Chapter CXXVI: Conclusion

That the economy of no nation can continue to grow _ad infinitum_ is, in general, as easy to believe[263-1] as it is difficult to point out with a specification of particulars what are the limits which cannot be exceeded. This would be possible first in the case of agriculture. Here there are points beyond which every man practically versed in the art can see, that an increase of the gross product must be attended by an absolute decrease in the net product.[263-2] But even supposing that a people had reached this point in their entire agriculture, they might still carry on industries, commerce, perform personal services for other nations, and obtain remuneration therefor in the means of subsistence and manufactured articles. If our nation has once entered on this path, it is evident that every improvement of its industry, every advance made by foreign countries in the production of raw material, manufactures and the consumption of services must result in a growth of our economy. David Hume was of opinion that industrial preponderance was in a necessary and continual state of transition from one country to another. A very highly developed state of industry made a country rich in money but enhanced the price of the means of subsistence, and the rate of wages; until finally it became impossible for it to compete in the markets of the world with cheaper countries, and industry, in consequence, emigrated to these.[263-3] But it is easy to see how all such limits are extended by the modern improvements in transportation, and the consequent facilitation of importation; and how much the remedy mentioned in § 198 has gained in importance by the modern advances made in machinery and the preponderance in so many respects of machine over hand labor.[263-4]

But here it is necessary to distinguish between the "applied" and only practical political economy, and "pure political economy." (§ 217.) A development thus continued would be attended with great difficulty even if the whole world constituted one great empire. We need only mention Austria, where some provinces have remained in a very backward, almost medieval condition, while others have for a long time manifested the symptoms of over-population. How much more in different states. An uncivilized nation will frequently not care to increase its consumption of our manufactures, if to do so it becomes necessary to carry on its agriculture more industriously. Another nation that has already tasted of the fruit of the tree of economic knowledge may not be satisfied with the mere production of raw material forever. In time it may want to carry on commerce and industry itself, and hence consider the breaking of its commercial course with us as a species of emancipation from us. And, further, how if other highly cultivated nations should compete with us in the markets of countries which produce merely raw material? if such rivals should wage war in which each party should harm his adversary for the mere love of doing harm, and not unfrequently in opposition to its own economic interests? I know of no period the development of which has not been attended by such disturbances, and hence they cannot be said to be entirely unnatural.[263-5]

And even at home and among highly civilized nations, there are wont to be many obstacles to advancement on this road of progress. Every great economic change is connected as cause and effect, with a variety of political, social and other reformations which are never accomplished without great hardship and hesitation.[263-6] Where the division of labor has been developed to any extent, the formerly existing circumstances which must be surrendered for the sake of progress are generally synonymous with the interests of some class. This class opposes the improvement, and a struggle becomes necessary to carry it out. But under certain circumstances, a long delay in effecting a necessary reform may paralyse or poison the minds of the people to such an extent that they may afterwards have neither the will nor the power to successfully advance. This is the most important exception to the rule laid down in § 24. The happier the ethnographic and social composition of a people, the better the national spirit, the more skillful the form of its constitution, the less frequently will it happen.[263-7] All this is true especially of over-population and the plethora[263-8] of capital which so easily injure the morality of a people. New inventions also, by means of which the limits of the possibility of production may be incalculably extended can be expected only from nations where there is no intellectual decline.[263-9]

[Footnote 263-1: There are, indeed, different opinions on
this matter, and they were preponderant during the second
half of the eighteenth century. Compare _Condorcet_, Tableau
historique, des Progrès de l'Esprit humain, especially
Epoque X, in which he treats of future progress.
Nevertheless, he obscurely alludes (Oeuvres, VIII, 350) to
a time when no further increase of population should take
place. _Malthus_, Principle of Population, III, ch. 1,
thoroughly demonstrates that in regard to the great
prolongation of human life which he foresaw, the idea of the
indefinite and that of the infinite were confounded with
each other.

In that young and vigorous country, the United States of
America, we find a popular school which, to say the least,
hints at the principle of infinite growth. Thus, for
instance, _Peshine Smith_ (Manual of Political Economy, New
York, 1853) teaches that the means of subsistence consumed
at the place of production are not destroyed, but may return
just as much to the soil in the form of manure as they had
previously drawn from it (ch. 1). Capital has a tendency to
increase more rapidly than population (ch. 6). The rate of
wages has a tendency to increase with the increase of
population (ch. 5). Mechanical progress increases the value
of human labor and causes that of capital to decline
relatively (ch. 3). He reverses, with _Carey_, Ricardo's law
of rent (ch. 2).

_Carey_, also, relying on the assumption that more fertile
land is brought under cultivation as civilization advances,
allows us to see no limits whatever to this growth. (Past,
Present and Future, ch. 3.) Still more clearly is the
principle of unlimited and continually accelerated growth
laid down in his Principles of Social Science, I, 270.
_Carey_ illustrates this principle by means of the example
of the continually accelerated motion of a falling body,
without noticing the practical _ad absurdum deductio_
involved in it, that at the end of the thousandth second a
falling body reaches a velocity of 1,000,000 feet. (loc.
cit., 204.) But even in England, at present, we find such
thoughts at times. _Banfield_, for instance, can scarcely
understand how the relative rates of wages, interest and
rent can decrease, except by an increase of their absolute
amounts. See his Organization of Industry, passim. And so
_v. Prittwitz_ entertains the most rosy-colored hopes. He
has no doubt that all governments which are still bad will
see the error of their ways and correct them. (Kunst reich
zu werden, 79.)

