II. THE NORMATIVE ASPECT OF THE UTILITY OF POVERTY DOCTRINE

Whatever the status of the positive claims of the doctrine of the utility of poverty, its normative subtext is more alien to most modern readers.^{Footnote 1} For some writers, wealth in the hands of the poor did not sum towards total national wealth; in Heckscher’s words, they aimed for “wealth for the ‘country,’ based on the poverty of the majority of its subjects”—a contradiction, but one that according to Heckscher had to wait for liberal economics to be rejected (Heckscher Reference Heckscher, Söderlund and Shapiro1955, pp. 152, 165). Sometimes the discounting of workers’ wealth was justified by paternalism: there were claims that frugal living and long hours of work would really make workers happier than what they preferred in practice: high wages, more leisure, and more consumption. Often enough, however, there really was no argument for discounting. It was simply presumed that workers’ material circumstances (above a certain minimum) were only a means to an end of total social prosperity, which was open-ended only for the state, masters, merchants, and other propertied classes. And action by the state to further this understanding was considered justified; thus the characterization of this normative attitude as supremacism.

Bernard de Mandeville is the most extreme and colorful champion of this supremacist view of workers. His ideas depart from the familiar necessity theory of motivation, which he explains in gloss “Q” to the Fable of the Bees. As an argument against national frugality, Mandeville proposes a thought experiment. If workers were to begin saving a fifth of their income, within five years they would accumulate an entire year’s worth of pay. But workers can hardly be persuaded to work as it is; “an Artificer … cannot be drove to his Work before Tuesday, because the Monday morning he has two Shillings left of his last Week’s pay; why should we imagine he would go to it at all, if he had fifteen or twenty Pounds in his Pocket” (Mandeville Reference Mandeville and Kaye1757a, p. 193). Only “immediate Necessity” can compel men to labor; and so Mandeville notoriously concludes that “as they [the poor] ought to be kept from starving, so they should receive nothing worth saving.” Otherwise, “who would do the Work?” (Mandeville [1924] Reference Mandeville and Kaye1957a, p. 193). He shrewdly observes that generally only three things motivate people to overcome sloth: pride, avarice, and necessity. Since the poor are little subject to the first two, their “Wants” must drive them to work: wants that are “Prudence to relieve, but Folly to cure.” The poor should accordingly receive such “a moderate quantity of money” that they avoid the twin extremes of desperation on the one hand and indolence on the other (Mandeville [1924] Reference Mandeville and Kaye1957a, p. 194).

If so far Mandeville’s views are characteristic of the basic necessity theory, his essay on “Charity Schools” reveals a harsher attitude. The case against saving, and for “moderate” wages, is reframed as an argument for poverty and ignorance:

Here Mandeville openly appeals to the benefit of one part of society to justify limits on another. Nature, Mandeville argues, requires man to work: “vast Toil” is required to obtain even bare subsistence. Even more labor is needed to sustain a civilized society in which wants have multiplied. To allow such a society to exist, in which further “many of its Members … live in Idleness, and enjoy all the Ease and Pleasure they can invent,” then it is necessary to have “great Multitudes of People that … by use and patience inure their Bodies to work for others and themselves besides” (Mandeville [1924] Reference Mandeville and Kaye1957a, pp. 286). And he goes on to say that the “Welfare of all Societies” requires that labor be performed by people who are contented with the bare necessities of life, can work uncomplainingly from dawn to dusk, and are willing to eat any nutritious food without regard to “Taste or Relish.” Without such people there could be no “Enjoyment, and no Product of any Country could be valuable”—although presumably the enjoying is being done by someone other than the workers themselves. In phrasing found in other writers, the workers need the spur of need; but Mandeville goes farther and says that “the greatest Hardships are look’d upon as solid Pleasures, when they keep a Man from Starving” (Mandeville [1924] Reference Mandeville and Kaye1957a, pp. 286–287).

Here, though, Mandeville attempts to soften his argument by considering worker happiness. He would “not be thought Cruel … [and] abhor[s] Inhumanity” (Mandeville [1924] Reference Mandeville and Kaye1957a, p. 310). Given that endlessly toiling workers are necessary in the “general Interest of the Society,” it would be cruelty to educate them. Knowledge only creates more desires and would serve only to make a manual laborer miserable. Mandeville claims that the poor, who work constantly and are “least acquainted with the Pomp and Delicacies of the World,” are the most contented people in society—hardships aren’t hardships to them, as they “know no better” (Mandeville [1924] Reference Mandeville and Kaye1957a, p. 311). But despite this justificatory gesture, Mandeville’s language breathes condescension towards the workers. He notes that “Obsequiousness and mean Services” are much better performed by people who are inferior to employers not only in “Riches and Quality, but likewise in Knowledge and Understanding” (Mandeville [1924] Reference Mandeville and Kaye1957a, pp. 289–290). He complains about the expense and difficulty of hiring servants, commenting that “the People of the meanest Rank know too much to be serviceable to us … what madness is it to encourage them in this, by industriously increasing at our Cost that Knowledge which they will be sure to make us pay for over again” (Mandeville [1924] Reference Mandeville and Kaye1957a, p. 302; emphasis added). There is a clear division between the “us,” the hirers of servants whose material ease and wealth matter, and the servants themselves whose wealth and ease do not. In a cruel analogy, Mandeville wryly observes that he wouldn’t want to ride a horse that considered itself his equal ([1924] 1957a, p. 290);^{Footnote 2} and he complains that “Servants in general … not only seem sollicitious [sic] to abolish the low Dignity of their Condition, but have already considerably rais’d it … from the Original Meanness which the publick Welfare requires it should always remain in” (Mandeville [1924] Reference Mandeville and Kaye1957a, p. 306; emphasis added). But perhaps most illuminating is Mandeville’s discussion of what might be called “equality of opportunity.” It is barbarous (he imagines his critics saying) that poor children with natural talent ought not to have the opportunity for advancement provided by charity schools. Mandeville’s response acknowledges that many great and useful men have indeed emerged from poverty, but that “when they were first employed, many as capable as themselves not brought up in Hospitals [orphanages] were neglected … [and] would have done as well as they.” Why waste a poor child on more exalted pursuits when “hard and dirty Labour is to be done”; and there is no better “Nursery for these Necessities than the Children of the Poor” (1957a, pp. 311)? Here, the need by society—or at least the wealthy—for willing servants is a trump justifying a system of unequal opportunity.

