Introductory Lectures on Political Economy

Various branches of Natural-philosophy occupy, in this respect, various intermediate places. The two processes which I have elsewhere
*38 endeavoured to describe, under the titles of “Physical investigation” and “Logical investigation,” will, in different cases, differ very much in their relative importance and difficulty. The science of Optics, for instance, furnishes an example of one approaching very near to pure mathematics; since, though the foundation of it consists in facts ascertained by experiment, these are fewer and more easily ascertained than those pertaining to other branches of Natural-philosophy. A very small number of principles, comprehensible even without being verified by the senses, being assumed, the deductions from them are so extensive, that, as is well known, a blind mathematician, who had no remembrance of seeing, gave an approved course of lectures on the subject. In the
application, however, of this science to the explanation of many of the curious natural phenomena that occur, a most extensive and exact knowledge of facts is called for.

In the case of Political-Economy, that the facts on which the science is founded are few, and simple, and within the range of every one’s observation, would, I think, never have been doubted, but for the error of confounding together the theoretical and the practical branches of it;—the
science of what is properly called Political- Economy,—and the practical
employment of it. The theory supplies principles, which we may afterwards apply practically to an indefinite number of various cases; and in order to make this application correctly, of course an accurate knowledge of the circumstances of each case is indispensable. But it should be remembered that the same may be said even with respect to Geometry. As soon as we come to the practical branch of it, and apply it in actual measurements, a minute attention to facts is requisite for an accurate result. And in each practical question in Political-Economy that may arise, we must be prepared to ascertain, and allow for, various disturbing causes, which may more or less modify the results obtained from our general principles; just as, in Mechanics, when we come to practice, we must take into account the thickness, and weight, and the degrees of flexibility, of ropes and levers.

The facts then which it may be necessary to ascertain for the practical decision of any
single case that may arise, are, of course, in Political-Economy (as in respect of the
application of the principles of
any science), indefinite in number, and sometimes difficult to collect; the facts on which the general principles of the science are
founded, come within the range of every one’s experience.

“By practical men,” (says the late Professor, in his introductory Lecture,)” are meant, I suppose, those who have had experience in the matters which Political-Economy considers. But who has not had that experience? The revenue of all men must consist of rent, profit, or wages; they must all exchange it for commodities or services. They all know, or have equally the means of knowing (for it can be discovered only by reflection), why they set a high value on some things, a low one on others, and disregard a third class.

“An academical body is not very commercial; but probably there is no one present who does not make twenty exchanges every week. If this experience is not enough to enable him to understand how the human passions act in buying and selling, he would be unable to comprehend it though his transactions equalled in number and amount those of Baring or Rothschild. It is in fact as impossible to avoid being a practical Economist, as to avoid being a practical Logician.”

If then any one should attempt the plan of collecting extensive historical and statistical details, as preparatory to his entering on the study of this science, he would be burdening his memory with an immense, and (as far as relates to the particular study before us)
confused mass of materials; out of which he would afterwards have to select such facts as bear on the subject, from a multitude of others, which, for that purpose, would be quite irrelevant.

But such a procedure would not merely imply a needless labour; it would be worse probably than a mere waste of time and toil; for two reasons:

lst. The student would be likely to bestow least attention on the facts which, for the present purpose, demand the most; and,
ice versâ, 2dly. He would be likely to form, unconsciously, an erroneous theory.

1st. He would be liable to be misled by the circumstance, that historians and travellers occupy themselves principally (as is natural) with the relation of whatever is
remarkable, and different to what commonly takes place in their own time or country. They do not dwell on the ordinary transactions of human life (which are precisely what furnish the data on which Political-Economy proceeds), but on every thing that appears an exception to general rules, and in any way such as could not have been anticipated. The sort of information which the Political-Economist wants, is introduced, for the most part, only incidentally and obliquely, and is to be collected imperfectly from scattered allusions. So that if you will give a rapid glance, for instance, at the history of these islands from the time of the Norman conquest to the present day, you will find that the differences between the two states of the Country, in most of the points with which our science is conversant, are but very imperfectly accounted for in the main outline of the narrative.

