Knowledge is Power:

Society a system of exchanges-Security of individual property the principle of exchange-Alexander Selkirk and Robinson Crusoe-Imperfect appropriation and unprofitable labour.

Society, both in its rudest form and in its most refined and complicated relations, is nothing but a system of Exchanges. An exchange is a transaction in which both the parties who make the exchange are benefited;-and, consequently, society is a state presenting an uninterrupted succession of advantages for all its members. Every time that we make a free exchange we have a greater desire for the thing which we receive than for the thing which we give;-and the person with whom we make the exchange has a greater desire for that which we offer him than for that which he offers us. When one gives his labour for wages, it is because he has a higher estimation of the wages than of the profitless ease and freedom of remaining unemployed;-and, on the contrary, the employer who purchases his labour feels that he shall be more benefited by the results of that labour than by retaining the capital which he exchanges for it. In a simple state of society, when one man exchanges a measure of wheat for the measure of wine which another man possesses, it is evident that the one has got a greater store of wheat than he desires to consume himself, and that the other, in the same way, has got a greater store of wine;-the one exchanges something to eat for something to drink, and the other something to drink for something to eat. In a refined state of society, when money represents the value of the exchanges, the exchange between the abundance beyond the wants of the possessor of one commodity and of another is just as real as the barter of wheat for wine. The only difference is, that the exchange is not so direct, although it is incomparably more rapid. But, however the system of exchange be carried on,-whether the value of the things exchanged be determined by barter or by a price in money,-all the exchangers are benefited, because all obtain what they want, through the store which they possess of what they do not want.

It has been well said that "Man might be defined to be an animal that makes exchanges."[6] There are other animals, indeed, such as bees and ants amongst insects, and beavers amongst quadrupeds, which to a certain extent are social; that is, they concur together in the execution of a common work for a common good: but as to their individual possessions, each labours to obtain what it desires from sources accessible to all, or plunders the stores of others. Not one insect or quadruped, however wonderful may be its approaches to rationality, has the least idea of making a formal exchange with another. The modes by which the inferior animals communicate their thoughts are probably not sufficiently determinate to allow of any such agreement. The very foundation of that agreement is a complicated principle, which man alone can understand. It is the Security of individual Property. Immediately that this principle is established, labour begins to work profitably, for it works with exchange. If the principle of appropriation were not acted upon at all, there could be no exchange, and consequently no production. The scanty bounty of nature might be scrambled for by a few miserable individuals-and the strongest would obtain the best share; but this insecurity would necessarily destroy all accumulation. Each would of course live from hand to mouth, when the means of living were constantly exposed to the violence of the more powerful. This is the state of the lowest savages, and as it is an extreme state it is a rare one,-no security, no exchange, no capital, no labour, no production. Let us apply the principle to an individual case.

The poet who has attempted to describe the feelings of a man suddenly cut off from human society, in "Verses supposed to be written by Alexander Selkirk during his solitary abode in the island of Juan Fernandez," represents him as saying, "I am monarch of all I survey."[7] Alexander Selkirk was left upon the same island as the Moskito Indian; and his adventures there have formed the groundwork of the beautiful romance of "Robinson Crusoe." The meaning of the poet is, that the unsocial man had the same right over all the natural productive powers of the country in which he had taken up his abode, as we each have over light and air. He was alone; and therefore he exercised an absolute although a barren sovereignty, over the wild animals by which he was surrounded-over the land and over the water. He was, in truth, the one proprietor-the one capitalist, and the one labourer-of the whole island. His absolute property in the soil, and his perfect freedom of action, were both dependent upon one condition-that he should remain alone. If the Moskito Indian, for instance, had remained in the island, Selkirk's entire sovereignty must have been instantly at an end. Some more definite principle of appropriation must have been established, which would have given to Selkirk, as well as to the Moskito Indian, the right to appropriate distinct parts of the island each to his particular use. Selkirk, for example, might have agreed to remain on the eastern coast, while the Indian might have established himself on the western; and then the fruits, the goats, and the fish of the eastern part would have been appropriated to Selkirk, as distinctly as the clothes, the musket, the iron pot, the can, the hatchet, the knife, the mathematical instruments, and the Bible which he brought on shore.[8] If the Indian's territory had produced something which Selkirk had not, and if Selkirk's land had also something which the Indian's had not, they might have become exchangers. They would have passed into that condition naturally enough;-imperfectly perhaps, but still as easily as any barbarous people who do not cultivate the earth, but exchange her spontaneous products.

The poet goes on to make the solitary man say, "My right there is none to dispute." The condition of Alexander Selkirk was unquestionably one of absolute liberty. His rights were not measured by his duties. He had all rights and no duties. Many writers on the origin of society have held that man, upon entering into union with his fellow-men, and submitting, as a necessary consequence of this union, to the restraints of law and government, sacrifices a portion of his liberty, or natural power, for the security of that power which remains to him. No such agreement amongst mankind could ever have possibly taken place; for man is by his nature, and without any agreement, a social being. He is a being whose rights are balanced by the uncontrollable force of their relation to the rights of others. The succour which the infant man requires from its parents, to an extent, and for a duration, so much exceeding that required for the nurture of other creatures, is the natural beginning of the social state, established insensibly and by degrees. The liberty which the social man is thus compelled by the force of circumstances to renounce amounts only to a restraint upon his brute power of doing injury to his fellow-men: and for this sacrifice, in itself the cause of the highest individual and therefore general good, he obtains that dominion over every other being, and that control over the productive forces of nature, which alone can render him the monarch of all he surveys. The poor sailor, who for four years was cut off from human aid, and left alone to struggle for the means of supporting existence, was an exception, and a very rare one, to the condition of our species all over the world. His absolute rights placed him in the condition of uncontrolled feebleness; if he had become social, he would have put on the regulated strength of rights balanced by duties.

