Basic for Economics

BASIC FOR ECONOMICS by L. W. Lockhart

Special list of 50 economics words		Frontispiece
To the Reader		7
PART I.	Discussion	9
PART II:	Examples
	Florence on Current Economic Teaching	30
	Marshall on Gold and Silver	47
	Cannan on the Grouping of Incomes	63
	Lavington on Business Organization	78
	Stamp on Stimulus in Work	94
	Malthus on The Factors Limiting Population	111

Part II : EXAMPLES

6 . MALTHUS ON THE FACTORS LIMITING POPULATION¹

I . Statement of the question -- Relation between the increase of population and food.
In attempting to see how to make the conditions of society better, the natural way of attacking the question is,

To go fully into this question, and to give an account of all the causes which have had an effect on man's development, would be far outside the powers of one person. The chief purpose of the present work is to make an observation of the effects of one great cause which has a deep connection with man's natural habits ; and which, though it has been frequently and strongly in operation as long as society has been in existence, has been taken into account very little by writers on this question. It is true that the statement of the facts on which this cause is based has been made again and again, and that they are frequently touched upon ; but its natural and necessary effects have been almost completely overlooked ; though probably, among other things, it has been responsible for much of the wrongdoing and unhappy conditions, and of that unequal distribution of the fruits of the earth which it has been the one desire of persons interested in the good of others to put an end to all through history.
The cause of which I am writing is the unchanging tendency for the increase of all living things to be greater than the food needed for their support.
Dr. Franklin has made the observation that the number of plants and animals is limited only by space and the fact that they get in one another's way because there is not enough for their support. If there were no other plants on the face of the earth, he says, it might in time be completely covered by one sort of plant, and if there were not other persons on it, the place of those who had gone might be taken, in a hundred years, or so, by men from one nation, only, for example by Englishmen.²
This is certainly true. The distribution of the seeds of existence among plants and animals seems to have been made from a full store ; but it is not possible to say the same about the space and the food which is necessary for their growth. The seeds of existence on this earth would, in conditions of free development, become enough for millions of earths in the space of some thousands of years. Need, that natural law, whose rule is seen everywhere, keeps them within the present limits. Plant existence and animal existence is cut down by this limiting law ; and man is unable by any efforts of reason to overcome it.
In plants and unreasoning animals, the view of the question is simple. The act of increasing themselves is forced upon them by a strong natural impulse ; and this impulse is at no time stopped by doubts about their power of supplying the needs of their offspring. For this reason, wherever they are free they give effect to their power of increasing ; and the over-supply which comes about in this way is cut down later by need of space and food supplies.
The effects of this limiting process on man are more complex. Though the natural impulse to do what is necessary for increasing his numbers is no less strong in him than in the other animals, he is faced by reason, which puts before him the fact that he may be giving existence to beings which he has no power of supporting. If he gives attention to his natural impulse, the outcome of limiting the family is very frequently wrongdoing. If he does not give attention to it, there will at all times be a tendency for there to be more men in existence than there is food for. But because, by that natural law which makes food necessary to man, it is not ever possible in fact to get an increase in population to a point where it will not be supported even at the lowest level by the supplies in existence, the fact that it is hard to get food will all the time be a factor limiting population. This factor is certain to be in operation somewhere, and will necessarily be experienced in some sort of unhappy conditions or the fear of them by a very great number of persons.
It will be clear enough from an observation of the different conditions of society through history that there is an unchanging tendency for population to be increased to a point where its support is no longer possible, and that it is kept to its necessary level by these causes. But before looking at history, the question will possibly be seen in a clearer light. if we make an attempt to see what would be the natural increase of population if its development was quite free and what rate of increase in the produce of the earth might be possible under the best conditions of man’s industry.
