The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface.
• Lecture I.
• Lecture II.
• Lecture III.
• Lecture IV.
• Lecture V.
• Lecture VI.
• Lecture VII.
• Lecture VIII.
• Lecture IX.
• Lecture X.
• Lecture XI.
• Appendix.
• Note On Page 32.
• Page 37.
• Page 39.
• Page 57.
• Page 65.
• Page 133.
• Page 145.
• Page 149.
• Page 164.
• Page 175.
• Page 183.
• Page 203.
• Page 223.

LECTURE I.

Gentlemen,—

The science of Political-Economy teaches the laws or rules which regulate the creation, accumulation, distribution, and consumption of wealth in different countries. Perhaps this definition may not of itself be sufficient to point out fully and clearly the true end and object of the science, and it may be proper at a future period to give a more detailed explanation of these subjects, when considering the manner in which the truths relating to them can be most successfully and profitably investigated. But before I proceed to such inquiries, it may not be useless to remove some of the objections that are frequently advanced against the methodical study of the science, and also some objections, which though never formally put forth, have not on that account been the less influential in creating a prejudice against Political-Economy, or whatever science assumes that name, and whatever doctrines it professes to inculcate. Those prejudices indeed are disappearing fast. Already has Political-Economy obtained several important victories over the errors even of those who are called practical men, and many important doctrines propagated by the political-economists, rather from their regard to truth than from any hope of their ever convincing the minds of legislators, now influence the councils of the country to such an extent, that few well educated men are found to dissent from them. It is a pleasing task, and consolatory to the rational and calm enquirer after knowledge, to peruse such a work as Adam Smith’s “Wealth of Nations,” and to compare the principles which he inculcates, with the changes in our policy which have taken place since his time, and to observe in how many instances the truths of science, calmly asserted and explained, have prevailed over the interested opposition of those who advocated a less enlightened system. Political-Economy is every day extending its empire, and although it has even now opposition to encounter, still some grounds of hostility have been already given up. Very few I believe could now be found to censure the study of it as impious or irreligious, although perhaps some may be inclined to turn away from the science as useless, or as unworthy of their attention, when they find that it is occupied about a subject so narrow and unimportant to human happiness as wealth may appear to them to be. Many perhaps will even think it a fair subject of doubt, whether wealth is really useful or prejudicial to society, and therefore will be disposed to consider that a very trifling science which is occupied in discussing the laws relating to the creation and distribution of such a doubtful good. To all these it may be said, that method and order require that subjects really separate should be studied separately, and that as wealth, whether it be a good or an evil, is assuredly distinct from every thing else, it is proper to make it the subject of a distinct science or a distinct branch of some science. In either case Political-Economy must be studied, to teach nations the method of avoiding wealth, if it be an evil, or of creating it and distributing it judiciously, if it be a good.

But a little more consideration will serve to prove that nothing relating to the Wealth of Nations is to be deemed unimportant.

Under the term Wealth is included all that contributes to the subsistence, the comforts, as well as the luxuries of the community, and it cannot be thought a matter of slight importance, in what quantity, or in what manner, these shall be distributed. If it be said, that wealth does not produce happiness, or even content, and that we often see the rich disposed to envy the condition of the labouring poor; a similar assertion may be made, without any greater degree of exaggeration, of wisdom and health, and every other worldly advantage. In short, they may be abused, and they do not of themselves constitute happiness. But surely it would be a useless waste of time to prove, that even to an individual, the possession of some riches is rather an advantage than the contrary; and it was well remarked by a philosopher of antiquity, that he perceived it to be false that wealth was an evil, from the ingenious and elaborate arguments used in support of that position, while no man thought it necessary to say one word on the opposite side. But omitting the question as it relates to an individual; since wealth, if it be a good, is certainly one which a man may seek too anxiously, or love too much, it is important to refer to the difference between the wealth of an individual and that of a nation. The individual can acquire wealth by unworthy means, or apply it to improper purposes. It may produce in him idleness, arrogance, or vicious luxury: the possession of it by an individual can therefore neither be a proper test of merit, or of happiness; while the poverty of the poor man may be owing to his scorn for the arts by which he sees riches acquired, or to his amiable though unthinking generosity of disposition. But how different, in all these respects, is national wealth from the riches of an individual. It cannot be acquired by violence or fraud; it must derive its source from industry, intelligence, and frugality. Even in trade, a wealthy trader may sometimes owe his success to fraud; but the body of merchants in a nation, if they earn wealth, must, we may rest assured, be distinguished alike for integrity in their dealings, for enterprising skill, and judicious economical industry. Equally different may be the disposition generated by riches in an individual, and in a nation. An individual is said to be rich, because he is much richer than those with whom he is compared; and such a superiority may produce arrogance, though such ought not to be its effect. But this disposition is not apt to be produced, from the wealth of the nation to which he belongs, in an individual, who does not perceive himself to be richer than the other members of the community. He may perhaps, on comparing his own with other countries, feel a kind of national pride, a harmless gratification at knowing that the poorest of his countrymen are comfortably lodged, and fed, and clothed. For it is to be observed, that though the wealth of an individual may be expended in procuring vicious luxuries, yet that of a rich nation, as distinguished from a poor nation, will be found to consist in the great mass of its inhabitants being comfortably and wholesomely fed, lodged, and clothed, and well rewarded for their industry. If otherwise, that wealth must be wrongly distributed; the cause and cure of which wrong distribution come also within the province of the political-economist to investigate.