Alexander Selkirk was originally left upon the uninhabited island of Juan Fernandez at his own urgent desire. He was unhappy on board his ship, in consequence of disputes with his captain; and he resolved to rush into a state which might probably have separated him for ever from the rest of mankind. In the belief that he should be so separated, he devoted all his labour and all his ingenuity to the satisfaction of his own wants alone. By continual exercise, he was enabled to run down the wild goat upon the mountains; and by persevering search, he knew where to find the native roots that would render his goat's flesh palatable. He never thought, however, of providing any store beyond the supply of his own personal necessities. He had no motive for that thought; because there was no human being within his reach with whom he might exchange that store for other stores. The very instant, however, that the English ships, which finally gave him back to society, touched upon his shores,-before he communicated by speech with any of his fellow-men, or was discovered by them,-he became social. He saw that he must be an exchanger. Before the boat's crew landed he had killed several goats, and prepared a meal for his expected guests. He knew that he possessed a commodity which they did not possess. He had fresh meat, whilst they had only salt. Of course what he had to offer was acceptable to the sailors; and he received in exchange protection, and a place amongst them. He renounced his sovereignty, and became once more a subject. It was better for him, he thought, to be surrounded with the regulated power of civilization, than to wield at his own will the uncertain strength of solitary uncivilization. But, had he chosen to remain upon his island, as in after-years he regretted he had not done, although a solitary man he would not have been altogether cut off from the hopes and the duties of the social state. If he had chosen to remain after that visit from his fellow-men, he would have said to them, before they had left him once more alone, "I have hunted for you my goats, I have dug for you my roots, I have shown you the fountains which issue out of my rocks;-these are the resources of my dominion: give me in exchange for them a fresh supply of gunpowder and shot, some of your clothes, some of the means of repairing these clothes, some of your tools and implements of cookery, and more of your books to divert my solitary hours." Having enjoyed the benefits which he had bestowed, they would, as just men, have paid the debt which they had incurred, and the exchange would have been completed. Immediately that they had quitted his shores, Selkirk would have looked at his resources with a new eye. His hut was rudely fashioned and wretchedly furnished. He had fashioned, and furnished it as well as he could by his own labour, working upon his own materials. The visit which he had received from his fellow-men, after he had abandoned every hope of again looking upon their faces, would have led him to think that other ships would come, with whose crews he might make other exchanges,-new clothes, new tools, new materials, received as the price of his own accumulations. To make the best of his circumstances when that day should arrive, he must redouble his efforts to increase his stock of commodities,-some for himself, and some to exchange for other commodities, if the opportunity for exchange should ever come. He must therefore transplant his vegetables, so as to be within instant reach when they should be wanted. He must render his goats domestic, instead of chasing them upon the hills. He must go forward from the hunting state, into the pastoral and agricultural.

Robinson Crusoe. (From a design by Stothard.)

In Defoe's story, Robinson Crusoe is represented as going into this pastoral and agricultural state. But he had more resources than Selkirk; and he at last obtained one resource which carried him back, however incompletely, into the social condition. He acquired a fellow-labourer. He made a boat by his own unassisted labour; but he could not launch it. When Friday came, and was henceforth his faithful friend and willing servant, he could launch his boat. Crusoe ultimately left his island; for the boat had given him a greater command over his circumstances. But had he continued there in companionship with Friday, there must have been such a compact as would have prevented either struggling for the property which had been created. The course of improvement that we have imagined for Selkirk supposes that he should continue in his state of exclusive proprietor-that there should be none to dispute his right. If other ships had come to his shores-if they had trafficked with him from time to time-exchanged clothes and household conveniences, and implements of cultivation, for his goats' flesh and roots-it is probable that other sailors would in time have desired to partake his plenty;-that a colony would have been founded-that the island would have become populous. It is perfectly clear that, whether for exchange amongst themselves, or for exchange with others, the members of this colony could not have stirred a step in the cultivation of the land without appropriating its produce;-and they could not have appropriated its produce without appropriating the land itself. Cultivation of the land for a common stock would have gone to the establishment precisely of the same principle;-they would still have been exchangers amongst themselves, and the partnership would not have lasted a day, unless each man's share of what the partnership produced had been rendered perfectly secure to him. Without security they could not have accumulated-without accumulations they could not have exchanged-without exchanges they could not have carried forward their labours with any compensating productiveness.

Imperfect appropriation-that is, an appropriation which respects personal wealth, such as the tools and conveniences of an individual, and even secures to him the fruits of the earth when he has gathered them, but which has not reached the last step of a division of land-imperfect appropriation such as this raises up the same invincible obstacles to the production of utility; because, with this original defect, there must necessarily be unprofitable labour, small accumulation, limited exchange. Let us exemplify this by another individual case.

We have seen, in the instances of the Moskito Indian and of Selkirk, how little a solitary man can do for himself, although he may have the most unbounded command of natural supplies-although not an atom of those natural supplies, whether produced by the earth or the water, is appropriated by others-when, in fact, he is monarch of all he surveys. Let us trace the course of another man, advanced in the ability to subdue all things to his use by association with his fellow-men; but carrying on that association in the rude and unproductive relations of savage life;-not desiring to "replenish the earth" by cultivation, but seeking only to appropriate the means of existence which it has spontaneously produced;-labouring, indeed, and exchanging, but not labouring and exchanging in a way that will permit the accumulation of wealth, and therefore remaining poor and miserable. We are not about to draw any fanciful picture, but merely to select some facts from a real narrative.

[6] Dr. Whately's Lectures on Political Economy.

[7] Cowper's Miscellaneous Poems.

[8] These circumstances are recorded in Captain Woodes Rogers' Cruising Voyage round the World, 1712.

* * *

Adventures of John Tanner-Habits of the American Indians-Their sufferings from famine, and from the absence among them of the principle of division of labour-Evils of irregular labour-Respect to property-Their present improved condition-Hudson's Bay Indians.

