     estimated at 18,000,000,000 francs, from which, however, the
     raw material used in industry is not deducted. The net
     income of Great Britain was estimated by Pitt, in 1799, at
     £135,000,000, of which £25,000,000 were received by
     landowners for rent, £25,000,000 by farmers, £5,000,000 were
     tithes, £3,000,000 from forests, canals, and mines,
     £6,000,000 from houses, £15,000,000 from state funds,
     £12,000,000 from foreign commerce, £28,000,000 from inland
     commerce and manufactures, £3,000,000 from fine arts,
     £80,000,000 from Scotland, £5,000,000 from foreign
     countries. (_Gentz_, Histor. Journ., 1799, I, 183 ff.)
     _Lowe_, England in its present Situation, 1822, p. 246,
     speaks of 255,000,000. About 1860, the incomes subject to
     taxation alone, that is, all above £100, amounted to
     335,000,000. The remainder was certainly worth one-half of
     this. (Statist. Journ., 1864, 121.) _Baxter_, in 1867,
     assumed it to be £825,000,000. Compare _L. Levi_, on
     Taxation, 6.

     In France, about forty years ago, according to Chaptal,
     Doudeauville, Balbi and others, about 6,500,000,000 francs
     gross national income could be counted on. _Schnitzler_
     speaks of 7,000,000,000 francs (Creation de la Richesse en
     France, 1842, I, 392), after deduction made of the raw
     material of manufacture. According to _Wolowski_,
     Statistique de la Fr., 1847, it was more than 12,000,000,000
     francs. _M. Chevalier_, Revue des deux Mondes, March 15,
     1848, has it 10,000,000,000 at most. In these four
     estimates, only material products are taken into account.
     _Ch. Dupin_ thinks the income per capita was, in 1730, = 108
     francs; in 1780, = 169; in 1830, = 269. _Cazeaux_, Eléments,
     163, estimated the net national income, in 1825, at
     5,000,000,000 francs; _Cochut_, in 1861, at 16,000,000,000.
     (Revue des deux Mondes, XXXVII, 703.)

     In Spain, _Borrego_, Nationalreichthum, etc. Spaniens, 1834,
     33, estimated the income from agriculture at 2,284,000,000
     francs; from industry, etc., 361,000,000; commerce,
     124,000,000; from houses, 186,000,000; canals, streets etc.,
     8,500,000; personal services, 75,000,000; money in
     circulation (probably loaned capital), 85,000,000.

     In the United States, in 1840, the national income was
     estimated at over $1,063,000,000; from agriculture, over
     $654,000,000; from manufactures, nearly $240,000,000;
     commerce, almost $80,000,000; mining, over $42,000,000; from
     lumber (_Wäldern_), almost $17,000,000; and from the
     fisheries, almost $12,000,000. The per capita amount of
     income was $62. It was largest in Rhode Island--$110; in
     Massachusetts it was $103; in Louisiana, $99; and in Iowa,
     smallest, $27; in Michigan, it was $33. Compare _Tucker_,
     Progress of the United States, 195 ff. The census of 1860
     assumes the national wealth, slaves not included, at
     $14,183,000,000, that is $451 per capita, with a per capita
     annual income of $112. According to _Czörnig_, the gross
     income of Austria, from agriculture, the chase and
     fisheries, in 1861, was 2,119,000,000 florins; from mining,
     41,000,000; from the industries, 1,200,000,000. In Prussia,
     the net national income, not including the revenue from
     state property, nor the income of the royal household,
     seems, from the returns of the income and _class_ tax, to
     have been about 2,458,000,000 thalers, in 1874. _Engel_,
     Preuss. Statist. Ztschr., 1875, 133. The majority of the
     above estimates are obviously unreliable.]


SECTION CXLVII.

NATIONAL INCOME.--ITS STATISTICAL IMPORTANCE.
[CONTINUED.]

The question frequently discussed, whether it is more advantageous to
increase the gross income or the net income[147-1] of a people, may be
readily answered with the assistance of our tripartite division. Since
economic production has no other object than the satisfaction of human
wants, the mere increase of the gross income of a people is a matter of
indifference. An increase of the net income puts a people in a condition
to increase either their numbers or their enjoyments. (See §§ 163 and
239.) The most desirable condition is where both these results are
produced. It is fortunate for a people when the _free_ income of the
nation increases by reason of the absolute or relative decrease of the
cost of production, which adds nothing to enjoyment. But it is
politically and morally to be lamented when it increases at the expense
of the satisfaction of man's necessary wants, especially if the majority
of the people deny themselves in this respect to produce that end. Sir
Thomas More called the sheep of his time, to make place for which so
many farm houses were razed to the ground, ravenous beasts, which
devoured men and laid waste city and country.[147-2]

     [Footnote 147-1: The greater number of writers, at bottom,
     understand by this question only whether greater efforts
     should be made to increase the wages of the lower classes or
     the rent and rate of interest on capital paid to the higher.
     (_Schmoller_, in the Tüb. Zeitschrift, 1863, 22.)]

     [Footnote 147-2: The difference between gross and net income
     was introduced into the science principally by the
     Physiocrates. _Vauban_ (1707) had no conception of it, and
     thirty years later a French minister, in his instructions
     concerning the levy of the _vingtièmes_, dimly seeing that
     the aggregate amount of the harvest was not clear gain,
     ordered, to obtain the latter, that the cost of reaping and
     threshing should be deducted. (_Dupont_, Correspondence of
     _J. B. Say_, 404, éd. Daire.) By _produit net_, _Quesnay_
     means the excess of original production over its cost,
     considered from the personal point of view of the individual
     landowner. This excess, it is claimed, can alone increase
     the national wealth and alone support the "steril" class.

     The political and military bearing of this very clearly
     recognized. (102 ff., éd Daire.) Hence _Quesnay_, favors it
     in every way; by large farming instead of small, by stock
     raising on a large scale, supplanting home labor by cheaper
     foreign labor, by machinery and the employment of manual
     labor, etc.; 91 ff., 200 ff., 274 ff. The elder _Mirabeau_
     teaches even that the goodness of a government or of a
     constitution, and even national morality may be inferred
     from the amount of the _produit net_. (Ph. rurale, ch. 5.)
     _Stewart_, Principles, I, ch. 20. _Adam Smith_ gives greater
     prominence to the gross income, and grades the principal
     branches of national labor according as they increase the
     gross product of the nation's economy. (II, chs. 1, 5.)
     Similarly, _J. B. Say_, Traité, ch. 8, § 3; _Lauderdale_,
     Inquiry, 142.

     _Ricardo_ thoroughly reacts against this view, and considers
     it a matter of indifference whether a net product (interest
     on capital and rent) of a given amount be obtained by the
     labor of five or seven million other men, so long as only
     five million can live on it. (Principles, ch. 26.) Similarly
     _Ganilh_, Systèmes, I, 218 ff.; Théorie, II, 96.
     Controverted by _Malthus_, Principles, II, § 6. _Buquoy_,
     Theorie der Nat. Wirthsch., 1815, 310 ff. _Sismondi_ has
     ridiculed this predilection for the net product which in
     _Ricardo_ corresponds with what the Germans call free
     product (_freien Ertrage_), and which, contrary to Ricardo's
     own opinion, he calls Ricardo's ideal, saying that according
     to him, nothing more was to be desired but that "the king
     should remain alone on the island and, by turning a crank
     forever, do all the work of England through the
     instrumentality of automata." (N. P., II, 330 ff.) An entire
     people should value only gross product. (I, 183.) In his
     Etudes, Essai, II: Du Revenu Social, _Sismondi_
     distinguishes as elements of the gross national income: a,
     pure capital, the return of outlay; b, that which is at once
     both capital and income, and serves as family support
     (capital as a necessarily remaining supply, income as the
     product of the preceding year); c, net income, the excess of
     production over consumption.

     The Socialists of our day would prefer to see the whole net
     income of a people employed in the satisfaction of the
     necessary wants of an ever increasing population. By this
     procedure, as a natural consequence, we should witness first
     the curtailing of the taxing power, of the funds for the
     satisfaction of the more refined wants and of the saving of
     capital, nor would it be long before even the existing
     generation would experience the bitterness of this "living
     from hand to mouth." After a time, even the possibility of
     progress and even of mere increase of population would
     cease.

     _Hermann_, Staatsw. Untersuch., 297 ff., has better than
     almost any one else developed the theory of income, and he
     lays most stress on the satisfaction of wants as the chief
     aim of public economy. _Kröncke_, Das Steuerwesen, 1804, 381
     ff.; Grundsätze einer gerechten Besteuerung, 1819, 93 f.,
     may be considered the predecessor who prepared the way for
     him. Compare the profound work of _Bernhardi_, Versuch einer
     Kritik der Gründe die für grosses und kleines Grundeigenthum
     angeführt werden, St. Petersburg, 1848. Many controversies
     on this subject may be closed by a more accurate
     understanding as to terms. Thus, for instance, when _Rau_,
     Handbuch, embraces in the cost of production the necessary
     maintenance of material-workmen, and of those engaged in the
     labor of commerce; or when _Jacob_, Staatswissenschaft, §
     496, and _Storch_, Einkommen, 116 ff., even the necessary
     support of every class useful to society, their valuation of
     the gross national income is in only apparent conflict with
     our doctrine on the subject.]


SECTION CXLVIII.

THE TWO PHASES OF INCOME.

In every income which has anything to do with other incomes, it is
necessary to distinguish its immediately productive side, and its profit
or acquisition side. It is necessary, in the first place, that all the
products made by private parties should, so to speak, be put into the
common treasury of the national economy, and that each should thence
draw his own private revenue. Justice requires that there should be a
perfect correlation between the two; that each should enjoy precisely
the quota of the national income to the production of which his person
or his property contributed. A just appreciation of the relative
productive power of the divers branches of labor constitutes one of the
chief bulwarks against the inroads of destructive socialistic theories.
The person who calls a good doctor or a good judge unproductive should,
to be consistent, call those who by their greater intelligence are
fitted to superintend agricultural and industrial enterprises
unproductive, also, as is done by the coarser socialists with their
apotheosis of mere manual labor. Unfortunately, such a settlement as is
above contemplated among the different factors of production, whose
owners are desirous to divide the common product among them, is possible
only where the factors of production are either of the same kind, or can
be reduced to a common denominator.[148-1] But if justice pure and
simple were meted out, no man could subsist. Love or charity must
supplement justice in order to assist those (and especially such as
without any fault of theirs) who are not able to produce anything, or
enough to supply those wants, for instance, children and the poor.

As the net national income, following the three great factors of all
economic production, is divided into three great branches, rent, wages
and interest on capital, the net income from any private business may be
reduced to one or more of these branches.[148-2] The three great
branches of income may be considered with advantage from a great many
different points of view. We may inquire in the case of each of them:
concerning its absolute magnitude, its relation to the aggregate
national income, to the magnitude of the factor of production, of which
it constitutes the remuneration; by what number of men it is shared, and
what number of wants it satisfies.[148-3] Lastly, the difference between
the amount stipulated for, and the original amount of both rent and
wages, as well as the interest of capital, is of special importance. The
former consists in the price paid by the borrower for the use of the
factor of production to the owner; the latter in the immediate products
which the employment of the same productive power brings on one's own
account. Evidently, the original amount is, in the long run, the chief
element in the determination of the stipulated amount. While the former
depends more on the deeper and more durably effective elements of price,
especially the cost of production, the value in use and the paying
capacity of purchasers; the latter is conditioned more by the
superficial variations of supply and demand, and even by custom. For our
purposes, the former is by far the more important, but, at the same
time, by far the more difficult to perceive.

     [Footnote 148-1: This is possible between labor and capital,
     at least in so far as a comparison can be instituted between
     the sacrifice of human rest there is in labor and the
     sacrifice of enjoyment in the building up of capital. But
     the person who introduces an entirely unimproved piece of
     land into the service of production, stands to the laborer
     as well as to the capitalist in a relation which is entirely
     incomparable with any other. (See § 156.) The doctrine of
     former agriculturists, that one-half of the harvest was to
     be ascribed to the soil and the other to the manure, would
     not suffice here, even if it were correct. Compare _Fraas_,
     Gesch. der Landbau- und Forstwissenschaft, 257. But in the
     production of a calf, the coöperation of a bull and cow are
     necessary. Yet no one is in condition to determine what
     portion of the calf is to be accounted as belonging to
     either. If the bull and cow belong to different owners, the
     relation of supply and demand, and the deeper causes that
     determine them, decide in what proportion the value of the
     calf is to be divided among them.]

     [Footnote 148-2: Among the greatest services rendered by
     _Adam Smith_ is, his complete demonstration, that any income
     may be resolved into one or more of the three great branches
     of the national income. (I, ch. 6.)]

     [Footnote 148-3: _Ricardo_ has not unfrequently bewildered
     uncritical readers, by his habit--in which he is by no means
     always consistent--of using the expressions higher and lower
     wages, higher and lower profit of capital, to designate not
     the absolute greatness of these branches of income, either
     in money or in the wants of life, nor their greatness from a
     personal point of view, but only their relative greatness as
     compared with the aggregate income, the measure of the quota
     of the aggregate product which is divided among workmen,
     capitalists, etc. And yet, in the case of most economic
     questions, this is without doubt the less interesting side.
     Compare the polemic of _R. Jones_, On the Distribution of
     Wealth, 1831, I, 288 ff.; _Senior_, Outlines, 142 seq.;
     _Carey_, On the Rate of Wages, 1834, 24. Thus, according to
     _Ricardo_, the increase of one branch is possible only at
     the expense of another, while in the case of flourishing
     nations, the three branches increase absolutely and
     together. _Ricardo_, himself, was by no means unacquainted
     with this, as may be seen from _Baumstark's_ German
     translation of his work, pp. 37, 108 ff.]



CHAPTER II.

THE RENT OF LAND.


SECTION CXLIX.

THEORY OF RENT.

Rent is that portion of the regular net product of a piece of land which
remains after deducting the wages of labor and the interest on the
capital usual in the country, incorporated into it.[149-1] Hence it is
the price paid for the using of the land itself, or for what Ricardo
calls the original inexhaustible forces of the soil which are capable of
being appropriated.[149-2] This price also depends, of course, on the
relation between demand and supply; the demand in turn, on the wants and
means of payment of buyers, but the supply by no means on cost of
production, which, from the definitions above given, is here
unthinkable. However, land has this in common with other means of
production, that its price is mainly determined by that of its products.

     [Footnote 149-1: According to _von Thünen_, Der isolirte
     Staat. in Beziehung auf Landwirthschaft und Nat. Oek, 1850,
     I, 14: "what remains of the revenue of an estate after
     deducting the interest on all the objects of value which may
     be separated from the soil." According to _Whately_, it is
     surplus profit. The expression "regular product" supposes,
     among other things, an average skillfulness of the economic
     individual. Thus, for instance, the farm-rent of a piece of
     land generally includes besides the real rent of the land,
     interest on much capital which is more or less firmly fixed
     in the soil. The importance of the latter may be
     approximately determined from the fact that in the
     electorate of Hesse, for instance, the value of all meadow
     lands, woods, and agricultural lands is estimated at from
     205 to 206 millions of thalers, and the value of all the
     houses at 100 millions. (_Hildebrand_, Statist. Mittheil.
     über die volkswirthschaftlichen Zustände Kurhessens, 1852,
     37.) In the English income tax of 1843, the annual value of
     all lands in Great Britain was estimated at over 45 millions
     sterling, that of all houses at over 38 millions. However
     the farm-rent of a piece of land does not by any means
     always embrace the entire rent. A part of the rent is paid
     to the state in the form of taxes, and another portion to
     the payment of tithes. Short leasehold terms, frequent land
     sales, the comparatively great difficulty of disengaging
     capital invested in the cultivation of land, the union of
     landed proprietor, capitalist and laborer in one person
     easily obscure the law of rent.]

     [Footnote 149-2: The stores of immediate plant food in a
     piece of land, of minerals in a mine, of salt in a salt
     mine, etc., are subject to the law of rent only in so far as
     they may be considered inexhaustible; that is, they are not,
     strictly speaking, subject to it. Our definition applies all
     the more to the capacity for cultivation, and of support or
     bearing capacity mentioned in § 35; and hence it is easier
     to follow the law of rent in the case of land used for
     building purposes than for agriculture. When _v. Mangoldt_
     claims that the exhaustibility or inexhaustibility of the
     soil has nothing to do with rent so long as it flows evenly
     (_so lange sie eben fliesst_) he is in harmony with his own
     general conception of rarity-premiums
     (_Seltenheitsprämien_).]


SECTION CL.

THEORY OF RENT. (CONTINUED.)

Agricultural products of equal quantity and quality are produced on
pieces of land of unequal fertility, even when the same amount of skill
is displayed by the husbandman, with very different outlays of capital
and labor.[150-1] And yet the price of these products in the same market
is uniformly the same. This price must, on the supposition of free and
intelligent competition, be, in the long run, at least high enough to
cover the cost of production on even the worst soil (the margin of
cultivation according to Fawcett), which must be brought under
cultivation in order to satisfy the aggregate want. (See § 110.) This
worst land need yield no rent.[150-2] The better land which, with an
equal outlay of labor and capital, produces a greater yield, furnishes
an excess over the cost of production.[150-3] This excess is rent,
which, as a rule, is obviously higher in proportion as the difference in
fertility between the worst and the better land is greater. The person
who cultivates the land of a stranger may unhesitatingly turn this rent
over to the owner; since, notwithstanding his so doing, all that he has
himself contributed to production in labor and capital of his own,
returns to him entire in the product.[150-4]

According to § 34, a continual increase in the amount of labor and
capital lavished on the fertilization of land, agricultural science
remaining the same, leads, sooner or later to this, that every new
addition of capital or labor becomes relatively less remunerative than
the preceding.[150-5] The worse the land is, the sooner is this point
reached. Hence, it necessarily happens that, with an increase in the
aggregate want of agricultural products, greater and greater amounts of
labor and capital are employed in the further fertilization of land, and
that there comes to be a greater difference between the fertility of the
worst and better lands, in consequence of which the rent of the latter
rises.[150-6]

     [Footnote 150-1: _Flotow_, Anleitung zur Abschätzung der
     Grundstücke nach Klassen, 1820, 50 ff., estimates the cost
     of production of a _scheffel_ of rye on land of the first
     class, at scarcely 1½ thalers; on land of the tenth class,
     at 3 thalers. In Hanover, it is estimated that about 60 per
     cent. of the land devoted to gardening and agricultural
     products produces only from 2 to 4 times the quantity of
     seed sown; over 35 per cent. from 5 to 8 times, and 4.5 per
     cent. from 9 to 12 times. (_Marcard_, Zur Beurtheilung des
     Nat. Wohlstandes im Königreich Hanover, Tab. 3.) In Prussia,
     the rates of net produce adopted by the central commission
     in 1862 vary from 3 to 420 silver groschens per _morgen_, in
     the case of agricultural land; from 6 to 420 in the case of
     meadow land; in the case of pasturage, from 1 to 360. (_v.
     Viebahn_, Statist. des Zollvereins, II, 966.) In England,
     parliamentary investigations (1821) have shown that the best
     land produces from 32 to 40, and the worst from 8 to 12
     bushels per acre of wheat. (Edinburgh Review, XL, 21.) As to
     the influence of the elevation of land, the royal Saxon
     commission for the assessment of the value of land,
     estimated that the net product of an acre _of_ land at a
     height above the level of the sea,

     In the case of 2d class land--
       Of  500 feet, 55     per cent.
       Of  800  "    52½       "
       Of 1600  "    48        "
       Of 2400  "    43.8      "

     In the case of 11th class land--
       42.9 per cent. of the gross yield.
       39½     "       "       "     "
       34      "       "       "     "
       26      "       "       "     "]

     [Footnote 150-2: The English are very fond of assuming that
     the worst land for the time being under cultivation pays no
     rent. (_Ricardo_, Principles, II, 2.) This fact is
     frequently obscured by the aggregation into one economic
     whole of land that pays no rent and land that is able to pay
     rent. (_John Stuart Mill_, Principles, II, ch. 16, § 3.)
     True it is that there is a great deal of land which cannot
     be farmed out, but which can be used only by its owners.
     Compare _Salfeld_, in the Landwirthsch. Centralb., 1871, II,
     182 ff. On land near Wetzlar which, notwithstanding the high
     price of land in the neighborhood, could not be farmed out
     at auction, because no one was desirous to lease it, and
     which was therefore turned over to the highest bidder for
     the preceding piece, see _Stöckhardt_, Zeitschr. für
     deutsche Landwirthe, 1861, 237. Where, however, all the land
     has its own proprietors, the competition of farmers may
     easily produce a rent for the worst land. It is a matter of
     complete indifference to the theory of rent, whether the
     worst land when possessed only by right of occupation or
     used as pasturage for cattle previous to its cultivation,
     had value or not. Compare _Nebenius_, Œff. Credit, I, 29;
     _Hermann_, Staatswirthsch. Unters., 170 seq.]

     [Footnote 150-3: The analogous gradation in mining may make
     this clearer.]

     [Footnote 150-4: _Ricardo_ illustrated this by the following
     example. An uncultivated tract of country is settled by a
     small colony. As long as there is here an excess of land of
     the best quality, and everyone may take possession of it
     without paying anything therefor, no rent of the land which
     is merely occupied is possible. But if all the first class
     land is under cultivation--land which perhaps with the
     employment of a small amount of capital yields 5 quarters an
     acre per annum; and the increasing population necessitates
     the cultivation of land of the second class, which with the
     same outlay of capital yields only 4 quarters an acre per
     annum, there arises a rent of 1 quarter an acre per annum
     for land of the first class. For the price, 4 quarters is
     now high enough to cover the cost of production per acre,
     and it must be a matter of complete indifference (complete
     indifference?) to a new comer whether he obtains 5 quarters
     from land of the first class as a farmer and pays out 1
     quarter, or whether he harvests 4 quarters from second class
     land as proprietor. If there is a further increase of
     population, so that land of the third class also, which
     yields only 3 quarters per acre per annum, must be brought
     under cultivation, the price of corn rises again because the
     cost of production has now to be covered by three quarters.
     Land of the first class now pays a rent of 2 quarters and
     second class land of 1 quarter. (Ch. 2.)]

     [Footnote 150-5: _von Thünen_, der isolirte Staat, II, I,
     179, estimates that a bed of manure 1/3 of an inch thick on
     an acre of ground, increases the production by ½; that a
     second ½ inch of manure increases the yield only by a + of
     5/8 corn; the third of ¼ corn, etc. _Geyer_ is of opinion
     that, in Saxony, land of the average quality will yield a
     gross product of 60 thalers per acre, and 14 thalers net
     product per acre, in case it is managed with the greatest
     intelligence and the employment of a large amount of
     capital; when managed in a very ordinary way, it would yield
     20 thalers gross, and 7½ thalers net product. _Thünen_
     gives the following formula determining when it is more
     advantageous to cultivate the old land with more
     _intensiveness_ (higher farming) than to begin the
     cultivation of new: As long as p - _a_q is less than
     sqrt(ap), so long is an increase of the outlay of capital on
     the same land more profitable than the cultivation of new
     land, and _vice versa_. Here p = aggregate product obtained
     by a workman in a year from the amount of capital used by
     him; a = sum of his necessary yearly wants; _a_ = the
     interest per annum of a capital = p; q = the amount of
     capital given to assist the individual workman.]

     [Footnote 150-6: _Ricardo_ had, in every case in which
     outlay of capital and labor of different degrees of
     productiveness had to be used on the same land, to suppose a
     price of the products = the cost of the least productive
     outlay. See the tables in _Ricardo's_ work, On the Influence
     of a low Price of Corn on the Profits of Stock, 1815, 14
     seq. _Schmoller_, on the other hand, rightly applies the
     principle of united costs of production in as far as the
     usual amount of profit of the producer is added to the cost
     of the commodity with the highest cost of production.
     Mittheilungen des Landwirthsch. Instituts zu Halle, 1865,
     128. Compare _supra_, §§ 106, 110.]


SECTION CLI.

THEORY OF RENT.--LAND FAVORABLY SITUATED.

The favorable situation of a piece of land operates, in almost every
politico-economical respect, in the same manner as its fertility.[151-1]
If a market, to be fully supplied, needs to be fed from a circuit of ten
miles, the price must be sufficient to make good not only the other cost
of production but the freight over ten miles. Here, therefore, all
producers living nearer to the market, who have to make a smaller outlay
for transportation and yet obtain the same market price for their
produce, make a profit exactly corresponding to the advantage of their
situation.[151-2]

The situation of individual pieces of land relatively to farm buildings,
etc., operates in a similar way.[151-3]

     [Footnote 151-1: _L'éloignement équivaut à la stérilité._
     (_J. B. Say._) If we imagine with _A. Walker_ an entirely
     uncultivated country, equally fertile in every part, settled
     only on the coast, and divided into shares of equal breadth,
     equally accessible at all points, so that every settler has
     unlimited space to extend his possessions from the coast
     into the interior, the shares situated in the middle of the
     coast strip would be most eagerly sought after; since in its
     vicinity, prospectively, all the institutions of the country
     would come together. The colonist, therefore, who should
     obtain that share as his, would, unquestionably, be in a
     condition to pay a price for this preference, that is a
     rent. (Science of Wealth, 296.)]

     [Footnote 151-2: It is a consequence both of their
     difference of situation and of their fertility that in the
     Himalaya the farmers low down on the sides pay 50 per cent.
     of the gross product as farm-rent, and higher up, 20 per
     cent. less. (_Ritter_, Erdkunde, III, 878.) Both influences
     may be traced most accurately in East Friesland, and in
     similar places: marsh land, sandy land, heath land, and high
     moorland.

     Its situation influences especially the money rent of land,
     and its quality the amount of produce. (_McCulloch_,
     Principles, III, 5.)]

     [Footnote 151-3: We need only mention the hauling of the
     crops and of manure. According to the instructions of the
     royal Saxon commission, above mentioned, the cost is assumed
     to be 10 per cent. higher for a distance of 250 rods, and 20
     per cent. higher for a distance of 500 rods.]


SECTION CLII.

THE THEORY OF RENT. [CONTINUED.]

From what we have said, it follows that the rent of the land of a
country is equal at least to the sum of all the differences between the
product of the least productive portions of capital which have been
necessarily laid out in the cultivation of the soil and the product of
the other portions more productively laid out by other husbandmen. It
may rise higher than this on account of a coalition among landowners or
immoderate competition among farmers, who may thereby be forced to
surrender a portion of their wages and interest on capital to the
former; but it can never lastingly fall below this amount. If the
landowners themselves were to surrender all claim to rent, the price of
agricultural products would not sink if the market was kept fully
supplied; and the excess obtained from the better land over and above
the cost of production would go, but only in the nature of a gift, to
the farmers, corn dealers and individual consumers.[152-1] Normal rent
is not to be explained by any mysterious or peculiar productiveness[152-2]
of the land that yields it, but on the contrary, by the fact that even
material forces unexhaustible in themselves, but which can be productive
only in combination with given parcels of land, uniformly oppose even
successively greater difficulties to every successive and additional
improvement.[152-3]

Moreover, the capital which becomes a part of the land to such an extent
that it cannot be separated from it, and perhaps not even distinguished
from it at sight, such for instance as has been laid out for purposes of
drainage or in the purchase of material intended to modify the nature of
the soil, partakes of the character of the land itself, and its yield
obeys the laws of rent. How frequently it happens that such improvements
made by the farmer without the least assistance from the owner of the
land permanently contribute to an increase of the rent. (§ 181.)[152-4]

     [Footnote 152-1: Compare _J. Anderson_, An Inquiry into the
     Nature of the Corn Laws, 1777. Extracts from the same in the
     Edinburgh Review, LIV, 91 ff. On the other hand, _Buchanan_,
     on Adam Smith, IV, 134, thinks that rent arises exclusively
     from the monopoly of the owners, and that without it the
     price of corn would be lower. It is certain, however, that
     if the land of a country be considered as one great piece of
     property, and under one great system of husbandry, the
     products of the soil might be offered permanently at a price
     corresponding to the average cost of production, on the
     better and worse pieces of land. (_Umpfenback_, N. Oek.,
     191.)]

     [Footnote 152-2: _Malthus_, On the Policy of restricting the
     Importation of foreign Corn, 1815. Additions, 1817, to the
     Essay on the Principle of Population, III, ch. 8-12;
     Principles, 217 ff.]

     [Footnote 152-3: _Ricardo_ says that if air, water,
     elasticity and steam were of different qualities, and might
     be made objects of exclusive possession; and that if each
     kind could be had only in a moderate supply, they would,
     like land, produce a rent, according as they were brought
     into use, one kind after another. In the class of natural
     forces, also, the possession of a secret of production or of
     inimitable skill, or a legal right to its exclusive use, may
     produce something similar to rent. (_Senior_, Outlines, 91.)
     _Hermann_, Staatswirthsch. Unters., 163 ff., had already
     laid the foundation of this doctrine, and earlier yet,
     _Canard,_ 17 seq., and _Hufeland_. I, 303 ff. See _supra_, §
     120. Hence _v. Mangoldt_ uses the word rent to designate all
     rarity-premiums. _John Stuart Mill_, III, ch. 5, 4.
     _Schäffle_ speaks of the universal existence of a surplus;
     that is, of the factor of rent (Nat. Oek., I, Aufl., 140
     ff.), and has recently developed this into a theory
     thoroughly systematic and detailed. (Nationalökonomische
     Theorie der ausschliessenden Absatzverhältnisse, 1867.)

     According to him, rent is "the premium paid for the most
     economic course taken in the interest of society in
     general;" and hence he finds rent as much in superior labor
     and in a very advantageous outlay of capital. Yet he grants,
     that "exclusive custom (_Kundschaft_) on the basis of
     natural advantages occurs only in the case of land-rent."
     (59.) And even granting that he is right, that no rent is by
     itself forever secure (74 seq.), and that much rent is a
     premium paid for a search after and the appropriation of the
     best land, divination of the best situations, etc. (60 ff.,
     74 ff.), there still remains the great difference between
     rent and the extra income from labor and capital; that here
     the very transitory nature of the substratum, or basis, and
     the personal merit of the recipient, is the rule, while in
     the former case it is a rare exception. Willingly,
     therefore, as I recognize the possibility and fruitfulness
     of Schäffle's way of conceiving this subject (the latter,
     especially, for monographic purposes), I prefer, so far as
     the entire system is concerned, the keeping apart of the
     three branches of income corresponding to the three factors
     of production as has been usual since Adam Smith's time.]

     [Footnote 152-4: _John Stuart Mill_, ch. 16, § 5. An example
     in _Fawcett_, Manual, 149 seq. This explains many objections
     to Ricardo's laws, which are the result of misconception.
     Thus, for instance, in _Schmalz_, Staatswirthschaftslehre,
     I, 81, Quarterly Review, XXXVI, 412 ff. _Bastiat_, Harmonies
     économiques, ch. 9, where rent is considered the interest on
     the capital laid out in bringing land under cultivation and
     improving it. If, however, we imagine an island to emerge
     suddenly from the waves in the vicinity of Naples, in
     consequence of an earthquake, no one can doubt that its land
     would sell at a very high rate and pay a very good rent. And
     yet no capital or labor has been laid out on it. A similar
     lesson is taught by the fact, that, in Scotland, rocks which
     are covered twice a day by the waves are leased for the sake
     of the sea-weed left on them. (_Adam Smith_, Wealth of
     Nations, I, ch. 11.) Also by the fact, that in Poulopinang,
     a cavity in which many edible swallows' nests are found,
     pays £500 a year rent. (Geogr. Ephemeriden, Oct., 1805,
     134.) However, _Bastiat_, abstractly speaking, is right when
     he says, that every one by the importation of agricultural
     products from quarters which pay no rent, and still more by
     emigrating thither, may deprive the owners of land of the
     tribute imminent in rent.

     But how would it be if the cost of transportation and
     emigration amounted to more than the rent? The case
     theoretically so important, in which all the land in the
     world is supposed to have been appropriated as private
     property, this writer, generally so lucid, treats in a
     surprisingly blind way (275 ff). It is remarkable that _A.
     Walker_, Science of Wealth, spite of his prejudices in favor
     of Bastiat's doctrines on the gratuitous nature of all
     natural forces, nevertheless follows, essentially,
     _Ricardo's_ theory of rent, 294 ff.

     A much more vulgar error yet is, that rent is the result of
     the capacity of the capital employed in the purchase of the
     land to produce some interest Thus _Hamilton_, Reports to
     the Congress on the Manufactures of the United States, 1793,
     and _Canard_, Principes, sec. 5. Per _contra_, compare
     _Turgot's_ view, _supra_, § 42, note 1. Even _Locke_,
     Considerations on the Lowering of Interest, Works, II, 17
     ff., maintained the closest parallel between rent and
     interest to be possible, with this difference only, that
     money was all of a kind but pieces of land of different
     degrees of fertility. Similarly _Sir D. North_, Discourse
     upon Trade, 1791, with his parallel of landlord and
     stocklord.]


SECTION CLIII.

THEORY OF RENT. (CONTINUED.)

Ricardo says that rent can never, not even in the slightest degree,
constitute an element in the price of corn. This is certainly not a very
happy way of expressing the truth, that a high rent is not the cause,
but the effect, of a relatively high price of corn.[153-1] Ricardo would
have been nearer right had he said that rent was not a component part of
the price of every portion of the supply of corn brought to market.

Is rent an addition to national income? Ricardo (ch. 31) answers this
question in the negative, and says that it takes from the consumers what
it gives to the owners of the land, and that it increases only the value
in exchange of the national wealth.[153-2] It is evident that as thus
stated, the question is not properly put. Neither interest on capital
nor wages are any addition to a nation's income, but, like rent, only
forms of trade, by means of which that income is distributed among the
individuals constituting the nation. (§ 201.)

The special kind of product obtained from a piece of land influences its
rent only in so far as the growth of that kind of product is exclusively
confined either by nature, privilege or prejudice to certain
land.[153-3] Adam Smith is of opinion that the rent of agricultural land
is ordinarily (!) one-third of the gross product; that of coal mines,
from one tenth to a maximum of one-fifth; of good lead and tin mines,
one sixth (with the dues paid the state of twenty-one and two-thirds per
cent.); of Peruvian silver mines, scarcely one-tenth; of gold mines,
one-twentieth. And he thinks that rent grows less certain for every
succeeding article.[153-4]

So far as this is based on facts, it may be explained as follows: The
greater capacity an article has for transportation from one place to
another, the less important is advantage of situation, which is
generally one of the chief elements of rent. The more indispensable the
commodity is, the more readily is the consumer induced to pay a price
for it greater than the cost of production; that is, to pay a rent. This
again is enhanced by the difficulty of the preservation of the
commodity. Lastly, the more it is a mere product of nature,[153-5] the
more difficult it is to simultaneously employ several portions of
capital of different grades of productiveness in its production.

     [Footnote 153-1: To be met with in this form even in _Adam Smith_,
     Wealth of Nations, I, ch. 11, pr. _John Stuart Mill_, Principles
     II, ch. 16, § 6, thus states the matter: "Whoever cultivates land,
     paying a rent for it, gets in return for his rent an instrument of
     superior power to other instruments of the same kind for which no
     rent is paid. The superiority of the instrument is in exact
     proportion to the rent paid for it." According to _v. Jacob_,
     Grundsätze der Nat. Oek., I, 187, rent constitutes a much larger
     portion of the price of commodities than is generally supposed, in
     as much as wages depend so largely on the price of the means of
     subsistence. Per contra, _Baudrillart_, Manuel, 391 ff., who
     maintains that rent is practically insignificant.]

     [Footnote 153-2: Similarly _Buchanan_, loc. cit., and _Sismondi_,
     Richesse commerciale, I, 49. Compare contra, _Malthus_, Inquiry
     into the Nature and Progress of Rent, 15. I would call attention
     _en passant_ to the absurdity that there may be an increase in the
     value in exchange of a nation's entire resources without any
     increase in its value in use. (_Supra_, § 8.)]

     [Footnote 153-3: Thus _Adam Smith_ remarks that corn fields and
     rice fields pay very different rents, because it is not always
     possible to convert one into the other. (Wealth of Nat., I, ch. 11,
     1.) Compare the tabular statistical view of the rent of land used
     for vineyards, gardens, meadows, pasturages, wood and farming
     purposes, in _Rau_, Lehrbuch, I, § 218. For a general theory of the
     rent of wooded land, see _Hermann_, Staatsw. Unters., 177 ff.; of
     vineyards, 181 seq.]

     [Footnote 153-4: _Adam Smith_, Wealth of Nat., I, ch. 11, 3.]

     [Footnote 153-5: It is hereby rendered akin to those low stages of
     civilization in which no rent is paid.]


SECTION CLIV.

THEORY OF RENT. (CONTINUED.)

As the purchase of a piece of land[154-1] is no more and no less than
its exchange against a portion of capital in the shape of money,[154-2]
its purchase price depends generally on the amount it will rent for as
compared with the interest on the capital to be given in exchange for
it. The rate of interest remaining the same, it rises and falls with its
rent. And _vice versa_, the rent remaining the same it rises and falls
inversely as the rate of interest.[154-3] A rise in the price of land is
not always a proof of the growing wealth of a people. It may proceed
from a depreciation of the value of money, or from a decrease of the
rate of interest caused by a decline in the number of loans which can be
advantageously placed.

It is frequently said, that the price paid for land is greater than the
money-capital which yields an equal revenue.[154-4] This, abstraction
made of proletarian distress prices for small parcels of land and of the
political and social privileges of landowners, is accounted for by the
assumed greater security of the latter,[154-5] which, however, fares ill
enough in war times, and times of political disturbance. The fact itself
is found to exist, I think, only in economically progressive times, when
confidence prevails, and it is based on the pretty certain prospect that
the rate of interest will decline, while rents will rise.[154-6]

It has been observed in Belgium, that the medium farm rent of land, in
quarters remarkable for any economic peculiarity whatever, pays an
interest lower, as compared with the purchase money, in proportion as
the country about is more thickly populated, and as its husbandry is
carried on by farmers instead of by owners.[154-7] This phenomenon is
doubtless correlated with these others, that the conditions just named
are pretty regularly attendant on a high state of civilization, and that
advanced civilization is attended uniformly by a decline in the rate of
interest. (175).[154-8]

     [Footnote 154-1: In every day language, people say of a man
     who has purchased a piece of land, that he "put" as much
     capital as is equal to the purchase price "into his land;"
     or "laid out on it" as much. But this mode of expression is
     as inaccurate as is this other: "the sun is rising," or "the
     sun has gone down."]

     [Footnote 154-2: _Macleod_, who is not fond of the natural
     mode of expression, maintains that the purchase price of a
     piece of land is equal to the discounted value of the sum of
     the values of all the future products to be obtained from
     the land. (Elements, 75.)]

     [Footnote 154-3: C:i::L:r in which C = the capital, i = its
     interest, L = the piece of land, and r = its rent.]

     [Footnote 154-4: There are traces to be found of the fact
     among the ancient Greeks, that the farm-rent of landed
     estates paid a smaller interest on the purchase money than
     was otherwise usual in the country. _Isaeus de Hagn._, 42;
     _Salmasius_, De Modo Usur., 848.]

     [Footnote 154-5: Thus even _North_ and _Locke_, loc. cit.;
     _Cantillon_, Nature du Commerce, 294.]

     [Footnote 154-6: Compare _List_, Werke II, 173. In Belgium,
     farm-rent per _hectare_ was, in 1830 = 57.25 francs, in 1835
     = 62.78, in 1840 = 70.44, in 1846 = 74.50, on an average.
     This was at the rate of from 2.62 to 2.80, or an average of
     2.67 per cent. on the purchase money. If to this we add the
     increase in the rise of land between 1830 and 1846, divided
     by 16, the yearly revenue rises from 2.67 to 3.91 per cent.,
     that is pretty nearly the rate of interest on hypothecation,
     and is higher or lower in the different provinces, as the
     former is higher or lower. (_Heuschling_, Résumé du
     Récensement général de 1846, 89.) In France, land paid but
     from 2 to 3 per cent. on the purchase money; but both rents
     and the price of land have doubled between 1794 and 1844.
     (Journal des Econ., IX, 208.)]

     [Footnote 154-7: Moreover, whole countries may, because of
     their great natural advantages, possess, so far as the
     commerce of the entire world is concerned, something
     analogous to rent. Thus, for instance, North America,
     although here, this world-rent finds expression in the
     national height of the wages of labor and of the rate of
     interest, (_v. Bernhardi_, Versuch einer Kritik der Gründe
     welche für grosses und kleines Grundeigenthum angeführt
     werden, 1848, 294.)]

     [Footnote 154-8: Writers as old as _Culpeper_, A Tract
     against the high Rate of Usurie, 1623, and _Sir J. Child_,
     Discourse of Trade, p. 22 of the French translation,
     observed the connection existing between a low rate of
     interest, national wealth and a flourishing state of
     commerce on the one hand, and a high price of the
     necessaries of life and of land in the other. _Sir W. Petty_
     would estimate the rent of land as follows: If a calf
     pasturing in an open meadow gains as much flesh in a given
     time as is equal to the cost of the food of 50 men for a
     day, and a workman, on the same land, in the same time,
     produces food for 60 men, the rent of the land must be 50,
     and the rate of wages 10. (Political Anatomy of Ireland, 62
     seq.; compare 54.) Besides, he accounts for the height of
     rents by the density of the population exclusively, and he
     would prefer to see both increase _ad infinitum_. (Several
     Essays on Political Arithmetic, 147 ff.)

     The germs of the _Ricardo_ law of rent, in _Boisguillebert_:
     the price of corn determines how far the cultivation may be
     extended; by manuring the land, as much corn as desired may
     be obtained, provided the cost of production is covered.
     (Traité des Grains, II, ch. 2 ff.) There is a foreshowing of
     the same law in the Physiocratic view that only in the
     production of raw material is there a real excess over and
     above the cost--_produit net_. Compare _Quesnay_, Probl.,
     économique, 177 ff. Sur les travaux des artisans. (Daire.)
     _Auxiron_, Principes de tout Gouvernement, 1776, I, 126.
     _Adam Smith_ came very near to the true principle in the
     case of coal mines, but was hindered reaching it in other
     cases by the false assumption that certain kinds of
     agricultural production always yield a rent, while others do
     so only under certain circumstances. Besides he always
     considered the interest of capital fixed in the soil;
     buildings, for instance, as part of the rent. (Wealth of
     Nat., I, ch. 11.) Compare _Hume's_ Letter to Adam Smith;
     _Burton's_ Life and Correspondence of Hume, II, 486; _von
     Thünen_, Isolirter Staat., I, 15 ff.

     The most immediate predecessors of _Ricardo_, Principles, 2,
     3, 24, 31, are _Anderson_ (§ 152); _West_, Essay on the
     Application of Capital to Land, 1815, and _Malthus_, Inquiry
     into the Nature and Progress of Rent, 1815. See § 152. It is
     wonderful how a theory which, in 1777, remained almost
     untouched, was in 1815 etc., attacked and defended with the
     greatest zeal, because it then affected the differences
     between the moneyed and landed interest. Yet _Ricardo_ did
     not take into account at all the rent-creating influence of
     the situation of land in relation to the market, as well as
     to the "farm-office" (_dem Wirthschaftshofe_). The influence
     of the system of husbandry on rent, first thoroughly treated
     by _von Thünen_, loc. cit. What has recently been urged
     against _Ricardo_ by, for instance, _J. B. Say_, Traité, II,
     ch. 9; _Sismondi_, N. P., III, ch. 12; _Jones_, Essay on the
     Distribution of Wealth, 1831 (see Edinburg Review, LIV),
     bears evidence either of a misunderstanding of the great
     thinker, or else contains only modifications of some
     individual abstract propositions of his, stated perhaps too
     strictly. In judging _Ricardo_, it must not be forgotten,
     that it was not his intention to write a text-book on the
     science of Political Economy, but only to communicate to
     those versed in it the result of his researches, in as brief
     a manner as possible. Hence he writes so frequently making
     certain assumptions; and his words are to be extended to
     other cases only after due consideration, or rather
     re-written to suit the changed case.

     _Baumstark_ very correctly says: "Rent rises, not because
     new capital has been invested, but when the circumstances of
     trade make a new addition to capital possible."
     (Volkswirthschaftliche Erläuterungen über Ricardo's System,
     1838, 567.) _Fuoco's_ Nuova Teoria della Rendita, Saggi
     economici, No. 1, is nothing but an Italian version of the
     doctrines of Malthus and Ricardo. The greater number of
     anti-Ricardo theories of rent have originated from the rapid
     and apparently unlimited growth of national husbandry in
     recent times. Thus it is a fundamental thought in
     _Rodbertus_, Sociale Briefe, 1851, No. 3, that an increase
     of the price of corn need not attend an increase of
     population, either uniformly or necessarily. According to
     _Carey_, The Past, the Present and the Future, ch. 1, 1848,
     the most fertile land is last brought under cultivation,
     because it is covered with swamps, forests, etc.; and
     because it offers greater resistance to the work of the
     agriculturist, by reason of its luxurious vegetation. The
     more elevated lands are first cultivated which present fewer
     obstacles to cultivation on account of their dryness, their
     thinner crust, etc. Carey generalizes this and thinks he has
     reversed the _Ricardo_ law of rent! He overlooks entirely
     that _Ricardo_ speaks only of the original powers of the
     soil. Now a swampy land which must be dried at the expense
     of a great deal of labor, possesses less of these original
     powers than a sandy soil which may be sown immediately. See
     _Carey_, Essay on the Rate of Wages, 232 ff., and the
     lengthy exposition of the same doctrine rank with inexact
     natural science and unhistorical history in the same
     author's Principles of Social Science, 1858, vol. I.

     There is this much truth, however, in Carey's error that,
     with increasing economic progress, the superiority not only
     of situation, relatively to the market, but also of natural
     fertility, may of itself go over to other lands. Thus, for
     instance, the ancient Slaves used clay soil everywhere as
     pasturage, and cultivated the sandy soil, because their
     pick-axes could overcome the resistance only of the latter.
     _Langethal_, Geschicte der deutschen Landw., II, 66;
     _Waitz_, Schlesw. Holstein, Gesch., I, 17. Similarly in
     Australia: _Hearne_, Plutology, 1864. Compare, _Roscher_,
     Nationalökonomik des Ackerbaues, § 34. The word fertility
     should not be taken too exclusively in its present
     agricultural sense. In a lower stage of civilization, the
     facility of military defense or the _ut fons, ut nemus
     placuit_--_Tacit._, Germ., 16--may have more weight.

     The chief difference in the theories of rent consists in
     this: whether rent is considered a result of production or
     only of distribution, and an equalization of gain. Compare
     _Behrens_, Krit. Dogmengeschichte der Grundrente, 1868, 48.]


SECTION CLV.

HISTORY OF RENT.

In poor nations, and in those in a low stage of civilization, especially
where the population is sparse, rent is wont to be low. In Turkistan,
land is valued according to the capital invested in its
irrigation.[155-1] In the interior of Buenos Ayres, at the beginning of
the nineteenth century, landed estates were paid for in proportion to
the magnitude of the live stock on them, so that it seemed, at least, as
if the land was given for nothing, or simply thrown in with the
purchase. And only a short time since, an English acre in the same
country, fifteen _leguas_ from the capital, was worth from three to four
pence, and at a distance of fifty _leguas_, only two pence.[155-2] In
Russia, also, not long since, the valuation of landed estates was made,
not in proportion to the superficies, but according to the number of
souls, that is, of male serfs, a _remnant_ suggestive of the previous
situation when no rent was paid.[155-3] Where, in relatively uncivilized
medieval times, instances of the farming out or leasing of land occur,
farm-rents are so small that their payment can only be considered as a
mere recognition of the owner's continuing right of property.

Under these circumstances, it is natural that great landowners,
especially in the lower stages of civilization, should exert an
especially great influence; and that their low tenants (_Hintersassen_)
are more dependent in proportion to the want of capital and the absence
of trade. Hence, these are wont to make up for the smallness of their
rent by great honors paid to their landlords, and great services,
especially military service.[155-4] Besides, the lords of the manor, in
almost every medieval period, have used their influence with the
government to cut down the wages of labor by serfdom and other similar
institutions, and the rate of interest on capital by prohibiting
interest, by usury laws, etc.; and thus, in both ways, to artificially
increase their own share of the national income.

     [Footnote 155-1: _A. Burnes_, Reise nach Bukhara, II, 238.]

     [Footnote 155-2: _W. Maccann_, Two Thousand Miles Ride
     through the Argentine Provinces, London, 1853, I, 20; II,
     143. Ausland, 1843, No. 140. Frisian ancient documents in
     which parcels of land are described as _terræ 20 animalium,
     48 animalium_, etc. _Lacomblet_, Urkundenbuch, I, 27.
     _Kindlinger_, Münster Beitr., I, Urkundenbuch, 24.]

     [Footnote 155-3: The custom began to be more usual in Russia
     also to say "so many _dessjatines_ and the peasantry
     belonging thereto." This was especially so in the case of
     very fertile land, as for instance in Orel. See _v.
     Haxthausen_, Studien, II, 510. Formerly the bank loaned only
     250 per soul, afterwards up to 300 R. Bco. (II, 81). Spite
     of this _v. Haxthausen_ thinks that rent would be illusory,
     in Russia, in case agriculture was carried on with hired
     workmen. (I, Vorrede, XIII.) _Carey's_ remark, "every one is
     familiar with the fact that farms sell for little more than
     the value of the improvements," may be true of the United
     States (The Past, Present and Future, 60.)]

     [Footnote 155-4: This condition of things continued in the
     highlands of Scotland until the suppression of the revolt of
     1745. The celebrated Cameron of Lochiel took the field with
     800 tenants, although the rent of the land was scarcely
     £500. (_Senior_, Three Lectures on the Rate of Wages, 45.)
     "Poor 12,000 pound sterling per annum nearly subverted the
     constitution of these kingdoms!" (_Pennant._)]


SECTION CLVI.

INFLUENCE OF ADVANCING CIVILIZATION ON RENT.

Advancing civilization contributes in three different ways to raise
rents.[156-1] The growth of population necessitates either a more
_intensive_ agriculture (higher farming), or causes it to extend over
less fertile parcels of land, or parcels less advantageously
situated.[156-2] If the growth of population be attended by an increase
of capital, this happens in a still higher degree. The people now
consume, if not more, at least wheat of finer quality, more and better
fed live stock; the consequence of which is, that the demands made on
the land are increased. Lastly, if the population be gradually
concentrated in large cities, this fact also must contribute to raise
rents, because it requires a multitude of costly transportations of
agricultural produce and so increases the cost of production (up to the
time of consumption) on the less advantageously situated
land.[156-3] [156-4]

As most of the symptoms of a higher civilization become apparent
earliest, and in the most striking manner, in large cities, so also a
rise in rents is first felt in them. The building of houses may be
considered as the most _intensive_ of all cultivation of land and that
which is most firmly fixed to the soil.[156-5] Rent has nowhere an
unsurpassable maximum any more than a necessary minimum.

     [Footnote 156-1: _Jung_, Lehrbuch der Cameralpraxis, 1790,
     182, has so little idea of this that he is of opinion that
     farm-rent must grow ever smaller.]

     [Footnote 156-2: According to _Schmoller_, in the
     Mittheilungen des landwirthschaftlich. Instituts zu Halle,
     1865, 112 seq., the average farm-rent of the Prussian
     domains per _morgen_, and the population to the square mile,
     amounted:

     ===============+============+============+============+============
       _District._  |  _1849._   |  _1864._   |  _1849._   |  _1858._
     ---------------+------------+------------+------------+------------
                    |       _Thalers._        |      _Population_
                    |                         |   _per square mile_
     Königsberg,    |    0.73    |    1.16    |    2076    |    2298
     Gumbinnen,     |    0.59    |    0.76    |    2059    |    2249
     Danzig,        |    1.02    |    1.51    |    2656    |    2926
     Marienwerder,  |    0.63    |    1.06    |    1944    |    2135
     Posen,         |    0.69    |    1.07    |    2789    |    2857
     Bromberg,      |    0.69    |    1.10    |    2116    |    2322
     Stettin,       |    1.07    |    1.73    |    2355    |    2614
     Cöslin,        |    0.83    |    1.30    |    1735    |    1940
     Stralsund,     |    0.95    |    1.50    |    2347    |    2549
     Breslau,       |    1.19    |    1.45    |    4733    |    5034
     Liegnitz,      |    1.17    |    1.75    |    3676    |    3763
     Oppeln,        |    0.86    |    1.20    |    3973    |    4433
     Potsdam,       |    1.08    |    1.59    |    3317    |    3640
     Frankfort,     |    1.29    |    2.00    |    2446    |    2660
     Magdeburg,     |    2.31    |    2.98    |    3290    |    3508
     Werseburg,     |    2.35    |    3.03    |    3934    |    4270
     Erfurt,        |    2.04    |    2.55    |    5621    |    5735
     Münster,       |    ....    |    2.03    |    3192    |    3299
     Minden,        |    2.48    |    2.62    |    4841    |    4808
     ===============+============+============+============+============

     Compare the review of rents in the states of the Zollverein,
     in _v. Viehbahn_, Statistik, II, 979. It is difficult to
     compare different countries with one another in this
     respect, because it is seldom certain whether the word rent
     means exactly the same thing in them. Besides, it should not
     be overlooked, how difficult it is to ascertain what rent,
     in the strict sense of the term, as used by _Ricardo_, is.]

     [Footnote 156-3: Moreover, the rise of rents, in so far as
     it depends on the greater cost of transportation to a
     growing market, becomes progressively slower. The concentric
     circles about that point increase in a greater ratio than
     the radii.]

     [Footnote 156-4: As to the history of rents in England, a
     comparison of the years from 1480 to 1484, with the most
     recent times, shows that the amount of rent estimated in
     money in agricultural districts, where no very great
     "improvements" have been made, have increased as 1 to
     80-100, while the price of wheat has increased 12-fold and
     wages 10-fold. (_Rogers_, in the Statist. Journal, 1864,
     77.) According to _Hume_, History of England, ch. 33, it
     seems that rents under Henry VIII. were only 1/10 of those
     usually paid in his time, while the price of commodities was
     only ¼ of the modern. _Davenant_, Works, II, 217, 221,
     estimates the aggregate rent of land, houses and mines, at
     the beginning of the seventeenth century, at £6,000,000;
     about 1698, at £14,000,000; capitalized respectively at
     £72,000,000 and £252,000,000. About 1714, _J. Bellers_,
     Proposals for Employing the Poor, puts it at £15,000,000;
     about 1726, _Erasm. Phillips_, State of the Nation in
     Respect to Commerce etc., at £20,000,000; about 1771, _A.
     Young_, at £16,000,000; about 1800, _Beeke_, Observations on
     the Income-Tax, at £20,000,000; about 1804, _Wakefield_,
     Essay on Political Economy, at £28,000,000; about 1838,
     _McCulloch_, Statist., I, 535, at £29,500,000. The poor tax
     in England and Wales, in 1841, was on a valuation of
     £32,655,000. (_Porter_, Progress, VI, 2, 614); 1864-5, the
     annual value of lands, £46,403,853 (Stat. Journal, 1869.)
     Moreover, the income from houses, railroads, etc. (real
     property other than lands), increased very much more than
     that received from pieces of farming land; between 1845 and
     1864-5, the former by 392.8 per cent., and the latter by
     27.9 per cent. (_Hildebrand's_ Jahrbb., 1869, II, 383 seq.);
     and the income tax of 1857 on £47,109,000. There was a still
     more rapid growth of rent in Scotland. In 1770, it was only
     £1,000,000-1,200,000: in 1795, £2,000,000; in 1842,
     £5,586,000. (_McCulloch_, I, 576, ff.) In Ireland, about
     1776, it was only $900,000, according to _Petty_. (Political
     Anatomy of Ireland, I, 113.) _A. Young_ assumed it to be
     £6,000,000 in 1778; _Newenham_, View of Ireland, about 1808,
     £15,000,000. In many parts of the Rosendale Forest in
     Lancashire, the land is leased by the ell, at £121, and even
     at £131 per acre; i. e., more than the whole forest of
     15,300 acres was rented for in the time of James I. In many
     of the moorland portions of Lancashire, rent has risen in
     150 years, 1,500 and even 3,000 per cent. (Edinburg Rev.,
     1843, Febr., 223.)

     The amount of rents in Prussia, _Krug_ assumed to be in
     1804, 50,000,000 thalers, and _von Viebahn_, Zollverein
     Statistik, II, 974, in 1862, 116,500,000 thalers. _Lavergne_
     assumed the rents of France after 1850 to be 1,600,000,000
     francs (Revue des deux Mondes, Mars, 1868); and _Dutot_,
     Journal des Economistes, Juin, 1870, in 1870, at
     2,000,000,000. In Norway, the capitalized value of all the
     land was assessed at 13,000,000,000 thalers in specie, in
     1665; in 1802, at 25,500,000; in 1839, at 64,000,000
     thalers. _Blom_, Statistik von Norwegen, I, 145. The older
     such estimates are, the more unreliable they are.]

     [Footnote 156-5: In Paris, in 1834, the square _toise_ = 37
     sq. feet, in the Rue Richelieu and Rue St. Honoré, cost
     1,500 to 2,000 francs; in Rue neuve Vivienne, 2,500 to 3,500
     francs; in 1857, from 200 to 500 francs per square meter, =
     10 sq. feet, was very usual. (_Wolowski_.) Before the gates
     of Paris, the rent amounted to as high as 250 francs per
     _hectare_; at Fontainebleau, to only from 30 to 40. (Journal
     des Economistes, Mars, 1856, 337.) In Market Square,
     Philadelphia, land was worth from 3,000 to 4,000 francs per
     sq. _toise_, and in Wall Street, New York, about 4,000
     francs. (_M. Chevalier_, Letters sur l'Amérique, 1836, I,
     355.) In St. Petersburg, after 6 years, the house frequently
     falls to the owner of the area. (_Storch._ by _Rau_, I, 248
     f.) In Manchester, the Custom House area cost from 10 to 12
     pounds sterling per square yard; in the center of the city,
     as high of £40, that is, nearly £200,000 per acre. In
     Liverpool, in the neighborhood of the Exchange and of Town
     Hall, the cost is from 30 to 40 pounds sterling. (Athenæum,
     Dec. 4, 1852.) In London, a corner building on London
     street, erected for £70,000, with only three front windows,
     pays a rental of £22,000. (Allg. Zeitung, 1 Febr., 1866.)
     The villa at Misenum--a very beautiful location--which the
     mother of the Gracchi bought for about 5,000 thalers, came
     into the possession of L. Lucullus, consul in the year B. C.
     74, for about 33 times as much. _Mommsen_, Römisch. Gesch.,
     II, 382.]


SECTION CLVII.

HISTORY OF RENT.--IMPROVEMENTS IN THE ART OF AGRICULTURE.

Improvements in the art of agriculture which are confined to individual
husbandmen leave rent unaffected. They do not perceptibly lower the
price of agricultural products, and only effect an increase of the
reward of enterprise which is entirely personal to the more skillful
producers and does not attach to the ground itself.

But how is it when these improvements become general throughout the
country? If population and consumption remain unchanged, the supply of
agricultural products will exceed the demand. This would compel farmers,
if there be no avenue open to exports, to curtail their production. The
least fertile and most disadvantageously situated parcels of land will
be abandoned to a greater or less extent, and the least productive
capital devoted to agriculture, withdrawn. In this way, rent goes down
both relatively and absolutely, although the owners of land may be able
to partially cover their loss by the gain which results to them as
consumers and capitalists.[157-1] (§ 186). After a time, however, and as
a consequence of the diminished price of corn, population and
consumption will increase, and entail an extension of agriculture and a
consequent rise in rents.[157-2] If it, relatively speaking, reaches the
same point as before, it still is absolutely much greater than before.
Let us suppose that there are three classes of land of equal extent in a
country, which for an equal outlay of capital produce 100,000, 80,000
and 70,000 bushels yearly. The rent of the land here would be equal to
at least 40,000 bushels. If the yield of production now doubles, while
the demand for agricultural products also doubles, the aggregate harvest
will be 200,000 + 160,000 + 140,000 bushels, and consequently rent will
have risen to at least 80,000 bushels. But this increase of rent has
injured no one. If the population increases in a less degree than the
productiveness of the land, the consumer may, to a certain extent, gain
largely, and the landowner better his condition. However, great
agricultural improvements spread so gradually over a country, that, as a
rule, the demand for agricultural products can keep pace with the
increased supply. But even in this case, that transitory absolute
decline of rent may be avoided; and it cannot be claimed universally, as
it is by many who are satisfied with mumbling Ricardo's words after him,
that an increase of rent is possible only by an enhancement of the price
of the products of the soil. Where the development of a people's economy
is a normal one, the rent of land is wont to increase gradually, but at
the same time to constitute a diminishing quota of the entire national
income.[157-3]

Improvements in milling,[157-4] and in the instruments of
transportation[157-5] adapted to agricultural products, and the
introduction of cheaper[157-6] food, have the same effect as
improvements of agricultural production. All such steps in advance
render an increase in population, or in the nation's resources, possible
without any corresponding increase in the amount paid to landowners as
tribute money.[157-7]

The foregoing facts furnish us the data necessary to decide what
influence permanent soil improvements have on the rent of land.[157-8]
The improved parcels of land now grow more fertile. Their rentability
also increases, while that of the others becomes not only relatively but
absolutely less, if the demand remains unaltered. The whole is as if
capital had been transformed into fertile land, and this added to the
improved land.

     [Footnote 157-1: Since it has seemed absurd to many writers
     to say that an improvement in the art of agriculture may
     cause rents to decline (compare _Malthus_, Principles, I,
     ch. 3, 8), _John Stuart Mill_, Principles, IV, ch. 3, § 4,
     prefers to put the question thus: whether the landowner is
     not injured by the improvement of the estates of other
     people, although his own is included in the improvement.
     Compare _Davenant_, Works, I, 361. And so the long
     agricultural crisis through which Germany passed at the
     beginning of the third decade of this century was produced
     mainly by the great impulse given to agriculture (_Thaer_,
     _Schuerz_ etc.), while population did not keep pace with it.
     Similarly, at the same time, in England, _McCulloch_, Stat.,
     I, 557 ff. Of course, the less fertile pieces of land
     declined even relatively most in price. From 1654 to 1663,
     Switzerland experienced a severe agricultural crisis,
     attended with oppressive cheapness of corn, a great decline
     in the price of land, innumerable cases of insolvency,
     revolts of the peasantry, emigration, etc. (_Meyer von
     Knonau_, Handbuch d. schweiz. Gesch., II, 43.) The Swiss
     had, precisely during the Thirty Years' War which spared
     them, so extensively developed their agricultural interests,
     that now that other countries began to compete with them,
     they could not find a market large enough for their
     products. For English instances of similar "agricultural
     distress" in the seventeenth and eighteenth centuries, see
     _Child_, Discourse on Trade, 73, 124 seq.; _Temple_,
     Observations upon the U. P., ch. 6; _Tooke_, History of
     Prices, I, 23 seq., 42. Even where there have been no
     technic improvements, a series of unusually good harvests
     may have the same results, of which there are many instances
     scattered through _Tooke's_ first volume.

     There is great importance attached in England to the
     difference between those agricultural reforms which save
     land and those which effect a saving in capital and labor.
     The latter, it is said, decrease the money rent of the
     landowner by depreciating the price of corn, but leave the
     corn-rent unaltered. The former, on the other hand, decrease
     the rent both in money and corn, but the money rent in a
     higher degree. (_Ricardo_, Principles, ch. 2; _J. S. Mill_,
     Principles, IV, ch. 3, 4.)]

     [Footnote 157-2: When the demand for products of the soil
     which minister to luxury, such as fat meat, milk,
     vegetables, is increasing, a greater cheapness of the
     necessary wheat may raise rent, for the reason that lands
     are now cultivated which were not formerly tillable. Thus,
     there is now land in Lancashire which could not formerly be
     planted with corn, because the laborers would have consumed
     more than the harvest yielded. Since the large imports of
     the means of subsistence from Ireland these lands have been
     transformed into artificial meadows, gardens, etc.
     (_Torrens_, The Budget, 180 ff.) Compare _Adam Smith_, I,
     257, ed. Bas. _Banfield_ would misuse these facts to
     overturn the theory of Ricardo. (Organization of Industry,
     1848, 49 ff.)]

     [Footnote 157-3: The French testamentary tax was on an
     amount,

       In 1835, of   552 mill. francs moveable property
               and   984  "    immoveable.
       In 1853, of   820  "    francs moveable property
               and 1,176  "    immoveable.
       In 1860, of 1,179  "    francs moveable property
               and 1,545  "    immoveable.

     so that the preponderance of immoveable property constituted
     a converging series of 78, 43, and 31 per cent. (_Parieu._)
     In North America, with its great unoccupied territory, the
     reverse is the case. The census of 1850 gave a moveable
     property of 36 per cent.; that of 1860 of only 30 per cent.
     According to _Dubost_, the rent of land in Algeria was 80
     per cent., a gross product of only 10-15 francs per
     _hectare_; in Corsica, 66 per cent., a gross yield of from
     30-35 per cent.; in the Department du Nord, 17.5-24 per
     cent., a gross yield of from 500-740 francs. (Journal des
     Economistes, Juin, 1870, 336 ff.)]

     [Footnote 157-4: The repeated sifting of the bran (_mouture
     économique_) had great influence in this respect. In France,
     in the sixteenth century, a _setier_ of wheat gave only 144
     pounds of bread. In 1767, according to _Malouin_, L'Art du
     Bonlanger, it gave 192 pounds. It now gives from 223 to 240
     pounds. The gain in barley is still greater; the _setier_
     gives 115 pounds of flour, formerly only 58. (_Roquefort_,
     Histoire de la Vie Privée des Français, I, 72 ff.
     _Beckmann_, Beitr. zur Gesch. der Erfind., II, 54.)]

     [Footnote 157-5: In the beginning of the eighteenth century,
     the counties in the neighborhood of London addressed a
     petition to Parliament against the extension of the building
     of turnpike roads which caused their rents to decline, from
     the competition of distant districts. (_Adam Smith_, Wealth
     of Nat., I, ch. 11, 1.) Compare _Sir J. Stewart_,
     Principles, I, ch. 10. Improvements in transportation which
     affect the longest and shortest roads to a market in an
     absolutely equal degree, as, for instance, the bridging of a
     river very near the market, leave rent unaffected. (_von
     Mangoldt_, V. W. L., 480.)]

     [Footnote 157-6: _Malthus_, Principles, 231 ff. If the
     laboring class were to become satisfied with living on
     potatoes instead of meat and bread as hitherto, rents would
     immediately and greatly fall, since the necessities of the
     people might then be obtained from a much smaller
     superficies. But after a time, the consequent increase in
     population might lead to a much higher rent than before;
     since a great deal of land too unfertile for the cultivation
     of corn might be sown with potatoes, and thus the limits of
     cultivation be reached much later.]

     [Footnote 157-7: In France, between 1797 and 1847, the
     average price of wheat did not rise at all. _Hipp. Passy_
     mentions pieces of land which produced scarcely 12
     hectolitres of wheat, but which now produce 20--an increased
     yield of 170 francs, attended by an increase in the cost of
     only 75 francs. (Journal des Economistes, 15 Oct., 1848.)
     Moreover, it may be that a not unimportant part of modern
     rises in the price of corn may be accounted for by the
     better quality of the corn caused by higher farming. (_Inama
     Sternbeg_, Gesch. der Preise, 10 seq.) Such facts, readily
     explainable by _Ricardo's_ theory, remove the objection of
     _Carey_, _Banfield_ and others, that the condition of the
     classes who own no land has, since the middle ages,
     unquestionably improved. Political Economy would be simply a
     theory of human degradation and impoverishment, if the law
     of rent was not counteracted by opposing causes. (_Rœsler_,
     Grundsätze, 210.) According to _Berens_, Krit.
     Dogmengeschichte, 213, the actual highness of rent is to be
     accounted for by the antagonism between the "soil-law
     (_Bodengesetz_) of the limited power of vegetation," and the
     "progress of civilization" (but surely only to the extent
     that the latter improves the art of agriculture). Thus, too,
     _John Stuart Mill_, Principles, I, ch. 12; II, ch. 11, 15
     seq.; III, ch. 4 seq.; IV, ch. 2 ff.]

     [Footnote 157-8: Thus, for instance, drainage works which,
     where properly directed, have paid an interest of from 25 to
     70 per cent. per annum in England and Belgium on the capital
     invested.]


SECTION CLVIII.

HISTORY OF RENT.--IN PERIODS OF DECLINE.

If a nation's economy be declining, in consequence of war for instance,
the disastrous influence hereof on rent may be retarded by a still
greater fall in wages or in the profit on capital. But it can be hardly
retarded beyond a certain point.[158-1] As a rule, the decline of rents
begins to be felt by the least fertile and least advantageously situated
land.[158-2] [158-3]

     [Footnote 158-1: "The falling of rents an infallible sign of
     the decay of wealth." (_Locke._) In England, in 1450, land
     was bought at "14 years' purchase;" i. e., with a capital =
     14 times the yearly rent paid, in 1470, at only "10 years'
     purchase." (_Eden_, State of the Poor, III, App., I, XXXV.)
     This was, doubtless, a consequence of the civil war raging
     in the meantime. The American war (1775-82) depressed the
     price of land in England to "23¼ years' purchase,"
     whereas it had previously stood at 32. (_A. Young._) The
     rent of land, in many places in France, declined from 10,000
     to 2,000 livres, on account of the many wars during Louis
     XIV.'s reign. (_Madame de Sévigné's_ Lettres, 25 Dec, 1689.)
     Even in 1677, it was only one-half of its former amount
     (_King_, Life of Locke, I, 129.) The whole Bekes county
     (_comitat_) in Hungary was sold for 150,000 florins under
     Charles VI.; after the unfortunate war with France.
     (_Mailath_, Oesterreich, Gesch., IV, 523.) Compare
     _Cantillon_, Nature du Commerce, 248. In Cologne, a new
     house was sold in the spring of 1848 for 1,000 thalers, the
     site of which alone had cost 3,000 thalers; and there are
     six building lots which formerly cost over 3,000 thalers,
     now valued at only 100 thalers. (_von Reden_, Statist.
     Zeitschr., 1848, 366.) On the other hand, Napoleon's war
     very much enhanced English rents (_Porter_, Progress of the
     Nation, II, 1, 150 ff.), because it affected England's
     national husbandry principally by hindering the importation
     of the means of subsistence. (_Passy_, Journal des
     Economistes, X, 354.)]

     [Footnote 158-2: Thus the price of lands, in Mecklenburg,
     between 1817 and 1827, fell 30 to 40 per cent. in the least
     fertile quarters; in the better, from 15 to 20 per cent.
     (_von Thünen_, in _Jacob_, Tracts relating to the Corn
     Trade, 40, 187.) _Per contra_, see Hundeshagen Landwirthsch.
     Gewerbelehre, 1839, 64 seq., and _Carey_, Principles, I,
     354.]

     [Footnote 158-3: The average rent in England was, in 1815,
     17s. 3d. In the counties, it was highest in Middlesex, 38s.
     9d.; in Rutland, 38s. 2d.; Leicester, 27s. 3d.; lowest in
     Westmoreland, 9s. 1d. In Wales, the average was 7s. 10d.;
     highest in Anglesea, 19s.; lowest in Merioneth, 4s. 8d. In
     Scotland the average was 5s. 1½d.; highest, Midlothian,
     24s. 6½d.; lowest, Highland Caithness, Cromarthy,
     Inverness and Rosse, from 1s. 1d. to 1s. 5d.; Orkneys,
     8½d.; Sutherland, 6d.; Shetlands, 3d. In Ireland, the
     average was 12s. 9d.; highest in Dublin, 20s. 1½d.;
     lowest, Donegal, 6s. (_McCulloch_, Stat., I, 544 ff.;
     Yearbook of general Information, 1843, 193.) In France,
     _Chaptal_, De l'Industrie Fr., 1819, I, 209 ff., estimates
     the average yield per _hectare_ at 28 francs; in the
     Department of the Seine, 216; Nord, 69.56; Lower Seine,
     67.85; in the upper Alps, 6.2; in the lower Alps, 5.99: in
     the Landes, 6.25. While in the Landes, only 20 francs a
     _hectare_ are frequently paid, the purchase price in the
     neighboring Medoc is sometimes 25,000 francs. (Journal des
     Economistes, Jan. 15, 1851.) In Belgium, the average price
     of agricultural land is 52.46; in East Flanders, 53.19; in
     Namur, 29.24. (_Heuschling_, Statistique, 77.)]


SECTION CLIX.

HISTORY OF RENT.--RENT AND THE GENERAL GOOD.

We so frequently hear rent called the result of the monopoly[159-1] of
land, and an undeserved tribute paid by the whole people to landowners,
that it is high time we should call attention to the common advantage it
is to all. There is evidently danger that, with the rapid growth of
population, the mass of mankind should yield to the temptation of
gradually confining themselves to the satisfaction of coarse, palpable
wants; that all refined leisure, which makes life and the troubles that
attend it worth enduring, and which is the indispensable foundation of
all permanent progress and all higher activity, should be gradually
surrendered. (See § 145.) Here rent constitutes a species of reserve
fund, which grows greater in proportion as these dangers impend by
reason of the decline of wages and of the profit of capital, or
interest.[159-2] Besides, precisely in times when rent is high, the sale
and divisibility of landed estates act as a beneficent reaction against
the monopoly of land, which is always akin to the condition of things
created by rent.

But it is of immeasurably greater importance that high rents deter the
people from abusing the soil in an anti-economic way; that they compel
men to settle about the centers of commerce, to improve the means of
transportation, and under certain circumstances to engage in the work of
colonization; while, otherwise, idleness would soon reconcile itself to
the heaping together of large swarms of men.[159-3] The anticipation of
rent may render possible the construction of railroads, which enable the
land to yield that very anticipated rent.

     [Footnote 159-1: "Rent is a tax levied by the landowners as
     monopolists." (_Hopkins_, Great Britain for the last forty
     Years, 1834.) For a very remarkable armed and successful
     resistance of farmers in the state of New York to the claims
     for rent of the Rensselaer family, represented by the
     government, see _Wappäus_ Nord Amerika, 734.]

     [Footnote 159-2: _Malthus_, Additions to the Essay on
     Population, 1817, III, ch. 10; compare also _Verri_,
     Meditazioni, XXIV, 3. The Physiocrates call the landowners
     _classe disponible_, since, as they may live without labor,
     they are best adapted to military service, the civil
     service, etc., either in person or by defraying the expenses
     of those engaged in them. (_Turgot_, Sur la Formation etc.,
     § 15; Questions sur la Chine, 5.)]

     [Footnote 159-3: Well discussed by _Schäffle_, Theorie, 65,
     72, 83. _Malthus_ considers the capital and labor expended
     in agriculture more productive than any other, because they
     produce not only the usual interest and wages, but also
     rent. If, therefore, the manufacturing and commercial profit
     of a country = 12 per cent., and the profit of capital
     employed in agriculture = 10 per cent., a corn law which
     compelled the capital engaged in manufactures and commerce
     to be devoted to agriculture would be productive of
     advantage to the national husbandry in general, if the
     increase in rent should amount to about 3 per cent. (On the
     Effects of the Corn Laws and of a Rise or Fall in the Price
     of Corn on the Agriculture and the general Wealth of the
     Country, 1815. The Grounds of an Opinion on the Policy of
     Restricting the Importation of Foreign Corn, 1815.) Compare
     _supra_, § 55, and the detailed rectification in _Roscher_,
     Nationalökonomik des Ackerbaues, etc., § 159 ff.]



CHAPTER III.

WAGES.


SECTION CLX.

THE PRICE OF COMMON LABOR.

Like the price of every commodity, the immediate wages of common labor
is determined by the relation of the demand and supply of labor. Other
circumstances being the same, every great plague[160-1] or
emigration[160-2] is wont, by decreasing the supply, to increase the
wage's of labor; and a plague, the wages of the lowest kind of labor
most.[160-3] And so, the increased demand, in harvest time, is wont to
increase wages; and even day board during harvest time is wont to be
better.[160-4] [160-5] In winter the diminished demand lowers wages
again.[160-6] Among the most effective tricks of socialistic sophistry
is, unfortunately, to caricature the correct principle: "labor is a
commodity," into this other: "the laborer is a commodity."

Moreover, common labor has this peculiarity, that those who have it to
supply are generally much more numerous than those who want it; while
the reverse is the case with most other commodities. Another important
peculiarity of the "commodity" labor, is, that it can seldom be bought,
without at the same time reducing the person of the seller to a species
of dependence. Thus, for instance, the seller cannot be in a place
different from that in which his commodity is. Hence a change in the
person, etc. of the buyer very readily necessitates in the workman a
radical change of life, and that the levelling adjustment of local
excess and want is rendered so difficult in the case of this
commodity.[160-7] Hence, it is that, if in the long run the exchange of
labor against wages is to be an equitable one (§ 110), the master of
labor must, so to speak, incorporate part of his own personality into
it, have a heart for faithful workmen and thus attach them to
himself.[160-8]

     [Footnote 160-1: High rate of Italian wages after the plague
     in 1348, but also many complaints of the indolence and
     dissoluteness of workmen. (_M. Villani_, I, 2 ff., 57 seq.
     _Sismondi_, Gesch. der ital. Republiken in Mittelalter, VI,
     39.) In England, the same plague increased the wages of
     threshers from an average of 1.7 d. in 1348, to 3.3 d. in
     1349. Mowers received, during the 90 years previous, 1/12 of
     a quarter of wheat per acre; in 1371-1390, from 1/7 to 1/6.
     The price of most of their wants was then from 1/8 to 1/12
     as high as in _A. Young's_ time, and wages ¼ as high.
     (_Rogers_, I, 306, 271, 691.) The great earthquake in
     Calabria, in 1783, produced similar effects. (_Galanti_, N.
     Beschreiburg von Neapel, I, 450.) Compare _Jesaias_, 13, 12.
     On the other hand, depopulation caused by unfortunate wars
     is not very favorable to the rate of wages; instance,
     Prussia in 1453 ff., after the Polish struggle, and Germany,
     after the Thirty Years' War.]

     [Footnote 160-2: How much it contributes to raise wages that
     workmen can, in a credible way, threaten to move to other
     places, is illustrated by the early high wages and personal
     freedom of sailors. Compare _Eden_, State of the Poor, I,
     36. In consequence of the recent great emigration from
     Ireland, the weekly wages of farm hands in that country was
     57.4 per cent. higher than in 1843-4. In Connaught, where
     the emigration was largest, it was 87 per cent. higher.
     (London Statist. Journ., 1862, 454.)]

     [Footnote 160-3: Compare _Rogers_, I, 276, and _passim_.]

     [Footnote 160-4: And this in proportion as the uncertainty
     of the weather causes haste. In England, the harvest doubles
     wages. (_Eden._) In East Friesland, it raises it from 8-10
     ggr. to 2 thalers sometimes (_Steltzner_); in the steppes of
     southern Russia, from 12-15, to frequently 40-50 _kopeks_.
     This explains why the country people who come into the
     weekly market are anxious, during harvest time, to get rid
     of their stocks as fast as possible. According to the
     Statist. Journal, 1862, 434, 448, the average wages in
     harvest and other times, amounted to:

                           _In harvest time._  _Other times._
     In Scotland for males,      18s. 7d.       12s. 11½d.
       "          "  females,    11s. 4d.        5s.  7d.
     In Ireland   "  males,      12s. 9d.        6s. 11½d.
       "          "  females,     8s. 3d.        3s.  9d.
       "          "  males,      15s. 4d.        7s.  1¼d.
       "          "  females,     7s.  1¾d.      3s. 11d.

     The reason why the wages of females rises more in harvest
     time than the wages of males may be the same that in many
     places in Ireland has made emigration more largely increase
     the wages of women. (l. c., 454.) Every excess of workmen
     depresses, and every scarcity of workmen enhances the wages
     of the lowest strata relatively most.]

     [Footnote 160-5: The wages of English sailors was usually
     40-50 shillings a month. During the last naval war, it rose
     to from 100 to 120, on account of the great demand created
     by the English fleet. (_McCulloch_, On Taxation, 40.)]

     [Footnote 160-6: The winter wages of German agricultural
     laborers varies between 6.1 and 20 silver groschens; summer
     wages between 7.9 and 27.5 silver groschens. _Emminghaus_,
     Allg. Gewerbelehre, 81, therefore, advises that in winter
     the meal time of workmen in the fields should be postponed
     to the end of the day, and winter wages then made less low
     than at present.]

     [Footnote 160-7: _W. Thornton_, On Labour, its wrongful
     Claims and rightful Dues, its actual, Present and possible
     Future, 1869, II, ch. 1. _Harrison_, Fortnightly Review,
     III, 50.]

     [Footnote 160-8: Just as the husband binds himself in
     marriage. While in concubinage there is apparent equality,
     it costs the woman a much greater sacrifice than the man.]


SECTION CLXI.

WAGES OF LABOR.--THE MINIMUM OF WAGES.

Human labor cannot, any more than any other commodity, be supplied, in
the long run, at a price below the cost of production.[161-1] [161-2] The
cost of production here embraces not only the necessary or customary
means of subsistence of the workman himself, but also of his family;
that is, of the coming generation of workmen. The number of the latter
depends essentially on the demand for labor. If this demand be such that
it may be satisfied by an average of six children to a family, the rate
of wages must be such as to support the workman himself and to cover the
cost of bringing up six children.[161-3] Where it is customary for the
wife and child, as well as for the father, to work for wages, the father
does not need to earn the entire support of the family, and hence
individual wages may be smaller.[161-4] But if it were to fall below the
cost mentioned above, it would not be long before increased mortality
and emigration, and a diminution of marriages and births would produce a
diminution of the supply; the result of which would be, if the demand
remained the same, a renewed rise of wages.

Conversely, it would be more difficult for the rate of wages to be
maintained long much above that same cost, in proportion as the
gratification of the sexual appetite was more generally considered the
highest pleasure of sense, and the love of parents for their children as
the most natural human duty. As Adam Smith says, where there is a great
demand for men, there will always be a large supply of them.[161-5]

     [Footnote 161-1: Compare _Engel's_ beautiful lecture on the
     cost of labor to itself (_Selbstkosten_ = _self-cost_),
     Berlin, 1866.]

     [Footnote 161-2: _Wolkoff_ zealously and rightly argues,
     that the minimum wages is not the _taux naturel_ of wages.
     (Lectures, 118 ff., 284.) _von Thünen_ also divides wages
     into two component parts--that which the workman must lay
     out in his support in order to continue able to work, and
     that which he receives for his actual exertion. (Isolirter
     Staat., II, 1, 92 seq.)]

     [Footnote 161-3: _Gasparin_ distinguishes five periods in
     the career of a workman generally: a, he is supported by his
     parents; b, he supports himself and is in a condition to
     save something; c, he marries, and supports his children
     with trouble; d, the children are able to work, and the
     father lives more comfortably; e, his strength and resources
     decline. (_Villermé_, Tableau de l'État physique et moral
     des Ouvriers, 1840, II, 387.)]

     [Footnote 161-4: _Cantillon_, Nature du Commerce, etc.,
     1755, is of opinion that a day laborer, to bring up two
     children until they are grown, needs about as much as he
     does for his own support; and that his wife may, as a rule,
     support herself by her own work. (42 ff.) In Germany, it is
     estimated that, in the case of day laborers, a woman can
     earn only from 1/3 to ½ of what her husband does; mainly
     because she is so frequently incapacitated for work by
     pregnancy, nursing, etc. (_Rau_, Lehrbuch, I, § 190.) In
     France, in 1832, a man working in the fields earned, on an
     average, 1¼ francs a day, the wife ¾ of a franc (200
     days to the year), the three children 38/100 francs (250
     days to the year), an aggregate of 650 francs per annum.
     (_Morogues._) In England, the average amount earned in the
     country was for males, per annum, £27 17s.; (munications
     relative to the Support and Maintenance of the Poor, 1834,
     p. LXXXVIII.) The wife of an English field hand, without
     children, earns 1/3 more than one with children. In the case
     of mothers, a difference of fewer or more children is
     unnoticeable in the effects on wages. (London Statist.
     Journal, 1838, 182.) In the spinning factories in
     Manchester, in 1834, children between 9 and 10 years of age
     were paid, weekly, from 2s. 9d. to 2s. 10d.; between 10 and
     12, from 3s. 6d. to 3s. 7d.; between 12 and 14, from 5s. 8d.
     to 5s. 9d.; between 14 and 16, from 7s. 5d. to 7s. 6d.
     (Report of the Poor Commissioners, 204.) Those manufactures
     which require great physical strength, like carpet and
     sail-cloth weaving, and those carried on in the open air and
     in all kinds of weather, allow of no such family competition
     and debasement of wages. (_Senior_ in the Report of the
     parliamentary Committee on Hand Weavers, 1841.)]

     [Footnote 161-5: Similarly, _J. Möser_, Patriot. Phant., I,
     40. _Adam Smith_ infers from the following symptoms in a
     country that wages are higher there than the indispensable
     minimum, viz.: if wages in summer are higher than in winter,
     since it is seldom that enough is saved in summer to satisfy
     the more numerous wants of winter; if wages vary less from
     year to year and more from place to place than the means of
     subsistence, it they are high even where the means of
     subsistence are cheapest. (Wealth of Nat., I, ch. 8.)]


SECTION CLXII.

COST OF PRODUCTION OF LABOR.

The idea conveyed by the expression necessaries of life is, within
certain limits, a relative one. In warm countries, a workman's family
needs less clothing, shelter, fuel and even food[162-1] than in cold
countries. This difference becomes still more striking when the warm
countries possess absolutely cheaper food as, for instance, rice,
Turkish wheat, bananas etc. Here, evidently, other circumstances being
the same, the rate of wages may be lower.[162-2] The cultivation of the
potato has operated in the same direction; since an acre of land planted
with potatoes yields, on an average, twice as much food as the same acre
planted with rye.[162-3] In France, two-thirds of the population lived
almost without animal food, on chestnuts, Indian corn, and potatoes
(_Dupin_), while in England, malt, hops, sugar, brandy, tea, coffee,
tobacco, soap, newspapers, etc. are described as "articles chiefly used
by the laboring classes." (_Carey_.)

The standard of decency of the working class also has great influence
here. The use of blouses in Paris has nothing repulsive, nor that of
wooden shoes in many of the provinces of France, nor the absence of
shoes in lower Italy; while the English workman considers leather shoes
indispensable, as he did only a short time ago a cloth coat. Compare
_infra_, § 214.[162-4]

     [Footnote 162-1: Explained since _Liebig's_ time by the fact
     that a part of food is consumed to preserve animal heat:
     means of respiration in contradistinction to means of
     nutrition. Recent research has shown that in cold weather
     more urea and also more carbonic acid are given off; hence
     the means of supplying this deficit should be greater in
     cold weather than in warm. This more rapid transformation is
     wont, when nutrition is sufficient, to be accompanied by
     more energetic activity. (_Moleschott_, Physiologie der
     Nahrungsmittel, 1850, 47, 50, 83.)]

     [Footnote 162-2: This is opposed in part by the fact that a
     hot climate induces indolence, and that therefore he needs a
     greater incentive to overcome his disposition to idleness.
     Thus, in the cooler parts of Mexico, the rate of wages was
     26 sous a day, in the warmer, 32 sous. (_Humboldt_, N.
     Espagne, III, 103.)]

     [Footnote 162-3: According to _Engel_, Jahrbuch für Sachsen,
     I, 419, on acres similarly situated and under similar
     conditions, the lowest yielded:

                _Watery contents  _Watery contents
                   included._        excluded._

     Of wheat,      1,881 lbs.       1,680 lbs.
      " rye,        1,549  "         1,404  "
      " pease,      1,217  "         1,095  "
      " potatoes,  21,029  "         5,257  "

     The dry substance of these products yielded:

              _Azotized                  _Mineral
             Substance._    _Fecula._     Matter._

     Wheat,      282 lbs.    879 lbs.     49 lbs.
     Rye,        243  "      661  "       34 lbs.
     Pease,      309  "      431  "       33 lbs.
     Potatoes,   525  "    3,785  "      178 lbs.

