Thomas Malthus

“ Almost every person, indeed, must occasionally do some productive labour; and the line of separation which Adam Smith has drawn between productive and unproductive labour may be perfectly distinct, although the denomination which he has given to the different classes of society, founded on their general character, must unavoidably be inaccurate with regard to the exertions of some individuals. It should also be constantly borne in mind, that Adam Smith fully allows the vast importance of many sorts of labour, which he calls unproductive. ”

“ If the labour of menial servants be as productive of wealth as the labour of manufacturers, why should not savings be employed in their maintenance, not only without being dissipated, but with a constant increase of their amount? But menial servants, lawyers, or physicians, who save from their salaries are fully aware that their savings would be immediately dissipated again if they were advanced to persons like themselves, instead of being employed in the maintenance of persons of a different description. ”

“ Some degree of duration and a consequent susceptibility of accumulation seems to be essential to our usual conceptions of wealth, not only because produce of this kind seems to be alone capable of forming those accumulations which tend so much to facilitate future production, but because they so essentially contribute to increase that store reserved for consumption, the possession of which is certainly one of the most distinguishing marks of riches compared with poverty. ”

“ In regard to the expense of education, it should be recollected that no small portion of it is employed in acquiring the skill necessary to the production and distribution of material objects, as in the case of most apprenticeships; and as the persons who have the means of teaching this skill, are themselves employed in this sort of production and distribution; and that the skill so acquired will finally be realized, according to its value on material objects, the capital so employed must clearly be considered as maintaining productive labour, in the most natural sense of the term. ”

“ The characteristic of poverty seems to be, to live from hand to mouth: the characteristic of riches is, to have a store to apply to for the commodities wanted for immediate consumption; but in every case of productive labour as explained by Adam Smith, there is always a period, though in some cases it may be very short, when either the stock destined to replace a capital, or the stock reserved for immediate consumption is distinctly augmented by it ”

“ Value in exchange is the relation of one object to some other or others in exchange. To determine this relation accurately in any particular case, an actual exchange must take place; and every exchange must imply not only the power and will to give some object in exchange for one more wanted, but a reciprocal desire in the party possessing the commodity wanted, for the commodity or the labour proposed to be exchanged for it. ”

“ The great mass of society will be divided chiefly into two classes, the rich and the poor, one of which will be in a state of abject dependance upon the other. But a taste for material objects, however frivolous, almost always requires for its gratification the accumulation of capital, and the existence of a much greater number of manufacturers, merchants, wholesale dealers, and retail dealers.* The face of society is thus wholly changed. A middle class of persons, living upon the profits of stock, rises into wealth and consequence ”

“ Thirdly, it has been stated by Adam Smith, and it is allowed to have been stated truly, that there is a balance very different from the balance of trade, which according as it is favourable or unfavourable, occasions the prosperity or decay of every nation. This is the balance of the annual production and consumption. If in given periods the produce of a country exceeds in a certain degree the consumption of those employed in its production, the means of increasing its capital will be provided; its population will increase, or the actual numbers will be better accommodated, and probably both. ”

“ If corn be dear, on account of a deficient supply, we say that corn has risen in value; but if we still pay the same money for our coats, shirts, and shoes, we never think of saying that they have fallen in value, although on account of the rise in a great mass of raw produce, they will have diminished most essentially in their general power of purchasing. The corn is said to have risen in exchangeable value, because its power of purchasing has been affected by a cause intrinsic to the article itself, namely, a deficiency of its supply. ”

“ In the same manner, if while money is considered as of the same value, certain commodities, either from scarcity, or the greater cost of production become more difficult of acquisition, as they will certainly not be acquired except by those who are willing and able to sacrifice a greater amount of money in order to obtain them, such sacrifice, if made, must be considered as an evidence of greater intensity of demand. ”

“ When we consider then the difficulties which present themselves on every supposition we can make, it may fairly be doubted whether it is probable that we shall be able to find a distinction more useful for practical purposes, and on the whole less objectionable in point of precision than that of Adam Smith; which draws the line that distinguishes riches from other kinds of value, between what is matter and what is not matter, between what is susceptible of accumulation and definite valuation, and what is without either one or both of these essential properties. ”

“ It is no doubt true, that the desire to enjoy the convenience or parade of personal attendance, and the advantages of legal and medical advice, has a strong tendency to stimulate industry. But though the tendency of personal services to act as a stimulus to the production of wealth be fully allowed, they can never be said directly to create it, so long as the definition is confined to material objects. ”

