Principles of Political Economy with some of their Applications to Social Philosophy
By John Stuart Mill
John Stuart Mill (1806-1873) originally wrote the
Principles of Political Economy, with some of their Applications to Social Philosophy very quickly, having studied economics under the rigorous tutelage of his father, James, since his youth. It was published in 1848 (London: John W. Parker, West Strand) and was republished with changes and updates a total of seven times in Mill’s lifetime.The edition presented here is that prepared by W. J. Ashley in 1909, based on Mill’s 7th edition, 1870. Ashley followed the 7th edition with great care, noting changes in the editions in footnotes and in occasional square brackets within the text. The text provides English translations to several lengthy quotations originally quoted by Mill in French. Ashley selected these from an 1865 “People’s Edition” of the Principles, but left in those quotations that had been omitted in that edition. He also prepared a useful Bibliographical Appendix, with additional readings and excerpts from some of Mill’s later writings, which we also include in this Econlib Edition. More on Mill’s life and works, as well as details of Ashley’s procedure, can be found in his Introduction.A few corrections of obvious typos were made for this website edition. However, because the original edition was so internally consistent and carefully proofread, we have erred on the side of caution, allowing some typos to remain lest someone doing academic research wishes to follow up. We have changed small caps to full caps for ease of using search engines.Internal references by page numbers have been replaced by linked paragraph reference numbers appropriate for this online edition. Paragraph references typically have three parts: the book, chapter, and paragraph. E.g.,
I.XI.15 refers to Book I, Chapter XI, paragraph 15.
William J. Ashley, ed.
First Pub. Date
London; Longmans, Green and Co.
The text of this edition is in the public domain. Picture of John Stuart Mill courtesy of The Warren J. Samuels Portrait Collection at Duke University.
- Preliminary Remarks
- Bibliographical Appendix
Of Popular Remedies for Low Wages
Book II, Chapter XII
§1. The simplest expedient which can be imagined for keeping the wages of labour up to the desirable point, would be to fix them by law: and this is virtually the object aimed at in a variety of plans which have at different times been, or still are, current, for remodelling the relation between labourers and employers. No one probably ever suggested that wages should be absolutely fixed; since the interests of all concerned, often require that they should be variable: but some have proposed to fix a minimum of wages, leaving the variations above that point to be adjusted by competition. Another plan which has found many advocates among the leaders of the operatives, is that councils should be formed, which in England have been called local boards of trade, in France “conseils de prud’hommes,” and other names; consisting of delegates from the workpeople and from the employers, who, meeting in conference, should agree upon a rate of wages, and promulgate it from authority, to be binding generally on employers and workmen; the ground of decision being, not the state of the labour-market, but natural equity; to provide that the workmen shall have
reasonable wages and the capitalist reasonable profits.
Others again (but these are rather philanthropists interesting themselves for the labouring classes, than the labouring people themselves) are shy of admitting the interference of authority in contracts for labour: they fear that if law intervened, it would intervene rashly and ignorantly; they are convinced that two parties, with opposite interests, attempting to adjust those interests by negotiation through their representatives on principles of equity, when no rule could be laid down to determine what was equitable, would merely exasperate their differences instead of healing them; but what it is useless to attempt by the legal sanction, these persons desire to compass by the moral. Every employer, they think,
ought to give
sufficient wages; and if he does it not willingly, should be compelled to it by general opinion; the test of sufficient wages being their own feelings, or what they suppose to be those of the public. This is, I think, a fair representation of a considerable body of existing opinion on the subject.
I desire to confine my remarks to the principle involved in all these suggestions, without taking into account practical difficulties, serious as these must at once be seen to be. I shall suppose that by one or other of these contrivances, wages could be kept above the point to which they would be brought by competition. This is as much as to say, above the highest rate which can be afforded by the existing capital consistently with employing all the labourers. For it is a mistake to suppose that competition merely keeps down wages. It is equally the means by which they are kept up. When there are any labourers unemployed, these, unless maintained by charity, become competitors for hire, and wages fall; but when all who were out of work have found employment, wages will not, under the freest system of competition, fall lower. There are strange notions afloat concerning the nature of competition. Some people seem to imagine that its effect is something indefinite; that the competition of sellers may lower prices, and the competition of labourers may lower wages, down to zero, or some unassignable minimum. Nothing can be more unfounded. Goods can only be lowered in price by competition, to the point which calls forth buyers sufficient to take them off; and wages can only be lowered by competition until room is made to admit all the labourers to a share in the distribution of the wages-fund. If they fell below this point, a portion of capital would remain unemployed for want of labourers; a counter-competition would commence on the side of capitalists, and wages would rise.
