§ 5. —by improvements in Production.
This brings us to the second of the counter-agencies, namely, improvements in production. These evidently have the effect of extending what Mr. Wakefield terms the field of employment, that is, they enable a greater amount of capital to be accumulated and employed without depressing the rate of profit; provided always that they do not raise, to a proportional extent, the habits and requirements of the laborer. If the laboring-class gain the full advantage of the increased cheapness, in other words, if money wages do not fall, profits are not raised, nor their fall retarded. But, if the laborers people up to the improvement in their condition, and so relapse to their previous state, profits will rise. All inventions which cheapen any of the things consumed by the laborers, unless their requirements are raised in an equivalent degree, in time lower money wages, and, by doing so, enable a greater capital to be accumulated and employed, before profits fall back to what they were previously.
Improvements which only affect things consumed exclusively by the richer classes do not operate precisely in the same manner. The cheapening of lace or velvet has no effect in diminishing the cost of labor; and no mode can be pointed out in which it can raise the rate of profit, so as to make room for a larger capital before the minimum is attained. It, however, produces an effect which is virtually equivalent; it lowers, or tends to lower, the minimum itself. In the first place, increased cheapness of articles of consumption promotes the inclination to save, by affording to all consumers a surplus which they may lay by, consistently with their accustomed manner of living. In the next place, whatever [pg 507] enables people to live equally well on a smaller income inclines them to lay by capital for a lower rate of profit. If people can live on an independence of [$1,000] a year in the same manner as they formerly could on one of [$2,000], some persons will be induced to save in hopes of the one, who would have been deterred by the more remote prospect of the other. All improvements, therefore, in the production of almost any commodity tend in some degree to widen the interval which has to be passed before arriving at the stationary state.
§ 6. —by the importation of cheap Necessaries and Implements.
Equivalent in effect to improvements in production is the acquisition of any new power of obtaining cheap commodities from foreign countries. If necessaries are cheapened, whether they are so by improvements at home or importation from abroad, is exactly the same thing to wages and profits. Unless the laborer obtains and, by an improvement of his habitual standard, keeps the whole benefit, the cost of labor is lowered and the rate of profit raised. As long as food can continue to be imported for an increasing population without any diminution of cheapness, so long the declension of profits through the increase of population and capital is arrested, and accumulation may go on without making the rate of profit draw nearer to the minimum. And on this ground it is believed by some that the repeal of the corn laws has opened to [England] a long era of rapid increase of capital with an undiminished rate of profit.
Before inquiring whether this expectation is reasonable, one remark must be made, which is much at variance with commonly received notions. Foreign trade does not necessarily increase the field of employment for capital. When foreign trade makes room for more capital at the same profit, it is by enabling the necessaries of life, or the habitual articles of the laborer's consumption, to be obtained at smaller cost. It may do this in two ways: by the importation either of those commodities themselves, or of the means and appliances for producing them. Cheap iron has, in a certain measure, the same effect on profits and the cost of [pg 508] labor as cheap corn, because cheap iron makes cheap tools for agriculture and cheap machinery for clothing. But a foreign trade, which neither directly nor by any indirect consequence increases the cheapness of anything consumed by the laborers, does not, any more than an invention or discovery in the like case, tend to raise profits or retard their fall; it merely substitutes the production of goods for foreign markets in the room of the home production of luxuries, leaving the employment for capital neither greater nor less than before.
It must, of course, be supposed that, with the increase of capital, population also increases; for, if it did not, the consequent rise of wages would bring down profits, in spite of any cheapness of food. Suppose, then, that the population of Great Britain goes on increasing at its present rate, and demands every year a supply of imported food considerably beyond that of the year preceding. This annual increase in the food demanded from the exporting countries can only be obtained either by great improvements in their agriculture, or by the application of a great additional capital to the growth of food. The former is likely to be a very slow process, from the rudeness and ignorance of the agricultural classes in the food-exporting countries of Europe, while the British colonies and the United States are already in possession of most of the improvements yet made, so far as suitable to their circumstances. There remains, as a resource, the extension of cultivation. And on this it is to be remarked that the capital by which any such extension can take place is mostly still to be created. In Poland, Russia, Hungary, Spain, the increase of capital is extremely slow. In America it is rapid, but not more rapid than the population. The principal fund at present available for supplying this country with a yearly increasing importation of food is that portion of the annual savings of America which has heretofore been applied to increasing the manufacturing establishments of the United States, and which free trade in corn may possibly divert from that purpose to growing food for our market. This limited source of supply, unless great improvements take place in agriculture, [pg 509] can not be expected to keep pace with the growing demand of so rapidly increasing a population as that of Great Britain; and, if our population and capital continue to increase with their present rapidity, the only mode in which food can continue to be supplied cheaply to the one is by sending the other abroad to produce it.
Chart XVII. Grain-Crops of the United States.
| Year. | Bushels. |
| 1865 | 1,127,499,187 |
| 1866 | 1,343,027,868 |
| 1867 | 1,329,729,400 |
| 1868 | 1,450,789,000 |
| 1869 | 1,491,412,100 |
| 1870 | 1,629,027,600 |
| 1871 | 1,528,776,100 |
| 1872 | 1,664,331,600 |
| 1873 | 1,538,892,891 |
| 1874 | 1,455,180,200 |
| 1875 | 2,032,235,300 |
| 1876 | 1,962,821,600 |
| 1877 | 2,178,934,646 |
| 1878 | 2,302,254,950 |
| 1879 | 2,434,884,541 |
| 1880 | 2,448,079,181 |
| 1881 | 2,699,394,496 |
| 1882 | 2,699,394,496 |
| 1883 | 2,623,319,089 |