Effects of the Corn Laws
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Thomas Malthus >> Effects of the Corn Laws
It was a fatal mistake in the system of the Economists to consider
merely production and reproduction, and not the provision for an
increasing population, to which their territorial tax would have
raised the most formidable obstacles.
On the whole then considering the present accumulation of
manufacturing population in this country, compared with any other in
Europe, the expenses attending enclosures, the price of labour and
the weight of taxes, few things seem less probable, than that Great
Britain should naturally grow an independent supply of corn; and
nothing can be more certain, than that if the prices of wheat in
Great Britain were reduced by free importation nearly to a level
with those of America and the continent, and if our manufacturing
prosperity were to continue increasing, it would incontestably
answer to us to support a part of our present population on foreign
corn, and nearly the whole probably of the increasing population,
which we may naturally expect to take place in the course of the
next twenty or twenty five years.
The next question for consideration is, whether an independent
supply, if it do not come naturally, is an object really desirable
and one which justifies the interference of the legislature.
The general principles of political economy teach us to buy all our
commodities where we can have them the cheapest; and perhaps there
is no general rule in the whole compass of the science to which
fewer justifiable exceptions can be found in practice. In the simple
view of present wealth, population, and power, three of the most
natural and just objects of national ambition, I can hardly imagine
an exception; as it is only by a strict adherence to this rule that
the capital of a country can ever be made to yield its greatest
amount of produce.
It is justly stated by Dr Smith that by means of trade and
manufactures a country may enjoy a much greater quantity of
subsistence, and consequently may have a much greater population,
than what its own lands could afford. If Holland, Venice, and
Hamburg had declined a dependence upon foreign countries for their
support, they would always have remained perfectly inconsiderable
states, and never could have risen to that pitch of wealth, power,
and population, which distinguished the meridian of their career.
Although the price of corn affects but slowly the price of labour,
and never regulates it wholly, yet it has unquestionably a powerful
influence upon it. A most perfect freedom of intercourse between
different nations in the article of corn, greatly contributes to an
equalization of prices and a level in the value of the precious
metals. And it must be allowed that a country which possesses any
peculiar facilities for successful exertion in manufacturing
industry, can never make a full and complete use of its advantages;
unless the price of its labour and other commodities be reduced to
that level compared with other countries, which results from the
most perfect freedom of the corn trade.
It has been sometimes urged as an argument in favour of the corn
laws, that the great sums which the country has had to pay for
foreign corn during the last twenty years must have been injurious
to her resources, and might have been saved by the improvement of
our agriculture at home. It might with just as much propriety be
urged that we lose every year by our forty millions worth of
imports, and that we should gain by diminishing these extravagant
purchases. Such a doctrine cannot be maintained without giving up
the first and most fundamental principles of all commercial
intercourse. No purchase is ever made, either at home or abroad,
unless that which is received is, in the estimate of the purchaser,
of more value than that which is given; and we may rest quite
assured, that we shall never buy corn or any other commodities
abroad, if we cannot by so doing supply our wants in a more
advantageous manner, and by a smaller quantity of capital, than if
we had attempted to raise these commodities at home.
It may indeed occasionally happen that in an unfavourable season,
our exchanges with foreign countries may be affected by the
necessity of making unusually large purchases of corn; but this is
in itself an evil of the slightest consequence, which is soon
rectified, and in ordinary times is not more likely to happen, if
our average imports were two millions of quarters, than if, on an
average, we grew our own consumption.
The unusual demand is in this case the sole cause of the evil, and
not the average amount imported. The habit on the part of foreigners
of supplying this amount, would on the contrary rather facilitate
than impede further supplies; and as all trade is ultimately a trade
of barter, and the power of purchasing cannot be permanently
extended without an extension of the power of selling, the foreign
countries which supplied us with corn would evidently have their
power of purchasing our commodities increased, and would thus
contribute more effectually to our commercial and manufacturing
prosperity.
