Commercial society deforms human nature
sashawonder
socb42_reading.docxSOCB42 READING WEEK1
page 1~5:
· The produce of annual labour supplies annual consumption, better or worse according to the proportion of produce to people, which proportion is regulated by the skill/etc. of the labour and the proportion of useful labourers, and more by the skill/etc. than by the proportion of useful labourers, as is shown by the greater produce of civilized societies.
page 9~32:
· Division of labour is the great cause of its increased powers, as may be better understood from a particular example, such as pin-making.(?)
· The effect is similar in all trades and also in the division of employments.
· The advantage is due to three circumstances:
-1) improved dexterity.
-2) saving of time.
-3) application of machinery, invented by workmen, or by machine-makers and philosophers.
· Hence the universal opulence of a well-governed society, even the day-labourer’s coat being the produce of a vast number of workmen.
· The division of labour arises from a propensity in human nature to exchange. This propensity is found in man alone. It’s encouraged by self-interest and leads to division of labour, thus giving rise to differences of talent more important than the natural differences, and rendering those differences useful.
· Division of labour is limited by the extent of the power of exchanging. Various trades cannot be carried on except in towns.
· Water-carriage widens the market, and so the first improvements are on the seacoast or navigable rivers, for example among the ancient nations on the Mediterranean coast.
· Improvements first took place in Egypt, Bengal and China; while Africa, Tartary and Siberia, and also Bavaria, Austria and Hungary are backward.
page 349~351:
· In the rude state of society stock is unnecessary. Division of labour makes it necessary.
· Accumulation of stock and division of labour advance together. Accumulation causes the same quantity of industry to produce more.
· This Book treats of the nature of stock, the effects of its accumulation, and its different employments.
page 422~439:
· There are two sorts of labour, productive and unproductive. Many kinds of labour besides menial service are unproductive.
· The proportion of the produce employed in maintaining productive hands determines the next year’s produce.
· Part of the produce replaces capital, part constitutes profit and rent. That which replaces capital employs none but productive hands, while unproductive and those who do not labour are supported by revenue.
· So the proportion of productive hands depends on the proportion between profit with rent and the part of produce which replaces capital. Rent anciently formed a larger proportion of the produce of agriculture than now. Profits were anciently a larger share of the produce of manufactures, so the proportion of produce required for replacing capital is greater than it was.
· The proportion between the funds determines whether the inhabitants of the country shall be industrious or idle. Increase or diminution of the capital of a country consequently increases or diminishes its annual produce. Capitals are increased by parsimony or saving. What is saved is consumed by productive hands.
· The frugal man establishes a perpetual fund for the employment of productive hands. Whether he spends on home or foreign commodities makes no difference. If he had not spent there would have been just as much money in the country and the goods produced by productive hands as well. Besides, when the annual produce diminishes, money will go abroad; and on the other hand money will come in when the annual produce increases. So even if the real wealth of a country consisted of its money, the prodigal would be a public enemy.
· Injudicious employment of capital has the same effect as prodigality. Frugality and prudence predominate. Prodigality is more intermittent than the desire to better our condition. Imprudent undertakings are small in number compared to prudent ones. Public prodigality and imprudence are more to be feared than private, but are counter-acted by private frugality and prudence.
· To increase the produce of a nation an increase of capital is necessary. If, therefore the produce has increased, we may be sure the capital has increased. This has been the case of almost all nations in peaceable times.
page 442~446:
· Apart from increase or diminution of capital different kinds of expense may be distinguished. An individual who spends on durable commodities will be richer than one who spends on perishable ones, the same thing is true of a nation.
· The former expense is easier to bring to an end, and gives maintenance to more people. It does not follow that it betokens a more generous spirit.
page 33~35:
· Division of labour being established, every man lives by exchanging. Difficulties of barter lead to the selection of one commodity as money, for example, cattle, salt, shells, cod, tobacco, sugar, leather and nails.
· Metals were eventually preferred because durable and divisible.
page 41~42:
· The next inquiry is what rules determine exchangeable value. Value may mean either value in use or value in exchange.
