The Character and Logical Method of Political Economy
§1. In commencing a course of lectures on Political Economy, it is usual and natural to indulge in some congratulatory remarks on the progress of the science in recent times, and more particularly on the satisfactory results which have attended the extensive, though as yet but partial, recognition of its principles in the commercial and financial codes of the country. It is indeed not easy to exaggerate the importance of these latter achievements; and it is certainly true that economic doctrines have, in recent years, received some useful developments and corrections; at the same time I think it must be admitted that, on the whole, the present condition and prospects of the science are not such as a political economist can contemplate with unmixed satisfaction.
It is now a quarter of a century since Colonel Torrens wrote us follows:—"In the progress of the human mind, a period of controversy amongst the cultivators of any branch of science must necessarily precede the period of unanimity. With respect to Political Economy, the period of controversy is passing away, and that of unanimity rapidly approaching. Twenty years hence there will scarcely exist a doubt respecting any of its fundamental principles."*1 Five-and-thirty years have now passed since this unlucky prophecy was uttered, and yet such questions as those respecting the laws of population, of rent, of foreign trade, the effects of different kinds of expenditure upon distribution, the theory of prices—all fundamental in the science—are still unsettled, and must still be considered as 'open questions,' if that expression may be applied to propositions which are still vehemently debated, not merely by sciolists and smatterers, who may always be expected to wrangle, but by the professed cultivators and recognised expounders of the science.*2 So far from the period of controversy having passed, it seems hardly yet to have begun—controversy, I mean, not merely respecting propositions of secondary importance, or the practical application of scientific doctrines (for such controversy is only an evidence of the vitality of a science, and is a necessary condition of its progress), but controversy respecting fundamental principles which lie at the root of its reasonings, and which were regarded as settled when Colonel Torrens wrote.
This state of instability and uncertainty as to fundamental propositions is certainly not favourable to the successful cultivation of Political Economy—it is not possible to raise a solid or durable edifice upon shifting quicksands; besides, the danger is ever imminent of reviving that scepticism respecting all economic speculation, which at one time so much impeded its progress. It would, indeed, be vain to expect that Political Economy should be as rapidly and steadily progressive as the mathematical and physical sciences. Its close affinity to the moral sciences, as has been often pointed out, brings it constantly into collision with moral feelings and prepossessions which can scarcely fail to make themselves felt in the discussion of its principles; while its conclusions, intimately connected as they are with the art of government, have a direct and visible bearing upon human conduct in some of the most exciting pursuits of life. Add to this, that the technical terms of Political Economy are all taken from popular language, and inevitably partake, in a greater or less degree, of the looseness of colloquial usage. It is not, therefore, to be expected that economic discussions should be carried on with the same singleness of purpose, or severity of expression and argumentation,—consequently with the same success,—as if they treated of the ideas of number and extension, or of the properties of the material universe.
Such considerations will, no doubt, account for much of the instability and vicissitude which have marked the progress of economic inquiry; but I do not think they are sufficient to explain the present vacillating and unsatisfactory condition of the science in respect to fundamental principles. To understand this, I think we must advert to circumstances of a more special character, and, more particularly, to the effect which the practical successes achieved by Political Economy (as exemplified in the rapid and progressive extension of the commerce of the country since the adoption of free trade) have had on the method of treating economic questions.