     In Saxony, from 1838 to 1852, the average prices stood as follows:

                               _Of Rye._  _Of Wheat._  _Of Potatoes._

     One lb. of dry substance,      1        1.28            .95
     One lb. of protein substance,  1        1.11           1.78
     One lb. of fecula,             1        1.14           0.72

     (loc. cit.) The high price of protein in wheat depends
     probably on the more agreeable appearance and pleasanter
     taste of wheat flour; the still higher price of potato
     protein on the exceedingly easy mode of its preparation.]

     [Footnote 162-4: As regards food alone, the cost of the
     support of a plowman on Count Podewil's estate, reduced by
     _Rau_, Lehrbuch, § 191, to the unit of rye, is annually
     1,655 lbs. of rye. According to _Koppe_, it is 1,952 lbs.;
     to _Block_, 2,300 lbs.; to _Kleemann_, from 1,888 to 2,552
     lbs.; to _Möllenger_, 2,171 lbs. The first three estimate
     the cost in meat at 78, 160 and 60 pounds. Compare _Block_,
     Beitr. Z. Landgüterschätzungskunde, 1840, 6. Exhaustive
     estimates for all Prussian governmental districts in _von
     Reden_, Preussische Erwerbs, und Verkehrsstatistik, 1853, I,
     177 ff., according to which the requirement, per family,
     varies between 71 thalers in Gumbinnen and 204 thalers in
     Coblenz, the average being 105 thalers. According to more
     recent accounts, a laborer's family in East Prussia, gangmen
     not included, get along very well on 177 thalers per annum.
     (_von der Goltz_, Ländl. Arbeiterfrage, 1872, 9 ff.) In
     Mecklenburg, omitting _Hofgänger_, on 183 thalers. (Ann.
     des. patr. Vereins, 1865, No. 26.)

     The necessary outlay of the family of an agricultural day
     laborer in England, in 1762, was estimated as follows: for
     bread and flour, £6 10s. per annum; for vegetables and
     fruit, £1 1-2/3s.; for fuel, light and soap, 2-9-5/6s.; for
     milk, butter and cheese, £1 1-6-5/6s.; for meat, £1 6s.; for
     house-rent, 1-6s.; for clothing, bedding, etc., 2-16-1/3s.;
     for salt, beer and colonial wares, 1-16-5/6s.; for medicine,
     expenses attending confinement of wife, etc., 1-6½s. (_J.
     Wade_, History of the middle and working Classes, 1853,
     545.) Concerning 1796, compare _Sir F. M. Eden_, State of
     the Poor, I, 660, 1823; _Lowe_, on the present Condition of
     England. Compare on the receipts and expenses of ten working
     families in and about Mühlhausen, the tables in the Journal
     des Economistes, October, 1861, 50; and further
     _Ducpétiaux_, Budgets économiques des Classes ouvrières en
     Belgique, 1855. According to _Playfair_ in _Knop_,
     Agriculturchemie, I, 810, ff., different classes of grown
     men need daily food.

     ===================+=========+========+========+========+========
        GRAMMES.        |  _1._   |  _2._  |  _3._  |  _4._  |  _5._
     -------------------+---------+--------+--------+--------+--------
     Plastic material,  |  56.70  |  70.87 | 119.07 | 155.92 | 184.27
     Fat,               |  14.70  |  28.35 |  51.03 |  70.87 |  70.87
     Starch,            | 340.20  | 340.20 | 530.15 | 567.00 | 567.00
     ===================+=========+========+========+========+========

     Here 1 stands for a convalescent who can bear only enough to
     preserve life; 2, the condition of rest; 3, moderate motion
     of from 5 to 6 English miles' walk daily; 4, severe labor =
     a walk of 20 English miles daily; 5, very severe labor = to
     a day's walk of 14 English miles, with a load weighing 60
     lbs. If the fat be given in terms of starch, the aggregate
     need of both substances in the case of 1 is 6.6 times as
     great as the need of plastic substance; in the case of 2, 3,
     4, and 5, respectively 5.7, 5.2, 4.8 and 4.0 times as much.

     A Dutch soldier doing garrison duty receives daily, in times
     of peace, 0.333 kilogrammes of wheat flour, 0.125 of meat,
     0.850 of potatoes, 0.250 of vegetables, containing in the
     aggregate 60 grammes of albumen. In forts, where the service
     is more severe, he receives 0.50 kilogrammes of wheat flour,
     0.06 of rice or groats, with an aggregate amount of 116
     grammes of albumen. (_Mulder_, Die Ernährung in ihrem
     Zusammenhange mit dem Volksgeiste, übersetzt _von
     Molecshott_, 1847, 58 seq.) According to the researches of
     Dr. Smith, in order to avoid the diseases caused by hunger,
     a man needs, on an average, to take 4,300 grains of carbon
     and 200 grains of nitrogen in his daily food; a woman 3,900
     grains of carbon and 180 grains of nitrogen. In 1862, the
     workmen in the famishing cotton industries of Lancashire
     were actually reduced to just about this minimum. (_Marx_,
     Kapital, I, 642.) Death from starvation occurs in all
     vertebrates when the loss of weight of the body, produced by
     a want of food, amounts to between two-fifths and one-half
     of what it was at the beginning of the experiment.
     (_Chossat_, Recherches expérimentales sur l'Inanition, 184,
     3.)]


SECTION CLXIII.

WAGES OF LABOR.--POWER OF THE WORKING CLASSES
OVER THE RATE OF WAGES.

In this way, the working classes hold in their own hands one of the
principal elements which determine the rate of wages; and it is wrong to
speak of an "iron law" which, under the control of supply and demand,
always reduces the average wages down to the means of subsistence.[163-1]
For the moment, indeed, not only individual workmen, but the whole
working class is master of the supply of its commodity only to a very
small extent; since, as a rule, the care for existence compels it to
carry, and that without interruption, its whole labor-power to market.
But it is true that the future supply depends on its own will; since,
with an increase or decrease in the size of the families of workingmen,
that supply increases or diminishes. If, therefore, by a favorable
combination of circumstances, wages have risen above the height of
urgent necessity, there are two ways open to the working class to take
advantage of that condition of things. The workman either raises his
standard of living, which means not only that his necessary wants are
better satisfied, his decencies increased and refined, but also and
chiefly, that the intellectual want of a good prospect in the future,
which so particularly distinguishes the honorable artisan from the
proletarian is taken into consideration. And it is just here that a
permanent workingmen's union, which should govern the whole class, might
exert the greatest influence. Their improved economic state can be
maintained only on condition that the laboring class shall create
families no larger than they hope to be able to support consistently
with their new wants.[163-2]

Or, the laboring class continues to live on as before, from hand to
mouth, and employ their increased resources to gratify their sexual
appetite earlier and longer than before, thus soon leading to an
increase of population.

The English took the former course in the second quarter of the last
century, when English national economy received a powerful impetus, and
the large demand for labor rapidly enhanced the rate of wages. The
Scotch did in like manner a generation later. The second alternative was
taken by the Irish, when the simultaneous spread of the cultivation of
the potato[163-3] and the union with England, at the beginning of the
nineteenth century, gave an extraordinary extension to their resources
of food. While the population of Great Britain, between 1720 and 1821,
did little more than double, the population of Ireland increased from
2,000,000 to nearly 7,000,000 between 1731 and 1821. No wonder,
therefore, that the average wages of labor was twenty to twenty-four
pence per day in the former, and in the latter only five pence.
(_MCCulloch._)[163-4]

Naturally enough, this difference of choice by the two peoples is to be
explained by the difference in their previous circumstances. The Irish
people, robbed by violence of their own higher classes, and, therefore,
and on this account precisely, almost entirely destitute of a middle
class, had lost the check on increase they possessed in the middle ages,
without having as yet assimilated to themselves the checks which come
with a higher stage of culture. Their political, ecclesiastical and
social oppression allowed them no hope of rising by temporary sacrifices
and energetic efforts permanently to a better condition as citizens or
gentlemen. Only the free man cares for the future. Hence, the sexual
thoughtlessness and blind good nature, the original tendencies of the
Irish people, necessarily remained without anything to counterbalance
them. It always supposes a high degree of intelligence and
self-restraint among the lower classes, when an increase in the
thing-value, or the real value of wages, does not produce an increase in
the number of workmen, but in their well-being. The individual is too
apt to think that it matters little to the whole community whether he
brings children into the world or not, a species of egotism which has
done most injury to the interests in common of mankind. As a rule, it
requires a great and palpable enhancement of wages to make workmen, as a
class, raise their standard of living.[163-5] [163-6]

     [Footnote 163-1: Compare _Lassalle_, Antwortschreiben an das
     Central Comite zur Berufung eines allg. deutschen
     Arbeitercongresses, 1863, 15; also _Turgot_, sur la
     Formation etc., § 6. When _Lassalle_ says that when a varied
     standard of living has become a national habit it ceases to
     be felt as an improvement, he says what is in a certain
     sense true. But is the man to be pitied who, absolutely
     speaking, is getting on well enough; relatively speaking,
     better off than before; but who is only not better off than
     other men?]

     [Footnote 163-2: A case in Holstein, in which, in the first
     half of the eighteenth century, the serfs of a hard master
     conspired together not to marry, and thus soon forced him to
     sell his estate. (_Büsch_, Darstellung der Handlung, V, 3,
     II.)]

     [Footnote 163-3: On the otherwise remarkable economic
     advance in Ireland about 1750, see _Orrey_, Letters
     concerning the Life and Writings of Swift, 1751, 127;
     _Anderson_, Origin of Commerce, a., 1751.]

     [Footnote 163-4: Compare especially _Malthus_, Principles,
     ch. 4, sec. 2. How little Adam Smith dreamt of this may be
     best seen in I, 115, Bas. Recently, the average wages per
     week amounted in England to 22½s., in Scotland to
     20½s., in Ireland to 14¾s. (_Levi_, Wages and Earnings
     of the working Classes, 1866.)]

     [Footnote 163-5: Thus the unheard of long series of
     excellent harvests in England, between 1715 and 1765,
     contributed very largely to this favorable transformation.
     Day wages expressed in wheat, between 1660 and 1719,
     amounted on an average to only about 2/3 of a peck; between
     1720 and 1750, to an entire peck. In the fifteenth century,
     a similar series of good harvests contributed very much to
     the flourishing condition of the "yeomanry." Under Henry
     VII., workmen earned from two to three times as much corn as
     they did a century later. And so in France, the great
     Revolution at the end of the eighteenth century, by setting
     free a vast quantity of hitherto bound-up force, enhanced
     the productiveness of the entire economy of the nation, and
     made the division of the national income more nearly equal.
     There is an essential connection here between the rapidity
     of the transition and the facts, that the habits of
     consumption of the working class received a powerful
     impulse, and that population increased much less rapidly
     than the national income. Compare _John Stuart Mill_,
     Principles, II, ch. 11, 2. In our own days again, English
     workmen had a splendid opportunity to raise their standard
     of life. Emigration to Australia, etc. preponderated over
     the natural increase of population to such an extent that,
     in 1852, for instance, only 217,000 more human beings were
     born in England and Wales than died, and 368,000 emigrated.
     At the same time, exports increased: in 1849, they were
     £63,000,000; in 1850 £71,000,000; about the end of 1853,
     something like £90,000,000.

     This golden opportunity was used by the English laboring
     classes to both largely multiply marriages and to enhance
     the rate of wages. The number of marriages contracted in
     England yearly, from 1843 to 1847, was 136,200; from 1853 to
     1857, 159,000. The number of births annually, from 1843 to
     1847, was 544,800; from 1853 to 1857, 640,400. And wages, in
     a number of industries, rose, between 1839 and 1859, from
     about 18 to 24 per cent. (Quarterly Review, July, 1860, 86),
     while the prices of most of the necessaries of life
     declined. That, in the same time, the condition of English
     laborers was elevated, both intellectually and morally, is
     proved by many facts cited in _Jones' and Ludlow's_ work on
     the social and political condition of the laboring classes
     in England. In Germany, the recent establishment of peace on
     a firm footing and the French war contributions have given
     the country an impulse which might be taken advantage of by
     the laboring class with the happiest results if they would
     accustom themselves to more worthy wants and at the same
     time preserve their accustomed industry.]

     [Footnote 163-6: The cheapening of the necessaries of life,
     experience shows, is more likely to lead to an increase of
     population; that of luxuries, to a raising of the standard
     of life or of comfort.]


SECTION CLXIV.

WAGES.--COST OF PRODUCTION OF LABOR.

As the cheapening of the means of subsistence, when the circle of wants
of the laboring class has not correspondingly increased, leads to a
decline of wages, so an enhancement of their price must, when wages are
already so low as only to be able to satisfy indispensable wants,
produce an increase in the rate of wages. The transition in the former
case is as pleasing as in the latter it is replete with the saddest
crises.[164-1] The slower the rise in the price of the means of
subsistence is, the more it is to be feared that the working classes
will seek to meet it, not by emigration or by a diminished number of
marriages, but by decreasing the measure of their wants, the
introduction of a poorer quality of food, etc.[164-2]

However, all this is true only of permanent changes in the average price
of the means of subsistence, such as are produced, for instance, by the
development of agriculture, by taxation etc. Transitory fluctuations,
such as result, for instance, from a single good or bad harvest, cannot
have this result.[164-3] It is, in poor countries at least, one of the
worst effects of a bad harvest, that it tends to positively lower the
rate of wages. A multitude of persons who would otherwise be able to
purchase much labor are now deterred from doing so, by the enhancement
of the price of food.[164-4] On the other hand, the supply increases:
many men who before would not work even for money, see themselves now
compelled to do so. Those who have been workmen hitherto are compelled
by want to make still greater exertions.[164-5]

In very cheap years, all this is naturally reversed.[164-6]

     [Footnote 164-1: According to _McCulloch_, Edition of _Adam
     Smith_, 472, the food of a day laborer's family constitutes
     between 40 and 60 per cent. of their entire support. In the
     case of Prussian field hands, it is generally 54 per cent.
     greatest in the province of Saxony, viz., 58 per cent. and
     lowest in Posen, 43 per cent. Compare _Rau_, Lehrbuch, I, §
     191. This may serve as a point of departure, from which to
     measure the influence of a given enhancement of the price of
     corn. In opposition to _Buchanan_ (Edition of _Adam Smith_,
     1817, 59), who had denied the influence of the price of the
     means of subsistence on the rate of wages, see _Ricardo_,
     Principles, ch. 16.]

     [Footnote 164-2: How easily English farmers have accustomed
     themselves to the consequences of momentary calamities, may
     be seen from _John Stuart Mill_, Principles, II, ch. 11, 5
     seq.; _Thornton_, Population and its Remedy, 1846, passim.
     _Malthus_, Principles, sec. 8, shows in opposition to
     _Ricardo_, Principles, ch. 8, that it is not all one to the
     laboring classes whether their wages rise while the price of
     the means of subsistence remains the same, or whether the
     rate of wages remaining nominally the same, the commodities
     to be purchased decline in price. If for instance,
     potato-food, physiologically considered, was just as good as
     flesh-food and wheat bread, yet an unmarried workman or a
     father with a number of children below the average would be
     able to save less from the former for the reason that it
     possesses less value in exchange. (Edinburg Rev., XII, 341.)
     Thus, e. g., in Ireland, between _A. Young_ and _Newenham_
     (1778-1808), the rate of wages increased more than the price
     of potatoes, but all other means of subsistence in a still
     greater ratio. (_Newenham_, A view of Ireland, 1808.)
     Compare _Malthus_, On the Policy of Restricting the
     Importation of foreign Corn, 1815, 24 ff.; contra.
     _Torrens_, on the Corn trade, 1820, 374 ff.]

     [Footnote 164-3: Compare _Garve_ in _MacFarlan_, On
     Pauperism, 1785, 77. Thus, in the United States, the same
     quantities of coffee, leather, pork, rice, salt, sugar,
     cheese, tobacco, wool, etc., could be earned in 1836 by 23.5
     days' labor; in 1840, by 20.75; in 1843, by 14.8; in 1864,
     by 34.6. (_Walker_, Science of Wealth, 256.)]

     [Footnote 164-4: The person who formerly consumed perhaps
     four suits of clothes in a year now limits himself to two,
     and forces the tailor to dismiss one journeyman. In Bavaria,
     the dear times, 1846-47, and probably also the disturbances
     of 1848-49, caused officials, pensioners, annuitants and
     professional men to discharge one-tenth of the female
     domestics they employed in 1840. (_Hermann_, Staatsw.
     Unters, II, Aufl., 467.)]

     [Footnote 164-5: The labor of digging during the time of
     scarcity in England was paid one-third of the price usually
     paid in good years. (_Porter_, Progress of the Nation, III,
     14, 454.) On the Slavic portions of Silesia, see _Hildebrand's_
     Jahrb., 1872, I, 292. According to _Rogers_, I, 227 ff., 315
     ff., and the table of prices in the appendix to _Eden_,
     State of the Poor, the price in England of a quarter of
     wheat and a day's wages was, in--

          1287,      2s.  10¼d.     3d.
          1315,      14s. 10-7/8d.     3d.
          1316,      15s. 11-7/8d.     3-7/8d.
          1392,       3s.  2-5/8d.     5d.
          1407,       3s.  4d.         3d.
          1439,  8s.-26s.  8d.         4½d.
          1466,       5s.  8d.       4-6d.
          1505,       6s.  8d.         4d.
          1575,      20s.              8d.
          1590,      21s.            3-6d.
          1600,                       10d.]

     [Footnote 164-6: _Petty_, Several Essays on Political
     Arithmetic, 133 ff. _Adam Smith_, Wealth of Nat., I, ch. 8.
     _Ricardo_, Principles, ch. 9. In Hesse, in consequence of a
     series of many rich harvests from 1240 to 1247, no servants
     could be had at all, so that the nobility and clergy were
     obliged to till their own lands. (_Anton_, Gesch. der
     deutschen Landwirthschaft, 111, 209.)]


SECTION CLXV.

WAGES.--THE DEMAND FOR LABOR.

The demand for labor, as for every other commodity, depends, on the one
hand, on the value in use of it, and on the other, on the purchaser's
capacity to pay for it (his solvability), These two elements determine
the maximum limit of wages, as the means of support considered
indispensable by the workmen determine the minimum. There are
circumstances conceivable under which the rise in wages might entirely
eat up rents; but there must always be a portion of the national income
reserved to reward capital (its profit). If wages were to absorb the
latter also, the mere owner of capital would cease to have any interest
in the progress of production. Capital would then be withdrawn from
employment and consumed.[165-1] Obviously, no man engaged in any
enterprise can give more as wages to his workmen than their work is
worth to him.[165-2] Hence the additional product in any branch of
industry, due to the labor of the workman last employed, has a
controlling influence on the rate of the wages which can be paid to his
fellow workmen. If the additional products of the workmen successively
last employed constitute a diverging series,[165-3] the last term in the
series is the natural expression of the unsurpassable maximum of wages;
if they constitute a converging series, men the employer can pay the
last workman higher wages than the additional product due to him;
provided, however, that the reduction which is to be expected in the
case of the workmen previously employed to the same level still leaves
him a sufficiently high rate of profit.[165-4] Hence the growing skill
of a workman, in and of itself, makes an increase of his wages
possible;[165-5] while, conversely, if he can be replaced by capital,
which always relatively decreases the value in use of his labor, there
is a consequent pressure on his wages.

     [Footnote 165-1: _Storch_, Handbuch, I, 205 seq.]

     [Footnote 165-2: Higher wages promised, for instance, as a
     reward for saving a human life or some other very precious
     thing in great danger of being destroyed. In the case of
     material production, labor is worth to the party engaged in
     the enterprise, at most, as much as the price of the product
     after the remaining cost of reproducing it is deducted.]

     [Footnote 165-3: Possibly in consequence of a better
     division of labor or of some other advance made in the
     technic arts.]

     [Footnote 165-4: Thus, for instance, in harvesting potatoes,
     if, after they have been ploughed up, only those nearest the
     surface are collected, a laborer can gather over thirty
     Prussian _scheffels_ in a day. But the fuller and completer
     the gathering of potatoes desired is, the smaller will be
     the product of one workman and of one day's labor. If,
     therefore, a man wants to gather even the last bushel in a
     potato field of 100 square rods, so much labor would be
     required to accomplish it that the workman would not gather
     enough to feed him during his work, to say nothing of
     supplying his other wants. Supposing that 100 _scheffels_ of
     potatoes had grown on 100 square rods, and that of these
     were harvested--

     _When the number of      _Then the additional yield
      men employed in          obtained by the
      gathering them was_      last workman employed is_

          4,    80   scheffels,
          5,    86.6     "        6.6 scheffels.
          6,    91       "        4.4     "
          7,    94       "        3       "
          8,    96       "        2       "

     (_von Thünen_, Der isolirte Staat, II, 174 ff.)]

     [Footnote 165-5: In Manchester, in 1828, the wages paid for
     spinning one pound of cotton yarn, No. 200, was 4s. 1d.; in
     1831, only from 2s. 5d. to 2s. 8d. But, in the former year,
     the spinner worked with only 312 spools; in the latter, with
     648; so that his wages increased in the ratio of 1274 to
     1566. (_Senior_, Outlines.)]


SECTION CLXVI.

WAGES.--PRICE OF COMMON LABOR.

In the case of a commodity as universally desired as human labor is, the
idea of the purchasers' capacity to pay (solvability) must be nearly
commensurate with the national income, or to speak more correctly, with
the world's income.[166-1] In regard to the different kinds of labor,
and especially to common labor, it is evident that the different kinds
of consumption require very different quantities of them. Here,
therefore, we depend on the direction which national consumption takes,
and this in turn is most intimately related to the distribution of the
national income.[166-2] If all workmen were employed in nothing but the
production of articles consumed by workmen, the rate of wages would be
determined almost exclusively by the ratio between the number of the
working population and the amount of the national income. But, if this
were the case, landowners and capitalists would be obliged to live just
as workmen do, and their highest luxury would have to consist in feeding
idlers. (§ 226). The effect must be much the same, when the wealthy are
exceedingly frugal and employ their savings as rapidly as possible in
the employment of common home labor; while, on the other hand, the
exportation of wheat, wood, and other articles, which the working
classes consume, in exchange for diamonds, lace, champagne, diminishes
the efficient demand for common labor in a country.[166-3]

The assumption frequently made, that the demand for labor depends on the
size of the national capital, is far from exact.[166-4] Thus, for
instance, every transformation of circulating into fixed capital,
especially when the labor used in effecting this transformation is
ended, diminishes the demand for other labor. That principle is not
unconditionally true, even in the case of circulating capital. Thus, for
instance, the rate of wages is wont to be raised by the transfer of
capital from such businesses as require little labor into such as
require much.[166-5] Only that part of circulating capital can have any
weight here which is intended, directly or indirectly, for the purchase
of labor and for the purchase of each kind of labor in particular.[166-6]
The capital of the employer is, by no means, the real source[166-7] of the
wages of even the workmen employed by him, It is only the immediate
reservoir through which wages are paid out, until the purchasers of the
commodities produced by that labor make good the advance, and thereby
encourage the undertaker to purchase additional labor. Correlated to this
is the fact, that other circumstances being the same, those workmen usually
receive the highest wages who have to do most immediately with the
consumer.[166-8]

     [Footnote 166-1: _Senior_ denies this. Let us suppose that
     agriculture in Ireland employs on every 200 acres ten
     working men's families, one-half of whom are used to satisfy
     the aggregate wants of the working people, and the other
     half in the production of wheat to be exported to England.
     If now the English market requires meat and wool instead of
     wheat, the Irish landowner will, perhaps, find it
     advantageous, of the ten laboring families, to employ one in
     stock raising, a second in obtaining food, etc. to support
     the laborers, and to discharge all the others. If, then, the
     increased net product is employed in the purchase of other
     Irish labor, all goes on well enough; but if, instead of
     this, the landowners should import articles of English
     manufacture, the demand for labor in Ireland would doubtless
     decrease, notwithstanding the increase of its income.
     (Outlines, I, 154.) _Senior_ here overlooks two things:
     first, that in the supposed case, if eight-ninths of Irish
     laborers are thrown out of employment, spite of the
     increased income of the owners of landed estates, Ireland's
     national income is on the whole probably diminished (§ 146),
     and secondly, that, possibly, the demand for labor in
     England experiences a greater increase than the decrease in
     Ireland; since, with the addition to the world-income, there
     would be an increase in the world-demand for labor.]

     [Footnote 166-2: Compare _Hermann_, Staatswirthsch.
     Untersuch., 280 ff. Earlier yet, _Malthus_, Principle of
     Population, II, ch. 13.]

     [Footnote 166-3: Thus, _Thomas More_, Utopia, 96, 197,
     thinks that if every one was industrious and engaged in only
     really useful business, no one would need to fatigue himself
     very much; while, as it is now, the few real laborers there
     are wear themselves out in the service of the vanity of the
     rich, are poorly fed and worked exceedingly hard.]

     [Footnote 166-4: _McCulloch_, Principles, 104, seq. 2d ed.]

     [Footnote 166-5: Thus, in France, during the continental
     blockade, distant ocean commerce declined, and manufactures
     flourished instead. (_Lotz_, Revision, III, 134.)]

     [Footnote 166-6: Thus, _Adam Smith_ divides "the funds
     destined for the payment of wages" into two kinds: the
     excess of employers' income over their own maintenance, and
     the excess of their capital over the demands of their own
     use of it. (Wealth of Nat, I, ch. 8.) _Senior_ considers it
     a self-evident principle, that the rate of wages depends on
     the size of the "fund for the maintenance of laborers
     compared with the number of laborers to be maintained."
     (Three Lectures on the Rate of Wages, 1830, Outlines, 153,
     ff.) But what determines the quota of the aggregate national
     wealth and national income that is to constitute this fund?
     _Carey_, Rate of Wages, 1835, has a very exhaustive
     commentary on _Senior_.]

     [Footnote 166-7: _Watts_, Statist. Journal, 1861, 500,
     asserts altogether too generally that an "increase of profit
     increases the future wages-fund, and consequently the demand
     for laborers;" and that therefore every new machine useful
     in manufactures must also be of use to the laboring class.
     The employer engaged in any enterprise who has grown richer,
     _can_ pay more wages, but whether he _will_ do it depends on
     other causes, and even his ability to do it, in the long
     run, on his customers. When _John Stuart Mill_, Principles,
     I, ch. 5, 9, says that only the capital which comes into the
     hands of labor before the completion of their work
     contributes to their support, it is as if he were to explain
     the phenomena of prices by demand and supply, and nothing
     else, denying the influence of the cost of production, of
     value in use, and of the deeper determining causes upon
     them. (_Supra_, § 107, note 1.) Compare _Roesler_, Z. Kritik
     der Lehre vom Arbeitslohn, 1861, 104 ff. In England, the
     superstition which to a great extent attached to the idea
     "wages-fund," was first questioned by _F. Longe_, Refutation
     of the Wages-Fund Theory of modern Political Economy, 1866.
     See also _Thornton_, On Labour, II, ch. 1. Even _John Stuart
     Mill_ dropped his earlier erroneous views on this subject.
     (Fortnightly Review, May and June, 1869.) Not, however,
     without exaggeration, as is proved by his well-known saying,
     that laborers needed capital but no capitalists. Still, even
     here, he tenaciously holds that a rise in wages which
     increases the price of some classes of commodities, must
     decrease the aggregate demand for commodities. But better
     paid workmen may now increase their demand for commodities
     to the same extent that the purchasers of labor who do not
     gain as much as before, or the consumers of the goods whose
     price has been enhanced diminish theirs. (_Brentano_, in
     Hildebrand's Jahrbb., 1871, 374.) Only, this increase need
     not affect the very commodities influenced by the decrease.]

     [Footnote 166-8: Thus, the person who builds his own house
     is wont to pay his workmen better than a contractor or
     builder by profession; and the maker of the entire
     manufactured article, as a rule, suffers less frequently
     than the maker of only half of it. (_Hermann_, Staatsw.
     Unters., II, Aufl., 471.)]


SECTION CLXVII.

DIFFERENCE OF WAGES IN DIFFERENT BRANCHES OF LABOR.

All the causes which make wages higher in some branches of labor; than
in others, may be divided into three great categories.[167-1]

A. Rare personal acquirements. The supply of labor requiring rare
personal ability will always be limited.[167-2] Such labor must,
naturally, have great value in use, when a small supply of it is met by
a great demand.[167-3] It sometimes happens that a species of labor can
be utilized only by a small circle of persons who demand it. But the
wages for it is raised very high by the great solvability of those who
do demand it. How frequently it happens, for instance, that a minister
is paid a very high salary for the ability he possesses of making
complicated and dry affairs of state attractive to the personal taste of
his sovereign.[167-4] Here, particularly, the confidence which the
workman inspires by his skill and fidelity enters as an element. Without
this confidence, there are many kinds of business which would be crushed
out entirely by the control it would be necessary to subject them to,
and others would not be possible at all.[167-5] When, for instance, in a
large manufacturing establishment, understrappers, workmen, foremen,
subordinate superintendents, directors, etc., draw different salaries,
their pay, if equitably graduated, should be in harmony with the
principles laid down in § 148, The head of a manufacturing
establishment, for instance, who has organized a more perfect division
and coöperation of labor, himself, and by means of which ten men are
enabled to perform the work before performed by twenty, may equitably
retain, as the reward of his organizing power, a considerable amount of
what was previously paid out in wages. Louis Blanc's proposition, that
all should receive equal salaries is, as Bastiat remarks, equivalent to
the assertion that a yard of cloth manufactured by a lazy or unskillful
workman is worth as much as two yards manufactured by an industrious and
skillful one.[167-6]

Such qualified labor, as is treated of here, may be most accurately
estimated, the quality of which supposes a certain cost of acquisition.
This cost may be considered as the outlay of so much capital, which,
with interest,[167-7] should come back to the workman in his wages.
Otherwise, others would be deterred from entering the same business by
the example of his loss. Here, especially, it is necessary to take into
account the long period of apprenticeship or tuition, and the large fees
paid for the same; and this, whether they depend on the natural
difficulties in the way of acquirement or on artificial obstacles
opposed to freedom of competition.[167-8] The influence of these
circumstances is particularly great in those kinds of labor which
require a "liberal" education.[167-9] Among the costs of production
proper, peculiar to this labor-force, must be included, also, the
necessary support of the workman, during the interval between the
completion of his studies and the beginning of his full reward.[167-10]

When a species of work requires special current expenses to be made in
order to its proper performance, these also should of course be made
good to the workman in his wages. Most intellectual labor, for instance,
requires quiet surroundings. The brain-worker cannot share his study
with his family, and, therefore should receive wages or remuneration
large enough in amount to enable him to arrange his dwelling
accordingly. A similar circumstance, only in a much higher degree,
enhances the price paid for diplomatic service.

     [Footnote 167-1: Excellent germs thereof in _Adam Smith_,
     Wealth of Nat., I, ch. 10, 1. Earlier yet, in _Galiani_,
     Della Moneta, I, 2. _Cantillon_, Nature du Commerce, 24 ff.]

     [Footnote 167-2: Even in the case of mere manual labor, for
     instance, a skillful packer of goods is paid higher wages
     than a mere day laborer; a sower better than a plowman or a
     digger; a vintner, in general, better than an agricultural
     laborer: in the Palatinate of the Rhine, in the ratio of
     36:24. Thus, almost anyone can paint a door or a house,
     while an artist possesses a species of natural monopoly.]

     [Footnote 167-3: Thus, the Greek juggler, who understood how
     to throw lintels from a certain distance through the eye of
     a needle, was very appropriately rewarded by his king with a
     bushel of lintels. On the other hand, the high fee paid for
     an operation for cataract depends both on the great
     importance of the eye which cannot be replaced in any way,
     and on the rarity of the courage among doctors to pierce the
     eye of a living man. Very remarkable achievements, which it
     requires great education to understand, are generally paid
     for at a very low rate. (_Stein_, Lehrbuch, 123.)]

     [Footnote 167-4: I need only recall _Richelieu_ and
     _Mazarin_, the last of whom left an estate worth 200,000,000
     livres. (_Voltaire_, Siècle de Louis XIV., ch. 6.) In
     Parisian industries, few workmen are as well paid as those
     who are skilled in rapidly effecting changes of form. The
     so-called _premières de modes_ frequently received more than
     1,800 francs a year, while the _apprêteuses_ received only
     from 15 to 20 sous a day. (Revue des deux Mondes, Sept. 15,
     1850.) There are women there paid very well for making
     pin-cushions, pen-wipers, etc., each one of a different
     form; but as soon as any one form ceases to be a novelty,
     the wages paid for making it sinks to a minimum. (_M. Mohl_,
     Gewerbswissenschaftliche Reise durch Frankreich, 87.)]

     [Footnote 167-5: Jewelers, lawyers, statesmen, generals.
     _Senior_ says that of the income of £4,000 which a lawyer or
     a doctor draws, only £40 are wages for his labor; £3,000 are
     a rent paid for the possession of extraordinary talent, or
     for his good luck, and £960 as the interest on his
     intellectual capital, which is also the chief element of
     wealth. (Outline, 134.)]

     [Footnote 167-6: On the sad experience of the tailors'
     association founded by Louis Blanc himself, at Clichy, and
     in consequence of which they soon gave up paying equal wages
     and returned to piece wages, see Journal des Economistes,
     Mars, 1850, 349.]

     [Footnote 167-7: As the interest on land improvements
     assumes the character of rent, so also does that of the
     education of labor the character of wages. The rate of
     interest usual in a country, and the average duration of the
     life of the workman affect the capital thus invested as a
     species of annuity.]

     [Footnote 167-8: Wages in the country are generally lower
     than in the cities. In the electorate of Hesse, for
     instance, on the supposition of steady employment, males, in
     the country, received 69 thalers, 23 silver groschens a
     year; females, 55 thalers, 9 silver groschens; in the
     cities, on the other hand, males, 88 thalers, 23 silver
     groschens, and females 61 thalers, 28 silver groschens.
     (_Hildebrand_, statistische Mittheilungen, 101, 137.) And
     so, according to _Colquhoun_, Treatise on Indigence, 1806,
     the English agricultural laborers received, on an average,
     £31 per annum, and manufacturing workmen, £55. The reason of
     this is, besides the greater facility of learning how to
     perform agricultural labor, the greater dearness of living
     in cities, and in England also, because industry has
     developed much more rapidly than agriculture.]

     [Footnote 167-9: The cost of bringing up a common laborer,
     in England, according to _Senior_, is £40; a gentleman,
     £2,040. (Outlines, 205.) The more expensive an education
     which one acquires for its own sake and without any special
     object beyond this in view, is, the less can the capital
     laid out in it affect wages. (_von Mangoldt_, V. W. L.,
     382.)]

     [Footnote 167-10: If the salaries of clergymen are, on an
     average, lower than the income of a lawyer or a doctor, it
     is partly because theological candidates are provided for
     much earlier, and partly because of the lesser cost
     attending the study of theology. Thus, at the end of the
     eighteenth century, there were 350 students at the
     University of Tubingen who are maintained gratis, on
     foundation-money, and who had previously attended monastery
     schools, free of charge. (_Nicolai_, Reisebescreibungen, XI,
     73.) The remarkable contrast between the high wages of the
     Athenian sophists and the low wages of modern abbés, Adam
     Smith accounts for principally by the many scholarships of
     modern times. In Saxony, in 1850 etc., the outlay by the
     state and of foundation-funds for the education of a student
     amounted to an average of nearly 140 thalers. (_Engel._)]


SECTION CLXVIII.

DIFFERENCE OF WAGES IN DIFFERENT BRANCHES OF LABOR. (CONTINUED.)

B. The great economic risk of the work. When a branch of labor necessary
to a country is, notwithstanding, attended by many chances of failure to
the individual who devotes himself to it, a sufficient supply of the
labor can be relied on only in case that the danger attending it is
compensated for by a corresponding premium paid to success.[168-1] The
choice of a profession or avocation, Adam Smith has compared to a
lottery, in which the fortunate winners gain only what the unfortunate
have lost. The greater the prizes, the greater also the number of
blanks.[168-2] However, the surplus wages in risky kinds of labor are
not sufficient to constitute a full insurance premium. This is connected
with the vanity of men who, as a rule, over-estimate not only their
talent but their good fortune,[168-3] and especially in youth, when they
decide on the choice of a profession, etc. According to this, wages must
be specially low where even complete failure does not endanger the
living or the social position of the workman. Partly on this account are
the industries carried on by women so poorly remunerated;[168-4] as also
such work as is done by a large class of people to fill up their leisure
hours.[168-5]

The prospect of frequent interruptions in any kind of labor must have
the same effect on the wages paid for it as its economic or business
risk.[168-6] Thus, for instance, a mason or roofer must earn at least
enough, during the days he can work, to enable him to live during the
time he is prevented working by bad weather. Hence, the highness of his
wages may, in some respects, be called an apparent one.[168-7] Wages
paid by the week more generally tend to equality than wages paid by the
day, and more so yet wages paid by the year, for then winter and summer
compensate the one for the other. When the workman must be ever ready to
perform his task, account must be taken not only of the number of hours
he is engaged, but also of fractions of his waiting hours, which must be
paid for likewise.[168-8] Two half days cost almost everywhere more than
one whole one.

The number of holidays plays a very important part here. In Protestant
countries, the workman must, in about three hundred work days, earn
enough to live on for about sixty holidays as well. In Catholic
countries, before the time of Clement XIV., he had to earn enough in
addition to support himself for about one hundred and fifty holidays, on
ninety of which he performed no work whatever.[168-9] So large a number
of holidays produces a higher rate of wages or necessitates a low
standard of life among the working classes.[168-10] Something similar is
true of evening leisure and rest;[168-11] _i. e._, of the time when
labor ceases.

     [Footnote 168-1: The greater the preparatory cost of labor
     is, the more difficult it is for workmen to go from one kind
     of labor to another; but, at the same time, the more certain
     it is that, without the inducement of a premium paid, there
     will be no after increase or recruiting of labor-force.]

     [Footnote 168-2: Thus, for instance, in the country, where
     doctors generally get along well enough, the most skillful
     never obtains any very distinguished position. But, in large
     cities, on the other hand, there is the greatest difference
     between first-class physicians and obscure practitioners.
     Great generals usually obtain a larger income and greater
     influence than great admirals; and so it is that prizes in
     the military lottery are greater, and there are therefore
     more blanks than in the naval lottery. The common soldier is
     almost everywhere worse paid than the common sailor. (_Adam
     Smith._) To some extent, this depends on the prison-like
     life of the seaman in times of service, and in the absence
     of an attractive uniform. As to the extent that the lottery
     comparison is defective, see _Macleod_, Elements, 215.]

     [Footnote 168-3: Who, otherwise, would have anything to do
     with a lottery in which the mass of players were certain to
     lose, and the keeper of it to gain? And this accounts for
     the fact well known to all financiers, that the amount of
     the budget remaining the same, a greater eagerness to enter
     the military service of the country is inspired by endowing
     the higher positions munificently--provided they are
     attainable by all--and paying the lower ones in a very
     niggardly way, than when the pay is made more uniform.
     Something similar is to be observed in the ecclesiastical
     service of the Roman and Protestant churches, inasmuch as
     the former, considered from an economic point of view,
     offers more magnificent prizes, but also more blanks, while
     the latter divides its emoluments more equally.]

     [Footnote 168-4: As most seamstresses are, when the worst
     comes to the worst, supported by their parents, connections
     by marriage, brothers, etc., the condition of those who have
     to live by their needle must be a pretty hard one. Who is
     not familiar with the refrain to _Hood's_ celebrated song of
     the shirt: "Oh God, that bread should be so dear, and flesh
     and blood so cheap!" There is a "distressed needlewoman's
     society" in London. They undoubtedly suffer from an
     overcrowding of their avocation, yet their chief desire is
     that the competition of all who do not live exclusively by
     the labor of their hands should be prohibited; for instance,
     that of seamstresses who are paid for their work outside of
     factories. (Edinb. Rev., 1851, 24.) In Paris, in 1845, the
     yearly earnings of women workers averaged 375 francs, their
     yearly wants 500 francs. (Journal des Economistes, X, 250.)
     This does not apply to female servants whose wages,
     especially in highly cultured localities as the vicinity of
     large cities (Holstein, Brandenburg), is very high. In
     England, the wages of female domestics is frequently higher
     than in the United States; and hence nearly two-thirds of
     all English girls between fifteen and twenty-five years of
     age serve as maids. _Browning_, Political and Domestic
     Condition of Great Britain, 413; _Carey_, Rate of Wages, 92.
     A remarkable indication that women thrive only in the
     family. (Compare § 250.)]

     [Footnote 168-5: Thus, the darning of stockings in the sandy
     parts of North Germany, in the Highlands of Scotland, in the
     Faroe Islands, and formerly, even in the ante-rooms of the
     Russian nobility. (_Schlözer_, Anfangsgründe der
     Staatswirthsch, I, 126.) Flax spinning and linen weaving in
     Westphalia and Ireland, and wool weaving in the East Indies.
     Manufacturing industries must be in a very highly developed
     condition, and machinery carried to a high degree of
     perfection to compete in price with these accessory
     industries. Cheapness of many products manufactured in
     convents and monasteries.]

     [Footnote 168-6: Among these interruptions, may also be
     reckoned the prospect the laborer has of being early
     incapacitated for work, and thus of seeing himself cut off
     from every other source of support. This is one of the
     principal reasons why opera singers are generally better
     paid than actors.]

     [Footnote 168-7: In Leipzig, in 1863, mason and carpenter
     journeymen earned during the summer, from twenty silver
     groschens to one thaler, ordinary garden workmen, 20 silver
     groschens, while shoemaker journeymen did not make much more
     than 3½ thalers a week, and manual laborers, only from 10
     to 15 silver groschens a day. The masons of Paris have the
     reputation of being the best patrons of the savings banks,
     and, on that account, are more exposed to being attacked by
     thieves than any other class. (_Frégier_, Des Classes
     dangereuses, II, 3, 1.) High wages paid for threshing in
     East Prussia, because, the workman during the winter can be
     employed in very few different kinds of labor, and therefore
     must earn his entire support by threshing. In Paris, of
     101,000 persons engaged in industry in 1860, 6,400 had to
     calculate on no interruption of their work, the remaining
     number, however, lost with a certain degree of regularity,
     from 2 to 4 months a year. (Revue des deux Mondes, 15 Fév.,
     1865.) If the interruption can be so accurately estimated in
     advance that the workman may engage in some business for
     himself during the interval, as for instance when the
     workmen in the Bavarian breweries work during the summer as
     masons, its influence on wages decreases. (_Storch_,
     Handbuch, I, 192.) As to how, in Switzerland, since 1850,
     the guaranty of full employment to masons in winter is
     considered as an addition to the wages of summer, see
     _Böhmert_, Arbeiterverhältnisse, I, 141.]

     [Footnote 168-8: _Commissionaires_, hack-drivers,
     _Extraposthalter_ in Germany, porters, nurses, guides,
     servants in watering places and countries visited by
     tourists. A London porter gets at least a shilling an hour.
     If employed by the day, he of course gets smaller wages.
     Image venders, who travel from house to house, sell their
     wares much lower at their own houses. The person who calls
     them in from the street is obliged to pay them not only for
     this one journey, but for several others which yielded them
     no profit.]

     [Footnote 168-9: If we call the minimum daily need or the
     absolute requirement of the workman = m, the rate of daily
     wages in the former case must amount to at least m + m/6; in
     the latter, on the other hand, to m + m/4. A Bavarian
     holiday estimated at a _minus_ of much more than 1,000,000
     florins. (_Hermann_, II, Anfl., 192.)]

     [Footnote 168-10: _Von Sonnenfels_, Polit. Abhandlungen,
     1777, 332 ff.]

     [Footnote 168-11: In a part of Lower Bavaria, in which there
     were 204 holidays in a year, among them the anniversaries of
     the consecration of 40 churches in the country about, and a
     feast day following each such anniversary, as well as
     target-shooting festivals, the celebration begins at 4
     o'clock P. M. of the preceding day. (_Rau_, Lehrbuch, I, §
     193.)]


SECTION CLXIX.

THE DISAGREEABLENESS OF CERTAIN CLASSES OF LABOR.--ITS EFFECT ON WAGES.

C. Lastly, the personal disagreeableness of the work, which must be
compensated for by higher wages. The uncleanness of a coal-worker's
task, that of the chimney-sweep, and the repulsive labor of the butcher,
demand high compensation, while other branches of business, themselves
productive of pleasure, and therefore engaged in by many for pleasure's
sake only, yield relatively little to those who engage in them as a
regular industry.[169-1]

To this category belong the kinds of labor which require extraordinary
effort,[169-2] or which put life or health in unusual jeopardy.[169-3]
But, indeed, when the danger attending any kind of work is made glorious
by the romantic light of honor, or by still higher motives, it ceases to
have any influence on wages.[169-4] On the other hand, the
disreputableness of a business in itself raises wages;[169-5] whereas,
scholars, poets, etc., leaving the charm inherent in their occupations
out of account, are for the most part remunerated only by the honor paid
them, and, not unfrequently, only by fame after they have gone
hence.[169-6] And yet their talents are so rare, the preparation so
laborious, the economic risk so great! Nor is there for the really
creative workman any such thing as evening rest. (_Riehl._) Common
intellectual labor is worse paid in our days than it was, comparatively
speaking, a generation ago; because the increased average education
makes it less burthensome to most people, and even seem positively
agreeable to many. It would, indeed, be a dangerous retrogressive step
towards barbarism, if it should come to such a pass, that labor
preponderantly intellectual should be permanently more poorly
remunerated than mere muscular labor.[169-7] [169-8]

     [Footnote 169-1: Thus the chase, fishing in rivers (compare
     _Theocrit._, Idyll., 21), gardening, fine female manual
     labor, and literature.]

     [Footnote 169-2: The high wages paid to mowers and threshers
     may be accounted for on this ground (§ 160). In countries
     that have a strong heavy soil, wages are frequently 20 per
     cent. higher than under circumstances otherwise similar
     where it is sandy or light. In Mexico, a digger gets about
     twice the wages of an agricultural laborer. (_Senior_, On
     the Value of Money, 56.)]

     [Footnote 169-3: Almost every trade predisposes to some
     special disease. Compare _Halfort_, Enstehung, Verlauf und
     Behandlung der Krankheiten der Künstler und
     Gewerbetreibenden, 1845. _Livy_, Traité d'Hygiène publique
     et privée, 1850, II, 755. It has been noticed, in Sheffield,
     that thoughtless steel polishers look unfavorably on certain
     new inventions intended to protect workmen against inhaling
     small particles of stone and iron dust. They dread that if
     these inventions come into general use, their wages would be
     lowered in consequence; and prefer a short and merry life to
     one longer and more quiet.

     In places in which nearly all kinds of work are dangerous,
     the danger cannot of course relatively raise the wages of
     anyone. Thus, in the Thuringian forest, the wages of the
     haulers of wood are very low. (_Lotz_, Revision, III, 151.)]

     [Footnote 169-4: Missionaries! Besides the extremely small
     wages paid to common soldiers (in the German infantry only
     36.5 thalers cash per annum, to which in Leipzig, for
     instance, rations, etc., add about 34 thalers more) is an
     outlay made by the government principally to effect a levy
     of the tax of the compulsory labor that lies in
     conscription. (_Knies._) In the volunteer system, the
     difference between officers and men is wont to be much
     smaller. Thus, _Gustav Wasa_ paid his German mercenaries as
     follows: 6 marks a month to captains, five to lieutenants
     and 4 to common soldiers. (_Geijer_, Schwed. Gesch., II, 125
     seq.) Similarly in the case of the Greek hired troops.
     (_Böckh_, Staatshaushalt der Athener, I, 165 ff.) As to how
     little at the outbreak of a war, soldier earnest money is
     increased, and positions as officers most sought after, see
     _Hermann_, II, Aufl., 479.]

     [Footnote 169-5: Thus, for instance, the skinning or flaying
     of dead animals is comparatively well paid, to which the
     rarity of the application of the work of executioners
     contributes. (_J. Moser_, Patr. Ph., I, No. 34.) The high
     wages of actors, singers, dancers, and especially of the
     female members of the stage, depends principally on the
     contempt with which they were formerly looked upon;
     excommunicated by the Catholic church, and a scarcely milder
     sentence passed upon them by the Protestant, until about the
     middle of the eighteenth century. (_Schleiermacher_,
     Christliche Sitte, 681.) Compare even _J. J. Rousseau_,
     Lettre sur les Spectacles à Mr. d'Alembert sur son Article
     Genève.]

     [Footnote 169-6: _Schiller's_ "Theilung der Erde." _Blanqui_
     says of the learned: "They are most frequently satisfied
     with a citizen-crown, and think themselves remunerated when
     justice has been done to their genius. Their magnanimity
     impels them, to their own injury, to diffuse their knowledge
     as rapidly as possible. Thus they are like the light of day
     which no one pays for, but which all enjoy, without thanking
     the giver as they ought." The reward of intellectual labor
     is called an _honorarium_. (_Riehl_, Die Deutsche Arbeit,
     1861, 232.) According to _J. B. Say_, Traité, II, ch. 7, the
     poor wages of savants depends on the fact that they take to
     market, and all at once, a great quantity of what they
     produce, which cannot even be used up.]

     [Footnote 169-7: In Switzerland, journeymen are often better
     paid than the clerks kept by the greater tradesmen.
     (_Böhmert_, Arbeiterverhältnisse, II, 168.) In England,
     also, since 1850, the wages for "unskilled labor" has risen,
     relatively, most. (_Tooke_, Hist. of Prices, VI, 177.) It
     would be a frightful peril to our whole civilization if
     school teachers and subordinate officials should be turned
     into enemies of the entire existing state of things by
     want.]

     [Footnote 169-8: The high wages paid to engineers on
     railroads is accounted for by the wear, physical and mental,
     their employment entails, and also by their unavoidable
     expenses away from home; further, by the importance of the
     interests confided to their trust. On the Leipzig-Dresden
     Railway, locomotive engineers, for the most part previously
     journeymen blacksmiths, earned 900 thalers a year.
     Similarly, in the case of pilots. The high wages paid on
     board ships engaged in the slave-trade arose from the
     unhealthiness of the African coast, where formerly
     one-sixteenth of the crew died yearly (Edinburg Rev., 480),
     from the moral turpitude of the business, and from the
     severe penalties under which it was afterwards prohibited.
     On the other hand, the low wages paid to European mining
     laborers is largely the consequence of the certainty of
     being cared for in old age, of those so employed. Weavers'
     wages are low because the facility of learning the trade
     makes it possible for the business to be carried on at home;
     and hence there is a comparatively great pressure to engage
     in it. (_Baines_, History of the Cotton Manufacture, 485
     ff.)

     According to the first annual report of the poor law
     commissioners (202), the weekly wages in Manchester of
     hod-carriers was 12s.; of hand-weavers, 7-15s.; of diggers,
     10-15s.,; of pack-carriers, 14-15s.; of shoemakers, 15-16s.;
     of machine-weavers, 13-16-5/6s.; of white-washers, 18s.; of
     tailors, 18s.; of dyers, 15-20s.; of plasterers, 19-21s.; of
     masons, 18-22s.; of tinsmiths, 22-24s.; of carpenters, 24s.;
     of spinners, 20-25s.; of machinists, 26-30s.; of iron
     founders and power-loom tenders, 28-30s. In Belgium, the
     average daily wages for male labor was 1.18 francs for
     agricultural laborers; for those engaged in industry, 1.48
     francs; in the manufacture of linen, 0.80 francs; of cotton,
     1.55; of woolens, 1.62; of silk, 1.25; of stockings, 1.14;
     of glass, 2.58; of coal, 1.33. All according to the
     Statistique générale de la B. In Athens, in the time of
     Aristophanes, a pack-carrier earned 4 oboli a day; a street
     sweeper, 3; a stone cutter on the public works, 6; a
     carpenter, 5; for roofing houses and taking down
     scaffoldings, each man, 6. The architects who superintended
     the building of the temple of Polias, on the other hand, got
     only 6 oboli per day, and the contractor 5. (_Böckh_, I, 165
     ff.)

     The Edictum Diocletiani of the year 301 after Christ
     contains the following provisions in relation to wages,
     besides "board:" shepherds, camel-drivers and muleteers, 20
     denarii; agricultural laborers, water-carriers, scavengers,
     25; bakers, masons, roofers, house-finishers and repairers
     of the inside, lime burners, wheelwrights and common clay
     moulders, 50; boatsmen, sailors, makers of marble or mosaic
     floors, 60; wall painters, 70; clay moulders for statues,
     75; artistic painters, 150. (ed. _Mommsen_, cap. 7.) In
     slave countries, the price of different slaves is to be
     judged, mainly, by the above rules. Concerning the Greeks,
     see _Böckh_, I, 95 ff. _St. John_, The Hellenes, III, 23 ff.
     It is a characteristic fact that the Romans, after the
     Syrian war, began to pay high prices for the hitherto much
     despised kitchen slaves. (_Livy_, XXXIX, 6.) Remarkable
     fixed prices for slaves by _Justinian_: Cod. VI, 43, 3; VII,
     7, 1, 5. Thus, in the Lex Burgundionum, tit. 10, the
     compensation for the murder of a common laborer is fixed at
     30 solidi; of a carpenter, at 40; of a smith, at 50; of a
     silversmith, at 100; of a goldsmith, at 150. Advanced
     civilization is wont to raise the price of slaves who
     perform work of a higher quality, just as it raises the
     wages of labor of a higher quality.]


SECTION CLXX.

RATE OF WAGES.--INFLUENCE OF CUSTOM.

Custom always exerts a great influence where there is question of
choosing an avocation with the intention of devoting one's self to it
entirely and exclusively. There is a public opinion which fixes the
gradation of the different classes of labor and their appropriate
reward, which is slow to change, and which both determines, and is
determined by the relation of supply and demand. There is an equilibrium
between the pleasantness of work and the rate of wages only in the case
of such kinds of labor as are on the same social footing. It frequently
happens, however, that the most repulsive work has to be performed by
those who are forced to accept any pay and to be satisfied with
it.[170-1] There are many branches of labor those engaged in which still
form a kind of exclusive caste; and the pay of the higher branches is
maintained at a high rate, especially by the fact that the members of
the castes to which they belong are provident in their marriages. The
lower classes are not in a condition to meet the preparation necessary
to engage in such professions, even if they were certain of being
afterwards reimbursed with interest for the outlay.[170-2] One of the
chief causes of the lowness of wages paid to women is, that so few
branches of labor are traditionally open to them, that the few that are,
are intended to supply luxuries, and are, besides, for the most part,
over-crowded. The distribution of the aggregate wages earned by any
industry, among the higher and lower classes of workmen who coöperate in
it, depends very largely on their social position relatively to one
another.[170-3] [170-4] Here political forms and changes may exert the
greatest influence.[170-5]

Thus, the artificial increase of the wages of masters effected by the
former guild-system was produced, to say the least, as much at the cost
of the journeymen and apprentices as of the public. And if, on the other
hand, it cannot be said that the most recent marked rise in wages, in so
many countries, is merely the consequence of the extension of the
parliamentary right of suffrage, certain it is that the two phenomena
are very closely related, and that both are at once the effect and the
cause of the intensified feeling of individuality and of the
consciousness of constituting a class in the community of the lower
strata of society.

     [Footnote 170-1: At least where the supply of labor in
     general surpasses the demand. Compare _J. S. Mill_,
     Principles, II, ch. 14, 3d ed. The dangerous industries in
     which lead, quicksilver, arsenic, etc. are manipulated or
     employed, should be and can be better paid than they
     actually are. In the Bavarian Palatinate, stone-cutters
     rarely reach their 45th year; and yet their wages are very
     low, because of the comparative over-population of the
     country. (_Rau_, _Haussen's_ Archiv., N. T. X., 228.) But
     the lowness of wages here is certainly and mainly caused by
     the little thought the workmen themselves give to
     considerations of health.]

     [Footnote 170-2: The lower the rate of wages of any class
     sinks, the more difficult it becomes for parents to devote
     their children to another career.]

     [Footnote 170-3: In Paris, 24,463 workmen with less than 3
     francs daily; 157,216, with from 3 to 5; 10,393, with from 5
     to 20 and even 3 to 5 francs. It is remarkable, however, how
     uniform the average wages in the different trades is:
     _vêtements_, 3.33 francs; _fils et tissus_, 3.42;
     _boisellerie_, _vannerie_, 3.44; _garçons boulangers_,
     _bouchers_ 3.50; _arts chimiques et céramiques_ 3.71;
     _bâtiments_, 3.81; _carosserie_, 3.86; _peaux et cuirs_,
     3.87; _ameublement_, 3.90; _articles de Paris_, 3.94;
     _métaux communs,_ 3.98; _métaux précieux_, 4.17;
     _imprimerie_, 4.18. (Journal des Economistes, Janv. 1853,
     111.)]

     [Footnote 170-4: How the Roman advocates were given to all
     sorts of ostentation, and even borrowed costly rings in
     order to raise their _honoraria_, see _Juvenal_, VII, 105,
     ff.]

     [Footnote 170-5: The salaries paid to the employees in the
     office of the minister of finance in France and the United
     States were as follows: to the porter, 1,500 and 3,734
     francs; the lowest clerk, 1,000 to 1,800, and 5,420 francs;
     to the head clerk, 3,200 to 3,600, and 8,672 francs; the
     secretary general, 20,000 and 10,840 francs; to the
     minister, 80,000 and 32,520 francs. (_Tocqueville_,
     Démocratie aux États-Unis, II, 74.) In the treasury
     department, at Washington, of 158 employees, only 6 received
     less than $1,000 salary, but only 2 over $2,000. (_M.
     Chevalier_, Lettres sur l'Amérique du Nord, II, 151, 456.)
     Compare _Büsch_, Geldumlauf, IV, 34. In Russia, the wages of
     the higher classes of laborers as compared with those paid
     the commoner class is much higher than in Germany.
     (_Kosegarten_, in _Haxthausen_, Studien, III, 583.) On the
     other hand, in England, since 1850, the rate of wages for
     unskilled labor has risen relatively more than any other.
     (_Tooke_, Hist. of Prices, VI, 177.)]


SECTION CLXXI.

HISTORY OF THE WAGES OF COMMON LABOR.--IN THE LOWER STAGES OF
CIVILIZATION.

In very low stages of civilization, where there is scarcely any such
thing as rent, and where capital is extremely rare, the wages of labor,
notwithstanding its small amount absolutely speaking, must eat up the
greatest part of the product.[171-1] With every further advance, the
condition of the laboring class is modified, according as the natural
decline in this relative amount of their wages is outweighed or
counterbalanced, or neither outweighed nor counterbalanced, by the
increase in the aggregate product; in other words, in the national
income in general as compared with the number of workmen.

     [Footnote 171-1: _Adam Smith_, Wealth of Nat., I, ch. 8.
     Thus in the case of nations of hunters. The wages of free
     laborers in Russia, at the beginning of this century, were
     so high that mowers, in the vicinity of Moscow, received a
     good half of the corn mowed by them, (_von Schlözer_,
     Aufangsgründe, I, 65.) As a rule, the natural relation of
     the three branches of income is here postponed by the
     intervention of slavery. (§ 76, 155.) But, for instance,
     since the negroes have been emancipated, in the southern
     states of the American Union, it has become necessary to
     promise them one-half of the cotton crop as wages, and for
     the employer to run all the risk of a bad harvest. (_R.
     Somers_, The Southern States since the War, 1871.) On the
     wretched pay of domestic servants in the middle ages, see
     _Grimm_, D. Rechtsalterth., 357.]


SECTION CLXXII.

HISTORY OF THE WAGES OF COMMON LABOR.--IN FLOURISHING TIMES.

When, where a nation's economy[172-1] is growing and flourishing,
capital increases more rapidly than population, there is a search for
employment by capital still greater than the search for employment by
labor. The consequence is, of course, a decline in the rate of interest,
and a rise in the rate of the wages of labor, although the latter may be
compelled to surrender a part of its increase to rent, which also rises.
If simultaneously with these phenomena, there have been great advances
made in national productive skill, especially in the cultivation of
land; if, therefore, labor and the capital consumed have become more
prolific, the condition of the laboring class is improved in a two-fold
manner; the condition of capitalists needs, to say the least, grow no
worse, and the increase of rent paid to landowners may be
avoided.[172-2]

This favorable development is most striking in the colonies of rich and
highly civilized parent countries, where the labor, capital and social
customs of an old and ripe civilization are found together with the
overflowing natural forces inherent in a virgin soil, engaged in the
work of economic production. Here the growth of national wealth is most
rapid; and the rate of wages is here wont to be highest.[172-3] With the
high rate of interest that obtains where capital is rapidly saved, and
with the low price of land, it is not a matter of difficulty for good
workmen to enter into the ranks of landowners and capitalists. In North
America, and especially in the western part,[172-4] it is very
frequently in the normal course of economic development for young people
to begin to work on wages, then to work on their own account, and
finally to become themselves employers of labor.

     [Footnote 172-1: Compare _Hermann_, Staatswirths. Unters.,
     241 ff.; _J. S. Mill_, Principles, ch. 3. As to how _Carey_
     confounds the rise and fall of the productiveness of labor
     with the rise and fall of wages, see _J. S. Mill's_ views in
     _Lange_, 1866, 218 ff.]

     [Footnote 172-2: In England, wages from 1400 to 1420,
     estimated in produce, were much higher than from 1500 to
     1533. (Statist. Journal, 1861, 544 ff.) Later, a quarter of
     wheat was earned by day labor as follows: under Elizabeth,
     in about 48 days; during the seventeenth century, in 43
     days; between 1700 and 1766, in 32 days; between 1815 and
     1848, in from 19 to at most 28¾ days. (_Hildebrand_, Nat.
     Oek. der Gegenwart und Zukunft.) Since 1860, it has been
     earned in about 14 days. About 1668, the wages paid to
     English laborers and servants was one-third higher than
     twenty years before. (_Sir J. Child_, Discourse on Trade, p.
     43 of the French translation.) _D. Defoe_, Giving Alms no
     Charity, 1704, draws a much more favorable picture of the
     time next succeeding. _Adam Smith_, Wealth of Nat., I, ch.
     8, shows how money-wages, in the eighteenth century, were
     higher and the price of corn lower than in the seventeenth
     century. Between 1737 and 1797, wages in most parts of
     England, except in the immediate neighborhood of the great
     cities, doubled. (_Eden_, I, 385.) In Scotland, about the
     year 1817, the wages of married farm servants, expressed in
     corn, were about 60 per cent. higher than in 1792.
     (_Sinclair_, Grundgesetze des Ackerbaues, 105.)

     _Boisguillebert_, Traité des Grains, I, 2, estimates the
     wages in France, for agricultural laborers, at least from 7
     to 8 sous, of present money, and at twice that amount in
     harvest time. In 1697, laborers in Paris received from 40 to
     50 sous. (Détail de la France, I, ch. 1, ch. 7.) _Vauban_
     estimates wages in large cities at 22½-45 sous; for
     country manual laborers, at 18 sous; for agricultural
     laborers, 12-13-1/5 sous. (Project d'une Dime royale, 89
     Daire.) On the other hand, _Chaptal_, De l'Industrie, Fr. I,
     245, 1819, speaks of an average wage--25 sous. _Dureau de la
     Malle_, Economie polit. des Romains, I, 151, allows
     agricultural laborers, in 80 departments of France, only
     20-25 sous. According to _Moreau de Joannés_, Journal des
     Econ., Oct. 1850, the average wages of a French agricultural
     family amounted per annum, in 1700, to 135 francs; in 1760,
     to 126; in 1788, to 161; in 1813, to 400; in 1840, to 500
     francs. While _A. Young_, Travels in France, 1787-89, speaks
     of wages of 20 sous a day; _Peuchet_, Statist. élémentaire,
     1805, 361, assumes it to be 30 sous, although the price of
     corn was not much higher. Compare _Birkbeck_, Agricultural
     Tour of France, 13, who is of opinion even, that French
     laborers are better situated than the English (?). From 1830
     to 1848, wages decreased about 30 per cent. (_L. Faucher_,
     Revue des deux Mondes, Avril, 1848.) _Levasseur_, Histoire
     des Classes ouvrières en France, II, 1858.

     General data for whole countries are obviously very
     doubtful. In Germany, for instance, economically active
     places have witnessed an undoubted elevation of the
     condition of the laboring classes. Thus, in Hamburg and
     Lower Saxony, about the end of the eighteenth century
     (_Büsch_, Geldumlauf, II, 56 ff.); while in Thuringia, in
     1556, a _sümmer_ of rye was earned by 7 summer days' labor,
     and in 1830 ff. by 8. (_Lotz_, Handbuch, I, 404.) In Hessen,
     also, there has been but a very small increase in wages.
     _(Hildebrand,_ Nat. Oek., I, 190.) According to _von der
     Goltz_, Ländliche Arbeiterfrage, 1872, 84 seq., wages in the
     country during the last twenty or thirty years have
     increased on an average, 50 per cent. at least; in Bavaria
     about 100 per cent.; in the Rhine province, male wages,
     about 100; female wages, from about 75 to 100 per cent. The
     masterly investigations of the wages of typesetters in Jena
     and Halle by _Strasburger_ in _Hildebrand's_ Jahrb., 1872, I
     ff., show that from 1717 to 1848, there was scarcely any
     change in them. A million m's was paid for in 1717-40 with
     26.93 Prussian _sheffels_ of rye; 1804-47 with from 24.80 to
     28.80. Since then, a remarkable rise; so that in 1871, up to
     November, 76.26 was reached. The prices of food, dwellings,
     fuel, clothing, such as is in demand by such laborers, rose
     between 1850 and 1860, 16.7 per cent., and the wages for
     1,000 m's in the same period of time rose about 14.3 and
     43.7 per cent. In the industrious manufacturing vicinity of
     Moscow, wages in 1815 were four times as high as in 1670,
     while the means of subsistence rose relatively much less.
     (_Storch_, I, 203.)]

     [Footnote 172-3: In the United States, the wages of
     carpenters and masons, about the end of the last century,
     were $0.62 and $0.75; in 1835, of the former from $1.12 to
     $1.25, and for the latter from $1.37 to $1.50. In 1848, the
     general wage was $0.75. The price of corn, in the meantime,
     did not rise, and the price of manufactured articles was
     much smaller. (_Carey_, Rate of Wages, 26 seq.; Past,
     Present and Future, 154.) In New York, as far back as 1790,
     wages were much higher (_Ebeling_, Geschichte und
     Erdbeschreibung von Nordamerika, II, 917); and between 40
     and 50 years ago, a journeyman mason might earn over 700
     thalers per annum. Agricultural laborers, in 1835, got $9 a
     month and their board, valued at $65 for the whole year. In
     the vicinity of large cities, both were higher. (_Carey_,
     91.) The condition of the factory hands, in Lowell, is a
     very good one. In 1839, more than 100 of them had over
     $1,000 each in the savings banks, and pianos at their mess
     places. (_Boz_, Notes on America, 1842.) Most of them could
     save $1.50 a week. _Colton_, in his Public Economy (1849),
     says that a workman would consider himself in a bad way if
     he could not save half of his wages. Compare _Chevalier_,
     Lettres sur l'Amérique, II, 174, 122, 19; I, 221 ff.

     Apprentices in the United States, in almost every instance,
     begin to be paid wages as soon as their work begins to prove
     useful. The work of half-grown children, who had not yet
     left the parental roof, was so well paid that it was
     estimated that a child earned for his parents, on the whole,
     £100 more than he cost them. What an incentive to marriage!
     (_Adam Smith_, Wealth of Nat., I, ch. 8.) In Canada,
     agricultural laborers earn between £24 and £30 per annum and
     their board. In and around Melbourne, agricultural laborers
     got from 15 to 20 shillings a week and lodging; herdsmen,
     £35 to £40 a year; girls, from £20 to £45 (Statist. Journal,
     1872, 387 ff.); female cooks, from £35 to £40; male cooks,
     from £52 to £156. In hotels, girls, from £30 to £35; female
     cooks, from £50 to £100; domestic servants, £39 to £52;
     carpenters, masons, etc., 10 shillings a day; the best
     tailors, from 60 to 75 shillings a week; shoemakers, from 40
     to 55 shillings; bakers, from 40 to 60 shillings a week.
     (Statist. Journal, 1871, 396 seq.) In San Francisco, a short
     time since, servant girls got $25 a month; Chinese, $1 a
     day; common laborers, $2; skilled artisans, from $3 to $5.
     (_Whymper_, Alaska, 299, 326.) The wages of a European
     tradesman, in Rio Janeiro, was from I to 2 Spanish piasters
     a day. (_Martius_, Reise, I, 131.) In the English West
     Indies, a new-born negro was formerly worth £5. (_B.
     Edwards_, History of the West Indies, II, 128.) The high
     wages paid in young colonies are frequently made temporarily
     still higher, by a large influx of capital in the shape of
     money, brought by emigrants, and by government outlays.
     Thus, in Van Diemen's land, for instance, in 1824,
     carpenters, masons, etc. got 12 shillings a day; in 1830,
     10; in 1838, only from 6 to 7, although between 1830 and
     1838, the export trade of the island trebled while the
     population scarcely doubled. (_Merivale_, On Colonies, II,
     225.)]

     [Footnote 172-4: As to how many workmen in the eastern part
     of North America buy land in the west, and so threaten their
     employers with immediate emigration, see _Brentano_,
     Arbeitergilden, II, 131. However, in Massachusetts, women's
     wages are in many instances so low that, considering the
     dearness of the means of subsistence, it is almost
     impossible to understand how they exist. (Statist. Journal,
     1872, 236 ff.)]


SECTION CLXXIII.

HISTORY OF THE WAGES OF COMMON LABOR.--IN FLOURISHING NATIONS.

A permanently[173-1] high rate of wages[173-2] is, both as cause and
effect, very intimately connected with a flourishing condition of
national life. It proves on the one hand, great productiveness of the
public economy of the people generally: prudence, self-respect and
self-control, even of the lowest classes, virtues, which, however, are
found, on the whole, only where political liberty exists, and where the
lowest classes are rightly valued by the higher.[173-3] On the other
hand, it produces a condition of the great majority of that portion of
the population who have to support themselves on the wages they receive,
worthy of human beings, a condition in which they can educate their
children, enjoy the present and provide for the future. Equality before
the law and participation in the affairs of government are empty
phrases, and even tend to inflame the passions, where the rate of wages
is not high. When the lower classes are dissatisfied, in highly
civilized countries, with the sensitiveness and mobility of the whole
national life, there can be no certainty of the freedom of the middle
classes or of the rule of the upper. Here, in other respects, also, the
philanthropy of employers harmonizes remarkably well with their
reasonable self-interest. According to § 40, only the well-paid workman
can accomplish anything really good, just as, conversely, only the good
workman is on the whole, and in the long run, well paid. This suggests
the physiological law, that where muscular activity is great, nutrition
must be great, likewise; and the rapid waste and repair of tissues
strengthens the muscles and gives tone to the whole physical life. With
a correct insight into the relations of things, antiquity described its
greatest worker, Herakles, as a great eater also. A well-paid workman,
who costs and accomplishes as much in a day as two bad ones, is cheaper
than they. He works much more cheerfully and faithfully, is, hence, more
easily superintended, is less frequently sick, and later
decrepid.[173-4] His childhood costs less, and his burial is not so
expensive. In cases of need, he can more easily bear the weight of
taxation or a temporary lowering of wages.[173-5] We might say of the
granting of holidays and of evening leisure something similar to what we
have said of the rate of wages. They are indispensable requisites to the
development of a desirable individuality in the working classes; and
when used for that purpose are certainly no detriment to the product of
labor or to employers.[173-6] [173-7]

In consideration of all the blessings attending a high rate of wages, we
may well be induced to put up with a certain and frequently inconvenient
external defiance of the lower classes which is wont to accompany
it.[173-8] It teaches the upper classes many a moral lesson, and is
surely a lesser sin in the lower, than the cowardly, malicious crimes of
the oppressed. When wages are so low that they have to be supplemented
by begging or public charity, the effect on morality is the same as when
government officials, who cannot live on their salaries, resort to
bribery or embezzlement.[173-9] [173-10]

     [Footnote 173-1: A merely momentary rise in wages might be
     the result of a great calamity, destructive of human life,
     and might seduce workmen not intellectually prepared for it
     into idleness. Compare _von Taube_, Beschreib. von Slavonien
     etc., II, § 4.]

     [Footnote 173-2: On the necessity of _free_ wages, that is
     of an excess over and above the costs of support and of
     maintaining one's position, see _Roesler_, Grandsätze, 394.]

     [Footnote 173-3: _Dans aucune histoire on ne rencontre un
     seul trait, qui prouve que l'aisance du peuple par le
     travail a nui à son obéissance, (Forbonnais.)_ This is true
     only of well governed countries. When, in England, about the
     middle of the eighteenth century, a great improvement took
     place in the condition of the laboring classes,
     _Postlethwayt_ (Great Britain's commercial Interests, 1759)
     was one of the first to recognize its general beneficial
     character; also _Th. Mortimer_. (Elements of Commerce,
     Politics and Finance, 1774, 82 ff.) _Benjamin Franklin_,
     before the American revolution, was of opinion that high
     wages made people lazy. (On the Price of Corn, 1776. On the
     laboring Poor, 1768.) He afterwards, however, acknowledged
     its generally good effect, and that even the products of
     labor might be cheapened thereby. (On the Augmentation of
     Wages, which will be occasioned in Europe by the American
     Revolution. Works II, 435 ff.) See further, _Paoletti_, Veri
     Mezzi di render felici le Società, ch. 15; _Ricardo_,
     Principles, ch. 5; _Th. Brassey_, on Work and Wages, 1872.
     _Umpfenbach_, Nat. Oek, 181, calls the costliness of labor to
     the purchaser of labor, "givers' wages," their purchasing
     power to the laborer himself, "receivers' wages," and is of
     opinion, that as civilization advances, the former declines
     and the latter rises.]

     [Footnote 173-4: When in the department of the Tarn flesh
     food was introduced among journeymen smiths instead of mere
     vegetable diet, the sanitary improvement that followed was
     so great that the number of days lost by sickness in a year
     decreased from 15 to 3. (_Moleschott_.)]

     [Footnote 173-5: In high stages of civilization, it is
     always more profitable, the result being the same, to keep a
     few well fed cattle than many poorly fed. (_Roscher_,
     Nationalök. d. Ackerbaues, § 179.) _Infra_, § 231. When the
     drainage of Oxford street in London was made while wages
     were rising, it happened that the cubic foot of masonry work
     at 10 shillings per day was cheaper than it was formerly at
     6 shillings per day. (_Brassey_, 68 ff.) _Senior_ calls it
     an absurdity to consider the high wages paid in England as
     an obstacle in the way of its successful competition with
     other countries. Rather would he consider it as the
     necessary result of the excellence of English labor. Thus,
     in his Lectures on the mercantile Theory of Wealth, p. 76,
     he says that if the English employ a part of their labor
     injudiciously, they must pay it not in proportion to what it
     really accomplishes, but to what it might do if well
     employed. If a man calls in a doctor to cut his hair, he
     must pay him as a doctor. If he puts a man to throwing silk
     who might earn 3 ounces of silver a week spinning cotton, he
     must pay him weekly 3 ounces of silver, although he may
     deliver no more silk within that time than an Italian who
     gets only 1½ ounces.]

     [Footnote 173-6: Norfolk country workmen never worked more
     than 10 hours a day except in harvest and seed time. But a
     plowman there accomplished as much in 5 days as another in
     8. (_Marshall_, Rural Economy of N., 138.) In southwestern
     Germany, the country working day is from 2 to 4 hours
     shorter than in the northeast, and yet just as much is
     accomplished in the former quarter. (_von der Goltz_, Ländl.
     Arbeiterfrage, 88, 131.) Thus the coal diggers of South
     Wales work 12 hours a day, those of Northumberland, 7; and
     yet the same achievement is 25 per cent. dearer in case of
     the former. In the construction of the Paris-Rouen Railroad,
     the English achieved more than the French, although the
     former worked from 6 A. M. to 5:30 P. M., and the latter
     from 5 A. M. to 7 P. M. (_Brassey_, 144 ff.) Examples from
     English manufactories in _Marx_, Kapital, I, 401 seq. In an
     English factory the hours worked were 12, and afterwards,
     11. This caused the number of attendants of the evening
     school to grow from 27 to 98. (_Horner._) _Dollfuss_, in
     Mühlhausen, reduced the number of hours worked from 12 to
     11, and let the wages remain the same as before. The result
     was besides a great saving made in fuel and light, a surplus
     product of at least 1-2/3 per cent. Something similar
     observed by _M. Chevalier_, Cours, I, 151.

     Hence _J. Möser_, Patr. Ph., III, 40, desired, on this
     account, that work in the evening should be prohibited by
     law. In England, not only the moral necessity, but also the
     economic general utility of leisure time of workmen has been
     defended, among others by _Postlethwayt_, Dictionary of
     Trade and Commerce, I, prelim. Discourse, 1751. A beautiful
     law, V Moses 24, 15. Only, care must be taken not to go to
     the other extreme, which is still more detrimental to
     personality. The North American ideal of 8 hours a day for
     work, 8 for eating, sleeping, etc., and 8 for leisure, would
     be injurious except to workmen intellectually very active.
     But the provision to be met with in many states of the Union
     and in the arsenal employ of the government, that in case of
     doubt, the work day is to be tacitly assumed as of 8 hours,
     has, it is said, correspondingly lowered wages. See _supra_,
     § 168.]

     [Footnote 173-7: In India, where the institution of caste is
     found, nearly half the year is made up of feast days, while
     in rationalistic China there is no Sunday and very few
     general holidays. (_Klemm_, A. Kulturgeschicht. VI, 425.
     _Wray_, The practical Sugar Planter, 1849.) The
     Judaic-Christian sanctification of the seventh day is a
     happy medium between these two extremes. Recuperation and
     collectedness get their due without its costing too much to
     action. _Ora et labora!_ Compare _Sismondi_, N. P. II, ch.
     5. Which is best, traveling on foot, to drag along all the
     time, or to walk decently and rest properly between times?
     The rest of Sunday, even leaving the work of recuperation
     and edification out of account, is necessary in the
     interests of the family and of cleanliness. The French
     _decadis_ accomplished materially even too little: _ils ont
     à faire à deux ennemis, qui ne cèderont pas, la barbe et la
     chemise blanche_. (_B. Constant._) Hence, an English prize
     essay on the material advantages of Sunday found 1,045
     competitors among English working men. (Tübinger Zeitschr.,
     1851, 363.)]

     [Footnote 173-8: Thus _Parkinson_, A Tour in America,
     complains that with four servants in the house, he was
     obliged to polish his own shoes, and with his wife and
     children to milk the cows, while his people were still
     asleep. Strange servants bringing a message, come in with
     their hats on. All domestics are called mister or misses.
     Servant maids are called "helps," and their masters,
     "employers." If a person at a hotel asks for a laundress, he
     is answered: "Yes, man, I will get a lady to wash your
     clothes." Similarly in _Fowler_, Lights and Shadows,...
     three Years' Experience in Australia. But, at the same time,
     it is remarkable how seldom a native born white American
     accepts a fee. On the other hand, Russia is the classic land
     of fees. There is a popular story in that country to the
     effect that when God divided the earth among the different
     nations, they were all satisfied except the Russians, who
     begged a little drink-money or fee in addition, (_von
     Haxthausen_, Studien, I, 70.) Similarly in Egypt. (_Ebers_,
     Durch Gosen zum Sinai, 1873, 31 seq.) The system of feeing
     servants holds a middle place between the modern system of
     paying for everything lawfully and the medieval system in
     which people either rob, donate or beg.]

     [Footnote 173-9: Compare _Garve_ in _Macfarlan_, 90. The
     wages of English wool workers in 1831 amounted to:

                                 _Tax per capita of the_
                                 _population for_
        _In_                     _support of the poor._
     Leeds,       22---22½s.           5s. 7d.
     Gloucester,  13---15¼s.           8s. 8d.
     Somerset,    16¾--19¾s.           8s. 9d.
     Wilts,       13-7/12--15-5/12s.  16s. 6d.

     _Ure_, Philosophy of Manufactures, 476. After an
     enthusiastic eulogy of high wages, _McCulloch_ remarks
     especially that the English poor rates cost more than if the
     laborers were obliged to provide for themselves by getting
     higher wages. (Principles, III, 7.) Sad results of the
     system which came into vogue in the South of England in
     1795, to supplement wages according to the price of corn and
     the number of children. Previously the laboring classes
     married only after the age of 25 and even at 35, and not
     until they had saved from £40 to £50. After the above
     mentioned system was adopted, even minors married. (Edinburg
     Review, LIII, 4, 7.)]

     [Footnote 173-10: _Von Thünen_, Isolirte Staat., II, 1, 154,
     gives the following formula as the expression of ideal
     wages: sqrt(ap), in which a = the necessary requirement for
     maintenance of the workmen, and p = the aggregate product of
     his labor. _von Thünen_ attached so much importance to this
     formula that he had it engraved on his tomb-stone. But even
     if it were possible to reduce capital-generating labor and
     wage-labor to a common denominator, it would not be possible
     nor equitable to maintain the same dividing measure when
     capital and labor contributed in very different amounts to
     the production of the common product. An artist, for
     instance, who could make costly vessels out of very cheap
     clay and with cheap fuel would get too little by _von
     Thünen's_ law; a mechanic who used a very efficient and
     costly machine, too much. The fundamental defect in his
     theory, _von Thünen_ himself seems to have obscurely felt.
     Compare the letter in his Lebensbeschreibung, 1868, 239 and
     _Roscher_, Geschichte der Nat. Oek., in Deutschland, 895 ff.]


SECTION CLXXIV.

HISTORY OF THE WAGES OF COMMON LABOR.--IN DECLINING COUNTRIES AND TIMES.

When, circumstances being otherwise unaltered, the aggregate income of a
nation decreases, the wages of labor are wont to be lower in proportion
as the points above mentioned, and which are unfavorable to the laborer
in his competition, appear.[174-1] The worse distribution, also, of the
national resources, when, instead of a numerous middle class, a few
over-rich people monopolize all that is to be possessed, diminishes the
wages of common labor and thus again produces a worse distribution than
before.[174-2] In a similar way, wages must decline when the mode of
life of the laboring class, or the quality of their work, has
deteriorated. Some of these causes may exist transitorily even among
otherwise flourishing nations; as, for instance, in war times,[174-3] or
when population for a while grows more rapidly than national wealth. But
among nations universally declining, they are all wont to meet, and one
strengthens the other.[174-4] One of the saddest symptoms of such a
condition is the low value here put upon the life and strength of
workmen. The cheapness of labor has indeed a charm for enterprising
spirits, which induces them to employ human labor even where machinery,
beasts, etc., would economically be better adapted to the performance of
the work.[174-5] Day-laborers are, on this account, more profitable to
persons of enterprise (_Unternehmer_=_undertaker_) because they can more
easily rid themselves of them. But such egotistic calculation should
have no place even in the case of actual slaves.[174-6]

Besides, it not unfrequently happens, that the laboring class seek to
oppose the decline of wages by increasing their industry, shortening
their holidays and leisure, and by drawing their wives and children into
their work. This may, under certain circumstances, result in an increase
of the national income, and thus constitute a transition to the
restoration of high wages, especially if beforehand there was reason to
complain of the idleness of the working class. But if the other
circumstances of competition are unfavorable to the working class, if
especially they used their personally increased income to add to the
population, it would not be long before they fell back to their previous
state. In such case, the consequence is, that the same quantity of labor
has become cheaper; that all permanent profit falls to the capitalists
and landowners, and all that remains to the laboring class is only
greater toil, a sadder home-life, and sadder children. The danger of
such an issue is all the greater, because few things so much contribute
to reckless marriages and the thoughtless procreation of children, as
the industrial coöperation of wife and child.[174-7] [174-8]

     [Footnote 174-1: Hence _Adam Smith_ says that it is not the
     richest countries in which wages are highest, but those
     which are becoming rich most rapidly.]

     [Footnote 174-2: The classic lands of low wages and
     pauperism are especially the East Indies and China. A
     minister of Kienlong was punished after he had extorted
     about 20,000,000 thalers. (_Barrow_, II, 149.) In the
     confiscation of the well known _Keschen_, the authorities,
     according to their own accounts, found 682 pounds of gold
     and more than 6,000,000 pounds in silver. Considering the
     colossal banquets of the rich, embracing several hundred
     courses, of which _Meyen_, Reise um die Erde, II, 390,
     describes an example, the wretched food of the poor is
     doubly striking. Count _Görtz_ relates that in Canton, rats
     and serpents are regularly exposed for sale. (Reise, 445.)
     The lowness of wages appears from the fact--one of
     many--that servants frequently get nothing but their board.
     (_Haussmann_, Voyage en Chine, etc.) In the cities,
     tradesmen with their tools run hither and thither about the
     streets begging for employment in the most imploring manner.
     Thousands live all their lives on rafts. Numberless
     instances of infanticide from want of food, (§ 251.) The
     influence of these circumstances on the morality of the
     people is best illustrated by the fact that _Keschen_, when
     he was ambassador to Thibet, preferred to confide his newly
     collected treasures to the escort of the French missionaries
     he persecuted rather than to the mandarins named by himself,
     so much more highly did he estimate European than Chinese
     honesty. (Edinburg Rev., 1851, 425 ff.) In the Chinese
     picture-writing, the word happiness was designated by a
     mouth well corked with rice. Chinese statisticians speak of
     mouths (_Maul_) where ours treat of the number of heads or
     souls. _Ritter_, Erdkunde, II, 1060. More favorable accounts
     in _Plath_, Münch. Akad., 1873, 784, 788 seq.

     In the East Indies, a great many of the rejected castes live
     on carrion, dead fish, noxious insects, and even the middle
     class find wheat flour too dear, and therefore mix it with
     peas, etc. (_Ritter_, VI, 1143.) It is said that Bengal, in
     the famine of 1770, lost more than one-third of its
     inhabitants. (_Mill_, History of British India, III, 432.)
     Eloquent description of misery in _Rickard_, India, or Facts
     submitted to illustrate the Character and Condition of the
     native Inhabitants, II, London, 1832. An immense number of
     badly paid servants of whom it may however be said that each
     one accomplishes very little. The Pindaries may pass for an
     extreme of Indian pauperism, corresponding to the
     pirate-calamity during the later Roman Republic. (Quarterly
     Review, XVIII, 466 ff.; _Ritter_, VI, 394 ff.)]

     [Footnote 174-3: Thus, in England, during the last great
     war, wages rose less than the price of corn, and sank less
     after it. About 1810, wages were nearly 100 per cent. higher
     than in 1767; but, on the other hand, the price of wheat,
     115; of meat, 146; of butter, 130, and of cheese, 153 per
     cent. (Edinburg Rev., XL., 28.) If it has some times been
     observed that crime, communistic machinations and
     revolutionary movements grow less frequent in times of war,
     the fact is not to be ascribed necessarily to a better
     condition of the laboring class. It might possibly be the
     consequence of the strongest and wildest elements of the
     laboring class finding some other career.]

     [Footnote 174-4: _Adam Smith_, loc. cit., on this point
     describes China as a stationary country (according to _R.
     Fortune_, Wanderings in China, 1847, 9, a decided decline
     has been noticeable there for a long time), and Bengal as a
     declining one. On the condition of wages among the Romans,
     _Juvenal_, III, 21 ff., is one of the principal sources.
     Hence the desire to emigrate because honest labor had no
     longer any foothold (23 ff.). Poor dwellings of the laboring
     class, dark, exposed to danger from fire (166, 190 ff.,
     225), and yet comparatively dear (223 seq.). Numerous crowds
     of robbers and beggars (302 ff.; IV, 116 ff.; V, 8; XIV,
     134). On beggary, see _Seneca_, Controv., V, 33. De
     Element., II, 6. De Vita beata, 25 ff. _Martial_, V, 81,
     XIV, 1, complains of the absence of outlook among the poorer
     classes. _Horace_, too, is rich in passages which might be
     appropriately cited in this connection. Characteristic
     question of the nabobs, in _Petron._, 48, 5: What on earth
     is that thing called a pauper?]

     [Footnote 174-5: Thus, in China, the East Indies, etc.,
     people travel in palanquins borne by men; in a multitude of
     cases, Chinese commodities are carried in wheelbarrows; and
     a great many roads are constructed, in reference not to
     wagons, properly so-called, but to this species of vehicle.
     How heartless the Chinese, who, before they save a drowning
     man, first higgle about the reward, and take pleasure in
     pestilence, famine, etc., because those who survive profit
     by them. See _Finlaison_, Journey of the Mission to Siam,
     1826, 62 ff.]

