§ 6. The phenomena of distribution presented by all advancing societies, passing upwards, correspond, precisely, with those observed in passing inwards from the mountains of the West, where population is small and land is valueless, to Massachusetts, where men abound and land is high; as here is shown :—

Land and labor, as we see, steadily increase in their dimensions, as the proportion assigned to the trader, transporter, merchant, money-dealer, and landlord, diminishes the prices of raw materials then steadily approximating, and furnishing the most conclusive evidence of advancing civilization. Man becomes free as the circulation becomes more rapid, and as land increases in value and becomes divided-all thus profiting by the increased ability to command Nature's services.

In full accordance with this, is what is now occurring in France, Germany, Denmark, Sweden, and Russia-the proportion of the landlord, the rate of profit, and the charge for the use of money, there declining, as land becomes more valuable, and man becomes more free.

The reverse of this, is what is now observed in India and Ireland, Jamaica, Portugal, Turkey, and other free-trade countries land there declining in value, while the proportion claimed as rent as steadily augments; the trader's profits, too,

exceeds 5s., twenty per cent. on which would only be 1s. a day—a sum which would scarcely pay the wages of the mere labor employed. It is, however, possible that the capital may sometimes be turned more than once in a day; and the capitalists in question, if they can be called so, are generally the old and infirm, whose labor is of little value. The calculation, therefore, may probably be correct; and we have mentioned it as the highest apparent rate of profit that we know."- SENIOR: Outlines of Political Economy, p. 214.

increasing as money disappears, and as the charge for its use is raised. Such, too, appears to be the course of affairs in England -the wages of agricultural labor having remained stationary, while the rental has nearly doubled.* So, again, is it in the United States the growth of pauperism, and the belief in the divine origin of slavery, there steadily gaining ground, and keeping pace with the consolidation of land in the older States. Such are the consequences of a system tending, necessarily, to increase the quantity of wheat, flax, cotton, or tobacco, required to be given in exchange for gold, silver, iron, copper, lead, or other of the metallic products of the earth.†

§ 7. The proportion of the capitalist declines with the growth of the power of association and combination - doing so, because of the great economy of labor consequent upon the increased rapidity of the societary circulation. That, itself, increasing with the development of individuality, it follows, necessarily, that the rate of profit and the charge for interest, must be always lowest, in those communities in which the loom and the anvil are placed side by side with the plough and the harrow. That such is the fact, is seen on comparing the Southern and Western States of the Union with the Northern and Eastern ones-Brazil with France India with England-or Ireland, Portugal, and Turkey, with Denmark and Belgium.

That reduction being a necessary consequence of the increased efficiency of labor, and increased economy of human effort, no difficulty is found in explaining the fact, that capital always accumulates most rapidly when the rate of profit is lowest. That it has been so in times that are past, is seen on comparing its growth in England under the Plantagenets, or in France under the House of Valois-when interest was very high-with what is now occurring in both those countries; or in this country, in the days anterior to the Revolution, with those of later times. It may also be seen, on comparing any of the purely agricultural countries, as Ireland, Brazil, or India, with others in which employments are diversified, as New England, France, or Bel

See ante, vol. ii. p. 93, for the statements of English writers of high authority on this subject.

† See ante, vol. ii. p. 205.

gium; or this country with itself, on comparing the period from 1817 to 1824, when mills and furnaces were everywhere closed, with the period from 1824 to 1834, when mills were being built.

Capital being the instrument used by man in his efforts to obtain power over nature, whatever tends to increase his power over the instrument, tends equally towards equality and freedom, and towards the elevation of the laborer of the present, at the expense of the accumulations of the past. Whatever, on the contrary, tends to increase the power of the instrument over him, tends to elevate those accumulations at his expense- to produce inequality and to re-establish slavery. His power over the instrument growing with the growth of association, and that growing with the growth of diversity in the modes of employment, it follows, necessarily, that the road towards freedom for man, is found in the direction leading to the development of the various faculties of the individuals of whom society is composed.

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§ 8. Throughout the process above described, we mark a perfect harmony in the interests of the various portions of society the laborer profiting largely by the proximity of the owner of the canoe, and the latter doing the same by that of the man who is both willing and able to use it. Neither profits at the expense of the other each obtaining a larger quantity of commodities and both being enabled to devote more of time, and of mind, to improvement of the machinery by help of which to command the use of nature's services, and thus obtain increase of wealth. Both are equally interested in every measure looking to the maintenance of peace, and in the adoption of a policy tending to secure the most rapid circulation of services and products, and the greatest economy of labor-the highest power of association—the most perfect development of individualityand the largest and most unrestricted commerce with their fellowmen. Moving in that direction, they find themselves enabled to cultivate the richer soils, with constant increase in the food at their command-the rich granary of nature abounding with supplies waiting for demand alone. The power of self-protection grows steadily, with constantly diminishing necessity for the services of the soldier or the sailor, the trader or the transporter,

and corresponding decline in the necessity for contributing to their support. The tendency towards equality increases from day to day-nature always working gratuitously, and working equally for the strong and the weak, the poor and the rich. The more she is made to labor in man's service, the greater is the tendency towards the development of the peculiar faculties of all -the greater must be the reward of each-and the higher must become the standard of man himself. *

