a general glut; but it must be applied with two important limitations. First, it goes upon the supposition, that the laws and other institutions of the country admit the freest possible interchange of all articles of wealth. If there be a monopoly of any one article, if only a few persons are privileged or enabled to produce and sell it,—and especially if this article be one of prime or universal necessity, — then there may be a glut, or over-production, of all other articles with reference to this one. To illustrate this point, I will take the most general case. All articles that are offered for sale or exchange may be roughly divided into two classes, according as they are articles of manufacture or products of agriculture. The latter are chiefly articles of food, and the demand and supply of food, as we have seen, are regulated by causes peculiar to itself, wholly irrespective of the presence or absence-the high or low prices of other commodities. The demand for agricultural products depends on the number of appetites to be satisfied, and can only be enlarged by an increase of the population, or diminished by the population becoming smaller; the supply of these products is determined by the extent of territory capable of cultivation, and by improvements in the modes of husbandry. Neither of these sources of supply can be increased at will, or on demand; the land, in such a country as Great Britain, is all owned and occupied, and the number of acres is limited; improvements in agriculture are made by the progress of discovery and invention, and not merely because they are needed to feed the people.

Now manufactures must be exchanged for food, and consequently they may be produced in too great abundance; there is no limit to their increase, but there is a limit to the supply of the only article for which they can be bartered. And we cannot here say, as the English Economists are fond of saying in the case of a particular glut: "Transfer your capital and industry from the article of which there is a surplus to that of which there is a deficiency." In England, industry cannot be transferred from manufactures to agriculture; the land is all owned and held at a monopoly price, and the landlords refuse to employ more labor upon it, even if a greater amount of food should be produced by the introduction of more hands. They find, or think they find, that a greater net product remains to

themselves when few hands are employed, than when there are many. Hence they endeavor to get rid of a portion of the agricultural laborers, instead of increasing their number. The policy of most English landlords is to depopulate their estates, to make the peasantry give place to flocks and herds, as in the North of Scotland, or to compel them, by unroofing and tearing down their dwellings, as in Ireland, to emigrate to foreign lands. Thus they imitate the system which has been practised for centuries in the Roman Campagna, which reduced the fields of Italy in the age of Pliny to a desert, and subsequently surrendered them to the Northern barbarians because there were not men enough left to defend them. The dispossessed tenantry are obliged to emigrate, or are driven into manufacturing industry; and thus the glut of manufactures is increased by the very causes which diminish the supply of food. True, food may be imported, as we have seen, even to an extent which is practically unlimited. But the very necessity for such importation, if it is found to exist in a country the agricultural resources of which are not yet developed to the utmost possible extent, proves that, in that country at least, there is already a glut of manufactures, and one which, in its effect on the rate of profits, would be very seriously felt, if there were not in other countries a glut of food. What actually exists in one nation, is possible in all nations; if there be an actual glut of, manufactures in Great Britain, such a glut is possible for the whole civilized portion of mankind. And this glut of manufactured products in England is not a consequence of the stinted bounty of nature in reference to agricultural products. The amount of food produced there, from its own soil, is yet far from having attained its maximum; it might become as populous as Belgium,- that is, fifty per cent more populous than at present, and yet not only feed all its inhabitants, but "produce commonly," as Belgium does, "more than double the quantity of corn required for the consumption of its inhabitants."

In most civilized countries, at least two thirds of the working population are engaged in agricultural pursuits, and but one third in manufactures and commerce; and this proportion

* McCulloch's Geographical Dictionary.

existed in England itself down as late as the reign of the Stuarts. But in 1821, only one third of the English population were engaged in tilling the soil; and twenty years later, or in 1841, there were only about one fifth thus employed,—a depopulation of the rural districts to the rapidity of which there is no parallel in history.* There is no absolute deficiency either of land or food; for both can be had in abundance, as has been shown, in other countries. But as there are obstacles which impede the emigration of capital, so there are those which obstruct in a still greater degree the emigration of the indigent portion of the people. Poverty-the very cause which renders it desirable for them to emigrate also renders emigration difficult, and often impossible.

