Famines are Caused by Bad Policy

⁴⁴ Whoever examines the history of European dearths and famines from 16th century to the present will find that a dearth always arose from a real scarcity.

This scarcity was created by:

• war, or
• the fault of the seasons, most frequently

It never arose from any combination of the inland wheat dealers. A famine only arose from the government’s violence in attempting to remedy a dearth improperly.

⁴⁵ In an extensive wheat country with free commerce and communication, the scarcity created by the most unfavourable seasons can never be so great as to produce a famine.

If managed with frugality and economy, the scantiest crop will maintain the same number of people fed during periods of moderate plenty.

Excessive drought or rain are bad for crops.

But wheat grows equally on:

• high and low lands, and
• wet or dry land

Drought or excessive rains may hurt one part of the country.

• But the other part will not have them.

In wet and dry seasons, some of the wheat lost in one part of the country is compensated by the wheat gained in the other.

Rice requires a very moist soil and must be laid underwater.

• In rice countries, a drought is much more dismal.
• However, even in such countries, the drought is perhaps never so universal to create a famine if the government allows a free trade.

The drought in Bengal a few years ago might have created a very great dearth.

Some improper regulations and restraints imposed by the East India Company on the rice trade perhaps contributed to turn that dearth into a famine.

⁴⁶ When the government tries to to remedy a dearth by ordering all dealers to sell their wheat at a reasonable price, it:

• hinders the dealers from bringing it to market, and
  • It may then produce a famine
• enables the people to consume it so fast.
  • It produces a famine before the season’s end.

The unlimited, unrestrained freedom of the wheat trade is the only effective preventative of a famine.

It is the best palliative of a dearth. Because the inconveniences of a real scarcity cannot be remedied, it can only be palliated. Free wheat trade deserves and requires the most protection of the law because no trade is so much exposed to popular odium.

⁴⁷ In years of scarcity, the lower classes impute their distress to the wheat merchant’s avarice.

Instead of profiting from the scarcity, he is often in danger of being ruined.

His magazines are in danger of being plundered and destroyed by violence.

The wheat merchant expects his main profit during years of scarcity when prices are high.

He is in contract with some farmers to furnish him a certain amount of wheat at a certain price for a certain number of years.

This contract price is settled according to the ordinary price which is moderate and reasonable.

Before the recent years of scarcity, it was about 336 pence for the quarter of wheat.

In years of scarcity, the wheat merchant buys most of his wheat for the ordinary price and sells it dearer.

This extraordinary profit is just enough to put his trade on a fair level with other trades.

It compensates his many other losses from:

• the wheat’s perishable nature, and
• the frequent and unforeseen fluctuations of its price

This alone shows why great fortunes are seldom made in the wheat trade.

A popular odium attends the wheat trade in years of scarcity.

It makes people of character and fortune averse to enter into it.

The wheat trade is abandoned to an inferior set of dealers.

The only middlemen that come between the grower and the consumer are:

• millers
• bakers
• mealmen [warehouse?]
• meal factors [agents? retailers?] , together with wretched hucksters [resellers? peddlers?]

⁴⁸ Europe’s ancient policy authorized and encouraged this popular odium against the wheat trade, even if the wheat trade is so beneficial to the public.

⁴⁹ The 5th and 6th of Edward 6th cap. 14 enacted that anyone who buys any wheat or grain with intent to sell it again would be an unlawful engrosser.

For the first fault:

• he would be imprisoned for two months, and
• the value of his wheat would be forfeited.

For the second:

• he would be imprisoned for 6 months, and
• the double value of his wheat would be forfeited.

For the third:

• he would be imprisoned in the pillory, and
• all his goods and chattels would be forfeited.

The ancient policy of other European countries was no better than that of England.

⁵⁰ Our ancestors imagined that people could buy their wheat cheaper from the farmer than from the wheat merchant.

They were afraid that the wheat merchant would require an exorbitant profit to himself.

They tried to:

• annihilate his trade altogether, and
• hinder any middle man from coming in between the grower and the consumer, by imposing many restraints.

A wheat carrier could only exercise his trade with a licence proving that he was fair.

Edward VI’s statute required three justices of the peace to grant this licence.

The privilege of granting it was further confined to the quarter-sessions by a statute of Elizabeth.