     [Footnote 174-6: Hence _Menander_ (342-290 before Christ)
     says it is better to be the slave of a good master than to
     live wretched in freedom. (_Stobœus_, Flor., 62, § 7.
     _Meinecke_, Fr. com. Gr., IV, 274.) _Libanios_, too, (Tom.,
     483, Reiske), in his "Blame of Poverty," represents slavery
     as better cared for, and freer from worry. Horrible
     contracts made even in Cæsar's time, from want, by freemen,
     to become gladiator-slaves. _Cicero_, pro Roscio, Am. 6;
     _Horat._, Serm., II, 7, 58 ff.; _Petron._, 117; _Seneca_,
     Epist., 37. And so by Justinian, cases of declined freedom
     are supposed. (L. 15, _Justin._, Cod., VII, 2.) "_Dans une
     armée on estime bien moins un pionnier, qu'un cheval de
     caisson, parce que le cheval est fort cher, et qu'on a le
     pionier pour rien. La suppression de l'esclavage a fait
     passer ce calcul de la guerre dans la vie commune._"
     (_Linguet._)]

     [Footnote 174-7: _Sismondi_ is guilty, however, of a
     philanthropic exaggeration when he says that the labor of
     children is always fruitless to the laboring classes. (R. P.
     I., 235.)]

     [Footnote 174-8: The bringing into juxtaposition of the
     rates of wages in different countries is doubtless one of
     the most important objects of comparative statistics. Only
     it is necessary not to confine it to the money amount of
     wages, but to make it embrace the prices of the principal
     means of subsistence. Thus, in France, before the outbreak
     of the French Revolution, a French workman earned a cwt. of
     bread on an average of 10.5 days; one of meat in 36.8; an
     English workman, in 10.4 and 25.3 days. (_A. Young._) In the
     interior of Russia, a female weaver earns, in a day, almost
     one Prussian _scheffel_ of rye, in Bielefeld, only about
     one-tenth of a _scheffel_; a table-cloth weaver, in the
     former place, 18 silver groschens, while the _scheffel_
     costs from 12 to 15 silver groschens. (_von Haxthausen_,
     Studien, I, 119, 170.) According to _Humboldt_, the
     money-wages paid in Mexico were twice as high, and the price
     of corn two-thirds as dear, as in France. (N. Espagne, IV,
     9.) According to _Rau_, Lehrbuch, I, § 180, the procuration
     of the following means of subsistence required in day labor
     in:

          ==============+============+=========+==========
                        |            |         |         |
                        |_Manchester.|_Hanover.|_Hanover.|
                        |            |         |         |
                        |  1810-20_  |  1700_  |  1827_  |
          --------------+------------+---------+----------
          Cwt. beef,    |   26       |   33    |   35    |
           "   potatoes,|    1.85    |   ----  |   ----  |
           "   wheat,   |    5.5     |   ----  |   ----  |
           "   rye,     |   ----     |    6.5  |    8.7  |
           "   butter,  |   42.3     |   87    |   64    |
           "   sugar,   |   96       |  181    |  128    |
          ==============+============+=========+==========
                        |_Upper  |             |         |
                        |Canada. |_Brandenburg.| Gratz.  |
                        |        |             |         |
                        | 1830_  |  1820-33_   |1826-45_ |
          --------------|--------+-------------+----------
          Cwt. beef,    |  6.6   |     34      |  36     |
           "   potatoes,| ----   |      1      |   2.68  |
           "   wheat,   |  2     |      7.6    |  11     |
           "   rye,     |  1.5   |      5.4    |   8.6   |
           "   butter,  | 22     |     83      |  84     |
           "   sugar,   | ----   |     ----    |  ----   |
          ==============+============+=========+==========

     Estimated in silver, the East Indian laborer earns from £1
     to £2 a year; the English, £9 to £15; the North American,
     £12 to £20. (_Senior._) _Hildebrand_, Nat-Oek., I, 195 ff.,
     assures us that the average rate of wages in Germany, in
     1848, amounted to 400 thalers a year; in England, to 300
     thalers; and that the prices of the means of subsistence in
     the latter country were 1½ times higher than in the
     former. _Engel_, Ueber die arbeitenden Klassen in England,
     1845, shows only the dark side of a real picture, and is
     silent on the other, and is well corrected by _Hildebrand_,
     I, 170 ff. Excellent statistics in _Sir F. M. Eden_, State
     of the Poor, I, 491-589. On the more recent times, compare
     the Edinburgh Review, April, 1851, April, 1862; Quarterly
     Rev., Oct., 1859, July, 1860. _Ludlow_ and _Jones_, loc.
     cit. On the situation in France, see _Blanqui's_ report in
     the Mémoires de l'Académie des Sciences morales et
     politiques, II, 7. _Leplay_, Les Ouvriers des deux Mondes,
     II, 1858. Very important are the "Reports from Her Majesty's
     diplomatic and consular Agents abroad respecting the
     Condition of the industrial Classes, and the Purchase-power
     of money in foreign Countries." (1871.)]


SECTION CLXXV.

WAGE POLICY.--SET PRICE OF LABOR.

Among the artificial means employed to alter the existing rate of wages,
we may mention first, a rate of wages fixed by governmental authority.
These have, in many places, constituted an intermediate step between
serfdom and the free wage-system. In most cases, this measure was
intended in the interest of the upper classes to prevent the lower
obtaining the full advantage of their freedom under the favoring
circumstances of competition.[175-1] In later times, another cause has
frequently been added to this, viz.: by diminishing the cost of
production to increase foreign sales. (See § 106.) In the higher stages
of civilization, nations will scarcely look with favor on the diminution
of the rightful, for the most part, individually small gains of the most
numerous, the poorest and most care-worn class of the community.[175-2]
The purchasers of labor would, in consequence, be badly served, since
they would have lost the possibility of obtaining better workmen by
paying higher wages. Hence, there would, probably, be none but mediocre
labor to be found.[175-3] On the other hand, fixed rates which keep
within the limits described in § 114 are, under certain circumstances,
desirable. This is especially the case where the purchasers of labor on
the one hand, and the buyers of labor on the other, have formed
themselves into united groups, and where the rate fixed is only in the
nature a treaty of peace under governmental sanction, when a war over
prices had either broken out actually or there was danger to fear that
one would break out. It must not be forgotten, that thus far common
labor has scarcely had any thing similar to an "exchange."[175-4]

     [Footnote 175-1: The plague known as the black death of
     1348, which devastated the greater part of Europe, was
     followed by many complaints on the part of the buyers of
     labor, of the cupidity and malicious conspiracies of the
     working classes. (See _supra_ § 160.) Fixed rates of wages
     under Peter the Cruel of Castile, 1351; contemporaneously in
     France, Ordonnances, II, 350, and in England, 25 Edw. III,
     c. 2; 37 Edw. III, c. 3. In France, the wages of a thresher
     were fixed at the one-twentieth or the one-thirtieth of a
     _scheffel_, while in present Saxony it is from
     one-fourteenth to one-twelfth. In England, under the same
     ruler, who had seen his castle at Windsor built, not by day
     laborers for wages, but by vassal masons, vassal carpenters,
     etc., whom he got together from all parts of the kingdom.
     That the rates might not be evaded, the succeeding king
     forbade both the leaving of agriculture for industry and
     change of domicile without the consent of a justice of the
     peace. (12 Richard II., c. 3.) All such provisions were
     little heeded in the 16th century. (_Rogers_, the Statist.
     Journal, 1861, 544 ff.)

     Fixed rates of wages under Henry VII. and Henry VIII., in
     the interest of workmen. (_Gneist_, Verwaltungsrecht, II,
     Aufl., 461 ff.) The fact that in 5 Elizabeth, c. 4, another
     attempt was made to fix the rate of wages by governmental
     provisions, in which the person paying more than the sum
     fixed was threatened with 10 days' imprisonment, and the
     person receiving less with 12, was in part akin to the
     English poor laws. If a poor man had the right to be
     eventually employed and supported by the community, it was,
     of course, necessary that the justice of the peace should be
     able to determine at what wages anybody should be prepared
     to work before he could say: I can find no work. Extended by
     2 James I., c. 6, to all kinds of work for which wages were
     paid. (_Eden_, State of the Poor, V, 123 ff., 140.) The
     buyers of labor in the eighteenth century frequently
     complained that these fixed wages were more to the advantage
     of workmen than of their masters. (_Brentano_, English
     Guilds., ed. by _Toulmin Smith_, 1870, Prelim. CXCI.)

     In Germany, the depopulation caused by the Thirty Years' War
     explains why, before and after the peace of Westphalia, so
     many diets were concerned with fixing the rate of wages of
     servants. Compare _Spittler_, Gesch., Hanovers, II, 175.
     Among the most recent instances of English fixed rates of
     wages, is 8 George III., for London tailors, and the
     Spitalfields Act of 1773, for silk weavers who had, a short
     time before, revolted. Also in New South Wales, about the
     end of the last century, on account of the high rate of
     colonial wages. (_Collins_, Account of the English Colonies
     of New South Wales, 1798.) Later, _Mortimer_, Elements of
     Politics, Commerce and Finance, 1174, 72, maintains fixed
     rates of wages to be necessary. In Germany the imperial
     decree of 1830, tit., 24, and again the ordinance of Sept.
     4, 1871, provide that each magistrate shall fix the rate of
     wages in his own district. _Chr. Wolf_, Vernunftige Gedanken
     vom gesellsch. Leben der Menschen, 1721, § 487, would have
     the rates so fixed that the laborers might live decently and
     work with pleasure.]

     [Footnote 175-2: Proposal for a fixed sale of wages in the
     protocols of the Chamber of Lords of Nassau, 1821, 12.]

     [Footnote 175-3: The Spitalfields Act was repealed in 1824,
     for the reason that the manufacturers themselves attributed
     the stationary condition of their industries for a hundred
     years to the fact that they were hampered by that act.
     _Ricardo's_ and _Huskisson's_ prophecies, on this occasion,
     fulfilled by the great impulse which the English silk
     industries soon afterwards received.]

     [Footnote 175-4: Compare _Brentano_, Arbeitergilden der
     Gegenwart, II, 288. However, fixed rates of wages equitably
     arranged, in the establishment of which neither party has
     been given an advantage over the other, have continued to
     exist much longer than our distrustful and novelty-loving
     age would think possible. Thus compositors' wages in London,
     from 1785 to 1800, from 1800 to 1810, from 1810 to 1816, and
     from 1816 to 1866, remained unaltered; those of London ship
     builders, from 1824 to 1867; of London builders, from 1834
     to 1853, and from 1853 to 1865. (_Brentano_ II, 213. Compare
     II, 250, 267 ff.)]


SECTION CLXXVI.

WAGES-POLICY.--STRIKES.

Where the wages-receiving class feel themselves to be a special class,
_vis-a-vis_ of the purchasers of their labor, they have frequently
endeavored, by the preconcerted suspension of labor upon a large scale,
to force their masters to pay them higher wages, or grant them some
other advantage.[176-1] It is hard to say whether such strikes have more
frequently failed or succeeded.[176-2]

As a rule, a war over prices, carried on by such means, and without
force on either side, must generally issue in the victory of the richer
purchasers of labor.[176-3] The latter require the uninterrupted
continuation of labor for their convenience and profit; but the workmen
need it to live. It is but seldom that the workmen will be in a
condition to stop work for more than a few months, without feeling the
sting of hunger. The purchaser of labor can live longer on his capital;
and the victory here belongs to the party who, in the struggle, holds
out longest. Hence, a strike that lasts more than six weeks may, for
that reason alone, be considered a failure. The employers of labor, on
account of their smaller number and greater education, make their
counter-coalition much more secret and effective. How many instances
there are in which labor-saving machines have come into use more rapidly
than they otherwise would have come but for the influence of these
coalitions![176-4]

On the other hand, it cannot be ignored that a host of workmen, by means
of an organization which provides them with a unity of will, such as the
heads of great enterprises naturally possess, must become much better
skilled in carrying on a struggle for higher wages. Where wages in
general tend to rise, but by force of custom, which is specially
powerful here (§ 170), are kept below their natural level, a strike may
very soon attain its end. And workmen are all the more to be wished
God-speed here in proportion as employers are slow to decide of their
own motion upon raising wages, and where, under certain
circumstances,[176-5] a single cold-hearted master might force all his
competitors to keep wages down. If even the entire working class should
follow the example of the strikers, so that all commodities, in so far
as they are products of labor, should grow dearer to an extent
corresponding to the rise in wages, there would still remain an
improvement of the condition of the working class at the cost of the
interest paid on capital and the profits of enterprise. It is, of
course, otherwise with the struggle of workmen against the natural
conditions which determine the rate of their wages (§§ 161-166) in which
they might, in turbulent times, possibly succeed[176-6] temporarily, but
would, in the long run, have to fail.[176-7]

The working class will be best fortified in such a struggle for higher
wages when their organization is a permanent one, and when they have
taken care, during good times, to collect a certain amount of capital to
protect their members, during their cessation from work, against acute
want. This is the object of the trades-unions as they have grown up in
England, especially since the total decline of the guild system and of
governmental provisions relating to apprentices, fixed rates of
wages[176-8] etc. But it cannot be denied that these unions, although
democratic in form, often exercise a very despotic sway over their
members;[176-9] that they have, so far as the employers of labor are
concerned, and the non-union laborers, gone back to a number of
measures, outgrowths of the guild and embargo systems, which it was
fondly hoped had been forever banished by the freedom of
industry.[176-10] What many of the friends of this system hope it may
accomplish in the future, viz.: regulate the whole relation between
capital and labor, and thus, on the whole, control the entire public
economy of a people,[176-11] is, fortunately, all the more certainly a
chimera, as any national or universal approximation to this end would be
the most efficacious way to compel employers of labor to the formation
of corresponding and probably far superior opposing unions.
Notwithstanding this, however, I do not doubt that the recent
development of trades-unions in England is both a cause and an effect of
the rise in wages in the branches of industry in question, as well as of
the moral elevation of the condition of the working class which has
simultaneously taken place.[176-12] The mere possibility of a strike is
of itself calculated, in the determination of the rate of wages, to
procure for the equitable purchaser of labor the desirable preponderance
over the inequitable.[176-13]

     [Footnote 176-1: Even _Boisguillebert_, Traité des Grains,
     was acquainted with instances of this kind in which from 600
     to 800 workmen simultaneously left their masters. There are
     much earlier instances in Italy. Thus, in Sienna, in 1381
     and 1384, in which the nobility sided with the workmen.
     (Rerum Ital. Scriptores, XV, 224, 294.) Strikes of
     journeymen began to be much more frequent in Germany in the
     guilds, from the time of the prospect of their becoming
     masters themselves, and of their living in the family of the
     masters had decreased. On similar strikes at Spires, in
     1351, at Hagenau in 1409, and Mainz in 1423, see _Mone's_,
     Zeitschrift, XVII, 56; XIII, 155, and _Hegel,_ Strassb.
     Chr., II, 1025. A remarkable strike of the Parisian book
     printers under Francis I. (_Hildebrand's_ Jahrb., 1873, II,
     375 ff.) In so-called "home manufactures," where the
     "manufacturer" is both orderer, preparer and seller, but
     strikes are scarcely possible without much fixed capital.
     The strike of the factory spinners in Lancashire in 1810
     caused 30,000 workmen to stop work for four months.

     Among the next following coalitions of labor, those of the
     Glasgow weavers in 1812 and 1822 were very important. In the
     latter, two workmen who would not participate with the
     strikers were blinded with sulphuric acid. In 1818, great
     strike by the Scotch miners. The Preston strike of 1853
     lasted 36 weeks. It is said that 6,200 male and 11,800
     female working people took part in it. (_Athenæum_, 30
     Sept., 1854.) Compare _Morrison_, Essay on the Relations
     between Labor and Capital, 1854. For a history of Swiss
     strikes, especially of the Zürich compositors' strike in
     1873, see _Böhmert_, Arbeiterverhältnisse, II, 287 ff. Comic
     type of a strike of married women in _Aristophanes_,
     Lysistrata. A practical one in Rome at the departure of the
     plebeians for the holy mountains, 492 before Christ.
     (_Livy_, II, 32,) then, on a small scale, on the removal of
     the pipers after Tiberius, 311 before Christ. (_Liv._, IX,
     30.)]

     [Footnote 176-2: Instances of successful strikes:
     Fortnightly Review, Nov. 1865. Similarly in Germany, in
     1865; but there, in truth, many strikes were only defensive
     and intended to restore the former thing-value of the
     declined money (Werke, XIII, 151). The English strikes, in
     1866 and 1867, failed nearly all, so that wages again
     declined to their level in 1859, and in many places, to what
     they had been in the crisis-year 1857. (Ausland, 16 April,
     1868.) As to how even in Victoria, strikes which opposed a
     decline of wages from 16 to from 8 to 10 shillings a day
     failed, after doing great injury, see Statist. Journ., 1861,
     129 ff.]

     [Footnote 176-3: The Preston strikers of 1853 got even from
     their non-striking colleagues, £30,000. Had their masters
     prevented this, the affair would have been terminated much
     sooner. (Quart. Rev., Oct. 1859.) But employers are much
     more frequently divided by rivalries than workmen,
     especially in strikes against new machines or when a
     manufacturer, who has too large a supply of goods on hand,
     desires a strike himself. On account of their smaller
     number, too, they are less in a condition to declare a
     recusant colleague in disgrace. _Adam Smith's_ remark that
     coalitions of capitalists are much more frequent than those
     of workmen, only that much less is said of them, is hardly
     applicable to our time. (Wealth of Nat., I, ch. 8, p. 100,
     ed. Bas.) But, since the strike of the London builders in
     1859, capitalists have begun to form more general opposing
     unions. On a very energetic one among the ship builders on
     the Clyde, see _Count de Paris_, Les Associations ouvrières
     en Angleterre, 1869, ch. 7. Examples on a smaller scale,
     Edinburg Review, LXXXIX, 327 ff. On the other hand, a
     "lock-out" on the part of capitalists is very difficult,
     from the fact that it is impossible to prevent idle workmen
     from being supported from the poor fund. Moreover, there can
     be no greater folly than for the workmen to add insult to
     their masters to their demand for higher wages, because then
     the limits within which the latter are willing to continue
     the business at all, are made much narrower, than they would
     be on a merely economic estimate.]

     [Footnote 176-4: Thus the "iron man," by which a single
     person can put from 1,500 to 3,000 spindles in motion; also
     an improved plane-machine, by means of which several colors
     can be printed at once. (_Ure_, Philosophy of Manufactures,
     366 ff.) Machines for riveting cauldrons. (_Dingler_,
     Polytechnisches Journal, LXXV, 413.)]

     [Footnote 176-5: Compare the statements in the Statist.
     Journal, 1867, 7.]

     [Footnote 176-6: Thus in several places in 1848, and in
     Paris in 1789, where even the lackeys and apothecary clerks
     formed such unions. (_Wachsmuth_, Gesch. Frankreichs im
     Revolutionszeitalter, I, 178.) Similarly, frequently in
     isolated factories.]

     [Footnote 176-7: _Thornton_ mentions six instances in which
     strikes and strike-unions may permanently raise wages: a,
     when those engaged in an enterprise have a virtual monopoly
     in their own neighborhood; b, when the country has, for the
     industry in question, great advantage over other lands; c,
     when the demand for the product of the industry is necessary
     on account of an increasing number and increasing capacity
     to pay of customers; d, when the progress of the arts,
     especially of machinery, makes the industry more productive;
     e, when the rise in the rate of wages affects all branches
     of industry to the same extent, and at the same time; f,
     when the industry is carried on on so large a scale that it
     yields greater profit, even while paying a smaller
     percentage than other industries. (On Labour, III, ch. 4.)
     It is easy to see that many of these conditions meet in the
     building industries in large cities.]

     [Footnote 176-8: Compare _Brentano_ in the Preliminary Essay
     to _T. Smith's_ English Guilds, ch. LXXII ff. The same
     author's Die Arbeitergilden der Gegenwart Bd., I, 1871.]

     [Footnote 176-9: The greater number of strikes begin with a
     small minority, generally of the best paid workmen, whom the
     others follow unwillingly but blindly. (Edinb. Rev., 149,
     422.) The despotic power of the Unions over their members
     depends principally on the fact that their treasury serves
     not only to maintain strikes but at the same time as an
     insurance fund for old age and sickness, and that every case
     of disobedience of a member is punished by expulsion, i. e.,
     with the loss of everything he has contributed. Hence the
     Quart. Rev., Oct., 1867, advises that these two purposes
     which are so hard, technically speaking, to reconcile with
     each other, should be required to be kept separate,
     especially as most of the unions, considered as benevolent
     associations, are really insolvent. (Edinb. Review, Oct.,
     1867, 421 ff.) On the other hand, both the _Count of Paris_,
     ch. 3, and _Thornton_ are favorable to the admixture of
     humane and offensive objects in the trades-unions, because
     the former contribute to make the latter milder. _Brentano_,
     I, 153, has no great objection to the insolvency shown by
     the books of the unions _vis-a-vis_ of their duties as
     insurers, since, hitherto, the subscription of an
     extraordinary sum has never failed to make up the deficit. A
     strike is detrimental in proportion as the striking workmen
     represent more of the previous preliminary operations that
     go to finish a product; as when, for instance, the 50 or 60
     spinners in a factory strike, and in consequence, from 700
     to 800 other workmen are thrown out of employment and forced
     into idleness against their will. What might not have been
     the consequence of the great union of the coal miners of
     Durham and Northumberland, the members of which numbered
     40,000 men, and stopped work from April to the beginning of
     September, 1864, so that at last it became necessary to
     carry Scotch coal to Newcastle! Compare _Engels_, Lage der
     arbeitenden Klassen in England, 314 ff.]

     [Footnote 176-10: The English unions even forbid their
     members to exceed the established time of work, or the
     established task. Thus, for instance, a penalty of one
     shilling for carrying at any time more than eight bricks in
     the case of masons, and a similar penalty inflicted on the
     person's companions who witness the violation of the rule
     and do not report the guilty party. Equality of wages for
     all members; piece-wages allowed only when the surplus
     earned is divided among one's companions. Hence the complete
     discouragement of all skill or industry above the average.
     If an employer exceeds the prescribed number of apprentices;
     if he engages workmen not belonging to the union; if he
     introduces new machines, a strike is ordered. With all this
     the severest exclusion respectively of one class of
     tradesmen by the other. If a carpenter lays a few stones, a
     strike immediately! (Quart. Rev., October, 1867, 363, 373.)
     Rigid shutting out of the products of one district from
     another. (Edinburg Rev., October, 1867, 431.) The poor
     hand-weavers were thus prevented going from their
     over-crowded trade into another. (_J. Stuart Mill_,
     Principles, II, ch. 14, 6.) However, many trades-unions
     still seem to be free from these degenerations, and the most
     influential unions the most moderate in their proceedings.
     (_Count de Paris_, ch. 8, 9; _Thornton_, III, ch. 2.)
     _Brentano_ expressly assured us that such degeneration of
     the unions in England is confined to the building
     trades-unions. (I, 68, 188.)]

     [Footnote 176-11: "They have no notion of contenting
     themselves with an equal voice in the settlement of labor
     questions; they tell us plainly that what they aspire to is
     to control the destinies of labor, ... to dictate, to be
     able to arrange the conditions of employment at their own
     discretion." (_Thornton_, III, ch. 1.) The membership of the
     English trades-unions was estimated, at the Manchester
     Congress, June, 1868, at 500,000 by some, and at 800,000 by
     others. _Brentano_, II, 310, speaks of 960,000. Since 1830,
     there have been frequent endeavors to effect a great
     combination, with special organizations of the different
     trades. During recent years, there have been even beginnings
     of an international organization, although in Germany, for
     instance, at the end of 1874, there were 345 trades-unions,
     with a membership of over 21,000. (_M. Hirsch._) A formal
     theory of workmen's unions to culminate in popular
     representation, in _Dühring_, Arbeit und Kapital, 1866,
     especially, p. 233; while the American _Walker_ accuses all
     such combinations, which used compulsion on any one, of
     moral high treason against republican institutions. (Science
     of Wealth, 272.)]

     [Footnote 176-12: The former view, for instance, of _Harriet
     Martineau_, "The tendence of strikes and sticks to produce
     low wages" (1834) is now unconditionally shared only by few.
     When _Sterling_ says that the momentary success of a strike
     is followed by a two-fold reaction which restores the
     natural equilibrium, viz.: increase of the number of workmen
     and decrease of capital (Journal des Econ., 1870, 192), he
     overlooks not only the length of the transition time which
     would certainly be possible here, but also that an altered
     standard of life of the workmen prevents the former, and one
     of the capitalists the latter. The _Count of Paris_ and
     _Thornton_ do not doubt that the elevation of the condition
     of the English working classes, as proved by _Ludlow_ and
     _Jones_, is to be ascribed, in part, to the effect of the
     trades-unions. Many of the unions work against the
     intemperance and quarrelsomeness of their members. The
     people's charter of 1835, came from the London "workingmen's
     association."]

     [Footnote 176-13: On the great utility of the arbitration
     courts between masters and workingmen, by which the struggle
     for wages is terminated in a peaceable manner and without
     any interruption of work, see _Schäffle_, Kapitalismus and
     Socialismus, 659. More minutely in _Thornton_, III., ch. 5.
     _Faucher_, Vierteljahrsschr., 1869, III, 302, calls
     attention to the fact that such "boards" may be abused to
     oppress small manufacturers.]


SECTION CLXXVII.

WAGES-POLICY.--STRIKES AND THE STATE.

Should the state tolerate the existence of strikes or strike-unions?
Legislation in the past most frequently gave a negative answer to the
question, as well from a repugnance for high wages as for the self-help
of the masses.[177-1] But even leaving the above reasons out of
consideration, every strike is a severe injury to the national resources
in general,[177-2] one which causes that part especially to suffer from
which those engaged in the various enterprises and the working class
draw their income. And, even for the latter, the damage endured is so
great that it can be compensated for only by very permanently high
wages.[177-3] How many a weak man has been misled by a long cessation
from work during a strike, which ate up his savings, into lasting
idleness and a devil-may-care kind of life. When employers, through fear
of strikes, keep all large orders, etc. secret, the workmen are not in a
condition to forecast their prospects and condition even for the near
future. And in the end a dread of the frequent return of such
disturbances may cause capital to emigrate.[177-4]

However, where there exists a very high degree of civilization, there is
a balance of reasons in favor of the non-intervention of
governments,[177-5] but only so long as the striking workmen are guilty
of no breach of contract and of no crime. Where every one may legally
throw up his employment, there is certainly no plausible legal objection
to all of them doing so at once, and then forming new engagements.
Coalitions of purchasers of labor for the purpose of lowering wages,
which are most frequent though noiselessly formed, the police power of
the state cannot prevent. If now it were attempted to keep the working
class alone from endeavoring to correspondingly raise their wages, the
impression would become general, and be entertained with right, that the
authorities were given to measuring with different standards. Where the
working classes so sensitively feel the influence of the government on
the state of their wages, they would be only too much inclined to charge
every chance pressure made by the circumstances of the times to the
account of the state, and thus burthen it with a totally unbearable
responsibility. Since 1824, freedom of competition has prevailed in this
matter on both sides in England.[177-6] The dark side of the picture
would be most easily brightened by a longer duration of contracts of
labor.[177-7]

Whether the trades-unions, when they shall have happily withstood the
fermentative process now going on, shall be able to fill up the void
created by the downfall of the economically active corporations of the
latter part of the middle ages, we shall discuss in our future work, Die
Nationalökonomik des Gewerbfleisses. One of the chief conditions
precedent thereto is the strict justice of the state, which should
protect members of the unions from all tyranny by their leaders, and
from violations of the legal rights of non-members.[177-8]

     [Footnote 177-1: Thus even 34 Edw. III., c. 9. Journeymen
     builders were forbidden by 3 Henry VI., c. 1, to form
     conspiracies to enhance the rate of wages, under pain of
     felony. Finally, 39 and 40 George III., c. 106, threatened
     any one who, by mere persuasion, should induce a workman to
     leave his master's service, etc., with 2 months in the
     work-house, or 3 months' imprisonment. In France, as late as
     June and September, 1791, all conspiracies to raise wages
     were prohibited under penalty, the incentive to such
     prohibition being the opposition to all _intérêts
     intermédiaries_ between the _intérêts particulier_; and the
     _intérêt general_ which is characteristic of the entire
     revolution. Compare the law of 22 Germinal, 11. The German
     Empire on the 16th of August, 1731, threatened journeymen
     strikers even with death, "when accompanied by great
     refractoriness and productive of real damage." (Art. 15.)]

     [Footnote 177-2: The strike of the spinners of Preston, to
     compel equal wages with those of Bolton, lasted from October
     to the end of December, 1836. The spinners got from their
     treasury 5 shillings a week (previously 22½ shillings
     wages); twisters, 2 to 3 shillings; carders and weavers
     lived on alms. In the middle of December, the funds of the
     union were exhausted. Altogether, the workmen lost 400,000
     thalers; the manufacturers, over 250,000; and many merchants
     failed. (_H. Ashworth_, Inquiry into the Origin and Results
     of the Cotton Spinners' Strike.) The Preston strike of 1853
     cost the employers £165,000, the workmen, £357,000.
     (Edinburgh Rev., July, 1854, 166.) The North-Stafford
     puddlers' strike, in 1865, cost the workmen in wages alone
     £320,000. Concerning 8 strikes that failed, mostly between
     1859 and 1861, which cost in the aggregate £1,570,000, of
     which £1,353,000 were wages lost, see Statist. Journ., 1861,
     503. A great mortality of the children of workingmen
     observed during strikes!]

     [Footnote 177-3: _Watts_ assumes that the strikers seek to
     attain, on an average, an advance in their wages of five per
     cent. Now, a week is about equivalent to two per cent. of
     the year. If, therefore, a strike lasted one month, the
     increase of wages it operates must last one and three-fifths
     years to compensate the workmen for their loss. A strike
     that lasts 12½ months would require 20 years to effect
     the same, and this does not include interest on lost wages.
     (Statist. Journal, 1861, 501 ff.) However, it is possible
     that the striking workingmen themselves should lose more
     than they gained, but that, for the whole working class, the
     gain should exceed the loss; since those who had not
     participated in the strike would participate in the
     increased wages. _Thornton_ is of opinion that employers
     have won in most strikes, but surrendered in the intervals
     between strikes, so that now English workmen receive
     certainly £5,000,000 more in wages than they would be
     getting were it not for the trades-unions. (III, ch. 3-4.)]

     [Footnote 177-4: By the Norwich strike, about the beginning
     of the fourth decade of this century, what remained of the
     industrial life of that city disappeared. (_Kohl_, Reise,
     II, 363 ff.) Similarly in Dublin. (Quart. Rev., October,
     1859, 485 ff.) In Cork, the workingmen's union, in 1827,
     allowed no strange workmen to join them, and, it is said,
     committed twenty murders with a view to that end. The
     builders demanded 4s. 1d. a day wages. This discouraged the
     erection of new buildings, and it frequently happened that
     they found employment only one day in two weeks. (Edinb.
     Rev., XLVII, 212.) When workingmen struggle against a
     natural decline of the rate of wages, they, of course, add
     to their misfortune.]

     [Footnote 177-5: The grounds on which _Brentano_, following
     _Ludlow_ and _Harrison_, justifies the intervention of the
     state, have a very dangerous bearing, inasmuch as they do
     not suppose, as a condition precedent, a perfectly wise and
     impartial governmental authority.]

     [Footnote 177-6: 5 George IV., c. 95: "provided no violence
     is used." Further, 6 George IV., c. 129, and 122 Vict., c.
     34. The law of 1871 declares the trades-unions lawful,
     allows them the right of registration, and thus empowers
     them to hold property. In France, the law of May 25, 1864,
     alters articles 414 to 416 of the _Code pénal_ to the effect
     that only such strikes shall be punished as happen _à l'aide
     de violences, voies de fait, manœuvres frauduleuses_;
     also coalitions against the _libre exercise du travail à
     l'aide d'amendes, défenses, proscriptions, interdictions_.
     But these amendments were rendered rather inoperative by the
     fact that meetings of more than 20 persons could be held
     only by permission of the police.]

     [Footnote 177-7: As, for instance, the coal workers in the
     north of England required a half year's service. So long as
     the trades-unions consider themselves, by way of preference,
     as instruments of war, it is conceivable how they oppose all
     binding contracts for labor. So now among the German
     journeymen book-printers, and so, also, for the most part,
     in England. (_Brentano_, II, 108.) In quieter times, when
     the trades-unions shall have become peace institutions, this
     will be otherwise. We cannot even enjoy the bright side of
     the freedom of birds without enduring its dark side! In
     Switzerland, breaches of contract by railroad officers are
     guarded against by their giving security beforehand; in
     manufactures, by the holding back of from 3 to 14 days'
     wages. (_Böhmert_, Arbeiterverhältnisse, II, 91, 388 ff.)]

     [Footnote 177-8: In Switzerland, the trades-unions have
     shown themselves very powerful against the employers of
     tradesmen, but rather powerless against manufacturing
     employers, and thus materially increased the already
     existing inferiority of the former. (_Böhmert_, II, 401.)
     They may, however, by further successful development,
     constitute the basis of a new smaller middle class, similar
     to the tradesmen's guilds at the end of the middle ages; and
     indeed by a new exclusiveness, in a downward direction. This
     would be a bulwark against the destructive inroads of
     socialism similar to that which the freed peasantry in
     France were and still are. While this is also _Brentano's_
     view, _R. Meyer_, Emancipationskampf des vierten Standes,
     1874, I, 254 ff., calls the trades-unions a practical
     preparation for socialism to which the English "morally went
     over" in 1869 (I, 751); which indeed loses much of the
     appearance of truth from the fact that _Marx_ (_Brentano_,
     Arbeitergilden, II, 332) and the disciples of _Lassalle_
     (_Meyer_, I, 312) hold the trades-unions in contempt. _John
     Stuart Mill_ approves of all trades-unions that seek to
     effect the better remuneration of labor, and opposes all
     which would bring the wages paid for good work and bad work
     to the same level. (Principles, II, ch. 14, 6; V, ch. 10,
     5.) Compare _Tooke_, History of Prices, VI, 176. Reports of
     the Commissioners appointed to inquire into the Organization
     and Rules of Trades-Unions, 1857.]


SECTION CLXXVIII.

WAGES-POLICY.--MINIMUM OF WAGES.

The demand[178-1] so frequently heard recently, that the state should
guaranty an "equitable" minimum of wages, could be granted where the
natural rate of wages has fallen below that minimum, only on condition
that some of the working class in the distribution of the wages capital
(no longer sufficient in all the less profitable branches of business)
should go away entirely empty handed. Hence, as a rule, in addition to
that wages-guaranty, the guaranty of the right to labor is also
required. But as useful labor always finds purchasers (the word "useful"
being here employed in the sense of the entire economy of a people, and
understood in the light of the proper gradation of wants and the means
of satisfying them), such a right to labor means no more and no less
than that the state should force labor which no one can use, upon
others.[178-2] Something similar is true of Louis Blanc's proposition
that the rate of wages of the workmen should be determined and regulated
by their own votes and among themselves.[178-3]

All such measures are injurious in proportion as they, by extending aid
and the amount of the minimum, go beyond the limits of benevolence, and
approach those of a community of goods. (§ 81 ff.) However, if they
would be lasting and not pull workmen rapidly down to the very depths of
universal and irremediable misery, these measures should be accompanied
by the bestowal of power on the guarantor to hold the further increase
of the human family within bounds.[178-4]

The condition of workmen can be continued good or materially improved
only on condition that their numbers increase less rapidly than the
capital destined for wages. The latter increases usually and most surely
by savings. But only the middle classes are really saving. In England,
for instance, the national capital increases every year by at least
£50,000,000, while the working classes spend at least £60,000,000 in
tobacco and spirituous liquors, _i. e._, in numberless instances, only
for a momentary injurious enjoyment by the adult males of the class, one
in which their families have almost no share. According to this, every
compulsory rise in wages would be a taking away from the saving class
and a giving to a class that effect no savings. Is not this to act after
the manner of the savages who cut down a fruit tree in order more
conveniently to relish its fruit?[178-5]

Benjamin Franklin calls out to workmen and says: If any one tells you
that you can become rich in any other way than through industry and
frugality, do not listen to him; he is a poisoner! And, in fact, only
those changes permanently improve the condition of the working classes
which are useful to the whole people: enhanced productiveness of every
branch of business in the country, increased capital, the growth (also
relative) of the industrial middle classes, the greater education,
strength of character, skill and fidelity in labor of workmen
themselves. Much especially depends upon their foresight and
self-control as regards bringing children into the world. Without this
latter virtue even the favorable circumstances would be soon trifled
away.[178-6]

     [Footnote 178-1: Compare, besides, the Prussian A. L. R.,
     II, 19, 2. In _Turgot_, _droit du travail_, and _droit au
     travail_ are still confounded one with the other. Œuvres
     éd. _Daire_, II, 302 ff; especially 306. In such questions,
     people generally think only of factory hands. But have not
     writers just as good a _droit au travail_ to readers whom
     the state should provide them with, lawyers to clients and
     doctors to patients?]

     [Footnote 178-2: _L. Faucher_ calls the _droit au travail_
     worse than the equal and compulsory distribution of all
     goods, because it lays hands on not only present products
     but even on the productive forces. It supposes that
     unlimited production is possible; that the state may
     regulate the market at pleasure to serve its purposes; that,
     in fact, the state can give without having first taken what
     it gave. (Mélanges d'Economie politique, II, 148 ff.) The
     French national assembly rejected the "right to labor" on
     the 15th of September, 1848, by 596 ayes to 187 nays, after
     the provisional government had proclaimed it, February 25.
     Le Droit au Travail à l'Assemblée nationale avec des
     Observations de _Faucher, Wolowski, Bastiat_ etc., by _J.
     Garnier_, Paris, 1848.]

     [Footnote 178-3: _L. Blanc_, De L'Organization du Travail,
     1849.]

     [Footnote 178-4: "Every one has a right to live. We will
     suppose this granted. But no one has a right to bring
     creatures into life to be supported by other people. Whoever
     means to stand upon the first of these rights must renounce
     all pretension to the last.... Posterity will one day ask
     with astonishment what sort of people it could be among whom
     such preachers could find proselytes." (_J. S. Mill_,
     Principles, II, ch. 12.)]

     [Footnote 178-5: Compare _Morrison_, loc. cit. Quarterly
     Rev., Jan. 1872, 260. The English savings in the savings
     banks, between 1839 and 1846, increased yearly in amount
     only £1,408,630, and scarcely half of this came from
     wages-workmen in the narrower sense of the term. What the
     latter contribute to the fund for the old and sick is not
     really productive capital but only individually deferred
     consumption. Let us suppose that a man had an income of
     $3,000 a year, of which he laid out yearly $2,000 ($1,000
     for wages, $1,000 for rent and interest on capital), and
     that he capitalizes $1,000. If now this man were, either
     through philanthropy or in furtherance of socialism, to
     double the wages he paid, the result would not be
     detrimental to the economic interests of the whole country
     only on the supposition that working classes who received
     the increased wages should either save what he is no longer
     able to save, or that by inventions or greater personal
     skill, etc., they should increase the national income.]

     [Footnote 178-6: According to _Hildebrand's_ Jahrbb., 1870,
     I, 435, 193, North American workmen, the quality of work
     being supposed the same, now accomplish from 20 to 30 per
     cent. less than before 1860. Thus, in 1858, in New York, a
     steam engine was manufactured for $23,000, in 2,323 work
     days. In 1869, a similar one was built for $40,000 in 3,538
     days. In the former case, the manufacturer made a profit. In
     the latter, he lost $5,000.

     _John Stuart Mill_, II, ch. 13. Against the
     "philanthropists" who find it hard to preach to the poor,
     the only efficacious means of improving their condition,
     _Dunoyer_, L. du T., IV, ch. 10, says: The rich _do_ employ
     it, although they have much less need of it! Even _Marlo_
     admits that a guaranty of the right to labor, without any
     measures to limit population, would, in a short time, and
     irredeemably lead the country to destruction. (Weltökonomie,
     I, 2, 357.) _von Thünen_, der isolirte Staat., II, 1, 81
     ff., would take a leap out of the vicious circle that those
     who live by the labor of their hands can produce no rise in
     their wages, because they are too little educated to hold
     their increase properly in check; and that, on the other
     hand, they cannot give their children a decent education,
     because their wages are too low; by suggesting that
     educational institutions should be established by the state,
     and that these should elevate the subsequent generation of
     workmen intellectually.]



CHAPTER IV.

INTEREST ON CAPITAL.


SECTION CLXXIX.

THE RATE OF INTEREST IN GENERAL.

Interest on capital,[179-1] or the price paid for the use of capital,
should not be confounded with the price of money (§ 42); although in
common life people so frequently complain of want of money where there
is only a want of capital, and sometimes even when there is a
superabundance of money.[179-2] This error is connected with the fact,
that for the sake of convenience, loans of capital are so often effected
in the form of money and that they are always at least estimated in
money; but neither of these things is essential.

In reality, however, we as seldom meet with interest[179-3] pure and
simple, as we do with rent pure and simple. A person who works with his
own capital can, at best, by a comparison with others, determine where,
in the returns of his business, wages stop and interest begins.[179-4]
And even in the loaning of capital, it depends largely on supply and
demand, whether the creditor shall suffer a deduction in consequence of
the absence of care and labor attending his gain, and whether the
debtor, in order to get some capital at all, shall sacrifice a part of
the wages of his labor.[179-5] When Adam Smith assumes it to be the rule
that the "profit of stock" is about twice as great as the "interest of
money,"[179-6] it is evident that a considerable amount of what is
properly wages or profit of the employer (_Uhternekmer_ = undertaker) is
included in the former.

Many businesses have the reputation of paying a very large interest on
the capital employed in them, when in reality they only pay the
undertaker of them wages unusually high as compared with the amount of
capital employed in them. Apothecaries, for instance, are called in some
places "ninety-niners," because it is said that they earn 99 per cent.
To discover the error, it would be sufficient to inquire the rate of
interest on the capital borrowed by the apothecary on hypothecation, for
instance, to enlarge his industry. But on the other hand, such a man who
has more than any other manufacturer to do with the most delicate
materials and with them in greater variety, requires proportionately
greater caution and knowledge. Besides, as the guardian of the health
and life of so many, and even as the comptroller of physicians, he
should be a man who inspired universal and unqualified confidence.[179-7]
By the rate of interest customary in a country, we mean the average rate of
the interest on money-capital employed safely and without trouble.

     [Footnote 179-1: In the case of fixed capital, we generally
     speak of rent; in the case of circulating capital, of
     interest. If interest be conceived as a fractional part of
     the capital itself, the relation between the two is called
     "the rate of interest," most generally expressed as a
     percentage, and for one year.]

     [Footnote 179-2: In Russia, great depreciation of the
     assignats, and yet the people complained of a "want of
     money." (_Storch_, Handbuch, II, 15.) According to the San
     Francisco correspondent of the Times, Jan. 31, 1850, one per
     cent. a day discount was paid there! Compare _North_,
     Discourse on Trade, 11 seq.]

     [Footnote 179-3: Gross interest and net interest
     corresponding to the difference between gross product and
     net product.]

     [Footnote 179-4: This is the natural rent of capital in
     contradistinction to the stipulated rent. (_Rau_, Lehrbuch,
     I, § 223.)]

     [Footnote 179-5: Thus, for instance, a so-called beginner
     who is conscious of possessing great working capacity, but
     who possesses for the time being little credit. _Tooke_,
     Considerations on the State of the Currency, 1826,
     distinguishes three kinds of capitalists: a, those who are
     averse to running any risk whatever or incurring any
     trouble, or are not able to incur any risk or trouble, for
     whom every great increase of the sinking fund lowers the
     rate of interest, and every war loan raises it; b, those who
     will run no risk, but who are not averse to the trouble of
     looking after their investments and of endeavoring to obtain
     a higher rate of interest; c, such as, to obtain a higher
     rate of interest, unhesitatingly risk something. Borrowers
     he divides thus: a, those who employ the borrowed capital
     and their own in such a way as to enable them to meet their
     obligations and besides to earn a reasonable profit; b,
     those who need others' capital to make up for the momentary
     failure of the productiveness of their own; lastly c,
     unproductive consumers.]

     [Footnote 179-6: Wealth of Nat., I, ch. 9. The gross product
     of English cotton industry was, in 1832, estimated at
     £32,000,000, viz: £8,000,000 worth of material, £20,000,000
     wages, £2,000,000 interest, £2,000,000 undertaker's profits.
     (_Schön_, Nat. Oek, 104.)]

     [Footnote 179-7: _Adam Smith_, I, ch. 10, 1: where the
     reasons why a shop-keeper in a small town apparently gets a
     larger interest than one in a large city, and yet gets rich
     less frequently, are developed. The high profit made from
     industrial secrets, Adam Smith very correctly considers
     wages (I, ch. 7). Why not also that made by inn-keepers? (I,
     ch. 10, 1.) When the returns of a business differ according
     to circumstances which depend on the person of the conductor
     of the business himself, and may by him be transferred into
     another business, etc.; when the competition in it is
     determined by personal agreeableness or disagreeableness, it
     is evident that the larger returns are to be ascribed rather
     to the highness of wages than of the rate of interest. The
     profit also which a second-hand hirer makes is wages.
     (_Riedel_, Nat. Oek., 376.)]


SECTION CLXXX.

RATE OF INTEREST IN GENERAL.--ITS LEVEL.

Within the limits of the same national-economic territory, the different
employments of capital tend uniformly to pay the same rate of
interest.[180-1] If one branch of business were much more profitable
than another, it would be to the interest of the owners of capital to
allow it to flow into the former and out of the latter, until a level
was reached.[180-2]

The most noticeable exception to this rule is only an apparent one. The
revenue (_Nutzung_) derived from the use of capital must not be
confounded with its partial restoration.[180-3] Thus, for instance, the
rent of a house, if the entire capital is not to be sooner or later
consumed entirely, must embrace, besides a payment for the use of the
house, a sum sufficient to defray the expenses of repairing it, and even
to effect a gradual accumulation of capital for the purpose of
rebuilding. The risk attending the investment of capital plays a very
large part and must be taken into special consideration. If the risk in
a business be so great that ten who engage in it succeed and ten fail,
the returns of the former, which are more than double those usual in the
country, in reality pay, when the ten who failed are taken into the
account, only the rate of interest customary in the country. The risk
may depend on the uncertainty of the person to whom the capital is
confided;[180-4] on the uncertainty of the branch of business in which
it is intended to employ it,[180-5] or on the uncertainty of the
commercial situation in general; but especially may it depend on the
uncertainty of the laws.[180-6] The temporary lying idle of capital, for
instance, in dwelling houses at bathing places during the winter season,
increases the rate of interest much more than it does the rate of wages
in the corresponding case of the lying idle of labor; for the reason
that there is something pleasurable in the repose of the latter.
(_Senior._) On the whole, the vanity of mankind has an effect upon the
rate of interest similar to that which it has on the rate of wages. (See
§ 168.) It causes the small chances of loss to be estimated below their
real value, and the extraordinary chances of gain above it.[180-7]

     [Footnote 180-1: Compare _Harris_, Essay on Money and Coins,
     13. _Per contra, Ganilh_, Dictionnaire analyt., 107.
     According to _Hermann_, Staatsw. Untersuchungen, 147, a
     product which withdraws an amount of capital = _a_ from the
     immediate use of its owner for _n_ months must bring in in
     its price a surplus, over and above the outlay of capital,
     which would bear the same ratio to the profit from another
     product which employed an amount of capital = _b_, _m_
     months, that _an_ bears to _bm_.]

     [Footnote 180-2: The class of bankers, etc. which precisely
     in the higher stages of civilization is one so highly
     developed, is called upon to adjust these differences.]

     [Footnote 180-3: Life annuities and annual revenues, _à
     fonds perdu_.]

     [Footnote 180-4: Hence, for instance, good men engaged in
     industrial pursuits who employ borrowed capital productively
     pay lower interest than idlers who are suspected of desiring
     only to spend it in dissipation. High house-rent usually
     paid by proletarians.]

     [Footnote 180-5: Thus even in _Anderson's_ time, it was
     necessary that the profit of one good year in the whale
     fishery should compensate for the damage caused by six bad
     ones. (Origin of Commerce, III, 184.) Slave-traders made
     their calculations to lose from three to four out of five
     expeditions. (Athenæum, May 6, 1848) Similarly in smuggling
     and contraband. High rate of interest in gross adventure
     trade and bottomry contracts, frequently 30 and even 50 per
     cent.; in ancient Athens, for a simple voyage to the Black
     Sea, 36 per cent., while the rate of interest customary in
     the country was only from 12 to 18 per cent.; the interest
     paid by rented houses only 8-1/7, and by land leases only 8
     per cent. (_Bockh_, Staatshaushalt der Athener, I, 175 ff.;
     _Isaeus de Hagn._, Hered., 293) In Rome, before Justinian's
     time, maritime interest was unlimited. (_Hudtwalker_, De
     Foenore nautico Romano, 1810.) And so in the manufacture of
     powder, the frequent explosion of the mills has to be taken
     into account: in France and Austria, 16 per cent. per annum.
     (_Hermann_, Principien, 119.) Here belong those new
     enterprises which, when they succeed, pay a high profit.
     _Thaer_, in reference to this insurance premium, says: if
     the capital employed to purchase a landed estate yields 4
     per cent., the inventory (_Inventar_) should bring in at
     least 6, and the working capital 12 per cent. (Ration.
     Landwirthschaft.)]

     [Footnote 180-6: Compare _supra_, § 91; _infra_, §§ 184,
     188.]

     [Footnote 180-7: Thus _Friedr. Perthes_, in _Politz_,
     Jarhbüchern, Jan., 1829, 42, thinks that the publication of
     scientific books in Germany, since 1800, caused, on the
     whole, a loss of capital. In the Canadian lumber trade,
     also, speculators, in the aggregate, lost more than was
     gained. Yet the business goes on because of its lottery
     character. (_John Stuart Mill_, II, ch. 15, 4.) In
     lotteries, it is certain that the aggregate of players lose.
     So too in speculation in English stocks, on account of the
     costs to be paid the state. In the case of frightful losses,
     which may afford food for the imagination, the reverse is
     found. Thus, for instance, in England, fire insurance, stamp
     duties included, was paid for at a rate five times as high
     as mathematical calculation showed it to be worth.
     (_Senior_, Outlines, 212 ff.) Much here depends naturally on
     national character, which, in England for instance, or in
     the United States, is much more adventurous than in many
     quiet regions of continental Europe.]


SECTION CLXXXI.

RULE OF INTEREST IN GENERAL.--CAUSES OF DIFFERENT RATES.

The real exceptions to the above rules are caused by a prevention of the
leveling influx and outflow of capital. Among nations in a low stage of
civilization, there is wont to be a multitude of legal impediments in
this respect. The existence of a difference of classes, of privileged
corporations, etc., not only restrains the transition of workmen, but
also of capital from one branch of industry to another. But even the
mere routine of capitalists, that blind distrust of everything new so
frequently characteristic of easily contented men, may produce the same
result.[181-1] In the higher stages of civilization, patents for
inventions and bank privileges, are causes of a lastingly higher rate of
interest than is usual in the country.[181-2] Finally, since in many
enterprises only a large amount of capital can be used at all, or at
least with most advantage, the aggregation of which from many small
sources is ordinarily much more difficult than the division of a large
one into small fractional parts; the rate of interest for very small
amounts of capital, and especially in the higher stages of civilization,
is usually lower than that of large amounts of capital. We need only
mention interest paid by savings-bank investments.[181-3]

If circulating capital has been changed into fixed capital, its yield
will depend upon the price of the particular goods in the production of
which it has been made to serve. Compared with the cost of restoration
of fixed capital, this yield may, in a favorable case, constitute an
extraordinarily high rate of interest, in an unfavorable a very low one;
and the former of these two extremes has a greater chance of being
realized, in proportion as it is difficult to multiply fixed capital of
the same kind; the latter, the more exclusively it can be employed in
only one kind of production, and the longer time it takes to be used up
by wear.[181-4] When fixed and circulating capital coöperate in
production, the latter, because it can be more easily withdrawn, but
also more easily replaced, first takes out its own profit, that is the
profit usual in the country and leaves all the rest to the former. When
fixed capital is sold, practically no attention is paid to what it
originally cost. The purchaser pays only for the prospective revenue it
will yield, which he capitalizes at the rate of interest usual in the
country. The seller henceforth looks upon his gain as an accretion to
capital, his loss as a diminution of capital, and no longer as high or
low interest.[181-5] That accretion might be considered the wages, paid
once for all, for the intelligent labor which governed the original
investment of the capital, and _vice versa_.

     [Footnote 181-1: Thus the rate of interest in the Schappach
     valley remained for a long time much lower than in the
     vicinity, for the reason that the peasantry who had grown
     rich through the lumber trade possessed notwithstanding
     little of the spirit of enterprise. (_Rau_, Lehrbuch, I, §
     233.)]

     [Footnote 181-2: Here the law produces a species of
     artificial fixation.]

     [Footnote 181-3: _Von Mangoldt_, Unternehmergewinn, 150.]

     [Footnote 181-4: In other words, the more fixed they are.
     Thus, for instance, dwelling houses in declining cities,
     canals, etc. which have been supplanted by better commercial
     routes; or again, the shafts and stulms of a mine which has
     been abandoned. When Versailles ceased to be a royal
     residence, the value of inhabited houses sank to one-fourth
     of what it had been. (_Zinkeisen_ in _Raumer's_ histor.
     Taschenbuch, 1837, 426.) A rate of interest greater than
     that usual in a country is seldom found where freedom of
     competition prevails, since it is necessary there to
     distinguish between rent and interest on capital. When in an
     open city, the capital employed in the construction of
     dwelling houses _detractis detrahendis_ pays 8 per cent.,
     while the rate of interest customary in the country is only
     4 per cent., the supply of houses will grow continually
     greater. Only the difficulties in the way of transferring
     capital from one business to another could here retard the
     leveling process, which where the political prospect for
     instance was bad, might last a long time--one of the
     principal reasons why, in 1848, the rent of houses declined
     much less than their purchase prices. The conjuncture was
     not serious enough to prevent the increase of population;
     but it entirely stopped the building of new houses. On the
     other hand, a bridge or railroad company may maintain a high
     rate of profit because competition cannot exist in the face
     of the great expense such enterprises require; but
     especially because the party who has here the advantage of
     priority may lower the price of transportation to such a
     point as to entirely discourage his rival. Compare
     _Hermann_, Staatsw. Untersuchungen, 145 ff. Interesting
     example of the London gas and water companies in _Senior_,
     Outlines, 101.]

     [Footnote 181-5: Thus, for instance, Leipzig-Dresden
     railroad stock cost originally 100 thalers per share, and
     was taken at that rate. The yearly dividends amounted in
     1856 to 13 thalers; that is, 13 per cent. for the original
     stockholders. But a person who on the 30th September, 1856,
     paid 285 thalers for a share, received but an interest of
     4½ per cent. on his capital. It is characteristic, how
     _Serra_, Sulle Cause, etc., 1613, I, 9, calls the high and
     the low rate of interest _prezzo basso e alto delle
     entrate_.]


SECTION CLXXXII.

VARIATIONS OF THE RATE OF DISCOUNT.

The fact that in commerce, etc., the rate of interest on capital loaned
for short periods of time (discount) is subject to great fluctuations,
while the mortgage rate of interest, for instance, remains the same
throughout, depends on similar causes.[182-1] Yet there are
contingencies in trade which, when taken immediate advantage of, promise
enormous profits, but which may disappear within a month; risks of the
most dangerous kind which can be conjured only by the immediate aid of
capital. These are both sufficient grounds of a high rate of interest.
Again, there are times of the profoundest calm in the commercial world,
during which capitalists are perfectly willing to make loans at a low
rate of interest, provided they are sure to be able to get back their
capital with the first favorable breeze that blows. Agriculture is too
immovable to come opportunely to the assistance of capitalists, here as
a receiver and there as a loaner of capital. As the cycle of its
operations is gone through usually only in a series of years, sudden
influxes or outflows of capital would cause it the greatest
injury.[182-2]

     [Footnote 182-1: _Nebenius_, Œff. Credit, I, 74 ff. Thus,
     Hamburg discount towards the end of the last century
     fluctuated between 2½ and 12 per cent., while the capital
     invested in agriculture brought an interest almost
     invariably of 4 per cent. (_Büsch_, Geldumlauf, VI, 4, 19.)
     At the same time, in Pennsylvania, the usual rate of
     interest was 6 per cent. per annum, and the rate of discount
     not unfrequently from 2 to 3 per cent. a month. (_Ebeling_
     Geschichte und Erdbeschreib. von Amerika, IV, 442.) During
     the crisis of 1837, it happened that ¼ per cent. a day was
     paid. (_Rau_, Archiv. N. F. IV, 382.) In the Prussian ports,
     during the crisis of 1810, it is said that in July the rate
     of discount was 2½ per cent. a month. (_Tooke_, Thoughts
     and Details, I, 111.) In Hamburg and Frankfort the rate of
     discount rose in the spring of 1848, but declined in June to
     2; until December it was 1¼, until the summer of 1849,
     ¾ per cent. (Tüb. Zeitschr., 1856, 95.) Rate of discount
     in France, about 1798, at least 2 per cent. a month.
     (_Büsch_, loc. cit., IV, 52.) Half a year previous, capital
     employed in the purchase of land paid an interest of from 3
     to 4 per cent. Legal interest was 5 per cent.; discount, at
     most, 6 per cent.; in very prosperous times 8-9, per cent.
     (_Forbonnais_, Recherches et Considérations, I, 372.)]

     [Footnote 182-2: Remarkable case in _Cicero's_ time in which
     bribery, carried on on a large scale, raised the rate of
     discount from 4 to 8 per cent. _Cicero_ ad. Quint. M, 15;
     ad. Att. IV, 15.]


SECTION CLXXXIII.

EFFECT OF INCREASED DEMAND FOR LOANS.

The price paid for the use of capital naturally depends on the relation
between the supply and demand, and especially of circulating capital.
The increase of the supply need no more unconditionally lower the rate
of interest than the price of any other commodity. If 50 hunters kill
1,000 deer yearly, and give 100 deer per annum as interest to the
capitalists who provided them with ammunition and rifles, a second
capitalist with an equal number of rifles and an equal amount of
ammunition may appear on the scene. If now 2,000 deer a year are killed,
the rate of profit of the capitalists will probably remain the same. But
if the woods are not rich enough in game for this, or the hunters not
numerous enough, too indolent, or too easily satisfied, the rate of
interest falls.[183-1]

The difficulties in the way of the desired increase of capital are here
of great importance. The smaller the surplus over and above their
absolutely necessary wants, which the people produce, the less their
tendency to make savings, the less the inclination to capitalization;
and the less the security afforded by the law is, the higher must the
rate of interest be to induce people to face these difficulties. We may
very well transfer the idea of cost of production to this
condition.[183-2]

The demand for capital depends, on the one hand, on the number and the
solvability of borrowers, especially of non-capitalists like landowners
and workmen; and, on the other hand, on the value in use of the capital
itself. Hence the growth of population is, other circumstances being the
same, a means to raise the rate of interest; because it infallibly
increases the competition of borrowers of capital, even if the increased
rate must take place at the expense of wages. The solvability or paying
capacity of the land-owning class as contrasted with the capitalists
can, in the last analysis, depend only on the extent and fertility of
their lands and on the quality of their agricultural husbandry; the
solvability or paying capacity of the working class, only on their skill
and industry. Where these have grown, an increase of the rate of
interest may be found in connection with an absolute growth of the rate
of wages and of rent, because the aggregate income of the nation has
become greater.

The value in use of capital, which is more homogeneous in proportion as
it has the character of circulating capital (_res fungibiles_) is, in
most instances, synonymous with the skill of the working class, and the
richness of the natural forces connected with it. The deciding element,
therefore, is the yield of the least productive investment of capital
which must be made to employ all the capital seeking employment. This
least productive employment of capital must determine the rate of
interest customary in a country precisely as cost of production on the
most unfavorable land determines the price of corn (§§ 110, 150), and as
the result of the work of the laborer last employed does the rate of
wages. (§ 165.)

What portion of the total national income, after deduction is made of
rent, shall go to the capitalists and what portion to the working class,
will depend mainly on whether the capitalists compete more greedily for
labor or the laboring classes for capital.[183-3] If, for instance,
capital should increase more rapidly than population, there must be a
relative increase in wages, and _vice versa_.[183-4] This is true
especially of that peculiar kind of higher wages which we shall (§ 145,
ff.) designate as the "undertaker's profit." The smaller the number of
persons engaged in enterprises is, in comparison with the number of
retired persons who live on their rents, incomes, etc., the smaller is
the portion of the so-called net profit of enterprise the latter must be
satisfied with in the shape of interest.[183-5]

     [Footnote 183-1: It is one of _Ricardo's_ (Principles, ch.
     21) chief merits, that he demonstrated the groundlessness of
     the opinion that the mere increase of capital must, on
     account of the competition of capitalists, lower the rate of
     interest, as is assumed by _Adam Smith_, I, ch. 9, _J. B.
     Say_, Traité, II, 8, and others. Compare also, _John Stuart
     Mill_, Principles, IV, ch. IV, 1.]

     [Footnote 183-2: _Storch_, Handbuch, II, 20.]

     [Footnote 183-3: Frequent withdrawals of capital must, other
     circumstances being the same, temporarily raise the rate of
     interest. In the long run, however, the question is decided
     by this: whether public opinion considers labor a greater
     sacrifice than the saving of capital. Compare _Roesler_,
     loc. cit., 8.]

     [Footnote 183-4: Compare _Hermann_, Staatsw. Unters., 240
     ff. Very much depends on whether the new increased
     consumption (of workmen when wages are rising, of
     capitalists when wages are declining) is of goods which are
     mainly the product of large capital, large factories, etc.,
     or chiefly of common labor, (_von Mangoldt_, Grundriss, 155
     seq.) When _Adam Smith_ suggests that the relation between
     wages and the profit of capital is determined by this:
     whether there is a market demand for more work or more
     commodities, for more "work to be done" or "work done" (I,
     ch. 7), he is, spite of appearances, very unsatisfactory.
     _Malthus_ distinguishes a restrictive principle of the rate
     of interest, viz.: the return made to the least productive
     agricultural capital, and a regulative one, viz.: the
     reciprocal relation between demand and supply of capital and
     labor. (Principles, ch. 5, sec. 4.) _Ricardo_, ch. 6, makes
     the profit of capital at all times and in every country
     depend on the quantity of labor which it is necessary to
     expend on the land which pays no rent, in order to satisfy
     the wants of workmen--a very correct theory.

     Only _Ricardo_ himself (ch. 21) and his school postulate
     altogether too unconditionally that their wants would always
     coincide with the minimum of maintenance or support. Thus,
     for instance, _J. S. Mill_, Principles, IV, ch. 3, 4.
     However, _Mill_ instead of _Ricardo's_ "wages" employs the
     better expression, "cost of labor." _Senior_ teaches that
     the distribution of the aggregate result between laborers
     and capitalists depends on the anterior course of both
     classes: on the value of the capital previously employed by
     capitalists to produce the means of satisfying working men's
     wants, and on the number of workmen which the previous
     laboring population have brought into existence. (Outlines,
     188 ff.) Concerning _von Thünen's_ vain attempt at a general
     formula, see _supra_, § 173. _Fourier's_ idea that 5/12 of
     the product should be distributed among labor, 3/12 among
     talent, and 4/12 among capital, is entirely baseless. (N.
     Monde, 309 ff.) _Considérant_, Destinée sociale, 192 ff. As
     early a writer as _H. Boden_, Fürstliche Machtkunst, 1700
     and 1740, 42, came strikingly near the truth. According to
     him, a low rate of interest is produced by four
     circumstances: surplus capital, a dearth of landed estates,
     a want of credit and exact justice, and lastly, the heavy
     taxation of capital.]

     [Footnote 183-5: Thus, in the last century, Spanish
     capitalists loaned capital readily to sure commercial
     companies, at from 2 to 3 per cent. per annum. (_Bourgoing,_
     Tableau de l'Espagne, I, 248.) The contemporary low rates of
     interest in Hannover, _Büsch_, Geldumlauf, VI, 4, 12,
     endeavors to explain by the absence of opportunities for
     investment, as no one dared to loan to any extent on fiefs
     or on the land of the peasantry, and because there was no
     law governing bills of exchange, etc.]


SECTION CLXXXIV.

HISTORY OF THE RATE OF INTEREST.

Among barbarous nations, the loaning of capital is wont to happen so
seldom, and to be limited so strictly to near relations, that it does
not yet occur to any one to stipulate for a regular compensation
therefor.[184-1] But, however, when they pass from this state to
interest proper, the rate must be, of course, very high.[184-2] The
premium for insurance is here very great, the possibility and
inclination to accumulate capital exceedingly small. Even of the
existing supply of capital, a great part remains idle, because the
faculty and the institutions necessary to concentrate it and permit it
to flow are wanting. (§ 43.) The unskillfulness of labor is more than
overcome by the excess of fertile and naturally productive land, of rich
sites still unoccupied, the cream of which, as it were, needs only to be
culled. Population is indeed sparse, but the usually prevailing absence
of freedom of the lower classes prevents wages claiming the full benefit
of competition.[184-3] This last circumstance is especially
important.[184-4] For a given amount of the national income and of rent,
every depression of wages must obviously raise the rate of interest, and
every enhancement of wages lower it.[184-5]

     [Footnote 184-1: _Tacit._, Germ., 26; _Marculf_, Form., 18,
     25 ff., 35; _Savigny_, Ueber das altrömische Schuldrecht, in
     the transactions of the Berlin Academy, 1833, 78 seq.]

     [Footnote 184-2: According to the Lex Visig., V, 5, § 8, the
     maximum rate of interest allowed on loans of money was
     12½ per cent., and on other _res fungibiles_, 50 per
     cent. From the 12th to the 14th century, the Lombards and
     the Jews in France and England took generally (?) 20 per
     cent. a year. (_Anderson_, Origin of Commerce, _a._, 1300.)
     Philip V. of France, in 1311, fixed the rate of interest at
     the fairs in Champagne at 15 per cent. (a species of
     discount) at most, and at a maximum everywhere of 20 per
     cent. (Ordonnances de la France, I, 484, 494, 508.) The
     legal rate of interest in Verona, in 1288, was fixed at a
     maximum of 12½ per cent.; in Modena, 1270, at 20 per
     cent. (_Muratori_, Antiquitt. Ital., I, 894); in Bresica,
     1268, at 10 per cent. (_v. Raumer_, Geschichte der
     Hohenstaufen, V, 395 ff.) Frederick II. wished to reduce it
     to 10 per cent. for Naples, but failed. (_Bianchini_, Storia
     delle Finanze di Nap., I, 299.) The tables of _Cibrario_,
     Economia polit. del medio Evo., III, 380, for 1306-1399,
     show for upper Italy interest to have been at 20, 15, 14,
     10, and also 5½ per cent. About 1430 the Florentines, in
     order to moderate the enormously high rate of interest,
     called Jews to their city, and the latter promised not to
     charge over 20 per cent. (_Cibrario_, III, 318.) In the
     Rhine country, the Kowerzens, during the 14th century, took
     from 60 to 70 per cent., for which they had, however, to pay
     a heavy tax to the archbishop. (_Bodmann_, Rh. Alterthümer,
     716.) Of Jewish maximum rates of interest, in the 14th and
     15th centuries, see _Stobbe_, Juden in Deutschland während
     des M. Alters, 103, 110, 234 seq.; _Hegel_, Strassb. Chr.,
     II, 977, 984.

     The rate of interest usual in these countries must not
     however be calculated from the data furnished by these
     usurious rates and fixed rates of interest, simply. In
     Germany, the rate of interest promised by princes in the
     13th and 14th centuries was usually 10 per cent. The
     Frankfort municipal loans made by Jews in the 14th century
     bore interest at the rate of 9, 11-2/3, 13, 18, 26, and even
     45 per cent. (_Kriegk_, F.'s Bürgerzwiste, 343, 539.) The
     rate of interest in the purchase of annuities continually
     declined between 1300 and 1500, especially in the time of
     the emancipation of manual laborers. Old Base documents
     give, between 1284 and 1580, as the highest rate, 11-3/9,
     and as the least, 5 per cent. The latter became more and
     more usual later, especially in the sale of house-rents
     (_Hauszins_), so that in 1841 all annuities (_Renten_) might
     be canceled by a payment of their amounts multiplied by 20.
     Until the beginning of the 15th century, in the city, the
     rule was 6 to 7 per cent.; outside of it, 8 to 10 per cent.
     (_Arnold_, Geschichte des Eigenthums in den deutschen
     Städten, 222 seq., 227 seq.) According to the Bremen Jahrb.
     of 1784, 164 seq., the rate of interest in the case of
     _Handfesten,_ in 1295, = 10 per cent., gradually sank: in
     the 15th century it was never over 6-2/3; after 1450,
     generally 5; in 1511 only 4 per cent. In 1441 ff., in
     Augsburg, people were satisfied with a business profit of
     7-2/3 per cent., while the usual rate of interest paid by
     house-rent, etc. was 5 per cent. (_Hegel_, Augsb. Chr., II,
     134 seq., 157.) Handsome tables in the rate of interest in
     the purchase of annuities for all Germany, from 1215 to
     1620, give as the rule, 7 to 10, scarcely ever over 15 per
     cent., in _M. Neumann_, Geschichte des Wuchers, 266 ff. For
     the upper Rhine, compare _Mone's_ Zeitschr., 26 ff. Among
     the Fathers of the councils of Constance and Basil 5 per
     cent. was considered equitable. Compare _F. Hammerlin_,
     1389-1457, De Emtione et Venditione unius pro viginti.
     Russian interest at 40 per cent., according to the laws of
     Jaroslaw (ob. 1054 after Christ). _Karamsin_, Russ. Gesch.,
     II, 47.]

     [Footnote 184-3: The high rate of interest in many countries
     at present may be thus accounted for. In the United States,
     during the last century, less than 8 per cent. was seldom
     paid. (_Ebeling_, III, 152.) According to _M. Chevalier_,
     Lettres sur l'Amérique du Nord, 1836, I, 59, the rate of
     interest in Pennsylvania was 6, in New York, 7, in most of
     the slave states, 8-9; in Louisiana, 10 per cent. In South
     Australia (1850) it was, with full security, 15-20 per cent.
     (_Reimer_, Südaustralien, 39.) In the West Indies, about the
     end of the last century, a strong negro might produce a
     revenue equal to one-fourth of his capital value. (_B.
     Edwards_, History of the British West Indies, II, 129.) In
     Brazil, the lowest rate of interest was at 9 per cent., and
     12-18 per cent. was nothing unusual. (_Wappäus_, M. and S.
     Amerika, 1871, 1413.) In Cuba, for the government 10, for
     private parties, 12 to 16 per cent. (_Humboldt_, Cuba, I,
     231.) In Potosi, in 1826, Temple got 30 per cent. interest
     on chattel mortgage, and from 2 to 4 per cent. a month was
     offered, while the rate of interest in Buenos Ayres amounted
     to 15 per cent. per annum. (_Temple_, Travels, II, 217.) In
     Russia, _Storch_, Handbuch, I, 262, speaks of 8-10 per cent.
     According to _v. Haxthausen_, it was, in the interior, never
     less than from 8 to 12 per cent. per annum; at Kiew and
     Odessa, 1¼, 1½ and 2 per cent. per month. (Studien, I,
     58, 467; II, 495.) In _Greece_, the rate of interest on
     first mortgages is at least 10, on a second, 15-18 per cent.
     (Ausland, 1843, No. 82.)]

     [Footnote 184-4: _Nebenius_, Œff. Credit, I, 55.]

     [Footnote 184-5: Only in this particular instance is what
     _Ricardo_ so frequently insists on true, viz: that the rate
     of wages can be increased only at the expense of the profit
     of capital, and _vice versa_.]


SECTION CLXXXV.

HISTORY OF THE RATE OF INTEREST.--INFLUENCE OF AN ADVANCE IN
CIVILIZATION.

With an advance in civilization, the rate of interest is wont to
decline.[185-1] [185-2] One of the chief causes of this phenomenon is the
necessity, as population and consumption increase, to employ capital in
the fertilization of less productive land, and in less profitable
investments.[185-3] An increase in the stock of money does not
necessarily depreciate the rate of interest. If this increase comes in
connection with a corresponding depreciation of the individual pieces of
metal, it cannot be said that the nation has thereby become richer in
capital. All that would be required in such case is only a greater
number of pounds of gold or silver, or more paper bills to represent the
same capital.[185-4] Only during the transition-period, during which the
depreciation of money is still incomplete, is the rate of interest wont
to be lowered; and all the more, since loaned capital is generally
offered and sought after in the form of money.[185-5] [185-6]

The decline of the rate of interest generally shows itself earliest in
the large cities, which are everywhere the national organ, in which the
good and bad symptoms of later civilization may be soonest
observed.[185-7]

Moreover, the condition of capitalists is not necessarily made worse by
a decline of the rate of interest. It is possible that, for a long time,
the increase of capital should continue more rapid than the decrease of
interest for each individual. (If, indeed, the aggregate interest of
capital should become absolutely smaller, there is always a pleasant
remedy available, viz.: to consume a part of the capital!) But, however,
a decline of the rate of interest is nearly always followed by increased
activity on the part of capitalists; and they come to the resolve to
retire later to enjoy the results of their previous labors. In Holland,
after the time of Louis XIV., no branch of business was wont to pay more
than from two to three per cent. In the case of the purchase of land, no
one calculated on more than two per cent. Hence it was scarcely possible
for small capitalists there to live on their interest; and the good
sense of the people so well adapted itself to this state of things that
to live in leisure on one's rents was considered a not entirely
honorable mode of existence.[185-8] The lower the rate of interest, the
larger, in highly civilized countries, is the stock on hand of cash apt
to become, for the reason that business men then hope to gain more by
the advantages of cash payments than by the saving of interest.[185-9]
[185-10]

     [Footnote 185-1: _Proudhon's_ idea, that this decline might
     at last bring about a total abolition of interest, is based
     on the same error as this other: that since a man may keep
     diminishing his per diem quantum of food, he might finally
     dispense with food altogether. _Proudhon's_ Banque du
     Peuple--People's Bank--which, by gradually diminishing the
     interest on its loans to the minimum cost of its
     administration, should compel other capitalists to follow
     its example.]

     [Footnote 185-2: Thus, in England, by virtue of 37 Henry
     III., c. 9, the legal interest was = 10 per cent.; by 21
     James I, c. 17 = 8; about 1651 = 6 per cent. (confirmed in
     1660); by 12 Anne, ch. 16 = 5 per cent. In the time of
     George II., where the security was good, only 3 per cent.
     was, as a rule, paid. In France, the legal rate of interest,
     at the beginning of the 16th century, was 1/10 of the
     capital; after 1657, 1/12; 1601 (_Sully_), 1/16; 1634
     (_Richelieu_), 1/18; 1665 (_Colbert_), 1/20. Compare
     _Forbonnais_ Recherches et Considérations, I, 48, 225, 385
     ff. It continued at this rate of 5 per cent. with short
     interruptions until the revolution. (_Warnkönig_, Franz.
     Staats. und Rechtsgeschichte, II, 588 seq.)

     The rates of interest in Russia, in the 16th century, had
     already declined to 20 per cent. (_Herberstein_, Reise, 41
     ff.; _Karamsin_, Russ. Geschichte, VII, 169.) In Holland, in
     1623, it was estimated that land purchases paid 3 per cent.;
     hypothecations, 4 to 6; deposits, 5 to 6; a flourishing
     business, 10 per cent. Compare _Usselinx_ in _Laspeyres_,
     Geschichte der volkswirthschaftl. Anschauungen der
     Niederländer, 76. About 1660, the rate of interest usual in
     Italy and Holland was at most 3 per cent. (in war times, 4);
     in France, 7; in Scotland, 10; in Ireland, 12; in Spain, 10
     to 12; in Turkey, 20 per cent. (_Sir J. Child_, Discourse on
     Trade, French translation, 75 ff.) Side by side with 6 per
     cent. as the rate of interest in England, it was (a little
     later) 10 in Ireland. _Petty_, Political Anatomy of Ireland,
     74.

     The same course of things is to be observed in ancient
     times. In _Solon's_ time, and again in that of _Lysias_, it
     was 18 per cent. (_Böckh_, Staatshaushalt der Athener, I,
     143 ff.) I am of opinion that the rate of interest declined
     during this long interval, but rose again in consequence of
     the Peloponnesian war. Among friends, in the time of
     _Demosthenes_, 10 per cent. (adv. Onetor., I, 386.)
     _Aristotle_, Rhet., III, 10, mentions 12 per cent., which
     _Aeschines_, adv. Ctes., 104, and _Demosthenes_, adv. Aph.,
     I, 820, 824, call low. The rate of commercial interest in
     Egypt (146 before Christ) seems to have been 12 per cent.
     per annum. (_Letronne_, Recompense promise à celui, etc.,
     1833, 7.) Contemporaneously in Rome, a similar rate of
     interest must have been considered usurious. (_Cicero_, ad.
     Att., I, 12.) Under the emperor _Claudius_, 6 per cent.
     (_Columella_, De Re rust., III, 3.) _Justinian_ allowed _to
     personae illustres_ 4 per cent. per annum. (L. 26 Cod., IV,
     32.)]

     [Footnote 185-3: A Huron with his bow and arrow kills 12
     pieces of game; the European, with a much better capital,
     his rifle, only 5. Compare _v. Schözer_, Anfangsgründe, I,
     28. _Mallthus_, Principles, ch. 5. According to _Ricardo_,
     ch. 6, the decline of the rate of interest because of the
     necessity of carrying on agriculture under harder
     conditions, must make all capital of which raw material
     forms a part more valuable; while the possessors of
     money-capital particularly find no indemnification.
     _Wakefield_, England and America, 1853, accounts for it by
     saying that production, besides the coöperation of capital
     and labor, needs "a field of employment;" and _Bastiat_,
     Harmonies, ch. 5, 13, by saying that with the advance of
     civilization, the results of former services lose in value
     as compared with later ones, because performed under less
     favorable circumstances.]

     [Footnote 185-4: _D. Hume_, Discourses No. 4 On Interest.
     Per contra, see _Locke_, Considerations of the Consequences
     of the Lowering of Interest; _Law_, sur l'Usage des Monaies,
     1697 (Daire); and _Montesquieu_, Esprit des Lois XXII, 6.
     _Cantillon_ draws a very nice distinction: If the increased
     amount _of_ money in a state comes into the hands of
     loaners, it will decrease the current rate by increasing the
     number of loaners; but if it comes into the hands of
     consumers, the rate rises, because now the demand _for_
     commodities is so much greater. (Nature du Commerce, 284.)]

     [Footnote 185-5: The reviews in the Göttingen G. Anz., 1777,
     and of _von Iselin_, in the Ephemeriden der Menschheit, II,
     170 ff., 177, question _Adam Smith's_ (Wealth of Nat., II,
     ch. 4) entirely too positive denial of the influence of the
     American production of gold and silver on the diminution of
     the rate of interest, a view which was shared also by
     _Turgot_, Form. et Distr., § 78. See a beautiful comparison
     between a declining of the prices of the currency which,
     promotes production, with the phenomena attending the growth
     of a tree, in _Schäffle_, N. Oek., II, Aufl., 249.]

     [Footnote 185-6: Thus the rate of interest in Rome fell from
     12 to 4 per cent. when Octavian suddenly threw the treasures
     of conquered Egypt upon the market, and the price of
     commodities only doubled. When later commerce had divided
     this amount of money among the provinces, it rose again.
     (_Sueton._, Oct., 41; _Dio C._, LI, 17, 21; Oros, IV, 19.)
     _Law's_ emissions of paper, in colossal amounts, depressed
     the rate of interest to 1¼ per cent. (_Dutot_, Réflexions,
     990--Daire.) But as soon as the paper money had lost its
     value, the former condition returned. Similar observations
     in Rio de Janeiro: _Spix_ und _Martius_, Reise, I, 131.]

     [Footnote 185-7: While in Paris the capital safely invested
     paid 2½ to 3 per cent., 57 out of 61 _conseils généraux_
     declared, in 1845, that the rate of interest on
     hypothecations, in their departments, was always over 5 per
     cent.; 17 estimated it at an average of from 6 to 7 per
     cent.; 12 at from 7 to 10; some said 12 and 15, and even 22
     per cent. in the case of small sums loaned for a short time.
     (_Chegarny_, Rapport au Nom de la Commission de la Réforme
     hypoth., 29 Avril, 1851.) In Russia, at the beginning of
     this century, the rate of interest in the Baltic provinces
     was 6 per cent.; in Moscow, 10; in Taurien, 25; in Astracan,
     30 per cent. (_v. Schlözer_, Anfangsgründe I, 102.) In 1750,
     in Naples, the rate of interest was from 3 to 5 per cent.,
     in the provinces from 7 to 9 per cent. (_Guliani_, della
     Moneta, IV, 1.) In Trajan's time in Rome, 6; in Bithynia, 12
     per cent. (_Plin._, Epist. VII, 18; X, 62.)]

     [Footnote 185-8: _Delacourt_ Aanwysing, 1669, I, 7.
     _Temple_, Observations on the U. Provinces, ch. 6, Works L.
     1854. Even _Descartes_ says of Holland's _ubi nemo non
     exercet mercaturam_. Compare per contra, _H. Grotius_, Jus
     Belli et Pacis, II, 12, 22. Very large capitalists, in
     _Smith's_ time, certainly lived generally on the interest of
     their money: Richesse de Hollande, II, 172. In England, at
     the present day, likewise, a vast number of persons who live
     on the interest of their money, occasionally take part in
     the speculation in commodities; which explains why so-called
     commercial crises are incomparably more extensive there, and
     reach incomparably deeper, than in Germany. Similarly,
     according to _Conring_, De Commercii, 1666, c. 36, in Venice
     and Genoa.]

     [Footnote 185-9: Hence the larger cash balances in England
     at the present day, which, however, are not kept in the form
     of coin, but of bank notes and bankers' deposits.]

     [Footnote 185-10: As to how every frugal capitalist works to
     the injury of capitalists as a class, but to his own
     advantage, by lowering the rate of interest and increasing
     the rate of wages, see _Senior_, Outlines, 188 ff.]


SECTION CLXXXVI.

HISTORY OF THE RATE OF INTEREST.--CAUSES OF A HIGH RATE IN THRIVING
COMMERCIAL NATIONS.

There are, however, even where a people's economy is in a flourishing
condition, many obstacles which cause the decline of the rate of
interest to take a retrogressive course, or which at least may delay it
for a time.

To this category belong all the modifications of a nation's economy
alluded to in § 183.[186-1] Among them, therefore, is every extension of
the limits of productive land. Let us suppose a nation which, its
capital and labor remaining the same in every respect, should suddenly
double its territory. The less productive places where investments were
made in the old province are now abandoned, and labor and capital
emigrate to the new. The result is, of course, an increase of the
aggregate national income, and, at the same time, a decrease of rent. (§
157.) Hence, the interest on capital and the wages of labor, taken
together, must greatly increase. Which of these two branches shall
profit most and longest by the increase will depend upon whether capital
or the number of workmen increases most rapidly.[186-2] A similar effect
must be produced when, by changes or modifications in the commercial
situation, in the tariff, etc., a nation is enabled to obtain the means
of subsistence at cheaper rates from more fertile and less settled
countries.[186-3]

The introduction of better methods of production has very different
immediate consequences, according as these methods affect the
commodities which minister to the wants peculiar to workmen as a class,
or do not. Let us suppose, as a first case, that the cost of ordinary
clothing is reduced one half by reason of newly discovered material,
better machines, etc. As in the case of the whole people, so also in
that of the owners of capital as consumers, there is, in consequence, an
addition to their enjoyment of life. Their interest as well as their
capital, compared with clothing material, would have become more
valuable. But the relation between capital and interest, that is, the
rate of interest, could not be directly changed. (Compare _infra_, note
3.) Only when the working class employ their materially increased wages
to increase population; when in consequence hereof, their wages,
estimated in money, again decline beyond what it was before; when,
therefore, the price of a given quantity of labor declines, does the
rate of interest rise, although a portion of that which the workmen have
lost may be added to rent on account of the increased population?[186-4]
[186-5] If the applicability of the new method of production is confined to
articles of luxury used by the upper classes, for instance to fine lace,
the rate of interest usual in the country will be affected thereby only to
the extent that through the medium of commerce such products are exchanged
with foreign nations against commodities consumed by the working classes.
But there are very few improvements in production which have not led to a
greater cheapness of those things which satisfy the wants of the working
class; and this is especially clear in the improvements in the means of
transportation so usual in our day.

However, the increase of fixed capital, such as machines, railroads,
etc., once they are completed, may, at first, cause a depression of the
rate of wages, as well as an enhancement of the rate of interest; the
former from the fact that a number of workmen is thereby, at least
temporarily, thrown out of employment; the latter because the conversion
of so much circulating into fixed capital must diminish the supply of
the former.[186-6]

A second class of obstacles consists in the diminution of the supply of
capital. War, for instance, always causes such a destruction of capital,
and at the same time for the most part renders the reproduction of
capital more difficult to such a degree that the rate of interest is
wont to rise greatly.[186-7] Something similar is true of other great
catastrophes and of extravagance on a large scale.[186-8] Every state
loan, whether intended for direct consumption or to procure capital for
use (_Nutzkapitalien)_, decreases the supply of circulating capital
which most directly determines the market rate of interest.[186-9] [186-10]

     [Footnote 186-1: _Wolkoff_ very well shows that the economic
     progress of mankind is effected partly by the improvement of
     production, and partly by saving. The former increases the
     rate of interest, the latter lowers it. (Lectures, 182, 189.
     Compare _supra_, § 45.)]

     [Footnote 186-2: Thus the rate of interest in Russia rose,
     after Catherine II. had conquered the provinces situated on
     the Black Sea. (_Storch_, Handbuch, II, 34.) The same is
     still more strikingly apparent in the judicious planting of
     agricultural colonies.]

     [Footnote 186-3: Abolition of the English corn laws! Foreign
     commerce when very advantageous, always adds to the
     well-being of the people; to the rate of interest, however,
     only to the extent that articles which are calculated to
     satisfy the wants of the working class become cheaper in
     consequence; and this in turn lowers the rate of wages. Let
     us suppose that a country had hitherto purchased yearly
     10,000 barrels of wine for $1,000,000. It might now happen
     that, in consequence of an advantageous commercial treaty,
     for instance, the 10,000 barrels might be obtained for
     $500,000. If, after this, wine-drinkers want to spend
     $1,000,000 for wine as they did before, they of course
     double their consumption of wine, but the rate of interest
     remains unchanged. If, on the other hand, they leave their
     consumption of wine where it was before and apply the saved
     half million to effect an increased demand for home
     products, the capital required for this production is set
     free at the same time. Hence, the relation between the
     supply and demand for capital has not changed, abstraction
     made of certain difficulties in the transaction. Compare
     _Ricardo_, Principles, ch. 7, rectifying _Adam Smith_,
     Wealth of Nat., I, ch. 9.]

     [Footnote 186-4: An increase in the rate of interest caused
     by a diminution in the rate of wages does not last long.
     Capital now increases more rapidly, and the increase is
     accompanied by an increased demand for labor. If, in the
     mean time, workmen have become accustomed to a lower
     standard of life, the increasing wages are followed by an
     increase of population: then the necessity of having
     recourse to the cultivation of land of a worse quality is an
     additional cause of a decreasing rate of interest. (Edinb.
     Rev., March, 1824, 26.)]

     [Footnote 186-5: According to this, it is easy to tell what
     influence the increasing skill or activity of the working
     class (for instance by a decrease in the number of holidays,
     coöperation of wife and child) must have. Where there has
     been no accompanying and corresponding elevation of the
     standard of life, and of the want of the class, the gain
     soon falls to the lot of the capitalists or landowners.]

