Book I, Chapter X, 4

In wealthy countries, the market is generally so extensive that any one trade can employ all the labor and stock of those engaged in it. People who live by one occupation while earning a little extra from another are found mainly in poor countries. Something of the same kind, however, occurs in the capital of a very rich one. I believe that no European city has more expensive house rent than London, yet I know no capital where a furnished room can be rented so cheaply. Lodging is not only much cheaper in London than in Paris; for lodging of equal quality it is much cheaper than in Edinburgh. Odd as it may seem, high house rent causes cheap lodging. Rent is high in London partly for the reasons that make it high in all great capitals: costly labor; costly building materials, generally brought from far away; and, above all, costly ground rent, since every landlord acts as a monopolist and often charges more for one acre of poor town land than can be had for a hundred of the best acres in the country. But it is high partly because local manners and customs oblige every head of a household to rent an entire house, from top to bottom. In England a dwelling house means everything beneath a single roof. In France, Scotland, and many other parts of Europe it often means only one floor. A London tradesman must rent a whole house in the part of town where his customers live. His shop occupies the ground floor, his family and he sleep in the attic, and he tries to meet part of the house rent by letting the two middle floors to lodgers. He expects to support his family from his trade, not his lodgers. In Paris and Edinburgh, by contrast, people who let lodgings commonly have no other livelihood; the charge for lodging must cover not only the house rent but all the family’s expenses.

PART II.—Inequalities Caused by the Policy of Europe.

These are the inequalities in the sum of advantages and disadvantages of the various employments of labor and stock that arise from the absence of any one of the three conditions mentioned above, even under the fullest freedom. But European policy, by denying things that full freedom, causes other inequalities of far greater importance.

It does so chiefly in three ways: first, by restricting competition in some occupations to fewer people than would otherwise wish to enter them; second, by increasing it in others beyond its natural level; and third, by obstructing the free movement of labor and stock both between occupations and between places.

First, European policy creates a very significant inequality in the sum of advantages and disadvantages of the different employments of labor and stock by restricting competition in some to fewer people than would otherwise wish to enter them.

The exclusive privileges of corporations are its chief means of doing so.

The exclusive privilege of an incorporated trade necessarily confines competition in its town to those who have the freedom of that trade. To gain this freedom one commonly has to serve an apprenticeship in the town under a properly qualified master. The corporation’s bylaws sometimes regulate how many apprentices a master may have, and almost always how many years each must serve. Both rules are intended to confine competition to far fewer people than would otherwise want to enter the trade. Limiting the number of apprentices does this directly. A long apprenticeship does so less directly, but just as effectively, by raising the cost of training.

In Sheffield, a corporation bylaw allows a master cutler no more than one apprentice at a time. In Norfolk and Norwich, a master weaver may have no more than two, on pain of forfeiting five pounds a month to the king. A master hatter may have no more than two apprentices anywhere in England or the English plantations, on pain of forfeiting five pounds a month, half to the king and half to whoever brings suit in a court of record. Although confirmed by a public law of the kingdom, both these regulations plainly spring from the same corporate spirit that enacted Sheffield’s bylaw. London’s silk weavers had been incorporated barely a year when they enacted a bylaw barring any master from keeping more than two apprentices at once. It took a special act of parliament to repeal it.

In ancient times, seven years seems to have been the usual duration of apprenticeship in most incorporated trades throughout Europe. All such incorporations were once called universities, indeed the proper Latin name for any corporation at all. The university of smiths, the university of tailors, etc., are expressions commonly found in old charters of ancient towns. When the particular corporations now called universities were first established, the period of study required for a master of arts degree was evidently modeled on the apprenticeship period in ordinary trades, whose corporations were much older. Just as seven years of work under a properly qualified master entitled a person to become a master and have apprentices of his own in an ordinary trade, so seven years of study under a properly qualified master entitled him to become a master, teacher, or doctor—terms once synonymous—in the liberal arts, and to have scholars or apprentices—also originally synonymous—study under him.

