Front Page Titles (by Subject) On the Definition of Political Economy; and on the Method of aInvestigation Proper to Ita - The Collected Works of John Stuart Mill, Volume IV - Essays on Economics and Society Part I
Return to Title Page for The Collected Works of John Stuart Mill, Volume IV - Essays on Economics and Society Part I
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
On the Definition of Political Economy; and on the Method of aInvestigation Proper to Ita - John Stuart Mill, The Collected Works of John Stuart Mill, Volume IV - Essays on Economics and Society Part I 
The Collected Works of John Stuart Mill, Volume IV - Essays on Economics and Society Part I, ed. John M. Robson, Introduction by Lord Robbins (Toronto: University of Toronto Press, London: Routledge and Kegan Paul, 1967).
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The online edition of the Collected Works is published under licence from the copyright holder, The University of Toronto Press. ©2006 The University of Toronto Press. All rights reserved. No part of this material may be reproduced in any form or medium without the permission of The University of Toronto Press.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
On the Definition of Political Economy; and on the Method of aInvestigation Proper to Ita
[Essay V in Essays on Some Unsettled Questions of Political Economy, 120-64. Reprinted from “On the Definition of Political Economy; and on the Method of Philosophical Investigation in that Science,” London and Westminster Review, IV and XXVI (Oct., 1836), 1-29. Original article identified in JSM’s bibliography as “An article headed ‘On the Definition of Political Economy, and on the method of philosophical investigation in that science’—running title ‘Political Economy, what—Nature and Methods of Political Philosophy.’ In the London and Westminster Review for October 1836 (No. 7 and 50) but written five years before, in the autumn of 1831. Rewritten in the summer of 1833” (MacMinn, 47).
In January, 1834, expressing gratitude at J.P. Nichol’s approbation of this essay, JSM asks him “to suggest all manner of further developments, clearer explanations and apter illustrations,” and goes on: “. . . I am ambitious that the essay, even if for that end it should remain unpublished for twenty years, should become classical and of authority . . .” (Earlier Letters, XII, 211). Nichol evidently suggested its publication in the London and Westminster (see ibid., 231). (See also the headnote, 230 above.)
The following text is that of 1844; in the variant notes (which derive from the version of 1836), “44” refers to the version in Some Unsettled Questions; “36” to that in the London and Westminster. Five of the variants derive also from JSM’s corrections in his copy of the article in the London and Westminster (see 313r-r, 314x-x, 328a-a, 330f-f, and 332p-p). In the 2nd edition of Some Unsettled Questions several typographical errors were introduced: “successfully” for “successively” (310.15), “definition” for “definitions” (311.10), “been previously been” for “previously been” (311.30), “and” for “and” (312.16), “Τέχυη” for “Τέχνη” (312.34), “of production” for “of the production” (314.25), and “experiments” for “experiments” (327.34).]
it might be imagined, on a superficial view of the nature and objects of definition, that the definition of a science would occupy the same place in the chronological which it commonly does in the didactic order. As a treatise bonb any science usually commences with an attempt to express, in a brief formula, what the science is, and wherein it differs from other sciences, so, it might be supposed, did the framing of such a formula naturally precede the successful cultivation of the sciencec .
This, however, is far from having been the case. The definition of a science has almost invariably not preceded, but followed, the creation of the science itself. Like the wall of a city, it has usually been erected, not to be a receptacle for such edifices as might afterwards spring up, but to circumscribe an aggregation already in existence. Mankind did not measure out the ground for intellectual cultivation before they began to plant it; they did not divide the field of human investigation into regular compartments dfirst, and thend begin to collect truths for the purpose of being etherein deposited; theye proceeded in a less systematic manner. As discoveries were gathered in, either one by one, or in groups resulting from the continued prosecution of some uniform course of inquiry, the truths which were successively brought into store cohered and became agglomerated according to their individual affinities. Without any intentional classification, the facts classed fthemselvesf . They became associated g in the mind, according to their general and obvious resemblances; and the aggregates thus formed, having to be frequently spoken of as aggregates, came to be denoted by a common name. Any body of truths which had thus acquired a collective denomination, was called a science. It was long before this fortuitous classification was felt not to be sufficiently precise. It was in a more advanced stage of the progress of knowledge that mankind became sensible of the advantage of ascertaining whether the facts which they had thus grouped together were distinguished from all other facts by any common properties, and what these were. The first attempts to answer this question were commonly very hunskilful, and the consequent definitions extremely imperfecth .
And, in truth, there is scarcely any investigation in the whole body of iai science requiring so high a degree of analysis and abstraction, as the inquiry, what the science itself is; in other words, what are the properties common to all the truths composing it, and distinguishing them from all other truths. Many persons, accordingly, who are profoundly conversant with the details of a science, would be very much at a loss to supply such a definition of the science itself as should not be liable to well-grounded logical objections. From this remark, we cannot except the authors of elementary scientific treatises. The definitions which those works furnish of the sciences, for the most part either do not fit them—some being too wide, some too narrow—or do not go deep enough into them, but define a science by its accidents, not its essentials; by some one of its properties which may, indeed, serve the purpose of a distinguishing mark, but which is of too little importance to have ever of itself led mankind to give the science a name and rank as a separate object of study.
The definition of a science must, indeed, be placed among that class of truths which Dugald Stewart had in view, when he observed that the first principles of all sciences belong to the philosophy of the human mind.[*] The observation is just; and the first principles of all sciences, including the definitions of them, have consequently participated hitherto in the vagueness and uncertainty which has pervaded that most difficult and unsettled of all branches of knowledge. If we open any book, even mathematics or natural philosophy, it is impossible not to be struck with the mistiness of what we find represented as preliminary and fundamental notions, and the very insufficient manner in which the propositions which are palmed upon us as first principles seem to be made out, contrasted with the lucidity of the explanations and the conclusiveness of the proofs as soon as the writer enters upon the details of his subject. Whence comes this anomaly? Why is the admitted certainty of the results of those sciences in no way prejudiced by the want of solidity in their premises? How happens it that a firm superstructure has been erected upon an unstable foundation? The solution of the paradox is, that what are called first principles, are, in truth, last principles. Instead of being the fixed point from whence the chain of proof which supports all the rest of the science hangs suspended, they are themselves the remotest link of the chain. Though presented as if all other truths were to be deduced from them, they are the truths which are last arrived at; the result of the last stage of generalization, or of the last and subtlest process of analysis, to which the particular truths of the science can be subjected; those particular truths having previously been ascertained by the evidence proper to their own nature.
Like other sciences, Political Economy has remained destitute of a definition framed on strictly logical principles, or even of, what is more easily to be had, a definition exactly co-extensive with the thing defined. This has not, perhaps, caused the real bounds of the science to be, in jthis country at leastj , practically mistaken or overpassed; but it has occasioned—perhaps we should rather say it is connected with—indefinite, and often erroneous, conceptions of the mode in which the science should be studied.
We proceed to verify these assertions by an examination of the most generally received definitions of the science.
1. First, as to the vulgar notion of the nature and object of Political Economy, we shall not be wide of the mark if we state it to be something to this effect:—That Political Economy is a science which teaches, or professes to teach, in what manner a nation may be made rich. This notion of what constitutes the science, is in some degree countenanced by the title and arrangement which Adam Smith gave to his invaluable work. A systematic treatise on Political Economy, he chose to call an Inquiry into the Nature and Causes of the Wealth of Nations; and the topics are introduced in an order suitable to that view of the purpose of his kbookk .
With respect to the definition in question, if definition it can be called which is not found in any set form of words, but left to be arrived at by a process of abstraction from a hundred current modes of speaking on the subject; it seems liable to the conclusive objection, that it confounds the essentially distinct, though closely connected, ideas of science and art. These two ideas differ from one another as the understanding differs from the will, or as the indicative mood in grammar differs from the imperative. The one deals in facts, the other in precepts. Science is a collection of truths; art, a body of rules, or directions for conduct. The language of science is, This is, or, This is not; This does, or does not, happen. The language of art is, Do this; Avoid that. Science takes cognizance of a phenomenon, and endeavours to discover its law; art proposes to itself an end, and looks out for means to effect it.
If, therefore, Political Economy be a science, it cannot be a collection of practical rules; though, unless it be altogether a useless science, practical rules must be capable of being founded upon it. The science of mechanics, a branch of natural philosophy, lays down the laws of motion, and the properties of what are called the mechanical powers. The art of practical mechanics teaches how we may avail ourselves of those laws and properties, to increase our command over external nature. An art would not be an art, unless it were founded upon a scientific knowledge of the properties of the subject-matter: without this, it lwould not bel philosophy, but empiricism; ἐμπειρία, not τέχνηm, in Plato’s sensem . n Rules, therefore, for making a nation increase in wealth, are not a science, but they are the results of science. Political Economy does not oof itselfo instruct how to make a nation rich; but whoever would be qualified to judge of the means of making a nation rich, must first be a political economist.
2. The definition most generally received among instructed ppersonsp , and q laid down in the commencement of most of the professed treatises on the subject, is to the following effect:—That Political Economy informs us of the laws which regulate the production, distribution, and consumption of wealth. To this definition is frequently appended a familiar illustration. Political Economy, it is said, is to the state, what domestic economy is to the family.
This definition is rfreer from the fault which we pointed out in the former one. It distinctly takes notice that Political Economy is a science and not an art; that it is conversant with laws of nature, not with maxims of conduct, and teaches us how things take place of themselves, not in what manner it is advisable for us to shape them, in order to attain some particular end.
s But though the definition is, with regard to this particular point, unobjectionable, so much can scarcely be said for the accompanying illustration; which rather sends back the mind to the current loose notion of Political Economy already disposed of. Political Economy is really, and is tstated in the definitiont to be, a science: but domestic economy, so far as it is capable of being reduced to principles, is an art. It consists of rules, or maxims of prudence, for keeping the family regularly supplied with what its wants require, and securing, with uanyu given amount of means, the greatest possible quantity of physical comfort and enjoyment. Undoubtedly the beneficial result, the great practical application of Political Economy, would be to accomplish for a nation something like what the most perfect domestic economy accomplishes for a single household: but supposing this purpose realised, there would be the same difference between the rules by which it might be effected, and Political Economy, which there is between the art of gunnery and the theory of projectiles, or between the rules of mathematical land-surveying and the science of trigonometry.
The definition, though not liable to the same objection as the illustration which is annexed to it, is itself far from unexceptionable. To neither of them, considered as standing at the head of a treatise, have we much to object. At a very early stage in the study of the science, anything more accurate would be useless, and therefore pedantic. In a merely initiatory definition, scientific precision is not required: the object is, to insinuate into the learner’s mind, it is scarcely material by what means, some general preconception vofv what are the uses of the pursuit, and what the series of topics through which he is about to travel. As a mere anticipation or wébauchew of a definition, intended to indicate to a learner as much as he is able to understand before he begins, of the nature of what is about to be taught to him, we do not quarrel with the received formula. But if it claims to be admitted as that complete xdefinitiox or boundary-line, which results from a thorough exploring of the whole extent of the subject, and is intended to mark the exact place of Political Economy among the sciences, its pretension cannot be allowed.
“The science of the laws which regulate the production, distribution, and consumption of wealth.” The term ywealthy is surrounded by a haze of floating and vapoury associations, which will let nothing that is seen through them be zshewnz distinctly. Let us supply its place by a periphrasis. Wealth is defined, all objects useful or agreeable to amankinda , except such as can be obtained in indefinite quantity without labour. Instead of ballb objects, some authorities say, all cmaterialc objects: the distinction is of no moment for dthed present purpose.
To confine ourselves to eproductione : If the laws of the production of all objects, or even of all fmaterialf objects, which are useful or agreeable to gmankindg , were comprised in Political Economy, it would be difficult to say where the science would end: at the least, all or nearly all physical knowledge would be included in it. Corn and cattle are material objects, in ha highh degree useful to imankindi . The laws of the production of the one include the principles of agriculture; the production of the other is the subject jofj the art of cattle-breeding, which, kin so far ask really an art, must be built upon the science of lphysiologyl . The laws of the production of manufactured articles involve the whole of chemistry and the whole of mechanics. The laws of the production of the wealth which is extracted from the bowels of the earth, cannot be set forth without taking in a large part of geology.
When a definition so manifestly surpasses in extent what it professes to define, we must suppose that it is not meant to be interpreted literally, though the limitations with which it is to be understood are not stated.
Perhaps it will be said, that Political Economy is conversant with such only of the laws of the production of wealth as are applicable to all kinds of wealth: those which relate to the details of particular trades or employments forming the subject of other and totally distinct sciences.
If, however, there were no more in the distinction between Political Economy and physical science than mthism , the distinction, we may venture to affirm, would never have been made. No similar division exists in any other department of knowledge. We do not break up zoology or mineralogy into two parts; one treating of the properties common to all animals, or to all minerals; another conversant with the properties peculiar to each particular species of animals or minerals. The reason is obvious; there is no distinction in kind between the general laws of animal or of mineral nature and the peculiar properties of particular species. There is as close an analogy between the general laws and the particular ones, as there is between one of the general laws and another: most commonly, indeed, the particular laws are but the complex result of a plurality of general laws modifying each other. A separation, therefore, between the general laws and the particular ones, merely because the former are general and the latter particular, would run counter both to the strongest motives of convenience and to the natural tendencies of the mind. If the case is different with the laws of the production of wealth, it must be becausen, in this case,n the general laws differ oin kindo from the particular ones. But if so, the difference pin kindp is the radical distinction, and we should find out what qthatq is, and found our definition upon it.
But, further, the recognised boundaries which separate the field of Political Economy from that of physical science, by no means correspond with the distinction between the truths which concern all kinds of wealth and those which relate only to some kinds. The three laws of motion, and the law of gravitation, are common, as far as human observation has yet extended, to all matter; and these, therefore, as being among the laws of the production of all wealth, should form part of Political Economy. There are hardly any of the processes of industry which do not partly depend upon the properties of the lever; but it would be a strange classification which included those properties among the truths of Political Economy. Again, the latter science has many inquiries altogether as special, and relating as exclusively to particular sorts of material objects, as any of the branches of physical science. The investigation of some of the circumstances which regulate the price of corn, has as little to do with the laws common to the production of all wealth, as any part of the knowledge of the agriculturist. The inquiry into the rent of mines or fisheries, or into the value of the precious metals, elicits truths which have immediate reference to the production solely of a peculiar kind of wealth; yet these are admitted to be correctly placed in the science of Political Economy.
The real distinction between Political Economy and physical science must be sought in something deeper than the nature of the subject-matter; which, indeed, is for the most part common to both. Political Economy, and the scientific grounds of all the useful arts, have in truth one and the same subject-matter; namely, the objects which conduce to man’s convenience and enjoyment: but they are, nevertheless, perfectly distinct branches of knowledge.