It has further been intimated by the friends of the corn laws, that
by growing our own consumption we shall keep the price of corn
within moderate bounds and to a certain degree steady. But this also
is an argument which is obviously not tenable; as in our actual
situation, it is only by keeping the price of corn up, very
considerably above the average of the rest of Europe, that we can
possibly be made to grow our own consumption.
A bounty upon exportation in one country, may be considered, in some
degree, as a bounty upon production in Europe; and if the growing
price of corn in the country where the bounty is granted be not
higher than in others, such a premium might obviously after a time
have some tendency to create a temporary abundance of corn and a
consequent fall in its price. But restrictions upon importation
cannot have the slightest tendency of this kind. Their whole effect
is to stint the supply of the general market, and to raise, not to
lower, the price of corn.
Nor is it in their nature permanently to secure what is of more
consequence, steadiness of prices. During the period indeed, in
which the country is obliged regularly to import some foreign grain,
a high duty upon it is effectual in steadily keeping up the price of
home corn, and giving a very decided stimulus to agriculture. But as
soon as the average supply becomes equal to the average consumption,
this steadiness ceases. A plentiful year will occasion a sudden
fall; and from the average price of the home produce being so much
higher than in the other markets of Europe, such a fall can be but
little relieved by exportation. It must be allowed, that a free
trade in corn would in all ordinary cases not only secure a cheaper,
but a more steady, supply of grain.
To counterbalance these striking advantages of a free trade in corn,
what are the evils which are apprehended from it?
It is alleged, first, that security is of still more importance than
wealth, and that a great country likely to excite the jealousy of
others, if it become dependent for the support of any
considerable portion of people upon foreign corn, exposes itself to
the risk of having its most essential supplies suddenly fail at the
time of its greatest need. That such a risk is not very great will
be readily allowed. It would be as much against the interest of
those nations which raised the superabundant supply as against the
one which wanted it, that the intercourse should at any time be
interrupted; and a rich country, which could afford to pay high for
its corn, would not be likely to starve, while there was any to be
purchased in the market of the commercial world.
At the same time it should be observed that we have latterly seen
the most striking instances in all quarters, of governments acting
from passion rather than interest. And though the recurrence of such
a state of things is hardly to be expected, yet it must be allowed
that if anything resembling it should take place in future, when,
instead of very nearly growing our own consumption, we were indebted
to foreign countries for the support of two millions of our people,
the distresses which our manufacturers suffered in 1812 would be
nothing compared with the wide-wasting calamity which would be then
experienced.
According to the returns made to Parliament in the course of the
last session, the quantity of grain and flour exported in 1811
rather exceeded, than fell short of, what was imported; and in 1812,
although the average price of wheat was one hundred and twenty five
shillings the quarter, the balance of the importations of grain and
flour was only about one hundred thousand quarters. From 1805,
partly from the operation of the corn laws passed in 1804, but much
more from the difficulty and expense of importing corn in the actual
state of Europe and America, the price of grain had risen so high
and had given such a stimulus to our agriculture, that with the
powerful assistance of Ireland, we had been rapidly approaching to
the growth of an independent supply. Though the danger therefore may
not be great of depending for a considerable portion of our
subsistence upon foreign countries, yet it must be acknowledged that
nothing like an experiment has yet been made of the distresses that
might be produced, during a widely extended war, by the united
operation, of a great difficulty in finding a market for our
manufactures, accompanied by the absolute necessity of supplying
ourselves with a very large quantity of corn.
2dly. It may be said, that an excessive proportion of manufacturing
population does not seem favourable to national quiet and happiness.
