Political economy Part 2

CHAPTER IV.

DIVISION OF LABOUR.

#25. How Division of Labour Arises.# When a number of workmen are engaged on any work, we find that each man usually takes one part of the work, and leaves other parts of the work to his mates. People by degrees arrange themselves into different trades, so that the whole work done in any place is divided into many employments or crafts. This division of labour is found in all civilised countries, and more or less in all states of society, which are not merely barbarous. In every village there is the butcher and the baker, and the blacksmith and the carpenter. Even in a single family there is division of labour: the husband ploughs, or cuts timber; the wife cooks, manages the house, and spins or weaves; the sons hunt or tend sheep; the daughters employ themselves as milkmaids. There is a popular couplet which says-- "When Adam delved and Eve span, Who was then the gentleman?"

It seems to express the fact that this division of labour existed in very early times, before there were any gentlemen.

In modern times the division of labour is immensely complicated: not only has every town and village its different tradespeople, and artisans and men in different posts and employments, but each district has its peculiar manufactures. In one place cotton goods are produced; in another, woollen goods; in other parts of the country flax, jute, silk are manufactured. Iron is made in Staffords.h.i.+re, Cleveland, South Wales, and Scotland; copper is smelted in South Wales; crockery is baked in the potteries; hosiery is manufactured in Nottingham and Leicester; linens are sewed in the North of Ireland; and so on. In every separate factory, again, there is division of labour; there is the manager, the chief clerk, the a.s.sistant clerks; the foremen of different departments, the timekeeper, the engine-tenter, and stokers, the common labourers, the carters, errand boys, porters, &c., all in addition to the actual mechanics of different kinds and ranks who do the princ.i.p.al work. Thus the division of labour spreads itself throughout the whole of society, from the Queen and her Ministers, down to the errand boy, or the street scavenger.

#26. Adam Smith on the Division of Labour.# There are many ways in which we gain by the division of labour, but Adam Smith has treated the subject so excellently that we had better, in the first place, consider his view of the matter. There are, as he thought, three ways in which advantage arises from the division of labour, namely--

(1.) Increase of dexterity in every particular workman.

(2.) Saving of the time which is commonly lost in pa.s.sing from one kind of work to another.

(3.) The invention of a great number of machines, which facilitate and abridge labour, and enable one man to do the work of many.

There can be no doubt as to the #increase of dexterity#, which arises from practice. Any one who has tried to imitate a juggler, or to play the piano, without having learned to do it, knows how absurdly he fails.

n.o.body could possibly do the work of a gla.s.s-blower without long practice. Even when a man can do a job in some sort of way, he will do it much more quickly if he does it often. Adam Smith states that if a blacksmith had to make nails without having been accustomed to the work, he would not make above 200 or 300 bad nails in a day. With practice he might learn to make 800 or 1000 nails in a day; but boys who are brought up to the nailer's trade can turn out 2300 nails of the same kind in the same time. But there is no need of many examples: everything that we see well or quickly made has been made by men who have spent a great deal of time and trouble in learning and practising the work.

Secondly, there is #a great deal of time lost when a man changes from one kind of work to another# many times in the day. Before you can make a thing you must get all the right tools and materials around you; when you have finished one box, for instance, you are all ready to make another with less trouble than the first; but if you have to go off and do something quite different, such as to mend a pair of shoes or write a letter, a different set of implements have to be got ready. A man, as Adam Smith thought, saunters a little in turning his hand from one kind of employment to another, and if this happens frequently, he is likely to become lazy.

