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LECTURE I.: CAUSES THAT HAVE RETARDED THE PROGRESS OF POLITICAL ECONOMY. - Nassau William Senior, Four Introductory Lectures on Political Economy 
Four Introductory Lectures on Political Economy (London: Longman, Brown, Green, and Longmans, 1852).
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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 the facts which are its subject-matter, have indeed attracted human attention from the earliest times; many opinions, right or wrong, have been formed respecting them, and many customs and laws, beneficial or injurious, have been the consequence: but it was not until nearly the middle of the last century, that any attempt was made to reduce those opinions into a system, or to ascertain the grounds on which they were founded, or even how far they were reconcileable with one another. To M. Quesnay belongs the honour of having first endeavoured to explain of what wealth consists, by what means it is produced, increased, and diminished, and according to what laws distributed; in other words, of having been the first teacher of Political Economy. In the course of his investigations, he found that in the pursuit of wealth all governments had not merely mistaken the straight road, but had frequently pursued a path leading directly away from it. He found that instead of endeavouring to attain a beneficial end by appropriate measures, they had been aiming at a useless result by means totally ineffectual. Until his time it had been supposed that wealth consists of gold and silver, and that the quantity of gold and silver in any given country is to be increased by encouraging the exportation and discouraging the importation of all other commodities, and by the perpetual interference of governments in the modes in which the labour of their subjects is exerted, and the objects to which it is directed. Quesnay showed that gold and silver make the smallest and least important portion of the wealth of a country. And he showed that the abundance of gold and silver, and of every other commodity, is to be promoted, not by restrictions on importation, nor by bounties on exportation, but by the absolute freedom of external and internal trade; by securing to every man the results of his industry or frugality, without attempting to order him what to produce or how to enjoy.
His inquiries seem to have produced on his own mind, and on the minds of his disciples, effects resembling those which would be created by the discovery of a map by a party who had been long wandering in an imperfectly known country. His map, indeed, was often inaccurate, but the points in which it was correct were the most important, and its errors, such as they were, were not detected by those to whom he offered it. Few men have ever presented to the human mind a more interesting subject of inquiry, and few have had a more devoted band of disciples. La Riviere, Mirabeau, Turgot, and the other writers forming the school called the French Economists, all implicitly adopted Quesnay’s opinions, and engaged zealously in their propagation.
The inquiry which Quesnay originated was pursued, and with still greater success, by Adam Smith. Smith was superior to Quesnay, and perhaps to every writer since the times of Aristotle, in the extent and accuracy of his knowledge. He was, on the whole, as original a thinker as Quesnay, without being equally subject to the common defect of original thinkers, a tendency to push his favourite theories to extremes; and in the far greater freedom then allowed to industry in Great Britain than in France, and in the greater publicity with us of the government receipt and expenditure, he possessed far greater advantages as an observer. With these high qualifications and favourable opportunities, and assisted by a style unequalled in its attractiveness, he has almost completely superseded the labours of his predecessors. The few who read their writings, read them not in the hope of obtaining the instruction which they were intended to afford, but as sources of historical information, or as examples of the errors to which powerful minds may be subject in the infancy of a study.
From the appearance of the “Wealth of Nations,” Political Economy has excited a constantly increasing interest. All the events, fortunate and unfortunate, which have occurred in Europe during that extraordinary period, have tended both to increase its actual importance, and to occasion that importance to be better estimated. The art to which it is principally applicable is the great art of government, and particularly that branch of government which consists in the raising and employment of public money. Not a tax can be imposed or applied without materially affecting the fortunes of those by whom it is paid, of those among whom it is expended, and of third persons, many of whom, perhaps, are unaware of its existence. To ascertain the character and the extent of these effects, even as to any existing tax, without the aid of the general principles supplied by Political Economy, is scarcely practicable: to foretell or even to conjecture, with probability, the effects of an untried tax, without such aid, is impossible. A government ignorant of the nature of wealth, or of the laws which regulate its production and distribution, resembles a surgeon who has not studied anatomy, or a judge unacquainted with law.