If it were possible that we could have a full report of the common business and common conversation, in the markets, the shops, and the wharfs, of Athens and Piræus, for a single day, it would probably throw more light on the state of things in Greece at that time, in all that Political-Economy is most concerned with, than all the histories that are extant put together.

There is a danger, therefore, that the mind of the student, who proceeds in the manner I have described, may have been even drawn off from the class of facts which are, for the purpose in question, most important to be attended to.

For it should be observed, that, in all studies there is a danger to be guarded against, which Bacon, with his usual acuteness, has pointed out: that most men are so anxious to make, or seek for, some application of what they have been learning, as not unfrequently to apply it improperly, by endeavouring, lest their knowledge should lie by them idle, to bring it to bear on some question to which it is irrelevant; like Horace’s painter, who being skilful in drawing a cypress, was for introducing one into the picture of a shipwreck. Bacon complains of this tendency among the logicians and metaphysicians of his day, who introduced an absurd and pernicious application of the studies in which they had been conversant, into Natural- Philosophy: “Harum artium sæpe pravus fit usus,
ne sit nullus.” But the same danger besets those conversant in every other study likewise, (Political-Economy of course not excepted) that may from time to time have occupied a large share of each man’s attention. He is tempted to seek for a solution of every question on every subject, by a reference to his own favourite science or branch of knowledge; like a schoolboy when first intrusted with a knife, who is for trying its edge on every thing that comes in his way.

Now in reference to the point immediately before us, he who is well read in history and in travels, should be warned of the danger (the more on account of the real high importance of such knowledge) of misapplying it;—of supposing that because Political-Economy is conversant with
human transactions, and he is acquainted with so much greater an amount of
human transactions than the generality of men, he must have an advantage over them in precisely the same degree, in discussing questions of Political-Economy. Undoubtedly he
has a great advantage, if he is careful to keep in view the true principles of the science; but otherwise, he may even labour under a disadvantage, by forgetting that (as I just now observed) the kind of transactions which are made most prominent, and occupy the chief space, in the works of historians and travellers, are usually not those of every-day-life,
*39 with which Political-Economy is conversant. It is in the same way that an accurate
military survey of any district, or a series of sketches accompanying a
picturesque tour through it, may even serve to mislead one who is seeking for a knowledge of its
agricultural condition, if he does not keep in mind the different objects which different kinds of survey have in view.

An injudicious study of history, then, may even prove an hindrance instead of a help to the forming of right views of Political-Economy. For not only are many of the transactions which are, in the historian’s view, the most important, such as are the least important to the Political-Economist, but also a great proportion of them consists of what are in reality the greatest
impediments to the progress of a society in wealth: viz. wars, revolutions, and disturbances of every kind. It is not in consequence of these, but in spite of them, that society has made the progress which in fact it has made. So that in taking such a survey as history furnishes of the course of events, e.g. for the last 800 years (the period I just now alluded to), not only do we find little mention of the causes which have so greatly increased national wealth during that period, but what we chiefly do read of is, the
counteracting causes; especially the wars which have been raging from time to time, to the destruction of capital, and the hindrance of improvement. Now if a ship had performed a voyage of 800 leagues, and the register of it contained an account chiefly of the contrary winds and currents, and made little mention of favourable gales, we might well be at a loss to understand how she reached her destination; and might even be led into the mistake of supposing that the contrary winds had forwarded her in her course. Yet such is History!

In the second place, it is hardly possible, however carefully any one may have abstained from setting out on his course of study with any principles of Political-Economy in his mind, that he should not, in the course of his reading, form to himself, insensibly and undesignedly, some kind of crude theory which will bias his future speculations. For as I remarked in a former lecture, Man is so formed as to theorize unconsciously; facts
will arrange themselves in his mind under certain classes, without his having any such design; and thus the materials he has been heaping together, will have been, as it were, building themselves up, into some, probably faulty, system, while he was not aware of the process going on in his own mind.

