(Note A.)—Absenteeism: Mr. M'CULLOGH's Defence of It Examined

The question of Irish Absenteeism has, for a long time, been discussed by politicians and political economists; some maintaining it to be a great evil; some admitting its injurious effects, but in a modified way only; whilst others, with Mr. J.R. M'Culloch, maintain that, by the principles of economic science, Absenteeism is no evil at all.

Apart altogether from the views of political economists, there are certain evils which result from Absenteeism. 1. There is that estrangement between landlord and tenant, which must naturally exist in cases where the tenant seldom or never sees his landlord; has no intercourse with him; is unacquainted with the sound of his voice, from which no word of kindly encouragement ever reaches him; never hears of him, except when the agent demands, in his name, the rent, which is to be sent to England, or to whatever foreign country he may reside in. Even though the argument were true, that his living out of Ireland inflicts no real pecuniary loss upon Ireland, the impression on the tenant's mind is different, and helps to increase the estrangement between him and his landlord, which so generally exists, and which all must lament as an evil. 2. It is an old and a commonly accepted adage, that affairs thrive under the master's eye, and that those things which he neither sees nor takes an interest in exhibit the signs of neglect. As a resident landlord rides over his property, improvements will frequently suggest themselves to his mind; some of them often easily and inexpensively done, although important from their usefulness. He is sure, at any rate, to know the condition of his estate, and he can, with a just discernment, encourage the industrious, help the weak, urge forward the slow, and have a friendly word for all, whether he approves, or is obliged to find fault. The value of this mode of dealing with the people cannot be over estimated, especially in Ireland, where a kind word from a superior goes a great way. An agent manages the property of an absentee. There are many such agents who are just and considerate, but the traditional character of an Irish land agent, resulting from long experience, is, that he is a haughty oppressive man, who has other interests to serve besides those of his employer; and who makes his employer's interests subservient to his own. Whether he thinks it a duty he owes his master, or that he believes it gives himself importance, an Irish land agent is frequently in the habit of acting in a proud, browbeating manner towards the tenants under him. I have seen a most respectable body of tenants, with their rent in their hands, stand with cowed and timid looks in the agent's office; they kept at as great a distance from him as space would allow; they were afraid to tender the rent, and yet they feared to hang back too long, as either course might bring down the ire of the great man upon them. His looks, his gestures, the few words he condescended to utter—even his manner of counting bank notes, which he thumped and turned over with a sort of insolent contempt,—all went to prove that those fears were not ill-founded. The scene forcibly reminded me of a group of children in the Zoological gardens, before the cage of one of the fiercer animals; they view him with awe, and, on account of his size and spots, with a certain admiration, but they are afraid of their lives to approach him. It is usual for a resident landlord to have an agent too, but he is subject to the personal observation, and under the immediate control of the landlord, who can be easily appealed to, if a misunderstanding should arise between him and any tenant. It is always a great satisfaction to the weaker party to have an opportunity of going, as they say, to the "fountain-head." It is bringing one's case before a higher tribunal when one feels he has not got justice in the court below. 3. Whether it is or is not the fact, that the landlord by living at home and spending his fortune amongst his people adds to the aggregate wealth of the nation, it is certain that his doing so is a partial and immediate good to the locality in which he resides. Often does the Irish peasant point to the decayed village, and the crumbling mansion, as evidences that the owner of the soil is an Absentee. 4. There is a special reason given by at least one English writer, why Irish landlords ought to be resident, and thus endeavour to gain the confidence of their tenants; and that is, because nine-tenths of the Irish estates have been confiscated from the native owners, and are held by men who differ from their tenants in country and religion; and their non-residence, and consequent want of sympathy with the people, perpetuates in the minds of those people the bitter traditions of rapine and conquest; so that, instead of feeling they are the tenants of kind, considerate landlords, they are apt to regard themselves, in some sort, as the despised slaves of conquerors, who, if they do not still look upon them as "Irish enemies," do not certainly entertain for them the feelings which ought to find a place in the breasts of landlords who look upon their tenants as something more than mere rent producers.