Independently of any difficulties respecting the import of corn,
variations in the channels of manufacturing industry and in the
facilities of obtaining a vent for its produce are perpetually
recurring. Not only during the last four or five years, but during
the whole course of the war, have the wages of manufacturing labour
been subject to great fluctuations. Sometimes they have been
excessively high, and at other times proportionably low; and even
during a peace they must always remain subject to the fluctuations
which arise from the caprices of taste and fashion, and the
competition of other countries. These fluctuations naturally tend to
generate discontent and tumult and the evils which accompany them;
and if to this we add, that the situation and employment of a
manufacturer and his family are even in their best state
unfavourable to health and virtue, it cannot appear desirable that a
very large proportion of the whole society should consist of
manufacturing labourers. Wealth, population and power are, after
all, only valuable, as they tend to improve, increase, and secure
the mass of human virtue and happiness.
Yet though the condition of the individual employed in common
manufacturing labour is not by any means desirable, most of the
effects of manufactures and commerce on the general state of society
are in the highest degree beneficial. They infuse fresh life and
activity into all classes of the state, afford opportunities for the
inferior orders to rise by personal merit and exertion, and
stimulate the higher orders to depend for distinction upon other
grounds than mere rank and riches. They excite invention, encourage
science and the useful arts, spread intelligence and spirit, inspire
a taste for conveniences and comforts among the labouring classes;
and, above all, give a new and happier structure to society, by
increasing the proportion of the middle classes, that body on which
the liberty, public spirit, and good government of every country
must mainly depend.
If we compare such a state of society with a state merely
agricultural, the general superiority of the former is
incontestable; but it does not follow that the manufacturing system
may not be carried to excess, and that beyond a certain point the
evils which accompany it may not increase further than its
advantages. The question, as applicable to this country, is not
whether a manufacturing state is to be preferred to one merely
agricultural but whether a country the most manufacturing of any
ever recorded in history, with an agriculture however as yet nearly
keeping pace with it, would be improved in its happiness, by a great
relative increase to its manufacturing population and relative check
to its agricultural population.
Many of the questions both in morals and politics seem to be of the
nature of the problems de maximis and minimis in fluxions; in which
there is always a point where a certain effect is the greatest,
while on either side of this point it gradually diminishes.
With a view to the permanent happiness and security from great
reverses of the lower classes of people in this country, I should
have little hesitation in thinking it desirable that its agriculture
should keep pace with its manufactures, even at the expense of
retarding in some degree the growth of manufactures; but it is a
different question, whether it is wise to break through a general
rule, and interrupt the natural course of things, in order to
produce and maintain such an equalization.
3dly. It may be urged, that though a comparatively low value of
the precious metals, or a high nominal price of corn and labour,
tends rather to check commerce and manufactures, yet its effects are
permanently beneficial to those who live by the wages of labour.
If the labourers in two countries were to earn the same quantity of
corn, yet in one of them the nominal price of this corn were twenty
five per cent higher than in the other, the condition of the
labourers where the price of corn was the highest, would be
decidedly the best. In the purchase of all commodities purely
foreign; in the purchase of those commodities, the raw materials of
which are wholly or in part foreign, and therefore influenced in a
great degree by foreign prices, and in the purchase of all home
commodities which are taxed, and not taxed ad valorem, they would
have an unquestionable advantage: and these articles altogether are
not inconsiderable even in the expenditure of a cottager.
As one of the evils therefore attending the throwing open our ports,
it may be stated, that if the stimulus to population, from the
cheapness of grain, should in the course of twenty or twenty five
years reduce the earnings of the labourer to the same quantity of
corn as at present, at the same price as in the rest of Europe, the
condition of the lower classes of people in this country would be
deteriorated. And if they should not be so reduced, it is quite
clear that the encouragement to the growth of corn will not be fully
restored, even after the lapse of so long a period.
