Book I, Chapter XI, 16

It may also help the public set the monetary pay of some of its lower-ranking servants. If the prices of some kinds of food rise because silver falls in value, their monetary pay, provided it was not excessive before, certainly should rise in proportion to that fall. Otherwise their real reward plainly diminishes by the same amount. But if prices rise because the land producing these foods has grown more valuable through improved fertility, it is much harder to judge by how much monetary pay should rise, or whether it should rise at all. Expanded improvement and cultivation necessarily raise the prices of all kinds of animal food, more or less, relative to grain; they also necessarily lower the prices of, I believe, all kinds of vegetable food. Animal food grows dearer because much of the land that produces it becomes fit to grow grain, and must yield the landlord and farmer the rent and profit of grain land. Vegetable food grows cheaper because the increased fertility of the land makes it more abundant. Improved agriculture also introduces many kinds of vegetable food that need less land and no more labor than grain, and so come to market much more cheaply. Such are potatoes and maize, or Indian corn, perhaps the two most important improvements that European agriculture, indeed Europe itself, has gained from the great expansion of its commerce and navigation. Moreover, many vegetables grown only by the spade in kitchen gardens when agriculture is primitive come to be grown by the plow in ordinary fields as it improves: turnips, carrots, cabbages, etc. Thus, as improvement advances, the real price of one kind of food necessarily rises while that of another necessarily falls. It becomes harder to judge how far the fall in one offsets the rise in the other. Once the real price of butcher’s meat has reached its peak—as it seems to have done for every kind except perhaps hogs flesh throughout much of England more than a century ago—any further rise in the price of another kind of animal food can have little effect on the condition of the lower ranks. Surely the poor throughout much of England cannot suffer nearly as much from a rise in the price of poultry, fish, wild-fowl, or venison as they benefit from a fall in the price of potatoes.

In the present season of scarcity, the high price of grain undoubtedly hurts the poor. But in times of moderate abundance, when grain is at its ordinary or average price, the natural rise in the price of any other kind of raw produce can affect them little. Perhaps they suffer more from the artificial price increases caused by taxes on manufactured goods such as salt, soap, leather, candles, malt, beer, ale, etc.

Effects of the Progress of Improvement upon the Real Price of Manufactures.

Improvement, however, naturally tends to lower the real price of almost all manufactured goods over time. The cost of the manufacturing labor itself probably falls in every case without exception. Better machines, greater skill, and a more suitable division and distribution of work—all natural effects of improvement—allow any given task to be done with far less labor. Even if the real price of labor rises considerably as society flourishes, this great reduction in the amount needed will generally more than compensate for the greatest rise in its price.

There are indeed a few kinds of manufacture for which the necessary rise in the real price of raw materials will more than offset every advantage improvement brings to production. In carpentry, joinery, and the coarser kinds of cabinetmaking, the necessary rise in the real price of timber from uncultivated land as land improves will more than offset all the advantages of the best machines, the greatest skill, and the most suitable division and distribution of work.

But whenever the real price of the raw material does not rise at all or rises only a little, the price of the manufactured product falls considerably.

Over the present and preceding centuries, this reduction has been most striking in manufactures using the base metals. A better watch movement than one that cost twenty pounds around the middle of the last century may now perhaps be bought for twenty shillings. Over the same period, prices have fallen greatly for the work of cutlers and locksmiths, all the toys made of base metals, and all the goods commonly called Birmingham and Sheffield ware, though the reduction has not been quite so great as for watchmaking. It has nevertheless astonished workers elsewhere in Europe, who often admit that they cannot make work of equal quality for twice or even three times the price. There may be no manufactures in which the division of labor can be taken further, or whose machinery offers greater scope for improvement, than those using base metals.

Clothmaking has seen no comparably noticeable reduction in price over the same period. On the contrary, I have been told that the price of superfine cloth has risen somewhat relative to its quality in the past five-and-twenty or thirty years, allegedly because its material, entirely Spanish wool, has grown considerably dearer. Yorkshire cloth, made entirely of English wool, is indeed said to have fallen considerably in price relative to its quality over the present century. But quality is so open to dispute that I regard all such reports as somewhat uncertain. The division of labor in clothmaking is nearly the same as it was a century ago, and the machinery is not very different. Small improvements in both, however, may have brought about some price reduction.

The reduction becomes much more apparent and undeniable when we compare the present price of cloth with its price at a much earlier time, toward the end of the fifteenth century, when labor was probably divided far less and the machines used were much less advanced.