Since, therefore, the rate of wages which results from competition distributes the whole existing wages-fund among the whole labouring population; if law or opinion succeeds in fixing wages above this rate, some labourers are kept out of employment; and as it is not the intention of the philanthropists that these should starve, they must be provided for by a forced increase of the wages-fund; by a compulsory saving. It is nothing to fix a minimum of wages, unless there be a provision that work, or wages at least, be found for all who apply for it. This, accordingly, is always part of the scheme; and is consistent with the ideas of more people than would approve of either a legal or a moral minimum of wages. Popular sentiment looks upon it as the duty of the rich, or of the state, to find employment for all the poor. If the moral influence of opinion does not induce the rich to spare from their consumption enough to set all the poor to work at “reasonable wages,” it is supposed to be incumbent on the state to lay on taxes for the purpose, either by local rates or votes of public money. The proportion between labour and the wages-fund would thus be modified to the advantage of the labourers, not by restriction of population, but by an increase of capital.
§2. If this claim on society could be limited to the existing generation; if nothing more were necessary than a compulsory accumulation, sufficient to provide permanent employment at ample wages for the existing numbers of the people; such a proposition would have no more strenuous supporter than myself. Society mainly consists of those who live by bodily labour; and if society, that is, if the labourers, lend their physical force to protect individuals in the enjoyment of superfluities, they are entitled to do so, and have always done so, with the reservation of a power to tax those superfluities for purposes of public utility; among which purposes the subsistence of the people is the foremost. Since no one is responsible for having been born, no pecuniary sacrifice is too great to be made by those who have more than enough, for the purpose of securing enough to all persons already in existence.
But it is another thing altogether, when those who have produced and accumulated are called upon to abstain from consuming until they have given food and clothing, not only to all who now exist, but to all whom these or their descendants may think fit to call into existence. Such an obligation acknowledged and acted upon, would suspend all checks, both positive and preventive; there would be nothing to hinder population from starting forward at its rapidest rate; and as the natural increase of capital would, at the best, not be more rapid than before, taxation, to make up the growing deficiency, must advance with the same gigantic strides. The attempt would of course be made to exact labour in exchange for support. But experience has shown the sort of work to be expected from recipients of public charity. When the pay is not given for the sake of the work, but the work found for the sake of the pay, inefficiency is a matter of certainty: to extract real work from day-labourers without the power of dismissal, is only practicable by the power of the lash. It is conceivable,
*71 doubtless, that this objection might be got over. The fund raised by taxation might be spread over the labour market generally, as seems to be intended by the supporters of the
droit au travail in France; without giving to any unemployed labourer a right to demand support in a particular place or from a particular functionary. The power of dismissal as regards individual labourers, would then remain; the government only undertaking to create additional employment when there was a deficiency, and reserving, like other employers, the choice of its own workpeople. But let them work ever so efficiently, the increasing population could not, as we have so often shown, increase the produce proportionally: the surplus, after all were fed, would bear a less and less proportion to the whole produce, and to the population: and the increase of people going on in a constant ratio, while the increase of produce went on in a diminishing ratio, the surplus would in time be wholly absorbed; taxation for the support of the poor would engross the whole income of the country; the payers and the receivers would be melted down into one mass. The check to population either by death or prudence, could not then be staved off any longer, but must come into operation suddenly and at once; everything which places mankind above a nest of ants or a colony of beavers, having perished in the interval.
These consequences have been so often and so clearly pointed out by authors of reputation, in writings known and accessible, that ignorance of them on the part of educated persons is no longer pardonable. It is doubly discreditable in any person setting up for a public teacher, to ignore these considerations; to dismiss them silently, and discuss or declaim on wages and poor-laws, not as if these arguments could be refuted, but as if they did not exist.
Every one has a right to live. We will suppose this granted. But no one has a right to bring creatures into life, to be supported by other people. Whoever means to stand upon the first of these rights must renounce all pretension to the last. If a man cannot support even himself unless others help him, those others are entitled to say that they do not also undertake the support of any offspring which it is physically possible for him to summon into the world. Yet there are abundance of writers and public speakers, including many of most ostentatious pretensions to high feeling, whose views of life are so truly brutish, that they see hardship in preventing paupers from breeding hereditary paupers in the workhouse itself. Posterity will one day ask with astonishment, what sort of people it could be among whom such preachers could find proselytes.