When Political Economy had nothing to recommend it to public notice but its own proper and intrinsic evidence, no man professed himself a political economist who had not conscientiously studied and mastered its elementary principles; and no one who acknowledged himself a political economist discussed an economic problem without constant reference to the recognised axioms of the science. But when the immense success of free trade gave experimental proof of the justice of those principles on which economists relied, an observable change took place both in the mode of conducting economic discussions, and in the class of persons who attached themselves to the cause of Political Economy. Many now enrolled themselves as political economists who had never taken the trouble to study the elementary principles of the science; and some, perhaps, whose capacities did not enable them to appreciate its evidence; while even those who had mastered its doctrines, in their anxiety to propitiate a popular audience, were too often led to abandon the true grounds of the science, in order to find for it in the facts and results of free trade a more popular and striking vindication.*3 It was if mathematicians, in order to attract new adherents to their ranks, had consented to abandon the method of analysis, and to rest the truth of their formulas on the correspondence of the almanacks with astronomical events. The severe and logical style which characterized the cultivators of the science in the early part of the century has thus been changed to suit the different character of the audience to whom economists now address themselves. The discussions of Political Economy have been constantly assuming more of a statistical character; results are now appealed to instead of principles; the rules of arithmetic are superseding the canons of inductive reasoning;*4 till the true course of investigation has been well nigh for forgotten, and Political Economy seems in danger of realizing the fate of Atalanta,
"Declinat cursus, aurumque volubile tollit."
It has been remarked by Mr. Mill that "in whatever science there exist, amongst those who have attended to the subject, what are commonly called differences of principle, as distinguished from differences of matter of fact or detail,—the cause will be found to be a difference in their conceptions of the philosophic method of the science. The parties who differ are guided, either knowingly or unconsciously, by different views concerning the nature of the evidence, appropriate to the subject."*5 Now this appears to me to be strikingly the case with respect to those 'differences of principle' to which I have adverted as at present existing amongst economists; and, therefore, I think I cannot better carry out the views of the liberal founder of this chair, than by availing myself of the opportunity which the opening of this course affords of considering at some length the nature, object, and limits of economic science, and the method of investigation proper to it as a subject of scientific study.
In discussing the nature, limits, and proper method of Political Economy, I shall at once pass over those numerous prepossessions connected with the study of this science, some of a moral, some of a religious, and some of a psychological nature, which so much impeded its early advances. To enter at any length into such considerations would be to occupy your time in travelling over ground which probably you have already traversed, or which, at all events, it is in your power to traverse, in other and more edifying company; and to waste my own in combating objections, which either have ceased to exist, or, if they still exist, exist in spite of repeated refutations—refutations the most complete and irrefragable, to which I could hope to add nothing of point or weight, and which I should only weaken by translating them into my own language.*6
I shall therefore at starting take it for granted that 'wealth,' the subject-matter of Political Economy, is susceptible of scientific treatment; that there are laws of its production and distribution; that mankind in their industrial operations are not governed by mere caprice and accident, but by motives which act extensively and constantly, which may therefore be discovered and classified, and made to serve as the principles of subsequent deductions. I shall further take it for granted that a knowledge of these laws of the production and distribution of wealth is a desirable and useful acquisition, both as a part of a liberal education, and for the practical purposes to which it may be applied; and, further, that this knowledge is more likely to be obtained by careful and systematic inquiry than by what is called the common sense of practical men—another name for the crude guesses of unmethodized experience; and, lastly, I shall assume that the study of those principles and motives of human conduct which are brought into play in the pursuit of wealth is not incompatible with the sentiments and duties of religion and morality.
§2. The question of the proper definition of Political Economy will come more fitly under our consideration after we have ascertained with some precision the character of the inquiry—that is to say, its purpose and the conditions under which this is sought to be accomplished. Even here, however, it may be well to refer to so much as may be fairly said to be agreed upon in connection with the subject of definition—agreed upon not indeed by all who discourse on economic questions (for on what are they agreed?), but at least by the school of economists of whom Adam Smith may be regarded as the founder, and J. S. Mill as the latest and most distinguished expositor. So far as I know, all writers of this school, however they may differ as to the primary assumptions of Political Economy, or the method by which it ought to be cultivated, at least agree in describing it as the Science of Wealth. Now this implies agreement upon other points of considerable importance to which I desire to call your attention.
