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CHAPTER II.: ANALYTICAL SURVEY OF THE FIELD OF POLITICAL ECONOMY. - Jeremy Bentham, The Works of Jeremy Bentham, vol. 3 
The Works of Jeremy Bentham, published under the Superintendence of his Executor, John Bowring (Edinburgh: William Tait, 1838-1843). 11 vols. Vol. 3.
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ANALYTICAL SURVEY OF THE FIELD OF POLITICAL ECONOMY.
For the genesis of the matter of wealth—the causes and mode of its production under its several modifications—reference may for the present be made to Adam Smith, who has not left much to do, except in the way of method and precision.
The following are the first steps in an analytical survey of the field of political economy, showing how to draw a circle round the subject, and how to invent or discover what remains to be invented or discovered in this quarter of the field of human knowledge.
On the part of the individuals by whom increase of wealth is produced, the production of it is either purely spontaneous, or (with or without design directed to the increase of it) either promoted or obstructed by the operations of government. The correspondent practical division of acts and operations, the effect of which is to exert an influence on the quantity of the national, to which may be added the mundane stock of the matter of wealth, is—1. Sponte acta; 2. Agenda; 3. Non-agenda.
In the track of political economy as in any other, whatever is done towards the attainment of the object, must be by creating inclination, or by bestowing power.
Inclination can only be operated upon by inducements, as—
1. By applications of a coercive or obligatory nature,—which are either injunctions or prohibitions.
2. By applications of an invitative nature, or encouragements,—which are either direct or indirect.
Power may to this purpose be distinguished into—1. Legal; 2. Physical; 3. Intellectual, or knowledge.
1. Legal power may be conferred—1. By forbearing to impose on the party proposed to be assisted coercion of any kind: 2. By coercing others in such a manner as to prevent them from obstructing his making use of the power of the preceding kind; 3. By compelling them to afford him assistance. In the two first of these cases, power is no more than liberty.
2. Physical power is conferred by giving to a party the physical instruments requisite to the attainment of the end proposed;—viz. money, or something that is to be had for money. This can only be done by legal power of one or other of the three kinds above mentioned.
3. Intellectual power is either—1. Active power; or, 2. Knowledge. If active power be given by law, it can only be in some indirect way, through physical and thence through legal power.
Knowledge is either—1. Of the modes of operating towards the end proposed;—viz. which are good, which bad—which worst, and which best; or, 2. Of matters of fact;—which may be conducive to this end, either—1. By pointing out inducement; 2. By pointing out legal power; 3. By conducing to physical power or to intellectual power—either as leading to knowledge of the modes of operating, or to other matters of fact more immediately leading to such knowledge.
Encouragements may be distinguished into—1. Direct; and, 2. Indirect. Direct consist of rewards, commonly called in this instance bounties, given to him who shall exercise his industry in such or such a way. Indirect, consist in discouragements opposed in the way of others, in the view of restraining them from exercising their industry in such or such a way; i. e. in such a way as shall prevent his exercising his in the way desired. If discouragements thrown in the way of A, answer the purpose of encouragement to B, it is because A’s acting in the track he is thus discouraged from would have tended to discourage B from acting in the track he is meant to be encouraged to act in, by diminishing the reward, natural or factitious, he would have got in some way by acting in it.
To the head of encouragements may also be added operations the tendency of which is to confer power, and in particular physical power; such as the giving or lending money or money’s worth, to be employed in the shape of a capital towards the carrying on a branch of industry meant to be encouraged.
In whichever of the above ways aid is applied, it must be either—1. With a view of increasing the quantity of industry in general; or, 2. With a view of increasing the relative quantity of a particular branch of industry.
The causes of wealth, or say rather the matter of wealth,* are—
2. Material—matter considered in respect of its possessing, or being capable of possessing value—viz. subservency to well-being, the final cause.
3. Efficient—viz. motion.
The modifications of well-being, ranged in the order of their importance, are—
1. Subsistence, present.
2. Security in respect of defence—viz. against the evils to which human nature is exposed, particularly from the action of agents exterior to a man’s body. Security in respect of future subsistence.
3. Enjoyment—viz. mere enjoyment, distinct from the maintenance of subsistence and the contemplation of security.
Matter, considered with reference to the final cause,—well-being, may be termed (such parts of it as by the use made of them become subservient to well-being, the final cause) matter of wealth.†
The term, matter of wealth, is applicable in common to—
1. Articles or instruments of subsistence;
2. Instruments of defence;
3. Instruments of enjoyment.
Articles of subsistence are either of constant or occasional use.
Articles of constant use are—
1. Articles of nourishment—viz. food and drink, i. e. liquid or solid; the distinction between which is at their point of nearest approach undeterminable.
