‘It may be objected, perhaps, that on the principle that the demand for commodities increases in the same ratio as their supply, there is no accounting for the gluts and stagnation produced by overtrading. We answer very easily—A glut is an increase in the supply of a particular class of commodities, unaccompanied by a corresponding increase in the supply of those other commodities which should serve as their equivalents. While our 1,000 farmers and 1,000 master-manufacturers are exchanging their respective surplus products, and reciprocally affording a market to each other, if 1,000 new capitalists were to join their society, employing each 100 labourers in tillage, there would be an immediate glut in agricultural produce ... because in this case there would be no contemporaneous increase in the supply of the manufactured articles which should purchase it. But let one half of the new capitalists become manufacturers, and equivalents in the form of wrought goods will be created for the new produce raised by the other half: the equilibrium will be restored, and the 1,500 farmers and 1,500 master-manufacturers will exchange their respective surplus products with exactly the same facility with which the 1,000 farmers and 1,000 manufacturers formerly exchanged theirs.’[189]
Sismondi answers this buffoonery which ‘very easily’ pokes about in a fog, by pointing to the real changes and revolutions which take place before his own eyes. ‘It was possible to put barbarous countries under the plough, and political revolutions, changes in the financial system, and peace, at once brought cargoes to the ports of the old agricultural countries which almost equalled their entire harvest. The recent Russian conquest of the vast provinces on the Black Sea, the change in the system of government in Egypt, and the outlawing of piracy in High Barbary, have suddenly poured the granaries of Odessa, Alexandria and Tunis into the Italian ports and have put such an abundance of corn on the markets that all along the coasts the farmer’s trade is fighting a losing battle. Nor is the remainder of Europe safe from a similar revolution, caused by the simultaneous ploughing under of immense expanses of new land on the banks of the Mississippi, which export all their agricultural produce. Even the influence of New Holland may one day be the ruin of English industry, if not in the price of foodstuffs, which are too expensive to transport, at least in respect of wool and other agricultural products which are easier to transport.’[190]
What would MacCulloch have to advise in view of such an agrarian crisis in Southern Europe? That half the new farmers should turn manufacturer. Whereupon Sismondi counters: ‘Such counsel cannot seriously apply to the Tartars of the Crimea or to the fellaheen of Egypt.’ And he adds: ‘The time is not yet ripe to set up new industries in the regions oversea or in New Holland.’[191]
Sismondi’s acuity recognised that industrialisation of the lands overseas was only a matter of time. He was equally aware of the fact that the expansion of the world market would not bring with it the solution to the difficulty but would only reproduce it in a higher degree, in yet more potent crises. His prediction for the expansive tendency of capitalism is that it will reveal an aspect of fiercer and fiercer competition, of mounting anarchy within production itself. Indeed, he puts his finger on the fundamental causes of crises in a passage where he states the trend of capitalist production precisely as surpassing all limits of the market. At the end of his reply to MacCulloch he says: ‘Time and again it has been proclaimed that the equilibrium will re-establish itself, that work will start again, but a single demand each time provides an impetus in excess of the real needs of trade, and this new activity must soon be followed by a yet more painful glut.’[192]
To such a profound grasp of the real contradictions in the movements of capital, the vulgarus on the Chair of London University with his harmony cant and his country-dance of 1,000 beribboned farmers and 1,000 bibulous manufacturers could find no effective answer.
CHAPTER XII
RICARDO v. SISMONDI
MacCulloch’s reply to Sismondi’s theoretical objections evidently did not settle the matter to Ricardo’s own satisfaction. Unlike that shrewd ‘Scottish arch-humbug’, as Marx calls him, Ricardo really wanted to discover the truth and throughout retained the genuine modesty of a great mind.[193] That Sismondi’s polemics against him and his pupil had made a deep impression is proved by Ricardo’s revised approach to the question of the effects of the machine, that being the point on which Sismondi, to his eternal credit, had confronted the classical school of harmony with the sinister aspects of capitalism. Ricardo’s followers had enlarged upon the doctrine that the machine can always create as many or even more opportunities for the wage labourers as it takes away by displacing living labour. This so-called theory of compensation was subjected to a stern attack by Sismondi in the chapter ‘On the Division of Labour and Machinery’[194] and in another chapter significantly entitled: ‘Machinery Creates a Surplus Population’,[195] both published in the Nouveaux Principes of 1819, two years later than Ricardo’s main work. In 1821, after the MacCulloch-Sismondi controversy, Ricardo inserted a new chapter in the third edition of his Principles, where he frankly confesses to his error and says in the strain of Sismondi: ‘That the opinion entertained by the labouring classes, that the employment of machinery is frequently detrimental to their interests, is not founded on prejudice and error, but is conformable to the correct principles of political economy.’[196]