     [Footnote 186-6: See the very clear but not entirely
     complete discussion in _John Stuart Mill_, Principles, IV,
     ch. 3 ff. When new railways, machines, etc., before they are
     complete, simultaneously increase the rate of interest and
     the rate of wages, and even sometimes rent, although they do
     not immediately increase the national income in any way, the
     phenomena are to be explained, not by a distribution of
     income, but as the result of an advance of capital made.]

     [Footnote 186-7: Compare _supra_, § 184. The rise of the
     rate of interest in Basil, between 1370 and 1393, _Arnold_
     (loc. cit.) accounts for by the wars and defeats of the
     upper German cities. Similarly in Zürich, 1457. (_Joh.
     Müller_, Schweizer Geschichte, IV, 211.) During the time
     immediately following the Spanish war of succession, the
     _usuriers les flus modérés_ in France got 12-15 per cent. a
     year. (_Dutot_, Réflexions, 1866.) In Russia the rate of
     interest, after the war of 1805-15, rose by 4-5 per cent.
     (_Storch_, Handbuch, 35 seq.) Per contra, _Nebenius_, Œff.
     Credit., 70 seq.]

     [Footnote 186-8: Thus the Hamburg conflagration, combined
     with the bad harvests of 1841, raised the rate of interest
     in Mecklenburg for a long series of years. Similarly in
     Würtemburg, the many bad harvests from 1845 to 1853, which
     are said to have caused a deficiency of 50,000,000 florins.
     (Tübinger Zeitschr., 1856, 568.)]

     [Footnote 186-9: In bad times, state loans are usually
     effected at a disproportionally high rate of interest. This
     also operates momentarily on the general rate of interest,
     to the injury of persons engaged in business enterprises;
     who, by the very fact of the withdrawal of so much capital,
     become involved in an unfavorable competition. In the long
     run, indeed, the high or low rates of interest paid by
     national debts, in so far as the creditor cannot demand
     reimbursement, has no influence on the rate of interest
     usual in the country. Such debts as cannot be declared due
     assume the character of stationary capital, the value in
     exchange of which is determined by their yearly return,
     capitalized at the rate of interest usual in the country.
     (_Hermann_, Staatswirthschaftliche Untersuch., 223.)]

     [Footnote 186-10: The coöperation of most of the causes
     above mentioned raised the English rate of interest which
     had sunk to 3 per cent. to an average of 5, from about 1760
     to 1816. Thus _Gauss_, in a manuscript work which I have
     used, relates that the fund for the support of professors'
     widows in Göttingen was, in 1794, expected to pay only 3 per
     cent. In 1799, the trustees observed that their capital
     could often be safely invested at 4 per cent.; somewhat
     later the rate of interest rose to 5 per cent., at which
     point it remained for years. About 1843 ff. the rate of
     interest in old Bavaria was only 4 per cent.; in more highly
     cultured Rhenish Bavaria, 5 per cent.]


SECTION CLXXXVII.

HISTORY OF THE RATE OF INTEREST.--EMIGRATION OF CAPITAL.

Midway between these classes of obstacles lies the very usual proceeding
of highly civilized nations whose rate of interest is low, to transfer
their capital into countries with a higher rate of interest, where the
production of raw material is predominant.[187-1] This is most
thoroughly accomplished by the emigration for good of the capitalists
themselves; but also least frequently, because the natural attachment of
man to his native country is usually too powerful, among the well-to-do
classes, to be overcome by the attraction of a higher rate of interest.
Temporary settlements in foreign countries are by far more frequent.
Either the capitalist removes there himself, for a time, to return
enriched, at farthest, in his old age; or he establishes a permanent
branch of his business there, and superintends it through the agency of
a trusted representative. The inhabitants of northern Italy, during the
last centuries of the middle ages, maintained such establishments, not
only for the purpose of carrying on commerce in merchandise along the
shores of the Levant, but also the money trade in the principal
countries of the west.[187-2] Similarly, the Hanseatic cities
contemporaneously in the north and northeast of Europe; and, to-day, the
English in almost all the important seaport cities in the world.[187-3]
Such enterprises are always somewhat dangerous, especially in countries
but little advanced in civilization.[187-4]

The best means to facilitate the migration of capital is credit. It is,
indeed, true, that in international trade, ordinary private loans are
seldom made. To make such loans would be to run too many risks; risks
through a want of knowledge of persons or circumstances, on account of
the difficulties in the way of continued supervision, and of being able
to assert and defend one's rights away from home.[187-5] Loans are much
more readily made to foreign states, to great corporations, or
joint-stock companies, whose condition is well-known; and which, by
reason of their perpetuity, have a deep and obvious interest in
maintaining an honorable reputation. The issuing of certificates of
stock, etc., has greatly facilitated international trade in
capital.[187-6] But the mode of loaning in foreign parts preferred is to
sell them commodities, and to require payment for them only after some
time has elapsed, of course, with interest. Purchases, on the contrary,
are paid for immediately, possibly even in advance.[187-7] The lower the
rate of interest in a country is, the longer and more cheaply can it
give credit to others; a new reason why the less civilized countries are
particularly fond of trading with the most civilized.[187-8] [187-9]

     [Footnote 187-1: _Nebenius_, Der öffentliche Credit, 83 ff.
     After the end of the Napoleonic war, English capital flowed,
     by way of preference, towards South America, afterwards
     towards Spain and Portugal; after 1830, to North America;
     after 1840, towards Germany and France, to be invested in
     the construction of railways in the latter countries.]

     [Footnote 187-2: The inhabitants of Asti began in 1226 to
     carry on the trade in money in trans-Alpine counties. In
     1256, _Louis IX_. ordered 150 Asti money-changers to be
     thrown into prison, and he confiscated the money they had
     loaned in France, to the amount of over 800,000 livres. They
     were afterwards turned over to their enemy, the Count of
     Savoy, as usurers. (_Muratori_, Scr. Rerum Ital., XI, 142
     seq.) About 1268, Louis IX. banished all money-changers of
     Lombard or Cahors origin: they were allowed only three
     months in which to collect their debts. (_Sismondi_,
     Histoire des Fr., VIII, 112.) About 1277, again all Italian
     money dealers were imprisoned, and 120,000 gold guldens
     extorted from them. (_Giov. Villani_, VII, 52.) After the
     Lombards had lost their freedom, the business passed into
     the hands of the Florentines and of the inhabitants of
     Lucca. (_Sismondi_, Gesch. der ital. Republiken, IV, 602;
     _Dante_, Inferno, XXI, 38.) Great part played by the
     brothers Franzesi as dealers in articles of luxury, and
     loaners on pledge etc., at the court of Philip IV. They seem
     to have instigated the persecution of other Italian money
     dealers, in 1291, from jealousy. (_Sismondi_, Histoire des
     Fr., VIII, 429 seq.) Great losses of the Florentines by the
     English-French war in 1337: Edward III. remained in the debt
     of his bankers Peruzzi and Bardi to the amounts respectively
     of 135,000 and 184,000 marks sterling; so that they and many
     others failed. France imprisoned all the Italian money
     dealers, and compelled them to pay a large amount of
     ransom-money. (_G. Villani_, XI, 71.) In 1376, the Pope who
     was engaged in a struggle with Florence, called upon all
     princes to despoil all Florentine merchants within their
     jurisdiction of their wealth, and to sell them as slaves;
     and France and England actually did so. (_Sismondi_,
     Geschichte der ital. Republiken, V, 257 seq., VII, 74.)]

     [Footnote 187-3: Shortly before the French Revolution, Cadiz
     had over 50 wholesale merchants against 30 retail, 30
     modistes and at least 100 tradesmen from France.
     (_Bourgoing_, Tableau, III, 130.) Commercial colonies!]

     [Footnote 187-4: Thus even the emperor Paul of Russia caused
     the property of English factors to be confiscated. The
     galleons which Holland and England captured in the Spanish
     war of succession belonged mostly to Amsterdam houses.
     (_Ranke_, Franz. Gesch., IV, 226.) Even _Galiani_, Della
     Moneta, IV, 3, thinks that, on this account, such commerce
     is incompatible with the warlike spirit. It is certain,
     however, that a government like the English would do well
     not to permit a war with such countries as Russia or the
     United States to break out too suddenly, that their subjects
     might have time to collect all their outstanding dues. When,
     in 1855, it was reported in London that all Russian drafts
     were dishonored, people looked upon that fact as the surest
     sign of coming war. English merchants had called in their
     advances to Russia during the preceding economic period, and
     refused to make new ones.]

     [Footnote 187-5: This of course disappears when the
     borrowing country is dependent on the loaning country. Thus,
     the Canton of Uri formerly prohibited the inhabitants of the
     Livinerthal to borrow capital except from them. It is said
     that, at the beginning of this century, the Uri capital then
     loaned amounted to one-half a million florins, that is, an
     average of 250 per householder. Now it is not over one-fifth
     of that amount. (_Franscini_, Canton Tessin, 126.) Think
     also of the plantation colonies! But even the East Indies
     may be looked upon as a species of colony for England. Hence
     _Fawcett_, Manual, 105, is rightly of the opinion that no
     other country has the possibility of being as useful to the
     East Indies as England. And in fact, the East Indian
     railways obtained of their capital of £82,500,000, only a
     very small part, £800,000, in India itself, a very small
     proportion of which latter sum was subscribed by the native
     population. (Ausland 24, Juli, 1869.)]

     [Footnote 187-6: What England is to-day, the Italian
     commercial cities were in the 16th and 17th centuries, viz.:
     the chief market for foreign loans. (Compare _Mun,_
     England's Treasure, 1664, ch. 4.) The Genovese loaned money
     in foreign countries at 2 and 3 per cent. (_Montanari_,
     Della Moneta, 1867, cap. 2.) It is said that the Dutch, in
     1778 invested 1,500 millions of livres in foreign national
     debts, especially those of France and England. (Richesse de
     Hollande, II, 178.) According to _J. G. Forster_, Schriften,
     III, 335, in 1781 alone, in Europe, 800 millions loaned
     capital. The Niederl. Jaerboek of 1789, p. 729, estimates
     the amount of interest coming from abroad, English and
     French not included, at from 50 to 60 millions of florins.
     About 1844, according to official estimates, 1,000 million
     florins in foreign loans, that is one-third of whole
     national income. (Allgemeine Zeitung, 1844, No. 35.) Now,
     Belgium, 300 million florins, in Austrian evidences of
     indebtedness. (Quarterly Review, October, 1862, 402.)
     According to _Baumstark_, Staatswissensch. Versuche über
     Staatscredit, etc., 1833, 77, foreign nations, between 1818
     and 1825, borrowed in England £49,000,000; and, about the
     same time, England participated in Russian, French and North
     American loans to the extent of £55,500,000. It is said that
     there were, in 1843, £25,000,000 English capital in the
     canals, railroads and banks of the United States. (_Porter_,
     Progress of the Nation, III, 4, 634.)]

     [Footnote 187-7: It is evident, from many of Demosthenes'
     orations on private matters, that Athens was in the habit of
     advancing the commercial capital needed by a great part of
     the inhabitants of the Mediterranean coast. Many colonial
     cities, Phaselis, for instance, had the very worst
     reputation in this respect. They were virtually pirates as
     regards Athens. (Adv. Lacrit., 931.) Here also it seems that
     the goods taken for the loan had to be brought to Athens.
     (941.) On the regular advances of Prussian merchants to
     their Lithuanian and Polish vendors, in the 15th century,
     while the former were forbidden even to buy on credit, see
     _Hirsch_, Geschichte des Danziger Handels, 167, 177. In
     Colbert's time, the Dutch gave 12 months credit in Europe.
     (_J. De Wit_, Mémoires, 184.) In England, _Child_ perceives
     a great advance in this: that in 1650, in all business in
     the interior, there was a credit of 3 to 18 months given;
     and in 1669, everything was paid for in cash. (Discourse on
     Trade, 45.) Concerning previous times, see _W. Raleigh_,
     Observations touching Trade and Commerce with the Hollander
     and other nations, 1603. (Works, VIII, 951 ff.) In North
     America, merchants in the interior frequently purchase their
     goods of importers on 6 months credit. (_Tellkampf_,
     Beiträge, I, 52.) In the West Indies, about the end of the
     last century, the English gave a credit, generally, of from
     12 to 16 months. (_B. Edwards_, History of the British West
     Indies, II, 383.) In Brazil, in the case of imports, 4, 8
     and even 12 months credit; payment in monthly installments,
     and frequently even longer delay, without interest. In the
     case of exports, when cash payments are not made, 1 per
     cent. a month, (_v. Reden_, Garn und Leinenhandel, 332.)
     Recently only about 40 per cent. of foreign advances are
     made at 12 to 20 months, 60 per cent. at from 50 to 70 days.
     (Tübing. Zeitschr., 1864, 517.)

     In Buenos Ayres, the producer or collector of export
     articles required the price to be paid usually a long time
     in advance (_habilitacion_), a very bold but necessary
     procedure, on account of his poverty. (_Robertson_, Letters
     on S. America, I, 174 ff.) In the corn trade in South
     Russia, at least one-half of the purchase money was required
     to be paid in advance, and even before shipment, the other
     half as soon as the corn arrived in the harbor, and, hence,
     sometimes, long before it was put on board. (_W. Jacob_, On
     the Corn Trade of the Black Sea, 23.) Compare _Tooke_, View
     of the Russian Empire, I, 339, Richesse de Hollande, II, 43,
     _Storch_, Handbuch, II, 61 seq. Russia was, about 1770, a
     credit-giving nation to the still poorer Persians.
     (_Gmelin_, Reise, III, 413.) The Spaniards also, in their
     American colonies, had always an expedition ready and
     waiting, the payment for which was made on the arrival of
     the second. (_Depons_, Voyage dans la Terre Firme, II, 368.)
     Moreover, active commerce simply, especially when
     circuitous, may be considered as in some way an
     international loan; and thus it is that the favorable
     "balance," by means of which claim-rights are obtained in
     foreign countries, is secured.]

     [Footnote 187-8: Notwithstanding the gratitude of the United
     States towards France, and spite of all the French
     ambassador could do, the English immediately after the
     conclusion of peace, attracted the greatest part of American
     trade to themselves. (_Chaptal_, de l'Industrie Fr., I,
     103.) Countries with a low rate of interest have an
     advantage in this respect, which grows after the manner of
     compound interest, when the duration of the advance of
     capital is prolonged. (_Senior_, Outlines, 195.)]

     [Footnote 187-9: How capitalists may, by the giving of
     international credit, fall into an injurious habit, is shown
     by the late and troublesome building up of the Dutch railway
     system, while so many foreign railway enterprises were
     provided with Dutch capital.]


SECTION CLXXXVIII.

HISTORY OF THE RATE OF INTEREST.--EFFECT OF A LOW RATE ON STATIONARY
NATIONS.

Beneficial as the spur of a low rate of interest is for countries
capable of development, it is a heavy drag on a stationary people, and
more so on those who have lost a portion of the field for the investment
of their capital by the competition of too powerful rivals.[188-1] A
real superabundance of capital is attended with cares and temptations
for the middle classes very similar to those caused by a so-called
over-population, especially to dishonesty and extravagance.[188-2] When
capital, population and the skillfulness of labor remaining the same,
continues to increase, the enlarged capital may very readily have every
succeeding year only the same return to divide among its owners, that
the smaller had in previous years.[188-3] Hence additional saving here
would produce no real enrichment of the people; and it might even happen
that the instinct to accumulate capital might in the future become
torpid to a greater degree than the capital itself had increased. In any
case, however, the decline of the rate of interest can continue only to
a certain point. There are numberless persons who would rather consume
their capital, or invest it in hazardous speculations than put it out at
interest at one per cent. a year.[188-4] At least, the tendency of a
decline in the rate of interest is, in the case of the richer, to
increase the amount of capital consumed as compared with productive
capital. The more moderate, sober and provident a people are, the lower
may the rate of interest decline without producing this effect. And so,
the more the capital of a nation is concentrated in the hands of a few;
because then the owners of capital are all the later forced to break in
upon it, for the sake of subsistence.[188-5] [188-6]

Among nations which have totally declined, the rate of interest is wont
to reach a high point once more; the natural result of great losses of
capital and men, while, at the same time, the freedom of the lower
classes and the security of property have been either curtailed or lost.
The weakness of age is, in many respects, even in the case of nations, a
second childhood.[188-7]

     [Footnote 188-1: _Temple_, Works I, 102, assures us that the
     Dutch in his time considered the payment of the principal of
     a public debt a real misfortune: "they receive it with
     tears, not knowing how to dispose of it to interest with
     such safety and ease." On Italy, see _Bandini_ (ob. 1760),
     Sopra le Maremme Sienese, 154 seq.; earlier _Montanari_,
     Della Moneta, 57. In the England of the present time, small
     capitalists especially belong to the so-called "uneasy"
     classes.]

     [Footnote 188-2: Numberless bankrupts and unbounded
     extravagance in Holland. (Richesse de Hollande, II, 168.) In
     England, the hazardous enterprises of 1825 were very much
     promoted by the action of the government which a short time
     before reduced the interest on its state debt. (_Tooke_,
     History of Prices, II, 148 ff.)]

     [Footnote 188-3: _J. S. Mill_, IV, ch. 4, 4. When _Ricardo_,
     ch. 6, says that every increase of productive capital must
     enhance the value in use, and still more the value in
     exchange, of a nation's property, but under such
     circumstances only to the advantage of the working class,
     and still more of the land owning class, he at least
     apparently presupposes an improvement, or increase of
     labor.]

     [Footnote 188-4: Think only of the so-called commercial
     crises, the speculation-rage preceding which is excited by
     the lowness of the rate of interest, the destruction of
     capital in which makes the rate of interest to retrograde
     materially. However, this very decline is, in itself, only a
     spur to speculation in evidences of national indebtedness,
     stocks, etc., in commodities, only where, without such
     speculation, a rise in prices was to be expected. Thus, for
     instance, the great English periods of speculation: 1796
     ff., in colonial products; 1808 ff., in raw materials in
     general; 1814, in articles of export, were times in which
     there was not the slightest facility in obtaining credit.
     (_Tooke_, History of Prices, III, 159.)]

     [Footnote 188-5: Between 1829 and 1849, the highest rate of
     interest paid by English capital employed in cotton
     industries was little over 2½ per cent. (Edinb. Rev.,
     April, 1849, 429.)]

     [Footnote 188-6: As the symptoms of a condition are very
     frequently mistaken for its cause, there have been many
     writers who, blinded especially by the contemplation of
     Holland, considered the lowness of the rate of interest as
     the _causa causans_ of all wealth, and who promised really
     magical results from its legislative regulation by the
     state. Thus _Sir Thomas Culpeper_, A Tract against the high
     Rate of Usury, 1623; continuation 1630; _Sir J. Child_,
     Brief Observations concerning Trade and the Interest of
     Money, 1668; Discourse of Trade, 1690. _Anderson_ (ob.
     1765), was of a similar opinion: Origin of Commerce, a.
     1601, 1651; and even _Ganilh_, Dictionnaire analytique, 99
     seq. (_Infra_, § 162.) Per _contra_, the anonymous essay,
     Interest of Money mistaken, 1668, and _Locke_,
     Considerations of the Consequences of the Lowering of
     Interest and Raising the Value of Money, 1691. Most moderns
     have considered the decline of the rate of interest an evil.
     Thus, for instance, _Canard,_ Principes, ch. 5, who
     uniformly makes this the starting point of a nation's
     downfall. See also _McCulloch_, Principles, III, 8.
     _Malthus_ draws a comparison between the saving of capital
     and the generation of children: only a high rate of interest
     makes the former really useful, and a high rate of wages the
     latter.

     Even great destruction and disturbances of capital by war,
     by loans to the state, for instance, are soon made good,
     provided the sources of the saving of capital are not dried
     up. (Principles, III, 370 ff., 401, ff.) _John Stuart Mill_
     expressly counsels rich and highly civilized nations not to
     neglect beneficent enterprises, although economically
     unproductive, because capital might be lost in them. The
     result of such a loss would, under certain circumstances,
     simply be that less capital would be exported or wasted in
     speculation. (Principles, II, ch. 5, 1.) Similarly _Canard_,
     who, therefore, compares state loans with blood-letting, as
     a remedy for a plethoric disease. (Ch. 9.) _Turgot_
     confounded cause and effect when he compared a high rate of
     interest to an inundation, below the level of which nothing
     can be produced; and which, the lower it became, the more
     dry ground there was for men to work on. (Sur la Formation,
     etc., § 89.)]

     [Footnote 188-7: Rate of interest in Persia from 40 to 50
     per cent. a year. (Ausland, 1844, No. 208.) In Tripoli,
     Christians and Jews alike loan the Arabs at the rate of 5
     per cent. a month; at least 1½ or 2. (_Rohlfs_, von
     Tripolis nach Alexandrien, 1871, I, 22.) In most of the East
     Indian kingdoms, the rate of interest is so high for the
     government itself that when the creditor, even without a
     return of the capital, gets the interest only for a few
     years, he is considered passably well indemnified. (_J. S.
     Mill_, II, ch. 15, 2.) In China, 12 to 15 per cent.; 36
     nothing unheard of. (_Barrow_, China, 562.)]


SECTION CLXXXIX.

INTEREST-POLICY.--LEGITIMATENESS OF INTEREST.

The legitimateness of interest is based on two unquestionable grounds:
on the real productiveness of capital, and on the real abstinence from
enjoyment of it by one's self.[189-1] Let us suppose a nation of
fishermen with no private ownership in land and no capital, living naked
in caverns, on sea-fish which the ebb of the ocean has left in the
puddles along the shore, and which are caught only with the hand.[189-2]
All workmen here may be equal, and each catch and consume three fish a
day. Let us again suppose that some clever savage reduces his
consumption to two fish a day, for one hundred days, and uses the stock
of one hundred fish collected in this way to enable him to devote all
his strength and labor, during fifty days, to the construction of a boat
and a net. With the aid of this capital he, from the first, catches
thirty per day. What now will his fellow tribesmen, who are not capable
of such intelligent and systematic self control to do as he has done,
do? What will they offer him for the use of his capital? In discussing
this question both parties will very certainly consider not only the
fifty days' labor spent in the construction of the boat, etc., but also
the one hundred and fifty days during which its maker had to abstain
from his full ration of food. If the borrower, of the thirty fish which
may be caught daily with the aid of his capital, gives twenty-seven
away, his condition is at least no worse than it was at first. On the
other hand, the lender, if compensated only for the wear and tear of his
capital, would reap no profit whatever from his loan. The interest to be
paid will be fixed somewhere between these two extremes by the relation
between demand and supply. A loan which pays no interest is a donated
use of capital. (_Knies._)[189-3] Interest may be called the reward of
abstinence (_Senior_), in the same way as wages is called the reward of
industry.[189-4] With the abolition of interest, exchange would be
limited to the mere present, without any mediation between the past and
the future. A great number of services would bring no equivalent in
return, and, therefore, as a rule, never be performed. Most of the
charges commonly made in our day against the "tyranny of capital" are,
at bottom, only a complaint that capital is not inexhaustible; and even
those workmen who are obliged to pay most to capital would be much worse
off without it.

     [Footnote 189-1: The Greeks very appropriately call interest
     τόκος, i. e., that which is born. In the loaning of capital
     productively invested, the creditor, in the interest
     received, consumes the real produce of his property. If the
     debtor has consumed the property unproductively, the
     creditor indeed lives on the debtor's other returns or
     supplies; which, however, without his intervention would
     probably have been consumed by their owner.]

     [Footnote 189-2: We here, for the time being, make
     abstraction of all entangling surrounding circumstances.
     However, _Diodor._, III, 15 ff., and _Strabo_, XVI, 773,
     describe a very similar condition of things among the
     Ichthyographs; also _Hildebrand_, Reise, um die Erde, III,
     2, in China. In the Sudan, whole generations fetch water
     every day from a distant town, instead of working for a few
     weeks to dig a deep well nearer home. (_Barth_, Afr. Reise,
     III, 297.)]

     [Footnote 189-3: The most recent relapse into the old error
     of the unproductiveness of capital, viz.: that of _Karl
     Marx_ (Das Kapital; Kritik der polit. Oekonomie, I, 167) is a
     turning round and round of the author in the vicious circle
     of his demonstration. If the value of every commodity
     depends simply on the labor necessary to bring it into
     existence, or on the time of labor required to produce it,
     it is self-evident that the value of the capital consumed
     for the purpose of its production, can at most be only
     preserved in the new product, and that all the additional
     value (_Mehrwerth_) of the latter should be ascribed to
     labor. (172, and passim.) Hence, strictly speaking, the
     capitalist who advances capital to workmen, is still bound
     in duty to be grateful to the latter when the value of his
     advance is preserved to him undiminished, (§ 173) and all
     interest levied by him should be considered as a payment
     towards the extinguishment of the capital [debt] itself.
     (556.) Relying on such theories, many socialists admit
     private property and even the right of inheritance to means
     of enjoyment and use capital (_Gebrauchskapitalien_)
     provided only that land and productive capital should pass
     over into the "collective property" of society, with
     compensation, however, to their former owners. Considering
     the short duration of most goods used in enjoyment or
     consumed, the evil consequences of a community of goods
     mentioned in § 81, could not be avoided to any extent by
     this means.

     How entirely fallacious the above assumption is, is seen
     most strikingly in the case of such goods as cigars, wine,
     cheese, etc., which, without the least addition of labor, by
     merely postponing the consumption of them, obtain a much
     larger value both in exchange and in use. Or, how would it
     be possible, for instance, to reduce the value of a
     hundred-year-old tree, over and above the cost of planting
     it, to labor alone? Similarly, the fact that on a Chilian
     _hacienda_, 25 per cent. of the cattle can be slaughtered
     and no diminution of the herd take place. (_Wappäus_, M. und
     S. Amerika, 784.) _Strassburger_ rightly inquires: if all
     the profit of capital is based on a cheating of workmen by
     capitalists, who is cheated in the case in which a
     manufacturer without workmen earns more with an increased
     capital than before with a small capital? (_Hildebrand's_
     Jahrb., I, 103.)]

     [Footnote 189-4: In a time full of nabobism and pauperism,
     when some can, without the least abstinence, make immense
     savings, and others none at all even with the greatest
     abstinence, we may comprehend where the socialists find food
     for their derision of the expression, "reward of
     abstinence."]


SECTION CXC.

INTEREST-POLICY.--AVERSION TO INTEREST.

At the same time, there is a strong aversion to the taking of interest
prevalent among nations in a low stage of civilization. Industrial
enterprises of any importance do not as yet exist here at all, and
agriculture is most advantageously carried on by means of a great many
parcels of land, but with little capital. The purchase of land is so
rare, and hampered by legal restrictions to such a degree, that loans
for that purpose are almost unheard of. And just as seldom does it
happen, by reason of the superabundance of land, that the heir of a
landowner borrows capital to effect an adjustment with his co-heirs, and
thus enter alone into the possession of the estate. Here, as a rule,
only absolute want leads to loaning.[190-1] If, in addition to this, we
consider the natural height of the rate of wages in such times, the
small number and importance of the capitalist class (§ 201), the tardy
insight of man into the course and nature of economic production,[190-2]
it will not be hard to understand the odium attached in the middle age
of every nation to so-called interest-usury[190-3] (_Zinswucher_).

Most religions, the Christian excepted (the universal religion!), have
been founded in the earlier stages of the nations who profess them, and
have there, at least outwardly, exercised their greatest influence. No
wonder, therefore, that so many religions have prohibited the taking of
interest. Thus, for instance, the Jewish which, indeed, allows interest
to be taken from foreigners, but raises loaning without interest among
Jews in their commerce with one another, to the dignity of a duty
binding on the conscience of the beneficent rich.[190-4] [190-5]
Similarly in the Koran.[190-6] The Fathers of the Church, also, on the
whole, look with disfavor on the taking of interest, relying upon
well-known passages in the Old Testament, and, in part, on misunderstood
expressions in the New.[190-7] This is especially true of the Fathers of
the Church from the beginning of the fourth century, when the Roman
empire was frightfully impoverished by the devastations of the
barbarians, and as a consequence the conditions as to interest which
prevail in the lowest stages of civilization had returned. Mercy towards
the poor usually occupies the foreground in the demonstrations of the
Fathers.[190-8]

     [Footnote 190-1: Distress-debts in contradistinction to
     acquisition-debts. (_Schmalz_, Staatswirthsch. Lehre in
     Briefen, I, 227.) Compare _Hesiod._, Opp., 647; also
     _Herodot._, I, 138.]

     [Footnote 190-2: Thus _Aristotle_, calls the taking of
     interest a gain against nature, since money is only a medium
     of exchange, and cannot produce its like. (Polit., 3, 23,
     Schn.) Similarly, _Plato_, De Legg., V, 742, and _Seneca_,
     De Benef., VII, 10. Compare, however, _Tacit_., Annal, XIII,
     42 seq. As late a writer as _Forbonnais,_ 1754, accounts for
     interest thus: Some people hoard their money instead of
     spending it; hence a scarcity or want of money, and those
     who need it are obliged, in order to draw it out, to promise
     to pay interest. (Eléments de Commerce, II, 92 ff.)]

     [Footnote 190-3: Numerous disturbances on account of debt,
     during the first centuries of the Roman Republic, until
     finally (compare _Livy_, VII, 42), the taking of interest
     was in the year 349 (?) before Christ, entirely prohibited.
     (_Tacit._, Annal. VI, 16.) The public opinion in such
     matters may be understood from the words of Cato: _majores
     ita in legibus posuerunt, furem dupli condemnari,
     foeneratorem quadrupli_. (De Re rust.) The _foenerari_
     compared with the _hominem occidere_. (_Cato_, in _Cicero_,
     De Off., II, 25.) In the higher stages of civilization
     little heed was paid to the law, in practice (compare
     _Livy_, XXXV, 7; _Plut._, Cato, I, 21.), although the
     democratic party always held fast to the legal perpetuation
     of the prohibition of interest. (_Mommsen_, Römisch. Gesch.,
     III, 493.)]

     [Footnote 190-4: Exod., 22, 25; Levit., 25, 35 ff.;
     Deuteron., 15, 7 seq.; 23, 19 seq.; Psalms, 15, 5; 109, 11;
     112, 5; Proverbs, 28, 8; Jerem., 15, 10; _Hes._, 18, 8.
     After the return from exile, the prohibition was restored.
     (Net. 5, 1 ff.) Was there, in the long duration of such
     prescriptions, an educational measure having reference to
     the peculiar fault towards which the Jewish national
     character had a special tendency? In Josephus's time even,
     usury practiced on one's country people was universally
     despised (Antiq. Jud., IV, 8, 25.), and the Talmud continues
     it. Compare _Michaelis_, De Mente ac Ratione Legis M. Usuram
     prohibentis. In Russia, the orthodox Jews are wont to evade
     the legal rate of interest by exacting one-half the profit,
     and estimating it approximately in advance at a probable
     sum. If, afterwards, the debtor declares under oath that he
     made no profit, the creditor has no more to say; but then
     the borrower would lose all credit in the future. (_Bonav.
     Mayer_, Die Juden unserer Zeit, 1842, 13 seq.)]

     [Footnote 190-5: The Mosaic passages, however, only prohibit
     the taking of interest from poor people of one's own
     country.]

     [Footnote 190-6: The prohibition in the Koran, ch. 2, 30, is
     regularly evaded in Persia, by deducting the proper amount
     at the moment the loan is made. (_Chardin_, IV, 157 ff.)
     Under the Mongolian rulers, it was done by way of
     preference, by a fictitious sale for cash, at prices out of
     all proportion. "Why cannot capitalists either buy land or
     carry on trade?" asked Sultan Gazan, on an occasion when the
     prohibition of interest was strongly insisted on.
     (_d'Ohsson_, Histoire des Mongols, IV, 397.)]

     [Footnote 190-7: For instance, _Luke_, 6, 34 ff., where
     interest is no more prohibited than in _Luke_, 14, 12 ff.,
     the mutual invitation of friends to a feast. Not less
     groundless is the supposed allegorical allusion (_Matthew_,
     21, 12) to interest-creditors. Rather might an approval of
     interest be inferred from _Matthew_, 25, 27.]

     [Footnote 190-8: _Origen_, for instance, would have the
     creditor take no interest; but exhorts the debtor to return
     double the amount unasked. (Homil., III, ad. Ps., § 37.)
     Hence there is here no condemnation of interest, but only an
     effort to transform all legal relations into relations of
     love. Quite the reverse in _Lactant._, Instit., VI, 12;
     _Basil_, ad. Matth., 5 ff.; _Ambrose_, De Off., III, 3;
     _Chrysost._, ad. Matth. Hom., 56; Tim., VII, 373 ff. (Paris,
     1727); _Hieronym._, ad. Ezech., V, 367 c. (Francof, 1684);
     _Augustin._, Epist., 54. Even _Cyprian_, 183, 318 (Paris,
     1726).]


SECTION CXCI.

INTEREST-POLICY.--THE CANON LAW, etc.

The canon law, from the first, endeavored to prevent contracts for
interest. We may even say that the prohibition of interest-usury is the
key-stone of the whole system of the political economy of the _Corpus
Juris Canonici_. The development of that law coincides, as to time, with
the senility of the Roman Empire and the childhood of modern
nations.[191-1] In the golden age of papal power, every
interest-creditor was refused the communion, the _testamenti factio_ and
the right of ecclesiastical burial. Proceedings at law could not be
instituted for the recovery of the principal debt until the creditor had
restored all the interest obtained. In the council of Vienna, in 1311,
it was declared heresy to defend the taking of interest. The universal
antipathy of the church towards the growing importance of the
_bourgeoisie_,[191-2] and the desire to give the spiritual courts an
extensive jurisdiction in litigated cases, may have contributed largely
to the adoption of these measures. In later medieval times, the secular
power offered its services to execute these laws;[191-3] and, to judge
of what public opinion in this matter was, we need only call to mind the
decided disapproval of interest by Dante, Luther and Shakespeare.[191-4]

The _Weddeschat_, a species of pledge or loan on security, constituted
the transition from this state of things to the modern economic system
of interest. The _Weddeschat_ was a sale with a reserved right of
redemption, by which the debtor gave his creditor the use and enjoyment
of a piece of land a sort of interest in kind, but which he could at any
time recover back, by payment of the principal. This was not very
oppressive on the debtor, as he was the only party who could recall the
contract.[191-5] In a higher stage of civilization, indeed the
continuance of this species of land-pledge would be exceedingly
disadvantageous, since the momentary possessor of a piece of land which
might be bought back by another person at any time at a price fixed in
advance, would scarcely think of improving it.[191-6]

And so, the introduction of rent-purchase (_Rentekauf_) was an important
step in advance: the incumbrancing of a piece of land which remained in
the possession of the debtor with an interest in kind paid to the
creditor. The latter could never claim anything further, while the
debtor and his heirs might redeem the land from this interest-incumbrance
by paying back the purchase money.[191-7] As the Pope, on the 19th of
January, 1569, renewed, in express terms, the prohibition of all interest
not based on rent-purchase, so did the police ordinances of the Empire, of
the sixteenth century, declare it to be the only lawful form of loaning at
interest; provided, always, that only the debtor could demand the
cancellation of the contract.[191-8] We find, however, that, on the whole,
at least Protestant countries had, before 1654, adopted the modern Roman
law relating to interest.[191-9] [191-10]

However, the long persistence of the prohibition of the canon law in
relation to interest, even with the refuge afforded by the introduction
of the rent-purchase system, and of dormant partnerships (_Commanditen_)
etc., so common in the sixteenth century,[191-11] would be
unintelligible, if, contemporaneously, the Jews did not carry on an
important and somewhat free trade in capital,[191-12] precisely as the
Armenians, Hindoos and Jews do in the Mohammedan world of to-day.

     [Footnote 191-1: The apostolic canons and several decrees of
     councils of the fourth century prohibit the taking of
     interest by the clergy. A Spanish provincial council dared,
     in 313, to extend the prohibition to the laity. Pope Leo I.
     condemned the taking of interest by the laity also, but only
     in the form of a moral law. (443.) The synod of
     Constantinople (814) punished the violation of the
     prohibition with excommunication. See _Thomas Aquin._ (ob.
     1274.) De Usuris, in the Quæstiones disputatae et quod
     libetales. The canon law, however, always permitted
     delay-interest (_Verzugszinsen_), and Gregory IX, allowed
     _justa et moderata expensa et congruam satisfactionem
     damnorum_ to be taken into account, (c. 17, X.) De Fora
     Comp. II, 2. A tacit recognition of the productiveness of
     capital is to be found in c. 7, X. De Donatt. inter. Virum.
     cett. IV, 20; and the later schoolmen, _Antonin_ and
     _Bernhardin_, (ob. 1459 and 144) are pretty clear on the
     point. But _Albertus Magnus_ had already recognized the
     _damnum emergens_ and _Thomas Aquinas_ the _lucrum cessans_
     as causes of interest. (Tübinger Zeitschr., 1869, 151, 159,
     161.) The essentially modern character of Roman law, which,
     in the form it has finally assumed, is in harmony with a
     high development of national economy, accounts for the fact
     that the glosse of _Accursius_ relying on _Irnerius_ and
     _Bulgarus_ entirely ignores the prohibition of interest. For
     a similar reason, in the 16th century, _Donellus_ and
     _Cujacius_ stand entirely on Roman ground. In the interval,
     indeed, men like _Bartolus_ and _Baldus_ were not disquieted
     by the canon law. (_Endemann_, Studien in der
     Römisch-Canonischen Wirtchaftsund Rechtslehre, I, 18, 27
     seq. 61.) Compare the rich historical material in
     _Salmasius_, De Usuris, 1638; De Modo Usurarum, 1639, and De
     Mutuo, 1640.]

     [Footnote 191-2: _A. Thierry_, Lettres sur l'Histoire de
     France, éd. 2., 248 ff.]

     [Footnote 191-3: Thus the emperor Basil, in the year 867, as
     _Justinian_ had before him, forbade the further payment of
     interest, once the amount already paid equaled the
     principal. (L. 29 seq.; Cod. IV, 32, Nov., 121, 2.) Compare
     Sachsenspiegel, I, 54. _Edward the Confessor_ is said to
     have issued the first prohibition of interest. (_Anderson_,
     Origin of Commerce, a. 1045.) _Edward III._ forbade all
     interest as the ruin of commerce. (Idem a., 1341.) About
     1391, the lower House had its zeal aroused against the
     "shameful vice of usury;" and again, in 1488, all interest
     on money and all rent-purchases stipulated for on unlawful
     conditions, were threatened with a fine of £20, the pillory,
     and six months imprisonment. (_Anderson_, a., 1488.) In
     France, the edict of Philip IV. of 1312. Compare
     _Beaumanoir_, Coûtumes, ch. 67, des Usures, No. 2.]

     [Footnote 191-4: _Dante_, Inferno, XI, 106 ff., suggests
     that interest-creditors had violated the command of _Moses_,
     I, 3. _Macchiavelli_ seems to judge otherwise: Compare
     Istoria Fior., VII, a, 1464; VIII, a, 1478. Very interesting
     discussions on the legitimateness of the taking of interest
     in 1353 seq., in which the Dominicans, up to the time of
     _Savonarola_, defended the strictest opinion. (_M. Villan_,
     III, 106.) _Luther_, Tract on Trade and Money, 1524, and
     Sermon on Usury, 1519. Later still, _Luther_ became more
     moderate. Thus, in his letter to the Danzig counsel, 1525,
     in _Neumann_, Geschichte des Wuchers in Deutschland, 617
     ff., in which, for instance, he blames the forcible carrying
     out of interest-prohibitions, draws a distinction between
     rich and poor, etc. So, too, in his letter: An die
     Pfarrherren, wider den Wucher zu predigen, 1540.
     _Melanchthon_, Phil. moral., 137 ff., is also more moderate.
     _Calvin_ was clearer in this matter, and no longer
     recognized the canonical prohibition of interest. (Epistolæ
     et Responsa, Hanov., 1597, epist. 383.) Similarly
     _Zwinglius_, who will not praise interest, but considers it
     a natural consequence of property (Opp. ed. Tugur., 1530, I,
     319 ff.), and even _Erasmus_, ad. Evang. Luc., 6, 44. Adagia
     v. Usuræ nautt. In _Shakespeare_, compare Merchant of
     Venice. _Bodinus_ also rejects on principle, even Roman
     interest, which he held to be 1½ per cent. a year: De
     Republ., 1584, V. 2. Even the practical Dutch excluded the
     so-called "table-keepers," from the communion up to 1657.
     Compare the contests hereon in _Laspeyres_, Gesch. d.
     volkswirthsch. Ansich. d. Niederl., 258 ff.]

     [Footnote 191-5: The mutual right of cancellation
     (_Kündbarkeit_) in the case of these contracts during
     periods poor in capital and credit, would easily have ruined
     the debtor. Compare _J. Möser_, Patr. Ph., II, No. 18. Hence
     municipal rights in the latter part of the middle ages,
     which in many other respects are so antagonistic to Rome,
     have seldom anything to object to its measures in this
     matter.]

     [Footnote 191-6: A reason why, as _A. Strüver_ remarks, the
     Church which was more a creditor than a debtor, never
     approved the Weddeschat above mentioned.]

     [Footnote 191-7: The institution of rent-purchase
     (_Rentekauf_) was already developed in the Hanse cities at
     the beginning of the fourteenth century. (_Stobbe_, in the
     Zeitschr. f. deutsches Recht, XIX, 189 ff.) About 1420, the
     bishops of Silesia inquired of the Pope, whether such
     contracts which had been the practice in Silesia for a
     century were lawful. The answer was a favorable one,
     although he left the rate of interest free in this
     particular case (Extr. Com. III, 5, 1, 2); after _Alexander
     IV._, however, as early as 1258, had instructed inquisitors
     not to take part in litigations concerning usurious
     contracts. Formerly all such contracts were prohibited in
     express terms. (Decret. Greg., V. 19, 1, 2), although, in
     France, the ordinances of Louis IX. and Louis X. (1254 and
     1315) had established fixed rates of interest therefor.
     Between pledge and rent-purchase, the right of the (virtual)
     loaner to expel the (virtual) borrower, which after fell
     into disquietude, occupies, so to speak, a middle place.
     (Compare _Eichhorn_, D. St.- und R.-Gesch., II, § 361, a
     III, § 450.) It was decreed, in France, in 1565, that all
     rent in kind should be converted into money rent.
     (_Warnkönig_, Franz., St.- und R.-Gesch., II, 585 ff.)]

     [Footnote 191-8: Magnum Bullar. Roman., II, 295.]

     [Footnote 191-9: A Prussian law allowing interest even
     without a contract of rent-purchase as far back as 1385.
     (_Voigt_, Geschich. von Preussen, V, 467.) In Marseilles, in
     1406, a rate of interest of ten per cent. allowed.
     (_Anderson_, Origin of Commerce, s. a.) Likewise in England,
     37 Henry VIII., c. 9. In Brandenburg, 1565, 6 per cent.
     (_Mylius_, C. C., March, II, 1, 11.) A retrograde step by 5
     and 6 Edward VI., c. 20; by which all interest was again
     prohibited. These laws had, practically, the effect of
     increasing interest to 14 per cent., and were therefore
     repealed in 1571. How unnatural the prohibition was is
     apparent from the fact that by 4 and 5 Philip and Mary, c.
     2, the possessor of 1,000 marks was estimated equal to a
     person with £200 annual income. In Denmark, the taking of
     interest at 5 per cent. was allowed in 1554, since "although
     it is contrary to God's command, yet [according to an
     opinion given by _Melanchthon_] this commerce cannot be
     entirely abolished." (_Kolderup-Rosenvinge's_ Dänische R.
     G., in _Homeyer_, § 142.) Similar views of the elector
     Augustus, 1583. (Cod. August 1, 139 ff.)

     The German Empire, in 1600, allowed the debtor to contract
     that, in case of delay, the contract might be declared
     annulled. In France, on the other hand, even during the 18th
     century, nearly all loans were made in the form of
     _rent-purchase_ (_Law_, Trade and Money, 127), and the
     creditor could declare the contract void only in case the
     debtor did not pay him the rent. (_Warnkönig_, Franz. R. G.,
     II, 585 ff.) For strictly Catholic countries, the prohibition
     relating to the taking of interest still really remains.
     However, _Leo X.'s_ bull, Inter multiplices, exempts the
     so-called _monti di pietà_, and by this means put obstacles
     in the way of saving, and promoted real usury. Of this last,
     _Niebuhr_, Briefe, II, 399, adduces very striking instances
     from the Pope's own temporal dominion. In the case of
     pledge, even 12 per cent. per annum is required. (Rom im
     Jahr, 1833, 163.) Yet, in 1830, the Poenitentiaria Romana
     instructed the clergy, without, however, deciding the chief
     question, not to disquiet people any longer in the
     confessional who had taken interest. (_Guillaumin_,
     Dictionnaire de l'Economie politique, art. usure.) On the
     Russian Sect, _Staroverzen_, which still condemns the taking
     of interest, see _Storch_, Handbuch, II, 19. By the Russian
     government it was permitted very early. _Ewers_, Ältestes
     Recht der R., 323 seq.]

     [Footnote 191-10: The first scientific defense of interest
     is generally considered to be that of _Salmasius_, loc. cit.
     Yet _Bacon_, Sermones fideles, C. 39 (after 1539), and at
     bottom also _H. Grotius_, De Jure Belli et Pacis, 1626,
     taught that it was lawful to take interest in so far as it
     was not against the love due to one's neighbor (_Endemann_,
     loc. cit., I, 62 ff.), and _Besold_, Quaestiones aliquot de
     Usuris, 1598, was as near the truth as _Salmasius_. Compare
     _supra_, note 4. How earnestly _North_ and _Locke_ labored
     against the lowering of interest by governmental
     interference, see _Roscher_, Z. Gesch. der engl.
     Volkswirths., 90, 102 ff. The best writers, in strictly
     Catholic countries, did violence to themselves in this
     matter for a long time after. Thus _Galiani_, Della Moneta,
     II, I seq.; and one cannot help being greatly surprised at
     witnessing the subtleties which _Turgot_, Mémoire sur le
     Prêt d'Argent, 1769, had to have recourse to, to prove the
     clearest matters. Thus: at the moment of the loan, a sum of
     money is exchanged against the mere promise of the other
     party, which is certainly less valuable. [If it were not,
     why should he borrow?] This difference must, therefore, be
     made up in interest, etc. _Mirabeau_ even was a decided
     opponent of interest. (Philos. rurale, ch. 6.) Compare,
     however, the theological defense by _Viaixnes_, 1728, in the
     Traité des Prêts de Commerce, Amsterdam, 1759, IV, 19 ff.]

     [Footnote 191-11: Of course, evaded in a thousand ways in
     practical life. Thus, for instance, people gave wheat, other
     commodities, and even uncoined gold and silver as loans, and
     had what interest they pleased promised them. In alienating
     the capital, they might stipulate _à fonds perdu_, as they
     thought best. (Turgot, I, c. § 29.) When debtors had
     promised under oath to make no complaint, the church ordered
     that they should be helped officially. When the temporal
     power showed itself lax, Alexander III. decreed that such
     questions should be brought before the spiritual courts.
     (Decret. Greg. V., tit. 19; 13 _Innocent_, Epist., VIII, 16;
     X, 61.) In England, _Richard of Cornwall_ obtained a
     monopoly of the whole loaning business. (_Matth. Paris_, ed.
     1694, 639: compare, also, 20 Henry III., 5.), from which
     fact the existence of the custom of taking interest about
     1235, is apparent. Cases in which English kings borrowed and
     promised payment back _cum damnis, expensis et interesse:_
     Anderson, Origin of Commerce, a. 1274, 1339.]

     [Footnote 191-12: Compare _Gioja_, Nuovo Prospetto, III,
     190. The canon law desired to put an interdict on their
     taking interest also: Decret. Greg., V, tit. 19, 12, 18.
     Frequently, also, a minimum of interest was provided for
     them: Ordonnances de la Fr., L. 53 seq. II, 575. Receuil des
     anciennes, Lois, I, 149, 152. John of France extended this
     to four _deniers_ per _livre_ per week, that is, annually
     86-2/3 per cent.! (_J. B. Say_, Traité II, ch. 8.) In
     Austria, in 1244, 174 per cent. allowed! (_Rizy_, Ueber
     Zinstaxen und Wuchergesetze, 1859, 72 ff.)]


SECTION CXCII.

INTEREST-POLICY.--GOVERNMENT INTERFERENCE.--FIXED RATES.

Instead of the medieval prohibition of interest, most modern states have
established fixed rates of interest, the exceeding or evasion of which,
by contract or otherwise, is declared null and void, and is usually
punishable as usury.[192-1] If the fixing of the rate is intended to
depress the rate of interest customary in the country,[192-2] [192-3] it
uniformly fails of its object. If control were great enough, vigilant
and rigid enough, which is scarcely imaginable, to prevent all
violations of the law, it is certain that less capital would be loaned
than had been, for the reason that every owner of capital would be
largely interested in employing his capital in production of his own.
More capital, too, would go into foreign parts, and there would be less
saved by those not engaged in any enterprise of their own. All of this
would happen to the undoubted prejudice of the nation's entire
economy.[192-4] [192-5]

If, on the other hand, the control by the government be not great
enough, the law would, in most cases, be evaded; especially as each
party, creditor as well as debtor, would find it to his advantage to
evade it. The latter, who otherwise would not be able to borrow at all,
is, as a rule, more in need of obtaining the loan, than the creditor is
to invest his capital. How easily, therefore, might he be induced to
bind himself by oath or by word of honor![192-6] He would, moreover, be
compelled to pay the creditor not only the natural interest and the
ordinary insurance premium, but also for the special risk he runs when
he violates the law threatening him with a severe penalty.[192-7] Hence
the last result is either a material enhancement of the difficulty of
obtaining loans or an enhancement of the rate of interest.[192-8]

     [Footnote 192-1: This is, historically, the second meaning
     of the word usury, while in the middle ages, for instance in
     England, under Elizabeth (_D. Hume_), the taking of any
     interest whatever was called usury. Science should employ
     this word only in the sense used in § 113.]

     [Footnote 192-2: In Switzerland, at the end of the 17th
     century, not only were those punished who took more interest
     than the law prescribed, but those who took less. (Compare
     Rechtsquellen von Basel, Stadt und Land, 1865, Bd. II.)]

     [Footnote 192-3: Fixed rates of interest of this kind are to
     be accounted for in part by a still continuing aversion of
     the legislator for interest in general; in part, by the
     opinion which prevails that precisely the most useful and
     most productive classes might be elevated by an artificial
     lowness of the rate of interest. (But most especially the
     government itself, which borrows more than it lends.) When
     Louis XIV. about 1665, lowered the rate of interest to 5 per
     cent., he claimed in the preamble to his decree that it
     would have the effect of promoting the welfare of landowners
     and business men, and of preventing idleness. Similarly
     _Sully_, Economies royales, L, XII. And so _J. Child_,
     Discourse of Trade, 69 ff., says that every lowering of the
     rate of interest, by law, produced a completely
     corresponding increase of the national wealth. He says,
     since the first reduction (?) of interest in 1545, the
     national wealth increased six fold; since the last, in 1651,
     the number of coaches increased a hundred fold;
     chamber-maids wore now better clothes than ladies formerly;
     on 'Change there were more persons with a fortune of £10,000
     than before with £1,000. Similarly _Culpeper_: compare
     _Roscher_, Z. Geschichte der eng. Volkswirthsch., 57 ff.
     Later, the French generally thought that a lowering of the
     rate of interest would prove injurious to the _noblesse de
     la robe_; hence even in 1634, parliament was opposed to it.
     (_Forbonnais_, Recherches et Considérations, I, 48, 226.)
     _Darjes_ says that information of all loans of capital
     should be made to the police authorities, and that the
     authorities might compel payment and the loaning of the
     principal over again to parties in need of capital. (Erste
     Gründe, 426 seq.) Something analogous practically provided
     for by the Würtemberg _Landesordnungen_ of the 16th century.
     (Compare also _von Schröder_, F. Schatz- und Rentkammer,
     XXV, 3.)]

     [Footnote 192-4: Precisely a high rate of interest is a
     powerful incentive to saving, and to the importation of
     capital.]

     [Footnote 192-5: _Usurae palliatae_, interest taken out of
     the capital, or stem-interest, called also money-usury in
     contradistinction to patent interest-usury. To this category
     belong the written acknowledgments of indebtedness to a
     larger amount than that actually received; acknowledging it
     in a higher kind of money than that in which the loan was
     made; the compulsory taking by the debtor of commodities at
     a disproportionately high price, in the place of money, or
     at a disproportionately low one, by the creditor. See the
     enumeration of such things in the police regulations of the
     empire, 1530, art. 26, and 1548, art. 17. Thus, in Paris,
     jewels are "sold" to students hard-pressed for money, which
     immediately find their way to the _monts de piété_, and have
     to be paid for some time after to the usurious "seller," at
     a most exorbitant price. The person who loans $100 at 6 per
     cent., and retains the interest for the next following year
     from the date of the loan, takes in reality nearly 6.4 per
     cent. Fraudulent accessory expenses of all kinds, _faux
     frais_, expenses of registration, for prolongation, and
     extinguishment, etc. Here belong, also, the provisions
     introduced into contracts to make redemption more difficult,
     the fixing of terms of payment in such a manner that the
     debtor is almost forced to let them slip by--called "usury
     in the conditions" in Austria. Remarkable instances from the
     16th century in _Vasco_, Usura libera, § 57 ff. Recently,
     _Braun_ und _Wirth_, Die Zinswuchergesetze, 1856, 190 ff. In
     view of the manifold business transactions behind which the
     interest-usurer may take refuge, the complete prevention of
     the latter would break the legs of commerce (loc. cit., 145
     ff.).]

     [Footnote 192-6: If the state, by annulling such promises,
     should incite the people to violate them, it would be a
     frightful step towards the demoralization of the nation:
     "thus rewarding men for obtaining the property of others by
     false promises, and then, not only refusing payment, but
     invoking legal penalties on those who have helped them in
     their need." (_J. S. Mill_, Principles, V, ch. 10, 2.)
     Besides, the Austrian usury law of 1803 punishes the
     borrower also as a spendthrift, and imprisons him for six
     months (§ 18), or else it designates where he shall make his
     domicile (_Ortsverweisung_). Modern loaning on drafts and
     bills of exchange, the acceptance of which is forged with
     the knowledge of the creditor, corresponds to what
     _Plutarch_, Quaest., Gr., 53, relates of the Cretans, who
     had, especially in later times, the worst possible
     reputation for avarice and dishonesty. (_Polyb._, VI, 46.
     _Paul_ to Titus, I, 12.)]

     [Footnote 192-7: He must insure him against the usury laws.
     (_Adam Smith._) According to _Krug_, Staatsökonomie, the
     usury laws should be called so because they promote usury,
     not because they prevent it. Compare to some extent,
     _Montesquieu_, Esprit des Lois, XXII, 18 ff.]

     [Footnote 192-8: When Catherine II. reduced the rate of
     interest in Livonia, in 1785, from 6 to 5 per cent., it soon
     became impossible, even on the best security, to borrow at
     less than 7 per cent. (_Storch_, Handbuch, II, 26.) And so,
     when in New York, in 1717, the rate of interest was reduced
     to 6 per cent., it became necessary, the following year, to
     raise it again to 8 per cent. The merchants, themselves,
     petitioned that it might be so raised, because they found it
     impossible to get any loans whatever. (_Ebeling_, Geschichte
     und Erdbeschreib. von Nord Amerika, III, 152.) In Chili, the
     legal rate of interest is 6 per cent., the actual rate,
     however, never under 12 per cent., and frequently 18 to 24
     per cent. In Peru, on the other hand, the repeal of the
     usury laws rapidly reduced the rate of interest from 50 to
     24 per cent., and finally to 12. (_Pöppig_, I, 118.)]


SECTION CXCIII.

INTEREST-POLICY.--EFFORTS TO AVOID THE EVIL EFFECTS OF A FIXED RATE.

It has been thought possible to avoid the evil effects of a fixed legal
rate of interest, by regulating it in such a way as to make it
coincident with the rate customary in the country.[193-1] But there are
numberless transactions in which an insurance premium, or premium for
risk or certain expenses of administration[193-2] on the part of the
loaner is inseparable from the true interest. Here, even the law which
entered most into detail could never properly provide for the infinite
gradations or shades of risk and trouble; and the rate in a great many
transactions would, therefore, be placed below the natural height.
Turgot long since observed that the value of a promise of future payment
is different not only for different persons, but at different times.
Thus, for instance, it is really less after there have been numerous
cases of bankruptcy than at other times.[193-3] If, now, it was desired
to fix the maximum rate of interest in such a way that it should equal
the rate customary in the country, where the security is good, the best
real property security for instance, the consequence would be, that
those persons who had no such guaranty to offer (leaving the loaning
"among brothers" out of the question) would either be unable to borrow
money at all, or, by evading the law, only at an artificially higher
rate. Hence the legislator causes injury where he wished to favor. This
has been observed in England in almost all past commercial
crises.[193-4] The man who makes it his business to loan his capital, on
short time and in small sums, undertakes a trade which the examination,
and the surveillance of a large number of small debtors, and the
necessity of reinvesting the many small sums paid him, render
exceedingly troublesome and disagreeable. Moreover, in loaning on short
terms of payment, there is always danger that his money may lie idle for
some length of time. These are reasons sufficient, why, in such cases,
when the whole compensation is denominated interest, a rate of interest
greater than usual in the country is equitable and even necessary. (§
179.)[193-5]

It has been frequently suggested that spendthrifts and adventurers
should be hindered using, or to speak more correctly, abusing the
nation's wealth by laws prohibiting the rate of interest at which they
might be expected to obtain credit; and this in the interest alike of
the creditors they might possibly find and in their own.[193-6] But
almost every inventor of genius, from Columbus to Stephenson, has been
obliged to be considered "an adventurer" for a time by "solid men." The
law limits him thus, and more especially during the critical period of
outlay which precedes the undoubted triumph of his idea, to his own
means or the gifts of others.[193-7] And how inadequate, as rule, are
both. The rich are as seldom discoverers, as discoverers are skillful
supplicants. And, as regards spendthrifts, they may ruin themselves in
so many thousands of ways, especially by buying or selling, and
unhindered by the state, that it is scarcely apparent why the one way of
borrowing should be legally closed to them.[193-8] How is it, if the law
itself drives them into the hands of a worse class of creditors, and
compels them to pay yet a higher rate of interest? Are they not simply
more rapidly ruined? States, themselves, have scarcely ever given any
heed to their own usury laws in borrowing or loaning.[193-9]

     [Footnote 193-1: In Austria, in 1803, in loaning on pledge,
     4 per cent.; in other loans and in the trade of merchants
     with one another, 6 per cent. In France, since 1807, with
     merchants, 6 per cent.; with others, 5. _Salmasins_, De Mono
     Usur., c. 1, advises that the maximum should be fixed as
     high as that usual in the most unfavorable cases. The
     reduction from such rate, where possible, would regulate
     itself.]

     [Footnote 193-2: _Petty_, Quantulumcunque concerning money,
     1682.]

     [Footnote 193-3: Sur le Prêt d'Argent, § 36.]

     [Footnote 193-4: How many merchants would have avoided
     bankruptcy here if they had been allowed to borrow at 8 per
     cent.! The established rate of 5 per cent. was certainly too
     low, considering the great demand for capital and the want
     of confidence at the moment, to permit capital to be loaned
     at that rate. Many saw themselves compelled to sell their
     merchandise or evidences of state indebtedness at a loss of
     30 per cent., in order to meet their obligations. But the
     person who, to anticipate the receipts due in 6 months, for
     instance, consents to suffer a loss of 30 per cent., pays,
     in a certain sense, interest at the rate of 60 per cent. a
     year. Compare _Tooke_, Considerations on the State of the
     Currency, 60, and History of Prices, II, 163, on the Crisis
     of 1825-26. Since the Bank, least of all, could exceed the
     legal rate of interest, numberless applications were made to
     it in times of war in order to obtain the difference between
     the legal rate and the rate usual in the country.
     (_Thornton_, Paper Credit of Great Britain, ch. 10.)
     Prussia, November 27, 1857, suspended the usury laws for 3
     months, on account of the commercial crisis, except the
     provisions relating to pawn-broker and minors.]

     [Footnote 193-5: _Turgot_ tells of Parisian "usurers" who
     made weekly advances to the market women of la Halle, and
     received for 3 livres, 2 sous interest; that is 173 per
     cent. a year. The premium for insurance may have been very
     high here. When such loaners were brought before the courts,
     and they were sentenced to the galleys, the usual punishment
     for usury, their debtors came and testified their gratitude
     by begging for mercy to them! (Mémoire sur le Prêt d'Argent,
     § 14, 31.) Compare _Cantillon_, Nature du Commerce, 276.]

     [Footnote 193-6: Thus, _Adam Smith_, Wealth of Nations, II,
     ch. 4. Similarly, _Roesler_ Grundsätze, 495 ff. Compare,
     _per contra_, _Jer. Bentham_, Defense of Usury: showing the
     Impolicy of the present legal Restraints on the Terms of
     pecuniary Bargains in Letters to a Friend. To which is added
     a Letter to Adam Smith on the Discouragement imposed by the
     above Restraints to the Progress of inventive Industry,
     1787; 3 ed., 1816.]

     [Footnote 193-7: The first steamboat in the United States
     was, for a long time, called the "Fulton-folly!"]

     [Footnote 193-8: It is just as hard to see why only
     money-capital should have a fixed rate of interest, and not
     buildings, etc. likewise.]

     [Footnote 193-9: In Holland, the legal rate of interest was
     lowered, in 1640, to 5 per cent., and in 1655 to 4; but not
     since. (_Sir J. Child_, Discourse of Trade, 151.) Besides,
     _Locke_, Considerations on the Lowering of Interest, Works,
     III, 34, assures us that, in his time, a man in England
     could make contracts for unlimited interest.]


SECTION CXCIV.

INTEREST-POLICY.--REPEAL OF THE USURY LAWS.

However, the complete repeal of the usury laws[194-1] has not under all
circumstances accomplished what it was supposed it would; and the state
should take great care, lest by an incautious framing of its laws, it
should put judges in such a position that they may be compelled to
coöperate in the execution of immoral contracts.[194-2] In the lowest
strata, so to speak, of the loaning business, the medieval condition
continues to exist (§ 190) after it has disappeared in the upper. Here,
the loan is effected scarcely ever for the purposes of production, but
most generally because of the most urgent necessity; and the debtor is
not in a condition, from want of education, and especially from his
ignorance of arithmetic, to estimate the magnitude of the burthen he has
undertaken. The business of loaning is, under such circumstances,
considered dishonorable, to some extent, by the public. And when a
business necessary in itself is held disreputable by public opinion, the
usual result is that bad men alone engage in it.[194-3] Real competition
which would but fix the natural price is wanting here in proportion as
the debtor is anxious for secrecy.[194-4]

Abuses in this respect are best guarded against by the establishment of
government loan-institutions, and by the publicity of the administration
of justice to debtors.[194-5] Besides, every contract might be
prohibited the terms of which were such that an inexperienced borrower
could not from them obtain a clear conception of the burthen he accepts,
or which hindered him from paying the debt at a proper time.[194-6]

Lastly, there should be a rate of legal interest fixed by the state to
be charged in such cases as interest is found to be in justice due, but
in which none is provided for by contract; and this rate should
approximate as nearly as possible to the rate usual in the
country.[194-7] [194-8]

     [Footnote 194-1: In 1787, Joseph II. abolished the penalties
     for usury, but allowed the provisions denying a legal
     remedy, in cases of usurious demand of over 4 per cent. for
     hypothecations, 6 per cent. for bills and 5 per cent. for
     other loans, to remain. Compare the prize essay by
     _Günther_, Versuch einer vollständigen Untersuchung über
     Wucher und Wuchergesetze, 1790; _v. Kees_, über die
     Aufhebung der Wuchergesetze, 1791; _Vasco_, Usura libera,
     1792. The opposite view represented by _Ortes_, E. N., II,
     24, and _v. Sonnenfels_, Ueber Wucher und Wuchergesetze,
     1789, and zu Herrn _von Kees_, Abhandlung, etc., 1791. The
     debates on the repeal of the usury laws in the French
     Chamber of Deputies, after which _Lherbette's_ motion in
     favor of their repeal was rejected. In France they were,
     during the assignat-period of bewilderment virtually, and in
     1804-1807 expressly (C. C., Art. 1907), but only
     provisionally repealed. In Würtemberg, all those having the
     right to draw bills of exchange were exempted from them in
     1839. Since the law of 1848, governing bills of exchange,
     gave all persons capable of contracting, the right to draw
     bills of exchange, the usury laws have ceased to have any
     existence; without much noise before and without much
     complaint after. (A. Allgem. Ztg., 24 März, 1857.) Recent
     complete or partial repeal of the usury laws: in England, in
     1854; in Denmark, in 1855; in Spain, in 1856; Sardinia,
     Holland, Norway and Geneva, 1857; Oldenburg, 1858; Bremen,
     1859; in the kingdoms of Saxony and Sweden, in 1864;
     Belgium, 1865; Prussia, the North German Confederation, and
     to some extent Austria, in 1867.]

     [Footnote 194-2: Compare _F. X. Funck_, Zins und Wucher,
     1868, a moral theological treatise which rightly demands a
     more rigid popular morality in relation to real usury, after
     the repeal of the usury laws. The recent cases in which
     courts have juridically acquitted usurers because they could
     not do otherwise, but have branded them morally, are of very
     questionable propriety, in view of the facility with which
     high and usurious rates of interest may be confounded. _R.
     Meyer_, Emancipationskampf, I, 78, advises that the
     capitalist be allowed to ask whatever interest he wishes,
     but that the state, as judge and executor of the laws,
     should enforce payment only at a certain rate determined by
     law.]

     [Footnote 194-3: Many laws seem to purposely permit this,
     inasmuch as they allow a rate of interest, higher in
     proportion as the position of the creditor is less
     respectable. Thus, formerly, in some places, the Jews might
     require higher interest than the Christians. Justinian
     allows _personis illustribus_ only 4 per cent.; ordinary
     private persons, 6 per cent.; money-changers, etc., 8 per
     cent. (L. 26, Cod. IV, 32.) On the other hand, according to
     the Indian legislation of Menu, the Brahman is obliged to
     confine himself to 2, the warrior to 3, the _vaysya_ to 4,
     the _sudra_ to 5 per cent. per month at most. (Cap. 8.)]

     [Footnote 194-4: _Turgot_ considered that only the _prêteurs
     à la petite semaine_, pawnbrokers who loaned to hard-pressed
     people on the confines of the middle class and artisans, and
     the infamous characters who advanced money to the sons of
     rich men to spend in dissipation, still passed for usurers.
     Only the latter are injurious; not, however, because of the
     high rate of interest they charge, but because they help in
     a bad cause. (Sur le Prêt d'Argent, § 32.) According to
     _Colquhoun_, Police of the Metropolis, 167, there are women
     in London from whom the hucksteresses borrow 5 shillings
     every day and return them every evening with ½ shilling
     interest. Something analogous happens much more frequently
     in the country, especially in the loaning in kind of
     productive capital to poor persons. Thus, in Tessin, there
     are many "iron cattle" which the borrower is obliged to
     return at their original value, plus an interest of about 36
     per cent. (_Franscini_, C. Tessin, 152.) On the Rhine,
     frequently as much as 200 per cent. a year, is stipulated
     for in such contracts. _Morstadt_, der N. Oekonom. Heft., IX,
     727.]

     [Footnote 194-5: Compare _J. J. Becher_, Polit. Discurs,
     1668, 219; _v. Schröder_, F. Schatz- und Rentkammer, Bd. §§
     123, 133 ff. The first _montes pictatis_ were expressly
     intended to check the usury of the Jews. Thus, in Florence,
     in 1495, after the expulsion of the Jews, voluntary
     contributions were made to found a municipal loaning
     establishment. Similarly, _Tiberius_, Tacit. Ann., VI, 16
     seq. _Count Soden_, Nat-Oek., IV, 57; V, 319, advises that
     all contracts for interest should be recorded in a public
     registry, under pain of their being held not actionable.]

     [Footnote 194-6: _Günther_, loc. cit., thinks that, in every
     contract in which the rate of interest is masked, its real
     rate should be expressed under penalty of invalidity. In
     addition to this, he would have those who have attained
     their majority put in full control of their fortune only
     after they had undergone an examination.

     It seems opportune that the old prohibition against interest
     on interest (_Cicero_, ad. Att., V, 21, and L, 26, Digest,
     XIV, 6) and the provision that the interest should not be
     permitted to be greater than the _alterum tantum_ (Digest,
     l. c.) should be permitted to continue. (Digest, l. c.) Both
     of these measures were first decreed by Lucullus, for the
     protection of Asia Minor. Compare § 115. Florentine law, of
     1693, that interest in arrears, or that interest on interest
     beyond 7 years, should not be added to the principal without
     an express contract to that effect. (_Vasco_, Usura libera,
     § 155.) In England, the usury laws were by 2 and 3 Victor.,
     c. 37, repealed, but only to the extent of excepting from
     their provisions bills of not over 12 months, and money
     loans not over £10. Compare _Rau_, Lehrbuch II, § 323.]

     [Footnote 194-7: Compare _Locke_, Considerations: Works, 10,
     32 ff. In Spain, the Council of State is required to
     regulate the rate of legal interest yearly (law of 1856,
     art. 8); a thing which, according to _Braun_, would be
     better done in each individual case by the judges
     themselves. (_Faucher's_ Vierteljahrsschrift, 1868, II,
     13.)]

     [Footnote 194-8: In Athens, the rate of interest in general
     was voluntary from the time of Solon, who, however, did away
     with slavery for debt. (Lysias adv. Theomn., 360.) Yet there
     was a legal rate of interest of 18 per cent. for the case in
     which a divorced husband delayed the return of his wife's
     dowry. Compare _Böckh_, Staatshaushalt der Athener, I, 148.]



CHAPTER V.

THE UNDERTAKER'S PROFIT. (_UNTERNEHMERLOHN._)


SECTION CXCV.

THE REWARD OF ENTERPRISE.

The essence of an enterprise or undertaking, in the politico-economical
sense of the word, consists in this, that the undertaking party engages
in production for the purpose of commerce, at his own risk. In the
earlier stages of a nation's economy, the production of consumers is,
naturally enough, limited chiefly by their own personal wants. Somewhat
later, when the division of labor has been further developed, the
workman produces at first, enough to meet occasional determinate
"orders;" and still later to meet them regularly and as a business.
Later yet, and in stages of civilization yet higher, especially when the
freedom of labor constantly grows, as it is wont to, here, and the
freedom of capital and trade becomes more extensive, enterprise plays a
part which grows more important as time rolls on, and is usually carried
on more at one's own risk.[195-1] This transition is a great advance,
inasmuch as the advantages of the coöperation of labor and of _use_ may
be utilized in a much higher degree by undertakers (_Unternehmer_) than
by producers who labor only to satisfy their own household wants, or to
meet "orders" already made. The awakening of latent wants, a matter of
the utmost importance to a people who would advance in civilization, is
something which can enter into the mind only of a man endowed with the
spirit of enterprise (an undertaker).[195-2]

While most English political economists have confounded the personal
gain of the undertaker with the interest on the capital used by
him,[195-3] many German writers have called the "undertaker's earnings"
or profit a special, and fourth, branch of the national income,
coördinate with rent, wages, and the interest on capital.[195-4] Yet,
the net income of every undertaker is either the fruit of his own land
used for purposes of production and of his capital, in which case it is
subject to the usual laws of development of rent and interest; or, it
must be considered as wages paid for his labor.[195-5] These wages he
earns, as a rule, by organizing and inspecting the work, calculating the
chances of the whole enterprise; frequently by, at the same time,
keeping the books and acting as cashier; and, in the case of small
undertakings, as a common fellow-workman. (Tradesman, peasant). In every
case, however, even when he puts an agent paid by himself in his place,
he earns these wages from the fact that his name keeps the whole
enterprise together; and for the reason that, in the last
instance,[195-6] he has to bear the care and responsibility attending
it.[195-7] When a business goes wrong, the salaried director or foreman
may permit himself to be called on to engage in another; but the weary,
watchful nights belong to the undertaker or man of enterprise, alone;
and "how productive such nights frequently are!"[195-8]

This profit of the undertaker is subject essentially to the same natural
law as wages in general are; only it differs in this from all other
branches of income, that it can never be stipulated for in advance.
Rather does it consist of the surplus which the product of the
undertaking affords over and above all the rent stipulated for in
advance or estimated at the rate usual in the country, the interest on
capital, and wages of common labor.[195-9]

     [Footnote 195-1: At first, usually imperfect enterprises in
     which the shop-instruments, etc., are kept ready for present
     orders; and then complete or perfect enterprises. (_v.
     Mangoldt_, Volkswirthschaftslehre, 255.)]

     [Footnote 195-2: _v. Mangoldt_, Lehre vom Unternehmergewinn,
     1855, 49 ff. The same author shows, in his
     Volkswirthschaftslehre, that it is better for the general
     good that the risk should be borne by the producer than by
     the consumer. In the case of the taking of orders, there is
     danger only of a technic failure, but in enterprise proper,
     there is possible also an economic miscarriage of the work,
     even when successful from a technic point of view. But in
     the case of the undertaker (man of enterprise),
     responsibility is much more of an incentive, production much
     more steady, and therefore much better able to exhaust all
     means of help. Consumers are much more certain in their
     steps, as regards price, etc., since they find what they
     want ready made.]

     [Footnote 195-3: Thus _John Stuart Mill_, Principles, II,
     ch. 15, 4, teaches with a certain amount of emphasis that
     the "gross profits of stock" are different not so much in
     the different branches in which capital is employed, as
     according to the personal capacity of the capitalist himself
     or of his agents. There are scarcely two producers who
     produce at precisely the same cost, even when their products
     are equal in quality, and equally cheap. Nor are there two
     who turn over their capital in precisely the same time.
     These "gross profits" uniformly fall into three classes:
     reward for abstinence, indemnity for risk, remuneration for
     the labor and skill required for superintendence. _Mill_
     complains that there is in English no expression
     corresponding to the French _profit de l'entrepreneur_. [The
     translator has taken the liberty to use the expression
     "undertaker's profit," for what the French call the _profit
     de l'entrepreneur_, and the Germans _Unternehmerlohn_, spite
     of its funereal associations, and because Mill himself
     employed it, although he recognized that it was not in good
     usage.--TR.] (II, ch. 15, 1) _Adam Smith_ had the true
     doctrine in germ (Wealth of Nat., I, ch. 6), but those who
     came after him did little to develop it. Compare _Ricardo_,
     Principles, ch. 6. 21. _Read_, Political Economy, 1829, 262
     ff., and _Senior_, Outlines, 130 seq., were the first to
     divide profit into two parts: interest-rent (_Zinsrente_)
     and industrial gain. Similarly, _Sismondi_, N. P., IV, ch.
     6. According to _A. Walker_, Science of Wealth, 1867, 253,
     285, "profits are wages received by the employer."]

     [Footnote 195-4: _Hufeland_, Grundlegung, I, 290 ff.;
     _Schön_, Nat-Oek., 87, 112 ff.; _Riedel_, Nat-Oek., II, 7 ff.;
     _von Thünen_, Der isolirte Staat, II, 1 80 ff.; _v.
     Mangoldt_, Unternehmergewinn, 34 ff. The latter divides the
     undertaker's profit (_profit de l'entrepreneur_) into the
     following parts:

     A. Indemnity for risk. If this be only an indemnity exactly
     corresponding to the risk, it cannot be looked upon at all
     as net income, but only as an indemnification for capital.
     If individual undertakers, favored by fortune, receive a
     much larger indemnification than is necessary to cover their
     losses, such indemnification is not income either, but an
     extraordinary profit not unlike a lottery-gain, unless it be
     called, perhaps, the reward of extraordinary courage
     (_Eiselen_), i. e., wages. If, lastly, the indemnity is
     uniformly somewhat larger than the risk, in order to
     compensate for the continual feeling that one is running a
     risk, it must be remembered that all remuneration for
     present sacrifice, made directly for the sake of production,
     is wont to be embraced under the name of wages.

     B. Wages and interest for the labor and capital utilized
     only in one's own production, and which cannot be let. _v.
     Mangoldt_ himself admits, that, in the long run, only
     certain qualified labor belongs to this category.

     C. Undertaker's rent (_Unternekmerrente_) depending on the
     rarity of undertakers (men of enterprise) compared with the
     demand. This, therefore, is not a third component part, but
     only one which adds to the other two, _Storch_, Handbuch, I,
     180, and _Rau_, Lehrbuch, I, § 237 ff., consider the profit
     of the undertaker as an admixture of wages and interest.
     Professor _J. Miscszewicz_ has given expression to an
     interesting thought in opposition to myself: that credit is
     a fourth factor of production (natural forces, labor and
     capital being the other three) produced by the three older
     factors, as capital by the two oldest. The undertaker's
     profit he then considers the product of this fourth factor,
     corresponding to rent, interest and wages.]

     [Footnote 195-5: Compare _Canard_, Principes, ch. 3; _J. B.
     Say_, Traité, II, ch. 7, Cours pratique, V, 1-2, 7-9,
     distinguishes three branches of income: rent, interest and
     the profits of industry; and he divides the latter again
     into the profits of the _savant_, the undertaker and
     workmen, (_v. Jacob_, Grundsätze der Nat.-Oek., § 292;
     _Lotz_, Handbuch, I, 471; _Schmalz_,
     Staatswirthschaftslehre, I, 116; _Nebenius_, Œff. Credit,
     I, Aufl., 466.)]

     [Footnote 195-6: I need only call attention to the influence
     that the mere name of a general sometimes exerts over the
     achievements and sometimes even over the composition of his
     army (Wallenstein!); and how important it sometimes is to
     keep his death a secret. And so the mere name of a minister
     of finance may facilitate loans, etc.]

     [Footnote 195-7: It is sufficient to mention the different
     positions occupied by the shareholders and preferred
     creditors of a joint-stock company.]

     [Footnote 195-8: Compare _von Thünen's_ Isolirter Statt, II,
     80 ff., and his Life, 1868, 96. _Meister muss sich immer
     plagen!_ (_Schiller._) See a long catalogue of books on the
     position of the undertaker in the principal different
     branches of industry in _Steinlein_, Handbuch der
     Volkswirthschaftslehre, I, 445 ff.]

     [Footnote 195-9: _Tantièmes_ occupy a middle place between
     wages and the undertaker's profit; dividends a middle place
     between undertaker's profit and the interest of capital. On
     this is based _Rodbertus's_ view, that an increase of joint
     stock companies raises _ceteris paribus_ the rate of
     interest, and an increase of productive associations the
     rate of wages, for the reason that in each instance, there
     is some admixture of "undertaker's profit," or reward of
     enterprise.]


SECTION CXCVI.

UNDERTAKER'S PROFIT.--CIRCUMSTANCES ON WHICH IT DEPENDS.

As the wages or reward of labor, in all instances, depends on the
circumstances mentioned in § 167 ff., so, also does the reward of
enterprise; in other words, the undertaker's profit or wages. It
depends, therefore:

A. On the rarity of the personal qualities required in a business, which
qualities may be divided into technical and ethical qualities. Among the
latter are, especially, the capacity to inspire capitalists with
confidence and workmen with love for their task; the administrative
talent to systematize a great whole made up of men and to order it
properly, to keep it together by sternness of discipline in which
pedantry has no part, and by economy with no admixture of avarice; and
frequently endurance and even presence of mind. These ethical,
statesmanlike qualities are, take them all in all, a more indispensable
condition of high undertaker's profit than the technical are.[196-1]

B. On the risk of the undertaking in which not only one's property, but
one's reputation, may be lost.[196-2]

C. As to the disagreeableness of the undertaking or enterprise, we must
take into especial consideration the disinclination of capitalists in
general to assume the care and trouble of concerning themselves directly
with the employment of their capital. (§ 183.) The undertaker's profit
is, besides, lower in proportion as he needs to care less for the
profitable application of the different sources of production, and for
their preservation. Hence it is, in general, higher for the direction of
circulating than of fixed capital; in speculative trade and in wholesale
trade which extends to the whole world, than in retail trade and merely
local business.[196-3]

It has, indeed, been remarked, that the undertaker's profit is, as a
rule, proportioned to the capital employed.[196-4] This may be true in
most cases, but only as the accidental compromise between opposing
forces. It is evident that the greater the enterprise is, the greater
may be the surplus over and above the compensation stipulated for in
advance of all the coöperating productive forces, and not only
absolutely but also relatively. We need only call to mind the successful
results attending the greater division of labor (§ 66) and the greater
division of use (_Gebrauchstheilung_) (§ 207); the greater facility of
using remains in production on a large scale, and the fact that all
purchases, and all obtaining of capital are made, when the items are
large, at cheaper rates, because of the more convenient conducting of
the business.

This is true up to the point where the magnitude of the whole becomes so
great as to render the conducting of it difficult. Considered even
subjectively, the great undertaker, whose name and responsibility keep a
great many productive forces together, may demand a higher reward,
because there are so few persons competent to do the same. On the other
hand, it cannot be denied that a support in keeping with his position
may be called the amount of the cost of production of the undertaker's
labor. If this cost is once fixed by custom, it will, of course, be
relatively high in those branches of business which permit only of the
employment of a small capital.[196-5]

In the higher stages of civilization, the undertaker's profit has, like
the rate of interest, a tendency to decline. This decline is, indeed, in
part, only an apparent one, caused by the decreased risk and the smaller
indemnity-premium. But it is, in part, a real one, produced by the
increased competition of undertakers.[196-6] The more intelligent
landowners and workmen become, the more readily do they acquire the
capacity and desire to use the productive forces peculiar to them in
undertakings of their own; and the number of retired persons who live
from their rents grows smaller with the decline of the rate of interest.
The strong competition of undertakers now leads to degeneration, and
undertakings or enterprises become usual in which the gains or losses
are subjective, and are destitute of all politico-economical
productiveness; for instance, the purchase of growing fruits, and
businesses carried on in "margins," or differences. It is self-evident
that the circumstances which retard the rate of interest, or turn it
retrograde, would have a similar effect on the undertaker's profit. (§
186.) On the whole, a rapidly growing people meet with great gains and
losses, but the preponderance is in favor of the former. A stationary
people are wont to become more and more careful and cautious. A
declining people underestimate the chances of loss, although in their
case they tend more and more to preponderate over the chances of gain.
(_v. Mangoldt._)

     [Footnote 196-1: Thus _Arkwright_, by his talent for
     organization principally, attained to royal wealth, while
     _Hargreaves_, a greater inventive genius, from a technic
     point of view, had to bear all the hardships of extreme
     poverty.]

     [Footnote 196-2: An experienced Frenchman, _Godard_,
     estimates that of 100 industrial enterprises attempted or
     begun, 20 fail altogether before they have so much as taken
     root; that from 50 to 60 vegetate for a time in continual
     danger of failing altogether, and that, at the furthest, 10
     succeed well, but scarcely with an enduring success.
     (Enquête commerciale de 1834, II, 233.)]

     [Footnote 196-3: Thus _Ganilh_, Théorie de l'Economie
     politique I, p. 145, was of the opinion that in France's
     foreign trade the profit was only 20, and in its internal
     trade, scarcely 10 per cent. of the value put in
     circulation.]

     [Footnote 196-4: _Hermann_ loc. cit. 208.]

     [Footnote 196-5: According to _Sinclair_, Grundgesetze des
     Ackerbaues, 1821, the profit on capital of English farmers
     was wont to be from 10 to 18 per cent. Only in very
     remarkable cases, by persons in very favorable
     circumstances, was from 15 to 20 per cent. earned; that is,
     on the whole, less than in commerce and industry. In the
     case of farmers of meadow land, 15 per cent. and even more
     was not unusual; because there is a need of less outlay
     here, but more mercantile speculation, especially in the
     fattening of live stock.

     At the end of the last century English farmers expected 10
     per cent. profit on their capital. (_A. Young_, View of the
     Agriculture of Suffolk, 1797, 25.) And so _Senior_ is of
     opinion that, in the England of to-day, industrial
     enterprises of £100,000 yield a profit of less than 10 per
     cent. a year; those of £40,000, at least 12½ per cent.;
     those of from £10,000 to £20,000, 15 per cent.; smaller ones
     20 per cent. and even more. He makes mention of fruit
     hucksters who earned over 20 per cent. a day; that is, over
     7,000 per cent. a year! (Outlines, 203 seq.) In Manchester,
     manufacturers, according to the same authority, turned over
     their capital twice a year at 5 per cent.; retail dealers,
     three times a year at 3½ per cent. (Ibid, 143.) _Torrens_,
     The Budget (1844), 108, designates 7 per cent. as the
     minimum profit which would induce an English capitalist to
     engage in an enterprise of his own. According to _v.
     Viebahn_, Statistik des Regierungsbezirks Düsseldorf, 836,
     I, 180, the undertaker's profit, i. e., the surplus money of
     the value of the manufactured articles, after deduction made
     of the raw material and wages, in the Berg country, amounted
     to, in 81 iron factories, 146,400 thalers; in 6 cotton
     factories, to 21,200 thalers; in 15 cloth factories, to
     14,725 thalers; in 4 worsted factories, to 1,700 thalers; in
     4 brush factories, to 800 thalers; in 2 tobacco factories to
     10,220 thalers; in 2 paper factories, to 7,400 thalers; on
     an average, 1,924 thalers; although many undertakers earned
     only from 200 to 400 thalers, and some few from 5,000 to
     10,000 thalers.]

     [Footnote 196-6: This is, of course somewhat oppressive to
     many individuals, and hence we find that in those countries
     which are unquestionably making great advances in
     civilization, there are so many complaints of alleged
     growing impoverishment. Compare _Sam. Fortrey_, England's
     Interest and Improvement, 1663; _R. Coke_, A Treatise
     wherein is demonstrated that the Church and State of England
     are in equal danger with the Trade of it, 1671. Britania
     languens, showing the Grounds and Reasons of the Increase
     and Decay of Land, etc., 1680. And per contra, England's
     great Happiness, wherein is demonstrated that a great Part
     of our Complaints are causeless, 1677. Analogous claims
     might be shown to exist in Germany by a collection of almost
     any number of opinions advanced during the last thirty
     years.]


SECTION CXCVI (_a._).

UNDERTAKER'S PROFIT.--HAVING THE "LEAD."

The undertaker's profit is that branch of the national income in which
the greater number of new fortunes are made. If a landowner has a large
income, he generally considers himself obliged to make a correspondingly
large outlay, one in keeping with his position; and workmen who are not
undertakers themselves seldom have the means to make large savings.
Besides, undertakers stand between the purchasers of their products and
the lessors of the productive forces used by them in the peculiarly
favorable situation which I may describe by the expression: having, as
they say in card-playing, "the lead."[196a-1] When, in the struggle for
prices, one party occupies a position which enables him to observe every
change of circumstance much sooner than his opponent, the latter may
always suffer from the effects of erroneous prices. If, for instance,
the productiveness of business increases, even without any personal
merit of the individual undertakers themselves, it will always be some
time before the decline in the price of commodities and the rise in the
rate of interest take place, as a result of the increased competition of
undertakers, consequent upon the extraordinary rate of the undertaker's
profit. It is difficult, and even impossible in most instances for the
proprietors of the productive forces which they have rented out, to
immediately estimate accurately the profit made by undertakers. On the
other hand, the least enhancement of the price of the forces of
production is immediately felt by the undertakers, and causes them to
raise their prices. They just as quickly observe a decline of the prices
of the commodities, and know how to make others bear it by lowering
wages and the rate of interest.[196a-2] It should not be forgotten that
the persons most expert, far-seeing, active and expeditious in things
economic, belong to the undertaking class.[196a-3] [196a-4]

     [Footnote 196a-1: The same principle is effective in
     intermediate commerce, and in the intervention of bankers
     between government and state creditors.]

     [Footnote 196a-2: This is much less the case in rents, for
     the reason that contracts here are made for a much longer
     term. Hence, here the farmer has as much to fear as to hope
     from a change of circumstances. Hence, too, we meet with a
     farmer who has grown rich much more seldom than with a
     manufacturer or a merchant.]

     [Footnote 196a-3: If an undertaker can cede his higher
     reward to another and guaranty its continuance, the
     circumstances which enable him to do this assume the nature
     of fixed capital; for instance, the trade or _clientèle_
     secured by custom or privilege. If the undertaker has not
     the power to dispose of it in this way, the increased profit
     either disappears with his retirement from the business or
     falls to the owner of the capital employed, and still more
     to the land owner. Thus, for instance, how frequently it has
     happened that a store, which has been largely resorted to by
     the public, drawn thither by the business tact of the
     lessee, has afterwards been rented by the owner at a higher
     rent! (_Hermann_, loc. cit. 210.)]

