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The Limits Of An Economic Society
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Value And Its Relation To Different Incomes
The Law Of Population
Boycotts And The Limiting Of Products
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Effects Of Dynamic Influences Within The Limited Economic Society
Perpetual Change Of The Social Structure


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Leading Facts Concerning Money
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Summary Of Conclusions
Conditions Insuring Progress In Method And Organization


The Law Of Population








Since the optimistic conclusion reached in the preceding chapter is
contingent on an increase of wealth which is not neutralized by an
increase of population, it remains to be seen whether the population
tends to grow at a rate that gives reason to fear such a neutralizing.
Does progress in method and in wealth tend to stimulate that enlarging
of the number of working people which, in so far as they are
concerned, would bring progress to an end? Is the dynamic movement
self-retarding and will it necessarily halt? The answer to this
question depends, in part, on the law of population.

The Malthusian Law

We need first to know whether the growth of
population is subject to a law, and if so, whether this law insures
the maintenance of the present rate of increase or a retarding of it.
The law of population formulated by Malthus at the beginning of the
last century is the single extensive and important contribution to
economic dynamics made by the early economists. It was based more upon
statistics and less on a priori reasoning than were most of the
classical doctrines. Even now the statement as made by Malthus
requires in form no extensive supplementing, and yet the change which
is required is sufficient to reverse completely the original
conclusion of the teaching. Malthusianism constituted the especially
"dismal" element in the early political economy, and yet, as stated by
its author, it revealed the possibility of a comfortable future for
the working class. One might look with cheerfulness on every
threatening influence it described if he could be sure that the
so-called "standard of living" on which everything depends would rise.
The difficulty lay in the fact that the teaching afforded no evidence
that it would thus rise. The common impression of readers was that it
was destined to remain stationary and that too at a low level. The
workmen of Malthus's time were not accustomed to getting much more
than the barest subsistence, and not many economists expected that
they would get much more, even though the world generally should make
gains.

The Popular Inference from the Malthusian Law

If we state the
conclusion which most people drew from the Malthusian law in its
simple and dismal form it is this: Whenever wages rise, population
quickly increases, and this increase carries the rate of pay down to
its former level. The earnings of labor depend upon the number of
laborers; a lessening of the number of workers raises their earnings
and an increase depresses them; and therefore, if every rise in pay
brings about a quick increase of population, labor can never hold its
gains; every rise is the cause of a subsequent fall.

Malthus's Qualification of his Statement

As we have said, Malthus
so qualified his statement that he did not positively assert that this
would describe the experience of the future; the fall in pay that
should follow the increase of numbers might not always be as great as
the original rise, and when a later rise should occur the fall
following it might be less than this second rise. In some way workers
might insist upon a higher standard of living after each one of their
periodical gains.

Why this Qualification is not Sufficient

The mere fact that the
standard of living may conceivably rise does not do much to render the
outlook cheerful, unless we can find some good ground for supposing
that it will rise and that economic causes will make it do so. We
should not depend too much on the slow changes that education may
effect, or base our law on anything that presupposes an improvement in
human nature. We need to see that in a purely economic way progress
makes further progress easier and surer and that the gains of the
working class are not self-annihilating but self-perpetuating. We may
venture the assertion that such is the fact: that when workers make a
gain in their rate of pay they are, as a rule, likely to make a
further gain rather than loss. While there must be minor fluctuations
of wages, the natural and probable effect of economic law is to make
the general rate tend steadily upward, and nothing can stop the rise
but perversion of the system. Monopoly may do it, or bad government,
or extensive wars, or anarchy growing out of a struggle of classes;
but every one of these things, not excepting monopoly, would naturally
be temporary, and even in spite of them, the upward trend in the
earning power of labor should assert itself. Instead of being
hopelessly sunk by a weight that it cannot throw off, the labor of the
future bids fair to be buoyed up by an influence that is
irrepressible.

Refutations of Malthusianism

The Malthusian law of population has
been so frequently "refuted" as to prove its vitality. It is in the
main as firmly impressed in the belief of scientific men as it ever
was, and some of the arguments which have been relied upon to
overthrow it require only to be stated in order to be discarded. One
of these is the claim that the statement of the law is untrue because,
during the century in which the American continent, Australia, parts
of Africa, and great areas elsewhere were in process of occupation,
mankind has not actually pressed on the limits of subsistence. No
intelligent view regards that fact as constituting anything but an
illustration of the Malthusian law. A vast addition to the available
land of the world would, of course, defer the time of land crowding
and the disastrous results which were expected from it, but with the
steady growth of population the stay of the evil influence would be
only temporary.

