An excerpt from:
The Source and Remedy of the National Difficulties
Anonymous, Rodwell and Martin, 1821
SOURCE AND REMEDY
PRINCIPLES OF POLITICAL ECONOMY,
LORD JOHN RUSSELL.
"The leanness that affects us, the objects of our misery, is an inventory to particularise their abundance." -- SHAKSPEARE.
"How to solder, how to stop
a leak -- that now is the deep design of a
politician." -- MILTON.
RODWELL AND MARTIN, NEW BOND-STREET.
your Lordship because I
believe you to be sincere and zealous in your
public opinions and conduct; and because I
know you to be a young man, and therefore
less likely to have your understanding incrusted
by established and received theories.
I was confirmed in this intention
by an Essay,
in a work generally attributed to your Lordship,
wherein you acknowledge the little satisfaction
you have hitherto received from the contra-
dictory opinions of writers on this subject.
They are indeed, my Lord, contradictory, not
only the one to the other, but to our best
feelings and plainest sense. From all the works
I have read on the subject, the richest nations
in the world are those where the greatest revenue
is or can be raised; as if the power of compelling
or inducing men to labour twice as much at the
mills of Gaza for the enjoyment of the Philis-
tines, were proof of any thing but a tyranny
or an ignorance twice as powerful.
How far my own opinions will be
with your Lordship's, I dare not hazard a con-
jecture; but as many of them are uncommon,
they may, as Hume says, "repay some cost to
understand them." But, my Lord, if they are
true, they have most important consequences;
I therefore earnestly intreat you not to reject
them without a patient and attentive exami-
Here then, my Lord, after having,
interest of our suffering country, again respect-
fully solicited your attention throughout the
progress of this inquiry, I leave off personally
In the consideration
of this important question, we must advert
to and reason from principles; I shall proceed therefore immediately
to lay down such as are of immediate consequence to the argument.
and such as must, I presume, if the wording be not cavilled at, be universally admitted as true.
First then, I hold, or rather I presume it is universally held, that LABOUR IS THE SOURCE OF ALL WEALTH AND REVENUE. It signifies not how our revenue may come to us, whether as interest of money-rent of houses, lands, mines, quarries --pensions -- profits of trade -- salary -- tithes: --come what way it will, through what channel it will, it must be originally derived from labour -- either our own labour, or the labour of others.
If then, this first principle be admitted, it follows conclusively that THE WEALTH OF A NATION, as of an individual, CONSISTS IN ITS RESERVED LABOUR: the stores either of money, machinery, manufactures, or produce, &c. &c. that it may possess, being the evidences and representatives of that reserved labour.
It is not my intention to clog this inquiry with an eternal reference to the opinions of other men -- I shall hereafter neither controvert nor advert to them; but it will be but honest to the uninitiated here to admit, that even this simple proposition has been objected to, and to state the nature of the objection, that he may be satisfied an endeavour to establish every principle against all possible objection, would require a folio rather than a letter. Thus it has been held by some "learned Thebans" to be erroneous, because we omit the powerful agency of nature: now this is strictly true; but then other and more "learned Thebans" come upon us with a distinction between "value in use" and "value in exchange" and show it is only true of "value in use;" this is still more accurate: but then it needs two more chapters, and, I ask, might not one chapter say to the others "we three are sophisticated?" Does not a plain man find his common interpretation of the language was perfectly correct?
At the same time that I shall be scrupulously studious of brevity, to be clear and intelligible must be the first consideration; therefore I shall myself refine a little even upon this second principle, and, for the avoiding future explanation, add, that the WEALTH OF A NATION CONSISTS IN ITS RESERVED SURPLUS LABOUR by which I mean the reserved labour beyond its usual and necessary consumption; for without this distinction, which, though too indefinite and inaccurate, may serve my purpose, the wealth of a nation would vary with the seasons; before harvest and after harvest materially. Now, however, that I have been stayed by this literal accuracy, I may add that when I shall hereafter speak of the surplus labour of a man, I mean by it, the representative of all the labour of the individual beyond what is exclusively appropriated to the maintenance and enjoyment of himself and family, But once for all, as I profess to neither to be learned nor critical on this subject, I trust the reader will allow my language the utmost latitude of meaning if by so doing it may include what is true,
or will limit and restrict any particular word or phrase, if in a general or more extensive sense the opinion would be erroneous; -- this blundering attempt at definition has already made me despair of any thing like accuracy.
The wealth of a nation having been now defined to be its reserved surplus labour, I shall add that RESERVED SURPLUS LABOUR IS CAPITAL, and further, that reserved SURPLUS LABOUR OR CAPITAL HAS A POWER OF REPRODUCTION, or of FACILITATING PRODUCE when invested in machinery, lands, agricultural improvements, &c. &c.