3. If we contemplate the whole field of human knowledge, attained or attainable, we find that it separates itself obviously, and as it were spontaneously, into two r divisions, which stand so strikingly in opposition and contradistinction to one another, that in all classifications of our knowledge they have been kept apart. These are, physical science, and moral or psychological science. The difference between these two departments of our knowledge does not reside in the subject-matter with which they are conversant: for although, of the simplest and most elementary parts of each, it may be said, with an approach to truth, that they are concerned with different subject-matters—namely, the one with the shuman minds , the other with all things whatever except the mind; this distinction does not hold between the higher regions of the two. Take the science of politics, for instance, or that of law: who will say that these are physical sciences? and yet is it not obvious that they are conversant fully as much with matter as with mind? Take, again, the theory of music, of painting, of any other of t the fine arts, and who will venture to pronounce that the facts they are conversant with belong either wholly to the class of matter, or wholly to that of mind?
The following seems to be the rationale of the distinction between physical and moral science.
In all the intercourse of man with nature, whether we consider him as acting uuponu it, or as receiving impressions vfromv it, the effect or phenomenon depends upon causes of two kinds: the properties of the object acting, and those of the object acted upon. Everything which can possibly happen in which man and external things, are jointly concerned, results from the joint operation of a law or laws of matter, and a law or laws of the human mind. Thus the production of corn by human labour is the result of a law of mind, and many laws of matter. The laws of matter are those properties of the soil and of vegetable life which cause the seed to germinate in the ground, and those properties of the human body which render food necessary to its support. The law of mind is, that man wdesiresw to possess subsistence, and consequently xwillsx the necessary means of procuring it.
Laws of mind and laws of matter are so dissimilar in their nature, that it would be contrary to all principles of rational arrangement to mix them up as part of the same study. In all scientific methods, therefore, they are placed apart. Any compound effect or phenomenon which depends both on the properties of matter and on those of mind, may thus become the subject of two completely distinct sciences, or branches of science; one, treating of the phenomenon in so far as it depends upon the laws of matter only; the other treating of it in so far as it depends upon the laws of mind.
The physical sciences are those which treat of the laws of matter, and of all complex phenomena in so far as dependent upon the laws of matter. The mental or moral sciences are those which treat of the laws of mind, and of all complex phenomena in so far as dependent upon the laws of mind.
Most of the moral sciences presuppose physical science; but few of the physical sciences presuppose moral science. yThe reason is obvious.y There are many phenomena (an earthquake, for example, zorz the motions of the planets) which depend upon the laws of matter exclusively; and have nothing whatever to do with the laws of mind. Many, therefore, of the physical sciences may be treated of without any reference to mind, and as if the mind existed as a recipient of knowledge only, not as a cause producing effects. But there are no phenomena which depend exclusively upon the laws of minda; even the phenomena of the mind itself being partially dependent upon the physiological laws of the bodya . All the mental sciences, therefore, bnot excepting the pure science of mindb , must take account of a great variety of physical truths; and (as physical science is commonly cand very properlyc studied first) may be said to presuppose them, taking up the complex phenomena where physical science leaves dthemd .
Now this, it will be found, is a precise statement of the relation in which Political Economy stands to the various sciences which are tributary to the arts of production.
The laws of the production of the objects which constitute wealth, are the subject-matter both of Political Economy and of almost all the physical sciences. Such, however, of those laws as are purely laws of emattere , belong to physical science, and to that exclusively. Such of them as are laws of the human fmindf , and no others, belong to Political Economy, which finally sums up the result of both combined.
Political Economy, therefore, presupposes all the physical sciences; it takes for granted all such of the truths of those sciences as are concerned in the production of the objects demanded by the wants of mankind; or at least it takes for granted that the physical part of the process takes place somehow. It then inquires what are the phenomena of mind which are concerned in the production and distribution* of those same objects; it borrows from the pure science of mind the laws of those phenomena, and inquires what effects follow from these mental laws, acting in concurrence with those physical ones.†
From the above considerations the following seems to come out as the correct and complete definition of Political Economy:—“The science which treats of the production and distribution of wealth, so far as they depend upon the laws of human nature.” Or thus—“The science relating to the moral or psychological laws of the production and distribution of wealth.”
For popular use this definition is amply sufficient, but it still falls short of the complete accuracy required for the purposes of the philosopher. Political Economy does not treat of the production and distribution of wealth in all states of mankind, but only in what is termed the social state; nor so far as they depend upon the laws of human nature, but only so far as they depend upon a certain portion of those laws. This, at least, is the view which must be taken of Political Economy, if we mean it to find any place in an encyclopedical division of the field of science. On any other view, it either is not g science at all, or it is several sciences. This will appear clearly, if, on the one hand, we take a general survey of the moral sciences, with a view to assign the exact place of Political Economy among them; while, on the other, we consider attentively the nature of the methods or processes by which the truths which are the object of those sciences are arrived at.
Man, who, considered as a being having a moral or mental nature, is the subject-matter of all the moral sciences, may, with reference to that part of his nature, form the subject of philosophical inquiry under several distinct hypotheses. We may inquire what belongs to man hconsidered individually, and ash if no human being existed besides himself; we may next consider him as coming into contact with other iindividualsi ; and finally, as living in a state of society, that is, forming part of a body or aggregation of human beings, systematically co-operating for common purposes. Of this last state, political government, or subjection to a common superior, is an ordinary ingredient, but forms no necessary part of the conception, and, with respect to our present purpose, needs not be further adverted to.
Those laws or properties of human nature which appertain to man as a mere individual, and do not presuppose, as a necessary condition, the existence of other individuals j(except, perhaps, as mere instruments or means)j , form a part of the subject of pure mental philosophy. They comprise all the laws of the mere intellect, and those of the purely self-regarding desires.
Those laws of human nature which relate to the feelings called forth in a human being by other kindividualk human or intelligent beings, las such;l namely, the affections, the conscience, or feeling of duty, and the love of approbation; and to the conduct of man, so far as it depends upon, or has relation to, these parts of his nature—form the subject of another portion of pure mental philosophy, namely, that portion of it on which morals, or ethics, are founded. For morality itself is not a science, but an art; not truths, but rules. The truths on which the rules are founded are drawn (as is the case in all arts) from a variety of sciences; but the principal of them, and those which are most nearly peculiar to mthism particular art, belong to a branch of the science of mind.
Finally, there are certain principles of human nature which are peculiarly connected with the ideas and feelings generated in man by living in a state of society, that is, by forming part of a union or aggregation of human beings for a common purpose or purposes. Few, indeed, of the elementary laws of the human mind are peculiar to this state, almost all being called into action in the two other states. But those simple laws of human nature, operating in that wider field, give rise to results of a sufficiently universal character, and even (when compared with the still more complex phenomena of which they are the determining causes) sufficiently simple, to admit of being called, though in a somewhat looser sense, laws of society, or laws of human nature in the social state. These laws, or general truths, form the subject of a branch of science which may be aptly designated from the title of social economy; somewhat less happily by that of speculative politics, or the science of politics, as contradistinguished from the art. This science stands in the same relation to the social, as anatomy and physiology to the physical body. It shows by what principles of his nature man is induced to enter into a state of society; how this nfeaturen in his position acts upon his interests and feelings, and through them upon his conduct; how the association tends progressively to become closer, and the co-operation extends itself to more and more purposes; what those purposes are, and what the varieties of means most generally adopted for furthering them; what are the various relations which establish themselves among ohuman beingso as the ordinary consequence of the social union; what those which are different in different states of society; pin what historical order those states tend to succeed one another;p and what are the effects of each upon the conduct and character of man.
This branch of science, whether we prefer to call it social economy, speculative politics, or the natural history of society, presupposes the whole science of the nature of the individual mind; since all the laws of which the latter science takes cognizance are brought into play in a state of society, and the truths of the social science are but statements of the manner in which those simple laws take effect in complicated circumstances. Pure mental philosophy, therefore, is an essential part, or preliminary, of political philosophy. The science of social economy embraces every part of man’s nature, in so far as influencing the conduct or condition of man in society; and therefore may it be termed speculative politics, as being the scientific foundation of qpracticalq politics, or the art of government, of which the art of legislation is a part.*
It is to this important division of the field of science that one of the writers who have most correctly conceived and copiously illustrated its nature and limits,—we mean M. Say,[*] —has chosen to give the name Political Economy. And, indeed, this large extension of the rsignificationr of that term is countenanced by its setymology.s But the words “political economy” have long ceased to have tso large at meaning. Every writer is entitled to use the words which are his tools in the manner which he judges most conducive to the general purposes of the exposition of truth; but he exercises this discretion under liability to criticism: and M. Say seems to have done in this instance, what should never be done without strong reasons; uto haveu altered the meaning of a name which was appropriated to a particular purpose (and for which, therefore, a substitute must be provided), in order to transfer it to an object for which it was easy to find a more characteristic denomination.
What is now commonly understood by the term “Political Economy” is not the science of speculative politics, but a branch of that science. It does not treat of the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end. It predicts only such of the phenomena of the social state as take place in consequence of the pursuit of wealth. It makes entire abstraction of every other human passion or motive; except those which may be regarded as perpetually antagonizing principles to the desire of wealth, namely, aversion to labour, and desire of the present enjoyment of costly indulgences. These it takes, to a certain extent, into its calculations, because these do not merely, like v other desires, occasionally conflict with the pursuit of wealth, but accompany it always as a drag, or impediment, and are therefore inseparably mixed up in the consideration of it. Political Economy considers mankind as occupied solely in acquiring and consuming wealth; and aims at showing what is the course of action into which mankind, living in a state of society, would be impelled, if that motive, except in the degree in which it is checked by the two perpetual counter-motives above adverted to, were absolute ruler of all their actions. Under the influence of this desire, it shows mankind accumulating wealth, and employing that wealth in the production of other wealth; sanctioning by mutual agreement the institution of property; establishing laws to prevent individuals from encroaching upon the property of others by force or fraud; adopting various contrivances for increasing the productiveness of their labour; settling the division of the produce by agreement, under the influence of competition (competition itself being governed by certain laws, which laws are therefore the ultimate regulators of the division of the produce); and employing certain expedients (as money, credit, &c.) to facilitate the distribution. All these operations, though many of them are really the result of a plurality of motives, are considered by Political Economy as flowing solely from the desire of wealth. The science then proceeds to investigate the laws which govern these several operations, under the supposition that man is a being who is determined, by the necessity of his nature, to prefer a greater portion of wealth to a smaller in all cases, without any other exception than that constituted by the two counter-motives already specified. Not that any political economist was ever so absurd as to suppose that mankind are really thus constituted, but because this is the mode in which science must necessarily proceed. When an effect depends upon a concurrence of causes, those causes must be studied one at a time, and their laws separately investigated, if we wish, through the causes, to obtain the power of either predicting or controlling the effect; since the law of the effect is compounded of the laws of all the causes which determine it. The law of the centripetal and that of the wtangentialw force must have been known before the motions of the earth and planets could be explained, or many of them predicted. The same is the case with the conduct of man in society. In order to judge how he will act under the variety of desires and aversions which are concurrently operating upon him, we must know how he would act under the exclusive influence of each one in particular. There is, perhaps, no action of a man’s life in which he is neither under the immediate nor under the remote influence of any impulse but the mere desire of wealth. xWith respect to thosex parts of human conduct of which wealth is not even the principal object, y to these Political Economy does not pretend that its conclusions are applicable. But there are also certain departments of human affairs, in which the acquisition of wealth is the main and acknowledged end. It is only of these that Political Economy takes notice. The manner in which it necessarily proceeds is that of treating the main and acknowledged end as if it were the sole end; which, of all hypotheses equally simple, is the nearest to the truth. The political economist inquires, what are the actions which would be produced by this desire, if, within the departments in question, it were unimpeded by any other. In this way a nearer approximation is obtained than would otherwise be practicable, to the real order of human affairs in those departments. This approximation zisz then to be corrected by making proper allowance for the effects of any impulses of a different description, which can be shown to interfere with the result in any particular case. Only in a few of the most striking cases (such as athea important one of the principle of population) are these corrections interpolated into the expositions of Political Economy itself; the strictness of purely scientific arrangement being thereby somewhat departed from, for the sake of practical utility. So far as it is known, or may be presumed, that the conduct of bmankindb in the pursuit of wealth is under the collateral influence of any other of the properties of our nature than the desire of obtaining the greatest quantity of wealth with the least labour and self-denial, the conclusions of Political Economy will so far fail of being applicable to the explanation or prediction of real events, until they are modified by a correct allowance for the degree of influence exercised by the other cause.
Political Economy, then, may be defined as follows; and the definition seems to be complete:—
“The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.”
But while this is a correct definition of Political Economy as a portion of the field of science, the didactic writer on the subject will naturally combine in his exposition, with the truths of the pure science, as many of the practical modifications as will, in his estimation, cbe most conducive toc the usefulness of his work.
The above attempt to frame a stricter definition of the science than what are commonly received as such, may be thought to be of little use; or, at best, to be chiefly useful in a general survey and classification of the sciences, rather than as conducing to the more successful pursuit of the particular science in question. We think otherwise, and for this reason; that, with the consideration of the definition of a science, is inseparably connected that of the philosophic method of the science; the nature of the process by which its investigations are to be carried on, its truths to be arrived at.
Now, in whatever science there are systematic differences of opinion—which is as much as to say, in all the moral or mental sciences, and in Political Economy among the rest; in whatever science there exist, among those who have attended to the subject, what are commonly called ddifferences of principled , as distinguished from differences of matter-of-fact or detail,—the cause will be found to be, a difference in their conceptions of the ephilosophic methode of the science. The parties who differ are guided, either knowingly or unconsciously, by different views concerning the nature of the evidence appropriate to the subject. They differ not solely in what they believe themselves to see, but in the quarter fwhencef they obtained the light by which they think they see it.
The most universal of the forms in which this difference of method is accustomed to present itself, is the ancient feud between what is called gtheory,g and what is called hpractice or experienceh . There arei, on social and political questions, two kinds of reasoners: there is one portion whoi term themselves practical men, and call the others theorists; a title which the latter do not reject, though they by no means recognise it as peculiar to them. The distinction between the two is a very broad one, though it is one of which the language employed is a most incorrect exponent. It has been again and again demonstrated, that those who are accused of despising facts and disregarding experience build and profess to build wholly upon facts and experience; while those who disavow theory cannot make one step without theorizing. But, although both classes of inquirers do nothing but theorize, and both of them consult no other guide than experience, there is this difference between them, and a most important difference it is: that those who are called practical men require specific experience, and argue wholly upwards from particular facts to a general conclusion; while those who are called theorists aim at embracing a wider field of experience, and, having argued upwards from particular facts to a general principle including a much wider range than that of the question under discussion, then argue downwards from that general principle to a variety of specific conclusions.
Suppose, for example, that the question were, whether absolute kings were likely to employ the powers of government for the welfare or for the oppression of their subjects. The practicals would endeavour to determine this question by a direct induction from the conduct of particular despotic monarchs, as testified j by history. The theorists would refer the question to be decided by the test not solely of our experience of kings, but of our experience of kmenk . They would contend that an observation of the tendencies which human nature has manifested in the variety of situations in which human beings have been placed, and especially observation of what passes in our own lmindsl , warrants us in inferring that a human being in the situation of a despotic king will make a bad use of power; and that this conclusion would lose nothing of its certainty even if absolute kings had never existed, or if history furnished us with no information of the manner in which they had conducted themselves.