4thly. It may be observed, that though it might by no means be
advisable to commence an artificial system of regulations in the
trade of corn; yet if, by such a system already established and
other concurring causes, the prices of corn and of many commodities
had been raised above the level of the rest of Europe, it becomes a
different question, whether it would be advisable to risk the
effects of so great and sudden a fall in the price of corn, as would
be the consequence of at once throwing open our ports. One of the
cases in which, according to Dr Smith, "it may be a matter of
deliberation how far it is proper to restore the free importation of
foreign goods after it has been for some time interrupted, is, when
particular manufactures, by means of high duties and prohibitions
upon all foreign goods which can come into competition with them,
have been so far extended as to employ a great multitude of
hands.(2*)"
That the production of corn is not exempted from the operation of
this rule has already been shown; and there can be no doubt that the
interests of a large body of landholders and farmers, the former to
a certain extent permanently, and the latter temporarily, would be
deeply affected by such a change of policy. These persons too may
further urge, with much appearance of justice, that in being made to
suffer this injury, they would not be treated fairly and
impartially. By protecting duties of various kinds, an unnatural
quantity of capital is directed towards manufactures and commerce
and taken from the land; and while, on account of these duties, they
are obliged to purchase both home-made and foreign goods at a kind
of monopoly price, they would be obliged to sell their own at the
price of the most enlarged competition. It may fairly indeed be
said, that to restore the freedom of the corn trade, while
protecting duties on various other commodities are allowed to
remain, is not really to restore things to their natural level, but
to depress the cultivation of the land below other kinds of
industry. And though, even in this case, it might still be a
national advantage to purchase corn where it could be had the
cheapest; yet it must be allowed that the owners of property in land
would not be treated with impartial justice.
If under all the circumstances of the case, it should appear
impolitic to check our agriculture; and so desirable to secure an
independent supply of corn, as to justify the continued interference
of the legislature for this purpose, the next question for our
consideration is;
Fifthly, how far and by what sacrifices, restrictions upon the
importation of foreign corn are calculated to attain the end in
view.
With regard to the mere practicability of effecting an independent
supply, it must certainly be allowed that foreign corn may be so
prohibited as completely to secure this object. A country with a
large territory, which determines never to import corn, except when
the price indicates a scarcity, will unquestionably in average years
supply its own wants. But a law passed with this view might be so
framed as to effect its object rather by a diminution of the people
than an increase of the corn: and even if constructed in the most
judicious manner, it can never be made entirely free from objections
of this kind.
The evils which must always belong to restrictions upon the
importation of foreign corn, are the following:
1. A certain waste of the national resources, by the employment of a
greater quantity of capital than is necessary for procuring the
quantity of corn required.
2. A relative disadvantage in all foreign commercial transactions,
occasioned by the high comparative prices of corn and labour, and
the low value of silver, as far as they affect exportable
commodities.
3. Some check to population, occasioned by a check to that abundance
of corn, and demand for manufacturing labours, which would be the
result of a perfect freedom of importation.
4. The necessity of constant revision and interference, which
belongs to almost every artificial system.
It is true, that during the last twenty years we have witnessed a
very great increase of population and of our exported commodities,
under a high price of corn and labour; but this must have happened
in spite of these high prices, not in consequence of them; and is to
be attributed chiefly to the unusual success of our inventions for
saving labour and the unusual monopoly of the commerce of Europe
which has been thrown into our hands by the war. When these
inventions spread and Europe recovers in some degree her industry
and capital, we may not find it so easy to support the competition.
The more strongly the natural state of the country directs it to the
purchase of foreign corn, the higher must be the protecting duty or
the price of importation, in order to secure an independent supply;
and the greater consequently will be the relative disadvantage which
we shall suffer in our commerce with other countries. This drawback
may, it is certain, ultimately be so great as to counterbalance the
effects of our extraordinary skill, capital and machinery.
The whole, therefore, is evidently a question of contending
advantages and disadvantages; and, as interests of the highest
importance are concerned, the most mature deliberation is required
in its decision.