The 5th of Elizabeth, commonly called the Statute of Apprenticeship, enacted that henceforth no person might practice any trade, craft, or mystery then practiced in England without first serving an apprenticeship of at least seven years. What had been the bylaw of numerous individual corporations thus became the general public law for all trades in England’s market towns. Although the statute’s language is very broad and plainly seems to cover the whole kingdom, judicial interpretation has confined it to market towns: people in country villages have been allowed to practice several trades without a seven years apprenticeship in each, because the inhabitants need those trades and there often are not enough people to supply each with its own workers. A strict reading of its language has likewise confined the statute to trades established in England before the 5th of Elizabeth, without extending it to those introduced since. This restriction has produced distinctions that, considered as rules for public order, are about as foolish as one could imagine. It has been ruled, for instance, that a coachmaker may neither make his own coach wheels nor employ journeymen to make them, but must buy them from a master wheelwright, since wheelwrighting was practiced in England before the 5th of Elizabeth. A wheelwright, however, even without an apprenticeship to a coachmaker, may make coaches himself or hire journeymen to do it: coachmaking falls outside the statute because it was not practiced in England when the statute was passed. Many manufactures of Manchester, Birmingham, and Wolverhampton fall outside it for the same reason: they were not practiced in England before the 5th of Elizabeth.

In France, apprenticeships last different lengths of time in different towns and trades. In Paris many require five years; but in many of these trades a person must then serve five more years as a journeyman before becoming qualified to practice as a master. During this latter period he is called his master’s companion, and the period his companionship.

Scotland has no general law uniformly regulating the duration of apprenticeships. The term varies between corporations. Where it is long, one can usually redeem part of it by paying a small fine. In most towns a very small fine will also buy the freedom of any corporation. Weavers of linen and hempen cloth, the country’s principal manufactures, and all the artisans serving them—wheelmakers, reelmakers, etc.—may practice in any incorporated town without paying a fine. In all incorporated towns anyone may sell butcher’s meat on any lawful day of the week. Three years is a common Scottish apprenticeship even in some very delicate trades; and in general I know no European country whose corporation laws are less oppressive.

The property every person has in his own labor is the original foundation of all other property, and therefore the most sacred and inviolable. A poor man’s patrimony lies in the strength and skill of his hands. To prevent him from employing them as he thinks fit, when he does his neighbor no harm, is a plain violation of this most sacred property. It is an obvious encroachment on the rightful liberty of both the worker and those willing to employ him. It prevents him from working at what he chooses, and them from hiring whom they choose. Surely employers, who have so much at stake, can be trusted to judge whether he is fit for employment. The legislator’s show of anxiety that they might hire an unsuitable person is plainly as intrusive as it is oppressive.

Long apprenticeships offer no assurance that shoddy workmanship will not often be put on public sale. When that happens it is generally due to fraud, not inability, and no length of apprenticeship can guard against fraud. Entirely different rules are needed to prevent this abuse. The sterling mark on silver plate and the stamps on linen and woolen cloth give buyers much greater assurance than any apprenticeship statute. Buyers generally look for these marks, but never think it worth asking whether a worker served a seven years apprenticeship.

Long apprenticeships do nothing to make young people industrious. A journeyman paid by the piece is likely to work hard because he benefits from every exertion. An apprentice is likely to be idle, and almost always is, because he has no immediate interest in working otherwise. In humbler occupations the sweetness of labor lies entirely in its reward. Those able to enjoy that reward soonest are likeliest to develop a taste for work and acquire industrious habits early. A young man naturally comes to dislike labor when he spends a long time receiving no benefit from it. Boys apprenticed through public charities are generally bound for longer than the usual period, and generally turn out very idle and worthless.

The ancients knew nothing of apprenticeships. The reciprocal duties of master and apprentice occupy an important place in every modern legal code. Roman law says nothing at all about them. I know of no Greek or Latin word—I believe I could venture to say there is none—that conveys what we now mean by apprentice: a servant bound for a period of years to work in a particular trade for a master’s benefit on condition that the master teach him the trade.

