by Karl Polanyi
On the urban scene the effects of the new scourge of fluctuating employment were, of course, manifest. Industry was generally regarded as a blind-alley occupation. “Workmen who are to-day fully employed may be to-morrow in the streets begging for bread …,” wrote David Davies and added: “Uncertainty of labour conditions is the most vicious result of these new innovations.” “When a Town employed in a Manufactory is deprived of it, the inhabitants are as it were struck with a palsy, and become instantly a rent-charge upon the Parish; but the mischief does not die with that generation.…” For in the meantime division of labor wreaks its vengeance: the unemployed artisan returns in vain to his village for “the weaver can turn his hand to nothing.” The fatal irreversibility of urbanization hinged upon this simple fact which Adam Smith foresaw when he described the industrial worker as intellectually the inferior of the poorest tiller of the soil, for the latter can usually take himself to any job. Still, up to the time Adam Smith published his Wealth of Nations, pauperism was not increasing alarmingly.
In the next two decades the picture suddenly changed. In his Thoughts and Details on Scarcity, which Burke submitted to Pitt in 1795, the author admitted that in spite of the general progress there had been a “last bad cycle of twenty years.” Indeed, in the decade following upon the Seven Years’ War (1763), unemployment increased noticeably, as the rise in outdoor relief showed. It happened for the first time that a boom in trade was remarked to have been accompanied by signs of growing distress of the poor. This apparent contradiction was destined to become to the next generation of Western humanity the most perplexing of all the recurrent phenomena in social life. The specter of overpopulation was beginning to haunt people’s minds. Joseph Townsend warned in his Dissertation on the Poor Laws: “Speculation apart, it is a fact, that in England, we have more than we can feed, and many more than we can profitably employ under the present system of law.” Adam Smith, in 1776, had been reflecting the mood of quiet progress. Townsend, writing only ten years later, was already conscious of a groundswell.
However, many things had to happen before (only five years later) a man as removed from politics, as successful, and as matter-of-fact as the Scotch bridge-builder, Telford, could burst out in the bitter complaint that little change is to be expected from the ordinary course of government, and that revolution was the only hope. A single copy of Paine’s Rights of Man mailed by Telford to his home village caused a riot to break out there. Paris was catalyzing the European fermentation.
In Canning’s conviction the Poor Law saved England from a revolution. He was primarily thinking of the 1790s and the French Wars. The new outburst of enclosures further depressed the standards of the poor in the countryside. J. H. Clapham, a defender of these enclosures, conceded that the “coincidence of the area in which wages were most systematically augmented from the rates with the area of maximum recent enclosures is striking.” In other words, but for aid-in-wages the poor would have sunk below the starvation level in wide areas of rural England. Rick-burning was rampant. The Popgun Plot found wide credence. Rioting was frequent; rumors of rioting very much more so. In Hampshire—and not there alone—the Courts threatened death for any attempt at “forcibly lowering the price of commodities, either at market or on the road”; yet simultaneously, the magistrates of that same county urgently pressed for the general granting of subsidies to wages. Clearly, the time for preventive action had come.
But why, of all courses of action, was that one chosen which appeared later as the most impracticable of all? Let us consider the situation and the interests involved. Squire and parson ruled the village. Townsend summed up the situation by saying that the landed gentleman keeps manufactures “at a convenient distance” because “he considers that manufactures fluctuate; that the benefit which he is to derive from them will not bear proportion with the burthen which it must entail upon his property.…” The burden consisted mainly in two seemingly contradictory effects of manufactures, namely, the increase in pauperism and the rise in wages. But the two were contradictory only if the existence of a competitive labor market was assumed, which would, of course, have tended to diminish unemployment by reducing the wages of the employed. In the absence of such a market—and the Act of Settlement was still in force—pauperism and wages might rise simultaneously. Under such conditions the “social cost” of urban unemployment was mainly borne by the home village to which the out-of-work would often repair. High wages in the towns were a still greater burden on rural economy. Agricultural wages were more than the farmer could carry, though less than the laborer could subsist on. In the long run, agriculture could not compete with town wages. On the other hand, there was general agreement that the Act of Settlement should be repealed, or at least loosened, so as to help laborers to find employment and employers to find laborers. This, it was felt, would increase the productivity of labor all round and, incidentally, diminish the real burden of wages. But the immediate question of the wage differential between town and village would obviously become even more pressing for the village by allowing wages to “find their own level.” The flux and reflux of industrial employment alternating with spasms of unemployment would dislocate rural communities more than ever. A dam had to be erected to protect the village from the flood of rising wages. Methods had to be found which would protect the rural setting against social dislocation, reinforce traditional authority, prevent the draining off of rural labor, and raise agricultural wages without overburdening the farmer. Such a device was the Speenhamland Law. Shoved into the turbulent waters of the Industrial Revolution, it was bound to create an economic vortex. However, its social implications met the situation as judged by the ruling village interest, the squire’s.