     [Footnote 196a-4: _Lassalle's_ socialistic attacks on
     Political Economy have been directed mainly against the
     undertaker's profit or reward. Compare the work
     "Bastiat-Schulze von Delitzsch, der ökonom. Julian oder
     Kapital und Arbeit," 1863. By means of state credit, he
     would have this branch of income turned over to common
     labor. _Dühring_ also, Kapital und Arbeit 90, declaims not
     so much against capital as against "the absolutism of
     undertakers." _Schäffle_ D. Vierteljahrsschrift Nr. 106, II,
     223, objects to this, that undertakers give value in
     exchange to unfinished products, a great service rendered
     even to the laboring class, who otherwise would have to
     resign the advantages of the division of labor.

     The undertaker's profit is precisely the part of the great
     politico-economical tree from which further growth chiefly
     takes place. To artificially arrest it, therefore, would be
     to hasten the stationary state, and thus make general and
     greater the pressure on workmen and capitalists, which it is
     sought to remove locally. Hence _Roesler_, Grundsätze, 507
     ff., very appropriately calls the undertaker's profit the
     premium paid by society to those who most effectually combat
     the "law of rent." The importance of a good undertaker may
     be clearly seen when a joint stock manufacturing company
     pays a dividend of from 20 to 30 per cent., while one close
     by, of the same kind, produces no profit whatever. But, at
     the same time, the socialistic hatred of this branch of
     income may be easily accounted for, in a time full of
     stock-jobbing, which last never produces except a
     pseudo-undertaker's profit.]



CHAPTER VI.

CONCLUDING REMARKS ON THE THREE BRANCHES OF INCOME.


SECTION CXCVII.

INFLUENCE OF THE BRANCHES OF INCOME ON THE PRICE OF COMMODITIES.

We have seen, § 106, that the cost of production of a commodity,
considered from the point of view of individual economy, may be reduced
to the payment for the use of the requisite productive forces rented or
loaned to the producer. Hence every great variation in the relation of
the three branches of income to one another must produce a corresponding
variation in the price of commodities.[197-1] When, for instance, the
rate of wages increases because they absorb a larger part of the
national income, those commodities in the production of which human
labor, directly employed, is the chief factor, must become dearer as
compared with others. Whether this difference shall be felt principally
by the products of nature or of capital (compare § 46 seq.), depends on
the causes which brought about the enhancement of the rate of wages.
Thus, a large decrease of population, or emigration on a large scale,
will usually lower rent as well as the rate of interest;[197-2] an
extraordinary improvement made in the art of agriculture, only the
former; and an extraordinary increase of capital, only the latter. The
usual course of things, namely that the growth of population
necessitates a heavier draft on the resources of the soil, and thus
causes rents to go up, and makes labor dear, must have the effect of
raising the price of the products of labor and of natural forces, as
compared with the products of capital; and all the more as it causes the
rate of interest to suffer a positive decline. The products of
mechanical labor become relatively cheaper; and cheaper in proportion as
the producing machinery is more durable; therefore in proportion as, in
the price of the services it renders, mere interest preponderates over
compensation for its wear and tear.[197-3]

Let us, for a moment, leave ground-rent out of the question entirely,
and suppose a nation's economy whose production is conducted by eleven
undertakers employed on different commodities. Let us suppose that
undertaker No. 1 uses machinery exclusively and employs only as many
workmen as are strictly necessary to look after it, that undertaker No.
2 has a somewhat larger number of workmen and a somewhat smaller amount
of fixed capital, etc.; and that this increase in the number of workmen
and decrease in the amount of fixed capital continues until we reach
undertaker No. 11, who employs all his capital in the payment of wages.
If now, the rate of wages were to rise, and the interest on capital to
fall in the same proportion, the commodities produced by undertaker No.
11 would rise most in price, and those of No. 1 decline most. In the
case of undertaker No. 6, the opposing influences would probably balance
each other, and if the producers of money belonged to this sixth class,
it would be very easy to get a view of the whole change in the
circumstances of production, in the money-price of the different
commodities.[197-4]

     [Footnote 197-1: Compare _Adam Smith_, I, ch. 7, fin. This
     relative increase or decrease of one branch of income at the
     expense or to the advantage of another, should be
     distinguished from the absolute change of its amount which
     does not affect the cost of production. Thus, for instance,
     when the rent of land indeed increases, but in consequence
     of a simultaneous improvement in agriculture, a decline in
     the rate of interest, and an enhancement of the price of
     wheat is avoided (§ 157). So, too, when individual wages
     increase on account of the greater skill and energy of
     labor, but the same quantity and quality of labor do not
     become dearer (§ 172 seq.); and lastly, when the rate of
     interest remaining unaltered, the receipts of capitalists
     are increased by reason of an increase of their capital (§
     185).]

     [Footnote 197-2: After the great plague in the 14th century
     in England, when all the products of labor became dearer,
     skins and wool fell largely in price: _Rogers_, I, § 400.]

     [Footnote 197-3: Anyone who carefully reads all the five
     divisions of _Ricardo's_ first chapter will soon find that
     this great thinker rightly understood the foregoing,
     although the great abstractness and hypothetical nature of
     his conclusions might easily lead the reader astray. The
     proposition which closes the second part, and which has been
     so frequently misunderstood by his disciples, can be
     maintained only on the supposition that the prices of all
     commodities hitherto have been made up of equal proportions
     of rent, capital and wages. But think of Brussels lace and
     South American skins!]

     [Footnote 197-4: Compare _J. Mill_, Anfangsgründe der polit.
     Oekonomie, Jacob's translation, § 13 ff.; _McCulloch_,
     Principles, III, 6. _Adam Smith_ was of opinion, that higher
     wages enhanced the price of commodities in an arithmetical
     ratio, a higher rate of interest in a geometrical one (I,
     ch. 9). Similarly _Child_, Discourse of Trade, 38. This last
     _Kraus_, Staatswirthschaft, better expresses by saying that
     an increase in the rate of interest operates in the ratio of
     the compounded interests.]


SECTION CXCVIII.

REMEDY IN CASE ONE FACTOR OF PRODUCTION HAS BECOME DEARER.

When one of the three branches of income has grown as compared with the
others; in other words, when the factor of production which it
represents has become relatively dearer, it is to the interest of the
undertaker and of the public, that it should be replaced where possible
by another and cheaper productive force. (§ 47.) On this depends the
advantageousness of _intensive_ agriculture (high farming) in every
higher stage of civilization. There land is dear and labor cheap. Hence,
efforts are made to get along with the least amount of land-surface, and
this minimum of land is made more productive by a number of expedients
in cultivation, by manuring it, by seed-corn, etc., of course also by
the employment of journeymen laborers, oxen, etc. And since the price of
land is intimately connected with the price of most raw material,
remains are here saved as much as possible, often with a great deal of
trouble.[198-1] In a lower stage of civilization, such savings would be
considered extravagance. As land is here cheap, and capital dear, it is
necessary to carry on the cultivation of land _extensively_; that is,
save in capital and labor, and allow the factor nature to perform the
most possible. The clearing up of untilled land, or the draining of
swampy land etc., would be frequently injurious here; for it would
require the use of a very large amount of capital to obtain land of
comparatively little value.

In large cities, it is customary to build houses high in proportion to
the dearness of the land.[198-2] Thus, in England, where the rate of
interest is low and wages high, labor is readily supplanted by capital.
In countries like the East Indies or China, the reverse is the case. I
need only call attention to the palanquins used in Asia instead of
carriages; to the men who in South America carried ore down eighteen
hundred steps to the smelting furnaces,[198-3] and, on the other hand,
to the "elevators," so much in favor in England, which are used in
factories to carry people from one story to another inside to save them
the trouble of going up stairs.[198-4]

     [Footnote 198-1: The sickle instead of the scythe; careful
     threshing by hand, and, where the rate of interest is low,
     threshing by machinery instead of the treading out of the
     sheaf by oxen. Thus in Paris the scraps from restaurants and
     soap factories are made into stearin; and the remnants in
     shawl factories in Vienna are sent to Belgium to be used by
     cloth manufacturers.]

     [Footnote 198-2: Remarked in ancient times of Tyre, which
     was situated on a small island, and, therefore, without the
     possibility of horizontal extension. (_Strabo_, XVI, 757.)]

     [Footnote 198-3: _Humboldt_, N. Espagne II, ch. 5, II, ch.
     11.]

     [Footnote 198-4: Thus, in England, the safety of railroad
     trains is not secured as in Germany by a multitude of
     watchmen, etc.; but by solid barriers, by bridges at every
     crossing, in other words, by capital.]


SECTION CXCIX.

INFLUENCE OF FOREIGN TRADE.

Foreign trade, that great means of coöperation of labor among different
nations, affords such a remedy in a very special manner. It very
frequently happens that the undertakers of one country, when a certain
factor of production seems too dear at home, borrow it elsewhere. Thus,
for instance, a country with a high rate of wages draws on another for
labor, and one with a high rate of interest on another for
capital.[199-1] We elsewhere consider such a course of things from the
standpoint of the supplying country, which in this way is healed of a
heavy plethora of some single factor of production which disturbs the
harmony of the whole. (§§ 187, 259, ff.). But, at the same time, the
supplied country, considered from a purely economic point of view, reaps
decided advantages therefrom. If, for instance, a Swiss confectioner
returns from Saint Petersburgh to his home, after having made a fortune
in an honest way, no one can say that Russia has grown poorer by the
amount of that fortune. This man made his own capital; if he were to
remain in Russia, its national economy would be richer than before his
immigration thither. Now, it is, at least, no poorer, and has in the
meantime had the advantage of the more skilled labor of the
foreigner.[199-2] And, so, when a capitalist living in Germany purchases
Hungarian land, the national income of Hungary is diminished by the
amount of the annual rent which now goes to Germany; but it receives an
equal amount in the interest on capital, provided the purchase was an
honorable one and the capital given in exchange for the land honestly
invested.[199-3] If Hungary, in general, had a superabundance of land
but a lack of capital, the economic advantage is undoubted.[199-4]

These economic rules, indeed, are applicable only to the extent that
higher and national considerations do not in the interest of all, create
exceptions to them. "Is not the life more than meat, and the body than
raiment?" No rational people will allow certain services to be performed
for them preponderantly by foreigners, even when they can be performed
cheaper by the latter--the services of religion, of the army, of the
state, etc. The same is true of landownership; and all the truer in
proportion as political and legal rights of presentation and other forms
of patronage are attached to it. Lastly, hypothecation-debts which go
beyond certain limits, may entail the same consequences as the complete
alienation of the land;[199-5] and Raynal may have been, under certain
circumstances, right when he said, that to admit foreigners to subscribe
to the national debt was equivalent to ceding a province to them.[199-6]
It is obvious that a great power may do much in this relation that would
be a risk to a small state.[199-7] [199-8]

     [Footnote 199-1: "The transportation of productive capital
     and industrial forces from one point where their services
     are worse paid for, to another where they find a rich
     reward, will not be apt to be made so long as the
     equilibrium may be obtained [most frequently much more
     easily] by the interchange of the products." (_Nebenius_,
     Œff. Credit, I, 48.) The repeal of the corn laws in England
     certainly diminished the emigration of English capital.]

     [Footnote 199-2: For an official declaration of the
     Brazilian state in this direction, see Novara Reise.]

     [Footnote 199-3: Basing himself hereon, _Petty_, Political
     Anatomy of Ireland, 82 ff., questions the usual opinion,
     that Ireland suffered so much from absenteeism. He says that
     a prohibition of absenteeism carried out to its logical
     conclusion would require every man to sit on the sod he had
     tilled himself. _Carey_, On the Rate of Wages, 1835, 477,
     calls English capitalists who draw interest from America,
     absentees.]

     [Footnote 199-4: The older political economists have, as a
     rule, ignored this law, and were wont to consider every
     payment of money to a foreign country as injurious. Thus,
     for instance, _Culpeper_, Tract against the high Rate of
     Usury, 1623, 1640, disapproves all loans made from foreign
     countries, because they draw more money in interest, and in
     repayment of the principal out of the nation, than they
     brought into it at first; and all the more, as the loan is
     generally procured, not in the precious metals, but in
     foreign goods, of which there is a superabundance in the
     home country. Similarly _Child_, Discourse of Trade, 1690,
     79, who claims that the creditor was always fattened at the
     expense of the debtor. Hence _v. Schröder_, Fürst, Schatz-
     und Rentkammar, 141, advises that the capital borrowed in
     foreign countries should be confiscated. Compare, also, _v.
     Justi_, Staatswirthschaft, II, 461. And yet the very
     simplest calculation shows, that if a man borrows $1,000 at
     5 per cent. and makes 10, he is doing a good business with
     the borrowed capital. This _Locke_, Considerations, 9,
     recognizes very clearly. Compare, also, _J. B. Say_, Traité,
     II, ch. 10, and _Hermann_, Staatsw. Unters., 365 seq.]

     [Footnote 199-5: Think of the English creditors in Portugal
     and the Genoese in Corsica (_Steuart_, Principles, II, ch.
     29.) Considered simply from an economic standpoint, the
     Edinburg Review, XX, 358, very clearly demonstrates that
     England should recruit her army from Ireland, where wages
     are so much lower than in Great Britain. But how dangerous
     in a political sense! In 1832, one-fourth of the stock of
     the United States Bank was in the hands of foreigners, and
     hence its opponents nick-named it the "British Bank." By the
     rules of the principal bank in Philadelphia, in 1836, only
     American citizens were allowed a vote in its proceedings.
     Similarly in the case of the Bank of France. (_M.
     Chevalier_, Lettres sur l'Amerique du N. I, 364.) It may be
     remarked in general, that the older political economists
     have based correct political views on false economic
     principles, while the more modern ignore them entirely.]

     [Footnote 199-6: Compare _Montesquieu_, E. des Lois L, XXII,
     17; _Blackstone_, Commentaries, I, 320.]

     [Footnote 199-7: Thus Austria conceded, in 1854-55, a number
     of railways to French capitalists, and always favored the
     purchase of landed estates by small foreign princes. In the
     latter case, Austrian influence abroad was much more
     promoted by the measure than was foreign influence in
     Austria.]

     [Footnote 199-8: Every nationality is not worth the
     sacrificing of the highest economic advantage or profit to
     it. Or, would it be preferable to leave the Hottentots and
     Caffirs, poor, barbarous and heathenish?]


SECTION CC.

INFLUENCE OF THE BRANCHES OF INCOME ON THE PRICE OF COMMODITIES.

In relation to foreign trade, in the narrowest sense of the term, fears
were formerly very frequently expressed and are sometimes even now,
which in the last analysis are based on the assumption that one country
might be underbid by another in all branches of commodities.[200-1] This
is evidently absurd. Whoever wants to pay for foreign commodities can do
it only in goods of his own. When he pays for them with money, the money
is either the immediate product of his own husbandry (mining
countries!), or the mediate product obtained by the previous surrender
of products of his own. To receive from foreign countries all the
objects which one has need of, would be to receive them as a gift.

It is just as absurd to fear that the three branches of income in the
same country's economy should be all relatively high at the same time,
and competition with foreign countries be thus made more difficult. Rent
and interest especially in this respect have to demean themselves in
ways diametrically opposed to each other.[200-2] When trade is entirely
free, every nation will engage at last in those branches of production
which require chiefly the productive forces which are cheapest in that
country; that is which the relatively low level of the corresponding
branch of income recommends to individual economy and enterprise. The
merely absolute and personal height of the three branches of income has,
as we have said, no direct influence on the price of commodities. In
this respect, all these may be higher in one country than in another.
Thus, for instance, English landowners, capitalists and workmen may be
all at the same time in a better economic condition respectively than
Polish landowners, capitalists and workmen, when the national income of
England stands to its area and population in general, in a much more
favorable ratio than the Polish.[200-3]

     [Footnote 200-1: Thus, _Forbonnais_, Eléments du Commerce I,
     73. _J. Moser_, Patr. Ph., I, No. 2.]

     [Footnote 200-2: For a thorough refutation of the error that
     everything is dearer in England than in France, see Journ.
     des Econ., Mai, 1854, 295 seq. A distinguished architect
     assured me in 1858, that a person in London could build
     about as much for £1 as for from 6 to 7 thalers in Berlin;
     only the aggregate expense in both countries is made up of
     elements very different in their relative proportions.]

     [Footnote 200-3: We very frequently hear that countries with
     high wages must be outflanked in a neutral market by
     countries with a low rate of wages. _Ricardo's_ disciples
     reject this, because a decrease in the profit would put the
     undertaker in a condition to bear the loss caused by the
     high wages paid. See Report of the Select Committee on
     Artisans and Machinery. _Senior_ ridicules such reasoning
     very appropriately by inquiring: "Might not the loss enable
     him to bear the loss?" Outlines, 146. And so _J. B. Say_
     thinks that wages are always lowest when undertakers are
     earning nothing. The truth is rather this: a country with a
     relatively high rate of wages cannot, in a neutral market,
     offer those commodities the chief factors required for the
     production of which is labor; but the comparatively low rate
     of interest or low rents, or the lowness of both found in
     connection therewith, must fit it to produce other
     commodities very advantageously. If, therefore, the rate of
     wages rises, the result will be to divert production and
     exports into other channels than those in which they have
     hitherto flowed. The old complaint of Saxon agriculturists,
     that there is a lack of labor in the country, is certainly
     very surprising in a nation as thickly populated as Saxony.
     But the remedy proposed by the most experienced
     practitioners consists chiefly in a higher rate of wages to
     enable workmen to care for themselves in old age, the
     introduction of the piece-work system and an increase of
     agricultural machines. But it seems to me, that the whole
     situation there points to the advantage of in part limiting
     the large farming hitherto practiced to live-stock raising
     and other branches in which labor may be spared, and in part
     of replacing it, by small farming of plants which are
     objects of trade.

     Many points belonging to this subject have been very well
     discussed by _J. Tucker_, in his refutation of _Hume's_
     theory on the final and inevitable superiority of poor
     countries over rich ones in industrial matters. (Four Tracts
     on political and commercial Subjects, 1774, No. 1; _L.
     Lauderdale_, Inquiry, 206.)]


SECTION CCI.

HARMONY OF THE THREE BRANCHES OF INCOME.--INDIVIDUAL DIFFERENCE IN THEM.

As national-economical civilization advances, the personal difference of
the three branches of income is wont to become more and more sharply
defined.[201-1] The struggle between landowners, farmers and workmen,
which Ricardo necessarily assumed, did not exist at all in the middle
ages; since landowners and farmers were then usually one and the same
person, and since workmen, either as slaves or peasants, were protected
against competition properly so called. And so in the industry of that
time, based on the trades or on domestic industry.[201-2] [201-3]

When, later, the division of labor increases, all the differences of
men's aptitudes are turned to more advantage, and are more fully
developed. In the same proportion that a working class is developed, the
members of which are nothing but workmen, and can scarcely hope to
possess capital or land,[201-4] there grows up, side by side with it, a
class of mere capitalists, who come to obtain an ever-increasing
importance.

Considered from a purely economic point of view, this transition has its
great advantages. How much must the existence of a special class of
capitalists facilitate the concentration of capital and the consequent
promotion of production, as well as its (capital's) price-leveling
influx and outflow! Even "idle" capitalists have this of good, that,
without them, no competent man, destitute of means could engage in any
independent enterprise. When, indeed, the gulf between these two classes
passes certain bounds, it may, politically and socially, become a great
evil. (§ 63.)[201-5]

     [Footnote 201-1: Among nations in their decline, rent and
     interest fall into one possession again, because capitalists
     here are wont to buy the land. (_Roscher_, Nationalökonomik
     des Ackerbaues, § 140 ff.)]

     [Footnote 201-2: Related to this peculiarity of the middle
     ages is the fact that the canon law looked with disfavor on
     the personal separation of the three factors of production.
     So also in the prohibition of the _Weddeschat_ referred to §
     161, instead of rent-purchase (_Rentekauf_), also by
     extending the idea of partnership to a number of
     transactions which are only forms of loan. (_Endemann_ in
     _Hildebrand's_ Jahrb., 1863, 176 ff.) Antiquity also, with
     the independence of its οἶκος, with its slavery, etc., had
     not developed the difference between the three branches of
     industry to any extent. _Rodbertus_, in _Hildebrand's_
     Jahrbb., 1865, I, 343.]

     [Footnote 201-3: If older writers, like _Steuart_, etc.,
     speak so little of capital, labor and rent, and so much of
     city and country, it is not on account of ignorance simply.
     The contrast between the latter was then much more important
     than to-day, and that between the former much less
     developed. When, indeed, _Colton_, Public Economy of the
     United States, 1848, 155 ff., claims that because in America
     the three branches of income do not exist in so separated a
     condition as in Europe, therefore European Political Economy
     and its theories are not applicable to America, he forgets
     that science should not be simply a description or
     impression made of the reality, but an analysis of it.]

     [Footnote 201-4: It is a very characteristic fact that, in
     our days, when workmen are spoken of, it is generally day
     laborers and tradesmen that are understood. In Prussia, in
     1804, 17.8 per cent. of the population earned their living
     by letting out their labor; in 1846, 22.8 per cent. as
     day-laborers, servants, journeymen, tradesmen and factory
     hands. (_Dieterici._)]

     [Footnote 201-5: _Ricardo_, Principles, ch. 4, recognizes
     the bright side as well as _Sismondi_, N. P., I, 268, or
     _Buret_, De la Misère des Classes laborieuses en Angleterre
     et en France, 1841, its dark side. _Sismondi_ thinks that
     land and the capital employed in its cultivation are found
     to the greatest disadvantage in the hands of the same
     person. The existence of a thrifty peasant class (also of a
     class of tradesmen) is one of the best means to prevent the
     too wide separation of the three branches of income.]


SECTION CCII.

HARMONY OF THE THREE BRANCHES OF INCOME.--NECESSITY OF THE FEELING OF A
COMMON INTEREST.

Every class corresponding to a branch of the national income must live
with the consciousness that its interests coincide with the economic
interests of the whole nation. Whenever the entire national income
increases, each branch of it may increase without any injury to the
others, and, as a rule, does really increase.[202-1] But it is possible
that the land owning class may be specially dependent on the prosperity
of the whole people. How easy it is for workmen to emigrate; and how
much easier yet for capital! England, to-day, can scarcely carry on a
great war, in which it would not, at least at the beginning, have to
fight English capital.[202-2] Where the treasure is, the heart is also!
The land alone is immovable. It alone cannot be withdrawn from the
pressure of taxation or from the distress of war. It alone cannot flee
into foreign parts.[202-3] [202-4] At the same time, it cannot be denied
that the possibility of being able to carry one's fortune out of a
country in one's pocketbook and to be able to procure there with one's
money the same conveniences, customs, etc., to which one was accustomed
at home, is, under certain circumstances, an important element of
political and religious freedom. Moreover, the bright side and the dark
of every class of owners, especially the dread of all unnecessary and
also of all necessary change, must be common to rent and interest.
Hence, where there is a marked and well-defined separation of the
branches of income, it will be always considered a difficult but
unavoidable problem, how to enable mere labor to take an active part in
the affairs of the state.[202-5]

In times when calm prevails (not, however, in transition-crises such as
are referred to in § 24), there is a public opinion concerning merit and
reward, we might say a public conscience, by which a definite relation
of the three branches of income to one another is declared equitable.
Every "fair-minded man" feels satisfied when this relation is realized,
and this feeling of satisfaction is one of the principal conditions
precedent to the prosperity of production; inasmuch as upon it depends
the participation (_Theilnahme_) of all owners of funds and forces.
Every deviation from this relation or proportion is, of course, a
misfortune,[202-6] but never so great as when it takes place at the
expense of the wages of labor. It should never be forgotten that rent is
an appropriation of the gifts of nature, and that interest is a further
fruit obtained by frugality from older labor already remunerated.
Besides, the rate of wages when high, generally adds to the efficiency
of labor, which cannot be claimed for interest or rent.[202-7] The best
means to preserve the harmony of the three branches of income is,
however, universal activity. "Rich or poor, strong or weak, the idler is
a knave." (_J. J. Rousseau._)

     [Footnote 202-1: The contrast between _Adam Smith_, at the
     end of the first book, and _Ricardo_, ch. 24, in regard to
     this point, is very characteristic of the times of those two
     authors. According to _Smith_, the private interests of the
     landowners and laborers run entirely parallel; only both
     classes are easily deceived as to their own interests.
     Capitalists understand their own interest very well, and
     represent it with great energy; but their interest is in
     opposition to the common good, in so far as their profit
     among a poor and declining people is higher than among a
     rich and flourishing one. _Ricardo_, on the other hand,
     thinks that the interest of the landowners is opposed to
     that of all others for the reason that they desire that the
     cost of the production of wheat etc. should be as high as
     possible.

     Related to this is the fact that, in _Adam Smith's_ time,
     the new theory of rent remained almost unnoticed, but that
     after 1815, it became rapidly popular. In a similar way, the
     socialists of the present time are wont to charge the
     undertaking class with opposing their own interests to those
     of the whole people, meaning by the whole the majority. (§
     196 a.)]

     [Footnote 202-2: Towards the end of the 14th century the
     great Flemish merchants always sided with the absolutism of
     France in opposition to their own _Artevelde_.]

     [Footnote 202-3: Hence it is, that in so many constitutions,
     charters of cities, etc., the exercise of the higher rights
     of citizenship is conditioned by the possession of a certain
     quantity of land, and that landownership is considered as a
     species of public function.

     I read, a short time ago, the life of a North-German
     noblemen who, in 1813, had fought bravely against the
     French, "although he was a man of large estates, and the
     enemy might therefore very easily have laid hands on them."
     If this "although" of his eulogist expressed the actual
     feeling of large landed proprietors, a great many old
     political institutions would have lost all foundation.

     _Ad. Müller_ was of opinion that the rights of
     primogeniture, etc., might be an obstacle in the way of the
     development of the net income of a nation's economy; but
     that they gave to the state and to the national life the
     warlike tone so necessary to them, etc. (Elemente, II, 90.)]

     [Footnote 202-4: "The Roman capitalists on whom Pompey
     counted, left him in the lurch at the moment of danger,
     because Cæsar destroyed only the constitution, but respected
     their business relations." (_K. W. Nitsch._)]

     [Footnote 202-5: _Kosegarten_, Nat. Oek., 186, thinks that,
     on account of the struggle between the labor interest and
     the interest of capitalists, in our times, the "fourth
     estate" is not as well represented by persons belonging to
     the propertied classes as the constitutionalist party
     thinks. And in fact, _Jarke_, Principienfragen, 1854, 197,
     would have it represented by the government, in order to
     prevent the struggle between rich and poor. See
     _Cherbuliez_, Riche ou Pauvre, p. 242 seq.]

     [Footnote 202-6: _A. Walker_ shows, in a very happy manner,
     how no misfortune, however great, whether it come from
     heaven or from earth, in the shape of pestilence, drought,
     flood or oppressive taxation, so rapidly and hopelessly
     ruins a nation's economy as when the harmony which should
     exist between capital and labor is disturbed by foul play or
     legal frauds between labor or capital and their reward. (Sc.
     of Wealth, 66.)]

     [Footnote 202-7: Compare _Lotz_, Revision, III, 322 ff.,
     327, 334 ff. Handbuch, I, 511 ff. _Lafitte_, Sur la
     Réduction de la Rente, 56. _Fuoco_ exaggerates this into the
     principle: _che la distribuzione, e non la produzione, sia
     la prima e principal operazione in economia_. (Saggi
     economici, II, p. 44.)]



CHAPTER VII.

DISTRIBUTION OF NATIONAL INCOME.


SECTION CCIII.

EFFECT OF AN EQUAL DIVISION OF THE NATIONAL INCOME.

The best distribution of the national income among a people is that
which enables them to enjoy the greatest amount and variety of real
goods, and permanently to produce real goods in an increasing quantity
and variety.

If the income of a people were divided equally among all, each one would
indeed, be, to a very great extent, independent of all others. But then,
no one would care to devote himself to the coarser and less agreeable
occupations, and these would be either entirely neglected, or people
would have to take turns in engaging in them.[203-1] (§ 9.) And thus
would disappear one of the chief advantages of the division of labor,
viz: that the higher orders of talent are devoted to the higher orders
of labor. Besides, it is very doubtful, whether, under such
circumstances, there would still be any solvent (_zahlungsfähige_)
demand for the achievements of art.

Nor would the saving of capital prosper, where such equality prevailed.
Most men consider the average outlay of their equals as an unavoidable
want, and save only to the extent that they possess more than others of
their class. If, therefore, every one had an equal income, no one would
consider himself in a condition to save.[203-2] The same consideration
would deter most men from every economic venture, and yet no great
progress is possible where no venture is made.[203-3] [203-4]

     [Footnote 203-1: According to _Schäffle_, System, II, 379
     ff., "the distribution of the social return of production
     which conduces to the attainment of the highest measure of
     civilization in the moral association of men and in all the
     grades of that association, and thereby to the satisfaction
     of all true human wants in the highest degree." Thus only
     can a satisfactory line of demarkation be drawn between the
     profit of capital and the wages of labor (384).]

     [Footnote 203-2: See _Aristoph._, Plut., 508 ff. Not taken
     into consideration sufficiently by _Benjamin Franklin_, in
     his eulogy of the equality of property: The internal State
     of America, 1784.]

     [Footnote 203-3: The essential characteristic of the desert
     is, according to _Ritter_, Erdkunde, I, 1019 seq., its
     uniformity. No break in the horizontal plain, and hence no
     condensation of atmospheric vapor into bodies of water of
     any considerable size. The composition of the soil is
     everywhere the same; nothing but masses of silex and salt,
     hard and sharp. Lastly, extreme mobility of the surface,
     which undulates with every wind, so that no plant can take
     root in it. Nearly every feature in this picture finds its
     analogon in the extreme political and economic equality of
     men.]

     [Footnote 203-4: _Les supériorités, qui ne sont dues qu'à,
     un usage plus intelligent et mieux réglé de nos facultés
     naturelles, loin d'être un mal, sont un véritable bien.
     C'est dans la plus grande prospérité, qui accompagne un plus
     grand et plus heureux effort, qu'est le principe de tout
     développement._ (_Dunoyer_, Liberté du Travail, IV, 9, 10.)
     But, indeed, the rich man should never forget that society
     "inasmuch as it permits the concentration of wealth in his
     hands, expects that he will employ it to better advantage
     than the mass of mankind would if that same wealth were
     equally divided among them." (_Brentano._)]


SECTION CCIV.

DISTRIBUTION OF NATIONAL INCOME.--MONEYED ARISTOCRACIES AND PAUPERISM.

The extreme opposite of this, when the middle class disappears and the
whole nation falls into a few over-rich men and numberless proletarians,
we call the oligarchy of money, with pauperism as the reverse of the
medal. Such a social condition has all the hardship of an aristocracy
without its palliatives. As it is, as a rule, the offspring of a
degenerated democracy,[204-1] it cannot in form depart too widely from
the principle of equality. Only get rich, they cry to the famishing
poor; the law puts no obstacle in your way, and you shall immediately
share our position.[204-2] Here the uniformity and centralization of the
state, which are an abomination in the eyes of genuine aristocracy, are
carried to the extreme. Capital takes the place of men, and is valued
more than men. All life is made to depend on the state, that its
masters, the great money-men, may control it as they will. The falling
away of all restrictions on trade, and of all uncommercial
considerations relating to persons and circumstances, gives full play to
capital, and speculators seek to win all that can be won. And, indeed,
all colossal fortunes are generally made at the expense of others,
either with the assistance of the state-power or by speculation in the
fluctuations of values.[204-3] The dependence of proletarians on others
is here all the greater, because from a complete absence of capital and
land, so far as they are concerned, they are compelled, uninterruptedly,
to carry their entire labor-force to market; and also because the supply
of labor is made in masses embracing a large number of individuals,
while the demand for labor lies in the hands of very few, and may be
very readily and systematically concentrated.[204-4] So great and
one-sided a dependence is, for men too far removed from one another for
real mutual love, doubtless one of the greatest of moral temptations. It
is as easy a matter for the hopelessly poor to hate the law, as it is
for the over-rich to despise it.[204-5] Under such circumstances, the
contagious power of communism, the dangers of which to order and freedom
we have treated of in § So, is great. There is a dreadful lesson in the
fact of history, that six individuals owned one-half of the province of
Africa, _when Nero had them put to death_![204-6] Externally, a moneyed
oligarchy will always be a weak state. The great majority who have
nothing to lose take little interest in the perpetuation of its
political independence. They rather rejoice at the downfall of their
oppressors hitherto, and are cheered by the hope of obtaining a part of
the general plunder.[204-7] The rich, too, separated from the neglected
and propertyless masses of the nation, and rightly distrustful of them,
begin to forget their nationality, and to balance its advantages against
the sacrifices necessary to preserve it. But, a merely materialistic
calculation leads doubtless to the conclusion, that universal empire is
the most rational form of the state. The world-sovereignty of Rome was,
by no circumstance more promoted than by the struggles between the rich
and the poor, which devastated the _orbis terrarum_, and in which the
Romans generally sided with the property classes.[204-8] [204-9] [204-10]
[204-11] However, the worst horrors of the contrast here described can
occur only in slave-countries. Compare _Roscher_, Nationalökonomik des
Ackerbaues, § 141.

     [Footnote 204-1: The more the lower classes degenerate into
     the rabble, and the more the national sovereignty comes into
     the hands of this rabble, the easier will it become for the
     rich to buy up the State.]

     [Footnote 204-2: In the middle stages of the nation's
     economy, such as are described in §§ 62, 66, 90, 207, in
     which even the relative advantages of industry on a large
     scale over industry on a small scale, are not much developed
     the making political rights dependent on the possession of a
     certain amount of property is certainly a means of promoting
     equality. Hence, therefore, a reconciliation between the
     differences of class created by birth, may be effected for a
     long time here.]

     [Footnote 204-3: _Hermann_, Staatsw. Untersuchungen, II,
     Aufl. 136.]

     [Footnote 204-4: _Necker_, Législation et Commerce des
     Grains, 1775,1. passim. Compare _Bacon_, Serm fideles, 15,
     29, 34, 39.]

     [Footnote 204-5: _Schiller's_ terrible words:

          "_Etwas muss er sein eigen nennen,
            Oder der Mensch wird morden und brennen._"

     --i. e., "Something must he call his own, or man will murder
     and burn."

     It is one of _J. G. Fichte's_ fundamental thoughts that as
     all property is based on mutual disclaimer, the person who
     has nothing of his own, has disclaimed nothing, and
     therefore reserves his original right to everything.
     (Geschlossener Handelstaat., Werke, III, 400, 445.)]

     [Footnote 204-6: _Plin._, H. N., XVIII, 7.]

     [Footnote 204-7: How frequently this circumstance turned to
     the advantage of the Germans during the migration of
     nations! Compare _Salvian_, De Gubern, Dei, VII. Very
     remarkable answer given by a Roman taken prisoner by Attila,
     why it must be more agreeable to live among the Huns than in
     the over-civilized Roman Empire: Prisci legatio, in
     _Niebuhr_, Corp. histor. Byzant., I, 191 ff. And thus the
     conquest of Constantinople by the crusaders, took place amid
     the jubilation of the populace and of the country people:
     _Nicetus_, Chron. Hist. Urbs capta, § 11, 340. This law of
     nature becomes most apparent when one compares the
     preponderating power of Rome against Carthage, with its
     weakness against the Cimbri and Mithradates. May not
     Hannibal have been to his own country a phenomenon like that
     which Cæsar was afterwards to Rome? A healthy and united
     Carthage he certainly could have held against Italy.]

     [Footnote 204-8: On the tendencies of the later times of the
     Jewish monarchy toward an oligarchy of money, see _Amos_, 2,
     6 seq.; 6 1 ff.; 8, 5 ff.; _Micha_, 2; 2 _Isaias_, 5, 8 seq.
     Compare _Nehem._ 5. While Exodus, 30 and 38, mentions over
     663,000 taxable men, the ten tribes comprising the kingdom
     of Israel had only 60,000. XII Kings, 15, 19. _Ewald_,
     Geschichte des Volkes Israel, II, 2, 320.]

     [Footnote 204-9: The spirit of the Grecian moneyed oligarchy
     is best revealed by _Plato_, De Republ., VIII, and
     _Aristotle_, Polit., III, VI, passim, the first of whom
     considers the contrast between rich and poor as in itself
     demoralizing (IV, 422). All that can be called by the name
     of tradition, the political faith of a people, and the
     national feeling of right, had, in the Grecian world, been
     transformed into mere reasoning and concerned itself, with
     frightful exclusiveness, to the contrast existing between
     rich and poor. Compare _Aristot._, Pol., II, 4, 1, with
     _Droysen_, Gesch. des Hellenismus, II, 496 etc., and the
     citations from _Menander_ in _Stob._, Serm., LXXXIX, 503, in
     which gold and silver are proclaimed almighty. It is a
     remarkable proof of the _omne venalia esse_ in Greece that
     _Thucydides_ (II, 65) lauds even _Pericles_, especially for
     his incorruptibility. _Demosthenes_ says of his
     contemporaries, that it excited envy when any one was
     bribed, laughter when he confessed it; that he who was
     convicted of it (bribery) was pardoned, and he who blamed
     it, hated. (Phil., II, 121.) Compare the list in _Demosth._,
     Pro. Cor., 324; _Pausan_, III, 10. In Athens, on the
     occasion of the census-constitution imposed forcibly on the
     state by _Antipater_, that in a population of 21,000
     citizens, only 9,000 had a property worth 2,000 drachmas or
     more, that is, enough for a man to live on in the most
     niggardly way, on the highest interest it would yield. If,
     in addition to this, account be taken of the large number of
     slaves, the small number of the property class is all the
     more surprising, inasmuch as Lycurgus' financial
     administration bears evidence that the people were in a
     flourishing and comfortable condition; that afterwards,
     peace for the most part prevailed, and that Alexander's
     victories enabled Grecian commerce to make large gains.
     Compare _Boeckh_, Staatsh. IV, 3, 9.

     In Sparta, the governing class finally numbered only
     700 families, 100 of which owned all the land, and 600
     of which were, therefore, only noble proletarians. It
     is well known that the social attempts at reform by
     Agis and Kleomenes only precipitated the downfall of
     the state. (_Plutarch_, Agis and Kleomenes.) _Aratos_
     owed a great part of the consideration in which he was
     held to the reputation which he obtained by protecting
     the property of the Sicyonian exiles (_Thirlwall_,
     History of Greece, VIII, 167), while on the other hand,
     men like _Agathocles and Nabis_ supported their faction
     by persecution of the rich, new debtor-laws and new
     division of land. (_Polyb._, XIII, 6, XVI, 13, XVII,
     17, XXVI, 2; _Livy_, XXXII, 38, 40, XXXIV, 31, XXXVIII,
     34; _Plutarch_, Cleom, 20.) _Livy_ expressly says that
     all the _optimates_ were in favor of the Romans, and
     that the multitude wanted _novare omnia_ (XXXV, 34). On
     the frightful struggle between these opposite parties,
     on the revolutions and counter revolutions, see also
     _Polyb._, XIII, 1, 2; XVIII, 36 ff., XXX, 14; XXII, 21;
     XXXVIII, 2, 3; _Diodor._, XIX, 6, 9; _Exc._, 587, 623;
     _Livy_, XLI, 25, XLII, 5; Pausan, VII, 14. In Bœotia,
     no one was for 25 years, chosen by the people for the
     higher offices, from whom they did not expect a
     suspension of the administration of justice in the
     matter of crimes and debts, as well as the spending of
     the national treasure. (_Polyb._, XX, 14, 5, 6.) The
     events at Corinth, before its conquest by the Romans,
     forcibly remind one of the Paris Commune of 1871. This
     decline had, as usual, begun earliest in the colonies:
     thus, in Sicily, even in _Thucyd._, V, 4. Milesian
     struggle off the πλουτὶς and χειρομάχα in _Plutarch_,
     Qu. Gr., 32; _Athen._, XII, 524.]

     [Footnote 204-10: The disappearance of the middle class in
     Rome, between the second and third Punic war, was brought
     about chiefly by the great foreign conquests made by it. An
     idea of the wealth which the governors of the provinces
     might extort may be formed from this among other facts, that
     Cicero originally demanded against Verres a fine of
     5,000,000 thalers. (_Cic._, in Verrem Div., 5.) Verres is
     related to have said, that he would be satisfied if he could
     retain the first year's booty; that during the second, he
     collected for his defenders; and during the third, for his
     judges! (_Cic._, in Verr., I, 14.) Even _Cicero_ became
     richer within the space of one year, in Cilicia, where it
     was well known he was not oppressive, by 110,000 thalers,
     which sum does not include numerous presents, pictures, etc.
     (_Drumann_, Gesch. Roms., VI, 384.) On the frightful
     oppression and extortion practised by Brutus (!) in Asia,
     see _Cicero_, ad. Att, V, 21; VI, 1. _Sallust_, in his
     Jugurtha, has shown how such men waged war, and to what
     extremes their well-deserved want might push them in his
     Catiline. _Patricium scelus!_ Most of the senators were in
     debt to Crassus; and this, together with his great political
     insurance-activity and power in elections, criminal cases at
     law, etc., it depended that he, for a time, figured beside
     Cæsar and Pompey.

     The wealth of these important personages must, and that not
     only relatively, have made the poor poorer and their luxury
     excited the covetousness of the people; but especially the
     great number of slaves they kept, combined with their
     pasturage system of husbandry, which rapidly spread over all
     of Italy after the provinces had emptied their granaries to
     supply the wants of the sovereign people, must have made it
     less and less possible for the proletarians to live by the
     work of their hands. Previously, the lower classes of the
     free born had been exempted from the military service, while
     slaves were conscripted for the fleet. Now, all this was
     changed; and thus was taken away one of the chief causes
     which had made the labor of free day laborers more
     advantageous on the larger estates. (_Nitzsch_, Gracchen,
     124 ff., 235 ff.) The spoils of war and conquest caused the
     higher middle class to prefer to engage in the usurious
     loaning of money rather than in industry which would much
     more rapidly have formed a small middle class. (_Mommsen_,
     R. G. I, 622 ff.)

     Hence, the _misera ac jejuna plebecula, concionalis hirudo
     aerarii_, according to _Cicero_, ad Att., I, 16, 6. At a
     time, when the Roman census showed a population of over
     1,500,000, Philippus, 104 before Christ, otherwise a
     "moderate" man, could claim that there were not 2,000
     citizens who had any property. (_Cic._, de Off., II, 21.)
     True, those few were in such a position, that Crassus would
     allow that those only were rich, who could feed an army at
     their own expense. (_Cicero_, Parad., VI, 61; _Plin._, H.
     N., XXXIII, 47.) Concerning the colossal private fortunes
     under some of the earlier imperators, see _Seneca_, De
     Benef., II, 27; _Tacit_., Ann., XII, 53, XIII, 32; XIV, 35;
     Dial. de Causis, 8, _Dio C._, LXIII, 2 seq.

     The clients of the time, that is the numerous poorly paid
     idlers treated as things of little value, in the service of
     the great, correspond, on a small scale, to the position of
     the great crowd in relation to the emperor. Compare
     _Friedländer_, Sittengeschichte Roms., I, 296 ff. As late as
     the West-Gothic storm, there were many houses which drew
     4,000 pounds in gold, and about 1/3 as much in kind, from
     their estates, per annum. (_Plut._, Bibl. Cod., 80, 63,
     Bekk.) Goddess Pecunia Majestas divitiarum, in _Juvenal_, I,
     113.

     If we take the Roman proletariat in its wider extent, the
     most frightful picture it presents is its slave-wars. Such a
     war Sicily had shortly before the _tribunate_ of the elder
     Gracchus, cost over a million (?) livres; and at the same
     time there was a great uprising of slaves desolating Greece.
     (_Athen._, VI, 83, 87 ff., 104.) A second war broke out in
     the time of Cimbri. But the most frightful was that under
     Spartacus, who collected 100,000 men, and the course of this
     uprising will always remain a type of proletarian and slave
     revolts. It originated among the most dangerous class of
     slaves, most dangerous because best prepared for the
     struggle, the gladiators, and among the immense _ergastula_,
     where they were held together in large masses. It spread
     with frightful rapidity, because the combustible material on
     which it fed was everywhere to be found. It was conducted
     with the most revolting cruelty. What the slaves demanded
     before all else was vengeance, and what dread had a
     gladiator of a death unaccompanied by torture?

     After the first successes of the slaves dissensions broke
     out among them. Such hordes can nowhere long preserve a
     higher object than the momentary gratification of their
     passions--a fact which shields human society from their
     rage. Piracy, also, is another side of this proletarian
     system. It found its strongest aliment in the system of
     spoliation practiced by the Romans in Asia Minor. The
     oppressed along the whole coast, joined the pirates
     "preferring to do violence rather than to suffer."
     (_Appian_, B. Mithr., 92, _Dio C._, XXXII, 3.) The temples
     and the wealthy Romans were in special danger. But the worst
     feature in the horrible picture was that many of the great
     shared in the spoils with the robbers. They bought slaves
     and other booty from them at mock prices, even close by the
     gates of Rome. (_Strabo_, XIV, 668 seq., _Dio C._, XXXVI,
     5.) Precisely as the slave-wars were looked upon with
     pleasure by the poorer free men. Incendiarism was one of the
     chief weapons of mutinous pauperism. (_Drumann_, IV, 282.)
     The celebrated bacchanalian trial and the questions of
     poisoning which followed it as a consequence (186 before
     Christ) may be looked upon, in Rome, as the first marked
     symptoms of the disruption between the oligarchy of money
     and the proletariat. This put the morality of the higher
     classes in a bad light, while, at the same time, a large
     slave conspiracy in Apulia, which was not suppressed until
     the year 185, exhibited the reverse of the picture. Cato,
     the censor, endeavored to oppose this tendency by high
     sumptuary taxes, and by establishing proletarian colonies.
     At the same time we see the various parties among the
     nobility uniting and the publicans joining them. (_Nitzsch_,
     Gracchen, 124 ff.) The history of the last hundred years of
     the Republic turns chiefly on the three great attempts made
     by the proletariat to overthrow the citadel of the moneyed
     oligarchy, under the Gracchi, under Marius and under Cæsar.
     The last was permanently successful but entailed the loss of
     the freedom of both parties.

     Among the pretty nearly useless remedies employed, besides
     those described in § 79, I may mention the following also:
     the great number of agrarian laws intended to lessen estates
     of too great extent owned by one person, and to restore a
     free peasant population, in the years 133, 123, 100, 91, 59
     before Christ; the law in Hannibal's time (_Livy_, XXI, 63)
     that no senator should own a ship with a capacity of more
     than 300 amphora; the provision (_Sueton._, Caes., 42) that
     all great herd-owners should take at least one-third of
     their shepherds from the ranks of freemen; the many laws _de
     repetundis_, the first of which was promulgated 149 before
     Christ, intended to protect the provinces against spoliation
     by the governors; the L. Gabinia, 56 before Christ, which
     prohibited the loaning by the provinces in Rome; lastly, a
     rigid enforcement of police provisions against slaves,
     especially against their bearing arms, which were carried to
     such an extent, that slaves who had killed a boar with a
     spear were crucified. (_Cicero_, in Verr., II, 3.) The chief
     rule of every real oligarchy of money is, while they hold
     the lower classes in general under their yoke with great
     severity, to keep dangerous elements in good humor at the
     expense of the state. Among these are especially the rabble
     in large cities and the soldiery. Compare _Roscher_,
     Betrachtungen über Socialismus und Communismus, 436, 437.]

     [Footnote 204-11: In medieval Italy, also, popular freedom
     was lost through a moneyed oligarchy and a proletariat.
     _Popolo grasso_ and _minuto_ (_bourgeoisie_--_peuple_) in
     Florence. The former were reproached especially with the
     breach of trust in the matter of the public moneys
     (_Sismondi_, Gesch. der Ital. Republiken, II, 323, seq.),
     which reminds one of the French cry, _corruption_ in 1847.
     _Machiavelli_ gives a masterly description of the class
     contrasts during the last quarter of the fourteenth century,
     in his Istoria Fiorent., III, a. 1378, 4. The poor, whose
     spokesmen recall the most desperate shibboleths of modern
     socialists, dwell principally on this, that there is only
     one important difference, that between rich and poor; that
     all men are by nature entirely equal; that people get rich
     only through deceit or violence; that the poor want revenge
     etc. It is significant how, in Florence, the largest banker
     finally became absolute despot, and that contemporaneously
     in Genoa, the Bank of St. George, in a measure, absorbed the
     state; the former supported by numerous loans made to
     influential persons like Crassus (_Machiavelli_, Ist. Fior.,
     VII); the latter by the overstraining of the system of
     national debt.]


SECTION CCV.

DISTRIBUTION OF THE NATIONAL INCOME.--HEALTHY DISTRIBUTION.

Hence a harmony of the large, medium and small incomes may be considered
the indispensable condition of the economic prosperity of a
people.[205-1] This prosperity is best secured when the medium-class
income prevails, when no citizen is so rich that he can buy the others,
and no one so poor that he might be compelled to sell himself. (_J. J.
Rousseau._)[205-2] Where there is not a numerous class of citizens who
have time enough to serve the state even gratis, as jurymen, overseers
of the poor, municipal officers, representatives of the people etc.
(compare § 63), and property enough to be independent of the whims and
caprices of others, and to maintain themselves and the state in times of
need, even the most excellent of constitutions must remain a dead
letter. Nor should there be an entire absence of large fortunes, and
even of inherited large fortunes. The changes of ministry which
accompany constitutional government are fully possible only when the
choice of men who would not lose their social position by a cessation of
their salaries as public functionaries is not altogether too
limited.[205-3] Thus the transaction of the most important political
business, especially that which relates to foreign affairs, requires a
peculiar elasticity of mind, and a capacity for routine on the grandest
scale, which with very rare exceptions, can be acquired only by
habituation to them from childhood, and which are lost as soon as the
care for food is felt. The bird's-eye-view of those who are born "great"
does not, by any means, embrace the whole truth of human things, but it
does a very important side of it. Among this class, as a rule, it is
easiest to find great party leaders, while leaders who have to be paid
by their party, generally become in the long run, mere party
tools.[205-4] It is true that it requires great intellectual and moral
power to resist the temptations which a brilliant hereditary condition
presents; temptations especially to idleness, to pride and debauchery.
For ordinary men, it is a moral and, in the end, an economic blessing,
that they have to eat their bread in the sweat of their brow,[205-5] and
that they can grow rich only by long-continued frugality.[205-6]
However, the distribution of the national income, and every change in
that same distribution, constitute one of the most important but at the
same time one of the most obscure departments of statistics.[205-7] When
inequality increases because the lower classes absolutely decline, there
is no use in talking any longer about the prosperity of the
nation.[205-8] It is different, of course, when only the higher classes
become, relatively speaking, higher yet. But even this latter kind of
inequality may operate disastrously, inasmuch as it nourishes the most
dangerous tendency of democracy, that of envy towards those who are
better off.

     [Footnote 205-1: _Verri_ Meditazioni, VI.]

     [Footnote 205-2: _Aristotle's_ view that, in a good state,
     the middle class should preponderate. (Polit. IV, 6, Sch.)
     _Sismondi_ says: _la richesse se réalise en jouissances;
     mais la jouissance de l'homme riche ne s'accroît pas avec
     ses richesses_. (Etudes sur l'Economie politique, 1837, I,
     15.)]

     [Footnote 205-3: If state offices were to be filled by
     doctors or lawyers who live by their practice, after a time,
     only those could be had who had no large practice to
     sacrifice, that is, beginners or obscuranti.]

     [Footnote 205-4: Per contra, see _Bazard_, Doctrine de Saint
     Simon, 323. But _Sismondi_ is certainly right: _nous ne
     croyons point, que les hommes qui doivent servir à
     l'humanité de flambeau naissent le plus souvent au sein de
     la classe riche; mais elle seule les apprécie et a le loisir
     de jouir de leurs travaux_. (Etudes, I, 174.)]

     [Footnote 205-5: To appreciate the demoralizing effects of
     an income obtained without labor and without trouble on men
     of small culture, we need only witness the bourgeoisie at
     great watering places, pilgrimage places, seats of courts
     and university cities supported largely by students.
     Similarly at Mecca, Medina, Meschhed, Rome, etc. (_Ritter_,
     Erdkunde VIII, 295 seq. IX, 32), and even in Palestine,
     during the crusades, when the miserable Pullanes counted on
     the tribute of the pilgrims. (_Wilken_, VII, 369, according
     to _Jacob de Vitriaco_.)]

     [Footnote 205-6: A man with $100,000 a year has a much less
     incentive to make savings than 100 men with $1,000 each per
     annum, for the reason that his economic wants are already
     all richly satisfied, and he can have little hope of
     improving it by saving. (_von Mangoldt_, V. W. L., 141.)]
     [Footnote 205-7: _Harrington's_ fundamental thought
     (1611-1677, Works, 1700) is, that the nature of the
     constitution of a state depends on the distribution of the
     ownership of its land. "Balance of property!" Where, for
     instance, one person owns all the land or the larger portion
     of it, we have a despotism; where the distribution is more
     equal, a democracy, etc. All real revolutions are based upon
     a displacement of the centre of gravity of property, since
     in the long run, superstructure and foundation can not be
     out of harmony with each other. For this reason, agrarian
     laws are the principal means to prevent revolutions.
     (_Roscher_, Gesch. der English. Volkswirthschaftslehre, 53
     ff.) _Montesquieu_ also pays special attention to the
     political consequences of the distribution of wealth. Thus,
     for instance, in monarchies, the creation of large fortunes
     should be promoted by the right of primogeniture; in
     aristocracies, on the other hand, the great wealth of a few
     nobles is as detrimental as that of extreme poverty. (Esprit
     des Lois, V, 8, 9.)]

     [Footnote 205-8: The common assertion of the socialists,
     that the inequality of property is frightfully on the
     increase, is as far from being proved as is the opposite one
     of _Hildebrand_, Nat. Oek. der Gegenwart und Zukunft, I, 245
     ff. According to _Macaulay_, Hist. of England, ch. 3, there
     were, in England, in 1685, only about three (ducal) families
     with an annual income of about £20,000 a year. The average
     income of a lord amounted to £3,000; of a baronet, to £900;
     of a member of the house of commons, to scarcely £800; and a
     lawyer with £1,000 per annum was considered a very important
     personage. At the same time, there were 160,000 families of
     free peasants, that is more than 1/7 of the whole
     population, whose average income amounted to from £60 to
     £70. For the year 1821, _Marshall_, Digest of all Accounts,
     etc., II, 1833, assumes, that there were 4,000 families with
     over £5,000 yearly income; 52,000 families with from £1,500
     to £5,000; 386,000 families with from £200 to £1,000;
     2,500,000 families with less than £200. Compare, _per
     contra_, the Edinburg Review, 1835. The income tax
     statistics of 1847 show that 22 persons had an income of at
     least £50,000 a year; 376 persons, from £10,000 to £50,000;
     788, from £5,000 to £10,000; 400, from £4,000 to £5,000;
     703, from £3,000 to £4,000; 1,483, from £2,000 to £3,000;
     5,234, from £1,000 to £2,000; 13,287, from £500 to £1,000;
     91,101, from £150 to £500.

     If we compare these numbers with the corresponding ones of
     the income tax of 1812, the numbers of those who returned an
     income of £150 to £500 increased 196 per cent.; of those
     with an income of from £500 to £1,000, 148 per cent.; of
     from £1,000 to £2,000, 148 per cent.; of from £2,000 to
     £5,000, 118 per cent.; of from £5,000 and more, 189 per
     cent.; while the population in general had increased by
     about 60 per cent. Compare Athenæum, August, 1850; Edinburgh
     Rev., April, 1857. Between 1848 and 1857, the development
     was less favorable, so that the incomes of from £150 to £500
     subject to taxation, increased only 7 per cent.; those from
     £500 to £1,000 about 9.56 per cent.; those from £10,000 to
     £50,000, by 42.4, and those over £50,000, 142.1 per cent.
     Between 1858 and 1864, the incomes derived from industry and
     commerce, subject to taxation below £200, had increased
     about 19.4 per cent.; those over £10,000, 59 per cent.;
     while the aggregate amount of all taxed incomes in this
     category increased 19 per cent. (Stat. Journal, 1865, 546.)
     According to _Baxter_, The National Income of the United
     Kingdom, 1868, there are now 8,500 persons with a yearly
     income of £5,000 and more, who draw in the aggregate 15.6
     per cent. of the national British income, and on the average
     nearly £15,000 each. There are, further, 48,800 persons with
     a yearly income of from £1,000 to £5,000; 178,300 with from
     £300 to £1,000; 1,026,400 with from £100 to £300; and
     1,497,000 with less than £100 a year from their property. In
     addition to this, 10,961,000 workmen on wages, with an
     aggregate income of £324,600,000. Compare §§ 172, 230.

     In France, the number of so-called _électeurs_, who paid
     direct taxes to at least the amount of 200 francs was, in
     1831, 166,583, and increased uninterruptedly until 1845,
     when it was 238,251, while the population had increased only
     8.5 per cent.

     In Prussia, the revenue from class-taxation up to 1840,
     increased, unfortunately, in a smaller proportion than the
     population: hence the lowest classes must have increased
     relatively more than the others. (_Hoffmann_, Lehre von den
     Steuern, 176 ff.) Between 1852 and 1873, according to the
     statistical returns from class-taxation and of the
     classified income tax, the growth of large incomes in the
     provinces of old Prussia, seems to have been much more rapid
     than that of the smaller ones. Thus, for every 100
     taxpayers, with an income of from 400 to 1,000 thalers,
     there was an increase to 175.5; of from 1,000 to 1,600
     thalers, for every previous 100, 210.2; from 1,600 to 3,200
     thalers, 232.3; of from 3,200 to 6,000, 253.9; of from 6,000
     to 12,000 thalers, 324.8; of from 12,000 to 24,000, 470.6;
     of from 24,000 to 52,000 thalers, 576.3; of from 52,000 to
     100,000 thalers, 568.4; of from 100,000 to 200,000 thalers,
     533.3; of over 200,000, 2,200. Hence, probably, a greater
     growth towards the top, than the general increase in the
     population will account for.

     This concentration of property took place most noticeably in
     Berlin, where for instance, between 1853 and 1875 the
     incomes of from 1,000 to 1,600 thalers increased 212.2 per
     cent.; those from 24,000 to 52,000, 994.1 per cent. There
     are now in the whole state 2.24 per cent. of the population
     (including those dependent on them) subject to the income
     tax; that is, estimated as having a yearly income of 1,000
     thalers. Of the remaining 97.76 per cent., more than a
     quarter, and probably more than one-half, are as a class
     free from taxation, because their income is presumably less
     than 140 thalers (6,049,699 against 532,367, exempt for
     other reasons and 4,850,791 belonging to classes subject to
     taxation: these three numbers probably not including
     dependents). Among the payers of an income tax, there are
     79,464 with an average income of 1,237 thalers per annum;
     41,366 with 2,171 thalers; 12,305 with 4,279 thalers; 4,030
     with 8,383 thalers; 1,655 with 16,527 thalers; 513 with
     32,428 thalers; 163 with 65,595 thalers; 39 with 137,692
     thalers; 21 with 427,142 thalers; and one with 1,700,000
     thalers per annum. (Preuss. statist. Ztschr., 1875, 116,
     132, 142, 145, 149.) As the reverse of this picture, we may
     take the fact that, in 1870, of 1,047,974 cases of
     guardianship, there were only 208,614 in which there was any
     property to be looked after. (Justiz-Minist-Blatt, 1872, No.
     6.)

     The figures from Bremen are very favorable. The incomes
     subject to taxation amounted, in 1847, to 71.6 thalers per
     capita; in 1869, to 131.2. The incomes subject to taxation
     in class No. 1, that is from 250 to 399 thalers, increased
     78 per cent.; in class No. 2, 400 to 499 thalers, 45 per
     cent.; in class No. 3, 500 thalers and more, by 57 per cent.
     The average income of the third class amounted, in 1847-50,
     to 1,952 thalers; 1866-69, to 2,439 thalers. In 1848, there
     were, of estates of over 3,000 thalers subject to taxation,
     only 38 to every 1,000 inhabitants; in 1866, 49. (Jahrb. f.
     amtl. Statistik Bremens, 1871, Heft 2, p. 185 seq.)]



BOOK IV.

CONSUMPTION OF GOODS.



CHAPTER I.

CONSUMPTION OF GOODS IN GENERAL.


SECTION CCVI.

NATURE AND KINDS OF CONSUMPTION.

As it is as little in the power of man to destroy matter as it is to
create it, we mean by the consumption of goods, in the broad sense of
the word, the abolition of or the doing away with an utility without any
regard to the question whether another higher utility takes its place;
in its narrower sense (consumption proper), a decrease of resources of
any kind. Consumption is the counterpart of production (§ 30), the top
of the tree of which production is the roots, and the circulation and
distribution of goods the trunk. (_A. Walker._) There is, also, what
Riedel calls immaterial consumption, as when a utility disappears,
either because the want itself to which it ministers disappears or
because views have changed as to the means to be employed towards its
satisfaction.[206-1]

     [Footnote 206-1: Diminutions of value, such, for instance,
     as an almanac, a newspaper, etc., undergoes simply from the
     appearance of the next years' etc.; of a shield or a part of
     an officer's uniform with the initials of the reigning
     sovereign, only because of the fact of a new succession to
     the throne. A boot or a glove loses a great part of its
     value when its mate is destroyed. (_Rau_, Lehrbuch, § 319.)]


SECTION CCVII.

NATURE AND KIND OF CONSUMPTION.--THE MOST USUAL KIND.

The commonest kind of consumption is that caused by the use of a thing,
or by the employing of it for the purpose of acquisition or of
enjoyment.[207-1] From time immemorial, enjoyment-consumption has been,
preponderantly, the affair of women, as acquisition-consumption has been
the business of men.[207-2] Other circumstances being equal, the degree
or extent of consumption by use (use-consumption) is determined by
national character. Thus, for instance, the cleanliness and love of
order characteristic of the Dutch have contributed greatly to the long
preservation in good condition of their dwellings and household
articles.[207-3]

In the higher stages of civilization, the use of goods is wont to be
divided more and more into special branches, according to the different
peculiarities of the goods themselves, and of the different wants of
men; a course of things which is, both as cause and effect, intimately
related to the division of labor. I here speak of a principle of
_division of use_ (differentiation and specialization). Thus, for
instance, Lorenz Lange, in 1722, found only one kind of tea in the trade
between Russia and China; Müller, in 1750, found seven; Pallas, in 1772,
ten; and Erman, in 1829, about seven hundred.[207-4] As the number of
gradations of different kinds of the same goods increases with
civilization, there is, in times of war, a retrogression in this
respect, to a lower economic stage.[207-5]

Opposed to this, we have the principle of the combination of use. There
are numberless kinds of goods which may serve a great many just as well
as they can one exclusive user; and this either successively or
simultaneously, inasmuch as there is no necessity why, with the
increasing use of the object, the size of the object itself should
increase in an equal proportion. (According to Marlo: wealth usable by
one; wealth usable by many; wealth usable by all.) Thus, for instance, a
public library may be incomparably more complete, and accessible in a
still higher degree than ten private libraries which together cost as
much as it did. And so, a restaurant-keeper may serve a hundred guests
at the same time, with a much greater table-variety, more to their
taste, and at a more convenient time, than if each person made the same
outlay for his private kitchen.[207-6] While formerly, only the great
could travel rapidly, combination of use has enabled even the lower
classes to do so in our own days. There is, doubtless, a dark side to
this picture, too. Combination of use requires frequently great
sacrifices of personal independence, which should not be underestimated
when they affect individuality of character, or threaten the intimacy
and closeness of family life. It is, however, a bad symptom when the
division of use increases without any corresponding combination of
use.[207-7] [207-8]

     [Footnote 207-1: We should also mention here destructive
     consumption, where the defenders of a country destroy
     buildings, supplies, etc., only that the enemy may not use
     them.]

     [Footnote 207-2: Compare Die Lebensaufgabe der Hausfrau,
     Leipzig, 1853; _von Stein_, Die Frau auf dem Gebiete der
     National Oekonomie, 1875, and the beautiful remarks of
     _Schäffle_, N. Oek., 166; and _Lotz_, Mikrokosmus, II, 370
     ff.]

     [Footnote 207-3: In Germany horses are said to last, on an
     average, 18 years; in England 25; in France and Belgium,
     only 12 years. (See for the proofs of this _Rau_, Handbuch
     II, § 168.) The more civilized a people are, the less do
     they completely destroy values by use; and the more do they
     use their old linen, etc. as rags; their remains of food as
     manure, etc. (_Roesler_, Grunds., 552.)]

     [Footnote 207-4: _Ritter_, Erdkunde, III, 209. Thus, the
     French in the 13th century were acquainted with only three
     kinds of cabbage; in the 16th, with six, about 1651, with
     12; they are now acquainted with more than 50; in the 16th
     century they knew only 4 kinds of sorrel; in 1651, 7; about
     1574, only 4 kinds of lettuce; to-day they know over 50;
     under Henry II., they were acquainted with 2 or 3 kinds of
     melons; in the 17th century, with 7; now they are acquainted
     with over 40. (_Roquefort_, Histoire de la Vie privée des
     Fr., I, 179 ff.) Instead of the four kinds of pears
     mentioned by de Serre (1600), there were, in 1651, about
     400. (I, 272.) Liebaud, 1570, knew only 19 kinds of grapes;
     de Serre, 41. (_Roquefort_, III, 29 ff.) According to the
     "Briefen eines Verstorbenen," IV, 390, the first
     kitchen-gardener in London had 435 kinds of salad, 240 of
     potatoes, and 261 of pease.

     And so precisely in ancient times. While the earlier Greeks
     speak of but one οἶνος, even at the most sumptuous feasts
     (compare, however, _Homer_, Il. XI, 641;) and while even in
     the time of Demosthenes only very few kinds of wine were
     known (_Becker_, Charicles, I, 455), _Pliny_, H. N. XIV, 13,
     was acquainted with about 80. In this respect the moderns
     have never returned to ancient simplicity; at least the
     fabliau, La Bataille des Vins, introduces us to 47 kinds of
     French wine in the 13th century. (Compare also _Wackernagel_
     in _Haupt's_ Zeitschrift für deutsches Alterth., VI. 261
     ff., and _Henderson_, History of ancient and modern Wines,
     1824.) The Lacedemonians, with their intentional persistence
     in a lower stage of civilization, used the same garment in
     winter and summer (_Xenoph._, De Rep. Laced., II, 4); while
     the contemporaries of Athenæos (III, 78 ff.) were acquainted
     with 72 kinds of bread. With what a delicate sense for good
     living the Romans in Caesar's time had discovered the best
     supply places for chickens, peacocks, cranes, thunny-fish,
     muraena, oysters and other shell-fish, chestnuts, dates,
     etc., may be seen in _Gellius_, N. A., VII, 16. Compare
     _Athen._, XII, 540.

     In the middle age of Italy, the houses had almost always
     three rooms: _domus_ (kitchen), _thalamus_, _solarium_.
     (_Cibrario_, E. P. del medio Evo, III, 45.) The manors or
     masters' houses built on the estates of Charlemagne had 3
     and 2 rooms, sometimes only 1, and sometimes 2 rooms and 2
     bedrooms. According to an old document of 895, a shed was
     worth 5 sols, a well-built manor 12. (_Anthon_, Geschichte
     der deutschen Landwirth., I, 249 ff., 311.) The Lex
     Alamanorum, tit. 92, provided that a child, in order to be
     considered capable of living, should have seen the roof and
     four walls of the house! See an able essay, capable of being
     still further developed, by _E. Herrmann,_ in which he
     endeavors to explain the _division of use_ and of labor on
     Darwin's hypothesis of the origin of species in the D.
     Vierteljahrsschrift, Januar., 1867.]

     [Footnote 207-5: Thus, 1785-1795, the best Silesian wool
     cost 60, the worst 26, thalers per cwt.; in 1805, on account
     of the great demand for cloth to make military uniforms, the
     former cost 78, the latter 50 thalers. (_Hoffmann_,
     Nachlass, 114.)]

     [Footnote 207-6: The one large kitchen naturally requires
     much less place, masonry, fuel, fewer utensils, etc., than
     100 small ones. Think of the relatively large savings
     effected by the use of one oven kept always heated! Even the
     Lacedemonians called their meal associations φειδίτια, i. e.,
     save-meals. Dainties proper can be consumed only in very
     small portions, but cannot well be prepared in such
     quantities. A guest at a first class Parisian restaurant
     has, at a moderate price, his choice of 12 _potâges_, _24
     hors d'œuvres_, _15-20 entrées de bœuf_, _20 entrées
     de mouton_, _30 entrées de volaille et gibier_, _15-20
     entrées de veau_, _12 de pâtisserie_, _24 de poisson_, _15
     de rôts_, _50 entremets_, _50 desserts_; and, in addition,
     perhaps 60 kinds of French wine alone. What more can a
     princely table offer in this respect? Compare
     _Brillat-Savarin_, Physiologie du Goût, Médit., 28.]

     [Footnote 207-7: In Diocletian's time, there was purple silk
     worth from 2½ thalers to 250 thalers per pound.
     (_Marquardt_, Röm. Privatalterthümer, II, 122.)]

     [Footnote 207-8: Concerning the application of the above
     principle in industry and in the care of the poor, see
     _infra_. The advantages afforded by consumption in common,
     or the combination of use, have been enthusiastically dwelt
     upon by _Fourier_, and the organization of his phalansteries
     is based essentially on that principle. In these colossal
     palaces, which, spite of all their magnificence, cost less
     than the hundred huts of which they take the place, a ball
     is given every evening, because it is cheaper to light one
     large hall, in which all may congregate. The division of
     use, or of consumption also, is here developed in a high
     degree. When 12 persons eat at the same table they have 12
     different kinds of cheese, 12 different kinds of soup, etc.
     Even little children are allowed to yield to the full to
     their gluttonous propensities, since on them depends the
     productive activity of the so-called _séries passionnées_.
     Compare Nouveau Monde, 272. The Saint-Simonists also
     characterize the _association universelle_ as the highest
     goal of human development. (_Bazard_, Exposition, 144 ff.)
     On the danger of this development to family life, see
     _Sismondi_, Etudes I, 43.]


SECTION CCVIII.

NATURE AND KINDS OF CONSUMPTION.--NOTIONAL CONSUMPTION.

By the notional consumption (_Meinungsconsumtion_), as Storch calls it,
operated by a change of fashion, many goods lose their value, without as
much as suffering the least change of form or leaving the merchant's
shop. This kind of consumption, too, is exceedingly different in
different nations. Thus, in Germany, for instance, fashions are much
more persistent than in France.[208-1] In the most flourishing times of
Holland, only noblemen and officers changed with the fashions, while the
merchants and other people wore their clothes until they went to
pieces.[208-2] In the East, fashions in clothing are very
constant;[208-3] but the expensive custom there prevails, for a son,
instead of moving into the house occupied by his father, to let it go to
ruin, and to build a new one as a matter of preference. The same is true
even in the case of royal castles. Hence, in Persia, most of the cities
are half full of ruins, and are in time moved from one place to
another.[208-4]

The national income of a country is, on the whole, much less affected by
a change of fashion than the separate incomes of its people. The same
whim which lowers the value of one commodity increases the value of
another; and what has ceased to be in fashion among the rich, becomes
accessible, properly speaking, to the poorer classes of the community
for the first time.[208-5] The want of varying his enjoyments is so
peculiar to man, and so intimately connected with his capacity for
progress, that it cannot in itself be blamed. But if this want be
immoderately yielded to, if the well-to-do should despise every article
which has not the charm of complete novelty, the advantages of the whole
pattern-system, by means of which the preparation of a large number of
articles from the same model at a relatively small cost, would be lost.
Besides, fashion, which makes production in large quantities, for the
satisfaction of wants that are variable and free, possible, frequently
means even a large saving in the cost of production.[208-6]

     [Footnote 208-1: The consequences of this are very important
     to the character of French and German industry.
     (_Junghanns_, Fortschritte des Zollvereins, I, 28, 51, 58.)
     Rapidly as the Parisian fashions in dress make their way
     into the provinces, their fashions in the matter of the
     table are very slow to do so. (_Rocquefort_, Hist. de la Vie
     privée des Fr., I, 88 seq.)]

     [Footnote 208-2: _Sir W. Temple._ Observations on the U.
     Provinces, ch. 6.]

     [Footnote 208-3: As most persons adorn themselves for the
     sake of the opposite sex, this invariability is caused by
     the oriental separation of two sexes. Our manufacturers
     would largely increase their market, if they could succeed
     in civilizing the East in this respect. In Persia, shawls
     are frequently inherited through many generations, and even
     persons of distinction buy clothes which had been worn
     before. (_Polak_, Persien, I, 153.) In China, the Minister
     of Ceremonies rigidly provided what clothes should be worn
     by all classes and under severe penalties. (_Davis_, The
     Chinese, I, 352 seq.)]

     [Footnote 208-4: _Jaubert_, Voyage en Perse, 1821. While
     cities like Seleucia, Ctesiphon, Almadin, Kufa, and even
     Bagdad, were built from the ruins of Babylon.]

     [Footnote 208-5: In Moscow, merchants close their accounts
     at Easter. Then begins a new cycle of fashions, after which
     all that remains is sold at mock-prices. (_Kohl_, Reise,
     98.) In Paris, there are houses which buy up everything as
     it begins to go out of fashion and then send it into the
     provinces and to foreign parts. Thus, there are immense
     amounts of old clothing shipped from France and England to
     Ireland. Hence, the latter country can have no national
     costume appropriate to the different classes; and the
     traveler sees with regret, crowds of Irish going to work in
     ragged frock-coats, short trowsers and old silk hats. In
     Prussia, many of the peasantry, in the time of Frederick the
     Great, wore the discarded uniforms of the soldiery.]

     [Footnote 208-6: _Schäffle_, N. Oek. _Hermann_, Staatsw.
     Untersuchungen, II, Aufl., 100.]


SECTION CCIX.

CONSUMPTION WHICH IS THE WORK OF NATURE.

The least enjoyable of all consumption (_loss-consumption_) is that
which is the work of nature; and nature is certainly most consuming in
the tropics. During the rainy season, in the region of the upper Ganges,
mushrooms shoot up in every corner of the houses; books on shelves swell
to such an extent that three occupy the place previously occupied by
four; those left on the table get covered over with a coat of moss
one-eighth of an inch in thickness. The saltpetre that gathers on the
walls has to be removed every week in baskets, to keep it from eating
into the bricks. Numberless moths devour the clothing. Schomburgk found
that, in Guiana, iron instruments which lay on the ground during the
rainy season became entirely useless within a few days, that silver
coins oxydized, etc.; evidently a great obstacle in the way of the
employment of machinery. In summer, the soil of this same region, so
rich in roots, is so parched by the heat, that subterranean fires
sometimes cause the most frightful destruction.

In Spanish America, there are so many termites and other destructive
insects that paper more than sixty years old is very seldom to be found
there.[209-1]

The warmer portions of the temperate zone are naturally most favorable
to the preservation of stone monuments. Thus, for instance, in
Persepolis, where there has been no intentional destruction, the stones
lie so accurately superimposed the one on the other that the lines of
junction can frequently be not even seen. The amphitheatre of Pola has
lost in two thousand years only two lines from the angles of the
stones.[209-2] The Elgin marble statues would certainly have lasted
longer in Greece than they will in England. On the other hand, warm and
dry climates have a very peculiar and exceedingly frightful species of
nature-consumption in the locust plagues. The principal countries
affected by such consumption are Asiatic and African Arabistan, the land
of the Jordan and Euphrates, Asia Minor, parts of Northern India. On
Sinai, locust plagues occur, on an average, every four or five years;
but from 1811 to 1816, for instance, they destroyed everything each
year. Their course is in its effects like an advancing conflagration. It
turns the green country, frequently in a single day, into a brown
desert; and famine and pestilence follow in its path.[209-3]

The colder regions of the temperate zone are exposed to danger and
damage from land-slides in their long series of mountains, and from
avalanches, from quicksands in many of their plains, from floods and the
total destruction of land along their coasts;[209-4] but, on the other
hand, they are, relatively speaking, freest from hurricanes, earthquakes
and volcanoes, the ravages of which no human art or foresight is
competent to cope with. From the point of view of civilization and of
politics there is here a great advantage. See § 36. The former maritime
power of Venice and of Holland is closely allied to the dangers with
which the sea continually threatened them, and which was a continual
spur to both. But, on the other hand, the danger from earthquakes which
always impends over South America and Farther India, must produce
consequences similar to those of anarchy or of despotism, because of the
uncertainty with which they surround all relations. See § 39.[209-5]

     [Footnote 209-1: _Ritter_, Erdkunde VI, 180 ff; _Schomburgk_
     in the Ausland, 1843, Nr. 274; _Humboldt_, Relation hist.,
     I, 306; Neuspanein, IV, 379; _Pöpping_, Reise, II, 197 ff.,
     237 ff. The ant, even in Marcgrav's time, was called the
     _rey do Brazil_.]

     [Footnote 209-2: _Ritter_, Erdkunde VIII, 895; _Burger_,
     Reise in Oberitalien, I, 7. The monuments of Nubia have
     suffered much less from the hand of time than those of Upper
     Egypt, because the air of the plateau is drier. The effects
     of climate have been most severely felt in Lower Egypt,
     where the air is most moist. (_Ritter_, I, 336, 701.) In the
     case of wood, on the other hand, dryness may be a great
     agent of destruction. Thus, in Thibet, wooden pillars,
     balconies, etc., have to be protected with woolen coverings
     to keep them from splitting. (_Turner_, Gesandtsreise,
     German translation, 393 ff.)]

     [Footnote 209-3: Compare _Ritter_, Erdkunde, VIII, 789-815,
     especially the beautiful collection of passages from the
     Bible bearing on the locust plague, 812 ff. _Pliny_, H. N.,
     XI, 85. _Volney_, Voyages en _Syrie_, I, 305. For account of
     an invasion of locusts, which, in 1835, covered half a
     square mile, four inches in thickness, see _v. Wrede_, R. in
     Hadhrammaut, 202. It is estimated that, in England, the
     destruction caused by rats, mice, insects, etc., amounts to
     ten shillings an acre per year; i. e., to £10,000,000 per
     annum. (_Dingler_, Polyt. Journal, XXX, 237.)]

     [Footnote 209-4: Origin of the gulf of Dollart in Friesland,
     2½ square miles in area between 1177 and 1287; and of
     Biesboch of 2 square miles in 1421. On the repeated
     destruction of lands in Schleswig by inundations, see
     _Thaarup_, Dänische Statistik, I, 180 seq. It is a
     remarkable fact that in relation to the Mediterranean,
     _Strabo_, VII, 293, considers all such accounts fables.]

     [Footnote 209-5: As to how the grandeur and
     irresistibleness, etc. of this nature-consumption in the
     tropics leads men to superstition and the indulgence of wild
     fancies, see _Buckle_, History of Civilization in England,
     1859, I, 102 ff. Since the conquest of Chili, sixteen
     earthquakes, which have destroyed large cities totally or in
     part, have been recorded.]


SECTION CCX.

NECESSITY OF CONSIDERING WHAT IS REALLY CONSUMED.

Whenever there is question of consumption, it is necessary to examine
with rigid scrutiny, what it is that has been really consumed; that is,
that has lost in utility. The person, for instance, who pays twenty
dollars for a coat, has consumed that amount of capital only when the
coat has been worn out.[210-1] What is called the consumption of one's
income in advance is nothing but the consumption of a portion of capital
which the consuming party intends to make good from his future
income.[210-2] Fixed capital, too, can certainly be directly consumed;
for instance, when the owner of a house treats the entire rent he
receives from it as net income, makes no repairs, and no savings to put
up a new building at some future time. As a rule, however, the owner of
fixed capital must, in order to consume it, first exchange it against
circulating capital. Thus the prodigality and dissipation, especially of
courts of absolute princes, have found numerous defenders who have
claimed that they are uninjurious, provided only the money spent in
extravagance remained in the country.[210-3] The prodigality itself,
that is, the unnecessary destruction of wealth is not, on that account,
any the less disastrous.[210-4] If, for instance, there are fire-works
to the amount of 10,000 dollars, manufactured exclusively by the workmen
of the country, ordered for a gala day; the night before they are used
for purposes of display, the national wealth embraces two separate
amounts, aggregating 20,000 dollars; that is, 10,000 dollars in silver
and 10,000 in rockets, etc. The day after, the 10,000 in silver are
indeed still in existence, but of the 10,000 in rockets, etc., there is
nothing left. If the order had been made from a foreign country the
reverse would have been the case, the silver stores of the people would
have been diminished, but their supply of powder would remain intact.

In a similar way, there is occasion given for the greatest
misunderstanding when people so frequently speak of producers and
consumers as if they were two different classes of people. Every man is
a consumer of many kinds of goods; but, at the same time, he is a
producer, unless he be a child, an invalid, a robber, a pick-pocket,
etc.[210-5] At the same time, Bastiat is right in saying that in case of
doubt when the interests of production and of consumption come in
conflict, the state, as the representative of the aggregate interest,
should range itself on the side of the latter. If we carry things on
both sides to their extremest consequences, the self-seeking desire of
consumers would lead to the utmost cheapness, that is, to universal
superfluity, and the self-seeking wish of producers to the utmost
dearness, that is, to universal want.[210-6]

     [Footnote 210-1: Compare _Mirabeau_, Philosophie rurale, ch.
     1; _Prittwitz_; Kunst reich zu werden, 474.]

     [Footnote 210-2: A very important principle for the
     understanding of the real effects of the spending of a state
     loan!]

     [Footnote 210-3: In this way _Voltaire_, Siècle de Louis
     XIV., ch. 30, excuses for instance the extravagant (?)
     buildings at Versailles; and in a very similar way Catharine
     II. expressed herself in speaking to the Prince de Ligne:
     Mémoires et Mélanges par le Prince de Ligne, 1827, II, 358.
     _v. Schröder_ even thinks that the Prince might consume as
     much and even more than "the entire capital" of the country
     amounted to; only, he would have him "let it get quickly
     among the people again." He is also in favor of the utmost
     splendor in dress, provided the public see to it that
     nothing was worn in the country which was not made in the
     country. (Fürstl. Schatz- u. Rentkammer, 47, 172.) Similarly
     even _Botero_, Della Ragion di Stato VII, 85; VIII, 191; and
     recently _v. Struensee_, Abhandlungen I, 190. The principle
     of Polycrates in _Herodotus_ is nearly to the same effect.
     Compare, per contra, _Ferguson_, Hist. of Civil Society, V,
     5.]

     [Footnote 210-4: With the exception of the profit made by
     the manufacturers.]

     [Footnote 210-5: Strikingly ignored by _Sismondi_, N. P.,
     IV, ch. II.]

     [Footnote 210-6: _Bastiat_, Sophismes économiques, 1847, ch.
     IV. Everything which, in the long run, either promotes or
     injures production, "steps over the producer and turns in
     the end to the gain or loss of the consumer." Only for this
     principle, inequality and dissensions among men would keep
     growing perpetually. All that the systems of Saint Simonism
     and communism contain that is relatively true is thus
     realized.]


SECTION CCXI.

NATURE AND KINDS OF CONSUMPTION.--PRODUCTIVE CONSUMPTION.

There is no production possible without consumption. The embodiment of a
special utility into any substance is a limitation of its general
utility. Thus, for instance, when corn is baked into bread, it can no
longer be used for the manufacture of brandy or of starch.[211-1]

When, therefore, consumption is a condition (outlay) to production it is
called productive (reproductive).[211-2] Here, indeed, the form of the
consumed goods is destroyed, but the value of the goods lives on in the
new product.

There are different degrees of productiveness in consumption also. Thus,
to a scholar, his outlay for books in his own branch is immediately
productive; but nevertheless, books in departments of literature very
remote from his own, pleasure trips, etc. may serve as nutrition and as
a stimulus to his mind. According to § 52, we are compelled to consider
all consumption productive which constitutes a necessary means towards
the satisfaction of a real economic want. We may, indeed, distinguish
between productive consumption in aid of material goods, of personal
goods and useful relations; but in estimating the productiveness of
these different sorts of consumption we are concerned not so much with
the nature of the consumption as the results in relation to the nation's
wants. The powder that explodes when a powder magazine burns is consumed
unproductively; but the powder shot away in war may be productively
consumed just as that used to explode a mine may be unproductively
consumed; for instance, when the war is a just and victorious one and
the mining enterprise has failed.[211-3]

The maintenance or support of those workmen whom they themselves
acknowledge to be productive is presumably accounted productive
consumption by all political economists. Why not, therefore, the cost of
supporting and educating our children, who, it is to be hoped, will grow
up later to be productive workmen. Man's labor-power is, doubtless, one
of the greatest of all economic goods. But without the means of
subsistence, it would die out in a few days. Hence we may, and even
without an atomistic enumeration of the individual services and products
of labor, consider the continued duration of that labor-power itself as
the continued duration of the value of the consumed means of
subsistence.[211-4]

     [Footnote 211-1: Even when air-dried bricks are made from
     water and clay which cost nothing; when purely occupatory
     work is done, and purely intellectual labor performed, some
     consumption of the means of subsistence by the workmen is
     always necessary.]

     [Footnote 211-2: Χρηματιστικαὶ in contradistinction to
     ἀναλωτικαὶ, according to _Plato_, De Rep., VIII, 559.
     Temporary consumption. (_Umpfenbach._)]

     [Footnote 211-3: _Storch_, Handbuch, II, 450.]

     [Footnote 211-4: Against the difference formerly usually
     assumed between productive and unproductive consumption, see
     _Jacob_, Grundsätze der Nat. Oek., II, 530. It is because of
     a too narrow view that _Hermann_ (II, Aufl., 311), instead
     of reproductive consumption, speaks of technic consumption.]


SECTION CCXII.

UNPRODUCTIVE CONSUMPTION.

Moreover, unproductive consumption embraces not only every economic
loss, every outlay for injurious purposes,[212-1] but also every
superfluous outlay for useful purposes.[212-2] Yet, not to err in our
classification here, it is necessary to possess the impartiality and
many-sidedness of the historian, which enable one to put himself in the
place of others and feel after them as they felt. The man, for instance,
who, in cities like Regensburg and especially Rome, sees numberless
churches often, so to speak, elbowing one another, cannot fail to
recognize the difference between the buildings of to-day for business,
political, educational and recreative purposes, and the medieval, for
the satisfaction of spiritual wants. The latter also may, in their own
sphere, and in their own time, have, as a rule, operated productively,
as the former operate, often enough, by way of exception unproductively;
as in the case of railway and canal speculations which have ended in
failure. It would be difficult to decide between the relative value of
the two kinds of wants, because the parties to the controversy do not,
for the most part, share the want (_Bedürfniss_) of their respective
opponents, frequently do not even understand it, and therefore despise
it. Thus, there are semi-barbarous nations, who can entertain that
respect for the laws which is necessary even from an economic point of
view only to the extent that they see the person whose duty it is to
cause them to be observed seated on a throne and surrounded by
impressive splendor. Hence, such splendor here could not be considered
merely unproductive consumption.[212-3]

We must, moreover, remark in this place as we did above, § 54, that it
is easiest to pass the boundary line between productive and unproductive
consumption in personal services. In 1830, the expenses of the state, in
Spain, amounted to 897,000,000 of reals per annum; the outlay of
municipal corporations, to 410,000,000, and that for external purposes
of religion, 1,680,000,000. (_Borrego._) This is certainly no salutary
proportion; but it is scarcely evidence of a worse economic condition
than the fact that in Prussia it would require a basin one Prussian mile
in length, thirty-three and eight-tenths feet broad, and ten feet deep
to hold all the brandy drunk in the country (_Dieterici_); or this
other, that the British people spend yearly £68,000,000 sterling for
taxes and £100,000,000 yearly for spirituous liquors.[212-4] Berkeley
rightly says that the course practiced in Ireland, with its famishing
proletarian population, of exporting the means of subsistence and
exchanging them against delicate wines, etc., is as if a mother should
sell her children's bread to buy dainties and finery for herself with
the proceeds.[212-5] [212-6]

     [Footnote 212-1: Thus, for instance, food which spoils
     unused, and food which is stolen and which puts a thief in a
     condition to preserve his strength to steal still more.]

