Understanding the #UnitedStatesofAmerica - The Wealth of Nations: Book One, Chapter Eight (Part Five) "The Case of China"

BOOK I

CHAPTER EIGHT: OF THE WAGES OF LABOR
Pages: 19 (Pages 56 to 62)

·THE CASE OF CHINA

Pg 56

China has been long one of the richest—i.e. one of the most fertile, best cultivated, most industrious, and most populous—countries in the world. But it seems , to have
been long stationary.

Pg 57

Marco Polo, who visited it more than 500 years ago, describes its cultivation, industry, and populousness in almost the same terms in which they are described by travelers today. It had, perhaps even long before his time, acquired the full complement of riches which the nature of its laws and institutions permits it to acquire. The accounts of all travelers, though inconsistent in many other respects, agree on the low wages of labor and on how hard it is for a laborer to bring up a family in China. If by digging the ground for a whole day he can get what will purchase a small quantity of rice in the evening, he is contented. The condition of skilled workmen is perhaps even worse. Instead of waiting patiently in their workshops for the calls of their customers, as in Europe, they are continually running about the streets with the tools of their respective trades, offering their services—begging for employment. The poverty of the lower ranks of people in China is far worse than that of the most beggarly nations in Europe. It is commonly said that in the neighborhood of Canton many hundreds or even thousands of families have no home on the land, but live permanently in little fishing-boats on the rivers and canals. The subsistence they find there is so scanty that they are eager to fish up the nastiest garbage thrown overboard from any European ship. . . . Marriage is encouraged in China not by •the profitableness of children but by •the liberty of destroying them. Every night in all large towns several babies are exposed in the street or drowned like puppies in the water. The performance of this nasty task is even said to be the avowed business by which some people earn their subsistence.
However, although China may be standing still it doesn’t seem to go backwards. Its towns are nowhere deserted by their inhabitants. The lands which have been cultivated are nowhere neglected.

Pg 58

So just about the same annual labor must continue to be performed, and the funds for maintaining it must not be noticeably diminished. So the lowest class of laborers, despite their scanty subsistence, must somehow find ways to continue their race far enough to keep up their usual numbers.
It would be different in a country where funds for the maintenance of labor were noticeably decreasing. Every year the demand for servants and laborers would, in all the different kinds of employments, be less than it was the year before. Many who had been bred in the higher classes, not being able to find employment in their own business, would be glad to seek it in the lowest. The lowest class being overstocked not only with its own workmen but also with the overflow from the other classes, the competition for employment in it would be so great as to reduce the wages of labor to the most miserable and scanty subsistence of the laborer. Many would not be able to find employment even on these hard terms, and would either starve or be driven to seek a subsistence by begging or by criminal activities. Want, famine, and mortality would immediately prevail in that class, and would spread from there into all the higher classes, until the remaining population of the country—those who had escaped the tyranny or calamity that had destroyed the rest—was reduced to a size that could easily be maintained by the revenue and stock that remained in it. This is perhaps nearly the present state of Bengal and of some other of the English settlements in the East Indies. In a fertile country •which had been much depopulated so that subsistence should not be very difficult, and •in which more than 300,000 die of hunger in one year, we maybe assured that the funds destined for the maintenance of the laboring poor are fast decreasing. The difference between the spirit of the British constitution which protects and governs North America, and that of the mercantile company that oppresses and domineers in the East Indies, cannot, perhaps, be better illustrated than by the different state of those countries.

Pg 59

So the liberal reward of labor is the necessary effect of increasing national wealth, and thus the natural symptom of it. The scanty maintenance of the laboring poor is the natural symptom that things are at a stand, and their starving condition that they are fast going backwards. 
In Great Britain the wages of labor seem at present to be evidently more than what is barely needed to enable the laborer to bring up a family. To satisfy ourselves on this point we needn’t enter into any tedious or doubtful calculation of what may be the lowest sum on which it is possible to do this. There are many clear symptoms that none of the wages of labor in this country are down at the lowest rate that is consistent with common humanity. ·I shall present four of them.·
(1) In almost every part of Great Britain there is a difference, even in the lowest sort of labor, between summer and winter wages. Summer wages are always higher. Yet the maintenance of a family is more expensive in winter, because of the extraordinary expense of fuel. Give, then, that wages are highest when this expense is lowest, it seems clear that they are regulated not by •what is necessary for this expense but by •the quantity and supposed value of the work. You might say: ‘A laborer ought to save part of his summer wages to defray his winter expense; his wages through the whole year need not exceed what is necessary to maintain his family through the whole year.’ But a slave—absolutely depending on us for immediate subsistence—wouldn’t be treated in this manner. His daily subsistence would be proportioned to his daily needs.