Mandeville might be dismissed as an outlier; he was after all severely attacked for his views on both poverty and morality (Himmelfarb Reference Himmelfarb1985, pp. 30–31). But evidence is ample that other writers shared his active desire for wages to be low. Not even Mandeville’s views on education were unique. Four decades after the Charity Schools essay Christopher Rawlinson echoed the complaint about the education of poor children. He asked plaintively, “[w]ho will be left to do the labour and drudgery of the world?” Rawlinson’s prescription, like Mandeville’s, was to avoid raising unattainable aspirations in the children of the poor by “inur[ing] them to the lowest and most early labour” (Rawlinson Reference Rawlinson1767, pp. 15–16). And preceding Mandeville was Sir William Petty’s 1662 rationale for the Poor Laws, viewed as a kind of recompense to the poor since society thought it “just to limit the wages of the poor, so as they can lay up nothing against the time of their impotency and want of work” (Petty Reference Petty and Hull1899, p. 20). Elsewhere, Petty reinforced the point that

Here the assumption is clear that the “Public” not only has an interest in the performance of the laborer, but both the right and the power to set his rate of compensation. The “Law” to which Petty refers is the Elizabethan-era Statute of Artificers (1563), which empowered county justices of the peace to “rate” or set wages; in practice it almost always operated as a maximum, not a minimum, wage (Kelsall 1938, p. 15). In principle—as Petty implied—the Poor Laws and the Statute of Artificers together presented the poor with a bargain. They received protection from extreme want during unemployment, disability, and old age in exchange for restrictions on their earnings and labor mobility. It was not, of course, a deal on which they were consulted, and its relative attractiveness seemed to vary by who was describing it.

Thomas Manley, for instance, seemed to believe that the poor should endure positive hardship in the name of England’s prosperity. He attributed the “great advantage” that foreign laborers had over England to their willingness to endure “cheapness of provisions, coarse dyet, and worse drink, parsimonious living and small wages.” The clear implication was that the English poor too ought to live this way, and shortly afterwards he says that England’s economic problem is “overvaluing our wages” (Manley Reference Manley1669, p. 17). Hierarchical presumptions seem to underlie this belief, which he reveals by blaming well-paid watermen for raising their rates “so they may live the better above their station” (Manley Reference Manley1669, p. 19; emphasis added). In a probable reference to the Statute of Artificers, he approvingly quotes a “Scotch Commander” who believed that “either we must have more efficacious Laws to retrench wages, or else all industry must suddenly cease” (Manley Reference Manley1669, p. 9).

The existence of the Statute of Artificers in the background of discussions about workers influenced those discussions even if the statute was felt to be ineffective. It still served as a kind of ideal for some advocates of low wages. For instance, William Allen in 1736 observed that “[s]ervants Wages are by much too high” (Allen Reference Allen1736, p. 32) and went on to make an initially confusing policy recommendation:

The key to this passage is to realize that Allen advocates bolstering employers’ negotiating power using the specific legal framework of the Statute of Artificers. Legally, adult men and women of less than a certain income or property level—that is, the laboring class—had an obligation to work for whoever offered to hire them if they were not already in service somewhere else. The local justices of the peace also had the power to set the maximum wage rate that could be contracted, and laborers were both forbidden to make labor contracts for less than one year and required to give notice to their employers before they wished to move elsewhere (Clapp, Juřica, and Fisher Reference Clapp, Juřica and Fisher1977, pp. 489–498). What Allen is proposing, then, is to force laborers to reveal—to any potential employer who asks—that they are unhired once their notice period is up. They would then be in violation of the statute and subject to severe punishment if they did not then immediately accept an offer of employment. The effect on a worker’s search and bargaining power can be imagined. Allen’s attitude toward working people is clarified still further when he follows this recommendation with a call for an Act of Parliament to prevent people in the maritime counties of England from emigrating to the “Plantations” [colonies], since the result of emigration is that the “Prices of Labour must be higher in such Counties[!]” (Allen,Reference Allen1736, pp. 33–34). The title of his pamphlet, Ways and Means to Raise the Value of Land, is at least a frank avowal that the prosperity of laborers isn’t Allen’s goal.