There will be general agreement that there has not so far been any country where the habits of the population were so straightforward and simple, and the food-supplies so unlimited that persons have not been kept from getting mated young because they will not have enough for the support of a family, and where no waste of man s existence has been caused by bad habits, by towns, by unhealthy trades or by overwork. For this reason, in no nation we have so far come across has the power of population had a chance of working quite freely.
Even where there is no law about getting married, it seems natural and right for a man’s love to become fixed quite early upon one woman ; and where there was nothing in the way of the relation which would be formed by such a feeling, and nothing causing the destruction of population later, the increase in the number of persons would clearly be much greater than any increase which there has so far been.
In the north parts of America, where the food supplies have been greater, the habits of the men and women more straightforward, and the reasons against persons getting married early less strong, than in any countries of Europe at the present day, the population has been increasing at the rate of too% in 25 years for more than 150 years.² But, even at these times, in some of the towns, there were more deaths than births,³ a fact which makes it dear that in those parts of the country which made up for these losses, the increase was necessarily much quicker than is normal in other places.
In the backwoods, In the backwoods, where the men are all farmers, and bad habits and unhealthy trades have almost no existence, the population has sometimes been increased by 100% in 15 years.¹. Even this surprising rate of increase is probably not as great as it might be. Very hard work is needed in opening up a new country ; such conditions are not generally looked on as very healthy ; and from time to time there are probably attacks from the Indians, causing possibly the death of some, and certainly taking from them part of the fruits of their industry.
In Euler’s statistics, based on a death-rate of 1 in 36, if the births are to the deaths as 3 is to 1, 100% increase will take place in only 12 years and 4/5ths. And this rate is not only a possible one but has in fact been in existence for short times in more countries than one.
It is the belief of Sir William Petty that it would be possible to have a 100% increase in so short a time as ten years.⁴
But to be quite certain that we are not making an over-statement, we will take the lowest of these rates of increase, a rate upon which there is general agreement, and for which there is no doubt that new births are completely responsible.
It may safely be said, then, that population, when not limited in any way, is increased by 100% every 25 years, or at the rate of x x² x³ . . . xⁿ.
It is not so simple to get an idea of the rate of increase of the produce of the earth. Of one thing, however, we may be quite certain, and that is that the rate of its increase in a limited space will necessarily be quite different from the rate of increase of population. It is quite as possible for there to be an increase of 100% on 1,000,000,000 every 25 years by the power of population as on 1,000. But the food for the support of the increase from the greater number will certainly not be got so readily. Man is necessarily limited in space. After the addition of acre to acre till all the fertile land has been planted up, the increase of food every year will be dependent on increasing the efficiency of the land in use. This is a supply which, because the producing power of the earth is limited, so far from increasing will necessarily get less and less. But population, if it was supplied with food, would have unlimited power ; and the increase of one time would give the power of a greater increase later, and this without any limit.
From the accounts we have of China and Japan it may well be doubted if an increase in the produce of these countries world be effected in any number of years, even by the best controlled efforts of industry. It is true that there are a number of parts of the earth in which so far no development has taken place, and which are almost without population ; but how far it is right to put to death or send into less fertile land even the population of these almost untouched places, is very open to question. The process of training their minds and controlling their industry would necessarily be slow ; and while this was going on, population would keep level with the increasing produce, so that there is very little chance of there ever being a great degree of knowledge and industry in operation upon fertile and free land. Even when this might take place, as it does sometimes in new dependent countries, the increase takes place so quickly that these conditions are not long present. If the United States of America go on increasing, which they certainly will do, though not as quickly as before, the Indians will be pushed farther and farther back into the country, till they are forced out of existence, and no more expansion of the land is possible.