2. Articles serving for the regulation of temperature and state of the air in respect of moisture. These are—either lodging or clothing.
3. Articles of occasional use, are articles of medicine.
The evils to which defence bears reference may be considered as having their source in the agency of irrational agents or rational agents.
Defence against evils apprehended from the agency of irrational agents, is defence against calamities.
Among rational agents, those from whose agency evil is apprehended, are either considered as members of the community in question, or not: in the first case, the defence is against delinquency; in the other case, against hostility.
A modification of the matter of wealth may be referred to that one of the above three heads to which it is conducive in the greatest degree;—for the same article which is principally subservient to one, may occasionally be subservient to either or both of the two others.*
Enjoyment being in a manner inseparable from the application of articles of subsistence to their use, all articles of subsistence are instruments of enjoyment likewise. The distinction is, therefore, not between articles of subsistence and instruments of enjoyment, but between articles of subsistence and instruments of mere enjoyment—viz. that by their application to use contribute nothing to subsistence any more than to defence.†
The practice of exchange being established, each modification of the matter of wealth, to whichsoever of the above-mentioned divisions it belongs, is in virtue of that practice convertible with more or less facility and certainty into every other.‡ The richer a community, the better secured it is thereby against hostility and famine.
A stock of instruments of mere enjoyment presupposes, on the part of each individual, a preassured stock of the articles of subsistence. The stock of articles of subsistence capable of being produced and kept up in a country, in any other view than that of exchange, has its limits: it can never extend much beyond the stock necessary for the subsistence of the inhabitants—the stock of instruments of mere enjoyment is without limit.
It is only in respect and in virtue of the quantity of the stock of instruments of mere enjoyment, that one country can exceed another country in wealth. The quantity of wealth is as the quantity of its instruments of enjoyment.
In cases where, two articles of subsistence contributing in an equal degree to that end, one contributes in a greater degree to enjoyment (as is testified by the greater price given for it,) it may be considered as possessed of a compound value, which by analysis may be resolved as it were into two values; one belonging to it in its capacity of an article of subsistence, the other in its capacity of an article of mere enjoyment.*
It is out of the fund for enjoyment that the portion of wealth allotted to defence, and the portion, if any, allotted to security in respect of subsistence, must be taken: for out of the portion allotted to subsistence none can be spared.
But though security increase in proportion as opulence increases, and inequality be an inseparable accompaniment of opulence, security does not increase in proportion as inequality increases. Take away all the ranks in respect of opulence, between the highest and the lowest—the inequality will be increased, but the degree of security will be diminished.
Luxury is not only an inseparable accompaniment to opulence, but increases in proportion to it. As men rise one above another in the scale of opulence, the upper one may, without excess, give into expenses which those below cannot give into without prodigality. It is therefore no more desirable that luxury should be repressed, than it is that opulence should be repressed—that is, that security should be diminished. If it were desirable that luxury should be repressed, it could be done no otherwise than either by depriving the more opulent classes of a part of their property in this view, or coercing them in the use of it. It would be less unreasonable to restrain prodigality wherever it is to be found, than to restrain the highest imaginable pitch of luxury on the part of those whose expense does not exceed their income.
The mass of that matter which is the material cause of wealth, has for its sources—
1. Land—i. e. dry land uncovered with water.
2. Water—i. e. land covered with water.
The matter of wealth considered in respect of its modifications, may be distinguished, in the first place, into matter in an unimproved state—in the state in which it comes out of the hands of nature; and matter in an improved state, i. e. modified by human labour, for the purpose of its being adapted to whatever uses it may be designed for.
Any distinguishable portion of the matter of wealth may be either an article of immediate or of subservient use.
It is an article of immediate use, when it is itself applicable to any one of the three above-mentioned ends, viz. subsistence, security, or enjoyment.
It is an article of subservient use, when, though it contribute to some one or more of those ends, it does so not by any immediate application of its powers to any one of the above three ends, but by the instrumentality of some other article which is of immediate use, and which it renders, or contributes or tends to render, subservient to that use.
The operations by which an increase of the matter of wealth is produced or promoted, may be enumerated under the following principal heads, viz.—
1. Discovery—viz. of the source of the raw material, or portion of matter of wealth in an unimproved state.
2. Discovery of this or that portion of land, considered as the source from which portions of matter in an unimproved state are extracted.
3. Extraction—viz. of the raw material from the portion of land which is its source.
When an increase of wealth to any given amount takes place, it is either by means of an increase of labour, or without any increase.
When it takes place without any increase in the quantity of labour, it takes place by means of an increase in the effect, or say, efficiency of the quantity of labour employed.