In the year 1828 there came to New York a white man named John Tanner, who had been thirty years a captive amongst the Indians in the interior of North America. He was carried off by a band of these people when he was a little boy, from a settlement on the Ohio river, which was occupied by his father, who was a clergyman. The boy was brought up in all the rude habits of the Indians, and became inured to the abiding miseries and uncertain pleasures of their wandering life. He grew in time to be a most skilful huntsman, and carried on large dealings with the agents of the Hudson's Bay Company, in the skins of beavers and other animals which he and his associates had shot or entrapped. The history of this man was altogether so curious, that he was induced to furnish the materials for a complete narrative of his adventures; and, accordingly, a book, fully descriptive of them, was prepared for the press by Dr. Edwin James, and printed at New York, in 1830. It is of course not within the intent of our little work to furnish any regular abridgment of John Tanner's story; but it is our wish to direct attention to some few particulars, which appear to us strikingly to illustrate some of the positions which we desire to enforce, by thus exhibiting their practical operation.

The country in which this man lived so many years is that immense territory belonging to the United States, which at that period was covered by boundless forests which the progress of civilization had not then cleared away. In this region a number of scattered Indian tribes maintained a precarious existence by hunting the moose-deer and the buffalo for their supply of food, and by entrapping the foxes and martens of the woods and the beavers of the lakes, whose skins they generally exchanged with the white traders of Europe for articles of urgent necessity, such as ammunition and guns, traps, axes, and woollen blankets; but too often for ardent spirits, equally the curse of savage and of civilized life. The contact of savage man with the outskirts of civilization perhaps afflicts him with the vices of both states. But the principle of exchange, imperfectly and irregularly as it operated amongst the Indians, furnished some excitement to their ingenuity and their industry. Habits of providence were thus to a certain degree created; it became necessary to accumulate some capital of the commodities which could be rendered valuable by their own labour, to exchange for commodities which their own labour, without exchange, was utterly unable to procure. The principle of exchange, too, being recognised amongst them in their dealings with foreigners, the security of property-without which, as we have shown, that principle cannot exist at all-was one of the great rules of life amongst themselves. But still these poor Indians, from the mode which they proposed to themselves for the attainment of property, which consisted only in securing what nature had produced, without directing the course of her productions, were very far removed from the regular attainment of those blessings which civilized society alone offers. We shall exemplify these statements by a few details.

Dying Lion

The country over which these people ranged occupies a surface that may be roughly described as five or six times as large as all England. They had the unbounded command of all the natural resources of that country; and yet their entire numbers did not equal the population of a moderately sized English county. It may be fairly said that each Indian required a thousand acres for his maintenance. The supplies of food were so scanty-a scantiness which would at once have ceased to exist had there been any cultivation-that if a large number of these Indians assembled together to co-operate in their hunting expeditions, they were very soon dispersed by the urgent desire of satisfying hunger. Tanner says, "We all went to hunt beavers in concert. In hunts of this kind the proceeds are sometimes equally divided; but in this instance every man retained what he had killed. In three days I collected as many skins as I could carry. But in these distant and hasty hunts little meat could be brought in; and the whole band was soon suffering with hunger. Many of the hunters, and I among others, for want of food became extremely weak, and unable to hunt far from home." What an approach is this to the case of the lower animals; and how forcibly it reminds us of the passage in Job (c. iv., v. 11), "The fierce lion perisheth for lack of prey."[9] In another place he says, "I began to be dissatisfied at remaining with large bands of Indians, as was usual for them, after having remained a short time in a place, to suffer from hunger." These sufferings were not, in many cases, of short duration, or of trifling intensity. Tanner describes one instance of famine in the following words:-"The Indians gathered around, one after another, until we became a considerable band, and then we began to suffer from hunger. The weather was very severe, and our suffering increased. A young woman was the first to die of hunger. Soon after this, a young man, her brother, was taken with that kind of delirium or madness which precedes death in such as die of starvation. In this condition he had left the lodge of his debilitated and desponding parents; and when, at a late hour in the evening, I returned from my hunt, they could not tell what had become of him. I left the camp about the middle of the night, and, following his track, I found him at some distance, lying dead in the snow."

This worst species of suffering equally existed at particular periods, whether food was sought for by large or by small parties, by bands or by individuals. Tanner was travelling with the family of the woman who had adopted him. He says, "We had now a short season of plenty; but soon became hungry again. It often happened that for two or three days we had nothing to eat; then a rabbit or two, or a bird, would afford us a prospect of protracting the sufferings of hunger a few days longer." Again he says, "Having subsisted for some time almost entirely on the inner bark of trees, and particularly of a climbing vine found there, our strength was much reduced."

The misery which is thus so strikingly described proceeded from the circumstance that the labour of the Indians did not take a profitable direction; and that this waste of labour (for unprofitable applications of labour are the greatest of all wastes) arose from the one fact, that in certain particulars these Indians laboured without appropriation. They depended upon the chance productions of nature, without compelling her to produce; and they did not compel her to produce, because there was no appropriation of the soil, the most efficient natural instrument of production. If the Indians had directed the productive powers of the earth to the growth of corn, instead of to the growth of foxes' skins, they would have become rich. But they could not have reached this point without appropriation of the soil. They had learnt the necessity of appropriating the products of the soil, when they had bestowed labour upon obtaining them; but the last step towards productiveness was not taken. The Indians therefore were poor; the European settlers who had taken this last step were rich.

