Book I, Chapter VIII, 4

A generous reward for labor not only encourages population growth but also increases the industry of ordinary people. Wages encourage industry, which, like any other human quality, grows stronger in proportion to the encouragement it receives. Abundant food increases a laborer's physical strength; the comforting hope of improving his condition, perhaps of ending his days in ease and plenty, inspires him to exert that strength to the fullest. Where wages are high, therefore, we shall always find workers more active, diligent, and swift than where wages are low: in England, for example, rather than Scotland, and near great towns rather than in remote rural districts. Some workers, admittedly, will be idle for three days if they can earn enough in four to live for the week. But this is by no means true of the majority. On the contrary, when workers receive generous payment by the piece, they are very apt to overwork and ruin their health and constitution within a few years. A carpenter in London and some other places is not expected to retain his full vigor beyond eight years. Something similar occurs in many other trades paid by the piece, as workers generally are in manufactures, and even in rural labor wherever wages are unusually high. Almost every class of craftspeople suffers some particular ailment caused by excessive exertion at its particular work. Ramuzzini, an eminent Italian physician, has written a book specifically about these diseases. We do not regard our soldiers as our most industrious people. Yet when soldiers have been assigned particular kinds of work and generously paid by the piece, their officers have often had to agree with the contractor that they would not be allowed to earn more than a certain sum per day at the agreed rate. Before this condition was imposed, competition among themselves and the desire for higher earnings often led them to overwork and damage their health through excessive labor. The much-decried idleness of the other three days is frequently the real consequence of overexertion during four days of the week. After several consecutive days of hard work, whether mental or physical, most people naturally feel a powerful desire for rest, almost impossible to resist without force or some pressing necessity. Nature calls for relief through some indulgence—sometimes mere rest, sometimes amusement and diversion. If that call is ignored, the consequences are often dangerous and sometimes fatal; sooner or later they almost always bring on the ailment particular to the trade. If masters always heeded reason and humanity, they would often have cause to restrain, rather than spur on, the exertions of many of their workers. In every trade, I believe, we shall find that the person who works moderately enough to work steadily not only remains healthy longest but also accomplishes the most work over the year.

It is claimed that workers are generally idler in years when provisions are cheap, and more industrious than usual when provisions are expensive. From this it has been concluded that abundant subsistence slackens their industry while scarce subsistence stimulates it. We can hardly doubt that somewhat more plenty than usual may make some workers idle. But it seems highly improbable that it has this effect on most of them, or that people in general work better poorly fed than well fed, disheartened than hopeful, often sick than usually healthy. We should remember that years of scarcity are generally years of sickness and death among ordinary people, inevitably reducing the produce of their industry.

In years of plenty, servants often leave their masters and trust to their own industry for a living. But cheap provisions also increase the fund available for maintaining servants, encouraging masters, especially farmers, to hire more of them. On such occasions, farmers expect to profit more from their grain by feeding a few additional laboring servants than by selling it cheaply in the market. Demand for servants rises while the number willing to serve falls. Thus the price of labor often rises when provisions are cheap.

In years of scarcity, the difficulty and uncertainty of earning a living make all these people eager to return to service. But expensive provisions diminish the funds available to maintain servants, prompting masters to reduce rather than increase their numbers. In years of high prices, too, poor independent workers often use up the little stock from which they had supplied the materials of their work, and must become journeymen in order to live. More people seek employment than can readily find it; many will accept lower terms than usual; and the wages of servants and journeymen often fall when provisions are dear.

Masters of every kind therefore frequently bargain better with servants in dear years than in cheap ones, finding them humbler and more dependent in the former. They naturally praise dear years as more favorable to industry. Landlords and farmers, two of the largest classes of masters, have another reason to favor high prices: the rents of the first and the profits of the second depend heavily on the price of provisions. Yet nothing could be more absurd than to suppose that people generally work less diligently for themselves than for others. A poor independent worker will generally be more industrious even than a journeyman paid by the piece. The former keeps the entire produce of his industry; the latter shares it with his master. Working separately and independently, the former is also less exposed to the temptations of bad company, which so often corrupt the morals of workers in large manufactories. His advantage over servants hired by the month or year, whose wages and maintenance remain the same whether they do much or little, is likely greater still. Cheap years tend to increase the proportion of independent workers to journeymen and servants of every kind; dear years tend to reduce it.