These observations are, in some degree, true of all the parts of the earth, where the development of the land is not complete. The thought of putting to death the populations of Asia and Africa is one which would not come into our heads for a minute. The education and organization of the industry of the different groups of Tartars and blackmen would be a work which would certainly take a long time and the effects would be uncertain, and sometimes not those which were desired.
Europe is far from having as great a population as it might have. In Europe there is the greatest chance that the industry of men will be under the best direction. Attention has been given to the science of farming in England and Scotland ; and there is still a great amount of unfarmed land in these countries. Let us see at what rate the produce of this island might possibly be increased under the best conditions for higher development.
If we say that by the best possible direction, and by giving great support to farming, the normal produce of this island might be increased to twice its present amount in the first 25 years, we will probably be naming a greater increase than there is reason for hoping possible.
In the 25 years after that there is no chance that the produce would be increased to four times the present amount. It would be against all our knowledge of the properties of land. To make the unfertile parts of greater value would take time and work ; and it will certainly be clear to those who have had anything to do with farming that in the same degree lit which there is increased development, the additions which it would be possible to make year by year to the normal supply of produce in earlier years will slowly and regularly get smaller and smaller. So that we may be better able to make a comparison between the increase of population and food, let us take statistics which, though we do not put them forward as without error, dearly make the producing powers of the earth seem greater than is probable from any experience we have had of its qualities.
Let us take it that the additions which might be made year after year to the earlier average amount of produce, in place of getting smaller, which they certainly would do, will keep at the same level and that the produce of this island might be increased every 25 years by an amount equal to what is produced at present. It would not be possible for any greater increase than this to be hoped for. In two or three hundred years it would make every acre of land in Ireland like a garden.
If we go farther, and say that the food supplies for man produced by all the earth might be increased every 25 years by an amount equal to what is at present produced, this will be naming a rate of increase greater than there seems any chance that the industry of man would be able to make possible.
It may safely be said then, that, in view of the present average conditions of the earth, it would not be possible under the best conditions of man’s industry for the food supplies to be increased at a greater rate than that of x 2x 3x . . . nx.
The necessary effects of these two different rates of increase, when in operation together, will be very surprising. Let us say that the population of this island is 11,000,000 ; and let us say that the present produce is enough for the support of such a number. In the first 25 years the population would be 22,000,000, and the food would be increased by 100%, so that supplies would be equal to this increase. . . . And at the end of the first 100 years, the population would be 176,000,000, and the food supplies only equal to the support of 55,000,000, so that a population of 121,000,000 would be quite without food.
Taking all the earth, and not only this island, there would be no chance of the population moving to some other place ; and if the present population is equal to 1,000,000,000 , the rate of increase of man would be as the numbers 1, 2, 4, 8, 16, 32, 64, 128, 256, and that of supplies as the numbers 1, 2, 3, 4, 5, 6, 7, 8, 9 . In 200 years the population would be to supplies as 256 to 9 ; in 300 years as 4,096 to 13, and in 2,000 years it would be very hard to give the relation between the rates at all.
In this view no limits of any sort are placed on the produce of the earth. It may go on increasing for ever and be greater than any named amount ; but still, because the power of population is so much greater all the time, the increase in the number of persons on the earth would only be kept down by the unchanging operation of the strong law of need, acting as a limiting factor upon the greater power.

