political economy, -...

FOUR

INTRODUCTORY LECTURESON

POLITICAL ECONOMY,

DEI.IYERED BEFORE TilE

UNIVERSITY OF OXFORD.

BY N ASSA U W. SENIOR, A.M.,I. ATE FELLOW OF MAGDALEN COLLEGE,

PROFESSOR OF POLITICAL ECONOM~·.

LONDON:LONGMAN, BROWN, GREEN, AND LONGMANS.

1852.

LO"DO":SI'OTTIIWOOOU and SRAW,

Ne. Itreet_Sqllare.

LECTURE I.CAUSES THAT HAVE RETARDED THE PROGRESS OF

POLITICAL ECONOMY.

POLITICAL Economy, as a separate branch of study,may be said to be about a century old. Many of thefacts which are its subject-matter, have indeed at-tracted human attention from the earliest times; manyopinions, right or wrong, have been formed respect-ing them, and many customs and laws, beneficial orinjurious, have been the consequence: but it wasnot until nearly the middle of the last century, thatany attempt was made to reduce those opinions intoa system, or to ascertain the grounds on which theywere founded, or even how far they were reconcile-able with one another. To M. Quesnay belongs thehonour of having first endeavoured to explain of whatwealth consists, by what means it is produced, in-creased, and diminished, and according to what lawsdistributed; in other words, of having been the firstteacher of Political Economy. In the course of hisinvestigations, he found that in the pursuit of wealthall governments had not merely mistaken the straightroad, but had frequently pursued a path leadingdirectly away from it. He found that instead of

4 CA~SES THAT HAVE RETARDED

endeavouring to attain a beneficial end by appropriatemeasures, they had been aiming at a useless resultby means totally ineffectual. Until his time it hadbeen supposed that wealth consists of gold and silver,and that the quantity of gold and silver in any givencountry is to be increased by encouraging the ex-portation and discouraging the importation of allother commodities, and by the perpetual interferenceof governments in the modes in which the labour oftheir subjects is exerted, and the objects to which itis directed. Quesnay showed that gold and silvermake the smallest and least. important portion of thewealth of a country. And he showed that the abun-dance of gold and silver, and of every other com-modity, is to be promoted, not by restrictions onimportation, nor by bounties on exportation, but bythe absolute freedom of external and internal trade;by securing to every man the results of his industryor frugality, without attempting to order him whatto produce or how to enjoy.

His inquiries seem to have produced on his ownmind, and on the minds of his disciples, effectsresembling those which would be created by thediscovery of a map by a party who had been longwandering in an imperfectly known country. Hismap, indeed, was often inaccurate, but the points inwhich it was correct were the most important, and itserrors, such as they were, were not detected by thoseto whom he offered it. Few men have ever presentedto the human mind a more interesting subject ofinquiry, and few have had a more devoted band of

'I'HE PROGRESS OF POLITIC.AL ECONOMY. 5

disciples. La Riviere, Mirabeau, Turgot, and theother writers forming the school called the FrenchEconomists, all implicitly adopted Quesnay's opi-nions, and engaged zealously in their propagation.

The inquiry which Quesnay originated was pur-sued, and with still greater success, by Adam Smith.Smith was superior to Quesnay, and perhaps to everywriter since the times of Aristotle, in the extent andaccuracy of his knowledge. He was, on the whole, asoriginal a thinker as Quesnay, without being equallysubject to the common defect of original thinkers, atendency to push his favourite theories to extremes;and in the far greater freedom then allowed to in-dustry in Great Britain than in France, and in thegreater publicity with us of the government receiptand expenditure, he possessed far greater advantagesas an observer. With these high qualifications andfavourable opportunities, and assisted by a style un-equalled in its attractiveness, he has almost completelysuperseded the labours of his predecessors. The fewwho read their writings, read them not in the hopeof obtaining the instruction which they were intendedto afford, but as sources of historical information, oras examples of the errors to which powerful mindsmay be subject in the infancy of a study.

From the appearance of the "VVealth of Nations,"Political Economy has excited a constantly increasinginterest. All the events, fortunate and unfortunate,which have occurred in Europe during that extra-ordinary period, have tended both to increase itsactual importance, and to occasion that importance

6 CA.USES THA.T HAVE RETARDED

to be better estimated. The art to which it is prin-cipally applicable is the great art of government, andparticularly that branch of governmentwhichconsistsin the raising and employmentof public money. Nota tax can be imposed or applied without materiallyaffecting the fortunes of those by whom it is paid, ofthose among whom it is expended, and of thirdpersons, many of whom, perhaps, are unaware of itsexistence. To ascertain the character and the extentof these effects, even as to any existing tax, withoutthe aid of the general principles supplied by PoliticalEconomy, is scarcely practicable: to foretell oreven to conjecture, with probability, the effects ofan untried tax, without such aid, is impossible. Agovernment ignorant of the nature of wealth, or ofthe laws which regulate its production and distribu-tion, resembles a surgeon who has not studied ana-tomy, or a judge unacquainted with law.

But, under the old system of Continental Europe,many things concurred to diminish the attentionwhich the evil consequencesof this ignorance mightbave been expected to attract. Each monarchy wasconsidered the patrimony of its king, and its publicrevenue a portion of his income. All that he couldget he spent or gave away; part of it went in warsfor his honour, part was wasted in building andpageantry, and part was distributed among his cour-tiers. Public debts were few and small, and werethe debts, not of the nation, but of the crown. Theinterest was not an additional burden on the people,but a deduction from the gratifications of the prince,

THE PROGRESS OF POLmCAL ECONOMY. 7

and was reduced from time to time, either by de-preciating the currency, or by the simple expedientof a refusal to pay. No right was recognised in thepublic to inquire into the amount of the royal revenue,the sources from which it was derived, or the purposesto which it was applied. These were the privateaffairs of the sovereign, which it was not decent oreven safe to canvass.

All this was changed at once by the FrenchRevolution. It was proclaimed in France, andadmitted, or scarcely denied, on the rest of theContinent, that governments are made for nations,not nations for governments; and that the publicrevenue is the revenue, not of the government, butof the nation,-not a property, but a trust,- nota rent or a tribute, but the purchase-money of thelabour necessary to prevent foreign and domesticviolence and fraud, paid over to the governmentmerely as an administrator, unlawfully employed ifapplied to any other purpose, and unlawfully de-manded if more than necessary for that purpose.

Every man felt himself interested that the propor-tion of his income which he had to pay over to thestate should be reduced, either by diminishing ex-penditure, or by varying the mode of assessment.

At the same time the wars in which Europe wasinvolved for a quarter of a century, and the scale onwhich they were carried on, occasioned in almost everycountry an enormous increase of that proportion of thewhole income of the people which is administered bythe government. Almost every country created a

8 CAUSES THAT HAVE RETARDED

national debt, and thus threw on its rulers the ad-ditional duty of collecting a revenue, to be applied,not for current expenses, but to repay those who hadadvanced the public expenditure of previous years.And not only were the people induced to interestthemselves in public affairs, they were frequentlycalled upon to act. In many countries the whole formof government was more than once demolished andreconstructed. Almost every nation, at some period,received, or was promised, representative institutions;everywhere the monarch, by appealing to the people,recognised the existence and the force of anational will.

In the British Islands self-government was nonovelty, but many circumstances concurred to in-crease and diffuse the interest taken in public affairs.Among these circumstances the principal ones werethe extension of the public expenditure, the altera-tions in the currency, and the effects of the poor laws.In no extensive empire recorded in history, has solarge a portion of the annual produce of the land,labour, and capital of the people, been administeredby the state. Every man felt himself to be a publicdebtor, and almost every man became, in some shapeor other, a public creditor. At the same time thenominal value of money, the standard by which hisclaims and liabilities were measured, was subject tovariations considerable in themselves, grossly exagge-rated by one party, and absolutely denied by another,of which few could point out the immediate causes,and no one could foretell the probable extent.Meanwhile, the effects of the poor laws over the

THE PROGRESS OF POLITICAL ECONOMY. 9

southern and south-eastern districts of England,became every day more apparent. It became obviousto the most unreflecting, that they were graduallyaltering the rights, both of property and of industry,the relations between the poor and the rich, thelabourer and his employer, and the habits and feelingsof the agricultural, and in many places of the townpopulation.

All these causes, and many others which it wouldbe tedious and almost impossible to enumerate, havegiven to the political sciences, during the last sixtyyears, an interest which no study, except perhaps thatof theology during the early progress of the Reform-ation, ever acquired. And this at a period when theextension of books and newspapers, and of the habitsand means of discussion and communication, has beensuch as our most sanguine ancestors never anti-cipated.

Of all the branches of political knowledge, themost important, and the most applicable to the pur-poses of government, is that which considers thenature and the origin of wealth. It is true that theultimate object of government, and indeed the ultimateobject of every individual, is happiness. But weknow that the means by which almost every manendeavours to increase his happiness, or, to use thecommon phrase, to better his condition, is by increas-ing his wealth. And to assist, or rather to protecthim in doing this, is the great difficulty in govern-ment. All the fraud, and almost all the violence, forthe prevention of which government is submitted to,

10 CAUSES THAT HA.VE RETARDED

arise from the attempts of mankind to deprive oneanother of the fruits of their respective industry andfrugality. To counteract these attempts, a publicrevenue must be raised and expended; and, as I havealready remarked, neither of these operations can bewell executed or well judged of by persons ignorantof Political Economy. It may be added, that thedesire for unjust gain, which, among savages, pro-duces robbery and theft, assumes, among civilisednations, the less palpable forms of monopoly, combina-tion, and privilege; abuses which, when of long stand-ing, it requires much knowledge of general principlesto detect or expose, and which it is still more difficultto remedy without occasioning much immediateinjury to individuals.

I think, therefore, that I may venture to say, thatno study ever attracted, during an equal period, somuch attention from so many minds, as has beenbestowed, during the last sixty years, on Political Eco-nomy. I do not mean that this attention was ac-knowledged, or even that all those who have beenframing and repeating theories respecting the modesin which wealth is created, increased, or diminshed,have been aware that they were political economists.Most of them as little suspected it as M. Jourdainthat he was speaking prose. But every countrygentleman who has demanded protection to agricul-ture, every manufacturer who has deprecated freetrade, every speculator who has called for paper cur-rency, everyone who has attacked, and almost everyone who has defended, the measures of the minister


for the time being, has drawn his principal argumentsfrom Political Economy.

At the same time, the avowed writers on this sub-ject have been more numerous than those on anyother science or art. If we look at our principalreviews, we shall find that a large portion of eachnumber is dedicated to it. M. Say has been translatedover and over, into every language in Europe. I haveseen three different translations of his great workpublished in different parts of Spain. In the UnitedStates of America there are newspapers exclusivelydevoted to it, and it has professors in almost everyuniversity in Europe, and in North America.