Mr Messance, a French writer of great knowledge and ingenuity and receiver of the tallies in the election of St Etienne, tries to show that the poor do more work in cheap years than in dear ones by comparing the quantity and value of goods made in three manufactures under each set of conditions: coarse woolens at Elbeuf, and linen and silk throughout the whole generality of Rouen. His account, copied from the registers of public offices, shows that both the quantity and the value of goods made in all three manufactures have generally been greater in cheap years than in dear ones, always greatest in the cheapest years and least in the dearest. All three appear to be stationary manufactures: although their output may vary somewhat from year to year, on the whole they are neither expanding nor contracting.

Linen manufacture in Scotland and coarse woolen manufacture in the West Riding of Yorkshire are growing industries, whose output generally increases in both quantity and value, despite some fluctuations. Having examined the published accounts of their annual output, however, I have found no discernible connection between its fluctuations and whether provisions in a given season were dear or cheap. In 1740, a year of severe scarcity, both industries do appear to have contracted considerably. But in 1756, another year of severe scarcity, Scottish manufactures advanced more than usual. The Yorkshire industry did decline, and its output did not regain its 1755 level until 1766, after the repeal of the American stamp act. In that year and the next, its output far surpassed anything it had achieved before, and it has continued to advance ever since.

The output of all major manufactures intended for distant sale must depend less on whether provisions are dear or cheap where the goods are made than on the circumstances shaping demand where they are consumed: peace or war, the prosperity or decline of rival manufactures, and the good or bad humor of their principal customers. Moreover, much of the extraordinary work probably done in cheap years never enters the public registers of manufactures. Male servants who leave their masters become independent laborers. Women return to their parents and commonly spin to make clothing for themselves and their families. Even independent workers do not always produce goods for public sale; some are employed by neighbors to make goods for household use. Their output therefore often leaves no trace in those public registers whose records are sometimes published with such fanfare and from which our merchants and manufacturers often vainly claim to pronounce on the prosperity or decline of the greatest empires.

Although changes in the price of labor do not always match changes in the price of provisions, and often move in the opposite direction, we must not conclude that food prices have no effect on wages. Labor's money price is necessarily governed by two circumstances: demand for labor and the price of life's necessities and comforts. Whether the demand for labor is growing, stationary, or declining, and accordingly calls for a growing, stationary, or declining population, determines how much of these necessities and comforts a laborer must be given; what is required to purchase that amount determines his money wage. Thus although the money price of labor is sometimes high when provisions are cheap, it would be higher still, if demand remained the same, when provisions were expensive.

The money price of labor sometimes rises in years of sudden, extraordinary plenty and falls in years of sudden, extraordinary scarcity because demand for labor rises in the former and falls in the latter.

In a year of sudden and extraordinary plenty, many employers possess funds sufficient to maintain and employ more industrious people than they employed the year before; the additional workers cannot always be found. Masters seeking more workers therefore bid against one another to secure them, sometimes raising both the real and the money price of labor.

The reverse occurs in a year of sudden and extraordinary scarcity. The funds available to employ workers are smaller than the year before. Many people lose their employment and bid against one another to obtain work, sometimes lowering both the real and the money price of labor. In 1740, a year of extraordinary scarcity, many people were prepared to work for mere subsistence. In the years of plenty that followed, finding laborers and servants became more difficult. The scarcity of a dear year reduces demand for labor and tends to lower its price, while expensive provisions tend to raise it. Conversely, the plenty of a cheap year increases demand for labor and tends to raise its price, while cheaper provisions tend to lower it. In ordinary fluctuations of food prices, these opposing forces appear to counterbalance each other. This is probably one reason wages everywhere are so much steadier and more enduring than the price of provisions.

Higher wages necessarily raise the price of many commodities by increasing the portion of that price paid as wages, and to that extent tend to reduce consumption at home and abroad. Yet the same cause that raises wages—an increase of stock—also tends to make labor more productive, allowing a smaller amount of labor to accomplish more work. The owner of stock employing many laborers necessarily tries, for his own benefit, to divide and allocate their tasks so that they can accomplish as much work as possible. For the same reason, he tries to provide the best machinery that he or they can devise. What occurs among the workers in a particular workhouse occurs for the same reason among those in a large society. The more numerous the workers, the more naturally they divide into distinct classes and subdivisions of employment. More minds turn to inventing the machinery best suited to each task, making its invention more likely. As a result of these improvements, many commodities come to be produced with so much less labor than before that the reduction in its quantity more than offsets the increase in its price.