Pg 60

(2) The wages of labor in Great Britain don’t fluctuate with the price of provisions. These vary everywhere from year to year, often from month to month. But in many places the money price of labor remains the same, sometimes for half a century together. In these places, therefore, if the laboring poor can maintain their families in years when the price of provisions is high, they must be at their ease in times when those prices are moderate, and in affluence when provisions are especially cheap. During the past ten years the high price of provisions in many parts of the kingdom hasn’t been accompanied by any noticeable rise in the money price of labor. In some places indeed it has, probably more because of an increase in the demand for labor than because of an increase in the price of provisions.
(3) Whereas the price of provisions varies more from year to year than the wages of labor, the wages of labor vary more from place to place than the price of provisions. The prices of bread and butchers’ meat are generally about the same through most of the united kingdom. These, like most other things that are sold by retail (which is how the laboring poor buy everything), are generally at least as cheap in large towns as in the remoter parts of the country; I’ll explain why in due course. But the wages of labor in and around a large town are often 20% or 25% higher than they are a few miles away. [He gives examples involving London and Edinburgh, and comments on the fact that workers don’t in general move into large towns in search of higher wages. Then:] After all that has been said of the levity and inconstancy of human nature, experience shows that man is the most difficult sort of luggage to be transported! If the laboring poor, therefore, can maintain their families in the parts of the kingdom where the price of labor is lowest, they must be in affluence where it is highest.

Pg 61

(4) The variations in the price of labor not only •don’t correspond (in place or time) with variations in the price of provisions but •are often quite opposite. [Smith elaborates on this with several pages of detail. Difference of place: wages and grain-prices in England compared with Scotland. Difference of time: wages and grain-prices on the united kingdom, France, and ‘probably most other parts of Europe’ in the 1600s compared with the 1700s. He discusses his evidence for what he says about wages in various times and places, concluding:] The price of labor can’t be ascertained very accurately anywhere, different prices being often paid at the same place and for the same sort of labor, not only according to the different abilities of the workman but according to the easiness or hardness of the masters. Where wages are not regulated by law, all we can claim to determine is what the most usual wages are; and experience seems to show that law can never regulate wages properly, though it has often claimed to do so.
The real recompense of labor, the real quantity of the necessities and conveniences of life that it can procure for the laborer, has during the present century increased perhaps even more than its money price. Grain has become somewhat cheaper, but also many other things from which the industrious poor derive an agreeable and wholesome variety of food have become much cheaper. Throughout most of the kingdom potatoes don’t now cost half what they did 30 or 40 years ago. The same is true of turnips, carrots, cabbages; things that were formerly raised only by the spade but are now commonly raised by the plough. All sorts of garden stuff has also become cheaper, as have. . . . coarser linen and woolen cloth which provide laborers with cheaper and better clothing; and coarser metals, leading to cheaper and better instruments of trade as well as with many agreeable and convenient pieces of household furniture. Soap, salt, candles, leather, and fermented liquors have indeed become a good deal dearer, chiefly because of the taxes on them.

Pg 62

But the quantity of these that the laboring poor need to consume is so small that the increase in their prices doesn’t cancel out the lessening of the prices of so many other things. For testimony that what has increased is not only the money price of labor but its real recompense, listen to the common complaint that luxury now extends even to the lowest ranks of the people, and that the laboring poor will no longer be contented with the same food, clothing, and lodging that satisfied them in former times!
Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage, or as an inconvenience, to the society? The answer seems at first abundantly plain. Servants, laborers, and workmen of various kinds constitute most of any large political society. And what improves the circumstances of most can’t be regarded as an inconvenience to the whole. Surely no society can be flourishing and happy if most of its members are poor and miserable. It is only fair that those who feed, clothe, and lodge the whole body of the people should have a share of the product of their own labor that enables them also to be tolerably well fed, clothed, and lodged.
Poverty no doubt discourages •marriage, but doesn’t always prevent it. And it seems to be ·positively· favorable to •generation. A half-starved Highland woman may bear more than 20 children, while many a pampered fine lady is incapable of bearing any and is generally exhausted by two or three. Barrenness, so frequent among women of fashion, is very rare among those of lower station. Luxury may inflame in the fair sex the passion for enjoyment, but it seems always to weaken—and often to destroy—the powers of generation.

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