WAGES IN CHINA. SMALL CAPITAL AND HIGH WAGES IN AMERICA.

ADVANTAGES OF NEWSETTLED COUNTRIES.- -POVERTY THE NATURAL CHECK ΤΟ POPULATION. GREAT POPULATION ADVANTAGEOUS ONLY WHEN RESULTING FROM PLENTY.INCREASING WEALTH PREFERABLE TO ANY STATIONARY CAPITAL. MISTAKE IN ENCOURAGING POPULATION.- POPULATION OF MANU

FACTURING TOWNS. -INDUSTRY.

PIECE-WORK.

CAROLINE.

I HAVE been reflecting a great deal on our last conversation, Mrs. B.; and the conclusions I have drawn from it are, that the greater the capital a country possesses, the greater number of people it can maintain, and the higher the wages of labour will be.

MRS. B.

The greater the stock of subsistence, the more people may be maintained by it, no doubt; but second inference is not at all a necessary conyour clusion. China is a very rich country, and yet wages are, I believe, no where so low. The accounts which travellers give of the miserable state of the inferior classes are painful to hear; and their poverty is not the result of idleness, for they run about the streets with tools in their hands, begging for work.

CAROLINE.

That is owing to the immense population of China; so that, though the capital of the country may be very considerable, still it is insufficient for the maintenance of all its inhabitants.

MRS. B.

You should therefore always remember that the rate of wages does not depend upon the absolute quantity of capital, but upon its quantity relative to the number of people to be maintained by it. This is a truth which, however simple, is continually lost sight of, and hence arise errors without number in political economy. If China had ten times the wealth it actually possesses, and its population were at the same time tenfold as numerous, the people would not be better fed.

small capital, and yet wages are remarkably high

there.

CAROLINE.

How do you account for that; for the demand for labour, you know, can be only in proportion to the extent of capital?

MRS. B.

The capital of America, though small when compared with those of the countries of Europe, is very considerable in proportion to the number of people to be maintained by it. In America, and in all newly-settled countries as yet thinly inhabited, the wages of labour are high, because capital increases with prodigious rapidity. Where land is plentiful and productive, and the labourers to cultivate it scarce, the competition amongst the landholders to obtain labourers is so great as to enable this class to raise their demands; and the higher the wages the labourer receives, the sooner he has it in his power to purchase a piece of land and become landholder himself. Thus the class of labourers is continually passing into the class of proprietors, and making room for a fresh influx of labourers, both from the rising generation and from emigrations from foreign countries.

CAROLINE.

America has then the double advantage of high wages and low price of land; no wonder that it is so thriving a country.

MRS. B.

The progress of wealth and improvement is no where so rapid as in the settlement of a civilised people in a new country; provided they establish laws for the security of their property, they require no other incitement to industry. In the new settlements of America, where the experienced farmer with his European implements of husbandry is continually encroaching on the barren wilderness, want is almost unknown, and a state of universal prosperity prevails. We may form some judgment of the rapid increase of their capital by that of their population. The facility with which the Americans acquire a maintenance sufficient to bring up a family encourages early marriages, and gives rise to numerous families; the children are well fed, thriving, and healthy; you may imagine how small are the proportion that die in comparison to the number born, when I inform you that their population doubles itself in about 23 years!

CAROLINE.

But does not such an immense increase of population reduce the rate of wages?

MRS. B.

No; because their capital increases in a still greater proportion; and as long as that is the case, wages, you know, will rise rather than fall. But

what I have said relative to America refers only to the United States of that country; which have the advantage of a free government protecting the property of all classes of men. In the Spanish settlements, where the government is of a very different description, the condition of the people is far less flourishing. The population of Mexico, one of the finest provinces of Spanish America, does not double itself in less than 48 years.

CAROLINE.

Yet I do not well understand why the poor should be worse off in England where there is a large capital, than in America where there is a smail one.

MRS. B.

Because you are again forgetting the fundamental rule which I have laid down for you, that capital must always be considered with reference to the number of people to be employed and maintained by it.

In England, and all the old-established countries of Europe, the population has gradually increased till it has equalled the means of subsistence; and as Europe no longer affords the same facility for the growth of capital as a newly-settled country, if the population goes on augmenting, it may exceed the means of subsistence, and in that case the wages of labour will fall instead of rising, and the condition of the poor become very miserable.