Generous wages encourage ordinary people to have children, and they also encourage them to work harder. Wages motivate industry. Like any other human quality, industry grows when it is encouraged. Plenty to eat makes a worker physically stronger. The hopeful prospect of improving his life, and perhaps spending his last years in comfort and plenty, drives him to use that strength fully. Where wages are high, workers are therefore more active, diligent, and quick than where wages are low. This is true in England compared with Scotland, for example, and near large towns compared with remote rural areas. Some workers do indeed take the other three days off if four days' earnings can support them all week. But most do not. On the contrary, workers paid generously by the piece often work so hard that they ruin their health and physical condition in a few years. A carpenter in London, and in some other places, is not expected to retain his full strength for more than eight years. Much the same happens in many other trades that pay by the piece. This is common in manufacturing and even in farm work where wages are unusually high. Almost every group of skilled workers suffers from some illness caused by working too hard at its particular trade. Ramuzzini, a distinguished Italian doctor, has written a book specifically about these diseases. We do not think of our soldiers as especially hardworking people. Yet when soldiers have been hired for certain kinds of work and paid well by the piece, their officers have often had to make the contractor agree to limit what they could earn each day at the agreed rate. Before that agreement, competition among the soldiers and the wish to earn more often made them overwork and harm their health. Overworking for four days is often the real reason for the other three days of idleness that people complain of so loudly. After several days of sustained hard mental or physical work, most people naturally have a strong urge to relax. Unless force or great need holds them back, they can hardly resist it. Their bodies demand a break, sometimes merely rest and sometimes amusement and diversion too. If they ignore this need, the effects are often dangerous and sometimes fatal. Sooner or later, such overwork almost always brings on an illness peculiar to their trade. If employers always listened to reason and humanity, they would often need to restrain many of their workers rather than urge them on. In every trade, I believe, the person who works at a moderate pace that he can keep up not only stays healthy longest but also gets the most work done over a year.

People claim that workers are usually lazier in years when food is cheap, and more industrious than usual when food is expensive. They conclude that abundant food weakens industry, while scarce food strengthens it. A little extra abundance may certainly make some workers idle. But it seems unlikely to have that effect on most workers. Nor does it seem likely that people generally work better when they are poorly fed rather than well fed, discouraged rather than hopeful, or often ill rather than generally healthy. Years when food is scarce are usually years of illness and death among ordinary people. That must reduce the amount of work they do.

In years of abundance, servants often leave their employers and try to live on what they earn working independently. But cheap food also increases the resources employers have to support servants. This encourages them, especially farmers, to hire more. On these occasions farmers expect to profit more by using their grain to support a few more hired farmworkers than by selling it cheaply at market. Demand for servants rises while the number willing to serve falls. Wages therefore often rise when food is cheap.

In years of scarcity, the difficulty and uncertainty of making a living make those people eager to go back into service. But expensive food reduces the resources employers have to maintain servants. They are therefore inclined to employ fewer, not more. In such years, poor independent workers also often use up the little stock they had used to buy materials for their work. To survive, they must become hired workers. More people seek jobs than can readily get them. Many will accept lower pay than usual, and the wages of both servants and hired workers often fall when food is expensive.

Employers of every kind therefore often get better terms from their servants in expensive years than in cheap years. They find servants more submissive and dependent, and naturally praise expensive years as better for industry. Landlords and farmers, two of the largest groups of employers, have another reason to welcome those years. The landlords' rents and farmers' profits depend heavily on food prices. Yet nothing is more absurd than to suppose people generally work less hard for themselves than for someone else. A poor independent worker will usually work harder even than a hired worker paid by the piece. The independent worker keeps everything his work produces; the hired worker shares it with his employer. Working separately and independently also makes the first less vulnerable to bad company, which so often corrupts workers' behavior in large factories. His advantage is likely even greater over servants hired by the month or year, who receive the same wages and upkeep whether they work much or little. Cheap years tend to increase the share of independent workers relative to hired workers and servants of every kind. Expensive years tend to reduce it.