According to this view, then, you will observe that wealth constitutes the proper and exclusive subject-matter of Political Economy—that alone with which it is primarily and directly concerned. The various objections of a popular kind which have been advanced against the study upon the ground, as it has been phrased, of its 'exclusive devotion to wealth,' it is not my intention to notice at any length, for reasons which have been already assigned. I shall only remark that these objections almost all resolve themselves into this—that there the matters of importance which are not included within the range of Political Economy—an objection which seems to proceed upon the assumption that Political Economy is intended as a general curriculum of education, and not as a means of eliciting truths of a specific kind.*7 Thus a late writer in theNorth British Review speaks slightingly of Political Economy as 'a fragmentary science.' Now what is the value of this objection? Does the writer mean that Political Economy is a fragment of universal knowledge? This may be granted, and yet the point of the objection be still not very apparent, unless we suppose that he designed to advocate some 'great and comprehensive science,' such as that which Thales and his contemporaries had in view when they inquired—'What is the origin of all things?' Indeed if the history of scientific progress teaches any lesson more distinctly than another, it is, that human research has generally been successful just in proportion as its objects have been strictly limited and clearly defined; that is to say, in proportion as science has become 'fragmentary.'
Passing by popular objections, it cannot be denied that the limitation of Political Economy to the single subject of wealth—or, to state the same idea in a different form, the constitution of a distinct science for the exclusive investigation of the class of phenomena called economic—has been objected to by writers of authority and reputation. Perhaps the most distinguished of those who have taken view this* has been M. Comte. According to him all the various phenomena presented by society—political, jural, religious, educational, artistic, as well as economic—ought to be comprised within the range of a single inquiry, of which no one branch or portion ought to be studied except in constant connection with all the rest. I have elsewhere discussed this doctrine of M. Comte's at considerable length, and need not therefore do more than refer to it here.*8 Other writers, however, of whom M. Say is one, without adopting this extreme view, have desired to extend the boundaries of economic investigation beyond the limits prescribed by the ordinary definition, and would embrace in the same discussion with the phenomena of wealth a large portion at least of the facts presented by man's moral and social nature. But the objections to this course appear to me to he fundamental and insuperable.
In the first place, the great variety of interests and considerations included under the science as thus conceived would seem to render the comprehension of them in one system of doctrines difficult, if not impracticable. But the fundamental defect in this mode of treatment—in the attempt to combine in the same discussion the laws of wealth and the laws, or a portion of the laws, of the moral and social nature of man—consists in this, that even where the subject-matter of the two inquiries is identical, even where the facts which they consider are the same, yet the relations and aspects under which these facts are viewed are essentially different. The same things, the same persons, the same actions are discussed with reference to a different object, and, therefore, require to be classified on a different principle.
If our object, for example, were to discover the laws of the production and distribution of wealth, those instruments of production the productiveness of which depends on the same conditions, and those persons whose share in the products of industry is governed by the same principles, should, respectively, be placed in the same categories; while, if our object were the larger one of social interests and relations generally, we might require a very different arrangement. Thus superior mental power, regarded with a view to the production of wealth, is an instrument of production perfectly analogous to superior fertility of soil; they are both monopolized natural agents; and the share which their owners obtain in the wealth which they contribute to produce, is regulated by precisely the same principles. Men of genius, therefore, and country gentlemen, however little else they may have in common, yet being both proprietors of monopolized natural agents, would in an inquiry into the laws of wealth be properly placed in the same class. In the same way, the wages of a day labourer and the salary of a minister of state depend on the same principle—the demand for and supply of their services; and these persons, therefore, so widely different in their social position and importance, would be included by the economist in the same category. On the other hand, farmers and landlords, who, with a view to social inquiries, would probably be ranked together as belonging to the agricultural interest, would, if our object were the narrow one of the discovery of the laws of wealth, be properly placed in different classes: the income of the farmer depending on the laws which regulate the rate of profit, while that of the landlord depends on the laws which regulate rent; those laws being not only not the same, but generally varying in opposite directions.*9
As I have said, M. Say is one of those writers who have treated Political Economy as having this larger scope, and nowhere are the inconveniences of the method he pursues more distinctly brought into view than in his valuable treatise: indeed it appears to me that most of the errors into which, notwithstanding the general merits of his work, he has fallen, are to be traced to this source. No one, I think, can peruse much of his writings without perceiving (and the same remark may be made of not a few French writers on Political Economy, and in particular of M. Bastiat) that his reasoning on economic problems is throughout carried on with a side glance at the prevalent socialistic doctrines. An inevitable consequence of this is—his object being quite as much to defend society and property against the attacks of their enemies as to elucidate the theory of wealth—that questions respecting the distribution of wealth are constantly confounded with the wholly different questions which the justification upon social grounds of existing institutions involves; and thus problems purely economic, come, under his treatment of them, to be complicated with considerations which are entirely foreign to their solution.
