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ed with Riches themselves ; so Riches themselves are but the means of something higher, of which happiness is the end.

Nothing can be more important than this distinction. Without it, it is impossible to comprehend the nature and causes of the distress under which Great Britain has long been suffering, and still suffers. With it, we may have a clear conception of the disease; and if we will, may apply a remedy.

When M. Say asserts that products can only be bought by products, he means products in his own sense, including what he calls immaterial Riches :-—and when he asserts that there exists abun. dance of products, and therefore that means of purchase cannot be wanting, and that such want cannot be the cause of the present stagnation, he means products in the sense of Malthus terial commodities.

But employed labor, as far as regards what Smith, Malthus, &c. call unproductive labor, is wanting : therefore the means of purchasing the goods, which overload the warehouses, are wanting. And this again throws productive labor out of employ, because there is no demand for it.

Here then is a point, at which productive and unproductive labor become disproportionate to each other in the market. And here it becomes evident how necessary they both are in their due proportions; and how incalculably important it is, therefore, to distinguish them precisely from each other.

It is clear, that in proportion to the excess of produce above its cost, will be the means of accumulation; and in proportion to the means of accumulation, a nation has the means of augmenting its RICHES : in proportion to the same excess of produce above cost, it has also the means of consumption. To decide soundly between the one and the other, as circumstances


is the great trial of wisdom in Political Economy.

What is the advantage of accumulation, but a greater future good at the expense of a minor present sacrifice ? What is the advantage of Riches, but to spend them at the moment when they can be spent with the greatest benefit? Do we not therefore mistake the means, or the supposed means, for the end, when we economise at unseasonable times ? There

appear to be at least three cases, in which there is a great limit to the wisdom of accumulation, or saving.

The first is, where a nation is arrived at such a degree of RICHES, and such a facility of increasing them, that a diminution of expenditure for the purposes of economy, or even a refusal of a proportionate increase of such expenditure, would be a vain and idle forbearance. ,

The second is, where great and necessary wars render a stop to accumulation, or to the same degree of accumulation, or even a sacrifice of part of the existing capital, indispensable.

The third is, where the whole labor, the whole machinery, and the whole products, having been swelled out in proportion to this increased expenditure, no future good to be derived from accumulation can equal the frightful distresses arising from a great and violent curtailment of the same cost and consumption ; and where, as an additional objection, even if the pecuniary gain were worth the price, a pecuniary loss, instead of gain, would ensue. We all know, that in private affairs, a cessation of expense is very often falseeconomy. Where buildings have been erected; where lands have been highly cultivated; where capital has been hazarded, and must be lost, unless it is nurtured to the time of its fructification, there it is a false economy to withhold the continuance of the cost which is necessary to carry them forward.

Nothing can be more demonstrative, than that the expenses of the late wars re-created themselves. The evil was, not in the destruction of capital; but in this incident to public loans, that one set of people, (the already rich,) pay a large portion of the interest of that, of which another set receive the benefit; by which means the property of a country too violently changes hands.

A continuation of loans therefore would be a good, were it not for this counterbalancing incident. But though loans are so far mainly objectionable, yet it may be confidently asserted, that there are numerous diminutions of expense by saving, which are false economy. They are the aggravation of the very life of the disease.

Now let us consider how Great Britain has been lately circumstanced. A war of unexampled expenditure created an unexampled demand both for productive and unproductive labor. The increased produce arising from capital, machinery, industry, and extended commerce, kept pace with the augmentation of consumption caused by the unprecedented increase of unproductive labor

All the additional apparatus therefore, and all the additional population equal to the new demand, had been completely developed in three and twenty years.

Whether this was a good, or an evil ; whether less production, less population, and less Riches, would have been a better thing ; and whether (good or bad) it could no longer have been avoided, was now no longer the question :the machinery, the vested capital, the produce, the population, existed. The question was, how to enable them to go on, with the least balance of evil.

To me it is one of those questions which leaves not the small. est particle of doubt in the mind. I should say; “ Go on with a liberal expenditure. The population thus excited into being, thus


grown into their several habits and qualifications by the public demand, must be supported. Do not throw those, who have hitherto lived upon the capital of the public purse, a burden upon the income of individuals, by throwing them on the Poor-rates. Do not think, that by putting lands out of cultivation, by rendering machinery useless, by sinking irredeemably capital, which has been generously ventured, by plunging into bankruptcy and despondence men of skill and enterprise, who have deserved well of the public; do not think, that when you are making a population discontented and desperate, you are saving money by diminishing your expenditure; or that if you could save it, it would be any otherwise than miserably saved.

“ Reduce gradually and cautiously ; employ part of your disbanded army and navy in public works ; in roads and canals : not in labor immediately productive ; for that is the disease ; but in labor which may facilitate future production ; a mode of ex. penditure which will have the good effects of saving without its evils.

