Speculations from Political Economy

The following nine articles are Speculations, by no means altogether recommendations. They are from Political Economy, i.e. they have nearly all of them been suggested by considering mere propositions of Political Economy. Some of them are old, or given me by friends: some are, I believe, new: these many persons will set aside as unpractical or impracticable, as that is the approved word by which people indicate that an idea is new to them. The topics of the nine articles have been largely taken from those now under political discussion, but they can hardly be called ephemeral; and, though they do not form a treatise, they will hardly be called disconnected. As they are speculations, no trouble has been taken to work out suggestions in detail, or give the shillings and pence correctly.
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Political economists have not overlooked efficiency of labour: they have underestimated its importance in the opinion of Edward Wilson, who has supplied me with the examples and arguments that follow and who has verbally given me leave to publish as much as I like.
The English workman, especially in a country town of moderate size, regards capital as unlimited, employment ( work ) as limited. A wall six feet high is to be built along the length of a certain garden: if one bricklayer is employed, the fewer bricks he lays daily the more days' employment he will get; if several bricklayers are employed, the fewer bricks one lays daily the more employment is left for the others. It thus appears that the more inefficient the labourer is, the better for himself, his fellow-handicraftsmen, and for labour in general: the more money is drawn from the capitalist.
There is a grain of truth in this view with respect to petty unavoidable repairs in a narrow locality: but the capital spent on such is as a drop in the ocean compared with that embarked in a single large work. Consider the case of the London Building Trade, as practised in the suburbs on all sides of London. The London bricklayers thoroughly believe that it is their interest to be inefficient: it is said that they have a rule that no bricklayer shall ever lay a brick with the right hand; they have also a rule against chasing, i.e. that no bricklayer, whatever his skill, shall lay more than a certain number of bricks a day; they believe that if the bricklayer laid a larger number of bricks he would get no more pay for a harder day's work, while the work would afford employment to a smaller number of labourers. Look however a little further. The speculative builders round London compete against each other, so that they carry on their trade on ordinary trade profits. Such a builder is building streets, house after house, each house costing him £800, and selling for £1000 say; and this, after paying his interest at the bank, etc., pays him about 10 to 15 per cent on his own capital embarked. Suppose now that the bricklayers increase their inefficiency either by a trade rule or by a combination to shorten the hours of labour. The cost of each house is increased £50 to him: nothing in the new bricklaying rules or rates affects the purchasers; the builder estimates that his profits will fall to 5 to 8 per cent on his capital. He does not care to pursue so risky a business at this rate of profit; he determines to contract operations. When he goes to his bank, a branch of one of the gigantic London joint-stock banks, at the end of the quarter, the manager of the branch comes forward as usual ready to continue the bank advances; but the builder says simply, The building trade is not so good as it was, and declines. The increased cost of bricklaying has affected all other speculative builders in much the same way; the consequence is that gold accumulates in the branch banks. The secretaries and managers of the great joint-stock banks do not let their capital idly accumulate; they buy New Zealand 6 per cents, or transfer to Frankfort or New York the capital that, but for the rise in cost of bricklaying, would have gone to the London bricklayers.