Thus he tells us*10 that rent, interest, and wages are all perfectly analogous; each giving the measure of utility which the productive agency (of which each respectively is the reward) subserves in production. Rent, according to this theory, does not depend on the different costs at which, owing to the physical qualities of the soil, agricultural produce is raised, nor profit on the cost of labour, nor wages on demand and supply,*11 but each on the utility of the functions which land, capital, and labour respectively perform in the creation of the ultimate product. Thus the distinct economic laws which regulate the distribution of wealth amongst the proprietors of those three productive agencies are confounded, in order to introduce a moral argument in defence of the existing structure of society, and to place the three classes of landlords, capitalists, and labourers on the same footing of social convenience and equity.
Dr. Whewell, in examining the cause of the failure of physical philosophy in the hands of the ancient Greeks, finds it in the circumstance that they introduced into their physical speculations ideas inappropriate to the facts which they endeavoured to solve. It was not, he tells us, as is commonly supposed, that they undervalued the importance of facts: for it appears that Aristotle collected facts in abundance; nor yet that there was any dearth of ideas by which to generalize the facts which they accumulated; but that instead of steadily and exclusively fixing their attention on the purely physical ideas of force and pressure, they sought to account for external phenomena by resorting to moral considerations—to the ideas of strange and common, natural and unnatural, sympathy, horror, and the like—the result, of course, being that their inquiries led to nothing but fanciful theorizing and verbal quibbling.*12
Now the introduction into economic discussions of such considerations as those to which I have adverted in the example given from M. Say, appears to me to be an error of precisely the same kind as that which was committed by the ancient Greeks in their physical speculations, and one to which the method adopted by M. Say, of embracing in the same discussion the principles and ends of social union with the economic laws of wealth, seems almost inevitably to lead. The writer who thus treats Political Economy, labours under a constant temptation to wander from those ideas which are strictly appropriate to his subject into considerations of equity and expediency which are proper only to the more extensive subject of society. Instead of addressing himself to the problem, according to what law certain facts result from certain principles, he proceeds to explain how the existence of the facts in question is consistent with social well-being and natural equity; and generally succeeds in deluding himself with the idea that he has solved an economic problem, when, in fact, he has only vindicated, or persuaded himself he has vindicated, a social arrangement.
The objections, therefore, to this method of treating Political Economy, resting as they do on the incompatible nature of the investigations which it seeks to combine, are fundamental. Even if it should be thought desirable to give the name of Political Economy to the larger inquiry, it would still be necessary to reserve for separate and distinct investigation the laws of the production and distribution of wealth.
