by Karl Polanyi
The repeal of Speenhamland was the work of a new class entering on the historical scene, the middle classes of England. Squirearchy could not do the job these classes were destined to perform: the transformation of society into a market economy. Dozens of laws were repealed and others enacted before that transformation was on the way. The Parliamentary Reform Bill of 1832 disfranchised the rotten boroughs and gave power in the Commons once and for all to businessmen. Their first great act of reform was the abolishing of Speenhamland. Now that we realize the degree to which its paternalist methods were merged with the life of the country, we will understand why even the most radical supporters of reform hesitated to suggest a shorter period of transition than ten or fifteen years. Actually, it took place with an abruptness which makes nonsense of the legend of English gradualism fostered at a later time when arguments against radical reform were sought. The memory of that brutal shock haunted for generations the British working class. And yet the success of this lacerating operation was due to the deep-seated convictions of the broad strata of the population, including the laborers themselves, that the system which to all appearances supported them was in truth despoiling them, and that the “right to live” was sickness unto death.
The new law provided that in the future no outdoor relief should be given. Its administration was national and differentiated. In this respect also it was a thoroughgoing reform. Aid-in-wages was, of course, discontinued. The workhouse test was reintroduced, but in a new sense. It was now left to the applicant to decide whether he was so utterly destitute of all means that he would voluntarily repair to a shelter which was deliberately made into a place of horror. The workhouse was invested with a stigma; to stay in it was made into a psychological and moral torture, while complying with the requirements of hygiene and decency—indeed, ingeniously using them as a pretense for further deprivations. Not the justices of peace, nor local overseers, but wider authorities—the guardians—were to administer the law under dictatorial central supervision. The very burial of a pauper was made an act by which his fellow men renounced solidarity with him even in death.
In 1834 industrial capitalism was ready to be started, and Poor Law Reform was ushered in. The Speenhamland Law which had protected rural England, and thereby the laboring population in general, against the full force of the market mechanism was eating into the marrow of society. By the time of its repeal huge masses of the laboring population resembled more the specters that might haunt a nightmare than human beings. But if the workers were physically dehumanized, the owning classes were morally degraded. The traditional unity of a Christian society was giving place to a denial of responsibility on the part of the well-to-do for the condition of their fellows. The Two Nations were taking shape. To the bewilderment of thinking minds, unheard-of wealth turned out to be inseparable from unheard-of poverty. Scholars proclaimed in unison that a science had been discovered which put the laws governing man’s world beyond any doubt. It was at the behest of these laws that compassion was removed from the hearts, and a stoic determination to renounce human solidarity in the name of the greatest happiness of the greatest number gained the dignity of a secular religion.
The mechanism of the market was asserting itself and clamoring for its completion: human labor had to be made a commodity. Reactionary paternalism had in vain tried to resist this necessity. Out of the horrors of Speenhamland men rushed blindly for the shelter of a utopian market economy.
* Martineau, H., The Hamlet, 1833.
* Professor Usher puts the date of the beginning of general urbanization at about 1795.
* Martineau, H., History of England during the Thirty Years’ Peace (1816–46), 1849.
* Martineau, H., The Parish, 1833.
C H A P T E R N I N E
Pauperism and Utopia
The problem of poverty centered around two closely related subjects: pauperism and political economy. Though we will deal with their impact on modern consciousness separately, they formed part of one indivisible whole: the discovery of society.
Up to the time of Speenhamland no satisfactory answer could be found to the question of where the poor came from. It was, however, generally agreed among eighteenth-century thinkers that pauperism and progress were inseparable. The greatest number of poor is not to be found in barren countries or amid barbarous nations, but in those which are the most fertile and the most civilized, wrote John M’Farlane in 1782. Giammaria Ortes, the Italian economist, pronounced it an axiom that the wealth of a nation corresponds with its population; and its misery corresponds with its wealth (1774). And even Adam Smith in his cautious manner declared that it is not in the richest countries that the wages of labor are highest. M’Farlane was not, therefore, venturing an unusual view when he expressed his belief that, as England had now approached the meridian of her greatness, the “number of poor will continue to increase.”*
Again, for an Englishman to forecast commercial stagnation was merely to echo a widely held opinion. If the rise in exports during the half-century preceding 1782 was striking, the ups and downs of trade were even more so. Trade was just starting to recover from a slump which had reduced export figures to the level of almost half a century before. To contemporaries the great expansion of trade and apparent growth of national prosperity which followed upon the Seven Years’ War merely signified that England too had had her chance after Portugal, Spain, Holland, and France. Her steep rise was now a matter of the past, and there was no reason to believe in the continuance of her progress, which seemed merely the result of a lucky war. Almost unanimously, as we saw, a falling off of trade was expected.
