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Project Gutenberg's Speculations from Political Economy, by C. B. Clarke
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Title: Speculations from Political Economy
Author: C. B. Clarke
Release Date: July, 2005 [EBook #8436]
[Yes, we are more than one year ahead of schedule]
[This file was first posted on July 10, 2003]
Edition: 10
Language: English
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*** START OF THE PROJECT GUTENBERG EBOOK SPECULATIONS FROM POLITICAL ***
Produced by John Hagerson, Jonathan Ingram,
and the Online Distributed Proofreading Team.
SPECULATIONS
FROM
POLITICAL ECONOMY
BY
C. B. CLARKE, F.R.S.
INTRODUCTION
The following nine articles are "Speculations," by no means
altogether recommendations. They are _from_ Political Economy, i.e.
they have nearly all of them been suggested by considering mere
propositions of Political Economy. Some of them are old, or given me
by friends: some are, I believe, new: these many persons will set
aside as unpractical or impracticable, as that is the approved word
by which people indicate that an idea is new to them. The topics of
the nine articles have been largely taken from those now under
political discussion, but they can hardly be called ephemeral; and,
though they do not form a treatise, they will hardly be called
disconnected. As they are speculations, no trouble has been taken to
work out suggestions in detail, or give the "shillings and pence"
correctly.
CONTENTS
1. EFFICIENCY OF LABOUR
2. RECIPROCITY AND RETALIATION
3. UNIVERSAL FREE TRADE
4. THE RANSOM OF THE LAND
5. MAKING THE MOST OF OUR LAND
6. FREE TRADE IN RAILWAYS
7. REFORM IN LAND LAW
8. EQUALISING OF TAXATION
9. WEALTH OF THE NATION
SPECULATIONS
_FROM POLITICAL ECONOMY_
1. EFFICIENCY OF LABOUR.
Political economists have not overlooked efficiency of labour: they
have underestimated its importance in the opinion of Edward Wilson,
who has supplied me with the examples and arguments that follow and
who has verbally given me leave to publish as much as I like.
The English workman, especially in a country town of moderate size,
regards capital as unlimited, employment ("work") as limited. A wall
six feet high is to be built along the length of a certain garden: if
one bricklayer is employed, the fewer bricks he lays daily the more
days' employment he will get; if several bricklayers are employed,
the fewer bricks one lays daily the more employment is left for the
others. It thus appears that the more inefficient the labourer is,
the better for himself, his fellow-handicraftsmen, and for "labour"
in general: the more money is drawn from the capitalist.
There is a grain of truth in this view with respect to petty
unavoidable repairs in a narrow locality: but the capital spent on
such is as a drop in the ocean compared with that embarked in a
single large work. Consider the case of the London Building Trade, as
practised in the suburbs on all sides of London. The London
bricklayers thoroughly believe that it is their interest to be
inefficient: it is said that they have a rule that no bricklayer
shall ever lay a brick with the right hand; they have also a rule
against "chasing," i.e. that no bricklayer, whatever his skill, shall
lay more than a certain number of bricks a day; they believe that if
the bricklayer laid a larger number of bricks he would get no more
pay for a harder day's work, while the "work" would afford employment
to a smaller number of labourers. Look however a little further. The
speculative builders round London compete against each other, so that
they carry on their trade on ordinary trade profits. Such a builder
is building streets, house after house, each house costing him £800,
and selling for £1000 say; and this, after paying his interest at the
bank, etc., pays him about 10 to 15 per cent on his own capital
embarked. Suppose now that the bricklayers increase their
inefficiency either by a trade rule or by a combination to shorten
the hours of labour. The cost of each house is increased £50 to him:
nothing in the new bricklaying rules or rates affects the purchasers;
the builder estimates that his profits will fall to 5 to 8 per cent
on his capital. He does not care to pursue so risky a business at
this rate of profit; he determines to contract operations. When he
goes to his bank, a branch of one of the gigantic London joint-stock
banks, at the end of the quarter, the manager of the branch comes
forward as usual ready to continue the bank advances; but the builder
says simply, "The building trade is not so good as it was," and
declines. The increased cost of bricklaying has affected all other
speculative builders in much the same way; the consequence is that
"gold" accumulates in the branch banks. The secretaries and managers
of the great joint-stock banks do not let their capital idly
accumulate; they buy New Zealand 6 per cents, or transfer to
Frankfort or New York the capital that, but for the rise in cost of
bricklaying, would have gone to the London bricklayers.
In this case it is easy to see that the quantity of work to be done
is not limited. Should the cost of building diminish but a little,
the rate of profit of the builders on their _own_ capital (in many
cases not one-tenth of the capital they employ) will run up to 20 or
30 per cent, or even more; and at even a 20 per cent profit the
bricklayers would find that a perfect rage for building would set in.
Every speculative builder in the trade would strain his credit to the
utmost, and take up every £100 from his bank that he could induce the
bank manager to let him have.
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