Book I, Chapter VIII, 2

Although North America is not yet as rich as England, it is far more prosperous and advancing much faster toward still greater wealth. The clearest mark of a country’s prosperity is growth in its population. In Great Britain and most other European countries, the population is thought to take at least five hundred years to double. In the British colonies in North America, it has been found to double in twenty or five-and-twenty years. At present this increase is due chiefly not to the constant arrival of new inhabitants but to the great multiplication of those already there. People who live to old age, it is said, frequently see from fifty to a hundred descendants of their own, and sometimes many more. Labor is so well rewarded there that a large family of children is a source of wealth and prosperity to parents rather than a burden. Before each child leaves home, the value of that child’s labor is reckoned at a hundred pounds of clear gain to them. A young widow with four or five young children, who among Europe’s middle or lower ranks would stand little chance of finding a second husband, is often courted there as a kind of fortune. The value of children is the strongest possible encouragement to marriage. We cannot therefore wonder that people in North America generally marry very young. Despite the great increase brought about by such early marriages, complaints of a shortage of hands are constant. The demand for workers, and the funds intended to support them, seem to grow faster still than the supply of workers they can employ.

Even if a country’s wealth is very great, we should not expect high wages if that wealth has long stood still. The funds set aside to pay wages—the revenue and stock of its inhabitants—may be immense; but if they have remained the same, or nearly so, for several centuries, the number of workers employed each year could easily meet, and even exceed, the number needed the next year. Hands would seldom be scarce, and masters would not have to bid against one another for them. On the contrary, workers would naturally multiply beyond the available employment. Jobs would be constantly scarce, and workers would have to bid against one another for them. If wages in such a country had ever been more than enough to support a laborer and enable him to raise a family, competition among workers and the interest of masters would soon reduce them to the lowest rate compatible with ordinary humanity. China has long been one of the richest countries in the world—that is, one of the most fertile, best cultivated, most industrious, and most populous. It seems, however, to have long stood still. Marco Polo, who visited it more than five hundred years ago, describes its cultivation, industry, and population in almost the same terms used by travelers today. Perhaps long before his time it had already acquired all the wealth its laws and institutions permit it to acquire. Travelers’ accounts disagree in many other respects, but agree on the low wages and on the difficulty a worker faces in raising a family in China. If a whole day digging the ground earns him enough to buy a little rice that evening, he is content. The condition of artisans is, if possible, still worse. Rather than sit idly in their workshops waiting for customers, as in Europe, they continually run through the streets carrying the tools of their trades, offering their services and virtually begging for work. The poverty of the lower ranks in China far exceeds that of the poorest nations of Europe. Near Canton, many hundred—commonly, it is said, many thousand—families have no dwelling on land, but live permanently in small fishing boats on the rivers and canals. Their sustenance is so scant that they eagerly fish up the foulest refuse thrown overboard from any European ship. Carrion, such as the carcass of a dead dog or cat, half-rotten and stinking, is as welcome to them as the most wholesome food is to people elsewhere. Marriage is encouraged in China not by the profit children bring, but by the liberty to destroy them. In every large town, several are left in the street each night or drowned in the water like puppies. Carrying out this dreadful task is even said to be the openly acknowledged livelihood of some people.

China, however, though it may perhaps stand still, does not seem to be moving backward. Nowhere are its towns deserted by their inhabitants; nowhere is land once cultivated left neglected. The same, or almost the same, annual labor must therefore still be performed, and the funds set aside to support it cannot have diminished noticeably. Despite their meager sustenance, then, the lowest class of workers must somehow manage to reproduce in sufficient numbers to maintain their customary population.

Things would be different in a country where the funds available to maintain labor were noticeably shrinking. Each year demand for servants and laborers throughout every class of employment would be less than the year before. Many people trained for higher classes of employment, unable to find work in their own calling, would gladly seek it in the lowest. That lowest class, overcrowded not only with its own workers but also with the overflow from every other class, would face such fierce competition for work that wages would fall to the most wretched and meager subsistence. Many could find no work even on these harsh terms, but would starve or be driven to seek a living through begging, or perhaps through the gravest crimes. Poverty, famine, and death would immediately spread through that class, and from there through all the higher classes, until the country’s population was reduced to the number that could readily be supported by the revenue and stock left to it—what had escaped the tyranny or calamity that destroyed the rest. This, perhaps, comes close to the present condition of Bengal and some other English settlements in the East Indies. When, in a fertile country previously much depopulated, where food should consequently not be very hard to obtain, three or four hundred thousand people nevertheless die of hunger in one year, we may be certain that the funds available to maintain the laboring poor are rapidly dwindling. The contrast between the character of the British constitution, which protects and governs North America, and that of the mercantile company, which oppresses and rules the East Indies, can perhaps be illustrated no better than by the differing conditions of those countries.