1 . T. R. Malthus : An Essay on Population (Everyman edition). Bk. I. Chap. I-II.
2 . Franklin's Miscell., p. 9.
3 . It seems from the statistics which were worked out a short time back that from the time when the first Europeans went to America to the year 1800 an increase of 100% in the population took place almost every 20 years. See a note on the increase of American population in Book II, Chap. XI.

II. The general factors limiting population and their process of operation.

The root factor limiting population seems then to be the need for food. But this root factor is only the end factor when a great number of deaths are being caused by the need for food.
The end factors may be said to be all those habits and all those diseases which seem to come into existence because there is not enough food ; and, in addition, all those factors, physical or not, which have unhealthy tendencies and may be a cause of death.
These factors limiting population, which are in operation with more or less force at all times, in every society, and keep the number down to the level of the food-supply, may be grouped under two general headings—factors which keep down the birth-rate, and factors which send up the death-rate.¹
The factors of the first group, in so far as they are put into operation on purpose are special to man, the outcome of his greater reasoning power which makes him able to take thought for the future effects of his acts. The factors limiting the increase of plants and unreasoning animals are all of the second group, or, if they are of the first, they are forced on them from outside. But man sees the trouble which so frequently comes to those who have families of great size. He gives thought to the amount of his property and income which is little more than enough for his support and sees how little there would be for everyone, if, with a very small addition, division had to be made of this amount among seven or eight. And having this knowledge, he is necessarily uncertain about his power of supporting the offspring he will probably have if he gives way to his desires. In a society in which all men were equal, if such a thing was possible, this would be the simple question. In the present condition of society other things have to be taken into account. May he not have to take a lower position in society and be forced to give up, in great measure, his old habits ? Has he any hope of getting work which will give him enough money for the support of a family ? Will he not have a harder existence and more work to do than he had as an unmarried man ? Will he not be unable to give to his offspring the same chances of education and development which he himself had ? And is he certain that if he has a family of great size, he will be able, even with the hardest work, to keep them safe from bitter need and the shame which goes with such a condition ? May he not even be forced to become dependent on others and get his support from the little which the public will give him?
Such thoughts as these are strong enough to keep, and certainly do keep, a great number of persons in all countries which are in a high stage of development from giving way to their natural impulse, which is experienced quite young, to be the lover of one woman only.
If wrongdoing is not caused by this controlling of natural impulses, it is without doubt the least bad effect which may come from the law of population. Because it puts limits on strong natural desires, some unhappy feelings will certainly be produced. But these are clearly not important in comparison with the bad effects which are caused by any of the other factors limiting population. It is simply a question of giving up short present pleasures in the interests of longer future pleasures, which reasoning beings are forced to do.
When wrongdoing is caused by this controlling of natural impulses, the bad effects are very marked. Sex-relations which are so free and uncontrolled that their effect is to make women unable to have babies, are damaging to everything which is best in man. Habits of this sort have, without doubt, some effect on men, and the bad effects they have on women, their tendency to overcome a woman’s best qualities, causing the destruction of those sweet impulses which in fact make her a woman, are clearly seen. And, in addition, it may be noted that the street- walkers who are to be seen in great numbers in all towns are probably unhappier and in greater need than any other group in society.
When bad sex habits are general in society, the roots of family well-being are attacked. The love of married persons for one another and for their offspring becomes less strong, and they give less thought and attention to the care and education of their young. The outcome of this is that society becomes less happy and its love of right less strong. This is specially true because free sex-relations and their effects have to be kept secret, and the need for acting in underhand ways is necessarily a cause of a number of other forms of wrong-doing.
The factors limiting population by destruction are of a number of different sorts, covering all causes, wrongdoing equally with unhappy conditions of existence, which are responsible for unnaturally early deaths ; for example, unhealthy trades, overwork, the effects of bad weather, great towns, unwise habits of all sorts, great need, bad medical care of babies, diseases, war, and the cutting off of the food supply.
If we take a look at these two groups of factors limiting population, the one acting on the birth-rate, the other on the death-rate, it will be seen that they may all be placed under the headings of self-control, wrongdoing, or unhappy conditions.
Among the factors limiting births, the decision not to get married, if it does not become a cause of free sex pleasures, may rightly be named self-control.
But unnatural and free sex-relations and the steps which are wrongly taken to keep secret the fruits of such acts clearly come under the heading of wrongdoing.
Among the factors limiting birth, those which seem to be the necessary effects of natural laws may be placed completely under the heading of pain and need ; but those for which we are clearly responsible, such as wars, unwise habits, and a number of others which it is in our power to keep free of, are of a mixed order. They are caused by wrongdoing, and their outcome is pain.
All these factors taken together have a limiting effect on population. It is clear that in every country where it is not possible for full use to be made of the power of producing young, as the factors limiting the birth-rate become stronger, those increasing the death-rate will become less strong, and, on the other hand, as the first become less strong, the second will become stronger. In other words, in countries which are naturally unhealthy or where the death-rate is high, there will not be a great number of factors at work keeping down the birth-rate ; but in countries which are naturally healthy and where the birth-rate is kept down, the first group of factors will be unimportant, that is to say, the death-rate will be unimportant.
In every country some of these limiting factors are in operation, with more or less force, at all times. But though they are so general, there ale not a great number of countries in which there is not a tendency for the population to become greater than the food-supply. This tendency almost necessarily keeps the lower orders of society at a low level of existence, and is a reason why it is not possible for their condition to become better for long.