From the point of view of Poor Law administration, Speenhamland was a grievously retrogressive step. The experience of 250 years had shown that the parish was too small a unit for Poor Law administration, since no treatment of this matter was adequate which failed to distinguish between the able-bodied unemployed on the one hand, the aged, infirm, and children on the other. It was as if a township today attempted to deal singlehanded with unemployment insurance, or as if such an insurance were mixed up with the care for the aged. Accordingly, only in those short periods when the administration of the Poor Law was both national and differentiated could it be more or less satisfactory. Such a period was that from 1590 to 1640, under Burleigh and Laud, when the Crown handled the Poor Law through the justices of peace, and an ambitious scheme of erecting poorhouses, together with the enforcement of labor, was initiated. But the Commonwealth period destroyed again what was now denounced as the personal rule of the Crown, and the Restoration, ironically enough, completed the work of the Commonwealth. The Act of Settlement of 1662 restricted the Poor Law to the parish basis, and legislation paid but scant attention to pauperism up to the third decade of the eighteenth century. In 1722, at last, efforts at differentiation set in; workhouses were to be built by unions of parishes, as distinct from local poorhouses; and occasional outdoor relief was permitted, as the workhouse would now provide a test of need. In 1782, with Gilbert’s Act, a long step was taken to expand the units of administration by encouraging the setting up of parish unions; at the same time it was urged that parishes find employment for the able-bodied in the neighborhood. Such a policy was to be supplemented by the granting of outdoor relief and even of aid-in-wages, in order to diminish the cost of relief to the able-bodied. Although the setting up of unions of parishes was permissive, not mandatory, it meant an advance toward the larger unit of administration and the differentiation of the various categories of the relieved poor. Thus in spite of the deficiencies of the system, Gilbert’s Act represented an attempt in the right direction, and as long as outdoor relief and aid-in-wages were merely subsidiary to positive social legislation, they need not have been fatal to a rational solution. Speenhamland put a stop to reform. By making outdoor relief and aid-in-wages general, it did not (as has been falsely asserted) follow up the line of
Gilbert’s Act, but completely reversed its tendency and actually demolished the whole system of the Elizabethan Poor Law. The laboriously established distinction between workhouse and poorhouse became meaningless; the various categories of paupers and able-bodied unemployed now tended to fuse into one indiscriminate mass of dependent poverty. The opposite of a process of differentiation set in: the workhouse merged into the poorhouse, the poorhouse itself tended more and more to disappear; and the parish was again made the sole and final unit in this veritable masterpiece of institutional degeneration.
The supremacy of squire and parson was even enhanced in consequence of Speenhamland, if such a thing was at all possible. The “undistinguishing benevolence of power,” of which the overseers of the poor complained, was at its best in that role of “Tory socialism” in which the justices of peace swayed the benevolent power, while the brunt of the rates was borne by the rural middle class. The bulk of yeomanry had long vanished in the vicissitudes of the Agricultural Revolution, and the remaining lifeholders and occupying-proprietors tended to merge with the cottagers and scrap-holders into one social stratum in the eyes of the potentate of the countryside. He did not too well distinguish between needy people, and people who happened to be in need; from the lofty heights from which he was watching the struggling life of the village there seemed to be no hard-and-fast line separating the poor from the destitute, and he may have been not unduly surprised to learn in a bad year that a small farmer was going “on the rates,” after having been ruined by their disastrous level. Surely such cases were not frequent, but their very possibility emphasized the fact that many ratepayers were themselves poor. On the whole, the relationship of the ratepayer and the pauper was somewhat similar to that of the employed and the unemployed of our times under various schemes of insurance which make the employed bear the burden of keeping the temporarily unemployed. Still, the typical ratepayer was usually not eligible for poor relief, and the typical agricultural laborer paid no rates. Politically, the squire’s pull with the village poor was strengthened by Speenhamland while that of the rural middle class was weakened.