A generous reward for labor, therefore, is both the necessary effect and the natural sign of growing national wealth. Meager subsistence among the laboring poor, by contrast, is the natural sign of stagnation; starvation among them, the sign of rapid decline.

In Great Britain at present, wages plainly seem to exceed what is strictly necessary to enable a laborer to raise a family. To establish this we need not undertake a long and uncertain calculation of the smallest sum on which a family can be raised. There are many clear signs that nowhere in this country are wages governed by this lowest rate compatible with ordinary humanity.

First, in almost every part of Great Britain, even in the lowest kind of labor, wages differ between summer and winter. Summer wages are always higher. Yet the extra cost of fuel makes supporting a family most expensive in winter. Since wages are highest when that cost is lowest, they are evidently governed not by the expense of subsistence but by the quantity and supposed value of the work. A laborer, it might be argued, ought to save part of his summer wages to cover winter expenses, and across the year his wages do not exceed what is necessary to support his family throughout the year. A slave, however, or anyone entirely dependent on us for immediate support, would not be treated in this way. His daily support would be proportioned to his daily needs.

Second, wages in Great Britain do not fluctuate with the price of provisions. That price changes everywhere from year to year and often from month to month. Yet in many places the money price of labor remains unchanged, sometimes for half a century. If the laboring poor there can support their families in expensive years, they must live comfortably when provisions are moderately abundant, and in affluence when they are exceptionally cheap. In many parts of the kingdom, the high price of provisions during these ten years past has brought no noticeable rise in money wages. In some parts wages have indeed risen, probably owing more to increased demand for labor than to the higher price of provisions.

Third, while the price of provisions varies more from year to year than wages do, wages, on the other hand, vary more from place to place than the price of provisions. Bread and butcher’s meat generally cost the same, or nearly so, throughout most of the united kingdom. These and most other goods sold at retail—the way the laboring poor buy everything—are generally at least as cheap in large towns as in remoter parts of the country, for reasons I shall explain later. Yet wages in a large town and its surroundings are often a fourth or a fifth part, twenty or five-and-twenty per cent. higher than wages only a few miles away. Eighteen pence a day may be considered the usual wage in London and its surroundings; a few miles away it drops to fourteen and fifteen pence. Tenpence may be considered the wage in Edinburgh and its surroundings; a few miles away it drops to eightpence, the usual wage for common labor across most of the low country of Scotland, where it varies much less than in England. Such a difference in prices, apparently not always enough to move a man from one parish to another, would necessarily move bulky commodities on a vast scale, not merely between parishes but from one end of the kingdom—or almost one end of the world—to the other, until their prices became far more nearly equal. For all that has been said about human fickleness and inconstancy, experience makes it plain that of all kinds of baggage, a man is the hardest to transport. If the laboring poor can support their families where wages are lowest in the kingdom, they must live in affluence where they are highest.

Fourth, differences in the price of labor not only fail to match differences in the price of provisions, whether between places or over time; they are often directly opposed.

Grain, the food of ordinary people, is dearer in Scotland than in England, from which Scotland receives very large supplies almost every year. But English grain must sell for more in Scotland, where it is brought, than in England, where it comes from; and in proportion to its quality it cannot sell for more in Scotland than the Scottish grain competing with it in the same market. Grain’s quality depends chiefly on how much flour or meal it yields when milled; in this respect English grain so far surpasses Scottish grain that although it often seems dearer, measured by volume, it is generally cheaper in reality, measured by quality or even by weight. The price of labor, by contrast, is higher in England than in Scotland. If the laboring poor can support their families in the one part of the united kingdom, they must live in affluence in the other. Oatmeal does provide most of the food, and the best part of it, for ordinary people in Scotland; their diet is generally much worse than that of their neighbors of the same rank in England. This difference in their way of living, however, is not the cause of the difference in wages but its effect, although I have often heard it presented, through a strange misunderstanding, as the cause. One man is not rich and his neighbor poor because the first keeps a coach while the second goes on foot; the first keeps a coach because he is rich, and the second goes on foot because he is poor.