So much for the moral and social aspect of Absenteeism. Now, let us examine, a little, the ground taken up by Mr. J.R. M'Culloch, who maintains that, according to the accepted principles of political economy, the fact of Irish landed proprietors residing out of their country inflicts no injury upon it. For Mr. Prior's views on Absenteeism he manifests great contempt, but treats himself with a kind of respectful commiseration, as being, in spite of his ignorance of political economy, "a gentleman in other respect—of great candour and good sense." He quotes his assertion that the aggregate of the absentee rents, amounting then to £627,799 annually, was entirely sent to the Absentee landlords in treasure, "which," continues Mr. Prior, "is so great a burthen upon Ireland that I believe there is not in history an instance of any one country paying so large a yearly tribute (!) to another." The parenthetic note of astonishment is Mr. M'Culloch's, who says, with regard to this passage, "it would really seem that in this, as in some other things, the universality and intensity of belief has been directly as the folly and falsehood of the thing believed."

It was in his examination in 1825, before a Parliamentary Committee, that Mr. M'Culloch put forward his views on Irish Absenteeism. He was asked this question: "Supposing the largest export of Ireland were in live cattle, and that a considerable portion of rent had been remitted in that manner, does not such a mode of producing the means of paying rent, contribute less to the improvement of the poor than any extensive employment of them in labour would produce?" He replies: "Unless the means of paying rent are changed when the landlord goes home, his residence can have no effect whatever." "Would not," he is asked, "the population of the country be benefited by the expenditure among them of a certain portion of the rent, which (if he had been absent) would have been remitted (to England)?" "No," he replies, "I do not see how it could be benefited in the least. If you have a certain value laid out against Irish commodities in the one case, you will have a certain value laid out against them in the other. The cattle are either exported to England or they stay at home. If they are exported the landlord will obtain an equivalent for them in English commodities; it they are not he will obtain an equivalent for them in Irish commodities; so that in both cases the landlord lives on the cattle, or on the value of the cattle: and whether he lives in Ireland or England there is obviously just the very same amount of commodities for the people of Ireland to subsist upon." Mr. Senior exposes this fallacy in the following words; "This reasoning assumes that the landlord, whilst resident in Ireland, himself personally devours all the cattle produced on his estates; for, on no other supposition can there be the very same amount of commodities for the people of Ireland to subsist upon, whether their cattle are retained in Ireland or exported." It may be said with equal truth, that to assume, as Mr. M'Culloch assumes, the Irish absentee's residence in England to be of no advantage to the people there, is assuming that "himself personally" devours all the cattle and corn sent to him in the shape of rent. But the landlord does not in either case devour all the beef and all the corn; by far the greater portion of those products go to house, and clothe, and feed the persons who minister to his various wants.

In the beginning of his Essay on Absenteeism Mr. M'Culloch, referring with apparent satisfaction to his evidence before the Committee, says, "it had been previously established, and is now universally conceded that the gentlemen who consume nothing in their families but what is brought from abroad are quite as good, as useful, and as meritorious subjects as they could be, if, they consume nothing but what is produced at home; and such being the case, it will require a sharper eye than has yet looked at this subject, to discover the great injury which is said to be done by their going abroad."

With the greatest respect for Mr. M'Culloch's skill as a political economist, this proposition has neither been established nor conceded in the unlimited sense in which he here puts it forward. Enthusiastic men, who become enamoured of some favourite theory, are apt to attach too much importance to it—push it too far, and try to fit things into it which it will not contain, without being modified or enlarged. This has been the case with political economists to a remarkable extent; a fact which John Stuart Mill notices and complains of as injurious to the science. The chief flaw in Mr. M'Culloch's apology for Absenteeism (as his essay may well be called) is, that he entirely overlooks the peculiar nature of Irish exports. Those exports consist almost exclusively of raw, or, to use Adam Smith's word, of rude produce; and where this is the case Mr. M'Culloch's principle will not hold without large modifications. Mr. Senior saw this, and, in dealing with Irish Absenteeism he modifies the principle accordingly. In discussing the proximate cause deciding the rate of wages, he lays down as his third proposition, that "It is inconsistent with the prevalent opinion, that the non-residence of landlords, funded proprietors, mortgagees, and other unproductive consumers can be detrimental to the labouring inhabitants of a country which does not export raw produce."

Mr. Senior here affirms Mr. M'Culloch's proposition, quoted above, but with the qualifying clause—"which does not export raw produce." I have italicised this clause because it contains the very exception which makes the general proposition inapplicable to Ireland, and to every country whose chief exports are, like Ireland's, raw produce.

To use the words of Mr. Senior, "If an Irish landlord reside on his estate he requires the services of certain persons, who must be also resident there to minister to his daily wants. He must have servants, gardeners, and, perhaps, gamekeepers. If he build a house, he must employ resident masons and carpenters; part of his furniture he may import, but the greater part of it must be made in his neighbourhood; a portion of his land, or, what comes to the same thing, a portion of his rent, must be employed in producing food, clothing, and shelter for all these persons, and for those who produce that food, clothing, and shelter. If he were to remove to England all these wants would be supplied by Englishmen. The land and capital which was formerly employed in providing the maintenance of Irish labourers, would be employed in producing corn and cattle to be exported to England, to provide the sustenance of English labourers. The whole quantity of commodities appropriated to the use of Irish labourers would be diminished, and that appropriated to the use of English labourers increased." Giving credit for ordinary prudence to the persons employed by resident Irish landlords, they would save a part of their earnings, and the part saved would go to increase the capital of the country; but when the landlords reside in England the moneys so paid away go into the pockets of English servants and mechanics, and their savings are added to the sum of English capital; for it is a fundamental principle of Political Economy that capital and all additions to capital are the result of saving. Writers on Ireland have been long proclaiming with all their might, that the first and greatest want of that country is capital. Half a century ago, when Mr. M'Culloch published his views of Irish Absenteeism, the rents annually paid to our absentee landlords were set down at from four to four and millions of pounds sterling. They have very much increased since, but let us still accept four and a-half millions as the amount. Were the absentee landlords resident, the whole of that rental would not be spent at home, as some of it would go for foreign commodities, such as tea, sugar, wine; but the greater part of it would be spent at home. Now, although the savings of the employees of Irish landlords could not, perhaps, be called large in any one year, yet had those savings gone on from Mr. Prior's time—1729—taking into account the increase of capital by the use of capital,—who can calculate the additions that would have been made to Irish capital, by this means, during so long a period? And as Mr. Mill's first fundamental proposition respecting capital is, that "Industry is limited by capital," who can measure the consequences to Irish industry of the capital lost to it by Absenteeism?

But the soundness of the principle laid down by Mr. M'Culloch as universally received, and which Mr. Senior accepts (with the qualification affecting raw produce) has not passed unchallenged. For greater clearness I shall repeat that principle here. "The gentlemen," says Mr. M'Culloch, "who consume nothing in their families but what is brought from abroad are quite as good, as useful, and as meritorious subjects as they could be if they consume nothing but what is produced at home." And the reason for this is to be found in his Principles of Political Economy where he says that, Foreign commodities are always paid for by British commodities, therefore, the purchase of Foreign commodities encourages British industry as much as the purchase of British commodities" (Principles of Political Economy, p. 152). The important exception to this theorem arising from the nature of the commodities exported and imported has been already dealt with. Let us examine the vital principle of the theorem. "The capital," says Adam Smith, "which is employed in purchasing in one part of the country in order to sell in another, the produce of the industry of that country, generally replaces by every such operation two distinct capitals, that had both been employed in the agriculture or manufactures of that country, and thereby enables them to continue that employment. When it sends out from the residence of the merchant a certain value of commodities it generally brings back in return at least an equal value of other commodities. When both are the produce of domestic industry it necessarily replaces by every such operation two distinct capitals which had both been employed in supporting productive labour, and thereby enables them to continue that support. The capital which sends Scotch manufactures to London, and brings back English corn and manufactures to Edinburgh, necessarily replaces, by every such operation, two British capitals, which had both been employed in the agriculture or manufactures of Great Britain.

