Chapter LVII: Book III: , Chap. II, § 4, and p. 269

298 Before beginning this discussion the reader is advised to review the
relation of profits to cost of labor, and the dependence of the
latter on its three factors, Book II, Chap. V, § 5.

299 Book I, Chap. IX

300 Mr. Mill commended, as the most scientific treatment of the subject
with which he had met, an “Essay on the Effects of Machinery,” by
William Ellis, “Westminster Review,” January, 1826.

301 Although their needs now attract more attention through the
extension of newspapers and cheap books, the condition of the
laboring-class is certainly better than it was fifty years ago. See
Mr. Robert Giffen’s “Progress of the Working-Classes in the Last
Half-Century” (1884), referred to in Book IV, Chap. V, § 1.

302 A comparison of Chart No. XVII with Chart No. VI will furnish some
means of learning whether the building of railways has gone on
faster than is warranted by the increase of our crops (see _supra_,
pp. 138).

303 Book I, Chap. V, § 2.

304 Book II, Chap. I, § 6.

305 “Progress of the Working-Classes in the Last Half-Century” (1884),
page 8.

306 “Leading Principles,” pp. 278-280.

307 “Progress of the Working-Classes in the Last Half-Century” (1884),
being his inaugural address as President of the London Statistical
Society, November 20, 1883.

308 1825.

309 1825.

310 Wages per day.

311 Wages per day.

312 Year 1878.

313 These mills have not been able to pay ten per cent regularly, as
mentioned in Chart No. XIX, but it has merely been supposed that ten
per cent were demanded by capital, in order to show that, for such a
dividend, it required a diminishing proportion of the price to meet
that estimate.

314 Book II, Chap. V, § 5; see also “North American Review,” May, 1884,
p. 517.

315 For the influences of small properties in restraining an undue
increase of population, see _supra_, p. 119. For a more general
account of the benefits arising from such holdings, consult Mill’s
original work, Book II, Chaps. VI and VII, and T. E. Cliffe Leslie’s
“Land Systems.”

316 Cf. E. L. Godkin, “North American Review,” 1868, p. 150.

317 Fawcett, “Manual of Political Economy” (last edition), chapter on
Co-operation.

318 Giffen, “Progress of the Working-Classes in the Last Half-Century,”
p. 19.

319 “History of Co-operation in England” (2 vols., 1879), p. 105.

320 Mr. Holyoake (“History of Co-operation in England,” p. 99) quotes as
follows from another’s experience: “My own pass-book shows that I
paid on November 3d, of last year (1860), £1 to become a member of a
co-operative store. I have paid nothing since, and I am now credited
with £3 16_s._ 6_d._, nearly three hundred per cent on my capital in
a single year. Of course, that arises from my purchases having been
large in proportion to my investment. In a co-operative store you
get five per cent upon the money which you invest as a shareholder;
and, if the store be well conducted, you will get seven and a half
per cent addition.”

321 For a full account of the proper steps to be taken in establishing a
store, with many practical details, see Charles Barnard’s
“Co-operation as a Business,” p. 119.

322 Cf. Walker, “Wages Question,” p. 276.

323 Godkin, “North American Review,” 1868.

324 “History of Co-operation,” vol. ii, chap. ix.

325 Holyoake, “History of Co-operation,” p. 131.

326 Godkin, “North American Review,” 1868.

327 Pp. 27, 31, 32.

328 Barnard, “Co-operation as a Business,” pp. 150-152.

329 Holyoake, “History of Co-operation,” p. 235.

330 See Thornton, “On Labor,” p. 370. Also see “Parliamentary
Documents,” 1868, 1869, xxxi; “Trades-Unions of England,” by the
Count de Paris; Brassey’s “Work and Wages,” chap. xiii.

331 See Walker, “Wages Question,” p. 283. Also see Mill, Book IV, Chap.
VII, § 5, for an account of M. Leclaire’s experiments in France with
house-painters.

332 See also Von Böhmert, “Gewinnbetheiligung,” second edition, 1878,
and Jevons’s “Methods of Social Reform” (1883). Professor Jevons
(“The State in Relation to Labor,” pp. 146, 147) has given a brief
bibliography, which I reproduce here:

Charles Babbage, “Economy of Manufactures,” chap. xxvi; H. C.
Briggs, “Social Science Association,” 1869; H. C. and A. Briggs,
“Evidence before the Trades-Union Commission,” March 4, 1868,
Questions 12,485 to 12,753 [Parliamentary Documents]; “The
Industrial Partnerships Record”; Pare, “Co-operative Agriculture”
(Longmans) 1870; Jean Billon, “Participation des Ouvriers aux
Bénéfices des Patrons,” Genève, 1877; Fougerousse, “Patrons et
Ouvriers de Paris” (Chaix), 1880; Sedley Taylor, “Society of Arts
Journal,” February 18, 1881, vol. xxix, pp. 260-270; also in
“Nineteenth Century,” May, 1881, pp. 802-811, “On Profit-Sharing”;
J. C. Van Marken, “La Question Ouvrière: Essai de Solution Pratique”
(Chaix) 1881.