In the third place, Smith a.s.serted that #the division of labour leads to the invention of machines# which abridge labour, because men, he thought, were much more likely to discover easy methods of attaining an object when their whole attention is directed to that object. But it seems doubtful how far this is correct. Workmen do occasionally invent some mode of lessening their labour, and a few important inventions have been made in this way. But, as a general rule, the division of labour leads to invention, because it enables ingenious men to make invention their profession. The greatest inventors, such as James Watt, Bramah, Fulton, Roberts, Nasmyth, Howe, Fairbairn, Whitworth, the Stephensons, Wheatstone, Bessemer, Siemens, have not been led to invention in the way described by Adam Smith, but have cultivated an original genius by careful study and long practice in mechanical construction. But the division of labour greatly a.s.sists invention, because it enables each factory to adopt particular kinds of machinery. In England the division of labour is continually becoming more and more minute, and it is not uncommon to find that the whole supply of some commodity is furnished from a single manufactory, which can then afford to have a set of machines invented on purpose to produce this one commodity. Such is even more the case in the large manufactories of the United States.

I will now describe four other ways in which great saving of labour arises from the division of labour, as follows:--

#27. The Multiplication of Services.# A great deal of labour is often saved by arranging work so that a labourer may serve many persons as easily as one. If a messenger is going to carry a letter to the post-office, he can as readily carry a score. Instead of twenty people each carrying their own letters, one messenger can do the whole work without more trouble. This explains why the post-office is able to forward a letter from any part of the kingdom to any other part for a penny or even a halfpenny. There are so many people sending and receiving letters, that a postman usually carries a great many, and often delivers half-a-dozen at once. But it would be quite impossible to send telegrams so cheaply, because every message has to be separately telegraphed along the wires, and then delivered at once by a special messenger, who can seldom carry more than one message at a time.

Archbishop Whately pointed out that when a party of travellers exploring a new country camp out at night, they naturally divide the work: one attends to the horses, another unpacks the stores, a third makes a fire and cooks the supper, a fourth goes for water, and so on. It would be quite absurd if a dozen travellers in one party were to light a dozen separate fires, and cook a dozen separate meals. The labour of lighting a fire and cooking for twelve persons is not much greater than doing the same for one or two. There are many things which, if once done, will serve for thousands or millions of people. If a person gets important information, as, for instance, that a storm is coming across the Atlantic Ocean, he can warn a whole nation by means of the newspapers.

It is a great benefit to have a meteorological office in London, where two or three men spend their labour in learning the weather all over the country by means of the telegraph, and thus enable us to judge, as far as possible, of the weather which is coming. This is a good case of the #multiplication of services#.

#28. The Multiplication of Copies# is also a means of increasing immensely the produce of labour. When the proper tools and models for making a thing are once provided, it is sometimes possible to go on multiplying copies with little further trouble. To cut the dies for striking a medal or coin is a very slow and costly work; but, when once good dies are finished, it is easy to strike a great many coins with them, and the cost of the striking is very small. The printing press, however, is the best case of multiplication of copies. To have the whole of Shakespeare's Plays copied out by a law stationer would cost more than two hundred pounds, and every new copy would cost as much as the first. Before the invention of printing, books used to be thus copied out, and ma.n.u.script books were therefore very expensive, besides being full of mistakes. The whole of Shakespeare's Plays can now be bought for a s.h.i.+lling; and any one of the Waverley Novels can be had for sixpence.

It may cost several hundred pounds to set up the type for a large book and stereotype it; but when this is once done, hundreds of thousands of copies can be struck off, and the cost of each copy is little more than that of the paper and the binding.

Almost all the common things we use now, such as ordinary chairs and tables, cups and saucers, teapots, spoons and forks, &c., are made by machinery, and are copies of an original pattern. A good chair can be bought for five s.h.i.+llings or less, but if you wanted to have a chair made of a new pattern, it would cost perhaps five or ten times as much.

#29. Personal Adaptation.# A further advantage of the division of labour is that, when there are many different trades, every person can choose that trade for which he is best suited--the strong healthy man becomes a blacksmith; the weaker one works a loom or makes shoes; the skilful man learns to be a watchmaker; the most ignorant and unskilful can find work in breaking stones or mending the hedges. Each man will generally work at the trade in which he can get the best wages, and it is an evident loss of skill if the artisan should break stones or sweep the streets.

