our high taxes, by raising the wages we pay to our workmen considerably above the level of those of the Continental states, lay us under a disadvantage with which neither our great capital, nor the superior skill and intelligence of our artisans, can enable us permanently to contend.

In so far, however, as respects America, we do not think that there is the smallest probability of her ever becoming a dangerous rival of ours in manufacturing industry, or that the fact of her being possessed of the raw material, is a circumstance of any importance. The Americans are possessed of such vast tracts of fertile, and hitherto unoccupied land, that agricultural employments must continue, for a very long period, to form decidedly the most beneficial mode in which they can employ their capital and industry and it may be supposed, that, according as a knowledge of the sound principles of public economy is more generally diffused, the people and their rulers will see the folly of attempting to force the premature establishment of manufactures; and will become more and more dispo sed to follow the just and liberal policy of allowing every individual to prosecute his own interest in his own way. But, assuming that the Americans should persevere in the erroneous policy, on which they have latterly been acting, of forcing the establishment of manufactures, what is the amount of the advantage they will gain from the possession of the raw material? It is clear, that if manufactures are ever to be successfully carried on in America, it can only be in the Northern States; for no one can imagine that manufactured goods produced by slave labour will ever be able to come successfully into competition with similar goods produced by free labour: And if cotton has to be exported from Georgia and Carolina to a distant part of the Union, the difference between the cost of its conveyance to Massachusetts, or Connecticut, and Great Britain, must be altogether inappreciable, as compared with the ultimate cost of the manufactured goods. We, therefore, entertain no fears whatever of the competition of America. There are insuperable obstacles to her becoming a manufacturing nation for a very long series of years; and when she does become one, the advantage she will derive from possessing the raw material, will be hardly worth mentioning, and will go but a very short way indeed, to balance the peculiar sources of our superiority.

But it is on the competition of our Continental neighbours, assisted by our high wages and taxes, that those who anticipate the decline of our manufacturing and commercial prosperity, lay the greatest stress. It is idle, it is said, for us to deceive ourselves, by trusting to the superior magnitude of our capital, and

the greater proficiency to which we have already attained in the manufacture. These advantages, it is admitted, may insure our ascendency for a while; but it is affirmed that they are not of a description that can be monopolized; that the French, and other Continental nations, have already made, and are continuing to make, considerable progress in the manufacture; and that our comparatively high wages and taxes must ultimately give them a superiority over us. As these statements have been repeatedly advanced, and have made a considerable impression, we shall examine them a little minutely.

In the first place, then, we have to observe, that we very much doubt whether wages are really higher in England than in France. That wages, estimated by the day, are higher in the former, is, we believe, true; but the question really at issue, is not, whether the wages paid to workmen employed for a given period are higher in France than in England, but,-whether the wages or sums paid for executing a particular piece of work are higher? Now, this is obviously a radically different question from the former. A very competent judge of such matters, the late Arthur Young, gave it as his opinion, that an Essex labourer, at 2s. 6d. a-day, was decidedly cheaper than a Tipperary labourer at 5d.! And, upon the same principle, though a French manufacturer were able to hire his workmen, by the day or the week, for some 20 or 30 per cent less than an English manufacturer pays to his, yet, as the British labourers, from their better training, the greater subdivision of employments amongst them, and their industrious habits, are able to execute a decidedly greater quantity of work in a given space of time than the French labourers, the wages or price of labour may really be lower in this country than in France. We do not, however, pretend to form an accurate estimate of the comparative price of labour in the two countries; but we have been assured, by gentlemen of great experience, and intimately acquainted with the state of industry in both countries, that although the French workmen may equal, or even surpass the English in jewellery, and in the manufacture of fancy articles and trinkets, and, generally, in all those departments in which labour is light, and into which machinery has not been largely introduced, they are very inferior to them in others; and that the English cotton, woollen, and hardware manufacturers, and machine makers, get any quantity of work cheaper, and at the same time incomparably better executed than it could be done in France.

It is not, therefore, from loose and ill-digested statements about the low rate of wages in France, as compared with their rate in England, that any accurate estimate can be formed of

the real price of labour in the two countries. But admitting, for the sake of illustration, for we believe the fact to be otherwise, that labour is really cheaper in France than in England, it will not require any very elaborate argument to show that this circumstance cannot, of itself, lay our cotton manufacturers under any disadvantage as compared with those of France or any other country.

We admit that it seems at first sight sufficiently paradoxical to affirm, that an increase of wages has a tendency to reduce the price of all that class of commodities, which, like cottons, and many other species of manufactured goods, are produced chiefly by the aid of machinery. But the paradox is only in appearance; and a very small degree of attention will serve to convince any one at all familiar with such investigations, that the proposition is as undeniable as it is important.