333 In his last edition of his “Manual,” Professor Fawcett thus
describes a co-operative experiment in agriculture: “The one that
has attracted the most attention was made nearly forty years since
by Mr. Gurdon, on his estate at Assington, near Sudbury, in Suffolk.
Mr. Gurdon was so much impressed with the miserable condition of the
agricultural laborers who were employed on his estate, that he was
prompted to do something on their behalf. When, therefore, one of
his farms became vacant, he offered to let it at the ordinary rent,
£150 a year, to the laborers who worked upon it. As they, of course,
had not sufficient capital to cultivate it, he in the first instance
loaned them the requisite stock and implements. The laborers were,
in fact, formed into a company in which there were eleven shares,
and no laborer was permitted to hold more than one share. The plan
was so eminently successful that in a few years sufficient had been
saved out of the profits to repay all that had been advanced, and
the stock and implements became the property of the laborers. Each
share greatly increased in value. Mr. Gurdon was so much encouraged,
not only by the pecuniary advantages secured to the laborers, but
also by the general improvement effected in their condition, that
some years afterward he let another and a larger farm on similar
terms. Although no statement of accounts has ever been published,
the remarkable pecuniary advantages secured to the laborers is
proved by the fact that, after enjoying at least as high wages as
were paid in the district, they were able in a few years to become
the owners of a valuable property, consisting of the stock and
implements on the farms. One of the most significant and hopeful
circumstances connected with the experiment is, that it was not
carried out by a picked body of men; and if so much could be done by
laborers who were probably among the worst educated in the country,
it maybe fairly concluded, that when the intelligence of our rural
population has been better developed, co-operation may be applied in
a more complete form to agriculture, and with even more striking
results than were obtained at Assington.... In the description which
has been frequently given of the system of peasant proprietorship,
it is shown how powerfully the industry of the laborer is stimulated
by the feeling of property. When he cultivates his own plot of
ground, he exerts himself to the utmost, because he knows that he
will enjoy all that is yielded by his labor. Each year, with the
extended use of machinery in agriculture, it is becoming more
advantageous to carry on farming on a large scale. When, therefore,
co-operative agriculture becomes practicable, land may be cultivated
by associations of laborers, and thus many of the advantages
associated with the system of peasant proprietorship may be secured,
while at the same time the disadvantages of small farming may be
avoided. The progress toward co-operative agriculture will no doubt
be slow and gradual.”

334 Godkin, “North American Review,” 1868. Also see Hermann
Schultze-Delitsch, “Die Entwickelung des Genossenschaftswesens in
Deutschland” (1870). This eminent philanthropist died April 29,
1883. For other forms of co-operation, building associations, etc.,
see Barnard, “Co-operation as a Business”; Pajot, “Du Progrès par
les Sociétés de Secours Mutuels” (1878).

335 See “Economics of Industry,” by Mr. and Mrs. Marshall, p. 223.

336 “Wealth of Nations,” Book V, chap. ii.

337 Book II, Chap. I, § 6.

338 Book III, Chap. XIX, § 5.

339 A higher rate is now imposed on landed than on professional incomes.

340 Cf. Walker, “Land and Rent,” page 134.

341 I have changed the sums mentioned in this illustration into our own
money.

342 Another common objection is that large and expensive accommodation
is often required, not as a residence, but for business. But it is
an admitted principle that buildings, or portions of buildings,
occupied exclusively for business, such as shops, warehouses, or
manufactories, ought to be exempted from house-tax.

It has been also objected that house-rent in the rural districts is
much lower than in towns, and lower in some towns and in some rural
districts than in others; so that a tax proportioned to it would
have a corresponding inequality of pressure. To this, however, it
may be answered that, in places where house-rent is low, persons of
the same amount of income usually live in larger and better houses,
and thus expend in house-rent more nearly the same proportion of
their incomes than might at first sight appear. Or, if not, the
probability will be that many of them live in those places precisely
because they are too poor to live elsewhere, and have, therefore,
the strongest claim to be taxed lightly. In some cases it is
precisely because the people are poor that house-rent remains
low.—MILL.

343 I have here also changed the amounts into our own money.

344 This illustration has also been changed, but only so far as to fit
the trade between England and the United States.

345 Probably the strongest known instance of a large revenue raised from
foreigners by a tax on exports is the opium-trade with China. The
high price of the article under the Government monopoly (which is
equivalent to a high export duty) has so little effect in
discouraging its consumption that it is said to have been
occasionally sold in China for as much as its weight in
silver.—MILL.