It would be possible for the state to guarantee employment at ample wages to all who are born. But if it does this, it is bound in self-protection, and for the sake of every purpose for which government exists, to provide that no person shall be born without its consent. If the ordinary and spontaneous motives to self-restraint are removed, others must be substituted. Restrictions on marriage, at least equivalent to those existing  in some of the German states, or severe penalties on those who have children when unable to support them, would then be indispensable. Society can feed the necessitous, if it takes their multiplication under its control; or (if destitute of all moral feeling for the wretched offspring) it can leave the last to their discretion, abandoning the first to their own care. But it cannot with impunity take the feeding upon itself, and leave the multiplying free.
To give profusely to the people, whether under the name of charity or of employment, without placing them under such influences that prudential motives shall act powerfully upon them, is to lavish the means of benefiting mankind, without attaining the object. Leave the people in a situation in which their condition manifestly depends upon their numbers, and the greatest permanent benefit may be derived from any sacrifice made to improve the physical well-being of the present generation, and raise, by that means, the habits of their children. But remove the regulation of their wages from their own control; guarantee to them a certain payment, either by law, or by the feeling of the community; and no amount of comfort that you can give them will make either them or their descendants look to their own self-restraint as the proper means of preserving them in that state. You will only make them indignantly claim the continuance of your guarantee, to themselves and their full complement of possible posterity.
On these grounds some writers have altogether condemned the English poor-law, and any system of relief to the able-bodied, at least when uncombined with systematic legal precautions against over-population. The famous Act of the 43rd of Elizabeth undertook, on the part of the public, to provide work and wages for all the destitute able-bodied: and there is little doubt that if the intent of that Act had been fully carried out, and no means had been adopted by the administrators of relief to neutralize its natural tendencies, the poor-rate would by this time have absorbed the whole net produce of the land and labour of the country. It is not at all surprising, therefore, that Mr. Malthus and others should at first have concluded against all poor-laws whatever. It required much experience, and careful examination of different modes of poor-law management, to give assurance that the admission of an absolute right to be supported at the cost of other people, could exist in law and in fact, without fatally relaxing the springs of industry and the restraints of prudence. This, however, was fully substantiated, by the investigations of the original Poor Law Commissioners. Hostile as they are unjustly accused of being to the principle of legal relief, they are the first who fully proved the compatibility of any Poor Law, in which a right to relief was recognised, with the permanent interests of the labouring class and of posterity. By a collection of facts, experimentally ascertained in parishes scattered throughout England, it was shown that the guarantee of support could be freed from its injurious effects upon the minds and habits of the people, if the relief, though ample in respect to necessaries, was accompanied with conditions which they disliked, consisting of some restraints on their freedom, and the privation of some indulgences. Under this proviso, it may be regarded as irrevocably established, that the fate of no member of the community needs be abandoned to chance; that society can and therefore ought to insure every individual belonging to it against the extreme of want; that the condition even of those who are unable to find their own support, needs not be one of physical suffering, or the dread of it, but only of restricted indulgence, and enforced rigidity of discipline. This is surely something gained for humanity, important in itself, and still more so as a step to something beyond; and humanity has no worse enemies than those who lend themselves, either knowingly or unintentionally, to bring odium on this law, or on the principles in which it originated.
§3. Next to the attempts to regulate wages, and provide artificially that all who are willing to work shall receive an adequate price for their labour, we have to consider another class of popular remedies, which do not profess to interfere with freedom of contract; which leave wages to be fixed by the competition of the market, but, when they are considered insufficient, endeavour by some subsidiary resource to make up to the labourers for the insufficiency. Of this nature was the expedient resorted to by parish authorities during thirty or forty years previous to 1834, generally known as the Allowance System. This was first introduced, when, through a succession of bad seasons, and consequent high prices of food, the wages of labour had become inadequate to afford to the families of the agricultural labourers the amount of support to which they had been accustomed. Sentiments of humanity, joined with the idea then inculcated in high quarters, that people ought not to be allowed to suffer for having enriched their country with a multitude of inhabitants, induced the magistrates of the rural districts to commence giving parish relief to persons already in private employment: and when the practice had once been sanctioned, the immediate interest of the farmers, whom it enabled to throw part of the support of their labourers upon the other inhabitants of the parish, led to a great and rapid extension of it. The principle of this scheme being avowedly that of adapting the means of every family to its necessities, it was a natural consequence that more should be given to the married than to the single, and to those who had large families than to those who had not: in fact, an allowance was usually granted for every child. So direct and positive an encouragement to population is not, however, inseparable from the scheme: the allowance in aid of wages might be a fixed thing, given to all labourers alike, and as this is the least objectionable form which the system can assume, we will give it the benefit of the supposition.
