The Principles of Political Economy

ise must be such as to bring many labourers together, and the capital must be large enough to maintain them. Still more needful is this when the nature of the employment allows, and the extent of the possible market encourages, a considerable division of labour. The larger the enterprise, the farther the division of labour may be carried. This is one of the pri

by a workman accustomed to machine-making, than by the person who uses it. Now, since the good performance and the duration of machines depend, to a very great extent, upon correcting every shake or imperfection in their parts as soon as they appear, the prompt attention of a workman resident on the spot will considerably reduce the expenditure arising from the wear and tear of the machinery. But in the case of a single lace-frame, or a single loo

hat if that part were executed by a steam engine, the same man might, in the case of weaving, attend to two or more looms at once: and, since we already suppose that one or

establishment persons who are up all night, and can therefore constantly attend to it, and also engineers to make and keep in repair any machinery, the addition of an apparatus for making gas to

urchase the raw produce, and with those who sell the manufactured article.” It will cost these clerks and accountants little more time and trouble to pay a large number of workmen than a small number; to check the accounts of large transactions, than of small. If the busi

uld be obliged to maintain almost as large an establishment as is now sufficient for the whole. Since each must arrange for receiving and delivering letters in all parts of the town, each must send letter-carriers into every street, and almost every alley, and this too as many times in the day as is now done by the Post Office, if the service is to be as well performed. Each must have an office for receiving letters in every neighbourhood, with

circumstances carries on the production at greatest advantage will be able to undersell the other. The power of permanently underselling can only, generally speaking, be derived from increased effectiveness of labour; and this, when obtained by a more extended division of employment, or by a classification tending to a better economy of skill, always implies a greater produce from the same labour, and not

ill suffice for merely covering that expense, and replacing the remaining circulating capital of the producer. The machinery therefore might answer perfectly well to the manufacturer, and enable him to undersell his competitors, though the effect on the production of the country might be not an increase but a diminution. It is true, the article will be sold cheaper, and therefore, of that single article, there will probably be not a smaller, but a greater quantity sold; since the loss to the community collectively has fallen upon the work-people, and they are not the principal customers, if customers at all, of most branches of manufacture. But though that particular branch of industry may extend itself, it will be by replenishing its diminished circulating capital from that of the community generally; and if the labourers employed in that department escape loss of employment, it is because the loss will spread itself over the labouring people at large. If any of them are reduced to the condition of unproductive labourers, supported by voluntary

y combines with the business of direction some portion of the details, which the other leaves to his subordinates: the small farmer follows his own plough, the small tradesman serves in his own shop, the small weaver plies his own loom. But in this very union of functions there is, in a great proportion of cases, a want of economy. The principal in the concern is either wasting, in the routine of a business, qualities suitable for the direction of it, or he is only fit for the former, and then the latter will be ill done. I must observe, however, that I do not attach, to this saving of labour, the importance often ascribed to it. There is undoubtedly much more labour expended in the superinte

l by the combination of many small contributions; or, in other words, by the formation of jo

ent indeed could have done both; and in countries where the practice of co-operation is only in the earlier stages of its growth, the government can alone be looked to for any of the works for which a great combination of means is requisite; because it can obtain those means by compulsory taxation,

n twice a day, for others once a week, for others that a steam ship of great size and expensive construction shall depart on fixed days twice in each month, it is evident that to afford an assurance of keeping up with punctuality such a circle of costly operations, requires a much larger capital and a much larger staff of qualified subordinates than can be commanded by an individual capitalist. There are other cases, again, in which though the business might be perfectly well transacted with small or moderate capitals, the guarantee of a great subscribed stock is necessary or desirable as a security to the public for the fulfilment of pecuniary engagements. This is especially the case when the nature of the bu

nfidence, publicity is a still more important element of success than a large subscribed capital. A heavy loss occurring in a private bank may be kept secret; even though it were of such magnitude as to cause the ruin of the concern, the banker may still carry it on for years, trying to retrieve its position, only

side of the question, we shall find that individual management has also very great advantages over joint

ich are always a very small part of the capital of the association, and in general but a small part of the fortunes of the directors themselves; and the part they take in the management usually divides their time with many other occupations, of as great or greater importance to their own interest; the business being the principal concern of no o