§3. But, secondly, the ordinary definition represents Political Economy as a science; and (as I have elsewhere said) "for those who clearly apprehend what science, in the modern sense of the term, means, this ought sufficiently to indicate at once its province, and what it undertakes to do. Unfortunately, many who perfectly understand what science means when the word is employed with reference to physical nature, allow themselves to slide into a totally different sense of it; or rather into acquiescence in an absence of all distinct meaning in its use, when they employ it with reference to social science. In the minds of a large number of people everything is Social Science which proposes to deal with social facts, either in the way of remedying a grievance, or in promoting order and progress in society: everything is Political Economy which is in any way connected with the production, distribution, or consumption of wealth. Now I am anxious here to insist upon this fundamental point: whatever takes the form of a plan aiming at definite practical ends—it may be a measure for the diminution of pauperism, for the reform of land-tenure, for the extension of co-operative industry, for the regulation of the currency; or it may assume a more ambitious shape, and aim at reorganising society under spiritual and temporal powers, represented by a high priest of humanity and three bankers—it matters not what the proposal be, whether wide or narrow in its scope, severely judicious or wildly imprudent—if its object be to accomplish definite practical ends, then I say it has none of the characteristics of a science, and has no just claim to the name. Consider the case of any recognised physical science—Astronomy, Dynamics, Chemistry, Physiology—does any of these aim at definite to practical ends? at modifying in a definite manner, it matters not how, the arrangement of things in the physical universe? Clearly not. In each case the object is, not to attain tangible results, not to prove any definite thesis, not to advocate any practical plan, but simply to give light, to reveal laws of nature, to tell us what phenomena are to found together, what effects follow from what causes. Does it result from this that the physical sciences are without bearing out the practical concerns of mankind? I think I need not trouble myself to answer that question. Well, then, Political Economy is a science in the same sense in which Astronomy, Dynamics, Chemistry, Physiology, are sciences. Its subject-matter is different; it deals with the phenomena of wealth, while, they deal with the phenomena of the physical universe; but its methods, its aims, the character of its conclusions, are the same as theirs. What Astronomy does for the phenomena of the heavenly bodies; what Dynamics does for the phenomena of motion; what Chemistry does for the phenomena of chemical combination; what Physiology does for the phenomena of the functions of organic life; that Political Economy does for the phenomena of wealth: it expounds the laws according to which those phenomena co-exist with or succeed each other; that is to say, it expounds the laws of the phenomena of wealth.
"Let me here briefly explain what I mean by this expression. It is one in very frequent use; but, like many other expressions in frequent use, it does not always perhaps carry to the mind of the hearer a very definite idea. Of course I do not mean by the laws of the phenomena of wealth, Acts of Parliament. I mean the natural laws of those phenomena. Now what are the phenomena of wealth? Simply the facts of wealth; such as production, exchange, price; or, again, the various forms which wealth assumes in the process of distribution, such as wages, profits, rent, interest, and so forth. These are the phenomena of wealth; and the natural laws of these phenomena are certain constant relations in which they stand towards each other and towards their causes. For example, capital grows from year to year in this country at a certain rate of progress; in the United States the rate is considerably more rapid; in China considerably slower. Now these facts are not fortuitous, but the natural result of causes; of such causes as the external physical circumstances of the countries in question, the intelligence and moral character of the people inhabiting them, and their political and social institutions; and so long as the causes remain the same, the results will remain the same. Similarly, the prices of commodities, the rent of land, the rates of wages, profits, and interest, differ in different countries; but here again, not at random. The particular forms which these phenomena assume are no more matters of chance than the temperature or the mineral productions of the countries in which they occur are matters of chance; or than the fauna and flora which flourish on the surface of those countries are matters of chance. Alike in the case of the physical and of the economic world, the facts we find existing are the results of causes, between which and them the connection is constant and invariable. It is, then, the constant relations exhibited in economic phenomena that we have in view, when we speak of the laws of the phenomena no of wealth; and in the exposition of these laws consists the science of Political Economy. If you ask me wherein lies the utility of such an exposition of economic laws, I answer, in precisely the same circumstance which constitutes the utility of all scientific knowledge. It teaches us the conditions of our power in relation to the facts of economic existence, the means by which, in the domain of material wellbeing, to attain our cards. It is by such knowledge that man becomes the minister and interpreter of Nature, and learns to control Nature by obeying her.
