condition of the labourer cannot be permanent, unless it is accompanied by a corresponding social and moral advancement. Before concluding this chapter, it is important to direct attention to the great influence exerted upon profits and wages by the export of capital. It has already been shown that the current rate of profit may be regarded partly as the cause and partly as the effect of the amount of capital accumulated. An increase in capital tends cæteris paribus to lower the rate of profit; whereas an advance in the rate of profit promotes the accumulation of capital. It is however essential to bear in mind that only a portion of the aggregate wealth which is annually saved in any country is invested in its own industry; the remainder is exported to be employed as capital in other countries. Hence the capital annually saved in such a country as England is divided into two portions; that portion which is exported produces no immediate effect upon the current rate of wages and profit prevailing in England. Consequently in all discussions relating to wages and profits, it is important not only to consider the whole amount of capital annually saved, but particular attention must be directed to the portion of this aggregate capital which is retained for home investment. It is evident that the relative magnitude of the two portions into which a nation's capital is thus divided will be regulated by the profits which are respectively realised by home and foreign investments. If a rise in the rate of profit abroad should be unaccompanied by any advance in the rate of profit at home, an influence is at once brought into operation to increase the relative amount of the capital which is exported, and consequently to diminish the amount retained for home investment. Although, therefore, there is no diminution in the national capital, yet as a smaller amount is employed in home industry, the effects that ensue will, in many respects, be analogous to those which would occur if the amount of wealth annually saved were diminished. This is particularly the case, as shown in the previous chapter, with regard to wages, which, depending upon the amount of circulating capital, must evidently be regulated, not so much by the whole amount of capital annually saved, as by the BOOK II. .CH. V. The influ ence exert ed on pro fits and wages by the export of capital. BOOK II. amount which is retained for home investment. It will be very necessary to bear this in mind when considering the various expedients which are resorted to for raising wages. It may here be generally said that an advance in wages, unaccompanied by any increase in the efficiency or productiveness of labour, can seldom confer a permanent benefit upon the labourer. Such an advance in wages will lower the rate of profit at home; a greater proportion of the national capital will therefore be invested abroad; the circulating capital in the country itself will be diminished; or, in other words, its wage fund will be decreased. 1 CHAPTER VI. PEASANT PROPRIETORS. HE reader has already been warned against the con Tension that the present system of land tenure in England is to be regarded as the type of that which prevails throughout Europe and the other civilised parts of the world. A very considerable portion of the land in England belongs to the large estates of the aristocracy; land is rarely cultivated by its owner. The farms in England are generally large, and are becoming larger; they are almost entirely cultivated by hired labour; and, consequently, the produce of the land has to be distributed amongst landlords, farmers, and labourers. But the condition of England in this respect was, a few centuries since, very different. No class of men in our early annals occupied a more prominent or honourable position than the yeomanry. Their praises have been sung by our greatest poets; their sturdy independence on many occasions preserved the liberty, and proved the courage, of the English race. The tenant farmers of the present day differ essentially from the old yeomen of England, who were freeholders, cultivating the land which they owned. Their holdings were generally much smaller than those of the present day. In many continental countries, such as France, Norway, Switzerland, Italy, Belgium, Prussia, and some of the German states, much of the land is still possessed by small proprietors, termed peasant proprietors, who own the land which they cultivate. A peasant proprietor frequently cultivates his farm entirely by the labour of himself and his family. In this case, land, BOOK II. Different kinds of land tenure. BOOK II. CH. VI Differences of opinion as to the advantages labour and capital are all supplied by the same individual; he therefore claims the whole produce of the land; and rent, wages, and profits are merged together. The question as to the comparative advantages and disadvantages of cultivating the land by peasant proprietors has been, perhaps, more keenly discussed by political economists than of peasant any other subject. On the Continent, not only political proprietor- economists, but practical farmers, are decidedly favourable ship. to peasant proprietorships; they can of course watch the system in actual working, and are therefore in a much better position to judge of its effects than we who have now no opportunity of observing any considerable tract of land in England cultivated by peasant proprietors. English opinion is so strongly in favour of large farming, that we may naturally expect to find that our countrymen almost invariably express themselves antagonistic to a system of peasant properties, which implies small farming. Amongst English political economists the two most prominent champions of the system are Mr Mill and Mr W. T. Thornton. Both of these writers have collected a great mass of facts bearing upon the subject, and have discussed these facts with the most perfect impartiality. Much of the opposition which has been expressed by English writers towards peasant proprietors is undoubtedly due to a radical misconception. Peasant proprietorships imply small farms, but a small farm cultivated by its owner differs essentially from a small farm either occupied by a tenant at will or rented upon a lease; we believe that the whole advantage which can be attributed to peasant properties is almost entirely due to the fact that the cultivator owns the soil which he tills. The well-known Arthur Young, whose preference in favour of large farming was most decided, has very happily said, 'Give a man the secure possession of a bleak rock, and he will turn it into a garden; give him a nine years' lease of a garden, and he will convert it into a desert.' The advantages of large farms considered. In a previous chapter, various reasons have been stated which lead to the conclusion, that large farms are more productive than small farms, when land is cultivated not by its owner, but by a tenant'. This opinion is corroborated by the facts of every-day experience; for there can 1 See Book I., Chap. VI. be no doubt that the size of farms in England is increasing, rather than diminishing; and the advantage of large farms is sure to be more prominently shown, as machinery of an expensive character becomes extensively used in agriculture. It cannot be supposed that small farms are being absorbed into larger ones, simply in consequence of the caprice of landlords; the absorption takes place, because tenants and landlords have alike learnt that a higher rent can be paid for a farm of six hundred acres, than for the same land divided into two farms of three hundred acres. But, although it can be proved that large farming is more productive than small farming, yet such a conclusion does not definitely decide whether or not a nation is benefited by a class of peasant proprietors; for it has been already stated, that there is a fundamental distinction between a peasant proprietor and a small tenant farmer. Now we believe that very great social advantages are derived from peasant proprietorships; but before enquiring into this particular branch of the subject, the economical effects resulting from the cultivation of land by peasant proprietors will be described. The question is in fact reduced to this-To what extent are the disadvantages which are associated with small farming compensated by the advantages which arise from the cultivator feeling that the land is his own? We will first make some general remarks on the subject, and then substantiate our opinions by well-authenticated facts. BOOK II. CH. VI. veniences of small farming, which are also appli cable to peasant proprietor Many of the inconveniences which belong to farming Inconon a small scale, exert a similar influence when an equally small farm is cultivated by a peasant proprietor. The want of proper machinery and implements is the most formidable difficulty with which small farming has to contend; and it may be observed, in England, that the implements and stock of small farms are generally of an inferior kind. A small farmer has not sufficient capital ships. promptly to take advantage of improved implements, and it often would not answer his purpose to make a considerable outlay in purchasing a new machine, considering the little work it would have to do on a small farm. The expenses of a small farm are comparatively much greater than those of a large one; a flock of six hundred sheep would probably require only one shepherd, but six separate |