Josiah Child, Interest Rates, and John Locke's “For a General Naturalization”

Abstract

Throughout the 1690s there were several high-profile parliamentary debates about lowering interest rates from 6 to 4 percent. Locke's involvement in these policy debates is significant. In this period, he circulated at least one important pamphlet on this issue to various Members of Parliament. The purpose of this article is to illuminate the links between Locke's arguments against interest rate reduction and immigration policy. Locke's essay “For a General Naturalization” (1693) employs some of the same pro-naturalization formulations that Josiah Child uses in A New Discourse of Trade (1693), a pamphlet that was ostensibly published in support of the parliamentary proposal for lower interest rates. Even though Locke had a long history with pro-naturalization arguments, the framework of his essay on naturalization is very likely an extension of those debates with Child about interest rates from 1691/2.

Introduction

The purpose of this article is to situate Locke's essay “For a General Naturalization” (1693) in the wider naturalization debates of the late seventeenth century and, more specifically, the economic debates about interest rates that were taking place in the 1690s.¹ While this essay represents Locke's most direct engagement with the issue of immigration, very little is known about the circumstances surrounding it. Mark Goldie speculates that the essay was written in anticipation of or in response to the General Naturalization Bill that was put forward in December 1693, which is most certainly the case.² However, very little work has been done to show how this text intersects with the many high-profile parliamentary debates on issues concerning political economy that were taking place at that time. Throughout the 1690s, Locke wrote a number of position papers on issues of political economy which were circulated among key policy makers to influence their opinions.³ In this period, Locke was beginning to give expression to a much more sophisticated theory of political economy. With greater understanding of the basic mechanisms driving economic activity, he started to flesh out the conceptual linkages between interest rates and population flows.

Beyond the broader currents of naturalization and political economy, this article also seeks to show that Josiah Child was a key interlocutor for Locke's essay on naturalization. While they disagreed about certain specific mechanisms of political economy (quite centrally the issue of interest rates), they shared a similar moral outlook and held many of the same assumptions about the inner workings of political economy more broadly. Both warned against the dangers of luxury and easy money, which breed idleness and moral laxity. They shared the belief that effective economic arrangements would incentivize moral and civic virtue, and, for the purposes of this paper, it is significant that Child and Locke were both firmly committed to a policy of open naturalization. They both believed that favorable immigration policy was intimately linked with England's economic and moral development. The conditions that would produce economic growth and incentivize positive moral behavior would necessarily lead to an influx of foreigners.

While Child published widely on the issues of trade and political economy in this period, of particular interest is his A New Discourse of Trade. Originally published under the title Brief Observations Concerning Trade and Interest of Money (1668), this treatise was revised and expanded by Child in 1690, and published anonymously as A Discourse about Trade. He republished this text again in 1693 under the new title A New Discourse of Trade.⁴ Locke owned all three of these editions.⁵ Notably, in his 1690 edition, Child dedicates an entire chapter to the issue of naturalization and the necessity of Parliament passing a bill that would encourage foreign immigration to England (incidentally, he also advocates for the naturalization of Jews).⁶ The timing of Child's 1693 reprinting of this text, not to mention Locke's then recent critical engagement with him over the issue of lowering interest rates, all lend additional weight to the idea that Locke was building on his engagement with Child's pro-naturalization formulations when he formally set out his ideas on the subject.

Locke's interest in the politics of naturalization has been given relatively little attention since David Resnick first published “For a General Naturalization” in 1987.⁷ In fact, it is still common for political theorists to argue that Locke had little interest in the issue of immigration.⁸ A peculiar feature of Lockean scholarship has been that, disconnected from the economic and historical context in which he was writing, not to mention the naturalization policies he actually supported, it has been possible to generate textually consistent but historically limited readings of the Second Treatise of Government that construe Locke as a strong proponent of what contemporary scholarship refers to as “exclusion,” i.e. territorial rights that include the right to unilaterally exclude immigrants.⁹

From what we know of Locke's involvement with the naturalization debates of the post-Restoration period, it is by no means clear that he believed that nations had the right to exclude immigrants. In contrast, he claimed that princes have a duty to “increase hands.”¹⁰ The last thing he would have wanted was to prevent foreigners from settling in England. Even supposing that governments did have the power and ability to restrict immigration inflows, there is no indication that Locke believed that they should do so. Quite tellingly, the only people concerned with regulating the comings and goings of their populations in the seventeenth century were absolutist monarchs, either expelling “undesirable” minorities (like the French Huguenots) or trying to prevent their disgruntled populations from leaving. Some of Locke's language on this issue, in fact, flirts with excess. He writes, “to put this past doubt this is certain: no country can by the accession of strangers grow too full of people.”¹¹ If properly managed, there was no foreseeable limit to the number of people a country could admit. Though, much as was the case with other features of the new science of political economy that were being developed in this period, this sentiment also seems to presume that there are self-regulating mechanisms at work governing the movement of people, all of which obviate the need for explicit government regulation.