"And now I beg you to observe what follows from this mode of conceiving our study. In the first place, then, you will remark that, as thus conceived, Political Economy stands apart from all particular systems of social or industrial existence. It has nothing to do with laissez-faire any more than with communism; with freedom of contract any more than with paternal government, or with systems of status. It stands apart from all particular systems, and is, moreover, absolutely neutral as between all. Not of course that the knowledge which it gives may not be employed to recommend some and to discredit others. This is inevitable, and is only the proper and legitimate use of economic knowledge. But this notwithstanding, the science is neutral, as between social schemes, in this important sense. It pronounces no judgment on the worthiness or desirableness of the ends aimed at in such so systems. It tells us what their effects will be as regards a specific class of facts, thus contributing data towards the formation of a sound opinion respecting them. But here its function ends. The data thus furnished may indeed go far to determine our judgment, but they do not necessarily, and should not in practice always, do so. For there are few practical problems which do not present other aspects than the purely economical—political, moral, educational, artistic aspects—and these may involve consequences so weighty as to turn the scale against purely economic solutions. On the relative importance of such conflicting considerations, Political Economy offers no opinion, pronounces no judgment, thus, as I said, standing neutral between competing social schemes; neutral, as the science of Mechanics stands neutral between competing plans of railway construction, in which expense, for instance, as well as mechanical efficiency, is to be considered; neutral, as Chemistry stands neutral between competing plans of sanitary improvement; as Physiology stands neutral between opposing systems of medicine. It supplies the means, or, more correctly, a portion of the means for estimating all; it refuses to identify itself with any.
"Now I desire to call particular attention to this characteristic of economic science, because I do not think it is at all generally appreciated, and because some serious and indeed lamentable consequences have arisen from overlooking it. For example, it is sometimes supposed that because Political Economy comprises in its expositions theories of wages, profits, and rent, the science is therefore committed to the approval of our present mode of industrial life, under which three distinct classes, labourers, capitalists, and landlords, receive remuneration in those forms. Under this impression, some social reformers, whose ideal of industrial life involves a modification of our existing system, have thought themselves called upon to denounce and deride economic science, as forsooth seeking to stereotype the existing forms of industrial life, and of course therefore opposed to their views. But this is a complete mistake. Economic science has no more connection with our present industrial system than the science of mechanics has with our present system of railways. Our existing railway lines have been laid down according to the best extant mechanical knowledge; but we do not think it necessary on this account, as a preliminary to improving our railways, to denounce mechanical science. If wages, profits, and rent find a place in economic theories, this is simply because these are the forms which the distribution of wealth assumes as society is now constituted. They are phenomena which need to be explained. But it comes equally within the province of the economist to exhibit the working of any proposed modification of this system, and to set forth the operation of the laws of production and distribution under such new conditions.
And, in connection with this point, I may make this remark: that so far is it from being true, as some would seem to suppose, that economic science has done its work, and thus become obsolete for practical purposes, an object of mere historical curiosity, it belongs, on the contrary, to a class of sciences whose work can never be completed, never at least so long as human beings continue to progress; for the most important portion of the data from which it reasons is human character and human institutions, and everything consequently which affects that character or those institutions must create new problems for economic science. Unlike the physicist, who deals with phenomena incapable of development, always essentially the same, the main facts of the economist's study—man as an industrial being, man as organized in society—are ever undergoing change. The economic conditions of patriarchal life, of Greek or Roman life, of feudal life, are not the economic conditions of modern commercial life; and had Political Economy been cultivated in those primitive, ancient, or mediæval times, while it would doubtless have contained some expositions which we do not now find in it, it must also have wanted many which it now contains. One has only to turn to the discussions on currency and credit which have accompanied the great development of our commerce during the last half-century to see how the changing needs of an advancing society evolve new problems for the economist, and call forth new growths of economic doctrine. At this moment one may see that such an occasion is imminent. Since the economic doctrines now holding their place in our text-books were thought out, a new mode of industrial organization has established itself in this and other countries. Co-operation is now a reality, and, if the signs are not all deceptive, bids fair to transform much of our industry. Now the characteric feature of co-operation, looked at from the economic point of view, is, that it combines in the same person the two capacities of labourer and capitalist; whereas our present theories of industrial remuneration presuppose a division of those capacities between distinct persons. Obviously, our existing theories must fail to elucidate a state of things different from that contemplated in their elaboration. We have thus need of a new exposition of the law of industrial remuneration—an exposition suited to a state of things in which the gains of producers, instead of taking the form of wages, profits, and rent, are realized in a single composite sum. I give this as an example of the new developments of economic theory which the progress of society will constantly call for. Of course it is an open question whether this is the direction in which industrial society is moving; and there are those, I know, who hold that it is not towards co-operation, but rather towards 'captains of industry' and organization of workmen on the military plan, that the current is setting. It may be so, and in this case the economic problem of the future will not be that which I have suggested above; nevertheless, an economic problem there still will be. If society were organized to-morrow on the principles of M. Comte, so long as physical and human nature remain what they are, the phenomena of wealth would exhibit constant relations, would still be governed by natural laws; and those relations, those laws, it would still be important to know. The function of the economist would be as needful as ever.