In whichever way it is settled, some sacrifices must be submitted
to. Those who contend for the unrestrained admission of foreign
corn, must not imagine that the cheapness it will occasion will be
an unmixed good; and that it will give an additional stimulus to the
commerce and population of the country, while it leaves the present
state of agriculture and its future increase undisturbed. They must
be prepared to see a sudden stop put to the progress of our
cultivation, and even some diminution of its actual state; and they
must be ready to encounter the as yet untried risk, of making a
considerable proportion of our population dependent upon foreign
supplies of grain, and of exposing them to those vicissitudes and
changes in the channels of commerce to which manufacturing states
are of necessity subject.
On the other hand, those who contend for a continuance and increase
of restrictions upon importation, must not imagine that the present
state of agriculture and its present rate of eminence can be
maintained without injuring other branches of the national industry.
It is certain that they will not only be injured, but that they will
be injured rather more than agriculture is benefited; and that a
determination at all events to keep up the prices of our corn might
involve us in a system of regulations, which, in the new state of
Europe which is expected, might not only retard in some degree, as
hitherto, the progress of our foreign commerce, but ultimately begin
to diminish it; in which case our agriculture itself would soon
suffer, in spite of all our efforts to prevent it.
If, on weighing fairly the good to be obtained and the sacrifices to
be made for it, the legislature should determine to adhere to its
present policy of restrictions, it should be observed, in reference
to the mode of doing it, that the time chosen is by no means
favourable for the adoption of such a system of regulations as will
not need future alterations. The state of the currency must throw
the most formidable obstacles in the way of all arrangements
respecting the prices of importation.
If we return to cash payments, while bullion continues of its
present value compared with corn, labour, and most other
commodities; little alteration will be required in the existing corn
laws. The bullion price of corn is now very considerably under sixty
three shillings, the price at which the high duty ceases according
to the Act of 1804.
If our currency continues at its present nominal value, it will be
necessary to make very considerable alterations in the laws, or they
will be a mere dead letter and become entirely inefficient in
restraining the importation of foreign corn.
If, on the other hand, we should return to our old standard, and at
the same time the value of bullion should fall from the restoration
of general confidence, and the ceasing of an extraordinary demand
for bullion; an intermediate sort of alteration will be necessary,
greater than in the case first mentioned, and less than in the
second.
In this state of necessary uncertainty with regard to our currency,
it would be extremely impolitic to come to any final regulation,
founded on an average which would be essentially influenced by the
nominal prices of the last five years.
To these considerations it may be added, that there are many reasons
to expect a more than usual abundance of corn in Europe during the
repose to which we may now look forward. Such an abundance(3*) took
place after the termination of the war of Louis XIV, and seems still
more probable now, if the late devastation of the human race and
interruption to industry should be succeeded by a peace of fifteen
or twenty years.
The prospect of an abundance of this kind, may to some perhaps
appear to justify still greater efforts to prevent the introduction
of foreign corn; and to secure our agriculture from too sudden a
shock, it may be necessary to give it some protection. But if, under
such circumstances with regard to the price of corn in Europe, we
were to endeavour to retain the prices of the last five years, it is
scarcely possible to suppose that our foreign commerce would not in
a short time begin to languish. The difference between ninety
shillings a quarter and thirty two shillings a quarter, which is
said to be the price of the best wheat in France, is almost too
great for our capital and machinery to contend with. The wages of
labour in this country, though they have not risen in proportion to
the price of corn, have been beyond all doubt considerably
influenced by it.
If the whole of the difference in the expense of raising corn in
this country and in the corn countries of Europe was occasioned by
taxation, and the precise amount of that taxation as affecting corn,
could be clearly ascertained; the simple and obvious way of
restoring things to their natural level and enabling us to grow
corn, as in a state of perfect freedom, would be to lay precisely
the same amount of tax on imported corn and grant the same amount in
a bounty upon exportation. Dr Smith observes, that when the
necessities of a state have obliged it to lay a tax upon a home
commodity, a duty of equal amount upon the same kind of commodity
when imported from abroad, only tends to restore the level of
industry which had necessarily been disturbed by the tax.