CHAPTER 34.

On the Exportation of Machinery

437. A few years only have elapsed, since our workmen were
not merely prohibited by Act of Parliament from transporting
themselves to countries in which their industry would produce for
them higher wages, but were forbidden to export the greater part
of the machinery which they were employed to manufacture at home.
The reason assigned for this prohibition was, the apprehension
that foreigners might av ail themselves of our improved
machinery, and thus compete with our manufacturers. It was, in
fact, a sacrifice of the interests of one class of persons, the
makers of machinery, for the imagined benefit of another class,
those who use it. Now, independently of the impolicy of
interfering, without necessity, between these two classes, it may
be observed, that the first class, or the makers of machinery,
are, as a body, far more intelligent than those who only use it;
and though, at present, they are not nearly so numerous, yet,
when the removal of the prohibition which cramps their ingenuity
shall have had time to operate, there appears good reason to
believe, that their number will be greatly increased, and may, in
time, even surpass that of those who use machinery.

438. The advocates of these prohibitions in England seem to
rely greatly upon the possibility of preventing the knowledge of
new contrivances from being conveyed to other countries; and they
take much too limited a view of the possible, and even probable,
improvements in mechanics.

439. For the purpose of examining this question, let us
consider the case of two manufacturers of the same article, one
situated in a country in which labour is very cheap, the
machinery bad, and the modes of transport slow and expensive; the
other engaged in manufacturing in a country in which the price of
labour is very high, the machinery excellent, and the means of
transport expeditious and economical. Let them both send their
produce to the same market, and let each receive such a price as
shall give to him the profit ordinarily produced by capital in
his own country. It is almost certain that in such circumstances
the first improvement in machinery will occur in the country
which is most advanced in civilization; because, even admitting
that the ingenuity to contrive were the same in the two
countries, the means of execution are very different. The effect
of improved machinery in the rich country will be perceived in
the common market, by a small fall in the price of the
manufactured article. This will be the first intimation to the
manufacturer of the poor country, who will endeavour to meet the
diminution in the selling price of his article by increased
industry and economy in his factory, but he will soon find that
this remedy is temporary, and that the market-price continues to
fall. He will thus be induced to examine the rival fabric, in
order to detect, from its structure, any improved mode of making
it. If, as would most usually happen, he should be unsuccessful
in this attempt, he must endeavour to contrive improvements in
his own machinery, or to acquire information respecting those
which have been made in the factories of the richer country.
Perhaps after an ineffectual attempt to obtain by letters the
information he requires, he sets out to visit in person the
factories of his competitors. To a foreigner and rival
manufacturer such establishments are not easily accessible, and
the more recent the improvements, the less likely he will be to
gain access to them. His next step, therefore, will be to obtain
the knowledge he is in search of from the workmen employed in
using or making the machines. Without drawings, or an examination
of the machines themselves, this process will be slow and
tedious; and he will be liable, after all, to be deceived by
artful and designing workmen, and be exposed to many chances of
failure. But suppose he returns to his own country with perfect
drawings and instructions, he must then begin to construct his
improved machines: and these he cannot execute either so cheaply
or so well as his rivals in the richer countries. But after the
lapse of some time, we shall suppose the machines thus
laboriously improved, to be at last completed, and in working
order.

440. Let us now consider what will have occurred to the
manufacturer in the rich country. He will, in the first instance,
have realized a profit by supplying the home market, at the usual
price, with an article which it costs him less to produce; he
will then reduce the price both in the home and foreign market,
in order to produce a more extended sale. It is in this stage
that the manufacturer in the poor country first feels the effect
of the competition; and if we suppose only two or three years to
elapse between the first application of the new improvement in
the rich country, and the commencement of its employment in the
poor country, yet will the manufacturer who contrived the
improvement (even supposing that during the whole of this time he
has made only one step) have realized so large a portion of the
outlay which it required, that he can afford to make a much
greater reduction in the price of his produce, and thus to render
the gains of his rivals quite inferior to his own.

441. It is contended that by admitting the exportation of
machinery, foreign manufacturers will be supplied with machines
equal to our own. The first answer which presents itself to this
argument is supplied by almost the whole of the present volume;
That in order to succeed in a manufacture, it is necessary not
merely to possess good machinery, but that the domestic economy
of the factory should be most carefully regulated.

The truth, as well as the importance of this principle, is so
well established in the Report of a Committee of the House of
Commons 'On the Export of Tools and Machinery', that I shall
avail myself of the opinions and evidence there stated, before I
offer any observations of my own:

Supposing, indeed, that the same machinery which is used in
England could be obtained on the Continent, it is the opinion of
some of the most intelligent of the witnesses that a want of
arrangement in foreign manufactories, of division of labour in
their work, of skill and perseverance in their workmen, and of
enterprise in the masters, together with the comparatively low
estimation in which the master manufacturers are held on the
Continent, and with the comparative want of capital, and of many
other advantageous circumstances detailed in the evidence, would
prevent foreigners from interfering in any great degree by
competition with our principal manufacturers; on which subject
the Committee submit the following evidence as worthy the
attention of the House:

I would ask whether, upon the whole, you consider any danger
likely to arise to our manufactures from competition, even if the
French were supplied with machinery equally good and cheap as our
own? They will always be behind us until their general habits
approximate to ours; and they must be behind us for many reasons
that I have before given.

Why must they be behind us? One other reason is, that a
cotton manufacturer who left Manchester seven years ago, would be
driven out of the market by the men who are now living in it,
provided his knowledge had not kept pace with those who have been
during that time constantly profiting by the progressive
improvements that have taken place in that period: this
progressive knowledge and experience is our great power and
advantage.

It should also be observed, that the constant, nay, almost
daily, improvements which take place in our machinery itself, as
well as in the mode of its application, require that all those
means and advantages alluded to above should be in constant
operation: and that, in the opinion of several of the witnesses,
although Europe were possessed of every tool now used in the
United Kingdom, along with the assistance of English artisans,
which she may have in any number, yet, from the natural and
acquired advantages possessed by this country, the manufacturers
of the United Kingdom would for ages continue to retain the
superiority they now enjoy. It is indeed the opinion of many,
that if the exportation of machinery were permitted, the
exportation would often consist of those tools and machines,
which, although already superseded by new inventions, still
continue to be employed, from want of opportunity to get rid of
them: to the detriment, in many instances, of the trade and
manufactures of the country: and it is matter worthy of
consideration, and fully borne out by the evidence, that by such
increased foreign demand for machinery, the ingenuity and skill
of our workmen would have greater scope; and that, important as
the improvements in machinery have lately been, they might, under
such circumstances, be fairly expected to increase to a degree
beyond all precedent.

The many important facilities for the construction of
machines and the manufacturing of commodities which we possess,
are enjoyed by no other country; nor is it likely that any
country can enjoy them to an equal extent for an indefinite
period. It is admitted by everyone, that our skill is unrivalled;
the industry and power of our people unequalled; their
ingenuity, as displayed in the continuol improvement in
machinery, and production of commodities, without parallel; and
apparently, without limit. The freedom which, under our
government, every man has, to use his capital, his labour, and
his talents, in the manner most conducive to his interests, is an
inestimable advantage; canals are cut, and railroads constructed,
by the voluntary association of persons whose local knowledge
enables them to place them in the most desirable situations; and
these great advantages cannot exist under less free governments.
These circumstances, when taken together, give such a decided
superiority to our people, that no injurious rivalry, either in
the construction of machinery or the manufacture of commodities,
can reasonably be anticipated.

442. But, even if it were desirable to prevent the
exportation of a certain class of machinery, it is abdundantly
evident, that, whilst the exportation of other classes is
allowed, it is impossible to prevent the forbidden one from being
smuggled out; and that, in point of fact, the additional risk has
been well calculated by the smuggler.

443. It would appear, also, from various circumstances, that
the immediate exportation of improved machinery is not quite so
certain as has been assumed; and that the powerful principle of
self-interest will urge the makers of it, rather to push the sale
in a different direction. When a great maker of machinery has
contrived a new machine for any particular process, or has made
some great improvement upon those in common use, to whom will he
naturally apply for the purpose of selling his new machines?
Undoubtedly, in by far the majority of cases, to his nearest and
best customers, those to whom he has immediate and personal
access, and whose capability to fulfil any contract is best known
to him. With these, he will communicate and offer to take their
orders for the new machine; nor will he think of writing to
foreign customers, so long as he finds the home demand sufficient
to employ the whole force of his establishment. Thus, therefore,
the machine-maker is himself interested in giving the first
advantage of any new improvement to his own countrymen.

