The Power In The Land. Fred Harrison
installed the power looms, would have had to have accepted an uncompetitive rate of return on his capital. So it was necessary to retain the use of an obsolete process of production by letting the hand weavers in their damp cellars carry the burden of the rents! Not until 1818 to 1820 did the pressure of speculative rents ease off: and that was when the entrepreneurs undertook their capital investment and modernisation programmes.
The macro-economic influences of the land monopolist were hidden from the public consciousness. This does not mean that the victims could not see the visible effects of land speculation. ‘It is well known that vile and loathsome buildings, probably the property of some opulent landowner, yield from the misery of their inmates a far larger rent than the plots on which the most luxurious and convenient mansions are built.’28 But the way that the exploiters distorted the allocation of resources and the pattern of consumption and production, and the whole range of matters — social and environmental — which constitute the human condition, were well concealed from the political and economic decision-makers of the time.
This is not to admit that the processes could not have been correctly analysed. Radcliffe provided a remarkably detailed account of the causal connection between the development of land values, technological advances and the growth of output.29 When the machine was introduced into the process of spinning yarn there was an immediate demand for new space. Old loom-shops were inadequate, so that ‘every lumber-room, even old barns, cart-houses, and outbuildings of any description were repaired, windows broke through the old blank walls, and all fitted up for loom-shops. This source of making room being at length exhausted, new weavers’ cottages with loom-shops rose up in every direction; all immediately filled’. And along with the increase in wages, rents doubled and trebled. As Radcliffe put it, ‘the plough was wholly indebted to the shuttle’, although — he claimed — many landlords did not seem to appreciate this fact. Radcliffe was anxious about the fact that the landlords were insufficiently concerned about the commercial welfare of the cotton industry.30 He warned the landlords that ‘the landed and agricultural purses were filled even to the brim by every article produced from the soil, or the farm yard being raised in price in proportion to the advanced labour and profit above-mentioned. This source held out even when the income from manufacturers and commerce had gone to the continent with the raw material, cotton yarns; hut unless this new system checks its decline, it cannot hold out much longer!'31
The weavers were obliged to spend long hours in a damp atmosphere in confined workrooms, often cellars near streams; the dampness was necessary to keep the thread supple. The power loom afforded the prospect of dry, healthy working conditions in new factories, as Radcliffe persisted in pointing out. But the machine could not come to their aid: it, too, was a victim of land monopoly.
The cotton weavers were trapped in a captive labour market. Ideally, they should have been free to decline to work in the industrial sector, which they would have done had their land not been confiscated from them and their forefathers. The entrepreneurs should have had to have attracted them off the land. Wages and working conditions would have had to have been at least as good as what the self-employed farmer/artisan could provide for himself.
But the freedom to decide one’s future was effectively denied to the workers and those who saved or borrowed to go into business on their own account. Labour and capital were united as victims of the land monopolists, and there was greater sympathy between them than is generally admitted. During the agitations of the time, the weavers who combined to press for higher wages did not propose that these should come out of existing profits: they recommended that prices should be raised. And there were sympathetic employers (Radcliffe was not alone) who did want to raise wages. The landlords in Parliament looked upon these proposals with horror. A general rise in wages would have come out of the ‘surplus’ of the nation’s product, which would have entailed a reduction in rental income.
Fortunately for the land monopolists, they had a reliable spokesman in the Home Secretary, Lord Sidmouth, the owner of considerable estates. Sidmouth used spies to watch over, and prosecute, the hungry workers. When it was discovered that magistrates could use existing laws to enforce a minimum living wage he acted promptly in the House of Lords: the laws were repealed.32 Consequently, with both man and machine shackled to a particularly severe phase of exploitation by the land monopolists, the owners of labour and capital found themselves competing with each other instead of cooperating to their mutual advantage.
The landed class did not relent on its demands. The squeeze on profit margins threatened to put many manufacturers out of business, the fate which did in fact await many of them. Radcliffe was aware of the criticisms levelled against landlords, who ‘have been censured for raising their rents at this period, and subsequently still higher’. But he did not begrudge them their exactions. He was, after all, receiving rents from his farms in Mellor.
If every manufacturer or merchant (for it is to this class I am alluding) will now only fancy himself to have been one of these land-owners at that time, and lay his hand upon his heart and say what he would have done under the circumstances I have been stating, I think there is not one of these theoretical censors that would be found to cast a second stone.33
Under the ruling system of property rights and taxation laws, of course, Radcliffe was right in predicting how the urban capitalists would have responded had they anticipated the trend in land values. But this does not justify what happened, nor did it relieve Radcliffe of the responsibility for correctly apportioning guilt for the problems which ensued.
The problems of the cotton industry can be illuminated in theoretical terms. Rent is an economic surplus, the amount left over from production once labour and capital have received their share — a share determined through competition for the opportunity to use the available resources to create new wealth. The amount which is received by capitalists and labourers has to be sufficient to attract them into the most rewarding activities, and enable them to reproduce over time. If landowners are under the pressure of competition, they will be forced to accept the surplus, and no more. In the absence of any inducement to compete, monopoly power enables them to demand a disproportionately large share of output. They are in the happy position of the highwayman who can demand ‘Your money or your life’, but with no risk of retribution. For they control the hangman through the legislature!
By imposing increasing demands on the wealth-creating agencies, or by refusing to reduce their exactions as the value of output declines, land monopolists eat into the share which ought to go to labour and capital as wages and interest. This is an irrational situation which cannot last for long. The system must break down. Capital is withdrawn when yields become unacceptably low, and investors are deterred from undertaking fresh capital formation. Labour goes hungry and either dies or suffers from malnutrition. Aggregate output contracts, and sooner or later the landlords are forced by realities to accept a cut-back in their rents — or to hold their land idle, in the certain expectation that, sooner or later, the demand for their land will yield the rents they originally demanded.
For the cotton industry in Radcliffe’s time, unfortunately, there was no fiscal mechanism to force down rents to market levels. The increasing speculation in land forced up rents, squeezed interest and wages, and deterred manufacturers from investing money in power looms. By forcing rents beyond the point of merely appropriating the economic surplus, they were effectively demanding a slice of future output in the current period. This inherently unstable situation must, as it did, lead to a general recession.
The insights which we can extract from a review of William Radcliffe’s record of the cotton industry have not been exhausted. We will allude to one more, for it has significant general relevance. In 1815, with the end of the Napoleonic war, the landlords were anxious about the prospect of a decline