It must be added, however, that there is no reason why the “practical limits” should not exist under a paternal or fraternal socialism as well as under the present social system. Even if industry were initiated and directed not by individuals but socialistically by Government, the sole motive need not be to increase the mere numbers of the people, and therefore the mere total quantity of food needed for a bare life. The motive of socialistic government would be to secure a high degree of comfort, not a bare subsistence, for all; and therefore, at the cost of a limitation of numbers, society would still remain at a distance from its greatest possible production of food. Whether such a limitation of numbers is likely to take place in the reconstituted society is discussed elsewhere.[[576]]
CHAPTER II.
THE WORKING MAN.
Measure of Value, 1823—In what sense Labour a Measure—Difficulties—Arguments of the Tract on Value—Measure in the same Country—Measure in different Countries—Measure at different Periods in the same—Measure as applied to varying Value of Currency—The Royal Literary Society—The Definitions—Wages—The Minimum of Social different from the Minimum of Physical Necessaries—High Wages, how made Permanent—The “Wages Fund,” whose Invention, and how far a Reality—“The New School of Political Economy,” its three Tenets—A General Glut in what Sense possible.
As the Rent and Corn pamphlets deal chiefly with Mother Earth, the tract on the Measure of Value[[577]] deals chiefly with Father Work. The search for a common measure of value is not, to Malthus, a purely academical problem. He considers such a measure desirable because in any inquiry into the wealth of nations it is important to distinguish between the rise of one commodity and the fall of another. The former is an intrinsic alteration of value which will affect every exchange in which the object is concerned; the latter an extrinsic which affects only the one exchange, of the object in question with the foreign object that has been altered. By value of course is to be understood economic value, or “the power of commanding other objects in exchange,” not value in the (not uncommon) wider sense, of usefulness in supplying wants.[[578]] The economic value of anything, taken in relation to some object which never changes its value from intrinsic causes, may be called the “natural or absolute value” of that thing, and the object with which it was compared may be called the “measure” of absolute or natural value, in other words, of the value which a thing must fetch if its supply is to be continued. While not only money but any and every object may be such a measure of value for a limited place and time, even money itself is not a good measure for widely different places or for long periods of time; and corn, which is better for long periods, is worse for short.
Labour is better than either, but Labour is ambiguous. We may measure the value of anything either by the labour it has cost us in the making of it, which gives us Ricardo’s sense of natural value, or by the labour it will purchase after it is made. Adam Smith,[[579]] who preferred labour both to money and corn as the measure of value, wavered between these two meanings of the terms. Malthus declares at once against the first sense. Labour, he says, in the sense of cost does not altogether determine value and therefore cannot measure it, even for similar places and times. In 1820 Malthus had been of opinion that a mean between corn and labour was a better measure of value than labour itself; but since 1823 he recurred to the view of Adam Smith,[[580]] and held that the amount of the unskilled common day labour of the agricultural labourer, which a thing will purchase or command, is a good measure of the value of it even at widely different places and times. “Agricultural labour is taken for the obvious reasons that it is the commonest species of labour, that it directly produces the food of the labourer, and that it is the most immediately connected with the gradations of soil and the necessary variations of profits. It is also assumed with Adam Smith, Mr. Ricardo, and other political economists, that, on an average, other kinds of labour continue to bear the same proportions to agricultural labour.”[[581]] The bodily exertion of the labourer does not change; it is the same sweat of the brow, the same sacrifice of physical force. When corn, for example, will command a less amount of labour than it would have done a century before, we may be sure it is because of a change not in the labour but in the corn; and we ought therefore to say not that labour has risen in value, but that corn has fallen. Malthus’ search for a permanent element in the changeable has led him to individual human labour as the economical unit. If the Chinese labourer has lower wages than the English, it is not because his labour is of lower value, but because his necessaries are of higher. Wages are higher in the United States not because labour is of higher value, but because necessaries are of lower.[[582]] Of course when skill enters into the labour, the unit is not the same; but, when we look only at unskilled, we find confirmation of Malthus’ view in the experience of the elder and the younger Brassey as employers of labour, that quantity for quantity “the cost of the labour [the expense of it to the employer] is the same everywhere” over the world.[[583]] The measure, however, is by no means out of court as regards skilled labour; the difference in kind may be stated in terms of a difference in degree. If the watchmaker’s labour be paid at the rate of 10s. a day, and the common agricultural labourer’s only at 1s. 8d., the former may be stated as equivalent to six days’ common labour.[[584]] Malthus has in his mind a scale of compensation such as is drawn out by Adam Smith in the tenth chapter of the first book of the Wealth of Nations.[[585]] Disagreeableness, difficulty, inconstancy, responsibility, risk of failure, are so many disabilities, for each of which a compensation must be made to the workman in the scale of his wages, as adding in effect so many more hours’ labour; and each higher class of workman must be paid the unit of common labourer’s wages, with the compensations superadded. In practice this means that men will not be found in sufficient numbers to do the higher class work unless the wages are sufficient to make it worth their while to undergo the disabilities. It is assumed that this scale has been adjusted by custom and the “higgling of the market” from generation to generation, till in any given neighbourhood each of the several skilled trades has a definitely recognized place in the series.[[586]]
This reasoning seems less convincing when we consider that the translation of skill into terms of hours would be different in different localities, and that the common labour, which is the unit, would vary in the same way. The measure of value would hold only for a given place, time, and people. To escape from the difficulty, we must consider the difference between the common labour at one time and place and the common labour at another as itself measurable, and allow for it; or else we must consider it as too small to disturb our conclusions, and so neglect it altogether. To reduce common labour to its theoretically simplest terms is to reduce it to something below our experience; and to reduce it to its actually simplest in the given cases is to reduce it to one thing in England, a second in France, a third in India, a fourth in America. There are differences of quality which cannot be with any certainty resolved into differences of quantity; such are the differences of individuals, the differences of nations, the differences of races. It will be found, also, that the part played by common as opposed to skilled labour, and by agricultural as opposed to manufacturing labour, differs so much between country and country that, in order to use labour as a measure, we should need other measures in addition to it. In short, if we had data enough to apply this measure, we should have data enough to dispense with it.