· 3 questions, 1) wherein consists the real price of commodities, 2) what are the different parts of this price, 3) why the market price sometimes diverges from this price, Will be answered in the next 3 chapters.
page 78~90:
· Ordinary or average rates of wages, profit, and rent may be called natural rates, to pay which a commodity is sold at its natural price, or for what it really costs, which includes profit, since no one will go on selling without profit.
· Market price is regulated by the quantity brought to market and the effectual demand. When the quantity brought falls short of the effectual demand, the market price rises above the natural; when it exceeds the effectual demand the market price falls below the natural; when it is just equal to the effectual demand the market and natural price coincide.
· It naturally suits itself to the effectual demand. When it exceeds that demand, some of the component parts of its price are below their natural rate; when it falls short, some of the component parts are above their natural rate. Natural price is the central price to which actual prices gravitate.
· Industry suits itself to the effectual demand, but the quantity produced by a given amount of industry sometimes fluctuates. The fluctuations fall on wages and profit more than on rent, affecting them in different proportions according to the supply of commodities and labour. But market price may be kept above natural for a long time, in consequence of want of general knowledge of high profits, or in consequence of secrets in manufactures, which may operate for long periods, or in consequence of scarcity of peculiar soils, which may continue for ever.
· A monopoly has the same effect as a trade secret, the price of monopoly being the highest which can be got. Corporation privileges/etc., are enlarged monopolies.
· Market price is seldom long below natural price, though apprenticeship and corporation laws sometimes reduce wages much below the natural rate for a certain period. Natural price varies with the natural rate of wages, profit and rent.
SOCB42 READING WEEK2
page 91~101:
· Produce is the natural wages of labour. Originally the whole belonged to the labourer. If this had continued, all things would have become cheaper, though in appearance many things might have become dearer. This state was ended by the appropriation of land and accumulation of stock, rent being the first deduction, and profit the second, both in agriculture, and other arts and manufactures.
· The independent workman gets profit as well as wages, but this case is infrequent. Wages depend on contract between masters and workmen. The masters have the advantage, though less is heard of masters’ combinations than of workmen’s. But masters cannot reduce wages below a certain rate, namely, subsistence for a man and something over for a family.
· Wages may be considerably above this rate, when there is an increasing demand for labourers, which is caused by an increase of the funds destined for the payment of wages. The funds consist of surplus revenue and surplus stock.
· The demand for labourers therefore increases with the increase of national wealth. High wages are occasioned by the increase, not by the actual greatness of national wealth.
· North America is more thriving than England. Wages are not high in a stationary country however rich.
page 110~117:
· High earning of labour are an advantage to the society. Poverty doesn’t prevent births, but is unfavourable to the rearing of children, and so restrains, while the liberal reward of labour encourages it as the wear and tear of the free man must be paid for just like that of the slave, though not so extravagantly.
· High wages increase population. The progressive state is the best for the labouring poor.
· High wages encourage industry. The opinion that cheap years encourage idleness is erroneous. Wages are high in cheap years, and low in dear years, so that masters commend dear years.
page 138~151:
· Advantages and disadvantages tend to equality where there is perfect liberty. Actual differences of pecuniary wages and profits are due partly to counterbalancing circumstances and partly to want of perfect liberty.
· There are 5 counterbalancing circumstances:
1, Wages vary with the agreeableness of the employment. Some very agreeable employments are exceedingly ill paid.
2, Wages vary with the cost of learning the business. The cost of apprenticeship accounts for the wages of manufacturers being higher than those of country labourers. Education for liberal professions is more costly and the pecuniary recompense consequently higher. Profits are not much affected by this circumstance.
3, Wages vary with constancy of employment.
4, Wages vary with the trust to be reposed. Profits are unaffected by trust.
5, Wages vary with the probability of success.
· Law and similar professions are nevertheless crowded. Public admiration makes a part of the reward of superior abilities, except in the peculiar case of players, opera singers etc.
· The greater part of men have an over-weening conceit of their abilities: lotteries show that the chance of gain is overvalued, and the moderate profit of insurers shows that the chance of loss is undervalued.
· Young people are particularly prone to overvalue the chance of gain and undervalue the risk of loss. For this reason soldiers are poorly paid, and sailors not much better.
page 158~161:
· 3 things are necessary as well as perfect freedom:
1, The employments must be well known and long established, since new trades yield higher wages and higher profits.