The imperfect appropriation which existed amongst the Indians, preventing, as it did, the accumulation of capital, prevented the application of that skill and knowledge which is preserved and accumulated by the Division of employment. Tanner describes a poor fellow who was wounded in the arm by the accidental discharge of a gun. As there was little surgical skill amongst the community, because no one could devote himself to the business of surgery, the Indian, as the only chance of saving his life, resolved to cut off his own arm; "and taking two knives, the edge of one of which he had hacked into a sort of saw, he with his right hand and arm cut off his left, and threw it from him as far as he could." The labour which an individual must go through when the state of society is so rude that there is scarcely any division of employment, and consequently scarcely any exchanges, is exhibited in many passages of Tanner's narrative. We select one. "I had no pukkavi, or mats for a lodge, and therefore had to build one of poles and long grass. I dressed more skins, made my own mocassins and leggings, and those for my children; cut wood and cooked for myself and family, made my snow-shoes, &c. &c. All the attention and labour I had to bestow about home sometimes kept me from hunting, and I was occasionally distressed for want of provisions. I busied myself about my lodge in the night-time. When it was sufficiently light I would bring wood, and attend to other things without; at other times I was repairing my snow-shoes, or my own or my children's clothes. For nearly all the winter I slept but a very small part of the night."

Tanner was thus obliged to do everything for himself, and consequently to work at very great disadvantage, because the principle of exchange was so imperfectly acted upon by the people amongst whom he lived. This principle of exchange was imperfectly acted upon, because the principle of appropriation was imperfectly acted upon. The occupation of all, and of each, was to hunt game, to prepare skins, to sell them to the traders, to make sugar from the juice of maple-trees, to build huts, and to sew the skins which they dressed and the blankets which they bought into rude coverings for their bodies. Every one of them did all of these things for himself, and of course he did them very imperfectly. The people were not divided into hunters, and furriers, and dealers, and sugar-makers, and builders, and tailors. Every man was his own hunter, furrier, dealer, sugar-maker, builder, and tailor; and consequently, every man, like Tanner, was so occupied by many things, that want of food and want of rest were ordinary sufferings. He describes a man who was so borne down and oppressed by these manifold wants, that, in utter despair of being able to surmount them, he would lie still till he was at the point of starvation, replying to those who tried to rouse him to kill game, that he was too poor and sick to set about it. By describing himself as poor, he meant to say that he was destitute of all the necessaries and comforts whose possession would encourage him to add to the store. He had little capital. The skill which he possessed of hunting game gave him a certain command over the spontaneous productions of the forest; but, as his power of hunting depended upon chance supplies of game, his labour necessarily took so irregular a direction, and was therefore so unproductive, that he never accumulated sufficient for his support in times of sickness, or for his comfortable support at any time. He became, therefore, despairing; and had that perfect apathy, that indifference to the future, which is the most pitiable evidence of extreme wretchedness. This man felt his powerless situation more keenly than his companions; but with all savage tribes there is a want of steady and persevering exertion, proceeding from the same cause. Severe labour is succeeded by long fits of idleness, because their labour takes a chance direction. This is a universal case. Habits of idleness, of irregularity, of ferocity, are the characteristics of all those who maintain existence by the pursuit of the unappropriated productions of nature; while constant application, orderly arrangement of time, and civility to others, result from systematic industry. The savage and the poacher are equally the slaves of violent impulses-equally disgusted at the prospect of patient application. When the support of life depends upon chance supplies, the reckless spirit of a gambler is sure to take possession of the whole man; and the misery which results from these chance supplies produces either dejection or ferocity. The author of this book used to observe the habits of a class of such persons, who frequent the Thames at Eton; and he thus described them in verses of his boyhood:-

What boat is this which creeps so lazily

Up the still stream? How quietly falls the drip

Of the slow paddle! Now it shoots along,

As if that lone man fear'd us. Well I ken

His rough and dangerous trade. He knows each hole

Where the quick-sighted eel delights to swim

When clouds obscure the moon; and there he lays

His traps and gins, and then he sleeps awhile;

But rouses up before the prying dawn

Betrays his course; and out he cautiously glides

To try his doubtful luck. Perchance he finds

Stores that may buy him bread; but oft'ner still

His toil is fruitless, and deject he comes

Home to his emberless hearth, and sits him down,

Idle and starving through the busy day.

Mungo Park describes the wretched condition of the inhabitants of countries in Africa where small particles of gold are found in the rivers. Their lives were spent in hunting for the gold to exchange for useful commodities, instead of raising the commodities themselves; and they were consequently poor and miserable, listless and unsteady. Their fitful industry had too much of chance mixed up with it to afford a certain and general profit. The accounts which of late years we have received from the gold-diggings of California and Australia exhibit the same suffering from the same cause. The natives of Cape de la Hogue, in Normandy, were the most wretched and ferocious people in all France, because they depended principally for support on the wrecks that were frequent on their coasts. When there were no tempests, they made an easy transition from the character of wreckers to that of robbers. A benefactor of his species taught these unhappy people to collect a marine plant to make potash. They immediately became profitable labourers and exchangers; they obtained a property in the general intelligence of civilized life; the capital of society raised them from misery to wealth, from being destroyers to being producers.

The Indians, as we thus see, were poor and wretched, because they had no appropriation beyond articles of domestic use; because they had no property in land, and consequently no cultivation. Yet even they were not insensible to the importance of the principle, for the preservation of the few advantages that belonged to their course of life. Tanner says, "I have often known a hunter leave his traps for many days in the woods, without visiting them, or feeling any anxiety about their safety." The Indians even carried the principle of appropriation almost to a division of land; for each tribe, and sometimes each individual, had an allotted hunting-ground-imperfectly appropriated, indeed, by the first comer, and often contested with violence by other hunters, but still showing that they approached the limit which divides the savage from the civilized state, and that, if cultivation were introduced amongst them, there would be a division of land, as a matter of necessity. The security of individual property is the foundation of all social improvement. It is impossible to speak of the productive power of labour in the civilized state, without viewing it in connexion with that great principle of society which considers all capital as appropriated.