An Objection based on a Higher Standard of Living

The second
objection is also an illustration rather than a refutation of the
Malthusian doctrine; it asserts that the standard of living is now
higher than it was, and the population does not increase fast enough
to force workers to lower it. Malthus's entire conclusion hung upon an
if. The rate of pay conformed to a standard, and if that standard
were low, wages would be so; while if it were higher, wages would be
higher also.

The Real Issue concerning the Doctrine of Population

There is a
real incompleteness in all such statements. Does the standard of
living itself tend to rise with the rise of wages and to remain above
its former level? When men make gains can they hold them, or, at any
rate, some part of them, or must they fall back to the level at which
they started? And this amounts to asking whether, after a rise in
pay, there is time enough before a fall might otherwise be expected to
allow the force of habit to operate, to accustom the men to a better
mode of living and forestall the conduct that would bring them down to
their old position. The standard of living, of course, will affect
wages only by controlling the number of laborers, and the
discouragement due to Malthusianism lies in the fact that it seems to
say that the number of workers is foreordained to increase so quickly,
after a rise in wages, as to bring them to their old level. Whether it
does or does not do this is a question of fact, and the answer is a
very clear one. The higher standards actually have come from the
higher pay, and they have had time to establish themselves.
Subsistence wages have given place to wages that provided comforts,
and these again to rates that provided greater comforts and modest
luxuries; and the progress has continued so long that, if habit has
any power whatever, there is afforded even by the Malthusian law
itself a guarantee that earnings will not fall to their former level
nor nearly to it.

A Radical Change in Theory

Progress is self-perpetuating. Instead
of insuring a retrogression, it causes further progress. The man who
has advanced from the position in which he earned a bare subsistence
to one in which he earns comforts is, for that very reason, likely to
advance farther and to obtain the modest luxuries which appear on a
well-paid workman's budget. "To him that hath shall be given," and
that by the direct action of economic law. This is a radical departure
from the Malthusian conclusion.

Three Possible Conditions for the Wage-earning Class

Workers are
in one of three possible conditions:--

(1) They may have a fixed standard and a very low one. Whenever they
get more than this standard requires, they may marry early, rear large
families, and see their children sink to their own original condition.

(2) They may have a fixed standard, but a higher one. They may be
unwilling to marry early on the least they can possibly live on, but
may do so as soon as their pay affords a modicum of comfort.

(3) They may have a progressive standard. There may be something
dynamic in their psychology, and it may become a mental necessity for
them to live better and better with advancing years, and to place
their children in a higher status than they themselves ever obtained.

A Historical Fact

The manner in which Malthus was actually
interpreted was as much due to the condition of workers in his day as
to anything which he himself said. It was small comfort to know that,
under the law of population, wages might conceivably become higher and
remain so because of a higher standard of living, provided the higher
standard was never attained. Facts for a long time were discouraging.
In due time they changed for the better. The opening of vast areas of
new land made its influence felt. It raised the pay of labor faster
than the growth of population was able to bring it down. This had the
effect of establishing, not only a higher standard, but a rising
standard, and as one generation succeeded another it became habituated
to a better mode of living than had been possible before. It was the
sheer force of the new land supplemented by new capital and new
methods of industry that accomplished this. It pushed wages upward, in
spite of everything that would in itself have pulled them down.

A Retarded Growth of Population

If Malthusianism, as most people
understood it, were true, population should increase most rapidly
during this period of great prosperity, and should do its best to
neutralize the effect of new lands, new capital, and new methods. In
some places the increase has been abnormally rapid, and in a local way
this has had its effect; but if we include in our view the whole of
what we have defined as civilized industrial society, the rate of
growth has not become more rapid, but has rather become slower during
this period. In one prosperous country, namely, France, population has
become practically stationary. Even in America, a country formerly of
most rapid growth, the increase, apart from immigration, has been much
slower than it was during the first half of the nineteenth century.
The growth of population, then, may proceed more slowly or come to a
halt, even while wealth and earning powers are increasing. If this is
so, a further accumulation of capital and further improvements in
method will not have to struggle against the effects of more rapidly
growing numbers, and their effects will become more marked as the
decades pass. There will be a weaker and weaker influence against
these forces which fructify labor and they will go on indefinitely,
endowing working humanity with more and more productive power and with
greater accumulations of positive wealth. Home owning, savings bank
deposits, invested capital, and comfortable living may be more and
more common among men who depend for their income mainly upon the
labor of their hands. Is this more than a possibility? Is there an
economic law that in any way guarantees it? Can we even say that
general wealth will, without much doubt, redound to the permanent
well-being of the working class, and that the more there is of this
prosperity, the less there is of danger that they will throw it away
by any conduct of their own? The answer to these questions is to be
found in a third historical fact.