Some persons complain, not altogether without reason, of the prevailing
ignorance of facts, relative to this and to many other subjects; and yet it will often be found that the parties censured, though possessed of less knowledge than they ought to have, yet possess more than they know what to do with. Their deficiency in arranging and applying their knowledge,—in combining facts,—and correctly deducing and employing general principles, shall be greater than their ignorance of facts. Now to attempt remedying this fault by imparting to them additional knowledge,—to confer the advantage of wider experience on those who have not the power of profiting by experience,—is to attempt enlarging the prospect of a short-sighted man by bringing him to the top of a hill.

In the tale of Sandford and Merton, where the two boys are described as amusing themselves with building a hovel with their own hands, they lay poles horizontally on the top, and cover them with straw, so as to make a flat roof: of course the rain comes through; and Master Merton then advises to
lay on more straw: but Sandford, the more intelligent boy, remarks that as long as the roof is flat, the rain must, sooner or later, soak through; and that the remedy is to make a new
arrangement, and form the roof sloping. Now the idea of enlightening incorrect reasoners by additional knowledge, is an error similar to that of the flat roof; it is merely laying on
more straw: they ought first to be taught the right way of raising the roof. Of course knowledge is necessary; so is straw to thatch the roof: but no quantity of materials will supply the want of knowing how to build.

I believe it to be a prevailing fault of the present day, not indeed to seek too much for knowledge, but to trust to accumulation of facts as a
substitute for accuracy in the logical processes. Had Bacon lived in the present day, I am inclined to think he would have made his chief complaint against unmethodized inquiry and illogical reasoning. Certainly he would
not have complained of
Dialectics as corrupting Philosophy. To guard
now against the evils prevalent in
his time, would be to fortify a town against battering-rams, instead of against cannon. But it is remarkable that even that abuse of Dialectics which he complains of, was rather an error connected with the reasoning-process than one arising from a want of knowledge. Men were led to false conclusions, not through mere ignorance, but from hastily assuming the correctness of the data they reasoned from, without sufficient grounds. And it is remarkable that the revolution brought about in philosophy by Bacon, was not the
efect, but the
cause, of increased knowledge of physical facts: it was not that men were taught to think correctly by having new phenomena brought to light; but on the contrary, they discovered new phenomena in
consequence of a new system of philosophizing.

In fact mere ignorance, of itself,
never can do any
positive harm; it can only prevent good. The evil is done when men act on
mistaken views;—when they
imagine themselves to know what they do not, whether their actual knowledge be little or much; or when they are compelled to
take some step without adequate information.

And it should be added that
false steps are also taken by those whose knowledge of facts
is not deficient, if they have what may be called a
logical deficiency. Whereas mere want of information, (and it is a want which
all must labour under in some points; since no one can know all things) only compels us to
stand still. A clear, logical, accurate mind, is always useful
as far as it goes; though in this or that class of subjects it may be hampered by ignorance of facts. Whereas, with an inaccurate reasoner, the greatest accumulation of knowledge only serves to lead him the further astray. He who knows how to build, but is short of materials, must build but a
small house, till he can collect more materials: but to one who knows not how to build, the greatest abundance of materials either lies useless in a heap, or is so put together as to fall down and crush the inhabitant.

Let the student then, while he is careful not to let his judgment be biassed by any theory not borne out by facts, begin, and proceed, by making
use of the knowledge he possesses and acquires, and carry with him in his inquiries such principles as he shall have been enabled satisfactorily to establish; and the ground-plan, as it were, of the building being thus correctly laid out, he will be enabled to employ profitably all the materials that from time to time come to hand, in carrying on the superstructure.

If the view which has been taken of this study be correct, it will be plain that the prominent part, and that which demands the principal share of our attention, in Political-Economy, strictly so called (i.e. considered as to the
principles of the science), must be the reasoning-process;—the accurate and dexterous application of Logical principles, in combining, and drawing inferences from, those few and simple data from which we set out;—in short, the Logical, not the Physical investigation.