     [Footnote 212-2: So far _Senior_, Outlines, 66, is right:
     the richer a nation or a man becomes, the greater does the
     national or personal productive consumption become.]

     [Footnote 212-3: Such gigantic constructions as the palaces,
     pyramids, etc. of Egypt, Mexico or Peru are a certain sign
     of the oppression of the people by rulers, priests or
     nobles. One of the Egyptian pyramids is said to have
     occupied 360,000 men for twenty years. (_Diodor._, I, 63;
     _Herodot._, II, 175; _Prescott_, History of Mexico, I, 153,
     History of Peru, I, 18.)]

     [Footnote 212-4: Edinburg Rev., Apr., 1873, 399.]

     [Footnote 212-5: _Berkeley_, Querist, 168, 175, says that
     the national wants should be the guiding rule of commerce,
     and that besides, the most pressing wants of the majority
     should be first considered.]

     [Footnote 212-6: _Ricardo_, Principles, p. 475, was of
     opinion that an outlay of the national or of private income
     in the payment of personal services increased the demand for
     labor and the wages of labor in a higher degree than an
     equal outlay for material things. The error at the
     foundation of this is well refuted by _Senior_, Outlines,
     160 ff.

     The first to zealously advocate and treat the theory of
     productive consumption was _J. B. Say_, Traité, III, ch. 2,
     seq.; Cours pratique, II, 265. But the germs of the doctrine
     are to be found in _Dutot_, Réflexions politiques sur le
     Commerce et les Finances, 1738, 974, _éd_. Daire. His
     distinctions are in part drawn with great accuracy. Thus he
     says that, among others, a manufacturer of cloth,
     productively consumes the results of his workmen, but that
     the workmen themselves who exchange these results for bread,
     consume the latter unproductively. _Say_ is guilty of the
     inconsistency of claiming that only that consumption is
     productive which contributes directly to the creation of
     material exchangeable goods, spite of the fact that he gave
     the productiveness of labor a much wider scope. _Rau_,
     Lehrbuch, I, § 102 ff., 323 seq., is more consistent in so
     far as he applies the same limitation in both cases.
     (Compare also § 333, 336.) _Hermann_, Staatsw.
     Untersuchungen, 170 seq., 231 ff., would prefer to see the
     idea of productive consumption banished from the science,
     for the reason that if the value of the thing alleged to be
     consumed continues, there can be no such thing as its
     consumption. But, I would rejoin: in a good national
     economy, there would be, according to this, scarcely any
     consumption whatever, because the aggregate value of that
     which I have called above productive consumption is
     unquestionably preserved, and continues in the aggregate
     value of the national products.

     Productive consumption is ultimately a stage of production,
     just as production itself is ultimately a means to an end,
     consumption, and therefore a preparation for the latter.
     Both ideas may be rigorously kept apart from each other,
     just as the expenses and receipts of a private business man,
     who makes a great portion of his outlay simply with the
     intention of reaping receipts therefrom, may be. Every one
     desires his production to be as large as possible, and his
     productive consumption, so far it does not fail of its
     object, as small as possible. _Riedel_ rightly says that the
     theory of reproductive consumption serves Political Economy
     as the bridge which closes the circle formed by the action
     of production, distribution and consumption. (Nat. Oek. III,
     49.) One of the chief fore-runners of the view we advocate
     was _McCulloch_, Principles, IV, 3 ff. _Gr. Soden_, Nat.
     Oek., distinguishes economic consumption, un-economic and
     anti-economic consumption. (Nat. Oek., I, 147.)]


SECTION CCXIII.

EQUILIBRIUM BETWEEN PRODUCTION AND CONSUMPTION.

In all cases economic production is a means to some kind of consumption
as its end.[213-1] The sharpest spur to productive activity is the
feeling of want.[213-2] "Want teaches art, want teaches prayer, blessed
want!" Well too has it been said: "Necessity is the mother of
invention!" Leaving mere animals out of consideration,[213-3] those men
who experience very few wants, with the exception of some rare and
highly intellectual natures, prefer rest to labor. Therefore, when
European merchants desire to engage in trade with a savage nation they
have uniformly to begin by sending them their nails, axes,
looking-glasses, brandy, etc., as gifts. Not until the savage has
experienced a new enjoyment does the want of continuing it make itself
felt; or is he prepared to produce for purposes of commerce.[213-4] In a
state of normal development, the complete and continuing satisfaction of
the coarser wants should constitute the foundation for the
higher.[213-5]

     [Footnote 213-1: We should not, indeed, say, on this
     account, with _Adam Smith_, IV, ch. 8, that "consumption is
     the sole end and purpose of all production," for labor and
     saving, besides their economic object have a higher one,
     imperishable and personal. Compare _Knies_, Polit. Oek. 129,
     and _supra_, § 30.]

     [Footnote 213-2: According to _Sir F. M. Eden_, State of the
     Poor, I, 254, it is one of the most unambiguous symptoms of
     advanced civilization when families eat regularly at the
     same table; so also sleeping in real beds. "Bed and board!"
     It is said that the regularity of meal times was introduced
     among the Greeks by Palamedes. _Athen._ I, 11, after
     _Æschylus_.]

     [Footnote 213-3: Hibernating animals have supplies and
     dwellings, that is something analogous to capital.]

     [Footnote 213-4: This advance is generally observed to be
     introduced by the _jus fortioris_. _Steuart_, Principles I,
     ch. 7. (Compare §§ 45-6-8.) In this way, the earliest
     oriental despotisms have unwittingly been of great service
     to mankind. What the sultan here accomplished with his few
     favorites was done in the lower stages of civilization of
     the west by the aristocracy of great vassals, in a manner
     more worthy of human beings, and in a much more stable form.
     (_J. S. Mill_, Principles I, 14 ff.)]

     [Footnote 213-5: _Banfield_, Organization of Industry, 1848,
     11.]


SECTION CCXIV.

CAUSES OF AN INCREASE OF PRODUCTION.

Only when wants increase does production increase also.[214-1] The old
maxim: _Si quem volueris esse divitem, non est quod augeas divitias, sed
minuas cupiditates (Seneca)_, would, if consistently carried out, have
thwarted the advance of civilization and frustrated the improvement of
man's condition. On the other hand, most political economists, without
more ado, assume that individuals, and still more nations, are wont to
extend the aggregate of their enjoyments just as far as there is a
possibility of satisfying their wants. But they forget here how great a
part is played in the world, as men are constituted, by the principle of
inertia.[214-2] At the first blush, what seems more natural than that
the less labor a people need employ to obtain the most indispensable
means of subsistence, the more time and taste would remain to them to
satisfy their more refined wants. According to this, we should expect to
discover a more refined civilization, especially, in intellectual
matters, in the earliest periods, when population is small, when land
exists in excess and is not yet exhausted. But, in reality, precisely
the reverse is the case. In the earliest stages of civilization
accessible to our observation, we find materialism prevailing in its
coarsest form, and life absorbed entirely by the lowest physical wants.
(Tropical lands.) Where bread grows on the trees, and one needs only to
reach out his hand and pluck it; where all one wants to cover his
nakedness is a few palm leaves, ordinary souls find no incentive to an
ant-like activity, or to a union among themselves for economic
purposes.[214-3] When a Mexican countryman earns enough to keep himself
and his family from absolute want by two days' labor in a week, he idles
away the other five. It never occurs to him that he might devote his
leisure time to putting his hut or his household furniture, etc., in
better shape. The necessity of foresight even is almost unknown; and in
the most luxuriantly fertile country in the world, a bad harvest
immediately leads to the most frightful famine. Humboldt was assured
that there was no hope of making the people more industrious except by
the destruction of the banana plantations.[214-4] But, indeed, there
would be little gained by such compulsory industry. To work for any
other end than satiation, it is necessary that man should feel wants
beyond the want created by mere hunger.[214-5] There are so many
conditions precedent (and mutually limiting one another) to a general
advance in civilization, that such an advance can, as a rule, take place
only very gradually. Let us suppose, for instance, a single Indian in
Mexico, perfectly willing to work six days in the week, and in this way
to cultivate a piece of land three times as great as his fellow Indians.
Where would he get the land? He would, for a time find no purchasers for
his surplus, and therefore not be in a condition to pay the landlord as
much as the latter hitherto received from the pasturage alone. Not until
cities are built and offer the rural population the products of industry
in exchange for theirs, can they be incited to, or become capable of
effecting a better cultivation of the land. This incentive and this
capacity, are inseparably connected with each other. Where the
agricultural population produce no real surplus, but after the fashion
of medieval times, produce everything they want themselves, and consume
all their own products with the exception of the part paid to the state
as a tax, there can scarcely be an industrial class, a commercial class,
or a class devoted to science, art, etc. And, conversely, it is only the
higher civilization which finds expression in the development of these
classes, that, by a more skillful guidance of the national labor, can
call forth its productiveness to an extent sufficient to yield a
considerable surplus of agricultural commodities over and above the most
immediate wants of the cultivators of the soil themselves. Hence, we
find that precisely in those countries which are most advanced in the
economic sense, there is relatively the smallest number of men engaged
in agriculture, and relatively the largest number in production of a
finer kind.[214-6] It is here as in private housekeeping: the poorer a
man is, the greater is the portion of his income which he is wont to lay
out for indispensable necessities.[214-7] [214-8]

     [Footnote 214-1: There is obviously here supposed besides
     the want thus increased, a capacity for development. Thus,
     for instance, the inhabitants of New Zealand brought with
     them, in what concerns clothing, dwellings, etc., the
     customs of a tropical into a colder country, and did not
     understand how to oppose the rigor of the new climate,
     except by building immoderately large fires, until they
     became acquainted with European teachers. (Edinb. Review,
     April, 1850, 466.)]

     [Footnote 214-2: Compare _R. S. Zachariä_, Vierzig Bücher
     vom Staate, VII, 37. Men in the lower stages of civilization
     cherish a greater contempt for those more advanced than they
     are themselves visited with by the latter. Thus it was
     customary for the Siberian hunting races to utter a
     malediction: May your enemy live like a Tartar, and have the
     folly to engage in the breeding of cattle. (_Abulghazi
     Bahadur_, Histoire généalogique des Tartares.) Nomadic races
     look upon the inhabitants of cities as for the most part
     prisoners.]

     [Footnote 214-3: The "happy, contented negroes," as Lord
     John Russel called them, work in Jamaica, on an average,
     only one hour a day since their emancipation. (Colonial
     Magazine, Nov. 1849, 458.) Egypt, India, etc., from time
     immemorial, the classic lands of monkish laziness. Compare
     _Hume_, Discourses, No. 1, on Commerce. On the other hand,
     the person who has six months before him for which he must
     labor and lay up a store, if he would not famish or freeze,
     must necessarily be active and frugal; and there are other
     virtues which go along with these. (_List_, System der
     polit. Oek., I, 304.) According to _Humboldt_, the change of
     seasons compels man to get accustomed to different kinds of
     food, and thus fits him to migrate. The inhabitants of
     tropical countries are, on the other hand, like
     caterpillars, which cannot emigrate nor be made to emigrate,
     on account of the uniform nature of their food.]

     [Footnote 214-4: _Humboldt_, N. Espagne, IV, ch. 9, II, ch.
     5. Similarly among the coarser Malayan tribes, the facility
     with which fish is caught and the cheapness of sago are the
     principal causes of their inertia and of their unprogressive
     uncivilization. (_Crawfurd._)]

     [Footnote 214-5: _Le travail de la faim est toujours borné
     comme elle. (Raynal.)_]

     [Footnote 214-6: Compare _Adam Smith_, I, ch. 11, 2;
     _supra_, § 54. In Russia, nearly 80 per cent. of the
     population live immediately from agriculture; in Great
     Britain, in 1835, only 35; in 1821, only 33; in 1831, only
     31½; in 1841, only 26 per cent. (_Porter._) According to
     _Marshall_, there were, in 1831, in British Europe,
     1,116,000 persons who lived from their rents, etc. In
     Ireland, there were, in 1831, over 65 per cent. of the
     population engaged in agriculture (_Porter_); in 1841, even
     66 per cent.]

     [Footnote 214-7: In Paris, in 1834, the average income per
     capita was estimated to be 1,029.9 francs, of which 46
     francs were paid out for service; 55.7 for education; 11.5
     for physicians' services, etc.; 7 on theatrical shows; 36
     for washing; 13.6 for public purposes. (_Dingler_, Polyt.
     Journal, LIII, 464.) According to _Ducpétiaux_, Budgets
     économiques des Classes ouvrières en Belgique, 1855, and
     _Engel_, Sächs. Statist. Ztschr., 1857, 170, the
     proportional percentage of family expenses for the following
     articles of consumption is:

     =======================+=========================================
                            |             EXPENSES OF
                            +--------------------+----------+---------
                            |  _a laborer's_     | _family_ |_a well-_
                            |  _family_          | _of the_ |_to-do_
     _Consumption Purpose._ |  _in comfortable_  | _middle_ |_family._
                            |  _circumstances._  | _class._ |
                            +----------+---------+----------+---------
                            |    _In_  |  _In_   |  _In_    |  _In_
                            |_Belgium._|_Saxony._|_Saxony._ |_Saxony._
                            |   _per_  |  _per_  |  _per_   |  _per_
                            |  _cent._ | _cent._ | _cent._  | _cent._
     -----------------------+----------+---------+----------+---------
     Food,                  |  61 \    | 62 \    |  55 \    |  50 \
     Clothing,              |  15 }    | 16 } 95 |  18 } 90 |  18 } 85
     Shelter,               |  10 } 95 | 12 }    |  12 }    |  12 }
     Heating and lighting,  |   5 }    |  5 /    |   5 /    |   5 /
     Utensils and tools,    |   4 /    |         |          |
                            |          |         |          |
     Education, instruction,|   2 \    |  2 \    | 3.5 \    | 5.5 \
     Public security,       |   1 }  5 |  1 }  5 | 2   } 10 | 3   } 15
     Sanitary purposes,     |   1 }    |  1 }    | 2   }    | 3   }
     Personal services,     |   1 /    |  1 /    | 2.5 /    | 3.5 /
     =======================+==========+=========+==========+=========

     Hence _Engel_ thinks that when the articles of food,
     clothing, shelter, heating and lighting have become dearer
     by 50 per cent., and other wants have not, and it is desired
     to proportionately increase the salaries of officials,
     salaries of 300, 600 and 1,000 thalers should be raised to
     427.5, 800 and 1,275 thalers respectively. (Preuss. Statist.
     Zeitschr., 1875.) _E. Herrmann_, Pricipien der Wirthsch.,
     106, estimates that in all Europe, 45.6 of all consumption
     is for food, 13.2 for clothing, 5.7 for shelter, 4.6 for
     furnishing, 5.3 for heating and lighting, 2.6 for tools and
     utensils, 13.3 for public security, 6.6 for purposes of
     recreation. Compare _Leplay_, Les Ouvriers Européens, 1855,
     and _v. Prittwitz_, Kunst reich zu werden, 487 ff. The
     expenses for shelter, service and sociability are specially
     apt to increase with an increase of income.]

     [Footnote 214-8: The necessity of an equilibrium between
     production and consumption was pretty clear to many of the
     older political economists. Thus, for instance, _Petty_
     calls the coarse absence of the feeling of higher wants
     among the Irish the chief cause of their idleness and
     poverty. Similarly _Temple_, Observations on the N.
     Provinces, ch. 6, in which Ireland and Holland are compared
     in this relation. _North_, Discourses upon Trade, 14 seq.;
     Potscr. _Roscher_, Zur Geschichte der english.
     Volswirthschaftslehre, 83, 91, 127 ff. _Becher_, polit.
     Discurs., 1668, 17 ff., was of opinion that the principal
     cause keeping the three great estates together, the very
     soul of their connection, was consumption. Hence the peasant
     lived from the tradesman, and the tradesman from the
     merchant. (_Boisguillebert_, Détail de la France, I, 4, II,
     9, 21.) According to _Berkeley_, Querist, No. 20, 107, the
     awakening of wants is the most probable way to lead a people
     to industry. And so _Hume_, loc. cit., _Forbonnais_,
     Eléments du Commerce, I, 364. The Physiocrates were in favor
     of active consumption. Thus _Quesnay_, Maximes générales, 21
     seq.; _Letrosne_, De l'Interêt social, I, 12. _La
     reproduction et la consommation sont rêciprocquement la
     mesure l'une de l'autre._ Some of them considered
     consumption even as the chief thing (_Mirabeau_, Philosophie
     rurale, ch. 1), which could never be too great. Further,
     _Verri_, Meditazioni, I, 1-4. _Büsch_, Geldumlauf, III, 11
     ff.

     The moderns have frequently inequitably neglected the
     doctrine of consumption. Thus it appears to be a very
     characteristic fact that in _Adam Smith's_ great book, there
     is no division bearing the title "consumption," and in the
     Basel edition of 1801, that word does not occur in the
     index. _Droz_ says that in reading the works of certain of
     his followers, one might think that products were not made
     for the sake of man, but man for their sake. But, on the
     other hand, there came a strong reaction with _Lauderdale_,
     Inquiry, ch. 5; _Sismondi_, N. Principes, L., II, passim;
     _Ganilh_, Dictionnaire Analytique, 93 ff., 159 ff.; but
     especially, and with important scientific discoveries,
     _Malthus_, Principles, B. II. _St. Chamans_, Nouvel Essai
     sur la Richesse des Nations, 1824, is an exaggerated
     caricature of the theory of consumption. For instance, he
     resolves the income of individuals into foreign demand or
     the demand of strangers (29); considers the first condition
     of public credit to lie in the making of outlay (32); and
     even calls entirely idle consumers productive, for the
     reason that they elevate by their demand a _utilité
     possible_, to the dignity of a _utilité réelle_ (286 ff.)
     The view advocated by Mirabeau, and referred to above, again
     represented by _E. Solly_, Considerations on Political
     Economy, 1814, and by _Weishaupt_, Ueb. die Staatsausgaben
     und Auflagen, 1819. And so according to _Carey_, Principles,
     ch. 35, § 6, the real difficulty does not lie in production,
     but in finding a purchaser for the products. But he
     overlooks the fact here that only the possessor of other
     products can appear as a purchaser. From another side, most
     socialists think almost exclusively of the wants of men, and
     scarcely consider it worth their while to pay any attention
     to the means of satisfying them.]


SECTION CCXV.

NECESSITY OF THE PROPER SIMULTANEOUS DEVELOPMENT OF PRODUCTION AND
CONSUMPTION.

Hence, one of the most essential conditions of a prosperous national
economy is that the development of consumption should keep equal pace
with that of production, and supply with demand.[215-1] The growth of a
nation's economy naturally depends on this: that production should
always be, so to speak, one step in advance of consumption, just as the
organism of the animal body grows from the fact that the secretions
always amount to something less than the amount of additional nutrition.
A preponderance of secretions would here be disease; but so would be a
too great preponderance of nutrition. Now, the politico-economical
disease which is produced by the lagging behind of consumption and by
the supply being much in advance of the demand, is called a commercial
(market) crisis. Its immediate consequence is, that for a great many
commodities produced, no purchasers can be found. The effect of this is
naturally to lower prices. The profit of capital and wages diminish. A
transition into another branch of production, not overcrowded, is either
not possible at all or is attended with care, great difficulties and
loss. It is very seldom that all these disadvantages are confined to the
one branch in which the disease had its original seat. For, since the
resources of the one class of producers have diminished, they cannot
purchase as much from others as usual. The most distant members of the
politico-economic body may be thereby affected.[215-2]

     [Footnote 215-1: _Boisguillebert_ lays the greatest weight
     on the harmony of the different branches of commerce.
     _L'équilibre l'unique conservateur de l'opulence générale_;
     this depends on there being always as many sales as
     purchases. The moment one link in the great chain suffers,
     all the others sympathise. Hence he opposes all taxation of
     commodities which would destroy this harmony. (Nature des
     Richesses, ch. 4, 5, 6; Factum de la France, ch. 4; Tr. des
     Grains I, 1.) _Canard_ Principes d'E. politique, ch. 6,
     compares the relation between production and consumption in
     national economy with that between arteries and veins in the
     animal body. On the other hand, _Sismondi_, N. Principes I,
     381, describes the bewilderment and want which are wont to
     arise when one wheel of the great politico-economical
     machine turns round more rapidly than the others.]

     [Footnote 215-2: Thus, for instance, an occasional
     stagnation of the cotton factories of Lancashire has
     frequently the effect of "making all England seem like a
     sick man twisting and turning on his bed of pain." (_L.
     Faucher._)]


SECTION CCXVI.

COMMERCIAL CRISES IN GENERAL.--A GENERAL GLUT.

The greater number of such crises are doubtless special; that is, it is
only in some branches of trade that supply outweighs demand. Most
theorists deny the possibility of a general glut, although many
practitioners stubbornly maintain it.[216-1] J. B. Say relies upon the
principle that in the sale of products, as contradistinguished from
gifts, inheritances, etc., payment can always be made only in other
products. If, therefore, in one branch there be so much supplied that
the price declines; as a matter of course, the commodity wanted in
exchange will command all the more, and, therefore, have a better vent.
In the years 1812 and 1813, for instance, it was almost impossible to
find a market for dry goods and other similar products. Merchants
everywhere complained that nothing could be sold. At the same time,
however, corn, meat and colonial products were very dear, and,
therefore, paid a large profit to those who supplied them.[216-2] Every
producer who wants to sell anything brings a demand into the market
exactly corresponding to his supply. (_J. Mill._) Every seller is _ex vi
termini_ also a buyer; if, therefore production is doubled, purchasing
power is also doubled. (_J. S. Mill._) Supply and demand are in the last
analysis, really, only two different sides of one and the same
transaction. And as long as we see men badly fed, badly clothed, etc.,
so long, strictly speaking, shall we be scarcely able to say that too
much food or too much clothing has been produced.[216-3]

     [Footnote 216-1: When those engaged in industrial pursuits
     speak of a lasting and ever-growing over-production, they
     have generally no other reason for their complaints than the
     declining of the rate of interest and of the undertaker's
     profit which always accompany an advance in civilization.
     Compare _J. S. Mill_, Principles, III, ch. 14, 4. However,
     the same author, I, 403, admits the possibility of something
     similar to a general over-production.]

     [Footnote 216-2: _Say's_ celebrated Théorie des Débouchés,
     called by McCulloch his chief merit, Traité, I, ch. 15. At
     about the same time the same theory was developed by _J.
     Mill_, Commerce defended, 1808. _Ricardo's_ express
     adhesion, Principles, ch. 21. Important germs of the theory
     may be traced much farther back: _Mélon_, Essai politique
     sur le Commerce, 1734, ch. 2; _Tucker_, On the
     Naturalization Bill, 13; Sketch of the Advance and Decline
     of Nations, 1795, 182.]

     [Footnote 216-3: Precisely the same commercial crisis, that
     of 1817 seq., which more than anything else led _Sismondi_
     to the conclusion that too much had been produced in all
     branches of trade, may most readily be reduced to _Say's_
     theory.

     There was then a complaint, not only in Europe but also in
     America, Hindoostan, South Africa and Australia, of the
     unsaleableness of goods, overfull stores, etc.; but this,
     when more closely examined, was found to be true only of
     manufactured articles and raw material, of clothing and
     objects of luxury; while the coarser means of subsistence
     found an excellent market, and were sold even at the highest
     prices. Hence, in this case, there was by no means any such
     thing as over-production. The trouble was that in the
     cultivation of corn and other similar products, too little
     was produced. There was a bad harvest even in 1816.

     The most important authorities in favor of the possibility
     of a general glut are _Sismondi_, N. Principes, IV, ch. 4,
     and in the Revue encyclopédique, Mai, 1824: Sur la Balance
     des Consommations avec les Productions. Opposed by Say in
     the same periodical (Juilliet, 1824); where the controversy
     was afterwards reopened in June and July, 1827, by
     _Sismondi_ and _Dunoyer_. Compare Etudes, vol. I; _Ganilh_,
     Théorie, II, 348 ff.; _Malthus_, Principles, II, ch. 1, 8.
     Compare _Rau_, _Malthus_ and Say, über die Ursachen der
     jetzigen Handelsstockung, 1821. _Malthus'_ views were
     surpassed by _Chalmers_, On Political Economy in Connexion
     with the moral State of Society, 1832. But even _Malthus_
     himself in his Definitions, ch. 10, No. 55, later, so
     defined a "general glut" that there could be no longer
     question of his holding to its universality. For an
     impartial criticism, see especially _Hermann_, Staatsw.
     Untersuchungen, 251, and _M. Chevalier_, Cours, 1, Leçon,
     3.]


SECTION CCXVII.

COMMERCIAL CRISES IN GENERAL.

All these allegations are undoubtedly true, in so far as the whole world
is considered one great economic system, and the aggregate of all goods,
including the medium of circulation, is borne in mind. The consolation
which might otherwise lie herein is made indeed to some extent
unrealizable by these conditions. It must not be forgotten in practice
that men are actuated by other motives than that of consuming as much as
possible.[217-1] As men are constituted, the full consciousness of this
possibility is not always found in connection with the mere power to do,
to say nothing of the will to do.[217-2] There are, everywhere, certain
consumption-customs corresponding with the distribution of the national
income. Every great and sudden change in the latter is therefore wont to
produce a great glut of the market.[217-3] The party who in such case
wins, is not wont to extend his consumption as rapidly as the loser has
to curtail his; partly for the reason that the former cannot calculate
his profit as accurately as the latter can his loss.[217-4]

Thus laws, the barriers interposed by tariffs, etc., may hinder the
too-much of one country to flow over into the too-little of another.
England, for instance might be suffering from a flood of manufactured
articles and the United States from an oppressive depreciation in the
value of raw material; but the tariff-laws places a hermetic dike
between want on one side and superfluity on the other. Strong national
antipathies and great differences of taste stubbornly adhered to may
produce similar effects; for instance between the Chinese and Europeans.
Even separation in space, especially when added to by badness of the
means of transportation may be a sufficient hinderance especially when
transportation makes commodities so dear that parties do not care to
exchange. In such cases, it is certainly imaginable that there should be
at once a want of proper vent or demand for all commodities; provided,
we look upon each individual class of commodities the world over as one
whole, and admit the exception that in individual places, certain parts
of the whole more readily find a market because of the general crisis.

Lastly, the mere introduction of trade by money destroys as it were the
use of the whole abstract theory.[217-5] So long as original barter
prevailed, supply and demand met face to face. But by the intervention
of money, the seller is placed in a condition to purchase only after a
time, that is, to postpone the other half of the exchange-transaction as
he wishes. Hence it follows that supply does not necessarily produce a
corresponding demand in the real market. And thus a general crisis may
be produced, especially by a sudden diminution of the medium of
circulation.[217-6] And so, many very abundant harvests, which have
produced a great decline in the value of raw material, and no less so a
too large fixation of capital which stops before its completion,[217-7]
may lead to general over-production. In a word, production does not
always carry with itself the guaranty that it shall find a proper
market, but only when it is developed in all directions, where it is
progressive and in harmony with the whole national economy. To use
Michel Chevalier's expression, the saliant angles of the one-half must
correspond to the re-entrant angles of the other, or confusion will
reign everywhere. Even in individual industrial enterprises, the proper
combination of the different kinds of labor employed in them is an
indispensable condition of success. Let us suppose a factory in which
there are separate workmen occupied with nothing but the manufacture of
ramrods. If these now exceed the proper limits of their production and
have manufactured perhaps ten times as many ramrods as can be used in a
year, can their colleagues, employed in the making of the locks or
butt-ends of the gun, profit by their outlay? Scarcely. There will be a
stagnation of the entire business, because part of its capital is
paralyzed, and all the workmen will suffer damage.[217-8] [217-9]

     [Footnote 217-1: As _Ferguson_, History of Civil Society,
     says, the person who thinks that all violent passions are
     produced by the influence of gain or loss, err as greatly as
     the spectators of Othello's wrath who should attribute it to
     the loss of the handkerchief.]

     [Footnote 217-2: If all the rich were suddenly to become
     misers, live on bread and water, and go about in the
     coarsest clothing, etc., it would not be long before all
     commodities, the circulating medium excepted, would feel the
     want of a proper market--all, including even the most
     necessary means of subsistence, because a multitude of
     former consumers, having no employment, would be obliged to
     discontinue their demand. Over-production would be greater
     yet if a great and general improvement in the industrial
     arts or in the art of agriculture had gone before. Compare,
     _Lauderdale_ Inquiry, 88. This author calls attention to the
     fact that a market in which the middle class prevails must
     put branches of production in operation very different from
     those put in operation where there are only a few over-rich
     people, and numberless utterly poor ones: England, the
     United States--the East Indies, and France before the
     Revolution. (Ch. 5, especially p. 358.)]

     [Footnote 217-3: If England, for instance, became bankrupt
     as a nation, the country would not therefore become richer
     or poorer. The national creditors would lose about
     £28,000,000 per annum, but the taxpayers would save that sum
     every year. Now, of the former, there are not 300,000
     families; of the latter there are at least 5,000,000. Hence,
     the loss would there amount to £100 a family per annum, and
     the gain here to not £6 per family. We may therefore assume
     with certainty that the two items would not balance each
     other as to consumption. The creditors of the nation, a
     numerous, and hitherto a largely consuming class, now
     impoverished, would be obliged to curtail their demand for
     commodities of every kind to a frightful extent; while a
     great many taxpayers would not feel justified in basing an
     immediate increase of their demand on so small a saving.
     Other revolutions, more political in character, may operate
     in the same direction by despoiling a brilliant court, a
     luxurious nobility or numerous official classes of their
     former income.]

     [Footnote 217-4: The above truth has been exaggerated by
     Malthus and his school into the principle that a numerous
     class of "unproductive consumers," who consume more than
     they produce, is indispensable to a flourishing national
     economy. From this point of view, the magnitude of England's
     debt especially has been made a subject of congratulation.
     Compare _Malthus_, Principles, II, ch. 1, 9. Similarly
     _Ortes_, E. N., III, 17, to whom even the _impostori
     mezzani_ and _ladri_ seem to be a kind of necessity. (III,
     23.) _Chalmers_, Political Economy, III ff. If it was only
     question of consumption here, all that would be needed would
     be to throw away the commodities produced in excess. Those
     writers forget that a consumer, to be desirable, should be
     able to offer counter-values.]

     [Footnote 217-5: _Malthus_, Principles, II, ch. 1, 3.]

     [Footnote 217-6: Let us suppose a country which has been
     used to effecting all its exchanges by means of
     $100,000,000. All prices have been fixed, or have regulated
     themselves accordingly. Let us now suppose that there has
     been a sudden exportation of $10,000,000, and under such
     circumstances as to delay the rapid filling up of the gap
     thus created. In the long run, the demand of a country for a
     circulation may be satisfied just as well with $90,000,000
     as with $100,000,000; only it is necessary in the first
     instance that the circulation should be accelerated or that
     the price of money should rise 10 per cent. But neither of
     these accommodations is possible immediately. In the
     beginning, sellers will refuse to part with their goods 10
     per cent. cheaper than they have been wont to. But so long
     as those engaged in commercial transactions have not become
     completely conscious of the revolution which has taken place
     in prices, and do not act accordingly, there is evidently a
     certain ebb in the channels of trade, and simultaneously in
     all. Demand and supply are kept apart from each other by the
     intervention of a generally prevailing error concerning the
     real price of the medium of circulation, and there must be,
     although only temporarily, buyers wanted by every seller,
     except the seller of money. In a country with a paper
     circulation, every great depreciation of the value of the
     paper money not produced by a corresponding increase of the
     same, may produce such results. _Say_ is wrong when he says
     that a want of instruments of exchange may be always
     remedied immediately and without difficulty.]

     [Footnote 217-7: Suppose a people, the country population of
     which produce annually $100,000,000 in corn over and above
     their own requirements, and thus open a market for those
     engaged in industrial pursuits to the extent of
     $100,000,000. And suppose that in consequence of three
     plentiful harvests, and because of an inability to export,
     the market should grow to be over-full, to such an extent
     that the much greater stores of corn have now (§ 5, 103) a
     much smaller value in exchange than usual. The latter may
     have declined to $70,000,000. Hence the country people now
     can buy from the cities only $70,000,000 of city wares. The
     cities, therefore, suffer from over-production. That people
     dispensing with the use of money should establish an
     immediate trade between wheat and manufactured articles, in
     which case the latter would exchange against a large
     quantity of the former, is not practicable, because no one
     can extend his consumption of corn beyond the capacity of
     his stomach, and the storage of wheat with the intention of
     selling it when the price advances is attended with the
     greatest difficulties.]

     [Footnote 217-8: If, for instance, there are too many
     railroads in process of construction, all other commodities
     may in consequence lose in demand, and when the further
     construction begins to be arrested on account of a
     superfluity of roads, the new rail factories, etc. are
     involved in the crisis.]

     [Footnote 217-9: On the special pathology and therapeutics
     of this economic disease, compare _Roscher_, Die
     Productionskrisen, mit besonderer Rücksicht auf die letzen
     Jahrzente in the Gegenwart, Brockhaus, 1849, Bd., III, 721
     ff., and his Ansichten der Volkswirthschaft, 1861, 279 ff.]


SECTION CCXVIII

PRODIGALITY AND FRUGALITY.

Prodigality is less odious than avarice, less irreconcilable with
certain virtues, but incomparably more detrimental to a nation's
economy. The miser's treasures, even when they have been buried, may be
employed productively, at least, after his death; but prodigality
_destroys_ resources. So, too, avarice is a repulsive vice, extravagance
a seductive one. The practice of frugality[218-1] in every day life is
as far removed from one extreme as the other. It is the "daughter of
wisdom, the sister of temperance and the mother of freedom." Only with
its assistance can liberality be true, lasting and successful. It is, in
short, reason and virtue in their application to consumption.[218-2]
[218-3]

     [Footnote 218-1: Negatively: the principle of sparing;
     positively: the principle of making the utmost use of
     things. (_Schäffle_, Kapitalismus und Socialismus, 27.)]

     [Footnote 218-2: Admirable description of economy in _B.
     Franklin's_ Pennsylvanian Almanac, How poor Rich. Saunders
     got rich; also in _J. B. Say_, Traité, III, ch. 5. _Adam
     Smith_, W. of N., II, ch. 3, endeavors to explain why it is
     that, on the whole and on a large scale, the principle of
     economy predominates over the seductions of extravagance.
     This, however, is true only of progressive nations.]

     [Footnote 218-3: The Savior Himself in His miracles, the
     highest pattern of economy: _Matth._, 14, 20; _Mark_, 6, 43;
     8, 8; _Luke_, 9, 17; _John_, 6, 12. That He did not intend
     to prohibit thereby all noble luxury is shown by passages
     such as _Matth._, 26, 6 ff.; _John_, 2, 10.]


SECTION CCXIX.

EFFECT OF PRODIGALITY.

Prodigality destroys goods which either were capital or might have
become capital. But, at the same time, it either directly or indirectly
increases the demand for commodities. Hence, for a time, it raises not
only the interest of capital, but the prices of many commodities.
Consumers naturally suffer in consequence; many producers make a profit
greater than that usual in the country until such time as the
equilibrium between supply and demand has been restored by an increase
of the supply of the coveted products. But the capital of spendthrifts
is wont to be suddenly exhausted; demand suddenly decreases, and
producers suffer a crisis. As Benjamin Franklin says, he who buys
superfluities will at last have to sell necessities. Thus the
extravagance of a court may contribute to the rapid prosperity of a
place of princely residence.[219-1] But it should not be forgotten that
all the food-sap artificially carried there had to be previously
withdrawn from the provinces. The clear loss caused by the destruction
of wealth should also be borne in mind.[219-2] [219-3]

     [Footnote 219-1: A rapid change of hands by money, as it is
     called in every day life. See, _per contra_, _Tucker_,
     Sermons, 31, 1774.]

     [Footnote 219-2: Only the superficial observer is apt to
     notice this apparent prosperity of the capital much more
     readily than the decline of the rest of the country, which
     covers so much more territory. In like manner, many wars
     have had the appearance of promoting industry, for the
     reason that some branches grew largely in consequence of the
     increased demand of the state; but they grew at the expense
     of all others which had to meet the increased taxes. Compare
     _Jacob_ in _Lowe_, England nach seinem gegenwartigen
     Zustande, 1823, cap. 2, 3; _Nebenius_, Oeffentlicher Credit,
     I, Aufl., 419 ff.; _Hermann_, department of the Seine,
     amounted, in 1850, to 497,000,000 francs; in the department
     of the Bouches du Rhone, to 39,000,000 francs; in 1855, on
     the other hand, they were, on account of the war,
     887,000,000 francs and 141,000,000. (Journal des Econ.,
     Juil., 1857, 32 ff.)]

     [Footnote 219-3: The Journal des Economistes for March,
     1854, very clearly shows, in opposition to the
     state-sophists who recommended extravagant balls, etc. as a
     means of advancing industry, and who even advocated the
     paying officials higher salaries on this account, and making
     greater outlays by them compulsory, that such luxury when it
     comes of itself may be a symptom of national wealth, but
     that it is a very bad means to produce prosperity
     artificially.]


SECTION CCXX.

WHEN SAVING IS INJURIOUS.

The act of saving, if the consumption omitted was a productive one, is
detrimental to the common good; because now a real want of the national
economy remains unsatisfied.[220-1] The effecting of savings by
curtailing unproductive consumption may embarrass those who had
calculated on its continuance. But its utility or damage to the whole
national economy will depend on the application or employment of what is
saved. Here two different cases are possible.

A. It is stored up and remains idle. If this happens to a sum of money,
the number of instruments of exchange in commerce is diminished. Hence,
in consequence, there may be either a general fall in the price of
commodities, or some commodities may remain unsold; that is, according
to § 217, a commercial crisis of greater or smaller extent.[220-2] If it
be objects of immediate consumption that are stored up and lie idle,
articles of food or clothing, for instance, the price of such
commodities is wont to be raised by the new and unusual demand for them,
precisely as it is lowered afterwards when the stores are suddenly
opened and thrown upon the market.[220-3]

B. If the saving effected be used to create fixed capital, there is as
much consumption of goods, the same support of employed workmen, the
same sale for industrial articles as in the previous unproductive
consumption; only, there the stream is usually conducted into other
channels. If a rich man now employs in house-building what he formerly
paid out to mistresses; masons, carpenters, etc. earn what was formerly
claimed by hair-dressers, milliners, etc.: there is less spent for
truffles and champagne and more for bread and meat. The last result is a
house which adds permanently either to personal enjoyment, or
permanently increases the material products of the nation's
economy.[220-4] And it is just so when the wealth saved is used as
circulating capital. Here, the wealth saved is consumed in a shorter or
longer time; and to superficial observers, this saving might seem like
destruction; but it is distinguished from the last by this, that it
always reproduces its full equivalent and more. However, the whole
quantity of goods brought into the market by such new capital cannot be
called its product. Only the use (_Nützung_) of the new capital can be
so called; that is the holding together or the development in some other
way of other forces which were already in existence until their
achievements are perfected and ready for sale.[220-5] [220-6]

     [Footnote 220-1: What evil influences such saving can have
     may be seen from Prussian frugality in its military system
     before 1806.]

     [Footnote 220-2: The custom of burying treasure is produced
     by a want of security (compare _Montanari_, Delia Moneta,
     1683-87, 97 Cust.), and by an absence of the spirit which
     leads to production. As _Burke_ says, where property is not
     sacred, gold and silver fly back into the bosom of the earth
     whence they came. Hence, in the middle ages, this custom was
     frequent, and is yet, in most oriental despotic countries.
     (_Montesquieu_, E. des L., XXII, 2.) And so in Arabia: _d'Arvieux_,
     _Rosenmüller's_ translation, 61 seq. _Fontanier_, Voyage dans l'Inde
     et dans le Golfe persique, 1644, I, 279. A Persian governor on his
     death bed refused to give any information as to where he had buried
     his treasure. His father had always murdered the slave who helped him
     to bury his money or any part of it. (_Klemm_, Kulturgeschichte, VII,
     220.) In lower stages of civilization, it is a very usual luxury to
     have one's treasures buried with the corpse. In relation to David's
     grave, see _Joseph._, Ant. Jud., VII, 15,3, XIII, 8, 4; XVI, 7, 1.
     Hence the orientals believe that _every_ unknown ruin hides a
     treasure, that every unintelligible inscription is a talisman to
     discover it by, and that every scientific traveler is a
     treasure-digger, (_v. Wrede_, R. in Hadhramaut, 113, 182 and
     _passim_.) Similarly in Sicily. (_Rehfues_, Neuester Zustand von S.,
     1807, I, 99.) In the East Indies every circumstance that weakens
     confidence in the power of the government increases the frequency of
     treasure-burial, as was noticed, for instance, after the Afghan
     defeat. Treasure-burial by the Spanish peasantry (_Borrego_,
     translated by Rottenkamp, 81), in Ireland (_Wakefield_, Account of I.
     I, 593), in the interior of Russia (_Storch_, Handbuch, I, 142), and
     among the Laplanders. The custom was very much strengthened among the
     latter when, in 1813, they lost 80 per cent. by the bankruptcy of the
     state through its paper money. (_Brooke_, Winter in Lapland, 1829,
     119; compare _Blom_, Statistik von Norwegen, II, 205.) As during the
     Thirty Years' War, so also in 1848, it is said that large amounts of
     money were burned by the Silesian and Austrian peasantry. Much of it
     is lost forever, but, on the whole, much treasure is wont to be found
     where much is buried; governments there make it a regal right to
     search for it.]

     [Footnote 220-3: If the hoarding takes place in a time of
     superfluity, and the restitution of the stores in a time of
     want, there is of course no detrimental disturbance, but on
     the contrary the consequence is a beneficent equilibrium of
     prices. This is the fundamental idea in the storage of
     wheat.]

     [Footnote 220-4: In the construction of national buildings,
     etc., we have the following course of things: compulsory
     contributions made by taxpayers, or an invitation to the
     national creditors to desist somewhat from their usual
     amount of consumption, and to employ what is saved in the
     building of canals, roads etc. In France, for instance,
     after 1835, 100,000,000 francs per annum. (_M. Chevalier_,
     Cours, I, 109.) The higher and middle classes of England
     saved, not without much trouble, however, between 1844 and
     1858, £134,500,000 in behalf of railway construction.
     _Tooke-Newmarch_.]

     [Footnote 220-5: Such savings have sometimes been prescribed
     by the state. In ancient Athens many prohibitions of
     consumption in order to allow the productive capital to
     first attain a certain height. Thus it was forbidden to
     slaughter sheep until they had lambed, or before they were
     shorn. (_Athen._, IX, 375, I. 9.) Similarly the old
     prohibition of the exportation of figs. (Ibid., III, 74.)
     Compare Petit. Leges. Atticae, V, 3. _Boeckh_,
     Staatshaushaltung, I, 62 seq.]

     [Footnote 220-6: The process of the transformation of
     savings from a money-income, in a money-economy
     (_Geldwirthschaft_), into other products, more closely
     analyzed in _v. Mangoldt_, V. W. L., 152 ff.]


SECTION CCXXI.

LIMITS TO THE SAVING OF CAPITAL.

It may be seen from the foregoing, that the mere saving of capital, if
the nation is to be really enriched thereby, has its limits. Every
consumer likes to extend his consumption-supply and his capital in use
(_Gebrauchskapitalien_); but not beyond a certain point.[221-1] Besides,
as trade becomes more flourishing, smaller stores answer the same
purpose. And no intelligent man can desire his productive capital
increased except up to the limit that he expects a larger market for his
enlarged production. What merchant or manufacturer is there who would
rejoice or consider himself enriched, if the number of his customers and
their desire to purchase remaining the same, he saw his stores of
unsaleable articles increase every year by several thousands?

This is another difference between national resources or world resources
and private resources. The resources of a private person, which are only
a link in the whole chain of trade, and which are, therefore, estimated
at the value in exchange of their component parts should, indeed, always
be increased by savings made. (§ 8.) For even the most excessive
increase of supply in general, which largely lowers the price of a whole
class of commodities, will never reduce the price of individual
quantities of that commodity below zero, and scarcely to zero. It is
quite otherwise in the case of national or world resources which must be
estimated according to the value in use of their component parts. Every
utility supposes a want. Where, therefore, the want of a commodity has
not increased, and notwithstanding there is a continuing increase in the
supply, the only result must be a corresponding decrease in the utility
of each individual part.[221-2]

If a people were to save all that remained to them over and above their
most urgent necessities, they would soon be obliged to seek a wider
market in foreign countries, or loan their capital there; but they would
make no advance whatever in higher culture nor add anything to the
gladness of life.[221-3] On the other hand, if they would not save at
all, they would be able to extend their enjoyments only at the expense
of their capital and of their future. Yet these two extremes find their
correctives in themselves. In the former case, a glut of the market
would soon produce an increased consumption and a diminished production;
in the latter the reverse. The ideal of progress demands that the
increased outlay with increased production should be made only for
worthy objects, and chiefly by the rich, while the middle and lower
classes should continue to make savings and thus contribute to wipe out
differences of fortune.[221-4]

     [Footnote 221-1: Up to this point, indeed, wants increase
     with the means of their satisfaction. The man who has two
     shirts always strives to get a dozen, while the person who
     has none at all, very frequently does not care for even one.
     And so the person who has silver spoons generally desires
     also to possess silver candle-sticks and silver plates. On
     Lucullus' 5,000 chlamydes, see _Horat._, Epist., I, 6, 40
     ff.]

     [Footnote 221-2: That consumption and saving are not two
     opposites which exclude each other is one of _Adam Smith's_
     most beautiful discoveries. See Wealth of Nat., II, ch. 3.
     But compare _Pinto_, Du Crédit et de la Circulation, 1771,
     335. Before his time most writers who were convinced of the
     necessity of consumption were apologists of extravagance.
     Thus _v. Schröder_, F. Schatz- und Rentkammer, 23 seq. 47,
     172. Louis XIV.'s saying: "A King gives alms when he makes
     great outlays." According to _Montesquieu_, Esprit des Louis
     VII., 4, the poor die of hunger when the rich curtail their
     expenses. This view, which must have found great favor among
     the imitators of Louis XIV. and Louis XV. was entertained to
     some extent by the Physiocrates; for instance, _Quesnay_,
     Maximes générales, 21 seq. Compare _Turgot_, Œuvres, éd,
     _Dare_, 424 ff. On the other hand, _Adam Smith_, loc. cit.
     says that the spendthrift is a public enemy, and the person
     who saves a public benefactor. _Lauderdale_, Inquiry, 219,
     reacts so forcibly against the one-sidedness which this
     involves that he believes no circumstance possible "which
     could so far change the nature of things as to turn
     parsimony into a means of increasing wealth." In his polemic
     against Pitts' sinking fund as inopportune and excessive, he
     assumes that all sums saved in that way are completely
     withdrawn from the national demand. See per contra
     _Hufeland_ n. Grundlegung I, 32, 238. _Sismondi_, N. P. II,
     ch. 6, with his distinction between _production_ and
     _revenu_, is more moderate; the former is converted into the
     latter only in as much as it is "realized," that is, finds a
     consumer who desires it, and pays for it. Now only can the
     producer rely on anything; can he restore his productive
     capital, estimate his profit, and use it in consumption, and
     lastly begin the whole business over again.... A stationary
     country must remain stationary in everything. It cannot
     increase its capital and widen its market while its
     aggregate want remains unaltered. (IV, ch. 1.)]

     [Footnote 221-3: Thus _John Stuart Mill_ thinks that the
     American people derive from all their progress and all their
     favorable circumstances only this advantage: "that the life
     of the whole of one sex is devoted to dollar-hunting, and of
     the other to breeding dollar-hunters." (IV, ch. 6, 2.) In
     the popular edition of 1865, after the experience of the
     American civil war, he materially modified this judgment.]

     [Footnote 221-4: _Storch_, Nationaleinkommen, 125 ff. That
     there is at least not too much to be feared from the making
     of too great savings is shown by _Hermann_, St. Untersuch.,
     371 seq. On the other hand, there is less wealth destroyed
     by spendthrifts than is generally supposed, for spendthrifts
     are most frequently cheated by men who make savings
     themselves. (_J. S. Mill_, Principles, I, ch. 5, 5.)]


SECTION CCXXII.

SPENDTHRIFT NATIONS.

As there are extravagant and frugal individuals, so also are there
extravagant and frugal nations. Thus, for instance, we must ascribe
great national frugality to the Swiss. In many well-to-do families in
that country, it is a principle acted upon to require the daughters to
look to the results of their white sewing, instead of giving them
pin-money; to gather up the crumbs after coffee parties in the presence
of the guests, and to make soup of them afterwards, etc. Sons are
generally neither supported nor helped to any great extent by their
parents in their lifetime, and are required to found their own homes.
They, therefore, grow rich from inheritance only late in years, when
they are accustomed to a retired and modest mode of life, and have
little desire, from mere convenience sake, to change it for another. And
so Temple informs us that it never occurs to the Dutch that their outlay
should equal their income; and when this is the case they consider that
they have spent the year in vain. Such a mode of life would cost a man
his reputation there as much as vicious excess does in other countries.
The greatest order and the most accurate calculation of all outlay in
advance is found in union with this; so that Temple assures us he never
heard of a public or private building which was not finished at the time
stipulated for in advance.[222-1]

On the other hand, the Englishman lives rather luxuriantly. He is so
used to enjoying comparative abundance, that when English travelers see
the peasantry of the continent living in great frugality, they generally
attribute it to poverty and not to their disposition to make savings. If
England has grown rich, it is because of the colossal magnitude of its
production, which is still more luxuriant and abundant than its
consumption.[222-2] This contrast may be the effect in part of
nationality and climate;[222-3] but it is certainly the effect in part
also of a difference in the stage of civilization which these countries
have respectively reached. The elder Cato had a maxim that a widow
might, indeed, allow her fortune to diminish, but that it was a man's
duty to leave more behind him than he had inherited.[222-4] And how
prodigally did not the lords of the universe live in later times!

     [Footnote 222-1: _Temple_, Observations on the U. Provinces,
     Works, I, 136, 138 seq., 179. _Roscher_, Geschichte der
     engl. Volkswirthschaftsl., 129. Thus, for instance, the
     Richesse de Hollande, I, 305, describes a rich town near
     Amsterdam in which a man with an income of 120,000 florins a
     year expended probably only 1,000 florins per annum on
     himself.]

     [Footnote 222-2: As early a writer as _D. Defoe_, Giving
     Alms no Charity! 1704, says: the English get estates; the
     Dutch save them. An Englishman at that time with weekly
     wages of 20 shillings just made ends meet; while a Dutchman
     with the same grew rich, and left his children behind him in
     very prosperous circumstances, etc. _L. Faucher_ draws a
     similar contrast between his fellow countrymen and the
     English. _Goethe's_ ingenuous observations (Werke, Bd., 23,
     246, ed. of 1840) in his Italian journey, show that the
     Italians, too, know how to save. _Molti pochi fanno un
     assai!_ And so in Bohemia, the Czechs have a good reputation
     for frugality, sobriety, etc. as workmen. They are more
     frugal than the Germans, although all the larger businesses
     belong to Germans, because when the Czech has saved
     something, he prefers to return to his village to putting
     his savings in jeopardy by speculation.]

     [Footnote 222-3: Drunkenness a common vice of northern
     people: thus in antiquity the Thracians (_Athen._, X, 42;
     _Xenoph._, Exp. Cyri, VII, 3, 32), the Macedonians, for
     instance, Philips (_Demosth._, Olynth., II, 23) and
     Alexander's (_Plutarch_, Alex., 70; De Adulat, 13). To drink
     like a Scythian, meant, among the Greeks, to drink like a
     beast. (_Athen._, X, 427; _Herod._, VI, 84.) On North German
     drunkenness in the 16th century, see _Seb. Münster_,
     Cosmogr., 326, 730. _Kantzow_, Pomerania, II, 128.]

     [Footnote 222-4: _Plutarch_, Cato, I, 21.]


SECTION CCXXIII.

THE MOST DETRIMENTAL KIND OF EXTRAVAGANCE.

The kind of extravagance which it is most natural we should desire to
see put an end to, is that which procures enjoyment to no one. I need
call attention only to the excessive durability and solidity of certain
buildings. It is more economical to build a house that will last 60
years for $10,000, than one which will last 400 years for $20,000; for
in 60 years the interest saved on the $10,000 would be enough to build
three such houses.[223-1] This is, of course, not applicable to houses
built as works of art, or only to produce an imposing effect. The object
the ancient Egyptians had in view in building their obelisks and
pyramids continues to be realized even in our day.

I might also call attention to the premature casting away of things
used. Our national economy has saved incredible sums since rags have
been manufactured into paper. In Paris 4,000 persons make a living from
what they pick up in the streets.[223-2]

     [Footnote 223-1: Compare _Minard_, Notions élémentaires
     d'Economie politique appliquée aux Travaux publics, 1850, 71
     ff. He calls to mind the many strong castles of the age of
     chivalry, the Roman aqueducts, theaters, etc., which are
     still in a good state of preservation, but which can be used
     by no one; so many bridges too narrow for our purposes, and
     so many roads too steep. The sluices at Dunkirk, made 12.60
     metres in width by Vauban, were made 16 meters wider in
     1822, and still are too narrow for Atlantic steamships. In
     England, private individuals have well learned to take all
     this into account. Compare _J. B. Say_, Cours pratique,
     translated by Morstadt, I, 454 ff.]

     [Footnote 223-2: _Fregier_, Die gefährlichen Klassen,
     translated 1840, I, 2, 38. In Yorkshire it is said that
     woolen rags to the amount of £52,000,000 a year are
     manufactured into useful articles. (_Tooke_,
     Wool-Production, 196.) Compare The Use of Refuse: Quart.
     Rev., April, 1868. On the ancient Greek ragpickers the
     so-called σπερμολόγοις, see _St. John_, The Hellenes, III,
     91; on the Roman _Centonariis_: _Cato_, R. R., 135;
     _Columella_, R. R., I, 8, 9; _Marquardt_, II, 476, V, 2,
     187.]



CHAPTER II.

LUXURY.


SECTION CCXXIV.

LUXURY IN GENERAL.

The idea conveyed by the word luxury is an essentially relative one.
Every individual calls all consumption with which he can dispense
himself, and every class that which seems not indispensable to
themselves, luxury. The same is true of every age and nation. Just as
young people ridicule every old fashion as pedantry, every new fashion
is censured by old people as luxury.[224-1]

But (§ I) a higher civilization always finds expression in an increased
number and an increased urgency of satisfied wants. Yet, there is a
limit at which new or intensified wants cease to be an element of higher
civilization, and become elements of demoralization. Every immoral and
every unwise want exceeds this limit.[224-2] Immoral wants are not only
those the satisfaction of which wounds the conscience, but also those in
which the necessities of the soul are postponed to the affording of
superfluities to the body; and where the enjoyment of the few is
purchased at the expense of the wretchedness of the many. And not only
those are unwise or imprudent for which the voluntary outlay is greater
than one's income, but those also where the indispensable is made to
suffer for the dispensable.

Thus it was in Athens, in the time of Demosthenes, when the festivities
of the year cost more than the maintenance of the fleet; when Euripides'
tragedies came dearer to the people than the Persian war in former
times. There was even a law passed (Ol. 107,4) prohibiting the
application of the dramatic fund to purposes of war under pain of
death.[224-3]

In the history of any individual people, it may be shown with
approximate certainty at what point luxury exceeded its salutary limits.
But in the case of two different nations, it is quite possible that what
was criminal prodigality with the one, may have been a salutary
enjoyment of life with the other; in case their economic
(_wirthschaftlichen_) powers are different. Precisely as in the case of
individuals, where for instance, the daily drinking of table wine may be
simplicity in the rich and immoral luxury in the case of a poor father
of a family.[224-4] Healthy reason has this peculiarity, that where
people will not listen to it, it never hesitates to make itself felt.
(_Benjamin Franklin._)[224-5]

However, the luxury of a period always throws itself, by way of
preference, on those branches of commodities which are cheapest.

     [Footnote 224-1: _Stuart_, Principles, II, ch. 30,
     _Ferguson_, History of Civil Society, VI, 2. Thus
     _Dandolus_, Chron. Venet., 247, tells of the wife of a doge
     at Constantinople who was so given to luxury that she ate
     with a golden fork instead of her fingers. But she was
     punished for this outrage upon nature: her body began to
     stink even while she was alive. In the introduction to
     _Hollinshed's_ Chronicon, 1557, there is a bitter complaint
     that, a short time previous, so many chimneys had been
     erected in England, that so many earthen and tin dishes had
     been introduced in the place of wooden ones. Another author
     finds fault that oak was then used in building instead of
     willow, and adds that formerly the men were of oak but now
     of willow. _Slaney_, On rural Expenditure, 41. Compare
     _Xenoph._, Cyrop., VIII, 8, 17.]

     [Footnote 224-2: Biblically determined: _Romans_, 13, 14.]

     [Footnote 224-3: _Plutarch_, De Gloria Athen., 348.
     _Athen._, XIV, 623. Petit. Legg. Att., 385.]

     [Footnote 224-4: _Livy_, XXXIV, 6 ff.]

     [Footnote 224-5: Most writers who have treated of luxury at
     all have generally confined themselves to inquiring whether
     it was salutary or reprehensible. Aristippus and
     Antisthenes, Diogenes, etc.; Epicureans and Stoics. The
     latter were reproached with being bad citizens, because
     their moderation in all things was a hindrance to trade.
     (_Athen._, IV, 163.) The Aristotelian _Herakleides_ declared
     luxury to be the principal means to inspire men with
     noble-mindedness; inspired by luxury, the Athenians
     conquered at Marathon. (_Athen._, XII, 512.) _Pliny_ was one
     of the most violent opponents of luxury. See _Pliny_, N. N.,
     XXXIII, 1, 4, 13, and other places. The controversy has been
     renewed by the moderns, especially since the beginning of
     the 18th century, after luxury of every kind had previously
     (for the most part on theological grounds, but also by
     Hutten, for instance) been one-sidedly condemned. Among its
     defenders were _Mandeville_, The Fable of the Bees, 1706,
     who, however, calls everything a luxury which exceeds the
     baldest necessities of life; _Voltaire_ in Le Mondain, the
     Apologie du Luxe, and Sur L'Usage de la Vie; _Mélon_, Essai
     politique sur le Commerce, ch. 9; _Hume_, Discourses, No. 2,
     On Refinement in the Arts; _Dumont_, Théorie du Luxe, 1771;
     _Filangieri_, Delle Leggi politiche ed economiche, II, 37;
     and the majority of the Mercantile school and of the
     Physiocrates. Among the opponents of luxury, _J. J.
     Rousseau_ towers over almost all others. Further, _Fénélon_,
     Télémaque, 1699, L. XXII; _Pinto_, Essai sur le Luxe, 1762.

     The reasons and counter-reasons advanced by those writers
     apply not only to luxury but to the lights and shades of
     high civilization in general. When a political economist
     declares for or against luxury in general, he resembles a
     doctor who should declare for or against the nerves in
     general. There has been luxury in every country and in every
     age. Among a healthy people, luxury is also healthy, an
     essential element in the general health of the nation. Among
     an unhealthy people luxury is a disease, and
     disease-engendering.

     For an impartial examination of the question, see
     _Ferguson_, History of Civil Society, towards the end; see
     also _Beckmann_, in _Justis'_ Grundsätzen der Polizei, 1782,
     § 308; _Rau_, Ueber den Luxus, 1817; _Roscher_, Ueber den
     Luxus, in the Archiv der Politischen Oekonomie, 1843, and in
     his Ansichten der Volkswirthschaft, 1861, 399 ff.]


SECTION CCXXV.

THE HISTORY OF LUXURY.--IN THE MIDDLE AGES.

During the middle ages, industry and commerce had made as yet but little
progress. Hence it was as difficult then for luxury to be ministered to
by fine furniture as by the products of foreign countries. Individual
ornamental pieces, especially arms and drinking cups,[225-1] were wont
to be the only articles of luxury. We have inventories of the domains of
Charlemagne from which we find that in one of them, the only articles of
linen owned were two bed-sheets, a table-cloth and a pocket
handkerchief.[225-2] Fashion is here very constant; because clothing was
comparatively dearer than at present. And so now in the East. In the
matter of dwellings, too, more regard was had to size and durability,
than to elegance and convenience. The palaces of Alfred the Great were
so frailly built that the walls had to be covered with curtains as a
protection against the wind, and the lights to be inclosed in
lanterns.[225-3]

Hence the disposition to use the products of the home soil as articles
of luxury was all the greater, but more as to quantity than to
quality.[225-4] Since the knight could personally neither eat nor drink
a quantity beyond the capacity of his own stomach, he kept a numerous
suite to consume his surplus. It is well known what a great part was
played among the ancient Germans by their retinues of devoted servants
(_comitatus_), which many modern writers have looked upon as
constituting the real kernel of the migration of nations.

In England, it was a maxim of state policy with Henry VII., whose reign
there terminated the middle age, to prohibit the great liveried suites
of the nobility (19 Henry VII., ch. 14) as Richard II., Henry IV. and
Edward IV. had already attempted to do. But even under James I., we find
ambassadors accompanied by a suite of 500 persons or 300
noblemen.[225-5]

The rich man welcomed every opportunity which enabled him to make others
share in a dazzling manner the magnitude of his superfluous wealth:
hence the numberless guests at weddings who were frequently entertained
for weeks.[225-6] These festivities are memorable not because of the
delicacies or great variety of the dishes, but because of their colossal
magnitude. Even William of Orange, 1561, entertained at his wedding
guests who had brought with them 5,647 horses; and he appeared himself
with a suite of 1,100 men on horseback. There were consumed on the
occasion 4,000 bushels of wheat, 8,000 of rye, 11,300 of oats, 3,600
_eimers_ of wine, 1,600 barrels of beer.[225-7] In the ordinance of
Münden regulating weddings, promulgated in the year 1610, it is
provided, that, at a large wedding there should not be over 24 tables,
nor at a small one over 14, with 10 persons at each table.[225-8]

The hospitality of the lower stages of civilization[225-9] must be
ascribed as well to this peculiar kind of luxury as to mere good nature.
Arabian chiefs have their noon-day table set in the street and welcome
every passer-by to it.[225-10] (_Pococke._) And so, distinguished
Indians keep an open cauldron on the fire cooking all the time, from
which every person who comes in may help himself. (_Catlin._)

Compared with this luxury of the rich, the poverty found side by side
with it appears less oppressive. There is no great gap between the modes
of life of the different classes.[225-11] This is the golden age of
aristocracy, when no one questions its legitimateness. When, later, the
nobleman, instead of keeping so many servants, begins to buy costly
garments for himself, he, indeed, supports indirectly just as many and
even more men; but these owe him nothing. Besides, in this last kind of
luxury, it is very easily possible for him to go beyond his means, which
is scarcely ever the case in the former.[225-12]

     [Footnote 225-1: Here, as a rule, the value of the metal was
     greater than the form-value; and hence the medieval
     monasteries frequently made loans of silver vessels, where
     of course, the form could not be taken into consideration.
     On the other hand, in the case of the table service,
     presented by the king of Portugal to Lord Wellington, the
     metal cost £85,000 and the workmanship £86,000. (_Jacob_,
     Gesch. der edlen Metalle, translated by Kleinschrod, II, 5.)
     Compare _Hume_, History of England, ch. 44, App. 3.
     Similarly under Louis XIV. (_Sismondi_, Hist. des Français,
     XXVII, 45.) When Rome was highly civilized, C. Gracchus paid
     for very good silver ware, 15 times the value of the metal,
     and L. Crassus, (consul 95 before Christ) 18 times its
     value. _Mommsen_, R. Gesch. II, 383.]

     [Footnote 225-2: _Specimen breviarii fiscalium Caroli
     Magni_; compare _Anton_, Gesch. der deutschen Landwirthsch.
     244 ff.]

     [Footnote 225-3: _Turner_, History of the Anglo Saxons, VII,
     ch. 6.]

     [Footnote 225-4: In _Homer_, the kings live on nothing but
     meat, bread and wine: compare _Athen._, I, 8. In the
     saga-poetry of Iceland, _H. Leo_ does not remember to have
     heard any other food mentioned except oat-pap, milk, butter
     and cheese, fish, the flesh of domestic animals, and beer.
     (_Raumer's_ Taschenbuch, 1835, 491)]

     [Footnote 225-5: _Hume_, History of England, ch. 49, Append.
     Similarly among all nations which have still preserved much
     of the medieval. Thus the duke of Alba, about the end of the
     last century, had not a single commodious hall in his
     immense palace, but 400 rooms for his servants, since at
     least all his old servants, and even their widows and
     families, continued to live with him. In Madrid alone, he
     paid £1,000 a month wages to his servants; and the son of
     the duke, Medina-Celi, £4,000 per annum. (_Townsend_, II,
     155, 158.) In many palaces in Moscow, previous to 1812,
     there were 1,000 and more servants, unskillful, clad for the
     most part as peasants, badly fed, and with so little to do
     that perhaps one had no service to perform but to fetch
     drinking water at noon, and another in the evening. Even
     poor noblemen kept 20 and 30 servants, (_v. Haxthausen_,
     Studien, I, 59.) _Forster_, Werke, VII, 347, explains Polish
     luxury in servants, by the poorness of the servants there: a
     good German maid could do more than three Polish servants.
     Thus, in Jamaica, it was customary to exempt from the
     slave-tax persons who kept fewer than 7 negroes. (_B.
     Edwards_, History of the W. Indies, I, 229.) Compare _Livy_,
     XXXIX, 11. The luxury of using torch-bearers instead of
     candelabra lasted until Louis XIV.'s time. (_Rocquefort_,
     Hist. de la Vie privée des Français, III, 171.) Compare _W.
     Scott_, Legend of Montrose, ch. 4.]

     [Footnote 225-6: A Hungarian magnate, under king Sigismund,
     celebrated his son's wedding for a whole year. (_Fessler_,
     Gesch. von Ungarn, IV, 1267.)]

     [Footnote 225-7: _Müller_, Annal. Saxon, 68. Several
     examples in _Sckweinichen's_ Leben von Büsching, I, 320 seq.
     _Krünitz_, Enclycopædie, Bd. 82, 84 ff. The wedding of the
     niece of Ottakar II. in 1264, has long been considered a
     most brilliant event in the history of medieval luxury.
     (_Palacky_, Gesch. von Böhmen, II, 191 ff.) Even yet, in
     Abyssinia, on the occasion of royal feasts, only meat and
     bread are eaten and mead drunk; but not only the great, but
     even common soldiers are entertained one after the other.
     (Ausland, 1846, No. 79.) Magnificent as was the table of a
     West Indian planter, it was in some respects very simple. A
     large ox was slaughtered for the feast, and everything had
     to be prepared from that: roast beef, beef steaks, beef
     pies, stews, etc. (_Pinckard_, Notes on the W. Indies, II.
     100 ff.)]

     [Footnote 225-8: _Spittler_, Geschichte Hanovers, I, 381.]

     [Footnote 225-9: _Tacitus_, Germ., 21 Leg., says of the
     Germans: _Convictibus et hospitiis non alia gens effusius
     indulget. Quemcunque mortalium arcere tecto, nefas habetur.
     Diem noctemque continuare potando, nulli probrum._]

     [Footnote 225-10: Entirely the same among the ancient
     Romans: _Valer. Max._, II, 5. Compare per _contra_,
     _Euripid._, Herc. fur., 304 seq.]

     [Footnote 225-11: Think of nomadic races especially, where
     the rich can employ their wealth only to increase the number
     of their partisans, for war purposes, etc.]

     [Footnote 225-12: _Ferguson_, Hist. of Civil Society, VI, 3;
     _Adam Smith_, Wealth of Nat., IV, ch. 4. Compare _Contzen_,
     Politicorum, 1629, 662. As to how in the lower stages of
     civilization, guests are used to supply the place of the
     post-office service, see _Humboldt_, Relation hist., II,
     61.]


SECTION CCXXVI.

LUXURY IN BARBAROUS TIMES.

The luxury of that uncivilized age shows itself for the most part on
particular occasions, and then all the more ostentatious, while in the
periods following it, it rather permeates the whole of life. Even J.
Möser excuses our forefathers for their mad celebration of their
_kirmesses_ and carnivals: _dulce est desipere in loco_, as Horace says,
and that they sometimes carried it to the extent of drowning
reason.[226-1] Among ourselves, the common man drinks brandy every day;
in Russia, seldom, but then, to the greatest excess.[226-2] The well
known peculiarity of feudal castles, that, besides one enormous hall,
they were wont to have very small and inconvenient rooms for every day
life, is accounted for in part by the great importance to them of festal
occasions, and in part by the cordiality of the life led in them, in
which lord and servants constituted one family. Nothing can be more
erroneous than to ascribe great temperance in general to people in a low
stage of civilization. Their simplicity is a consequence of their
ignorance rather than of their self-control. When nomadic races have
once tasted the cup of more delicate enjoyment, it is wont to hurry them
to destruction.[226-3]

     [Footnote 226-1: _Möser_, Patr. Ph. IV, 7. On the feast of
     fools and the feast of asses of the middle ages, compare
     _Dutillet_, Mémoire pour sevir à l'Histoire de la Fête des
     Fous; _D. Sacchi_, Delle Feste popolari del medio Evo.
     During the latter half of the 16th century, the first
     Hannoverian minister received only 200 thalers salary and
     pieces of clothing, while the wedding of a certain von
     Saldern cost 5,600 thalers. (_Spittler_, Gesch. Hannovers,
     I, 333.)]

     [Footnote 226-2: _v. Haxthausen_, Studien, II, 450, 513.
     Thus, in 1631, of those who had died suddenly, there were
     957 who died of drunkenness. (_Bernouilli_, Populationistik,
     303.) According to _v. Lengefeldt_, Russland im 19. Jahrh.,
     42, the number is now 1,474 to 1,911 per annum. On Poland,
     see _Klebs_, Landeskulturgesetzgebung in Posen, 78. When the
     South American Indians begin to drink, they do not stop
     until they fall down senseless. (_Ulloa_, Noticias
     Americanas, ch. 17.) The old Romans considered all
     barbarians to be drunkards. (_Plato_, De Legg., I, 638.) In
     eating, also, uncivilized people are extremely irregular. A
     Jackute or Tunguse consumes 40 pounds of meat; three men
     devour a whole reindeer at a meal. (_Cochrane_, Fussreise,
     156.) One ate in 24 hours the back quarter of a large ox, or
     ½ a _pud_ of fat, and drank an equal quantity of melted
     butter. (_Klemm_, Kulturgeschichte, III, 18.) Similarly
     among hunting races. See _Klemm_, I, 243, 339; II, 13, 255.
     On the South Sea Islanders, see _Hawkesworth_, III, 505;
     _Forster_, I, 255.]

     [Footnote 226-3: Rapid degeneration of almost all barbaric
     dynasties as soon as they have subjugated civilized
     countries.]


SECTION CCXXVII.

INFLUENCE OF THE CHURCH AND OF THE CITY.

The change in this situation takes place first of all in the churches
and in the cities. The Church has passed through almost every stage of
development in advance of the State; and civilization, both in the good
and bad sense of the term, has become general, and gradually acclimated
in the rural districts, through the influence of the cities. In the
Church, the earliest art endeavored to reach the beautiful. There, we
first find music, painting, sculpture, foreign perfumes, incense and
variegated garments.[227-1] In the cities, growing industry introduces a
more attractive style of clothing and a more ornamental style of
household furniture. Commerce, beginning to thrive, raises foreign
commodities into wants,[227-2] and thus the old luxury of feudal times
is modified.[227-3] The large number of idle servants is diminished. All
the more refined pleasures are extended downward to wider circles of the
people. Instead of individual bards, rhapsodists, skalds and
minnesingers, we have the beginnings of the theater, and instead of
tournaments, the shooting matches. (_Freischiessen._)

But it is remarkable how much earlier here pomp and splendor are
considered than convenience. The Spanish _romanceros_ of the 12th
century display wonderful splendor in their descriptions of the Cid, and
the trousseau of his daughters. But, on the other hand, the wife of
Charles VII. seems to have been the only French woman in the 15th
century who had more than two linen chemises. Even in the 16th century,
it frequently happened that a princess made a present to a prince of a
single shirt. At this time the German middle class were wont to sleep
naked.[227-4]

Even now, half-civilized nations look more to the outward appearance of
commodities than to their intrinsic value. Thus, for instance, in
Russia, we find large numbers of porcelain services extravagantly
painted and gilded, awkward, the material of which is full of blisters;
damaskeened knives, gilt sad-irons and candle-snuffers with landscapes
engraved on them: but nothing fits into anything else; the angles are
vicious, the hinges lame, and the whole soon goes to pieces. And so,
among export merchants in Bremen, for instance, it is a rule, on all
their wares intended for America, to put a label made of very beautiful
paper, with their coat-of-arms or firm-name in real silver, and to do
the packing in as elegant a manner as possible.[227-5] Cloths intended
for America are usually exceedingly light, destitute of solidity, but
very well dressed. The cotton-printers who work for the African market
prefer to employ false but cheap and dazzling colors.[227-6]

     [Footnote 227-1: The use of window-glass in churches in
     England dates from 674, in private houses from 1180.
     (_Anderson_, Origin of Commerce, s. a.) Even in 1567, it was
     so rare that during the absence of the lords from their
     country seats, the panes were taken out and stored for safe
     keeping. (_Eden_, State of the Poor, I, 77.) As to how
     Scotland developed in this respect still later, see
     _Buckle_, History of Civilization in England, II, 172.]

     [Footnote 227-2: In our day, at the breakfast of a German of
     the middle class, may be found East Indian coffee, Chinese
     tea, West Indian sugar, English cheese, Spanish wine, and
     Russian caviar, without any surprising degree of luxury.
     Compare _Gellius_, N. A., VII, 16.]

     [Footnote 227-3: In England, the transition is noticeable,
     especially under Elizabeth: _Hume_ History, ch. 44, app. 3.
     In France, under Louis XIV.; _Voltaire_, Siècle de Louis,
     XIV., ch. 29.]

     [Footnote 227-4: Poesias Castellanas anteriores al Siglo XV;
     Tom. I, 347, 327. _Roscher_, loc. cit. _J. Voight_, in
     _Raumer's_ historischem Taschenbuche, 1831, 290; 1835, 324,
     seq. Thus, one of Henry VIII's wives, in order to get salad,
     had first to send for a gardener from Flanders; while at the
     time, a single ship imported into England from 3,000 to
     4,000 pieces of clothing in gold brocade, satin or silk.
     (_Anderson_, a. 1509, 1524, 4; Henry VIII, c. 6.)]

     [Footnote 227-5: Irish linen, worth from 30 to 35 shillings,
     is often provided with a label which cost 5 shillings.
     (_Kotelmann_, Statistische Uebersicht der landwirthschaftl.
     und industriellen Verhältnisse von Oestereich und dem
     Zollverein, 215.)]

     [Footnote 227-6: Compare _Kohl_, Reise in Deutschland, II,
     18, 250. _Roscher_, in the Göttinger Studien, 1845, II, 403,
     ff. About 1777, _Büsch_ described the difference of goods
     manufactured in England "for the continent and home
     consumption," as being just the same as the difference now
     between goods for Africa and goods for Europe. (Darstellung
     der Handlung, Zusatz, 89.)]


SECTION CCXXVIII.

HISTORY OF LUXURY IN HIGHLY CIVILIZED TIMES.

The direction which luxury takes in times when civilization is advanced,
is towards the real, healthy and tasteful enjoyment of life, rather than
an inconvenient display. This tendency is exceedingly well expressed by
the English word _comfort_, and it is in modern England that the luxury
of the second period has found it happiest development. It is found side
by side with frugality; and it frequently even looks like a return to
the unaffected love of nature.[228-1]

Thus, since Rousseau's time,[228-2] the so-called English gardens have
dropped the former Versailles-Harlem style. Thus, too, modern fashion
despises the awkward long wig, powdering etc.[228-3] Instead of garments
embroidered, or faced with fur or lace, and instead of the galloon hat
worn under Louis XIV. and Louis XV., the French revolution has
introduced the simple citizen frock-coat and the round silk hat. The
"exquisite" may even with these outshine others by the form he selects,
the material he wears, or by frequent change, but much less strikingly
than before.[228-4] Since every one, in the purchase of household
furniture, etc., looks more to its use than to the honor of being sole
possessor of an article or having something in advance of everybody
else, it becomes possible for industry to manufacture its products in
much larger quantities, and after the same model, and thus to furnish a
much better article for the same price.[228-5] Besides, more recent
industry has produced a multitude of cheap substitutes for costly
objects of luxury: plated silver-leafing, cotton-velvet goods,
etc.;[228-6] besides the many steel engravings, lithographs etc., which
have exerted so beneficent an influence on æsthetic education.

In the England of our days, the houses are comparatively small, but
convenient and attractive, and the salutary luxury of spending the
pleasant season in the country very general.[228-7] The country-roads
are narrow but kept in excellent order and provided with good
inns.[228-8] More value is here attached to fine linen cloth than to
lace;[228-9] to a few but nourishing meat-dishes than to any number of
sauces and confections of continental kitchens.[228-10] Especially is
the luxury of cleanliness, with its morally and intellectually
beneficial results found only in well-to-do and highly cultured nations.
As formerly in Holland, so now in England, it is carried to the highest
point of development. In the latter country, the tax on soap is
considered a tax on an indispensable article.[228-11] The reverse is the
case in North America, if we can believe the most unprejudiced and
friendly observers.[228-12] The person who lives in a log-house must, to
feel at ease within his four walls, first satisfy a number of necessary
wants.[228-13]

     [Footnote 228-1: The reformation of the sixteenth century
     had a remarkable tendency towards natural and manful
     fashions, as contradistinguished from the immediately
     preceding and the immediately following periods. Compare _J.
     Falke_, Deutsche Trachten und Modenwelt, II, 1858.]

     [Footnote 228-2: _J. J. Rousseau_, N. Héloise, II, L. 11.
     Compare _Keysler_, Reise, I, 695.]

     [Footnote 228-3: That a similar transition marked an epoch
     in the history of Grecian morals was recognized even by
     _Thucydides_, I, 6; compare _Asios_, in _Athen._, XII, 528.]

     [Footnote 228-4: It will always remain a want to own clothes
     for every day wear and festal occasions. The frock coat
     satisfies this want in the cheapest way. As soon as people
     cease to distinguish clothing for festal occasions by the
     cut, gold-embroidery, fur-facing, etc. will appear again,
     which would necessarily prove a great hardship to the
     propertyless classes of the educated, and even to the higher
     classes.]

     [Footnote 228-5: On the striking contrast presented in this
     respect by the English and French, and even Russian customs,
     see _Storch_, Handbuch, II, 179 ff. _J. B. Say_, Cours
     pratique, translated into German by _Morstadt_, I, 435 ff.;
     Deutsche Vierteljahrsschrift, 1853, I, 182.]

     [Footnote 228-6: Paper-hangings, instead of costly gobelins
     and leather hangings, were not known in France until after
     1760, nor in the rest of Europe until much later. Busts of
     plaster were (_Martial_, IX, 17, and _Juvenal_, II, 4) usual
     among those who were less well off.]

     [Footnote 228-7: Similarly even in _Giov. Villani_, XI, 93,
     the villas of the highly cultured Florentines appear finer
     than their city houses, while in Germany, at that time, even
     the richest citizens lived only in the city.]

     [Footnote 228-8: Sidewalks in the cities, recommended by _J.
     J. Rousseau_, as a popular convenience and as a safeguard
     against the carriage-aristocracy.]

     [Footnote 228-9: In France, the luxury of lace was conquered
     by Marie Antoinette, but still more effectually by the
     Revolution. Previous to that time, many Parisians wore four
     manchettes to each shirt. (_Palliser_, History of Lace,
     1865.)]

     [Footnote 228-10: During the middle ages, strongly seasoned
     food, ragouts, etc., were more in favor than in even France
     to-day; compare _Legrand d'Aussy et Roquefort_, Histoire de
     la Vie priveé des Français, passim. The wine even, at that
     time, used to be mixed with roots: _vin de romarin_,
     _clairet_, _hippocras_, (_W. Wackernagel_, Kl. Schriften I,
     86, 7.) The French kitchen became simpler and more natural,
     only after the middle of the 18th century. (_Roquefort_,
     III, 343.)]

     [Footnote 228-11: The taxed consumption of soap amounted in
     England in 1801 to 4.84 and in 1845, 9.65 pounds per capita.
     (_Porter_, Progress of the Nation, V, 5, 579.) Soap-boiling
     in London dates from 1520 only. Before that time, all white
     soap was obtained from the continent. (_Howell_,
     Londinopolis, 208.) _Erasmus_ charged that England, in his
     time, was an exceedingly dirty country. The Italians, on the
     other hand, were at that time greatly distinguished above
     northern people, especially the Germans, by their
     cleanliness. (_Buckhardt_, Kultur der Renaissance, 295.) The
     Vienna river-baths after 1870, _Nicolai_, Reise, III, 17,
     mentions as something deserving special note. The Leipzig
     river-baths date from 1774.]

     [Footnote 228-12: _Birkbeck_, Notes on America, 39. Even in
     New York, it is not very long since there were no common
     sewers. Just as characteristic is the uncleanliness of the
     South African _boers_ (_Mauch_, in _Petermann's_
     Mittheilungen, Ergänz-Heft, XXVII, 23), when compared with
     the celebrated cleanliness of the old Dutch.

     Americans will certainly not agree with the "friendly
     and unprejudiced" observers mentioned in the text; for
     no one acquainted with genuine American home-life can
     deny that cleanliness is an American characteristic. It
     is only justice to the author to say that the above
     note (12), so far as it relates to America, appeared in
     the second edition of his work, and probably in the
     first; and that he is not so much to be blamed for it
     as the unfriendly and prejudiced, if not ignorant
     observers. It may be said, however, that, from the use
     of the word "log-house," in the context, the author
     does not intend to apply this remark to the older
     settlements.--TRANSLATOR.]

     [Footnote 228-13: The most frightful uncleanliness prevails
     among the inhabitants of polar countries, who never bathe,
     because of the climate, avoid all ventilation, and because
     of the leathern clothing which they smear with grease, etc.
     The Tunguses consider the after-birth cooked or roasted as a
     great delicacy. "Fathers and mothers wipe their children's
     noses with their mouth, and gulp the secretion down."
     (_Georgi_, Beschreib. aller Nationen des russ. Reiches, I,
     287.) Among the Koruks, the suitor rinses his mouth with his
     sweetheart's water. (loc. cit., I, 349, 353.) Compare
     _Klemm_, Kulturgeschichte, III, 24, 57. In warmer climates,
     even less civilized nations are clean, for instance in the
     East and South-Sea Islands, etc. All the more surprising is
     the uncleanliness of the Hottentots and Bushmen, where the
     natural color is observable only under the eyes, where the
     tears produced by too much smoke has washed away the crust
     of dirt which, with this exception, covers the whole body.
     (_Klemm_, Kulturgeschichte, 333.) How long it takes for
     cleanliness to become a national trait, may be inferred from
     the history of water-closets, when, for instance, their
     introduction into every house during the 16th and even the
     17th century, had to be provided for by law in Paris.
     (_Beckmann_, Beiträge, II, 358 ff.) The Göttingen statutes
     of 1342 had to expressly prohibit persons to _merdare_ in
     public wine-cellars where persons ate and drank together.
     (_Spittler_, Gesch. Hannovers, I, 57.) Similarly in the
     courts of the German princes. On the other hand,
     universality of water-closets in England to-day.

     In ancient times, too, the uncleanliness of the Spartans in
     body and clothing was very surprising to the Athenians:
     _Xenoph._, Resp. Laced., II, 4; _Plutarch_, Lycurg, 16.
     _Just._, Lac., 5. Still more that of many barbarians, for
     instance of the Illyrians: _Stobaeus_, V, 51, 132; _Gaisf.
     Aelian._, V, H. IV, 1. The ancient Romans bathed only once a
     week (_Seneca_, Epist., 86), while under the Empire, "the
     baths embraced and filled up the whole life of man and all
     his wishes." (_Gerlach._) Compare _Becker_, Gallus, II, 10
     ff.; _Lamprid_, V, Comm., 11.]


SECTION CCXXIX.

EXTENT OF LUXURY IN HIGHLY CIVILIZED TIMES.

The luxury of this second period fills the whole of life and permeates
every class of people. Hence we may most easily determine the degree of
development a people have attained by the quantity of commodities of a
finer quality which are, indeed, not indispensable to life, but which it
is desirable should be consumed on as extensive a scale as possible by
the nation, for the sake of the fullness of life and the
freshness[229-1] of life to which they minister.

Thus, for instance, as civilization has advanced, there has been almost
everywhere a transition to a finer quality of the material of which
bread is made. The number of consumers of white bread in France in 1700,
was 33 per cent. of the population; in 1760, 40; in 1764, 39; in 1791,
37; in 1811, 42; in 1818, 45; in 1839, 60 per cent.[229-2] About 1758,
in England and Wales, 3,750,000 of people lived on wheat bread; on
barley bread, 739,000; on rye bread, 888,000; on oat bread, 623,000. The
cultured southeastern population had almost nothing but wheat bread,
while in the north and northwest, oat bread continued to be used a long
time; and in Wales only 10 per cent. of the population ate wheat bread.
This condition of things in England has since been much improved. But,
at the extremities of the Hebrides, nine-tenths of the population still
live on barley bread; and in Ireland it was estimated, in 1838, that
with 8,000,000 inhabitants, potatoes were the chief article of food of
5,000,000, and oat bread of 2,500,000.[229-3]

And so, the consumption of meat in cities is uniformly much larger than
in the country. In the cities of the Prussian monarchy and subject to
the slaughter-house tax, it amounted in 1846, per capita: in East
Prussia, to 61 lbs.; in Pommerania, to 66; in Posen, to 70; in West
Prussia, to 71; in Saxony, to 75; in the Rhine Province, to 83; in
Silesia, to 86; in Brandenburg, to nearly 104; in Berlin alone, to 114:
an average in the whole country, however, of scarcely 40 lbs. per
capita. (_Dietrici._) In the kingdom of Saxony, the average consumption
of beef and pork was, shortly before 1866, about 50 lbs.; in Dresden
alone, 86.7; in Leipzig, 136.9 lbs.[229-4] The consumption of meat in
England is exceedingly great, so that, for instance, in several orphan
asylums in London, the daily meat ration amounts to an average of from
0.23 to 0.438 lbs. The meat-consumption of a well-to-do family, children
and servants included, Porter estimates at 370 lbs. per capita per
annum. The meat ration of soldiers in the field amounts in England to
676 grammes a day; in France, to 350.[229-5]

The consumption of sugar in 1734, in England, was about 10 lbs. per
capita; in 1845, in the whole of the British Empire, 20-1/3 lbs.; in
1849, almost 25 lbs.; in 1865, over 34 lbs.; but it must not be
overlooked here, that in Ireland the consumption of sugar per capita was
scarcely over 8 lbs.[229-6] In the German Zollverein, the consumption of
sugar, in 1834, amounted to an average of 2½ lbs. per capita; in
1865, to more than 9 lbs. In France, the consumption of the same article
rose from 1.33 kilogrammes, the average from 1817 to 1821, to 7.35 lbs.
in 1865.[229-7] The population of the Zollverein rose 25.8 per cent.
between 1834 and 1847, while the importation of coffee increased 117.5
per cent.; of spices, 58.2; southern fruits, 34.5, and cocoa, 246.2 per
cent.[229-8]

A great many of vegetables and fruits, which seem to us to be almost
indispensable articles of subsistence, have been cultivated only a short
time. Thus the English have been acquainted with artichokes, asparagus,
several kinds of beans, salad, etc. only since 1660.[229-9] Even in
France, the finer kinds of fruits have appeared on the tables of the
middle class only since the beginning of the last century.

The per capita consumption of wool in England, about a generation ago,
amounted to about 4 lbs. a year; in Prussia to 1.67; of cloth, to 5.76
and 2.17 ells; of leather, to 3.03 and 2.22 lbs. respectively.[229-10]
Of silk goods, England consumes half as much as the rest of all Europe,
and an Englishman from 5 to 6 times as much as a Frenchman, although
England does not produce a single pound of raw silk.[229-11]

     [Footnote 229-1: Thus, for instance, the modern enjoyments
     of coffee, tea, newspapers, tobacco etc., promote
     domesticity with which antiquity was so little acquainted.
     _Zaccharia_, Vierzig Bücher, VI, 60.]