Long apprenticeships are entirely unnecessary. Arts far more advanced than ordinary trades, such as clockmaking and watchmaking, hold no mystery requiring a long course of instruction. Inventing such beautiful machines in the first place, and even inventing some of the tools used to make them, undoubtedly required profound thought and much time, and may rightly count among the happiest achievements of human ingenuity. But once the machines and tools have been invented and are well understood, thoroughly explaining to a young man how to use the tools and construct the machines can scarcely require more than a few weeks of lessons; perhaps a few days would suffice. In ordinary mechanical trades a few days would certainly be enough. Manual skill, even in ordinary trades, admittedly takes considerable practice and experience. Yet a young man would practice far more diligently and attentively if he worked from the beginning as a journeyman, paid according to the little work he could do and himself paying for materials he sometimes spoiled through clumsiness and inexperience. His training would generally be more effective and always less tedious and expensive. The master, admittedly, would lose out: he would lose all the apprentice’s wages that he now saves over seven years. Perhaps in the end the apprentice himself would lose out too. With a trade so easily learned he would face more competitors, and his wages as a fully trained worker would be much lower than now. Increased competition would reduce masters’ profits as well as workers’ wages. Trades, crafts, mysteries—all would lose. But the public would gain, for the work of every artisan would reach the market much more cheaply.

Corporations and most corporation laws were established to prevent just this fall in prices, and hence in wages and profit, by restraining the free competition that would certainly cause it. In ancient times, in many parts of Europe, a corporation could be established solely by the authority of the incorporated town where it was situated. In England a royal charter was also required. This royal prerogative, however, seems to have been reserved more to extract money from subjects than to defend their common freedom from oppressive monopolies. Once a fine was paid to the king, the charter seems usually to have been readily granted. And when a particular group of artisans or traders chose to act as a corporation without a charter, these so-called adulterine guilds were not always stripped of their privileges on that account, but were required to pay an annual fine to the king for permission to exercise privileges they had usurped [See Madox Firma Burgi p. 26 etc.]. Direct supervision of every corporation, and of the bylaws it chose for its own governance, belonged to the incorporated town where it was established. Discipline over them usually came not from the king but from that larger corporation of which the smaller ones were parts or members.

In wealthy countries, a market is usually large enough for a single trade to use all the labor and stock of those engaged in it. People who live by one job while earning a little extra from another are found mainly in poor countries. Yet there is a similar example in the capital of a very rich country. I believe no city in Europe has higher house-rent than London. But I know no capital where a furnished room can be rented more cheaply. Lodgings in London cost much less than in Paris. They also cost much less than equally good lodgings in Edinburgh. Oddly enough, high house-rent is what makes lodgings cheap. Rents in London are high partly for the reasons they are high in all great capitals: labor is expensive, building materials must generally be brought from far away and are expensive, and, above all, ground-rent is expensive. Every landlord acts like a monopolist and often charges more rent for a single acre of poor town land than can be had for a hundred acres of the best country land. But rents are also high partly because of the local custom requiring every head of a family to rent an entire house, from top to bottom. In England, a dwelling-house means everything under one roof. In France, Scotland, and many other parts of Europe, it often means only one floor. A London shopkeeper must rent a whole house in the area where his customers live. His shop is on the ground floor, and his family sleeps in the attic. He tries to cover part of the rent by letting the two middle floors to lodgers. He expects to support his family through his trade, not his lodgers. In Paris and Edinburgh, however, people who let lodgings commonly have no other way to support themselves. The lodging price must therefore pay not just their rent but all their family expenses.

PART II.—Inequalities Caused by European Policy.

These are the inequalities in the overall advantages and disadvantages of different ways of using labor and stock caused by the absence of any of the three conditions mentioned above. They arise even where there is complete freedom. But European policy does not allow complete freedom and causes other, much more important inequalities.

It does so chiefly in three ways. First, it limits competition in some occupations to fewer people than would otherwise wish to enter them. Second, it increases competition in others beyond its natural level. Third, it obstructs the free movement of labor and stock between occupations and between places.

