An Essay on the Principle of Population
Book III, Chapter XII
Of Corn-Laws. Restrictions upon Importation.
The laws which prohibit the importation of foreign grain, though by no means unobjectionable, are not open to the same objections as bounties, and must be allowed to be adequate to the object they have in view,—the maintenance of an independent supply. A country, with landed resources, which determines never to import corn but when the price indicates an approach towards a scarcity, will necessarily, in average years, supply its own wants. Though we may reasonably therefore object to restrictions upon the importation of foreign corn, on the grounds of their tending to present the most profitable employment of the national capital and industry, to check population, and to discourage the export of our manufactures; yet we cannot deny their tendency to encourage the growth of corn at home, and to procure and maintain an independent supply. A bounty, it has appeared, sufficient to make it answer its purpose in forcing a surplus growth, would, in many cases, require so very heavy a direct tax, and would bear so large a proportion to the whole price of the corn, as to make it in some countries next to impracticable. Restrictions upon importation impose no direct tax upon the people. On the contrary, they might be made, if it were thought advisable, sources of revenue to the government, and they can always, without difficulty, be put in execution, and be made infallibly to answer their express purpose of securing, in average years, a sufficient growth of corn for the actual population.
We have considered, in the preceding chapters, the peculiar disadvantages which attend a system either almost exclusively agricultural or exclusively commercial, and the peculiar advantages which attend a system in which they are united, and flourish together. It has further appeared that, in a country with great landed resources, the commercial population may, from particular causes, so far predominate, as to subject it to some of the evils which belong to a state purely commercial and manufacturing, and to a degree of fluctuation in the price of corn greater than is found to take place in such a state. It is obviously possible, by restrictions upon the importation of foreign corn, to maintain a balance between the agricultural and commercial classes. The question is not a question of the effieciency or inefficiency of the measure proposed, but of its policy or impolicy. The object can certainly be accomplished, but it may be purchased too dear; and to those who do not at once reject all inquiries on points of this kind, as impeaching a principle which they hold sacred, the question, whether a balance between the agricultural and commercial classes of society, which would not take place naturally, ought, under certain circumstances, to be maintained artificially, must appear to be a most important practical question.
One of the objections to the admission of the doctrine that restrictions upon importation are advantageous is, that it cannot possibly be laid down as a general rule that every state ought to raise its own corn. There are some states so circumstanced that the rule is clearly and obviously inapplicable to them.
In the first place, there are many states which have made some figure in history, the territories of which have been perfectly inconsiderable compared with their main town or towns, and utterly incompetent to supply the actual population with food. In such communities, what is called the principal internal trade of a large state, the trade which is carried on between the towns and the country, must necessarily be a foreign trade, and the importation of foreign corn is absolutely necessary to their existence. They may be said to be born without the advantage of land, and, to whatever risks and disadvantages a system merely commercial and manufacturing may be exposed, they have no power of choosing any other. All that they can do is to make the most of their own situation, compared with the situation of their neighbours, and to endeavour by superior industry, skill, and capital, to make up for so important a deficiency. In these efforts, some states of which we have accounts have been wonderfully successful; but the reverses to which they have been subject have been almost as conspicuous as the degree of their prosperity compared with the scantiness of their natural resources.
Secondly, restrictions upon the importation of foreign corn are evidently not applicable to a country which, from its soil and climate. is subject to very great and sudden variations in its home supplies, from the variations of the seasons. A country so circumstanced will unquestionably increase its chance of a steady supply of grain by opening as many markets for importation and exportation as possible, and this will probably be true, even though other countries occasionally prohibit or tax the exports of their grain. The peculiar evil to which such a country is subject can only be mitigated by encouraging the freest possible foreign trade in corn.