To these ends, this article is organized as follows. The first section provides an overview of the naturalization debates that were taking place in the Restoration period. These discourses were grappling with three key events: (a) the new science of demography and population studies advanced by John Graunt and William Petty, (b) the Dutch economic miracle, and (c) the Huguenot refugee crisis. The following section shows that Locke's interest in naturalization can be traced back to some of his earliest writing on political matters, dating to the time he was in the service of Lord Ashley Cooper. The next section provides an account of the interest rate debates that were taking place in the period after the Glorious Revolution, more specifically the prominent roles Child and Locke played in these debates. The final section shows how the issues of interest and naturalization were intimately related in the economic theories of Child and Locke.

Populationist discourses

By the mid-seventeenth century, population discourses were changing. Up to that time, the republican tradition had historically advocated for a generous naturalization policy to aid in national defense and territorial expansion.¹² The natural-law tradition had also customarily held that individuals had a right to communicate and trade with whomever they wished and that states had a duty to be hospitable to strangers, granting them residency if they so wished.¹³ Around the time of the English Restoration, however, three events dramatically transformed this discourse. First, in 1662 John Graunt published Natural and Political Observations Made upon the Bills of Mortality, which was the first methodologically rigorous attempt to quantify England's population size. This text, along with William Petty's Political Arithmetick (circulated in the 1670s and printed in 1690), demonstrated that England's population was not in decline and that the country could sustain many more people than it did. In fact, employing Graunt's methods, Petty actively promoted policies, specifically regarding England's policy toward Ireland, that would lead to the influx of immigrants. He argued that with the proper attention to economic policy, strangers could be “admitted ad infinitum.”¹⁴

The empirical turn in Graunt's and Petty's analysis on population was in part inspired by concerns about England's competitive advantage in the world of international trade. Since the early seventeenth century, the Dutch had been the formidable trade powerhouse of Europe. One of the most pressing political economic questions of this period was how they had achieved supremacy. In 1663, Samuel Fortery argued that, the Dutch case proved, “Two things therefore appear to be chiefly necessary to make a Nation great and powerful, which is, to be rich and populous.”¹⁵ As Fortery suggests, it was widely believed that there was a strong correlation between economic prosperity and population size (or density). One of the central points of conflict in this debate was whether population growth drives economic attainment or whether it was merely a by-product of that success.

These arguments proved to be the source of deep divisions among political economists of this period. For instance, in his Brief Observations (1668), Josiah Child argues that Dutch population growth stemmed from their laws concerning usury. Their interest rate policies “were sufficient to make any barren Land fruitful, and a fruitful Land an entire Garden, which by consequence would maintain ten times the number of Inhabitants that the same Tract of Land would do where no such Laws were.”¹⁶ By effectively managing interest rate policy, the country had been transformed into a fruitful garden with an abundance of inhabitants.

Not everyone agreed with Child's formulation. In response, one anonymous critic argues that interest rates should be seen as subordinate to the dynamics of trade, monetary supply, and population size. The author claims that Dutch “trade makes plenty of money and people; their plenty of money, with abundance of people makes land dear, and the dearness of land, with plenty of money, makes interest naturally low.”¹⁷ This anonymous tract runs very close to some of the arguments Locke would develop in Some of the Consequences (1668), which were also set out to challenge Child. Locke argues that economic health is more directly traced to population size and money supply than to low interest rates. In fact, he concludes that interest rates should be kept artificially high by state policy, otherwise a string of morally and economically catastrophic consequences would follow (more on this below).¹⁸ In a slightly different vein, William Aglionby (1669) also rejected the mechanism of interest rates, arguing instead that Dutch success stemmed from the “plenty and abundance of all things, which commonly follows great numbers of people, particularly being so situated, as to take the advantage of three great Rivers, and the Sea.”¹⁹ And finally, William Temple (1673) argued “the true Original and Ground of Trade, to be, great multitude of People crowded into small compass of Land, whereby all things necessary to Life become dear, and all Men, who have Possession, are induc'd to Partimony.”²⁰ On this account, population density drives trade and economic productivity.