These effects, in the present condition of society, seem to be produced in this way. Take, for example, a country where the food-supply is enough for the support in complete comfort of its population. Because of the tendency to over-population, which is to be seen at work even in countries where the worst habits are common, there is an increase in population before there is an increase in the supply of food. So now 11,500,000 have to be supported by food which before was only needed for 11,000,000. Because of this the living conditions of the poor will become much worse and a great number of them will be in need. In addition there is a greater increase of workers than of work, so there will be a tendency to a fall in the rates of payment, while at the same time there will be a tendency to an increase in the price of food. So as to make as much money as they did before, men are forced to do more work. In those bad times there is much to keep men from getting married and it is so hard to take care of a family that the rate of growth of population becomes slower. At the same time, because workers are to be got cheaply and because there is a great supply of them and they are forced to be harder-working, farmers take on more men, new land is ploughed, and animal waste is used on the old land to make it more fertile ; till in the end the food-supply may have the same relation to the population as it had at first. The workers are again living in a certain amount of comfort and the forces controlling population become less strong and, after a short time, the same change from good times to bad, and from bad times to good, is gone through again.
This process of change, up and down, will probably not be clear to the public, and it may be hard, even after detailed observation, for its stages to be worked out. But it will not be possible for any man who gives thought to the question to be in doubt that some such process is in operation in almost all old countries, though it may be less marked and regular than in my account.
One of the chief reasons why this up and down process has been to some degree overlooked and less certainly supported by experience than might seem natural, is the fact that the histories of man which we have are, generally, only histories of the higher order of society. We have not a great number of good accounts of the conditions and habits of those groups among which the up and down process chiefly takes place. To get a good history of this sort, of one country at a certain point of time, a detailed record, based on a number of different observations by a number of different persons in a number of different places, would have to be kept of the conditions and ways of living of the lower order of society, and of the reason for them. And we would have to have records of this sort stretching over hundreds of years before it would be possible for us to make any general and true observations on the question. In some countries in past years attempts have been made to get together statistics of this sort¹, and a better knowledge of the structure of society may be hoped for with the expansion of this work. But the science is still young, and a number of questions about which facts are to be desired have been overlooked, while others have not been given enough care and attention. Among these may be numbered the questions as to the relation between the numbers of persons of full growth and the numbers of persons getting married ; the degree to which bad habits are caused by the need to put off getting married ; the relation between the death-rate among babies of persons living in great need and of those persons who are not so poor ; changes in the rates of payment for work (taking into account the different value of money at different times) ; the changing levels of comfort and well-being among the lower orders of society at different times over a given number of years, and complete records of persons married and of births and deaths, which are most important in this connection.
A true detailed history, covering these facts, would give new light on the working of the factors limiting population. and would probably make clear the existence of that process of changing conditions, up and down, which was noted before. But the ups and downs are necessarily not regular because of a number of causes which come into operation ; for example, the starting of new industries or the giving up of old ones ; the degree of development which farmers are ready to undertake years when there is a great supply of food and years when there is not enough ; wars, unhealthy times, poor-laws, moves of population, and other causes of the same sort.
The fact that the same payment does not necessarily give the same purchasing power has probably been specially responsible for keeping this up and down process from being seen by all. A general fall in the price of work is not frequent ; but it is common knowledge that frequently there will be no change in the price of work, though the price of food has been slowly getting higher. This, in fact, will generally be so, if the growth of industry and trade is great enough to make use of the new workers who are in the market, and so keep the then increased supply from sending the money price lower.¹ But an increased number of workers getting the same money-payment will necessarily, by their competition, make the money-price of grain go up. This is, in fact, a fall in the price of work ; and at such a time the condition of the lower orders of society will necessarily be slowly getting worse. But the farmers and men with capital are becoming well-off because workers are to be got so cheaply. Their increasing capital makes them able to give work to a greater number of men. But there would probably have been a fall in population when it had become harder to take care of a family, so the demand for workers would, alter a certain time, be greater than the supply, and the price of work would go up, if it was free to come to its natural level. And so the price of work, and, as an outcome, the condition of the lower orders of society, might go up and down, though in terms of money there might have been no fall in the rates of payment.
There is little doubt that the same process of changing conditions is in operation in societies at a very low stage of development, where there is no regular price for work. When there has been an increase in population almost up to the level of the food supply, all the factors for keeping down the birth-rate and sending up the death-rate will naturally come into operation with greater force. Bad sex habits will become more general, babies will be put to death more frequently and wars and diseases will be more probable and a more fertile cause of deaths. These causes will probably be in operation till population has again come down to the level of the food-supply. Then the higher level of existence will again be responsible for an increase ; and, after a certain time, its growth will again be stopped by the same causes. ⁴
More detailed histories than we have would be necessary to make quite clear the existence of this process, which the growth of a higher organization in society has a natural tendency to overcome. Without attempting this, then, my purpose is simply to give reasons and examples in support of these arguments :---