The first of these methods is a method of induction, merely; the last a mixed method of induction and ratiocination. The first may be called the method à posteriori; the latter, the method à priori. We are aware that this last expression is sometimes used to characterize a supposed mode of philosophizing, which does not profess to be founded upon experience at all. But we are not acquainted with manym mode of philosophizingn, on political subjects at least, to which such a description is fairly applicablen . By the method à posteriori we mean that which requires, as the basis of its conclusions, not oexperienceo merely, but pspecificp experience. By the method à priori we mean (what has commonly been meant) reasoning from an assumed hypothesis; which is not a practice confined to mathematics, but is of the essence of all science which admits of general reasoning at all. To verify the hypothesis itself à posteriori, that is, to examine whether the facts of any actual case are in accordance with it, is no part of the business of science at all, but of the application of science.
In the definition which we have attempted to frame of the science of Political Economy, we have characterized it as essentially an abstract science, and its method as the method à priori. Such is undoubtedly its character as it has been understood and taught by all its most distinguished teachers. It reasons, and, as we contend, must necessarily reason, from assumptions, not from facts. It is built upon hypotheses, strictly analogous to qthoseq which, under the name of definitions, are the foundation of the other abstract sciences. Geometry presupposes an arbitrary definition of a line, “that which has length but not breadth.” Just in the same manner does Political Economy presuppose an arbitrary definition of man, as a being who invariably does that by which he may obtain the greatest amount of necessaries, conveniences, and luxuries, with the smallest quantity of labour and physical self-denial with which they can be obtained in the existing state of knowledge. It is true that this definition of man is not formally prefixed to any work on Political Economy, as the definition of a line is prefixed to Euclid’s Elements; and in proportion as by being so prefixed it would be less in danger of being forgotten, we may see ground for regret that this is not done. It is proper that what is assumed in every particular case, should once for all be brought before the mind in its full extent, by being somewhere formally stated as a general maxim. Now, no one who is conversant with systematic treatises on Political Economy will question, that whenever a political economist has shown that, by acting in a particular manner, a labourer may obviously obtain higher wages, a capitalist larger profits, or a landlord higher rent, he concludes, as a matter of course, that they will certainly act in that manner. Political Economy, therefore, reasons from assumed premises—from premises which rmightr be totally without foundation in fact, and which are not pretended to be universally in accordance with it. The conclusions of Political Economy, sconsequentlys , like those of geometry, are only 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 to the whole class of cases under consideration—are taken into the account.
This ought not to be denied by the political economist. If he deny it, then, and then only, he places himself in the wrong. The à priori method which is laid to his charge, as if his employment of it proved his whole science to be worthless, is, as we shall presently show, the only method by which truth can possibly be attained in tany department of the social sciencet . All that is requisite is, that he be on his guard not to ascribe to conclusions which are grounded upon an hypothesis a different kind of certainty from that which really belongs to them. They would be true without qualification, only in a case which is purely imaginary. In proportion as the actual facts recede from the hypothesis, he must allow a corresponding deviation from the strict letter of his conclusion; otherwise it will be true only of things such as he has arbitrarily supposed, not of such things as really exist. That which is true in the abstract, is always true in the concrete with proper allowances. When a certain cause really exists, and if left to itself would infallibly produce a certain effect, that same effect, modified by all the other concurrent causes, will correctly correspond to the result really produced.
The conclusions of geometry are not strictly true of such lines, angles, and figures, as human hands can construct. But no one, therefore, contends that the conclusions of geometry are of no utility, or that it would be better to ushut up Euclid’s Elementsu , and content ourselves with “practice” and “experience.”
No mathematician ever thought that his definition of a line corresponded to an actual line. As little did any political economist ever imagine that real men had no object of desire but wealth, or none which would not give way to the slightest motive of a pecuniary kind. But they were justified in assuming this, for the purposes of their argument; because they had to do only with those parts of human conduct which have pecuniary advantage for their direct and principal object; and because, as no two individual cases are exactly alike, no general maxims could ever be laid down unless some of the circumstances of the particular case were left out of consideration.
But we go vfartherv than to affirm that the method à priori is a legitimate wmodew of philosophical investigation in the moral sciences: we contend that it is the xonlyx mode. We affirm that the method à posteriori, or that of specific experience, is altogether inefficacious in those sciences, as a means of arriving at any considerable body of valuable truth; though it admits of being usefully applied in aid of the method à priori, and even forms an indispensable supplement to it.
There is a property common to almost all the moral sciences, and by which they are distinguished from ymanyy of the physical; this is, that it is seldom in our power to make experiments in them. In chemistry and natural philosophy, we can not only observe what happens under all the combinations of circumstances which nature brings together, but we may also try an indefinite number of new combinations. This we can seldom do in ethical, and scarcely ever in political zsciencez . We cannot try forms of government and systems of national policy on a diminutive scale in our laboratories, shaping our experiments as we think they may most conduce to the advancement of knowledge. We therefore study nature under circumstances of great disadvantage in these sciences; being confined to the limited number of experiments which take place (if we may so speak) of their own accord, without any preparation or management of ours; in circumstances, moreover, of great complexity, and never perfectly known to us; and with the far greater part of the processes concealed from our observation.
The consequence of this unavoidable defect in the materials of the induction is, that we can rarely obtain what Bacon has quaintly, but, not unaptly, termed an experimentum crucis.
In any science which admits of an unlimited range of arbitrary experiments, an experimentum crucis may always be obtained. Being able to vary all the circumstances, we can always take effectual means of ascertaining which of them are, and which are not, material. Call the effect B, and let the question be whether the cause A in any way contributes to it. We try an experiment in which all the surrounding circumstances are altered, except A alone: if the effect B is nevertheless produced, A is the cause of it. Or, instead of leaving A, and changing the other circumstances, we leave all the other circumstances and change A: if the effect B in that case does not take place, then again A is a necessary condition of its existence. Either of these experiments, if accurately performed, is an experimentum crucis; it converts the presumption we had before of the existence of a connection between A and B into proof, by negativing every other hypothesis which would account for the appearances.
But this can seldom be done in the moral sciences, owing to the immense multitude of the influencing circumstances, and our very scanty means of varying the experiment. Even in operating upon an individual mind, which is the case affording greatest room for experimenting, we cannot often obtain a crucial experiment. The effect, for example, of a particular circumstance in education, upon the formation of character, may be tried in a variety of cases, but we can hardly ever be certain that any two of those cases differ in all their circumstances except the solitary one of which we wish to estimate the influence. In how much greater a degree must this difficulty exist in the affairs of states, where even the number of arecordeda experiments is so scanty in comparison with the variety and multitude of the circumstances concerned in each. How, for example, can we obtain a crucial experiment on the effect of a restrictive commercial policy upon national wealth? We must find two nations alike in every other respect, or at least possessed, in a degree exactly equal, of everything which conduces to national opulence, and adopting exactly the same policy in all their other affairs, but differing in this only, that one of them adopts a system of commercial restrictions, and the other badoptsb free trade. This would be a decisive experiment, similar to those which we can almost always obtain in experimental physics. Doubtless this would be the most conclusive evidence of all if we could get it. But let any one consider how infinitely numerous and various are the circumstances which either directly or indirectly do or may influence the amount of the national wealth, and then ask himself what are the probabilities that in the longest revolution of ages two nations will be found, which agree, and can be shown to agree, in all those circumstances except one?
Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of “abstract speculation.”
Although sufficiently ample grounds are not afforded in the field of politics, for a satisfactory induction by a comparison of the effects, the causes may, in all cases, be made the subject of specific experiment. These causes are, laws of human nature, and external circumstances capable of exciting the human will to action. The desires of man, and the nature of the conduct to which they prompt him, are within the reach of our observation. We can also observe what are the objects which excite those desires. The materials of this knowledge every one can principally collect within himself; with reasonable consideration of the differences, of which experience discloses to him the existence, between himself and other people. Knowing therefore accurately the properties of the substances concerned, we may reason with as cmuchc certainty as in the most demonstrative parts of physics from any assumed set of circumstances. This will be mere trifling if the assumed circumstances bear no sort of resemblance to any real ones; but if the assumption is correct as far as it goes, and differs from the truth no otherwise than as a part differs from the whole, then the conclusions which are correctly deduced from the assumption constitute abstract truth; and when completed by adding or subtracting the effect of the non-calculated circumstances, they are true in the concrete, and may be applied to practice.
Of this character is the science of Political Economy in the writings of its best teachers. To render it perfect as an abstract science, the combinations of circumstances which it assumes, in order to trace their effects, should embody all the circumstances that are common to all cases whatever, and likewise all the circumstances that are common to any important dclassd of cases. The conclusions correctly deduced from these assumptions, would be as true in the abstract as those of mathematics; and would be as near an approximation as abstract truth can ever be, to truth in the concrete.
When the principles of Political Economy are to be applied to a particular case, then it is necessary to take into account all the individual circumstances of that case; not only examining to which of the sets of circumstances contemplated by the abstract science the circumstances of the case in question correspond, but likewise what other circumstances may exist in that case, which not being common to it with any large and strongly-marked class of cases, have not fallen under the cognizance of the science. These circumstances have been called disturbing causese. And here onlye it is that an element of uncertainty enters into the process—an uncertainty inherent in the nature of these complex phenomena, and arising from the impossibility of being quite sure that all the circumstances of the particular case are known to us sufficiently in detail, and that our attention is not unduly diverted from any of them.
This constitutes the only uncertainty of Political Economy; and not of it alone, but of the moral sciences in general. When the disturbing causes are known, the allowance necessary to be made for them detracts in no way from scientific precision, nor constitutes any deviation from the à priori method. The disturbing causes are not handed over to be dealt with by mere conjecture. Like friction in mechanics, to which they have been often compared, they may at first have been considered merely as a nonassignable deduction to be made by guess from the result given by the general principles of science; but in time many of them are brought within the pale of the abstract science itself, and their effect is found to admit of as accurate an estimation as those more striking effects which they modify. The disturbing causes have their laws, as the causes which are thereby disturbed have theirs; and from the laws of the disturbing causes, the nature and amount of the disturbance may be predicted à priori, like the operation of the fmore generalf laws which they are said to modify or disturb, but with which they might more properly be said to be concurrent. The effect of the gspecialg causes is then to be added to, or subtracted from, the effect of the general ones.
These disturbing causes are sometimes circumstances which operate upon human conduct through the same principle of human nature with which Political Economy is conversant, namely, the desire of wealth, but which are not general enough to be taken into account in the abstract science. Of disturbances of this description every political economist can produce many examples. In other instances the disturbing cause is some other law of human nature. In the latter case it never can fall within the province of Political Economy; it belongs to some other science; and here the mere political economist, he who has studied no science but Political Economy, if he attempt to apply his science to practice, will fail.*
As for the other kind of disturbing causes, namely those which operate through the same law of human nature out of which the general principles of the science arise, these might always be brought within the pale of the abstract science if it were worth while; and when we make the necessary allowances for them in practice, if we are doing anything but guess, we are following out the method of the abstract science into minuter details; inserting among its hypotheses a fresh and still more complex combination of circumstances, and so adding pro hâc viceh a supplementary chapter or appendix, or at least a supplementary itheoremi , to the abstract science.
Having now shown that the method à priori in Political Economy, and in all the other branches of moral science, is the only certain or scientific mode of investigation, and that the à posteriori method, or that of specific experience, as a means of arriving at truth, is inapplicable to these subjects, we shall j be able to show that the latter method is notwithstanding of great value in the moral sciences; namely, not as a means of discovering truth, but of verifying it, and reducing to the lowest point that uncertainty before alluded to as arising from the complexity of every particular case, and from the difficulty (not to say impossibility) of our being assured à priori that we have taken into account all the material circumstances.
If we could be quite certain that we kknewk all the facts of the particular case, we could derive llittlel additional advantage from specific experience. The causes being given, we mmaym know what will be their effect, without an actual trial of every possible combination; since the causes are human feelings, and outward circumstances fitted to excite them: and, as these for the most part are, or at least might be, familiar to us, we can more surely judge of their combined effect from that familiarity, than from any evidence which can be elicited from the complicated and entangled circumstances of an actual experiment. If the knowledge what are the particular causes operating in any given instance were revealed to us by infallible authority, then, if our abstract science were perfect, we should become prophets. But the causes are not so revealed: they are to be collected by observation; and observation in circumstances of complexity is apt to be imperfect. Some of the causes may lie nbeyondn observation; many are apt to escape it, unless we are on the look-out for them; and it is only the habit of long and accurate observation which can give us so correct a preconception what causes we are likely to find, as shall induce us to look for them in the right quarter. But such is the nature of the human understanding, that the very fact of attending with intensity to one part of a thing, has a tendency to withdraw the attention from the other parts. We are consequently in great danger of adverting to a portion only of the causes which are actually at work. And if we are in this predicament, the more accurate our deductions and the more certain our conclusions oin the abstract,o (that is, making abstraction of all circumstances except those which form part of pthep hypothesis,) the less we are likely to suspect that we are in error: for no one can have looked closely into the sources of fallacious thinking without being deeply conscious that the coherence, and neat concatenation of our philosophical systems, is more apt than we are commonly aware to pass with us as evidence of their truth.
We cannot, therefore, too carefully endeavour to verify our theory, by comparing, in the particular cases to which we have access, the results which it would have led us to predict, with the most trustworthy accounts we can obtain of those which have been actually realized. The discrepancy between our anticipations and the actual fact is often the only circumstance which would have drawn our attention to some important qdisturbing causeq which we had overlooked. Nay, it often discloses to us errors in thought, still more serious than the omission of what can with any propriety be termed a disturbing cause. It often reveals to us that the basis itself of our whole argument is insufficient; that the data, from which we had reasoned, comprise only a part, and not ralwaysr the most important part, of the circumstances by which the result is really determined. Such oversights are committed by very good reasoners, and even by a still rarer class, that of good observers. It is a kind of error to which those are peculiarly liable whose views are the largest and most philosophical: for exactly in that ratio are their minds more accustomed to dwell upon those laws, qualities, and tendencies, which are common to large classes of cases, and which belong to all place and all time; while it often happens that circumstances almost peculiar to the particular case or era have a far greater share in governing that one case.
Although, therefore, a philosopher be convinced that no general truths can be attained in the affairs of nations by the à posteriori road, it does not the less behove him, according to the measure of his opportunities, to sift and scrutinize the details of every specific experiment. Without this, he may be an excellent professor of abstract science; for a person may be of great use who points out correctly what effects will follow from certain combinations of possible circumstances, in whatever tract of the extensive region of hypothetical cases those combinations may be found. He stands in the same relation to the legislator, as the smeres geographer to the practical navigator; telling him the latitude and longitude of all sorts of places, but not how to find whereabouts he himself is sailing. If, however, he does no more than this, he must rest contented to take no share in practical politics; to have no opinion, or to hold it with extreme modesty, on the applications which should be made of his doctrines to existing circumstances.
