No tendency of a like kind exists with respect to manufactured articles. The tendency is in the contrary direction. The larger the scale on which manufacturing operations are carried on, the more cheaply they can in general be performed. As manufactures, however, depend for their materials either upon agriculture, or mining, or the spontaneous produce of the earth, manufacturing industry is subject, in respect of one of its essentials, to the same law as agriculture. But the crude material generally forms so small a portion of the total cost that any tendency which may exist to a progressive increase in that single item is much overbalanced by the diminution continually taking place in all the other elements; to which diminution it is impossible at present to assign any limit.
It follows that the exchange values of manufactured articles, [pg 483] compared with the products of agriculture and of mines, have, as population and industry advance, a certain and decided tendency to fall. Money being a product of mines, it may also be laid down as a rule that manufactured articles tend, as society advances, to fall in money price. The industrial history of modern nations, especially during the last hundred years, fully bears out this assertion.
In regard to manufactures, as opposed to raw products, it is to be remarked “that, as the course of price in the field of raw products is, on the whole, upward, so in that of manufactured goods the course is, not less strikingly, in the opposite direction. The reasons of this are exceedingly plain. In the first place, division of labor—the first and most powerful of all cheapeners of production, but for which there is in extractive industry but very limited scope—finds in manufacturing industry an almost unbounded range for its application; and, secondly, it is in manufacturing industry also that machinery, the other great cheapener of production, admits of being employed on the largest scale, and has, in fact, been employed with the most signal success. It follows at once from these facts, taken in connection with the further fact that industrial invention does not take place per saltum, but gradually—one invention ever treading on the heels of another—and that its advance seems to be subject to no limitation; it follows, I say, from these considerations, that that portion of the cost of manufactured goods which properly belongs to the manufacturing process must, with the progress of society, undergo constant diminution.... In all the great branches of manufacturing industry the portion of the cost incurred in the manufacturing process bears in general a large proportion to that represented by the raw material, while the influence of industrial invention, in reducing this portion of the cost, is, as every one knows, great and unremitting in its action.”
As has been said, “the two great cheapeners of production are division of labor and machinery, and the degree in which these admit of being applied to manufacture is mainly dependent upon the scale on which the manufacturing process is carried on. Those manufactures, therefore, that are produced upon a large scale are the sort of manufactures in which we may expect the greatest reduction in cost; in which, therefore, the fall in price, with the progress of society, will be most marked. But the manufactures which are produced upon the largest scale are those for which there exists the largest demand—that is to say, are those which enter most extensively into the consumption of the great mass of people. They are [pg 484] also, I may add, those in which a fall in price is apt to stimulate a great increase of demand. All the common kinds of clothing, furniture, and utensils fall within the scope of this remark; and it is in these, rather than in the commodities consumed exclusively or mainly by the richer classes, that we should, accordingly, expect to find the greatest marvels of cheapening.” But the articles of common consumption are those in which “the amount of manufacture bestowed upon them bears a smaller proportion to the raw material than is the case with the more elaborate manufactures. Such coarser manufactures, therefore, would feel the effects of the advancing cost of the raw material more sensibly than the refined sorts. Nevertheless, it can not be supposed to compensate the advantages due to the causes I have pointed out which fall to the share of the commoner sorts. It is in this class of goods that the most remarkable reductions in price have been accomplished in the past, and it is in them, probably, that we shall witness in the future the greatest results of the same kind.”
§ 4. —that tendency from time to time Counteracted by Improvements in Production.
Whether agricultural produce increases in absolute as well as comparative cost of production depends on the conflict of the two antagonist agencies—increase of population and improvement in agricultural skill. In some, perhaps in most, states of society (looking at the whole surface of the earth), both agricultural skill and population are either stationary, or increase very slowly, and the cost of production of food, therefore, is nearly stationary. In a society which is advancing in wealth, population generally increases faster than agricultural skill, and food consequently tends to become more costly; but there are times when a strong impulse sets in toward agricultural improvement. Such an impulse has shown itself in Great Britain during the last fifteen or twenty years [before 1847]. In England and Scotland agricultural skill has of late increased considerably faster than population, insomuch that food and other agricultural produce, notwithstanding the increase of people, can be grown at less cost than they were thirty years ago; and the abolition of the Corn Laws has given an additional stimulus to the spirit of improvement. In some other countries, and particularly in France, the improvement of agriculture gains ground still more decidedly upon population, because though [pg 485] agriculture, except in a few provinces, advances slowly, population advances still more slowly, and even with increasing slowness, its growth being kept down, not by poverty, which is diminishing, but by prudence.
Moreover, the cheapened cost of transportation has admitted to England and the Continent the wheat supplies of our Western States at a low price even after having been carried to transatlantic markets. New methods of getting food-supplies from foreign countries act equally with improvements at home.