Moral Philosophy, the theory of wages, the discussions of poverty and Social Welfare Policy in the 18th and 19th century were inextricably linked. Unlike contemporary economic theory, the classical economists were cognisant of the importance of moral and ethical notions with respect to both theoretical and policy considerations.
The discussion on poverty and the Poor Laws is unfortunately still extremely relevant as much of the ideological arguments forming the foundation of social welfare during these times are still in use by discussants of modern social welfare policy. It is during the period under examination that we begin to see distinctions between "deserving" and "undeserving poor" and movement from the idea of entitlement for help versus eligibility for relief as the basis for access to help for the poor. Sadly enough, the relevance of this discussion for the current debate on social welfare policy should not be understated. The same, or similar, arguments against the 1795-7 reforms put forward by Bentham and his successors are still being articulated today against the welfare state in Great Britain and the United States.
The transformation in the understanding of the rights of the poor in Britain during the nineteenth century cannot solely be explained on the basis of the transformation in the economic conditions of the time. Moreover, given that the term "poor" in the eighteenth and nineteenth centuries referred to people who earn their living not from their property or their profession, the Poor Law debate actually affected the majority of the population. Precisely, poor refers to the working class as a whole, including the reserve army of labour. It is a definition which is not linked to the level of income received, but solely related to ownership of property or professional skills.
In fact, given the massive increases in productivity in the industrial sectors, it cannot be legitimately argued that the 1795-7 Poor Law Amendment could not be sustained or even extended. Moreover, in spite of these significant increases in productivity in both industrial and agricultural production, the conditions of existence for the poor (i.e., real wages and the standard of living) cannot be argued to have significantly improved from the end of the eighteenth century until the eighteen fifties. As such, the steady retreat from a social welfare policy attempting to ensure the subsistence of the poor towards a policy that rejected even the right of subsistence cannot be justified on the grounds that the earlier policy was no longer required as the growth of capitalism ensured more than basic subsistence for the workers. Given such a radical transformation in social welfare policy, it is necessary to determine if there were any major changes that could have simultaneously affected the policy makers of the period.
There is no doubt that the recipients of poor relief altered prior to our examination and poor relief altered to meet the needs of demand. Although our discussion will concentrate on the major reforms of 1795-7 and then 1834, some information of the situation up until this period is useful. I will further supplement information during the diaries if it is warranted.
To see social welfare as largely and in general ‘demand-led’ rather than ‘supply-led’ seems reasonable enough. To put it crudely, the welfare system responded to economic and demographic facts, trying to meet the needs of children and the able-bodied ‘labouring poor’ before 1630, increasingly satisfying the demand of the old from 1660-1760, and shifting to the young and able bodied again after 1780 (Slack, 1995, p 46).
According to Slack, in the period between 1660-1750, poor rate had actually increased to 1% of national income which enabled 8% of the population to be relieved in 1750 (Slack, 1995, p45). Slack also argues that the system did help the poor and stem to some extent the true hardships of poverty (e.g., starvation, malnutrition)
First, the Welfare system was confronting a real problem of poverty, particularly in rural England, in the hard times of the 1870s; and the fact that it was capable of meeting, though not entirely over coming, it was not mean achievement. Secondly, the machinery of poor relief responded to demand, it did not as its critics would argue create it (Slack, 1995, p 46)
As we have discussed in the diaries up to now, classical economics arises during the consolidation of capitalist economic relations, as such property rights are not taken for granted within the theory, but needed to be justified. In the classical tradition, justification was based, for the most part, on the natural rights tradition of John Locke or Hugo Grotius. This philosophical foundation begins to change with the rise of utilitarian theory espoused by Jeremy Bentham who was a mentor and friend of many political economists (e.g., James and J.S. Mill, Ricardo) and this shift is reflected in economic and policy discussions (e.g., wages, poverty, criminality) in the period.
The interesting thing about classical economics and post-Ricardian economics and the discussions of the time on the question of poverty and social policy is the transformation in the manner and treatment of the rights of the poor and the shift in the burden of responsibility for the creation and existence of poverty. On a level more relevant to policy considerations, we observe a shift in responsibility for the existence of poverty from a general statement accusing the state and church in the writings of Hunt and Cobbett, to that of the economic system in the classical authors (the Physiocrats, Smith, Ricardo and the "Ricardian Socialists"), to finally the Poor themselves (Malthus, James Mill and J.R. McCulloch).
Since we have already covered the transformation in theory of wages in detail (from Smith, to Malthus, to Ricardo, to the wages-fund), I will only discuss this when they are relevant to our discussion of social welfare policy.