In actual fact, prosperity was just round the corner, a prosperity of gigantic proportions which was destined to become a new form of life not only for one nation but for the whole of mankind. But neither statesmen nor economists had the slightest intimation of its oncoming. As for the statesmen, this may have been a matter of indifference, as for another two generations the rocketing trade figures only dented the edge of popular misery. But in the case of the economists it was singularly unfortunate as their whole theoretical system was erected during this spate of “abnormalcy,” when a tremendous rise in trade and production happened to be accompanied by an enormous increase in human misery—in effect, the apparent facts on which the principles of Malthus, Ricardo, and James Mill were grounded reflected merely paradoxical tendencies prevailing during a sharply defined period of transition.
The situation was indeed puzzling. It was in the first half of the sixteenth century that the poor first appeared in England; they became conspicuous as individuals unattached to the manor, “or to any feudal superior” and their gradual transformation into a class of free laborers was the combined result of the fierce persecution of vagrancy and the fostering of domestic industry which was powerfully helped by a continuous expansion of foreign trade. During the course of the seventeenth century there was less mention of pauperism, even the incisive measure of the Act of Settlement was passed without public discussion. When by the end of the century discussion revived, Thomas More’s Utopia and the early Poor Laws were more than 150 years old, the dissolution of the monasteries and Kett’s Rebellion were long forgotten. Some enclosing and “engrossing” had been going on all the time, for example, during the reign of Charles I, but the new classes as a whole had become settled. Also while the poor in the middle of the sixteenth century were a danger to society, on which they descended like hostile armies, at the end of the seventeenth century they were merely a burden on the rates. On the other hand, this was no more a semifeudal society but a semicommercial one, the representative members of which were favoring work for its own sake and could accept neither the medieval view that poverty was no problem, nor that of the successful encloser that the unemployed were merely able-bodied idlers. From this time onward, opinions about pauperism began to reflect philosophical outlook, very much as theological questions had before. Views on the poor mirrored more and more views on existence as a whole. H
ence the variety and seeming confusion in these views, but also their paramount interest to the historian of our civilization.
The Quakers, these pioneers in the exploring of the possibilities of modern existence, were the first to recognize that involuntary unemployment must be the outcome of some defect in the organization of labor. With their strong faith in businesslike methods they applied to the poor among themselves that principle of collective self-help which they occasionally practised as conscientious objectors when wishing to avoid supporting the authorities by paying for their keep in prison. Lawson, a zealous Quaker, published an Appeal to the Parliament Concerning the Poor That There Be no Beggar in England as a “Platforme,” in which he suggested the establishment of Labour Exchanges in the modern sense of a public employment agency. This was in 1660; an “Office of Addresses and Encounters” had been proposed ten years before by Henry Robinson. But the Restoration Government favored more pedestrian methods; the tendency of the Act of Settlement in 1662 was directly contrary to any rational system of labor exchanges, which would have created a wider market for labor; settlement—a term used for the first time in the Act—bound labor to the parish.