Has then, I will ask,- and it was as an introductionto these questions that I have ventured on so longa preface, - has the progress of Political Economybeen in proportion to the ardour with which it hasbeen urged? If it has not been so, by what causeshas its progress been retarded? and are they causeswithin our control?

To the first question, the answer must be, No.After so much and so long continued discussion, wemight have hoped that its limits would have beenaccurately laid down, its terms defined, and its gene-ral principles admitted. It is unnecessary to proveformally that this is not the case. Everyone isaware that Political Economy is in a state of im-perfect development, - I will not say characteristicof infancy, but certainly very far from maturity. ·Weseldom hear its principles made the subject of conver-sation, without perceiving that each interlocutor has

12 CAUSES THAT llAVE RETARDED

his own theory as to the objects to which the in-quiries of a political economist ought to be directed,and the mode in which they ought to be pursued.When we read the most eminent of the recent writerson the subject, we find them chiefly engaged in con-troversy. Instead of being able to use the works ofhis fellow labourers, every economist begins by de-molition, and erects an edifice, resting perhaps, in agreat measure, on the same foundations, but differingfrom all that has preceded it in form and arrange-ment.

Supposing it to be conceded that this is a correctrepresentation of the actual situation of the study, Iproceed to the more important questions, by whatobstacles has its improvement been impeded, and arethere any, and what means, by which they may beremoved?

One of the principal causes which has preventedthe progress of Political Economy from being adequateto the attention which has been bestowed on it, isinherent in its nature. I will not say unfortunatelyso, since it is at the same time the principal cause ofthe attention which it deserves, and, in fact, of theattention which it has received. I mean its directinfluence on the welfare of mankind; and the effecton our reasonings of this disturbing cause, has beenstrikingly increased by the state of transition inwhich the institutions of almost all the civilised worldhave been struggling for the last sixty years, and seemdestined to struggle for an indefinite period.

If our laws had been of the unchangeable character


which has been ascribed to those of the Medes andPersians, we might have investigated the nature andsources of wealth with the impartiality with which westudy the motions of the heavenly bodies. No onewould have felt himself interested in denying con-clusions which would have been unsusceptible ofpractical application. That wealth consists, not ofmoney, but of the things which money can purchase,-that it is not lessened by resorting to the cheapestmarket,-that it is not augmented by augmentingthe nominal value of the tokens by which it is mea-sured,-that it increases with the increasing pro-ductiveness of labour, and diminishes if more labourbe required to produce a given result,-that theprofits of commerce consist not in what is given, butin what is received, are propositions which might havebeen neglected as truisms, or alluded to as self-evident,but could scarcely have been made the subjects ofeager controversy. Monopolies would never havebeen defended, if monopolists had been secure.

It is to the difference in this respect in the state ofEurope, that I ascribe the difference in the degree ofclamour which was raised against Adam Smith inEngland, and the earlier economists in France, andthat which has been directed against their successorsin both countries. The doctrines of Quesnay andSmith were as much opposed to existing abuses asthose of Malthus or of Ricardo; but there did notappear to be the same chance of their application.While restriction and prohibition was the rule, andapparently the unalterable rule, political economists


were forgiven for proclaiming the advantages of freetrade. The theory was even admitted as long as thepractice seemed at a distance. But these halcyontimes are over: it is becoming every day more ap-parent, that whatever is generally believed to be ex-pedient, will sooner or later be attempted; and thatinstitutions are to be attacked and defended, not byforce, but by argument,-not by mere clamour, ordogged refusal, but by convincing the public of thebenefit or of the disadvantage of the proposed alter-ation.

Archbishop Whately has well remarked, that thedemonstrations of Euclid would not have commandeduniversal assent, if they had been applicable to the pur-suits and fortunes of individuals; and of all branchesof human knowledge, Political Economy, from the com-plexity of its relations, and the vagueness of its no-menclature, offers the easiest scope to a prejudiced oran uncandid reasoner. The great improvements thatare taking place in our commercial and financialpolicy, will tend to diminish this obstacle to politicalscience by removing the subjects of contest. Andwe may hope that its force will be still further di-minished by the mere progress of the study, as -itsterms become better defined, and more and more ofits principles are established and recognised. But itwould be vain to hope that it ever will be got rid of,or that men will examine questions which come hometo their business and bosoms, with the unbiassedspirit which urges the astronomer or the mathe-matician.


Another cause which has rendered fruitless much ofthe attention bestowed on Political Economy, hasbeen the frequent attempt to discuss insulated ques-tions connected with it, by those who have not pre-viously endeavoured to acquaint themselves with itsgeneral outline. In some sciences this is, to a certainextent, practicable. In those sciences which consistin a great measure of independent facts, such as law,or natural history, a single branch may sometimes bestudied successfully. But in Political Economy thedifferent propositions are so mutually dependent, thatit is impossible to reason safely concerning anyonewithout constantly bearing in mind all the others.And yet nothing is more common than to find personswriting books and making speeches, and even pro-posing, with the utmost confidence, legislative mea-sures involving principles as to which the acutest andmost diligent inquirer has not been able to make uphis mind, not only without having settled within them-selves the meaning of their principal terms, but evenwithout being themselves aware that they are usingwords to which they attach no definite ideas.

The errors which I have mentioned have beencommitted principally by those who, without beingprofessedly political economists, frequently indeedexpressly disclaiming that character, have treated thesubjects which Political Economy considers. Butmany who have avowedly devoted themselves to itspursuit, seem to have misdirected their efforts, forwant of a clear conception of the object of their in-vestigations, of the manner in which they ought to be


conducted, or of the nature of the difficulties to besurmounted. If the teacher of Political Economyhave not decided whether he is engaged on a scienceor on an art, whether it is his duty to explain pheno-mena or to deliver precepts, whether his principalbusiness is to observe facts or to deduce inferences,whether his premises are all physical truths or dependpartly on arbitrary assumption, - his work, though itmay contain partial views of the highest value, cannotpossibly form a clear or a consistent whole. Nor isit sufficient that the professor should have made uphis mind as to what he has to teach. It is important,though not equally important, that the student shouldhave a general notion as to what he has to learn, as tothe nature of the subjects which are to be laid beforehim, of the conclusions to which he will be asked toassent, and of the arguments by which they will besupported. The view that is to be taken, may perhapsnot suit his habits of thought or of inquiry. It maybe too abstract or too concrete. If he be accustomedto demonstration, he may be ill satisfied by proofs andillustrations drawn from actual life, and mixed withirrelevant accidents. If his pursuits have been prac-tical, he may be disgusted by reasonings founded onhypotheses representing nothing that actually takesplace. Or his objections may be directed ratheragainst the subject itself than against the mode of itstreatment. He may think that too much importance,or if not too much importance, too exclusive an at-tention, is directed towards wealth. He may wishthat economists would consider man as a being with

THE PROGRESS OF POLITICAL ECONOMY. 1 7

higher qualities, higher duties, and higher enjoymentsthan those which are concerned in the production,distribution, and consumption of commodities andservices, and may regret to see him treated merely asa cause or a recipient of rents, profits, and wages.But if he be forewarned, he will not be disappointed,and, knowing beforehand the sort of study in whichhe is to be engaged, he will more easily perceive thepremises and weigh the arguments of its professor.

18 POLITICAL RCONOMY

LECTURE II.POLITICAL ECONOMY A MENTAL STUDY.

IN the present and the following two Lectures, Ishall consider whether Political Economy is a phy-sical or a mental study; whether it may be moreconveniently treated as a science or as an art; andwhether its· premises are to be taken solely fromobservation and consciousness, or rest, in part, onarbitrary assumptions. And I shall begin by stating,at some length, the distinction between science andart,-not with the hope of saying anything new, butbecause I believe that that distinction, though it hasbeen clearly drawn, may not be familiar to all myhearers.

Shortly, it may be said that, as a history is astatement of past facts, so a science is a statement ofexisting facts, and an art a statement of the meansby which future facts may be caused or influenced,or, in other words, future events brought about.The first two aim only at supplying materials for thememory and the judgment; they do not presupposeany purpose beyond the acquisition of knowledge.The third is intended to influence the will. It pre-supposes that some object is to be attained, and

A MENTAL STUDY. 19points out the easiest, the safest, or the most effec-tual conduct for that purpose. It is for this reasonthat the collection of related facts which constitute ascience is generally a less complex thing than thecollection of related precepts which constitute an art.A single science may be complete in itself;-a manmay confine himself to chemistry, or to zoology, orto botany. He may pursue anyone of those sciencesto the boundaries of existing knowledge, and knownothing of the others. But an art must draw itsmaterials from many sciences. No man can teachor practise well the art of agriculture unless he havesome knowledge of chemistry, botany, zoology, me-chanica, and indeed of many other sciences.

In the progress of human knowledge art precedesscience. The first efforts of man are practical. Hehas an object in view, and tries various means ofaccomplishing it. Some of these utterly fail, somesucceed imperfectly, and others are effectual, but atan unnecessary expense of time and trouble. Ashis experience increases, he gradually lays down forhimself certain practical rules. If the business inwhich he is engaged can be managed by a solitaryindividual, these rules may be known only to him-self, and be lost at his death. It is thus that wehave lost many of the secrets of the ancient painters.But if it be one that requires co-operation, theybecome known to his assistants and to his pupils,and gradually to all who are engaged in similarpursuits. Many minds are employed in improvingthem and in adding to their number, until at length

20 POLITICAL ECONOMY

they swell into a system. It may be long, however,before they exist in any but a traditional form. Thegreat architects of the middle ages left behind themno written precepts. They taught their pupils byoral instruction, and the rest of the world and pos-terity by example. The desire, however, to commu-nicate and perpetuate information is one of thestrongest passions of inventive minds. As booksmultiply and become the principal means by whichthis can be effected, those who are conscious of su-perior knowledge become writers. They composetreatises in which the means which are supposed tobe productive of certain effects are arranged andpreserved; and the knowledge which previouslyrested on individual experience or traditional routinebecomes an art.

With the exception, however, of poetry, architec-ture, and generally of the arts tbat are addressed to thetaste and the imagination, for which nations in an earlystage of civilisation seem to have a peculiar aptitude,the arts of an unscientific age contain many rules inef-fectual for their intended purposes, and many that arepositively opposed to them. Thus the medicine of themiddle ages ordered plants with yellow flowers to beused in cases of jaundice, and those with red flowersin fevers, and directed fomentations and ointments tobe applied not to the wound but to the sword. Atlength a man arrives with wider views or less docilehabits of mind, who is not satisfied to obey whatoften appear to him to be arbitrary rules, though heis told that they are the results of experience. He

A MENTAL STUDY. 21endeavours to account for the effects which he seesproduced, that is to say, to refer them to somegeneral laws of matter or of mind. To do this is tocreate a science. As soon as scientific habits ofthought prevail, men are teazed by any appearancefor which they cannot account. Their first motiveis to question its reality. Evidence of mesmericclairvoyance has been produced enough to satisfy asceptical inquirer, if the phenomenon itself could beaccounted for. But we cannot refer it to any generallaw, and therefore the greater part of those who thinkabout it, deny its existence; many suspend their opi-nion, and scarcely any are complete believers. If itsexistence should ever be thoroughly established, thewhole scientific world will be engaged in searching forthe general principles to which it is to be referred;for no one will be satisfied with accepting it as aninsulated unexplained fact.