The beautiful harmony of this great law is thus exhibited in a work before referred to:

"It is a point worthy of particular attention, that the advantages secured by the capitalist and the laborer, in and through (or by means of) the progress of improvement, are not gained by either at the expense of the other. Both prosper together. Nor are they gained at the expense of any third person. On the contrary, persons who contributed, in no respect, to the improvement, nor to the co-operation of the laborer and the capitalist, by means of which improvement has been made, participate in the benefits thence resulting. The laborer who, at the second period, retained, after remunerating the capitalist for his assistance, a reward, in canoes or other things, equivalent to 4, for the same toil as that for which his predecessor had but 1-he who, in the third stage, after paying the capitalist, has 14, in the place of the 4 which his father had-naturally desires to exchange some of them for articles of a different kind, made by other laborers. He cannot, however, require of the latter, for any long period, that they should exchange services with him upon unequal terms, by giving him the product of much more labor than he has himself expended. If he did, he would make it the interest of some to build canoes, not only for their own use, but for the purpose of selling to others. Suppose that, after the second stage of improvement had been reached, values had so adjusted themselves, as that a canoe exchanged for venison the average product of a week's hunting; or for fish caught in seven days' labor with the net, the hook, and the spear. At the third stage, the canoe-builders would, as at first, obtain, in exchange for a given amount of labor, a quantity of venison or of fish, increased in the proportion of 14 to 4, or 3 times as much as formerly. At this rate, the hunters and fishermen would have no greater ability to procure canoes than before. The supply would increase rapidly, the means of third persons to purchase them remaining stationary. Great numbers would, consequently, be left unsold on the hands of the makers. If, desiring to avoid this result, the boat-builders should offer to take 9 saddles of venison in exchange for the same canoe, or the same share in a canoe, as that for which they at first asked 14-in other words, should surrender to the hunters and fishermen five-fourteenths of the advantage gained through the improvement of axes- the case would then stand thus: The laborers who work with the axe would still have increased their proportion of the product more than the capitalists who furnish the axes-the first obtaining 9 in place of 4, the second but 4 in place of 2, whether measured in canoes, venison, or fish. The first would obtain nine-fourteenths, or 24 times as much venison as before. The second would have twice as many canoes to exchange for venison as before; but as the purchasing power of canoes is reduced in the proportion of nine-fourteenths, they would obtain but eighteen-fourteenths, or a fraction of four-fourteenths- about 28 per cent. more venison and fish than before. The purchasers of canoes would obtain 14 for the same labor as formerly procured but 9; or would get a canoe by the labor

§ 9. All the facts of history, as well as all those which at the present moment meet our view, prove that the advance of nations in wealth and happiness, morality, intelligence, and freedom, is in the inverse ratio of the rate of profit, and of interest. Turning, however, to Mr. McCulloch, we find that gentleman asserting directly the reverse of this, and in the following words :

"As capital is nothing more than the accumulated produce of previous industry, it is evident its increase will be most rapid when industry is most productive; or, in other words, when the profits of stock are highest.* The man who can produce a bushel of wheat in three days, has it in his power to accumulate twice as much as the man who, either from a deficiency of skill, or from his being obliged to cultivate a bad soil, is forced to labor six days to produce the same quantity; and the capitalist who can invest stock so as to yield him a profit of ten per cent., has it equally in his power to accumulate twice as fast as the capitalist who can only obtain five per cent. for his capital. Conformably to this statement, it is found that the rate of profit, or, which is the same thing, the power to accumulate capital, is always greatest in those countries which are most rapidly aug

of 44 days instead of 7 — substituting silver dollars, in the place of saddles of venison. We have only the same facts, presented under an aspect rendered more familiar by the use of coin as the medium of exchange. The great truth will remain, that wages have increased. Profits have increased also, although in an inferior degree, as to their absolute amount; while the value and the price of the commodity, out of the proceeds of the exchange or sale of which both profits and wages are paid, has been diminished. Availing themselves of the gratuitous bounty of nature, by making use of the forces which she freely lends to human intelligence, the workman may take an increase of his wages, the capitalist may appropriate an addition to his profits-leaving a surplus to be distributed for the benefit of the entire community of consumers. Daily experience verifies the truth, that high prices are not essential to high wages and high profits. These come from cheap production, and being entirely consistent with it, their existence in any community does not preclude the idea that it may vie in cheapness, in an untried mode of production, with other regions where wages and profits are at a lower rate. It is, moreover, of material importance to observe that, while the capitalist's proportionate share of the PRODUCTS diminishes in consequence of an improvement in machinery, it does not follow that his share must bear a smaller proportion to his capital than before."-SMITH: Manual of Political Economy.

* Mr. McCulloch adds to this passage the following note:

To avoid all chance of misconception, it is necessary to observe that this refers to net profit, or to the sum which remains to the capitalist after all his outgoings are compensated, including therein a sum sufficient to insure his capital against risk, and to make up for whatever may be peculiarly disagreeable in his business."