ABSTRACT
Everyone but an idiot knows that the lower classes must be kept poor, or they will not be industrious.
(Arthur Young 1771)
It has become an accepted opinion in the history of economic thought that the mid-eighteenth century witnessed a change in the prevailing attitude to labour within political economy (Coats 1958; Baird 1997; Hatcher 1998; Firth 2002; Dew 2007). Before this point, in the ‘mercantilist’ literature, the view was widely held that workers needed to be coerced to work by the threat of poverty and the achievement and maintenance of low wages was seen as a necessary foundation of a prosperous economy and a stable social order (see Furniss 1920). In the third quarter of the eighteenth century, however, economic writers began to recognise the role and power of economic incentives as a positive inducement to the supply of labour and to see the economic and social advantages of high wages. This move to embrace a more ‘liberal’ attitude to labour is regarded as most clearly evident in the work of Adam Smith, who argued against the necessity of subjecting workers to poverty and supported an increase in the living standards of the working population on economic as well as moral grounds (see Marshall 1998; Firth 2002). Later classical economists, it has been further argued, were not wholly hostile to the interests of workers and indeed were broadly in favour of the improvement in the material condition of the working class (see Coats 1967). The debate on labour in political economy did, indeed, change over the
course of the eighteenth century. But how deep rooted and fundamental was this change? Historians of economic thought, most notably A.W. Coats (1958), have argued that political economists after 1750 took a profoundly different approach to labour than that suggested by the earlier mercantilist writers. Several factors such as the ‘Enlightenment’ and the increased use of mechanised forms of production are seen to have helped promote greater sympathy for the plight of the labourer (see McNulty 1980: 32-5).
Historians, on the other hand, have looked to emphasise the influence of changing economic conditions on the direction of economic debates on labour in the eighteenth century. John Hatcher (1998), thus, has argued that a harsher economic environment in the post-1750 period prompted political economists to acknowledge the economic and social costs of low wages. In the view of Hatcher, the change in attitudes to labour in the mid-eighteenth century took place within the context of a ‘portfolio of enduring beliefs’ (Hatcher 1998: 104) and thus was far less profound than most historians of economic thought have tended to imply (see Dew 2007). This chapter takes a different focus in considering the approach of the
mercantilists and the classical economists to the concept of work. It is argued that an instrumental view of work survived the transition from mercantilism to classical economics. Even though economic writers in the second half of the eighteenth century believed in the effectiveness of incentives as a positive enticement to work, most still started from the same basic premise that work was irksome. Like the mercantilists, the classical economists were broadly in agreement that work had to be extracted from unwilling workers. The continuity in the conceptual analysis of work had two important consequences. First, it meant that human needs were defined in a narrow way: there was no clear recognition that workers along with the rest of humanity might have a need for work, not just as a means to secure their basic needs, but also as a source of creative activity. Work was seen as a means to an end, rather than an end in itself. Second, the view of work as an inherent bad deflected attention away from the possibility of making work into a more rewarding activity, via the reform of the institutions and organisation of work. Hence it appeared that each worker was born to labour in a joyless fashion since work was by its very nature painful. There was a general failure to see the endogenous roots of workers’ resistance to work and the consequent scope for progress in the quality of work. At worse, the ideology of work as ‘toil and trouble’ (Smith 1976b vol. 1: 47) served to condone and legitimate the drudgery and deprivation of work in the real world. A partial exception to the above was J.S. Mill. While he recognised the
inherent hardships of work under all economic systems, he acknowledged the fact that the aversion to work was linked in a direct way to the system of work under capitalism. Indeed, he argued for reforms in work organisation to overcome the specific costs of capitalist work organisation. However, he vacillated about whether in fact capitalism should be replaced by an alternative economic system. The chapter is divided into five main sections. The next section sets out
the key aspects of the labour doctrine of the mercantilists. This is followed by a section that looks at the debate on labour in the economics literature during the period 1750-76. The third section examines Adam Smith’s conception of work. The fourth section discusses the development of ideas on the nature and role of work within classical economics. The fifth section focuses on the specific contribution of J.S. Mill. The sixth section concludes.