This is a small sample of the array of pamphlets published on Dutch economic success in this period. Even while there were clear disagreements about the specific mechanisms at work, it is striking how many commentators simply assumed that population size was a key indicator of economic health. While these arguments failed to produce naturalization reforms, they had real-world implications. Most notably, in 1685 King James II admitted to England roughly 50,000 persecuted French Huguenot refugees stemming from the repeal of the Edict of Nantes.²¹ While some of the public debate around this issue still harkened back to the hospitality discourse of the natural-law tradition, many commentators who supported open immigration saw this as a chance to demonstrate the empirical value of population-driven economic gains. As will be seen below, one can draw a direct line from the questions of Dutch economic success in the early Restoration period to the debates about Huguenot refugees and interest rates in the 1690s.²²

Locke's naturalization background

In many respects, anxiety about Dutch economic success and the possibility that open immigration might improve England's standing were the backdrop to a great deal of Locke's political commentary. For instance, the toleration discourse he is so well known for largely took place in the immediate aftermath of the influx of Huguenots. Locke's A Letter Concerning Toleration (1689) is a document that presupposes an increase in cross-cultural encounters between people of various religious and, indeed, ethnic backgrounds. In his public debate with Jonas Proast in A Third Letter for Toleration (1692), Locke writes, “Live amongst you then jews, mahometans, and pagans may; but endenizened they must not be. But why? Are there not those who are members of your commonwealth, who do not embrace the truth that must save them, any more than they? What think you of socinians, papists, Anabaptists, quakers, Presbyterians?”²³ While denizenship was a different legal status than that of naturalization – denizenship was a much more truncated form of citizenship granted by executive order from the king, whereas naturalization was extended only by an Act of Parliament – the cumulative effect of arguments of these kinds suggests not only that Locke was steeped in the politics of immigration, but also that he was willing to go much farther than the public policy of his day in terms of admitting and granting civil status to non-Protestants (indeed, non-European) foreigners.²⁴ The Dutch economic success and the Huguenot refugee crisis had confirmed to proponents of open immigration that the speedy naturalization of prospective citizens was so beneficial to the economic health of a nation that it should become formal state policy.

Support for these policy positions can be traced back to the early days of Locke's political thought. His first known encounters with English naturalization policy took place in the late 1660s with Ashley Cooper's involvement with the General Act of Naturalization of 1669.²⁵ Ashley was a member of a special committee that sought to address the issue of the “decay in land rents and trade,” to which the committee recommended a bill of general naturalization.²⁶ Locke had come into Ashley's service in 1667, first as the family physician, but then later as the secretary to the lords proprietors of Carolina. Whether he was directly influenced by Ashley's stance on naturalization is difficult to tell.²⁷ Perhaps they already shared very similar views on the issue. Then again, that Locke begins writing on these issues at that time is circumstantial evidence for Ashley's influence.²⁸

The convergence between Locke and Lord Ashley on the issue of immigration can be traced through several documents in this early period. In “An Essay on Toleration” (1667), which Goldie calls “the first fruit of his close association with Lord Ashley,” Locke makes the case that the lack of tolerance in society would have a negative effect “upon the number and industry of our people, on which depends the power and riches of the kingdom.”²⁹ This language, practically formulaic, was ubiquitous among seventeenth-century proponents of general naturalization. As noted above, in Some of the Consequences (1668), another pamphlet written at Ashley's request, to combat arguments advanced by Child in the late 1660s national interest rate debates, Locke argues that the causal mechanism behind the Dutch economic success was not artificially reduced interest rates, but rather “their plenty of people and money in proportion to their land which makes money cheap.”³⁰ Naturalization also features conspicuously in the Fundamental Constitutions of Carolina (1669).³¹ The document offers a surprisingly easy path to citizenship: “Whatsoever alien shall, in this form, before any precinct register, subscribe these Fundamental Constitutions, shall be thereby naturalized.”³² Finally, in a short piece on “Trade” (1674), yet another essay composed at Shaftesbury's request, Locke listed “easy naturalization” as one of the key variables to a healthy economy.³³

As this selection of references indicates, Locke was steeped in the radical Whig naturalization politics advocated by Shaftesbury in this period. Furthermore, as Laslett and Harrison show, this influence is also reflected in his library. Locke owned many key books on political economy that dealt with the emerging demographic theory of the period. They write,

Locke had two editions of the most original work in the social sciences published in his time, Graunt's Natural and Political Observations upon the Bills of Mortality, and he went to the trouble, while in France, of acquiring what seems to have corresponded to the bills of mortality for Paris. Whilst he lived in Rotterdam he noted down the weekly totals of burials in the city. He had Petty on Political Arithmetic, though not all the relevant tracts, and he was consulted about the publication of the posthumous work under that title which appeared in 1691.³⁴

In short, not only does Locke's early writing evince a proclivity to open-immigration arguments, but also he was quite evidently immersed in the contemporaneous literature on demography and naturalization in this period.

