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this country, from depressing the rate of profit much nearer to that lowest point to which it is always tending, and which, left to itself, it would so promptly attain & The resisting agencies are of several kinds.

First among them, we may notice] one which is so

simple and so conspicuous, that some political economists, especially M. de Sismondi and Dr. Chalmers, have attended to it almost to the exclusion of all others. Thisis, the waste of capital in periods of over-trading and rash speculation, and in the commercial revulsions by which such times are always followed. It is true that a great part of what is lost at such periods is not destroyed, but merely transferred, like a gambler's losses, to more successful speculators) But even of these mere transfers, a large portion is always to foreigners, by the hasty purchase of unusual quantities of foreign goods at advanced prices. And much also is absolutely wasted. Mines are opened, railways or bridges made, and many other works of uncertain profit commenced, and in these enterprises much capital is sunk which yields either no return, or none adequate to the outlay. Factories are built and machinery erected beyond what the market requires, or can keep in employment. Even if they are kept in employment, the capital is no less sunk; it has been converted from circulating into fixed capital, and has ceased to have any influence on wages or profits. Besides this, there is a great unproductive consumption of capital, during the stagnation which follows a period of general over-trading. Establishments are shut up, or kept working without any profit, hands are discharged, and numbers of persons in all ranks, being deprived of their income, and thrown for support on their savings, find themselves, after the crisis has passed away, in a condition of more or less impoverishment. Such are the effects of a commercial revulsion : and that such revulsions are almost periodical, is a consequence of the very tendency of profits which we are considering. By the time a few years have passed over without a crisis, so much

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additional capital has been accumulated, that it is no longer
possible to invest it at the accustomed profit: all public
securities rise to a high price, the rate of interest on the
best mercantile security falls very low, and the complaint
is general among persons in business that no money is to
be made. Does not this demonstrate how speedily profit
would be at the minimum, and the stationary condition of
capital would be attained, if these accumulations went on
without any counteracting principle : But the diminished
scale of all safe gains, inclines persons to give a ready ear to
any projects which hold out, though at the risk of loss, the
hope of a higher rate of profit; and speculations ensue,
which, with the subsequent revulsions, destroy, or transfer
to foreigners, a considerable amount of capital, produce a
temporary rise of interest and profit, make room for fresh
accumulations, and the same round is recommenced.
This, doubtless, is one considerable cause which arrests
profits in their descent to the minimum, by sweeping away
from time to time a part of the accumulated mass by which
they are forced down. But this is not, as might be inferred
from the language of some writers, the principal cause. If
it were, the capital of the country would not increase; but
in England it does increase greatly and rapidly. This is
shown by the increasing productiveness of almost all taxes,
by the continual growth of all the signs of national wealth,
and by the rapid increase of population, while the condition
of the labourers certainly is not on the whole declining.
These things prove that each commercial revulsion, how-
ever disastrous, is very far from destroying all the capital
which has been added to the accumulations of the country
since the last revulsion preceding it, and that, invariably,
room is either found or made for the profitable employment
of a perpetually increasing capital, consistently with not
forcing down profits to a lower rate. -

o e - vo § 6. This brings us to the second of the counter-agen~~~~ cies, namely, improvements in production. These evidently ~! have the effect of extending what Mr. Wakefield terms the Y

field of employment, that is, they enable a greater amount of capital to be accumulated and employed without depress-A

ing the rate of profit: provided always that they do not raise, to a proportional extent, the habits and requirements