The subject might easily be followed out to a greater length; but I have thought it sufficient to make this brief allusion to the difference between the wealth of an individual and that of a community, both because the subject has been much more ably discussed than I can pretend to treat it, by the professor who originally discovered its importance and drew attention to it, and also because the arguments generally used, even by those who are opposed to the study of Political-Economy, do all seem to imply that National Wealth is an object that deserves to be promoted. They may frequently be heard advocating this measure, and decrying that, on account of its supposed consequences, as favourable or inimical to the increase of national wealth. And even much of the prejudices entertained against this science, and much of the difficulty attending the diffusion of what are called its doctrines, that is, of such propositions belonging to the science as can be demonstrated to be true, lies in the very interesting nature of the subjects with which it is conversant. Scarcely any man comes to the contemplation of them with a mind free from prejudice and crude undigested theories. They relate to matters so important, that every one feels a necessity of forming some opinion upon them, and few can calmly wait, and duly deliberate, and reflect upon each doctrine, before they peremptorily decide upon its truth or falsehood. Almost every man’s mind is pre-occupied with the opinions or prejudices of some party or system which he has hastily adopted; and there is in general scarcely room left for truth to gain admittance.

And if few are found who despise Political-Economy, from not feeling sufficient concern for the matters about which it treats, still fewer are repelled by an opinion of its abstruseness. On the contrary, most men think themselves competent to discuss all its doctrines, and to argue on all questions connected with the wages of labour, and the effect of taxes, rents, national debts, tithes, and poor laws. By those men, Political-Economy is not despised or rejected as an abstruse uninteresting study, difficult of comprehension, and occupied with subjects of no public or general utility. They do not condemn it, as employed about unimportant subjects, or matters beyond the reach of the human mind to investigate, but they hold the study of Political-Economy, as a science, useless, because they think they feel themselves competent to discuss all its branches extempore, as they arise in casual conversation. With proud humility they admit, that they are not political-economists. They even think it a mark of their independent spirit, that they are not guided by the opinions of writers, whom, in fact, they have never read, and that they dare to dissent from doctrines, which in reality they never studied, and which they do not understand. These people will not study Political-Economy, because they say that without any study, mere common sense is sufficient to show them the absurdity of free trade, the necessity of bounties and restrictions on our commerce, to encourage and protect our manufacturers, and of corn-laws, to promote our agricultural interests, and to enable the nation to support the taxes necessary to pay the interest of the national debt. Other questions connected with our foreign and domestic, our commercial and colonial policy, are disposed of with equal facility; and the different theories thus defended, are generally, by way of recommendation, announced to be opposed to the doctrines of Political-Economy. Of course, this is often done, not from any dislike to the science, but from a wish to conciliate the populace, by promising to point out to them an easy path to wisdom, without the necessity of previous study and learning; sometimes it is done to secure the sympathy of those who are conscious of not possessing the knowledge which the speaker disclaims, and who may therefore be gratified at hearing it decried as useless. For example: I remember reading a speech of an orator much admired for his eloquence, in which he advocated poor laws, partly on the ground that they were opposed to the conclusions of Algebra and Political-Economy. With those, however, who employ such language for such purposes, I have no concern here. Rhetorical artifices of various kinds will always be employed, according to the nature of the audience which the orator wishes to influence. But many are serious in their opposition to the doctrines of Political-Economy, and are themselves deluded by the sophisms they use, and do really think, that because a doctrine is opposed to science, it must be conformable to common sense or to common experience.