The degree of efficiency in the quantity of labour employed being given, the increase of wealth produced by the labour will be as the quantity of it.
If the quantity of wealth which, before the increase of efficiency, required a year’s labour of two thousand men, be now produced by a year’s labour of one thousand, there remains the year’s labour of one of the sets of a thousand men, which, when employed in the same way, or with the same degree of efficiency as that of the first set, will produce a fresh mass of wealth equal to the original one.
Reducing by one-half the number of men employed about an individual mass of work, the quantity of the work done not being diminished by such reduction, is therefore the same thing in effect as doubling the number of men employed with the same degree of efficiency as before.
But this supposes that the number of hands thus rendered unnecessary with regard to the production of the given quantity of work, are employed with the same degree of efficiency, or at any rate are employed. If not employed at all, no increase in the quantity of wealth will be brought about by the increase in the efficiency of the mass of labour which continues to be employed:—if employed, but employed with a less degree of efficiency, then the fresh quantity of wealth thus produced by the expelled hands will fail of being equal to the quantity produced by the hands retained, in a degree proportioned to the difference in the degree of efficiency.
If by means of the introduction of machinery, or improvement in the machinery in use, a manufacturer be enabled with one thousand hands to perform the same quantity of work as that which before the improvement required two thousand hands, it might seem at first sight, from this statement, that the natural effect of the improvement would be the retaining the same quantity of hands employed in that branch of manufacture, and thence the doubling the quantity of goods manufactured in the time. But without an addition to the mass of pecuniary capital, which is a circumstance accidental and not belonging to the case, the retaining of the same number of hands so employed would in no instance be possible; for the production and keeping up of the machinery or other auxiliary means would always require a considerable quantity of labour, the payment of which would be attended with a proportionable mass of expense, by which a proportionable part of the capital would be absorbed.
If the hands employed on the machinery should be paid at a higher rate than the hands employed in the manufacture, the capital being the same after the improvement as before, the number of manufacturing hands would be still further decreased on this account.
Hence it follows, that increase of wealth by saving of labour is not so great as increase of wealth by increase of quantity of labour; and that, consequently, opposition to machinery is well grounded, if no care be taken to provide immediate employment for the discharged hands. At first, the temporary distress will outweigh the temporary enjoyment; but, so far as depends on increase of wealth, the increase of enjoyment is perpetual.
The quantity of wealth, or matter of wealth, existing in a community at the end of a given space of time (say forty years,) will be as the quantity of wealth existing therein at the commencement of the period—plus the quantity of wealth that has come into it, minus the quantity that has gone out of it.
Hence two modes of increasing the quantity of wealth:—1. The direct and positive mode, increasing the quantity that comes in; 2. The indirect and negative mode, diminishing the quantity that goes out.
Wealth has two sources, to which correspond two modes of coming into a community:—1. Home production; 2. Importation.
It has in like manner two correspondent modes of going out:—1. Consumption; 2. Exportation.
In the case of importation, the increase is only relative, relation being had to the community in question: importation alone being considered, by so much as the wealth of this community is increased, by so much is the wealth of some other community decreased.
In the like manner, in the case of exportation, the decrease is only relative: exportation alone being considered, by so much as the wealth of this community is decreased, that of some other is increased: in relation to the world at large, the quantity suffers not in either case any change.
In general, import, in respect of one portion of wealth, does not take place, but export, in respect to another and correspondent portion, a portion generally regarded as being of equal value takes place at nearly the same time; the transfer or self-deprivation having the acquisition, for what in the language of English law is called its consideration, and in the language of general logic, its final cause. But between community and community, as between individuals, from matters of fear, amity, or remote personal interest, it will sometimes happen that export from this community shall take place without a correspondent import into it from that—import into this country without export from it into that; though import into this cannot take place (unless it be from spots occupied in common by the two, such as the greater part of the sea, and some unappropriated parts of the land) without export from that.
Consumption, again, takes place in either of two ways:—1. Purposely, in the way of use; or, 2. Undesignedly, in the way of deperition without use.
Deperition is either total or partial: partial, is deterioration.
Deperition is in strictness no otherwise true of any portion of matter than in as far as it respects form, and value as resulting from that form—value, i. e. subserviency to use.
An act whereby deperition is produced, is called destruction. An act whereby deterioration is produced, may be termed deterioration (the word being used in the active sense) or endamagement.
Acts whereby destruction or deterioration is produced, and thereby loss without preponderant benefit, it is the province of the non-penal branch of the law to define, and of the penal to prevent.
Preservation may be either total or partial: it can only be partial in cases where decrease to a greater or less amount is indispensable, as in case of taxes.