ty of interest in the subject it is seldom to be expected that any one should feel, who is conducting a business as the hired servant and for the profit of another. There are experiments in human affairs which are conclusive on the point. Look at the whole class of rulers, and ministers of state. The work they are entrusted with, is among the most interesting and exciting of all occupations; the personal share which they themselves reap of the national benefits or misfortunes which befall the state under their rule, is far from trifling, and the rewards and punishments which they may expect from public estimation are of the plain and palpable kind which are most keenly felt and most widely appreciated. Yet how rare a thing is it to find a statesman in whom mental indolence is not stronger than all thes

the care and trouble which it costs to attend to them, and the credit of liberality and openhandedness is cheaply bought by a disregard of such trifling considerations. But small profits and small expenses often repeated, amount to great gains and losses: and of this a large capitalist is often a sufficiently good calculator to be practically aware; and to arrange his bu

er-statements of a true principle, often met with in Adam Smith. In his days there were few instances of joint stock companies which had been permanently successful without a monopoly, except the class of cases which he referred to; but since his time there have been many; and the regular increase both of the spirit of combination and of the ability to combine, will

ncern is large, and can afford a remuneration sufficient to attract a class of candidates superior to the common average, it is possible to select for the general management, and for all the skilled employments of a subordinate kind, persons of a degree of acquirement and cultivated intelligence which more than compensates for their inferior interest in the result. Their greater perspicacity enab

iece: and the superior efficiency of this is so well known, that judicious employers always resort to it when the work admits of being put out in definite portions, without the necessity of too troublesome a surveillance to guard against inferiority in the execution. In the case of the managers of joint stock companies, and of the superintending and controlling officers in many private establishments, it is a common enough practice to connect their pecuniary interest with the interest of their employers, by giving them part of their remuneration in the form of a percentage on the profits. The

n is free its results will show whether individual or joint stock agency is hest adapted to the particular case,

m of production is greatly favoured by a progressive condition of capital. It is chiefly when the capital of a country is receiving a great annual increase, that there is a large amount of capital seeking for investment: and a new enterprise is much sooner and more easily entered upon by new capital, than by withdrawing capital from existing employments. The change is also much facilitated by

ype of all these characteristics, there is a perpetual growth not only of large manufacturing establishments, but also, wherever a sufficient number of purchasers are assembled, of shops and warehouses for conducting retail business on a large scale. These are almost always able to undersell the smaller tradesmen, partly, it is understood, by means of division of labour,

whole of the gas or water required could generally be produced by one set only; even double sets of pipes, if the companies did not prevent this needless expense by agreeing upon a division of the territory. Were there only one establishment, it could make lower charges, consistently with obtaining the rate of profit now realized. But would. it do so? Even if it did not, the community in the aggregate would still be a gainer. since the shareholders are a part of the community, and they would obtain higher profits while the consumers paid only the same. It is, however, an error to suppose that the prices are ever permanently kept down by the competition of these companies. Where competitors are so few, they always end by agreeing not to compete. They may run a race of cheapness to ruin a new candidate, but as soon as he has established his footing they come to terms with him. When, therefore, a business of real public importance can only be carried on advantageously upon so large a scale as to render the liberty of competition almost illusory, it is an unthrifty dispensation of the public resources that se

respects, on different grounds from the general question between great and small industrial establishments. In its social aspect, and as an element in the Distribution of Wealth, th

of which agriculture is susceptible, is chiefly that which Mr. Wakefield terms Simple Co-operation; several persons helping one another in the same work, at the same time and place. But I confess it seems to me that this able writer attributes more importance to that kind of co-operation, in reference to agriculture properly so called, than it deserves. None of the common farming operations require much of it. There is n

ovided by some person to whom the others pay a consideration for its use; especially as, when worked by steam, they are so constructed as to be moveable.3 The large farmer can make some saving in cost of carriage. There is nearly as much trouble in carrying a small portion of produce to market, as a much greater produce; in bringing home a small, as a much larger quantity of manures, and articles of daily consumption. There is also the greater cheapness of buying things in large quantities. These various advantages must count for something, but it does not seem that they ought to count for very much. In England, for some generations, there has been little experience of small farms; but in Ireland the experience has been ample, not merely under the worst but under the best management; and the highest Irish authorities may be cited in opposition to the opinion which on this subject commonly prevails in England. Mr. Blacker, for example, one of the most experienced agriculturists and successful improvers in the North of Ireland, whose experience was chiefly in the best cultivated, which are also the most minutely divided parts of the country, was of opinion, that tenants holding farms not exceeding from five to eight or ten acres, could live comfortably and pay as high a rent