Interest rate debates post-Glorious Revolution

In the years immediately following the Glorious Revolution of 1688, many commentators were attempting to assess and diagnose the economic downturn the country was facing.³⁵ The Nine Years War (1688–1697) had led to a substantial disruption of trade.³⁶ The difficulties felt by various sectors of the economy run throughout the parliamentary record of this period, which is filled with petitions from regional guilds and manufacturers seeking support and relief from the difficulties they faced. To make matters worse, due to the changing climatic conditions stemming from the Little Ice Age, there were also several failed harvests that led to significant food shortages.³⁷ In places like Oxford and Northampton, anxiety over food scarcity led to price-fixing riots.³⁸ As Waddell explains, in this period there were “at least forty food riots, eight recoinage disturbances and several excise riots, as well as threatening ‘clamours’ from unpaid sailors, disbanded soldiers, and underemployed weavers.”³⁹ The economic outlook was quite grim. The pamphlets seeking to rehabilitate the English economy of this period touched on everything from moral degeneracy to immigration.⁴⁰ It was not uncommon for artisans and craft guilds affected by the slump to point the finger at foreign-born migrants, like the recent influx of French Huguenots.⁴¹

It is with this economic downturn in mind that Josiah Child started to rehabilitate his arguments about the merits of low interest rates that had been defeated in the late 1660s.⁴² In A Discourse about Trade (1690), Child makes the case that a high interest rate

doth prevent the cultivation and improvement of our Country, as otherwise it might and would be improved; doth hinder the growth of Trade and imployment and increase of the Hands of our Country; doth encourage Idleness and Luxury, and discourage Navigation, Industry, Arts and invention; then I make no question, but the taking of such an Interest as exceeds the Measure of our Neighbours, is Malum in se [wrong in itself], by the light of Nature, and consequently a Sin.⁴³

As noted above, Child believed that the secret to the Dutch economic success had been their low interest rates. This not only stimulated their manufacturing base, but it helped to explain their growth in population. Low interest rates stimulated economic productivity, leading to increased trade, which in turn led to higher wages. These higher wages attracted foreign workers, which further enhanced their economic productivity and trade. On this account, the best way for England to quickly improve its economic standing would be to both lower its interest rate to four percent and then, concurrently, make it easy for immigrants to naturalize.

Child's stature as a political economist in this period and the timing of this argument are significant.⁴⁴ It is certainly no coincidence that A Discourse about Trade was published around the same time as there was this renewed attempt to address this issue in Parliament.⁴⁵ On 10 October 1690, a bill was put forth in the House of Commons “for the Reducing of Interest of Money from Six Pounds to Four Pounds per Cent. per Ann.”⁴⁶ While several commentators were pushing for lower interest rates in this period, none quite had Child's reputation, especially given the prominent role he played in the parliamentary debates on this issue in the 1660s.⁴⁷ In fact, with those earlier debates in mind, a Member of Parliament, likely Sir John Somers, approached Locke asking him to revisit the arguments he had set out against Child in his 1668 paper Some of the Consequences.⁴⁸ Before Locke could formally enter the public debate, however, the bill was narrowly defeated by three votes after a rather brief period of time on 26 November 1690.⁴⁹

The following year there was a renewed attempt to push through a bill lowering interest rates. On 12 November 1691, a motion was made to consider another “Bill for the Lessening of Interest of Money,” this time approved 131 to 105.⁵⁰ Unlike the previous session, given the overwhelming willingness to consider new legislation on interest, support for the measure had clearly grown. The proposal was read for the first time on 14 November, incidentally a week after the date of Locke's introductory remarks to Some Considerations, dated 7 November (1691).⁵¹ It was at this point that opponents of the bill hoped to leverage Locke's influence and intellectual stature. Edward Clarke wrote to Locke on 15 December explaining how he had been circulating a draft of his updated and revised pamphlet.⁵² He writes,

I have given Sir Francis [Masham] one, and have disposed of four or five more so advantageously in the House that it is already a doubt whether the Bill for Lowering the Interest of Money will ever be read a second time or not; and all that have read the Considerations are clearly of opinion the arguments therein are abundantly sufficient to destroy that bill, and all future attempts of the like kind.⁵³

Armed with the more sophisticated arguments set out by Locke, Clarke was confident that he would be able to influence several of his colleagues to vote against the bill.

Clarke's exuberance notwithstanding, the bill was, in fact, read a second time on 7 January 1692. After heated debate, the committee considering the bill set forth several amendments which were submitted and incorporated into the original bill, which was then read for a third time to the House on 15 January.⁵⁴ This time, despite Clarke's and Locke's efforts, “An Act for lessening the Interest of Money” would go on to pass in the House of Commons on 23 January 1692 with a sizable majority: yeas 150, noes 101.⁵⁵ On the day of the bill's passing, and despite the policy defeat, Clarke wrote to Locke conveying to him the impact he believed his essay had had: “the Greatest and best men in our House were obliged to that Treatise for all the Arguments they used in those Debates.” He lamented, however, that the bill advanced not on its merits, but only because it provides “a supposed benefit to the borrower,” and for these same reasons, he fretted, it will “carry through the House of Lords likewise.”⁵⁶

Bracing for defeat, Clarke's letter suggests that he believed that the bill's approval in the House of Lords was imminent. Things would end up, however, taking a favorable turn for the opponents of lower interest rates. The House of Lords received the bill from the lower house on 28 January,⁵⁷ and then on 1 February sent it to committee, where it curiously and quite inexplicably disappeared.⁵⁸ In fact, on 17 February, the House of Commons, presumably perturbed that the bill had not yet made it out of committee, ordered “That a Message be sent to the Lords, to put them in mind of the Bill, intituled, An Act for lessening the Interest of Money.”⁵⁹ This reminder from the House of Commons notwithstanding, and for reasons that are not entirely clear, the bill passed into obscurity with Parliament's spring prorogation. The issue was not taken up again.