‘Mercantilism’ is the term commonly used to describe the body of opinion that held sway in economic thought from the sixteenth through to the mideighteenth centuries. The mercantilists believed that the affluence of a nation depended on its ability to achieve and maintain a positive trade surplus. Based on this, it was seen as of vital importance that a nation kept down the price of its exports (see Heckscher 1935; Magnusson 1994). At the time when the mercantilists wrote, labour was the chief input into production and hence also the major cost of production. Consequently, there was a keen focus on the level of wages. It was argued that wages should be kept as low as possible not just to minimise direct labour costs and hence also export prices, but also to maximise the supply of labour (Furniss 1920; Coats 1958; Hatcher 1998; Firth 2002). The mercantilists believed that low wages were necessary to ensure that workers worked on a regular and continuous basis. The above ideas formed the basis of the so-called ‘utility of poverty’ thesis: the argument that the wealth of the nation was greatest where those who laboured were poor (Furniss 1920: 8). The paradox in mercantilist labour doctrine was that, while the labourer was seen to provide the source of the nation’s wealth, he or she was argued to have no right to any greater share of economic wealth than was necessary to meet his or her most basic material needs. A number of ideas and opinions informed the case put forward by the
mercantilists in support of low wages. First, the view was taken that the English labourer was innately opposed to work. Daniel Defoe thus wrote scathingly in 1704 about the ‘taint of slothfulness’ (Defoe 1704: 27) that was possessed by the working population in England. In the absence of poverty, workers would be certain to remain idle and higher wages were to be avoided as a means of enforcing a regular pattern of work that was required to increase national wealth. Thomas Mun’s view that ‘penury and want do make a people wise and industrious’ (Mun 1664: 182), was typical of the mercantilist period as a whole (see Furniss 1920: 117-18). Alongside low wages, the workhouse was to act as a ‘school of industry’ (Furniss 1920: 109) to instil in the poor the habit of regular and diligent work. Second, it was claimed that workers had very low material horizons, and would be unresponsive to wage incentives. High wages were seen to result in increased idleness with a negligible or zero effect on consumption levels (Hatcher 1998: 69-70), and low wages and high prices were recommended as a means to coerce the workforce into working long hours. Third, workers in England were condemned for drinking excessive amounts of alcohol and for leading debauched lives. Defoe lamented that ‘there’s nothing more certain than for an Englishman to work until he has got his pocket full of money, and then to go and be idle, or perhaps drunk, till ‘tis all gone’ (Defoe 1704: 27; emphasis in original). It was argued that if wages were allowed to rise then workerswere sure to indulge their passion for ‘vice’ (see Furniss 1920: 99-101).1
Low wages, in this case, were to be encouraged to ensure that the labouring
population adopted more godly habits of abstinence and prudence (Firth 2002: 46). Fourth, there was a fear that a rise in the living standards of the labourer would lead to disorder and sedition in society (Hatcher 1998: 70-1). A low level of wages, therefore, was needed to thwart the political ambitions of the lower classes and to preserve the existing social order. The mercantilists were in favour of state regulation of the labour market
to maintain wages at the subsistence level (see McNulty 1980: 24). Acceptance of an unregulated or ‘free’ labour market in political economy was to come later on. Among those who felt that the actual wage had come to exceed the subsistence level, a not uncommon view in the period before 1750, the conclusion was reached that wages should be reduced, either by lowering money wages or by raising the price of basic foodstuffs (Furniss 1920: 177). Other routes to lower wages involved measures such as increased immigration that helped to increase competition in the labour market (McNulty 1980: 28; Firth 2002: 47). The majority of authors, however, believed that English workers should be paid slightly higher wages than their foreign counterparts on account of their superior subsistence needs (see Furniss 1920: 183-7). These writers, which included Sir Walter Harris, Josiah Tucker, and Jacob Vanderlint, advocated measures to lower the subsistence wage, principally through the reduction in food prices. In this case, the state was to play a leading role in ensuring that the price of food was minimised. Not every contributor to the mercantilist literature was opposed to the
principle of high wages (see Wiles 1968). Several writers, including Defoe, pointed to the positive impact of high wages on consumption, and hence on accumulation and wealth creation (Wiles 1968: 117-21). Others, like John Cary and Josiah Tucker, believed that high wages could lead to a rise in productivity as well as the quality of labour (Wiles 1968: 122-6). Yet, these views were qualified (see Hatcher 1998: 104-5). Defoe, who was ‘perhaps the most outstanding exponent of the relation between wages and consumption’ (Wiles 1968: 119), continued to condemn the ‘crimes of indolence and sloth’ (quoted in Furniss 1920: 138) of overpaid English labourers. Josiah Tucker, ‘one of the most able writers of the era upon economic subjects’ (Wiles 1968: 124), declared that if ‘the price of labour is continually beat down, combinations of journeymen against their masters are prevented, industry is encouraged, and an emulation is excited: All which are greatly for the public good’ (Tucker 1750: 42). High wages could not be tolerated, in effect, while evidence showed that they acted to lower the available supply of labour (see Hatcher 1998: 105-6). The mercantilists sought to portray the dedication to work as a national
as well as moral duty. In the first place, it was argued that work was ‘good’, not in itself necessarily, but rather as a means of creating and advancing national wealth. Hard work was needed to maintain the wealth of the nation, and was to be performed with an attitude of service to one’s fellow citizens. Those who worked ceaselessly for the nation were to be treated with
respect, while those who avoided work were to be treated with the contempt they deserved. The nationalistic understanding of the ‘duty of labour’, hence, was important to mercantilist writers in condoning and legitimating the economic as well as social degradation of the labourer (see Furniss 1920: 200-1). In the second place, work was regarded as praiseworthy because of the evil of idleness (see McNulty 1980: 32). The imposition of endless toil via the maintenance of low wages was seen to keep the labourer away from an assortment of evils and to enable him or her to live a more virtuous and ultimately ‘happier’ life (see Furniss 1920: 121-2; Firth 2002: 47). Thus, Josiah Child concluded in 1693 that workers ‘lived better’ (18) where they were industrious, a view that served to justify the utility of hard times. An underlying belief was that workers had a rightful position at the
bottom of the social hierarchy and that they were born to carry out ‘the menial tasks of society’ (Furniss 1920: 147). Poverty thus was to be used to prevent social mobility and to preserve the extant class divisions in society (see Firth 2002). The notion that workers could be encouraged to acquire higher consumption wants and aspirations and to gain personal reward from work would have struck most mercantilist writers as absurd and nonsensical. Rather, they saw it as the duty of workers to toil in an unremitting fashion for low wages. Henry Fielding, writing in 1751, used religious doctrine to justify the
position of workers as the burden-bearers of society. Thus, he wrote that:
