This essay was written five years after the famous Reflections on the Revolution in
Apart from its historical interest, the essay here reprinted is a well argued statement of the case for free market, private property, limited government principles. Although Burke addressed himself to an England where the typical employer-employee relationship involved a farmer and the laborers he hired, the principles Burke invoked to demolish the fallacies of political interventionism of his day apply equally well to present situations. Old fallacies neither die nor fade away; they must be controverted.
The original essay runs to nearly eleven thousand words and may be found in volume VII of The Works of the Right Hon. Edmund Burke in eight volumes, London, Thos. M’Lean, 1823. It has here been shortened and, for the sake of clarity some archaisms have been put into modern idiom.
Edmund A. Opitz
Of all things, an indiscreet tampering with the trade of provisions is the most dangerous, and it is always worst in the time when men are most disposed to it:—that is, in the time of scarcity. Because there is nothing on which the passions of men are so violent, and their judgment so weak, and on which there exists such a multitude of ill-founded popular prejudices.
The great use of government is as a restraint; to provide for us in our necessities is not in its power. It would be a vain presumption in statesmen to think they can do it. The people maintain them, and not they the people. It is in the power of government to prevent much evil; it can do very little positive good in this, or perhaps in anything else.
Nothing can be so base and so wicked as the political canting language, "The laboring poor." Let compassion be shown in action, the more the better, according to every man’s ability, but let there be no lamentation of their condition. Labor is a commodity like every other, and rises or falls according to the demand. This is in the nature of things.
There is an implied contract, much stronger than any instrument or article of agreement, between the employee in any occupation and his employer—that the labor, so far as that labor is concerned, shall be sufficient to pay to the employer a profit on his capital and a compensation for his risk; in a word, that the labor shall produce an advantage equal to the wage. Whatever is enforced above that is a direct tax: and if the amount of that tax be left to the will and pleasure of another, it is an arbitrary tax.
If I understand it rightly, the tax proposed on the farming interest of this kingdom is to be levied at what is called the discretion of justices of peace.
The questions arising on this scheme of arbitrary taxation are these: whether it is better to leave all dealing, in which there is no force or fraud, collusion, or combination, entirely to the persons mutually concerned in the matter contracted for; or to put the contract into the hands of those, who can have none, or a very remote interest in it, and little or no knowledge of the subject.
It might be imagined that there would be very little difficulty in solving this question; for what man of any degree of reflection can think that a lack of interest in any subject closely connected with a lack of skill in it, qualifies a person to intermeddle in any the least affair, much less in affairs that vitally concern the agriculture of the kingdom, the first of all its concerns, and the foundation of all its prosperity in every other matter, by which that prosperity is produced?
The vulgar error on this subject arises from a total confusion in the very idea of things widely different in themselves—those of custom and agreement and those of judicature. When a contract is being negotiated, it is a matter of discretion and of interest between the parties. In that relationship, and in what is to arise from it, the parties are the masters. If they are not completely so, they are not free, and therefore their contracts are void.
But this freedom is limited once the contract is made. Then their discretionary powers expire, and a new order of things takes its origin. Then, and not till then, and on a difference between the parties, the office of the judge commences. He cannot dictate the contract. It is his business to see that it be enforced, provided that it is not contrary to pre-existing laws or obtained by force or fraud. If he is in any way a maker or regulator of the contract, in so much he is disqualified from being a judge.
The proposed measures are premised on the misconception that the farmer and the man he employs have opposite interests—that the farmer oppresses the hired man, and that a gentleman called a justice of peace is the protector of the latter and a control and restraint on the former.
Both Parties Gain from Trade
First, then, I deny in this case, or in similar cases, that contracting parties originally had different interests. By accident it may be so undoubtedly at the outset; but then the contract is of the nature of a compromise, and compromise is founded on circumstances that suppose it the interest of the parties to be reconciled in some medium. The principle of compromise adopted, of consequence the interests cease to be different.
But in the case of the farmer and the hired man, their interests are always the same, and it is absolutely impossible that their free contracts can be onerous to either party. It is the interest of the farmer that his work should be done with effect and celerity; and that cannot be, unless the hired man is well fed, and otherwise provided with such necessaries of animal life, according to its custom as may keep the body in full force, and the mind gay and cheerful.
It is plainly more the farmer’s interest that his men should thrive than that his horses should be well-fed, sleek, plump, and fit for use, or than that his wagon and ploughs should be strong, in good repair, and fit for service.
On the other hand, if the farmer ceases to profit from his employees so that his capital is not continually replenished, it is impossible for him to pay the wages from which his employees maintain themselves.
The Employer’s Profit
It is, therefore, the first and fundamental interest of the employee that the farmer should have a full incoming profit on the product of his labor. The proposition is self-evident and nothing but the malignity, perverseness, and ill-governed passions of mankind, and particularly the envy they bear to each other’s prosperity, could prevent their seeing and acknowledging it with thankfulness to the benign and wise Disposer of all things, who obliges men, whether they will or not, in pursuing their own selfish interests, to connect the general good with their own individual success.