“ If instead of a temporary abundance of supply compared with the demand, the cost of producing any particular commodity were greatly diminished, the fall of price would in the same manner be occasioned by an increased abundance of supply, either actual or contingent. In almost all practical cases it would be an actual and permanent increase; because the competition of the sellers would lower the price, and it very rarely happens that a fall of price does not occasion an increased consumption. ”

“ In order that each individual in a society should be furnished with that share of the whole produce, to which he is entitled, by his wants and powers, it is not only necessary that there should be some measure of this share, but some medium by which he can obtain it in the quantity and at the time best suited to him. ”

“ In the first place, then, it will readily be granted, that as material capital is the specific source of that great department of the national revenue, peculiarly called profits, and is further absolutely necessary to that division of labour, and extended use of machinery, which so wonderfully increases the productive powers of human industry, its vast influence on the progress of national wealth must be considered as incontrovertibly established. ”

“ If, as some affirm, every person is a reproductive consumer who obtains for himself a value equal to that which he consumes, it is obvious that all menial servants kept for pomp or pleasure will be productive consumers; but it is quite impossible that a saving, or an increase of wealth and capital can result to any individual from the employment of a great number of such reproductive consumers. ”

“ Every man, therefore, in order to secure this reciprocal demand, would endeavour, as is justly stated by Adam Smith, so to carry on his business, as to have by him, besides the produce of his own particular trade, some commodity for which there was so general and constant a demand, that it would scarcely ever be refused in exchange for what he wanted. ”

“ If in calling personal services productive of wealth, we do not look to the character of what is produced, but merely to its effect in stimulating other producers, this is introducing a new and separate consideration, which has no relation to the direct production of wealth. ”

“ If, for instance, a commodity which had been habitually demanded and consumed by a thousand purchasers, were suddenly to be wanted by two thousand, it is clear that before this increased extent of demand can be supplied, some must go without what they want; and it is scarcely possible to suppose that the intensity of individual demand should not exist in such a degree among a sufficient number of these two thousand demanders, as to take off the whole of the commodity produced at an increased price. ”

“ We do not often hear of the value of air and water, although they are bodies in the highest degree useful, and indeed essentially necessary to the life and happiness of human beings. Yet it may be admitted that the term, taken perhaps in a metaphorical, rather than in a literal sense, may imply, and is sometimes used to imply, whatever is in any way beneficial to us, and in this sense may apply without impropriety to an abundant spring of water, or to a fine air, although no question could arise respecting their value in exchange. ”

“ But the productive labourers at the same time that they obtain wealth, and the means of accumulation for themselves, furnish a large surplus to that other most important class of society which lives upon the profits of capital. This distinction alone is quite sufficient to place in a different point of view the productive labourers of Adam Smith, and those engaged in personal services. ”

“ If a taste for idle retainers, and a profusion of menial servants, had continued among the great landholders of Europe from the feudal times to the present, the wealth of its different kingdoms would have been very different from what it is now. Adam Smith has justly stated that the growing taste of our ancestors for material conveniences and luxuries, instead of personal services, was the main cause of the change. While the latter continue to be the predominant taste, few comparatively will be living on the profits of capital. ”

“ In Peru, where the precious metals were found by the Spaniards in much greater abundance, the practice of smelting and refining the richest ores had begun to prevail, although no shafts had been sunk to any depth in the earth.† But in Peru the state of property was so peculiar, and there was so little commerce of any kind, that a medium of exchange seems not to have been called for; at least there is no account of the use of either of the precious metals, or of any other commodity in the capacity of money. ”

“ If the consumption in such periods fully equals the produce, no means of increasing the capital will be afforded, and the society will be nearly at a stand. If the consumption continually exceeds the produce, every succeeding period will see the society worse supplied, and its prosperity and population will be evidently on the decline. ”

“ It has sometimes been said, that demand is always equal to supply; because no supply of any commodity can take place for which there is not a demand, which will take off all that is offered. In one sense of the terms in which demand and supply have been used, this position may be granted. The actual extent of the demand, compared with the actual extent of the supply are always nearly equal to each other. If the supply be ever so small, the extent of the demand cannot be greater ”

“ It seems to be quite necessary indeed that the commodity chosen for a medium of exchange should, in addition to the other qualities which may fit it for that purpose, be in such frequent use that the estimation in which it was held, founded on the desire to possess it, and the difficulty of obtaining it, should be tolerably well established. ”

“ In fact, it may be said, that the giving a greater price for a commodity, while the difficulty of obtaining money remains the same, necessarily implies a greater intensity of demand; and that the real question is, what are the causes which determine the increase or diminution of this intensity of demand, which shows itself in a rise or fall of prices. ”