I have said that a single art generally draws itspremises from many different sciences. So a singlescience generally affords premises to many differentarts. How numerous are the sciences which areapplicable to the art of war. How numerous are thearts which depend in part on the principles ofchemistry. And it is obvious that every increaseof human knowledge must increase the influence ofscience on art. Under this influence many new rulesare laid down, and many, which were supposed to befounded on experience, are abandoned as unnecessaryor injurious. The art becomes in some respects moresimple and in others more complex: more complex

22. POLITICAL ECONOMY

because its precepts become more diversified andmore detailed; more simple because, instead of beingthrown together with little apparent connection, theyare grouped under the general principles supplied byscience.

Sciences are divided into two great classes, differ-ing both as to the matters which they treat, and thesources from which they draw their premises. Theseare the physical and the mental, or, as they are some-times called, the moral sciences. The proper subjectsof the first are the properties of matter; those of thesecond are the sensations, faculties, and habits of thehuman mind. As we have no experience of mindseparated from matter (perhaps indeed are incapableof conceiving its existence), and as the mind can actonly through the body, even the more purely mentalsciences are forced to take notice of matter; and manyof them, such as the sciences which have been calledeesthetic, those which account for the pleasure whichwe derive from beauty and sublimity, seem at firstsight to treat of little except material objects. Butthey consider those objects merely with reference totheir effects on the human mind. To classify andaccount for those effects as a part of the philosophyof mind is the purpose of the science, and it regardsin matter only the qualities which produce them.On the other hand, a botanist in the description ofplants cannot omit the qualities which render themagreeable or useful to man. Without doubt, to bepleased by the sight and smell of a rose is as muchan attribute of the human mind as the form, colour,

A MENTAL STUDY. 23and other qualities which occasion that pleasure areattributes of the rose. But it is to the rose only thatthe botanist looks. He states that it is beautiful andodoriferous as a part of the description of the plant,not of that of the being to whom it is beautiful andodoriferous.

The same difference separates arts, though the lineis less clearly marked. For as every art must usematerial instruments, it is to a certain extent physical;and as every art aims at producing pleasure or pre-venting pain, it must be, to a certain extent, mental.Still, however, the difference exists. Noone wouldcall rhetoric a physical art, though its teacher mustdeliver precepts as to voice and gesture. No onewould call agriculture a mental art, though a treatiseon agriculture would be incomplete which did notcompare the advantages and disadvantages of task-work and day-work, - a comparison involving wideand numerous moral considerations.

Where the subject is matter the distinction betweenan art and a science is in general easily perceptible.No one confounds the science of projectiles with theart of gunnery, or the art of surgery with the scienceof anatomy. But it appears to be much less easy todistinguish the arts and the sciences which have fortheir subject the operations of the human mind.Thus we often talk of the art of logic, and of thescience of morality. But logic is not an art but ascience. It is not a collection of precepts how toreason, but a statement of the principles on which allreasoning depends. The logician does not advise, he


merely instructs. He does not teach us to argue bymeans of syllogisms, but asserts the fact that allreasoning is syllogistic. His statements are all gene-ral; they have no relation to time or to place. Theyare unconnected with any science but his own. Onthe other hand, morality is not a science but an art.The object of the moralist is not to inform us as tothe nature of the faculties and the sensations of man,but to advise us how to use those faculties, and howto subject ourselves to those sensations, for the pur-pose of promoting our happiness. He must thereforedraw his materials from many different sciences, andmust vary his precepts according to the social condi-tion of those whom he addresses. The morality ofthe Stoics was fitted to an aggregate of petty com-munities constantly engaged in foreign and civil war,in which defeat involved the worst of human evils,the loss of life, of relations, of property, and of liberty.No Greek could be sure that in a year's time hiscountry might not be conquered by a neighbouringtribe, or his party overthrown by a revolution, andall his family and friends murdered before his eyes,or sold with him into slavery. Under such circum-stances, insensibility, the power of enduring the ap-proach and the presence of evil, and the insecurity,and even the absence of good, appeared to be thequality most conducive to happiness. The Stoicmoralist, therefore, was as anxious to blunt the desiresand harden the perceptions of his pupils, as theEnglish moralist is to rouse their ambition, and toexpand their sensibility. The logic of Aristotle and

A MENTAL STUDY. 25the logic of Whately are the same, but how little dowe find in common when we compare the morality ofZeno with that of Smith or of Paley.

It appears to me that the greater tendency to con-found science and art, when the subject is mind, thanwhen it is matter, arises from the more immediateinfluence on human conduct possessed by the mentalsciences. The sciences which consider matter haveoften little apparent connection with any of the artsto which they are subservient. The application ofchemistry to agriculture has taken place almost withinour own recollection; its application to navigation isstill more recent; to transport by land, more recentstill; to the transmission of intelligence, scarcely tenyears old. Such sciences may be, and indeed generallyare, most earnestly studied by men who have noobject beyond the discovery and diffusion of truth.That object is enough to satisfy the most ardentscientific ambition, and to urge the most unweariedscientific labours. The astronomer does not considerwhat will be the practical results of his inquiries, orwhether they will lead to any practical results what-ever. His object is knowledge. The uses to whichthat knowledge may be applied, the mode and thedegree in which it may affect men's conduct, he leavesto others.

On the other hand, the mental sciences are directlyand obviously connected with the arts of which theyfurnish the principles; and those arts almost everyeducated man must practise. No man studies thescience of reasoning without resolving to apply its


principles whenever he has to exercise the art of con-troversy. No man inquires into the laws whichregulate the human intellect or the human passions,without framing out of them some practical rules forthe employment of his own faculties and the regula-tion of his own affections.

The distinction between physical and mental isimportant, not only with respect to the subjectstreated by the sciences and arts in each class, but alsowith respect to the principal sources from which theyrespectively draw their premises.

In all sciences and in all arts these sources are butthree - observation, consciousness, and hypothesis.The physical sciences, being only secondarily con-versant with mind, draw their premises almost ex-clusively from observation or hypothesis. Thosewhich treat only of magnitude and number, or,as they are usually called, the pure sciences, drawthem altogether from hypothesis. The mathema-tician does not measure the radii of a circle in orderto ascertain that they are all equal: he infers theirequality from the definition with which he setsout. Those which abstain from hypothesis dependon observation. It is by observation that the as-tronomer ascertains the motions of the planets, thebotanist classifies plants, and the chemist discoversthe affinities of different bodies. They disregardalmost entirely the phenomena of consciousness. Thephysical arts are almost exclusively based on observa-tion. As their object is to produce positive effects,they trust as little as possible to hypothesis; and the

A MENTAL STUDY. 27

mental phenomena which they have to consider aregenerally few and simple. The art of navigation, theart of mining, or the art of fortification, might betaught by a man who had never studied seriously theoperations of his own mind.

On the other hand, the mental sciences and themental arts draw their premises principally fromconsciousness. The subjects with which they arechiefly conversant are the workings of the humanmind. And the only mind whose workings a manreally knows is his own. When he wishes to ascer-tain the thoughts and the feelings of others, his firstimpulse always is, to endeavour to suppose himself inwhat he believes to be their situation, and to considerhow he himself would then think and feel. His nextimpulse is to infer that similar moral and intellectualprocesses are taking place in them. If he be acautious observer, he endeavours to correct this in-ference by examining their countenances, their words,and their actions. But these are uncertain symptoms,often occasioned by a state of mind different fromthat which they appear to indicate; and often em-ployed for the purpose of concealment or of deception.

When a man endeavours to discover what is passingin the mind of another, by reflecting on what haspassed or is passing in his own, the certainty ofthe result depends of course on the degree in whichthe two minds coincide. The educated man, there-fore, estimates ill the feelings and the faculties of theuneducated, the adult those of the child, the sanethose of the insane, the civilised man those of the

28 POLITICAl. ECONOMY

savage. And this accounts for the constant mis-management of the lower orders, and of children,madmen, and savages, by their intellectual and moralsuperiors. The student of mental science is in thesituation of an anatomist, allowed to dissect only asingle subject, and forced to conjecture the internalconformation of other men by assuming that it re-sembles that of the subject which he has dissected,and correcting that assumption only by observingthe forms of their bones and the outward play of theirmuscles. The mental peculiarities of other men arelikely to mislead him in particular instances. Hisown mental peculiarities are likely to mislead him onall occasions.

Another important difference, between mental andphysical studies, is the degree and the manner inwhich they respectively can be aided by experiment.When we are dealing with matter, we frequently areable to combine its particles at will, and to ascer-tain the results of the combination. If we find that,all other things remaining the same, the presence orabsence of a given element is followed by the presenceor absence of a given result, we ascribe to that ele-ment and to that result the relation of cause andeffect, or at least of condition and result.

But we can scarcely be said to be able to make ex-periments on the minds of others. It is necessary toan experiment, that the observer should know accu-rately the state of the thing observed before the ex-periment, and its state immediately after it. Butwhen the minds of other men are the subject, we can

A MENTAL STUDY. 29

know but little of either the one state or of the other.We are forced, therefore, to rely not on experiment,but on experience, that is to say, not on combinationsof known elements effected for the purpose of testingthe result of each different combination, but on ourobservation of actual occurrences, the results of thecombination of numerous elements, only a few ofwhich are within our own knowledge. And the con-sequence is, that we frequently connect facts whichare really independent of one another, and not unfre-quently mistake obstacles for causes.

The measure now" before parliament for intro-ducing into Ireland a compulsory provision for thedestitute, is defended by an appeal to experience. Weare told that the English poor have such a provision,and are the most industrious and the best maintainedpopulation in Europe. The Irish poor have no suchprovision, and are the idlest and the poorest peoplethat is called civilised. If the presence of a poor lawin the one and its absence in the other were the onlydifference in. the history of the two countries, thiswould really be an instance of experience. If acountry with a previous history precisely resemblingthat of England, possessing precisely the same phy-sical and moral advantages, and differing solely inthe absence of a poor law, were found to be idle andmiserable, we might justly infer that the prosperityof England is owing to its poor law; for there wouldbe no other cause to which it could be referred. And

• This Lecture was delivered in March, 1847.


the misery of the other country could be referred tono cause except its want of a poor law. But whenwe find that the English and the Irish nations differin race, in religion, and in habits, - that the one ischiefly a town and the other almost exclusively acountry population,-that the one consists principallyof labourers for hire, the other of small tenants, -thatthe one lives on wages, the other on its own crop,-that the vice of the one is improvidence, that of theother indolence,-that in one country the religion ofthe people has been persecuted, in the other endowed,-that in the one the clergy of the people are the alliesof the government, in the other its enemies,-that inthe one public sympathy is with the supporter oforder and peace, in the'other with the disturber, -thatthe code which prevails in the one is that which issanctioned by parliament and administered by courtsof justice, in the other is one framed by conspirators,promulgated by threatening notices, and enforced byoutrage and assassination,-that it is more dangerousto obey the law in the one than to violate it in theother, - when we find that these differenceshave lastedfor centuries, and that, almost from our earliest know-ledge of them, the circumstances in which the twocountries have been placed have been not only dis-similar but opposed, it is obvious that the wretched-ness of Ireland in the absence of a poor law does notprove that the presence of such an institution hasbeen beneficial to England. All that is proved isthat a country can prosper with a poor law and bemiserable without one. To that extent the expe-

A MENTAL STUDY. 31rience of England and Ireland is decisive. It is acomplete answer to anyone who should maintaineither that a country in which the population areforced to rely for subsistence on their own resourceswill necessarily be laborious, or that one in whichthe law protects everyone, whatever be his conduct,from want, will necessarily be indolent. But it is noanswer to anyone who should maintain that such arethe tendencies of the two opposite institutions, butthat such tendencies may be neutralised by counter-acting causes. And yet there are thousands ofeducated men who call such reasoning as this arguingfrom experience, and are now anxious to make thetremendous experiment of an Irish poor law on theEnglish model in reliance on what they call the ex-perience of England.

When we direct our attention to the workings ofour own minds, that is to say, when we search forpremises by means of consciousness instead of bymeans of observation, our powers of trying experi-ments are much greater. To a considerable degreewe command our own faculties, and though there arefew, perhaps none, which we can use separately, wecan at will exercise one more vigorously than theothers. We can call, for instance, into peculiar acti-vity, the judgment, the memory, or the imagination,and note the differences in our mental condition asthe one faculty or the other is more active. Andthis is an experiment. Over our mental sensationswe have less power. We cannot at will feel angry, orenvious, or frightened. But we can sometimes,though


rarely, put ourselves really into situations by whichcertain emotions will be excited. And when, as isusually the case, this is impossible or objectionable, wecan fancy ourselves in such situations. The firstis an actual experiment. We can approach the brinkof an unprotected precipice and look down. We caninterpose between our bodies and that brink a lowparapet, and look over it. And if we find that ouremotions in the two cases differ,-that though there isno real danger in either case, though in both ourjudgment equally tells us that we are safe, yet thatthe apparent danger in the one produces fear, whilewe feel secure in the other, - we infer that the imagi-nation can excite fear for which the judgment affirmsthat there is no adequate cause. The second is theresemblance of an experiment, and when tried bya person with the vivid imagination of Shakspeare orHomer may almost serve for one. But with ordinaryminds it is a most fallacious expedieint, Few menwhen they picture themselves in an imaginary situa-tion take into account all the incidents necessary tothat situation. And those which they neglect maybe among the most important.

Having explained the distinction between a scienceand an art, and the chief differences between the artsand sciences which consider as their principal subjectthe laws of matter, and those whose principal subjectis mind, I now come to one of the practical questionsin which this long preface will I hope be found useful,namely, whether Political Economy be a mental or aphysical study.

A MENTAL STUDY. 33Unquestionably the political economist has much

to do with matter. The phenomena attending theproduction of material wealth occupy a great part ofhis attention; and these depend mainly on the lawsof matter. The efficacy of machinery, the diminish.ing productiveness, under certain circumstances, ofsuocessive applications of capital to land, and thefecundity and longevity of the human species, are allimportant premises in Political Economy, and all arelaws of matter. But the political economist dwellson them only with reference to the mental phenomenawhich they serve to explain; he considers them asamong the motives to the accumulation of capital,as among the sources of rent, as among the regula-tors of profit, and as among the causes which pro-mote or retard the pres;:iure of population on sub-sistence. If the main subject of his studies were thephysical phenomena attending the production ofwealth, a system of Political Economy must containa treatise on mechanics, on navigation, on agricul-ture, on chemistry-in fact, on the subjects of almostall the physical sciences and arts, for there are fewof those arts or sciences which are not subservient towealth. All these details, however, the politicaleconomist avoids, or uses a few of them sparinglyfor the purpose of illustration. He does not attemptto state the mechanical and chemical laws whichenable the steam engine to perform its miracles-he passes them by as laws of matter; but he explains,as fully as his knowledge will allow, the motives whichinduce the mechanist to erect the steam engine, and


the labourer to work it. And these are laws of mind.He leaves to the geologist to explain the laws of matterwhich occasion the formation of coal, to the chemistto distinguish its component elements, to the engineerto state the means by which it is extracted, and to theteachers of many hundred different arts to point outthe uses to which it may be applied. What he reservesto himself is to explain the laws of mind under whichthe owner of the soil allows his pastures to be laidwaste, and the minerals which they cover to be ab-stracted; under which the capitalist employs, in sink.ing shafts and piercing galleries, funds which might bedevoted to his own immediate enjoyment; under whichthe miner encounters the toils and the dangers of hishazardous and laborious occupation; and the laws, alsolaws of mind, which decide in what proportions theproduce, or the value of the produce, is divided betweenthe three classes by whose concurrence it has beenobtained. When he uses as his premises, as he oftenmust do, facts supplied by physical science, he doesnot attempt to account for them; he is satisfied withstating their existence. If he has to prove it, helooks for his proofs, so far as he can, in the humanmind. Thus the economist need not explain why it isthat labour cannot be applied to a given extent ofland to an indefinite amount with a proportionatereturn. He has done enough when he has provedthat such is the fact; and he proves this by showing,on the principles of human nature, that, if it wereotherwise, no land except that which is most fertile,and best situated, would be cultivated. All the tech-

A MEN'J'AL STUDY. 35

nical terms, therefore, of Political Economy, representeither purely mental ideas, such as demand, utility,value, and abstinence, or objects which, though some ofthem may be material, are considered by the politicaleconomist so far only as they are the results or thecauses of certain affections of the human mind, suchas wealth, capital, rent, wages, and profits.

In the next Lecture I shall consider the first of thetwo remaining questions, - namely, whether PoliticalEconomy may be better treated as a science or as anart.

86 REASONS FOR TREATING

LECTURE III.

REASONS FOR TREATING POLITICAL ECONOMY ASA SCIENCE.

IN the following Lecture I shall consider whetherPolitical Economy may be better treated as a scienceor as an art.

If Political Economy is to be treated as a science,it may be defined as "the science which states thelaws regulating the production and distribution ofwealth, so far as they depend on the action of thehuman mind."

If it be treated as an art, it may be defined as "theart which points out the institutions and habits mostconducive to the production and accumulation ofwealth." Or if the teacher venture to take a widerview, as "the art which points out the institutionsand habits most conducive to that production, accu-mulation, and distribution of wealth, which is mostfavourable to the happiness of mankind."

According to the law which I have already men-tioned, as regulating the progress of knowledge,Political Economy, when, in the 17th century, it firstattracted notice as a subject of separate study, was

POLITICAL ECONOMY AS A SCIENCE. 87

treated as an art. At that time human happinesswas considered as dependent chiefly on wealth, andwealth, as I have previously remarked, was supposedto consist ofgold and silver. The object which the poli-tical economist proposed to himself and to his reader,was the accumulation within his own country of theutmost possible amount of the precious metals. Thequestions which now agitate society, as to the distribu-tion of wealth, were unregarded. All that was aimedat, was its acquisition and retention in a metallicform. As respects the countries possessing nativedeposits of the precious metals, the means of effectingthis were supposed to be obvious and easy. Theyhad only to promote the extraction of silver frommines, and that of gold from auriferous sands, and toprohibit the exportation of either. This was thepolicy of Spain and Portugal. The countries notpossessing a native supply, could obtain it only bywhat was called a favourable balance of trade, that isto say, by exporting to a value exceeding that oftheir imports, and receiving the difference in money.And the money so acquired, they were taught to re-tain, by prohibiting its exportation. The prevailingopinion shows itself in the preamble of the 5 Rich. II.stat. 1. cap. 2., one among the many statutes andproclamations by which this prohibition was for cen-turies enforced. 'For the great mischief which thisrealm suffereth, and long hath done, for that gold andsilver are carried out of the realm, so that, in effect,there is none thereof left, which thing, if it shouldlonger be suffered, would shortly be the destruction


of the same realm, which God prohibit;" and thestatute proceeds to forbid such exportation on painof forfeiture. The merchants, however, who werenecessarily the first to test the effects of this prohibi-tion, found it inconvenient. Some trades, particularlythose with the East, could be carried on only by theconstant exportation of gold or silver, and in allothers it was occasionally useful. They did notventure to attack the theory that the prosperity of acountry depends on its accumulation of money. Fewof them, probably, doubted its truth. But they main-tained that the means by which the legislature en-deavoured to promote this excellent result, in fact de-feated it. " Allow us," they said, "to send out silverto Asia, and we will bring back silks and calicos,not forour own consumption, which of course would be a loss,but to sell on the Continent for more silver than theycost, and we shall add annually to the national trea-sure." This was assented to, and after more than fourcenturies of prohibition, the export of bullion was al-lowed by the 15Car. II. cap. 17. "Forasmuch," saysthe act, "as several considerable foreign trades cannotbe conveniently driven without the species of moneyand bullion, and that it is found, by experience, thatthe speciesof money and bullion are carried in greatestabundance, as to a common market, to such placesas give free liberty of exporting the same, and thebetter to keep in and increase the current coins of thislcingdom, be it enacted, that it shall be lawful to ex-port all sorts of foreign coin and bullion, first enter-ing the same at the custom-house."

POLmCAL ECONOMY AS A scrsscs, 39

The art of Political Economy now became morecomplex. Its object, indeed, was a very simple one,merely to increase the current coin of the country;but this was to be effected, not by restraining everytrade which carried out bullion, but only those whichcarried out more than they brought in. But howwere such trades to be detected? A test was sup-posed to be applied, by ascertaining whether theirimports were intended for home consumption, or forre-exportation. In the former case, the trade, whetherprofitable or not to the merchant, was obviously mis-chievous to the country.

In the second case the trade, if profitable to themerchant, must also benefit the country, as it wouldreceive more money than it sent out. "It is not,"says Sir James Stewart·, "by the importation offoreign commodities, and by the exportation of goldand silver, that a nation becomes poor; it is byconsuming those commodities when imported. Themoment the consumption begins, the balance turns.Nations which trade to India by sending out goldand silver for a return of superfluities of a mostconsumable nature, the consumption of which theyprohibit at home, do not spend their own specie,but that of their neighbours, who purchase the re-turns of it for their own consumption. Consequentlya nation may become immensely rich by the constantexportation of specie and importation of consumablecommodities. But she would do well to beware not

• An Inquiry into the Principles of Political Economy, book ii.ch, xxix. pp. 418,419., and 422.


to resemble the milliner who took it into her head towear the fine laces which she used to make up forher customers. While a favourable balance is pre-served upon foreign trade, a nation grows richerdaily; and when one nation grows richer, othersmust be growing poorer."