North America is not yet as rich as England, but it is growing much faster and becoming richer at a much greater rate. The clearest sign of a country’s prosperity is growth in its population. In Great Britain and most other European countries, the population is thought to take at least five hundred years to double. In the British colonies in North America, it doubles in twenty or five-and-twenty years. Today that growth comes mainly not from the steady arrival of newcomers but from people having many children. People who reach old age there often live to see fifty to a hundred direct descendants, and sometimes many more. Labor is so well paid that many children bring their parents wealth and prosperity rather than becoming a burden. Before leaving home, each child’s work is reckoned to bring the parents a clear gain of a hundred pounds. In Europe, a young widow of the middle or lower ranks with four or five small children would have little chance of finding another husband. There she is often courted as if she brought a fortune. Children’s economic value provides the strongest encouragement to marry. So it is no surprise that North Americans generally marry very young. Despite the great population growth caused by these early marriages, people constantly complain that workers are scarce. Demand for workers, and the funds set aside to support them, apparently grow faster still than the supply of people available to work.

Even if a country is very rich, wages are unlikely to be very high if its wealth has long stopped growing. The revenue and stock of its inhabitants, the funds used to pay wages, may be enormous. But if those funds have stayed the same, or nearly the same, for centuries, the number of people working each year could readily meet or exceed the next year’s demand for workers. Workers would rarely be scarce, and employers would not have to compete to hire them. Instead, the number of workers would naturally grow beyond the available jobs. Jobs would always be scarce, and workers would have to compete for them. If wages in such a country had ever exceeded what a worker needed to live and raise a family, competition among workers and employers’ interest would soon push them down to the lowest level compatible with ordinary human decency. China has long been one of the world’s richest countries: among the most fertile, best cultivated, most industrious, and most populous. Yet it seems to have long stopped growing. Marco Polo visited it more than five hundred years ago. His descriptions of its farming, industry, and population are much like descriptions by travelers today. Perhaps even before his visit, China had reached the maximum wealth that its laws and institutions allowed. Travelers’ accounts disagree on many other points, but all agree that Chinese wages are low and that workers struggle to raise families. A worker is content if a whole day digging the ground earns enough to buy a little rice that evening. The condition of craftspeople is worse, if that is possible. Instead of waiting idly in their workshops for customers, as in Europe, they constantly run through the streets carrying the tools of their trades, offering their services and practically begging for work. Poverty among China’s lower ranks far exceeds poverty among the poorest peoples of Europe. Near Canton, it is commonly said that many hundred, indeed many thousand, families have no home on land. They live all the time in small fishing boats on rivers and canals. They find so little to eat there that they eagerly fish the filthiest garbage thrown overboard by European ships out of the water. A dead animal, such as the half-rotten, foul-smelling body of a dog or cat, is as welcome to them as healthy food is to people in other countries. In China, marriage is encouraged not because children bring income, but because parents are free to destroy them. In every large town, several children are left in the streets each night or drowned in the water like puppies. Some people are even said to earn a living openly by doing this horrifying work.

China may be standing still, but it does not seem to be going backward. Its towns have not lost their inhabitants, and land once farmed is not left untended. So the country must still perform the same amount, or nearly the same amount, of labor each year. The funds that support that labor therefore cannot have fallen substantially. Despite their scant food and other necessities, the lowest-paid workers must somehow have enough surviving children to keep their numbers steady.