A knowledgeable and resourceful French writer, Mr Messance, receiver of the tallies in the election of St Etienne, tries to show that poor people work more in cheap years than in expensive ones. He compares the quantity and value of goods made in three industries in those years. One makes coarse woolens at Elbeuf. The other two make linen and silk throughout the whole generality of Rouen. His figures, copied from public-office registers, show that all three industries generally produced more goods, both in quantity and value, when food was cheap than when it was expensive. Their output was always greatest in the cheapest years and smallest in the most expensive. All three industries seem to be steady overall: output changes somewhat from year to year, but they are neither growing nor shrinking.

Linen making in Scotland and coarse woolen making in the West Riding of Yorkshire are growing industries. Despite fluctuations, their output generally rises in both quantity and value. I have looked at published accounts of their annual output, however, and cannot see any clear relationship between its changes and cheap or expensive food. Both industries did decline considerably in 1740, a year of severe scarcity. But in 1756, another year of severe scarcity, Scottish manufacturing grew faster than usual. Yorkshire manufacturing did decline. Its output did not return to its 1755 level until 1766, after the American stamp act was repealed. In 1766 and the following year it rose far beyond any previous level, and it has continued growing ever since.

The output of large industries that sell to distant markets depends less on whether food is cheap or expensive where the goods are made than on conditions affecting demand where they are used. Those conditions include peace or war, the success or decline of competing industries, and whether their main customers are willing to buy. Besides, much of the extra work probably done in cheap years never appears in public manufacturing registers. Male servants who leave their employers become independent workers. Women return to their parents and commonly spin to make clothes for themselves and their families. Even independent workers do not always make things for public sale. Some make household goods for their neighbors. Their output often does not appear in public registers. Those records are sometimes published with great fanfare, and merchants and manufacturers often claim, without good reason, that they can use them to announce the prosperity or decline of great empires.

Changes in wages often do not match changes in food prices. They are often in the opposite direction. But that does not mean food prices have no effect on wages. Money wages necessarily depend on two things: demand for labor and the prices of life's necessities and comforts. Demand for labor determines how much of these goods workers must receive. It does so according to whether demand, and the population needed to meet it, is growing, steady, or declining. Money wages then depend on what it costs to buy that amount. So when food is cheap, money wages may be high. But with the same demand for labor, they would be even higher if food were expensive.

When an unexpectedly abundant harvest raises demand for labor, and an unexpectedly scarce one lowers it, money wages sometimes rise in the abundant year and fall in the scarce one.

In a year of sudden, unusual abundance, many employers have enough resources to support and hire more workers than they hired the year before. But they cannot always find all those extra workers. Employers who need more workers then bid against each other for them. This sometimes raises both the real and money wages paid for labor.

The reverse happens in a year of sudden, unusual scarcity. Employers have fewer resources for hiring workers than in the previous year. Many people lose their jobs and compete with one another for work. This sometimes lowers both real and money wages. In 1740, a year of unusual scarcity, many people were willing to work for food alone. In the plentiful years that followed, finding laborers and servants was harder. Scarcity in an expensive year reduces demand for labor and tends to lower wages, while high food prices tend to raise them. Abundance in a cheap year raises demand and tends to raise wages, while cheap food tends to lower them. With ordinary changes in food prices, these opposite forces seem to offset each other. This is probably part of the reason wages everywhere are much steadier than food prices.

Higher wages necessarily raise the prices of many goods by increasing the share of their price that pays wages. To that extent, higher wages tend to reduce purchases of these goods both at home and abroad. Yet the same thing that raises wages—an increase in stock—also tends to make labor more productive. It allows a smaller amount of labor to do more work. Someone whose stock employs many workers has an interest in dividing up and assigning their tasks so they produce as much as possible. For the same reason, the owner tries to give them the best machines that either the owner or the workers can devise. What happens among the workers in one workshop also happens throughout a large society. As their numbers increase, they naturally divide into more specialized occupations and subgroups. More minds work on inventing the best machinery for each task, so such machinery is more likely to be invented. These improvements mean that many goods take so much less labor to produce than before that the smaller amount of labor more than offsets its higher price.