Speenhamland system

The Speenhamland system was a form of outdoor relief intended to mitigate rural poverty in England and Wales at the end of the 18th century and during the early 19th century. The law was an amendment to the Elizabethan Poor Law (the Poor Relief Act 1601). It was created as an indirect result of Britain's involvements in the French Revolutionary and Napoleonic Wars (1793–1815).^[1]^[2]^: 168

Operation

The system was named after a 1795 meeting in Speenhamland, Berkshire, where local magistrates devised the system as a means to alleviate the distress caused by high grain prices. The increase in the price of grain may have occurred as a result of a poor harvest in the years 1795–96, though at the time this was subject to great debate. Many blamed middlemen and hoarders as the ultimate architects of the shortage.^[3]

The Speehamland scale read, "When a gallon loaf of bread cost one shilling:... every Poor and Industrious Man should have for his own Support 3s weekly, either produced by his Family's Labour, or an Allowance from the Poor rates, and for the support of wife and every other of his Family 1s 6d.... When the Gallon loaf shall cost 1s 4d then every Poor and Industrious Man shall have 4s Weekly for his own, and 1s and 10d for the Support of every other of his Family. And so on in proportion as the price of bread rises and falls."^[4]

The authorities at Speenhamland approved a means-tested sliding-scale of wage supplements in order to mitigate the worst effects of rural poverty. Families were paid extra to top up wages to a set level according to a table. This level varied according to the number of children and the price of bread. For example, if bread was 1s 2d (14 pence) a loaf, the wages of a family with two children were topped up to 8s 6d (102 pence).

The first formula was set at a time of high prices and possible over-charging, minimum wage inflation was deliberately muted compared to price rises. If bread rose to 1s 8d (20 pence) the wages were topped up to 11s 0d (132 pence). In this quoted example in percentage terms, a 43% price rise led to a 30% wage rise (wages fell from 7.3 to 6.6 loaves).

The immediate impact of paying the poor rate fell on the landowners of the parish concerned. They then sought other means of dealing with the poor, such as the workhouse funded through parish unions. Eventually pressure due to structural poverty caused the introduction of the new Poor Law (1834).

The Speenhamland system appears to have reached its height during the Napoleonic Wars, when it was a means of allaying dangerous discontent among growing numbers of rural poor faced by soaring food prices, and to have died out in the post-war period, except in a few parishes.^[5] The system was popular in the south of England. William Pitt the Younger attempted to get the idea passed into legislation but failed. The system was not adopted nationally but was popular in the counties which experienced the Swing Riots during the 1830s.

Criticisms

In 1834, the Report of the Royal Commission into the Operation of the Poor Laws 1832 called the Speenhamland System a "universal system of pauperism". The system allowed employers, including farmers and the nascent industrialists of the town, to pay below subsistence wages, because the parish would make up the difference and keep their workers alive. So the workers' low income was unchanged and the poor rate contributors subsidised the farmers.

Thomas Malthus believed a system of supporting the poor would lead to increased population growth rates because the Poor Laws encouraged early marriage and prolific procreation, which would be a problem due to the Malthusian catastrophe (where population growth would exceed food production).^[6] More recent scholarly analysis of census data by E. A. Wrigley, and Richard Smith shows that Malthus was mistaken.^[7]

Historian Rutger Bregman argues that food production actually grew steadily by a third between 1790 and 1830, though with a smaller section of the populace able to access it due to mechanization,^[8] and the population growth that actually happened was due to growing demand for child labour and not Speenhamland.^[9]

David Ricardo believed that Speenhamland would create a poverty trap, where the poor would work less, which would make food production fall, in its turn creating the space for a revolution;.^[10] However, Bregman argues the poverty that existed back then was not caused by a supposed Speenhamland "poverty trap", as "wage earners were permitted to keep at least part of their allowances when their earnings increased", but instead was the result of price hikes resulting from England returning to the gold standard, a policy Ricardo himself had recommended.^[11]

While some scholars believe that social unrest resulted from the system, others believe it was due to the adoption of the gold standard and industrialization, which equally affected all the populace in areas with or without Speenhamland.^[12]

This system of poor relief, and others like it, lasted until the passing of the Poor Law Amendment Act 1834, which prohibited boards of guardians supplementing the wages of full-time workers. This was not always implemented locally as guardians did not want to separate families in workhouses, and it was often cheaper to supplement wages than operate larger workhouses.^[13]