Still another writer who makes nearly Mandevillian statements about the poor is Henry Fielding—the playwright, novelist, and eventual London magistrate. After praising sumptuary laws, he writes without any evident irony that:

Fielding too praises the Statute of Artificers (and related laws), although he thinks that their wage-rating provisions have gone so far into disuse that “an incredulous Reader may almost doubt whether there are any such existing” (1751, p. 85). Nevertheless, he defends them vigorously, arguing that it was a “charitable Project” to lower wages so that everyone capable of work could be hired. Furthermore, keeping the price of labor low would help poor farmers to export grain at a profit, which was also a “general Advantage to the Kingdom”; besides, “such a restraint is very wholesome to the poor Labourers themselves” for the usual reasons that they will work harder and “live better” in times of dearth than of plenty (Fielding Reference Fielding1751, pp. 88–90). Was it not better, in any case, for duly appointed and sober judges to set wages rather than allow “the lowest Artificers, Husbandmen, and Labourers, [be] Judges in their own Cause; [and let it be] left to their own Discretion, to exact what Price they please for their Labour[?]” (Fielding Reference Fielding1751, p. 89).

The social importance of this type of talk obviously depended on how moribund the Statute of Artificers really was in the eighteenth century. Furniss himself believed that the practice of “rating” or legally fixing wages using the statute had died out by the 1730s at the latest, though the mindset underlying the practice—that wages were a proper object of government regulation, and indeed that there was a “correct” level of wages—survived and fed into later theorizing on the subject (1920, pp. 158–159). But even research available at his time of writing concluded that the practice of wage assessments survived into the 1760s (Tawney Reference Tawney1913, p. 329). Subsequent historical discoveries go further. Documentary evidence for wage-fixing under the statute shows activity in the 1760s at roughly only half the average level in the seventeenth century, and there is at least some recorded activity all the way up to the repeal of the statute by 53 Geo. 3, c. 40, in 1813 (Kelsall Reference Kelsall1938, pp. 102–110; Minchinton Reference Minchinton1972, pp. 20–21; Wiener Reference Wiener1974, p. 913). It is of course possible that the statute was less inimical to workers’ interests than it appeared. This is a topic of long-running historical debate, with some specialists arguing that the main goal of the statute was the repression of labor (Rogers Reference Rogers1884, pp. 398–402) and that it operated principally to impose maximum rather than minimum wages (Kelsall Reference Kelsall1938, p. 15).^{Footnote 3} Others have countered that the statute was little (or ineffectively) enforced and that it sometimes operated in the interests of workers (Hewins Reference Hewins1898; Minchinton Reference Minchinton1972, pp. 14–16). There seems to be no disagreement, though, that the statute could be used to impose maximum rather than minimum wages and that such was in fact a common practice into the eighteenth century. The text of the statute itself ambiguously orders the justices of the peace to “limit, rate, and appoint the wages [of labourers]” but prescribes punishments only for workers or masters who contract for more than the allowed rate (Clapp et al. Reference Clapp, Juřica and Fisher1977, pp. 493–494). The surviving text of an eighteenth-century wage assessment for Kent describes “[y]early wages appointed by the Justices to be taken by the servants … not exceeding the following sums” (Hammond and Hammond Reference Hammond and Hammond1913, p. 144; emphasis added). And as late as 1796 members of Parliament arguing over Samuel Whitbread’s minimum wage bill overwhelmingly viewed the existing law as authorizing maximum wages only (Parliamentary History, 1818, col. 704–705). For a low-wage theorist such as Allen to talk about “Wages ordered by Authority” therefore wasn’t a dream but an appeal to a real institution, even if a somewhat moribund one. And the precedent of the statute might have encouraged such fantasies as those of otherwise liberal figures such as Andrew Fletcher, George Berkeley, and Francis Hutcheson to actually enslave the idle and undeserving poor, albeit in a (relatively!) humane manner (Rozbicki Reference Rozbicki2001). The statute’s existence, then, strengthens the impression that a supremacist attitude towards the poor was more than just the fringe belief of one or two thinkers, and that British institutions were such that discussion of it was more than just idle speculation.

III. SMITH AND THE DOCTRINE

The mere existence of the doctrine of the utility of poverty in general, and of its supremacist element in particular, of itself does nothing to demonstrate that Adam Smith was both aware of it and framed his comments on laborers, in the Wealth of Nations specifically, at least partly to oppose it. Definitive proof is impossible, given that Smith never explicitly and unambiguously mentions the doctrine. There are, however, many factors that, taken together, make such awareness and opposition highly likely. Smith’s lifestyle as a well-informed person would have exposed him to a doctrine that was regularly discussed in the press. He also owned books that contained references to it, and textual evidence from the Wealth of Nations indicates familiarity. In the last category the central exhibit is the “equity, besides” passage itself. It appears to have been directly inspired (or, less charitably, plagiarized) from Bishop Berkeley’s earlier Querist and shares wording with a key element of Mandeville’s commentary on the Fable of the Bees as well. Since both Berkeley and Mandeville were clearly dealing with utility of poverty themes in those parts of their works, the probability becomes overwhelming that Smith was aware of them too.