First, European policy creates a very important inequality in the overall advantages and disadvantages of different uses of labor and stock by restricting competition in some occupations to fewer people than would otherwise wish to enter them.

Exclusive privileges granted to trade corporations are its main tool for doing so.

In a town, the exclusive privilege of an incorporated trade necessarily limits competition to those admitted as members of that trade. To gain admission, a person usually must have served an apprenticeship in the town under a properly qualified master. The corporation’s rules sometimes control how many apprentices a master may have, and almost always how many years each apprentice must serve. Both rules aim to keep the number of potential competitors much smaller than it would otherwise be. A limit on apprentices directly restricts competition. A long apprenticeship restricts it less directly, but just as effectively, by making training more costly.

In Sheffield, a corporation rule allows no master cutler more than one apprentice at a time. In Norfolk and Norwich, a master weaver may have no more than two apprentices, or he forfeits five pounds a month to the king. Nowhere in England or the English plantations may a master hatter have more than two apprentices. The penalty is five pounds a month, half for the king and half for anyone who sues in a court of record. Both these rules have been confirmed by a public law of the kingdom. Yet they clearly come from the same corporation mentality that produced the Sheffield rule. The silk-weavers in London had been incorporated for barely a year when they passed a rule limiting each master to two apprentices at a time. Parliament had to pass a special act to repeal it.

In earlier times, seven years seems to have been the usual apprenticeship for most incorporated trades throughout Europe. All such corporations were once called universities, the proper Latin term for any corporation at all. Old charters of ancient towns commonly speak of the university of smiths, the university of tailors, etc. When the institutions now specifically called universities first arose, they apparently copied from older trade apprenticeships the number of years required to study for a master of arts degree. To become a master in an ordinary trade and take apprentices himself, a person had to work seven years under a qualified master. Likewise, to become a master, teacher, or doctor in the liberal arts—terms that once meant the same thing—he had to study seven years under a qualified master. He could then have scholars or apprentices study under him; those terms, too, originally meant the same thing.

The 5th of Elizabeth, commonly called the Statute of Apprenticeship, declared that no one could thereafter practice any trade, craft, or skilled occupation then practiced in England unless he had served at least seven years as an apprentice in it. What had previously been a rule of many individual corporations thus became the general public law for trades in English market towns. The statute’s wording is very broad and plainly seems to cover the whole kingdom. In practice, however, its effect has been limited to market towns. Courts have held that in country villages a person may practice several trades without serving seven years in each one. Such trades are needed by the residents, and villages often do not have enough people to provide separate workers for every trade. A strict reading of the wording has also limited the law to trades established in England before the 5th of Elizabeth. It has never applied to trades introduced since then. This limitation has produced several distinctions that seem as foolish as any imaginable rules of public order. For example, a coachmaker has been ruled unable to make his own coach-wheels or employ journeymen to make them. He must buy them from a master wheelwright, since wheelwrights worked in England before the 5th of Elizabeth. Yet a wheelwright who has never apprenticed as a coachmaker may make coaches himself or hire journeymen to make them. Coachmaking is outside the statute because it was not practiced in England when the statute was made. Many manufactures in Manchester, Birmingham, and Wolverhampton are outside it for the same reason: they did not exist in England before the 5th of Elizabeth.

In France, apprenticeships vary in length by town and by trade. In Paris, many trades require five years. But in many of them a person must then work five more years as a journeyman before he can practice as a master. During this second period he is called his master’s companion, and the period is called his companionship.

Scotland has no general law setting the length of all apprenticeships. The period varies between corporations. Where it is long, a person can usually pay a small fine to avoid part of it. In most towns, too, a very small fine buys membership in any corporation. Weavers of linen and hempen cloth, the country’s main manufactures, and craftspeople who support them, such as wheel-makers and reel-makers, may practice in any incorporated town without paying a fine. In all incorporated towns, anyone may sell butchers’ meat on any lawful day of the week. In Scotland, three years is a common apprenticeship even for some very delicate trades. In general, I know of no European country where corporation laws impose so little hardship.