"The capital employed in purchasing foreign goods for home consumption, when this purchase is made with the produce of domestic industry, replaces too, by every such operation, two distinct capitals; but one of them only is employed in supporting domestic industry. The capital which sends British goods to Portugal, and brings back Portuguese goods to Great Britain, replaces, by every such operation, only one British capital. The other is a Portuguese one. Though the returns, therefore, of the foreign trade of consumption should be as quick as those of the home trade, the capital employed in it will give but one half of the encouragement to the industry or productive labour of the country.

"But the returns of the foreign trade of consumption are very seldom so quick as those of the home trade. The returns of the home trade generally come in before the end of the year, and sometimes three or four times in the year. The returns of the foreign trade of consumption seldom come in before the end of the year, and sometimes not till after two or three years. A capital, therefore, employed in the home trade, will sometimes make twelve operations, or be sent out and returned twelve times, before a capital employed in the foreign trade of consumption has made one. If the capitals are equal, therefore, the one will give four and twenty times more encouragement and support to the industry of the country than the other."

If this position of Adam Smith's be tenable, it cannot be true, that the purchase of foreign commodities encourages British industry as much as the purchase of British commodities. In order to have a clear idea of his reasoning it will be useful to repeat some of the leading principles which regulate and explain the nature of capital. 1. Capital is usually defined to be the accumulated stock of the produce of labour. A definition which, if not completely satisfactory, is sufficiently correct for our present purpose. 2. Capital is essential to production. 3. Capital employed in production is wholly consumed in the process of production. "Capital," as Mill, and in fact as every political economist says, "is all consumed; though not by the capitalist. Part is exchanged for tools or machinery, which are worn out by use; part for seed or materials, which are destroyed as such, by by being sown or wrought up, and destroyed altogether by the consumption of the ultimate product. The remainder is paid to labourers, who consume it for their daily wants; or if they, in their turn, save any part, this also is not generally speaking, hoarded, but (through savings banks, benefit clubs, or some other channel) re-employed as capital, and consumed." These principles open the way to the understanding of what Adam Smith means by the replacing of capital.

Capital is consumed in production, and must be replaced. How is it replaced? By the new product. It reappears in the new product; in the production of which it was consumed. Moreover it reappears with a profit to the capitalist, who has employed it for the purposes of production. Let us hear well in mind that the capital consumed in production is consumed, not by the capitalist himself, but in the purchase of various things necessary for production, and in wages. All this capital which is employed and consumed in production, is the net spendable income of the producing nation. And it is spent in food, raiment, lodging, and other necessaries; and of course in luxuries too; and when it is spent, or "consumed," as the word is, the nation, so far from being the poorer, has grown richer; because the capital consumed has reappeared, or, as Adam Smith says, has been replaced by the new product, and, in the usual course, with an increase in the form of profit.