It was possibly the force of these considerations that led Malthus, as time went on, to approach somewhat nearer to Ricardo, whose measure, so far as he had one, was not the labour purchased but the labour that entered into cost. But he adhered to the substance of his doctrine as expressed in the tract; and his positions, in detail, were as follows:—
The power of one object to command another in exchange is influenced either by a change in the object itself, or by a change in the other. If we found a case where there was never a change in the first object itself, then we should have, in that first, a measure of natural or absolute as opposed to nominal or relative value, i. e. a measure of that value of an article which satisfies the “conditions of the supply” of it, and enables its production to be continued without loss to the producers. By “conditions of supply” is meant Ricardo’s “cost of production” with the addition of ordinary profits. No measure of market or relative values is possible; and to have a measure of natural value itself we must make two postulates,—that natural value depends on “labour and profits” (sic), on rent little if at all, and that the “wages” of labour are also the “value” of labour,—what labour is paid is also what labour will fetch. It is easy to apply the measure where only labour is concerned, for then the labour that the things cost is a sufficient measure; it would be evident, at any change, that the things had become cheaper, not the labour dearer. But in present society value is more complicated; labour is no doubt the chief source of it, but profits are a very considerable one.[[587]] The natural conditions of supply, however, may be stated in terms of labour, just as if labour had been the sole ingredient. This would give us a measure for the same country at the same place and time. The total quantity of labour that an article cost, with the addition of ordinary profits stated in terms of labour, would be the same as that quantity of labour which an article would purchase in its natural value.
In the case of different countries, at the same time, the difficulties are not quite the same. Exchange is there determined not by labour but by money prices; and money is of very different value in the one country and in the other. But the differences in the value of money in different countries are in proportion to the different prices of agricultural labour—1500 days’ labour at 4d. a day in India, at 2s. in England, meaning £25 and £150 respectively; and, if fixed capital to the value of 300 days’ labour were advanced to each of them, while profits calculated in days’ labour were twenty per cent. in the one case, ten in the other, the result would be an article whose conditions of supply would require in the one case a money price of £31, in the other of £168. The difference is no doubt due to the superior efficiency of English industry and skill which enables England to purchase the precious metals more cheaply,[[588]] but the cost of getting the money would not tell us the true present value of the money in England or in India. It is not the labour spent on the gold, but the labour purchased by it, that will help us here. In each country within itself we would measure the natural value of money as well as of anything else by what labour it will purchase; know the difference between the value of money in the one and its value in the other by the difference between the amount of labour it will purchase in the one case and the amount it will purchase in the other.[[589]]
In the case of different periods in the same country, though we have not, as in the case of two different countries, the test of an actual exchange, we can still use labour as the measure. We must allow for the higher profits of the earlier period; and on the (Ricardian) principle that profits and wages vary inversely, though corn wages have risen, profits have in proportion fallen, and the total value of the produce measured by its power of purchasing labour must be the same,[[590]] the purchased labour then representing the producing labour plus the then rate of profits. From Ricardo’s dogma it seems (to Malthus) to follow directly that the value of labour is constant.[[591]] Taking the labour they will purchase as the best measure of the value of the precious metals, as of anything else, we have light on one of the pressing questions of the day (in 1823), the causes of the changing value of money. The causes affect not the labour but the money, and they are of two kinds. The first Malthus describes as a primary or necessary cause, namely, the variation in profits depending on the (Ricardian) theory of the interlocking of wages and profits, and the (Malthusian) theory of the relation of profits to rent. Dear corn due to difficult cultivation would lower profits, and would alter the value of money, but only in relation to raw, not in relation to manufactured produce, or at least (from the effects of Ricardo’s principle of the inverse variation of wages and profits) not to the same extent. But the second, which is a “secondary and incidental” class of causes, affects both raw and manufactured goods, and is often enough to completely dwarf the effects of the primary cause;[[592]]—it is the general commercial situation of a country,—“the fertility and vicinity of the mines, the different efficiency of labour in different countries, the abundance or scarcity of exportable commodities, and the state of the demand and supply of commodities and labour compared with” the precious metals.[[593]] The efficiency of labour and a prosperous commerce, with a great consequent demand for corn and labour, are often more powerful in making bullion cheap than agricultural productiveness and high profits in making bullion dear and corn cheap. During the war—say from 1790 to 1814—we had an instance of this, and since the war—say from 1814 to 1823—we have had a clear instance, he thinks, of the converse.[[594]]