I need not now enter upon the defence of any of the particular doctrines that are thus impugned; for without such discussion, a little reflection will enable us to perceive that those who thus hold opinions acknowledged to be contrary to the admitted principles of the science, must in general be superficial dogmatists of error. It is universally allowed that Political-Economists are not too apt to follow in each other’s track. On the contrary, the difference of opinion which exists among them on some important points is frequently brought forward unjustly as an argument against the science. When they agree therefore on any point, the decrier of Political-Economy, who holds opinions contrary to theirs, may reasonably imagine that his opinions, and the arguments by which he maintains them, have occurred to others as well as to himself: at least he ought not boldly to presume that what his careless consideration of the subject suggested to him has escaped the notice of those who have studied it as a distinct science. A small share of sense or modesty might therefore teach him that he ought to inquire whether those opinions and arguments have been observed and answered.—The knowledge or study of Political-Economy is not confined to men of any class or creed; and it would be very strange indeed if there was any false proposition whose falsehood could be at once detected and exposed by men of common sense unacquainted with the subject, at the same time that it always made converts of those who had given the matter a more attentive consideration.

But I am sure it is unnecessary to say any thing by way of argument, for the purpose of convincing you, gentlemen, that on this subject, as well as on every other within the scope of human reason, a diligent investigation will be more likely to lead to truth than to falsehood; and therefore that in general the political-economists, that is, those men who have studied the subject with care and attention, will be more likely to hold correct opinions than those who contemn Political-Economy, and are content to discuss each point unmethodically as it rises. Perhaps there is even no subject in which method and order are of more importance than in this, as there is none in which the questions are so interwoven with each other, and in which it is so often a matter of difficulty, in cases of two observed coincident phenomena, to determine which is the cause and which is the effect. On this point, careful deliberate reasoning is the more necessary, as it is the only means of obtaining truth or knowledge. Experiment is impracticable, from the mighty interests which are involved in every case; and owing to some peculiar circumstances attending this science, experience, without theory and reasoning, must ever prove a blind and inefficient guide. So numerous are the circumstances which influence every event, that it is impossible by mere observation to determine how much each has contributed to the result, or how far the effects of some may have been counteracted by the more powerful efficacy of others. The length of time also which must elapse in many instances before the effects of political changes can completely develope themselves, adds an additional uncertainty to experience, by limiting its range, preventing cause and effect from coming within the view of the same persons, and giving time and opportunity for intervening circumstances to modify the effects of our institutions, and prevent their natural tendency from coming into full operation. But indeed I believe that the very vagueness and uncertainty of experience is one of the principal reasons why it is so often referred to in opposition to theory. It is an easy matter for an indolent person, when pressed by reasons which he cannot answer and yet is unwilling to admit, to say that they are contrary to experience. It is an assertion easily made and easily understood, and of great apparent weight, and yet the persons resorting to it would in general be very much embarrassed if they were called upon to prove how the doctrines they oppose are contrary to experience, or how, where, and when, that experience was obtained. Such assertions frequently mean no more than that those principles are unsupported by experience, because in fact they have never been tried, although the general principles from which they have been deduced as necessary conclusions, by unimpeachably correct reasoning, are conformable to the experience of all mankind. The mere witnessing of coincident phenomena, unaccompanied by any reflection on the cause of such coincidence, is a far different thing from the experience of a rational being.

Were the shepherd who spends his days and nights in the fields, and who daily looks into the skies, and sees or thinks he sees the sun and stars revolving in a diurnal course around the earth, to deride the speculations of the scientific astronomer, and contrast his own experience with the theories of the other, he would be told that experience without theory was blind, and that even in experience and accurate observation he was as much inferior to the astronomer as in science; that the difference was, that his observations were casual, inaccurate, and unmethodical, while those of the other were accurate and scientific. In like manner the political-economist omits no opportunity of acquiring the knowledge of facts, though he uses reason and cautious theory to distinguish the relation of cause and effect from accidental or unnatural coincidences.