Sir James Stewart's work was published in 1767,and as he says that it was the work of eighteenyears, it must have been written between that yearand the year 1749. Though he calls Political Eco-nomy a science, he treats it as an art, and has themerit of having first given to it limits clearly se-parating it from the other moral and political arts."Its object is," he says, "to secure a certain fund ofsubsistence for all the inhabitants, to obviate everycircumstance which may render it precarious, toprovide every thing necessary for supplying thewants of the society, and to employ the inhabitantsin such a manner as naturally to create reciprocalrelations and dependencies between them, so as tomake their several interests lead them to supply oneanother with their reciprocal wants."· This agreeswith my second proposal, namely, to define PoliticalEconomy as "the art which points out the institu-tions and habits most conducive to the productionand accumulation of wealth." As incidental to theart, he was forced to examine the science, and aconsiderable portion of his work consists of inquiriesinto the laws which regulate the production and

• Book I. Introduction.

POLITICAL ECONOMY AS A scrsscs, 41

distribution of wealth. The extracts which I haveread, show that he did not escape the prevalent errorsof his times. And these errors were so grave, as torender the practical portion of his treatise not merelyuseless for its intended purposes, but positively in-jurious. A legislator following his precepts, wouldwaste the wealth of the richest country, and destroythe diligence of the most industrious. But thescientific part of the work, particularly the chapterson population, and on the influence of taxation onwages, contains truths of great importance, whichwere unknown to his contemporaries, and cannot besaid to be generally recognised even now.

Among the contemporaries of Stewart were theFrench Economists, or, as they have lately been called,the Physiocrats, forming the school founded byQuesnay. With the exception, however, of Turgot,they wrote on the whole art of government. Theirworks, indeed, contain treatises on Political Economyaccording to my third proposed definition, that is tosay, " on the institutions and habits most conduciveto that production, accumulation, and distribution ofwealth, which is most favourable to the happiness ofmankind;" but they contain much more. Quesnayand his followers lived in a country subject to politicalinstitutions, of which many were mischievous, morewere imperfect, and all were unsettled. That the exist-ing system of government was bad, everyone acknow-ledged. The economists believed that they haddiscovered why it was bad. They believed that theyhad discovered that agriculture is the only source of


wealth, and rent the only legitimate source of publicrevenue. And they proposed, therefore, to substitutefor the innumerable taxes on importation, on ex-portation, on transit, on production, on sale, on con-sumption, and on the person of man, which thenformed the fiscal system of France, a single tax on therent of land. So far their precepts were founded onthe science of Political Economy. But when theyproposed the separation of legislative and judicialfunctions, and required the whole legislative power tocenter in an absolute hereditary monarch, they drewtheir premises from other branches of mental science.I have said that Turgot was an exception; and it isremarkable, that the only man among the disciplesof Quesnay who was actually practising PoliticalEconomy as an art, is the only one who treated itsprinciples as a science. His" Reflexions sur la For-mation, et la Distribution des Richesses," publishedin 1771, is a purely scientific treatise. It containsnot a word of precept; and might have been writtenby an ascetic, who believed wealth to be an evil.

"'ItVenow come to Adam Smith, the founder ofmodern Political Economy, whether it be treated as ascience or as an art. He considered it as an art." Political Economy," he says, in the introduction tothe fourth book, " proposes two distinct objects: first,to provide a plentiful revenue or subsistence for thepeople, or, more properly, to enable them to providesuch a revenue or subsistence for themselves; and,secondly, to supply the state or common weal with arevenue sufficient for the public service. It proposes


to enrich both the people and the sovereign." Theprincipal purpose of his work was to show theerroneousness of the means by which political econo-mists had proposed to attain these two great objects.And in the then state of knowledge, this could be doneonly by proving that many of them mistook thenature of wealth, and all of them the laws accordingto which it is produced and distributed. Thescientific portion of his work is merely an introductionto that which is practical.

Of the five books into which the work is divided,it occupies only the first and second. The third is anhistorical sketch of the progress of national opulence.The fourth, the longest in the whole work, considersthe direct interferences by which governments haveattempted to lead or force their subjects to becomerich; and decides, "that every system which endea-vours, either by extraordinary encouragements, todraw towards a particular speciesof industry a greatershare of the capital of the society than would naturallygo to it, or, by extraordinary restraints, to forcefrom a particular species of industry some share ofthe capital which would otherwise be employed in it,is in reality subversive of the great purpose which itmeans to promote. It retards, instead of accelerating,the. progress of the society towards real wealth andgreatness; and diminishes, instead of increasing, thereal value of the annual produce of its land andlabour."

"All systems," he adds, "either of preference orof restraint, therefore, being thus completely taken


away, the obvious and simple system of natural libertyestablishes itself of its own accord. According to thatsystem, the sovereign has only three duties to attendto: first, the duty of protecting the society from theviolence and invasion of other independent societies;secondly, the duty of protecting, as far as possible,every member of the society from the injustice oroppression of every other member of it, or the dutyof establishing an exact administration of justice; and,thirdly, the duty of erecting and maintaining certainpublic works and certain public institutions, which itcan never be for the interest of any individual, orsmall number of individuals, to erect and maintain."

The fifth book, which points out the means bywhich the duties of the sovereign may best be per-formed, and the necessary public revenue provided,is, in fact, a treatise on the art of government. Ittreats of the subsidiary arts of war, of jurisprudence,and of education. It considers the advantages anddisadvantages of religious endowments, and even thedetails of the opposed systems of patronage and po-pular election, and of equality and inequality of bene-fices. It considers at great length the modes andeffects of taxation and of public loans, and concludesby an elaborate plan for diminishing the taxationof Great Britain, by requiring all the British de-pendencies, of which Ireland and North America thenformed part, to contribute directly to the imperialtreasury.

I have often doubted whether we ought not to wishthat Adam Smith had published his fifth book as a se-


parste treatise with an appropriate title. It is by farthe most amusing and the easiestportion of the" Wealthof Nations," and must have attracted many readerswhom the abstractions of the first and second books,if they had formed a separate work, would have re-pelled. On the other hand, the including by so greatan authority, in one treatise, and under one name, manysubjects belonging to different arts, has certainly con-tributed to the indistinct views as to the nature andsubjects of Political Economy, which appear still toprevail.

The English writers who have succeeded AdamSmith, have generally set out by defining Political Eco-nomy as a science, and proceeded to treat it as an art.

Thus Mr. M'Cullocb states, as the proper subjectsof Political Economy, "the laws which regulate theproduction, accumulation, distribution, and consump-tion of the articles or products possessing exchange-able value." Political Economy, then, is a science.But he goes on to say, that" the object of PoliticalEconomy is to point out the means by which the in-dustry of man may be rendered most productive ofwealth, the circumstances most favourable to its ac-cumulation, and the mode in which it may be mostadvantageously consumed." So defined, PoliticalEconomy is an art,-a branch, in fact the principalbranch, of the art of government.

Mr. James Mill says that he has in view merely toascertain the laws of production, distribution, and con-sumption. His treatise, therefore, ought to be merelyscientific. But when he says that Political Economy


ought to be to the state what domestic economyis to the family, and that its object is to ascertain themeans of multiplying the objects of desire, and toframe a system of rules for applying them with thegreatest advantage to that end, he turns it into anart.

Mr. Ricardo is, however, an exception. His greatwork is little less scientific than that of Turgot. Hisabstinence from precept, and even from illustrationsdrawn from real life, is the more remarkable, as thesubject of his treatise is distribution, the most practi-cal branch of Political Economy, and taxation, themost practical branch of distribution.

The modern economists of France, Germany, Spain,Italy, and America, so far as I am acquainted withtheir works, all treat Political Economy as an art.

Many of them complain of what they call the ab-stractions of the English school, and others accuse itof narrow views, and of an exclusive attention towealth; cri ticisms which must arise from an opinionthat Political Economy is a branch of the art ofgovernment, and that its business is to influence theconduct of a statesman, rather than to extend theknowledge of a philosopher.

It appears, from this hasty sketch, that the termPolitical Economy has not yet acquired a definitemeaning, and that, whichever of the three definitionsI adopt, I shall be free from the accusation of havingunduly extended or narrowed the field of inquirywhich the statute founding this professorship has laidopen to me.


There is much in favour of the third definition, thatwhich defines Political Economy as the art whichteaches what production, distribution, accumulation,and consumption of wealth is most conducive to thehappiness of mankind, and what are the habits andinstitutions most favourable to that production, dis-tribution, accumulation, and consumption.

It raises the political economist to a commandingeminence. The most extensive, though perhaps notthe most important, portion of human nature, lieswithin his horizon.

The possession of wealth is the great object ofhuman desire, its production is the great purposeof human exertion. The modes and the degree inwhich it is distributed, accumulated, and consumed,occasion the principal differences between nations.The philosopher who could teach such an art, wouldstand at the head of the benefactors of mankind.

But the subject is too vast for a single treatise, orindeed for a single mind. This will be evident if weconsider the extent of one of its subordinate branches,the limits to be assigned to posthumous power. Onthe death of a proprietor, ought his property to revertto the state, as it does in Turkey, or to go to hischildren, as it does in France, or to be subject to hisdisposition by deed or by will? If it be subjected tohis disposition, ought he to have merely the power ofappointing his immediate successors, or of entailing itfor one generation, or for two, or for ever? Is itadvisable that he should have the power, not only ofappointing a successor to his property, but of directing


how that successor shall employ it? And ought sucha power to be unlimited, or to be confined to certainpurposes, or within a certain period? Ought the lawsof successionand of testamentary power to be the sameas respects land and movables, or to differ totally, orin any, or what, particulars? Ought these questionsto be resolved differently in an old country and in acolony, in a monarchy, in an aristocracy, and in arepublic? If Political Economy be a branch of theart of government, these inquiries form a branch,though a very small one, of Political Economy.

But there is scarcely anyone of them which it wouldnot require a long treatise to answer satisfactorily.How many, for instance, are the considerations whichmust be attended to in a discussion as to the proprietyof enabling individuals to found permanent institutionsfor the purposes of religion, of education, and ofcharity, and as to the period for which they ought tobe allowed to govern them from the grave?

It is almost impossible to overrate the importanceof the art of government. With the exception, per-haps, of morality, it is the most useful of the mentalarts; but, with no exception whatever, it is themost extensive. Too much attention cannot begiven to it; but that attention should be subdivided.Too many minds cannot be employed on it, but eachshould select a single province; and the narrowerthe province, of course the more completely is itlikely to be mastered.

My second definition, that which defines PoliticalEconomy as the art which teaches what are the


institutions find habits most favourable to the pro-duction and accumulation of wealth, is not liable tosimilar objections. It opens a field of inquiry, posi-tively indeed wide, but comparatively narrow. Theobject proposed by the political economist is nolonger human happiness, but the attainment of oneof the means of human happiness, wealth.