It is obvious that this is merely another mode of fixing a minimum of wages; no otherwise differing from the direct mode, than in allowing the employer to buy the labour at its market price, the difference being made up to the labourer from a public fund. The one kind of guarantee is open to all the objections which have been urged against the other. It promises to the labourers that they shall all have a certain amount of wages, however numerous they may be: and removes, therefore, alike the positive and the prudential obstacles to an unlimited increase. But besides the objections common to all attempts to regulate wages without regulating population, the allowance system has a peculiar absurdity of its own. This is, that it inevitably takes from wages with one hand what it adds to them with the other. There is a rate of wages, either the lowest on which the people can, or the lowest on which they will consent, to live. We will suppose this to be seven shillings a week. Shocked at the wretchedness of this pittance, the parish authorities humanely make it up to ten. But the labourers are accustomed to seven, and though they would gladly have more, will live on that (as the fact proves) rather than restrain the instinct of multiplication. Their habits will not be altered for the better by giving them parish pay. Receiving three shillings from the parish, they will be as well off as before though they should increase sufficiently to bring down wages to four shillings. They will accordingly people down to that point; or perhaps, without waiting for an increase of numbers, there are unemployed labourers enough in the workhouse to produce the effect at once. It is well known that the allowance system did practically operate in the mode described, and that under its influence wages sank to a lower rate than had been known in England before. During the last century, under a rather rigid administration of the poor-laws, population increased slowly, and agricultural wages were considerably above the starvation point. Under the allowance system the people increased so fast, and wages sank so low, that with wages and allowance together, families were worse off than they had been before with wages alone. When the labourer depends solely on wages, there is a virtual minimum. If wages fall below the lowest rate which will enable the population to be kept up, depopulation at least restores them to that lowest rate. But if the deficiency is to be made up by a forced contribution from all who have anything to give, wages may fall below starvation point; they may fall almost to zero. This deplorable system, worse than any other form of poor-law abuse yet invented, inasmuch as it pauperizes not merely the unemployed part of the population but the whole, received a severe check from the Poor Law of 1834: I wish it could be said that there are no signs of its revival.
§4. But while this is generally condemned, there is another mode of relief in aid of wages, which is still highly popular; a mode greatly preferable, morally and socially, to parish allowance, but tending, it is to be feared, to a very similar economical result: I mean the much-boasted Allotment System. This, too, is a contrivance to compensate the labourer for the insufficiency of his wages, by giving him something else as a supplement to them: but instead of having them made up from the poor-rate, he is enabled to make them up for himself, by renting a small piece of ground, which he cultivates like a garden by spade labour, raising potatoes and other vegetables for home consumption, with perhaps some additional quantity for sale. If he hires the ground ready manured, he sometimes pays for it at as high a rate as eight pounds an acre: but getting his own labour and that of his family for nothing, he is able to gain several pounds by it even at so high a rent.
*73 The patrons of the system make it a great point that the allotment shall be in aid of wages, and not a substitute for them; that it shall not be such as a labourer can live on, but only sufficient to occupy the spare hours and days of a man in tolerably regular agricultural employment, with assistance from his wife and children. They usually limit the extent of a single allotment to a quarter, or something between a quarter and half an acre. If it exceeds this, without being enough to occupy him entirely, it will make him, they say, a bad and uncertain workman for hire: if it is sufficient to take him entirely out of the class of hired labourers, and to become his sole means of subsistence, it will make him an Irish cottier: for which assertion, at the enormous rents usually demanded, there is some foundation. But in their precautions against cottierism, these well-meaning persons do not perceive, that if the system they patronize is not a cottier system, it is, in essentials, neither more nor less than a system of conacre.
There is no doubt a material difference between eking out insufficient wages by a fund raised by taxation, and doing the same thing by means which make a clear addition to the gross produce of the country. There is also a difference between helping a labourer by means of his own industry, and subsidizing him in a mode which tends to make him careless and idle. On both these points, allotments have an unquestionable advantage over parish allowances. But in their effect on wages and population, I see no reason why the two plans should substantially differ. All subsidies in aid of wages enable the labourer to do with less remuneration, and therefore ultimately bring down the price of labour by the full amount, unless a change be wrought in the ideas and requirements of the labouring class; an alteration in the relative value which they set upon the gratification of their instincts, and upon the increase of their comforts and the comforts of those connected with them. That any such change in their character should be produced by the allotment system, appears to me a thing not to be expected. The possession of land, we are sometimes told, renders the labourer provident. Property in land does so; or what is equivalent to property, occupation on fixed terms and on a permanent tenure. But mere hiring from year to year was never found to have any such effect. Did possession of land render the Irishman provident? Testimonies, it is true, abound, and I do not seek to discredit them, of the beneficial change produced in the conduct and condition of labourers, by receiving allotments. Such an effect is to be expected while those who hold them are a small number; a privileged class, having a status above the common level, which they are unwilling to lose. They are also, no doubt, almost always, originally a select class, composed of the most favourable specimens of the labouring people: which, however, is attended with the inconvenience that the persons to whom the system facilitates marrying and having children, are precisely those who would otherwise be the most likely to practise prudential restraint. As affecting the general condition of the labouring class, the scheme, as it seems to me, must be either nugatory or mischievous. If only a few labourers have allotments, they are naturally those who could do best without them, and no good is done to the class: while, if the system were general, and every or almost every labourer had an allotment, I believe the effect would be much the same as when every or almost every labourer had an allowance in aid of wages. I think there can be no doubt that if, at the end of the last century, the Allotment instead of the Allowance system had been generally adopted in England, it would equally have broken down at that time did really exist; population would have started forward exactly as in fact it did; and in twenty years, wages plus the allotment would have been, as wages plus the allowance actually were, no more than equal to the former wages without any allotment. The only difference in favour of allotments would have been, that they make the people grow their own poor-rates.
I am at the same time quite ready to allow, that in some circumstances, the possession of land at a fair rent, even without ownership, by the generality of labourers for hire, operates as a cause not of low, but of high wages. This, however, is when their land renders them, to the extent of actual necessaries, independent of the market for labour. There is the greatest difference between the position of people who live by wages, with land as an extra resource, and of people who can, in case of necessity, subsist entirely on their land, and only work for hire to add to their comforts. Wages are likely to be high where none are compelled by necessity to sell their labour. “People who have at home some kind of property to apply their labour to, will not sell their labour for wages that do not afford them a better diet than potatoes and maize, although in saving for themselves, they may live very much on potatoes and maize. We are often surprised in travelling on the Continent, to hear of a rate of day’s wages very high, considering the abundance and cheapness of food. It is want of the necessity or the inclination to take work, that makes day-labour scarce, and, considering the price of provisions, dear, in many parts of the Continent, where property in land is widely diffused among the people.”
*74 There are parts of the Continent, where, even of the inhabitants of the towns, scarcely one seems to be exclusively dependent on his ostensible employment; and nothing else can explain the high price they put on their services, and the carelessness they evince as to whether they are employed at all. But the effect would be far different if their land or other resources gave them only a fraction of a subsistence, leaving them under an undiminished necessity of selling their labour for wages in an overstocked market. Their land would then merely enable them to exist on smaller wages, and to carry their multiplication so much the further before reaching the point below which they either could not, or would not descend.
To the view I have taken of the effect of allotments, I see no argument which can be opposed, but that employed by Mr. Thornton,
*75 with whom on this subject I am at issue. His defence of allotments is grounded on the general doctrine, that it is only the very poor who multiply without regard to consequences, and that if the condition of the existing generation could be greatly improved, which he thinks might be done by the allotment system, their successors would grow up with an increased standard of requirements, and would not have families until they could keep them in as much comfort as that in which they had been brought up themselves. I agree in as much of this argument as goes to prove that a sudden and great improvement in the condition of the poor has always, through its effect on their habits of life, a chance of becoming permanent. What happened at the time of the French Revolution is an example. But I cannot think that the addition of a quarter or even half an acre to every labourer’s cottage, and that too at a rack rent, would (after the fall of wages which would be necessary to absorb the already existing mass of pauper labour) make so great a difference in the comforts of the family for a generation to come, as to raise up from childhood a labouring population with a really higher permanent standard of requirements and habits. So small a portion of land could only be made a permanent benefit, by holding out encouragement to acquire by industry and saving, the means of buying it outright: a permission which, if extensively made use of, would be a kind of education in forethought and frugality to the entire class, the effects of which might not cease with the occasion. The benefit would however arise, not from what was given them, but from what they were stimulated to acquire.
No remedies for low wages have the smallest chance of being efficacious, which do not operate on and through the minds and habits of the people. While these are unaffected, any contrivance, even if successful, for temporarily improving the condition of the very poor, would but let slip the reins by which population was previously curbed; and could only, therefore, continue to produce its effect, if, by the whip and spur of taxation, capital were compelled to follow at an equally accelerated pace. But this process could not possibly continue for long together, and whenever it stopped, it would leave the country with an increased number of the poorest class, and a diminished proportion of all except the poorest, or, if it continued long enough, with none at all. For “to this complexion must come at last” all social arrangements, which remove the natural checks to population without substituting any others.
Book II. Chapter XII. Section 3
Book II. Chapter XII. Section 4
Notes of a Traveller, p. 456.
Over-Population, ch. viii.
Book II. Chapter XIII. Section 1