A Matter of Market Determination
But who are to judge what that profit and advantage ought to be? Certainly, no authority on earth. It is a matter of usage and contract dictated by the reciprocal conveniences of the parties, and indeed by their reciprocal necessities.
I shall be told by the zealots of the sect of regulation that this may be true, and may be safely committed to contract or agreement between farmer and hired man, when the latter is in the prime of his youth, and at the time of his health and vigor, and in ordinary times of abundance. But in calamitous seasons, under accidental illness, in declining life, and with the pressure of a numerous offspring, what is to be done? When a man cannot live and maintain his family by the natural hire of his labor, should not his wage be raised by authority?
On this head I must be allowed to submit what my opinions have ever been.
And, first, I premise that labor is, as I have already intimated, a commodity, and, as such, an article of trade. If I am right in this notion, then labor must be subject to all the laws and principles of trade, and not to regulations foreign to them, which may be totally inconsistent with those principles and those laws. When any commodity is carried to market, it is not the necessity of the vendor, but the necessity of the purchaser that determines the price. If the goods at market are beyond the demand, they fall in their value; if below it, they rise. The subsistence of a man who carries his labor to a market is totally beside the question in this way of viewing it. The only question is, what is his labor worth to the buyer?
But if authority comes in and forces the buyer to a price, what is this in the case (say) of a farmer, who buys the labor of ten or twelve laborers, and three or four tradesmen, what is it, but to make an arbitrary division of his property among them?
If a commodity is raised by authority above what it will yield with a profit to the buyer, that commodity will be the less dealt in. If a second blundering interposition be used to correct the blunder of the first, and an attempt is made to force the purchase of the commodity (of labor for instance), one of two things must happen: either the forced buyer is ruined, or the price of the product of the labor, in that proportion, is raised. Then the wheel turns round, and the evil complained of falls with aggravated weight on the complainant. The price of corn, which is the result of the expense of all the operations of husbandry, taken together, and for some time continued, will rise on the wage earner, considered as a consumer. The very best will be, that he remains where he was. But if the price of the corn should not compensate the price of labor, what is far more to be feared, the most serious evil, the very destruction of agriculture itself, is to be apprehended.
Prices Regulate Trade
Laws prescribing, or magistrates exercising, a very stiff and often inapplicable rule, or a blind and rash discretion, never can provide the just proportions between earning and salary on the one hand, and living costs on the other: whereas interest, habit, and the tacit convention, that arise from a thousand nameless circumstances, produce a tact that regulates without difficulty what laws and magistrates cannot regulate at all.
But what if the rate of hire to the employee comes far short of his necessary subsistence, and the calamity of the time is so great as to threaten actual famine? Is the poor fellow to be abandoned?
In that case, my opinion is this. Whenever it happens that a man can claim nothing according to the rules of commerce and the principles of justice, he passes out of that department and comes within the jurisdiction of mercy. In that province the magistrate has nothing at all to do; his interference is a violation of the property which it is his office to protect. Beyond all doubt, charity to the poor is a direct and obligatory duty upon all Christians, next in order after the payment of debts, full as strong, and by nature made infinitely more delightful to us.
But the manner, mode, time, choice of objects, and proportion, are left to private discretion; and, perhaps, for that very reason it is performed with the greater satisfaction because the discharge of it has more the appearance of freedom; recommending us besides very specially to the divine favor, as the exercise of a virtue most suitable to a being sensible of its own infirmity.
The Evils of Price Control
A greater and more ruinous mistake cannot be fallen into than that the trades of agriculture and grazing can be conducted upon any other than the common principles of commerce, namely, that the producer should be permitted, and even expected, to look to all possible profit which, without fraud or violence, he can make; to turn plenty or scarcity to the best advantage he can; to keep back or to bring forward his commodities at his pleasure; to account to no one for his stock or for his gain. On any other terms he is the slave of the consumer; and that he should be so is of no benefit to the consumer. No slave was ever so beneficial to the master as a freeman that deals with him on an equal footing by contract, formed on the rules and principles of contending interests and compromised advantages. The consumer, if he were permitted, would in the end always be the dupe of his own tyranny and injustice.
What is true of the farmer is equally true of the middleman, whether the middleman acts as factor, jobber, salesman, or speculator, in the markets of grain. These traders are to be left to their free course; and the more they make, and the richer they are, and the more largely they deal, the better both for the farmer and consumer between whom they form a natural and most useful link of connection; though, by the machinations of the old evil counselor, Envy, they are hated and maligned by both parties.
I hear that middlemen are accused of monopoly. Without question, the monopoly of authority is, in every instance and in every degree, an evil; but the accumulation of capital is the contrary. It is a great benefit, and a benefit particularly to the poor. A tradesman who has but a hundred pound capital, which (say) he can turn but once a year, cannot live upon a profit of 10 per cent, because he cannot live upon ten pounds a year; but a man of ten thousand pounds capital can live and thrive upon 5 per cent profit in the year because he has five hundred pounds a year. The same proportion holds in turning it twice or thrice. These principles are plain and simple; and it is not our ignorance, so much as the levity, the envy, and the malignity of our nature, that hinders us from perceiving and yielding to them; but we are not to suffer our vices to usurp the place of our judgment.