To recur to my former illustrations, he must, as inthe former case, inquire whether, according to theprinciples of Political Economy, individuals ought tobe enabled to direct how the property which they haveacquired in life shall be employed after their deaths,in providing religious teaching, and to what extent,and for what periods, their posthumous legislationought to be enforced; but he must stop far short ofthe point to which his inquiries, if he had adopted theformer definition, would have extended. He mustconfine himself to the effect of such institutions onthe production and accumulation of wealth. He hasnow no business to inquire whether endowments implyarticles of faith, and articles of faith produce indif-ference or hypocrisy; whether the servility of a hier-archy be compensated by its loyalty, or the turbulenceof sectarianism by its independence of thought. Hehas no longer to compare the moral and religiousinfluence of an endowed, with that of an unendowedclergy. He does not inquire whether the moralityof the one is likely to be ascetic, and that of the otherlatitudinarian; whether the one will have more in-fluence over the bulk of the people, and the otherover the educated classes; whether the one is likely


to produce numerous contending sects, animated byzeal, but inflamed by intolerance, and the other anunreflecting apathetic comformity. These are mat-ters beyond his jurisdiction. But he assumes, onthe general principles of human nature, that everycivilised society requires teachers of religion, and thatthese teachers must be paid for their services. Heshows, on the. principles of' Political Economy, that inevery such society there are revenues derived fromland or from capital, which are consumed by a classnot forced to take an active part in producing them,and enjoying, therefore, a leisure which they aretempted to waste in indolence or in frivolous occupa-tion. He shows that to dedicate a portion of theserevenues to the payment of the teachers of religion,is merely to substitute for a certain number of laylandlords, or lay fundholders, bound to the perform-ance of no public duty, ecclesiastical fundholders, orecclesiastical landlords, rendering, in return for theirincomes, services which, under what is called thevoluntary system, must be purchased by those whorequire them. He shows that such a dedication mustdiminish the number of idle persons, and thereforeincrease the productive activity of the communityand diminish the subjects of necessary expenditure,and therefore increase its disposable income; andhe infers that the wealth of a society may beaugmented by allowing such endowments to becreated. He may go on to show that such en-dowments may cease to be favourable to wealth, ifthe founder's legislative power be unlimited, since


the doctrines of which he has ordered the dissemina-tion may have been originally unpopular, or maybecome so as knowledge advances. The politicaleconomist, therefore, may recommend that all suchinstitutions be subjected to the control of the legisla-ture, in order to prevent endowments from beingwasted by providing teachers for whom there are nocongregations, and that they be also subjected toperiodical revision, in order to accommodate thesupply of instruction to the demand.

He may proceed to consider the different forms ofendowments, by tithes, by land, by rent-charges,and by the investment of money. He may showhow the first is an obstacle to all improvement,and the second to improvement by the landlord;how the third diminishes with the progress of wealth,and the fourth may perish with the fund on which itis secured. And he may propose remedies for thesedifferent inconveniences. If he go further thanthis, he wanders from the art of wealth into the artof government.

I have introduced this rather long illustration, notonly as an example of the different modes in whichthe art of Political Economy must be treated, accord-ing to the definition with which the teacher sets out,but also as a specimen of the extent and variety ofthe details into which he must enter, even if headopt the less extensive definition.

nut this is not all. I have already remarked thatall the practical arts draw their principles fromsciences. If, however, the teacher of an art were to


attempt to teach also the different sciences on which itis founded, his treatise would want unity of subject,and be inconveniently long. He generally, therefore,assumes his scientific principles as established, andrefers to them as well known. The teacher of theart of medicine merely alludes to the facts whichform the sciences of anatomy and chemistry; theteacher of rhetoric assumes that his pupil is ac-quainted with the science of logic and with that ofgrammar. Many of the sciences and of the artswhich are subservient to the art of Political Economy,may be thus treated. The political economist, forinstance, assumes that protection from domestic orforeign violence or fraud, is essential to any consider-able production or accumulation of wealth, and heconsiders the means by which the expense of pro-viding this protection may be best supported; but hedoes not inquire what are the necessary legal and mili-tary institutions. He leaves these to be pointed outby the arts of war and of penal and civil jurispru-dence, and by the sciences on which those arts depend.

There is one science, however, to which this treat-ment cannot as yet be applied, and it is the sciencemost intimately connected with the art of PoliticalEconomy, that is to say, the science which statesthe laws regulating the production, accumulation,and distribution of wealth, or, in other words, thescience (as distinguished from the art) of PoliticalEconomy itself. The time I trust will come, perhapswithin the lives of some of us, when the outlineof this science will be clearly made out and gene-


rally recognised, when its nomenclature will be fixed,and its principles form a part of elementary instruc-tion. A teacher of the art of Political Economy willthen be able to refer to the principles of the science asfamiliar and admitted truths. I scarcely need repeathow far this is from being the case at present. With-out doubt, many of the laws of the science have beendiscovered, and a few of them are generally acknow-ledged; and some of its terms have been defined, and thedefinitions accepted. Still, however, there remains, asI remarked in the first Lecture, much to explore andmuch to explain. Weare still far from the boundsof what is to be known, and further still from anygeneral agreement as to what is known. Everywriter, therefore, on the art of Political Economy, isforced to prefix, or to interweave among his precepts,his own views of the science, and thus to add to thepractical portion of his work a scientific portion ofperhaps equal length. It appears to me, that the fiveyears during which this professorship is tenable, istoo short a period for so vast an undertaking. Ipropose, therefore, to take as my subject, not the art,but the much narrower province, the science; and toexplain, in the following Lectures, the general lawswhich regulate the production, accumulation, and dis-tribution of wealth, leaving it to writers with moreleisure to point out what are the institutions mostfavourable to its production and accumulation, andto speculators of still wider views to say what pro-duction, accumulation, distribution, and consumptionare most favourable to human happiness.


But though I follow substantially the example ofTurgot and Ricardo, I do not propose to follow itimplicitly. Though I profess to teach only thetheory of wealth, I do not refuse the right to considerits practical application. There is, indeed, somethingimposing and almost seductive in a work of purescience, especially if it be a science connected withhuman affairs. 'Ve admire the impartiality of thephilosopher who discusses matters that agitate nationswithout mixing in the strife, or noticing the use thatmay be made of the truths which he scatters. Andwe admit, with comparative readiness, conclusionswhich do not appear to have been influenced bypassion, the great disturber of observation and ofreasoning. This was one of the great causes of thepopularity of Ricardo. He was the first Englishwriter who produced Political Economy in a purelyscientific form. He is usually a logical reasoner, sothat his conclusions can seldom be denied if his pre-mises are conceded, and his premises must usually beconceded, for they are usually hypothetical. Menwere delighted to find what appeared to be firmfooting, in a new and apparently unstable science,and readily gave their assent to theories which didnot obviously lead to practice. But though it bedesirable that from time to time a writer shouldarise able and willing to treat the science in thissevere and abstract manner, his treatise will be moreserviceable to masters than to students. To thosewho are already familiar with the subject, to thosewho have already perceived how deeply mankind

POLITICAL ECONOMY AS A f)CIENCE. 55

are interested in obtaining correct views as to thelaws which regulate the production and distributionof wealth, a naked statement of those laws, thoughit should not possess the elegance of Turgot, or theoriginality of Ricardo, must still be useful, and evenagreeable. A mere student would find it repulsive.He ought to be attracted to Political Economy byseeing from time to time its practical application.He should be taught that he is studying a sciencecomposed of principles which no statesman, no legis-lator, no magistrate, no member even of a board ofguardians can safely disregard. And this will bebest effected by putting before him examples of thegood which has been done by adhering to those prin-ciples, and of the evil which has punished their neglect.These examples, therefore, I shall think myself atliberty to give. I shall think myself justified, forinstance, in showing how the natural distribution ofwealth may be affected by the institution of poor-laws. And I shall not confine myself to their effectsupon wealth. I shall consider how far a well-framedpoor-law may promote the moral as well as thematerial welfare of the labouring classes, and an ill-administered poor-law may produce moral, intellectual,and physical degradation. But these discussionsmust be considered as episodes. They form no partof the science which I profess. I shall enter intothem, not as a political economist, but as a statesmanor a moralist; and I shall expect from those whodo me the honour of listening to them, not the fullconviction which follows scientific reasoning, but the

56 POLI'!'ICAL ECONOMY AS A SCIENCE.

qualified assent which is given to the precepts of anart.

In the next Lecture I shall consider whether thescience of Political Economy may be more con-veniently based on positive or on hypothetical prin-ciples.

57

LECTURE IV.

THAT POLITICAL ECONOMY IS A POSITIVE, NOT ANHYPOTHETICAL SCIENCE. -DEFINITION OF WEALTH.

IN the present Lecture I shall consider whether thescience of Political Economy may be more conveni-ently based on positive or on hypothetical principles,and shall afterwards explain, more fully than I haveas yet done, the sense in which I use the word wealth.Mr. John Mill, who has contributed much to Politi.cal Economy, as he has, indeed, to every sciencewhich he has touched, maintains that it is based onhypothesis. As it is impossible to change Mr. Mill'slanguage for the better, I shall extract the materialparts of the passage in which he states and supportsthis opinion.

"Political Economy,"" he says, "is concerned withman solely as a being who desires to possess wealth,and who is capable of judging of the comparativeefficacy of means for obtaining that end. It predictsonly such of the phenomena of the social state as takeplace in consequence of the pursuit of wealth. It

• Essays on some Unsettled Questions of Political Economy,pp. 137, 138, 139, 140. 144, 145.