And in this, a great, and almost peculiar difficulty presents itself, in the want of a well-constructed and established nomenclature. The terms which may be considered as forming the technical language of Political-Economy, being all taken from common discourse, in which most of them are used with great laxity of signification, stand more in need, than those of almost any science, of accurate definition, and rigid confinement to their defined sense; and yet they have (probably for that very reason) seldom been defined at all by the writers who employ them.

I have said, that the very circumstance which makes a definition the
more necessary, is apt to lead to the
omission of it: for when any terms are employed that are
not familiarly introduced into ordinary discourse, such as “parallelogram,” or “sphere,” or “tangent;” “pencil of rays,” or “refraction,”—”oxygen,” or “alkali,”—the learner is ready to inquire, and the writer to anticipate the inquiry, what is meant by this or that term? And though in such cases it is undoubtedly a correct procedure to answer this inquiry by a definition, yet, of the two cases, a definition is even more necessary in the other, where it is not so likely to be called for;—where the word, not being new to the student, but familiar to his ear, from its employment in every-day discourse, is liable to the ambiguity which is almost always the result. For in respect of words that sound “something new and strange,” though it is, as I have said, much better to define them in the outset, yet even without this, the student would gradually collect their meaning pretty correctly, as he proceeded in his study of any treatise; from having nothing to mislead him,—nothing from which to form his notions at all, except the manner in which the terms were employed in the work itself that is before him. And the very desire he had felt of a definition would lead him in this way to form one, and generally a sufficiently correct one, for himself.

It is otherwise with terms to which we are familiarly accustomed. Of these, the student does not usually crave definitions, from supposing, for that reason, that he understands them well enough: though perhaps (without suspecting it) he has in reality been accustomed to hear them employed in various senses, and to attach but a vague and inaccurate notion to them. If you speak to an uninstructed hearer, of any thing that is
spherical, or
circular, or
cylindrical, he will probably beg for an explanation of your meaning; but if you tell him of any thing that is
round, it will not strike him that any explanation is needed; though he has been accustomed to employ the word, indiscriminately, in
all the senses denoted by the other three.

I have dwelt thus fully on points which may be thought almost self-evident to an academical audience, because I know that you will be not unlikely to meet with some persons, not only who have overlooked, but even who openly oppose these principles;—who honestly avow their dislike of accurate and precise language on this subject, and object to “the pedantic practice of defining terms.” Many of them probably speak thus from really knowing no better;—from having a superficial and ill-cultivated mind. Others perhaps know well enough what they are doing, and are engaged by interest or prejudice on the side of some doctrines which they are conscious cannot abide the test of clear and accurate reasoning. The thief, according to Homer’s allusion, rejoices in a fog:
.

The only effect which declamations against the absurdity of using precise language in Political-Economy will have on a man of well-trained understanding, will be to put him on his guard against such declaimers; well knowing what description of persons are usually foremost in a mob that is clamouring against Police and Gas-lights.

Definitions then (such I mean as shall serve to preclude ambiguity)
*40 are most wanted in those very cases where (as in Political-Economy) both the reader and the writer are the most apt not to perceive the want, from the terms being such as are in common use. And there is this additional difficulty; that here it is necessary to define and to use each term in some sense corresponding as nearly as possible to common use;—agreeably to some
one, and, if possible, the most usual of the several popular meanings. Else, there will be some justice in the complaint (which at any rate we must expect
will be made, whether justly or unjustly) against our making innovations in language, and endeavouring to attach a new sense to words. This complaint I say will most likely be made, because it really is, to a certain degree, an innovation in language (though for scientific purposes indispensable) to confine to a precise and definite sense an expression which in ordinary discourse is used loosely and in various senses. But still we should endeavour to innovate as little as possible.

Moreover, even after a definition shall have been fully comprehended and admitted, there will be need of continual care to avoid sliding insensibly into ambiguity by employing the term occasionally in some different sense, at variance with the definition, but, conformable to one of the popular meanings.