Despite Clarke's fear that low interest rates would benefit borrowers, it is not clear why the bill ultimately failed to pass in the House of Lords. Perhaps this bill touched on the growing rift between merchants and country gentleman, or, given the degree to which these arguments touched on the issue of immigration, anti-naturalization sentiments may have also played a key role.⁶⁰ For instance, the infamous Tory Sir John Knight, a Bristol merchant, and someone who would prove to be a source of virulent opposition to naturalization, sided with Clarke and Locke in their opposition to lowering interest rates to 4 percent.⁶¹ Even though he may have benefited from low interest rates as a merchant, the salient issue for Knight may have been the support it would give to the pro-naturalization elements that featured so heavily in Child's argument. Then again, he may have been convinced by the Lockean arguments that artificially lowered interest rates would eventually undermine trade and the value of estates.

Along these same lines, it may have been the case that there were enough country gentlemen among the Lords who, in agreement with the MPs of the lower house, believed the bill to be a “dangerous experiment” that would diminish the value of estates.⁶² This is exactly the framework of Locke's objection to the policy. He cautions policy makers with a foreboding prognosis:

When a nation is running into decay and ruin, the Merchant, and Monied Men, do what you can, will be sure to starve last: Observe it where you will, the decays that come upon, and bring to Ruine any Country, do constantly first fall upon the land; and though the Country Gentleman … be not very forward to think so; yet this nevertheless is an undoubted truth, that he is more concern'd in Trade, and ought to take a greater care that it be well manag'd and preserved than even the Merchant himself.⁶³

If those on the committee debating this bill were landed noblemen, then it is not clear that they would have been willing to risk the supposed benefits of borrowing when the value of their lands might fall. It was widely assumed among opponents of the bill in the House of Commons that lowering interest would devalue estates by one-fifth.⁶⁴

Whatever the reasoning of the Lords was, the fact that the bill reducing interest languished in committee provides a useful backdrop to Child's renewed push to popularize his arguments at the end of 1692. The relatively recent policy victory in the House of Commons and the, at least in theory, pending judgment in the House of Lords may explain the dramatic retitling of A Discourse about Trade (1690) to A New Discourse of Trade, now emblazoned with his name. Nearly a full year had passed since the bill to lower interest rates had been sent to the House of Lords. Significantly, no changes had been made to the text except its title and signature. This repackaging must have been an attempt to spotlight the otherwise doomed bill, or at the very least to rehabilitate public pressure to reconstitute and revitalize public debate on this issue.

Interest and naturalization

It is worth remembering that Child's arguments about interest rates are fundamentally related to immigration. Ever since the 1660s he had understood that England needed to open its borders with pro-naturalization policies if it were to compete with Dutch success. The general formulation of his argument proceeds as follows: he begins by noting that “Low Interest is the Natural Mother of Frugality, Industry, and Arts”; and “nothing hath or will incline this or any other Nation more to Thriftiness and good Husbandry, than the Abatement of Interest.”⁶⁵ From this he goes on to link all sorts of evils to high interest rates. It weakens productivity and hinders trade, which in turn engenders idleness and a propensity to luxury. But specifically he is concerned by the degree to which high interest rates drive down wages. The Dutch economic success had sufficiently demonstrated to him that low interest rates lead to high salaries, which in turn leads to “multitudes of people.”⁶⁶ He argues that “for much want of People would procure greater Wages, and greater Wages, if our Laws gave encouragement, would procure us a supply of People without the charge of breeding them.”⁶⁷

Child cautions that at their current rate of 6 percent, interest rates incentivize potentially degenerate behavior. He warns against “destructive Consumption … tending only to nourish Idleness, Luxury and Beggary.”⁶⁸ Conversely, if rates were lowered, this would produce a cascade of positive effects. For example, rather than bequeathing their sons lump sums of money, which would allow them to live idly off interest alone, fathers would be forced to bring their children “up to Writing, Arithmetick, and Merchants Accompts, and instruct them in Trades.”⁶⁹ Child worries that under the existing conditions many would continue “through the easiness of a deceitful Gain to live Idlely in good Towns on their Rents, rather than to give themselves with any pains to liberal Arts, or to till or husband their Inheritances.”⁷⁰ With a money- and trade-savvy merchant class that is compelled to live more frugally and to earn a living through husbandry or publicly beneficial trade, this would prohibit men from living passively off of exorbitant financial returns. Furthermore, these conditions would encourage individuals to invest their money in ways that are more “profitable to the Publick,”⁷¹ like the building of merchant ships or the purchasing and retailing of land.⁷² In the case of the latter, he suspects that low interest will make land an easy investment, especially if one is free to sell to foreign immigrants. A solid understanding of trade, he notes, “quickly brings us to find our advantage in permitting all Strangers to co-habit, trade and purchase Lands amongst us upon as easie terms as the Dutch do.”⁷³ In short, England could monetize its land by selling it to immigrant laborers who would engage in the value-producing arts of husbandry or skilled manufacture.

