A Policy of Free Exchange: An Argument Against Socialism and Socialistic Legislation
1.  In 1870 Stanley Jevons, after having read my works then published, as he has very handsomely acknowledged in his preface, spoke of Political Economy as the 'shattered science'—an expression which has acquired a certain popular vogue. Long previous to this, in 1856, when I had occasion to study the works on Economics then current in their relation to credit and banking, I had pointed out their defects, and said, in the Introduction to Vol. II of my Theory and Practice of Banking: 'We have no hesitation in saying that the whole system of Political Economy, as laid down by Ricardo and developed by Mr. John Stuart Mill, is utterly and radically bad'—which gave prodigious offence at the time. I also said: 'The time has come when all Political Economy must be rewritten.' After thirty-eight years people are beginning to find out that this is true.
Essay II, Maitland
2.  Mr. Cleveland here refers to the great trusts and monopolies which have ruled the markets for some years past; but his words are equally applicable to combinations in this country which have attempted and, to some extent, succeeded in forcing the Government to conform to their demands.
Essay IV, Fortescue
3.  The net loss on this exhibition exceeded £200,000.
4.  I am aware that two of the Australian provinces have recently succeeded in floating loans in London, and that it is now assumed that their principal difficulties are over. None the less I see no occasion to alter a word that I have written; for without going into detail I may say that I do not share the general confidence in such sudden resurrection from collapse; and am strengthened in my opinion by two recent enactments of the Parliament of New Zealand, which could only have been passed in the fear of a serious financial crisis, and are not justified even by that. If New Zealand's recovery be so slow and uncertain, how much slower and more uncertain must Australia's be!
Essay VI, Acworth
5.  National Railways, by James Hole. London: Cassell & Co., 1893.
6.  London and South-Western 3 per cent. debentures have, I believe, been dealt in at 107.
7.  Government Railways in a Democratic State. Economic Journal, December, 1892.
8.  Lending money to Australia. Nineteenth Century, August, 1892.
9.  The summary of the text I borrow verbatim from Professor Hadley's invaluable Railroad Transportation.
10.  Macaulay, History of England, Chapter III.
11.  The following summary of Post Office history from the time when the idea of using the Post Office monopoly as an engine of taxation first took root, down to the time when an outraged public opinion thrust Rowland Hill into the office to prevent State officials doing after their kind, is not mine. It is extracted from Mr. Joyce's excellent History of the Post Office (London, Bentley, 1893). As Mr. Joyce is a trusted and high-placed officer of the Department, we may fairly assume that his indictment is at least not overdrawn. 'Let us compare for a moment the beginning of the nineteenth with the end of the seventeenth century. In 1695 the postage from London to Liverpool, or to York, or to Plymouth, was, for a single letter, 3d.; in 1813 it was 11d. In 1695, wherever letters were being carried clandestinely, the policy was to supplant; in 1813 the policy was to repress. In 1695 the King would not consent to a single prosecution, even for the sake of example; in 1813, when the Post Office revenue had passed from the King to the people, prosecutions were being conducted wholesale. In 1695 a circuitous post would be converted into a direct one, even though the shorter distance carried less postage; in 1813 a direct post, in place of a circuitous one, was being constantly refused on the plea that a loss of postage would result. In 1695 London enjoyed the advantage of a penny post, and this post carried up to one pound in weight; in 1813 the penny post had been replaced by a two-penny and three-penny one, and, except in the case of a packet passing through the general post, the weight was limited to four ounces. In 1813, moreover, the complications were bewildering. In some places there were fifth-clause posts, and in others penny posts; and the charge by these posts was in addition to the charge by the general post. Some towns, over and above all other charges, paid an additional 1d. on each letter for the privilege of the mail-coach passing through them. Of two adjoining houses one might receive its letters free of any charge for delivery and not the other. This difference was to be found in towns where building was going on—as, for instance, at Brighton—old houses being considered within, and new houses without, what was called the usage of delivery. In London itself, the complications, if possible, were more bewildering still. The three-penny post began where the two-penny post ended. Thus far the practice was simple enough. But the general post limits did not coincide with the limits of the two-penny post; and the limits of both the two-penny post and the general post differed from those of the foreign post. Indeed, it is probably not too much to say that in 1813 there was not a single town in the kingdom at the Post Office of which absolutely certain information could have been obtained as to the charge to which a letter addressed to any other town would be subject. More than ten years later, Post Office experts, examined before a Committee of the House of Commons, were unable to state what, even on letters delivered in London, would in certain cases be the proper postage.'