But, under the old system of Continental Europe, many things concurred to diminish the attention which the evil consequences of this ignorance might have been expected to attract. Each monarchy was considered the patrimony of its king, and its public revenue a portion of his income. All that he could get he spent or gave away; part of it went in wars for his honour, part was wasted in building and pageantry, and part was distributed among his courtiers. Public debts were few and small, and were the debts, not of the nation, but of the crown. The interest was not an additional burden on the people, but a deduction from the gratifications of the prince, and was reduced from time to time, either by depreciating the currency, or by the simple expedient of a refusal to pay. No right was recognised in the public to inquire into the amount of the royal revenue, the sources from which it was derived, or the purposes to which it was applied. These were the private affairs of the sovereign, which it was not decent or even safe to canvass.
All this was changed at once by the French Revolution. It was proclaimed in France, and admitted, or scarcely denied, on the rest of the Continent, that governments are made for nations, not nations for governments; and that the public revenue is the revenue, not of the government, but of the nation,—not a property, but a trust,—not a rent or a tribute, but the purchase-money of the labour necessary to prevent foreign and domestic violence and fraud, paid over to the government merely as an administrator, unlawfully employed if applied to any other purpose, and unlawfully demanded if more than necessary for that purpose.
Every man felt himself interested that the proportion of his income which he had to pay over to the state should be reduced, either by diminishing expenditure, or by varying the mode of assessment.
At the same time the wars in which Europe was involved for a quarter of a century, and the scale on which they were carried on, occasioned in almost every country an enormous increase of that proportion of the whole income of the people which is administered by the government. Almost every country created a national debt, and thus threw on its rulers the additional duty of collecting a revenue, to be applied, not for current expenses, but to repay those who had advanced the public expenditure of previous years. And not only were the people induced to interest themselves in public affairs, they were frequently called upon to act. In many countries the whole form of government was more than once demolished and reconstructed. 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 a national will.
In the British Islands self-government was no novelty, but many circumstances concurred to increase and diffuse the interest taken in public affairs. Among these circumstances the principal ones were the extension of the public expenditure, the alterations in the currency, and the effects of the poor laws. In no extensive empire recorded in history, has so large a portion of the annual produce of the land, labour, and capital of the people, been administered by the state. Every man felt himself to be a public debtor, and almost every man became, in some shape or other, a public creditor. At the same time the nominal value of money, the standard by which his claims and liabilities were measured, was subject to variations considerable in themselves, grossly exaggerated 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 southern and south-eastern districts of England, became every day more apparent. It became obvious to the most unreflecting, that they were gradually altering the rights, both of property and of industry, the relations between the poor and the rich, the labourer and his employer, and the habits and feelings of the agricultural, and in many places of the town population.
All these causes, and many others which it would be tedious and almost impossible to enumerate, have given to the political sciences, during the last sixty years, an interest which no study, except perhaps that of theology during the early progress of the Reformation, ever acquired. And this at a period when the extension of books and newspapers, and of the habits and means of discussion and communication, has been such as our most sanguine ancestors never anticipated.
Of all the branches of political knowledge, the most important, and the most applicable to the purposes of government, is that which considers the nature and the origin of wealth. It is true that the ultimate object of government, and indeed the ultimate object of every individual, is happiness. But we know that the means by which almost every man endeavours to increase his happiness, or, to use the common phrase, to better his condition, is by increasing his wealth. And to assist, or rather to protect him in doing this, is the great difficulty in government. All the fraud, and almost all the violence, for the prevention of which government is submitted to, arise from the attempts of mankind to deprive one another of the fruits of their respective industry and frugality. To counteract these attempts, a public revenue must be raised and expended; and, as I have already remarked, neither of these operations can be well executed or well judged of by persons ignorant of Political Economy. It may be added, that the desire for unjust gain, which, among savages, produces robbery and theft, assumes, among civilised nations, the less palpable forms of monopoly, combination, and privilege; abuses which, when of long standing, it requires much knowledge of general principles to detect or expose, and which it is still more difficult to remedy without occasioning much immediate injury to individuals.