For a specimen of the popular ambiguity of the terms most employed in Political-Economy, and of the tendency to neglect the defining of them, or to depart in practice from the defined sense, I may refer you to the late Professor’s account (placed in Appendix to Elements of Logic) of the different definitions or employments by political-economists, of some of the commonest, and most important terms: viz. Value, Wealth, Labour, Capital, Rent, Wages, Profit. There is no one of these in the use of which all the most eminent writers have agreed with each other; and hardly one of them in the use of which some one or other of these writers has not occasionally disagreed with himself. Mr. Senior remarks in his introductory Lecture, “I almost regret now that I did not suggest in each place the definition which appeared to me the most convenient.” That he did not, however, I am inclined to think better on the whole; because objections might have been raised against each of his definitions; the discussion of which would have had the effect of drawing off attention from that which is perhaps, in the outset, the most essential point; viz. a full perception both of the
importance of accurate definitions, and of the existing
want of them. When the reader is brought to perceive clearly the discrepancy of writers on a scientific subject in their use of language, and to reflect on the confusion and inaccuracy which must be the result, the first and perhaps most essential step is made. The existence, and the character, of the disease being ascertained and fully admitted, it is then time enough to propose a remedy. The difficulties in the study of Political-Economy, will appear much less disheartening, when it is distinctly perceived in what they principally consist; and the uncertainty often complained of in the study will be traced to its true cause;—a cause which it is in our power to remove, since it lies, not in the subject-matter itself, but in the inaccurate and inattentive reasoning of those who have written on it.

Let the student then consider correctness of the reasoning-process, and (with a view to this) a clear definition of technical terms, and careful adherence to the sense defined, as the first—the most important—and the most difficult point, in the science of Political-Economy. Let him by all means collect facts to the greatest possible amount, that are likely to throw light on any of the questions to be discussed; but let him be prepared to state and to reason upon these in the most precise language; otherwise he will only be encumbering himself with a confused heap of materials, which will be rather an impediment than an assistance.

And when much doubt has been thrown over any question that arises, let him apply the utmost attention to ascertain, both from the existing discussions of it, and from the nature of the case, whether the difficulty springs from the mistatement or ignorance of facts, or (as will much oftener happen) from some ambiguity of language, or other fault of reasoning. The latter is not only, as I have said, a more common source of error in the present subject, but also in itself more important; because a mistake as to the facts of any particular case, leads merely to an erroneous conclusion as to
that case, and does not interfere with the correctness of the results obtained in other cases where we may be better informed; whereas the ambiguous use of a term may vitiate a whole train of reasoning, and thus establish an unsound general principle, which will lead to an indefinite number of errors in particular cases.

If, for instance, Mr. Ricardo (to take one of the instances Mr. Senior has introduced) had merely been under a mistake as to the existing rate of wages in some particular Country, this would indeed have vitiated his conclusions relative to that Country, but need not have affected the general principles of his work: but by speaking of wages sometimes (in the ordinary sense) as a certain
amount, and sometimes (in the sense he introduced) as a certain
proportion, he has involved the whole subject in perplexity. He, and several who have followed him,
*41 have spoken of
high or low wages, sometimes in reference to the labourer’s receiving so much
per day, sometimes to his receiving so much
per cent. of the price of the commodity he produces: and thus a vein, as it were, of ambiguity and confusion, runs through all the discussions connected with the subject.

Dr. Hamilton, in his work on the “Progress of Society,”—which I mention, both because when Mr. Senior’s statement was written of the various uses of terms by Political-Economists, this author’s were not included, the work not having been then published; and also because, notwithstanding the laxity I complain of in his employment of language, there is much in the book to repay the perusal,—Dr. Hamilton, I say, uses “Wealth” in one part of his work, in the ordinary sense; and censures writers on Political-Economy, for treating of that too exclusively, and not enough considering human welfare in general, which is not wholly dependent on wealth; while in other places he employs wealth as synonymous with welfare.