2, The employments must be in their natural state, since the demand of labour in each employment varies from time to time and profits fluctuate with the price of the commodity produced.
3, The employments must be the principal employment of those who occupy them, since people maintained by one employment will work cheap at another.
page 164~166, 179, 185~186:
· The policy of Europe occasions more important inequalities in 3 ways:
1, It restricts competition in some employments, principally by giving exclusive privileges to corporations, which require long apprenticeship and limit the number of apprentices. 7 years is the usual period of apprenticeship. The Statute of Apprenticeship, which required it everywhere in England, has been confined to market towns, and to trades existing when it was passed.
2, The policy of Europe increases competition in some trades. It cheapens the education of the clergy and thereby reduces their earnings.
3, The policy of Europe obstructs the free circulation of labour. Apprenticeship and corporation privileges obstruct circulation from employment to employment and from place to place, so that the changes of employment necessary to equalize wages are prevented.
page 335~339:
· Every improvement in the circumstances of society raises rent. Extension of improvement and cultivation raises it directly, and so does the rise in the price of cattle, etc. Improvements which reduce the price of manufactures raise it indirectly and so does every increase in the quantity of useful labour employed.
· The contrary circumstances lower rent. There are 3 parts of produce and 3 original orders of society. The interest of the proprietors of land is inseparably connected with the general interest of the society. So also is that of those who live by wages, but the interest of those who live by profit has not the same connexion with the general interest of the society.
page 481~535:
· The great commerce is that between town and country, which is obviously advantageous to both. The cultivation of the country must be prior to the increase of the town, though the town may sometimes be distant from the country from which it derives its subsistence. This order of things is factored by the natural preference of man for agriculture.
· Cultivators require the assistance of artificers, who settle together and form a village, and their employment augments with the improvement of the country. In the American colonies an artificer who has acquired sufficient stock becomes a planter instead of manufacturing for distant sale, as in countries where no uncultivated land can be procured. Manufactures are naturally preferred to foreign commerce. So the natural course of things is first agriculture, then manufactures, and finally foreign commerce. But this order has been in many respects inverted.
· After the fall of the Roman Empire all the land of Western Europe was engrossed, chiefly by large proprietors. Primogeniture and entails prevented the great estates being divided. Primogeniture was introduced because every great landlord was a petty prince. It is now unreasonable, but supports the pride of family distinctions. Entails have the same origin, and are now abused. Great proprietors are seldom great improvers. The occupiers were not likely to improve, as they were slaves attached to the land and incapable of acquiring property. Slave labour is the dearest of all. At present sugar and tobacco can afford slave cultivation, corn cannot. The slaves were succeeded by metayers, who are very different in that they can acquire property. But they could have no interest to employ stock in improvement. Metayers were followed by farmers, who sometimes fund it to their interest to improve when they have a lease, but leases were long insecure. The forty-shilling freeholder vote in England contributes to the security of the farmer. The law of Scotland is not quite so favorable. In the rest of Europe the farmer is less secure. Customary services were vexatious to the farmer, and so also were compulsory labour on the roads, purveyance and tall ages. Even under the best laws the farmer is at a disadvantage in improving, but large farmers are the principal improvers after small proprietors. The common prohibition of the export of corn and the restraints on internal trade in agricultural produce were further discouragements to agriculture.
· The townsmen were not at first favored more than the countrymen. They were very nearly of servile condition, but arrived at liberty much earlier than the country people, acquiring the farm of their town, first for a term of years and afterwards in perpetuity, as well as other privileges equivalent to freedom, and a government of their own. It seems strange that sovereigns should have abandoned the prospect of increased revenue and have erected independent republics, but the towns were the natural allies of the sovereign against the lords. The sovereigns who quarreled most with the barons were the most liberal to the towns. The city militia was often able to overpower the neighboring lords, as in Italy and Switzerland. In France and England the cities could not be taxed without their own consent. In consequence of this greater security of the towns industry flourished and stock accumulated there earlier than in the country. Cities on the seacoast or on navigable rivers are not dependent on the neighboring country. The cities of Italy were the first to grow opulent, being centrally situated and benefited by the crusades. The cities imported manufactures and luxuries from richer countries, which were paid for by rude produce. Demand for such manufactured articles having become considerable, their manufacture was established in the cities. All countries have some manufactures. Sometimes manufactures for distant sale are introduced in imitation of foreign manufactures. Sometimes they have grown up out of the coarser home manufactures.