When 'Capital and Labour' was written twenty years ago, the Indian tribes who were abiding in the territory of the United States were principally in the condition which has been described by Tanner. The want of resources in the country of the Indians was so manifest, that, when commissioners from the government of the United States, in 1802, gathered together the chiefs of the various tribes of the Creek Indians in their own country, to propose to them a plan for their civilization, it became necessary to provide for the support of the people so assembled by conveying food into the forests from the stores of the American towns. The Indians have now vanished from their old hunting-grounds. Where they so recently maintained a precarious existence, there are populous cities, navigable rivers, roads, railways. The clink of the hammer is heard in the forge, and the rush of the stream from the mill-dam tells of agriculture and commerce. But even the Indians themselves have become labourers. They have been removed to a large tract of country, far away from the settled parts of the United States, and have been raised into the dignity of cultivators. The Cherokees, the Creeks, and the Choctaws, with many smaller tribes, now breed cattle instead of hunting martens. They have houses in the place of huts; they have schools and churches. Instead of being extirpated by famine or the sword, they have been adopted into the great family of civilized man.

Penn's Treaty with the Indians.

But this wise and humane arrangement of the United States has not wholly removed the Indians from the wide regions of North America. In the Hudson's Bay territories the life which Tanner described still goes forward. The wants of civilized society-the desire to possess the earth-have transported the Indians from the banks of the Ohio to the lands watered by the Arkansas. The opposite principle has retained them on the shores of Hudson's Bay. They are wanted there as hunters, and are not encouraged as cultivators. They are kept out of the pale of civilization, and not received within it. The rude industry of the Hudson's Bay Indians is stimulated by the luxury of Europe into an employ which would cease to exist if the people became civilized. If agriculture were introduced amongst them-if they were to grow corn and keep domestic animals-they would cease to be hunters of foxes and martens, because their wants would be much better supplied by other modes of labour, involving less suffering and less uncertainty. As it is, the traders, who want skins, do not think of giving the Indians tools to work the ground, and seeds to put in it, and cows and sheep to breed other cows and sheep. They avail themselves of the uncivilized state of these poor tribes, to render them the principal agents in the manufacture of fur, to supply the luxuries of another hemisphere. But still the exchange which the hunters carry on with the European traders, imperfect as it is in all cases, and unjust as it is in many, is better for the Indians than no exchange; although we fear that ardent spirits take away from the Indians the greater number of the advantages which would otherwise remain with them as exchangers. If the Indians had no skins to give to Europe, Europe would have no blankets and ammunition to give to them. They would obtain their food and clothing by the use of the bow alone. They would live entirely from hand to mouth. They would have no motive for accumulation, because there would be no exchanges; and they would consequently be even poorer and more helpless than they are now as exchangers of skins. They are suffering from the effects of small accumulations and imperfect exchange; but these are far better than no accumulation and no exchange. If the course of their industry were to be changed by perfect appropriation-if they were consequently to become cultivators and manufacturers, instead of wanderers in the woods to hunt for wild and noxious animals-they would, in the course of years, have abundance of profitable labour, because they would have abundance of capital. This is the better lot of the tribes with whom the government of the United States has made a far nobler treaty than Penn made with his Indians. As it is, their accumulations are so small, that they cannot proceed with their own uncertain labour of hunting without an advance of capital on the part of the traders; and thus, even[Pg 33]

[Pg 34]in the rude tradings of these poor Indians, credit, that complicated instrument of commercial exchange, operates upon the direction of their labour. Of course credit would not exist at all without appropriation. Their rights of property are perfect as far as they go; but they are not carried far enough to direct their labour into channels which would ensure sufficient production for the labourers. Their labour is unproductive because they have small accumulations;-their accumulations are small because they have imperfect exchange;-their exchange is imperfect because they have limited appropriation. We may illustrate this state of imperfect production by another passage from Tanner's story:-

"The Hudson's Bay Company had now no post in that part of the country, and the Indians were soon made conscious of the advantage which had formerly resulted to them from the competition between rival trading companies. Mr. Wells, at the commencement of winter, called us all together, gave the Indians a ten-gallon keg of rum and some tobacco, telling them at the same time he would not credit one of them the value of a single needle. When they brought skins he would buy them, and give in exchange such articles as were necessary for their comfort and subsistence during the winter. I was not with the Indians when this talk was held. When it was reported to me, and a share of the presents offered me, I not only refused to accept anything, but reproached the Indians for their pusillanimity in submitting to such terms. They had been accustomed for many years to receive credits in the fall; they were now entirely destitute not of clothing merely, but of ammunition, and many of them of guns and traps. How were they, without the accustomed aid from the traders, to subsist themselves and their families during the ensuing winter? A few days afterwards I went to Mr. Wells, and told him that I was poor, with a large family to support by my own exertions; and that I must unavoidably suffer, and perhaps perish, unless he would give me such a credit as I had always in the fall been accustomed to receive. He would not listen to my representation, and told me roughly to be gone from his house. I then took eight silver beavers, such as are worn by the women as ornaments on their dress, and which I had purchased the year before at just twice the price that was commonly given for a capote;[10] I laid them before him on the table, and asked him to give me a capote for them, or retain them as a pledge for the payment of the price of the garment, as soon as I could procure the peltries.[11] He took up the ornaments, threw them in my face, and told me never to come inside of his house again. The cold weather of the winter had not yet set in, and I went immediately to my hunting-ground, killed a number of moose, and set my wife to make the skins into such garments as were best adapted to the winter season, and which I now saw we should be compelled to substitute for the blankets and woollen clothes we had been accustomed to receive from the traders."