Thirdly, restrictions upon importation are not applicable to a country which has a very barren territory, although it may be of some extent. An attempt fully to cultivate and improve such a territory by forcibly directing capital to it would probably, under any circumstances, fail; and the actual produce obtained in this way might be purchased by sacrifices which the capital and industry of the nation could not possibly continue to support. Whatever advantages those countries may enjoy, which possess the means of supporting a considerable population from their own soil, such advantages are not within the reach of a state so circumstanced. It must either consent to be a poor and inconsiderable community, or it must place its chief dependence on other resources than those of land. It resembles in many respects those states which have a very small territory; and its policy, with regard to the importation of corn, must of course be nearly the same.
In all these cases there can be no doubt of the impolicy of attempting to maintain a balance between the agricultural and commercial classes of society which would not take place naturally.
Under other and opposite circumstances, however, this impolicy is by no means so clear.
If a nation possesses a large territory consisting of land of an average quality, it may without difficulty support from its own soil a population fully sufficient to maintain its rank in wealth and power among the countries with which it has relations either of commerce or of war. Territories of a certain extent must ultimately in the main support their own population. As each exporting country approaches towards that complement of wealth and population to which it is naturally tending, it will gradually withdraw the corn which for a time it had spared to its more manufacturing and commercial neighbours, and leave them to subsist on their own resources. The peculiar products of each soil and climate are objects of foreign trade, which can never, under any circumstances, fail. But food is not a peculiar product; and the country which produces it in the greatest abundance may, according to the laws which govern the progress of population, have nothing to spare for others. An extensive foreign trade in corn beyond what arises from the variableness of the seasons in different countries is rather a temporary and incidental trade, depending chiefly upon the different stages of improvement which different countries may have reached, and on other accidental circumstances, than a trade which is in its nature permanent, and the stimulus to which will remain in the progress of society unabated. In the wildness of speculation it has been suggested (of course more in jest than in earnest), that Europe ought to grow its corn in America, and devote itself solely to manufactures and commerce, as the best sort of division of the labour of the globe. But even on the extravagant supposition that the natural course of things might lead to such a division of labour for a time, and that by such means Europe could raise a population greater than its lands could possibly support, the consequences ought justly to be dreaded. It is an unquestionable truth that it must answer to every territorial state, in its natural progress to wealth, to manufacture for itself, unless the countries from which it had purchased its manufactures possess some advantages peculiar to them besides capital and skill. But when upon this principle America began to withdraw its corn from Europe, and the agricultural exertions of Europe were inadequate to make up for the deficiency, it would certainly be felt that the temporary advantages of a greater degree of wealth and population (supposing them to have been really attained) had been very dearly purchased by a long period of retrograde movements and misery.
If then a country be of such a size that it may fairly be expected finally to supply its own population with food; if the population which it can thus support from its own resources in land be such as to enable it to maintain its rank and power among other nations; and further, if there be reason to fear not only the final withdrawing of foreign corn used for a certain time, which might be a distant event, but the immediate effects that attend a great predominance of a manufacturing population, such as increased unhealthiness, increased turbulence, increased fluctuations in the price of corn, and increased variableness in the wages of labour; it may not appear impolitic artificially to maintain a more equal balance between the agricultural and commercial classes by restricting the importation of foreign corn, and making agriculture keep pace with manufactures.
Thirdly, if a country be possessed of such a soil and climate, that the variations in its annual growth of corn are less than in most other countries, this may be an additional reason for admitting the policy of restricting the importation of foreign corn. Countries are very different in the degree of variableness to which their annual supplies are subject; and though it is unquestionably true that if all were nearly equal in this respect, and the trade in corn really free, the steadiness of price in a particular state would increase with an increase in the number of the nations connected with it by the commerce of grain; yet it by no means follows that the same conclusion will hold good when the premises are essentially different; that is, when some of the countries taken into the circle of trade are subject to very great comparative variations in their supplies of grain, and when this defect is aggravated by the acknowledged want of real freedom in the foreign trade of corn.