Now, the greater the division of labour and the more extensive factories become, the better chance there is for finding an employment just suited to each person's powers; clever workmen do the work which no one else can do; they have common labourers to help them in things which require no skill; foremen plan out the work, and allot it to the artisans; clerks, who are quick at accounts, keep the books, and pay and receive money; the manager of the factory is an ingenious experienced man, who can give his whole attention to directing the work, to making good bargains, or to inventing improvements in the business. Every one is thus occupied in the way in which his labour will be most productive and useful to other people, and at the same time most profitable to himself.

#30. Local Adaptation.# Lastly, the division of labour allows of local adaptation--that is, it allows every kind of work to be done in the place most suitable for it. We have already learnt (sec. 22, p. 29) that each kind of labour should be carried on where it is most productive; but this cannot be done unless there be division of labour--so that while the French grow wine, weave silk, or make _articles de Paris_, they buy the cottons of Manchester, the beer of Burton-on-Trent, or the coals of Newcastle. When trade is free, and the division of labour is perfect, each town or district learns to make some commodity better than other places: watches are made in Clerkenwell; steel pens in Birmingham; needles at Redditch; cutlery at Sheffield; pottery at Stoke; ribbons at Coventry; gla.s.s at St. Helen's; straw bonnets at Luton; and so forth.

It is not always possible to say exactly why certain goods are made better in one place--for instance, silks in Lyons--than anywhere else; but so it often is, and people should be left as free as possible to buy the goods they like best. Commodities are manufactured in order that they may produce pleasure and be useful, not, as we shall see, in order that labourers may be kept hard at work. Now, when trade is left free it gives rise to division of labour, not only between town and town, county and county, but between the most distant nations of the earth. Thus is created what may be called #the territorial division of labour#.

Commerce between nation and nation is not only one of the best means of increasing wealth and saving labour, but it brings us nearer to the time when all nations will live in harmony, as if they were but one nation.

#31. The Combination of Labour.# We now see what great advantages arise from each man learning a single trade thoroughly. This is called the division of labour, because it divides up the work into a great many different operations; nevertheless, it leads men to a.s.sist each other, and to work together in manufacturing the same goods. Thus, in producing a book, a great many trades must a.s.sist each other: type-founders cast the type; mechanics make the printing press; the paper is manufactured at the paper works; printers' ink is prepared at other works; the publishers arrange the business; the author supplies the copy; the compositors set up the type; the reader corrects the proofs; the pressmen work off the printed sheets; then there are still the bookbinders, and the booksellers, besides a great many other small trades which supply the tools wanted by the princ.i.p.al trades. Thus, society is like a very complicated machine, in which there is a great number of wheels, and wheels within wheels; each part goes on attending to its own business, and doing the same work over and over again. There is what we should call a #complex organization# (Greek, organon, instrument), that is to say, different people and different trades work as instruments of each other, all a.s.sisting in the ultimate result.

But it is to be observed that n.o.body plans out these systems of divided labour; indeed few people ever know how many trades there are, and how they are connected together. There are said to be about thirty-six distinct kinds of employment in making and putting together the parts of a piano; there are about forty trades engaged in watchmaking; in the cotton business there are more than a hundred occupations. But new trades are frequently created, especially when any new discovery takes place; thus, there are at least sixteen different trades occupied in photography, or in making the things required by photographers; and railways have produced whole series of employments which did not exist fifty years ago. These trades arise without any Act of Parliament to make them or allow them. There is no law to say how many trades there shall be, nor how many people shall go into each trade, because n.o.body can tell what will be wanted in future years. These things are arranged by a kind of #social instinct#. Each person takes up the kind of work which seems to suit him and to pay him best at the time.

Another and a totally different kind of combination of labour arises when men arrange to a.s.sist each other in doing the same work. Thus, sailors pulling at the same rope combine their labour together; other instances are, carrying the same ladder, rowing the same boat, and so forth. In this case there is said to be #simple combination of labour#, because the men do the same sort of work. When the men have different operations to perform, there is said to be #complex combination of labour#, as when one man points a pin and another makes the head. On board a s.h.i.+p there is both simple and complex combination. When several men work at the same capstan the combination is simple, because one man does exactly the same as the others. But the captain, mate, steersman, carpenter, boatswain, and cook work together in complex combination, since each attends to his own proper duties. Similarly, in a company of soldiers the privates act together in simple combination, but the officers of different ranks have distinct duties to perform, so that the combination becomes complex. Men who thus a.s.sist each other are usually able to do far more work than if they acted separately.