Evidence in the last 30 years shows that the bread scale devised during the Speenhamland meeting in 1795 was by no means universal, and that even the system of outdoor relief which found one of its earliest, though not its first, expressions in Speenhamland was not completely widespread. Allowances or supplements to wages were used generally as a temporary measure and the way they operated differed between regions. Mark Blaug's 1960 essay The Myth of the Old Poor Law charged the commissioners of 1834 with largely using the Speenhamland system to vilify the old poor law and create a will for the passage of a new one. However, historians such as Eric Hobsbawm have argued that the old poor law was still damaging by subsidising employers, and heightening dependency of workers' incomes on local aristocrats.^[14]^: 50–51^[15]

Daniel A. Baugh argues that relief costs did not greatly increase. After the Napoleonic Wars the conditions of employment and subsistence in south-east England underwent a fundamental change. The Speenhamland System did not differ much in consequences from the older system; what mattered was the shape of the poverty problem.^[16]

Notes

^ Hammond, J L; Barbara Hammond (1912). The Village Labourer 1760-1832. London: Longman Green & Co. p. 19.
^ Polanyi, Karl (1957). The great transformation. Boston: Beacon Press.
^ Walter Elder, "Speenhamland Revisited." Social Service Review 38.3 (1964): 294-302 online.
^ Grover, Chris (June 2020), Hard Work, History Today
^ Phillis Deane (1965) The First Industrial Revolution Cambridge: Cambridge Press. p144. ISBN 0-521-29609-9
^ Bregman, Rutger (5 May 2016). "Nixon's Basic Income Plan". Jacobin. New York. Retrieved 30 October 2018. Another clergyman, Thomas Malthus, drew out Townsend's ideas. In 1798, he described 'the great difficulty' on the road to progress, 'that to me appears insurmountable'. His premise was twofold: (1) humans need food to survive, and (2) the passion between the sexes is ineradicable. Conclusion: population growth will always exceed food production.... But the Speenhamland system apparently encouraged people to marry as fast and procreate as prolifically as possible. Malthus was convinced England was teetering on the brink of a disaster as terrible as the Black Death, which wiped out half the population between 1349 and 1353.
^ E. A. Wrigley, and Richard Smith, "Malthus and the Poor Law," Historical Journal 63.1 (2020): 33-62.
^ Bregman, Rutger (5 May 2016). "Nixon's Basic Income Plan". Jacobin. New York. Retrieved 30 October 2018. Fears of declining food production were baseless as well. Agricultural production experienced a steady upward trajectory, increasing by a third between 1790 and 1830. "But while food was more plentiful than ever, a decreasing share of the English population could afford it. Not because they were lazy, but because they were losing the race against the machine.
^ Bregman, Rutger (5 May 2016). "Nixon's Basic Income Plan". Jacobin. New York. Retrieved 30 October 2018. The population explosion that so worried Malthus was attributable chiefly to the growing demand for child labor, not basic income [i.e., the Speenhamland system].
^ Bregman, Rutger (5 May 2016). "Nixon's Basic Income Plan". Jacobin. New York. Retrieved 30 October 2018. Economist David Ricardo (a close friend of Malthus) was equally skeptical. He believed basic income [i.e., the Speenhamland system] would create a poverty trap: the poor would work less, causing food production to fall, fanning the flames of a French-style revolution.
^ Bregman, Rutger (5 May 2016). "Nixon's Basic Income Plan". Jacobin. New York. Retrieved 30 October 2018. Ricardo's analysis was equally faulty. There was no poverty trap in the Speenhamland system: wage earners were permitted to keep at least part of their allowances when their earnings increased. And the rural unrest that so worried Ricardo was actually a result of price hikes caused by England's return to the gold standard (which he recommended), not basic income [i.e., the Speenhamland system].
^ Bregman, Rutger (5 May 2016). "Nixon's Basic Income Plan". Jacobin. New York. Retrieved 30 October 2018. Recent scholarship also highlights a mismatch between adoption of the policy and unrest; villages with and without the policy rioted in 1830. All English peasants suffered from the return to the gold standard, along with industrialization in the north and the invention of the threshing machine. Threshers (which separate the wheat from the chaff) destroyed thousands of jobs in one fell swoop, depressing wages and inflating the cost of poor relief.
^ Grover, Chris (September 2015). "Understanding changes to Tax Credits: historical and policy dimensions of wage supplements in Britain". Lancaster University. Retrieved 26 April 2017.
^ Hobsbawm, E.; Rudé, G. (1969). "Captain Swing". {{cite journal}}: Cite journal requires |journal= (help)
^ McGaughey, E (2018). "Will Robots Automate Your Job Away? Full Employment, Basic Income, and Economic Democracy". SSRN. doi:10.2139/ssrn.3044448. S2CID 219336439. SSRN 3044448. {{cite journal}}: Cite journal requires |journal= (help)part 3(1)
^ Daniel A. Baugh, "The cost of poor relief in south-east England, 1790-1834." Economic History Review 28.1 (1975): 50-68 online