Maximum Satisfaction of Wants
The balance between consumption and production makes price. The market settles, and alone can settle, that price. Market is the meeting and conference of the consumer and producer when they mutually discover each other’s wants. Nobody, I believe, has observed with any reflection, what the market is, without being astonished at the truth, the correctness, the celerity, the general equity with which the balance of wants is settled. They who wish the destruction of that balance, and would, by arbitrary regulation, decree that diminished production should not be compensated by increased price, directly lay their ax to the root of production itself.
When Government Interferes Least
The moment that government appears in the market place, all the principles of the market will be subverted. I don’t know whether the farmer will suffer by it as long as there is a tolerable market of competition; but I am sure that, in the first place, the trading government will speedily become bankrupt, and the consumer in the end will suffer.
If the object of government buying should be what I suspect it is, to destroy the dealer, commonly called the middleman, and by incurring a voluntary loss to impel the baker to deal with government, I am to tell them that government must set up another trade, that of a miller or a meal man, attended with a new train of expenses and risks. If government should succeed in both these trades, so as to exclude those who trade on natural and private capitals, then government will have a monopoly in its hands, which, under the appearance of a monopoly of capital, will, in reality, be a monopoly of authority, and will ruin whatever it touches. The agriculture of the kingdom cannot stand before it.
The example of Rome, which has been derived from the most ancient times, and the most flourishing period of the Roman Empire (but not of the Roman agriculture) may serve as a great caution to all governments, not to attempt to feed the people out of the hands of the magistrates. If once they are habituated to it, though but for one-half year, they will never be satisfied to have it otherwise. And, having looked to government for bread, on the very first scarcity they will turn and bite the hand that fed them. To avoid that evil, government will redouble the causes of it; and then it will become inveterate and incurable.
Government’s Limited Role
It is one of the finest problems in legislation, and what has often engaged my thoughts whilst I followed that profession, "What the State ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual discretion." Nothing, certainly, can be laid down on the subject that will not admit of exceptions, many permanent, some occasional. But the clearest line of distinction which I could draw, whilst I had my chalk to draw any line, was this: That the State ought to confine itself to everything that is truly and properly public, to the public peace, to the public safety, to the public order. In its preventive police it ought to be sparing of its efforts. Statesmen who know themselves will, with the dignity which belongs to wisdom, proceed only in this the superior orb and first mover of their duty, steadily, vigilantly, severely, courageously: whatever remains will, in a manner, provide for itself. But as they descend from the state to a province, from a province to a parish, and from a parish to a private house, they go on accelerated in their fall. They cannot do the lower duty; and, in proportion as they try it, they will certainly fail in the higher. They ought to know the different departments of things: what belongs to laws and what manners alone can regulate. To these, great politicians may give a leaning, but they cannot give a law.
The Law Perverted
Our legislature has fallen into this fault as well as other governments; all have fallen into it more or less. The once mighty State, which was nearest to us locally, nearest to us in every way, and whose ruins threaten to fall upon our heads, is a strong instance of this error. I can never quote France without a for boding sigh.
Revolution in France
That State has fallen by the hands of the parricides of their country, called the Revolutionists—a species of traitors, of whom I can never think or speak without a mixed sensation of disgust, of horror, and of detestation, not easy to be expressed. These nefarious monsters destroyed their country for what was good in it: for much good there was in the constitution of that noble monarchy, which, in all kinds, formed and nourished great men, and great patterns of virtue to the world. But though its enemies were not enemies to its faults, its faults furnished them with means for its destruction. My dear departed friend, whose loss is even greater to the public than to me, had often remarked, that the leading vice of the French monarchy (which he had well studied) was in good intention ill-directed, and in a restless desire of governing too much. The hand of authority was seen in everything and in every place. All, therefore, that happened amiss in the course even of domestic affairs was attributed to the government, and, as it always happens in this kind of officious universal interference, what began in odious power ended always, I may say without an exception, in contemptible imbecility. For this reason, as far as I can approve of any novelty, I thought well of the provincial administrations. Those, if the superior power had been severe, and vigilant, and vigorous, might have been of much use politically in removing government from many invidious details. But as everything is good or bad, as it is related or combined, government being relaxed above as it was relaxed below, and the brains of the people growing more and more addled with every sort of visionary speculation, the shiftings of the scene in the provincial theaters become only preparatives to a revolution in the kingdom, and the popular actings there only the rehearsals of the terrible drama of the republic.
Tyranny and cruelty may make men justly wish the downfall of abused powers, but I believe that no government ever yet perished from any other direct cause than its own weakness. My opinion is against an overdoing of any sort of administration, and more especially against this most momentous of all meddling on the part of authority, the meddling with the subsistence of the people.