Suppose, for instance, that the extreme variations above and below the average quantity of corn grown, were in England ¼ and in France 1/3, a free intercourse between the two countries would probably increase the variabless of the English markets. And if, in addition to England and France, such a country as Bengal could be brought near, and admitted into the circle—a country in which, according to Sir George Colebrook, rice is sometimes sold four times as cheap in one year as in the succeeding without famine or scarcity;*46 and where, notwithstanding the frequency of abundant harvests, deficiencies sometimes occur of such extent as necessarily to destroy a considerable portion of the population; it is quite certain that the supplies both of England and France would become very much more variable than before the accession.
In point of fact, there is reason to believe that the British isles, owing to the nature of their soil and climate, are peculiarly free from great variations in their annual produce of grain. If the compare the prices of corn in England and France from the period of the commencement of the Eton tables to the beginning of the revolutionary war, we shall find that in England the highest price of the quarter of wheat of 8 bushels during the whole of that time was 3l. 15s. 6¾d. (in 1648), and the lowest price 1l. 2s. 1d. (in 1743), while in France the highest price of the septier was 62 francs 78 centuries (in 1662), and the lowest price 8 francs 89 centimes (in 1718).*47 In the one case the difference is a little above 3¼ times, and in the other very nearly 7 times. In the English tables, during periods of ten or twelve years, only two instances occur of a variation amounting to as much as 3 times; in the French tables, during periods of the same length, one instance occurs of a variation of 4 times or above. These variations may, perhaps, have been aggravated by a want of freedom in the internal trade of corn, but they are strongly confirmed by the calculations of Turgot, which relate solely to variations of produce, without reference to any difficulties or obstructions in its free transport from one part of the country to another.
On land of an average quality he estimates the produce at seven septiers the arpent in years of great abundance; and three septiers the arpent in years of great scarcity; while the medium produce he estimates at five septiers the arpent.*48 These calculations he conceives are not far removed from the truth; and proceeding on these grounds he observes that, in a very abundant year, the produce will be five months above its ordinary consumption, and in a very scarce year as much below. These variations are, I should think, much greater than those which take place in this country, at least if we may judge from prices, particularly as in a given degree of scarcity in the two countries there is little doubt that, from the superior riches of England, and the extensive parish relief which it affords to the poorer classes in times of dearth, its prices would rise more above the usual average than those of France.
If we look to the prices of wheat in Spain during the same period, we shall find, in like manner, much greater variations than in England. In a table of the prices of the fanega of wheat in the market of Seville from 1675 to 1764 inclusive, published in the Appendix to the Bullion Report,*49 the highest price is 48 reals vellon (in 1667), and the lowest price 7 reals vellon (in 1720), a difference of nearly seven times; and in periods of ten or twelve years the difference is, in two or three instances, as much as four times. In another table, from 1753 to 1792 inclusive, relating to the towns of Old Castille, the highest price in 1790 was 109 reals vellon the fanega, and in 1792 the lowest was only 16 reals vellone the fanega. In the market of Medina del Rio Seco, a town of the kingdom of Leon, surrounded by a very fine corn country, the price of the load of four fanegas of wheat was, in May, 1800, 100 reals vellon, and in May, 1804, 600 reals vellon, and these were both what are called low prices, as compared with the highest prices of the year. The difference would be greater if the high prices were compared with the low prices. Thus, in 1799, the low price of the four fanegas was 88 reals vellon, and in 1804 the high price of the four fanegas was 640 reals vellon—a difference of above seven times in so short a period as six years.*50
In Spain, foreign corn is freely admitted; yet the variation of price, in the towns of Andalusia, a province adjoining the sea, and penetrated by the river Guadalquiver, though not so great as those just mentioned, seem to shew that the coasts of the Mediterranean by no means furnish very steady supplies. It is known, indeed, that Spain is the principal competitor of England in the purchase of grain in the Baltic; and as it is quite certain that what maybe called the growing or usual price of corn in Spain is much lower than in England, it follows, that the difference between the prices of plentiful and scarce years must be very considerable.
I have not the means of ascertaining the variations in the supplies and prices of the northern nations. They are, however, occasionally great, as it is well known that some of these countries are at times subject to very severe scarcities. But the instances already produced are sufficient to shew, that a country which is advantageously circumstanced with regard to the steadiness of its home supplies may rather diminish than increase this steadiness by uniting its interests with a country less favourably circumstanced in this respect; and this steadiness will unquestionably be still further diminished, if the country which is the most variable in its supplies is allowed to inundate the other with its crops when they are abundant, while it reserves to itself the privilege of retaining them in a period of slight scarcity, when its commercial neighbour happens to be in the greatest want.*51
3dly, if a nation be possessed of a territory, not only of sufficient extent to maintain under its actual cultivation a population adequate to a state of the first rank, but of sufficient unexhausted fertility to allow of a very great increase of population, such a circumstance would of course make the measure of restricting the importation of foreign corn more applicable to it.
A country which, though fertile and populous, had been cultivated nearly to the utmost, would have no other means of increasing its population than by the admission of foreign corn. But the British isles shew at present no symptoms whatever of this species of exhaustion. The necessary accompaniments of a territory worked to the utmost are very low profits and interest, a very slack demand for labour, low wages, and a stationary population. Some of these symptoms may indeed take place without an exhausted territory; but an exhausted territory cannot take place without all these symptoms. Instead, however, of such symptoms, we have seen in this country, during the twenty years previous to 1814, a high rate of profits and interest, a very great demand for labour, good wages, and an increase of population more rapid, perhaps, than during any period of our previous history. The capitals which were laid out in bringing new land into cultivation, or improving the old, must necessarily have yielded good returns, or, under the actual rate of general profits, they would not have been so employed: and although it is strictly true that, as capital accumulates upon the land, its profits must ultimately diminish; yet owing to the increase of agricultural skill, and other causes noticed in a former chapter, these two events do not by any means always keep pace with each other. Though they must, finally unite and terminate the career of their progress together, they are often, during the course of their progress, separated for a considerable time, and at a considerable distance. In some countries, and some soils, the quantity of capital which can be absorbed before any essential diminution of profits necessarily takes place is so great, that its limit is not easily calculated; and certainly, when we consider what has been actually done in some districts of England and Scotland, and compare it with what remains to be done in other districts, we mast allow that no near approach to this limit has yet been made. On account of the high money price of labour, and of the materials of agricultural capital, occasioned partly by direct and indirect taxation, and partly, or perhaps chiefly by the great prosperity of our foreign commerce,*52 new lands cannot be brought into cultivation, nor great improvements made on the old, without a high money price of grain; but these lands, when they have been so brought into cultivation, or improved, have by no means turned out unproductive. The quantity and value of their produce have borne a full and fair proportion to the quantity of capital and labour employed upon them; and they were cultivated with great advantage both to individuals and the state, as long as the same, or nearly the same, relations between the value of produce and the cost of production, which prompted this cultivation, continued to exist.
In such a state of the soil, the British empire might unquestionably be able not only to support from its own agricultural resources its present population, but double, and in time, perhaps, even treble the number; and consequently a restriction upon the importation of foreign corn, which might be thought greatly objectionable in a country which had reached nearly the end of its resources, might appear in a very different light in a country capable of supporting from its own lands a very great increase of population.
But it will be said, that although a country may be allowed to be capable of maintaining from its own soil not only a great, but an increasing population, yet, if it be acknowledged that, by opening its ports for the free admission of foreign corn, it may be made to support a greater and more rapidly increasing population, it is unjustifiable to go out of our way to check this tendency, and to prevent that degree of wealth and population which would naturally take place.
This is unquestionably a powerful argument; and granting fully the premises, it cannot be answered upon the principles of political economy solely. I should say, however, that if it could be clearly ascertained that the addition of wealth and population so acquired would subject the society to a greater degree of uncertainty in its supplies corn, greater fluctuations in the wages of labour, greater unhealthiness and immorality owing to a larger proportion of the population being employed in manufactories, and a greater chance of long and depressing retrograde movements occasioned by the natural progress of those countries from which corn had been imported; I should have no hesitation in considering such wealth and population as much too dearly purchased. The happiness of a society is, after all, the legitimate end even of its wealth, power, and population. It is certainly true that with a view to the structure of society most favourable to this happiness, and an adequate stimulus to the production of wealth from the soil, a very considerable admixture of commercial and manufacturing population with the agricultural is absolutely necessary; but there is no argument so frequently and obviously fallacious as that which infers that what is good to a certain extent is good to any extent; and though it will be most readily admitted that, in a large landed nation, the evils which belong to the manufacturing and commercial system are much more than counterbalanced by its advantages, as long as it is supported by agriculture; yet, in reference to the effect of the excess which is not so supported, it may fairly be doubted whether the evils do not decidedly predominate.
It is observed by Adam Smith, that the "capital which is acquired to any country by commerce and manufactures is all a very uncertain and precarious possession, till some part of it has been secured and realized in the cultivation and improvement of its lands.*53
It is remarked in another place, that the monopoly of the colony trade, by raising the rate of mercantile profit, discourages the improvement of the soil, and retards the natural increase of that great original source of revenue—the rent of land.*54
Now it is certain that, at no period, have the manufactures, commerce and colony trade of the country been in a state to absorb so much capital as during the twenty years ending with 1814. From the year 1764 to the peace of Amiens, it is generally allowed that the commerce and manufactures of the country increased faster than its agriculture, and that it became gradually more and more dependent on foreign corn for its support. Since the peace of Amiens the state of its colonial monopoly and its manufactures has been such as to demand an unusual quantity of capital; and if the peculiar circumstances of the subsequent war, the high freights and insurance, and the decrees of Buonaparte, had not rendered the importation of foreign corn extremely difficult and expensive, we should at this moment, according to all general principles, have been in the habit of supporting a much larger portion of our population upon it, than at any former period of our history. The cultivation of the country would be in a very different state from what it is at present. Very few or none of those great improvements would have taken place which may be said to have purchased fresh land for the state that no fall of price can destroy. And the peace, or accidents of different kinds, might have curtailed essentially both our colonial and manufacturing advantages, and destroyed or driven away our capital before it had spread itself on the soil, and become national property.
As it is, the practical restrictions thrown in the way of importing foreign corn during the war have forced our steam-engines and our colonial monopoly to cultivate our lands; and those very causes which, according to Adam Smith, tend to draw capital from agriculture, and would certainly have so drawn it if we could have continued to purchase foreign corn at the market prices of France and Holland, have been the means of giving such a spur to our agriculture, that it has not only kept pace with a very rapid increase of commerce and manufactures, but has recovered the distance at which it had for many years been left behind, and now marches with them abreast.
But restrictions upon the importation of foreign corn in a country which has great landed resources, not only tend to spread every commercial and manufacturing advantage possessed, whether permanent or temporary, on the soil, and thus, in the language of Adam Smith, secure and realize it; but also tend to prevent those great oscillations in the progress of agriculture and commerce, which are seldom unattended with evil.
It is to be recollected, and it is a point of great importance to keep constantly in our minds, that the distress which has been experienced among almost all classes of society from the sudden fall of prices, except as far as it has been aggravated by the state of the currency, has been occasioned by natural, not artificial causes.
There is a tendency to an alternation in the rate of the progress of agriculture and manufactures in the same manner as there is a tendency to an alternation in the rate of the progress of food and population. In periods of peace and uninterrupted trade, these alternations, though not favourable to the happiness and quiet of society, may take place without producing material evil; but the intervention of war is always liable to give them a force and rapidity that must unavoidably produce a convulsion in the state of property.
The war that succeeded to the peace of Amiens found us dependent upon foreign countries for a very considerable portion of our supplies of corn; and we now grow our own consumption, notwithstanding an unusual increase of population in the interval. This great and sudden change in the state of our agriculture could only have been effected by very high prices occasioned by an inadequate home supply and the great expense and difficulty of importing foreign corn. But the rapidity with which this change has been effected must necessarily create a glut in the market as soon as the home growth of corn became fully equal or a little in excess above the home consumption; and, aided only by a small foreign importation, must inevitably occasion a very sudden fall of prices. If the ports had continued open for the free importation of foreign corn, there can be little doubt that the price of corn in 1815 would have been still considerably lower. This low price of corn, even if by means of lowered rents our present state of cultivation could be in a great degree preserved, must give such a check to future improvement, that if the ports were to continue open, we should certainly not grow a sufficiency at home to keep pace with our increasing population; and at the end of ten or twelve years we might be found by a new war in the same state that we were at the commencement of the present. We should then have the same career of high prices to pass through, the same excessive stimulus to agriculture*55 followed by the same sudden and depressing check to it, and the same enormous loans borrowed with the price of wheat at 90 or 100 shillings a quarter, and the monied incomes of the landholders and industrious classes of society nearly in proportion, to be paid when wheat is at 50 or 60 shillings a quarter, and the incomes of the landlords and industrious classes of society greatly reduced—a state of things which cannot take place without an excessive aggravation of the difficulty of paying taxes, and particularly that invariable monied amount which pays the interest of the national debt.
On the other hand a country which so restricts the importations of foreign corn as on an average to grow its own supplies, and to import merely in periods of scarcity, is not only certain of spreading every invention in manufactures and every peculiar advantage it may possess from its colonies or general commerce on the land, and thus of fixing them to the spot and rescuing them from accidents; but is necessarily exempt from those violent and distressing convulsions of property which almost unavoidably arise from the coincidence of a general war and an insufficient home supply of corn.
If the late war had found us independent of foreigners for our average consumption, not even our paper currency could have made the prices of our corn approach to the prices which were at one time experienced.*56 And if we had continued, during the course of the contest, independent of foreign supplies, except in an occasional scarcity, it is impossible that the growth of our own consumption, or a little above it, should have produced at the end of the war so universal a feeling of distress.
The chief practical objection to which restrictions on the importation of corn are exposed is a glut from an abundant harvest, which cannot be relieved by exportation. And in the consideration of that part of the question which relates to the fluctuations of prices this objection ought to have its full and fair weight. But the fluctuation of prices arising from this cause has sometimes been very greatly exaggerated. A glut which might essentially distress the farmers of a poor country, might be comparatively little felt by the farmers of a rich one; and it is difficult to conceive that a nation with an ample capital, and not under the influence of a great shock to commercial confidence, as this country was in 1815, would find much difficulty in reserving the surplus of one year to supply the wants of the next or some future year. It may fairly indeed be doubted whether, in such a country as our own, the fall of price arising from this cause would be so great as that which would be occasioned by the sudden pouring in of the supplies from an abundant crop in Europe, particularly from those states which do not regularly export corn. If our ports were always open, the existing laws of France would still prevent such a supply as would equalize prices; and French corn would only come in to us in considerable quantities in years of great abundance, when we were the least likely to want it, and when it was most likely to occasion a glut.*57
But if the fall of price occasioned in these two ways would not be essentially different, as it is quite certain that the rise of price in years of general scarcity would be less in those countries which habitually grow their own supplies; it must be allowed that the range of variation will be the least under such a system of restrictions as, without preventing importation when prices are high, will secure in ordinary years a growth equal to the consumption.*58
One objection however to systems of restriction must always remain. They are essentially unsocial. I certainly think that, in reference to the interests of a particular state, a restriction upon the importation of foreign corn may sometimes be advantageous; but I feel still more certain that in reference to the interests of Europe in general the most perfect freedom of trade in corn, as well as in every other commodity, would be the most advantageous. Such a perfect freedom, however, could hardly fail to be followed by a more free and equal distribution of capital, which, though it would greatly advance the riches and happiness of Europe, would unquestionably render some parts of it poorer and less populous than they are at present; and there is little reason to expect that individual states will ever consent to sacrifice the wealth within their own confines to the wealth of the world.
It is further to be observed, that, independently of more direct regulations, taxation alone produces a system of discouragements and encouragements which essentially interferes with the natural relations of commodities to each other; and as there is no hope of abolishing taxation, it may sometimes be only by a further interference that these natural relations can be restored.
A perfect freedom of trade therefore is a vision which it is to be feared can never be realized. But still it should be our object to make as near approaches to it as we can. It should always be considered as the great general rule. And when any deviations from it are proposed, those who propose them are bound clearly to make out the exception.
Notes for this chapter
Husbandry of Bengal, p. 108. Note. He observes in the text of the same page that the price of corn fluctuates much more than in Europe.
Garnier's edition of the Wealth of Nations, vol. ii. table, p. 188.
Œuvres de Turgot, tom. vi. p. 143. Edit. 1803.
Appendix, p. 182.
Bullion Report. Appendix, p. 185.
These two circumstances essentially change the premises on which the question of a free importation, as applicable to a particular state, must rest.
No restrictions upon the importation of grain, however absurdly severe, could permanently maintain our corn and labour at a much higher price than in the rest of Europe, if such restrictions were essentially to interfere with the prosperity of our foreign commerce. When the money price of labour is high in any country, or, what is the same thing, when the value of money is low, nothing can prevent it from going out to find its level, but some comparative advantages, either natural or acquired, which enable such country to maintain the abundance of its exports, notwithstanding the high money price of its labour.
Vol. ii. b. iii c. 4. p. 137.
Vol. ii. b. iv. c. 8. p. 495.
According to the evidence before the House of Lords (Reports, p. 49), the freight and insurance alone on a quarter of corn were greater by 48 shillings in 1811 than in 1814. Without any artificial interference then, it appears that war alone may occasion unavoidably a prodigious increase of price.
According to Mr. Tooke (High and Low Prices, p. 215), if the last war had found us with a growth beyond our consumption, we should have witnessed a totally different set of phenomena connected with prices. It will be found upon examination, that the prices of our corn led the way to the excess and diminution of our paper currency, rather than followed, although the prices of corn could never have been either so high or so low if this excess and diminution had not taken place.
Almost all the corn merchants who gave their evidence before the committees of the two houses in 1814 seemed fully aware of the low prices likely to be occasioned by an abundant crop in Europe, if our ports were open to receive it.
[1825.] In the sixth number of the Westminster Review, in which prodigious stress is laid upon the necessary effect of the corn laws in occasioning great fluctuation, in the prices of corn, a table, said to be from the very highest mercantile authority, is given of the average prices of wheat at Rotterdam for each of the ten years ending with 1824. The purpose for which the table is produced, is to shew the average price of wheat in Holland during these ten years; but it incidentally shews that, even in Holland, which in many respects must be peculiarly favourable to steady prices, a free trade in corn can by no means secure them.
In the year 1817, the price per last of 86 Winchester bushels was 574 guilders; and in 1824, it was only 147 guilders; a difference of nearly four times. During the same period of ten years the greatest variation in the average price of each year in England, was between 94s. 9d. which was the price in 1817, and 43s. 9d. which was the price in 1822, (Appendix to Mr. Tooke's work on High and Low Prices. Table xii. p. 31.)—a difference short of 2 1/5! ! [Note: There are in fact two exclamation points in the original text of the 6th edition (p. 207). The arithmetic change does work out to being just short of 2.2 times: there is no missing unit of measurement as a potential typographical error. Additionally, there are very few typographical errors in this edition. Quite possibly this is one of the first instances in print of a doubling of exclamation points for extra emphasis.—Econlib Editor.]
It is repeated over and over again, apparently without the slightest reference to facts, that the freedom of the trade in corn would infallibly secure us from the possibility of a scarcity. The writer of the article Corn Laws in the supplement to the Encyclopædia Britannica goes so far as to say, "it is constantly found that when the crops of one country fail, plenty reigns in some other quarter**** There is always abundance of food in the world. To enjoy a constant plenty, we have only to lay aside our prohibitions and restrictions, and cease to counteract the benevolent wisdom of Providence." The same kind of language is repeated in the Review above adverted to: "If there be a bad harvest," it is said, "in one country, there is a good one in another, and the surplus produce of the latter supplies the deficiency of the former, &c. &c:." Now there are the best reasons for believing that these statements are decidedly contradicted by the most enlarged experience. In the first place, if they were true, and if the general plenty alluded to were only prevented by the want of a free trade in corn, we should necessarily see a great rise of prices in one country, contemporaneous with a great fall in others; but a slight glance at the prices of corn in the countries of the commercial world for the last one or two centuries will be sufficient to convince any impartial person that, on the contrary, there is a very remarkable sympathy of prices at the same periods, which is absolutely inconsistent the truth of the above statements. Secondly, all travellers who have paid any attention to the seasons, agree in stating that the same sort of weather often prevails in different countries at the same time. The peculiar and excessive heats of the very last summer not only prevailed generally over the greatest part of Europe, but extended even to America. Mr. Tooke, On High and Low Prices, (p. 247. 2d Edit.) quotes a passage from Mr. Lowe's work on the Present State of England, in which he observes, that "The public, particularly the untravelled part of the public, are hardly of the similarity of temperature prevailing throughout what may be called the corn-country of Europe, we mean Great Britain, Ireland, the North of France, the Netherlands, Denmark, the northwest of Germany, and in some measure Poland and the northeast of Germany." He then goes on to state instances of scarcity in different countries of Europe at the same time. And in the justness of these remarks, on the prevalence of a general similarity of seasons in Europe within certain latitudes, Mr. Tooke says he perfectly concurs. Many of the corn-merchants examined before the Committees of the two Houses, both in 1814 and 1821, expressed similar opinions; and I do not recollect a single instance of the opinion, that good and bad harvests generally balance each other in different countries, being stated by any person who had been in a situation to observe the facts. Such statements, therefore, must be considered as mere assertions quite unsupported by the least shadow of proof.
I am very far however from meaning to say that the circumstance of different countries having often an abundance or deficiency of corn at the same time, though it must prevent the possibility of steady prices, is a decisive reason against the abolition or alteration of the corn-laws. The most powerful of all the arguments against restrictions is their unsocial tendency, and the acknowledged injury which they must do to the interests of the commercial world in general. The weight of this argument is increased rather than diminished by the numbers which may suffer from scarcity at the same time. And at a period when our ministers are the most laudably setting an example of a more liberal system of commercial policy, it would be greatly desirable that foreign nations should not have so marked an exception as our present corn-laws to cast in our teeth. A duty on importation not too high, and a bounty nearly such as was recommended by Mr. Ricardo, would probably be best suited to our present situation, and best secure steady prices. A duty on foreign corn would resemble the duties laid by other countries on our manufactures as objects of taxation, and would not in the same manner impeach the principles of free trade.
But whatever system we may adopt, it is essential to a sound determination, and highly useful in preventing disappointments, that all the arguments both for and against corn-laws should be thoroughly and impartially considered; and it is because on a calm, and, as far as I can judge, an impartial review of the arguments of this chapter, they still appear to me of weight sufficient to deserve such consideration, and not as a kind of protest against the abolition or change of the corn-laws, that I republish them in another edition. .
End of Notes
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