Monday, January 3, 2011

"Mr. Wordy" on Corn, Combinations and Chrematistique

From Coningsby by Benjamin Disraeli.
Mr. Rigby listened at first to the inquiries of Coningsby, urged, as they ever were, with a modesty and deference which do not always characterize juvenile investigations, as if Coningsby were speaking to him of the unknown tongues. But Mr. Rigby was not a man who ever confessed himself at fault. He caught up something of the subject as our young friend proceeded, and was perfectly prepared long before he had finished to take the whole conversation into his own hands.

Mr. Rigby began by ascribing every thing to the reform bill, and then referred to several of his own speeches on schedule A. Then he told Coningsby that want of religious faith was solely occasioned by want of churches; and want of loyalty, by George IV. having shut himself up too much at the cottage in Windsor Park; entirely against the advice of Mr. Rigby. He assured Coningsby that the church commission was, operating wonders, and that with private benevolence, (he had himself subscribed £1000, for Lord Monmouth) we should soon have churches enough. The great question now was their architecture. Had George IV. lived, all would have been right. They would have been built on the model of the Buddhist pagoda. As for loyalty, if the present king went regularly to Ascot races, he had no doubt all would go right. Finally, Mr. Rigby impressed on Coningsby to read the Quarterly Review with great attention ; and to make himself master of Mr. Wordy's History of the Late War in twenty volumes, a capital work, which proved that Providence was on the side of the Tories.
"Mr Wordy" was Sir Archibald Alison, Sheriff of Lanarkshire (Glasgow), author of Modern History of Europe from the French Revolution to the Fall of Napoleon in ten volumes (not twenty) and indefatigable Tory activist and propagandist. Alison's views on corn laws and combinations (trade unions) could hardly be considered "classical liberal political economy". He was adamantly opposed to both free trade and popular democracy. Yet his diatribe against trade union "restrictions" was taken up by economic journalists toward the end of the 19th century and drifted into economics textbooks in the early 20th century as the notorious 'lump-of-labor' fallacy claim.

Alison didn't continence the classical liberal bromide that the benefits from free trade would accrue from cheaper prices, even if other nations didn't reciprocate in lowering trade barriers,
It is in vain, therefore, to say, cheap prices are a blessing in themselves, and the consumers at least are ever benefited by a fall in the cost of grain. Cheap prices are a real blessing if that effect consists with prosperity to the producer, as by improved methods of cultivation or manufacture, or the benignity of nature in giving fine seasons. But cheap prices are the greatest of all evils, and to none more than the consumers, if they are the result, not of the magnitude of domestic production, but of the magnitude of foreign importation. It was that sort of cheap prices which ruined the Roman empire, from the destruction of the agriculture of Italy; it is that sort of cheap prices which has ruined the Indian weavers, from the disastrous competition of the British steam-engine; it is that sort of low prices which has so grievously depressed British shipping, from the disastrous competition of the Baltic vessels under the reciprocity system. It is in vain for the consumers to say, we will separate our case from that of the producers, and care not, so as we get low prices, what comes of them. Where will the consumers be, and that erelong, if the producers are destroyed? What will be the condition of the landlords if their farmers are ruined? or of bondholders if their debtors are bankrupt? or of railway proprietors if traffic ceases? or of owners of bank stock if bills are no longer presented for discount? or of the 3 per cents if Government, by the failure of the productive industry of the country, is rendered bankrupt? The consumers all rest on the producers, and must sink or swim with them.
No doubt the most incongruous divergence from liberal principles can be found in Alison's endorsement of the views of the French political economist, Simonde de Sismondi, whose critique of political economy as chremitistics echoes in the contemporary writings of Herman Daly and the steady state and degrowth advocates.
According to the Chrematists, the wealth of a nation, as of an individual producer, is to be measured by the excess of the value of production over its cost. This, says Sismondi, is the most fatal of all errors, and the grand source of the misery of the working classes, and instability of society, in all the manufacturing states of Europe. It is true, the wealth of a master-manufacturer is to be measured by the excess of the price he obtains for his produce over the cost of its production ; but a master-manufacturer is not a nation. A nation consists not only of masters but of workmen; not only of consumers but producers. The latter class is by far the most numerous, the most important, the most likely to increase. If they are reduced to misery in consequence of the reduction of their wages by the introduction of machinery, the employment of juvenile or female labour, the immigration of foreign labourers, or any other cause, it is a poor compensation to say, that the profits of their employers have been greatly augmented at their expense....

Such are Sismondi's political views, which are enforced in the volumes before us by a vast array of historical and statistical facts... That we consider his ideas as in the main just, and his anticipations too likely to prove well-founded, may be inferred from the pains we have taken to form a digest of them in the preceding pages.

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