"A far more serious consequence, however, of ignoring the neutral attitude of this study in relation to questions of practical reform is the effect it has had in alienating from it the minds of the working classes. Instead of appearing in the neutral guise of an expositor of truth, the contributor of certain data towards the solution of social problems—data which of themselves commit no man to any course, and of which the practical cogency can only be determined after all the other data implicated in the problem are known—instead of presenting itself as Chemistry, Physiology, Mechanics present themselves, Political Economy too often makes its appearance, especially in its approaches to the working classes, in the guise of a dogmatic code of cut-and-dried rules, a system promulgating decrees, 'sanctioning' one social arrangement, 'condeming' another, requiring from men, not consideration, but obedience. Now when we take into account the sort of decrees which are ordinarily given to the world in the name of Political Economy—decrees which I think I may say in the main amount to a handsome ratification of the existing form of society as approximately perfect—I think we shall be able to understand the repugnance, and even violent opposition, manifested towards it by people who have their own reasons for not cherishing that unbounded admiration for our present industrial arrangements which is felt by some popular expositors of so-called economic laws. When a working man is told that Political Economy 'condemns' strikes, hesitates about co-operation, looks askance at proposals for limiting the hours of labour, but 'approves' the accumulation of capital, ane 'sanctions' the market rate of wages, it seems not an unnatural response that 'since Political Economy is against the working man, it behoves the working man to be against Political Economy.' It seems not unnatural that this new code should come to be regarded with suspicion, as a system possibly contrived in the interest of employers, which it is the workmen's wisdom simply to repudiate and disown. Economic science is thus placed in an essentially false position, and the section of the community which is most vitally interested in taking to heart its truths is effectually prevented from even giving them a hearing. I think it, therefore, a matter not merely of theoretic but of the utmost pratical importance, that the strictly scientific character of this study should be insisted on. It is only when so presented that its true position in relation to practical reforms, and its really benevolent bearing towards all sorts and conditions of men, will be understood, and that we can hope to overcome those deep-seated but perfectly natural prejudices with which the most numerous class in the community unfortunately regard it."*13
Notes for this chapter
'Essay on the Production of Wealth,' Introduction, p. xiii. 1821.
Vide Appendix A.
See an article in the Edinburgh Review, April 1854, on 'The Consumption of Food in the United Kingdom,' and compare this with the celebrated 'Merchants' Petition' of 1820, the production of Mr. Tooke. With reference to the former I may quote the remark of Mr. Tooke:—"It is necessary, even in setting forth the successes of a just policy, that no violence should be done to established modes of reasoning, or to the facts of the case as they really exist."