I should have said : “ The present is a moment doubly unpropitious to a great and sudden decrease of expenditure, because the power of expenditure has been already greatly decreased in a rich and powerful class, by accidental circumstances, either of seasons, or mismanagement. The agriculturists, whose expenditure supported so many laborers, and took off so much manufactured produce, are already, by the fall of corn in 1814 and 1815, shorn, perhaps, of one half of their incomes. Do not aggravate distresses already frightful.”

I should have said : “ Listen not to the clamors of those, whose business it is to find fault. You will not even avoid their

censures by yielding to their objections. They will reproach you either way

! But how much more, when misfortune attends your measures, even though they should be those of their own suggestion. If success cannot soothe them, will failure satisfy them with you ?"

I hear the answer to this : « The ministers of a mixed government, like that of Great Britain, cannot act independent of popular prejudices and popular clamor. The good of public saving is inseparable from popular opinion, .--especially when it keeps off taxes,--and this ideal good is more than doubled by the supposition that it diminishes the power of Government."

This is true : but much might yet be done to enlighten the pub


Nothing can be more absurd, than the argument, that the expenses of cultivation decreased proportionably. One consideration alone (out of many) juts an end to this argument. A great part of Agriculture and Trade is carried on with borrowed capital. Fall of prices did not reduce interest of money.

lic mind; and the mind of all, but party, is still capable of receiving rays of light. But where do we hear or see an attempt to put things in a true light, except from the profound and inestimable pen of MALTHUS ?


Numerous other important questions are involved in this doctrine of the necessity of a due proportion between productive and unproductive labor. Among the rest, the question of MACHI


be said, that when the producers are too numerous for the non-producers, why defend that which facilitates production? I answer, that to facilitate production by decrease of cost, proportionably facilitates demand, by decrease of price. If it does not do this, it must be admitted that it increases the evil of over-produce.

It is clear, that what adds to the demand at least in proportion to he addition to the supply, cannot be an evil in a case where the grievance is want of demand. At the same time, it is clear that price, high with respect to costs, and at the same time low in itself, is the most favorable to prosperity and riches ; because it is at the same time a stimulant to the producer, and a benefit to the consumer. And this must be the reason why the amount of the riches of a country, taken on a large scale, is tolerably expressed, when reckoned by their money price. For though one article may increase in price compared with another, when some accident diminishes its quantity compared with its usual proportion to that other, yet on the whole, increased production with decreased price will be counterbalanced in the total amount of price by increased demand and consumption."

Let it be recollected, that money-price, and intrinsic value, must never be confounded. The money-price is the measure of the value of things in their artificial character of Riches—compounded of all the necessary quali. ties coming under that definition. Intrinsic value is neither measured by cost, nor limited to what is transferable, (or the quantum of other things it can acquire in exchange,) or the power of acquiring other things in exchange at all, &c.

When therefore Mr. Ricardo mentions the case of 2000 pair of stockings, made by machinery at the cost at which 1000 pair only were made before, and says the money-price, in such case, of the 2000 pair, does not exceed the former money-price of the 1000 pair, yet the national gain in what is useful is double in that article, it seems as if he wished to raise the idea that the money-price was no measure of the value of which it professed to be a measure. But what does this prove that the money-price is not the measure of intrinsic value, which it does not profess to be—but that it is the measure of that value which comes under the name of Riches: viz, the value of a commodity, according to the quantum of other things it can procure, of a similar value, measured by a compound of the respective costs and demands.

PRICE. If the definition I have given enables us by a precise conception of the nature of Riches, to distinguish between productive and unproductive labor, it enables us with equal precision, not only to know of what Riches consist, but to measure their comparative quantities and values. It shews us, that PRICE EXPRESSED IN MONEY is that measure.

How that price is regulated, has been in some degree anticipated.

Its base is the cost of the production, including capital, interest, and labor bodily and intellectual.

All beyond this, and which constitutes profit, is formed of more complicated and varying considerations. It arises from the proportion between supply and demand.

Price cannot long continue below the costs, including moderate and average profits, because without these production would cease.

But Price may long continue above cost, and give great partial profits, so long as the amount of the supply, from whatever insurmountable difficulties in reaching that amount, is kept below the demand.

Under this head come the high profits from fertile soils, in the shape of rent; and the high profits from partial machinery, monopolised under the security of a patent.


PROFITS. Profits then are the excess of Price above Cost. On this subject some of the fashionable modern economists seem to labor under great errors. They assume these Profits to be fixed; or rather to be regulated by a fixed rule of excess above a given cost; from whence they draw the conclusion, that an increase of that cost in

wages, or otherwise, is to such amount a deduction from PROFIT.

But Profit is governed by demand, which depends on the comparative want, combined with the comparative means, of purchase. PROFITS therefore and wages may, and generally do, increase at the same time.

For the same reason PROFIT may fall below the standard, and wages may do the same. The former may, for a time, entirely cease, and be followed by loss.

Misconceptions on the subject of Profit are among the most mischievous which can occur in this science. PROFIT gives the spring to industry and enterprise. Damp the hope of this, and

:' I confess that the authority of Ricardo, &c. seduced me into this error in my Tract on Population and Riches.

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