#32. Disadvantages of the Division of Labour.# There are certainly some evils which arise out of the great division of labour now existing in civilised countries. These evils are of no account compared with the immense benefits which we receive; still it is well to notice them.

In the first place, #division of labour tends to make a man's power narrow and restricted#; he does one kind of work so constantly, that he has no time to learn and practice other kinds of work. A man becomes, as it has been said, worth only the tenth part of a pin; that is, there are men who know only how to make, for instance, the head of a pin. In the time of the Romans it was said, _ne sutor ultra crepidam_, let not the shoemaker go beyond his last. When a man accustomed only to making pins or shoes goes into the far west states of America, he finds himself unfitted for doing all the kinds of hard work required from a settler.

The poor peasant from Norway or Sweden, who seems at first sight a less intelligent man, is able to build his own house, till the ground, tend his horse, and in a rough way, make his own carts, implements, and household furniture. Even the Red Indian is much better able to take care of himself in a new country than the educated mechanic. The only thing to be said is that the skilled shoemaker, or mechanic of whatever sort, must endeavour to keep to the trade which he has learnt so well.

It is a misfortune both for himself and for other people if he is obliged to undertake work which he cannot do so well.

A second disadvantage of the division of labour is that #trade becomes very complicated, and when deranged the results are ruinous to some people#. Each person learns to supply only a particular kind of goods, and if change of fas.h.i.+on or any other cause leads to a falling off in the demand for that kind of goods, the producer is left in poverty, until he can learn another trade. At one time the making of crinoline skirts for ladies was a large and profitable trade; now it has ceased almost entirely, and those who learnt the business have had to seek other employments. But each trade is generally well supplied with hands perfectly trained to the work, and it is very difficult for fresh workmen, especially when old, to learn the new work, and compete with those who have long practised it. In some cases this has been successfully done; thus the Cornish miners, when the mines in Cornwall were no longer profitable, went into the collieries, where more hewers of coal were much wanted. But, generally speaking, it is very difficult to find a new employment in England, and this is a strong reason why trades-unions should make no objection to new men entering a trade to which they have not been brought up.

The colliers tried to keep the Cornish miners out of the coal pits. In order to keep their own wages as high as possible they would let other men starve. But this is a very selfish and hurtful way of acting. If every trade were thus to try and keep all other people away, as if the trade were their own property, there would constantly be a number of unfortunate people brought to the workhouse through no fault of their own. It is most important, therefore, to maintain a man's right to do whatever kind of work he can get. It is one of the first and most necessary rights of a labourer to labour in any honest way he finds most profitable to himself. #Labour must be free.#

CHAPTER V.

CAPITAL.

#33. What is capital?# We will now endeavour to understand the nature of #the third requisite of production, called capital, which consists of wealth used to help us in producing more wealth#. All capital is wealth, but it is not true that all wealth is capital. If a man has a stock of food, or a stock of money with which he buys food, and he merely lives upon this without doing any labour, his stock is not considered to be capital, because he is not producing wealth in the meantime. But if he is occupied in building a house, or sinking a well, or making a cart, or producing anything which will afterwards save labour and give utility, then his stock is capital.

The great advantage of capital is that it enables us to do work in the least laborious way. If a man wants to convey water from a well to his house, and has very little capital, he can only get a bucket and carry every bucket-full separately; this is very laborious. If he has more capital, he can get a barrel and wheel it on a barrow, which takes off a large part of the weight; thus he saves much labour by the labour spent upon the barrel and barrow. If he has still more capital his best way will be to make a ca.n.a.l, or channel, or even to lay a metal pipe all the way from the well to his house; this costs a great deal of labour at the time, but, when once it is made, the water will perhaps run down by its own weight, and all the rest of his life he will be saved from the trouble of carrying water.