Ethical Philosophy and its influence on social welfare policy
Today’s diary will discuss the transformation between moral philosophical traditions that actually influence the debate on social policy and we will begin with the Natural Rights Tradition. Next week I am on holiday, but the week after we will recommence with a discussion of Natural Rights Arguments on the right of subsistence deriving from Aquinas, but reasserted by Locke, then we will discuss Utilitarian as espoused by Jeremy Bentham on poverty and the rights of the poor. The following week we will examine the discussions on the basis of the creation and existence of poverty and some perspectives both economic and philosophical. Then in the next week we will begin our discussion of social welfare policy to the poor in the 18th and 19th centuries, linking it with the arguments of political economists who played such a large role in its creation (specifically the 1834 Poor Law Amendment, aka the New Poor Law).
Since we are considering the questions of poverty and social justice, it is appropriate to begin with an examination of the theories of wages in the 19th century and to establish their philosophical foundations.
The examination of the influence of differing ethical theories, i.e., Natural Rights versus Utilitarianism, on the theoretical and policy considerations of classical and post-Ricardian economic theory is fruitful in that we can observe a transformation in not only the treatment of wages, but also recommendations with respect to the rights of the poor and different social policies towards poverty in the eighteenth and nineteenth centuries. Moreover, these different ethical positions influence the theory of wages.
As an example, the notion of subsistence appearing in the classical tradition derives from the right of existence appearing in Aquinas, which is developed into a right of subsistence by Suarez and later is adopted by John Locke.
Moreover, there are different treatments of the notion of unemployment deriving from the different theories of wages, i.e., the classical versus wage-fund theories. This, in combination with the differing underlying ethical foundations of these theories, reveals:
- on the one hand, the entitlement of poor towards relief (from the natural rights tradition) deriving from the fact that it is the society (or economic system) that is responsible for their situation found in the classical tradition;
- on the other hand, the notion of eligibility (deriving from utilitarianism) which is then linked to the notion of full employment existing in the wages-fund theories.
The transformation in economic doctrine (and the underlying ethical theories) is significant because it is upon economic theory that the Poor Law amendment of 1834 was justified.
Moreover, undoubtedly this amendment altered the manner in which the rights of the poor were examined up to and including the 20th century (and the Poor Law amendment passed in the beginning of the 20th century). In fact, it is not until the Keynesian Revolution following the Great Depression of 1929 that the rights of the poor began to be addressed in a different manner, ensuring their "basic subsistence" as citizens within a country. There is a major difference if we compare social welfare policy in the 19th to 20th centuries, most probably deriving from the influence of the socialist movement. In the 19th century, both natural rights and utilitarian theory argue that those who do not attempt to provide for their subsistence are not entitled to charity. In the 20th century, entitlement to subsistence was treated, up until recently, as a right of citizenship.
Bentham, Jeremy (2/1797) "Observations on the Poor Law Bill introduced by the Right Hon. William Pitt," unpublished manuscript appearing in Observations on the Poor Bill, introduced by the Right Honourable William Pitt, (Joseph) Hume Tracts Number 38, University College London, pp. 2-48.
Bentham, Jeremy (9/1797) "Pauper Management," in Annals of Agriculture.
Bentham, Jeremy, The Collected Works of Jeremy Bentham: Writings on the Poor Laws, Volume I, Clarendon Press, Oxford, 2001.
Cowherd, Raymond (1977). Political Economists and the English Poor Laws: A Historical Study of the Influence of Classical Economics on the Formation of Social Welfare Policy, Athens, Ohio: Ohio University Press.
Himmelfarb, Gertrude (1984) The Idea of Poverty: England in the Early Industrial Age, London: Faber and Faber Ltd., 1985.
Locke, John (1689) Two Treatises of Government, Cambridge: Cambridge University Press, 1988.
Meek, Ronald (1962) The Economics of Physiocracy: Essays and Translations, Fairfield, NJ: A.M. Kelley Publishers, 1993.
Quesnay, François (1764) "Rural Philosophy," in Meek (1962), pp. 138-150.
Quesnay, François (1765) "Natural Right," in Meek (1962), pp. 43-56.
Quesnay, François (1757-8?) "Corn," in Meek (1962), pp. 72-87.
Tuck, Richard (1979) Natural Rights Theories: Their Origin and Development, Cambridge: Cambridge University Press, 1995.
Slack, Paul, (1995) The English Poor Law 1531-1782, Cambridge University Press.
Tully, James (1980) A Discourse on Property: John Locke and his Adversaries, Cambridge: Cambridge University Press.
Wade, John (1833) History of the Middle and Working Classes, New York: A.M. Kelley Publishers, 1969.
Williams, Karel (1981) From Pauperism to Poverty, Routledge & Kegan Paul.
Some Good news:
Yesterday, I spent the day encouraging some friends and colleagues who are in town for the Association of Heterodox Economics conference to begin to participate on the daily kos; so while the diary is a bit late, I think it is for a good cause, as I have been successful in my endeavour and have got at least one person to agree to participate both by writing diaries and commenting.