· The rise of towns benefited the country, because they afforded: (1) A ready market for its produce; (2) Because merchants bought land in the country and improved it; (3) Because order and good government were introduced.
· Before foreign commerce and fine manufactures are introduced great proprietors are surrounded by bands of retainers, and tenants at will were just as dependent as retainers. The power of the ancient barons was founded on this. It was anterior to and independent of the feudal law. It was moderated by the feudal law, and undermined by foreign commerce. At present a rich man maintains in all as many persons as an ancient baron, but he contributes only a small portion of the maintenance of each person. To meet their new expenses the great proprietors dismissed their retainers and their unnecessary tenants, and gave the remaining tenants long leases, thus making them independent. The great proprietors thus became insignificant.
· Old families are rare in commercial countries. A revolution was thus insensibly brought about, and commerce and manufactures became the cause of the improvement of the country. This order of things is both slow and uncertain compared with the natural order, as may be shown by the rapid progress of the North American colonies, and the slow progress of England in agriculture in spite of favors accorded to it and the still slower progress of France, Spain and Portugal. Italy alone was improved throughout by foreign commerce and exported manufactures. The national capital acquired by commerce and manufactures is an uncertain possession till realized in the improvement of land.
page 537~545:
· The first object of political economy is to provide subsistence for the people. Two different systems proposed for this end will be explained.
· Wealth and money in common language are considered synonymous. Locke thought gold and silver the most substantial part of the wealth of a nation. Others say that it is necessary to have much money in order to maintain fleets and armies abroad. So all European nations have tried to accumulate gold and silver. At first by a prohibition of exploration, but merchants found this inconvenient, and therefore argued that exportation did not always diminish the stock in the country, and that the metals could be retained only by attention to the balance of trade. Their arguments were partly sophistical, but they convinced parliaments and councils.
page 565~576:
· Writers who begin by including lands, houses and consumable goods in wealth often forget them later. Wealth being supposed to consist in gold and silver, political economy endeavored to diminish imports and encourage exports, by restraints upon importation and encouragements to exportation, which restraints and encouragements will be considered in the next 6 chapters.
· High duties and prohibitions giving a monopoly to a particular home industry are very common. They encourage the particular industry, but neither increase general industry nor give it the best direction. The number of persons employed cannot exceed a certain proportion to the capital of the society, and every man’s interest leads him to seek that employment of capital which is most advantageous to the society.
· (1) He tries to employ it as near home as possible.
(2) He endeavors to produce the greatest possible value. He can judge of this much better than the statesman.
· High duties and prohibitions direct people to employ capital in producing at home what they could buy cheaper from abroad. It is as foolish for a nation as for an individual to make what can be bought cheaper. Sometimes by such regulations a manufacture may be established earlier than it would otherwise have been but this would make capital accumulate slower, and the country might always be just as rich if it never acquired the manufacture. No one proposes that a country should strive against great natural advantages, but it is also absurd to strive against smaller advantages whether natural or acquired. Merchants and manufacturers get the most benefit from high duties and prohibitions.
page 614~617:
· The whole doctrine of the balance of trade is absurd. Where there is an even balance and the exchange consists wholly of native commodities two countries trading will gain nearly equally. Mixed cases conform to the principle.
page 622~627:
· The sophistry of merchants inspired by the spirit of monopoly has confounded the common-sense of mankind. Wealthy neighbors are an advantage to a nation as well as an individual.
· The French trade, if not restrained, would be much more advantageous to Great Britain than the American. But the traders of France and England are jealous of each other. No country has ever been impoverished by an unfavorable balance, and those which have the freest trade have been the most enriched by foreign trade. Prosperity and decay depend on the balance of produce and consumption, which is quite different from the balance of trade, and may be constantly in favor of a nation when the balance of trade is against it.
page 839~841:
· The object is to depress the manufactures of our neighbours. The mercantile system absurdly considers production and not consumption to be the end of industry and commerce. Restraints on importation of competing commodities sacrifice the interest of the consumer to the producer, and so do bounties on exportation and the provisions of the Methuen treaty, but the most extravagant case of all is that of the management of the American and West Indian colonies. The contrivers of the whole mercantile system are the producers and especially the merchants and manufacturers.
