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of rendering to themselves. The ulterior extensions of which this principle of remuneration is susceptible, being of great social as well as economical importance, will be more particularly adverted to in a subsequent stage of the present enquiry.
As I have already remarked of large establishments generally, when compared with small ones, whenever competition is free its results will show whether individual or joint stock agency is best adapted to the particular case, since that which is most efficient and most economical will always in the end succeed in underselling the other.
§ 3. The possibility of substituting the large system of production for the small, depends, of course, in the first place, on the extent of the market. The large system can only be advantageous when a large amount of business is to be done it implies, therefore, either a populous and flourishing community, or a great opening for exportation. Again, this as well as every other change in the system of production is greatly favoured by a progressive condition of capital. It is chiefly when the capital of a country is receiving a great annual increase, that there is a large amount of capital seeking for investment: and a new enterprise is much sooner and more easily entered upon by new capital, than by withdrawing capital from existing employments. The change is also much facilitated by the existence of large capitals in few hands. It is true that the same amount of capital can be raised by bringing together many small sums. But this (besides that it is not equally well suited to all branches of industry), supposes a much greater degree of commercial confidence and enterprise diffused through the community, and belongs altogether to a more advanced stage of industrial progress.
In the countries in which there are the largest markets, the widest diffusion of commercial confidence and enterprise, the greatest annual increase of capital, and the greatest
number of large capitals owned by individuals, there is a tendency to substitute more and more, in one branch of industry after another, large establishments for small ones. In England, the great type of all these characteristics, there is not only a perpetual growth of large manufacturing establishments, but also, wherever a sufficient number of purchasers are assembled, of shops and warehouses for conducting retail business on a large scale. These are almost always able to undersell the smaller tradesmen, partly, it is understood, by means of division of labour, and the economy occasioned by limiting the employment of skilled agency to cases where skill is required; and partly, no doubt, by the saving of labour arising from the great scale of the transactions, as it costs no more time, and not much more exertion of mind, to make a large purchase, for example, than a small one, and very much less than to make a number of small
With a view merely to production, and to the greatest efficiency of labour, this change is wholly beneficial. In some cases it is attended with drawbacks, rather social than economical, the nature of which has been already hinted at. But whatever disadvantages may be supposed to attend on the change from a small to a large system of production, they are not applicable to the change from a large to a still larger. When, in any employment, the régime of independent small producers has either never been possible, or has been superseded, and the system of many workmen under one management has become fully established, from that time any further enlargement in the scale of production is generally an unqualified benefit. It is obvious, for example, how great an economy of labour would be obtained if London were supplied by a single gas or water company instead of the existing plurality. While there are even as many as two, this implies double establishments of all sorts, when one only, with a small increase, could probably perform the whole operation equally well; double sets
of machinery and works, when the whole of the gas or water required could generally be produced by one set only; even double sets of pipes, if the companies did not prevent this needless expense by agreeing upon a division of the territory. Were there only one establishment, it could make lower charges, consistently with obtaining the rate of profit now realized. But would it do so? Even if it did not, the community in the aggregate would still be a gainer; since the shareholders are part of the community, and they would obtain higher profits, while the consumers paid only the same. It is, however, an error to suppose that the prices are really kept down by the competition of these companies. Where competitors are so few, they always agree not to compete. They may run a race of cheapness to ruin a new candidate, but as soon as he has established his footing they come to terms with him. When, therefore, a business of real public importance can only be carried on advantageously upon so large a scale as to render the liberty of competition almost illusory, it is an unthrifty dispensation of the public resources that several costly sets of arrangements should be kept up for the purpose of rendering to the community this one service. It is much better to treat it at once as a public function, and if it be not such as the government itself could beneficially undertake, it should be made over entire to the company or association which will perform it on the best terms for the public. In the case of railways, for example, no one can desire to see the enormous waste of capital and land (not to speak of increased nuisance) involved in the construction of a second railway to connect the same places already united by an existing one; while the two would not do the work better than it could be done by one, and after a short time they would certainly be amalgamated. Only one line ought to be permitted, but the control over that line never ought to be parted with by the state, unless on a temporary concession, as in France; and the vested right which Parliament has allowed to be acquired by the existing com
panies, like all other proprietary rights which are opposed to public utility, is morally valid only as a claim to compensation.
§ 4. The question between the large and the small system of production as applied to agriculture-between large and small farming, the grande and the petite culture— stands, in many respects, on different grounds from the general question between great and small industrial establishments. In its social aspect, and as an element in the Distribution of Wealth, this question will occupy us hereafter: but even as a question of production, the superiority of the large system in agriculture is by no means so clearly established as in manufactures.
I have already remarked, that the operations of agriculture are little susceptible of benefit from the division of labour. There is but little separation of employments even on the largest farm. The same persons may not in general attend to the live stock, to the marketing, and to the cultivation of the soil; but much beyond that primary and simple classification, the subdivision is not carried. The combination of labour of which agriculture is susceptible, is chiefly that which Mr. Wakefield terms Simple Co-operation; several persons helping one another in the same work, at the same time and place. But I confess it seems to me that this able writer attributes more importance to that kind of cooperation, in reference to agriculture properly so called, than it deserves. None of the common farming operations require much of it. There is no particular advantage in setting a number of people to work together in ploughing or digging or sowing the same field, or even in mowing or reaping it unless time presses. A single family can generally supply all the combination of labour necessary for these purposes. And in the works in which an union of many efforts is really needed, there is seldom found any impracticability in obtaining it where farms are small.
The waste of productive power by subdivision of the land often amounts to a great evil, but this applies chiefly to a subdivision so minute, that the cultivators have not enough land to occupy their time. Up to that point, the same principles which recommend large factories, are applicable to agriculture. For the greatest productive efficiency, it is generally desirable (though even this proposition must be received with qualifications) that no family who have any land, should have less than they could cultivate, or than will fully employ their cattle and tools. These, however, are not the dimensions of large farms, but of what are reckoned in England very small ones. The large farmer has some advantage in the article of buildings. It does not cost so much to house a great number of cattle in one building, as to lodge them equally well in several buildings. There is also some advantage in implements. A small farmer is not so likely to possess expensive instruments. But the principal agricultural implements, even when of the best construction, are not expensive. It may not answer to a small farmer to own a threshing machine, for the small quantity of corn he has to thresh; but there is no reason why such a machine should not in every neighbourhood be owned in common, or provided by some person to whom the others pay a consideration for its use. The large farmer can make some saving in cost of carriage. There is nearly as much trouble in carrying a small portion of produce to market, as a much greater produce; in bringing home a small, as a much larger quantity of manure, and articles of daily consumption. There is also the greater cheapness of buying things in large quantities. These various advantages must count for something, but it does not seem that they ought to count for very much. In England, for some generations, there has been little experience of small farms: but in Ireland the experience has been ample, not merely under the worst but under the best management: and the highest Irish authorities may be cited in opposition to the opinion which on this subject commonly