The craziest aspect of the system was its economics proper. The question “Who paid for Speenhamland?” was practically unanswerable. Directly, the main burden fell, of course, on the ratepayers. But the farmers were partly compensated by the low wages they had to pay their laborers—a direct result of the Speenhamland system. Moreover, the farmer was frequently remitted a part of his rates, if he was willing to employ a villager who would otherwise fall on the rates. The consequent overcrowding of the farmer’s kitchen and yard with unnecessary hands, some of them not too keen performers, had to be set down on the debit side. The labor of those who were actually on the rates was to be had even more cheaply. They had often to work as “roundsmen” at alternating places, being paid only their food, or being put up for auction in the village “pound,” for a few pence a day. How much this kind of indentured labor was worth is another question. To top it all, aids-in-rent were sometimes allowed to the poor, while the unscrupulous proprietor of the cottages made money by rack-renting the unsanitary habitations; the village authorities were likely to close an eye as long as the rates for the hovels continued to be turned in. That such a tangle of interests would undermine any sense of financial responsibility and encourage every kind of petty corruption is evident.
Still, in a broader sense, Speenhamland paid. It was started as aid-in-wages, ostensibly benefiting the employees, but actually using public means to subsidize the employers. For the main effect of the allowance system was to depress wages below the subsistence level. In the thoroughly pauperized areas, farmers did not care to employ agricultural laborers who still owned a scrap of land, “because none with property was eligible for parish relief and the standard wage was so low that, without relief of some sort, it was insufficient for a married man.” Consequently, in some areas only those people who were on the rates had a chance of employment; those who tried to keep off the rates and earn a living by their own exertions were hardly able to secure a job. Yet in the country at large the great majority must have been of the latter sort and on each of them employers as a class made an extra profit since they benefited from the lowness of wages, without having to make up for it from the rates. In the long run, a system as uneconomical as that was bound to affect the productivity of labor and to depress standard wages, and ultimately even the “scale” set by the magistrates for the benefit of the poor. By the 1820s the scale of bread was actually being whittled down in various counties, and the wretched incomes of the poor were reduced even further. Between 1815 and 1830 the Speenhamland scale, which was fairly equal all over the country, was reduced by almost one-third (this fall also was practically universal). Clapham doubts whether the total burden of the rates was as severe as the rather sudden outburst of complaints would have made one believe. Rightly. For although the rise in the rates was spectacular and in some regions must have been felt as a calamity, it seems most probable that it was not so much the burden itself as rather the economic effect of aid-in-wages on the productivity of labor that was at the root of the trouble. Southern England, which was most sorely hit, paid out in poor rates not quite 3.3 percent. of its income—a very tolerable charge, Clapham thought, in view of the fact that a considerable part of this sum “ought to have gone to the poor in wages.” Actually, total rates were falling steadily in the 1830s, and their relative burden must have decreased even more quickly in view of the growing national welfare. In 1818 the sums actually spent on the relief of the poor totalled nearly eight million pounds; they fell almost continuously until they were less than six million in 1826, while national income was rising rapidly. And yet the criticism of Speenhamland became more and more violent owing to the fact, so it appears, that the dehumanization of the masses began to paralyse national life, and notably to constrain the energies of industry itself.
Speenhamland precipitated a social catastrophe. We have become accustomed to discount the lurid presentations of early capitalism as “sob-stuff.” For this there is no justification. The picture drawn by Harriet Martineau, the perfervid apostle of Poor Law Reform, coincides with that of the Chartist propagandists who were leading the outcry against the Poor Law Reform. The facts set out in the famous Report of the Commission on the Poor Law (1834), advocating the immediate repeal of the Speenhamland Law, could have served as the material for Dickens’s campaign against the Commission’s policy. Neither Charles Kingsley nor Friedrich Engels, neither Blake nor Carlyle, was mistaken in believing that the very image of man had been defiled by some terrible catastrophe. And more impressive even than the outbursts of pain and anger that came from poets and philanthropists was the icy silence with which Malthus and Ricardo passed over the scenes out of which their philosophy of secular perdition was born.