Experience is indeed only a negative guide, except in cases where we have attained the highest degree of perfection, or accomplished the end we have in view: in such cases we may remain satisfied with the degree of knowledge and power we already possess; but in all other cases, as experience, from its very nature, cannot invent, however it may suggest improvements, we must have recourse to theory as our guide: if we resolve on no instance to depart from the beaten track, we establish a principle which precludes all improvement, and which, if our ancestors had acquiesced in it, would have kept them almost in a savage state.

It may seem strange, and almost inconsistent with the evident utility of Political-Economy, that it should be a science of comparatively modern origin; but on consideration it will appear that the circumstances which occasion its principal utility are peculiar to modern times. To shew this fully and at length would be inconsistent with my present purpose, and can best be done after we shall have considered some of the principal branches of this science; but it may not be amiss, even now, and it will not consume much of your time, to call your attention briefly to some of those peculiarities of modern times to which I have alluded; one of these, and perhaps the most important in its remote effects upon Political-Economy, is the difference of the manners of carrying on wars used now and in former times, and the different results that are produced by them. In some of the most celebrated wars of ancient times the result was that the vanquished party was destroyed and the victorious one enriched; now the result of war is that all parties continue to exist, and all are impoverished, debts are contracted, and taxes must be imposed, and a particular importance is given to that branch of Political-Economy which teaches how to impose those burthens so as least to impair the wealth of the country or to interfere with the subsistence or comforts of the population.

Other causes also which have led Political-Economy to assume so much importance in modern times may be found in the comparative length and steadiness of their domestic tranquillity, in the great care with which all reasonable contracts are enforced, and in the effective regulations of modern police. Also the quickness with which intelligence of all kinds is diffused, and the superior degree of information now spread among all classes of society, make the conduct of individuals more uniform than before, and render their consequences less a matter of chance, and more subject to calculation. It is undoubtedly true, that it is easier to calculate what shall be the general and ordinary conduct of all persons placed under certain circumstances than how any individual shall behave in the same situation; and the more generally the knowledge of their interests is diffused among any class of people, the more certain we may be that the great majority of them will pursue the path which their interest points out.

The state of slavery in which the majority of the population of ancient countries was kept was of itself a sufficient hindrance to the investigation of all questions relating to population, and the circumstances which determine the wages of labour. These questions, which are of the highest importance in modern Political-Economy, could never have arisen if the mass of the poorer inhabitants were not free. Slaves, like domestic animals, where every individual has an owner, who has the profits of his work, and is at the expense of his subsistence, can never exist in greater numbers than are required. Their labour must always be worth more than the price of their support. Thus, when we discuss the different questions of Political-Economy, we shall find that most of them are of such a nature that they could not have arisen in ancient times; and we shall see at the same time the advantages that must arise from a complete and general comprehension of them.

And if the science demands some time and labour from those who desire to form correct and rational opinions on the subjects which come within it, yet there is scarcely any learning so well worth the pains required to become master of it. In free countries especially, such as this is, where every man is permitted freely to pronounce his opinions on the utility or impolicy of every law, it is the duty of every man who has a few moments of spare time for studies not professional, to dedicate to it that small portion which this science demands. No person can tell how much influence his declared opinions may have on the opinions and conduct of others; and he must plead guilty to the charge of overweening confidence or culpable carelessness, who proclaims his opinions boldly on points of practical importance, without attempting to learn the principles of a science which professes to teach him on such subjects how to discern the truth from the specious falsehood.