In 1487, being the 4th of Henry VII., a law provided that “whoever sells at retail a broad yard of the finest scarlet grained cloth, or any other grained cloth of the finest make, for more than sixteen shillings shall forfeit forty shillings for each yard so sold.” Sixteen shillings then contained about as much silver as four-and-twenty shillings in our present money, and was considered a reasonable price for a yard of the finest cloth. Since this was a sumptuary law, such cloth had probably usually sold for somewhat more. A guinea may be considered the highest price today. Even supposing the quality of the cloth equal—although present cloth is most probably much better—the money price of the finest cloth has plainly fallen considerably since the end of the fifteenth century. Its real price has fallen much more. Six shillings and eightpence was then, and for long afterward, considered the average price of a quarter of wheat. Sixteen shillings therefore paid for two quarters and more than three bushels of wheat. At a present valuation of eight-and-twenty shillings per quarter, the real price of a yard of fine cloth in those days must have equaled at least three pounds six shillings and sixpence in our present money. Its buyer had to give up command over as much labor and subsistence as that sum can buy today.

The reduction in the real price of coarse cloth, though considerable, has not been as great as that of fine cloth.

In 1463, being the 3rd of Edward IV., a law provided that “no servant employed in husbandry, no common laborer, and no servant of an artisan living outside a city or borough shall wear clothing made of cloth costing more than two shillings the broad yard.” In the 3rd of Edward IV., two shillings contained very nearly as much silver as four in our present money. But the Yorkshire cloth now sold at four shillings a yard is probably far better than any made then for the very poorest class of ordinary servants. Even the money price of their clothing, adjusted for quality, may thus be somewhat lower today than it was then. Its real price is certainly much lower. Tenpence was then regarded as a moderate and reasonable price for a bushel of wheat. Two shillings therefore bought two bushels and nearly two pecks of wheat, worth eight shillings and ninepence today at three shillings and sixpence a bushel. For one yard of this cloth a poor servant had to give up the power to buy as much subsistence as eight shillings and ninepence would buy today. This, too, was a sumptuary law restraining the luxury and extravagance of the poor. Their clothing, therefore, had commonly cost far more.

The same law forbade people of the same class to wear hose costing more than fourteen-pence a pair, equal to about eight-and-twenty pence of our present money. But fourteen-pence then bought a bushel and nearly two pecks of wheat, which today would cost five shillings and threepence at three and sixpence a bushel. Today we would consider this a very high price for a pair of stockings for a servant of the poorest and lowest class. Yet such a servant had to pay its real equivalent for them then.

In the time of Edward IV., knitting stockings was probably unknown anywhere in Europe. Hose were made from ordinary cloth, which may have contributed to their high price. Queen Elizabeth is said to have been the first person in England to wear stockings. She received them as a gift from the Spanish ambassador.

The machinery used in both coarse and fine woolen clothmaking was far less advanced in those days than now. Since then it has received three major improvements, as well as probably many smaller ones whose number or importance is hard to establish. First came the replacement of the distaff and spindle with the spinning wheel, which can do more than twice as much work with the same amount of labor. Second came several ingenious machines that make winding worsted and woolen yarn, or properly arranging the warp and weft before they enter the loom, easier and quicker to an even greater degree. Before these machines were invented, this operation must have been extremely slow and troublesome. Third came the fulling mill, used to thicken the cloth instead of trampling it in water. Neither windmills nor watermills of any kind were known in England as early as the beginning of the sixteenth century, or, as far as I know, elsewhere in Europe north of the Alps. They had reached Italy some time before.

These circumstances may help explain, to some extent, why the real price of both coarse and fine cloth was so much higher then than now. More labor was needed to bring the goods to market. Once there, the goods therefore had to buy, or exchange for the price of, more labor.

In those days, coarse cloth was probably made in England as it always has been where arts and manufactures are in their infancy. It was probably produced in households: members of almost every family occasionally did every part of the work, but only when they had nothing else to do, not as the principal occupation from which any of them drew most of their subsistence. As already observed, work done this way always comes to market much more cheaply than work that is the principal or sole support of its maker. Fine cloth, on the other hand, was then made not in England but in the rich commercial country of Flanders, probably by people who, then as now, earned all or most of their living from it. It was also a foreign product and must have paid some duty to the king, at least the old customs of tonnage and poundage. The duty was probably not very large. European policy then was not to restrict imports of foreign manufactures with high duties, but rather to encourage them, so that merchants could provide great men as cheaply as possible with comforts and luxuries that domestic industry could not supply.

These circumstances may also help explain why the real price of coarse cloth in those days was so much lower in relation to fine cloth than it is now.

Conclusion of the Chapter.

I shall conclude this very long chapter by observing that every improvement in society’s circumstances tends, directly or indirectly, to raise the real rent of land, increasing the landlord’s real wealth and his power to buy the labor or the product of the labor of others.

Expanded improvement and cultivation raise it directly. The landlord’s share of the produce necessarily grows as the produce grows.