12.  I have written x shillings because, after exhausting perambulations through the mazes of the Post Office Guide, I am quite unable to understand what the additional charge actually is.
13.  I believe I am correct in saying that since the beginning of this year more passengers have been killed and seriously injured in stage coach than in train accidents. This would make the percentage of risk run in these two means of conveyance roughly something like 10,000 to 1. The impotence of statistics to touch the imagination can hardly be better illustrated than by the fact that, while we constantly hear of the dangers of railway travelling, the man who dares to climb the box seat of a coach is seldom acclaimed as a hero.
14.  The fascination of the theory of an ideal uniformity has indeed induced the Prussian Government to subject the ordinary retail traffic of the country to equal mileage rates, the same for a ton of gray shirtings as for a ton of silk velvet. But when it comes to serious matters, to enabling German agriculturists and millers to hold their own against the competition of Russia and Hungary and the United States, or to diverting the traffic of Westphalia from Antwerp and Amsterdam to the German ports of Hamburg and Bremen, theory and ideals go to the winds, and the German Government frankly puts out special tariffs based wholly on what the traffic will bear; in other words, on the very unideal consideration of commercial competition.
15.  The hackney carriage license duties in London are historically a survival from the days when locomotion, like everything else, was taxed. And it is mainly owing to the fact that the Chief Commissioner of Police is a subordinate of the Home Office and not a London local official at all that they have not been swept away, or at least largely modified, ere this. But, of course, these duties might quite well be justified on the ground of the excessive user by hackney carriages of the London streets, and in that case would be only another form of the very equitable principle involved in the Highways (Locomotives) Amendment Act, 1878.
16.  In this case the explanation is, of course, obvious on the face of the map. The North-Western is not the direct line to either town. To Cambridge the rate is fixed by the Great Eastern, with a route only 55½ miles in length; to Oxford by the Great Western, with a distance of 63 miles. For its 78 miles to Oxford the North-Western can charge, therefore, as for 63 miles; while for its 92 miles to Cambridge it can only charge as for 55½.
17.  It is five years since we had any conspicuous improvement in English railway service. Even in passenger service, in which we led the world, without equal or second, a few years back, the Americans are going ahead of us in all directions. This is no accident. The Board of Trade and Parliament and the public have been regulating railway rates, railway methods of working (signals, brakes, block system, mixed trains, &c.), railway servants' hours of labour, employers' liability, &c., &c. The railway chiefs have been occupied, mistakenly perhaps, in endeavouring to minimise that regulation. They have had neither time nor heart to think of improvements.
18.  There is no one work with which I am acquainted adequately dealing with this chapter of railway history. Its general tenour may be learnt from Hadley's Railroad Transportation, C. T. Adams' Railway Problem, and Clark's State Railroad Commissions. I have myself attempted, in evidence before the House of Commons Committee of last session on Railway Rates, to make the outlines of the story accessible—if anything in a Blue Book ever is accessible—to English readers.
19.  The United States Interstate Commerce Commission, in its sixth and latest annual report, declares that 'the practice of the Commission is so to administer the law as to protect each locality in the enjoyment of its natural advantages....Each community is entitled to the benefits arising from its location and natural conditions.' With all possible respect for the Commission I venture to assert that its practice is nothing of the kind. The only practice that even approaches conformity to this theory would be the enjoinment on the companies of equal mileage rates for like commodities in like quantities. And from such a course the strong common sense of the Commissioners may be trusted to preserve them. Further, had the theory that a locality has a right to be protected in the enjoyment of its natural advantages been suffered to control the railway policy of the past, the problem which the Commission now has to solve of an equitable adjustment of competitive rates over the continent of North America would never have come into existence, for the buffalo must have still shared with the Red Indian the undisturbed occupation of the larger part of the area of the United States.