No one who tattempts to lay down propositions for the guidancet of mankind, however perfect his scientific acquirements, can dispense with a practical knowledge of the actual modes in which the affairs of the world are carried on, and an extensive personal experience of the actual ideas, feelings, and intellectual and moral tendencies of his own country and of his own age. The true practical statesman is he who combines this experience with a profound knowledge of abstract political philosophy. Either acquirement, without the other, leaves him lame and impotent if he is sensible of the deficiency; renders him obstinate and presumptuous if, as is more probable, he is entirely unconscious of it.u
Such, then, are the respective offices and uses of the à priori and the à posteriori methods—the method of abstract science, and that of specific experiment—as well in Political Economy, as in all the other branches of social philosophy. Truth compels us to express our conviction that whether among those who have written on these subjects, or among those for whose use they wrote, vfew can be pointed out who havev allowed to each of these methods its just value, and systematically kept each to its proper objects and functions. One of the wpeculiaritiesw of modern times, the separation of theory from practice—of the studies of the closet from the outward business of the world— x has given a wrong bias to the ideas and feelings both of the ystudenty and of the man of business. Each undervalues that part of the materials of thought with which he is not familiar. The one despises all comprehensive views, the other neglects details. The one draws his notion of the universe from the few objects zwith which his course of life has happened to render him familiarz ; the other having got demonstration on his side, and forgetting that it is only a demonstration nisi—a proof at all times liable to be set aside by the addition of a single new fact to the hypothesis—adenies,a instead of examining and sifting, the allegations which are opposed to him. For this he has considerable excuse in the b worthlessness of the testimony on which the facts brought forward to invalidate the conclusions of theory usually rest. In these complex matters, men see with their preconceived opinions, not with their eyes: an interested or a passionate man’s statistics are cofc little worth; and a year seldom passes without examples of the astounding falsehoods which large bodies of respectable men will back each other in publishing to the world as facts within their personal knowledge. It is not because a thing is asserted to be true, but because in its nature it may be true, that a sincere and patient inquirer will feel himself called upon to investigate it. He will use the assertions of opponents not as evidence, but indications leading to evidence; suggestions of the most proper course for his own inquiries.
But while the philosopher and the practical man bandy half-truths with one another, we dmay seek far without finding oned who, placed on a higher eminence of thought, comprehends as a whole what they see only in separate parts; who can make the anticipations of the philosopher guide the observation of the practical man, and the specific experience of the practical man warn the philosopher where something is to be added to his theory.
The most memorable example in modern times of a man who united the spirit of philosophy with the pursuits of active life, and kept wholly clear from the partialities and prejudices both of the student and of the practical statesman, was Turgote; thee wonder not only of his age, but of f history, for his astonishing combination of the most opposite, and, judging from common experience, almost incompatible excellences.
Though it is impossible to furnish any test by which a speculative thinker, either in Political Economy or ging any other branch of social philosophy, may know that he is competent to judge of the application of his principles to the existing condition of his own or any other country, indications may be suggested by the absence of which he may well and surely know that he is hnoth competent. His knowledge must at least enable him to explain and account for what is, or he is an insufficient judge of what ought to be. If a political economist, for instance, finds himself puzzled by any recent or present commercial phenomena; if there is any mystery to him in the late or present state of the productive industry of the country, which his knowledge of principle does not enable him to unriddle; he may be sure that something is wanting to render his system of opinions a safe guide in existing circumstances. Either some of the facts which influence the situation of the country and the course of events are not known to him; or, knowing them, he knows not what ought to be their effects. In the latter case his system is imperfect even as an abstract system; it does not enable him to trace correctly all the consequences even of assumed premises. Though he succeed in throwing doubts upon the reality of some of the phenomena which he is required to explain, his task is not yet completed; even then he is called upon to show how the belief, which he deems unfounded, arose; and what is the real nature of the appearances which gave a colour of probability to allegations which examination proves to be untrue.
When the speculative politician has gone through this labour—has gone through it conscientiously, not with the desire of ifindingi his system complete, but of making it so—he may deem himself qualified to apply his principles to the guidance of practice: but he must still continue to exercise the same discipline upon every new combination of facts as it arises; he must make a large allowance for the disturbing influence of unforeseen causes, and must carefully watch the result of every experiment, in order that any residuum of facts which his principles did not lead him to expect, and do not enable him to explain, may become the subject of a fresh analysis, and furnish the occasion for a consequent enlargement or correction of his general views.
The method of the practical philosopher consists, therefore, of two processes; the one analytical, the other synthetical. He must analyze the existing state of society into its elements, not dropping and losing any of them by the way. After referring to the experience of individual man to learn the law of each of these elements, that is, to learn what are its natural effects, and how much of the effect follows from so much of the cause when not counteracted by any other cause, there remains an operation of synthesis; to put all these effects together, and, from what they are separately, to collect what would be the effect of all the causes acting at once. If these various operations could be correctly performed, the result would be jprophecyj ; but, as they can be performed only with a certain kapproximationk to correctness, mankind can never predict with absolute certainty, but only with a less or greater degree of probability; according as they are better or worse apprised what the causes are,—have learnt with more or less accuracy from experience the law to which each of those causes, when acting separately, conforms,—and have summed up the aggregate effect more or less carefully.
With all the precautions which lhave beenl indicated there will still be some danger of falling into partial views; but we shall at least have taken the best securities against it. All that we can do more, is to endeavour to be impartial critics of our own theories, and to free ourselves, as far as we are able, from that reluctance from which few inquirers are altogether exempt, to admit the reality or relevancy of any facts which they have not previously either taken into, or left a place open for in, their systems.
If indeed every phenomenon was generally the effect of no more than one cause, a knowledge of the law of that cause would, unless there was a logical error in our reasoning, enable us confidently to predict all the circumstances of the phenomenon. We might then, if we had carefully examined our premises and our reasoning, and found no flaw, venture to disbelieve the testimony which might be brought to show that matters had turned out differently from what we should have predicted. m If the causes of erroneous conclusions were always npatentn on the face of the reasonings which lead to them, the human understanding would be a far more trustworthy instrument than it is. But the narrowest examination of the process itself will help us little towards discovering that we have omitted part of the premises which we ought to have taken into our reasoning. Effects are commonly determined by a concurrence of causes. If we have overlooked any one cause, we may reason justly from all the others, and only be the further wrong. Our premises will be true, and our reasoning correct, and yet the result of no value in the particular case. There is, therefore, almost always room for a modest doubt as to our practical conclusions. Against false premises and unsound reasoning, a good mental discipline may effectually secure us; but against the danger of overlooking something, neither strength of understanding nor intellectual cultivation can be more than a very imperfect protection. A person may be warranted in feeling confident, that whatever he has carefully contemplated with his mind’s eye he has seen correctly; but no one can be sure that there is not something in existence which he has not seen at all. He can do no more than satisfy himself that he has seen all that is visible to any other persons who have concerned themselves with the subject. For this purpose he must endeavour to place himself at otheiro point of view, and strive earnestly to see the object as they see it; nor give up the attempt until he has either added the appearance which is floating before them to his own stock of realities, or made out clearly that it is an optical deception.
The pprinciplesp which we have now stated are by no means alien to common apprehension: they are not absolutely hidden, perhaps, from any one, but are commonly seen through a mist. We might have presented the latter part of them in a phraseology in which they would have seemed the most familiar of truisms: we might have cautioned inquirers against too extensive generalization, and reminded them that there are exceptions to all rules. Such is the current language of those who distrust comprehensive thinking, without having any clear notion why or where it ought to be distrusted. We have avoided the use of these expressions purposely, because we deem them superficial and inaccurate. The error, when there is error, does not arise from generalizing too extensively; that is, from including too wide a range of particular cases in a single proposition. Doubtless, a man often asserts of an entire class what is only true of a part of it; but his error generally consists not in making qtoo wideq an assertion, but in making the wrong kind of assertion: he predicated an actual result, when he should only have predicated a tendency to that result—a power acting with a certain intensity in that direction. With regard to exceptions; in rany tolerably advancedr science there is properly no such thing as an exception. What is thought to be an exception to a principle is always some other and distinct principle cutting into the former: some other force which impinges against the first force, and deflects it from its direction. There are not a law and an exception to that law—the law acting in ninety-nine cases, and the exception in one. There are stwos laws, each possibly acting in the whole hundred cases, and bringing about a common effect by their tconjunctt operation. If the force which, being the less conspicuous of the two, is called the udisturbingu force, prevails sufficiently over the other force in some one case, to constitute that case what is commonly called an vexceptionv , the same disturbing force probably acts as a modifying cause in many other cases which no one will call exceptions.
Thus if it were stated to be a law of nature, that all heavy bodies fall to the ground, it would probably be said that the resistance of the atmosphere, which prevents a balloon from falling, constitutes the balloon an wexceptionw to that pretended law of nature. But the real law is, that all heavy bodies tend to fall; and x to this there is no exception, not even the sun and moon; for even they, as every astronomer knows, tend towards the earth, with a force exactly equal to that with which the earth tends towards them. The resistance of the atmosphere might, in the particular case of the balloon, from a misapprehension of what the law of gravitation is, be said to prevail over the law; but its disturbing effect is quite as real in every other case, since though it does not yprevent, it retardsy the fall of all bodies whatever. The rule, and the so-called exception, do not divide the cases between them; each of them is a comprehensive rule extending to all cases. To call one of these concurrent principles an exception to the other, is superficial, and contrary to the correct principles of nomenclature and arrangement. An effect of precisely the same kind, and arising from the same cause, ought not to be placed in two different categories, merely as there does or does not exist another cause preponderating over it.
It is only in zartz , as distinguished from science, that we can with propriety speak of exceptions. Art, the immediate end of which is practice, has nothing to do with causes, except as the means of bringing about effects. However heterogeneous the causes, it carries the effects of them all into one single reckoning, and according as the sum-total is plus or minus, according as it falls above or below a certain line, Art says, Do this, or Abstain from doing it. The exception does not a run by insensible degrees into the rule, like what are called exceptions in science. In a question of practice it frequently happens that a certain thing is either fit to be done, or fit to be altogether abstained from, there being no medium. If, in the majority of cases, it is fit to be done, bthatb is made the rule. When a case subsequently occurs in which the thing ought not to be done, an entirely new leaf is turned over; the rule is now done with, and dismissed: a new train of ideas is introduced, between which and those involved in the rule there is a broad line of demarcation; as broad and tranchant as the difference between Ay and No. Very cpossibly,c between the last case which comes within the rule and the first of the exception, there is only the difference of a shade: but that shade probably makes the whole interval between acting in one way and in a totally different one. We may, therefore, in talking of art, unobjectionably speak of the rule and the exception; meaning by the rule, the cases in which there exists a preponderance, however slight, of inducements for acting in a particular way; and by the exception, the cases in which the preponderance is on the contrary side.
THE CURRENCY QUESTION
Westminster Review, XLI (June, 1844), 579-98. Signed “A”; not republished. Original heading: “Art. XI.—1. An Inquiry into the Currency Principle; the Connexion of the Currency with Prices, and the Expediency of a Separation of Issue from Banking. By Thomas Tooke, Esq., F.R.S. [London:] Longman, [Brown, Green, and Longmans,] 1844. 2. An Inquiry into the Practical Working of the Proposed Arrangements for the Renewal of the Charter of the Bank of England, and the Regulation of the Currency. With a Refutation of the Fallacies advanced by Mr. Tooke. By R. Torrens, Esq., F.R.S. [London:] Smith, Elder, and Co., 1844.” Running head: “The Currency Question.” Identified in JSM’s bibliography as “An article headed ‘The Currency Question’ being a review of pamphlets by Tooke and Torrens on currency, in the Westminster Review for June 1844. (No. 2)” (MacMinn, 57). No corrections or variants in Somerville College copy.
The Currency Question
mr. tooke is known to all who are conversant with the discussions of the last twenty-five years on commercial topics, as an authority, on all such subjects, of the highest order. Beyond, perhaps, any other man, he brings to the consideration of mercantile phenomena an intimate practical knowledge of the elements upon which they depend, combined with habits of reflecting, or, to give the operation its proper name, of theorizing, which qualify him to discriminate and analyse the influences of those various elements. Owing to this union of qualifications, those who are interested in such inquiries have found in his various publications (and particularly in the “History of Prices,”[*] which is a summary of them all) a scientific explanation of those complex and apparently anomalous phenomena of prices, which the commercial history of the last half century presents in so great abundance, and which, until shown by him to be exemplifications of those very principles and laws with which they seemed to conflict, were perplexing even to those who best understood the subject, and often dangerously misleading to those who did not. The opinions, therefore, of Mr. Tooke upon the questions raised by the new ministerial scheme for the reform of the currency are entitled to an attentive, and, from all who are capable of appreciating what he has previously written, a respectful hearing.*
In the first of the pamphlets[†] named at the commencement of this article, Mr. Tooke has taken the field against the system of doctrines on which the ministerial measure is founded, and which derives its commonest designation from the names of two of its most distinguished supporters—Mr. Jones Loyd and Mr. Norman.[*] To represent the other side of the dispute, we have prefixed the latest pamphlet of the indefatigable Colonel Torrens, who was, we believe, the first promulgator of the theory in question, and who has come forward as its champion against “the fallacies advanced by Mr. Tooke.”[†]
For any influence which further discussion can have upon the decision of parliament, it is evidently useless. Parliament has made up its mind. The measure of Sir R. Peel[‡] has been received with approbation by nearly all, in parliament and the press, by whom any opinion has been expressed on it; and with acquiescence, if not satisfaction, by the public. There is not the smallest chance of its undergoing material alteration in its way through either house. That the attention, therefore, of thinkers should be directed to the views contained in Mr. Tooke’s pamphlet, is of importance rather as a matter of abstract discussion, essential to the right understanding of commercial phenomena, than with a view to any direct practical result. The question has ceased to be a practical one, and cannot again become so for ten years to come. But it involves highly important questions of theory; the practical bearing of which, as of all theories, far transcends the limits of any single application.