⁵

It is almost unnecessary to give examples in support of the first argument. The second and third will be seen to be true after we have given an account of the limiting factors which come into operation first in the past and present condition of society.
We will now go on to this account.

Let it be noted that an increase in the supply of food is used in the sense of an increase which will make it possible for the mass of society to have more food. An increase might certainly take place in a given society without there being any distribution among the poorest orders, and so the impulse would be given to population.

1 . Commonly talked of as the ' positive and preventive checks'.
2 . The wise list of questions which Sir Thomas. Sinclair sent round to numbers of persons in Scotland. and the important accounts which he has got together from that part of the island, are the highest credit to him and these accounts will for all time be a sign of the learning, good sense and general knowledge of the men of religion in Scotland. It is to be regretted that facts in connection with places near together are not put together in this work, because this, would have been a help to the memory in getting and keeping in mind the condition of the different parts. The fact that the same things are said again and again, and that opposite opinions are given, is not, it seems to me, so much to be regretted. There is more reason to have belief lathe opinions of a number of different men than in the opinion of one man. Even if this work was done for us by one man of great learning, though the reading of it would take less time, it would not have so great a value. If one or two small changes had been made, and if true and complete records for the last 150 years had been put in this work would have been of the very greatest value, and it would have given a better picture of the conditions within a country, than any other account in existence. But no amount of hard work would give us this last, most important addition.
3 . If the new workers in The market every year were able to get work only on farms, their com- petition might make the price of work so much lower that though there was an increased population there might not be any greater demand for grain ; or in other words, if farmers were able to get nothing but more units of work in exchange for more units of produce, they might not be ready to go to the trouble of producing more.
4 . Sir James Stuart makes a very happy comparison between the power of producing young and a spring kept down by a force changed in degree (Polit. Econ., Vol. I.6.i., c.4, p.20) which would naturally be the cause of an up and down motion like that I have been picturing for the process of changing conditions. In the first book of his Political Economy he give a very clear account of a number of points in connection with population.
5 . I make my statement with this care because it is my belief that there are some examples in which population does not keep up to the level of the food supply. But these are not normal and generally it may be said that :

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Part II : EXAMPLES

6 . MALTHUS ON THE FACTORS LIMITING POPULATION1

II. The general factors limiting population and their process of operation.

6 . MALTHUS ON THE FACTORS LIMITING POPULATION¹