Articles from the London press show that the necessity theory was alive and well at least as late as the 1760s. A pseudonymous writer penned a 1767 letter to the New Daily Advertiser in which he denounced the greed of landlords, Smithfield cattle salesmen, and corn dealers in raising the price of provisions. Making due allowance for polemical exaggeration, he accused them of using the necessity theory to justify their actions:

The necessity theory had been attacked with even more venom by the anonymous T. X. Y. Z. in 1765, who imagined a rich man in his easy chair “harangu[ing] with great plausibility upon the propriety of low wages, and dear provisions, in order that necessity may impel the poor to constant labor” (T. X. Y. Z. 1765). But even in the next decade, in 1771, Arthur Young could make his well-known statement in the Farmer’s Tour through the East of England that “every one but an ideot [sic] knows, that the lower classes must be kept poor, or they will never be industrious” (Young Reference Young1771, p. 361). In context it is clear that Young is reporting the opinions of master-manufacturers, not necessarily his own; still, Young himself held a version of the necessity theory, since there was a point at which wages would “bring on an exemption from regular labour.” He thought there was a “golden mean” for wages, “how seldom so ever it is found” (Young Reference Young1771, p. 311). Finally, there is evidence that the necessity theory even survived long after Adam Smith; John Weyland’s pamphlet opposing Samuel Whitbread’s Poor Law reform bill of 1808 criticized the aspiration to raise the wages of the poor on the grounds of “the temptation to idleness, which the possession of superfluous money holds out; a large portion of the labour of the young … would be lost: and habits of irregularity, and profligacy must inevitably be contracted” (Weyland Reference Weyland1807, pp. 14–15). Even Schulze-Gaevernitz, in his comments on the low wage theory (1895, p. 16), mentions that some German employers and government ministers were calling for a wage reduction in order to stimulate worker effort—in 1875–76! Clearly, then, the theory was still discussed actively in Smith’s day; it seems likely that he would have encountered it when speaking with Scottish men of affairs, or reading newspapers available in Glasgow, Edinburgh, or London coffeehouses.

There is, also, the evidence of Smith’s library. James Bonar’s and Hiroshi Mizuta’s catalogs show that Smith owned many works that discuss the doctrine of the utility of poverty, though this of course doesn’t definitely prove that he read them. He owned the works of Aristophanes, for example, which include (in the Plutus) an early discussion of the necessity theory of motivation (1938, l. 510–515; Mizuta Reference Mizuta1967, p. 68). Smith could have read about a scheme to “retrench the hire of poor mens labour” in the fifth edition of Josiah Child’s Discourse on Trade, published by the Foulis press at Glasgow in the year he began his teaching there and later cataloged in his library (Bonar Reference Bonar1894, p. 22; Child Reference Child1751, p. x; Rae Reference Rae1895, p. 42).^{Footnote 4} He is listed as having owned Addison’s Spectator, possibly a bound volume of all numbers (Mizuta Reference Mizuta1967, p. 65), and Smith’s modern biographer judges it likely that the young Adam read Spectator essays as part of his early studies at Kirkcaldy under the tutelage of David Miller (Phillipson Reference Phillipson2010, p. 19). So it is quite possible that he would have read, in essay 200, that “the poor … work only that they may live; and if with two day's labour they can get a wretched subsistence, they will hardly be brought to work the other four” (Addison Reference Addison1837, 296). He owned all four volumes of Arthur Young’s Eastern Tour, which discusses the necessity theory and the idea of wage moderation at length (Bonar Reference Bonar1894, p. 122). Strangely, no works by Mandeville are cataloged, although Smith did own William Law’s attack on him (Mizuta Reference Mizuta1967, pp. 111, 117). It seems hard to believe that Smith’s discussion of Mandeville in Part Seven of the Theory of Moral Sentiments and his explicit mention of “the second volume of the Fable of the Bees” in his Edinburgh Review discussion of Jean-Jacques Rousseau (1982a, p. 250) were purely based on hearsay; it is more likely that Mandeville’s works were simply lost to the catalog, or that Smith had access to them some other way, perhaps through the university library. Smith would also have had access to David Hume’s views on the utility of poverty, both from personal conversation and through his ownership of Hume’s works (Mizuta Reference Mizuta1967, p. 105).

There are, further, textual references in the Wealth of Nations that do seem to imply familiarity with the doctrine’s arguments. Smith mentions the “common complaint” that “luxury extends itself even to the lowest ranks of the people … the labouring poor will not now be contented with the same food, cloathing and lodging which satisfied them in former times” (WN, 1776, I.viii.35, p. 96). Smith also tells us that “exaggerated accounts of the present wages of labour have lately [been] represented … to the publick” (WN, 1776, I.viii.35, p. 95). And although Smith only rarely responded to individuals directly, he did for certain review (and reject) a wages-cost theory of export prices in Matthew Decker’s essay referenced in Book Four (Decker Reference Decker1750; WN, 1776, IV.vii.c., p. 597).