These are some of the best principles with which to begin this inquiry, because they are the least likely to be disputed; but there are certain consequences I shall proceed to deduce from them, neither so immediately apparent, nor so certain as to leave me the same assurance of universal assent. The intent and object of all writers of political economy has hitherto been, to suggest the best means of increasing the wealth or capital of a country; now NATURE, I say, HAS PUT BOUNDS TO THE ACCUMULATION OF CAPITAL, and further, for this is the great practical purpose of the argument, I hope to shew that THE ACCUMULATION OF CAPITAL IS VERY LIMITED, if the happiness of the whole, and not the luxuries of a few, is the proper subject for national congratulation.
We will examine the question simply. Suppose the whole labour of the country to raise just sufficient for the support of the whole population; it is evident there is no surplus labour, consequently, nothing that can be allowed to accumulate as capital.
Suppose the whole labour of the country to raise as much in one year as would maintain it two years, it is evident one year's consumption must perish, or for one year men must cease from productive labour. But the possessors of the surplus produce, or capital, will neither maintain the population the following year in idleness, nor allow the produce to perish; they will employ them upon something not directly and immediately productive, for instance, in the erection of machinery, &c. &c. &c. But the third year, the whole population may again return
to productive labour, and the machinery erected in the last year coming now into operation it is evident the produce of the whole will be greater than the first years produce, by the additional power of the machinery and consequently that the superabundant produce will be one whole year's consumption, and the produce of the machinery in addition. It will follow still more necessarily, therefore, either that this surplus labour must perish, or be put to use as before; and this usance again adds to the productive power of the labour of the society, and so on progressively, till men must cease from productive labour for a time, or the produce of their labour must perish.
This is the palpable consequence in the simplest state of society, and neither the detail of figures, the jargon of our political economists, nor the complexity of existing institutions, can alter this consequence, although the one may confuse us in discourse, and the other abuse us in the endeavour; and, in proof, we will proceed to trace the progress of the accumulation of capital in existing societies, which will be found confirmatory of what I have stated.
The first step is, that the possessor of capital, never mind how obtained nor how invested, whether in lands, houses, money, or manufactures, engrosses so much of the labour of others for the use of his capital, as they are able to benefit by its use, and this is what is called interest of money, profits of trade, rent, &c. But as all men that have ever felt the accumulative power of money have a passion to accumulate it, the accumulation of capital would proceed, and as capital has a reproductive power, produce would go on increasing, until no man would avail himself of the capital of another, and consequently till no man could live on his capital, because no man would give, his labour for its use*. Here then the evil would have corrected itself, and the society
* Even in these Utopian speculations. the great land-holder should possibly, be excepted; a rent, equal to the expense on importation, being always secure to him. No increase of capital could entirely destroy the rent of lands, because but a small part of the rental is payment for the use of capital, but for the use of the land, which no capital can increase; --it is a payment because the land-holder has a monopoly, a payment for nothing.
would be in the same situation as in the first year, with this difference only, that its surplus produce must perish, because there is no further means of investing it.
THE PROGRESS OF THIS INCREASING CAPITAL WOULD, in established societies, BE MARKED BY THE DECREASING INTEREST OF MONEY, or, which is the same thing, the decreasing quantity of the labour of others that would be given for its use; but so long as capital could command interest at all, it would seem to follow, that the society cannot have arrived at that maximum of wealth, or of productive power, when its produce must be allowed to perish.
When, however, it shall have arrived at this maximum, it would be ridiculous to suppose, that society would still continue to exert its utmost productive power. The next consequence therefore would be, that where men heretofore laboured twelve hours they would now labour six, and this is national wealth, this is national prosperity. After all their idle sophistry, there is, thank God! no means of adding to the wealth of a nation but by adding to the facilities of living: so that wealth is liberty -- liberty to seek recreation -- liberty to enjoy life -- liberty to improve the mind: it is disposable time, and nothing more. Whenever a society shall have arrived at this point, whether the individuals that compose it, shall, for these six hours, bask in the sun, or sleep in the shade, or idle, or play, or invest their labour in things with which it perishes, which last is a necessary consequence if they will labour at all, ought to be in the election of every man individually.
The decreased value of capital is however so certain a consequence, that if we could ascertain the actual value of the surplus produce of any society at any given time, if we could foresee the exact progress of improvement and machinery in facilitating labour, or multiplying its powers, and the necessary expenditure of human labour in their improvement and erection, we could, allowing for the progressive increase of society, by the common rule of proportion, ascertain almost to an hour when capital, would cease . . .