444. In point of fact, the machine-makers in London greatly
prefer home orders, and do usually charge an additional price to
their foreign customers. Even the measure of this preference may
be found in the evidence before the Committee on the Export of
Machinery. It is differently estimated by various engineers; but
appears to vary from five up to twenty-five per cent on the
amount of the order. The reasons are: 1. If the machinery be
complicated, one of the best workmen, well accustomed to the mode
of work in the factory, must be sent out to put it up; and there
is always a considerable chance of his having offers that will
induce him to remain abroad. 2. If the work be of a more simple
kind, and can be put up without the help of an English workman,
yet for the credit of the house which supplies it, and to prevent
the accidents likely to occur from the want of sufficient
instruction in those who use it, the parts are frequently made
stronger, and examined more attentively, than they would be for
an English purchaser. Any defect or accident also would be
attended with more expense to repair, if it occurred abroad, than
in England.

445. The class of workmen who make machinery, possess much
more skill, and are paid much more highly than that class who
merely use it; and, if a free exportation were allowed, the more
valuable class would, undoubtedly, be greatly increased; for,
notwithstanding the high rate of wages, there is no country in
whichit can at this moment be made, either so well or so cheaply
as in England. We might, therefore, supply the whole world with
machinery, at an evident advantage, both to ourselves and our
customers. In Manchester, and the surrounding district, many
thousand men are wholly occupied in making the machinery, which
gives employment to many hundred thousands who use it; but the
period is not very remote, when the whole number of those who
used machines, was not greater than the number of those who at
present manufacture them. Hence, then, if England should ever
become a great exporter of machinery, she would necessarily
contain a large class of workmen, to whom skill would be
indispensable, and, consequently, to whom high wages would be
paid; and although her manufacturers might probably be
comparatively fewer in number, yet they would undoubtedly have
the advantage of being the first to derive profit from
improvement. Under such circumstances, any diminution in the
demand for machinery, would, in the first instance, be felt by a
class much better able to meet it, than that which now suffers
upon every check in the consumption of manufactured goods; and
the resulting misery would therefore assume a mitigated
character.

446. It has been feared, that when other countries have
purchased our machines, they will cease to demand new ones: but
the statement which has been given of the usual progress in the
improvement of the machinery employed in any manufacture, and of
the average time which elapses before it is superseded by such
improvements, is a complete reply to this objection. If our
customers abroad did not adopt the new machinery contrived by us
as soon as they could procure it, then our manufacturers would
extend their establishments, and undersell their rivals in their
own markets.

447. It may also be urged, that in each kind of machinery a
maximum of perfection may be imagined, beyond which it is
impossible to advance; and certainly the last advances are
usually the smallest when compared with those which precede them:
but it should be observed, that these advances are generally made
when the number of machines in employment is already large; and
when, consequently, their effects on the power of producing are
very considerable. But though it should be admitted that any one
species of machinery may, after a long period, arrive at a degree
of perfection which would render further improvement nearly
hopeless, yet it is impossible to suppose that this can be the
case with respect to all kinds of mechanism. In fact the limit of
improvement is rarely approached, except in extensive branches of
national manufactures; and the number of such branches is, even
at present, very small.

448. Another argument in favour of the exportation of
machinery, is, that it would facilitate the transfer of capital
to any more advantageous mode of employment which might present
itself. If the exportation of machinery were permitted, there
would doubtless arise a new and increased demand; and, supposing
any particular branch of our manufactures to cease to produce the
average rate of profit, the loss to the capitalist would be much
less, if a market were open for the sale of his machinery to
customers more favourably circumstanced for its employment. If,
on the other hand, new improvements in machinery should be
imagined, the manufacturer would be more readily enabled to carry
them into effect, by having the foreign market opened where he
could sell his old machines. The fact, that England can,
notwithstanding her taxation and her high rate of wages, actually
undersell other nations, seems to be well established: and it
appears to depend on the superior goodness and cheapness of those
raw materials of machinery the metals--on the excellence of the
tools--and on the admirable arrangements of the domestic economy
of our factories.

449. The different degrees of facility with which capital can
be transferred from one mode of employment to another, has an
important effect on the rate of profits in different trades and
in different countries. Supposing all the other causes which
influence the rate of profit at any period, to act equally on
capital employed in different occupations, yet the real rates of
profit would soon alter, on account of the different degrees of
loss incurred by removing the capital from one mode of investment
to another, or of any variation in the action of those causes.