#34. Fixed and Circulating Capitals.# Capital is usually said to be either fixed or circulating capital, and we ought to learn very thoroughly the difference between these two kinds. #Fixed capital# consists of factories, machines, tools, s.h.i.+ps, railways, docks, carts, carriages, and other things, which last a long time, and a.s.sist work. It does not include, indeed, all kinds of fixed property. Churches, monuments, pictures, books, ornamental trees, &c., last a long time, but they are not fixed capital, because they are not used to help us in producing new wealth. They may do good, and give pleasure, and they form a part of the wealth of the kingdom; but they are not capital according to the usual employment of the name.

#Circulating capital consists of the food, clothes, fuel, and other things which are required to support labourers while they are engaged in productive work.# It is called circulating because it does not last long; potatoes and cabbages are eaten up, and a new supply has to be grown; clothes wear out in a few months or a year, and new ones have to be bought. The circulating capital, which is in the country now, is not the same circulating capital which was in the country two years ago. But the fixed capital is nearly the same: some factories may have been burnt or pulled down; some machines may have become worn out, and have been replaced by new ones. But these changes in fixed capital are comparatively few; whereas the whole or nearly the whole of the circulating capital is changed every year or two.

But the fact is that we cannot distinguish so easily as we may seem to do between fixed and circulating capitals; there may be kinds of capital which are neither quite fixed nor quite circulating, but something between the two. Flour is soon eaten up, and is circulating capital. A flour mill lasts fifty years, perhaps, and may certainly be called fixed capital; a flour sack lasts about ten years on an average. Is such a sack fixed or circulating capital? It seems to me difficult to say. In the case of a railway, the coal and oil wanted for the engine are used up at once, and are clearly circulating capital; the railway wagons last about ten years, the locomotive engines twenty years or more; the railway stations last at least thirty years; there is no reason why the bridges and tunnels and embankments should not last hundreds of years with proper care. Thus we see that #capital is altogether a question of time, and we must say that capital is more fixed as it endures or continues useful a longer time; it is more circulating in proportion as it is sooner worn out or destroyed, and thus requires to be more frequently replaced#.

#35. How Capital is obtained. Capital is the result of saving or abstinence#, that is, it can only be obtained by working to produce wealth, and then not immediately consuming that wealth. The poor savage who has to labour hard every day for fear that he may have to go without food, has no capital; but when he has food in hand, and can employ himself in making bows and arrows to facilitate the capture of animals, he is investing capital in the bows and arrows. Whenever we work in this way for a future purpose, we are living on capital and investing it. The abstinence (Latin, _abs_, from, and _tenens_, holding) consists in holding off from the enjoyment of something which we have produced, or might produce with the same labour. #To save# is to keep something whole or untouched for future use; we save it as long as we do not consume it.

If I have a stock of flour and eat it up, there is an end of the flour, and I cannot be said to save that. But if, while eating the flour, I am engaged in making a plough or a cart, or any other durable thing which will help me in production, I have turned one form of capital into another form. I might have eaten the flour in idleness, in which case it would not have been capital. But, while eating it, I worked for a future purpose. In so doing I am said to #invest capital#, which means #to turn circulating into fixed capital, or less durable into more durable capital#. Capital, accordingly, is invested for longer or shorter periods according to the durability of the form in which it is invested (Latin, _in_, on, and _vestire_, to clothe). A good plough will perhaps last twenty years; all through that time the owner should be getting back by its use the benefit of the labour and capital spent in making it. When it is worn out, he ought to have all the capital it cost paid back, with some increase or interest. Capital invested in railway wagons should pay itself back during the ten years that the wagons last on an average.

The capital invested in any work may always be said to consist of wages or what is bought with wages. Thus the capital invested in railways really consisted of the food, clothes, and other commodities consumed by the labourers who made the railways. It is true that tools also were needed as well as the iron rails, sleepers, bricks, and other materials required for the work. But as these things had previously been made by labour, we may consider that the capital really invested in them was the wages of the labourers who had already made them. Thus, #when we go far enough back, we always find that the capital invested consisted of the maintenance of labourers#.