The growth of capital and even of human wealth in general is
capable of indefinite increase (81). The rate of interest
would sink almost to zero if so much capital were
accumulated that no "undertakers" could be found who care to
use it (305). Large farming will entirely cease in the
future (307), and when the system of railroads is entirely
completed, the whole earth will present the appearance of
one immense park (29). He would allay all fear concerning
the exhaustion of combustible material by pointing out the
possibility consequent upon improved means of communication,
that a great many of the inhabitants of the colder regions
of the earth might migrate in winter to a warmer climate
(21). At the same time, artesian wells might be made to
bring to the surface the internal heat of the earth, or
metallic plates connected with the wings of a windmill,
might be made to generate heat by their friction on one
another (22). See the same author's Andeutungen über
künftige Fortschritte und die Gränz en der Civilization, 21
Aufl., 1855.]

[Footnote 263-2: According to § 165, we might say: where the
product of the workman last employed is not sufficient to
meet his own wants. Thus _J. B. Say_ says that only that can
be considered a product, the utility of which is at least
equal to its cost. He makes use of the example where a three
days' journey is necessary to obtain the food requisite for
one. As the limits of production he gives the following: too
few human wants; too costly methods of production; too high
taxes, natural obstacles created by infertility or too great
distance. (Traite I, ch. 15. Cours pratique, I, 349.)]

[Footnote 263-3: _D. Hume_, Discourses, No. 3, On Money.]

[Footnote 263-4: England is especially well situated in this
respect, in consequence of its excellent commercial position
and its surplus of the principal auxiliary products, such as
coal, iron, etc. Should the coal-beds of such a
manufacturing country be ever entirely exhausted, it is
scarcely possible to see, from our present point of view,
how the most rapid and most frightful decline of its
national economy could be averted! Compare the opening
address before the British Association, by Armstrong, at
Newcastle (1863), who prophecies the exhaustion of the
English coal-beds in 212 years at the rate at which coal had
been consumed during the eight preceding years. According to
the report of the royal committee on the coal question
(1871, vol. III), Great Britain has still attainable
deposits, that is 4,000 feet deep, 90,207,000,000 tons of
coal in its coal beds already known; and in beds not yet
worked, 56,273,000,000 tons. Compare, also, _Jevons_, The
Coal Question (1866). It is estimated that the most
productive French coal-field will be exhausted in 100 years.
(_M. Chevalier_, Rapport du Jury international de 1867,
57.)]

[Footnote 263-5: Even _J. S. Mill's_ views on the
probability of perpetual peace on earth are altogether too
rosy: Principles III, ch. 17, 5. This is still truer of
_Buckle_. History of Civilization, I, ch. 4. In the modern
state-system of Europe, there is wont to be in each
generation, a peaceful half and a warlike one, which follow
each other as ebb and flow. I need only mention the
preponderance of peace between 1714 and 1740, between 1763
and 1793, and between 1815 and 1853. It happens frequently
that at the close of the period of peace, intelligent and
noble but unhistorical and therefore short-sighted minds
begin to dream of perpetual peace. Even a man like _Dohm_
(Ueber die bürgerliche Verbesserung der Juden, 227 seq.)
expected, in 1785, that considering the size and quality of
armies, and the mutual knowledge of all countries of one
another, that instead of actually waging war, nations might
send to each other well authenticated statements of the
strength, for instance, of their navies and of the sums
necessary to maintain them for a number of years.]

[Footnote 263-6: The Mongols saw the abandonment of their
nomadic life in so gloomy a light that they seriously
thought of turning all China with its countless human beings
into pasture-land! (_Gibbon_, History of the Roman Empire,
ch. 34.)]

[Footnote 263-7: It is a fact characteristic of the history
of England, that Norman supremacy and afterwards bondage
were wiped out so gradually that contemporary historians
have nothing to say of the transformation. (_Macaulay_,
History of England, ch. 1.) Repeal of the corn laws
_vis-a-vis_ of the most recent industrial advance of the
country.]

[Footnote 263-8: Even _Ricardo_ says that in a highly
civilized country the continual making of savings is by no
means desirable. Carried to an extreme, saving would lead to
the equal poverty of all. (Principles, ch. 5.)]

[Footnote 264-9: The _Beccaria_, Economia publica I, 3, 31,
teaches that the limits of population are to be found at the
point where agriculture cannot be made to yield an
additional increase of products, and where foreign countries
do not offer any more a counter value of their products in
exchange for the manufactured articles and the services to
be furnished them. Similarly, _Büsch_, Geldumlauf III, 7;
otherwise, indeed, V, 15, in which, in opposition to _Adam
Smith_, it is claimed that the work to be performed by one
nation for others has no limits which cannot be exceeded.
_Steuart's_ theory of the limits to the production of every
commercial nation: Principles, I, ch. 18. _Lauderdale_,
Inquiry, ch. 5, 274 ff., says categorically, that all wealth
which is produced by the transformation of raw material
depends on the production of such raw material, and of the
means of subsistence necessary for the support of the labor
employed in such transformation. Excellent investigations by
_Malthus_ in the additions (1817) to the Essay on the
Principles of Population, II, ch. 9-13. Compare _Roscher_
Nationalöcon. des Ackerbaues, § 162. As early a writer as
_Mirabeau_, Philosophie rurale, ch. X, was of opinion that a
country whose industries were on as large a scale as those
of Holland, dispersed its people indeed over the whole
earth, made them independent at home, but almost destroyed
their nationality.]