After the Glorious Revolution, Quaker philosophy produced in John Bellers a veritable prognosticator of the trend of social ideas of the distant future. It was out of the atmosphere of the Meetings of Sufferings, in which statistics were now often used to give scientific precision to religious policies of relief, that, in 1696, his suggestion for the establishment of “Colleges of Industry” was born, in which the involuntary leisure of the poor could be turned to good account. Not the principles of a labor exchange, but the very different ones of exchange of labor underlay this scheme. The former was associated with the conventional idea of finding an employer for the unemployed; the latter implied no less than that laborers need no employer as long as they can exchange their products directly. “The labour of the poor being the mines of the rich,” as Bellers said, why should they not be able to support themselves by exploiting those riches for their own benefit, leaving even something over? All that was needed was to organize them in a “College” or corporation, where they could pool their efforts. This was at the heart of all later socialist thought on the subject of poverty, whether it took the form of Owen’s Villages of Union, Fourier’s Phalanstères, Proudhon’s Banks of Exchange, Louis Blanc’s Ateliers Nationaux, Lassalle’s Nationale Werkstätten, or for that matter, Stalin’s Five-Year Plans. Bellers’s book contained in nuce most of the proposals that have been connected with the solution of this problem ever since the first appearance of those great dislocations that the machine produced in modern society. “This college-fellowship will make labour and not money, the standard to value all necessaries by.…” It was planned as “a College of all sorts of useful trades that shall work for one another without relief.…” The linking of labor-notes, self-help, and cooperation is significant. The laborers, to the number of three hundred, were to be self-supporting, and work in common for their bare existence, “what any doth more, to be paid for it.” Thus subsistence and payment according to results were to be combined. In the case of some minor experiments of self-help, the financial surplus had gone to the Meeting of Sufferings and was spent for the benefit of other members of the religious community. This surplus was destined to have a great future; the novel idea of profits was the panacea of the age. Bellers’s national scheme for the relief of unemployment was actually to be run for profit by capitalists! In the same year, 1696, John Cary promoted the Bristol Corporation for the Poor, which, after some initial success failed to yield profits as did, ultimately, all other ventures of the kind. Bellers’s proposal was built on the same assumption as John Locke’s labor-rate system, put forward also in 1696, according to which the village poor should be allocated to the local ratepayers for work, in the proportion in which these latter were contributing to the rates. This was the origin of the ill-starred system of roundsmen practised under Gilbert’s Act. The idea that pauperism could be made to pay had firmly gripped people’s minds.
It was exactly a century later that Jeremy Bentham, the most prolific of all social projectors, formed the plan of using paupers on a large scale to run machinery devised by his even more inventive brother, Samuel, for the working of wood and metal. “Bentham,” says Sir Leslie Stephen, “had joined his brother and they were looking out for a steam engine. It had now occurred to them to employ convicts instead of steam.” This was in 1794; Jeremy Bentham’s Panopticon plan with the help of which jails could be designed so as to be cheaply and effectively supervised had been in existence for a couple of years, and he now decided to apply it to his convict-run factory; the place of the convicts was to be taken by the poor. Presently the Bentham brothers’ private business venture merged into a general scheme of solving the social problem as a whole. The decision of the Speenhamland magistrates, Whitbread’s minimum wage proposal, and, above all, Pitt’s privately circulated draft of a comprehensive bill for the reform of the Poor Law had made pauperism a topic among statesmen. Bentham, whose criticism of Pitt’s Bill was supposed to have brought about its withdrawal, now came forward in Arthur Young’s Annals with elaborate proposals of his own (1797). His Industry-Houses, on the Panopticon plan—five stories in twelve sectors—for the exploitation of the labor of the assisted poor were to be ruled by a central board set up in the capital and modelled on the Bank of England’s board, all members with shares worth five or ten pounds having a vote. A text published a few years later ran: “(1) The management of the concerns of the poor throughout South Britain to be vested in one authority, and the expense to be charged upon one fund. (2) This Authority, that of a Joint-Stock Company under some such name as that of the National Charity Company.”* No less than 250 Industry-Houses were to be erected, with approximately 500,000 inmates. The plan was accompanied by a detailed analysis of the various categories of unemployed, in which Bentham anticipated by more than a century the results of other investigators in this field. His classifying mind showed its capacity for realism at its best. “Out of place hands” who had been recently dismissed from jobs were distinguished from such as could not find employment on account of “casual-stagnation”; “periodical stagnation” of seasonal workers was distinguished from “superseded hands,” such as had been “rendered superfluous by the introduction of machinery” or, in even more modern terms, from the technologically unemployed; a last group consisted of “disbanded hands,” another modern category brought into prominence, in Bentham’s time, by the French War. The most significant category, however, was that of “casual-stagnation,” mentioned above, which included not only craftsmen and artists exercising occupations “dependent upon fashion” but also the much more important group of those unemployed “in the event of a general stagnation of manufactures.” Bentham’s plan amounted to no less than the levelling out of the business cycle through the commercialization of unemployment on a gigantic scale.