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Saturday, November 17, 2012

The more Labor there is in a State, the more the State is Judged Naturally Rich

The wealth of a nation depends on putting the labor force to work. Those who are unnecessary for farming can be employed in making higher quality products and manufactured goods, particularly durable goods made from metal. Saving is the key determinant of wealth and gold is a particularly useful form of savings because it can purchase all things, even in time of war. The prince and property owners determine how people will be employed by their consumption choices, while the Catholic Church reduces the resources available to materially sustain the people.

IN A LONG CALCULATION included in the supplement, it is shown that the labor of 25 adults is sufficient to provide for 100 others adults with all the necessities of life, according to the European standard of living. In these estimates, it is true that food, clothing, housing, etc., are coarse and rather elementary, but there is ease and abundance. It may be assumed that a good third of the people in a state are too young or too old for daily work, and that another sixth are property owners, sick, or entrepreneurs of different sorts, who do not, by the labor of their hands, contribute to the different needs of men. That makes half the people without work, or at least without the work in question. So if 25 persons do all the work needed for the maintenance of 100 others, there remain 25 persons out of the 100 who are capable of working but have nothing to do.
The soldiers, and the domestic servants in well-to-do families, will form part of these 25. And if all the others are employed refining, by additional labor, the things necessary for life, like making fine linen, fine cloth, etc., the state will be judged rich in proportion to this increase in labor, though it adds nothing to the quantity of things needed for the subsistence and maintenance of men.
Labor gives an additional taste to food and drink. A fork, a knife, etc. finely made, are more valuable than those roughly and hastily made. The same may be said of a house, a bed, a table, and everything needed for the comforts of life.
It is true that it is of little difference in a state whether people are accustomed to wear coarse or fine clothes if both are equally lasting, and whether people eat nicely or coarsely if they have enough and are in good health. Drink, food, clothing, etc., are equally consumed, and whether finely or coarsely produced, this type of wealth is not permanent.
But it is always true to say that the states where fine cloths, fine linen, etc., are worn, and where people eat properly and delicately, are considered rich compared to those where these things are cruder. Furthermore, the states where one sees more people living in the finest manner are considered wealthier than those where one sees fewer in proportion.
But if the 25 persons in 100 of whom we have spoken were employed to produce durable commodities, like mining iron, lead, tin, copper, etc., and refining them into tools and instruments for the use of men, such as bowls, plates and other useful objects that are much more durable than earthenware, the state will not only appear to be richer, but will be in reality.
It will be so, especially if these people are employed in mining gold and silver from the earth, which are not only durable metals, but are, so to speak, permanent. Fire itself cannot destroy them, they are generally accepted as the measure of value, and they can always be exchanged for any of the necessities of life. And if these inhabitants work to bring gold and silver in a state, in exchange for the manufactures and work that they produce and send abroad, their labor will be equally useful and will in reality improve the state.
The point that seems to determine the comparative greatness of states is their reserve stock above the yearly consumption, [i.e., savings] like reserves of cloth, linen, grain, etc., to be used in times of need, or war. And as gold and silver can always buy these things, even from the enemies of the state, gold and silver are the true reserve stock of a state, and the larger or smaller the actual quantity of this stock necessarily determines the comparative greatness of kingdoms and states.53
If it is the practice to import gold and silver from abroad by exporting the commodities and merchandise of the state, such as grain, wine, wool, etc., this will enrich the state, but at the expense of a decrease in population. However, if gold and silver are imported from abroad in exchange for the labor of the people, such as manufactured goods and articles which contain little of the production of the soil, this will enrich the state in a useful and essential manner. It is true that in a great state, the 25 persons in 100, of whom we have spoken, cannot all be employed in making articles for foreign consumption. A million men, for example, would make more clothing than would be annually consumed in the entire commercial world. Most people in every country are clothed with local products, and there will seldom be found, in any state, 100,000 persons employed in making clothing for foreigners. This is shown in the supplement with regard to England, which, of all the nations of Europe, supplies the most cloth to foreigners.
In order for the consumption of the manufactures of a state to become significant in foreign countries, the goods must be well made and highly respected by a large consumption inside the state. This is necessary to discredit all foreign manufactures and give plenty of employment to the inhabitants.54
If enough employment cannot be found to occupy the 25 persons in 100 with work that is useful and profitable to the state, I see no objection to encouraging employment which serves only for ornament or amusement. The state is not considered less rich for a thousand toys, which serve to entertain the ladies or even men, or are used in games and diversions, than it is for useful and serviceable objects. It is said that Diogenes, at the siege of Corinth, would roll his barrel so that he might not seem idle while all others were at work. And we have today societies of men and women occupied in work and exercise as useless to the state as that of Diogenes. As long as the labor of a man supplies ornament or even amusement in a state, it is worth while to encourage it, unless the man can find a way to employ himself usefully.
It is always the inspiration of the property owners, which encourages or discourages the different occupations of the people, and the different kinds of labor that they invent.
The example of the prince, followed by his court, is generally capable of determining the inspiration and tastes of the other property owners, and the example of these last naturally influences all the lower ranks. Therefore, and without a doubt, a prince is able, by his own example and without any constraint, to give such a turn as he likes to the labor of his subjects.
If each owner in a state had only a little piece of land, like that which is usually leased to a single farmer, there would hardly be any cities. The people would be more numerous and the state richer if every owner employed the inhabitants supported on his land with some useful work.
However, when the nobles have great estates, they necessarily bring about luxury55 and idleness. Whether an Abbot at the head of 100 monks living on the produce of several fine estates, or a nobleman with 50 domestic servants and horses kept only for his service, live on these estates, would be indifferent to the state, if it could remain in constant peace.
But a nobleman with his retinue and his horses is useful to the state in time of war. He can always be useful in the judicial system and the keeping of order in the state in peacetime. And in every case, he is a great ornament to the country, while the monks are, as people say, neither useful nor ornamental in peace or war, on this side of heaven.
The convents of mendicant friars are much more pernicious to a state than those of the closed orders. The closed orders usually do no more harm than to occupy estates which might serve to supply the state with officers and judges, while the mendicants, who are themselves without useful employment, often interrupt and hinder the labor of other people. They take from poor people in charity the subsistence which ought to fortify them for their labor. They cause them to lose much time in useless conversation, not to speak of those who involve themselves in families and those who are malicious. Experience shows that the countries which have embraced Protestantism, and have neither monks nor mendicants, have become visibly more powerful. They also have the advantage of having suppressed a great number of holy days when no work is done in Roman Catholic countries, and which diminish the labor of the people by about an eighth part of the year.
If a state wanted to achieve its full potential, it might be possible, it seems to me, to diminish the number of mendicants by incorporating them into the monasteries, as vacancies or deaths occur. This could be done while still providing places in the monastery for those who show little or no aptitude in speculative sciences,56 but who are capable of advancing the practical arts, i.e., in some area of mathematics.57 The celibacy of churchmen is not as disadvantageous as is popularly believed, as is shown in the preceding chapter, but their idleness is very harmful.
Essay on Economic Theory, An

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