What was affirmed by Cicero of all things with which philosophy is conversant, may be asserted without scruple of the subject of currency—that there is no opinion so absurd as not to have been maintained by some person of reputation. There even appears to be on this subject a peculiar tenacity of error—a perpetual principle of resuscitation in slain absurdity. There are at this day numerous persons who can read and write, and some who think themselves oracles of wisdom, who see no harm in emancipating a paper currency from the restraint of convertibility, and from every definite principle of limitation, provided only that it is grounded on the security of actual property; forgetful that even the assignats were issued on no less a security than the principal portion of the soil of France, and that a paper so guaranteed is no more protected from depreciation, if issued in excess, than the land itself would be if offered for sale in unusual quantity. There are writers of pretension, not only out of Bedlam, but even, we can assure Sir Robert Peel, out of Birmingham, who think it the duty of the legislature periodically to degrade the standard (or to authorize an increase of inconvertible paper exactly equivalent) in proportion as the progress of industry creates an increase of productions and a multiplication of pecuniary transactions. But it is not against these extravagant aberrations that it is now necessary to contend. In the discussions which we are here concerned with, both sides admit, that the proper standard of currency is the precious metals, at an unalterable mint valuation; that a pound (precisely as stated by Sir Robert Peel) should mean a fixed quantity of gold of a given fineness; and that no one who has contracted to pay that given quantity, should be allowed on any pretext to discharge his debt by paying a smaller quantity, or making over paper equivalent to a smaller quantity. Gold is not an ideally perfect standard—a commodity absolutely unchangeable in cost of production; but it approaches nearer to that abstract perfection of a measure of value, than any other production of nature or industry; and if it were far more subject to fluctuation than it is, it would be less so than the policy of a government,—especially one which takes for its principle of guidance “the wants of trade,” which in this case simply means the convenience of debtors.
Assuming then—as conceded by all persons whom it is at present necessary to reason with—that the value of a paper currency must be maintained at par with the coin which it professes to represent, and that to effect this the issuers must be compelled to give coin for their notes whenever demanded; there is an ulterior question, on which those who are entitled to be considered authorities on the principles of the circulating medium, part company. According to one opinion, steadiness of value in a paper currency is sufficiently secured by ready and immediate convertibility. This was, until lately, the prevailing, if not the exclusive doctrine, among those by whom the theory of money had been successfully cultivated. Within the last few years another doctrine has sprung up, of which Colonel Torrens was, as we have said, the originator, Mr. Loyd, Mr. Norman, and Mr. McCulloch among the chief propounders, and to which Sir Robert Peel and his cabinet have become proselytes.
According to this doctrine, the check of convertibility acts too slowly, and admits of great mischief from excess of issues before it begins to operate. Convertibility, it is contended, is a security only against permanent depreciation. When an increased issue of paper has sunk the value of the currency below its regular proportion to the currencies of other countries, the exchanges turn, gold becomes an article of export, and, to obtain it, notes are returned upon the Bank. But the increase of issues has, in the meantime, raised prices; which, when the excess of paper is removed, relapse to their former level. This is already a mischief; it deranges mercantile calculations, creates unexpected gains to some at the expense of others, and adds to the gambling character in a certain degree inherent in all the great operations of commerce. But the evil seldom ends here. All advance of prices tends to encourage speculation; especially when the same cause which creates the advance (being increased issues made by bankers, in the form of increased advances to their customers) occasions, as its very first effect, a reduction of the rate of interest. The conjunction of rising markets and a low rate of interest leads to speculative purchases, by which the rise itself is heightened and prolonged. The rise, however, not being grounded on any permanent cause of increased price (such as a deficiency of supply); in proportion to its continuance, the fall, when the tide turns, is from a greater height, and also to a lower depth. Those who during the rise of prices obtained credit upon the apparently increasing value of the goods which they held, are only enabled to fulfil their engagements by parting with the goods at almost any sacrifice, and prices sink for a time as much below their accustomed rate as they had previously been raised above it.
To avert these evils, in the opinion of Colonel Torrens and Mr. Loyd, and we may now add of Sir Robert Peel, something more than convertibility is necessary. Their remedy is to place the issuers under a legal impossibility of ever increasing their issues (beyond a certain moderate minimum), except in exchange for bullion, which, if refused to them, would probably be sent to the mint and coined. By this contrivance the paper currency is prevented from being arbitrarily increased. It can only, under such a system, be extended, when, if the augmentation were not made, an equivalent increase would probably take place in the portion of the currency which consists of coin.
But it is not enough, according to these authorities, to prevent increase of issues, otherwise than in exchange for bullion; it is also necessary to prevent the currency from being diminished, otherwise than by not re-issuing the notes which are presented for payment. Under the present system, the Bank, when it finds its treasure leaving it, does not remain passive, and allow the exchange of notes for specie to go on until, the needful contraction having been effected, the drain stops of itself. It becomes alarmed, and endeavours by calling in its issues to stop the efflux of bullion in an earlier stage. It diminishes its loans to merchants, depriving them in a period of falling prices of the accustomed accommodation, which is then more than usually necessary. Or it throws some of its securities upon the market, and by absorbing a portion of the capital which is seeking investment, deprives the merchants of an equivalent amount of pecuniary advances. By either process, it raises the rate of interest and increases the difficulty of obtaining loans, at a period which is already one of pressure; thus heightening all the evils of a commercial revulsion.
By the plan proposed, that of compelling the issuers to keep their securities at a fixed amount, and to let the currency contract or expand only by the exchange of gold for notes and of notes for gold, the paper will, according to this theory, be preserved exactly the same in quantity as the metallic money which would otherwise circulate in its place; this identity of quantity being, it is supposed, indispensable to secure identity of value.
It is generally assumed, as essential to this mode of regulating the currency, that the privilege of issue should be confined to a single establishment. But the rule of holding an unvarying amount of securities, and of issuing notes beyond that amount only in exchange for bullion, might be applied to a multiplicity of issuers; and a scheme for that purpose was, in fact, devised by Colonel Torrens. Sir Robert Peel cuts the knot by prohibiting to the country banks any issues whatever beyond the average of the last two years. He does not apply to them, as he does to the Bank of England, the other half of the proposed system, by preventing arbitrary diminution as well as increase; either because he thinks that in preventing over-issue he has guarded sufficiently against revulsion, or because he deems more minute precautions superfluous in an arrangement which is avowedly preparatory to the suppression of all banks of issue other than the Bank of England.
Under the system thus established, we are confidently told that the calamity of almost periodical recurrence, commonly known by the name of a “commercial crisis,” will be greatly diminished both in frequency and in severity. Some permit themselves to use language which at least seems to import that these convulsions will be rendered impossible. Colonel Torrens looks upon the measure as one which “will effectually prevent the recurrence of those commercial revulsions, those cycles of excitement and depression, which as Mr. Loyd has so felicitously explained, result from the alternate expansion and contraction of an ill-regulated circulation.”[*] He admits, indeed, that undue speculation, and the consequent reaction, might prevail to a great extent even under a metallic currency. But he attributes to the measure now proposed, an efficacy in counteracting those evils, sufficient to constitute that measure “the most important and the most salutary, as regards the reform of our monetary system, which has been brought under the consideration of parliament since the act of 1819 for the resumption of cash payments.” [Ibid.]
We shall examine presently how far the measure deserves to be considered—again in the words of Colonel Torrens—as “the reform of a banking system hitherto, perhaps, the most defective in Europe.” [Ibid.] But whatever may be its recommendations, that of preventing, or even greatly alleviating commercial revulsions, can scarcely be one of them; since commercial revulsions are as frequent and as disastrous where this so bitterly-condemned banking system does not exist. Not to mention Amsterdam or Hamburg, the currency of France differs as little from a purely metallic currency as that of any civilized country can well do in this industrial era. France has no country banks of issue, no notes below twenty pounds (a large sum measured by the standard of French incomes), and nobody has ever imputed to the single issuing body which exists in France, any depreciating action on the currency. Even the custom of making payments by cheques is not yet generally adopted. Metallic money is the common medium of payment. Yet commercial revulsions are as severe, in proportion to the amount of mercantile business, in France as in England, and fill quite as large a space in public discussion and in the meditations of statesmen and of economists. An evil common to all commercial countries, in the ratio of the extent of their transactions, cannot depend upon a cause peculiar to England and the United States. What a currency actually metallic does not prevent, it is impossible that making the paper conform exactly to the variations of a metallic currency can cure.
As the notions of persons unacquainted with trade on what constitutes a commercial crisis are generally rather vague and obscure, we will, before going further, state as distinctly as possible what are its principal characteristics.
A commercial crisis is the recoil of prices, after they have been raised by speculation higher than is warranted by the state of the demand and of the supply. Speculation is almost always set in motion by something which affords apparent grounds for expecting either an extra demand or a deficient supply. But the anticipation may, in the first place, be erroneous; in the second, however rational it may be, the speculation (especially where the prospect of gain is considerable) is very likely to be overdone, each speculator conducting his operations as if he alone knew the circumstances on which the hope of profit is grounded. The rise consequent upon the speculative purchases attracts new speculators, insomuch that, paradoxical as it may appear, the largest purchases are often made at the highest price. But at last it is discovered that the rise has gone beyond the permanent cause for it, and purchases cease, or the holders think it is time to realise their gains. Then the recoil comes; and the price falls to a lower point than that from which it had risen, because the high price has both checked the demand, and, by stimulating production or importation, called forth a larger supply. Besides, many of those who during the high price have contracted engagements, which they trusted to a further rise for giving them the means of fulfilling, are unable to hold on until the crisis is past, but must sell at any sacrifice.
When this series of effects is confined to some one article of commerce, individuals may be ruined, but the mercantile world generally is not disturbed. When, however, as in 1825 and at several other periods in the present century, the opening of new markets, or some expected deficiency of supply extending to various important articles, has set speculation at work in several great departments at once, the spirit is apt to become general, and other commodities rise in price without any reasonable cause whatever. In such cases, the ultimate revulsion is most extensive and calamitous.
As long as the seasons vary, as markets fluctuate, and men miscalculate, or the passion of gain (as in gamblers) over-rides their calculations, so long will these alterations of ebb and flow, these “cycles,” as Colonel Torrens calls them, “of excitement and depression,”[*] continue. They are worse in America than in England, because American commerce is conducted in a more gambling spirit; they are worse at Liverpool than in London, for the same reason. But whatever aggravates the natural fluctuations of the markets, or creates fluctuations when they would not otherwise exist, increases both the frequency and the destructiveness of such convulsions. This the corn laws do; and it is one of their principal evils. This it is also affirmed that the currency, as at present regulated, does; and the merit claimed for the system now to be introduced is, that this artificial cause of fluctuation will be cut off.
It is here that Mr. Tooke and the authors of the new scheme are irreconcilably at variance. He denies in toto the evils imputed to the existing system.
The imputations are—First: That the banks, by arbitrary extension of their issues, raise prices; and thus create fluctuation, and speculation, and ultimate revulsions, where such would not otherwise exist.
Secondly: That when speculations have commenced from causes unconnected with the banks, they, by extending their issues, concurrently with the rise of prices, prevent the rise from being checked in an early stage. And when the rise of prices, by its operation on the exports and imports, has caused an efflux of gold, they hasten to stop it by a contraction of the currency equal to or beyond the previous expansion; which contraction being effected by a forced operation upon the loan market, aggravates the difficulties of persons already distressed.
Mr. Tooke disputes both these assertions.
He denies that an extension of issues can be arbitrarily made by the banks; or that, if made, it has any necessary tendency to raise prices.
He denies that, when prices are rising, the extension of issues, which frequently takes place simultaneously, retards the action of the causes which tend to check the rise; or that by preventing such increase of issues, improvident speculation would be earlier arrested, and the consequent calamities confined within a narrower range.[*]
It is at once seen that this controversy involves a very important question in the theory of currency; one, indeed, which has not, to our knowledge, been subjected to thorough examination or put precisely in issue before. This question is—With what limitations, if any, the proposition is true that an increase in the quantity of the currency raises prices?
That it is true in some sense and in some circumstances, no one thinks of disputing; but that it is a universal principle, and true without any limitation, may perhaps have been too easily taken for granted.
If—to adopt an illustration sometimes used—every person in England were to awake one morning with a sovereign in his pocket, no one could doubt that the rise of prices would be immediate. All or most would hasten to expend their sovereign, either for pleasure or profit; and as there would be no more commodities to be distributed than before, each would bear a higher price.
On the other hand, suppose that a foreigner lands in England, bringing with him five thousand pounds in gold. This additional purchasing power, being brought into the market, would raise prices, but at first only the prices of those commodities which it was employed in purchasing. It might happen not to be employed in purchasing anything, and then it would not raise prices at all. We scarcely think that any one would contest the possibility, at least, of the case described by Mr. Tooke in the following passage. We quote from his “History of Prices,” because the statement of the same principle in his pamphlet is somewhat more imperfect, and gives an advantage to Colonel Torrens to which we do not think that the merits of the case entitle him:—
That an additional issue by the Bank of a million or of five millions on securities, would, cæteris paribus, reduce the market rate of interest, may be granted; but it is not self-evident, or consistent with experience, that prices of commodities would therefore necessarily rise. The persons who obtained such an increased price for their securities as induced them to sell, would doubtless, upon receiving the money, seek some other investment for it. There might not be, nor would it be likely that there should be, anything in the state of supply and demand in the markets for commodities to induce persons not habitually in them nor so disposed, to speculate in goods; while the probability is, and such has been the course of experience, that, as by the supposition the market rate of interest in this country would, by such an operation of the Bank, be depressed below its ordinary rate relatively to other countries, there would be every inducement to the individuals who thus had their capitals disengaged to seek investment in securities abroad, whether public or private. As there would not, by the operation of the Bank, be necessarily any additional inducement to export commodities, the capital to be transmitted abroad for such investments would be remitted in bullion. The effect, therefore, of the issue of the million or five millions of bank notes by the Bank, might merely be their return upon the Bank for bullion to be exported. This was, in point of fact, the process in 1834, when the Bank increased its securities by between three and four millions, and reduced its treasure by the same amount; while the markets for commodities, although the rate of interest was low, and the facility of credit complete, were in the most quiescent state possible, and the corn markets falling. (History of Prices, vol. iii, pp. 273-4.)
Or suppose another case, of frequent occurrence. A country bank issues an extra amount of notes in advances to farmers, to enable them to hold their corn, in hopes of getting a higher price. With the notes received from the bank the farmer pays his rent, and withholds the corn by the sale of which he would otherwise have paid it. But, for every farmer who has not sold his corn, there is a miller or corn dealer somewhere who has not bought it. The notes which this miller or corn dealer was prepared to pay, he now puts into deposit, or repays to the banker from whom they had been borrowed. By as much as the one is enabled to postpone his sale, by so much does the other his purchase. There may have been not a pound more expended in consequence of the transaction, nor any action on prices, except to render more gradual the rise which was taking place from other causes in the price of corn.
If the declaration of innumerable witnesses merits any confidence, the modus operandi of country issues must very often be of this sort. The country bankers unanimously disclaim any arbitrary power over their issues, and declare that in certain states of the markets they cannot extend their circulation; if they attempt it, the increase comes back to them, either in deposits or by being presented for payment. They are, it may be said, interested witnesses. But they must mean something by this assertion. It cannot be a mere falsehood. It is confirmed, too, by many persons of the greatest experience, who have no interest in banks of issue,—Mr. Samuel Gurney, for example, and the late Mr. Rothschild.[*] There must be some fact at the bottom of what is asserted. It may be a fact partially stated or misunderstood, and they may be entirely wrong in their explanation of it. But a fact of some sort there must be. We have not seen, on the other side of the question, any attempt to clear up the difficulty, or show the origin of the supposed mistake. We have met with nothing except a flat denial.