The second limitation of the doctrine that a universal glut is impossible, is founded on the division, that I have already made (pp. 40, 41), of all the commodities which constitute wealth into two classes. First, there are the articles which are designed for immediate consumption, and which directly satisfy the wants of man; such as food and clothing that are ready to be eaten and worn, the houses that shelter us, and the ornaments and luxuries that gratify our tastes. And, secondly, there are the tools, implements, and raw materials, by means of which, or out of which, the former articles are made, but which, in their present shape, are not fitted for our immediate gratification and support. These two classes may be designated respectively as, 1. Finished products, and, 2. Producing agents. The division between them does not exactly correspond with that between capital and the other portion of

The following table, taken from the official reports, shows the proportionate per cent of the British population who were engaged respectively in agricultural, commercial, and manufacturing, and all other pursuits, at four decennial periods.

The census of 1851, though it presents a more minute classification of the occupations of the people, unfortunately does not enable us to divide the population into three classes, so as to continue the foregoing table. But according to the best estimate that can be framed from it, the agricultural portion of the British population in 1851 was a little less than 20 per cent of the whole.

wealth which is not capital. All producing agents are capital, it is true; but all finished products are not excluded from the definition of capital. A merchant's capital, for instance, often consists exclusively of commodities that are completely manufactured and ready for use; a retailer's stock is generally of this character.

It is evident that all wealth of the second class, all producing agents, possess only a kind of secondary and derivative value; they are prized, not for their own sake, but for what may be made out of them, or produced by their aid. And it is equally evident, that if the demand for commodities of the first class, finished products, is not coextensive, if it does not keep pace, with the demand for the second class of objects of wealth, or producing agents, then there must be an excess of supply, or a glut, of the former, and a consequent fall of prices and diminution of profits. No one buys a plough or a loom for its own sake; for in itself, it gratifies no feeling and satisfies no want. The one is valued only because it helps us to raise corn, and the other, because it enables us to manufacture cloth. The only effect of the purchase of either, then, is, not to relieve the market already glutted with corn and cloth, but to furnish prospectively a greater supply of both, and thus to increase the glut.

We may admit, then, the force of the common argument, so far as it goes, against the possibility of a glut; and we may still deny that it covers the whole ground, or that it demonstrates the impossibility of any such excess of supply of one class of articles, as cannot be remedied by diverting the sources of production from those commodities which are in excess to those which are deficient. We admit, that a capitalist who wishes to sell also wishes to buy; for to sell is to exchange, and the seller's disposition to part with one product is exactly measured by his disposition to obtain another of precisely equivalent value. We admit, also, that he does not wish to sell or exchange for money alone, so as to create a scarcity of that one article; for though he receives money in one half of his transaction, or as a seller, he pays it in the other half, as a purchaser. So far as money is concerned, then, his operation leaves the market in the same state in which he found it, not glutted by the number of sellers of goods, nor “tightened,” as the phrase is, by the want of money.

But though he buys as much as he sells, is it true that he always relieves the market by the former operation just as fast, and to the same extent, that he burdens it by the latter, so that the balance of transactions remains as it would have been, if he had not entered the market at all? We can easily see that he does not, in any one case of two articles corresponding to each other as finished product and producing agent. Suppose the market, for instance, to be already amply furnished with grain. One who brings to it an additional thousand bushels of grain to sell, occasions a glut of this article, and certainly does nothing towards relieving this glut by expending all the money which he received for grain upon the purchase of ploughs and other implements for clearing and breaking up more land, and thus producing a larger harvest the next year. Or if cloth enough is already offered for sale, the sellers of it will certainly occasion a glut of this article, if they exchange the whole stock of it for power-looms, and thus double or treble the quantity of cloth which will be offered for sale the next month. The same reasoning is applicable to any other two commodities that are related to each other as finished product and producing agent. It is equally evident that it is applicable to all such cases, taken together; or, in other words, a general glut of finished products is possible, and such a glut cannot be relieved by diverting capital to other employments. There is no other employment for it, as every use of capital is, directly or indirectly, to increase the amount and value of finished products. Then a superabundance of capital, in reference to the field for its employment, is possible; and the inevitable result of such a surplus is a diminution of the rate of profit.

Thus far, I have only proved that a glut of finished products is possible. The probability of its actual occurrence, I have already said, will depend upon the magnitude of the wants of the people, as determined, 1. by their numbers, 2. by the degree of civilization which they have obtained, and, 3. by the greater or less inequality of the distribution of property among them.

First, it is obvious enough, that the consumption of finished products in any country, other things being equal, will depend upon the number of its inhabitants. The demand for food is