Business Cycles

Business Cycles

Jean Charles Léonard de Sismondi

New Perspectives on Political Economy

1819

"Nor does even the present condition of our manufacturing and commercial interests, though in some respects they are prosperous, indicate a steady advance to that state which produces the greatest well-being to the greatest number; with crises occurring at periods of about six years, when a sudden stagnation comes upon manufacturing prosperity, and indeed on business of every kind, shaking the stability of the largest concerns, ruining numbers of those below them, and bringing destitution and starvation on those they employ. The cause of these crises does not seem satisfactorily explained. They have been partly accounted for by glutted markets, and over-speculation; but a deficiency in that staple article of food, corn, has been most generally contemporaneous with them, forcing the poor, the great consumers, to spend so much less in manufactured articles, and what may be called luxuries. As regards also this numerous and most important part of our population, is it, as a whole, so happy, so healthy, so well fed, and so well clothed, as it was 80 or 100 years ago? No doubt the working classes, when they are in full employment, have more luxuries in their food, dress in finer if not better clothes, and have more comforts than were thought of at that time; but the much larger proportion of the utterly destitute, and the immense amount of suffering which results from any check or depression in commerce, manufactures, or agriculture, felt still more keenly by those who have been accustomed to comfort, if not luxury, more than compensate for these advantages. And unquestionably the price of provisions is higher, in proportion to the rate of wages, than it was at that time. The great question still remains; can that country be in a sound economical state, in which 8 per cent. of the whole population is mainly maintained by public or private charity? To this waste must be added that of fraud and crime, of which it is the fertile source."