For Child, high interest rates encourage the wealthy to live idly off investments instead of engaging in economically productive financial husbandry, where money is directly invested into commercial interests, like ships and land. As noted above, it is striking that he believes that idleness among the merchant class is directly linked to beggary among the laboring poor. He concludes that when trade flounders, this will “drive them [our laborers] from us to other Countries that give better rates, and so the Dutch have drained us of our Sea-men and Wollen Manufactures; and We, the French of their Artificers and Silk Manufactures, and of many more we should if our Laws otherwise give them fitting Encouragement.”⁷⁴ An effective interest rate policy not only curbs degenerate lifestyles, but also stimulates trade and population growth. England would have a strong balance of trade, where it exports more finished goods than it imports, but also an equally desirable balance of immigration, where it receives more workers than it loses.

Though Locke does not explicitly thematize naturalization in Some Considerations the way that Child does, the implications of population flows are also the logical conclusion of his arguments. In this respect, even though they are on opposite ends of the interest policy debate, they agree that England would soon need to pass pro-naturalization legislation. Despite their differences, both assumed that population increase would be either the cause or the effect of healthy economic policy. Furthermore, both men also affirm the merits of having a frugal and industrious population base and a favorable balance of trade, with an emphasis on the production of raw materials, manufacture, and increased export. It is also striking that, like Child's, it is difficult to separate Locke's economic arguments from his moral ones. As noted above, Child calls high interest “wrong in itself” and a sin. And he routinely worries that bad economic policies might degrade the moral character of society. The same can be said about Locke.⁷⁵ This is not to say, however, that Child and Locke are deriving their moral positions from the mechanisms of economy. It is much more likely that they are seeking to reconcile the effects of market forces with what they perceive to be the just parameters of the natural law.⁷⁶

Though similar in form, Locke's argument is the exact inverse of Child's. He warns that low interest rates will incentivize dangerous consumption and investment patterns, which will erode society from within. The industrious country gentleman who produces his own raw goods and finished products, and who, furthermore, limits his expenditures on luxury items cultivates a favorable balance of trade for his farm (a rough metaphor for the country as a whole). He not only lives within his means but accrues wealth. This constancy only comes under threat when he is succeeded by a profligate son, “a fashionable young Gentleman, that cannot dine without Champane and Burgundy, nor Sleep but in a Damask Bed; whose Wife must spread a long train of Brocard, and his Children be always in the newest French cut and Stuff.”⁷⁷ Like Child, but for the opposite reasons, Locke worries that being accustomed to easy money will lead to a profligate lifestyle, a desire for finery which will contribute to the excesses of “Debauchery, Idleness, and Quarrels.”⁷⁸ It is quite significant that Locke's theory of economy only really works when the public has been habituated to a life of frugality and hard work. He clearly presumes that the working class will have a moral disposition that will keep them from being tempted by the glimmering prospect of higher wages in foreign lands.

Perhaps even more critically, Locke worries that any attempt to limit interest rates in the face of overriding market forces will turn men into liars. Since desperation, he surmises, drives men to take loans in the first place, and furthermore since he rejects the view that the “price of the hire of money can be regulated by law,”⁷⁹ Locke predicts that men will begin to make promises they cannot keep or look for ways to obey the letter of the law while violating its spirit.⁸⁰ He worries about the degree to which the “ever Frequency of Oaths shall make them be looked on as Formalities of Law or the Custom of straining of Truth.”⁸¹ Since “Faith and truth, especially in all occasions of attesting it, upon the solemn appeal to heaven by an oath, is the great bond of society,” laws that incentivize dishonesty will do more than just economic damage; they will undermine social trust and, more broadly, the entire moral fabric of society.⁸²

Locke agrees with Child that lowering interest rates will increase speculative investment in land, but he believes that this would ultimately distort the productive forces of society. Land will become a cheap product that is devalued inasmuch as it is commodified and traded. He explains that policies which make money cheap and land speculation easy will lead “Men to live beyond their Estates, Debts will increase and multiply.”⁸³ Under such conditions, when facing shortfalls, these speculators will eventually need to sell their land to cover their losses. Rather than investing in the land and developing manufacture, lower interest rates lead men to “turn their land into money.”⁸⁴