But the strongest argument that Smith was a self-conscious participant in a discussion on the utility of poverty rests on a similarity of wording between his passage beginning “[n]o society can surely be flourishing and happy” from the Wealth of Nations (I.viii.36, p. 96) and related phrases in both Mandeville’s commentary on the Fable of the Bees (originally published in 1714) and Bishop Berkeley’s Querist, first published in 1735. Near the conclusion of remark “Q” of the earlier work, Mandeville says:

This is the same remark “Q” in which (as we have seen earlier) Mandeville argues that when the poor are “well managed,” their wages remain close to subsistence, and that “it is the Interest of all rich Nations, that the greatest part of the Poor should almost never be idle, and yet continually spend what they get” (Mandeville [1924] Reference Mandeville and Kaye1957a, pp. 190–193). The discourse is firmly in the utility of poverty tradition; if Smith in turn wrote his “flourishing and happy” with Mandeville’s “happy, and what we call flourishing” in mind, it is easy to imagine that the rest of Mandeville’s argument in remark “Q” was in his mind as well. This is an admittedly speculative claim by itself, but the evidence of Berkeley’s Querist strengthens it greatly.

In his unusual work, Berkeley posed 595 leading questions designed mainly to encourage Irish economic development. Some of the questions are nonsensical unless the doctrine of the utility of poverty is assumed as an opponent. The four below, for instance, clearly take aim at both the necessity theory of motivation (advocating low wages) and the compatibility of national wealth with worker poverty.

Clearly, question 355 assumes a rival position (even if somewhat exaggerated for effect by Berkeley) that the labouring ox be muzzled. Questions 2 and 62 attack the idea that national wealth can be separated from the wealth of the common people. And number 20 points to an alternative motivational strategy to the imposition of low wages: the cultivation of better taste. The reader is most struck, however, by the similarity of the italicized phrases between questions 2 and 62 and the full Smith passage opening this essay:

Salim Rashid has already noticed this similarity and argues that Smith essentially plagiarized these passages and Berkeley’s advanced views on the pro-worker goals of policy generally. Rashid even uncovered evidence from Smith’s personal letters that he was aware of Berkeley and his works as a young student at Oxford (Rashid Reference Rashid1990, p. 15). This is in addition to Smith’s known ownership of the 1751 edition of the Querist (Bonar Reference Bonar1894, pp. 12–13, 71; Mizuta Reference Mizuta1967, p. 71).^{Footnote 5} Taking the Mandeville passage into account could thicken this plot even further; it is possible, if unprovable, that Berkeley consciously or unconsciously employed some of Mandeville’s phrasing, and Smith was influenced by them both. In any event it becomes hard to believe that Smith just happened on a choice of words closely echoing ones used by two famous near-contemporaries on the same subject without being aware of their substantive arguments on that same subject; namely, the utility of poverty.

A skeptic could still argue that the appearance of “well fed, clo[a]thed, and lodged” in Berkeley and Smith could be a coincidence if the latter phrase was in common use in the eighteenth century. But a careful search of pre-Smithian writing finds only a few appearances of the phrase before 1776, at least with the character recognition and search technologies available as of this writing.^{Footnote 6} These appearances included the 1750, 1751, and 1760 editions of the Querist; Berkeley’s (Reference Berkeley1752) Miscellany incorporating the same text; and Robert Wallace’s Characteristics of the present political state of Great Britain (1758), which also explicitly quotes Berkeley’s words. Addison used a similar but not identical formula in 1711—“better fed, and clothed, and lodged”—to compare London’s inhabitants to the rest of England in Spectator, number 200 (Addison Reference Addison1837, p. 295), and his language is quoted in later pamphlets attacking him, such as one by Daniel Maclauchlan (1735). A straightforward description of a Liverpool charity school describes how donations “fed, cloathed, and lodged” students (A New Description of Berkshire &c, 1749, p. 8), and the same phrase describes the treatment of slaves in an African travelogue (Pellow Reference Otteson1735, p. 115). Edmund Burke’s Observations (1769) contains the again slightly different phrase “fed, cloathed, lodged, and warmed” when comparing the standard of living of English and French artificers (Burke Reference Burke1769, p. 40). But only one perfect match plausibly rivals Berkeley as original inspiration for Smith’s phrasing: an anonymous description of America made for the benefit of potential emigrants (American Husbandry, 1775). This uses the exact phrase “well fed, cloathed and lodged” to describe the inhabitants of New England, and in fact depicts those colonies as a kind of paradise in which there is great liberty, little distinction of ranks, and low taxes. This positive view of America closely aligns with Smith’s own attitude as expressed in the first book of the Wealth of Nations (WN, 1776, I.viii.35, pp. 87–88). Counting against the candidacy of the American pamphlet, however, is the triple appearance of the phrase “fed, cloathed, and lodged” in Smith’s “early draft” of the Wealth of Nations. This first appearance is in a broadly similar context to the final version: after describing how landlords and monied men live on the labor of peasants, merchants, and tradesmen, respectively, Smith states that “[a]ll the indolent and frivolous retainers upon a court are, in the same manner, fed, cloathed, and lodged by the labour of those who pay the taxes which support them” (2009, p. 563). The second and third appearances relate national wealth to the stock of real commodities and discuss the role of money (2009, p. 576). Since scholars believe that the “early draft” was written no later than 1762 (Smith Reference Smith, Meek, Raphael and Stein2009, p. 561), the 1775 anonymous pamphlet about America could not have been Smith’s inspiration at least for the core of the phrase. The late addition of “well” is indeed puzzling, but it is almost inconceivable that the obscure Liverpool and Africa tracts—or a pure coincidence of word choice—should have led Smith to mimic Berkeley’s phrasing in a passage including almost exactly the same point as the latter’s query 2. The additional presence of “flourishing” in similar contexts makes the judgment even more secure. To sum up the reasoning then: elements of Berkeley’s Querist as well as Mandeville’s commentary on the Fable of the Bees clearly address utility of poverty arguments; Smith’s language in the “equity, besides” passage closely echoes these same elements from both works; there are no plausible alternative inspirations for Smith’s phrasing; it is therefore highly likely that Smith was self-consciously participating in a conversation with Berkeley and Mandeville about utility of poverty themes.