For our own part, we see no incredibility in the assertion of the bankers. We believe it to be in the main correct. It appears to us perfectly consistent with the theory of the subject.
The notion that every increase in the amount of the circulating medium must raise prices, proceeds, as it seems to us, upon the erroneous supposition, that an increase of money must be an increase of purchasing power.
The purchasing power which determines prices is of two kinds,—ultimate purchasing power, which determines permanent prices; and the portion of that power which is in actual exercise at a given time; this determines the fluctuations of prices.
The ultimate purchasing power of the community is, in the words of Mr. Tooke, “the quantity of money constituting the revenues of the different orders of the state, under the head of rents, profits, salaries, and wages.”[*] We think he should rather have said their “gross incomes,” to include that portion of their receipts which is employed in replacing material, and in renewing machinery and buildings as they wear out. The whole of these incomes is destined to be, and is, expended in purchases, either for personal consumption or for reproduction. The aggregate of money incomes, compared with the whole annual produce of the country, determines general prices, as between the dealer and the consumer. If you add to the currency in a way which increases the aggregate of incomes, you raise prices; but this condition can be satisfied by nothing short of a permanent increase* of the quantity of money in the country; either from an influx of the metals, caused by a diminution in the cost at which they can be produced and imported, or from increased issue of an inconvertible paper currency. We say inconvertible, because it is admitted that of that alone could any increase have the character of permanence.†
But though an extension of issues may not increase the aggregate money incomes of the community, nor raise general prices between dealer and consumer, upon which prices all dealers depend for their ultimate returns, and on the anticipation of which they necessarily ground all their transactions with one another; some may suppose that it must increase the money demand for commodities at the particular moment; because the person who obtains the bank notes does so for the purpose of using them, and may be supposed to bring them immediately into the market and make purchases to their full extent.
This opinion seems to us to rest upon a great misconception of what constitutes the money demand for a commodity.
It seems to be thought by many people that the purchase of commodities implies the direct transfer of so much money from hand to hand in return for so much produce; and that the limit to the possible demand for a commodity at any moment, is the quantity of money then and there waiting to be exchanged for it.* With this mode of thinking it is no wonder that any one should suppose that whenever you add to the money at that place physically present, you add as much to the demand, and consequently to the price. But this is a very inadequate notion indeed of what constitutes purchasing power.
The purchasing power of an individual at any moment is not measured by the money actually in his pocket, whether we mean by money the metals, or include bank notes. It consists, first, of the money in his possession; secondly, of the money at his banker’s, and all other money due to him and payable on demand; thirdly, of whatever credit he happens to possess. To the full measure of this three-fold amount he has the power of purchase. How much he will employ of this power, depends upon his necessities, or, in the present case, upon his expectations of profit. Whatever portion of it he does employ, constitutes his demand for commodities, and determines the extent to which he will act upon price.
Now, of these three elements of money demand, the first alone is grounded upon a corresponding amount of money actually in esse. The second, or the deposit at his banker’s, is in part grounded upon actual money, namely, to the extent of about one-third, that being the proportion which prudent bankers profess to keep in their coffers to meet the drafts of their depositors. The third element of money demand, namely credit, has no basis of actually existing money at all. It is an additional money demand, created over and above that which is constituted by all the money in actual circulation. But it is exactly as operative upon prices as the money itself, provided the possessor chooses to make use of the purchasing power which it confers. This explains why periods of general confidence, when large prospects of gain seem to be opening themselves, and when there is a disposition among dealers to employ not only all their money but all or much of their credit in enlarging their operations, are attended with so great a rise of general prices. The effect is sometimes ascribed to the bills of exchange and other transferable paper which these transactions generate, and which are said to perform the functions of currency. Those who use this language mistake the effect for the cause. Bills of exchange are mere evidences of credit. The credit itself is the operating cause. It is manifest that when buyers are willing to employ their credit as well as their money in making purchases, their demand for commodities becomes so much greater, and prices must rise. They would rise if no such thing as a transferable acknowledgment of debt had ever been known in the country.
We may observe, parenthetically, that these considerations remove the puzzle which has been made of whether deposits, and cheques, and bills of exchange, are to be considered as money. With those who think that money alone confers power of purchase, these questions are very pertinent. When they ask whether deposits, or whether anything else, is money, they mean, does it operate on money prices? If it does, they think it a necessary consequence that it should be called money. But when once it is clearly seen that credit, so far as employed in the purchase of commodities, operates upon prices in exactly the same degree as money, the question what forms of credit should be called money, becomes extremely unimportant. It would probably be best that no form whatever should be so called.
If the views now stated be sound, it seems not easy to understand how an increased creation of the written evidences of credit called bank notes, can, of itself, create an additional demand, or occasion a rise of price. Admitting bank notes to be money (which is, in truth, a mere question of language), what does the person do who issues them, but take so much from the third element of purchasing power, namely credit, and add it to the first element, money in hand—making no addition whatever to the total amount? More properly, he merely converts so much credit from an unwritten into a written, and from a cumbrous into a convenient, form. Bank notes are to credit precisely what coin is to bullion; the same thing, merely rendered portable and minutely divisible. We cannot perceive that they add anything, either to the aggregate of purchasing power, or to the portion of that power in actual exercise. The person to whom the notes are advanced is proved by that very fact to have credit, and his requiring the advance proves that to that extent he intends to use his credit in making purchases. Is it supposed that having credit, and intending to buy goods by means of it, he will be disabled from doing so because a banker is prohibited from one particular mode of giving him credit?*
It must be conceded, and Mr. Tooke does fully concede,[*] that if bankers, urged by competition or caught by the contagious confidence of speculative times, make advances to persons who otherwise have not credit and cannot give good security, in that case the foregoing arguments do not apply. To that extent they do create a new purchasing power, a new demand, and, as its consequence, a rise of price. The American banks did raise prices by reckless advances; by lending money to persons who could not repay them. No one is more aware of this than Mr. Tooke. It is not, however, by their notes, as such, that banks thus misconduct themselves. Imprudent advances of their deposits, or of their private capital, or imprudent indorsement and guarantee of the engagements of their customers, have precisely the same effect. All extension of credit, legitimate or illegitimate, tends, in proportion as it is made use of, to a rise of price. And all contraction of credit produces an equivalent collapse.
That bank notes, as such, have any peculiar power on prices, we see no reason whatever to believe: and we hold with Mr. Tooke, that when they are increased, their increase is a consequence of a rise of prices, not a cause.[†] It is a known fact that the country issues almost invariably increase when the prices of agricultural produce are rising. The reason is, that the buyers, having larger payments to make, apply for more notes to make them with, it being the custom in the provision and cattle markets not to buy on credit, but to pay immediately in bank notes. A rise of other prices does not necessarily lead to increased issues; because, in almost all other transactions between dealers, bank notes are already superseded by cheques, or book credits; and these would soon be introduced into the markets for agricultural produce, if the obtaining bank notes were rendered difficult. Even the small quantity of bank notes which are employed at the clearing house or elsewhere, to effect the ultimate liquidation of these cheques and credits by the payment of balances, might, as Mr. Tooke remarks,[‡] have their place supplied by exchequer bills (as in Scotland), or by drafts on the Bank of England.
Whether the credit which necessarily exists in a commercial country assumes the form of bank notes or no, is, in short, a mere matter of convenience. In whatever form or vesture the credit is given, its influence on price is the same. He who has credit, and desires to employ it in purchases, will find the means of doing so without bank notes, and will act upon prices accordingly; while if he does not think the time favourable for making purchases, even having the notes in his possession will not induce him to do it; he will either keep them by him until they are wanted, or they will go into deposit.
It appears, then, that any increase of issues which is likely to take place under the present system of convertibility, is in itself quite inoperative to raise prices,* and cannot, therefore, be an exciting cause of commercial revulsions; but that a spirit of speculation, or an undue extension of credit, does raise prices, and raises them equally whether bank notes are generated by it or not; and that by preventing the increase of bank notes during such periods, nothing would be done to check the rise, since it is not bank notes which, as it is sometimes expressed, sustain prices, but the state of credit generally. No mode of regulating bank notes would either arrest the rise, or moderate the subsequent revulsion, which is always proportional.
There is, however, one way in which the present administration of the currency does heighten the evils of a commercial revulsion. The rise of prices in periods of exaggerated confidence checks exportation and greatly increases importation. A balance has to be paid in gold, and this is demanded from the Bank. To stop the drain, it hastily contracts its issues, that is, it sells securities and diminishes its loans, thus aggravating, in a period of difficulty, the already existing pressure upon the loan market; and this, it is urged, will be prevented by the ministerial measure, since the bank will not be permitted to contract its issues, except by not re-issuing the notes which have been returned to it for payment. But, as Mr. Tooke remarks,[*] to attain this object it is only necessary that the bank should habitually hold so large a reserve of bullion as will admit of allowing any probable drain to proceed until it has reached its limits. Whatever amount of reserve is needed for this purpose will be equally necessary on the plan of Sir Robert Peel, since the bullion, against which all notes beyond the fixed amount of securities are to be issued, must be sufficient to meet the greatest drain which can ever be supposed to occur. We shall see presently that, in reality, the amount of reserve which would suffice on Mr. Tooke’s plan will not be sufficient on Sir Robert Peel’s.
We think, then—although with unfeigned diffidence, considering the high authorities by which we are opposed—that the reasons urged in recommendation of the contemplated changes, and in proof of the theory on which they rest, are all untenable, and that the system about to be adopted is in no way preferable to the present system, if improved as Mr. Tooke proposes, by making it imperative on the Bank to keep a larger reserve of bullion. But though not preferable, whether it is in any way inferior is another consideration. That question must be determined, not by its effects on price, for these we believe to be null, but by its operation upon the rate of interest, for that is real. Fluctuations of price do not, we believe, depend upon bank issues; but the operations of banks, as of other money-lenders, of course act upon the loan market, or as it is improperly called, the money market; in other words, upon the rate of interest, and what is almost synonymous, the prices of securities.
Mr. Tooke does not share the common opinion, that increased issues, by lowering the rate of interest, operate as a stimulus to speculation. He thinks it a vulgar error
That a facility of borrowing at a low rate of interest, not only confers the power of purchasing, but affords the inducement, applies the stimulus to speculation in commodities. If by facility of borrowing be meant a laxity of regard to security for repayment on the part of the lender, there is every probability that money so borrowed will be hazardously, if not recklessly employed; and whether in the purchase of shares, or of foreign securities, or of merchandize, or in any other mode of adventure or enterprise, or in mere personal expenditure, is a matter of chance, depending on the disposition and views of the borrower. Such borrowers are not stimulated to purchase commodities speculatively, merely because they can borrow on low terms; they are but too happy if they can borrow at all. But to suppose that persons entitled to credit are likely to be induced—stimulated is the favourite term—by the mere circumstance of a low rate of interest, to enter into speculations in commodities (using the term speculation in its obnoxious sense), argues a want of knowledge of the motives which lead to such speculations. These are seldom, if ever, entered into with borrowed capital, except with a view to so great an advance of price, and to be realized within so moderate a space of time, as to render the rate of interest or discount a matter of comparatively trifling consideration. (Pp. 81-2.)
The truth is, that the power of purchase by persons having capital and credit is much beyond anything that those who are unacquainted practically with speculative markets have any idea of. (P. 79.)
A person having the reputation of capital enough for his regular business, and enjoying good credit in his trade, if he takes a sanguine view of the prospect of a rise of price of the article in which he deals, and is favoured by circumstances in the outset and progress of his speculation, may effect purchases to an extent perfectly enormous, compared with his capital.* (P. 136.)
But why should this purchasing power be directed to the purchase of commodities, if there was nothing in the state of supply relatively to the rate of consumption, to afford the prospect of gain on the necessary eventual resale? The error is in supposing the disposition or will to be co-extensive with the power. The limit to the motive for the exercise of the power is in the prospect of resale with a profit. (P. 79.)
But although the issues of banks may not have the effect imputed to them, of stimulating speculation by lowering the rate of interest, there is no doubt that the mode of issuing and the mode of recalling them may and does produce fluctuations in the loan market.
Fluctuation is an evil in the interest of loans, as well as in the prices of commodities; and that is the best banking system (solvency and convertibility being first provided for) under which there is least liability to such fluctuations.
In this respect it is Mr. Tooke’s opinion that the system about to be introduced is decidedly inferior to the old:—
That a total separation of the business of issue from that of banking is calculated to produce greater and more abrupt transitions in the rate of interest, and in the state of credit, than the present system of union of the departments. (P. 124.)
The ground of this opinion deserves attention.
It is a fact, attested by experience, that a drain of gold upon the Bank for exportation takes place in most cases mainly by drawing out deposits. As, in the proposed system, there is nothing to cause any change in this respect, we must suppose that this would still be the case, and that the demand for gold would be first felt by the deposit department.
Now, under the present arrangements, in case of a run upon the deposits, the Bank has to rely, not only on the portion of reserve which it retains, like other bankers, against the deposits themselves, but also on the gold in reserve on account of its notes. Until all the gold in the possession of the Bank is exhausted, it is in no danger of stopping payment. But under the proposed system the department of deposit must rest upon its own resources. The reserve in the deposit department could derive no aid from the issue department, while it would have to bear the first brunt of the whole action intended to be exercised through it upon the latter. As it would be prohibited from meeting this demand by creating more notes, or even by having the notes which it paid out, and which then went to the issue department for gold, returned to it; either the reserve of the deposit department alone will require to be as great as is now requisite for the deposits and issues together, or it will be obliged to suspend its discounts and sell its securities much earlier and more abruptly than is necessary under the present mixed system. If the demand for gold were to the extent of three or four millions, no “merchant, banker, or money dealer,” says Mr. Tooke,
Could for a moment have a doubt as to the extremity of pressure which it would cause. I am most intimately persuaded that it would be within the mark to suppose that a rate of discount (assuming that the doors of the Bank and the ears of the directors were irrevocably closed against all applications) of twenty per cent. and upwards, would in many cases be submitted to, and sacrifices of goods, if any large proportion were held on credit, would be made at a still greater loss. And after all, it might be a question whether even this effort of the Bank on its securities would be effectual in restoring its reserve in sufficient time to meet the exigency.
While the circulating department was still abundantly provided with gold, the deposit department might have no alternative but to stop payment.
And all this inconvenience may have been purely gratuitous, as a sacrifice to the currency principle; because the utmost demand for gold might have been satisfied by an export of 3,000,000l. or 4,000,000l., which, under a system of issuing and banking, would have been attended, as in the instances of 1828-29, and 1831-32, with no inconvenience whatever. (Pp. 109-10, 111.)
Indeed, if the purpose for which the new arrangements are intended is to be carried out, the deposit department must in any case begin selling its securities the moment a drain upon it commences; because if it does not, the notes which will be returned to the issue department in exchange for gold will not have been taken from those in circulation among the public, but from the reserve in the deposit department; and the cherished object of making the currency vary in quantity exactly as would be the case with a metallic currency will not be effected.