Some commodities are almost entirely the produce of manual labour, while others, as cotton twist, for example, are almost entirely the produce of the labour of fixed capital, or machinery; and it is, therefore, plain, that nearly the whole of the first class, or their value, must go to the labourer as his wages, and that of the second to the manufacturer, as his profits. Suppose, to illustrate what has now been stated, that a manufacturer has a machine worth L.10,000, calculated to last for a considerable number of years, and which can manufacture goods with the assistance of but little manual labour. In this case, it is quite clear that the goods produced by the machine really form the profit of the capital expended in its construction; and their value, or price rated in money, must, therefore, vary with every variation in the rate of profit. If profits are 10 per cent, then the goods annually produced by the machine must, supposing the value of money not to alter, sell for L.1,000, exclusive of a small additional sum to replace the wear and tear of the engine. Should profits rise to 15 per cent, the price of the goods produced by the machine must rise to L.1,500, for otherwise the manufacturer would not obtain the common and average rate of profit. And if, on the other hand, profits should fall to 5 per cent, the price of the goods must, for the same reason, fall to L.500. If, therefore, it can be shown that a rise of wages reduces the rate of profits, it necessarily follows that it must also reduce the value and price of all such commodities as are chiefly produced by the aid of fixed capital or machinery.

But it is clear that every rise of wages, which is not accompanied by an increased productiveness of industry, must proportionally lower the rate of profit. Profits and wages,

though most commonly paid, or estimated in money, are parts of, and really make up between them, all that portion of the produce of industry that remains after rent is deducted or set aside;-and it is as clear as the sun at noon-day, that when the portion of the produce of industry, or its value, going to the labourer is increased, the portion remaining to the capitalist, or its value, must be diminished. The introduction of money obscures, but it does not in the slightest degree affect, the relation of profits and wages. So long as the productiveness of industry remains the same, the one must always vary inversely as the other, that is, profits must fall when wages rise, and rise when wages fall.

This principle shows conclusively, that, instead of our high wages laying our cotton manufacturers under any disadvantage as compared with foreigners, their effect must be distinctly and completely the reverse. High wages cause low profits; and as the principal part of the value of cottons and other commodities chiefly produced by the agency of machinery, consists of profits, it must be comparatively low when wages are high. Suppose, for example, that two pretty durable machines, of equal power and goodness, and which can perform their work with but little manual labour, are erected, the one in France and the other in England; and suppose, farther, that the machines cost L.20,000 each, and that the common and average rate of nett profit in France is six, and in England only five per cent: it is plain that the goods produced, or the work performed by the French machine will have to sell for, or be worth, L.1,200, whereas the goods produced, or the work performed by the English machine, will only sell for, or be worth, L.1,000; for such are the sums which will yield the proprietors of these machines the customary rate of profit accruing to those who carry on industrious undertakings in the countries to which they respectively belong,-a regard to their own interest not allowing them to take less than this rate, and the competition of their neighbours not allowing them to obtain more.

Nor is this the only advantage, in point of cheapness, that would be enjoyed by the English manufacturers. For, inasmuch as one description of machinery is, for the most part, largely employed in the production of another, it is most probable that, in the event of one of the machines being made in England and the other in France, the English one would not cost so much as L.20,000, and that its produce might, on that account, be sold for even less than L.1,000.

The effect of a rise of wages on the price of those commodities that are chiefly produced by means of manual labour, is

different. It raises their value, or price, proportionally to the extent to which the rise of wages exceeds the fall of profit on the capital employed in their production. And hence it follows, that a country where wages are high and profits low, has a decided advantage over a country where wages are low and profits high, in the cheaper rate at which she can afford to sell all those articles that are chiefly produced by means of machinery; while the latter has an equal advantage over the former, in the cheaper rate at which she can afford to sell the articles chiefly produced by the immediate labour of the hand. And such, in point of fact, is the exact relative condition of Great Britain and the Continental States. The bulk of our exports consists of cotton and woollen stuffs and yarn, hardware, and other articles, in the production of which machinery is very largely employed; whereas the bulk of the exports of France, Germany, &c. consists of the products of their soil, jewellery, fancy articles, and coarse manufactured goods, principally the product of manual labour. The idea that high wages can ever be injurious to the commerce of a country, is, therefore, quite imaginary. They tend, indeed, to give its industry a peculiar bias and direction, but that is all. If, on the one hand, they raise the value of certain descriptions of commodities, and check their exportation, on the other hand they proportionally lower the value of other descriptions, and fit them the better for the foreign market.

Our manufacturers may, therefore, be of good cheer. The advantages they enjoy over the manufacturers of the Continent, in the possession of the various natural and acquired facilities for conducting the business of manufacturing already enumerated, would, supposing other things to be equal, give them a decided superiority in all equally accessible markets: and if it be really true that the price of labour in Great Britain is higher than on the Continent, that circumstance must, by lowering the rate of profit, lower the price, and consequently increase the demand for cotton and other articles principally produced by the agency of machinery.*

The taxes imposed on manufactured goods being commonly drawn back on exportation, have no direct influence on the price of such of them as are destined for a foreign market: And, ex

See, for a farther illustration of this principle, Mr Ricardo's Principles of Political Economy and Taxation, p. 34, 1st edit., and Mr M'Culloch's Principles of Political Economy, p. 320.