     [Footnote 229-2: The food of the French people has improved
     also in point of quantity. At the beginning of the
     eighteenth century, of cereals there were 472 liters per
     capita, at present there are 541 liters; and in addition,
     now, 240 liters of potatoes and vegetables more than then.
     Compare _Moreau de Joannès_, Statistique de l'Agriculture de
     la France, 1848, and the same writer's Statistique céréale
     de la France, in the Journal des Economistes, 1842, Janv. On
     the recent decrease or increase in the consumption of meat,
     see the very different estimates of _M. Chevalier_, Cours.,
     I, 113 seq., and Journal des Economistes, Mars, 1856, 438
     ff.]

     [Footnote 229-3: _Ch. Smith_, Tracts on the Corn Trade,
     1758, 182. _Eden_, State of the Poor, I, 563, seq. In
     _McCulloch_, Statist, I, 316, 466 ff., 548. Moreover,
     _Rogers_ says that English workmen in the middle ages, for
     the most part, consumed wheat bread. (Statist. Journal,
     1864, 73.) About the middle of the 13th century, only from
     11 to 12 _malters_ of wheat were produced on the estates of
     the bishop of Osnabrück; about 470 of oats, 300 of rye, and
     120 of barley. (_J. Möser_, Osnabrück, Gesch., Werke, VII,
     2. 166.) Even beer was brewed from oats in the earlier part
     of the middle ages. (_Guérard_, Polyptiques, I, 710 ff.) The
     ancients, also, in their lower stages of civilization, lived
     on barley bread by way of preference, and went over to wheat
     only at a later period; compare _Plin._, H. N. XVIII, 14.
     _Heracl._, Pont, fr. 2. _Athen._, IV., 137, 141. _Plutarch_,
     Alcib., 23. As to how, in Rome, the transition from _far_ to
     the much more costly _triticum_, was connected with the
     extension of the hide of land from 2 to 7 _jugera_, see _M.
     Voigt_ in the Rhein. Museum f. Philol., 1868.]

     [Footnote 229-4: To this, in Saxony, must be added about
     from 6 to 7 pounds of veal and mutton. The recent increase
     in the consumption of meat in Saxony is very encouraging:
     1840, about 30 lbs. of beef and pork per capita; 1851-57, 40
     lbs. (Sächs. Statist. Ztschr., 1867, 143 seq.) On the other
     hand, _Schmoller_ estimated the consumption of meat in
     general in Prussia, in 1802, at 33.8; in 1816, at 22.5; in
     1840, at 34.6; in 1867, at 34.9 lbs. (_Fühling_, N. Landw.
     Zeitg., XIX; Jahrg. Heft., 9 seq.) Paris consumed, in 1850,
     145 pounds of butcher's meat per capita; in 1869, 194
     pounds. In the year of the revolution, 1848, the consumption
     declined 45 per cent.; the consumption of wine in barrels,
     16 per cent.; in bottles, 44 per cent.; of sea-fish, 25 per
     cent.; of oysters, 24 per cent.; of beer, 20 per cent.; of
     eggs, 19 per cent.; of butter, 13 per cent.; of fowl, 6 per
     cent. (_Cl. Juglar_, in the Journal des Economistes, March,
     1870.)]

     [Footnote 229-5: _Porter_, Progress of the Nation, V, 5, 591
     ff.; _Hildesheim_, Normaldiet, 52 ff. Well-known English
     popular song: "Oh, the roast beef of old England" etc. Even
     at the end of the 17th century one-half of the nation
     partook of fresh meat scarcely once or twice a week; most of
     that consumed was salted. (_Macaulay_, History of England,
     ch. 3.) But even _Boisguillebert_, Traité des Grains, II, 7,
     characterizes the English as great beer-drinkers and
     meat-eaters, from the highest class to the lowest, while the
     French consumed almost nothing but bread. Similarly _J. J.
     Becher_, Physiologie, 1678, 202, 248, on the great
     consumption of meat and sugar in England.]

     [Footnote 229-6: _Anderson_, Origin of Commerce, a. 1743;
     _Porter_, Progress, V, 4, 350 ff.; Meidinger, 154 ff.;
     Memorandum respecting British Commerce, etc., before and
     since the Adoption of Free Trade, 1866. On men-of-war each
     man gets 35-45 lbs. a year; in the poorhouse, old men
     22¾. (_Porter._)]

     [Footnote 229-7: In Henry IV.'s time, in France, sugar was
     sold by the apothecaries by the ounce!]

     [Footnote 229-8: _Deiterici_, Statist. Uebersicht des
     Verkehrs, etc. im Zollvereine, 4; Fortsetzung, 168 ff., 208,
     265, 599. Thus, in Great Britain, the population between
     1816 and 1828 grew, from 13½ million to nearly 16
     million. On the other hand, consumption, when the average
     from 1816 to 1819 is compared with that from 1824 to 1828,
     increased in a much greater proportion: soap, from 67¾ to
     100 million pounds; coffee, from 7,850,000 to 12,540,000
     pounds; starch, from 3-1/5 to 6-1/3 million pounds. (Quart.
     Rev., Nov., 1829, 518.) The consumption of tea per capita in
     1801 was 1.5 lbs., in 1871, 3.93 lbs. (Statist. Journ.,
     1872, 243.) In the matter of illumination, a very beneficent
     luxury has been obtained, inasmuch as, spite of the fact
     that gas-light is so generally used in recent times, i. e.,
     since 1804, the consumption of oil has very much increased,
     on account of the lamps now so much in favor; and that of
     candles also has increased, relatively speaking, more
     rapidly than the population. The illumination produced is
     much richer now than formerly, a fact which, besides its
     sanitary advantages, has had a good influence in diminishing
     street robberies. (_Julius_, Gefängnisskunde, XXII.) During
     the middle ages, candles were very dear; according to
     _Rogers_ (I, 415) 1-1/3 to 2 shillings per pound.]

     [Footnote 229-9: Present state of England, 1683, III, 529;
     compare _Storch_, Handbuch, II, 337 seq.]

     [Footnote 229-10: _Dieterici_, Statist. Uebersicht, 321 ff.,
     363, 399.]

     [Footnote 229-11: _Bernouilli_, Technologie, II, 223. It is
     a striking symptom of the wealth or ostentation of the later
     period of the Empire that, according to _Ammian. Marcell_,
     (XXIII, 258-ed. Paris, 1636) silk goods were a want even
     among the lower classes, notwithstanding the fact that they
     had to be imported from China.]


SECTION CCXXX.

EQUALIZING TENDENCY OF LATER LUXURY.

The whole social character of this luxury has something
equalizing[230-1] in it; but it supposes particularly that there is not
too marked a difference in the resources of the people.

A proper gradation of national wants is best guarantied by a good
distribution of the national resources.[230-2] The more unequal the
latter is, the more is there spent on vain wants instead of on real
ones; and the more numerous are the instances of rapid and even immoral
consumption. Where there are only a few over-rich men, more foreign
products and products of capital are wont to be called for than home
products and productions of labor; and luxury especially despises all
those commodities manufactured in large institutions.[230-3] Every
change in the consumption-customs of a people, in this respect, should
be most carefully observed; thus, for instance, whether brandy is
exchanged for beer, tobacco for meat, cotton for cloth, or the
reverse.[230-4]

One of the characteristics of this period is the endeavor to possess the
best quality of whatever is possessed at all, and to be satisfied with
less of it rather than purchase more of an inferior quality. This is,
essentially, to practice frugality, inasmuch as certain
production-services remain the same whether the commodity is of the best
or the worst quality, and that commodities of the best quality are more
superior to the worst in intrinsic goodness than they are in price. But
this course supposes a certain well-being already existing.

In this period, also, the luxury of the state is wont to take the
direction of those enjoyments which are accessible to all.[230-5]

     [Footnote 230-1: Formerly the dress of citizens was a weak
     imitation of the court costume: at present the reverse is
     the case, and the court costume is only a heightening of the
     citizen costume. Compare _Riehl_, Bürgerl. Gesellschaft,
     191.]

     [Footnote 230-2: _Helvetius_, De l'Homme, 1771. sec. VI, ch.
     5.]

     [Footnote 230-3: _J. B. Say_, Traité, II, 4; _Sismondi_, N.
     P., IV, ch. 4. As early a writer as _Lauderdale_, Inquiry,
     358 ff., thought the social leveling of modern times would
     promote English industry. In the East Indies, on the other
     hand, only the most expensive watches, rifles, candelabras
     etc. were sold, because the nabobs were the only persons who
     created any demand for European commodities (312 ff.). _Adam
     Smith_, Wealth of Nat., II, ch. 3, draws a very correct
     distinction between the luxury of durable goods and that of
     those which perish rapidly; the former is less calculated to
     impoverish an individual or a whole nation; and hence it is
     much more closely allied to frugality. Similarly even
     _Isocrates_, ad Niccol., 19; _Livy_, XXIV, 7; _Plin._, H.
     N., XIII, 4; _Mariana_, 1598, De Rege et Regis Institutione,
     III, 10; _Sir W. Temple_, Works, I, 140 seq., who found this
     better kind of luxury in Holland: _Berkeley_, Querist, No.
     296 ff.]

     [Footnote 230-4: _Schmoller_, loc. cit., considers it no
     favorable symptom, that in Prussia, between 1802 and 1867,
     the per capita consumption of milk decreased and that of
     wool increased. According to _L. Levi_, the consumption of
     brandy in England decreased from 1854 and 1870, from 1.13 to
     1.01 gallons per capita; but, on the other hand, the
     consumption of malt increased from 1.45 to 1.84 bushels, and
     the consumption of wine from 0.23 to 0.45 gallons. The
     number of licenses to retail spirituous liquors was, in
     1830, 6.30 per thousand of the population; in 1860-69, only
     5.57. (Statist. Journal, 1872, 32 ff.)]

     [Footnote 230-5: Compare _Cicero_, pro Murena, 36. The
     Athenians under Pericles, in times of peace, spent more than
     one-third of their state-income on plastic and architectural
     works of art. The annual state-income amounted to 1,000
     talents (_Xenoph._, Exp. Cyri, VII, 1, 27), while the
     propylea alone cost, within 5 years, 2,012 talents.
     (_Böckh_, Staatsh., I, 283.) On the other hand,
     _Demosthenes_ complains of the shabbiness of public
     buildings, and the magnificence of private ones in his time.
     (adv. Aristocr., 689, Syntax., 174 seq.)

     _Demetrius Phalereus_ blames even Pericles, on account of
     his extravagance on the propylea, although Lycurgus had
     been, not long before, addicted to luxury after the manner
     of Pericles. (_Cicero_, De Off., II, 17.)]


SECTION CCXXXI.

THE ADVANTAGES OF LUXURY.

The favorable results which many writers ascribe to luxury in general
are true evidently only of this period. And thus luxury, inasmuch as it
is a spur to emulation, promotes production in general; just as the
awarding of prizes in a school, although they can be carried away only
by a few, excites the activity of all its attendants. A nation which
begins to consume sugar will, as a rule, unless it surrenders some
previous enjoyment, increase its production.[231-1] In countries where
there is little or no legal security, in which, therefore, people must
keep shy of making public the good condition they are in, this
praise-worthy side of luxury is for the most part wanting.[231-2]

All rational luxury constitutes a species of reserve fund for a future
day of need. This is especially true of these luxuries which take the
form of capital in use (_Nutzkapitalien_.) Where it is customary for
every peasant girl to wear a gold head-dress,[231-3] and every
apprentice a medal, a penny for a rainy day is always laid by among the
lower classes. The luxury which is rapidly consumed has a tendency in
the same direction. Where the majority of the population live on
potatoes, as in Ireland, where, therefore, they are reduced to the
smallest allowance of the means of subsistence, there is no refuge in
case of a bad harvest. A people on the other hand, who live on wheat
bread may go over to rye bread, and a people who live on rye bread to
potatoes. The corn that in good years is consumed in the making of
brandy may, in bad years, be baked into bread.[231-4] And the oats
consumed by horses kept as luxuries may serve as food for man.
Pleasure-gardens (_Lustgärten_) may be considered as a kind of last
resort for a whole people in case of want of land.[231-5] [231-6]

     [Footnote 231-1: Compare _Benjamin Franklin's_ charming
     story, Works I, 134 ff.; ed. Robinson. _Colbert_ recommended
     luxury chiefly on account of its service to production.]

     [Footnote 231-2: Turkish magnates who keep several
     magnificent equipages ride to the sultan's in a very bad
     one. Risa Pascha, when at the height of his power, had his
     house near a villa of the sultan painted in the plainest and
     most unsightly manner possible. The walls of a park in
     Constantinople painted half in red and half in blue, to give
     it the appearance of being two _gardens_. (Alg. Zeitung, 16
     Juli, 1849.) In Saxony, between 1847 and 1850, the number of
     luxury horses diminished from 6.11 to 5.64 per cent. of the
     total number of horses in the kingdom. (_Engel_, Jahrbuch,
     I, 305.) In the same country there were coined in 1848 over
     64,000 silver marks, derived from other sources than the
     mines. (_Engel_, Statis. Zeitschr. I, 85.) In England, on
     the other hand, the number of four-wheeled carriages
     increased more than 60 per cent. between 1821 and 1841,
     while the population increased only 30 per cent. (_Porter_,
     Progress, V, 3, 540.)]

     [Footnote 231-3: Such a head-dress may very easily be worth
     300 guldens in Friesland. Gold crosses worn by the peasant
     women about Paris. (_Turgot_, Lettre sur la Liberté du
     Commerce des Grains.)]

     [Footnote 231-4: So far it is of some significance, that
     nearly all not uncivilized nations use their principal
     article of food to prepare drinks that are luxuries. Thus,
     the Indians use rice, the Mexicans mais, the Africans the
     ignam-root. It is said that in ancient Egypt, beer-brewing
     was introduced by Osiris. (_Diodor._, I, 34.) Compare
     _Jeremy Bentham_, Traité de Législation, I, 160. _Malthus_,
     Principle of Population, I, ch. 12; IV, ch. 11.]

     [Footnote 231-5: While in thinly populated North America,
     space permits the beautiful luxury in cemeteries of
     ornamenting surroundings of each grave separately (_Gr.
     Görtz_, Reise, 24), the Chinese garden-style seeks to effect
     a saving in every respect. In keeping with this is the fact
     that animal food has there been almost abolished. Compare,
     besides, _Verri_, Meditazioni, XXVI, 3.]

     [Footnote 231-6: _Garve_ thinks that luxury, when it takes
     the direction of a great many trifles, little conveniences,
     etc., has the effect of distracting the people. Here there
     are few men of towering ambition or of inextinguishable
     revenge, but at the same time, few entirely unselfish and
     incorruptible patriots. (_Versuche_, I, 232.)]


SECTION CCXXXII.

LUXURY IN DECLINING NATIONS.

In declining nations, luxury assumes an imprudent and immoral character.
Enormous sums are expended for insignificant enjoyments. It may even be
said that costly consumption is carried on there for its own sake. The
beautiful and the true enjoyment of life makes place for the monstrous
and the effeminate.

Rome, in the earlier part of the empire, affords us an example of such
luxury on the most extensive scale.[232-1] Nero paid three hundred
talents for a murrhine vase. The two acres (_Morgen_) of land which
sufficed to the ancient citizens for a farm (_Acker_) were not now
enough to make a fish-pond for imperial slaves. The sums carried by the
exiles with them, to cover their traveling expenses and to live on for a
time, were now greater than the fortunes of the most distinguished
citizens had been in former times.[232-2] There was such a struggle
among the people to surpass one another in procuring the freshest
sea-fish that, at last, they would taste only such as they had seen
alive on the table. We have the most exalted descriptions of the
beautiful changes of color undergone by the dying fish; and a special
infusion was invented to enable the epicure better to enjoy the
spectacle.[232-3] Of the transparent garments of his time, Seneca says
that they neither protected the body nor covered the nakedness of
nature. People kept herds of sheep dyed in purple, although their
natural white must have been much more agreeable to any one with an eye
for the tasteful.[232-4] Not only on the roofs of houses were fish-ponds
to be seen, but gardens even hanging on towers, and which must have been
as small, ugly and inconvenient as they were costly.[232-5] Especially
characteristic of the time was the custom of dissolving pearls in wine,
not to make it more palatable, but more expensive.[232-6] The emperor
Caligula, from simple caprice, caused mountains to be built up and cut
away: _nihil tam efficere concupiscebat, quam, quod posse effici
negaretur_.[232-7] This is the real maxim of the third period of luxury!
People changed their dress at table, inconvenient as it was to do so,
occasionally as often as eleven times. Perfumes were mixed with the wine
that was drunk, much as it spoiled its taste, only that the drinkers
might emit sweet odors from every pore. There were many so used to being
waited on by slaves that they required to be reminded by them at what
times they should eat and when they should sleep. It is related of one
who affected superiority over others in this respect, that he was
carried from his bath and placed on a cushion, when he asked his
attendant: "Am I sitting down now?"[232-8] It is no wonder, indeed, that
an Apicius should reach out for the poisoned cup when his fortune had
dwindled to only _centies sestertium_, _i. e._, to more than half a
million thalers.[232-9]

In this last period, the coarse debauchery of the earlier periods is
added to the refined. Swarms of servants, retinues of gladiators who
might be even politically dangerous,[232-10] monster banquets, at which
Cæsar, for instance, entertained the whole Roman people, colossal
palaces such as Nero's _aurea domus_, which constituted a real city;
annoying ostentation in dress[232-11] again becomes the order of the
day. The more despotic a state becomes, the more is the craving for
momentary enjoyment wont to grow; and for the same reason that great
plagues diminish frugality and morality.[232-12]

     [Footnote 232-1: _Meierotto_, Sitten und Lebensart des
     Römer, II, 1776; _Boettiger_, Sabina, II, 1803;
     _Friedländer_, Darstellungen aus der Sittengeschichte Roms,
     Bd. III, 1868; which latter work has been written with the
     aid of all that modern science can afford.]

     [Footnote 232-2: _Plin._, H. N., XXXVII, 7; XVIII, 2;
     _Seneca_, Quaest. Natur., I, 17; Consol. ad. Helviam, 12.]

     [Footnote 232-3: _Seneca_, Quaest. Natur., III, 18; _Plin._,
     H. N., IX, 30.]

     [Footnote 232-4: _Seneca_, De Benef., VII, 9; _Plin._, N.
     N., VIII, 74.]

     [Footnote 232-5: _Valer. Max._, IX, 1; _Seneca_, Epist, 122.
     Thus Hortensius sprinkled his trees with wine. _Macrob._,
     Sat., III, 13.]

     [Footnote 232-6: Besides Cleopatra, Caligula especially did
     this frequently. Compare also _Horat._, Serm., II, 3, 239
     ff. Similarly, the luxury of the actor Aesopus, when he
     placed a dish worth 6,000 _louis d'or_ before his guests,
     consisting entirely of birds which had been taught to sing
     or speak. _Pliny_, H. N., X, 72. Compare _Horat._, loc.
     cit., 345.]

     [Footnote 232-7: _Sueton._., Caligula, 37. _Hoc est luxuriae
     propositum, gaudere perversis. Seneca_., Epist., 122.
     According to the same letter of Seneca, the luxury of Nero's
     time had its source rather in vanity than in sensuality and
     gluttony.]

     [Footnote 232-8: _Martial_, V, 79; _Plin_., H. N. XIII, 5.
     _Seneca_, De Brev. Vitæ. I, 12.]

     [Footnote 232-9: _Seneca_, Cons. ad Helviam 10, _Martial_,
     III, 22.]

     [Footnote 232-10: Hence, early limited by law. _Sueton._.
     Caes. 10. Augustus limited the exiles to taking 20 slaves
     with them: _Dio Cass._ VII, 27. Special value attached to
     dwarfs, buffoons, hermaphrodites, eunuchs, precisely as
     among the moderns in the times of the degenerated absolutist
     courts, the luxury of which is closely allied in many
     respects to that of declining nations.]

     [Footnote 232-11: Caligula's wife wore, on ordinary
     occasions, 40,000,000 sesterces worth of ornaments. _Plin._
     H. N. IX, 58.]

     [Footnote 232-12: _Gibbon_, History of the Decline and Fall
     of the Roman Empire, ch. 27. What a parallel between this
     later Roman luxury and the literary taste represented for
     instance by Seneca!

     Let any one who would embrace the three periods of luxury in
     one view, compare the funeral ceremonies of the Greek age of
     chivalry (_Homer_, Il.), with those in _Thucyd._ (II, 34,
     ff.), _Demosth._ (Lept., 499 seq.), and the interment of
     Alexander the Great and, of his friend Hephaestion
     (_Diodor._, XVII, 115, XVIII, 26 ff.) Sullas (Serv. ad
     _Virgil_, Æneid VI, 861. _Plutarch_, Sulla, 38), and that of
     the wife of the emperor Nero (_Plin._, H. N. XII, 41).
     _Roscher_, loc. cit. 66 ff.]


SECTION CCXXXIII.

LUXURY-POLICY.

Sumptuary laws (_die Luxusgesetzgebung_) have been aimed, at all times,
principally at the outlay for clothing, for the table and for
funerals.[233-1] In most nations the policy of luxury has its beginning
in the transition from the first to the second period of luxury above
described.[233-2] The extravagant feasts, which remain of the first
period, seem vulgar to the new public opinion which is created. On the
other hand, the conveniences of life, the universality, the refinement
and variety of enjoyments characteristic of the second period are not
acceptable to the austerity of old men, and are put down as effeminacy.
In this period the bourgeoisie generally begin to rise in importance,
and the feudal aristocracy to decay. The higher classes see the lower
approximate to them in display, with jealous eyes. And, hence, dress is
wont to be graded in strict accordance with the differences of
class.[233-3] But these laws must be regarded as emanating from the
tendency, which prevails in these times, of the state to act as the
guardian of its wards, its subjects. The authority of the state waxes
strong in such periods; and with the first consciousness of its power,
it seeks to draw many things into its sphere, which it afterwards
surrenders.

     [Footnote 233-1: Which of these three kinds of luxury
     specially preponderated has always depended on the
     peculiarities of national character. Thus, among the ancient
     Romans, it was the second; among the French, the first. In
     Germany the prohibitions relating to "toasts," or drinking
     one another's health have played a great part. Thus the
     well-known Cologne reformation of 1837. Compare _Seb.
     Münster_, Cosmogr., 326.]

     [Footnote 233-2: In Greece, _Lycurgus'_ legislation seems to
     have contained the first prohibition relating to luxury. No
     one should own a house or household article which had been
     made with a finer implement than an ax or a saw; and no
     Spartan cook should use any other spice than salt and
     vinegar. (_Plut._, De Sanitate, 12; _Lycurg._, 13. On
     Periander, see _Ephorus_, ed. _Marx_, fr. 106. _Heracb._,
     Pont. ed.; _Köhler_, fr. 5; _Diog. Laert._, I, 96 ff.) The
     luxury-prohibitions of Solon were aimed especially at the
     female passion for dress and the pomp of funerals. Those who
     had the surveillance of the sex watched also over the luxury
     of banquets. _Athen._, VI, 245; _Demosth._ in _Macart._,
     1070. In Rome, there were laws regulating the pomp of and
     display at funerals, dating from the time of the Kings; but
     especially are such laws to be found in the twelve tables.
     Lex Oppia de Cultu Mulierum in the year 215 before Christ. A
     very interesting debate concerning the abolition of this law
     in _Livy_, XXXIV, 1 ff. About 189, prohibition of several
     foreign articles of luxury. _Plin._, H. N., XIII, 5, XIV,
     16. Measures of Cato the censor. (_Livy_, XXXIX, 44.) First
     law relating to the table, L. Orchia, in the year 187;
     afterwards L. Fannia, 161, L. Didia, 143 before Christ.
     (_Macrob._, Sat. V, 13; _Gellius_, N. A., II, 24. _Plin._,
     H. N., X, 7.) After a long pause, sumptuary laws relating to
     food, funerals and games of chance, constitute an important
     part of Sulla's legislation.]

     [Footnote 233-3: _Latus clavus_ of the Roman senators;
     _annulus_ of the knights. In the latter middle age, the
     knights were wont to be allowed to wear gold, and esquires
     only silver; the former, damask; the latter, satin or
     taffeta; but when the esquires also used damask, velvet was
     reserved for the knights alone. _St. Palaye_, Das
     Ritterwesen, by _Klüber_, IV, 107; II, 153 seq. But towards
     the end of the middle ages many sumptuary laws were enacted
     in cities by plebeian jealousy of the rich. The Venetian
     sumptuary laws were passed on account of the anxiety of the
     state that some rich men might shine above the rest of the
     oligarchs.]


SECTION CCXXXIV.

HISTORY OF SUMPTUARY LAWS.

As in Italy, Frederick II., in Aragon, Iago I., in 1234, in England,
Edward III., by 37, Edward III., c. 8 ff., so in France Philip IV. was
the first who busied himself seriously with sumptuary
legislation;[234-1] that is the same king who had introduced in so many
things the modern political life into France. (For instance, the
ordinance of 1294, regulating apparel and the luxury of the table.) In
the 14th century, we find sumptuary laws directed mainly against expense
for furs, and in the 16th mainly against that for articles of gold and
silver. From the descriptions left us in such laws of the prohibited
luxuries, we may learn as much of the history of technology and of
fashion, as we may of the history of classes from the gradation of the
things permitted. The fines imposed for violations of these laws, under
Philip IV. went for the most part to the territorial lord; and in the
16th and 17th centuries to the foundation of charitable institutions.
The state, as a rule, took no share of them; doubtless to avoid the
odium which might attach to this kind of revenue.

Beginning with the end of the 16th century, the sumptuary laws of France
relating to the luxuries permitted to the several classes of the people
disappear. The legislator ceases to be guided by moral considerations
and begins to be influenced by reasons partaking of a commercial and
police character; and here we may very clearly demonstrate the origin of
the so-called mercantile or protective system. Thus, in the declaration
of Louis XIV. dated December 12, 1644, we find a complaint, that not
only does the importation of foreign articles of luxury threaten to rob
France of all its gold and silver, but also that the home manufacture of
gold cloth, etc., which at Lyons alone ate up 10,000 livres a week, had
the same effect. Under Colbert, in 1672, it was specially provided for,
in the prohibition of coarser silver ware, that all such ware should be
brought to the mint.[234-2] In the edict of 1660, the king even says
that he has in view especially the higher classes, officers, courtiers,
etc., in whom it was his duty to be most deeply interested. To preserve
the latter from impoverishment was the main object of the law.

Under Louis XV. all sumptuary laws were practically a dead
letter.[234-3] Their enforcement is, indeed, exceedingly difficult, as
it is always harder to superintend consumption than production. The
latter is carried on in definite localities, not unfrequently even in
the open air. The former is carried on in the secrecy of a thousand
homes. Besides, sumptuary laws have very often the effect to make the
forbidden fruit all the sweeter. Where they are based on a difference of
class, not only the passion for pleasure, but the vanity of the lower
classes is an incentive to their violation.[234-4] Spite of the severity
of the penalties attached to the violation of these laws, of redoubled
measures of control, which are dreadful burdens on the intercourse
between man and man,[234-5] the French government has been compelled to
admit, after almost every internal commotion, and almost every external
war, that its sumptuary laws fell into disuse.

     [Footnote 234-1: Ordonnances de France, I, 324, 531. Worms
     law of 1220. (_Riehl_, Pfälzer, 246.) Braunschweig law of
     1228, that at weddings there should not be over 12 plates
     nor more than three musicians. (_Rehtmeyer_, Chron., 466.)
     Danish sumptuary law of 1269. First law regulating dress in
     Prussia in 1269. (_Voigt_, Gesch. von Preussen, V, 97.) On
     Henry II., see _v. Raumer_, Hohenstaufen, VI, 585. Some of
     the earlier restrictions on luxury, such as that of 190 in
     England and France, against scarlet ermine, etc., may have
     been related to the religious fervor of the crusades. _St.
     Louis_, during the whole period of his crusades wore no
     articles of luxury.]

     [Footnote 234-2: The English prohibition against the wearing
     of silk on hats, caps, stockings etc. (1 and 2 Phil. and
     Mary, ch. 2.) was promulgated with the intention of
     promoting the home manufacture of wool. And so _Sully_,
     Economics, L, XII, XVI, was in favor of laws regulating
     outlay mainly from "mercantilistic" reasons, that the
     country might not be impoverished by the purchase of foreign
     expensive articles. The police ordinance of the Empire of
     1548, tit. 9, desired to guard against both the "excessive"
     exportation of money and the obliteration of class
     differences; that of 1530, tit. 9, and the Austrian police
     ordinance of Ferdinand I. had only the second object in
     view. (_Mailath_, Gesch., von Oesterreich, II, 169 ff.) How,
     in Denmark, prohibitions of luxury grew very soon into
     prohibitions of imports with a protective intention, see in
     _Thaarup_, Dänische Statistik, I, 521 seq. On the
     mercantilistic object of the greater number of prohibitions
     of coffee, in the 18th century, see _Dohm_, über
     Kaffeegesetzgebung, in the D. Museum, Bd., II, St. 8, No.
     4.]

     [Footnote 234-3: _Des Essart_, Dictionnaire universel de
     Police, VI, 146. In Great Britain, the Scotch luxury-law of
     1621 is the last. (_Anderson_, Origin of Commerce, a. 1621.)
     In Germany, there were some such laws until the end of the
     18th century; and the laws regulating mourning have lasted
     longest. Compare that of Frederick the Great of 1777, the
     Bamberg and Wurzberg laws of 1784, in _Schlözer_,
     Staatsanzeigen, IX, 460; fol. 141 ff. There are many men who
     have no desire to go to any heavy expense in mourning, but
     do not dare to give expression thereto in certain cases, and
     therefore look with favor on a law to which they may appeal
     as an excuse.]

     [Footnote 234-4: Compare _N. Montaigne_, 1580, Essais, I,
     63. A striking instance in antiquity: _Macrob._, II, 13;
     most recently in _Lotz_, Revision, I, 407.]

     [Footnote 234-5: Compare especially the French sumptuary law
     of 1567. Zaleucos went so far in his severity as to punish
     with death the drinking of unmixed wine, without the
     prescription of a physician. (_Athen._, IX, 429.) The effort
     has sometimes been made to enlist the feeling of honor of
     the people in the controlling of luxury. Thus old Zaleucos
     forbade the wearing of gold rings or Milesian cloth unless
     the wearer desired to commit adultery, or to be guilty of
     sins against nature (_Diodor._, XII, 21); but such laws are
     scarcely attended with success.]


SECTION CCXXXV.

DIFFICULTY OF ENFORCING SUMPTUARY LAWS.

The impossibility of enforcing sumptuary laws has been most strikingly
observed, where it has been attempted to suppress the consumption of
popular delicacies in the first stages of their spread among the people.
Thus, an effort was made in this direction in the sixteenth century, as
regards brandy; in the seventeenth, as regards tobacco; in the
eighteenth, as regards coffee; all which three articles were first
allowed to be used only as medicines.[235-1] When governments discovered
after some time the fruitlessness of the efforts, they gave up the
prohibition of these luxuries and substituted taxes on them
instead.[235-2] Thus an effort was made to combine a moral and a fiscal
end. But it should not be lost sight of that the lower these taxes are,
the greater the revenue they bring in; that is, the less the moral end
is attained, the more is the fiscal end. Even Cato took this course. His
office of censor, which united the highest moral superintendence with
the highest financial guidance, must of itself have led him in this
direction.[235-3] In modern times the most important excises and
financial duties of entry have been evolved out of sumptuary laws. Even
the Turks, after having long tried to prohibit tobacco-smoking in vain,
afterwards found in the duties they imposed on that plant a rich source
of income. That such taxes are among the best imposed, where they do not
lead to frauds on the government, become excessive, or diminish
consumption to too great an extent, is universally conceded.

Beyond this there is, on the whole, little left of the old police
regulations relating to luxury. Thus, governmental consent is, in most
countries, required for the establishment of places where liquors are
sold at retail, for the maintenance of public places of amusement, for
shooting festivals, fairs, etc.; and this consent should not be too
freely granted. The police power prescribes certain hours at which
drinking places shall be closed. Games of chance are wont to be either
entirely prohibited or restricted to certain places and times (bathing
places), or are reserved as the exclusive right of certain institutions,
especially state institutions. The object of this is, on the one hand,
to facilitate their supervision, and on the other, to diminish the
number of seductive occasions. Here, too, belongs the appointment of
guardians to spendthrifts, which is generally done on the motion of the
family by the courts; but which, indeed, occurs too seldom to have any
great influence on the national resources, or on national morals.[235-4]

     [Footnote 235-1: Hessian law that only apothecaries should
     retail brandy, 1530. English tobacco laws of 1604; _Rymer_,
     Fœdera, XVI, 601. Papal excommunication fulminated in
     1624, against all who took snuff in church, and repeated in
     1690. A Turkish law of 1610 provided that all smokers should
     have the pipe broken against their nose. A Russian law of
     1634, prohibiting smoking under penalty of death. In
     Switzerland, even in the 17th century, no one could smoke
     except in secret. Coffee had a hard struggle even in its
     native place. (_Ritter_, Erdkunde, XIII, 574 ff.) Prohibited
     in Turkey in 1633, under pain of death. _v. Hammer_,
     Osmanische Staatsverwaltung, I, 75. In 1769, coffee was
     still prohibited in Basel, and was allowed to be sold by
     apothecaries only, and as medicine. (_Burkhardt_, C. Basel,
     I, 68.) Hanoverian prohibition of the coffee trade in the
     rural districts in 1780: _Schlözer_, Briefwechsel, VIII, 123
     ff.]

     [Footnote 235-2: According to _v. Seckendorff_,
     Christenstaat, 1685, 435 seq., a decidedly unchristian
     change.]

     [Footnote 235-3: _Livy_, XXXIX, 44. In Athens, too, the
     highest police board in the matter of luxury was the
     areopagus, which was at the same time a high financial
     court. Sully transformed the prohibition of luxury in regard
     to banquets into a tax on delicacies. Similarly, in regard
     to funeral-luxuries, at an earlier date. (_Cicero_, ad.
     Att., XII, 35.)]

     [Footnote 235-4: Customary even in the early Roman republic,
     and adjudged _exemplo furioso_. (_Ulpian_, in L. 1 Digest,
     XXVII, 10.) The immediate knights of the empire were in this
     respect very severe towards those of their own order. See
     _Kerner_, Reichsrittersch. Staatsrecht, II, 381 ff. _Sully_
     ordered the parliaments to warn spendthrifts, to punish them
     and place them under guardianship. (Economies royales, L,
     XXVI.) According to _Montesquieu_, it is a genuine
     aristocratic maxim to hold the nobility to a punctual
     payment of their debts. (Esprit des Lois, V, 8.)]


SECTION CCXXXVI.

EXPEDIENCY OF SUMPTUARY LAWS.

To judge of the salutariness of sumptuary laws, we must keep the above
three social periods in view throughout. At the close of the first
period, every law which restricts the excesses of the immediately
succeeding age (the middle age) is useful because it promotes the noble
luxury of the second period.[236-1] And so, in the third period,
legislation may at least operate to drive the most immoral and most
odious forms of vice under cover, and thus to diminish their contagious
seduction. It is a matter of significance that, in Rome, the most
estimable of the emperors always endeavored to restrict luxury.[236-2]
But too much should not be expected of such laws. _Intra animum medendum
est; nos pudor in melius mutet._[236-3] It is at least necessary, that
the example given in high places should lend its positive aid, as did
that of Vespasian, for instance, who thus really opposed a certain
barrier to the disastrous flood of Roman luxury.[236-4]

But a strong and flourishing nation has no need of such leading
strings.[236-5] Where an excrescence has to be extirpated, the people
can use the knife themselves. I need call attention only to the
temperance societies of modern times (Boston, 1803), which spite of all
their exaggeration[236-6] may have a very beneficial effect on the
morally weak by the solemn nature of the pledge, and the control their
members mutually exercise over one another. It is estimated that, of all
who enter them, in the British Empire, at least 50 per cent. remain true
to the pledge. In Ireland the government had endeavored for a long time
to preserve the country from the ravages of alcohol by the imposition of
the highest taxes and the severest penalties for smuggling. Every
workman in an illegal distillery was transported for seven years, and
every town in which such a one was found was subjected to a heavy fine.
But all in vain. Only numberless acts of violence were now added to
beastly drunkenness. On the other hand, the temperance societies of the
country decreased the consumption of brandy between 1838 and 1842, from
12,296,000 gallons to 5,290,000 gallons. The excise on brandy decreased
£750,000; but many other taxable articles yielded so much larger a
revenue, that the aggregate government income there increased about
£91,000.[236-7] [236-8] The Puritanical laws which some of the United
States of North America have passed prohibiting all sales of spirituous
liquors except for ecclesiastical, medical or chemical purposes, have
been found impossible of enforcement.[236-9] [236-10]

     [Footnote 236-1: Commendable laws relating to luxury in
     Florence in the beginning of the 15th century. The outlay
     for dress, for the table, for servants and equipages was
     limited; but, on the other hand, it was entirely
     unrestricted for churches, palaces, libraries, and works of
     art. The consequences of this legislation are felt even in
     our day. (_Sismondi_, Gesch. der Ital. Freistaaten im M. A.,
     VIII, 261. Compare _Machiavelli_, Istor. Fior., VII, a.,
     1472.)]

     [Footnote 236-2: Thus Nerva (_Xiphilin._, exc. Dionis,
     LXVIII, 2); Hadrian (_Spartian V. Hadrian_, 22); Antoninus
     Pius (Capitol, 12); Marcus Aurelius (Capitol, 27); Pertinax
     (Capitol, 9); Severus Alexander (_Lamprid_, 4); Aurelian
     (_Lamprid_, 49); Tacitus (_Vopisc_, 10 seq).]

     [Footnote 236-3: Extracted from the remarkable speech made
     by the personally frugal Tiberius (_Sueton._, Tib., 34)
     against sumptuary laws: _Tacit._, Annal., III, 52 ff.
     Compare, however, IV, 63.]

     [Footnote 236-4: _Tacit._, Ann., III, 55: but the
     differences in fortune had, at the same time, become less
     glaring. Henry IV. also dressed very simply for example's
     sake, as did also Sully, and ridiculed those _qui portaient
     leurs moulins et leur bois de haute-futaie sur leurs dos_.
     (_Péréfixe_, Histoire du Roi Henry le grand, 208.)]

     [Footnote 236-5: The gross luxuries of drunkenness and
     gluttony are a direct consequence of universal grossness,
     and disappear of themselves when higher wants and means of
     satisfying them are introduced. (_v. Buch_, Reise durch
     Norwegen und Lappland, 1810, I, 166; II, 112 ff.)]

     [Footnote 236-6: While, formerly, they cared only to abstain
     from spirits, the so-called "total abstinence" has prevailed
     since 1832. Most teetotallers compare moderate drinking to
     moderate lying or moderate stealing; they even declare the
     moderate drinker worse than the drunkard, because his
     example is more apt to lead others astray, and he is harder
     to convert. (But, Psalm, 104, 15!) The coat of arms of the
     English temperance societies is a hand holding a hammer in
     the act of breaking a bottle. (Temperance poetry!)]

     [Footnote 236-7: _McCulloch_, On Taxation, 342 ff. Speech of
     _O'Connell_ in the House of Commons, 27 May 1842. The more
     serious crimes decreased 1840-44, as compared with the
     average number during the five previous years by 28, and the
     most grievous by 50 per cent. (_Rau_, Lehrbuch, II, § 331.)
     Recently, the first enthusiasm awakened by Father Matthew
     has somewhat declined, and the consumption of brandy
     therefore increased. Yet, in the whole United Kingdom in
     1853, only 30,164,000 gallons were taxed; in 1835,
     31,400,000; although the population had in the meantime
     increased from 10 to 11 per cent. In 1834, there were in the
     United States 7,000 temperance societies with a membership
     of 1,250,000. The members of these societies are sometimes
     paid higher wages in factories; and ships which allow no
     alcohol on board are insured at a premium of five per cent.
     less. (_Baird_, History of the Temperance Societies in the
     United States, 1837.)]

     [Footnote 236-8: In the princedom of Osnabrück, the number
     of distilleries was noticeably diminished under the
     influence of the temperance societies; but the consumption
     of beer was rapidly increased twenty-fold. (Hannoverisches
     Magazin, 1843, 51. _Böttcher_, Gesch. der M. V. in der
     Norddeutschen Bundestaaten, 1841.)]

     [Footnote 236-9: Even in 1838, Massachusetts had begun to
     restrict the sale at retail. The agitation for the
     suppression of the liquor shops begins in 1841. According to
     the Maine law of 1851, a government officer alone had the
     right to sell liquor, and only for the purposes mentioned in
     the text. The manufacture or importation of liquor for
     private use was left free to all. A severe system of
     house-searching, imprisonment and inquisitorial proceedings
     in order to enforce the law. Similarly in Vermont, Rhode
     Island, Massachusetts and Michigan. (Edinburg Rev., July,
     1854.) There are, however, numberless instances related in
     which the law has been violated unpunished since 1856, and
     still more since 1872. See _R. Russell_, North America, its
     Agriculture and Climate, and Edinburg Rev., April, 1873,
     404.]

     [Footnote 236-10: From the foregoing, it is intelligible why
     most modern writers, even those otherwise opposed to luxury,
     are not favorably inclined towards sumptuary laws. "It is
     the highest impertinence and presumption in kings and
     ministers, to pretend to watch over the economy of private
     people and to restrain their expense, either by sumptuary
     laws or by prohibiting the importation of foreign luxuries.
     They are themselves always, and without any exception (?)
     the greatest spendthrifts in the society. If their own
     extravagance does not ruin the state, that of their subjects
     never will." (_Adam Smith_, I, ch. 3.) Compare _Rau_,
     Lehrbuch II, § 358 ff. _R. Mohl_, Polizeiwissenschaft, II,
     434 ff.

     _Montesquieu's_ opinion that in monarchies luxury is
     necessary to preserve the difference of class but that in
     republics it is a cause of decline, is very peculiar. In the
     latter, therefore, luxury should be restricted in every way:
     agrarian laws should modify the too great difference in
     property and sumptuary laws restrain the too glaring
     manifestations of extravagance. (Esprit des Lois, VII, 4.)
     As an auxiliary to the history of sumptuary laws, compare
     _Boxmann_, De Legibus Romanorum sumptuarias, 1816. _Sempere
     y Guarinos,_ Historia del Luxo y de las Leyes sumtuarias de
     Espana, II, 1788; _Vertot_, Sur l'Establissement des Lois
     somptuaires parmi les Français, in the Mémoires de
     l'Academie des Inscr., VI, 737 seq, besides the sections on
     the subject in _Delamarre_, Traité de la Police, 1772 ff.;
     _Penning_, De Luxu et Legibus sumtuariis, 1826.
     (_Holland._)]



CHAPTER III.

INSURANCE IN GENERAL.


SECTION CCXXXVII.

INSURANCE IN GENERAL.

The idea of societies for mutual assistance intended to divide the loss
caused by destructive accidents which one person would not be able to
recover from among a great many is very ancient. The insurance of their
members against causes of impoverishment was one of the principal
elements[237-1] of the strength of the medieval communities (_Gemeinden
und Körperschaften._) If we compare these insurance institutions of the
middle ages with those of the present, we discover the well-known
difference between a _corporation_ and an _association_. There the
members stand to one another in the relation of _persons_ who,
therefore, seek to guaranty their entire life in the one combination;
here, they appear only as the representatives of limited portions of
capital confronted with a definite risk, the average of which may be
accurately determined. Hence, the former are of small extent, mostly
local; the latter may extend over whole continents, and even over the
whole earth. The former have uniformly equal members; the latter embrace
men of the most different classes. While the former, therefore, simply
govern themselves, often only on the occasion of their festive
gatherings, the latter need a precise charter, an artificial tariff and
a board of officers.

As the absolute monarchical police-state constitutes, generally, the
bridge between the middle ages and modern times, so too the transition
from the medieval to the modern system of insurance has been frequently
introduced by state insurance.[237-2] [237-3] This was very natural at a
time when the guilds of the middle ages had lost their importance, and
private industry was not ripe enough to supply the void left by them.
The government of a country, far in advance intellectually of the
majority of its subjects, may, by force, induce them to participate in
the beneficent effects of insurance, and immediately provide
institutions extensive enough to guaranty real safety. While it may be
called a rule that mature private industry satisfies wants more rapidly,
in greater variety, and more cheaply than state industry; in the case of
insurance against accidents, especially of insurance against fire, there
are many peculiarities found which would make the entire cessation of
the immediate action of the state in this sphere, or its limitation
simply to a legislative and police supervision of insurance, seem a
misfortune. A dwelling is one of the most universal and urgent of wants,
and indeed a governing one in all the rest of the arrangements of life.
If it be destroyed, it is especially difficult to find a substitute for
it, or to restore it. And to the poorest class of those who need
insurance, private insurance will, perhaps, be never properly
accessible.[237-4] If German fire insurance and the German system of
fire prevention be so superior to the English and North American, etc.,
one of the principal causes is that German governmental institutions so
powerfully participate in it.[237-5]

     [Footnote 237-1: The Icelandic _repps_ consisting as a rule
     of 20 citizens subject to taxation, who mutually insured one
     another against the death of cattle (to the extent of at
     least one-fourth the value), and against damage from fire.
     After every fire three chambers of each house were replaced;
     so also the loss of clothing and of the means of
     subsistence, but not other goods or articles of display.
     (_Dahlmann_, Danisch Gesch., II, 281 ff.) Scandinavian
     parish-duty, (_Gemeindepflicht),_ of assistance in case of
     damage by fire: _Wilda_, Gesch. des deutschen Strafrechts,
     I, 142. Similarly Capitul. a. 779 in _Pertz_, Leges, I, 37.
     This matter plays an important part in the guilds out of
     which a large portion of the ancient cities were evolved:
     compare _Wilda_, Gildenwesen in M. Alter. 123.]

     [Footnote 237-2: Proposed national fire insurance
     (_Landesbrandversicherung_) in which for the time being
     several villages should form a company, the surplus of which
     was to go to the ærarian, and the deficit to be made up by
     the same: _Georg Obrecht_, Fünf unterschiedliche Secreta,
     Strasburg, 1617, No. 3. A similar proposition made on
     financial grounds in 1609, and rejected in Oldenburg.
     (_Beckmann_, Beitr. zur Gesch. der Erfind, I, 219 ff.) The
     idea sometimes suggested in our day, of making the system of
     insurance a government prerogative, arises as much from the
     passion for centralization as from socialistic tendencies.
     Compare the Belgian Bulletin de la Commission de Statist.
     IV, 210, and _Oberländer_, Die Feuerversicherungsanstalten
     vor der Ständeversammlung des k. Sachsen, 1857.]

     [Footnote 237-3: Maritime insurance is much older than
     insurance against risks on land; the Dutch institutions of
     Charles V.'s time seem to have existed long before.
     (Richesse de Hollande, I, 81 ff.) On Flemish, Portuguese and
     Italian maritime insurance in the 14th century, see
     _Sartorius_, Gesch. der Hanse, I, 215; _Schäfer_, Portug.
     Gesch. II, 103 ff., and _F. Bald. Pegolotti_, Tratato della
     Mercatura in Della decima, etc., della Moneta e della
     Mercatura dei Fiorentini, 1765. The class engaged in
     maritime commerce are indeed especially and early rich in
     capital, speculative and calculating.]

     [Footnote 237-4: In Berlin, in 1871, the movable property of
     30.4 per cent. of all dwellings was insured; but with this
     great difference, that of the smallest (without any heatable
     rooms) only 5.3 per cent. were insured; while of dwellings
     having 5-7 heatable rooms, 84 per cent. had taken this
     precaution. (_Schwabe_, Volkszahlung von 1871, 169) But it
     should not be forgotten that private insurance, especially
     when speculative, is not in favor of having much to do with
     persons of small means, while public institutions are, for
     the most part, obliged to reject no proposition for
     insurance in their own line, except when coming from a few
     manufacturing quarters especially exposed to fire.]

     [Footnote 237-5: Outside of Germany, public fire insurance
     is to be still found only in German Austria, in Denmark,
     Switzerland and Scandinavia. The Germans had, in 1871, an
     insurance-sum of 5,908,760,000 thalers, while the mutual
     private insurance companies had about 1,435,000,000 (of
     which, at most, 200,000,000 to 300,000,000 were on immovable
     property), and joint-stock insurance companies, after
     deducting re-insurance (_Rückversicherung_), about
     7,000,000,000. (Mittheilungen der öff. F. V. Anstalten,
     1874, 84 ff.) Between 1865 and 1870, it was estimated that
     the per capita insurance of the population was: in Saxony,
     407 thalers; in Würtemberg, 410; in Baden, 365; in Prussia,
     332; in Switzerland, 425. On the other hand, in the much
     wealthier British Empire, only 325 per capita; in North
     America, 215. (loc. cit., 92.) Even in the case of
     joint-stock insurance companies, the average receipts of
     premiums (1867-70) were, in Germany, 2 per 1,000 of the
     insurance-sums; in the United Kingdom, 4.06 per 1,000; in
     the United States, 10.77; and the damage respectively 1.25,
     2.28, 5.92 per 1,000 of the insurance-sum. (loc. cit., 93.)]


SECTION CCXXXVII (_a_).

INSURANCE IN GENERAL.--MUTUAL AND SPECULATIVE INSTITUTIONS.

All insurance institutions fall into two classes:

A. Mutual insurance companies, in which the insured are also as a
society the insurers, and share the aggregate damage, of a year, for
instance, among themselves.

B. Speculative institutions, in which a party, generally a joint-stock
company, in consideration of a certain definite compensation (premium
agreed upon and paid in advance), assumes the risk.[237a-1]

So far as security is concerned, no absolute preference can be accorded
to either of these classes. Mutual insurance companies require to extend
their business very largely[237a-2] to be able to meet great damage. And
even where the liability of the members is unlimited, care must be taken
to distinguish between the legally and the actually possible.[237a-3]
The joint capital of a well organized[237a-4] premium-association
affords, in this respect sufficient security from the first, but the
ratio between its security-fund and the amount of its assumed
liabilities becomes less favorable as the business is extended, in case
the fund itself is not enlarged.[237a-5] Mutual insurance may accomplish
something analogous to that accomplished by a joint-stock fund by
collecting a reserve of yearly dues in advance, thus modifying the
burdensome vacillation of the amount payable each year.[237a-6]
Experience, however, teaches, that the strongest form of mutual
insurance, that supported either by municipalities or by the state, has
been able to meet extraordinary damage from fire much better than
premium-institutions, which are too quickly left in the lurch by the
stockholders when the damage is greater than the amount of the stock
subscribed. So also loss from fire caused by war or riots is for the
most part and on principle, excluded by speculative insurance
institutions.[237a-7]

In point of cheapness to the insured, mutual insurance seems to have the
advantage, since it contemplates no profit.[237a-8] From a
national-economical point of view, also, it is very much of a question,
whether the active competition of premium institutions, in a sphere
which affords little room for industry proper, is more of a spur to make
them "puff up" their claims (_Reclamen_) or to the simplification of
their administration.[237a-9] However, premium-institutions are more
easily capable of extending the circle of their business;[237a-10] which
of itself decreases the general expenses and strengthens their insuring
power. Premium-insurance supposes a greater development of capitalistic
speculation than does mutual insurance. But, even in the highest stages
of civilization, the competition of some mutual insurance companies is
desirable to protect the insured from a too high rate of profit to the
insurers.[237a-11] [237a-12] And since the principle of mutual insurance
has so little attraction for capitalists in a time like that in which we
live that it can be maintained perhaps only by the support of the state
or of municipalities, we may consider the desirableness of the state's
continuing to participate in some way in the matter of insurance as
established.

     [Footnote 237a-1: We might, however, improperly add another
     class, that of self-insurance, which lies in the proper
     distribution of a large capital over a great many points.
     When, for instance, a large state insures its buildings,
     this seems a superfluous outlay of public money for the
     benefit of private associations. Or does England insure its
     ships? On this account, in Prussia, the insurance of
     post-offices which Frederick William favored, has recently
     been done away with. (_Stephan_, Gesch. der Preuss. Post,
     195, 803.)]

     [Footnote 237a-2: According to _Brüggemann_ (D. Allg. Ztg.,
     1849, No., 75 ff.), 100 million thalers of an insurance-sum.
     Actual American legislation prescribes in the case of mutual
     insurance a minimum number of members of from 200 to 400, a
     minimum amount of annual premiums of from $25,000 to
     $200,000, of cash payments on the annual premium of from 10
     to 40 per cent. of cash-paid yearly premiums, $5,000 to
     $40,000; and a maximum amount of premium notes made by a
     member of $500. (Compare Mittheilungen, 26 ff.)]

     [Footnote 237a-3: Hence several mutual companies limit
     themselves to a maximum liability. Thus, for instance, the
     Gotha Fire Insurance Company requires from each member a
     bond that in case of necessity, four times the amount of the
     presumptive contribution paid in advance shall be paid
     after; in Altona, six times the yearly premium is the
     maximum.]

     [Footnote 237a-4: In France, every premium-insurance-company
     has to be approved by the government (Cod. de Comm., art
     37), and the approval is not given until 1/5 of the
     joint-stock capital has been deposited. (_Block_, Dictionn.
     de l'administration, Fr. 153.) Many recent American laws
     require that the shares of insurance companies should be
     registered with the name of the owner.]

     [Footnote 237a-5: The Aix-Munich Fire Insurance Association
     raised its joint-stock capital after the Hamburg fire from 1
     to 3 million thalers.]

     [Footnote 237a-6: Usually so that the regular yearly
     contribution is higher than the average damage and cost of
     administration; this excess is then returned in the form of
     a dividend, either immediately at the close of the yearly
     account, or which is still safer, after several years. In
     the Stuttgart private insurance company, the reserve must
     amount to one per cent. of the amount insured, before the
     premium-surplus is returned. The Gotha fire insurance
     company, between 1821 and 1842, paid back an average of 46
     per cent.; and even in 1842, after the Hamburg
     conflagration, there was an after-payment of only 98 per
     cent. necessary. This collection in advance of a fund for
     extraordinary losses is more secure than borrowing in case
     of need, and paying back in good years. Thus, the Baden
     Landes-Brandkasse had a debt in 1837 of 800,000 florins.
     (_Rau_, in the Archiv., III, 320 ff.) In a mutual insurance
     company, where entrance and exit are free, this would be
     scarcely possible.]

     [Footnote 237a-7: Nearly three-fourths of the public
     insurance institutions insure also against fire caused by
     war (Mitth., 1874, 85), a matter of importance even as war
     is waged in our own days, since in 1870-71, the damage from
     fire by the Franco-Prussian war in France was estimated at
     141,000,000 francs. (Mitth., 1873, 33.)]

     [Footnote 237a-8: In Prussia, the mutual fire insurance
     companies, in 1865 and 1866 had an administration outlay of
     0.24 and 0.22 per 1,000 of the amount insured; the premium
     insurance companies of 0.80 and 0.96; the latter doubtless
     including large assessments for common purposes. (Preuss.
     Statist. Ztschr., 1868, 269.) In all Germany, the outlay for
     administration is, for public institutions, 4 per cent. of
     the contributions; for premium institutions, inclusive of
     their dividends, 37.1 per cent.; for the more important
     French private institutions, even 68.8 per cent. (Mitth.,
     1874, 89, 92.)]

     [Footnote 237a-9: German public fire insurance institutions
     generally have a territory of their own, in which that
     institution is the only one of the kind. On the other hand,
     the premium institutions in the whole empire keep about
     80,000 agents, i. e., a number 50 times as large as the
     number of officers of the former, (loc. cit. 90.)]

     [Footnote 237a-10: Mutual insurance companies, as they have
     extended, have sometimes split up into several; for
     instance, the insurance companies against damage by hail at
     Lübeck, Güstrow, Schwedt and Griefswald, daughters of that
     at New Brandenburg.]

     [Footnote 237a-11: The founder of the Mutual Fire Insurance
     Company of Gotha expressed the hope that in it, it would be
     possible to insure 60 per cent. cheaper than was customary
     in the joint stock companies of the time. In the system of
     agricultural _Einzelhöfe_ in Germany, small mutual insurance
     companies are possible, and insurance then may be very
     cheap.]

     [Footnote 237a-12: On the premium associations, _Bernoulli_
     Ueber die Vorzüge der gegenseitige Brandasscuranzen vor
     Prämiengesellschaften, 1827. _Per contra_, _Masius_, Lehre
     der Versicherung und Statische Nachweisung aller V.
     Anstalten in Deutschland, 1846. In Prussia, premium
     associations are growing more rapidly than mutual: the per
     capita amount on the whole population insured in the former
     against damage from fire in 1861 was 116.6 thalers; in 1866,
     154.2; in 1869, 176.6; in the latter in 1861, 103.5; 1866,
     124.3; 1869, 154.3 thalers. (_Engel_, Statist. Zeitschr.,
     1868, 268 ff.; 1871, 284 ff.) In France, in the former, in
     1857, almost 36 milliards of francs; in the latter, in 1864,
     13 milliards. (Mitth., 1871, 51.)]


SECTION CCXXXVII (_b_).

INSURANCE IN GENERAL.--ECONOMIC ADVANTAGES OF INSURANCE.

The national-economic advantage of insurance consists in this, that the
damage which is divided among many, and which, therefore, is felt but
lightly by each one, is probably made up for, not by an inroad upon the
body of still existing original resources, but by savings made from
income. This, indeed, is unconditionally true only of such damage as
does not depend at all on the will of man, such as, for instance, the
damage caused by hail. On the other hand, there is especially in
maritime[237b-1] and fire insurance,[237b-2] a great temptation to
culpable and even criminal destruction; to the latter, when the object
insured is estimated at too high a value. (Speculation-fires!) And it is
difficult to say whether this drawback or that advantage is the greater.
But, on the other hand, every kind of insurance is attended by good
consequences to the credit of a people. It is of advantage to personal
credit, since it prevents sudden impoverishment; but it is by far more
advantageous to real-credit (_Realcredit_ = _material credit_) the
pledges of which, while their forms may be destroyed, it preserves the
value of; that is their economic essence. This last is most clearly
manifest in the case of public insurance institutions, with compulsory
participation; while in the case of entirely voluntary insurance, the
creditor can never be certain that his debtor has not neglected
something necessary. The aggregate danger is less than the sum of
individual dangers, for the reason that it is more certain, and that
uncertainty of itself is an element of danger.[237b-3] [237b-4]

     [Footnote 237b-1: Even in Demosthenes' oration against
     Zenothemis, we may see how easily the analogy of maritime
     insurance may lead to criminal destruction of property.
     Similar cases mentioned by _Pegolotti_ before the middle of
     the 14th century. (Delia Decima dei Fiorentini, III, 132.)]

     [Footnote 237b-2: French experience teaches that during a
     commercial crisis there are more fires in mercantile
     magazines than at other times; while in times when sugar is
     a drug in the market, etc., many sugar factories are burned.
     (Dictionnaire de l'Econ. polit, I, 88.) The style of our
     house-building and fire-extinguishing institutions is wont
     to improve with economic culture. Hence, for instance, in
     Mecklenburg, 1651 to 1799, cities burned down, in whole or
     in greatest part, 72 times; 1800 to 1850, only once.
     (_Boll_, Gesch., von Mecklenb., II, 618 ff.) However, in
     many countries the damage caused by fire has largely
     increased: in Baden, for instance, by 100,000 florins a
     year. Insurance capital, 1809 to 1818, 65 fl.; 1819 to 1828,
     128 fl.; 1829 to 1836, 152 fl. (_Rau_, Archiv, III, 322.)
     Similarly in Switzerland. In Bavaria, of every 10,000
     buildings insured, in 1856-60, there were 4.6 fires per
     annum; 1861-65, 5.04; 1866-69, 8.67. (Preuss. Statist.
     Ztschr., 1871, 315.)

     In Saxony, in 1849-53, there was one fire in every 290
     buildings; 1854-58, in every 201; 1859-63, in every 180. Of
     these fires, 68 per cent. of the whole number were from
     known causes, i. e., 36.4 per cent. from incendiarism; 28.5
     per cent. from negligence. (Sächs, Statist. Ztschr., 1866,
     106, 115.) Even in antiquity, similar evil consequences
     attended the generosity which gratuitously compensated
     damage by fire. Compare _Juvenal_, III, 215 ff.; _Martial_,
     III, 52. In England, of every 128 cases of damage by fire of
     "farming stock," 49 were caused by incendiaries, for the
     most part actuated by revenge. Hence, there, a notice is
     posted on insured buildings by the insurance companies which
     runs: "this farm is insured; the fire office will be the
     only sufferer in the event of a fire." In London, of every
     seven fires among the small trading class, one is estimated
     to have been the work of an incendiary, and of all fires at
     least one-third (Athenæum, 2, Nov., 1867), if not one-half
     (Mitth., 1879, 100). One of the largest English fire
     insurance companies estimates that the introduction of the
     lucifer match has caused it a damage of £10,000 per annum.
     Of 9,345 fires, 932 were ascribed to gas, 89 to certain, and
     76 to doubtful, incendiarism, 127 to lucifer matches, 8 to
     storms, 100 to negligence, 80 to drunkenness, 2,511 to the
     catching fire of curtains, 1,178 to candles, 1,555 to
     chimneys, 494 to stoves, 1,323 to unknown causes. (Quart.
     Rev., Dec, 1854, 14 ff.) Fires originate from criminal
     (_dolose_) causes most frequently when a new stage in the
     politico-economical development of a people is reached,
     which renders the buildings put up in a former and lower
     stage of development insufficient.]

     [Footnote 237b-3: A Prussian fire insurance regulation, as
     far back as 1720, expressly says: "everybody scruples to
     make the least loan on pledged houses in towns." "Every care
     shall be taken to make the least possible amount of loans in
     cities." (_Jacobi_, in _Engel's_ Zeitschr., 1862, 122.)
     _Leib_, Dritte Periode, etc., 1708, cites a proverb to the
     effect that, in Hamburg, "no house takes fire;" that is, at
     a time that its fire-fund-system (_Brandkassenwesen_) had as
     yet found few imitators, _v. Justi's_ proposition to combine
     the insurance of houses against fire with a loaning-bank for
     houses. (Polizeiwissenschaft, 1756, I, § 7, 8 ff.) In
     Russia, in 1815, the loaning bank was the only fire
     insurance company, which however assumed risks only on stone
     houses at three-fourths of their value in consideration of
     15 per 1,000 annual premium. (_Rau_, Lehrbuch, I, 229.)]

     [Footnote 237b-4: _Spittler_, Politik., 441, objects to
     insurance that it diminishes benevolence and approximates to
     communism, thus hitting the dark side of all very high
     civilization.]


SECTION CCXXXVII (_c_).

FIRE INSURANCE.

The present system of fire insurance has been introduced in many places
by the establishment of so-called domanial fire-guilds
(_Domanial-Brandgilden_), by which the country population on crown-lands
bound themselves to mutually assist one another by furnishing thatch,
and horse and hand power in the rebuilding of burned houses. Whatever
was wanting after this was made up by gratuitous supplies of wood from
the public forests, by the granting of governmental fire-licenses to beg
(_begging letters_), by permission to have collections made in the
churches[237c-1] etc. The next step was generally the establishment of
public insurance (_Landes-Assecuranz_) only for houses,[237c-2] but with
compulsory membership. This compulsion was justified by the continuing
interest of the state in the payment of the house-tax, as well as by the
interest of the eventual owner of the estate, and of
hypothecation-creditors.[237c-3] [237c-4] The insurance of moveable
property is much more recent, both by reason of the nature of the
property itself, which becomes of importance only at a later date, and
also on account of the much greater difficulty of carrying on such
insurance.[237c-5] The thought of making this species of insurance
compulsory, or of turning it over to the state, has seldom been
suggested.

     [Footnote 237c-1: Thus in Austria, even after the middle of
     the 18th century: _Schopf_, L. W. des öst. Kaiserstaates, I,
     p. 175. In the mandate of the electorate of Saxony of Dec.
     7, 1715; but the fire-fund (_Feuerkasse_) of 1729 depended
     on voluntary but regular collections, besides which it
     obtained certain contributions from the state and the
     church. Those who gave nothing, however, were threatened
     with getting nothing, or very little, in case of fire.
     Parties desiring to rebuild massively had especially much to
     expect. (Cod. August Forst., I, 538.) The charters of the
     oldest German _Landesbrandkassen_ contain a provision that,
     in future, no further fire-collections shall be allowed.]

     [Footnote 237c-2: The English Hand-in-Hand Fire Office for
     houses, founded in 1696; the Union Fire O., for houses and
     movable property, in 1714: both mutual institutions. The
     premium-institution, the Sun Fire Office, 1710
     (_Frankenberg_, Europ. Herold, 1705, II, 181), mentions fire
     insurance as a special characteristic of England. But we may
     trace fire insurance on buildings and harvest supplies in
     the low countries about the Vistula in Prussia, even as far
     back as 1623. (_Jacobi_, loc. cit., 131.) Brandenburg
     fire-fund, 1705, with voluntary admittance of all houses,
     and fixed relation between the yearly contribution and the
     insurance capital. If a fire happened, the fund repaired the
     damage caused to the fullest extent its means allowed.
     (_Mylius_, Corp. Const. March. V., I, 174 seq.) Even in
     1706, it became necessary to prohibit speaking ill of the
     institution. It was, therefore, abolished later. The first
     Würtemberg private fire insurance company, 1754, founded on
     similar principles, and which was still existing in 1760,
     had a like fate (_Bergius_, Polizei und Camerelmagazin, III,
     40 ff.), but it was exchanged in 1773 for a mutual public
     company. In Berlin a mutual insurance company in 1718
     (_Bergius_, Cameralistenbibliothek, 151); in Denmark, 1830
     (_Thaarup_, Dän. Statist., II, 173 seq.); in Silesia, 1742;
     Calenberg-Grubenhagen, 1750; in Baden, 1758; in Kurmark,
     1765; in Hildesheim, 1765; in Hesse-Darmstadt, 1777. In
     France, the Parisian institution of 1745 is considered the
     oldest. (_Beckmann_, Beitr. z. Gesch. d. Erfindd., I, 218.)]

     [Footnote 237c-3: In Galenberg-Grubenhagen only the
     _Bauerhöfe_ subject to the common burthens were obliged to
     enter, in Hildesheim, all houses subject to taxation; in
     Darmstadt all house-owners who were allowed only a _dominium
     utile_. In Kurmark, the subjects of the estate might be
     compelled to enter by their lords, but could not be kept
     out. Of Prussian companies in 1846, entrance was compulsory
     only in those of East Prussia and Posen. In Würtemberg
     compulsion since 1773; confirmed in 1853. Also in Zurich,
     Jan. 24, 1832; in Schaffhausen Nov. 27, 1835. In Berne, only
     for state, municipal and mortgaged houses; for the latter
     only so far as it was not expressly left to the creditor.
     Introduced into Baden in 1807, after most of the parishes
     (_Gemeinden_) had voluntarily accepted it; confirmed in
     1840. The provision that at least no judicial hypothecation
     should be made on an un-insured house is found in the
     Darmstadt law of 1777, § 13, and in that of Mainz of 1780,
     art. I, § 15. _Rau_, Lehrbuch, II, § 25 a., finds compulsion
     in the case of property in common and in that of property
     belonging to other persons very appropriate. It is a matter
     worthy of thought, that, in cities like Berlin, Breslau,
     Thorn and Stettin, compulsory fire insurance is still
     retained. In Upper Silesia, the abolition of compulsory
     provisions has had for effect to cause 52 per cent. of all
     buildings to be insured. (Press Zeitschr, 1867, 329).]

     [Footnote 237c-4: Question of introducing state insurance
     into Hungary. As a cultured land, and one rich in capital,
     is better adapted to insurance, it would be folly to
     "emancipate" ones self from Trieste, etc. in this respect.
     But, on the other hand, only state-insurance can attract the
     Hungarians and make them feel universally the want of
     insurance. A reconciliation of these opposing views might be
     effected by compelling the peasantry to insure their farm
     houses, and allowing complete liberty in the cities and with
     reference to movable property.]

     [Footnote 237c-5: Even _Bergins_, Polizei und Cameralmag.,
     III, 80, 1768 ff., doubts the possibility of the insurance
     of movable property. Insurance of movable property of the
     Evangelical clergy in the electorate of Mark, in which,
     however, only movable property of the value of 400 thalers
     is considered. But by this provision the changeableness of
     the object, which so facilitates fraud, was done away with.
     Hamburg joint-stock company for the insurance of movable
     property, 1779. Electorate of Saxony fire-fund for movable
     property, 1784-1818, which, however, made good, as a rule,
     only 25 per cent. of the damage caused. In Prussia, in 1814,
     there were only 12 insurance companies in which movable
     property could be insured. In the aggregate even they were
     but of little extent, and had generally a partnership,
     guild, or communal basis. (_Jacobi_, loc. cit, 123.) On the
     other hand, in 1869, there were in all the mutual insurance
     companies, 530,600,000 thalers worth of movable property
     insured, besides 2,814,800,000 thalers worth of immovable
     property, and 366,100,000 thalers worth of property of a
     mixed nature, partly movable and partly immovable. (Preuss.
     Statist. Zeitschr., 1876, 298.)]


SECTION CCXXXVII (_d_).

REQUISITES OF A GOOD SYSTEM OF FIRE INSURANCE.

Among the chief requisites of a good fire insurance system are the
following:

A. The adoption in insuring of measures for the prevention of criminal
abuse on the part of the insured. No one should be benefited by the
burning of his insured goods.[237d-1] Hence, the rates of insurance
should be rigidly fixed according to the real value in exchange.[237d-2]
In the case of houses, the value of the incombustible elements of value
should be deducted; also the value of the ground and the value it
possesses from being advantageously situated, etc. The simultaneous
insurance of the same object in several companies without proper notice
being given should be unconditionally prohibited.[237d-3] The control of
all this may be greatly facilitated by requiring foreign insurance
companies to obtain a special permit to carry on their business in the
country, and to allow them to effect insurance only through responsible
home agents.[237d-4] Most insurance companies exclude from insurance
personal property which may be easily secreted, such, for instance, as
jewels, cash money, valuable documents, etc.

B. There should be a just proportion between the insurance premium and
the risk. This depends not only on the style of building of the houses
themselves and of those in the neighborhood,[237d-5] on the situation,
the too great intricacy (_Complicirung_) of which extends the ravages of
fire, as its too great isolation makes assistance difficult;[237d-6] but
also on the nature of the business carried on in them,[237d-7] and on
the condition of the local development of fire police. Highly cultured
places, especially large cities, are really much less exposed to damage
from fire. To not take this into account would be not only to
compulsorily dole out charity to the poorer classes of the people, and
to the less cultivated portions of the country,[237d-8] but it would
indirectly put an obstacle in the way of a transition to the massive
construction of houses, and of good, that is, as a rule, of costly
fire-extinguishing institutions.[237d-9] On the other hand,
administration must be rendered much more difficult by the taking of
risks of many degrees of danger, especially as it is scarcely possible,
for a long time, to even hope for a statistically unassailable basis of
a tariff graded in exact accordance with the risk.[237d-10] If those
objects especially exposed to danger should be excluded altogether, the
common utility of the institution would be largely diminished; and the
insured least exposed to danger would nevertheless have to complain of a
relatively too high contribution.[237d-11] If every peculiar class of
risks were to be treated as one whole, the insuring principle itself
would suffer.[237d-12] Where the nation or municipality engages in the
business of compulsory insurance, its too rigid system of rate-fixing
has something inequitable in it, inasmuch as it makes the most provident
housekeeper suffer from the danger from fire of his neighbor's
establishment, a gas factory, for instance.

C. The certainty of compensation for damage suffered. The government
should see to it that the institution does not promise more than it can
perform with its joint-stock capital and by means of its
premiums.[237d-13] The good will of foreign institutions to keep their
promises to the letter is best assured by requiring them as a condition
precedent of carrying on their business in a country, to bind themselves
to litigate only in the home courts. They protect themselves against the
risk of very large insurances by the system of re-insurance, by
transferring a portion of the premium as well as of the risk to one or
more other insurance companies.[237d-14]

D. In all highly cultured quarters, the almost entirely voluntary
fire-extinguishing system, in which the people turned out in a body to
battle with the flames, made way for the fire-militia system; and if the
latter should make place for what we may designate as a standing
fire-army which is most easily attained in connection with the
fire-insurance system, we should reach the ideal of such a system,
especially if the business of insurance was in the hands of the state or
of the municipality. Such a system would be in accordance with the
principle of the division of labor, and, also, with the fact that
usually the most vital interest is the greatest spur to action.[237d-15]

     [Footnote 237d-1: The former almost unrestricted liberty of
     the American system of insurance has recently been
     curtailed, in most of the states, by a rigid governmental
     superintendence, by special insurance boards with power to
     permit companies to engage in the business of insurance, and
     endowed with the right of imposing proper penalties, but of
     declaring the privilege forfeited at the end of any year.
     Compare _Brämer_ in III, Ergänzungshefte der Preuss.
     Statist. Ztschr. und Mitth., 1871, No. 1.]

     [Footnote 237d-2: The first fire insurance provisions or
     regulations paid little attention to the danger of
     over-valuation. Similarly _v. Justi_, Abh. von der Macht,
     Glückseligkeit, etc., eines Staats. 1860, 81. Also
     _Krünitz_, Oekonom. Encyclopædie, 1788, XIII, considers it
     improbable that any one would have his home insured at a
     higher than its real value. On the other hand, there were
     formerly bitter complaints made in the United States that
     the agents, on whom the determination of the rate of premium
     and the control of the insurance-sum depended chiefly, were
     led to make over-valuations in furtherance of their own
     interests. (Mitth., 1871, 3; 1874, 95.)]

     [Footnote 237d-3: If the valuation were made to depend on
     the purchase price or on the cost of replacing or restoring
     the damaged property, even this would be some temptation to
     not entirely upright men. Hence the Baden law of 1840
     expressly provides that instead of this, the selling price
     shall be the basis; the law of 1852, § 17, the medium cost
     of the combustible parts, after deduction made of the
     diminution in value caused by age. The fixing of premiums in
     the case of houses should be repeated from time to time on
     account of wear. According to the Calenb. Grubenh. law of
     1823, § 21, every 10 years. According to the Baden law of
     1852, § 28, 33, and the Württemberg law of 1853, § 12, the
     city council should examine annually in what cases a new
     valuation was necessary. The more certainly over-insurance
     is avoided, the less need is there of the superintendence
     policy adapted to a rather barbarous state of insurance,
     that only a part of the value shall be made good. The
     Phœnix fire insurance company in Baden for the insurance
     of movable property has reserved the right to investigate at
     any time and to satisfy itself as to the value of the
     insured object, and to lower the amount insured in
     accordance with its own opinion. The provision that the
     valuation shall be made by the authorities of the place, or
     that it shall be approved by them is frequently found. In
     Saxony, for instance (law of Nov. 14, 1835), the Leipzig
     city council gives its approval when it finds the amount
     insured in keeping with the means of the insured, and
     entertains no suspicions as to his honesty. To what a bad
     state of things a less liberal course leads, see in
     _Masius_, loc. cit., 85. This indeed is only difficult in
     large cities. It is also to be considered that it is not so
     much the many small amounts, but the few large ones that are
     dangerous to insurance. The Prussian scheme wanted to give
     up the police superintendence of insurance, but to punish
     over-insurance of more than 5 per cent. of the common value,
     by imposing a fine equal to the amount of over-insurance on
     the insured, the agents, and on the conductors of the
     business. (_Jacobi_, in II. Ergänzhefte der Preuss. Statist.
     Ztschr., 1869.) The provision that the amount paid as
     damages for a burned house shall be immediately employed in
     rebuilding, is to be explained in part by requisite A; in
     part also by the same police-guardianship against presumed
     negligence which introduced compulsory insurance.]

     [Footnote 237d-4: Compare _Brügemann_, Die Mobiliar V. in
     Preussen nach dem G. von 1837.]

     [Footnote 237d-5: _Oberländer_, loc. cit. 108, calls
     insurance without classification of risks, a "mutual
     benevolent institution;" and one rigidly classified
     according to the probable period of burning, "an institution
     for the making of advances" (_Vorschuss-Anstalt._) In Baden,
     even in 1737, there was no difference made between a massive
     building and a wooden hut with a straw roof in the Black
     forest. (_Rau_, Archiv., III, 324.) Here, there was in 1844
     to 1849, an average damage by fire in houses with brick
     roofs of 1,302 florins, with thatch roofs of 1,786 florins,
     with shingle roofs of 2,292 florins, to say nothing of the
     greater frequency of such damage in each succeeding class.
     (_Rau_, Lehrbuch, II, 1, § 26, a.) In Württemberg, before
     1843, the owners of insured personal property, in houses
     with thatch roofs, had, in the same time, received 22 per
     1,000 compensation for damage; in houses with brick roofs,
     from 8 to 9 per 1,000. (_Rau_, loc. cit.) In 17 German
     insurance companies, between 1866 and 1869, massive
     buildings with hard roofs paid 1,003,000 thalers and
     received 612,000 thalers; the not massive with hard roofs
     paid 1,544,000 thalers and received 1,339,000; houses with
     soft roofs paid 2,420,000 and received 2,792,000. (Preuss,
     Statist. Zeitschr. 1861, 327.) Similar observations made in
     Berne during 23 years.]

     [Footnote 237d-6: While in most English insurance companies,
     there are only three classes: common, hazardous, and doubly
     hazardous, in Rhenish Prussian insurance companies, there
     are seven, according to the style of building, and in each
     class two subdivisions, according to the location.]

     [Footnote 237d-7: According to an English average of 15
     years, there is some damage from fire yearly in the
     following classes of buildings and on the following
     percentages:

                            _Of the whole number_.
          Match factories,         30.00
          Lodging houses,          16.5
          Hat makers,               7.7
          Cloth makers,             2.6
          Candle makers,            3.8
          Smiths,                   2.4
          Carpenters,               2.2
          Oil and color dealers,    1.5
          Book dealers,             1.1
          Coffee houses,            1.2
          Beer houses,              1.3
          Bakeries,                 0.75
          Wine dealers,             0.61
          Small dealers in spices,  0.34
          Eating houses,            0.86

     (Quart. Rev., 1854, 23.) There is indeed a difference in the
     intensity of these fires. For instance, in inns, there have
     been a great many; but the damage has been for the most part
     insignificant.]

     [Footnote 237d-8: In Paris the houses insured had a value of
     2,370,000,000 francs, but the damage from fire amounted to
     only 0.016 per 1,000! (Dictionn. d'Econ. politique, I, 89.)
     On an average, the premiums in France amount to 0.85 per
     1,000. In Prussia, 1867-69 on an average: in the province of
     Prussia, 9.46 per 1,000; Posen, 3.75; Brandenburg, Berlin
     not included, 2.82; Pomerania, 2.52; Westphalia, 2.15;
     Schleswig-Holstein, 2.09; Hanover, 1.99; Silesia, 1.68;
     Saxony, 1.47; Hesse-Nassau, 1.46; the Rhine country, 1.34;
     Sigmaringen, 0.56; city of Berlin, 0.28 per 1,000. (Preuss.
     Statist. Zeitschr., 1871, 289.) How largely a higher
     civilization tends to arrest the spread of fire by the
     reason of the great facilities of rendering assistance is
     shown by the fact that for 100 buildings totally consumed in
     Posen, in 1837-40, there were 13.4 only injured: in 1866-69,
     32 were injured for 100 totally consumed. In Prussian
     Saxony, 1839-44, 34; 1867-69, 57. (loc. cit., 329.) In
     Baden, the district called the _Seekreis_ got from the
     fire-fund, in 1845-49, 80 per cent. more than it contributed
     to it; the middle Rhine district contributed 37 per cent.
     more than it received. The Bavarian Reza district, 1828-29,
     received only 11.4 per cent. for damages, and paid 19 per
     cent. of all premiums; the Lower Danube district, 10 and 8.8
     per cent. (_Rau_, Lehrbuch, II, § 28, 26.) The city of
     Leipzig contributed from 1/19 to 1/17 of the insurance paid,
     1864-68, to the insurance companies taking risks on real
     property in the kingdom of Saxony, and received back only
     from 1/662 to 1/114, although its fire extinguishing
     institutions cost, in 1870, 26,182 thalers. (Official.)]

     [Footnote 237d-9: Even premium-institutions have frequently
     very different rates for the same risk, according as they
     fear greater or less competition, or desire to recommend
     themselves in a new place, etc. Hence the tricks of the
     trade with which most of them surround their tariff.]

     [Footnote 237d-10: In Würtemberg, theaters, powder mills,
     places where brick and lime are burned, porcelain factories,
     iron-works, etc. cannot be insured at all. In
     Calenb-Grubenh. and Bremen-Verden, shingle-roofed houses can
     be insured only at 2/3 of their real value.]

     [Footnote 237d-11: Thus, for instance, in the electorate of
     Mark, each of the four classes of houses bears its own loss
     alone. To the fourth class, for instance, belong smithies,
     brick factories, and buildings with steam engines, etc. The
     Baden law of 1852 puts the same burthen in the same place,
     upon houses exposed to danger in a greater or lesser degree;
     but provides for 4 classes (_Gemeindeclassen_) with
     different rates of contribution, and assigns each _Gemeinde_
     every year, according to the relative magnitude of the
     losses of the previous year, to one of those classes. How
     risky it is for large cities to confine their insurance,
     because of the ordinarily small amount of damage to them
     from fire, only to insurance institutions of their own, is
     shown by the case of Hamburg in the year 1842, where three
     joint stock insurance companies could pay only from 75 to 80
     per cent., and the Bieber Mutual Insurance Company, only 20
     per cent.]

     [Footnote 237d-12: In the case of buildings, the greater
     risk is generally calculated by correspondingly multiplying
     the insurance-value, but in case of damage by fire, it is
     simply made good.]

     [Footnote 237d-13: In the insurance companies specified by
     _Masius_, loc. cit., 176, the aggregate amount of their
     insurance, stood to the amount necessary to cover it, by
     means of receipts from premiums, reserve, and joint-stock
     capital:

     In the Leipzig Fire Insurance Company, as              100:1.87
     In the Trieste Fire Insurance Company, as              100:1.80
     In the Elberfeld Fire Insurance Company, as            100:1.19
     In the Aix-Munich Fire Insurance Company, as           100:1.15
     In the Cologne Colonia Fire Insurance Company, as      100:2.44
     In the Karlsruhe Phœnix Fire Insurance Company, as     100:3.7
     In the Berlin Fire insurance Company, as               100:6.3
     In the Gotha, about as                                 100:2.6
      (including the four fold after payment note)

     In the same companies the amount of damage and of expense
     for the last preceding year were, on every 100 thalers, of
     insurance, 46 pfennigs (1/300 thalers), 44, 29, 48, 67, 55,
     35, 42; an average of 45, that is 1½ per 1,000. Besides,
     much depends on the degree to which the joint-stock capital
     can be applied. Thus, for instance, in Berlin, on every
     1,000 thalers 200 are paid in cash, and a note
     (_Solawechsel_) given for the rest, payable in two months
     after notice. Where the unpaid remaining stock is but a mere
     book-debt, and may even be evaded by disclaiming the stock
     itself, it of course affords very little security.]

     [Footnote 237d-14: Compare _Volz._ Tübinger Zeitschr. 1847,
     349 ff.]

     [Footnote 237d-15: The preparatory steps towards this ideal
     were taken long ago. Thus, for instance, the
     personal-property insurance companies have offered premiums
     for special merit in extinguishing fires (Calenb.-Grubenh.,
     1814, § 35), saving things from a burning house is looked
     after by the agents of personal property insurance
     companies; compensation is almost universally made not only
     for the damage done by fire, but also that caused while the
     fire is being extinguished. The excellent fire-extinguishing
     institutions of England are maintained by the common action
     of the insurance companies. There have been complaints,
     however, that they have shown a preference for insured
     objects. (Mitth., 1874, 113.)]



BOOK V.

ON POPULATION.



CHAPTER I.

THEORY OF POPULATION.


SECTION CCXXXVIII.

INCREASE OF POPULATION IN GENERAL.

That amid the thousand dangers which threaten the existence of the
individual the species may endure, the Creator has endowed every class
of organic beings with such reproductive power, and so much pleasure in
propagating their kind, that if the action of these were entirely
unrestricted, it would soon fill up the earth.[238-1] In the case of the
human race, also, the physiological possibility of propagation has very
wide limits.[238-2] It would be nothing extraordinary that a healthy
pair, living in wedlock from the 20th to the 42nd year of the woman's
life, that is, during the whole time of her full capacity to bear
children, should rear six children to the age of puberty. This would,
therefore, suffice to treble the population in a single generation;
provided that all who had grown up should marry. According to
Euler,[238-3] when the births were 5 per cent. and the deaths 2 per
cent., the population doubled in not quite 24 years; when the increase
was 2½ per annum, in 28 years; when 2, in 35 years, and when 1½
per cent. in 47 years.

The United States furnish us with a striking illustration of this
doctrine, and on the grandest scale. There the natural increase of the
white population, from 1790 to 1840, was 400.4 per cent.; that is in the
first decade 33.9 per cent. of the population in 1790; in the second
33.1, in the third 32.1, in the fourth 30.9, in the fifth 29.6 per
cent.[238-4] [238-5]

     [Footnote 238-1: Thus, for instance, the sturgeon can,
     according to _Leuckart_, produce 3,000,000 eggs in a year.
     According to _Burdach_, the posterity of a pair of rabbits
     may be over 1,000,000 in four years; and that of a
     plant-louse, according to _Bonnet_, over a 1,000,000,000 in
     a few weeks. The prolificacy of a species of animals is wont
     to be greater in proportion as the structure-material
     (_Bildungsmaterial_) saved within a given time during the
     course of individual life, is greater, and as material wants
     during the embryonic period are limited; also
     (teleologically), in proportion as to the danger the
     individual is exposed to. Compare _Leuckart_ in _R.
     Wagner's_ physiolog. Wörterbuch, Art. Zeugung.
     Teleologically, _Bastiat_ says: _cette surabondance parait
     calculée partout en raison inverse de la sensibilité, de
     l'intelligence et de la force avec laquelle chaque espèce
     résiste à la déstruction_. (Harmonies, ch. 16.)]

     [Footnote 238-2: The researches of modern physiology make it
     probable that an ovum is detached from the ovaries at each
     period of healthy menstruation. (_Bischoff_, Beweis der von
     der Begattung unabhängigen periodischen Reifung und Lösung
     der Eier bei den Säugethieren und Menschen, 1844.) It is
     hardly possible to ascertain how many of these ova are
     capable of fecundation. Among the animals, on which the
     greater number of accurate observations have been made, that
     is in the case of horses, it has been found that, in the two
     districts of Prussia most favorably conditioned, of 100
     mares that had been lined, 63.3 became pregnant, and 53.5
     gave birth to live foals; in the rest of the Prussian
     monarchy, the births were only 46 per cent. Compare
     _Schubert_, Staatskunde, VII, 1, 98. In the Belgian _haras_
     (places for breeding horses), between 1841 and 1850, about
     30 per cent. of the "leaps" proved fruitful, from 2 to 3 per
     cent. aborted, the rest were either probably or certainly
     unfruitful. (_Horn._, Statist. Gemälde, 171.) In the human
     species, also, the great number of first-born generated in
     the first weeks of marriage, bears witness to a high degree
     of procreative susceptibility.

     On the other hand, the healthy male semen ejected during a
     single act of coition contains innumerable germs, a very few
     of which are sufficient to produce fecundation. (_Leuckart_,
     loc. cit, 907.) According to _Oesterlen_, Handbuch der
     medicischen Statistik, 1865, 196, from 10 to 20 per cent. of
     all marriages were childless. In the United Kingdom, _Farr_,
     report on the Census of 1851, estimated that in a population
     of 27,511,000, there were 1,000,000 childless families, when
     the term is allowed to embrace widows and widowers as well
     as married couples.]