The Birth Rate Small among the Upper Classes in Society

In most
countries it is the well-to-do classes that have small families and
the poor that have large ones. It is from the interpretation of this
fact that we can derive a most important modification of the
Malthusian law. It is the voluntary conduct of different classes which
determines whether the birth rate shall be large or small; and the
fact is that in the case of the rich it is small, in the case of the
poor it is comparatively large, while in the case of a certain middle
class, composed of small employers, salaried men, professional men,
and a multitude of highly paid workers, it is neither very large nor
very small, but moderate. In a general way the birth rate varies
inversely as the earning power of the classes in the case, though the
amounts of the variations do not correspond to each other with any
arithmetical exactness. If one class earns half as much per capita as
another, it does not follow that the families belonging to this class
will have twice as many children. They do, on the average, have more
children. There is, then, at least an encouraging probability that
promoting many men from the third class to the middle class would
cause them to conform to the habit of the class they joined. This
class is at present largely composed of persons who have risen from
the lowest of the classes, and any future change by which the third
class becomes smaller and the second larger would doubtless retard the
average birth rate of the whole society.

Motives for the Conduct of the Different Classes

History and
present fact are again enlightening in that they reveal the chief
motive that determines the rapidity of the increase of the population.
When children become self-supporting from an early age, the burden
resting on the father when he has a comparatively small number of them
is as large as it ever will be. If they can earn all they cost when
they reach the age of ten, the maintenance of the children will cost
as much when the oldest child has reached that age as it will cost at
any later time. Even though one were added to the family every year or
two, one would graduate from the position of dependence every year or
two, and the number constantly on the father's hands for support would
probably not exceed five or six, however large the total number might
become. The large number of children in families of early New England
and the large number of them in French Canadian families at a recent
date were due to the fact that land was abundant, expenses were small,
and a boy of ten years working on the land could put into the family
store as much as his maintenance took out of it. The food problem was
not grave in those primitive places and times, and neither were the
problems of clothing, housing, and educating. It is in this last item
that the key to a change of the condition lay, for the time came when
more educating was required, when the burden of maintaining children
continued longer, and a condition of self-support was reached at no
such early date as it had been in rural colonies.

The Effect of Endowing Children with Education and with
Property

When children need to be thoroughly educated, the burden
of maintaining a family of course increases. An unduly large family
means the lowering of the present standard of living for all and a
lowering of the future standard for the children. With most workmen it
is not possible either to endow many children with property or to
educate them in an elaborate way. The fear, therefore, of losing
present comforts for the family as a whole and the fear of losing
caste by seeing the family drop, at a later date, into a lower social
class, are arguments against large families.

Why Economic Progress perpetuates Itself

The economic motive which
causes progress to perpetuate itself and to bring about more and more
progress is the determined resistence to a fall from a social status.
The family must not lose caste. It must not sacrifice any of the
absolute comforts to which it is accustomed, particularly when so
doing entails a degradation. Such is human nature that the
unwillingness to give up something to which one is accustomed is a far
stronger spur to action than the ambition to get something to which
one is not accustomed; and a social rank once attained is not
surrendered without a struggle. A tenacious maintenance of status is
the motive which figures most prominently in controlling the growth of
population and the increase of capital. The rich maintain the status
of the family by means of invested wealth, the poor do it by
education, and members of the middle class do it by a combination of
the two.

Status maintained by Education

In case of wage earners the need of
educating children and the advantages that flow from it overbalance
the need of bequeathing to them property; and yet the need of
bequeathing property of some kind is a powerful motive also. It is
important to enable them to procure the tools of some handicraft, or
to secure themselves against dangers from sickness or accident.
Moreover, it is not altogether technical education which counts in
this way. Culture in itself is a means, not only of direct enjoyment,
but of maintaining a social rank. The well-informed person
accomplishes directly what a well-to-do person accomplishes
indirectly, in that he gets direct pleasures from life which other
people cannot get, and he enjoys consideration of others and has
influence with them as an uninformed person cannot. The need,
therefore, of educating children for the sake of making them good
producers and the need of doing it for the purpose of making them good
consumers and of enabling them to make the most of what they produce
works against too rapid an increase of numbers.