This incident at once shows us that the great blessing of the civilized state is its increase of the powers of production. Here we see the Indians, surrounded on all sides by wild animals whose skins might be made into garments, reduced to the extremity of distress because the traders refused to advance them blankets and other necessaries, to be used during the months when they were employed in catching the animals from which they might obtain the skins. It is easy to see that the Indians were a long way removed from the power of making blankets themselves. Before they could reach this point, their forests must have been converted into pasture-grounds;-they must have raised flocks of sheep, and learnt all the various complicated arts, and possessed all the ingenious machinery, for converting wool into cloth. By their exchange of furs for blankets, they obtained a share in the productiveness of civilization;-they obtained comfortable clothing with much less labour than they could have made it out of the furs. If Tanner had not considered the capote which he desired to obtain from the traders, better, and less costly, than the garment of moose-skins, he would not have carried on any exchange of the two articles with the traders. The skins of martens and foxes were only valuable to the Indians, without exchange, for the purpose of sewing together to make covering. They had a different value in Europe as articles of luxury; and therefore the Indians by exchange obtained a greater plenty of superior clothing than if they had used the skins themselves. But the very nature of the trade, depending upon chance supplies, rendered it impossible that they should accumulate. They had such pressing need of ammunition, traps, and blankets, that the produce of the labour of one hunting season was not more than sufficient to procure the commodities which they required to consume in the same season. But supposing the Indians could have bred foxes and martens and beavers, as we breed rabbits, for the supply of the European demand for fur, doubtless they would have then advanced many steps in the character of producers. The thing is perhaps impossible; but were it possible, and were the Indians to have practised it, they would immediately have become capitalists, to an extent that would have soon rendered them independent of the credit of the traders. They must, however, have previously established a more perfect appropriation. Each must have enclosed his own hunting-ground; and each must have raised some food for the maintenance of his own stock of beavers, foxes, and martens. It would be easier, doubtless, to raise the food for themselves, and ultimately to exchange corn for clothing, instead of furs for clothing. When this happens-and it will happen sooner or later, unless the remnant of the hunting Indians are extirpated by their poverty, which proceeds from their imperfect production-Europe must go without the brilliant variety of skins which we procure at the cost of so much labour, accompanied with so much wretchedness, because the labour is so unproductive to the labourers. When the ladies of London and Paris are compelled to wear boas of rabbits instead of sables, and when the hair of the beaver ceases to be employed in the manufacture of our hats, the wooded regions of Hudson's Bay will have been cleared-the fur-bearing animals will have perished-corn will be growing in the forest and the marsh-the inhabitants will be building houses instead of trapping foxes;-there will be appropriation and capital, profitable labour and comfort. Three hundred thousand mink and marten-skins will no longer be sent from those shores to London in one year; but Liverpool may send to those shores woven cottons and worsteds, pottery and tools, in exchange for products whose cultivation will have exterminated the minks and martens.

Pine-Marten.

[9] The authorized version has old; the more correct translation is fierce.

[10] A sort of great-coat.

[11] Skins.

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The Prodigal-Advantages of the poorest man in civilized life over the richest savage-Savings-banks, deposits, and interest-Progress of accumulation-Insecurity of capital, its causes and results-Property, its constituents-Accumulation of capital.

There is an account in Foster's Essays of a man who, having by a short career of boundless extravagance dissipated every shilling of a large estate which he inherited from his fathers, obtained possession again of the whole property by a course which the writer well describes as a singular illustration of decision of character. The unfortunate prodigal, driven forth from the home of his early years by his own imprudence, and reduced to absolute want, wandered about for some time in a state of almost unconscious despair, meditating self-destruction, till he at last sat down upon a hill which overlooked the fertile fields that he once called his own. "He remained," says the narrative, "fixed in thought a number of hours, at the end of which he sprang from the ground with a vehement exulting emotion. He had formed his resolution, which was, that all these estates should be his again; he had formed his plan, too, which he instantly began to execute." We shall show, by and by, how this plan worked in detail;-it will be sufficient, just now, to examine the principles upon which it was founded. He looked to no freak of fortune to throw into his lap by chance what he had cast from him by wilfulness. He neither trusted to inherit those lands from their present possessor by his favour, nor to wring them from him by a course of law. He was not rash and foolish enough to dream of obtaining again by force those possessions which he had exchanged for vain superfluities. But he resolved to become once more their master by the operation of the only principle which could give them to him in a civilized society. He resolved to obtain them again by the same agency through which he had lost them-by exchange. But what had he to exchange? His capital was gone, even to the uttermost farthing; he must labour to obtain new capital. With a courage worthy of imitation he resolved to accept the very first work that should be offered to him, and, however low the wages of that work, to spend only a part of those wages, leaving something for a store. The day that he made this resolution he carried it into execution. He found some service to be performed-irksome, doubtless, and in many eyes degrading. But he had a purpose which made every occupation appear honourable, as every occupation truly is that is productive of utility. Incessant labour and scrupulous parsimony soon accumulated for him a capital; and the store, gathered together with such energy, was a rapidly increasing one. In no very great number of years the once destitute labourer was again a rich proprietor. He had earned again all that he had lost. The lands of his fathers were again his. He had accomplished his plan.

A man so circumstanced-one who possesses no capital, and is only master of his own natural powers-if suddenly thrown down from a condition of ease, must look upon the world, at the first view, with deep apprehension. He sees everything around him appropriated. He is in the very opposite condition of Alexander Selkirk, when he is made to exclaim "I am monarch of all I survey." Instead of feeling that his "right there is none to dispute," he knows that every blade of corn that covers the fields, every animal that grazes in the pastures, is equally numbered as the property of some individual owner, and can only pass into his possession by exchange. In the towns it is the same as in the country. The dealer in bread and in clothes,-the victualler from whom he would ask a cup of beer and a night's lodging,-will give him nothing, although they will exchange everything. He cannot exist, except as a beggar, unless he puts himself in the condition to become an exchanger.