Undoubtedly, the social dislocation caused by the machine and the circumstances under which man was now condemned to serve it had many results that were unavoidable. England’s rural civilization was lacking in those urban surroundings out of which the later industrial towns of the Continent grew.* There was in the new towns no settled urban middle class, no such nucleus of artisans and craftsmen, of respectable petty bourgeois and townspeople as could have served as an assimilating medium for the crude laborer who—attracted by high wages or chased from the land by tricky enclosers—was drudging in the early mills. The industrial town of the Midlands and the Northwest was a cultural wasteland; its slums merely reflected its lack of tradition and civic self-respect. Dumped into this bleak slough of misery, the immigrant peasant, or even the former yeoman or copyholder, was soon transformed into a nondescript animal of the mire. It was not that he was paid too little, or even that he labored too long—though both happened often to excess—but that he was now existing under physical conditions which denied the human shape of life. Negroes of the African forest who found themselves caged, panting for air in the hull of a slave-trader might have felt as these people felt. Yet all this w
as not irremediable. As long as a man had a status to hold on to, a pattern set by his kin or fellows, he could fight for it, and regain his soul. But in the case of the laborer this could happen only in one way: by his constituting himself the member of a new class. Unless he was able to make a living by his own labor, he was not a worker but a pauper. To reduce him artificially to such a condition was the supreme abomination of Speenhamland. This act of an ambiguous humanitarianism prevented laborers from developing into an economic class and thus deprived them of the only means of staving off the fate to which they were doomed in the economic mill.
Speenhamland was an unfailing instrument of popular demoralization. If a human society is a self-acting machine for maintaining the standards on which it is built, Speenhamland was an automaton for demolishing the standards on which any kind of society could be based. Not only did it put a premium on the shirking of work and the pretense of inadequacy, but it increased the attraction of pauperism precisely at the juncture when a man was straining to escape the fate of the destitute. Once a man was in the poorhouse (he would usually land there if he and his family had been for some time on the rates), he was morally and psychologically trapped. The decencies and self-respect of centuries of settled life wore off quickly in the promiscuity of the poorhouse, where a man had to be cautious not to be thought better off than his neighbor, lest he be forced to start out on the hunt for work, instead of “boondoggling” in the familiar fold. “The poor-rate had become public spoil.… To obtain their share the brutal bullied the administrators, the profligate exhibited their bastards which must be fed, the idle folded their arms and waited till they got it; ignorant boys and girls married upon it; poachers, thieves and prostitutes extorted it by intimidation; country justices lavished it for popularity, and Guardians for convenience. This was the way the fund went.…” “Instead of the proper number of labourers to till his land—labourers paid by himself—the farmer was compelled to take double the number, whose wages were paid partly out of the rates; and these men, being employed by compulsion on him, were beyond his control—worked or not as they chose—let down the quality of his land, and disabled him from employing the better men who would have toiled hard for independence. These better men sank down amongst the worst; the rate-paying cottager, after a vain struggle, went to the pay table to seek relief.…” Thus Harriet Martineau.* Bashful latter-day liberals ungratefully neglected the memory of this outspoken apostle of their creed. Yet even her exaggerations, which they now feared, put the highlights in the right place. She herself belonged to that struggling middle class, whose genteel poverty made them all the more sensitive to the moral intricacies of the Poor Law. She understood and clearly expressed the need of society for a new class, a class of “independent laborers.” They were the heroes of her dreams, and she makes one of them—a chronically unemployed laborer who refuses to go on relief—say proudly to a colleague who decides to go on the rates: “Here I stand, and defy anybody to despise me. I could set my children into the middle of the church aisle and dare anyone to taunt at them about the place they hold in society. There may be some wiser; there may be many richer; but there are none more honourable.” The big men of the ruling class were still far from comprehending the need for this new class. Miss Martineau pointed to “the vulgar error of the aristocracy, of supposing only one class of society to exist below that wealthy one with which they are compelled by their affairs to have business.” Lord Eldon, she complained, like others who must know better, “included under one head [‘the lower classes’] everybody below the wealthiest bankers—manufacturers, tradesmen, artisans, labourers and paupers.…”* But it was the distinction between these last two, she passionately insisted, that the future of society depended upon. “Except the distinction between sovereign and subject, there is no social difference in England so wide as that between the independent labourer and the pauper; and it is equally ignorant, immoral, and impolitic to confound the two,” she wrote. This, of course, was hardly a statement of fact; the difference between the two strata had become nonexistent under Speenhamland. Rather, it was a statement of policy based upon a prophetic anticipation. The policy was that of the Poor Law Reform Commissioners; the prophecy looked to a free competitive labor market, and the consequent emergence of an industrial proletariat. The abolishment of Speenhamland was the true birthday of the modern working class, whose immediate self-interest destined them to become the protectors of society against the intrinsic dangers of a machine civilization. But whatever the future had in store for them, working-class and market economy, appeared in history together. The hatred of public relief, the distrust of state action, the insistence on respectability and self-reliance, remained for generations characteristics of the British worker.