     [Footnote 238-3: See the exhaustive table in _Euler_,
     Mémoires de l'Académie de Berlin 1756, in _Süssmilch_,
     Göttl. Ordnung, I, § 160. Bridge has constructed the
     following formula:

     Log. A = Log. P + n x Log.(1+(m-b)/mb).  Here P stands for
     the actually existing population, 1/m = the ratio between
     the annual mortality and the number of the living, 1/b, the
     ratio of the number of annual births to the number of the
     living, n the number of years, A, the population at the end
     of three years, the quantity sought for.]

     [Footnote 238-4: _Tucker_, Progress of the United States,
     89, ff. 98. Here deduction is already made of immigrants and
     their posterity, who after subtracting the loss by
     emigration back to the old country, amounted to over
     1,000,000. It probably amounted to more yet. If, as
     _Wappäus_ does (Bevölekerungsstatistik, 1859, I, 93, 122
     ff.), we calculate the rate of increase per annum, we have
     an average during the first decade of 2.89, during the
     second of 2.83, the third of 2.74, the fourth of 2.52, the
     seventh of 2.39, the eighth (1860-70) of probably 2.25 per
     cent. On the still greater ratio of increase in earlier
     times, see _Price_, Observations on reversionary Payments,
     1769, 4 ed. 1783, I, 282 seq., I, 260.

     It was nothing unheard of to see an old man with a living
     posterity of 100. (_Franklin_, Observations concerning the
     Increase of Mankind, and the Peopling of New Countries,
     1751.) It is said that in the region about Contendas, in
     Brazil, there were on from 70 to 80 births a mortality of
     from 3 to 4 per annum (how long?), and an unfortunate birth
     (_unglücklichen_) was scarcely ever heard of. Mothers 20
     years of age had from 8 to 10 children; and one woman in the
     fifties had a posterity of 204 living persons. (_Spix und
     Martius_, Reise III, 525).]

     [Footnote 238-5: Immense increase of the Israelites in
     Egypt. (Genesis 46, 27; Numbers, 1.)]


SECTION CCXXXIX.

LIMITS TO THE INCREASE OF POPULATION.

There is certainly one limit which the increase of no organic being can
exceed: the limit of the necessary means of subsistence. But, so far as
the human race is concerned, this notion is somewhat more extensive,
inasmuch as it embraces besides food, also clothing, shelter, fuel, and
a great many other goods which are not, indeed, necessary to life, but
which are so considered.[239-1] We may illustrate the matter by a simple
example in the rule of division. If we take the aggregate of the means
of subsistence as a dividend, the number of mankind as divisor; then the
average share of each is the quotient. Where two of these quantities are
given, the third may be found. Only when the dividend has largely
increased can the divisor and quotient increase at the same time
(prosperous increase of population). If, however, the quotient remains
unchanged, the increase of the divisor can take place only at the
expense of the quotient (proletarian increase of population).[239-2]
Hence it is to be expected that the quantity of the means of subsistence
being given and also the requirement of each individual, the number of
births and the number of deaths should condition each other. Where, for
instance, the number of church livings has not been increased, only as
many candidates can marry as clergymen who held such livings have died.
The greater the average age of the latter is, the later do the former
marry, in the average, and _vice versa_. And so, in the case of whole
nations, when their economic consumption and production remain
unaltered.[239-3] A basin entirely filled with water can be made to
contain more only in case it is either increased itself, or a means is
found to compress its contents. Otherwise as much must flow out on the
one side as is poured in on the other.

And so, everything else remaining stationary, the fruitfulness of
marriages must, at least in the long run, be in the inverse ratio of
their frequency. (See § 247.)[239-4] [239-5]

     [Footnote 239-1: When it is known that, in the Hebrides,
     one-third of all the labor of the people has to be employed
     in procuring combustible material (_McCulloch_, Statist.
     Account, I, 319), it will no longer excite surprise that,
     according to Scotch statistics, some parishes increase in
     population after coal has been found in them, and others
     decrease when their turf-beds are exhausted.]

     [Footnote 239-2: Compare _Isaias_, 9:3. According to
     _Courcelle-Seneuil_, Traité théorique et pratique d'Economie
     politique, I, 1858, the _chiffre nécessaire de la population
     égal à la somme des revenus de la société diminuée de la
     somme des inégalités de consommation et divisée par le
     minimum de consommation_: P=(R-J)/M.]

     [Footnote 239-3: Thus _Süssmilch_, Göttliche Ordnung in den
     Veränderungen des menschlichen Geschlechts, 1st ed., 1742,
     4th ed., 1775, I, 126 ff., assumes that one marriage a year
     takes place, on from every 107 to every 113 persons living.
     On the other hand, 22 Dutch towns gave an average of 1 in
     every 64. This abnormal proportion is very correctly
     ascribed by _Malthus_, Principles of Population, II, ch. 4,
     to the great mortality of those towns: viz., a death for
     every 22 or 23 persons living, while the average is 1:36.
     The Swiss, _Müret_, (in the Mémoires de la Société
     économique de Berne, 1766, I, 15 ff.), could not help
     wondering that the villages with the largest average
     duration of life should be those in which there were fewest
     births. "So much life-power and yet so few procreative
     resources!" Here too, _Malthus_, II, ch. 5, solved the
     enigma. The question was concerned with Alpine villages with
     an almost stationary cow-herd business: no one married until
     one cow-herd cottage had become free; and precisely because
     the tenants lived so long, the new comers obtained their
     places so late. Compare _d'Ivernois_, Enquête sur les Causes
     patentes et occultes de la faible Proportion de Naissances à
     Montreux: yearly 1:46, of the persons living, while the
     average in all Switzerland was 1:28.

     In France according to _Quételet_, Sur l'Homme, 1835, I, 83
     ff., there was:

     ===============+===================+============+================
                    |  _One marriage_   | _Children_ | _One death_
          _In_      |     _a year_      |    _to a_  |   _yearly _
                    |   _for every_     | _marriage_ | _for every_
     ---------------+-------------------+------------+----------------
      4 Departments |110-120 inhabitants|    3.79    |35.4 inhabitants
     15      "      |120-130      "     |    3.79    |39.2      "
     23      "      |130-140      "     |    4.17    |39.0      "
     18      "      |140-150      "     |    4.36    |40.6      "
     10      "      |150-160      "     |    4.43    |40.3      "
      9      "      |160-170      "     |    4.48    |42.7      "
      6      "      |170 and more "     |    4.48    |46.4      "
     =================================================================

     The two departments of Orne and Finisterre present a very
     glaring contrast: in the former, one birth per annum on
     every 44.8 (1851 = 51.6), a marriage on every 147.5, a death
     on every 52.4 (1851 = 54.1) living persons; in the latter,
     on the contrary, on every 26 (1851 = 29.8), 113.9 and 30.4
     (1851 = 34.2). In Namur, the proportions were 30.1, 141,
     51.8; in Zeeland, 21.9, 113.2, 28.5. (_Quételet_, I, 142.)
     The Mexican province, Guanaxuato, presents the most
     frightful extreme: one birth per annum on every 16.08 of the
     population living, and one death in every 19.7. (_Quételet_,
     I, 110.)]

     [Footnote 239-4: Compare even _Steuart_, Principles, I, ch.
     13. _Sadler_, Law of Population, 1830, II, 514:

     =======================================+=============+===========
                                            |_Marriages_  |_Children_
                                            | _per annum_ |_on every_
                                            | _on every_  |  _100_
                                            | _10,000_    |_Marriages_
                                            |_inhabitants_|
     ---------------------------------------+-------------+-----------

        In the purely Flemish provinces     |             |
          of Belgium                        |     128     |  481
        In the purely Wallonic provinces    |             |
          of Belgium                        |     139     |  448
        In the mixed provinces of Belgium   |     152     |  425
        In Holland                          |     148     |  476
        In Lombardy                         |     166     |  489
        In Bohemia                          |     173     |  413
        In the kingdom of Saxony            |     170     |  410
     =======================================+=============+===========]

     [Footnote 239-5: Compare _Horn_, Bevölkerungswissenschaftliche
     Studien, I, 162 ff., 191, 252 ff. In most countries, there
     is a much larger number of children to a marriage in the
     rural districts than in the cities; but at the same time,
     marriages are much less frequent there. In Saxony, however,
     where the cities show a greater marital productiveness, the
     rural districts present a large number of marriages. Of the
     10 countries compared by _Wappäus_, II, 481 ff., only
     Prussia and Schleswig are exceptions to the rule.]


SECTION CCXL.

INFLUENCE OF AN INCREASE OF THE MEANS OF SUBSISTENCE.

The sexual instinct and the love for children are incentives of such
universality and power, that an increase of the means of subsistence is
uniformly followed by an increase in the numbers of mankind. _Partout,
où deux personnes peuvent vivre commodément, il se fait un mariage._
(_Montesquieu._) Thus after a good harvest, the number of marriages and
births is wont to considerably increase; and conversely to diminish
after bad harvests.[240-1] [240-2] [240-3] In the former case, it is
rather hope than actual possession which constitutes the incentive to
the founding of new families. Hence the greatest increase is not found
in connection with the absolutely lowest price of corn, but with those
prices which present the most striking contrast to those of a previous
bad year.[240-4]

The introduction of the potato has promoted the rapid increase of
population in most countries. Thus, the population of Ireland in 1695,
was only 1,034,000; in 1654, when the cultivation of the potato became
somewhat more common it was 2,372,000; in 1805, 5,395,000; in 1823,
6,801,827; in 1841, 8,175,000. In 1851, after the fearful spread of the
potato-rot it fell again to 6,515,000.[240-5] In general, every new or
increasing branch of industry, as soon as it yields a real net product
is wont to invite an increase of population. Machines, however, have not
this effect only when they operate to produce rather a more unequal
division of the national income than an absolute increase of that
income.[240-6]

     [Footnote 240-1: That rich food directly increased
     prolificacy is proved from the fact that, for instance, our
     domestic animals are much more prolific than wild ones of
     the same species. Compare _Villermé_, in the Journ. des
     Economistes VI, 400 ff. The months richest in conceptions
     fall universally in the spring, and again in the pleasant
     season immediately following the harvest. On the other hand,
     during the seasons of fast in the Catholic church the number
     of cases of conception is below the average. (Jour. des
     Econ., 1857, 808).]

     [Footnote 240-2: Thus the annual mean number of marriages
     amounted to:

     =============================================
                   | _Between 1841_ |  _In 1847_
                   |  _and 1850._   |   _alone._
     --------------+----------------+-------------
     In Saxony,    |     15,505     |    14,220
     In Holland,   |     22,352     |    19,280
     In Belgium,   |     28,968     |    24,145
     In France,    |    280,330     |   249,797
     =============================================

     _Horn_, loc. cit. I, 167. In the governmental district
     (_Regierungsbezirke_) of Düsseldorf, there was in the years
     of scarcity, 1817 and 1818, one marriage for every 134 and
     137 souls; on the other hand, in 1834 and 1835, in every 103
     and 105. (_Viebahn_, I, 120 seq.) In England, the variations
     in the yearly price of corn are reflected in the variations
     in the number of yearly marriages. Thus, in 1800, 114
     shillings per quarter; 1801, 122 shillings; 1802 (Peace of
     Amiens), 70 shillings; 1803, 58 shillings. The number of
     marriages in the four years respectively was 69,851, 67,288,
     90,396, 94,379. (_Porter_, Progress of the Nation, III, ch.
     14, 453.)

     Similarly in Germany, in 1851, the conclusion of peace
     increased the number of marriages, and the scarcity of 1817
     diminished it. In Prussia, in 1816, there was one marriage
     for every 88.1 of the population; in 1828, for every 121.4;
     in 1834 (origin of the great Zollverein), for every 104; in
     1855, for every 136.4; in 1858 (hope of a new era), in every
     105.9. (_v. Viebahn_, Statistik des Zollvereins II, 206.)

     In Austria, the price of rye was:

     ==============================================
               |  _Per Metze._  |   _No. of_
               |              | _Marriages._
     ----------+--------------+--------------------
     In 1851,  | 2.47 florins |  336,800
     In 1852,  | 2.11   "     |  316,800
     In 1853,  | 3.38   "     |  283,400
     In 1854,  | 4.36   "     |  258,000
     In 1855,  | 4.43   "     |  245,400 (_Czörnig._)
     ==============================================

     On Sweden, see Wargentin in _Malthus_, II, ch. 2.

     The decreased number of births in consequence of a bad
     harvest, and _vice versa_, appears of course only during the
     following calendar year. Thus, in 1847, as compared with the
     average of the years 1844 and 1845, there were fewer
     children born in England by 4 per 1,000, in Saxony by 7 per
     1,000, in Lombardy by 59, in France by 63, in Prussia by 82,
     in Belgium by 122, in Holland by 159 per 1,000. (_Horn_, I,
     239 ff.) In Germany, the conscription-years corresponding to
     the scarcity time, 1816-17, gave a _minus_ of 25 per cent.
     in many places below the average. (_Bernouilli_,
     Populationistik, 219.) In the case of marriage, the relative
     increase or decrease is still more characteristic, so far as
     our purpose is concerned, than the absolute increase or
     decrease. Thus in Belgium, for instance, against 1,000
     marriages dissolved by death, there were, in 1846, only 971
     new ones contracted, and in 1847 only 747; while in 1850
     there were 1,500. The falling off in Flanders alone was
     still greater. Thus, in 1847, there were only 447 marriages
     contracted for 1,000 dissolved. (_Horn_, I, 170 ff.)
     However, _Berg_, using Sweden as an illustration, rightly
     calls attention to the fact, that the variations in the
     number of marriages and births is determined in part by the
     number of adults, that is, of the number of births 20 and
     more years before. Compare _Engel's_ Statist. Zeitschr.,
     1869, 7.]

     [Footnote 240-3: Sometimes, a sudden increase in the
     frequency of marriages may have very accidental and
     transitory causes. Thus, for instance, in France in 1813,
     when the unmarried were so largely conscripted, the number
     of marriages rose to 387,000, whereas the average of the
     five previous years was 229,000. (_Bernouilli_,
     Populationistik, 103.)]

     [Footnote 240-4: Thus, for instance, in nearly all countries
     affected by the movement of 1848, there were, during the
     last months of that year, an unusually large number of
     conceptions. (_Horn_., I, 241 seq.) According to
     _Dieterici_, Abh. der Berliner Akademie, 1855, 321 ff.,
     there was one birth a year for the number of persons living.

     ========================================================
                 | _Ten years' average._ |   _1849 alone._
     ------------+----------------------------+--------------
     In France,  |         36.19         |       35.79
     In Tuscany, |         24.42         |       22.82
     In Saxony,  |         24.51         |       23.08
     In Prussia, |         25.5          |       23.62
     ========================================================

     The great majority of men at that time believed all they
     liked to believe.]

     [Footnote 240-5: _Marshall_, Digest of all Accounts, I, 15.
     _Porter_, I, ch. I, 9.]

     [Footnote 240-6: _Wallace_, in this respect, places industry
     far behind agriculture. (On the Numbers of mankind in
     ancient and modern Times.) The county of Lancashire had, in
     1760, that is shortly before the introduction of the great
     machine industry, 297,000 inhabitants; in 1801, 672,000; in
     1831, 1,336,000; in 1861, 2,490,000. Saxony has, in almost
     every place, a relatively large number of births in
     proportion as in any locality, commerce and industry
     preponderate over agriculture, and _vice versa_. See
     _Engel_, Bewegung der Bevölkerung im K. Sachsen, 1854. But
     this should not be generalized into a universal law. For
     instance, Prussia and Posen have an average number of births
     greater than that of the Rhine country and Westphalia. (_v.
     Viebahn_, Statistik des L. V, II, 222.)]


SECTION CCXLI.

EFFECT OF WARS ON POPULATION.

We may now understand why it is that only those wars which are
accompanied by a diminution of the sources of the means of support
decrease population. The loss in the numbers of mankind produced by
wars, hardships, etc., would, as a rule, be readily made up for by
increased procreation.[241-1] Thus, for instance, in Holland, the long
Spanish war permitted an increase of the population for the reason that
the national wealth increased at the same time; while the short war with
Cromwell, which curtailed commerce, caused 3,000 houses in Amsterdam
alone to remain empty.[241-2] In England and Wales, the population
increased during the most frightful war of modern times, from 8,540,000
in 1790, to over 12,000,000 in 1821; in France, from, probably,
26,000,000 or 27,000,000 in 1791, to 29,217,000 in 1817. England,
indeed, was itself never the seat of war, and its commerce was increased
by the war in some directions as much as it was diminished by it in
others. France's own territory was devastated only in the first and in
the last years of the war. But the Revolution had, on the whole, once
the storms of the Reign of Terror were over, not only more equally
divided the means of subsistence in France, but it had developed them in
a higher degree.[241-3] [241-4]

It cannot even be unconditionally predicated of emigration, that it
hinders the increase of population. As soon as people have begun to
calculate upon emigration, as a resort for themselves in case of
distress, or upon the emigration of others, by which they would be left
a larger field for action at home, a number of marriages is contracted
and a number of children born; which would otherwise not have been the
case. Most men, especially when young and enamoured, hope for the
realization of all their wishes. Favorable chances, open to a great
number of men alike and which every one thinks himself competent to
calculate, are commonly over-estimated by the majority.[241-5] (See §
259.)

     [Footnote 241-1: The war of 1870-71 cost Germany 44,890
     lives. (Preuss. Statist. Ztschr., 1872, 293.) This number is
     not quite 20 per cent. of the excess of births (794,206)
     over deaths (563,065) in Prussia in the year 1865. On the
     other hand, in from 1856 to 1861 there were 10,000 cases of
     murder and manslaughter in all Europe, Turkey excepted.
     (_Hausner_, Vergl. Statistik, I, 145.) About the end of the
     last century, it was estimated that about 1,000,000 children
     were born annually in France. (_Necker_, Administration des
     Finances, I, 256.) Of these, about 600,000 outlived their
     18th year. (_Peuschet_, Essai de Statistique, 31.) There
     were, annually, about 220,000 marriages. Hence the number of
     the unmarried was increased annually by 80,000 young men,
     who, according to _Peucshet_ (32), amounted to over
     1,450,000. According to this, the number of recruits, per
     annum, might amount to hundreds of thousands without causing
     any appreciable diminution in the number of births and
     marriages. Compare _Malthus_, Principle of Population, II,
     ch. 6. On the other hand, long continued wars have the
     effect of keeping the men physically strongest from
     marriage, and so to deteriorate the race.]

     [Footnote 241-2: Richesse de Hollande, I, 149. During the
     Amsterdam commercial crisis, from 1795 to 1814, there were
     for every 4 births an average of 7 deaths. So that the
     population, in 1795, was still 217,000, and in 1815, only
     180,000. (_Bickes_, Bewegung der Bevölkerung Anhang, 28.)]

     [Footnote 241-3: On the other hand, the population of East
     Prussia, between 1807 and 1815 diminished 14 per cent. (_v.
     Haxthausen_, Ländl. Verfassung der Preuss. Monarchie, I,
     93.) The battles of the Seven Years' War are said to have
     consumed 120,000 Russians, 140,000 Austrians, 200,000
     Frenchmen, 160,000 Englishmen, Hanoverians, etc., 25,000
     Swedes, 28,000 of the troops of the empire, and 180,000
     Prussians. Yet the population of Prussia fell off 1,500,000.
     (_Frédéric_, Œuvres posthumes, IV, 414; Preuss. Gesch.
     Friedrich's M., II, 349.) During the Thirty Years' War, the
     population of Bohemia fell from 3,000,000 to 780,000.
     (_Mailath_, Gesch. von Oesterr, III, 455.) Württemberg,
     according to the military recruiting lists had a population,
     in 1622, of 300,000 inhabitants. (_Spittler_, Werke, XII,
     34.) In 1641, the population was only 48,000; according to a
     promotion-speech of _J. B. Andreä_. But between 1628 and
     1650, more than 58,000,000 florins were lost by war
     contributions, and about 60,000,000 florins by plunder;
     about 36,000 private houses were in ruins. (_Spittler_,
     Württ. Gesch., 254.) On Alsace, Freisingen and Göttingen,
     see _Londorp_, Bellum sexenn., II, 563; _Zschocke_,
     Bayerische Geschichte, III, 302; _Spittler_, Hanov. Gesch.,
     II, 37 ff., 114. On Germany generally, see _R. F. Hanser_,
     Deutschland nach dem dreissigjährigen Kriege, 1862. However,
     many estimates of the diminution of the population are
     exaggerated, because it has not been considered that a great
     part of the men who disappeared in one place fled to
     another, for the time being more secure. Compare _Kius_ in
     _Hildebrand's_ Jahrb., 1870, I ff.

     The population of Massachusetts increased 8,310 yearly,
     before the War of Independence; during the war, only 1,161,
     although the enemy scarcely ever entered the country.
     (_Ebeling_, Gesch. und Erdbeschreib. der V. Staaten I, 236.)
     Russia had a mortality during the war years, 1853-55, of
     2,272,000, 2,148,000, and 2,541,000; in the years of peace
     previous, 2,000,000 at most.]

     [Footnote 241-4: Besides the mere loss of men, war operates
     destructively on production, since it affects especially the
     most productive classes as to age, while pestilence, famine,
     etc., carry off children, old people, and the feeble. Hence,
     a people's public economy recovers more readily from the
     last named misfortune than from war.]

     [Footnote 241-5: Compare _Giov. Botero_, Della Cause della
     Grandezza della Città, L. II, and Ragion di Stato, VIII, 95;
     where colonization is compared to the swarming of bees. _W.
     Raleigh_, Discourse of War in general, Works VIII. 257 ff.
     Similarly _Child_, Discourse of Trade, 371 ff. _Ustariz_,
     Teoria y Practica del Commercio, 1724, ch. 4. _Franklin_,
     Observations on the Increase of Mankind, which reminds one
     of the continued growth of polyps.]


SECTION CCXLII.

COUNTER TENDENCIES TO THE INCREASE OF POPULATION.

The extension of economic production is always a labor; the surrender of
one's ordinary means of subsistence to new comers, a sacrifice; but, on
the other hand, the procreation of children is a pleasure. Hence it
seems to be incontestably true that the powers of increase of
population, considered from an entirely sensuous point of view, tend to
go beyond the bounds of the field of food. Malthus gave expression to
this fact by saying that population had a tendency to increase in a
geometrical progression, but the means of subsistence, even under the
most favorable conditions, only in an arithmetical progression.[242-1]
If the word "tendency" be correctly understood in the sense in which
Malthus employed it, so that the reality appears as the product of
several and partly opposite tendencies,[242-2] the first half of his
allegation can scarcely be contested.[242-3] If a father has three sons,
and each of the three three in turn, the love of procreation and the
power of procreation, all being in the normal condition of health, are
precisely three times as great in the second generation as in the first,
and nine times as great in the third, etc. The second half of Malthus's
principle is more open to doubt. If it be true, as has been asserted,
that man's means of subsistence consist solely of animals and plants,
and these, as well as man, increase in a geometrical ratio, and usually
even with a much larger multiplier, yet it is here, surprisingly enough,
overlooked that their natural increase is interrupted by the consumption
of them by man. On the other hand, it is true that even raw material, by
means of more skillful technic processes (§ 134, 157), and the values by
which man ennobles them, may always increase in a greater ratio than a
merely arithmetical one. (§ 33).[242-4] But, that, in the long run, the
means of subsistence should keep pace with the extreme of sensuous
desire and of physiological power, is utterly incredible. Hence, the
latter tendency is limited by others.

A. And indeed, firstly, by repressive counter-tendencies. As soon as
there is a larger population in existence than can be supported, the
surplus population must yield to a mournful necessity; in a favorable
case, to that of emigration, but usually to hunger, disease and misery
generally.

"The earth," says Sismondi, "again swallows the children she cannot
support." It is the weakest especially who are elbowed off the bridge of
life, over which we pass from birth to the normal death from old age,
because there is not room enough on it for all. Hence the frightful
mortality among the poorer classes and in childhood. Now it is the
absence of a healthy habitation,[242-5] or of proper clothing, or, in
the case of children, of rational superintendence[242-6] which sows the
germs of a thousand diseases; and now the absence of proper care, rest
etc., which intensifies these diseases. Every bad harvest is wont, when
its consequences are not alleviated by a high and healthy civilization,
to increase mortality. (§ 246, 9). Thus, in Sweden, during the second
half of the 18th century, the average yearly mortality was = 1:39-40. On
the other hand, in the bad year 1771 = 1:35.7; 1772 = 1:26.7, and in
1773, as an after consequence, 1:19.3. In this last, although it was a
fertile year, there were only 48 births to every 100 deaths.[242-7]
Among nations low down in civilization, the repressive counter tendency
may assume a very violent character. How many cases of murder, human
sacrifice, and even war, have been occasioned by over-population and
famine.

B. Secondly, by preventive counter tendencies.[242-8] The person who
believes himself unable to support children refrains from begetting
them. This, we may call one of the most natural of duties. We might even
say that the person who begets a child which he knows he is not in a
condition to support, is guilty of a grievous sin against civil society,
and of a still more grevious one against his poor child. Strange! To
beget a child with countless wants, with an immortal soul! That is
certainly an act the most pregnant with consequences which any ordinary
man can perform in his life; and yet how thoughtlessly it is performed
by the majority!

This counter-tendency is to be found only in the case of man. Plants and
animals yield to the sexual instinct regardless of everything.[242-9]
Where there is no question whatever of having food enough to support
children, as is the case with the better-to-do classes, the dread of
losing the decencies of life, or of "losing caste," acts as a
preventive[242-10] [242-11] to the founding a family, or increasing the
numbers of one. Unfortunately, abstinence from the procreation of
children may be exercised not only in accordance with the moral
law,[242-12] but also, in contravention of it.[242-13] There is a
necessary connection between human reason and human freedom and the
possibility of misusing them. And it is certainly the inevitable fate of
man either to place a morally rational check on the sexual impulse, or
to be forcibly held within the limits of the means of subsistence, since
they cannot be over-stepped by him--through the agency of vice and
misery.[242-14] [242-15]

     [Footnote 242-1: Principle of Population, I, ch. I. Adam
     Smith also implicitly held the view that the demand for the
     means of subsistence is always in advance of them. Wealth of
     Nat., I, ch. II, pref. and P. I.]

     [Footnote 242-2: This may be represented by what physicists
     call the "parallelogram of forces." Compare _Senior_,
     Outlines, 47. _Malthus'_ own explanation of "tendency," in
     his letter at the end of _Senior_, Two Lectures on
     Population, 1829.]

     [Footnote 242-3: On the inaccuracy of the expression,
     "geometrical progression," in the present case, see _Moser_,
     Gesetze des Lebensdauer, 1839, 132.]

     [Footnote 242-4: _Weyland_, Principles of Population and
     Production, 1816, 25 ff.]

     [Footnote 242-5: In Paris the mortality is greater in the
     _arrondissements_ in proportion to their poverty, of which
     the relative numbers of untaxed dwellings afford a
     criterion. According to this, between 1822 and 1826,

     =========================================================
         _The       | _Had a yearly mortality |  _Locations
     Arrondissement_|    of  1 in every_      | non imposées._
     ---------------+-------------------------+---------------
         II,        |     71 of population.   |     0.07
        III,        |     67    "             |     0.11
          I,        |     66    "             |     0.11
         IV,        |     62    "             |     0.15
         XI,        |     61    "             |     0.19
         VI,        |     58    "             |     0.21
          V,        |     64    "             |     0.22
        VII,        |     59    "             |     0.22
          X,        |     49    "             |     0.23
         IX,        |     50    "             |     0.31
       VIII,        |     46    "             |     0.32
        XII,        |     44    "             |     0.38
     =========================================================

     _Villermé_, in the Journal des Econ., Novbr. 1853. The
     average house-rent in _arrondissement_ II, amounted to 605
     francs per annum; in III, to 426; in I, to 498; in IX, to
     172; in VIII, to 173; in XII, to 148 francs. Doctor Holland
     divided all the streets in Manchester into three classes,
     and each class, in turn, into three sub-classes, according
     to the qualities of the dwellings. The yearly mortality in I
     a was 1:51; in I b = 1:45; I c = 36; II a = 1:55; II b =
     1:38; III c = 1:25. (Report of Inquiry into the State of
     large Towns and Populous Districts, 1843.)]

     [Footnote 242-6: In Prussia, the Jewish population, between
     1822 and 1840, increased 34½ per cent.; the Christians
     only 28½ per cent.; although among the Jews there was
     only one marriage a year in every 139, and one birth in
     every 28; among the Christians, in every 112 and 25. This is
     accounted for, mainly by the favorable circumstances that
     Jewish mothers leave their homes seldomer to work outside,
     and thereby devote more attention, even in the lower
     classes, to the care of their children.]

     [Footnote 242-7: _Wappäus_, Allg. Bevölkerungsstatistik, I,
     315. In Thurgau, in 1815, the mortality was = 2,143, in 1817
     = 3,440; in Luzerne, in 1820 = 1,543, in 1817 = 3,511.
     (_Bernouilli_, Populationistik, 219.) And so in London
     between 1601 and 1800, when the five dearest and five
     cheapest years of each decade are taken together, the
     aggregate mortality in the dearest was 1,971,076, in the
     cheapest, 1,830,835. (_Farr_, in the Statist. Journal, 1846,
     163 ff.) The rule did not apply to the time 1801-1820; but
     it did again to the time 1821-1840 (l. c., 174). Compare
     _Messance_, Recherches sur la Population, 311; _Roscher_,
     Kornhandel und Theuerungspolitik, 54 ff. When scarcity
     continues a longer time, the mortality sometimes decreases
     on account of the largely diminished number of small
     children. In Lancashire, the number of deaths during the
     commercial crisis, 1846-47, was 36 per cent. greater than
     the average of the three last preceding years; in 1857-8 it
     was 11.9 per cent. greater. (_Ausland_, 1862, No. 44.)]

     [Footnote 242-8: _Malthus_ uses the word "preventive check,"
     while he calls the repressive counter-tendencies "positive."
     _R. Mohl_, Polizeiwissenschaft, I, 88, speaks of preventive
     and destructive causes. Anteriorly and subsequently
     operating causes. (_Knapp_).]

     [Footnote 242-9: Hence the infinite productiveness of
     irrational organisms is limited only by their mutual
     struggle for the means of support. That which cannot live
     there dies. "In this case there can be no artificial
     increase of food, and no prudential restraint from
     marriage." (_Darwin_, Origin of species, 4 ed. 1866, 73.)
     Compare _B. Franklin_, Observations concerning the Increase
     of Mankind, § 21. _Lamennais_, indeed, asserts that no plant
     and no animal takes away food from any other; that the earth
     has room for all!]

     [Footnote 242-10: The rule that population tends to extend
     everywhere as far as the means of subsistence will permit,
     _Sismondi_, N. Principes, VII, ch. 3, has taken occasion to
     ridicule, basing himself on the example of the Montmorency
     family. This family has, notoriously, always lived in
     superabundance, and is, notwithstanding, on the verge of
     extinction. _Sismondi_ here forgets the relativity of the
     idea "means of subsistence." Persons occupying an exalted
     social position not only think that they want more in this
     respect, but they are wont in forming marriage contracts to
     use the greatest and frequently exaggerated caution. Hence
     it is that families of this rank become, relatively
     speaking, frequently extinct; and, moreover, such a fact is
     here most frequently taken notice of. _Sadler_, Law of
     Population, 1830, infers from the frequent extinction of
     English noble families, that wealth leads to sterility; and,
     on the other hand, poverty (but not famine!) to prolificacy;
     and _Doubleday's_ (True Law of Population, 12 ff.)
     suggestion, in explanation hereof, that over-fed animals and
     over-manured plants are sterile, as ably refuted in the
     Edinburg Rev., LI. It is there shown that the marriages of
     the English peers are fruitful above the average; that their
     extinction is partly due to the fact that the younger sons
     seldom married, and that hence there is a lack of collateral
     relations. But, in great part, such extinction is only
     apparent; since such a family is said to be extinct when
     only the male stem is extinct. The French nobility, from the
     9th to the 11th century, continually increased in number.
     After this, the succession of females and cases of
     extinction became more frequent, because the nobility, in
     order to keep their estates together, began to not desire
     many sons. _Sismondi_, Hist. des Français, V, 182. Compare
     _Benoiston de Châteauneuf_, De la Durée des Familles nobles
     en France, in the proceedings of the Académie des Sciences
     morales et politiques, II, 792 ff. Besides, between 1611 and
     1819, 763 English baronet families became actually extinct,
     653 continued to exist, and 139 had been raised to the
     peerage; an average of from 3 to 4 peer families became
     extinct yearly. (Statist. Journal, 1869, 224.) There were,
     about 1569 2,219 Venetian _nobili_; in 1581, 1,843 (_Daru_,
     VI, 240 ff.); in Addison's time (1705), only 1,500. On the
     decrease of the Roman patricians, see _Dionys._, Hal., I,
     85; _Tacit._, Ann., XI, 25; on that of the Spartan knights:
     _Clinton_, Fasti Hellenici, II, 407 ff.; of the _ehrbaren
     Geschlechter_, at Nürnberg: _Hegel_, N. Stadtchroniken,
     1862, 214. Compare, also, Westminster Rev., Oct., 1849.]

     [Footnote 242-11: How, in England, not only many
     distinguished persons, but also their servants, are kept
     from marriage in this way, because they are sure of not
     being able to satisfy the wants of their bachelorhood as
     fathers of families, see in _Malthus_, P. of P., II, ch. 8.
     A description of the general misery which would result if
     all men consumed only that which was physically
     indispensable, in _Senior_, Outlines, 39.]

     [Footnote 242-12: See _Bastiat's_ beautiful words, in which
     he characterizes the holy ignorance of children, the modesty
     of young maidens, the severity of public opinion, etc., as a
     law of limitation: (Harmonies, 437 seq.)]

     [Footnote 242-13: Compare _Proudhon_, Contradictions, ch.
     13.]

     [Footnote 242-14: That want of employment or of business has
     rather a preventive tendency, see _Malthus_, Principle of
     Population, VII, ch. 14.]

     [Footnote 242-15: _Malthus_, P. of P., II, ch. 13. I
     formerly called this natural law by the name of the
     investigator who earned the largest share of scientific
     merit in connection therewith. It cannot, indeed, be said,
     that he was the first to observe it. Compare even
     _Machiavelli_, Discorsi (between 1515 and 1518), II, 5. And
     so _Giovanni Botero_ taught that the number of the
     population depended not so much on the number of
     _congiungimenti_ so much as on the rearing of children.
     (Ragion di Stato, 1592, VII, 93 ff.) The _virtù generativa
     degli uomini_, which is always the same, is found face to
     face with the _virtù nutritiva delle citta_. The former
     would continue to operate _ad infinitum_, if the latter did
     not limit it. The larger a city is, the more difficult it is
     to provide it with the means of subsistence. In the last
     instance, the slave-sales of Guinea, the cannibalism of the
     Indians, the robber-system of the Arabians and the Tartars,
     the migration of nations, crimes, litigation, etc., are
     traced back to the narrowness of the means of subsistence.
     (Delle Cause della Grandezza delle Città, 1598, Libr. III.)
     Sir Walter Raleigh (ob. 1618), was of opinion that the earth
     would not only be full but overflowing with human beings
     were it not that hunger, pestilence, crime, war, abstinence
     welcome sterility, etc. did away with the surplus
     population. (History of the World, I, ch. 8, 4. Discourse of
     war: Works, VII, 257 ff.) According to _Child_, Discourse of
     Trade, 371 ff., 149, the population is always in proportion
     to the amount of employment.

     If England could employ only 100 men while 150 were reared,
     50 would have to emigrate or perish; and so, too,
     conversely, occasional vacancies would soon be filled.
     Similarly _Davenaut_, Works II, 233, 185; who, however, in
     the practical application of this law of nature, adopts the
     error of his contemporary, G. King, the statistician,
     according to whom the population of England would increase
     to 11,000,000 (II, 176) only after 600 years. _Benjamin
     Franklin's_ Observations Concerning the Increase of Mankind,
     Peopling of new Countries, etc., 1751, are very good.
     Franklin here shows that the same tables of mortality do not
     apply to town and country, nor to old nations and new ones.
     The nation increases more rapidly in proportion as it is
     easy to contract marriage. Hence the increase is smallest in
     luxurious cities and thickly populated countries. Other
     circumstances, being equal, hunting nations require the
     largest quantity of land for the purpose of subsistence, and
     industrial nations least. In Europe, there was a marriage in
     every 100 of the population per annum; in America, on every
     50; 4 children to a marriage in the former, and 8 in the
     latter.

     Population diminishes as a consequence of subjugation, bad
     government, the introduction of slavery, loss of territory,
     loss of trade and food. He who promotes the opposite
     advantages may well be called the "father of his country."
     Further, _D. Hume_, Of the Populousness of the Ancient
     Nations: Discourses No. 10. _Per contra, Wallace_, On the
     Numbers of Mankind in Ancient and Modern Times, in which the
     superior populousness of antiquity is maintained, 1753.
     _Wallace_ relied chiefly on the more equable distribution of
     land, and the smaller luxury of the ancient nations.
     _Herbert_, Essai sur le Police des Grains (1755), 319 ff.
     Les Intérêts de la France mal entendus, par un Citoyen
     (Amsterd., 1757), I, 197.

     _Steuart_ threw light especially on the connection between
     mortality and the number of marriages (Principles, I, 13);
     and he claims, with the utmost confidence, that only the
     want of the means of subsistence, using the expression in
     its broadest sense (I, 15), can put a limit to the increase
     of population (I, 14). He calls wrongful procreation
     (_falsche Zeugung_) the chief cause of pauperism (II, 1),
     and his views on public charity have a strong Malthusian
     complexion (I, 14). Compare further _A. Young_, Political
     Arithmetics (1774), I, ch. 7. _Townsend_, Dissertation on
     the Poor Laws (1786), makes a happy use of the example of
     the Island of Juan Fernandez, in which a colony of goats was
     developed, first alone, and afterwards in a struggle with a
     colony of dogs, to illustrate the laws of the development of
     population as limited by the supply of food. Compare the
     same author's Journey through Spain, II, 8 seq.; 358 ff.,
     III, 107. _G. M. Ortes_, Riflessioni sulla Popolazione,
     delle Nazione per rapporto all'Economia nazionale, 1790,
     ascribes geometrical progression to the increase of
     population (cap. I) precisely as in the case of other
     animals; only, in the case of the latter, a limit is put to
     their increase by _forza_, and in the case of man, by
     _ragione_. When the population of a country has attained its
     proper development, celibacy is as necessary in order to
     keep it so as marriage. Otherwise the door would be opened
     to extreme pauperism, to the debauchery of the "venus vaga,"
     to eunuchism and polygamy (4). Strangely enough, _Ortes_
     asserts that no people are richer per capita than any other.
     The distribution of wealth among the apparently richer,
     operates to make individuals heap wealth together in greater
     quantities (8).

     _Malthus_ himself wrote his classical work under the
     influence of a very intelligible reaction (1st ed., 1798; 2d
     ed., 1803). For a whole generation, the European public had
     had no other view broached but that the tree of human kind
     might keep on growing even until it reached the heavens, if
     care were only taken to manure the ground, to water the
     roots and prune the branches according to the latest
     world-improving recipes. _Malthus_, in opposition thereto,
     called attention to the limits placed by nature to the
     number of mankind. He demonstrated that it was not merely
     arbitrary laws which opposed the Utopian happiness of all,
     but in part the niggardliness of nature; and in greater part
     the passions and sins of men themselves. If he sometimes
     described the limits as narrower than they really are, and
     if an occasional coarse expression escaped him, we need not
     wonder. His polemic was well founded, and he was at the time
     still a young man (born 1766, ob. 1834). He modified much in
     the later editions of his work. For instance, he stopped the
     unsavory sentence in which he says that a man born into the
     world already occupied, whose family cannot support him, and
     whose labor society does not need, has not the smallest
     right to demand the smallest particle of food, and is really
     superfluous in the world; that there is no place for him at
     the great banquet of nature; that nature bids him go hence
     and does not hesitate herself to execute the command. _P.
     Leroux_ in a small pamphlet in answer to _Malthus_, quotes
     this sentence at least forty times. Moreover, _Möser_, who
     certainly is not considered a misanthrope, was not only
     acquainted with the Malthusian law, but develops it in
     words, and with consequences which strongly recall the very
     words which raised such a storm against _Malthus_. Compare
     Patr. Phant. I, 42; II, 1; IV, 15 (against vaccination); V,
     26.

     The opinions of political economists in our own day are, as
     might be expected, divided on some of Malthus' expressions
     and on his practical counsels. He has indeed but few such
     one-sided followers as _Th. Chalmers_, On Political Economy
     in Connexion with the moral State and moral Prospects of
     Society, 1832. Malthus' fundamental views, however, are
     truly scientific. (Κτῆμα ἐς ἀεὶ!) Compare _Baudrillart_,
     Manuel, 424 seq., and _A Walker_, Science of Wealth, who
     strangely enough (452) opposes Malthus, and yet is (458)
     virtually of the same opinion. Even the better class of
     socialists base themselves on the same view, without,
     however, thanking Malthus for it. Thus for instance, _K.
     Marlo_, System der Weltökonomie (1848, 52), passim. For an
     excellent history of the theory of population, see _R.
     Mohl_, Gesch. und Literatur der Staatswissenschaften, III,
     409 ff. (1858).]


SECTION CCXLIII.

OPPONENTS OF MALTHUS.

Of Malthus' opponents, John Stuart Mill has said, that a confused notion
of the causes which, at most times and places, keep the actual increase
of mankind so far behind their capacity for increase, has every now and
then given birth to some ephemeral theory, speedily forgotten; as if the
law of the increase of population were a different one under different
circumstances, and as if the fecundity of the human species, by direct
divine decree, was in keeping with the wants of society for the time
being.[243-1]

The majority of such theories are based, on the proof that Malthus'
description of one stage of civilization is not true of another,
although the great discoverer, who, with his admirable many-sidedness,
had investigated the law of population in and throughout all the stages
of civilization, had, as a rule, himself given due weight to all of
this. The objection of unwarranted generalization applies to Malthus
much less than to the majority of his opponents. Since, for instance, in
young colonies, even the natural forces, which are in themselves limited
or exhaustible, afford a wide field of operation for a long time; many
American writers have supposed that labor alone was the source of
wealth, and that, to say the least, wealth should increase in the same
ratio as mankind; and even in a still greater ratio, since the division
of labor grows easier as population increases in density.[243-2] But
here it is forgotten that in every instance of economic production,
there are many factors engaged, each one of which can take the place of
another only up to a certain point. There are others, especially Grahame
and Carey,[243-3] who allude to the possibility of emigration, which is
still so far from being exhausted. But Malthus had nothing to say of the
impossibility of emigration. He spoke only of the great difficulties in
its way. (III. ch. 4.) There are many writers who would wish simply to
ship emigrants off, like a great many doctors who send their patients
away to die! (§ 259 ff.) When Sadler says that human prolificacy,
circumstances remaining the same, is inversely as the density of
population, he uses, to say the least, a very inaccurate mode of
expression.[243-4] The grain of truth hidden in this assertion does
certainly not come from Gray's theory, that in the higher stages of
civilization, the better living usual is a hinderance to the increase of
population, and that the prevailing influence of large cities increases
mortality;[243-5] but from influences, or, to speak more correctly, from
free human considerations, on which no one has thrown so much light as
Malthus. And indeed, where is the man who has better understood or more
warmly recommended the "aristocratic" impulse which should, in well
ordered civil society, hold the sexual instinct in equilibrium?[243-6]
Malthus himself pleasantly derides his opponents, who, to explain how
the same rifle, charged with the same powder and provided with the same
ball, produces an effect varying with the nature of the object at which
it is fired, prefer, instead of calculating the force of resistance of
the latter, to take refuge in a mysterious faculty by virtue of which
the powder has a different explosive force, according to the greater or
less resistance the ball meets when it strikes.[243-7] The peculiarity
of Godwin's polemics may be inferred from the fact that he considered it
very doubtful whether the population of England had increased during the
four preceding generations; and that he traces the increase of the
population of the United States to the influence of emigration almost
exclusively, and allows the desertion of whole English regiments in 1812
ff. to play a part in accounting for that increase.[243-8]

Malthus has been accused of rejoicing over the evils which are wont to
decimate surplus population; but the same charge might be brought
against those physicians who trace the diseases back to the causes that
produce them. He has also been branded as the enemy of the lower
classes, spite of the fact that he is the very first who took a
scientific interest in their prosperity.[243-9] As John Stuart Mill has
said, the idea that all human progress must at last end in misery was so
far from Malthus' mind, that it can be thoroughly combated only by
carrying Malthus' principles into practice.[243-10]

     [Footnote 243-1: _J. S. Mill_, Principles I, ch. 10.]

     [Footnote 243-2: _Everett_, New ideas on population, with
     remarks on the theories of Malthus and Goodwin, 1823.
     Similarly _Carey_, Principles of Social Science, I, 88 ff.,
     who, with a "natural philosophical" generalization, shows
     that the more the matter existing on the earth takes the
     form of men, the greater becomes the power of the latter to
     give direction to natural forces with an ever accelerated
     movement. So also _Fontenay_, in the Journal des
     Economistes, Oct., 1850, says: _un nombre de travailleurs
     doublé produit plus du double et ne consomme pas le double
     de ce que produisaient et consommaient les travailleurs de
     l'époque précédente_. Even _Bastiat_ inclines to the same
     over-estimation of one factor of production. He promises in
     the introduction to his Harmonies économiques to prove the
     proposition: _toutes choses égales d'ailleurs, la densité
     croissante de population équivaut à une facilité croissante
     de production_. (Absolutely it is true, but whether
     relatively, quære.)]

     [Footnote 243-3: _Grahame_, Inquiry into the Principle of
     Population, 1816; _Carey_, Rate of Wages, 236 ff.]

     [Footnote 243-4: Varies inversely as their numbers: _M. Th.
     Sadler_, The Law of Population, a treatise in Disproof of
     the Superfecundity of human Beings, and developing the real
     Principles of their Increase, III, 1830. There were, for
     instance--

     ===================================================
                       | _Inhabitants_ |   _Number of_
                       | _per English_ | _children to a_
                       |  _sq. mile_   |   _marriage_
     ------------------+---------------+----------------
     The Cape          |       1       |      5.48
     The United States |       4       |      5.22
     Russia in Europe  |      23       |      4.94
     Denmark           |      73       |      4.98
     Prussia           |     100       |      4.70
     France            |     150       |      4.22
     England           |     160       |      3.66
     ===================================================

     Most of these figures are very uncertain; and even if they
     were true, they would afford a very bad proof of his
     assertion. Besides, _Sadler_ was one of those extreme tories
     who resorted almost to Jacobin measures in opposition to the
     reforms advocated by Huskisson, Peel and Wellington. Like
     Sadler, _A. Guillard_, Eléments de Statistique humaine ou
     Démographie comparée, 1855. But, for instance, in Saxony,
     population has for a long time increased most rapidly, in
     those places where it is already densest. Compare _Engel,_
     loc. cit. The five German kingdoms and Mecklenburg-Strelitz
     hold the same relative rank, on a ten-year average, in
     relation to the number of births that they do to density of
     population, (_v. Viehbahn_, Statistik des Z. V., II, 321
     seq.)]

     [Footnote 243-5: _Gray_, The Happiness of States, or an
     Inquiry concerning Population, 1875. _Weyland_, Principles
     of Population and Production, 1816, had already ascribed to
     industry in itself a tendency to make the increase of
     Population less rapid!]

     [Footnote 243-6: Compare _Rossi_, Cours d'Economie
     politique, I, 303 ff.]

     [Footnote 243-7: _Malthus_, Principle of Population, V, ch.
     3. Thus _J. B. Say_ asks those population-mystics: if in
     thickly populated countries the power of procreation
     diminishes of itself, how comes it that even here the
     extraordinary voids made by pestilence, etc. are so rapidly
     filled up?]

     [Footnote 243-8: _Godwin_, Inquiry concerning the Power of
     Increase in the Numbers of Mankind, III, 1821; III, ch. IV.
     Compare the same socialistic writer's essay: Inquiry
     concerning public Justice (II, 1793), which in part provoked
     Malthus' book. _David Booth_ (in Godwin's first book) had
     the misfortune to ridicule Malthus by comparing his law with
     the law of gravitation, which he said did not freely operate
     in nature and was undemonstrable in space void of air! From
     a better point of view, Bastiat says of Malthus' traducers,
     that they might as well blame Newton when they were injured
     by a fall.]

     [Footnote 243-9: Principle of Population, III, ch. 13. His
     moral severity in other respects is apparent especially in
     IV, ch. 13, towards the end.]

     [Footnote 243-10: Every good family takes care of their
     children even before their birth. How far from practical is
     the view that the means of subsistence come as a matter of
     course, provided only that men are here before them!]



CHAPTER II.

HISTORY OF POPULATION.



SECTION CCXLIV.

HISTORY OF POPULATION.--UNCIVILIZED TIMES.

In the case of those wild tribes which can only use the forces of nature
by way of occupation, the small extent of the field of food is filled up
by even a very sparse population. And the principal means by which
population is there limited are the following: the overburthening and
ill treatment of the women,[244-1] by which the simultaneous rearing of
several small children is rendered impossible;[244-2] the inordinately
long time that children are kept at the breast;[244-3] the wide-spread
practice of abortion;[244-4] numerous cases of murder, especially of the
old and weak;[244-5] everlasting war carried on by hunting nations to
extend their hunting territory, found in conjunction with cannibalism in
many tribes.[244-6] Besides, nations of hunters are frequently decimated
by famine and pestilence, the latter generally a consequence of
never-ending alternation between gluttony and famine.[244-7]

Most negro nations live in such a state of legal insecurity that it is
impossible for a higher civilization with its attendant increase of the
means of subsistence to take root among them. At the same time, their
sexual impulses are very strong.[244-8] Here the slave-trade constituted
the chief preventive of over-population. If this traffic were suppressed
simply and no care taken through the instrumentality of commerce and of
missions to improve the moral and economical condition of the negroes,
the only probable but questionable gain would be that the prisoners made
in the numberless wars generated by famine would be murdered instead of
being sold.

Nomadic races, with their universal chivalry, are wont to treat their
women well enough to enable them bear children without any great
hardship.[244-9] But the mere use of natural pasturage can never be
carried to great intensity. The transition to agriculture with its
greater yield of food but with the diminished freedom by which it is
accompanied is a thing to which these warlike men are so averse that it
directs the surplus population by the way of emigration into neighboring
civilized countries, where they either obtain victory, booty and
supremacy, or are rapidly subjugated. Such migrations are a standing
chapter in the history of all Asiatic kingdoms; they for a long time
disturb declining civilized states, finally conquering them, and begin
the same cycle in the new kingdom.[244-10] Where nomadic races see
themselves cut off from such migrations their marriages are wont to be
unfruitful.[244-11]

     [Footnote 244-1: In New Holland they are beaten by their
     husbands even on the day of their confinement. Their heads
     are sometimes covered with countless scars. _Collins_ says
     that for mere pity one might wish a young woman there death
     rather than marriage. (Account of N. S. Wales, 560 ff.)
     South American Indian women actually kill their daughters,
     with a view of improving the condition of women. (_Azara_,
     Reisen in S. Amerika, II, 63.) How the women among the
     aboriginal inhabitants of North America were oppressed is
     best illustrated by the absence of ornaments among the
     women, while the men were very gaudily decked, and carried
     small hand-mirrors with them. (_Prinz Neuwied_, N. A. Reise,
     II, 108 seq.) The early decay of female beauty among all
     barbarous nations is related to the ill-treatment they
     receive.]

     [Footnote 244-2: The custom of killing one of twins
     immediately after birth or of burying a child at the breast
     with its mother, prevails extensively among savage nations.
     On New Holland, see _Collins_, 362; on North America,
     Lettres édifiantes, IX, 140; on the Hottentots, _Kolb_, I,
     144.]

     [Footnote 244-3: In many Indian tribes, children are kept at
     the breast until their fifth year. (_Klemm_,
     Kulturgeschichte I, 236; II, 85.) Among the Greenlanders,
     until the third or fourth year (_Klemm_, I, 208); among the
     Laplanders and Tonguses, likewise (_Klemm_, III, 57); among
     the Mongols and Kalmucks, longer yet. (_Klemm_, III, 171.)]

     [Footnote 244-4: The New Hollanders have a special word to
     express the killing of the fœtus by pressure.
     (_Collins._) Among certain of the Brazilian tribes, this is
     performed by every woman until her 30th year; and in many
     more the custom prevails for a woman when she becomes
     pregnant to fast, or to be frequently bled. (_Spix und
     Martius_, Reise, I, 261.) Compare _Azara._, II, 79.]

     [Footnote 244-5: On the Bushmen, see _Barrow_, Journey in
     Africa, 379 ff.; on the Hottentots, among whom even the
     wealthy aged are killed by exposure, see _Kolb_, Caput bonæ
     Spei, 1719, I, 321; on the Scandinavian, old Germans,
     Wendes, Prussians, _Grimm_, D. Rechtsalterthümer, 486 ff.;
     on the most ancient Romans, _Cicero_, pro Rosc. Amer, 35,
     and Festus v. Depontani, Sexagenarios; on Ceos, _Strabo_, X,
     486; on the ancient Indians, _Herodot._, III, 38, 99; on the
     Massagetes, _Herodot._, I, 216; on the Caspians, _Strabo_,
     XI, 517, 520. Touching picture of an old man abandoned in
     the desert, unable to follow his tribe compelled to emigrate
     for want of food: _Catlin_, N. American Indians, I, 216 ff.
     We here see how the killing of helpless old people may be
     considered a blessing among many nations. Death is also
     sometimes desired by reason of superstition. For instance,
     the Figians think that after death they will continue to
     live of the same age as that at which they died.
     (_Williams_, Figi and the Figians, I, 183.) The Germans who
     died of disease did not get to Walhalla! (_W. Wackernagel_,
     Kl. Schriften, I, 16.)]

     [Footnote 244-6: On the frightful cannibalism practiced on
     the upper Nile, see _Schweinfurth_ in _Petermann's_ geogr.
     Mettheilungen, IV, 138, seq. Australian women seldom outlive
     their 30th year. _Lubbock_, Prehistoric Times, 449. Many are
     eaten by the men as soon as they begin to get old.
     (Transactions of the Ethnolog. Society, New Series, III,
     248.) A chief of Figi Islands who died recently had eaten
     872 men in his lifetime. _Lawry_, Visit to the Friendly and
     Fejee Islands, 1850. Even the more highly civilized Mexicans
     had preserved this abomination. According to _Gomara_,
     Cronica de la N. Espana, 229, there were here from 20,000 to
     25,000 human sacrifices a year; according to _Torquemada_,
     Indiana, VII, 21, even 20,000 children a year. _B. Diaz_, on
     the other hand, puts the number down at 2,500 only. Compare
     _Klemm_, Kulturgeschichte, V, 103, 207, 216.]

     [Footnote 244-7: The usual coldness, so much spoken of, of
     the Indians, seems to have an economic rather than a
     physiological cause. At least, it has also been observed
     among the Hottentots. (_Levillant_, Voyage, I, 12 seq.), and
     under favorable economic conditions the Indians have
     sometimes increased very rapidly. (Lettres édifiantes, VIII,
     243.) Whether the practice in vogue among the Botocuds to
     carry the organ of generation continually in a rather narrow
     envelope, or that among the Patachos of lacing the foreskin
     with the tendrils of a plant, is not a "preventive check,"
     quære. Compare _Prinz Neuwied_, Bras. Reise, II, 10; I,
     226.]

     [Footnote 244-8: On the gold coast, people become fathers in
     their 12th year even, and mothers at 10. (_Ritter_,
     Erdkunde, I, 313.) In the whole of the Soudan the climate is
     so exciting that the intercourse of the sexes is said to be
     a "physical necessity," and an unmarried man of eighteen is
     universally despised. But, indeed, the individual is little
     valued in Africa, on account of the great prolificacy of the
     African race. (_Ritter_, I, 385.)]

     [Footnote 244-9: _Herodot._, IV, 26.]

     [Footnote 244-10: Compare _Machiavelli_, at the beginning of
     his Istoria Fiorentina. The migration of the Germani is
     accounted for simply by the family and marriage relations of
     the Germans, which necessarily favored prolificacy: _Severa
     matrimonia ... singulis uxoribus contenti sunt ... septae
     pudicitia ... paucissima adulteria ... publicatae pudicitiae
     nulla venia ... nemo vitia ridet ... numerum liberorum
     finire, flagitium habetur ... sua quemque mater uberibus
     alit ... sera juverum Venus eoque inexhausta pubertas ...
     quanto plus propinquorum, tanto gratiosior senectus._
     _Tacit._, Germ., 14. Entirely similar in character were the
     migrations of the Normans, which lasted just as long as the
     resistance to the countries they would invade, seemed to
     them a matter of less difficulty than the transition to a
     higher civilization in their own country. _Malthus_ has
     corrected the extravagant notions concerning the former
     density of population in the North--the _vagina nationum_,
     according to Jornandes! (_Malthus_, I, ch. 6.) Compare,
     however, _Friedrich M._, in Antimachiavel, ch. 21, and the
     later view: Ouevres, IX, 196.]

     [Footnote 244-11: Among the Bedouins even three children are
     considered a large family; and they even complain of that
     number. (_Burckhardt._)]


SECTION CCXLV.

INFLUENCE OF A COMMUNITY OF WOMEN AND POLYGAMY.

Most barbarous nations live very unchaste;[245-1] so that, as Tacitus
observes, the ancient Germans were a brilliant exception to the
rule.[245-2] Vices of unchastity always limit the otherwise natural
increase of population. Premature enjoyment exhausts the sources of
fruitfulness in the case of many.[245-3] The life of the child conceived
in sin is generally little valued by its parents. Hence the numerous
instances of exposure and infanticide.[245-4] We have already seen how
closely, psychologically speaking, a community of goods is allied to a
community of women. (§ 85.) And, indeed, in the lower stages of
civilization, we find as close an approximation to the latter as to the
former; and it is difficult to believe that, among men living in a state
of nudity, the marriage of one man to one woman could properly
exist.[245-5] But it is as little possible to reconcile a community of
women with density of population as great national wealth with a
community of goods. Any one acquainted with the condition and capacities
of new born children knows that the weak little flame easily goes out
when not nursed by family care.[245-6]

Polygamy also is a hinderance to the increase of population. Abstract
physiology must, indeed, admit that a man may, even without any danger
to his health, generate more children than a woman can bear.[245-7] But,
in reality, the simultaneous enjoyment of several women leads to excess
and early exhaustion;[245-8] and if one of them is married after the
other, the older who might still bear children for a long time are
neglected by the man.[245-9] Monogamy is, doubtless, the Creator's law,
since only in monogamous countries can we expect to find the intimate
union of family life, the beauties of social intercourse and free
citizenship.[245-10] "God made them male and female."[245-11] And yet in
all countries with which we are statistically acquainted, there is a
somewhat larger number of boys than of girls born;[245-12] but this
excess is removed by the time that puberty sets in, by reason of the
greater mortality of boys. Only extraordinary conditions which thin the
ranks of males, such as war and emigration, leave a preponderance of the
number of women.[245-13] Hence, among barbarous nations, who live in
everlasting strife (§§ 67, 70), polygamy is very generally established.
Men are seldom deterred therefrom by a solicitude concerning what they
shall eat, since the women are treated as slaves, and rather support the
men than are supported by them.[245-14] But in the civilized countries
of the east, the polygamy of the great may actually lead to the
compulsory singleness of many of the lower classes, as a species of
compensation.[245-15] The monstrous institution of eunuchism, which has
existed time out of mind in the east, is a consequence of this condition
of things as well as of the natural jealousy of the harem.[245-16]

     [Footnote 245-1: Impurity of the Kamtschatdales, bordering
     on a community of women. (_Klemm_, Kulturgeschichte, I, 287
     ff., 350 ff.; II, 206, 297 seq.) On Lapland, see _Klemm_,
     III, 55. In their purely nomadic period, even the Getes,
     afterwards remarkable for their noble character (_Horat._,
     Carm., III, 24), have had very loose relations of the sexes.
     (_Menander_, in _Strabo_, VII, 297.)]

     [Footnote 245-2: Very unlike the Celts: _Strabo_, IV, 199.
     But the Germans even at the time when the compensation
     system alone prevailed, imposed a disgraceful death on the
     _corpore infames. (Tacit._, Germ., 12.) In keeping with this
     purity of the Germans was the deep gravity and the genuine
     heartiness of their ancient nuptial ceremonies. (_Tacit._,
     Germ., 18.) Similarly, in England throughout the middle
     ages. (_Lappenberg_, Engl., Gesch. I, 596.) Great moral
     severity of the Scandinavians (_Weinhold_, Altnord. Leben,
     255), so that the gratification of the sexual appetite
     outside of marriage was punishable with death. (_Adam
     Brem._, IV, 6, 21.)]

     [Footnote 245-3: Abuse of young girls in New Holland
     (_Collins_, 563); among the American aborigines
     (_Charlevoix_, Histoire de la N. France, III, 304; Lettres
     édifiantes, VII, 20 ff.); among the negroes (_Buffon_,
     Histoire naturelle de l'Homme, VI, 255).]

     [Footnote 245-4: Infanticide in Kamtschatka, _Klemm_, I,
     349.]

     [Footnote 245-5: In most mythical histories, the
     institutions of property and of marriage are ascribed to the
     same name (Menes Cecrops, the Athenian Thesmophories.) Among
     the Indian tribes of Terra Firma, the exchange of wives and
     the _jus primæ noctis_ of the chiefs are very common.
     (_Depons_ Voyage, I, 304, ff.) In North America, the Indians
     are very eager to rent out their wives for a glass of
     brandy. (_Prinz Neuwied_, N. A. Reise, I, 572 seq.) Compare
     _Lewis_ and _Clarke_, Travels to the Source of the Missouri
     and the Pacific Ocean, 1804-1806. Almost always on entering
     a higher age-class it is one of the principal conditions to
     leave one's wife for a time to the more distinguished. On
     feast days, prayer days, etc., the women give themselves
     publicly up to vice; and this can be commuted only by a
     gift. (_Prinz Neuwied_, I, 129 ff., 272.) Community of women
     in California. (_Bagert_, Nachrichten von der Halbinsel C.
     1772.) In many of the South Sea Islands, the youth of the
     higher classes were wont to form themselves into so-called
     _arreyo-societies_, the object of which was the most
     unlimited intercourse of the sexes (a pair being united
     generally only from 2 to 3 days), and the murder of the new
     born children. The girls principally were murdered, and
     hence the missionaries at Otaheite (New Cytheria) found only
     1/5 as many women as men. _Chaque femme semble être la femme
     de tous les hommes chaque homme le mari de toutes les
     femmes._ (_Marchand_, I, 122.) The many governing queens
     here are characteristic. Compare _Forster_, Reise II, 100,
     128; _Kotzebue_, Reise, III, 119; European Magazine, June,
     1806; _Reybaud_, Voyages, et marines, 128, and the
     quotations in _Klemm_, Kulturgesch., IV, 307.

     Similar customs are found among the nomads. The Bedouins
     dissolve their marriages so easily that a man forty-five
     years old had 50 wives; family secrets are a thing unknown
     there. (_Burckhardt_, Notes on the Bedouins, 64; Travels
     app. II, 448; _Ritter_, Erdkunde, XII, 205, 211, 983.) On
     the Libyans, see _Herodot._, IV, 168, 172, 186, 180: on the
     Massagetes, _Herodot._, I, 216; on the Taprobanes, _Diod._,
     II, 58; on the Troglodytes, _Pomp, Mella._, I, 8,
     _Agatharch_, 30. Community of women among the ancient
     Britons, _Caesar_, B. G. V, 14 seq.; also among the naked,
     tatooed Caledonians, _Dio Cass._, LXXVI, 12; probably also
     among the cannibal Irish. _Strabo_, IV, 201. Great laxity of
     the marriage tie in Moelmud's laws of Wales, (_Palgrave_,
     Rise and Progress of the English Commonwealth, I, 458 ff.)
     in which country a species of tenure in common of land and
     servants was customary. (_Wachsmuth_, Europ. Sittengesch.
     II, 225.) In Russia, in very ancient times, only the Polanes
     had real marriages. (_Nestor v. Schlözer_, I, 125 seq.)
     Something very analogous even among the Spartans: same
     education for boys and girls, admittance for men to the
     female gymnasiums; marriage in the form of an abduction, and
     afterwards fornication. (_Xenoph._, De rep. Laced. I, 6:
     _Plutarch_, Lycurg. 15.) Adultery tolerated by law in
     countless cases. (_Xenoph._, II, 7 ff.; _St. John_, The
     Hellenes, I, 394.) History of the origin of the so-called
     Partheniæ; _Strabo_, VI, 279. (_Supra_, § 83.) The custom
     which prevails among so many barbarous nations to designate
     one's progeny by the name of the mother, _Sanchoniathan_
     traces to the licentiousness of women. (p. 16, Orell.)
     Traces of this also in Egypt: _Schmidt_, Papyrusurkunden,
     321 ff. Avunculus means little grand-father. Many proofs
     which _Peschel_, Völkerkunde, 243 seq. explains otherwise,
     but which seem to me to point to an original community of
     wives.]

     [Footnote 245-6: The relation existing between the so-called
     organization of labor (§ 82) and a community of wealth is
     repeated in the relation of a community of wives to the
     situation in Dahomey, where every man has to purchase his
     wife from the king. _Gumprecht_, Afrika, 196. Similarly
     among the Incas: _Prescott_, Hist. of Peru, I, 159. Even the
     sale of wives is a step in advance as compared with a
     community of wives (§ 67 seq).]

     [Footnote 245-7: It is said that a German prince of the 18th
     century had 352 natural children. (_Dohm_, Denkwürdigkeiten,
     IV, 67.) Feth Ali, shah of Persia, had made 49 of his own
     sons provincial governors, and he had besides 140 daughters.
     (_Ker Porter_, II, 508.)]

     [Footnote 245-8: Turkish married men are frequently impotent
     at the age of 30. (_Volney_, Voyage dans la Turquie, II,
     445.) Similarly in Arabia. (_Niebuhr,_ Beschreibung, 74.)
     The use of aphrodisiac means very wide-spread in the East.
     According to _Niebuhr_ (76), monogamous marriages produced
     absolutely more children than polygamous. Compare _G.
     Botero_, Ragion di Stato, VIII, 93 ff.; _Montesquieu_,
     Lettres Persanes, N., 114; _Süssmilch_, Göttl. Ordnung, I,
     Kap., 11. On the other hand, _Th. L. Lau_, Aufrichtiger
     Vorschlag von ... Einrichtung der Intraden (1719), 6,
     recommends the allowing of polygamy as a means of increasing
     population.]

     [Footnote 245-9: Rehoboam had 18 wives and 60 concubines,
     and only 88 children (II Chron., 11, 21); that is not much
     more than one child by each.]

     [Footnote 245-10: The high esteem for woman requisite to
     true love seems to be almost irreconcilable with polygamy.
     The wife stands to the husband in the relation of a
     mistress; and, in reference to the latter, fidelity has
     scarcely any meaning. The husband also has no confidence in
     his wife; and hence the seclusion of the harem. But the
     domestic tyrant is easily made the slave of a higher power.
     And what becomes of fraternal love with the half-brother
     feeling of children of different mothers?]

     [Footnote 245-11: Genesis 1, 27; 5, 12; 7, 13.]

     [Footnote 245-12: Compare _J. Graunt_, Natural and Political
     Observations on the Bills of Mortality (1662). During the
     course of the 19th century, according to averages made from
     long series of years, there were, for every 1,000 girls born
     alive in Lombardy, 1,070 boys; in Bohemia, 1,062; in France,
     1,058; in Holland, 1,057; in Saxony, 1,056; in Belgium,
     1,052; in England, 1,050; in Prussia, 1,048. On the whole,
     the ratio in 70,000,000 children born alive was as 100 :
     105.83. The excess of males over females in bastards is
     smaller than in the case of legitimate children, in towns
     than in the country. Everything considered, the number of
     boys born seems to be greater than the number of girls in
     proportion as the father is in advance of his wife in years.
     Compare _Sadler_, Law of Population, II, 343. _Hofacker_,
     Ueber die Eigenschaften die sich vererben, 51 ff. _Wappäus_,
     Allg. Bevölkerungstatistik, II, 151, 160 ff., 306 ff. _Per
     contra_, we have _Legoyt's_ supposition that the number of
     boys born is greater in proportion as the parents are more
     nearly of an age: Statistique comparée, 500.]

     [Footnote 245-13: According to the censuses between 1856 and
     1861, there are for every 1,000 men in Belgium 994 women; in
     Austria, 1,004; in Prussia, 1,004; in France, 1,001; in
     England, 1,039; in Holland, 1,038. The majority of the
     latter seems to have diminished everywhere the greater the
     distance in time from the most recent great wars; and to
     belong only to those age-classes which were coeval with
     those wars. (Preuss. amtliche Tabellen für 1849, I, 292.) In
     the United States there were, 1800-1844, for every 1,000
     women, 1,033-1,050 men; mainly accounted for by large
     immigration. Between 1819 and 1855 the immigration was
     2,713,391 men and 1,720,305 women. (_W. Bromwell_, History
     of Immigration to the United States, New York, 1856.) In
     Switzerland, among the population belonging to the cantons,
     there were for every 1,000 men, 1,038 women; among the
     foreign Swiss, 970; among foreigners, 650. (_Bernouilli_,
     Populationistik, 31.) Compare _Horn_, loc. cit., I, 105 ff.,
     who supposes a natural principle of equilibrium: the greater
     the preponderance of the number of women, the more does it
     happen that only the younger women are married; the greater
     consequently the difference between the ages of the married
     couple, and the more probable the birth of boys, and _vice
     versa_. (115 ff.)]

     [Footnote 245-14: Compare _Catlin_, N. American Indians, I,
     118 ff. Even Strabo believed that among the Median
     mountaineers each man had five wives! (XI, 526.)]

     [Footnote 245-15: Concerning Solomon's 700 wives and 300
     concubines, see I Kings, 11, 3; according to the Canticle of
     Canticles, only 60 wives and 80 concubines. According to
     _Mirkhond_ and _Khondemir_, there was in the place in which
     the Sassand shah resided, 3,000 women of the harem and
     12,000 female slaves. Polygamy among the latter class is
     seldom possible or thought of. Of 2,800 Moslems in Bombay,
     only 100 lived in polygamy, and only 5 had three wives each.
     (_Ritter_, Erdkunde, 1088.) I lay no weight here on the
     assertion so frequently repeated of travelers in the east,
     that more girls than boys are born there; for the reason
     that there is there no real statistics, and that the infidel
     travelers can be permitted few glimpses into the secrecy of
     family life. _Lady Sheil_ indeed assures us that in Persia
     itself the opinion prevails that there are a great many more
     women than men. Glimpses of Life and Manners in Persia,
     1855. Similar pretense among the Mormons.]

     [Footnote 245-16: We find, even on Egyptian temples,
     pictures representing the castration of prisoners. _Franck_,
     in the Mémoires sur l'Egypte, IV, 126. On Babylon, see
     _Hellanicus_, apud. Donat. ad Terent. Eunuch., I, 2, 87.
     This province, besides Assyria (the ancient seat of sultan
     glory), delivered 500 castrated boys per annum to the king
     of Persia. (_Herodot._, III, 92.) Of the califs, Soliman is
     said to be the first (at the beginning of the 8th century)
     who had his harem superintended by eunuchs; a very sensual
     master who frequently changed his wives. (_Reiske Z.
     Abulfeda_, I, 109 ff.; _Weil_, Gesch. der Kalifen, I, 573.)
     At an audience which the calif Moktadir gave to a Byzantine
     ambassador, there appeared 4,000 white and 3,000 black
     eunuchs. (_Rehm._, Gesch. des Mittelalters, I, 2, 32.) In
     the harems of the present Persian persons of rank, there are
     usually from 6 to 8 eunuchs. _Rosenmüller_, Altes und Neues
     Morgenland, IV, 290. In Upper Egypt, the castration of
     handsome boys by monks (!) is a regular trade. About 2 per
     cent. die in consequence of the operation, the others rise
     in consequence in price from 200-300 to 1,000 piasters.
     (_Ritter_, Erdkunde, I, 548.) In the Frankish middle age,
     the merchants of Verdun castrated persons to sell them in
     Spain. Compare _Liutprand_, Hist., VI, 3, in _Muratori_,
     Script. Rerum Ital., II, 1, 470.]


SECTION CCXLVI.

HISTORY OF POPULATION.--IN HIGHLY CIVILIZED TIMES.

The conditions of population among mature and flourishing nations is
characterized by this, that the moral and rational preventive tendencies
counter to over-population decidedly preponderate. Here so much value is
attached to the life, and to the healthy and comfortable life of human
beings already in existence that even the majority of the lower classes
take care to bring no more children into the world than can be properly
supported, nor to bring them into being in advance of food. Here, too,
mortality is relatively small, which when population is stationary is
found in connection with a higher average duration of human life.[246-1]
While among savage and semi-savage nations, travelers are struck by no
phenomenon as much as by the total absence of old men,[246-2] in most
European nations the average duration of life has, during the last
centuries, seemed to noticeably increase. In France, for instance,
between 1771 and 1780, on a population of 29,000,000 at most, there were
as many deaths as on 35,000,000 between 1844 and 1853.[246-3] In Sweden,
the classic land of statistics relating to population, mortality from
1749 to 1855 had diminished 0.107 per cent. per annum.[246-4] [246-5]

No reasonable man considers mere living the highest good; but, from an
average prolongation of life, we may with great probability infer an
improvement in the means of subsistence, in hygienic measures, etc.,
even for the lower classes, who everywhere constitute the great majority
of the population. _Aisance est vitalité!_--at least on the supposition
that morality remains the same.[246-6] How great may not have been the
effect, for instance, of the healthier mode of the building of modern
cities, of the disappearance of the greater number of fortifications
etc., the more rational character of the healing art, the extension of
vaccination,[246-7] the hygienic measures adopted by governments,[246-8]
the better care of the poor and especially the asylums for small
children! The modern system of agriculture and of the corn trade make
famines less destructive of life.[246-9] (§ 115). The modern
quarantine-system has protected us entirely against a number of plagues;
and the worst epidemics of our day cannot be compared with those of
earlier periods or in less civilized countries. In the second half of
the 17th century, it was estimated in London that a plague would occur
once in every 20 years, each of which swept away one-fifth of the entire
population.[246-10] And in that very city the annual mortality between
1740 and 1750 varied three-fifths, during the second half of the 18th
century only one-third, during the 19th century only one-fifth in the
same decade; a clear proof of the diminished fatality of
epidemics.[246-11] [246-12]

     [Footnote 246-1: The so-called _Populationistikers_ are wont
     to distinguish between the average and probable duration of
     life (_vie moyenne--vie probable_); and understand by the
     former the number of years which, on an average, have been
     accorded to one deceased; by the latter, the number of years
     after the expiration of which one-half of a given number of
     human beings have disappeared. If _x_ deceased persons have
     lived an aggregate of _s_ years, their average duration of
     life = _s_/_x_. In the case of a whole people, indeed, even
     the many-years' average of the duration of life of those
     deceased expresses the true average duration of life only
     when (a rare case) the aggregate population remains
     stationary. For, when the population is increasing, the
     average age of the deceased is smaller than the average
     duration of life, and, when population is decreasing,
     larger. In the saddest case of all, when there are no births
     whatever, and the nation is gradually dying out, there would
     be an increase from year to year of the average age. In all
     such cases, strictly speaking, only the actual observation
     and following up of those born, until they die; can afford a
     safe result. This is _Hermann's_ method, introduced into
     Bavaria since 1835. Compare the XIII. and XVII. numbers of
     the official Bavarian statistics with _G. Meyer's_ criticism
     in _Hildebrand's_ Jahrbüchern, 1867, I. And indeed _Hopf_,
     Preuss. Statist. Zeitschr., says that a complete table of
     mortality can be made, according to the best method, only
     after centuries of observation.

     Compare _Kopf_, in the 3d edition of _Kolb's_ Handbuch der
     Statistik, and the solid works of _G. F. Knapp_, Ueber die
     Ermittelung der Sterblichkeit (1868) and Die Sterblichkeit
     in Sachsen (1869). _Price's_ mode of calculation of which
     _Deparcieux_ is the real author, which divides the number of
     the living by the arithmetical mean of the number of births
     and deaths is not only inaccurate (_Meyer_, loc. cit., 43
     ff.) but erroneous in principle, since it allows two
     countries of equal population to be the same, the one of
     which has 120,000 births and a mortality of 80,000, and the
     other, on the contrary, 80,000 births and a mortality of
     120,000. _Engel_ recommends as the measure of real vitality
     the ratio between the "living years" and the "dead years,"
     meaning by the former the sum of the years which those still
     living have lived through, and by the latter the sum of the
     years lived through by those who have died within a given
     period. (Preuss. Statist. Zeitschr., 1861, 348 ff.) But the
     inference which may be drawn from a high or a low average of
     life is altogether ambiguous. A high average may as well be
     produced by a great mortality among children as by a
     favorable mortality among those of mature age; and a low
     average as well by a relatively small number of births as by
     a relatively short duration of life. (_Meyer_, loc. cit.,
     23, 24.)]

     [Footnote 246-2: On the aborigines of America, see Lettres
     édifiantes, VII, 317 ff. _Cook,_ Third Voyage, III, ch. 2.
     _La Pérouse_, Voyage, ch. 9. _Robertson_, Hist. of America
     B., IV. _Raynal_, Histoire des Indes L., XV. On the African
     negroes: _M. Park_, ch. 1. They are said to manifest the
     symptoms of old age at 40, and very seldom to live to be
     over 55 or 60 years of age.]

     [Footnote 246-3: _Necker_, De l'Administration des Finances
     de la France, 1784, I, 205 ff., gives for 1771-80 the
     average number of births, per annum, 940,935; of deaths,
     818,391; the population at 24,229,000. _Legoyt_, Statist.
     Comp., estimates the last, in 1784, at at least 26,748,843,
     probably even at 28,718,000. During the period, 1844-53,
     35,000,000 to 36,000,000 Frenchmen had only about as many
     births (956,317) and deaths (815,723) as a much smaller
     population before the Revolution--the latter numbers,
     according to official estimation, omitting the
     still-born--which _Necker_ also scarcely took into
     consideration. _C'est la différence entre un peuple de
     prolétaires et une nation, dont les deux tiers jouissent des
     bienfaits de la propriété. (Moreau de Jonnès)._ In France,
     there was one death, in 1784, on every 30 living; in 1801,
     on every 35.8 living; in 1834-5, on every 38 living; in
     1844, on every 39.9 living; in 1855-57 (average), on every
     41.1 living; in 1860-65 (average), on every 43.7 living. It
     is also probable, that the average duration of life in
     France increased from the fact that, from 1800 to 1807, the
     number of persons subject to conscription was only 45 per
     cent. of the whole corresponding number of births; but that
     from 1822 to 1825 it was 61 per cent. (_Bernoulli_,
     Populationistik, 452.) On Paris alone, see _Villermé_,
     Mémoire lu à l'Académie des Sciences, 29 Nov., 1824. Compare
     _supra_, § 10.]

     [Footnote 246-4: _Wappäus_, Allg. Bevölkerungsstatistik. In
     Prussia, in the less cultured provinces (the eastern), the
     mortality and number of births is greatest; but in the whole
     country the relative mortality seems to have remained
     stationary since 1748. (_Engel_, Preuss. Statist. Zeitschr.,
     1861, 336 seq.) And even the average age of the deceased
     decreased even between 1820 and 1860 (344 ff.) In Berlin
     alone, the arithmetical mean of the number of births and
     deaths shows no improvement, at least (loc. cit. 1862,
     195).]

     [Footnote 246-5: In Geneva, where there have been almost
     uninterrupted tables of mortality, giving the age at the
     time of death, the average duration of life during the 2d
     half of the 16th century is estimated at 21-1/6 years;
     during the 17th century, at 25¾ years; from 1701 to 1750,
     at 32-7/12 years; from 1750 to 1800, at 34½ years; from
     1814 to 1833, at 40-2/3 years. Compare _Mallet_, Recherches
     historiques et statistiques sur la Population de Genève,
     1837, 98 ff., 104 ff., and _Bernouilli_, Schweiz, Archiv.,
     II, 77; _per contra, d'Ivernois_, sur la Mortalité
     proportionelle des peuples considérée comme Mesure de leur
     Aisance et Civilization, 1833, 12 ff. But little can be
     inferred from this, on account of the large immigration, of
     adults for the most part. Geneva is said to have had, in the
     16th century, never much more than 13,000 inhabitants; at
     the end of the 17th century it had 17,000; in 1789, 26,000;
     between 1695 and 1795 there was an increase of 6,000 at
     least from abroad. (_Bernouilli_, Populationistik, 369 seq.)
     Compare _Wappäus_ in the Götting. Gesellsch. der Wissensch.
     Bd., VIII, 1860, who, however, as well as _Neison_,
     Contributions to Vital Statistics, VI ff., is too skeptical
     as regards modern progress in vitality.]

     [Footnote 246-6: Higher civilization, indeed, instead of
     leading to higher vitality, may lead to immoderate toil and
     immoderate enjoyment. (_Schäffle_, in the D.
     Vierteljahrsschrift, April, 1862, 340.) _Engel_ says that,
     in general, life is more intense in our day, and hence leads
     to a more rapid exhaustion of individual life-force.
     (Preuss. Statist. Ztschr., 1862, 53.) According to English
     experience of the well-fed classes, those have the greatest
     duration of life who otherwise live in modest circumstances.
     Thus, for instance, clergymen thirty years of age have still
     an average expectation of life of 39.49 years; members of
     the learned professions, 38.86; country gentlemen, 40.22;
     members of the aristocracy, 37.31; princes of the blood,
     only 34.04; sovereigns, only 27.16 (Statist. Journal, 1859,
     356 ff.); while agricultural laborers, who have sufficient
     means and intelligence to participate in the so-called
     friendly societies, have an expectation of life of 40.6
     years after their thirtieth year. (_Neison_, loc. cit.) On
     the whole, it seems to be in harmony with the democratic
     leveling tendencies of our own age, that the better care of
     children and of the sick has lengthened short lives, and
     that the unrest of the times has shortened the long lives,
     although the level of the general average continually rises,
     notwithstanding. Thus, in Geneva, the proportion of those
     who outlived their thirtieth year was: in the 16th century,
     after 1549, 29.87; in the 17th century, 37.29; in the 18th
     century, 49.39; in the 19th century, until 1833, 58.85 per
     cent. of the number of births. On the other hand, the
     expectation of life of those who had attained their 80th
     year, was in these four centuries respectively 6.22, 5.87,
     4.40 and 3.84 years. (_Mallet_, l. c., and Statist. Journal,
     1851, 316 ff.) In keeping with this is, that according to
     _Guy's_ researches, the average duration of life of the
     English peerage and baronetage was, in 1500-1550, 71.27
     years; 1550-1600, 68.25 years; 1600-1650, 63.95 years;
     1650-1700, 62.40 years; 1700-1745, 64.13 years. (Statist.
     Journal, 1845, 74.) However, we may most directly infer a
     favorable condition of things from the diminished mortality
     of children, for the reason that this, far more directly
     than the mortality of adults, is conditioned by the quality
     of food. The younger a child is, the more exclusively is its
     life-force the product of these two factors: the physical
     constitution of its parents and the care bestowed upon it.
     Compare _F. J. Neumann_, Die Gestaltung der mittleren
     Lebensdauer in Preussen, 1865, 26 ff. In Prussia, in
     1751-60, only 312 in 1,000 outlived their tenth year; in
     1861-70, 633 in 1,000. Yet, since 1856, the mortality of
     children has again begun to increase. (_Knapp_,
     Mittheilungen des Statist. Bureaus, VIII, p. 8.)]

     [Footnote 246-7: _Duvillard_, Analyse ou Tableau de
     l'Influence da la petite Vérole, 1806, is of opinion that
     before vaccination only 4 per cent. of those over 30 years
     of age were spared by the small-pox; that two-thirds of all
     new-born children were attacked by the disease sooner or
     later, and that from one-eighth to one-seventh of those
     attacked died; and of small children even one-third. Hence,
     in many countries, the average duration of life was
     increased 3½ years by reason of vaccination. In London,
     between 1770 and 1779, of 1,000 deaths, 102 were caused by
     the small-pox; in from 1830 to 1836, only 25 in 1,000.
     (_Porter_, Progress of the Nation, I, 1, 39.) In Berlin,
     between 1792 and 1801, 4,999 persons died of the small-pox;
     between 1812 and 1822, only 555. (_Casper._) That this is
     really a consequence of vaccination is proved by the facts
     of the Chemnitz small-pox epidemic of 1870-71, during which,
     in four of the streets principally visited by it, 9 per
     cent. were taken ill. Of 4,375 persons who had been
     vaccinated, 2.12 per cent. were attacked; of 644 who were
     not vaccinated, 54.38 per cent. Of those attacked, 2.1 per
     cent. of the former and 11.3 per cent. of the latter died.
     (Leipzig Tageblatt, 5 Mai, 1871.)]

     [Footnote 246-8: Among the earliest institutions of medical
     police are the following: the Swedish Collegium medicum
     under Charles XI; the Prussian, 1724; the Danish, 1740; the
     quarantine law of Louis XIV., of 1683; the Parisian bureau
     of nurses, 1715; lying-in establishments since 1728; French
     institutions for the saving of drowned persons, 1740;
     English institutions for the saving of persons in cases of
     apparent death, 1744; bathing largely promoted by government
     since the eighteenth century; prohibition by Maria Theresa
     of burial in churches and of locating cemeteries too near
     dwelling houses, in 1778. Even _Thomasius_, De Jure
     Principum circa Sepultur., § 8, had advised this; and, in
     Italy, _Fr. Patricius_, De Inst. Republ. V, 10. On ancient
     medical police, see _Pyls_ Repertorium für öffentliche und
     gerichtliche Arzneiwissenschaft, II 167, ff. III, 1 ff.]

     [Footnote 246-9: In France, the number of deaths in the
     cheap years, 1816 and 1819, amounted to an average of
     755,877; of the dear years, 1817 and 1818, to an average of
     750,065. (Ann. d'Economie politique, 1847, 333.) Thus, the
     same scarcity in Pomerania increased its otherwise smaller
     mortality relatively less than in Posen. (_Hildebrand's_
     Jahrbb. 1872, I, 292.) It is a good sign that in Altenburg,
     between 1835 and 1864, the variation in the price of corn
     had no influence on its mortality, although the number of
     marriages and of births was conditioned by it. (_v. Scheel_
     in _Hildebrand's_ Jahrbb., 1866, I, 161 ff.)]

     [Footnote 246-10: _Sir W. Petty_, Several Essays, 31 seq.
     Great regularity of epidemics in the tropical world:
     _Humboldt_, N. Espagne, II, 5. The great plague in the
     middle of the 14th century is said to have destroyed 2/3 of
     the population of Norway, of Upland, 5/6; in the mountain
     districts of Wermeland only 1 boy and 2 girls were left.
     (_Geijer_, Schwed. Gesch., I, 186.) According to _Sismondi_,
     Gesch. der Italien. Republiken, VI, 27, 3/5 of the whole
     population of Europe died at that time. How the cholera
     would have raged among our forefathers in the middle ages!
     Certainly, as it does now in the East Indies; since, when of
     those really attacked by the disease among ourselves so many
     die, we cannot attribute our small number of deaths from
     cholera to the smaller intensity of the disease or to the
     greater skill of our doctors, but chiefly to the better
     nourishment of our people, to their better dwellings and
     greater cleanliness. Compare _Heberden_, On the Increase and
     Decrease of Disease, 1801.]

     [Footnote 246-11: _Bernouilli_, Populationistik, 363, seq.
     Whether, on this account, we can infer the increased health
     of the people, is very much doubted by the aged _laudatores
     temporis acti_. They would have us believe that it is
     possible that the prolongation of the average of human life
     is to be explained by taking into account the case of
     numerous valetudinarians who formerly died early, but who
     are _now_ preserved to drag out a miserable existence. The
     relative number of those who have died of old age did not
     noticeably increase between 1816 and 1860 either in Berlin
     or in the Prussian state. (_Engel_, Zeitschr., 1862, 222.)
     Compare, per contra, _Marx_, Ueber die Abnahme der
     Krankheiten durch die Zunahme der Civilization: transactions
     of the Göttinger