It is plain, then, according to this reasoning, that for every portion of capital consumed in production, a new capital re-appears. If two capitals are consumed in production, two new capitals reappear in their place: if three are consumed, three reappear; and so on. Let us now go back to Adam Smith's words quoted above: "The capital which sends British goods to Portugal, and brings back Portuguese goods to Great Britain, replaces, by every such operation, only one British capital. The other is a Portuguese one. Though the returns, therefore, of the foreign trade of consumption should be as quick as those of the home trade, the capital employed in it will give but one half of the encouragement to the industry or productive labour of the country." Applying this principle to the subject in hand, we find that Absenteeism inflicts an injury upon Ireland, in addition to, and quite distinct from the one, which results from the nature of the commodities sent by Ireland to England. An Irish absentee in London buys British commodities with Irish commodities. In doing so, he replaces two capitals, one British and one Irish; but if he resides in Ireland, and buys Irish commodities with Irish commodities, he replaces two Irish capitals instead of one, as happens, when he resides in England; and thus gives double the encouragement to Irish industry which he would give to it if he resided in England.

"The entire price or gross value of every home-made article constitutes net revenue, net income to British subjects. Not a portion of the value, but the whole value, is resolvable into net income and revenue maintaining British families, and creating and sustaining British markets. Purchase British articles with British articles, and you create two such aggregate values, and two such markets for British industry. Whereas, on the contrary, the entire value of every foreign article imported is net income to the foreigner and sustains foreign markets. Purchase foreign articles with British articles, and you only create one value for your own benefit instead of creating two, and only one market for British industry instead of two. You lose the acquisition of the entire value on one side, which you might have had, as well as on the other, and you lose a market for British industry to the full extent of that gross value."

If the principle laid down by Adam Smith were unsound, that the man who buys British commodities with British commodities replaces two British capitals, whilst he who buys foreign commodities with British commodities replaces but one British capital, Mr. M'Culloch had an inviting opportunity of exposing its unsoundness in the edition of The Wealth of Nations edited by him; and in fact he has written an elaborate note on the passage, but, as it seems to me, without proving the doctrine which it enunciates to be incorrect. Here is the portion of Mr. M'Culloch's footnote which deals with the subject: "Dr. Smith does not say that the importation of foreign commodities has any tendency to force capital abroad; and unless it did this, it is plain that his statement with respect to the effect of changing a home for a foreign trade of consumption, is quite inconsistent with the fundamental principle he has elsewhere established, that industry is always in proportion to the amount of capital." From this, his opening sentence, it would seem that Mr. M'Culloch mistook the force and tendancy of Adam Smith's reasoning, who does not, in the passage annotated by Mr. M'Culloch, advocate the change of a foreign for a home trade of consumption. He only goes to prove that a home trade is more profitable to a nation than a foreign one, in as much as it replaces two home capitals, whilst the foreign trade replaces but one. For a country with vast manufactories, like Great Britain, the home trade would not be at all sufficient, but—as far as it goes—it is double as advantageous as the foreign trade. Adam Smith seeks to prove no more. But Mr. M'Culloch meets the question more directly as follows: "Suppose, for the sake of illustration, that the case put by Dr. Smith actually occurs—that the Scotch manufactures are sent to Portugal; it is obvious, if the same demand continue in London for these manufactures as before they began to be sent abroad, that additional capital and labourers will be required to furnish commodities for both the London and Portuguese markets. In this case, therefore, instead of the industry of the country sustaining any diminution from the export of Scotch manufactures to a foreign country, it would evidently be augmented, and a new field would be discovered for the profitable employment of stock."

As this reasoning is only a continuation of the misconception of Adam Smith's meaning just noticed, a very few words upon it will suffice. If the same demand continue in London for the Scotch manufactures as before they were sent to Portugal, or elsewhere, the Scotch manufacturers will be only too glad to continue to supply London and Portugal too; and the trade of the nation will be expanded; and the capital of the nation will be augmented by the foreign trade, because by that foreign trade British capital is replaced, and with a profit; but surely this does not in any way disturb the principle that the Scotch manufactures sold in London replace, or re-produce two British capitals, whilst those sold in Portugal replace, or reproduce only one.

From these considerations on Absenteeism, it may, I think, be fairly inferred that popular belief regarding its injurious effects is well founded, although misconceptions may be entertained as to the precise way in which the injury occurs.