[200-1] Thus, Forbonnais, Eléments du Commerce I, 73. J. Moser, Patr. Ph., I, No. 2.
[200-2] For a thorough refutation of the error that everything is dearer in England than in France, see Journ. des Econ., Mai, 1854, 295 seq. A distinguished architect assured me in 1858, that a person in London could build about as much for £1 as for from 6 to 7 thalers in Berlin; only the aggregate expense in both countries is made up of elements very different in their relative proportions.
[200-3] We very frequently hear that countries with high wages must be outflanked in a neutral market by countries with a low rate of wages. Ricardo's disciples reject this, because a decrease in the profit would put the undertaker in a condition to bear the loss caused by the high wages paid. See Report of the Select Committee on Artisans and Machinery. Senior ridicules such reasoning very appropriately by inquiring: "Might not the loss enable him to bear the loss?" Outlines, 146. And so J. B. Say thinks that wages are always lowest when undertakers are earning nothing. The truth is rather this: a country with a relatively high rate of wages cannot, in a neutral market, offer those commodities the chief factors required for the production of which is labor; but the comparatively low rate of interest or low rents, or the lowness of both found in connection therewith, must fit it to produce other commodities very advantageously. If, therefore, the rate of wages rises, the result will be to divert production and exports into other channels than those in which they have hitherto flowed. The old complaint of Saxon agriculturists, that there is a lack of labor in the country, is certainly very surprising in a nation as thickly populated as Saxony. But the remedy proposed by the most experienced practitioners consists chiefly in a higher rate of wages to enable workmen to care for themselves in old age, the introduction of the piece-work system and an increase of agricultural machines. But it seems to me, that the whole situation there points to the advantage of in part limiting the large farming hitherto practiced to live-stock raising and other branches in which labor may be spared, and in part of replacing it, by small farming of plants which are objects of trade.
Many points belonging to this subject have been very well discussed by J. Tucker, in his refutation of Hume's theory on the final and inevitable superiority of poor countries over rich ones in industrial matters. (Four Tracts on political and commercial Subjects, 1774, No. 1; L. Lauderdale, Inquiry, 206.)
HARMONY OF THE THREE BRANCHES OF INCOME.—INDIVIDUAL DIFFERENCE IN THEM.
As national-economical civilization advances, the personal difference of the three branches of income is wont to become more and more sharply defined.[201-1] The struggle between landowners, farmers and workmen, which Ricardo necessarily assumed, did not exist at all in the middle ages; since landowners and farmers were then usually one and the same person, and since workmen, either as slaves or peasants, were protected against competition properly so called. And so in the industry of that time, based on the trades or on domestic industry.[201-2] [201-3]
When, later, the division of labor increases, all the differences of men's aptitudes are turned to more advantage, and are more fully developed. In the same proportion that a working class is developed, the members of which are nothing but workmen, and can scarcely hope to possess capital or land,[201-4] there grows up, side by side with it, a class of mere capitalists, who come to obtain an ever-increasing importance.
Considered from a purely economic point of view, this transition has its great advantages. How much must the existence of a special class of capitalists facilitate the concentration of capital and the consequent promotion of production, as well as its (capital's) price-leveling influx and outflow! Even "idle" capitalists have this of good, that, without them, no competent man, destitute of means could engage in any independent enterprise. When, indeed, the gulf between these two classes passes certain bounds, it may, politically and socially, become a great evil. (§ 63.)[201-5]
[201-1] Among nations in their decline, rent and interest fall into one possession again, because capitalists here are wont to buy the land. (Roscher, Nationalökonomik des Ackerbaues, § 140 ff.)