Observations on the Effects of the Corn Laws, and of a Rise or Fall in the Price of Corn on the Agriculture and General Wealth of the Country

by T. R. Malthus

If we return to cash payments, while bullion continues of its present value compared with corn, labour, and most other commodities; little alteration will be required in the existing corn laws. The bullion price of corn is now very considerably under sixty three shillings, the price at which the high duty ceases according to the Act of 1804.

If our currency continues at its present nominal value, it will be necessary to make very considerable alterations in the laws, or they will be a mere dead letter and become entirely inefficient in restraining the importation of foreign corn.

If, on the other hand, we should return to our old standard, and at the same time the value of bullion should fall from the restoration of general confidence, and the ceasing of an extraordinary demand for bullion; an intermediate sort of alteration will be necessary, greater than in the case first mentioned, and less than in the second.

In this state of necessary uncertainty with regard to our currency, it would be extremely impolitic to come to any final regulation, founded on an average which would be essentially influenced by the nominal prices of the last five years.

To these considerations it may be added, that there are many reasons to expect a more than usual abundance of corn in Europe during the repose to which we may now look forward. Such an abundance(3*) took place after the termination of the war of Louis XIV, and seems still more probable now, if the late devastation of the human race and interruption to industry should be succeeded by a peace of fifteen or twenty years.

The prospect of an abundance of this kind, may to some perhaps appear to justify still greater efforts to prevent the introduction of foreign corn; and to secure our agriculture from too sudden a shock, it may be necessary to give it some protection. But if, under such circumstances with regard to the price of corn in Europe, we were to endeavour to retain the prices of the last five years, it is scarcely possible to suppose that our foreign commerce would not in a short time begin to languish. The difference between ninety shillings a quarter and thirty two shillings a quarter, which is said to be the price of the best wheat in France, is almost too great for our capital and machinery to contend with. The wages of labour in this country, though they have not risen in proportion to the price of corn, have been beyond all doubt considerably influenced by it.

If the whole of the difference in the expense of raising corn in this country and in the corn countries of Europe was occasioned by taxation, and the precise amount of that taxation as affecting corn, could be clearly ascertained; the simple and obvious way of restoring things to their natural level and enabling us to grow corn, as in a state of perfect freedom, would be to lay precisely the same amount of tax on imported corn and grant the same amount in a bounty upon exportation. Dr Smith observes, that when the necessities of a state have obliged it to lay a tax upon a home commodity, a duty of equal amount upon the same kind of commodity when imported from abroad, only tends to restore the level of industry which had necessarily been disturbed by the tax.

But the fact is that the whole difference of price does not by any means arise solely from taxation. A part of it, and I should think, no inconsiderable part, is occasioned by the necessity of yearly cultivating and improving more poor land, to provide for the demands of an increasing population; which land must of course require more labour and dressing, and expense of all kinds in its cultivation. The growing price of corn therefore, independently of all taxation, is probably higher than in the rest of Europe; and this circumstance not only increases the sacrifice that must be made for an independent supply, but enhances the difficulty of framing a legislative provision to secure it.

When the former very high duties upon the importation of foreign grain were imposed, accompanied by the grant of a bounty, the growing price of corn in this country was not higher than in the rest of Europe; and the stimulus given to agriculture by these laws aided by other favourable circumstances occasioned so redundant a growth, that the average price of corn was not affected by the prices of importation. Almost the only sacrifice made in this case was the small rise of price occasioned by the bounty on its first establishment, which, after it had increased operated as a stimulus to cultivation, terminated in a period of cheapness.

If we were to attempt to pursue the same system in a very different state of the country, by raising the importation prices and the bounty in proportion to the fall in the value of money, the effects of the measure might bear very little resemblance to those which took place before. Since 1740 Great Britain has added nearly four millions and a half to her population, and with the addition of Ireland probably eight millions, a greater proportion I believe than in any other country in Europe; and from the structure of our society and the great increase of the middle classes, the demands for the products of pasture have probably been augmented in a still greater proportion. Under these circumstances it is scarcely conceivable that any effects could make us again export corn to the same comparative extent as in the middle of the last century. An increase of the bounty in proportion to the fall in the value of money, would certainly not be sufficient; and probably nothing could accomplish it but such an excessive premium upon exportation, as would at once stop the progress of the population and foreign commerce of the country, in order to let the produce of corn get before it.