But still, with all these apparent difficulties, his prospects of subsisting, and of subsisting comfortably, are far greater than in any other situation in which he must labour to live. As we have already seen, the condition of by far the greater number of the millions that constitute the exchangers of civilized society is greatly superior to that of the few thousands who exist upon the precarious supplies of the unappropriated productions of nature in the savage life. Although an exchange must always be made-although in very few cases "the fowl and the brute" offer themselves to the wayfaring man for his daily food-although no herbs worth the gathering can be found for the support of life in the few uncultivated parts of a highly cultivated country-the aggregate riches are so abundant, and the facilities which exist for exchanging capital for labour are therefore so manifold, that the poorest man in a state of civilization has a much greater certainty of supplying all his wants, and of supplying them with considerably more ease, than the richest man in a state of uncivilization. The principle upon which he has to rely is, that in a highly civilized country there is large production. There is large production because there is profitable labour;-there is profitable labour because there is large accumulation;-there is large accumulation because there is unlimited exchange;-there is unlimited exchange because there is universal appropriation. John Tanner was accounted a rich man by the Indians-doubtless because he was more industrious than the greater number of them; but we have seen what privations he often suffered. He suffered privations because there was no capital, no accumulation of the products of labour, in the country in which he lived. Where such a store exists, the poorest man has a tolerable certainty that he may obtain his share of it as an exchanger; and the greater the store the greater the certainty that his labour, or power of adding to the store, will obtain a full proportion of what previous labour has gathered together.

In 1853 the amount of stock vested to the account of depositors in savings-banks in the United Kingdom was 34,546,434l. Since the establishment of savings-banks, 68,885,283l. had been so invested; and the gross amount of interest paid to the depositors had been 25,733,771l. This large capital, which had so fructified as to produce more than twenty-five millions as interest, was an accumulation, penny by penny, shilling by shilling, and pound by pound, of the savings of that class of persons who, in every country, have the greatest difficulty in accumulating. Habitual efforts of self-denial, and a rigid determination to postpone temporary gratification to permanent good, could alone have enabled these accumulators to retain so much of what they had produced beyond the amount of what they consumed.

The capital sum of more than thirty-four millions now belonging to the depositors in 575 savings-banks, represents as many products of industry as could be bought by that sum. It is a capital which remains for the encouragement of productive consumption; that is, it is now applied as a fund for setting others to produce,-to enable them to consume while they produce,-and in like manner to accumulate some part of their productions beyond what they consume. The millions of interest which the depositors have received is the price paid for the use of the capital by others who require its employment. The whole amount of our national riches-the capital of this and of every other country-has been formed by the same slow but certain process of individual savings, and the accumulations of savings, stimulating new industry, and yielding new accumulations.

The consumption of any production is the destruction of its value. The production was created by industry to administer to individual wants, to be consumed, to be destroyed. When a thing capable of being consumed is produced, a value is created; when it is consumed, that value is destroyed. The general mass of riches then remains the same as it was before that production took place. If the power to produce, and the disposition to consume, were equal and constant, there could be no saving, no accumulation, no capital. If mankind, by their intelligence, their skill, their division of employments, their union of forces, had not put themselves in a condition to produce more than is consumed while the great body of industrious undertakings is in progress, society would have been stationary,-civilization could never have advanced.

It may assist us in making the value of capital more clear, if we take a rapid view of the most obvious features of the accumulation of a highly civilized country.

The first operation in a newly settled country is what is termed to clear it. Look at a civilized country, such as England. It is cleared. The encumbering woods are cut down, the unhealthy marshes are drained. The noxious animals which were once the principal inhabitants of the land are exterminated; and their place is supplied with useful creatures, bred, nourished, and domesticated by human art, and multiplied to an extent exactly proportioned to the wants of the population. Forests remain for the produce of timber, but they are confined within the limits of their utility;-mountains "where the nibbling flocks do stray," have ceased to be barriers between nations and districts. Every vegetable that the diligence of man has been able to transplant from the most distant regions is raised for food. The fields are producing a provision for the coming year; while the stock for immediate consumption is ample, and the laws of demand and supply are so perfectly in action, and the facilities of communication with every region so unimpeded, that scarcity seldom occurs, and famine never. Rivers have been narrowed to bounds which limit their inundations, and they have been made navigable wherever their navigation could be profitable. The country is covered with roads, with canals, and now, more especially, with railroads, which render distant provinces as near to each other for commercial purposes as neighbouring villages in less advanced countries. Science has created the electric telegraph, by which prices are equalized through every district, by an instant communication between producers and consumers. Houses, all possessing some comforts which were unknown even to the rich a few centuries ago, cover the land, in scattered farm-houses and mansions, in villages, in towns, in cities, in capitals. These houses are filled with an almost inconceivable number of conveniences and luxuries-furniture, glass, porcelain, plate, linen, clothes, books, pictures. In the stores of the merchants and traders the resources of human ingenuity are displayed in every variety of substances and forms that can exhibit the multitude of civilized wants; and in the manufactories are seen the wonderful adaptations of science for satisfying those wants at the cheapest cost. The people who inhabit such a civilized land have not only the readiest communication with each other by the means of roads and canals, but can trade by the agency of ships with all parts of the world. To carry on their intercourse amongst themselves they speak one common language, reduced to certain rules, and not broken into an embarrassing variety of unintelligible dialects. Their written communications are convoyed to the obscurest corners of their own country, and even to the most remote lands, with prompt and unfailing regularity, and now with a cheapness which makes the poorest and the richest equal in their power to connect the distant with their thoughts by mutual correspondence. Whatever is transacted in such a populous hive, the knowledge of which can afford profit or amusement to the community, is recorded with a rapidity which is not more astonishing than the general accuracy of the record. What is more important, the discoveries of science, the elegancies of literature, and all that can advance the general intelligence, are preserved and diffused with the utmost ease, expedition, and security, so that the public stock of knowledge is constantly increasing. Lastly, the general well-being of all is sustained by laws-sometimes indeed imperfectly devised and expensively administered, but on the whole of infinite value to every member of the community; and the property of all is defended from external invasion and from internal anarchy by the power of government, which will be respected only in proportion as it advances the general good of the humblest of its subjects, by securing their capital from plunder and defending their industry from oppression.

