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harder in order to obtain a higher pay by the day. And capitalists, likewise, in their struggles to avoid ruin, try to make up for diminished profits by increased sales*.

All this increase of production, by adding to the glut, tends to cause a yet further fall in prices, and to occasion further losses to the producers. But in the economical, as in the moral and physical worlds, there are few evils that do not sooner or later work out their own cure. Even in the apparently desperate state of things we have been describing, there are elements in operation of a nature to bring about an improvement. The extraordinary cheapness of goods produced in increased quantities at a continual loss, opens their consumption to a lower and more numerous class of purchasers. They make their way into new markets, and are employed in substitution for other goods, or for purposes to which they had not previously been applied. A new and enlarged demand thus springs up: and in the mean time, the anxiety of the producers to diminish their expenses forces them to task their ingenuity to the

* Mr. T. Attwood, in his Examination before the Committee of Secrecy on the Bank Charter question in 1831, says, "Nothing is more common than for manufacturers to increase their establishments at the very time they are upon the road to ruin. In the iron trade, for example, if they have two furnaces they will build a third, because the loss upon the two furnaces is 10s. a ton, but upon the three, it will be reduced to 5s. a ton. Within the last five or six months, when the iron masters and manufacturers generally are all going to ruin, and in a state I do not like to describe, they are, many of them, enlarging their works, not to partake of profit, but to prolong the path to ruin, by dimi nishing their general charges." 5654-5.

utmost, in the invention of new machines or processes, by which a saving of cost may be effected; so that it often happens by the time a new and enlarged demand has been established through the sacrifice of large stocks of goods at losing prices, that the producers find themselves enabled to supply this demand at these same prices, with a profit. We believe the history of the silk, the iron, the glove, and the cotton-trade, and perhaps of many more, within the last few years, affords decided instances of an extended beneficial demand having been thus bought by temporary sacrifices.

It is, however, strongly to be suspected that such epochs of general embarrassment and distress among the productive classes, accompanied-indeed, brought on-by a general glut or apparent excess of the stocks of all goods in every market, -phenomena of which sad experience has of late too frequently attested the real existence, in spite of what theory may urge as to their impossibility -it is to be suspected, we say, that such phenomena are anomalies, not in the order of events which flow from the simple and natural laws of production, but occasioned by the force of some artificial disturbing cause or other, introduced through the fraud or folly of the rulers of the social communities they so grievously affect. A few words will explain our meaning as far as we think it necessary to proceed in the development of this important principle on the present occasion.

We have hitherto spoken of price as synonimous with value. But in truth, this is only on the faith of the conventional assumption which is the basis of all commercial interchange, that

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money is a true measure of value. Unhappily, this assumption is far from well-founded-nay, it may be pronounced a pernicious fallacy. Money, whether of intrinsic value, as coin, or the representative only of value, as bank-notes, is, like every other changeable commodity, liable to vary in value with changes in the relation of its demand and supply. Gold and silver money freely coined, must vary in local value with every alteration (and they are very frequent) in the local supply and demand of the precious metals. Bank paper payable on demand in coin must vary precisely in value with the metal into which it is by law convertible at the option of its possessor. Inconvertible paper-money will vary whenever the quantity in circulation is either beyond or within the quantity which is required, at the time, for the exigencies of commerce, in the country through which the paper circulates. And as these exigencies are continually fluctuating, and there exists no test by which their extent can be at any time gauged, this kind of money likewise must be frequently varying in value.

Bearing in mind this instability of value inherent in money of all kinds, we cannot fail to perceive that a general glut—that is, a general fall in the prices of the mass of commodities below their producing cost-is tantamount to a rise in the general exchangeable value of money; and is a proof, not of an excessive supply of goods, but of a deficient supply of money, against which the goods have to be exchanged. Suppose every article in the market to have fallen in price fifty per cent.

This is no proof that any one article

has fallen in value-that is, in general estimation as compared with the rest. Still less is it any proof that there has been an over-production of all goods-(which is in fact an unintelligible proposition, for how can there be too great an abundance of all good things? Can the desires of man ever be sated?) It is simply a proof that the value of money has risen one hundred per cent.

But money, being employed as the measure of value, ought essentially to be invariable itself in value. Lamentable, therefore, is the ignorance and neglect of those governments, which, while enforcing the employment of money of any kind as a medium of exchange, take no precautions against its liability to vary in value, and permit such variations to derange the whole course of trade, to vitiate all money contracts, and convert, as we have witnessed in late years, the triumphs of invention, the success of industry-the very abundance of produce of every description, into a source of suffering to every class of producers!

It is unpardonable mismanagement only of this kind that can so far invert the natural character of things, and give rise to so paradoxical a phenomenon as universal over-production. Of such mismanagement we shall have examples to offer at a later period, as well as propositions for its correction. Meantime we proceed to examine the nature of the existing arrangements for the distribution of wealth.

CHAPTER IX.

DISTRIBUTION OF WEALTH.

Natural and necessary inequality of Conditions and Property.-Adventitious advantages.—Natural Right of Succession to Property by Will or Inheritance-Variety of conventional Rules.-Test of their Equity.—Natural Distribution of new Wealth-among Labourers, Land-owners, and Capitalists-Can be determined only by the principle of free Exchange.—The same principle tends to the greatest increase of distributable Produce.-Limitation of interference of Government to the securing of Persons and Property.

IN as far as we have hitherto traced the natural laws which determine the production of wealth, it has, we think, been apparent throughout that the conditions most favourable for its increase are the free and secure enjoyment by every adult individual of his personal liberty, natural advantages, and acquired property,-conditions which necessarily include freedom of industry and exchange, and the free use of the spontaneous bounty of Heaven.

There would have been good reason for presuming à priori that the general rules which tend to bring about the greatest aggregate of production are the most favourable to the interest of all consumers. For the more there is to divide, the larger, it is probable, will be the share of each.