IV. ADDING EQUITY

Smith’s addition of the two words “equity, besides” to a passage probably inspired by Berkeley and Mandeville highlights his unique contribution to the debate on the utility of poverty. Previous writers—including Dudley North, Sir Walter Harris, and Nathaniel Forster—had already challenged the “positive” claims of the necessity theory of motivation (Furniss Reference Furniss1920, pp. 125–126; North Reference North1691, p. 27). Taking a different approach, both John Cary and Jacob Vanderlint defended high wages as leading to spending and hence prosperity (Furniss Reference Furniss1920, p. 127; Vanderlint Reference Vanderlint1734, pp. 16, 158).^{Footnote 7} But these were still at root instrumental defenses of high wages—not challenges to the normative claims of the doctrine of the utility of poverty. Such challenges did exist, but usually focused on including workers’ material welfare in the overall social goal. Thus Berkeley himself implied in query 131 that the goal of public institutions ought to be “the well-being of the whole” (Berkeley Reference Berkeley1735, p. 32). In his essay on commerce, Hume similarly embraced worker prosperity as valuable. Even though England’s high wages lead to “some disadvantages in foreign trade,” he observed that “foreign trade is not the most material circumstance, 'tis not to be put in competition with the happiness of so many millions” (Hume Reference Hume1752, pp. 18–19). Similarly, as Jacob Viner (Reference Viner1930) recognized, Robert Wallace was a strong high-wage theorist who explicitly stated

Smith was, of course, fully in agreement with this view. The Wealth of Nations praised the “progressive state” of economic growth because in it “the condition of the labouring poor, of the great body of the people, seems to be the happiest and the most comfortable.” Those who complain about high wages do not understand that the “liberal reward of labour” is the effect of “the greatest publick prosperity” (WN, 1776, I.viii.43, p. 99). This aspect of Smith is what Edwin Cannan had in mind by observing that he viewed wealth “per head” as opposed to wealth “in the aggregate” as the goal of policy: a goal that entailed approval of high worker wages (Cannan Reference Cannan1926, p. 127).^{Footnote 8}

But Smith in the Wealth of Nations hints at going further, invoking the language of justice to draw a protective boundary around workers’ labor. The “equity, besides” and other passages suggest that there are things that cannot be done to workers even in pursuit of greater national wealth. Smith apparently collided, therefore, with the advocates of the doctrine of the utility of poverty not just on the ultimate goals of policy but also, so to speak, on process. The contrast can be seen clearly with (to choose just one instance) Fielding, who, as has been seen, bizarrely described mutually voluntary wage-setting as allowing “the lowest Artificers, Husbandmen, and Labourers, [to be] Judges in their own Cause” (Fielding Reference Fielding1751, p. 89). By comparison, Smith forthrightly stated:

Fielding seemed to view workers’ labor as somehow detached from them, perhaps held in a kind of trust for the nation. Therefore a wage negotiation resembles a legal “cause” or case over some external asset whose value it would indeed be inappropriate for the workers alone to set. (The argument would seem to apply equally to the employers, though Fielding does not make that case!) Smith, by contrast, unequivocally views labor as the property of the individual worker and indeed as the “foundation of all other property” (WN, 1776, I.x.c.12, p. 138). Elsewhere he famously speaks of the “natural liberty [of all British subjects] of exercising what species of industry they please” (WN, 1776, IV.ii.42, p. 470) and says that “the law ought always to trust people with the care of their own interest,” implying that to do otherwise is an “evident violation[n] of natural liberty, and therefore unjust” (WN, 1776, IV.v.b.16, p. 530). What Smith arguably added to the debate on the utility of poverty, then, was not only the policy objective of wealth “per head” (or possibly median wealth) but also a view of workers as dignified and rightful owners of their own labor.^{Footnote 9}

This was not, of course, a perspective wholly unique to Smith. Hume, for instance, had clearly stated that “[e]very person … ought to enjoy the fruits of his labour” (Hume Reference Hume1752, pp. 17–18). And Malachy Postlethwayt denounced the doctrine of the utility of poverty as “contend[ing] for the perpetual slavery of the working people of the kingdom” (Postlethwayt Reference Postlethwayt1766, p. 14, quoted in Furniss Reference Furniss1920, p. 126). But Smith’s language empowering the workers became more culturally prominent. And equity was at its center.