of the labourer. If the labouring class gain the full advantage of the increased cheapness, in other words, if money wages do not fall, profits are not raised, nor their fall retarded. But if the labourers people up to the improvement in their condition, and so relapse to their previous state, profits will rise. All inventions which cheapen any of the things consumed by the labourers, unless their requirements are raised in an equivalent degree, in time lower money wages: and by doing so, enable a greater capital to be accumulated and employed, before profits fall back to what they were previously. Improvements which only affect things consumed exclusively by the richer classes, do not operate precisely in the same manner. The cheapening of lace or velvet has no effect in diminishing the cost of labour; and no mode can be pointed out in which it can raise the rate of profit, so as to make room for a larger capital before the minimum is attained. It, however, produces an effect which is virtually equivalent; it lowers, or tends to lower, the minimum itself. In the first place, increased cheapness of articles of consumption promotes the inclination to save, by affording to all consumers a surplus which they may lay by, consistently with their accustomed manner of living; and unless they were previously suffering actual hardships, it will require little self-denial to save some part at least of this surplus. In the next place, whatever enables people to live equally well on a smaller income, inclines them to lay by capital for a lower rate of profit. If people can live on an independence of 500l. a year in the same manner as they formerly could on one of 1000l., some persons will be induced to save in hopes of the one, who would have been deterred by the more remote prospect of the other. All

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/improvements, therefore, in the production of almost any

| commodity, tend in some degree to widen the interval which

to to be passed before arriving at the stationary state: but this effect belongs in a much greater degree to the improvements which affect the articles consumed by the labourer, since these conduce to it in two ways; they induce people to accumulate for a lower profit, and they also raise the rate of profit itself.

* § 7. Equivalent in effect to improvements in production, 2 is the acquisition of any new power of obtaining cheap com: ... modities from foreign countries. If necessaries are cheap. ened, whether they are so by improvements at home or importation from abroad, is exactly the same thing to wages | and profits. Unless the labourer obtains, and by an im| provement of his habitual standard, keeps, the whole benefit,

\ the cost of labour is lowered, and the rate of profit raised. As long as food can continue to be imported for an increas. ing population without any diminution of cheapness, so long the declension of profits through the increase of population and capital is arrested, and accumulation may go on with

out making the rate of profit draw nearer to the minimum.

And on this ground it is believed by some, that the repeal of the corn laws has opened to this country a long era of rapid increase of capital with an undiminished rate of profit. Before inquiring whether this expectation is reasonable, one remark must be made, which is much at variance with commonly received notions. Foreign trade does not necessarily increase the field of employment for capital. It is not the mere opening of a market for a country's productions, that tends to raise the rate of profits. If nothing were obtained in exchange for those productions but the luxuries of the rich, the expenses of no capitalist would be diminished; profits would not be at all raised, nor room made for the accumulation of more capital without submitting to a reduction of profits: and if the attainment of the

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stationary state were at all retarded, it would only be because the diminished cost at which a certain degree of luxury could be enjoyed, might induce people, in that prospect, to make fresh savings for a lower profit than they formerly were willing to do. When foreign trade makes room for more capital at the same profit, it is by enabling the necessaries of life, or the habitual articles of the labourer's consumption, to be obtained at smaller cost. It may do this in two ways; by the importation either of those commodities themselves, or of the means and appliances for producing them. Cheap iron has, in a certain measure, the same effect on profits and the cost of labour as cheap corn, because cheap iron makes cheap tools for agriculture and cheap machinery for clothing. But a foreign trade which neither directly, nor by any indirect consequence, increases the cheapness of anything consumed by the labourers, does not, any more than an invention or discovery in the like case, tend to raise profits or retard their fall ; it merely substitutes the production of goods for foreign markets, in the room of the home production of luxuries, leaving the employment for capital neither greater nor less than before. It is true, that there is scarcely any export trade which, in a country that already imports necessaries or materials, comes within these conditions: for every increase of exports enables the country to obtain all its imports on cheaper terms than before. A country which, as is now the case with England, admits food of all kinds, and all necessaries and the materials of necessaries, to be freely imported from all parts of the world, no longer depends on the fertility of her own soil to keep up her rate of profits, but on the soil of the whole world. It remains to consider how far this resource can be counted upon for making head during a very long period against the tendency of profits to decline as capital Increases. It must, of course, be supposed that with the increase of capital, population also increases; for if it did not, the con

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