Opinions are every day assuming greater weight in society. It is daily becoming more important, that the notions which are generally entertained should be correct, since they now lead so directly to action. In every day’s conversation there is a discussion and propagation of opinions on these subjects, and in general they excite the greatest interest. No person can now remain altogether neutral, and avoid such topics. He must, according to the degree of pains he has taken with the subject, be a teacher of useful truth, or a disseminator of mischievous falsehood. Opinions, whether true or false, will no longer remain inactive; they both immediately affect legislation, and exercise immense influence on a class of people formerly removed beyond the reach of such discussions, but whose notions and consequent conduct are now of the greatest importance as well to their own comforts as to the peace and prosperity of their country. I allude to the labouring orders, both agricultural and manufactural. It is no longer a question, whether these men shall think or not, or what degree of influence their opinions ought to exert over their conduct; they will follow the path where they conceive their interests to point, and it only remains to be considered, in what manner a true sense of their real interests may be most effectually brought home to them. The change has taken place, whether for the better or the worse it is useless now to enquire, since the steps which have led to it can never be retraced. The people will no longer be guided by the authority of others. The appeal must be made to their own reason, which will hardly fail to lead to error and its consequent crimes, if ingenious sophistry and unwearied diligence are employed to lead their minds astray, while no pains are taken to present truth to their understanding, and to make them acquainted with both sides, since they cannot be prevented from learning the wrong side of every question. All reflecting people now concur in this, that the comforts and happiness of the labouring classes depend almost entirely upon their own conduct; and this opinion is equally consistent with either doctrine respecting the policy or impolicy of poor-laws.

On this point legislation can do little more than provide that the laws shall not hold out any motive or encouragement to imprudence, and that the consequences of misconduct and improvidence shall as much as possible fall upon the individual rather than upon the community: here Political-Economy is merely a defensive science, which attempts to prevent the injudicious interference of speculative legislation. It depends in some degree upon every person present, whether the labourer is taught that his interest will be best promoted by prudence and industry, or by a violent demolition of the capital destined to his support. Unhappily the moral sense of right and wrong is very feeble among those classes at the present period, and the conduct of the labourer will be principally decided by what he conceives to be the cause of his distress, and that again will be very much influenced by the pains which each of you, gentlemen, take to learn and disseminate the true doctrines of Political-Economy, and the arguments by which they can be supported. Let the labourer be taught to know, and the proof is simple and easy to be understood by all, that the wages of his labour cannot be determined by the wishes of his employer, that they are even as independent of the decrees of the legislature as they are of his own will, and that they are ultimately entirely dependant upon the prudence or improvidence, the industry or idleness, of the labouring classes themselves. Let them be taught to trace out accurately the entire set of consequences that would result from each law that they might feel most inclined to call for, and they will at the same time see how inevitably their wild legislation would ensure their own destruction, and how small a part of their present weal or woe is “that part which laws or kings can cause or cure.”

In addition to the important questions which relate more immediately to the condition and comfort of those classes, which it is the first duty of the legislature to provide for, and which call more immediately for the attention of the political-economist, there are many other questions connected with our commerce and manufactures, our shipping and colonial interests, and the degree of protection which each demands, and above any, because vitally affecting all, with the different modes of raising the immense revenue required to pay the annual interest of the national debt, and to defray the current expenses of the year. All these are subjects of the first importance; and it may be considered in some measure the duty of every man to act his part towards making general a right understanding of them: at least upon political subjects involving such important consequences, no man should without due caution propagate opinions which he believes to be at variance with the doctrines laid down by all who have given the matter an attentive and methodical consideration; and Political-Economy requires no more. It cannot require much labour to perceive how advantageous to the public a general knowledge of these subjects must prove.

If every man can be taught that the laws are framed for the common good of all, and not for the benefit of any single order or individual, and that every man is alike concerned that they should meet with respect and obedience, we may then hope to see no more open violations of the law committed by large bodies of men, under the notion that in doing so they are best consulting their own interests. I am not so sanguine as to hope that the diffusion of useful knowledge will completely banish crime; but if crimes shall then sometimes occur, they will be committed only by a few depraved individuals, who will look to concealment, not to defiance, for their protection; in this concealment the body of the people will give them no assistance; they will be looked upon as common enemies, and when detected, will meet with little sympathy; and the laws will be more satisfactorily and effectually enforced by a few constables with staffs, the emblems of their office, than they are now by such a military force as might be found sufficient to repel an army of invaders.

I propose, when next I have the pleasure of addressing you, to offer some observations upon the measure of value and utility, and the principal causes which connect or sometimes apparently separate them. I shall afterwards explain the manner in which I conceive the study of this science may be most successfully prosecuted, and point out the course which I shall pursue in attempting to explain and prove those principles, of the truth and importance of which I am most firmly convinced.

M. L.