SOCB42 READING WEEK3
page 873~875:
· The system of natural liberty leaves the sovereign only 3 duties:
1, the defense of the country;
2, the administration of justice;
3, the maintenance of certain public works.
· The next book will treat of the necessary expenses of the sovereign, the methods of contribution towards the expenses of the whole society, and the causes and effects of public debts.
page 879~890:
· The expense of a military force is different at different periods. Among hunters it costs nothing. When shepherds go to war the whole nation moves with its property and the sovereign is at no expense. Shepherds are far more formidable than hunters. Husbandmen with little commerce and only household manufactures are easily converted into soldiers, and it seldom costs the sovereign anything to prepare them for the field, or to maintain them when they have taken the field. Later it becomes necessary to pay those who take the field, since artificers and manufacturers must be maintained by the public when away from their work, and the greater length of campaigns make service without pay to heavy a burden even for husbandmen.
· The possible proportion of soldiers to the rest of the population is much smaller in civilized times. The expense of preparing for the field was long inconsiderable. Soldiers were not a distinct class in Greece and Rome, nor at first in feudal times. But as war becomes more complicated, division of labour becomes necessary to carry the art to perfection. As society advances the people become unwarlike.
· There are only 2 methods of providing for defense: (1) to enforce military exercises and service; (2) to make the trade of the soldier a separate one: in other words the establishment of a militia or a standing army.
· Militias were anciently only exercised and not regimented. Five-arms brought about the change by making dexterity less important, and discipline much more so.
page 901~910:
· The expense of justice is different at different periods. Civil government was first rendered necessary by the introduction of property. Property strengthens the causes of subordination.
· There are 4 causes of subordination: (1) superiority of personal qualifications; (2) superiority of age; (3) superiority of fortune; (4) superiority of birth.
· The distinction of birth is not present among hunters,but always among shepherds. Distinction of birth and fortune are both most powerful among shepherds. Among shepherds inequality of fortune arises and introduces civil government, but the judicial authority was long a source of revenue rather than expense, which produced great abuses, whether the sovereign exercised the judicial authority in person or by deputy. These abuses could not be remedied so long as the sovereign depended only on land revenue and court fees, but when taxed became necessary, the people stipulated that no presents should be taken by judges.
page 984~994:
· The ancient system was more successful than the modern, which corrupts public teaching and stifles private. If there were no public institutions for education nothing except what was useful would be taught. Women’s education is excellent in consequence of the absence of public institutions. Ought the state to give no attention to education? In some cases it ought, in others it need not.
· Division of labour destroys intellectual, social and martial virtues unless government takes pains to prevent it, whereas in barbarous societies those virtues are kept alive by constant necessity. The education of the common people requires attention from the state more than that of people of rank and fortune, whose parents can look after their interests and who spend their lives in varied occupations chiefly intellectual, unlike the children of the poor. The state can encourage or insist on the general acquirement of reading, writing and arithmetic, by establishing parish schools, giving prizes, and requiring men to pass an examination before setting up in trade. In this way the Greeks and Romans maintained a martial spirit. Martial spirit in the people would diminish both the necessary size and the danger of a standing army.
· The Greek and Roman institutions were more effectual than modern militias, which only include a small portion of the people. It is the duty of government to prevent the growth of cowardice, gross ignorance and stupidity.
page 1003~1016:
· Religious sects usually begin with the austere system, and in small religious sects morals are regular and orderly and even disagreeably rigorous and unsocial. There are 2 possible remedies: (1) the requirement of a knowledge of science and philosophy from candidates for professions and offices; (2) the encouragement of public diversions.
· Where no religion was factored the sovereign would not require to influence the teachers of religion, as he must where there is an established church, since he cannot directly oppose the doctrines of the clergy. The clergy hold their benefices for life, and violence used against them would be ineffectual; so management must be resorted to. Bishops were originally elected by the clergy and people, afterwards by the clergy alone, still later to a large extent by the Pope. This, joined with the great wealth of the clergy, rendered them exceedingly formidable.