58 POLITICAL ECONOMY A POSITIVE,

makes entire abstraction of every other human passionor motive, except those which may be regarded asperpetually antagonising principles to the desire ofwealth; namely, aversion to labour, and desire of thepresent enjoyment of costly indulgences. These ittakes, to a certain extent, into its calculations, becausethese do not merely, like other desires, occasionallyconflict with the pursuit of wealth, but accompany italways as a drag or impediment, and are therefore in-separably mixed up in the consideration of it. Politi-cal Economy considers mankind as occupied solely inacquiring and consuming wealth, and aims at showingwhat is the course of action into which mankind,living in a state of society, would be impelled, if thatmotive, except in the degree in which it is checkedby the two perpetual counter-motives above advertedto, were absolutely ruler of all their actions. Underthe influence of this desire, it shows mankind accu-mulating wealth, and employing wealth in the pro-duction of other wealth; sanctioning by mutualagreement the institution of property; establishinglaws to prevent individuals from encroaching uponthe property of others by force or fraud; adoptingvarious contrivances for increasing the productive-ness of their labour; settling the division of theproduce by agreement, under the influence of com-petition (competition itself being governed by certainlaws, which laws are therefore the ultimate regulatorsof the division of the produce), and employing certainexpedients, as money, credit, &c., to facilitate thedistribution. All these operations, though many of

NOT AN HYPOTHETICAL SCIENCE. 59

them are really the result of a plurality of motives,are considered by Political Economy as flowing solelyfrom the desire of wealth. The science then proceedsto investigate the laws which govern these severaloperations, under the supposition that man is a beingwho is determined, by the necessity of his nature, toprefer a greater proportion of wealth to a smaller inall cases, without any other exception than that con-stituted by the two counter-motives already specified,Not that any political economist was ever so absurdas to suppose that mankind are really thus constituted,but because this is the mode in which science mustnecessarily proceed. When an effect depends upon aconcurrence of causes, those causes must be studiedone at a time, and their laws separately investigated,if we wish, through the causes, to obtain the powerof either predicting or controlling the effect; sincethe law of the effect is compounded of the laws of allthe causes which determine it. The law of the cen-tripetal and that of the tangential force must havebeen known, before the motions of the earth andplanets could be explained, or many of them predicted.The same is the case with the conduct of man insociety. In order to judge how he will act underthe variety of desires and aversions which are con-currently operating upon him, we must know howhe would act under the exclusive influence of eachone in particular. There is, perhaps, no action of aman's life in which he is neither under the immediatenor under the remote influence of any impulse butthe mere desire of wealth. 'With respect to those


parts of human conduct of which wealth is Hot eventhe principal object, to these Political Economy docsnot pretend that its conclusions are applicable. Hutthere are also certain departments of human affairs,in which the acquisition of wealth is the main andacknowledged end. It is only of these that PoliticalEconomy takes notice. The manner in which itnecessarily proceeds is that of treating the main andacknowledged end as if it were the sole end; which,of all hypotheses equally simple, is the nearest to thetruth. The political economist inquires, what arethe actions which would be produced by this desire,if, within the departments in question, it were un-impeded by any other?

"It reasons, and, as we contend, must necessarilyreason, from assumptions, not from facts. It is builtupon hypotheses strictly analogous to those which,under the name of definitions, are the foundation ofthe other abstract sciences. Geometry presupposesan arbitrary definition of a line, 'that which haslength but not breadth.' Just in the same mannerdoes Political Economy presuppose an arbitrary de-finition of man, as a being who invariably does thatby which he may obtain the greatest amount ofnecessaries, conveniences, and luxuries, with thesmallest quantity of labour and physical self-denialwith which they can be obtained in the existing stateof knowledge. It is true that this definition of manis not formally prefixed to any work on PoliticalEconomy, as the definition of a line is prefixed toEuclid's Elements; and in proportion as, by being


so prefixed, it would be less in danger of being for-gotten, we may see ground for regret that it is notdone. It is proper that what is assumed in everyparticular case, should once for all be brought beforethe mind in its full extent, by being somewhereformally stated as a general maxim. Now, no onewho is conversant with systematic treatises on Poli-tical Economy will question, that whenever a politicaleconomist has shown that, by acting in a particularmanner, a labourer may obviously obtain higherwages, a capitalist larger profits, or a landlord higherrent, he concludes, as a matter of course, that theywill certainly act in that manner. Political Economy,therefore, reasons from assumed premises-from pre-mises which might be totally without foundation infact, and which are not pretended to be universally inaccordance with it. The conclusions of PoliticalEconomy, consequently, like those of geometry, areonly true, as the common phrase is, in the abstract;that is, they are only true under certain suppositions,in which none but general causes-causes common tothe whole class of cases under consideration-aretaken into account."

I have extracted this long passage because it is aclear statement of an original view of the science ofPolitical Economy, - a view so plausible, indeed sophilosophical, that I feel bound either to adopt it, orto state fully my reasons for rejecting it. I am notaware of any writer, except, perhaps, Mr. Merivale,who has expressed a formal concurrence in Mr. Mill's


doctrine; but Mr. Ricardo has practically assentedto it.

His treatment of the science, indeed, is still moreabstract than that proposed by Mr. Mill. He addsto Mr. Mill's hypothesis other assumptions equallyarbitrary; and he draws all his illustrations, notfrom real life, but from hypothetical cases. Out ofthese materials he has framed a theory, as to the dis-tribution of wealth, possessing almost mathematicalprecIsIOn.

But neither the reasoning of Mr. Mill, nor theexample of Mr. Ricardo, induce me to treat PoliticalEconomy as an hypothetical science. I do not think itnecessary, and, if unnecessary, I do not think itdesirable.

It appears to me, that if we substitute for Mr. Mill'shypothesis, that wealth and costly enjoyment are theonly objects of human desire, the statement that theyare universal and constant objects of desire, that theyare desired by all men and at all times, we shall havelaid an equally firm foundation for our subsequentreasonings, and have put a truth in the place of anarbitrary assumption. 'Ve shall not, it is true, fromthe fact that by acting in a particular manner alabourer may obtain higher wages, a capitalist largerprofits, or a landlord higher rent, be able to infer thefurther fact that they will certainly act in that manner,but we shall be able to infer that they will do so inthe absence of disturbing causes. And if we are able,as will frequently be the case, to state the cases inwhich these causes may be expected to exist, and the


force with which they are likely to operate, we shallhave removed all objection to the positive as opposedto the hypothetical treatment of the science.

I have said that the hypothetical treatment of thescience, if unnecessary, is undesirable. It appears tome to be open to three great objections. In the firstplace it is obviously unattractive. No one listens toan exposition of what might be the state of thingsunder given but unreal conditions, with the interestwith which he hears a statement of what is actuallytaking place.

In the second place, a writer who starts fromarbitrarily assumed premises, is in danger of forget-ting, from time to time, their unsubstantial founda-tion, and of arguing as if they were true. This hasbeen the source of much error in Ricardo. He assumedthe land of every country to be of different degreesof fertility, and rent to be the value of the differencebetween the fertility of the best and of the worstland in cultivation. The remainder of the produce hedivided into profit and wages. He assumed thatwages naturally amount to neither more nor less thanthe amount of commodities which nature or habit hasrendered necessary to maintain the labourer and hisfamily in health and strength. He assumed that, inthe progress of population and wealth, worse andworse soils are constantly resorted to, and thatagricultural labour, therefore, becomes less and lessproportionately productive; and he inferred thatthe share of the produce of land taken by the land-lord and by the labourer must constantly increase,


and the share taken by the capitalist constantlydiminish.

This was a logical inference, and would conse-quently have been true in fact, if the assumed pre-mises had been true. The fact is, however, thatalmost everyone of them is false. It is not truethat rent depends on the difference in fertility of thedifferent portions of land in cultivation. It mightexist if the whole territory of a country were ofuniform quality. It is not true that the laboureralways receives precisely the necessaries, or evenwhat custom leads him to consider the necessaries, oflife. In civilised countries he almost always receivesmuch more; in barbarous countries he from time totime obtains less. It is not true that as wealth andpopulation advance, agricultural labour becomes lessand less proportionately productive. The corn nowraised with the greatest labour in England is raisedwith less labour than that which was raised with theleast labour three hundred years ago, or than thatwhich is now raised with the least labour in Poland.I t is not. true that the share of the produce taken bythe capitalist is least in the richest countries. Thoseare the countries in which it generally is the greatest.Mr. Ricardo was certainly justified in assuming hispremises, provided that he was always aware, andalways kept in mind, that they were merely assumed.This, however, he seems sometimes not to know, andsometimes he forgets. Thus he states, as an actualfact, that in an improving country, the difficulty ofobtaining raw produce constantly increases. He


states as a real fact, that a tax on wages falls noton the labourer but on the capitalist.

He affirms that tithes occasion a proportionateincrease in the price of corn, and a proportionateincrease of wages, and therefore are a tax on thecapitalist, not on the landlord. Positions both ofwhich depend on an assumed fixed amount of wages.

A third objection to reasoning on hypothesis is itsliability to error, either from illogical inference, orfrom the omission of some element necessarily inci-dent to the supposed case. When a writer takes hispremises from observation and consciousness, andinfers from them what he supposes to be real facts, ifhe have committed any grave error, it generally leadshim to some startling conclusion. He is thus warnedof the probable existence of an unfounded premise, orof an illogical inference, and if he be wise, tries backuntil he has detected his mistake. But the strange-ness of the results of an hypothesis, gives no warning.We expect them to differ from what we observe, andlose, therefore, this incidental means of testing thecorrectness of our reasoning .

.An illustration of this may be found in the emi-nently ingenious and eminently erroneous work ofColonel Torrens, called" The Budget." Colonel Tor-rens supposes the commercial world to consist of onlytwo countries, equal in wealth and civilisation, whichhe calls England and Cuba. He supposesthat Englandhas peculiar advantages for the production of wool-lens, and Cuba for that of sugar, and that the clothof the one, and the sugar of the other, are freely


exchanged in proportion to the labour which each hascost. He then supposes Cuba to impose a duty onEnglish cloth, which would of course, to a certain ex-tent, prevent its importation; and he states that theconsequence would be, that England would have tosend money to Cuba for sugar, until the exportationof money had impoverished England, and its importa-tion had enriched Cuba.

Now if Colonel Torrens, instead of hypothetical, hadtaken real cases, if he had inquired, for instance, intothe results of the prohibitive system of France, andhad come to the conclusion that that system increasesher wealth, the strangeness of such a result wouldhave led him to suspect an error in his facts or in hisreasoning. But the strangeness of the result of animaginary case did not rouse his suspicion. The factis, that his hypothetical argument is erroneous; andthe error consists in his not having taken into accountan element essentially incident to his supposed case,namely, the influence of commercial restrictions on theefficiency of labour. If he had taken this element intoaccount, he would have found that Cuba, by her pro-hibitive system, would diminish the productive powerof her labour, and consequently would find it herinterest to import from England commodities whichshe previously produced at home; so that the ultimateresult would probably be, rather an export of goldfrom Cuba than from England.

Colonel Torrens's book always reminds me of thesuit of clothes which the Laputa tailor cut on hypo-thetical data. Unfortunately, however, for the credit


of the Laputa artist, Gulliver tried them on, and theerror which had slipped into the calculation showeditself in every form of misfit. Happily for ColonelTorrens, and happily for ourselves, we have not triedon his theory.

But though the objections against founding thescience on hypothesis seem to me decisive, I do notgive up hypothetical illustrations. Such illustrationsnot only make abstract reasonings more easily intel-ligible, they often expose their errors. Conclusionswhich appeared to be correct, when the vague termsof capital and labour, profit and wages, were used,are often found to be erroneous, when an hypotheticalexample embodies these abstractions, and endeavoursto show the moral and physical processes by whichthe supposed result would be obtained. The absenceof such illustrations is one of the great defects ofAdam Smith. Perhaps this very defect contributedto the popularity of his work. Such illustrations,however useful, always give an appearance ofstiffnessand pedantry. The careless reader or hearer neglectsthem, and the real student is annoyed at having tolearn the dramatis persona of an imaginary case.But if Smith had used them, he would probably haveavoided some errors, and have preserved his succes-sors from many more. His example in this and insome other respects, introduced a loose,popular modeof treating Political Economy, which has mainly re-tarded its progress.