Again, the doctrine, as mischievous as it is, I conceive, unfounded, that since there is a tendency in population to increase faster than the means of subsistence, hence, the pressure of population against subsistence may be expected to become greater and greater in each successive generation, (unless new and extraordinary remedies are resorted to,) and thus to produce a progressive diminution of human welfare;—this doctrine, which some maintain in defiance of the fact that all civilized countries have a greater proportionate amount of wealth, now, than formerly,—may be traced chiefly to an undetected ambiguity in the word “tendency,” which forms a part of the middle term of the argument. By a “tendency” towards a certain result is sometimes meant, “the existence of a cause which, if
operating unimpeded, would produce that result.” In this sense it may be said, with truth, that the earth, or any other body moving round a centre, has a
tendency to fly off at a tangent; i.e. the centrifugal force operates in that direction, though it is controlled by the centripetal; or, again, that man has a
greater tendency to fall prostrate than to stand erect; i.e. the attraction of gravitation and the position of the centre of gravity, are such that the least breath of air would overset him, but for the voluntary exertion of muscular force: and, again, that population has a
tendency to increase beyond subsistence; i.e. there are in man propensities which, if unrestrained, lead to that result.

But sometimes, again, “a tendency towards a certain result” is understood to mean “the existence of such a state of things that that result
may be expected to take place.” Now it is in these
two senses that the word is used, in the two premisses of the argument in question. But in this latter sense, the earth has a greater tendency to remain in its orbit than to fly off from it; man has a greater tendency to stand erect than to fall prostrate; and (as may be proved by comparing a more barbarous with a more civilized period in the history of any Country) in the progress of society, subsistence has a tendency to increase at a greater rate than population. In this Country, for instance, much as our population has increased within the last five centuries, it yet bears a far less ratio to subsistence (though still a much greater than could be wished) than it did five hundred years ago.

Inaccuracies of this kind lead of course to those discrepancies and occasional absurdities from which some persons infer that Political-Economy is throughout a chimæra; and that to decide all the questions of which it treats, by random guesses, and without any attempt to gain fixed principles, is preferable to all thought of systematic study: in the same manner as the errors and the bitter contests of theologians have led some to decry or deride all religion; under the name of which indeed, yet more, and more mischievous absurdities have been broached than even Political-Economists can be charged with.

It may be worth observing that, in examining, framing, or altering, definitions in Political-Economy, you will find in most persons a tendency (as in other subjects also) to introduce
accidental, along with, or instead of,
essential circumstances: I mean, that the notion they attach to each term, and the explanation they would give of it, shall embrace some circumstances,
generally, but, not always, connected with the thing they are speaking of; and which might, accordingly, (by the strict account of an accident) be “absent or present, the essential character of the subject remaining the same.” A definition framed from such circumstances, though of course incorrect, and likely at some time or other to mislead us, will not unfrequently obtain reception, from its answering the purpose of a correct one, at a particular time and place.

For instance, the Latin word
Meridies, to denote the
southern quarter, is etymologically suitable (and so would a definition founded on that etymology)
in our hemisphere; while in the other, it would be found just the reverse. Or if any one should define the North Pole, that which is “inclined towards the sun,” this would, for
half the year, answer the purpose of a correct definition; and would be the opposite of the truth for the other half. Such glaring instances as these, which are never likely to occur in practice, serve best perhaps to illustrate the character of such mistakes as do occur. A specimen of that introduction of accidental circumstances which I have been describing, may be found, I think, in the language of a great number of writers, respecting Wealth and Value; who have usually made
Labour an essential ingredient in their definitions. Now it is true,
it so happens, by the appointment of Providence, that valuable articles are, in
almost all instances, obtained by Labour; but still, this is an accidental, not an essential circumstance. If the aerolites which occasionally fall, were diamonds and pearls, and if these articles could be obtained in no other way, but were casually picked up, to the same amount as is now obtained by digging and diving, they would be of precisely the same value as now. In this, as in many other points in Political-Economy, men are prone to confound
cause and
effect. It is not that pearls fetch a high price
because men have dived for them; but on the contrary, men dive for them because they fetch a high price.