Berkeley’s query 2 had asked “[w]hether a people can be called poor, where the common sort are well fed, clothed, and lodged” (Berkeley Reference Berkeley1735, p. 5). The choice of “common sort” to describe the people already contrasts to Smith’s alternative description of them as “members [of society]” and “they who feed, cloath and lodge the whole body of the people” (WN, 1776, I.viii.36, p. 96; emphasis added). Smith’s wording emphasizes the active creation of value by the workers, while Berkeley’s use of the passive voice seems to imply that workers are cared for (or at least organized by) the beneficence of the state, or the rich. But the most salient addition is that of “equity, besides” itself. The term “equity” did (and still does today) have a technical legal meaning of which Smith was aware (LJ [B], 2009, p. 424). But his obvious usage of “equity” here was as a synonym for the “natural justice” that ought to be, but is not always, realized in the conduct of states. Such usage is consistent with many other examples in his writings. Thus in the very last paragraph of the Theory of Moral Sentiments (TMS) he describes “natural equity, which ought to be enforced by the positive laws of every country” (TMS, 1776, VII.iv.37, p. 341). In the Lectures on Jurisprudence (LJ) he speaks of how the standard of the civil law differs from that of “naturall justice and equity” with respect to debased coinage (LJ [A], 2009, 1/21/1763, pp. 100–101). Earlier he had contrasted legal privileges derived from “the civil constitutions of states” with those grounded on “natural reason and equity” (LJ [A], 2009, 1/17/1763, p. 82); and he also contrasts the “law of nature and equity” with “the civil law of the country” (LJ [A], 2009, 2/3/1763, p. 134). These varying phrasings paint equity as either an exact or, at worst, very close synonym for natural justice. Therefore a famous statement in the TMS describing deviations from natural justice would seem to apply to equity as well:

Why Smith chose to use “equity” rather than “natural justice” in his famous passage can probably be attributed to style: “[i]t is but equity, besides” reads more smoothly than the alternative “[i]t is but natural justice, besides.” But either choice would have sent the same signal: that there was at least the potential for tension between natural justice and existing positive law. No appeal to justice is necessary where injustice is not feared.

What injustice did Smith fear when he wrote the “equity, besides” passage? That he was (almost certainly) aware of the doctrine of the utility of poverty suggests that at least one possible injustice would be for the workers to have their wages suppressed by legal means. The legislative framework of the Statute of Artificers, as has been seen, was a mechanism for doing precisely this. To read “equity, besides” as a protest, at least in part, against such thinking would be consistent with Smith’s bitter condemnation elsewhere of the apprenticeship provisions of the Statute of Artificers as violating the “patrimony of the poor man” in his own labor (WN, 1776, I.x.c.12, p. 138). It is similarly congruent with his view of the Law of Settlement as “an evident violation of natural liberty and justice” (WN, 1776, I.x.c.59, p. 157).

There is, however, puzzling evidence against the hypothesis that the “equity besides” passage was partly meant to criticize wage fixing. This evidence is Smith’s surprisingly mild criticism of wage fixing itself whenever he discusses it explicitly. Striking a strangely pragmatic tone, he claims that “experience seems to show that law can never regulate [wages] properly, though it has often pretended to do so” (WN, 1776, I.viii.34, p. 95), though he does later point out that “[w]henever the law has attempted to regulate the wages of workmen, it has always been rather to lower them than to raise them” (WN, 1776, I.x.c.34, p. 147). In a similar vein Smith invokes the judgment of Richard Burn’s History of the Poor Laws that wages aren’t by their nature susceptible of “minute limitation” and that regulation would suppress “emulation” as well as “industry or ingenuity” (Burn Reference Burn1764, p. 130; WN, 1776, I.x.c.60, p. 157). Later, in the digression on silver, Smith describes without negative comment the medieval statute of laborers, which began the practice of (attempted) wage control by the central government (WN, 1776, I.xi.e.2, p. 195). These muted reactions contrast surprisingly with the vigorous defense of worker self-ownership implicit in the attack on the apprenticeship provisions and the Law of Settlement. If his own labor is truly the “patrimony of the poor man” (WN, 1776, I.x.c.12, p. 138) and all subjects possess the “natural liberty of exercising what species of industry they please” (WN, 1776, IV.ii.42, p. 470), then the mere practicability of wage regulation, or its effect on “emulation,” would seem to be, at best, supporting arguments to the overriding moral case for free bargaining.

While not entirely satisfying, a possible explanation for Smith’s inconsistency emerges from his discussion of the 1768 Act to regulate the wages of journeymen tailors in London. This was Smith’s law of “8^th of George III” (WN, 1776, I.x.c.61, p. 157), which was itself an extension of a similar measure in 1720. These measures were blatant enactments of the doctrine of the utility of poverty, designed to thwart journeymen tailors’ combinations (unions) that were seeking “greater Wages” and shorter hours of work (C.J. 19, 1718–1721, p. 416). Parliament assisted the master tailors (employers) by outlawing combinations, stipulating fourteen-hour days (6 AM to 8 PM[!]), and fixing the wage at “any Sum not exceeding Two Shillings per Diem [and 1s.8d outside the peak spring production period]” (Statutes of the Realm, 7 Geo. I, c.13; emphasis added). The 1768 extension of this measure made absolutely clear its intention to thwart market wages for the tailors, complaining that employers outside central London were “giv[ing] larger Wages, and, in Times of hurry, can get Journeymen from other Masters, which gives those Masters advantage in Trade, and have got Customers from them” (Commons 1803, p. 535). Characteristically, Mandeville himself had complained of the 1720 episode that “Journeymen Taylors go to Law with their Masters … [and] in the midst of their poverty they insult their Betters” (Mandeville [1924] Reference Mandeville and Kaye1957a, pp. 311–312).