The Effect of Factory Legislation

These motives are powerfully
strengthened when they are reenforced by public opinion and positive
law. The ambition of workers to secure laws which will forbid the
employment of children under the age of sixteen is, in this view, a
reasonable wish and one that if carried out would tend to promote the
welfare of future generations. It is doubtless true that this is not
the sole motive, and some weight must be accorded to the desire to
reduce the amount of available labor, and to protect adults who tend
machines from the competition of children who could do it as well or
better. There is, however, an undefined feeling in the laborers'
minds that when children all work from an early age the wages of the
whole family somehow become low, and that it takes all of them to do
for the family what the parents might do under a different condition.
The Malthusian law shows how, in the long run, this is brought about.
The increased strength of the demand for factory laws and compulsory
education is a positive proof of the growth of the motives which put a
check on population.

Absolute Status and Relative Status both Involved

The absolute
comfort a family may enjoy and its social position are both at stake,
and we need not trouble ourselves by asking whether the comparative
motive--the need of keeping pace with others in the march of
improvement--will cease to act if a whole community advances together.
We saw at the outset that this motive acts powerfully on a superior
class, which has before its eyes a lower class into whose rank some of
its members may possibly drop. The lowest class must always be
present, however a community may advance, and a well-to-do worker will
always dread falling into it. If it should grow smaller and smaller in
number, and if the second of the three classes we are speaking of
should grow larger, the dread of falling from the one to the other
would not disappear. The relative status--that which appeals to caste
feeling and the desire for the consideration of others--would continue
to be influential, as well as the desire for positive comforts; and
the motive that depends on comparisons might even be at its strongest
when the lowest class should so dwindle that few would be left in it
except cripples, the aged, or the feeble-minded. An efficient worker
would struggle harder to keep his family out of such a class than to
keep it out of one which would have upon it only the ordinary stigma
of poverty.

Checks more Effective as Wealth Increases

It is clear that the
dominant motives which restrain the growth of population act more
powerfully on the well-to-do classes than on the poor. The need of
invested wealth, the need of education, the determination to adhere to
a social standard of comfort and to avoid losing caste, are stronger
in the members of the higher classes than in those of the lower ones,
and become more dominant in the community as more and more of its
members belong to the upper and the middle classes.

Immediate Causes of a Slow Increase of Population

The economic
motive for a slow growth of population can produce its effect only as
it leads to some line of conduct which insures that result. Means must
be adopted for attaining the end desired, and when one looks at some
of the means which are actually resorted to, he is apt to get the
impression that an indispensable economic result is in some danger of
being attained by an intolerable moral delinquency. Must the society
of the future purchase its comforts at the cost of its character?
Clearly not if the must in the case is interpreted literally. A low
birth rate may be secured, not at the cost of virtue, but by a
self-discipline that is quite in harmony with virtue and is certain to
give to it a virile character which it loses when men put little
restraint on their impulses. Late marriages for men stand as the
legitimate effect of the desire to sustain a high standard of living
and to transmit it to descendants; and late marriages for women stand
first among the normal causes of a retarded growth of population.
Moreover, the same moral strength which induces men to defer marriage
dictates a considerate and prudent conduct after it, and prevents
unduly large families without entailing the moral injury which
reckless conduct involves. On the other hand, there may be an
indefinite postponement of marriage by classes that lack moral stamina
and readily lapse into vice. There are vicious measures, not here to
be named in detail, which keep down the number of births or increase
the number of deaths, mostly prenatal, though the infanticide of
earlier times is not extinct. By strength and also by weakness, by
virtue and also by vice, is the economic mandate which limits the rate
of growth of population carried out. A limit of growth must be imposed
if mankind is to make the most of itself or of the resources of its
environment. There is no great doubt that it will be so imposed, and
the great issue is between the two ways of doing it; namely, that
which brutalizes men and depraves them morally and physically, and
that which places them on a high moral level.

