.. . . OF THE NATIONAL DIFFICULTIES, DEDUCED FROM PRINCIPLES OF POLITICAL
ECONOMY, IN A LETTER TO LORD JOHN RUSSELL.

"The leanness that affects us, the objects of our misery, is an inventory to
particularise their abundance." -- Shakspeare

"How to solder, how to stop a leak--that now is the deep design of a
politician." -- Milton.

                                                  London, February, 1821,

MY LORD,

I ADDRESS your Lordship because I believe you to be sincere and zealous in
your public opinions and conduct; and because I know you to be a young man,
and therefore less likely to have your understanding incrusted by
established and received theories.

I was confirmed in this intention by an Essay, in a work generally
attributed to your Lordship, wherein you acknowledge the little satisfaction
you have hitherto received from the contradictory opinions of writers on
this subject. They are indeed, my Lord, contradictory, not only the one to
the other, but to our best feelings and plainest sense. From all the works I
have read on the subject, the richest nations in the world are those where
the greatest revenue is or can be raised; as if the power of compelling or
inducing men to labour twice as much at the mills of Gaza for the enjoyment
of the Philistines, were proof of any thing but a tyranny or an ignorance
twice as powerful. 

How far my own opinions will be conclusive with your Lordship's, I dare not
hazard a conjecture; but as many of them are uncommon, they may, as Hume
says, "repay some cost to understand them." But, my Lord, if they are true,
they have most important consequences; I therefore earnestly intreat you not
to reject them without a patient and attentive examination. 

Here then, my Lord, after having, for the interest of our suffering country,
again respectfully solicited your attention throughout the progress of this
inquiry, I leave off personally addressing you.

In the consideration of this important question, we must advert to and
reason from principles; I shall proceed therefore immediately to lay down
such as are of immediate consequence to the argument and such as must, I
presume, if the wording be not cavilled at, be universally admitted as true.

First then, I hold, or rather I presume it is universally held, that LABOUR
IS THE SOURCE OF ALL WEALTH AND REVENUE. It signifies not how our revenue
may come to us, whether as interest of money-rent of houses, lands, mines,
quarries --pensions -- profits of trade -- salary -- tithes: -- come what
way it will, through what channel it will, it must be originally derived
from labour, either our own labour, or the labour of others. 

If then, this first principle be admitted, it follows conclusively that THE
WEALTH OF A NATION, as of an individual, CONSISTS IN ITS RESERVED LABOUR:
the stores either of money, machinery, manufactures, or produce, &c. &c.
that it may possess, being the evidences and representatives of that
reserved labour.

It is not my intention to clog this inquiry with an eternal reference to the
opinions of other men -- I shall hereafter neither controvert nor advert to
them; but it will be but honest to the uninitiated here to admit, that even
this simple proposition has been objected to, and to state the nature of the
objection, that he may be satisfied an endeavour to establish every
principle against all possible objection, would require a folio rather than
a letter. Thus it has been held by some "learned Thebans" to be erroneous,
because we omit the powerful agency of nature: now this is strictly true;
but then other and more "learned Thebans" come upon us with a distinction
between "value in use" and "value in exchange" and show it is only true of
"value in use;" this is still more accurate: but then it needs two more
chapters, and, I ask, might not one chapter say to the others "we three are
sophisticated?" Does not a plain man find his common interpretation of the
language was perfectly correct? 

At the same time that I shall be scrupulously studious of brevity, to be
clear and intelligible must be the first consideration; therefore I shall
myself refine a little even upon this second principle, and, for the
avoiding future explanation, add, that the WEALTH OF A NATION CONSISTS IN
ITS RESERVED SURPLUS LABOUR by which I mean the reserved labour beyond its
usual and necessary consumption; for without this distinction, which, though
too indefinite and inaccurate, may serve my purpose, the wealth of a nation
would vary with the seasons; before harvest and after harvest materially.
Now, however, that I have been stayed by this literal accuracy, I may add
that when I shall hereafter speak of the surplus labour of a man, I mean by
it, the representative of all the labour of the individual beyond what is
exclusively appropriated to the maintenance and enjoyment of himself and
family, But once for all, as I profess to neither to be learned nor critical
on this subject, I trust the reader will allow my language the utmost
latitude of meaning if by so doing it may include what is true, or will
limit and restrict any particular word or phrase, if in a general or more
extensive sense the opinion would be erroneous; -- this blundering attempt
at definition has already made me despair of any thing like accuracy. 

The wealth of a nation having been now defined to be its reserved surplus
labour, I shall add that RESERVED SURPLUS LABOUR IS CAPITAL, and further,
that reserved SURPLUS LABOUR OR CAPITAL HAS A POWER OF REPRODUCTION, or of
FACILITATING PRODUCE when invested in machinery, lands, agricultural
improvements, &c. &c.