We have now stated partly, in the words of Mr. Tooke, partly and more often in our own, the grounds on which, in common with him, we have adopted the following conclusions:—
That the proposed changes in the mode of regulating the currency will be attended with none of the advantages predicted; that, so far as intended to guard against the danger of over-issue, they are precautions against a chimerical evil; that the real evil of commercial vicissitudes, of “cycles of excitement and depression,”[*] is not touched by them, nor by any regulations which can be adopted for bank notes or other mere instruments of credit; and that in what Mr. Tooke justly calls (next to solvency and convertibility) “the main difference between one banking system and another,” namely, “the greater or less liability to abrupt changes in the rate of interest and in the state of commercial credit,”[*] the present arrangements, under the condition of a larger bank reserve, have a decided advantage over the new system.
We have left ourselves little room for any observations on Colonel Torrens’s reply to Mr. Tooke.
Colonel Torrens is one of the first living economists, and, as he says of Mr. Tooke, “can afford to lose some reputation by his present publication,”[†] though we do not think that such a result is to be apprehended. In clearness and precision of statement, and in that closeness of discussion which is a great part both of argumentative power and of dialectical dexterity, Colonel Torrens has never more distinguished himself. Not a single exposed point in his adversary escapes him; and on some minor questions we think he has successfully answered Mr. Tooke. That we cannot entertain a similar opinion of his main argument, we have sufficiently shown: and the grounds of our difference have been so fully explained as to dispense, we hope, with any detailed controversy.
THE CLAIMS OF LABOUR
D&D, II (1867), 181-217. Headed: “The Claims of Labour”; with a footnote identifying the first publication, and adding: “Part of a review of the work by Mr. Helps, entitled ‘The Claims of Labour: an Essay on the Duties of the Employers to the Employed’ [London: Pickering, 1844].” (In 1859 the reading was “. . . review of a work, entitled ‘The . . . Employed.’ ”) Reprinted from Edinburgh Review, LXXXI (Apr., 1845), 498-525 (unsigned), where it appeared as Art. VII (with the title of Help’s work). Identified in JSM’s bibliography as “A review of a book entitled ‘The Claims of Labour’ (by Arthur Helps Esq.) in the Edinburgh review for April 1845” (MacMinn, 58).
This article, its subject still fresh in JSM’s mind when he wrote his Principles (see Book IV, Chaps. vi and vii), was conceived a year before the commencement of the Principles; on 9 Nov., 1844, he wrote to Macvey Napier, editor of the Edinburgh:
I have been feeling lately a very great inclination to write something on the doctrines & projects which are so rife just at present on the fashionable subject of the “Claims of Labour”—& the little book so called, would furnish an appropriate text, if you are inclined to the subject, & would not prefer seeing it in other hands. It appears to me that along with much of good intention, & something even of sound doctrine, the speculations now afloat are sadly deficient, on the whole, in sobriety & wisdom—forgetful, in general, of the lessons of universal experience, & of some of those fundamental principles which one did think had been put for ever out of the reach of controversy by Adam Smith, Malthus, & others. The general tendency is to rivet firmly in the minds of the labouring people the persuasion that it is the business of others to take care of their condition, without any self control on their own part—& that whatever is possessed by other people, more than they possess, is a wrong to them, or at least a kind of stewardship, of which an account is to be rendered to them. I am sure you will agree with me in thinking it very necessary to make a stand against this sort of spirit while it is at the same time highly necessary as well as right, to shew sympathy in all that is good of the new tendencies, & to avoid the hard, abstract mode of treating such questions which has brought discredit upon political economists & has enabled those who are in the wrong to claim, & generally to receive, exclusive credit for high & benevolent feeling.
I do not know of anything so important at the present time as to attempt to place these subjects in their right position before the public—& it can nowhere be done so well as in the Edinburgh review—where I hope it will be done even if it should not suit you that I should do it—although I know no reason for thinking that the manner in which I should treat the subject would be unsuitable to you. (Earlier Letters, Collected Works, XIII, 643-4.)
The following text is collated with that in D&D, II (1st ed.), and that in the Edinburgh. In the footnoted variants, the 2nd ed. is indicated by “67”; the 1st by “59”; the Edinburgh by “45”. Two corrections in JSM’s hand in the Somerville College copy (an off-print paged 1-28, but otherwise unaltered) are indicated at 387l-l and m-m.
The Claims of Labour
“persons of a thoughtful mind,” says the introduction to this little volume, “seeing closely the falsehood, the folly, and the arrogance of the age in which they live, are apt, occasionally, to have a great contempt for it; and I doubt not, that many a man looks upon the present time as one of feebleness and degeneracy. There are, however, signs of an increased solicitude for the aClaims of Laboura , which of itself is a thing of the highest promise, and more to be rejoiced over than all the mechanical triumphs which both those who would magnify, and those who would depreciate, the present age, would be apt to point to as containing its especial significance and merit.”[*]
It is true that many are now inquiring, more earnestly than heretofore, “how the great mass of the people are fed, clothed, and taught—and whether the improvement in their condition corresponds at all with the improvement of the condition of the middle and upper classes.” [P. 3.] And many are of opinion, with the writer from whom we quote, that the answer which can be given to these questions is an unsatisfactory one. Nor is the newly-awakened interest in the condition of the labouring people confined to persons, like this author, of feeling and reflection. To its claims upon the conscience and philanthropy of the more favoured classes, to its ever-strengthening demands upon their sense of self-interest, this cause now adds the more ephemeral attractions of the last new fashion. The bClaims of Labourb have become the question of the day: the current of public meetings, subscriptions, and associations, has for some time set strongly in that direction; and many minor topics which previously occupied the public mind, have either merged into that question, or been superseded by it. Even the Legislature, which seldom concerns itself much with new tendencies of opinion until they have grown too powerful to be safely overlooked, is invited, in each Session with increasing urgency, to provide that the labouring classes shall earn more, work less, or have their lot in some other manner alleviated; and in each Session yields more or less cheerfully, but still yields, though slowly yet increasingly, to the requisition.
That this impulse is salutary and promising, few will deny; but it would be idle to suppose that it has not its peculiar dangers, or that the business of doing good can be the only one for which czealc suffices, without dknowledged or circumspection. A change from wrong to right, even in little things, is not so easy to make, as to wish for, and to talk about. Society cannot with safety, in one of its gravest concerns, pass at once from selfish supineness to restless activity. It has a long and difficult apprenticeship yet to serve; during which we shall be often reminded of the dictum of Fontenelle, that mankind only settle into the right course after passing through and exhausting all the varieties of error.[*] But however this may be, the movement is not therefore to be damped or discouraged. If, in the attempt to benefit the labouring classes, we are destined to see great mistakes committed in practice, as so many errors are already advocated in theory, let us not lay the blame upon excess of zeal. The danger is, that epeoplee in general will care enough for the object, to be willing to sacrifice other people’s interest to it, but not their own; and that the few who lead will make the sacrifice of their money, their time, even their bodily ease, in the cause; but will not do for its sake what to most men is so much more difficult—undergo the formidable labour of thought.
For several reasons, it will be useful to trace back this philanthropic movement to its small and unobvious beginnings—to note its fountain-head, and show what mingled streams have from time to time swelled its course.
We are inclined to date its origin from an event which would in vulgar apprehension seem to have a less title to that than f any other honourable distinction—the appearance of Mr. Malthus’s Essay on Population. Though the assertion may be looked upon as a paradox, it is historically true, that only from that time has the economical condition of the labouring classes been regarded by thoughtful men as susceptible of permanent improvement. We know that this was not the inference originally drawn from the truth propounded by Mr. Malthus. Even by himself, that truth was at first announced as an inexorable law, which, by perpetuating the poverty and degradation of the mass of mankind, gave a quietus to the visions of indefinite social improvement which had agitated so fiercely a neighbouring nation. To these supposed corollaries from Mr. Malthus’s principle, it was, we believe, indebted for its early success with the more opulent classes, and for much of its lasting unpopularity with the poorer. But this view of its tendencies only continued to prevail while the theory itself was but imperfectly understood; and now lingers nowhere but in those dark corners into which no subsequent lights have penetrated. The first promulgator of a truth is not always the best judge of its tendencies and consequences; but Mr. Malthus early abandoned the mistaken inferences he had at first drawn from his celebrated principle, and adopted the very different views now almost unanimously professed by those who recognise his doctrine.
So long as the necessary relation between the numbers of the labouring population and their wages had escaped attention, the poverty, bordering on destitution, of the great mass of mankind, being an universal fact, was (by one of those natural illusions from which human reason is still so incompletely emancipated) conceived to be inevitable;—a provision of nature, and as some said, an ordinance of God; a part of human destiny, susceptible merely of partial alleviation in individual cases, from public or private charity. The only persons by whom any other opinion seemed to be entertained, were those who prophesied advancements in physical knowledge and mechanical art, sufficient to alter the fundamental conditions of man’s existence on earth; or who professed the doctrine, that poverty is a factitious thing, produced by the tyranny and rapacity of governments and of the rich. Even so recent a thinker, and one so much in advance of his predecessors, as Adam Smith, went no further than to say, that the labourers might be well off in a rapidly progressive state of the public wealth;[*] —a state which has never yet comprehended more than a small portion of the earth’s surface at once, and can nowhere last indefinitely; gbut thatg they must be pinched and in a condition of hardship in the stationary state, which in a finite world, composed of matter not changeable in its properties, is the state towards which things must be at all times tending. The ideas, therefore, of the most enlightened men, anterior to Mr. Malthus, led really to the discouraging anticipations for which his doctrine has been made accountable. But these anticipations vanished, so soon as the truths brought to light by Mr. Malthus were correctly understood. It was then seen that the capabilities of increase of the human species, as of animal nature in general (being far greater than those of subsistence under any except very unusual circumstances), must be, and are, controlled, everywhere else, by one of two limiting principles—starvation, or prudence and conscience: That, under the operation of this conflict, the reward of ordinary unskilled labour is always and everywhere (saving temporary variations, and rare conjunctions of circumstances) at the lowest point to which the labourers will consent to be reduced—the point below which they will not choose to propagate their species: That this hminimumh , though everywhere much too low for human happiness and dignity, is different in different places, and in different ages of the world; and, in an improving country, has on the whole a tendency to rise. These considerations furnished a sufficient iexplanationi of the state of extreme poverty in which the majority of mankind had almost everywhere been foundj , without supposing any inherent necessity in the case—any universal cause, other than the causes which have made human progress altogether so imperfect and slow as it is. And the explanation afforded a sure hope, that whatever accelerates that progress would tell with full effect upon the physical condition of the labouring classes. Whatever raises the civilization of the people at large—whatever accustoms them to require a higher standard of subsistence, comfort, taste, and enjoyment, affords of itself, according to this encouraging view of human prospects, the means of satisfying the wants which it engenders. In every moral or intellectual benefit conferred upon the mass of the people, this doctrine teaches us to see an assurance also of their physical advantage; a means of enabling them to improve their worldly circumstances—not in the vulgar way of “rising in the world,” so often recommended to them—not by endeavouring to escape out of their class, as if to live by manual labour were a fate only endurable as a step to something else; but by raising the class itself, in physical well-being and in self-estimation. These are the prospects which the vilified population principle has opened to mankind. True, indeed the doctrine teaches this further lesson, that any attempt to produce the same result by other means—any scheme of beneficence which trusts for its moving power to anything but to the influence over the minds and habits of the people, which it either directly aims at, or may happen indirectly to promote—might, for any general effect of a beneficial kind which it can produce, as well be let alone. And, the doctrine being brought thus into conflict with those plans of easy beneficence which accord so well with the inclinations of man, but so ill with the arrangements of nature, we need not wonder that the epithets of “Malthusians” and “Political Economists” are so often considered equivalent to hard-hearted, unfeeling, and enemies of the poor;—accusations so far from being true, that no thinkers, of any pretensions to sobriety, cherish such hopeful views of the future social position of labour, or have so long made the permanent increase of its remuneration the turning-point of their political speculations, as those who most broadly acknowledge the doctrine of Malthus.
But if the permanent place now occupied in the minds of thinking men by the question of improving the condition of the labouring classes, may be dated from the new light cast by Malthus’s speculations upon the determining laws of that condition, other causes are needful to account for the popularity of the subject as one of the topics of the day; and we believe they will be found in the stir and commotion of the national mind, consequent upon the passing of the Reform Bill.[*]
It was foretold during the Reform crisis, that when the consequences of the Bill should have had time to manifest themselves, the direct effects with which all mouths were filled, would prove unimportant compared with those indirect effects which were never mentioned in discussion, and which hardly any one seemed to think of. The prophecy has been signally verified. Considered as a great constitutional change, both friends and enemies now seem rather surprised that they should have ascribed so much efficacy to the Bill, for good or for evil. But its indirect consequences have surpassed every calculation. The series of events, commencing with Catholic Emancipation,[†] and consummated by the Reform Act, brought home for the first time to the existing generation a practical consciousness of living in a world of change. It gave the first great shock to old habits. It was to politics what the Reformation was to religion—it made reason the recognised standard, instead of authority. By making it evident to the public that they were on a new sea, it destroyed the force of the instinctive objection to new courses. Reforms have still to encounter opposition from those whose interests they affect, or seem to affect; but innovation is no longer under a ban, merely as innovation. The existing system has lost its prestige; it has ceased to be the system which Tories had been taught to venerate, and has not become that which Liberals were accustomed to desire. When any wide-spread social evil was brought before minds thus prepared, there was such a chance as there had not been for the last two hundred years, of its being examined with a real desire to find a remedy, or at least without a predetermination to leave things alone. That the evils of the condition of the working classes should be brought before the mind of the nation in the most emphatic manner, was the care of those classes themselves. Their “petition of grievances” was embodied in the People’s Charter.
The democratic movement among the operative classes, commonly known as Chartism, was the first open separation of interest, feeling, and opinion, between the labouring portion of the commonwealth and all above them. It was the revolt of nearly all the active talent, and a great part of the physical force, of the working classes, against their whole relation to society. Conscientious and sympathizing minds among the ruling classes, could not but be strongly impressed by such a protest. They could not but ask themselves, with misgiving, what there was to say in reply to it; how the existing social arrangements could best be justified to those who deemed themselves aggrieved by them. It seemed highly desirable that the benefits derived from those arrangements by the poor should be made less questionable—should be such as could not easily be overlooked. If the poor had reason for their complaints, the higher classes had not fulfilled their duties as governors; if they had no reason, neither had those classes fulfilled their duties in allowing them to grow up so ignorant and uncultivated as to be open to these mischievous delusions. While one sort of minds among the more fortunate classes were thus influenced by the political claims put forth by the operatives, there was another description upon whom that phenomenon acted in a different manner, leading, however, to the same result. While some, by the physical and moral circumstances which they saw around them, were made to feel that the condition of the labouring classes ought to be attended to, others were made to see that it would be attended to, whether they wished to be blind to it or not. The victory of 1832, due to the manifestation, though without the actual employment, of physical force, had taught a lesson to those who, from the nature of the case, have always the physical force on their side; and who only wanted the organization, which they were rapidly acquiring, to convert their physical power into a moral and social one. It was no longer disputable that something must be done to render the multitude more content with the existing state of things.