The error as to method complained of is the opposite of that of 'anticipatio naturæ,' which was the bane of science when Bacon wrote, and against which his most vigorous attacks were directed. Nevertheless (and it is a proof as well of the philosophic sagacity for which he was so distinguished, as of the perfect sobriety of his mind), the great reformer was not so carried away by his opposition to the prevailing abuse, as to overlook the danger of its opposite. In the following passage he describes with singular accuracy, both the error itself to which I have adverted, and the causes of it. "Quod si etiam scientiam quandam, et dogmata ex experimentis moliantur; tamen semper fere studio præpropero et intempestivo deflectunt ad praxin: non tantum propter usum et fructum ejusmodi praxeos; sed ut in opere aliquo novo veluti pignus sibi arripiant, se non inutiliter in reliquis versaturos: atque etiam aliis se venditent, ad existimationem meliorem comparandam de iis in quibus occupati sunt. Ita fit, ut, more Atalantæ de via decedant ad tollendum aureum pomum; interim vero cursum interrumpant, et victoriam emittant e manibus."—'Novum Organum,' lib. i. aph. 70.
'Essays on Some Unsettled Questions of Political Economy,' p. 141.
See particularly Whately's 'Introductory Lectures on Political Economy.'
Que l'économie politique no s'occupe que des intérêts de cette vie, c'est une chose évidente, avouée. Chaque science a son objet qui lui est propre. Si elle sortait de ce monde, ce ne serait plus de l'économie politique, ce serait la théologie. On ne doit pas plus lui demander compte de ce qui se passe dans un monde meilleur, qu'on ne doit demander à la physiologie comment s'opère la digestion dans l'estomac des anges."—'Cours Complet d'Economie Politique,' par J. B. Say, tom. i. p. 48, troisiême édition.
[This reads "view this" in the second edition. Probably it should read "this view."—Ed.]
See 'Essays h, Political Economy, Theoretical and Applied'—M. Comte and Political Economy.
Rent and profit possess under their superficial aspects so many attributes in common that it is not strange there should be a disposition to identify them as economic phenomena of the same kind. Among French economists in particular this view is nearly universal; not merely M. Say and those who have generally followed him, but that much abler thinker and clearer expositor, the late M. Cherbuliez, of Geneva, having so conceived the phenomena. It may be well, therefore, to set down briefly the facts which justify the distinction. 1. The rate of profit falls, that of rent rises with the progress of society: the latter attains its maximum in old communities such as ours, precisely where the former attains its minimum. 2. Rent and profit stand in different relations to price: e.g., a rise of agricultural prices, if permanent, would imply, other things being the same, a rise of rent, but it would not imply or be attended with a rise of agricultural profits; on the contrary, agricultural profits, and profits generally, would most probably fall as a consequence of a rise in agricultural prices. 3. A tax on the profits of any particular branch of industry would raise prices in that industry; the receivers of profits would be thus enabled to transfer the burden of the tax to the consumers of the commodities they produce. A tax on rent would have no corresponding effect on agricultural prices, and would rest definitively on the owners of the soil. 4. Variations in rents are slow, and, as a rule, in an upward direction; in profits, still more in interest, variations are frequent and rapid, and not in any constant direction.
'Cours Complet,' tom. i. pp. 213-215.
M. Say, it is true, in another part of his work (vol. ii. p. 45), states the law of wages correctly as depending on demand and supply, but the doctrine alluded to in the text is no less distinctly stated. The doctrines are, no doubt, irreconcilable; but with this I am not concerned.
Sir John Herschel's explanation of the failure is substantially the same. "Aristotle," he says, "at least saw the necessity of having recourse to nature for something like principles of physical science; and, as an observer, a collector, and recorder of facts and phenomena, stood without an equal in his age. It was the fault of that age, and of the perverse and flimsy style of verbal disputation which had infected all learning, rather than his own, that he allowed himself to be contented with vague and loose notions drawn from general and vulgar observation, in place of seeking carefully, in well arranged and thoroughly considered instances, for the true laws of nature."
'Essays in Political Economy. Theoretical and Applied,' pp. 252-261. .
End of Notes
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