Taxes may be imposed either to furnish means for future expenditure, or to afford compensation to those who in times past have furnished the means for expenditure which then was future: in other words, for growing expenses, or for discharge of debts.
The amount of taxes imposed for growing expenses, takes from the amount of national wealth in certain ways, and adds to it in other ways, more or less, according as it is employed. It takes from the means or instruments of enjoyment, present or future, immediate or more or less remote, according as it would have been spent, lent out, or hoarded, had it not been for the tax. It adds to the security of the whole, in proportion as it is employed for the purpose of national security, in the way of national defence and otherwise. It adds to the subsistence and enjoyment of a part, in proportion as it is applied to those purposes, by those among whom it is distributed in consideration of the services by which they have respectively contributed to that end.
The amount of taxes imposed in discharge of debt, of itself neither adds to nor takes from the mass of national wealth, but is the necessary result of measures of expense, necessary or unnecessary, avoidable or unavoidable, beneficial or pernicious, by which in former times a decrease in the mass of national wealth was produced. But when, and in so far as, the money produced by these taxes is actually employed in discharge of debt, it adds to capital, and thereby to growing wealth.
Finance is an appendix and inseparable accompaniment to political economy. Taxes are sacrifices made of wealth and opulence at the expense of enjoyment, to security, in respect of defence, and security in respect of subsistence.
Taxes and other means of supply for the expenses of government,—wars with their taxes and their devastations, are means by which, of necessity, in a certain degree, and too often beyond the extent of the necessity, decrease in the amount of wealth and population is produced. In this way the field of political economy includes within it the field of finance.
A tax, in as far as the thing taxed is abstained from, operates as a prohibition—as a discouragement to that branch of trade or production to which the thing belongs, and as an encouragement to rival branches; that is, more or less to all other branches. Hence another head of connexion between finance and political economy in its narrower sense. The same illusion which has recommended the encouragement of particular branches of wealth as a means of increase to the whole, has led to the exaggeration of the bad effect of taxes in this point of view.
Hence the care taken by governments to throw the weight of taxes upon imports and home productions, rather than upon exports; that is, upon their own subjects, rather than upon foreigners.
Under the above heads may be reduced, without violence, everything that can be said on the subject of political economy, including finance.
[* ]The compound term, “matter of wealth,” is employed to prevent ambiguity: it carries with it a reference to quantity. There are many things which may constitute part of the matter of wealth, which when taken separately, or in small quantities, would hardly be called wealth. Thus the wealth of a stationer may consist in rags, a small portion of which lying on a dunghill few would call wealth; none, however, could deny that they might constitute part of the matter of wealth.
[† ]Wealth, considered as arising at successive periods, is called income. That portion of it which is employed for the purpose of giving increase to its amount, is called capital.
[* ]Thirty years after the conclusion of the seven years’ war, some ammunition bread that had been baked for the Prussian army at the time of that war, was found in such a state as to have been eatable; a piece of it was eaten for curiosity’s sake by a person whom I knew. In default of stones, which have sometimes for want of iron been used as cannon balls, this ammunition bread might have been applied to the purpose of defence.
[† ]Instances of instruments of mere enjoyment are abundant:—tobacco and perfumes may be sufficient for illustration.
[‡ ]It is in consequence of the interconvertibility above mentioned—wealth in one shape being convertible into every other—that every instrument of mere enjoyment is a pledge of security, and that national power, so far as depends upon wealth, is in proportion not to absolute, but only to relative opulence—not to the absolute quantity of the matter of wealth in a nation, but to its ratio to the mass of the population. For of the aggregate value of the aggregate mass of the matter of wealth in a nation, the part dedicated to enjoyment is the only part applicable to the purpose of defence. What is necessary to subsistence must be applied to subsistence, or the man must starve. Hence the reason why France, so much superior to Britain, not only in population, but in absolute wealth, is yet inferior in power, except with relation to countries so near that the expense of invading them may be more or less defrayed by the contributions raised in them.
[* ]In the character of an article of subsistence, a pound of potatoes and a pound of pine-apples may stand pretty nearly upon the same level;—but a single pound of pine-apples may sell for the same price as one hundred pounds of potatoes,—the pound of potatoes selling for a halfpenny, and the pound of pine-apples for one hundred halfpence. This being the case, out of the hundred halfpence, which is the price and value of the pound of pine-apples, one halfpenny goes to subsistence, and the remaining ninety-nine to mere enjoyment. It is the same thing as if the halfpenny had been employed in the purchase of another pound of potatoes, and the remaining ninety-nine in the purchase of perfumed powder for the hair, instead of being put into the mouth for nourishment.