Smith’s discussion of this issue combines clear-eyed analysis with elliptical criticism. He comments that “[w]henever the legislature attempts to regulate the differences between masters and their workmen, its counsellors [sic] are always the masters” (WN, 1776, I.x.c.61, p. 157)—a precise description of the lobbying efforts of the master tailors in Parliament. Smith then insinuates rather than states that the wage law may be unjust and inequitable, and compares it with a good law to prevent the payment of fraudulent truck wages. He then openly states that the law of 8 Geo. III, c.17 is in favor of the masters, and describes the unequal treatment given to worker and employer combinations. The Act regulating the journeymen is, in fact, a way of using the law to create a combination of employers to prevent a rise in wages. But then Smith closes by endorsing “the complaint of the workmen, that it puts the ablest and most industrious upon the same footing with an ordinary workman” (WN, 1776, p. 158, I.x.c.61). This was the same rationale Dr. Burn gave for opposing wage regulation under the Statute of Artificers (Burn Reference Burn1764, p. 130; WN, 1776, I.x.c.60, p. 157). All the ingredients are seemingly present to deem the law “an evident violation of natural liberty and justice,” and yet Smith does not do so. His circumspection here seems of a similar order as that about the wage-fixing practices of the Statute of Artificers.

Two explanations for Smith’s apparent inconsistency suggest themselves. The first is the simplest: that Smith really was not a consistent champion of natural justice for workers, or that he did not after all perceive free wage bargaining to be part of natural justice. This explanation suits Salim Rashid’s iconoclastic claim that Smith’s idée fixe was free trade, and that the rest of his system was a hodgepodge of unacknowledged and often inconsistent borrowings from other writers (Rashid Reference Rashid1990). While an ultimate answer about Smith’s true motives would require a full expedition into his moral theory, it isn’t valueless to weigh the Wealth of Nations in a balance of its own—as might have been done by alert contemporary readers. This suggests a second, less cynical, explanation for the inconsistency. As has been seen, Smith did not just directly plagiarize Berkeley’s Querist; he made changes of wording that significantly changed the meaning of queries 2 and 62, the likely sources of the “equity, besides” passage. Furthermore, Smith chose not to adopt Berkeley’s entire program for the poor, notably the proposals in queries 381, 382, and 384 to actually enslave “sturdy beggars” for “a certain term of years” (Berkeley Reference Berkeley1735, pp. 80–81). Acknowledging that Smith was guilty of poor citation practices (at least by modern standards) does not mean he had no ideas of his own about the welfare of the common people. His lukewarm condemnations of the wage-fixing provisions of the Statute of Artificers do not actually contradict the more pro-worker attitude implicit in his stronger statements. He did anyway think, rightly or wrongly, that “these practices have gone entirely into disuse” (WN, 1776, I.x.c.60, p. 157). A defunct practice might not have seemed worth serious criticism. A better test of what Smith really thought about wage fixing is his attitude to the regulation of the journeymen tailors, since that law was recent, clearly still operative, and merely a specific application of the wage-fixing philosophy of the Statute of Artificers.

Here Smith’s rhetorical strategy must be considered. As both Willie Henderson (Reference Henderson and Brown2004) and Michael Clark (Reference Clark2011) have argued convincingly, Smith had a notable tendency to hedge his statements and shade meanings to what he thought his audience would accept. And if he hoped to influence Westminster politicians, it would have been unwise to openly denounce laws in the passage of which powerful people had been personally involved only eight years before the publication of the Wealth of Nations. This was of course precisely the case with the 1768 statute, which was actually drafted by a committee including the Lord Mayor and the Members of Parliament for the City of London, Middlesex, Essex, Surrey, Kent, and Hertford (Commons 1803, pp. 483, 593). It would have been far costlier for Smith to call this law “an evident violation of natural liberty and justice” than it was to say the same of the Law of Settlement passed nearly two centuries before, by powerful men long dead, even if the settlement provisions were sometimes still enforced. Yet, for all that, Smith still did find a way to convey his opinion of the 1768 law by indirection and insinuation. An intelligent reader easily infers that the law was hypocritical and unjust, though Smith does not explicitly say this. By closing on the unthreatening complaint that the law gave no incentive for the “ablest and most industrious,” he masterful disarms any fear of sedition—no doubt the reason that the tailors of both Smith’s time and the 1720s employed the same rhetorical formula in their broadsides (The Case of the Journeymen-Taylors residing in the Cities of London and Westminster, most humbly offered to the Consideration of both Houses of Parliament, 1721). In such a reading the inconsistency in tone between and among this and Smith’s other statements on justice for workers might actually be deliberate, indicating caution and strategy rather than inconsistency. Smith would still be a defender of the idea that in natural justice, workers rightfully disposed of their own labor and rightfully enjoyed its fruits.