I think, therefore, that I may venture to say, that no study ever attracted, during an equal period, so much attention from so many minds, as has been bestowed, during the last sixty years, on Political Economy. I do not mean that this attention was acknowledged, or even that all those who have been framing and repeating theories respecting the modes in which wealth is created, increased, or diminshed, have been aware that they were political economists. Most of them as little suspected it as M. Jourdain that he was speaking prose. But every country gentleman who has demanded protection to agriculture, every manufacturer who has deprecated free trade, every speculator who has called for paper currency, every one who has attacked, and almost every one who has defended, the measures of the minister for the time being, has drawn his principal arguments from Political Economy.
At the same time, the avowed writers on this subject have been more numerous than those on any other science or art. If we look at our principal reviews, we shall find that a large portion of each number is dedicated to it. M. Say has been translated over and over, into every language in Europe. I have seen three different translations of his great work published in different parts of Spain. In the United States of America there are newspapers exclusively devoted to it, and it has professors in almost every university in Europe, and in North America.
Has then, I will ask,—and it was as an introduction to these questions that I have ventured on so long a preface,—has the progress of Political Economy been in proportion to the ardour with which it has been urged? If it has not been so, by what causes has its progress been retarded? and are they causes within our control?
To the first question, the answer must be, No. After so much and so long continued discussion, we might have hoped that its limits would have been accurately laid down, its terms defined, and its general principles admitted. It is unnecessary to prove formally that this is not the case. Every one is aware that Political Economy is in a state of imperfect development,—I will not say characteristic of infancy, but certainly very far from maturity. We seldom hear its principles made the subject of conversation, without perceiving that each interlocutor has his own theory as to the objects to which the inquiries 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 writers on the subject, we find them chiefly engaged in controversy. Instead of being able to use the works of his fellow labourers, every economist begins by demolition, and erects an edifice, resting perhaps, in a great measure, on the same foundations, but differing from all that has preceded it in form and arrangement.
Supposing it to be conceded that this is a correct representation of the actual situation of the study, I proceed to the more important questions, by what obstacles has its improvement been impeded, and are there any, and what means, by which they may be removed?
One of the principal causes which has prevented the progress of Political Economy from being adequate to the attention which has been bestowed on it, is inherent in its nature. I will not say unfortunately so, since it is at the same time the principal cause of the attention which it deserves, and, in fact, of the attention which it has received. I mean its direct influence on the welfare of mankind; and the effect on our reasonings of this disturbing cause, has been strikingly increased by the state of transition in which the institutions of almost all the civilised world have been struggling for the last sixty years, and seem destined to struggle for an indefinite period.
If our laws had been of the unchangeable character which has been ascribed to those of the Medes and Persians, we might have investigated the nature and sources of wealth with the impartiality with which we study the motions of the heavenly bodies. No one would have felt himself interested in denying conclusions which would have been unsusceptible of practical application. That wealth consists, not of money, but of the things which money can purchase,—that it is not lessened by resorting to the cheapest market,—that it is not augmented by augmenting the nominal value of the tokens by which it is measured,—that it increases with the increasing productiveness of labour, and diminishes if more labour be required to produce a given result,—that the profits of commerce consist not in what is given, but in what is received, are propositions which might have been neglected as truisms, or alluded to as self-evident, but could scarcely have been made the subjects of eager controversy. Monopolies would never have been defended, if monopolists had been secure.
