CONCLUSION.
That the economy of no nation can continue to grow ad infinitum is, in general, as easy to believe[263-1] as it is difficult to point out with a specification of particulars what are the limits which cannot be exceeded. This would be possible first in the case of agriculture. Here there are points beyond which every man practically versed in the art can see, that an increase of the gross product must be attended by an absolute decrease in the net product.[263-2] But even supposing that a people had reached this point in their entire agriculture, they might still carry on industries, commerce, perform personal services for other nations, and obtain remuneration therefor in the means of subsistence and manufactured articles. If our nation has once entered on this path, it is evident that every improvement of its industry, every advance made by foreign countries in the production of raw material, manufactures and the consumption of services must result in a growth of our economy. David Hume was of opinion that industrial preponderance was in a necessary and continual state of transition from one country to another. A very highly developed state of industry made a country rich in money but enhanced the price of the means of subsistence, and the rate of wages; until finally it became impossible for it to compete in the markets of the world with cheaper countries, and industry, in consequence, emigrated to these.[263-3] But it is easy to see how all such limits are extended by the modern improvements in transportation, and the consequent facilitation of importation; and how much the remedy mentioned in § 198 has gained in importance by the modern advances made in machinery and the preponderance in so many respects of machine over hand labor.[263-4]
But here it is necessary to distinguish between the "applied" and only practical political economy, and "pure political economy." (§ 217.) A development thus continued would be attended with great difficulty even if the whole world constituted one great empire. We need only mention Austria, where some provinces have remained in a very backward, almost medieval condition, while others have for a long time manifested the symptoms of over-population. How much more in different states. An uncivilized nation will frequently not care to increase its consumption of our manufactures, if to do so it becomes necessary to carry on its agriculture more industriously. Another nation that has already tasted of the fruit of the tree of economic knowledge may not be satisfied with the mere production of raw material forever. In time it may want to carry on commerce and industry itself, and hence consider the breaking of its commercial course with us as a species of emancipation from us. And, further, how if other highly cultivated nations should compete with us in the markets of countries which produce merely raw material? if such rivals should wage war in which each party should harm his adversary for the mere love of doing harm, and not unfrequently in opposition to its own economic interests? I know of no period the development of which has not been attended by such disturbances, and hence they cannot be said to be entirely unnatural.[263-5]
And even at home and among highly civilized nations, there are wont to be many obstacles to advancement on this road of progress. Every great economic change is connected as cause and effect, with a variety of political, social and other reformations which are never accomplished without great hardship and hesitation.[263-6] Where the division of labor has been developed to any extent, the formerly existing circumstances which must be surrendered for the sake of progress are generally synonymous with the interests of some class. This class opposes the improvement, and a struggle becomes necessary to carry it out. But under certain circumstances, a long delay in effecting a necessary reform may paralyse or poison the minds of the people to such an extent that they may afterwards have neither the will nor the power to successfully advance. This is the most important exception to the rule laid down in § 24. The happier the ethnographic and social composition of a people, the better the national spirit, the more skillful the form of its constitution, the less frequently will it happen.[263-7] All this is true especially of over-population and the plethora[263-8] of capital which so easily injure the morality of a people. New inventions also, by means of which the limits of the possibility of production may be incalculably extended can be expected only from nations where there is no intellectual decline.[263-9]
[263-1] There are, indeed, different opinions on this matter, and they were preponderant during the second half of the eighteenth century. Compare Condorcet, Tableau historique,[TN 120] des Progrès de l'Esprit humain, especially Epoque X, in which he treats of future progress. Nevertheless, he obscurely alludes (Œuvres, VIII, 350) to a time when no further increase of population should take place. Malthus, Principle of Population, III, ch. 1, thoroughly demonstrates that in regard to the great prolongation of human life which he foresaw, the idea of the indefinite and that of the infinite were confounded with each other.
In that young and vigorous country, the United States of America, we find a popular school which, to say the least, hints at the principle of infinite growth. Thus, for instance, Peshine Smith (Manual of Political Economy, New York, 1853) teaches that the means of subsistence consumed at the place of production are not destroyed, but may return just as much to the soil in the form of manure as they had previously drawn from it (ch. 1). Capital has a tendency to increase more rapidly than population (ch. 6). The rate of wages has a tendency to increase with the increase of population (ch. 5). Mechanical progress increases the value of human labor and causes that of capital to decline relatively (ch. 3). He reverses, with Carey, Ricardo's law of rent (ch. 2).
Carey, also, relying on the assumption that more fertile land is brought under cultivation as civilization advances, allows us to see no limits whatever to this growth. (Past, Present and Future, ch. 3.) Still more clearly is the principle of unlimited and continually accelerated growth laid down in his Principles of Social Science, I, 270. Carey illustrates this principle by means of the example of the continually accelerated motion of a falling body, without noticing the practical ad absurdum deductio involved in it, that at the end of the thousandth second a falling body reaches a velocity of 1,000,000 feet. (loc. cit., 204.) But even in England, at present, we find such thoughts at times. Banfield, for instance, can scarcely understand how the relative rates of wages, interest and rent can decrease, except by an increase of their absolute amounts. See his Organization of Industry, passim. And so v. Prittwitz entertains the most rosy-colored hopes. He has no doubt that all governments which are still bad will see the error of their ways and correct them. (Kunst reich zu werden, 79.)
The growth of capital and even of human wealth in general is capable of indefinite increase (81). The rate of interest would sink almost to zero if so much capital were accumulated that no "undertakers" could be found who care to use it (305). Large farming will entirely cease in the future (307), and when the system of railroads is entirely completed, the whole earth will present the appearance of one immense park (29). He would allay all fear concerning the exhaustion of combustible material by pointing out the possibility consequent upon improved means of communication, that a great many of the inhabitants of the colder regions of the earth might migrate in winter to a warmer climate (21). At the same time, artesian wells might be made to bring to the surface the internal heat of the earth, or metallic plates connected with the wings of a windmill, might be made to generate heat by their friction on one another (22). See the same author's Andeutungen über künftige Fortschritte und die Gränz en der Civilization, 21 Aufl., 1855.
[263-2] According to § 165, we might say: where the product of the workman last employed is not sufficient to meet his own wants. Thus J. B. Say says that only that can be considered a product, the utility of which is at least equal to its cost. He makes use of the example where a three days' journey is necessary to obtain the food requisite for one. As the limits of production he gives the following: too few human wants; too costly methods of production; too high taxes, natural obstacles created by infertility or too great distance. (Traite I, ch. 15. Cours pratique, I, 349.)