The rise in the real price of those parts of the land’s raw produce that at first results from expanded improvement and cultivation, and afterward prompts their further expansion—the rise in the price of livestock, for example—also directly raises the rent of land, and by an even greater proportion. Not only does the real value of the landlord’s share, his real command over others’ labor, rise with the real value of the produce; the proportion of the whole produce that belongs to him rises too.

Collecting that produce after its real price has risen takes no more labor than before. A smaller share of it will therefore suffice to replace the stock employing that labor, with the ordinary profit. A greater share must consequently go to the landlord.

The distinction can also help the public decide how much money to pay some lower-ranking public servants. If some foods cost more because silver has lost value, their pay should certainly rise in the same proportion, assuming it was not too high to begin with. Otherwise their real pay will fall by that amount. But if prices have risen because the land producing those foods has become more valuable through improved fertility, it is much harder to judge how much, or even whether, their pay should rise. Expanding and improving cultivation necessarily raises the price of animal foods to some extent relative to grain. I believe it just as necessarily lowers the price of every kind of plant food. Animal foods cost more because much of the land that produces them becomes suitable for grain. It must then earn the landlord and farmer the rent and profit they could earn by growing grain. Plant foods cost less because more fertile land produces more of them. Agricultural improvements also introduce many plant foods that need less land and no more labor than grain, and can therefore be sold much more cheaply. Potatoes and maize, or Indian corn, are examples. These may be the two most important improvements that the expansion of trade and navigation has given European agriculture, or even Europe itself. Also, many plant foods once grown only with a spade in kitchen gardens can, with improved farming, be grown with a plow in ordinary fields. These include turnips, carrots, cabbages, etc. Thus, as a country develops, the real price of one kind of food necessarily rises while that of another falls. It is hard to judge how much one change offsets the other. Once the real price of meat has reached its highest point—as seems to have happened over much of England more than a century ago for all kinds except perhaps pork—later increases in the price of any other animal food cannot greatly affect poorer people's circumstances. Across much of England, an increase in the price of poultry, fish, wild birds, or venison surely cannot hurt the poor as much as a fall in the price of potatoes helps them.

In the current season of shortage, high grain prices certainly hurt the poor. But when supplies are reasonably plentiful and grain is at its usual or average price, a natural rise in the price of another raw product cannot affect them much. They may suffer more from the artificially high prices of manufactured goods caused by taxes on salt, soap, leather, candles, malt, beer, ale, etc.

How Development Affects the Real Price of Manufactured Goods.

Development naturally tends to lower the real price of nearly all manufactured goods over time. The cost of the labor used to make them probably falls in every case. Better machines, greater skill, and a better division and organization of work all naturally follow from development. Together they mean that much less labor is needed to make any particular item. Even if a thriving society causes the real price of labor to rise considerably, the large reduction in the amount needed will usually more than offset even a very large increase in its price.

In a few industries, though, the necessary increase in the real price of raw materials more than offsets every saving made in production. As land is developed, the real price of wood from land unsuitable for cultivation must rise. In carpentry, joinery, and rough cabinetmaking, that rise more than offsets any gain from better machines, greater skill, or a better division and organization of work.

But if the real price of raw materials rises little or not at all, the price of the finished product falls considerably.

The clearest example in this and the previous century is goods made from ordinary metals. A better watch mechanism can perhaps be bought now for twenty shillings than could have been bought for twenty pounds around the middle of the last century. Prices have also fallen greatly for knives and other cutlery, locksmiths' goods, small articles made of ordinary metals, and products commonly called Birmingham and Sheffield ware. The fall is not quite as great as for watches, but it has astonished workers elsewhere in Europe. They often admit they cannot make goods as good for twice or even three times the price. Perhaps no other industries can divide labor into so many tasks or use machines that allow for so many improvements as those working with ordinary metals.

Clothmaking has not seen such a clear fall in price over the same period. Indeed, I have been told that in the past five-and-twenty or thirty years, the price of the finest cloth has risen somewhat for a given quality. The reason given was a considerable increase in the price of its material, which is entirely Spanish wool. Yorkshire cloth, made entirely of English wool, is said to have fallen considerably in price for a given quality during the present century. But judgments about quality are very open to dispute, so I regard all such reports as somewhat uncertain. The division of labor in clothmaking is much the same as a century ago, and the machines are not very different. There may nevertheless have been small improvements in both that have brought prices down somewhat.

But the reduction becomes much clearer and harder to deny when we compare today's cloth prices with those near the end of the fifteenth century. At that time labor was probably far less divided and the machines far less effective than today.

