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agriculture and manufactures, are among the principal causes of her wealth, and of the political influence we find her exerting. But, to say nothing of other advantages, which may ultimately accrue from the rise of wages, this augmentation has already produced one most valuable result in England. It has ameliorated the condition of that class of men, who live by the labor of their hands alone, that is, the most numerous portion of society. This class, elsewhere reduced to the most scanty subsistence, are much better off in England. They there obtain by their labor the necessaries of life in greater abundance than in many other parts of Europe; and there can be no doubt, that this springs from the influence of American commerce on the rate of wages. I know it may be said, that, notwithstanding the increase of labor and of subsistence in Europe, and notwithstanding the emigration which may take place, the same causes which we have mentioned, and which have reduced wages so low, will continue to operate, because they are inherent in the constitutions of European states, whose defects will not be remedied by the liberty and prosperity of America. Perhaps it may be said, also, that the number of proprietors and capitalists, a number very small compared with that of the men, who, having no landed property nor capital, are compelled to live upon wages, will remain the same, because the causes which accumulate landed property and capital in their hands will not change, and consequently that they will reduce, or rather keep wages very low. Finally, it may be said, that the tyranny of the feudal laws, the mode of taxation, the excessive increase of the public revenue, and the laws of commerce, will always produce the same effect of diminishing wages, and that, WOL. II. LL
should Europe derive any real advantage, in this respect, from American independence, it would not be permanent.
To these suggestions, many things may be said in reply. I will observe, in the first place, that, if the governments of Europe endeavour to counteract the salutary effects, which the independence of America would naturally produce in respect to them, it is not the less interesting to endeavour to ascertain what these effects would be. Better days may come, when, the true principles of the happiness of nations being better understood, there will be some sovereign sufficiently enlightened and just to put them in operation. The causes, which tend continually to accumulate and concentrate landed property and wealth in a few hands, may be diminished. The remains of the feudal system may be abolished, or, at least, rendered less oppressive. The mode of taxation may be changed, and its excess moderated. And, lastly, bad commercial regulations may be amended. The tendency of all these improvements will be, to enable the working classes to profit by the favorable change, which the American Revolution must naturally produce.
But, admitting that all the causes, which have just been mentioned, should concur to keep the wages, which the day-laborer receives for his work in Europe, at a low rate, they could, however, only weaken the influence exerted by the prosperity of America, and not wholly destroy it. If every thing else remained in the same state, there would still be a greater consumption, and consequently more labor to be performed. Now, this consumption and labor continually increasing in the same ratio with the increase of population and wealth in the New World, an augmentation of wages in Europe will be the necessary result; for the coun
teracting causes will not operate more powerfully than they now do.”
* The suggestion in this essay, that the capacity of a nation for cheap production is not dependent solely upon the lowness of wages, is very just, indeed quite obvious, and yet it is not usually so satisfactorily presented in works on political economy, as it is above. Those works are apt to lead the reader into a misapprehension on this subject, by assigning to the money rate of wages too predominant an influence on the money price of products. That it is not decisive in this respect is demonstrated in the example put in the text, namely, that of England, where wages are higher than in any other European country; and yet England maintains a successful competition in the foreign markets with other nations, and not only with those where labor is cheaper, but also with those where interest is usually lower, for instance, Holland. These are disadvantages under which England, and still more the United States, labor in competition with the Dutch in her foreign markets, and also the home markets, provided all goods, both foreign and domestic, are admitted into the home market upon the same footing without discrimination.
How are these disadvantages to be compensated? It may be by some or all of the following advantages, viz. 1. By low rents and cheap materials. 2. By plenty and cheapness of fuel. 3. By facility of inland transportation. 4. By a good geographical position for marine transportation. 5. By a good mercantile marine. 6. By commercial advantages secured by treaties and conventions with foreign nations. 7. By superior intelligence and skill of operatives. 8. By improvements in machinery and more perfect implements. 9. By more intense industry, rendering a day's labor more effective independently of any superiority of skill or implements. 10. By superior sagacity, activity, and enterprise on the part of the undertakers and conductors of the national industry. 11. By the greater enterprise, skill, and activity of the merchants. In comparing the condition of different nations as competitors in commerce, these causes ought all to be kept in view, no less than the money rate of wages and the rate of interest; and so presented, that a just weight may be assigned to each.
In regard to the influence of the growth of the United States upon the rate of wages in Europe, Franklin's argument supposes, that the increase of employment for European laborers will be greater in proportion to the increase of the laborers themselves, than if the country were stationary. The proposition is probably true, but not so obviously so, that it can be taken for granted. The essay would have been clearer and more satisfactory, had this question been treated.—W. PHILLIPs.
ON LUXURY, IDLENESS, AND INDUSTRY.*
It is wonderful how preposterously the affairs of this world are managed. Naturally one would imagine, that the interest of a few individuals should give way to general interest; but individuals manage their affairs with so much more application, industry, and address, than the public do theirs, that general interest most commonly gives way to particular. We assemble parliaments and councils, to have the benefit of their collected wisdom; but we necessarily have, at the same time, the inconvenience of their collected passions, prejudices, and private interests. By the help of these, artful men overpower their wisdom, and dupe its possessors; and if we may judge by the acts, arrêts, and edicts, all the world over, for regulating commerce, an assembly of great men is the greatest fool upon earth.
I have not yet, indeed, thought of a remedy for luxury. I am not sure, that in a great state it is capable of a remedy, nor that the evil is in itself always so great as it is represented. Suppose we include in the definition of luxury all unnecessary expense, and then let us consider whether laws to prevent such expense are possible to be executed in a great country, and whether, if they could be executed, our people generally would be happier, or even richer. Is not the hope of being one day able to purchase and enjoy luxuries a great spur to labor and industry? May not luxury, therefore, produce more than it consumes, if without such a spur people would be,
* From a letter to Mr. Benjamin Vaughan, dated at Passy, July 26th, 1784.
as they are naturally enough inclined to be, lazy and indolent? To this purpose I remember a circumstance. The skipper of a shallop, employed between Cape May and Philadelphia, had done us some small service, for which he refused to be paid. My wife, understanding that he had a daughter, sent her a present of a new-fashioned cap. Three years after, this skipper being at my house with an old farmer of Cape May, his passenger, he mentioned the cap, and how much his daughter had been pleased with it. “But,” said he, “it proved a dear cap to our congregation.” “How so?” “When my daughter appeared with it at meeting, it was so much admired, that all the girls resolved to get such caps from Philadelphia ; and my wife and I computed, that the whole could not have cost less than a hundred pounds.” “True,” said the farmer, “but you do not tell all the story. I think the cap was nevertheless an advantage to us, for it was the first thing that put our girls upon knitting worsted mittens for sale at Philadelphia, that they might have wherewithal to buy caps and ribbons there; and you know that that industry has continued, and is likely to continue and increase to a much greater value, and answer better purposes.” Upon the whole, I was more reconciled to this little piece of luxury, since not only the girls were made happier by having fine caps, but the Philadelphians by the supply of warm mittens.
In our commercial towns upon the seacoast, fortunes will occasionally be made. Some of those who grow rich will be prudent, live within bounds, and preserve what they have gained for their posterity ; others, fond of showing their wealth, will be extravagant and ruin themselves. Laws cannot prevent this; and perhaps it is not always an evil to the public. A shilling spent idly by a fool, may be picked up by a wiser person,