What is more, Locke worries that the rise of a brokerage class of land speculators will create a redundancy in the transferal of rents, tying up the money supply. He writes, “the multiplying of Brokers hinders Trade of any Country by making the Circulation, the Money goes larger, and in Circuit more stops, so that the Returns must necessarily be slower and scantier, to the prejudice of Trade.”⁸⁵ The idea here is that Locke presumes that renters would have to hoard their money in order to pay rent (typically due once or twice a year) to the broker, and the broker must then do the same to pay his creditors. Locke worries that this speculative investment in land would critically limit the amount of money in circulation since individuals at each stage of the investment chain (renter to broker and broker to banker) would need to save up a huge percentage of the country's money supply – Locke suspects upwards of 25 percent – to pay their rents and debts.⁸⁶

Locke also predicts that a land commodity, brokerage economy would drive up the cost of consumables. Since less money is in circulation, and since more men will be speculating on land and living off borrowed money, there will be fewer individuals applying themselves to the value-generating activities of husbandry and manufacture. Locke, in fact, warns, “Money is a barren thing, and produces nothing, but by Compact transfers that Profit that was the Reward of one man's Labour into another man's Pocket.”⁸⁷ A brokerage economy only appears to generate wealth, but it is chimerical since there is very little productive labor at its root. For Locke it would be more efficient to cut the speculative land brokers out of the equation altogether. Contrary to Child, he argues that it is only when money is costly to borrow that the merits of husbandry will pay, and men will be incentivized to invest in the production of raw goods and manufacture.

In the normal course of events, Locke suspects that people only buy land when, after carefully plying their trade and gradually building up their industry, they are looking to invest their surplus wealth. He writes, “And Men in Trade seldom think of laying out their money upon Land, till their Profit has brought them in More, than their Trade can well employ.”⁸⁸ Under these more preferable conditions, the purchase of land is not a speculative investment in the way it is for brokers. To begin with, the assumption seems to be that the land is bought outright, not mortgaged. The newly purchased land will be either the new site of expanded manufacture or subsequently leased out to tradesmen who will make improvements to the land while paying rents. When leased in this way, there is now only the landowner and the renter; there is no middleman broker or end-of-the-line banker to bottleneck the flow of currency.

With high interest rates, the landowner receives a much higher return on investment since he would receive both rent and, assuming the renting laborer productively plies his trade and makes improvements on the property, an increase in land value. In fact, by investing in land this way, by cutting out the brokerage speculator and the banker, Locke argues that over time this would lead to an even better return on investment than would have occurred by lending money at 4 or even 6 percent. Allowing the interest rate to go as high as 6 percent would not only incentivize healthier investment and consumption patterns, leading to even greater returns. Through patience and diligent labor, the husband or manufacturer would work the land, increasing its value and profitability. This, in turn, would raise the amount of money the landowner could receive through rents. But more broadly, Locke suspects that the entire country would benefit since more sectors of the economy would be productive through labor and industry.

In contrast to these favorable conditions of value creation, Locke warns that the cascade effect of low interest rates would contribute to a severely contracted production base. When there is less money in circulation to spend on goods and services (all the easily available money having been quickly caught up in brokerage investment schemes), and there are fewer laborers plying their trade, productivity will be diminished overall. As fewer goods and services are available, demand for consumables and, hence, prices will increase. The high costs of goods will weaken exports, which then will lead to an unfavorable balance of trade. From this Locke envisions a devastating domino effect: laborers will not be able to afford goods and will have to borrow to make ends meet. Eventually, they will begin to default on their loans and rents. The brokerage class will be next; they too will start to fault on their loans to the bankers and creditors. What is more, those laborers who are struggling to make ends meet will begin looking elsewhere for more favorable economic conditions. In fact, in at least two places Locke worries about farmers and tenants “running away” (perhaps to foreign countries) from their debts.⁸⁹

In contrast to Child's belief that low interest rates will increase immigration, Locke argues just the opposite, that any such proposal actually “endangers the drawing away our People, both Handicrafts, Mariners, and Soldiers, who are apt to go where their Pay is best; which will always be where there is greatest plenty of Money.”⁹⁰ A bit later he reiterates this same point. The lowering of interest will prevent

Foreigners to come here and buy Lands, and settle amongst us. Whereby we have this double loss; First we lose their Persons, increase of people being the increase both of strength and riches: Secondly we lose so much Money. For though whatever an Englishman gives to another for Land, though raised to 40 Years purchase, be not one farthing advantage to the Kingdom, yet whatever a Foreigner, who purchases Land here, gives for it, is so much every farthing clear gain to the Nation, for the Money comes clear in, without carrying out anything for it, and is all one as if it drop'd down from the Clouds.⁹¹

Land speculation, where brokers purchase investment properties with firty-year mortgages, indefinitely tie up the money supply and weaken trade for all the reasons Locke indicates above. When interest rates are high, Locke suspects that speculative investment becomes less attractive, and this will naturally incentivize more economically productive ventures. Even though wages are lower, so too are prices; everyone benefits from stronger purchasing power and the increase in cash flows. In short, more people can take advantage of the fruits that come with robust trade.