possess the amount of live stock suitable to the size of their farms. A small farm and a badly stocked farm are not synonymous. To make the comparison fairly, we must suppose the same amount of capital which is possessed by the large farmers to be disseminated among the small ones. When this condition, or even any approach to it, exists, and when stall feeding is practised (and stall feeding now begins to be considered

ose observation, peasant farmers often possess in an eminent degree. The traditional knowledge, for example, of the culture of the vine, possessed by the peasantry of the countries where the best wines are produced, is extraordinary. There is no doubt an absence of science, or at least of theory; and to some extent a deficiency of the spirit of improvement, so far as relates to the introduction of new processes. There is also a want of means to make experiments, which can seldom be made with advantage

ter than can be paid, and therefore practically at a varying rent always amounting to the utmost that can be paid. To understand the subject, it must be studied where the cultivator is the proprietor, or at least a métayer with a permanent tenure; where the labour he exerts to increase the produce and value of the land avails wholly, or at least partly, to his own benefit and that of his descendants. In another division of our subject, we shall discuss at

oying less, a greater return is obtained in proportion to the outlay. It does not answer to any one to pay others for exerting all the labour which the peasant, or even the allotment-holder, gladly undergoes when the fruits are to be wholly reaped by himself. This labour, however, is not unproductive: it all adds to the gross produce. With anything li

most, one-third. Hence Mr. Wakefield infers, that “as in France only three people are supported by the labour of two cultivators, while in England the labour of two cultivators supports six people, English agriculture is twice as productive as French agriculture,” owing to the superior efficiency of large farming through combination of labour. But in the first place, the facts themselves are overstated. The labour of two persons in England does not quite support six people, for there is not a little food imported from foreign countries, and from Ireland. In France, too, the labour of two cultivators does much more than supply the food of three persons. It provides the three persons, and occasionally foreigners, with flax, hemp, and to a certain extent with silk, oils, tobacco, and latterly sugar, which in England are wholly obtained from abroad; nearly all the timber used in France is of home growth, nearly all which is used in England is imported; the principal fuel of France is procured and brought to market by persons reckoned among agriculturists, in England by persons not so reckoned. I do not take into calculation hides and wool, these products being common to both countries, nor wine or brandy produced for home consumption, since England has a corresponding production of beer and spirits; but England has no material export of either article, and a great importation of the last, while France supplies wines and spirits to the whole world. I say nothing of fruit, eggs, and such minor particles of agricultural produce, in which the export trade of France is enormous. But not to lay undue stress on these abatements, we will take

and energy in that country, than to any special cause; and even if partly the effect of minute subdivision, it does not prove that small faring is disadvantageous, but only (what is undoubtedly the fa

intance with facts and authorities on his own subject, which generally characterises his countrymen, lays it down as a settled truth, that small or moderate-sized farms yield not only a larger gross but a larger net produce: though, he adds, it is desirable there should be some great proprietors, to lead the way in new improvements.6 The most apparently impartial and discriminating judgment that I have met with is that of M. Passy, who (always speaking with reference to net produce) gives his verdict in favour of large farms for grain and fora

s produce than the mere food which he eats. It is questionable whether, even in the most subdivided districts of Europe which are cultivated by the proprietors, the multiplication of hands on the soil has approached, or tends to approach, within a great distance of this limit. In France, though the subdivision is confessedly too great, there is proof positive that it is far from having reached the point at which it would begin to diminish the power of supporting a non-agricultural population. This is demonstrated by the great increase of the towns; which have of

ns of that eminent authority on agricultural statistics, M. Léonce de Lavergne, undertaken by desire of the Academy of Moral and Political Sciences of the Institute of France, have led to the conclusion that since the Revolution of 1789, the total produce of French agriculture has doubled; profits and wages having both increased in about the same, and rent in a still greater ratio. M. de Lavergne, whose impartiality is one of his greatest merits, is, moreover, so far in this instance from the suspicion of having a case to make out, that h

ent. The only question which remains open is one of degree; the comparative rapidity of agricultural improvement under the two systems; and

ion, and of the efficiency of labour. We shall return to it hereafter as affecting the distribution of the produce, and the physical and soci