A person’s property in his own labor is the original basis of all other property and so is the most sacred and secure kind. A poor man’s inheritance is the strength and skill of his hands. Preventing him from using them as he sees fit, when he does not harm his neighbor, plainly violates this sacred property. It clearly intrudes on the rightful freedom of both the worker and those who might wish to hire him. It stops him from doing the work he chooses and stops them from hiring the person they choose. Employers can surely judge for themselves whether a person is fit for the work; they have a strong interest in getting it right. The lawmaker’s show of concern that they might hire the wrong person is plainly both meddlesome and oppressive.

Long apprenticeships cannot ensure that shoddy workmanship will not often be offered for sale. When that happens, it is generally due to fraud, not a lack of skill. Even the longest apprenticeship cannot prevent fraud. Different rules are needed to prevent this abuse. The sterling mark on silverware and the stamps on linen and woolen cloth give buyers much better protection than any apprenticeship law. A buyer usually checks those marks but never thinks it worth asking whether the worker served a seven-year apprenticeship.

Long apprenticeships do nothing to teach young people to work hard. A journeyman paid by the piece has reason to work hard because every extra effort benefits him. An apprentice has no immediate reason to do so and is therefore likely to be idle, as he almost always is. In the lower occupations, the satisfaction of work lies entirely in being paid for it. Those who can enjoy that reward sooner are more likely to come to like work sooner and develop a habit of working hard at an early age. A young man naturally comes to dislike work if he gets no benefit from it for a long time. Boys apprenticed through public charities are generally bound for more than the usual number of years. They generally turn out very idle and unreliable.

The ancients did not have apprenticeships at all. Every modern legal code devotes substantial space to the mutual duties of master and apprentice. Roman law says nothing about them. I know of no Greek or Latin word—and I believe I could safely say there is none—that expresses what we now mean by apprentice: a servant bound to work in a particular trade for a master’s benefit for a number of years, on condition that the master teaches him the trade.

Long apprenticeships are entirely unnecessary. Skills far more advanced than ordinary trades, such as making clocks and watches, have no secrets that demand years of instruction. Inventing such fine machines in the first place, and even inventing some of the tools used to make them, certainly required deep thought and a great deal of time. These inventions rightly rank among the finest achievements of human ingenuity. But once the machines and tools have been invented and are well understood, fully teaching a young man how to use the tools and build the machines cannot take more than a few weeks of lessons. Perhaps a few days would be enough. A few days of lessons would certainly be enough for ordinary mechanical trades. Of course, gaining manual skill even in ordinary trades takes a great deal of practice and experience. But a young man would practice much more carefully and diligently if he worked from the beginning as a journeyman. He would receive pay according to the small amount of work he could do and, in turn, pay for materials he sometimes ruined through clumsiness or inexperience. His training would generally be more effective and always less tedious and costly. The master, however, would lose out. He would lose the apprentice’s wages, which he now keeps for seven years. In the end, the apprentice himself might also lose out. In a trade so easy to learn, he would face more competitors. Once fully trained, he would earn much less than he does now. The same increased competition would lower masters’ profits as well as workers’ wages. All the trades and crafts would lose. But the public would gain, since all craftspeople’s work would reach the market at a much lower price.

Corporations and most corporation laws have been created to prevent this drop in prices, and therefore in wages and profits, by limiting the free competition that would certainly cause it. In ancient times, in many parts of Europe, establishing a corporation required only the authority of the incorporated town where it was formed. In England it also required a royal charter. But the crown seems to have kept this power mainly to collect money from its subjects, rather than to protect everyone’s freedom from oppressive monopolies. The charter was generally granted readily when a fine was paid to the king. Sometimes a group of craftspeople or traders acted as a corporation without a charter. These groups were called adulterine guilds. They were not always stripped of their privileges for that reason, but instead had to pay the king a fine each year for permission to use the privileges they had taken [See Madox Firma Burgi p. 26 etc.]. The incorporated town directly supervised all its corporations and the internal rules they chose to adopt. Any discipline imposed on them usually came not from the king but from the larger town corporation of which these smaller ones were parts.