It may be remarked, that I have as yet used theword wealth, without defining it. I have done so,

68 DEFINITION OF WEALTH.

because I employ it in its popular sense, and becausethe ideas usually attached to that word appear to meto be sufficiently precise, to prevent any danger of myhearers misunderstanding it. Having now, however,completed the introduction to the science of PoliticalEconomy, having marked out its province, and statedthe mode in which I intend to treat it, I think it ad-visable formally to define the term which expressesits subject matter. And this for two reasons. First,because, in a scientific work, every technical termought to be defined; and, secondly, because that termhas been employed by many of those who have pre-ceded me, in senses differing from that which I adopt.

In ordinary use, and I think it is the most con-venient use, wealth comprehends all those things, andthose things only, which, directly or indirectly, aremade the subjects of purchase and sale, of letting andhiring. For this purpose, they must, in the firstplace, possess utility, or, in other words, be capable ofaffording pleasure or preventing pain, since no onewould purchase or hire anything absolutely useless.In the second place, they must be limited in supply,since no one would buy anything of which he mightacquire as much as he pleased by merely taking pos-sessionof it. The water in the open sea is practicallyunlimited in supply; anyone who chooses to go forit, may have as much of it as he pleases. The portionof it which has been brought to London to supplysalt water baths is limited, and cannot be obtained,therefore, without payment. In the third place,nothing is wealth that is not capable of appropriation.

DEFINITION OF WEALTH. 69Fine weather is useful, and is limited in supply, butit is not wealth, since it cannot be appropriated. Somethings are capable of appropriation only under pecu-liar circumstances. In an extensive, thinly inhabitedplain, light and air are incapable of appropriation,every inhabitant may enjoy them equally; but in atown, one house intercepts them from another. Atown house, surrounded by an open space, has moreof them than one in a street. The possessor of such ahouse, and of the ground which surrounds it, has prac-tically appropriated its peculiar advantages of lightand air; they add to its value, and form, therefore,part of his wealth. He even may sell them with-out parting with his house, by selling the privilegeof erecting buildings which will intercept them.Fourthly, as is implied by the definition, nothingcan be wealth which is not directly or indirectlytransferable. High birth is agreeable and rare, itmay add to the happiness of its possessor, but, as itis absolutely incapable of transfer, it is not part ofhis wealth. Most of our personal qualities are onlyindirectly transferable; they are transferable, notin themselves, but embodied in the commoditieswhich their possessor can produce, or in the serviceswhich he can render. The skill of a painter is trans-ferable in the form of a commodity, his pictures;the skill of a surgeon in that of a service, the dex-terity with which he performs an operation. Suchqualities perish by the death of the possessor, or maybe impaired or destroyed by disease, or renderedvalueless by changes in the customs of the country,


which put an end to the demand for their products.Even to the same perSOll,and under the same circum-stances in all other respects, they may become wealth,or cease to be wealth, merely in consequence of achange in the social position of their possessor. WhenMiss Linley became Mrs. Sheridan, her powers ofaction and song ceased to be wealth; they remainedthe delight of private societies, but were no longerobjects of sale. If Sheridan had condescended toaccept an income on such terms, his wife's accom-plishments would have enriched him. Subject, how-ever, to these contingencies, personal qualities arewealth, and wealth of the most valuable kind. Theamount of the revenue derived from their exercise inEngland, far exceeds the rental of all its land.

The words wealth and value differ as substance andattribute. All those things, and those things only,which constitute wealth, are valuable. As the mean-ing of the term value has been the subject of long andeager controversy, I shall, at a future period, considerat some length the different significations which havebeen given to it. It is enough to say at present thatI use it in its popular acceptation, as signifying inanything the quality which fits it to be given andreceived in exchange, or, in other words, to be let orsold, hired or purchased.

It follows, from this definition of wealth, that in acommunity enjoying perfect abundance, there wouldbe no wealth. If every object of desire could be pro-cured by a wish, nothing would have value, andnothing would be exchanged. It follows, also, that it

DEFINITION OF WEALTH. 71

is possible to conceive at least a temporary diminutionof the wealth of a community occasioned by an in-crease of their means of enjoyment. This would bethe immediate consequence of any cause which shouldoccasion the supply of any useful article to changefrom limited to unlimited. Thus, if the climate ofEngland could suddenly be changed to that of Bogota,and the warmth which we extract imperfectly andexpensively from fuel were supplied by the sun, fuelwould cease to be useful, except as one of the pro-ductive instruments employed by art. We shouldwant no more grates or chimney-pieces in our sitting-rooms. What had previously been a considerableamount of property in the fixtures of houses, in stockin trade, and materials, would become valueless. Coalswould sink in price; the most expensive mines wouldbe abandoned; those which were retained wouldafford smaller rents. The proprietors and tradesmenspecially affected by the change would lose not onlyin wealth, but in the means of enjoyment. Theowner of a mine whose rent fell from 20,000l. a yearto 10,000l., would not be compensated by being savedthe expense of fuel in every room except his kitchen.On the other hand, persons without fire-places or coal-cellars of their own, would lose nothing, and the restof the world would lose only in the value of theirgrates, chimney-pieces, and stocks of coal; and allwould gain in enjoyment by being able to devote toother purposes the money which they previouslypaid for artificial warmth. Still for a time therewould be less wealth. That time, indeed, would be


short; the capital and the labour previously devotedto warming our apartments, would be diverted to theproduction of new commodities. The cheapness ofcoal would increase the supply of manufacturedarticles, and there would then be as much wealthas there was before the change; probably more, andcertainly much more enjoyment. It is probable thatsalt forms a smaller part of the wealth of Englandthan of Hindostan, though every Englishman hastwenty times as much of it as every Hindoo. TheEnglishman is allowed to use freely the abundantsupply offered by nature. In Hindostan there is anatural scarcity, aggravated tenfold by the Govern-ment.

'Ve may conceive a case in which unlimited abun-dance would dest.roy not only the value, but theutility of a whole class of commodities; wouldprevent them not merely from being objects of ex-change, but even from being objects of desire. Thiswould be the case as to all the commodities whoseonly utility is to be a means of displaying wealth.If emeralds were suddenly to become as abundantas pebbles, they could be no longer used as orna-ments; and if no other use could be made of them,and I am not aware of any, they would be value-less. All their possessors, at the time of the change,would find themselves poorer, and neither they noranyone else would be compensated by any in-creased means of enjoyment. It would be a meredestruction of wealth.

It may be as well to remark, that things may be

DEFINITION OF WEALTH. 73wealth to individuals without forming part of thewealth of the community to which those individualsbelong. This is the casewith respect to almostall thewealth created by an artificial limitation of supply.The monopolies with which Elizabeth rewardedher favourites were wealth to them, but diminishedthe wealth of the rest of the community. The samemay be said of a patent right, or of the secrecy of amanufacturing process. The process itself, whichis protected by the patent or by the secrecy, is part ofthe wealth of the community, since it enables themto have more or better commodities; but the mono-poly granted by the patent, or guarded by thesecrecy,is wealth only to its owner. As soon as thepatent terminates, or the secret is divulged, thewealth of the community is increased by the in-creasedabundance of the commoditiesto the produc-tion of which everyone may now apply the process.

Again, the national debt is wealth to the pro-prietors of stock, but as the sum received in divi-dends is paid in taxes, it cannot form a part of thewealth of the nation. If, indeed, those two sumsprecisely coincided, if there were no expenses ofcollection, and if taxes did not interfere with theproduction of wealth, the national debt would notdiminish the national wealth, though it couldnot aug-ment it. It would be a mere matter of distribution.But the expense of collecting the national revenue,and the interference of taxation with production, areso much pure loss; and by the amount of these


two sources of expense and loss, we should be richerif the national debt were repudiated.

The wealth which consists merely of a right orcredit on the part of A. with a corresponding duty ordebt on the part of B., is not considered by the politi-'cal economist. He deals with the things which arethe subjects of the right or of the credit, not with thecliams or the liabilities which may affect them. In fact,the credit amounts merely to this, that B. has in hishands a part of the property of A.

I have said that my definition of wealth differs fromthat which has been adopted by many of my prede-cessors. Some political economists extend the termto all the objects of human desire; others restrict itto what they have called material products; and othersto the things which cannot be acquired or producedwithout labour. The objections to the first definitionare obvious. If wealth be the subject of PoliticalEconomy, and wealth include all that man desires,Political Economy, whether a science or an art, is thescienceor the art which treats of human happiness-a subject, as I have already remarked, too extensive tobe included in a single treatise. The second, thatwhich confines wealth to material objects, is moreplausible. It includes all visible wealth, it includesall wealth which is capable of direct and completesale. The things which it excludes are mere objectsof the intellect. They may be shared, but cannot becompletely transferred, since the proprietor, though hemay impart them, cannot divest himself of them;they may produce permanent effects, but perish them-

DEFINITION OF WEALTH. 75selves with the individual mind of which they arequalities. But as they obey, in other respects, thesame laws as material wealth, are obtained by thesame means, and owe their value to the same causes,I think their exclusion a fatal objection to a definitionof wealth. The definition which confines wealth tothe things which cannot be acquired or produced with-out labour, differs little from mine, which confines itto things limited in supply. Whatever must beobtained by labour is necessarily limited in supply,the supply of labour itself being limited; and, on theother hand, there are, in fact, scarcely any, if there beany, commodities limited in supply and capable oftransfer, which can be obtained without some labour.So that wealth is always found subject to both theseincidents. Nor does value appear to depend on eitherincident exclusively. A quarter of corn from thebest, and one from the worst land, of equal goodness,sell in the same market at the same price, though onemay have cost three times as much labour as theother. The pictures of Hans Hemling are far morelimited in supply than those of Raffaelle, and yet theysell for much less.

We can separate, however, the two qualities in ourminds. We can suppose a commodity useful andtransferable to be limited in supply, but that supplyto be gratuitously afforded by nature. About1,980,000Ibs. weight of silver is supposed to be nowannually supplied. Now, ifprecisely the same quantityof pure silver as is now produced daily in each re-fining house, were every day to be supernaturally


deposited on a table in the refining house, and allother sources of supply were to cease, silver wouldcontinue to be limited in supply just as it is now,but would no longer be procured by labour. Is thereany reason for supposing that its value would alter?If its value would remain the same, it followsthat itdepends on limitation of supply, and that limitationof supply, not the necessityof labour, is the differentiawhich constitutes wealth. An uncut copy of an earlyprinted book is worth, perhaps, ten times as much asa copy which has been fitted to be read by cuttingopen its leaves. Because it has cost more labour?K0: it has cost rather less. Because it is morereadable? No: it is useless for the purpose of read-ing. Simply because such copiesare more limited insupply.

THE END.

LoNDON:

SPOTrISWl'OnEi and SHAW,New-street-Sqnsre.

political economy, -...

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