450. This principle will appear more clearly by taking an
example. Let two capitalists have embarked L10,000 each, in two
trades: A in supplying a district with water, by means of a
steam-engine and iron pipes; B in manufacturing bobbin net. The
capital of A will be expended in building a house and erecting a
steam-engine, which costs, we shall suppose, L3000; and in laying
down iron pipes to supply his customers, costing L7000. The
greatest part of this latter expense is payment for labour, and
if the pipes were to be taken up, the damage arising from that
operation would render them of little value, except as old metal;
whilst the expense of their removal would be considerable. Let
us, therefore, suppose, that if A were obliged to give up his
trade, he could realize only L4000 by the sale of his stock. Let
us suppose again that B, by the sale of his bobbin net factory
and machinery, could realize L8000 and let the usual profit on
the capital employed by each party be the same, say 20 per cent:
then we have

Capital invested; Money which would arise from sale of machinery;
Annual rate of profit per cent; Income

L L L L
Water works 10,000 4000 20 2000
Bobbin net Factory 10,000 8000 20 2000


Now, if, from competition, or any other cause, the rate of
profit arising from water-works should fall to 20 per cent, that
circumstance would not cause a transfer of capital from the
water-works to bobbin net making; because the reduced income from
the water-works, L1000 per annum, would still be greater than
that produced by investing L4000, (the whole sum arising from the
sale of the materials of the water-works), in a bobbin net
factory, which sum, at 20 per cent, would yield only L800 per
annum. In fact, the rate of profit, arising from the water-works,
must fall to less than 8 per cent before the proprietor could
increase his income by removing his capital into the bobbin net
trade.

451. In any enquiry into the probability of the injury
arising to our manufacturers from the competition of foreign
countries, particular regard should be had to the facilities of
transport, and to the existence in our own country of a mass of
capital in roads, canals, machinery, etc., the greater portion of
which may fairly be considered as having repaid the expense of
its outlay, and also to the cheap rate at which the abundance of
our fuel enables us to produce iron, the basis of almost all
machinery. It has been justly remarked by M. de Villefosse, in
the memoir before alluded to, that Ce que l'on nomme en France,
la question du prix des fers, est, a proprement parler, la
question du prix des bois, et la question, des moyens de
communications interieures par les routes, fleuves, rivieres et
canaux.

The price of iron in various countries in Europe has been
stated in section 215 of the present volume; and it appears, that
in England it is produced at the least expense, and in France at
the greatest. The length of the roads which cover England and
Wales may be estimated roughly at twenty thousand miles of
turnpike, and one hundred thousand miles of road not turnpike.
The internal water communication of England and France, as far as
I have been able to collect information on the subject, may be
stated as follows:

In France

Miles in length

Navigable rivers 4668
Navigable canals 915.5
Navigable canals in progress of execution (1824) 1388

6971.5 (1*)

But, if we reduce these numbers in the proportion of 3.7 to 1,
which is the relative area of France as compared with England and
Wales, then we shall have the following comparison:

Portion of France equal in size to England and Wales

England(2*)
Miles Miles

Navigable rivers 1275.5 1261.6
Tidal navigation(3*) 545.9
Canals, direct 2023.5
Canals, branch 150.6

2174.1 2174.1 247.4
Canals commenced --- 375.1

Total 3995.5 1884.1

Population in 1831 13,894,500 8,608,500


This comparison, between the internal communications of the
two countries, is not offered as complete; nor is it a fair view,
to contrast the wealthiest portion of one country with the whole
of the other: but it is inserted with the hope of inducing those
who possess more extensive information on the subject, to supply
the facts on which a better comparison may be instituted. The
information to be added, would consist of the number of miles in
each country, of seacoast, of public roads, of railroads, of
railroads on which locomotive engines are used.

452. One point of view, in which rapid modes of conveyance
increase the power of a country, deserves attention. On the
Manchester Railroad, for example, above half a million of persons
travel annually; and supposing each person to save only one hour
in the time of transit, between Manchester and Liverpool, a
saving of five hundred thousand hours, or of fifty thousand
working days, of ten hours each, is effected. Now this is
equivalent to an addition to the actual power of the country of
one hundred and sixty-seven men, without increasing the quantity
of food consumed; and it should also be remarked, that the time
of the class of men thus supplied, is far more valuable than that
of mere labourers.

NOTES:

1. This table is extracted and reduced from one of Ravinet,
Dictionnaire Hydrographique. 2 vols. 8vo. Paris. 1824.

2. I am indebted to F. Page. Esq. of Speen, for that portion of
this table which relates to the internal navigation of England.
Those only who have themselves collected statistical details can
be aware of the expense of time and labour, of which the few
lines it contains are the result.

3. The tidal navigation includes: the Thames, from the mouth of
the Medway; the Severn, from the Holmes: the Trent, from Trent
Falls in the Humber; the Mersey from Runcorn Gap.