#36. Investment of Capital.# We have two things to consider with regard to the investment of capital, #firstly, the quant.i.ty of the capital#, #and secondly, the length of time for which it is invested#. The same quant.i.ty of capital will keep more or less men at work, according as it is invested for shorter or longer periods. A man in growing potatoes only needs to wait for the result of his labour during one year on an average. If his food and clothing during one year cost thirty pounds, then capital worth thirty pounds is sufficient to keep him at work in this way. Three men cultivating potatoes will of course require three times as much capital, or ninety pounds worth; ten men will need three hundred pounds worth, and so on in proportion. But in growing vines it is necessary to wait several years after the vines are planted before they begin to bear. Suppose it to require five years waiting, then the labourer will want 5 x 30, or one hundred and fifty pounds worth of capital before he can grow vines. Three vine-growers will want 3 x 5 x 30, or four hundred and fifty pounds worth of capital; ten men, 10 x 5 x 30, or fifteen hundred pounds worth, and so on in proportion. Thus we see clearly that the capital required in any kind of industry is proportional to the number of men employed, and also to the length of time for which the capital remains locked up, or invested on the average. But there is no fixed proportion whatever between the number of labourers and the capital they require--it entirely depends upon the length of time in which the capital is turned over, that is, invested, and got back again. A poor savage manages to live on a few days' capital in hand; a potato grower on one year's capital. On a modern farm in which many durable improvements are made, the quant.i.ty of capital required is very much greater. To employ men upon a railway requires immense capital, because so much of it is sunk in a very fixed and durable form in the embankments, tunnels, stations, rails, and engines.

#37. Labour cannot be Capital.# It is not uncommon to hear it said that #labour is the poor man's capital#; and then it is argued that the poor man has just as much right to live upon his capital as the rich man upon his. And so he has, if he can do it. If a labourer can go and produce any kind of wealth, and exchange it for food and necessaries, of course he may do so. But, as a general rule, he cannot do this without working for a length of time, waiting till the produce is finished and sold. In order to do this he wants something more than his labour, namely, his food in the meantime, besides materials and tools. These form the required capital, and there is no good in calling labour capital when it is really quite a different thing. At other times I have heard it said that #land is capital, intelligence is capital#, and so forth. These are all misleading expressions. The intended meaning seems to be that some people live upon what they get from land, or from intelligence, as other people live upon what they get as interest upon capital. Nevertheless, land is not capital, nor is intelligence capital. Production requires, as we have seen, three distinct things, namely, land, labour, and capital; and there is much harm in confusing things together by giving them the same name when they are not the same thing.

CHAPTER VI.

DISTRIBUTION OF WEALTH.

#38. How Wealth is Shared.# We have learned what wealth is, how it is to be used, and how it may be produced in the greatest quant.i.ties, with the least possible labour, but we have yet to enter on the more difficult parts of our subject. We must now try to make out how wealth is shared among those who have a hand in producing it. The requisites of production, as we have seen, are land, labour, and capital; if these were all supplied by the same person, no doubt the produce ought all to belong to him, with the exception of what is taken by the government as taxes. But, in a state of society such as exists at present, the labourer seldom owns all the land and capital he uses; he goes to work on another man's farm, or in another man's factory; he lives in another man's house, and often eats another man's food; he derives benefits from other men's inventions, and discoveries; and he uses roads, railways, public buildings, &c., furnished at the cost of the community.

The production of wealth, therefore, depends not on the will and exertions of a single man, but on the proper bringing together of land, labour, and capital, by different persons and cla.s.ses of persons. These different persons must have their several shares of the wealth produced; if they furnish something requisite for producing, they can make a bargain and ask for more or less of the produce. But #it is not mere chance or caprice which governs the sharing of wealth, and we have to learn the natural laws according to which the distribution takes place#.