In 1487, being the 4th of Henry VII., a law provided that “whoever sells by retail a broad yard of the finest scarlet dyed-in-the-wool cloth, or of other dyed-in-the-wool cloth of the finest workmanship, for more than sixteen shillings, must pay forty shillings for every yard sold.” Sixteen shillings then contained about as much silver as four-and-twenty shillings today. That was considered a reasonable price for a yard of the finest cloth. Since the law aimed to limit extravagant spending, such cloth had probably often sold for more. A guinea may be considered today's highest price. Even assuming that the cloth was of equal quality, though today's is probably much better, the money price of the finest cloth has clearly fallen considerably since the late fifteenth century. Its real price has fallen much more. Six shillings and eightpence was then, and for a long time afterward, considered the average price of a quarter of wheat. Sixteen shillings therefore bought two quarters and more than three bushels of wheat. At today's price of eight-and-twenty shillings per quarter, the real price of a yard of fine cloth in those days would equal at least three pounds six shillings and sixpence today. A buyer had to give up the ability to purchase as much labor and food as that sum buys now.

The real price of coarse cloth has fallen considerably too, but less than the price of fine cloth.

In 1463, being the 3rd of Edward IV., a law provided that “no farm servant, ordinary laborer, or servant of a craftsperson living outside a city or borough may wear cloth costing more than two shillings per broad yard.” In the 3rd of Edward IV., two shillings contained nearly as much silver as four shillings today. But Yorkshire cloth now sold for four shillings a yard is probably much better than any cloth then made for the poorest servants. Even its money price may therefore be somewhat lower today when quality is taken into account. Its real price is certainly much lower. Tenpence was then considered a moderate, reasonable price for a bushel of wheat. Two shillings therefore bought two bushels and nearly two pecks of wheat. At today's price of three shillings and sixpence a bushel, that wheat would cost eight shillings and ninepence. A poor servant buying a yard of this cloth had to give up the ability to purchase as much food as eight shillings and ninepence buys today. This law, too, aimed to limit the poor's luxury and extravagance. So their clothing had commonly cost much more.

The same law barred these people from wearing hose costing more than fourteen-pence per pair, equal to about eight-and-twenty pence in today's money. But fourteen-pence then bought a bushel and nearly two pecks of wheat. At today's price of three and sixpence per bushel, that would cost five shillings and threepence. Today we would think that a very high price for stockings for the poorest servants. Yet in those days they had to pay its real equivalent.

Knitting stockings was probably unknown in Europe in Edward IV's time. Hose were made from ordinary cloth, which may be one reason they were expensive. Queen Elizabeth is said to have been the first person to wear stockings in England. She received them as a gift from the Spanish ambassador.

Machines for making both coarse and fine woolen cloth were far less effective then than they are now. Since then, there have been three major improvements and probably many smaller ones whose number and importance are hard to establish. First, the spinning wheel replaced the distaff and spindle and produces more than twice as much with the same labor. Second, several clever machines made winding worsted and woolen yarn, and arranging the warp and weft before putting them in the loom, still easier and faster. Before those machines were invented, this work must have been extremely slow and difficult. Third, the fulling mill replaced treading cloth in water to thicken it. No windmills or watermills of any kind were known in England as early as the beginning of the sixteenth century, nor, as far as I know, elsewhere in Europe north of the Alps. They had reached Italy some time earlier.

These facts may partly explain why both coarse and fine cloth had much higher real prices then than now. It took more labor to bring the goods to market. Once there, they therefore had to sell for enough to buy more goods or labor.

Coarse cloth was probably made in England then much as it has always been made where crafts and manufacturing are at an early stage. It was probably made at home, with different members of nearly every household doing different parts of the work whenever they had nothing else to do. It was not their main job or the source of most of anyone's living. As already noted, work done this way is always sold much more cheaply than work on which a worker chiefly or wholly depends for a living. Fine cloth, by contrast, was not then made in England. It was made in wealthy, trading Flanders, probably by people who, then as now, earned all or most of their living from it. Because it was imported, it also had to pay the king some duty, at least the old customs on tonnage and poundage. The duty was probably not very high. European governments did not then try to restrict imports of manufactured goods with high duties. Instead, they encouraged imports, so merchants could provide powerful people as cheaply as possible with conveniences and luxuries that their own countries could not make.

These facts may also partly explain why coarse cloth cost so much less than fine cloth in real terms then compared with today.

Conclusion of the Chapter.

I will end this very long chapter with an observation. Every improvement in a society's circumstances tends, directly or indirectly, to raise the real rent of land. It increases landlords' real wealth and their ability to buy other people's labor or what that labor produces.

More extensive development and cultivation raise rent directly. As more is produced from the land, the landlord's share necessarily grows.

Higher real prices for some raw products of land also raise rent directly, and by an even greater proportion. Those higher prices first result from wider development and cultivation and then encourage further development. Rising cattle prices are one example. Not only does the landlord's share become more valuable, letting him buy more of other people's labor; his share also grows as a proportion of the total product.

Even after its real price rises, that product takes no more labor to gather than before. A smaller share will therefore be enough to replace the stock used to employ that labor and to earn the usual profit on it. A larger share must consequently go to the landlord.