Moral Losses attending Civilization

There is little doubt that
vice has made gains which reduce in a disastrous way the otherwise
favorable results of increasing wealth. The "hastening ills" that are
said to attend accumulating wealth and decaying manhood have come in a
disquieting degree and forced us to qualify the happy conclusions to
which a study of purely economic tendencies leads. The evil is not
confined to the realm of family relations, but pervades politics,
"high finance," and a large part of the domain of social pleasures.
The richer world is the more sybaritic--self-indulgent and intolerant
of many moral restraints; and if one expects to preserve an
unquestioning trust in the future, he must find a way in which the
economic gains which he hopes for can be made without a casting away
of the moral standards which are indispensable. The greatest possible
achievement in this direction would be an abandonment of vicious
restraints on population and a general increase of the forethought and
the self-command which even now constitute the principal reliance for
holding the birth rate within prudent limits.

The Working of Malthusianism in Short Periods as Contrasted with an
Opposite Tendency in Long Ones

There is little doubt that by a long
course of technical improvement, increasing capital, and rising wages,
the laboring class of the more prosperous countries have become
accustomed to a standard of living that is generally well sustained
and in most of these countries tends to rise. There is also little
uncertainty that a retarded growth of population has contributed
somewhat to this result. One of the facts which Malthus observed is
consistent with this general tendency. Even though the trend of the
line which represents the standard of living be steadily upward, the
rise of actual wages may proceed unevenly, by quick forward movements
and pauses or halts, as the general state of business is flourishing
or depressed. In "booming" times wages rise and in hard times they
fall, though the upward movements are greater than the downward ones
and the total result is a gain.

Now, such a quick rise in wages is followed by an increase in the
number of marriages and a quick fall is followed by a reduction of the
number. The birth rate is somewhat higher in the good times than it is
in the bad times. Young men who have a standard of income which they
need to attain before taking on themselves the care of wife and
children find themselves suddenly in the receipt of such an income and
marry accordingly. There is not time for the standard itself
materially to change before this quick increase of marriages takes
place, and the general result of this uneven advance of the general
prosperity may be expressed by the following figure:--



The line AC measures time in decades and indicates, by the figures
ranging from 1 to 10, the passing of a century. AB represents the
rate of wages which, on the average, are needed for maintaining the
standard of living at the beginning of the century; and CD measures
the amount that is necessary at the end. The dotted line which crosses
and recrosses the line BD describes the actual pay of labor, ranging
now above the standard rate and now below it. Whenever wages rise
above the standard, the birth rate is somewhat quickened, and
whenever they fall below it, it is retarded; but the increase in the
rate does not suffice to bring the pay actually down to its former
level. The descent of the dotted line is not equal to the rise, and
through the century the earnings of labor fluctuate about a standard
which grows continually higher.

The pessimistic conclusion afforded by the Malthusian law in its
untenable form requires (1) that the standard of living should be
stationary and low, and (2) that wages should fluctuate about this low
standard. In this view the facts would be described by the following
figure:--



AC measures a century, as before, by decades, and the height of BD
above BC measures the standard of living prevailing through this
time. The dotted line crossing and recrossing BD expresses the fact
that wages sometimes rise above the fixed standard and are quickly
carried to it and then below it by a rapid increase in the number of
the laborers.

Members of the Upper Classes not Secure against the Action of the
Malthusian Law if a Great Lower Class is Subject to It

It is clear
that if the workers are to be protected from the depressing effect
which follows a too rapid increase of population, the Malthusian law
in its drastic form must not operate in the case of the lowest of the
three classes, so long as that is a numerous class. A restrained
growth in the case of the upper two classes would not suffice to
protect them if the lowest class greatly outnumbered them, and if it
also showed a rapid increase in number whenever the pay of its members
rose. The young workers belonging to this class would find their way
in sufficient numbers into the second class to reduce the wages of its
members to a level that would approximate the standard of the lowest
class. Under proper conditions this does not happen; for the drastic
action of the Malthusian law does not take place in the case of the
third class as a whole, but only in the case of a small stratum within
it.

Countries similarly exposed to Dangers from Other
Countries

Something of this kind is true of a number of countries
which are in close communication with each other. If a rise of pay
gave a great impetus to growth of population in Europe, and if this
carried the pay down to its original level or a lower one, emigration
would be quickened; and although the natural growth in America might
be slower, the American worker might not be adequately protected. The
influx of foreigners might more than offset the slowness of the
natural growth of population in America itself. The most important
illustration of this principle is afforded by the new connection which
America is forming with the Asiatic nations across the Pacific.





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