Things would be different in a country where the funds for supporting workers were clearly shrinking. Every year there would be less demand for servants and laborers in every type of work. Many people trained for better-paid kinds of work would fail to find jobs in their own occupations and would gladly look for work in the lowest-paid jobs. Those occupations would have too many of their own workers as well as people coming from all the others. Competition for jobs would be so intense that wages would fall to the most miserable, meager level of survival. Many would find no jobs even on these harsh terms. They would starve or be driven to survive by begging, or perhaps by committing terrible crimes. Poverty, famine, and death would quickly spread through the lowest class and then through the higher ones. The country’s population would shrink until the revenue and stock left there could easily support it. That remaining wealth would be what had escaped the tyranny or disaster that destroyed the rest. This may be close to the present condition of Bengal and some other English settlements in the East Indies. Consider a fertile country that has already lost much of its population, so food should not be very hard to obtain. If three or four hundred thousand people nevertheless die of hunger in a single year, we can be sure that the funds for supporting poor workers are rapidly shrinking. The contrast between the British constitution, which protects and governs North America, and the mercantile company, which oppresses and dominates the East Indies, may be seen most clearly in the different conditions of those places.

Generous pay for labor is therefore both a necessary effect and a natural sign of growing national wealth. Meager support for poor workers is a natural sign of a country standing still. Workers starving is a sign that it is rapidly declining.

In Great Britain today, wages appear clearly to exceed the bare amount workers need to raise families. We need not make a long or uncertain calculation of that minimum to see it. Several clear signs show that wages nowhere in the country are set by the lowest level compatible with ordinary human decency.

First, in almost every part of Great Britain, even the lowest-paid work has different summer and winter wages. Summer wages are always higher. Yet supporting a family costs more in winter because fuel is unusually expensive then. Since wages are highest when these costs are lowest, they plainly depend on how much work is done and what that work is thought to be worth, rather than the cost of support. One might say that workers should save part of their summer wages to pay winter costs, so their pay over the whole year is no greater than what their families need for the year. But we would not treat a slave, or anyone completely dependent on us for immediate support, that way. We would provide daily support in line with daily needs.

Second, British wages do not rise and fall with food prices. Those prices change everywhere from year to year and often from month to month. But in many places the money wage stays the same, sometimes for half a century. If poor workers in those places can support their families when food is expensive, they must live comfortably when supplies are moderately abundant and be well-off when food is unusually cheap. High food prices over these ten years past have not brought any noticeable rise in money wages in many parts of the kingdom. In some places wages have risen, probably more because demand for labor increased than because food prices did.

Third, food prices vary more between years than wages do, but wages vary more between places than food prices do. Bread and butcher’s meat generally cost the same, or nearly the same, across most of the united kingdom. These and most other goods sold at retail—the way poor workers buy everything—are generally at least as cheap in large towns as in remote rural areas, for reasons I will explain later. But wages in a large town and its surrounding area are often a fourth or a fifth part, twenty or five-and–twenty per cent. higher than wages a few miles away. Eighteen pence a day may be taken as the usual wage in London and nearby. A few miles away it falls to fourteen and fifteen pence. Tenpence may be taken as the wage in Edinburgh and nearby. A few miles away it falls to eightpence, the usual wage for ordinary work throughout most of lowland Scotland, where wages vary considerably less than in England. This wage difference is apparently not always enough to make a person move from one parish to another. But the same difference in the price of bulky goods would inevitably cause them to be shipped in large quantities from parish to parish, and even from one end of the kingdom—almost one end of the world—to the other. That trade would soon bring prices closer together. Whatever has been said about human fickleness, experience clearly shows that people are the hardest cargo of all to move. So if poor workers can support their families where wages are lowest in the kingdom, they must be well-off where wages are highest.

Fourth, changes in wages not only fail to match changes in food prices across places or over time. They often go in opposite directions.

Grain, the ordinary people’s food, is more expensive in Scotland than in England, which sends Scotland very large supplies almost every year. English grain must sell for more in Scotland, where it is delivered, than in England, where it comes from. Given its quality, it also cannot sell for more in Scotland than Scottish grain competing with it in the same market. Grain quality depends mainly on how much flour or meal it yields when milled. English grain is so much better than Scottish grain in this respect that, although it often appears more expensive by volume, it generally costs less for its actual quality or even by weight. By contrast, labor costs more in England than in Scotland. If poor workers can support their families in one part of the united kingdom, they must be well-off in the other. Oatmeal does provide the largest and best part of the ordinary Scottish diet, which is generally much worse than the diet of people of the same rank in England. But this difference in diet results from the difference in wages; it does not cause it, although I have often heard people mistakenly claim that it does. One man is not rich because he rides in a coach while his neighbor walks. The rich man rides because he is rich, and the poor man walks because he is poor.