346 A land-tax is, to its extent, an evidence that the state claims a
certain right in the soil, and that it stands to the contributor, as
it were, in the place of a landlord. This tax, however, is generally
so small that it does not materially diminish the rent of land. So
far as it goes, it is a tax on rent.

347 Some argue that the materials and instruments of all production
should be exempt from taxation; but these, when they do not enter
into the production of necessaries, seem as proper subjects of
taxation as the finished article. It is chiefly with reference to
foreign trade that such taxes have been considered injurious.
Internationally speaking, they may be looked upon as export duties,
and, unless in cases in which an export duty is advisable, they
should be accompanied with an equivalent drawback on exportation.
But there is no sufficient reason against taxing the materials and
instruments used in the production of anything which is itself a fit
object of taxation.—MILL.

348 See Lalor’s “Cyclopædia,” article “Distilled Spirits,” by David A.
Wells.

349 “United States Statistical Abstract,” 1883, pp. 2, 3.

350 The old condition of things was well described by Sydney Smith: “We
must pay taxes upon every article which enters into the mouth or
covers the back, or is placed under the foot. Taxes upon everything
which is pleasant to see, hear, feel, smell, and taste. Taxes upon
warmth, light, and locomotion. Taxes upon everything upon earth and
the waters under the earth. On everything that comes from abroad or
is grown at home. Taxes on raw material. Taxes on every value that
is added to it by the industry of man. Taxes on the sauce which
pampers man’s appetite and the drug which restores him to health. On
the ermine which decorates the judge and the rope which hangs the
criminal. On the brass nails of the coffin and on the ribbons of the
bride. At bed or at board, couchant or levant, we must pay. The
beardless youth manages his taxed horse with a taxed bridle on a
taxed road, and the dying Englishman, pouring his medicine (which
has paid 7 per cent) into a spoon (which has paid 30 per cent),
throws himself back upon his chintz bed (which has paid 22 per
cent), makes his will, and expires in the arms of the apothecary
(who has paid £100 for the privilege of putting him to death). His
whole property is then taxed from 2 to 10 per cent; besides the
probate, large fees are demanded for burying him in the chancel: his
virtues are handed down to posterity on taxed marble, and he is then
gathered to his fathers to be taxed no more.”

351 “Financial Reform Almanac,” 1883, pp. 107-109.

352 “Handbuch der Verfassung und Verwaltung in Preussen und dem
Deutschen Reich,” by Graf Hue de Grais (second edition, 1882), p.
138.

353 “Le Budget. Revenus et Dépenses de la France,” by M. Block (1881),
pp. 57, 82.

354 Taken, with modifications, from Milnes’s “Problems in Political
Economy,” p. 377.

355 Book I, Chap. IV, § 5.

356 Although Mr. Mill had reference to the French wars in the beginning
of this century, his words apply also to the circumstances of our
own late war, 1861-1865.

357 Cairnes, “Leading Principles,” pp. 381, 382.

358 Book I, Chap. IV.

359 Mr. Mill here takes up political considerations, which are not
properly to be included in a purely economic treatment. (See the
beginning of § 6.)

360 See “Sketch of the History of Political Economy,” _supra_, p. 6,
note 1.

361 For bibliography of the United States shipping question, see
Appendix I.

362 D. A. Wells, “Cobden Club Essays,” second series, p. 533.

363 See F. W. Taussig’s “Protection to Young Industries as applied in
the United States” (1883).

364 In a letter written February 26, 1866, to Mr. Horace White,
published in the Chicago “Tribune,” and reprinted in the New York
“Nation,” May 29, 1873.

365 Business men constantly use the term “cost of production” when in
reality they mean that which to the economist is expressed by “cost
of labor.” If cost of labor becomes higher, it takes from
profits—the place where they feel the difficulties of
competition—but they say that the cost of production has risen: the
cost, to them, only has risen, that is, the “cost of labor,” not
“cost of production.”

366 Cf. Cairnes, “Leading Principles,” pp. 324-341; and _supra_, Book
III, Chap. II, § 4.

367 The fact (sufficiently established by Mr. Brassey) is not considered
also that England gives higher wages to operatives than the
Continent, and yet England is able to undersell France and Germany
in neutral markets. It is evident, however, that England can
undersell only in occupations in which she has advantages.

368 Cairnes, “Leading Principles,” pp. 382-388.

369 “Compendium,” 1880, pp. 1343-1377.

370 “Princeton Review,” 1883, p. 222.

371 The United States have at the present time but five persons engaged
in agriculture for each square mile of settled area.

372 Book IV, Chap. I, § 2.

373 “Fifteenth Annual Report of the Massachusetts Bureau of Statistics,
1884,” by Carroll D. Wright.

374 See Milnes’s “Problems in Political Economy.”