Essay VII, Mackay
20.  I have, by the courtesy of the manager of the company, been allowed to satisfy myself by personal inspection that a very large proportion of these Ordinary insurances are taken out by members of the working class.
Essay VIII, Mallet
21.  A Tariff for Revenue: What it really Means. Forum, September, 1892.
22.  The Labour Movement, p. 78. L. T. Hobhouse, 1893.
23.  It is perhaps unnecessary to say that the following application of Jevon's final utility theory to the doctrine of progression has no pretension to novelty, but it was noticed by the present writer before he had the advantage of knowing that he had been anticipated in his conclusion by the very elaborate investigations of certain Dutch economists. Professor Seligman, in his learned and exhaustive article in the Political Science Quarterly for June, 1893, summarizes their results and covers the whole ground of the discussion.
24.  Jevons' Theory of Political Economy, 2nd edition, p. 49.
25.  Ibid. p. 43.
26.  Ibid. p. 49.
27.  Ibid. p. 55.
28.  Jevons' Theory of Political Economy, 2nd edition, p. 57.
29.  Ibid. p. 148.
30.  Jevons' Theory of Political Economy, 2nd edition, p. 152.
31.  Ibid. p. 5.
32.  Mr. Charles Devas (Political Economy, p. 197) has some very pertinent criticisms on this law, directed, however, rather against the possibility of its application than against its abstract truth.
33.  Banfield; quoted by Jevons, p. 45.
34.  As Bastiat, a writer who is not answered when he is taunted with economic optimism, expresses it (Harmonies Économiques, p. 291):—
'Toute propriété est une valeur, toute valeur est une propriété;
Ce qui n'a pas de valeur est gratuit, ce qui est gratuit est commun;
Baisse de valeur, c'est approximation vers la gratuité;
Approximation vers la gratuité, c'est réalisation partielle de communauté.'
But although the domain of things common or gratuitous to all, the aggregate of utilities, is constantly increasing, that of things having exchange value, of property, does not decrease, for the horizon of human desires and possible satisfactions is always expanding and with it the field of human labour and service, production and exchanges, without which those desires cannot be satisfied. 'La propriété' is a pioneer which accomplishes its work in one sphere and then passes to another.
35.  Distribution of Products, p. 38.
36.  Distribution of Products, p. 41.
37.  It has been calculated that there is no country where the entire accumulated property would sell for enough to maintain its population on the most economical terms for more than three years, and that the world, as a whole, is always within a single year of starvation.
38.  It has been impossible in this paper to touch on a question, which yet lies at the root of all speculation on the subject of taxation, viz. its incidence on individuals and classes. The following words show the importance of the question in connexion with our present subject: 'Without going so far as some economists in thinking that wherever taxes are first imposed they are so diffused and distributed in the process of exchange as to render all elaborate attempts at a nice adjustment of them a matter of comparative unimportance, it is undeniable that under no system of taxation can any class escape a share of the burden, and, least of all, the most helpless and improvident class. It is conceivable that if a direct tax were imposed on the working classes, they might be unable to recover the whole of it by a rise in the rate of wages. It is not easily conceivable that a tax on capital would not be gradually diffused throughout the community, and ultimately affect wages, and be borne in a large proportion by the working classes.' Again, 'There can be no greater mistake than to suppose that an immense and increasing burden of taxation can be raised by any "adjustments" on what is called the property of about five million persons without a disastrous recoil on the interests of the working classes.'—Sir Louis Mallet, Free Exchange, p. 194.
39.  A fairly full account of these taxes, whether on income or capital, real or personal estate, is given in a report by Mr. Buchanan (Foreign Office, 1892; Miscellaneous Series, No. 267).
40.  Foreign Office, 1892; Misc. Series, No. 268.
41.  These figures are taken from Hayter's Victorian Year Book; and a year has been chosen before the recent check to the Colony's prosperity; since which panegyrics of Victorian State Socialism have notably diminished.
42.  Sir C. Dilke, Problems of Greater Britain, vol. i. p. 192.
Essay IX, Lyttelton
43.  A learned writer has recently given good reason for asserting that Christianity was persecuted not as a religion but as an association, and that the Roman Empire was opposed to all associations whatever with the sole exception of Benefit Clubs. The Church in the Roman Empire, pp. 354-360. Ramsay.