This capital is ready to be won by the power of every man capable of work. But he must exercise this power in complete subjection to the natural laws by which every exchange of society is regulated. These laws sometimes prevent labour being instantly exchanged with capital, for an exchange necessarily requires a balance to be preserved between what one man has to supply and what another man has to demand; but in their general effect they secure to labour the certainty that there shall be abundance of capital to exchange with; and that, if prudence and diligence go together, the labourer may himself become a capitalist, and even pass out of the condition of a labourer into that of a proprietor, or one who lives upon accumulated produce. The experience of every day shows this process going forward-not in a solitary instance, as in that of the ruined and restored man whose tale we have just told, but in the case of thriving tradesmen all around us, who were once servants. But if the labourer or the great body of labourers were to imagine that they could obtain such a proportion of the capital of a civilized country except as exchangers, the store would instantly vanish. They might perhaps divide by force the crops in barns and the clothes in warehouses-but there would be no more crops or clothes. The principle upon which all accumulation depends, that of security of property, being destroyed, the accumulation would be destroyed. Whatever tends to make the state of society insecure, tends to prevent the employment of capital. In despotic countries, that insecurity is produced by the tyranny of one. In other countries, where the people, having been misgoverned, are badly educated, that insecurity is produced by the tyranny of many. In either case, the bulk of the people themselves are the first to suffer, whether by the outrages of a tyrant, or by their own outrages. They prevent labour, by driving away to other channels the funds which support labour. In some eastern countries, where, when a man becomes rich, his property is seized upon by the one tyrant, nobody dares to avow that he has any property. Capital is not employed; it is hidden: and the people who have capital live not upon its profits, but by the diminution of the capital itself. In the very earliest times we hear of concealed riches. In the book of Job those who "long for death" are said to "dig for it more than for hid treasures." The tales of the East are full of allusions to money buried and money dug up. The poor woodman, in making up his miserable faggot, discovers a trap-door, and becomes rich. In India, where the rule of Mohammedan princes was usually one of tyranny, even now the search after treasure goes on. The popular mind is filled with the old traditions; and so men dream of bags of gold to be discovered in caves and places of desolation, and they forthwith dig, till hope is banished, and the real treasure is found in systematic industry. It was the same in the feudal times in England, when the lord tyrannized over his vassals, and no property was safe but in the hands of the strongest. In those times people who had treasure buried it. Who thinks of burying treasure now in England? In the plays and story-books which depict the manners of our own early times, we constantly read of people finding bags of money. We never find bags of money now, except when a very old hoard, hidden in some time of national trouble, comes to light. So little time ago as the reign of Charles II. we read of the Secretary to the Admiralty going down from London to his country-house, with all his money in his carriage, to bury it in his garden. What Samuel Pepys records of his doings with his own money, was a natural consequence of the practices of a previous time. He also chronicles, in several places of his curious Diary, his laborious searches, day by day, for 7000l. hid in butter firkins in the cellars of the Tower of London. Why is money not hidden and not sought for now? Because people have security for the employment of it, and by the employment of it in creating new produce the nation's stock of capital goes on hourly increasing. When we read in Blackstone's 'Commentaries on the Laws of England,' that the concealment of treasure-trove, or found treasure, from the king, is a misdemeanour punishable by fine and imprisonment, and that it was formerly a capital offence, we at once see that this is a law no longer for our time; and we learn from this instance, as from many others, how the progress of civilization silently repeals laws which belong to another condition of the people.

Treasure-finding.

When we look at the nature of the accumulated wealth of society, it is easy to see that the poorest member of it who dedicates himself to profitable labour is in a certain sense rich-rich, as compared with the unproductive and therefore poor individuals of any uncivilized tribe. The very scaffolding, if we may so express it, of the social structure, and the moral forces by which that structure was reared, and is upheld, are to him riches. To be rich is to possess the means of supplying our wants-to be poor is to be destitute of those means. Riches do not consist only of money and lands, of stores of food or clothing, of machines and tools. The particular knowledge of any art-the general understanding of the laws of nature-the habit from experience of doing any work in the readiest way-the facility of communicating ideas by written language-the enjoyment of institutions conceived in the spirit of social improvement-the use of the general conveniences of civilized life, such as roads-these advantages, which the poorest man in England possesses or may possess, constitute individual property. They are means for the supply of wants, which in themselves are essentially more valuable for obtaining his full share of what is appropriated, than if all the productive powers of nature were unappropriated, and if, consequently, these great elements of civilization did not exist. Society obtains its almost unlimited command over riches by the increase and preservation of knowledge, and by the division of employments, including union of power. In his double capacity of a consumer and a producer, the humblest man has the full benefit of these means of wealth-of these great instruments by which the productive power of labour is carried to its highest point.

But if these common advantages, these public means of society, offering so many important agents to the individual for the gratification of his wants, alone are worth more to him than all the precarious power of the savage state-how incomparably greater are his advantages when we consider the wonderful accumulations, in the form of private wealth, which are ready to be exchanged with the labour of all those who are in a condition to add to the store. It has been truly said by M. Say, a French economist, "It is a great misfortune to be poor, but it is a much greater misfortune for the poor man to be surrounded only with other poor like himself." The reason is obvious. The productive power of labour can be carried but a very little way without accumulation of capital. In a highly civilized country, capital is heaped up on every side by ages of toil and perseverance. A succession, during a long series of years, of small advantages to individuals unceasingly renewed and carried forward by the principle of exchanges, has produced this prodigious amount of the aggregate capital of a country whose civilization is of ancient date. This accumulation of the means of existence, and of all that makes existence comfortable, is principally resulting from the labours of those who have gone before us. It is a stock which was beyond their own immediate wants, and which was not extinguished with their lives. It is our capital. It has been produced by labour alone, physical and mental. It can be kept up only by the same power which has created it, carried to the highest point of productiveness by the arrangements of society.

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