Locke is particularly attuned to the fact that a healthy economy attracts foreign workers, but it is also important to note that these conditions will attract the right kind of workers. Locke's criteria for immigrants had nothing to do with their ethnicity or religion. What mattered first was whether they were frugally minded estate holders who want to buy into the economy. Ideally, they would be those who wished to transfer their fortunes to England, and in doing so they would add to the domestic monetary supply, which would come “as if drop'd down from the Clouds.” Besides trade, the admittance of foreign-born migrants with fortunes was one of the few ways a country could increase its money supply. Second, migrants could also be skilled artisans and laborers who were not put off by lower wages. Of course, these lower wages were offset by lower prices, greater purchasing power, and the rapid circulation of money, where, as Locke explains, a “shilling may at one time pay 20 men in 20 days.”⁹² These hardworking laborers, wisely employed, would rent land, increasing its value, all the while enhancing the country's production and manufacturing base.⁹³

About a year after Child published A New Discourse of Trade, not too long after the debates about interest rates had subsided, Locke started writing “For a General Naturalization.” Given Locke's relationship with Clarke, with whom he addressed various policy proposals in this period, it is surprising that they did not correspond about this subject matter.⁹⁴ At least no letter exists showing they discussed it.⁹⁵ It seems most likely that Locke started drafting the document at the end of the year in 1693, perhaps as early as November in preparation to contribute to the impending parliamentary debates. The timing of this essay suggests that he was aware of the impending General Naturalization Bill, that it would be (or was) put forward on 7 December 1693, but not the renewed discussion about laws protecting the wool industry, which became the source of parliamentary discussion on 4 January 1694. Neither does he appear to be aware of Sir John Knight's vituperative and highly public denunciation of the bill. Knight's offending tract was likely written and circulated soon after the bill had been advanced to committee in early January,⁹⁶ and was burned by the public hangman on 1 March 1694.⁹⁷ All of this confirms Goldie's December 1693 dating of the document.

Even though the text does not mention interest rates – since the issue of lower interest rates had failed to advance out of committee in the House of Lords the previous year, there was no need to relitigate this issue – the tract can still be read as an extension of the arguments set out against Child in those former debates. The essay reflects many of the same formulations about naturalization that were employed by Child. Locke also reiterates some of the same underlying market assumptions that were at play in his writing on interest: laws that violate market forces cannot be adhered to; manufacture and labor are the true source of value creation in the economy; currency circulation is key to a productive economy; and productivity drives down wages and prices, which will, in turn, lead to a greater demand for export goods. Adding to these arguments, Locke maintains that the admission of immigrants would have an even greater salutary effect on a country's productivity. Through population growth, one would be able to bolster both the domestic manufacturing base and the export of finished goods. The effective management of skilled immigrant laborers would produce an even more favorable balance of trade, and so the cycle of prosperity goes.

Locke's critical engagement with Child is significant and not merely because it illuminates the complex contours of disagreement within political economists in this period. More specifically, while the disagreement between Child and Locke can be traced back to the late 1660s, the significance of their divergence can more broadly be traced to the economic revolution that had taken place after the Glorious Revolution. Steve Pincus explains that after 1688 “the Tory stranglehold on economic ideology” espoused by Child gave way to other voices.⁹⁸ The challenge that Locke poses to Child at this time is not merely an attempt to relitigate a decades-old question, though it can certainly be interpreted this way. The disagreement between the two men really touches on the central question of what the post-revolutionary transformation of the country would look like. Both men believed that manufacture, trade, and immigration (among other things) were crucial components of economic growth and of the moral vitality of the country, even if they disagreed about the specific mechanisms that underwrote a healthy economy.

Conclusion

The content of Locke's “For a General Naturalization” is striking for two reasons. The first is not only the degree to which it recapitulates the populationist rhetoric of that period, but also the degree to which it resembles Child's pro-naturalization formulations. Given Locke's many encounters with Child over the issues of colonization and interest rates, there are good reasons to believe that Locke's “For a General Naturalization” was critically engaging with Child's naturalization arguments set out in A New Discourse of Trade. But second, this analysis also implies that any critical assessment of Locke's stance on immigration must engage with the intellectual tradition and policy context in which he was writing. These elements should help to mitigate the claims that Locke was a strong proponent of excluding migrants or the myth that he was uninterested in the question of immigration, as some have argued. The historical record shows not only that did Locke repeatedly engage with the issue of open naturalization over his career, but also that when he gave formal treatment to this subject his analysis was rooted in the economic debates on interest rates from the early 1690s.