These are some of the best principles with which to begin this inquiry,
because they are the least likely to be disputed; but there are certain
consequences I shall proceed to deduce from them, neither so immediately
apparent, nor so certain as to leave me the same assurance of universal
assent. The intent and object of all writers of political economy has
hitherto been, to suggest the best means of increasing the wealth or capital
of a country; now NATURE, I say, HAS PUT BOUNDS TO THE ACCUMULATION OF
CAPITAL, and further, for this is the great practical purpose of the
argument, I hope to shew that THE ACCUMULATION OF CAPITAL IS VERY LIMITED,
if the happiness of the whole, and not the luxuries of a few, is the proper
subject for national congratulation.

We will examine the question simply. Suppose the whole labour of the country
to raise just sufficient for the support of the whole population; it is
evident there is no surplus labour, consequently, nothing that can be allowed
to accumulate as capital.

Suppose the whole labour of the country to raise as much in one year as
would maintain it two years, it is evident one year's consumption must
perish, or for one year men must cease from productive labour. But the
possessors of the surplus produce, or capital, will neither maintain the
population the following year in idleness, nor allow the produce to perish;
they will employ them upon something not directly and immediately
productive, for instance, in the erection of machinery, &c. &c. &c. But the
third year, the whole population may again return to productive labour, and
the machinery erected in the last year coming now into operation it is
evident the produce of the whole will be greater than the first years
produce, by the additional power of the machinery and consequently that the
superabundant produce will be one whole year's consumption, and the produce
of the machinery in addition. It will follow still more necessarily,
therefore, either that this surplus labour must perish, or be put to use as
before; and this usance again adds to the productive power of the labour of
the society, and so on progressively, till men must cease from productive
labour for a time, or the produce of their labour must perish.


This is the palpable consequence in the simplest state of society, and
neither the detail of figures, the jargon of our political economists, nor
the complexity of existing institutions, can alter this consequence,
although the one may confuse us in discourse, and the other abuse us in the
endeavour; and, in proof, we will proceed to trace the progress of the
accumulation of capital in existing societies, which will be found
confirmatory of what I have stated. 

The first step is, that the possessor of capital, never mind how obtained
nor how invested, whether in lands, houses, money, or manufactures,
engrosses so much of the labour of others for the use of his capital, as
they are able to benefit by its use, and this is what is called interest of
money, profits of trade, rent, &c. But as all men that have ever felt the
accumulative power of money have a passion to accumulate it, the
accumulation of capital would proceed, and as capital has a reproductive
power, produce would go on increasing, until no man would avail himself of
the capital of another, and consequently till no man could live on his
capital, because no man would give, his labour for its use.* Here then the
evil would have corrected itself, and the society would be in the same
situation as in the first year, with this difference -only, that its surplus
produce must perish, because there is no further means of investing it. THE
PROGRESS OF THIS INCREASING CAPITAL WOULD, in established societies, BE
MARKED BY THE DECREASING INTEREST OF MONEY, Of which is the same thing the
decreasing quantity of the labour of others that would be given for its use;
but so long as capital could command interest at all, it would seem to
follow, that the society cannot have arrived at that maximum of wealth, or
of productive power, when its produce must be allowed to perish. 

When, however, it shall have arrived at this maximum, it would be ridiculous
to suppose, that society would still continue to exert its utmost productive
power. The next consequence therefore would be, that where men heretofore
laboured twelve hours they would now labour six, and this is national
wealth, this is national prosperity . After all their idle sophistry, there
is, thank God no means of adding to the wealth of a nation but by adding to
the facilities of living: so that wealth is liberty -- liberty to seek
recreation -- liberty to enjoy life -- liberty to improve the mind: it is
disposable time, and nothing more. Whenever a society shall have arrived at
this point, whether the individuals that compose it, shall, for these six
hours, bask in the sun, or sleep in the shade, or idle, or play, or invest
their labour in things with which it perishes, which last is a necessary
consequence if they will labour at all, ought to be in the election of every
man individually. [cont.]


*Even in these Utopian speculations the great land-holder should possibly,
be excepted; a rent, equal to the expense on importation, being always secure
to him. No increase of capital could entirely destroy the rent of lands,
because but a small part of the rental is payment for the use of capital, but
for the use of the land, which no capital can increase; --it is a payment
because the land-holder has a monopoly, a payment for nothing.

(From _The Source and Remedy of the National Difficulties, deduced from
principles of political economy in a letter to Lord John Russell_,
Anonymous, London: Rodwell and Martin, 1821.)



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