It is to the difference in this respect in the state of Europe, that I ascribe the difference in the degree of clamour which was raised against Adam Smith in England, and the earlier economists in France, and that which has been directed against their successors in both countries. The doctrines of Quesnay and Smith were as much opposed to existing abuses as those of Malthus or of Ricardo; but there did not appear to be the same chance of their application. While restriction and prohibition was the rule, and apparently the unalterable rule, political economists were forgiven for proclaiming the advantages of free trade. The theory was even admitted as long as the practice seemed at a distance. But these halcyon times are over: it is becoming every day more apparent, that whatever is generally believed to be expedient, will sooner or later be attempted; and that institutions are to be attacked and defended, not by force, but by argument,—not by mere clamour, or dogged refusal, but by convincing the public of the benefit or of the disadvantage of the proposed alteration.
Archbishop Whately has well remarked, that the demonstrations of Euclid would not have commanded universal assent, if they had been applicable to the pursuits and fortunes of individuals; and of all branches of human knowledge, Political Economy, from the complexity of its relations, and the vagueness of its nomenclature, offers the easiest scope to a prejudiced or an uncandid reasoner. The great improvements that are taking place in our commercial and financial policy, will tend to diminish this obstacle to political science by removing the subjects of contest. And we may hope that its force will be still further diminished by the mere progress of the study, as its terms become better defined, and more and more of its principles are established and recognised. But it would be vain to hope that it ever will be got rid of, or that men will examine questions which come home to their business and bosoms, with the unbiassed spirit which urges the astronomer or the mathematician.
Another cause which has rendered fruitless much of the attention bestowed on Political Economy, has been the frequent attempt to discuss insulated questions connected with it, by those who have not previously endeavoured to acquaint themselves with its general outline. In some sciences this is, to a certain extent, practicable. In those sciences which consist in a great measure of independent facts, such as law, or natural history, a single branch may sometimes be studied successfully. But in Political Economy the different propositions are so mutually dependent, that it is impossible to reason safely concerning any one without constantly bearing in mind all the others. And yet nothing is more common than to find persons writing books and making speeches, and even proposing, with the utmost confidence, legislative measures involving principles as to which the acutest and most diligent inquirer has not been able to make up his mind, not only without having settled within themselves the meaning of their principal terms, but even without being themselves aware that they are using words to which they attach no definite ideas.
The errors which I have mentioned have been committed principally by those who, without being professedly political economists, frequently indeed expressly disclaiming that character, have treated the subjects which Political Economy considers. But many who have avowedly devoted themselves to its pursuit, seem to have misdirected their efforts, for want of a clear conception of the object of their investigations, of the manner in which they ought to be conducted, or of the nature of the difficulties to be surmounted. If the teacher of Political Economy have not decided whether he is engaged on a science or on an art, whether it is his duty to explain phenomena or to deliver precepts, whether his principal business is to observe facts or to deduce inferences, whether his premises are all physical truths or depend partly on arbitrary assumption,—his work, though it may contain partial views of the highest value, cannot possibly form a clear or a consistent whole. Nor is it sufficient that the professor should have made up his mind as to what he has to teach. It is important, though not equally important, that the student should have a general notion as to what he has to learn, as to the nature of the subjects which are to be laid before him, of the conclusions to which he will be asked to assent, and of the arguments by which they will be supported. The view that is to be taken, may perhaps not suit his habits of thought or of inquiry. It may be too abstract or too concrete. If he be accustomed to demonstration, he may be ill satisfied by proofs and illustrations drawn from actual life, and mixed with irrelevant accidents. If his pursuits have been practical, he may be disgusted by reasonings founded on hypotheses representing nothing that actually takes place. Or his objections may be directed rather against the subject itself than against the mode of its treatment. He may think that too much importance, or if not too much importance, too exclusive an attention, is directed towards wealth. He may wish that economists would consider man as a being with higher qualities, higher duties, and higher enjoyments than those which are concerned in the production, distribution, and consumption of commodities and services, and may regret to see him treated merely as a 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 which he is to be engaged, he will more easily perceive the premises and weigh the arguments of its professor.