Ideas, unless outward circumstances conspire with them, have in general no very rapid or immediate efficacy in human affairs; and the most favourable outward circumstances may pass by, or remain inoperative, for want of ideas suitable to the conjuncture. But when the right circumstances and the right ideas meet, the effect is seldom slow in manifesting itself. In the posture of things which has been described, we attribute considerable effect to certain writers, by whom what many were either thinking or prepared to think, was for the first time expressly proclaimed. Among these must be reckoned Mr. Carlyle, whose “Chartism”[*] and “Past and Present”[†] were openly, what much of his previous writings had been incidentally, an indignant remonstrance with the higher classes on their sins of omission against the lower; contrasted with what he deemed the superior efficiency, in that relation, of the rulers in older times. On both these points, he has met with auxiliaries from a directly opposite point of the political horizon; from those whom a spirit of reaction against the democratic tendencies of the age, had flung off with the greatest violence in the direction of feudal and sacerdotal ascendancy. As, in the Stuart times, there were said to be Church Puritans and State Puritans, so there are now Church Puseyites, and what may be called State Puseyites; k men who look back with fondness to times when the poor had no notion of any other social state than to give obedience to the nearest great landholder, and receive protection; and who assert, in the meantime, the right of the poor to protection, in hopes that the obedience will follow.
To complete the explanation of this increase of sympathy for the poor, it ought to be noticed that, until lately, few were adequately aware of their real condition. The agitation against the Poor-Law,[*] bad as it was and is, both in its objects and in its effects, had in it this good, that it incessantly invited attention to the details of distress. The inquiries emanating from the Poor-Law Commission, and the official investigations of the last few years, brought to light many facts which made a great impression upon the public; and the poverty and wretchedness of great masses of people were incidentally unveiled by the struggles of parties respecting the Corn-Laws.[†] The Agriculturists attempted to turn the tables upon their opponents, by highly coloured pictures of the sufferings and degradation of the Factory loperativesl ; and the League repaid the attack with interest, by sending emissaries into the rural districts, and publishing the deplorable poverty of the agricultural labourers.
From these multifarious causes a feeling has been awakened, which would soon be as influential in elections as the anti-slavery movement some years ago, and dispose of funds equal to those of the missionary societies, had it but as definite an object. The stream at present flows in a multitude of small channels. Societies for the protection of needlewomen, of governesses—associations to improve the buildings of the labouring classes, to provide them with baths, with parks and promenades, have started into existence. Legislative interference to abridge the hours of labour in mmanufactoriesm has obtained large minorities, and once a passing majority, in the House of Commons; and attempts are multiplying to obtain, by the consent of employers, a similar abridgment in many departments of retail trade. In the rural districts, every expedient, practicable or not, for giving work to the unemployed, finds advocates; public meetings for the discussion and comparison of projects have lately been frequent; and the movement towards the “allotment system” is becoming general.
If these, and other modes of relieving distress, were looked upon simply in the light of ordinary charity, they would not fill the large space they do in public discussion, and would not demand any special comment. To give money in alms has never been, either in this country or in most others, a rare virtue. Charitable institutions, and subscriptions for relief of the destitute, already abounded: and if new forms of suffering, or classes of sufferers previously overlooked, were brought into notice, nothing was more natural than to do for them what had already been done for others. People usually give alms to gratify their feelings of compassion, or to discharge what they think their duty by giving of their superfluity to alleviate the wants of individual sufferers; and beyond this they do not, nor are they, in general, qualified to look. But it is not in this spirit that the new schemes of benevolence are conceived. They are propounded as instalments of a great social reform. They are celebrated as the beginning of a new moral order, or an old order revived, in which the possessors of property are to resume their place as the paternal guardians of those less fortunate; and which, when established, is to cause peace and union throughout society, and to extinguish, not indeed poverty—that hardly seems to be thought desirable—but the more abject forms of vice, destitution, and physical wretchedness. What has hitherto been done in this brilliant career of improvement, is of very little importance compared with what is said; with the objects held up to pursuit, and the theories avowed. These are not now confined to speculative men and professed philanthropists. They are made familiar to every reader of newspapers, by sedulous inculcation from day to day.
It is therefore not superfluous to consider whether these theories, and the expectations built upon them, are rational or chimerical; whether the attempt to carry them out would in the end be found to accord or conflict with the nature of man, and of the world in which he is cast. It would be unfair to the theorists to try them by anything which has been commenced, or even projected. Were they asked if they expect any good to the general interest of the labouring people, from a Labourers’ Friend Society, or a Society for Distressed Needlewomen, they would of course answer that they do not; that these are but the first leaf-buds of what they hope to nourish into a stately and spreading tree; that they do not limit their intentions to mitigating the evils of a low remuneration of labour, but must have a high remuneration; in the words of the operatives in the late disturbances—“a fair day’s wages for a fair day’s work;”[*] —that they hope to secure this, and will be contented with nothing short of it. Here, then, is a ground on which we can fairly meet them. That object is ours also. The question is of means, not ends. Let us look a little into the means they propose.
Their theory appears to be, in few words, this—that it is the proper function of the possessors of wealth, and especially of the employers of labour and the owners of land, to take care that the labouring people are well off:—that they ought always to pay good wages;—that they ought to withdraw their custom, their patronage, and any other desirable thing at their disposal, from all employers who will not do the like;—that, at these good wages, they ought to give employment to as great a number of persons as they can afford; and to make them work for no greater number of hours in the twenty-four, than is compatible with comfort, and with leisure for recreation and improvement. That if they have land or houses to be let to tenants, they should require and accept no higher rents than can be paid with comfort; and should be ready to build, at such rents as can be conveniently paid, warm, airy, healthy, and spacious cottages, for any number of young couples who may ask for them.
All this is not said in direct terms; but something very little short of it is. These principles form the standard by which we daily see the conduct, both of classes and of individuals, measured and condemned; and if these principles are not true, the new doctrines are without a meaning. It is allowable to take this picture as a true likeness of the “new moral world”[*] which the present philanthropic movement aims at calling into existence.
Mankind are often cautioned by divines and moralists against unreasonableness in their expectations. We attach greater value to the more limited warning against inconsistency in them. The state of society which this picture represents, is a conceivable one. We shall not at present inquire if it is of all others the most eligible one, even as an Utopia. We only ask if its promoters are willing to accept this state of society, together with n its inevitable accompaniments.
It is quite possible to impose, as a moral or a legal obligation, upon the higher classes, that they shall be answerable for the well-doing and well-being of the lower. There have been times and places in which this has in some measure been done. States of society exist, in which it is the recognised duty of every owner of land, not only to see that all who dwell and work thereon are fed, clothed, and housed, in a sufficient manner; but to be, in so full a sense, responsible for their good conduct, as to indemnify all other persons for any damage they do, or offence they may commit. This must surely be the ideal state of society which the new philanthropists are contending for. Who are the happy labouring classes who enjoy the blessings of these wise ordinances? The Russian boors. There are other labourers, not merely tillers of the soil, but workers in great establishments partaking of the nature of omanufactorieso , for whom the laws of our own country, even in our own time, compelled their employers to find wholesome food, and sufficient lodging and clothing. Who were these? The slaves on a West pIndianp estate. The relation sought to be established between the landed and manufacturing classes and the labourers, is therefore by no means unexampled. The former have before now been forced to maintain the latter, and to provide work for them, or support them in idleness. But this obligation never has existed, and never will nor can exist, without, as a countervailing element, absolute power, or something approaching to it, in those who are bound to afford this support, over those entitled to receive it. Such a relation has never existed between human beings, without qimmediateq degradation to the character of the dependent class. Shall we take another example, in which things are not carried quite so far as this? There are governments in Europe who look upon it as part of their duty to take care of the physical well-being and comfort of the people. The Austrian government, in its German dominions, does so. Several of the minor German governments do so. But with paternal care is connected paternal authority. In these states we find severe restrictions on marriage. No one is permitted to marry, unless he satisfies the authorities that he has a rational prospect of being able to support a family.
Thus much, at least, it might have been expected that the apostles of the new theory would have been prepared for. They cannot mean that the working classes should combine the liberty of action of independent citizens, with the immunities of slaves. There are but two modes of social existence for human beings: they must be left to the natural consequences of their mistakes in life; or society must guard against the mistakes, by prevention or punishment. Which will the new philanthropists have? If it is really to be incumbent on whoever have more than a mere subsistence, to give, so far as their means enable them, good wages and comfortable homes to all who present themselves, it is not surely intended that these should be permitted to follow the instinct of multiplication at the expense of others, until all are reduced to the same level as themselves. We should therefore have expected that the philanthropists would have accepted the condition, and contended for such a measure of restriction as might prevent the good they meditate from producing an overbalance of evil. To our surprise, we find them the great sticklers for the domestic liberty of the poor. The outcry against the Poor-Law finds among them its principal organs. Far from being willing that a man should be subject, when out of the poorhouse, to any restraints other than his own prudence may dictate, they will not submit to its being imposed upon him while actually supported at the expense of others. It is they who talk of Union Bastiles. They cannot bear that even a workhouse should be a place of regulation and discipline; that any extrinsic restraint should be applied even there. Their bitterest quarrel with the present system of relief is, that it enforces the separation of the sexes.
The higher and middle classes might randr ought to be willing to submit to a very considerable sacrifice of their own means, for improving the condition of the existing generation of labourers, if by this they could hope to provide similar advantages for the generation to come. But why should they be called upon to make these sacrifices, merely that the country may contain a greater number of people, in as great poverty and as great liability to destitution as now? If whoever has too little, is to come to them to make it more, there is no alternative but restrictions on marriage, combined with such severe penalties on illegitimate births, as it would hardly be possible to enforce under a social system in which all grown persons are, nominally at least, their own masters. Without these provisions, the millennium promised would, in little more than a generation, sink the people of any country in Europe to one level of poverty. If, then, it is intended that the law, or the spersonss of property, should assume a control over the multiplication of the people, tell us so plainly, and inform us how you propose to do it. But it will doubtless be said, that nothing of this sort would be endurable; that such things are not to be dreamt of in the state of English society and opinion; that the spirit of equality, and the love of individual independence, have so pervaded even the poorest class, that they would not take plenty to eat and drink, at the price of having their most personal concerns regulated for them by others. If this be so, all schemes for withdrawing wages from the control of supply and demand, or raising the people by other means than by such changes in their minds and habits as shall make them fit guardians of their own physical condition, are schemes for combining incompatibilities. They ought ton proper conditionst to be shielded, we hope they already are so, by public or private charity, from actual want of mere necessaries, and from any other extreme of bodily suffering. But if the whole income of the country were divided among them in wages or poor-rates, still, until there is a change in themselves, there can be no lasting improvement in their outward condition.
And how is this change to be effected, while we continue inculcating upon them that their wages are to be regulated for them, and that to keep wages high is other people’s business and not theirs? All classes are ready enough, without prompting, to believe that whatever ails them is not their fault, but the crime of somebody else; and that they are granting an indemnity to the crime if they attempt to get rid of the evil by any effort or sacrifice of their own. The National Assembly of France has been much blamed for talking in a rhetorical style about the rights of man, and neglecting to say anything about the duties. The same error is now in the course of being repeated with respect to the rights of poverty. It would surely be no derogation from any one’s philanthropy to consider, that it is one thing to tell the rich that they ought to take care of the poor, and another thing to tell the poor that the rich ought to take care of them; and that it is rather idle in these days to suppose that a thing will not be overheard by the poor, because it is not designed for their ears. It is most true that the rich have much to answer for in their conduct to the poor. But in the matter of their poverty, there is no way in which the rich could have helped them, but by inducing them to help themselves; and if, while we stimulate the rich to repair this omission, we do all that depends on us to inculcate upon the poor that they need not attend to the lesson, we must be little aware of the sort of feelings and doctrines with which the minds of the poor are already filled. If we go on in this course, we may succeed in bursting society asunder by a Socialist revolution; but the poor, and their poverty, we shall leave worse than we found them.
The first remedy, then, is to abstain from directly counteracting our own end. The second, and most obvious, is Education. And this indeed is not the principal, but the sole remedy, if understood in its widest sense. Whatever acts upon the minds of the labouring classes, is properly their education. But their minds, like those of other people, are acted upon by the whole of their social circumstances; and often the part of their education which is least efficacious as such, is that which goes by the name.
Yet even in that comparatively narrow sense, too much stress can hardly be laid upon its importance. We have scarcely seen more than the small beginnings of what might be effected for the country even by mere schooling. The religious rivalries, which are the unhappy price the course of our history has compelled us to pay for such religious liberty as we possess, have as yet thwarted every attempt to make this benefit universal. But if the children of different religious bodies cannot be instructed together, each can be instructed apart. And if we may judge from the zeal manifested, and the sums raised, both by the Church and by Dissenters, since the abandonment of the Government measure two years ago, there is no deficiency of pecuniary means for the support of schools, even without the aid which the State certainly will not refuse. Unfortunately there is something wanting which pecuniary means will not supply. There is a lack of sincere desire to attain the end. There have been schools enough in England, these thirty years, to have regenerated the people, if, wherever the means were found, the end had been desired. But it is not always where there are schools that there is a wish to educate. There may be a wish that children should learn to read the Bible, and, in the Church Schools, to repeat the Catechism. In most cases, there is little desire that they should be taught more; in many, a decided objection to it. Schoolmasters, like other public officers, are seldom inclined to do more than is exacted from them; but we believe that teaching the poor is almost the only public duty in which the payers are more a check than a stimulant to the zeal of their own agents. A teacher whose heart is in the work, and who attempts any enlargement of the instruction, often finds his greatest obstacle in the fears of the patrons and managers lest the poor should be “over-educated;” and is driven to the most absolute evasions to obtain leave to teach the common rudiments of knowledge. The four rules of arithmetic are often only tolerated through ridiculous questions about Jacob’s lambs, or the number of the Apostles or uofu the Patriarchs; and geography can only be taught through maps of Palestine, to children who have yet to learn that the earth consists of Europe, Asia, Africa, and America. A person must be beyond being argued with, who believes that this is the way to teach religion, or that a child will be made to understand the Bible by being taught to understand nothing else. We forbear to comment on the instances in which Church Schools have been opened, solely that through the influence of superiors the children might be drawn away from a Dissenting School already existing; and, as soon as that was shut up, the rival establishment, having attained its end, has been allowed to fall into disuse.
This spirit could never be tolerated by any person of honest intentions, who knew the value of even the commonest knowledge to the poor. We know not how the case may be in other countries, among a more quick-witted people; but in England, it would hardly be believed to what a degree all that is morally objectionable in the lowest class of the working people is nourished, if not engendered, by the low state of their understandings. Their infantine credulity to what they hear, when it is from their own class; their incapacity to observe what is before their eyes; their inability to comprehend or believe purposes in others which they have not been taught to expect, and are not conscious of in themselves—are the known characteristics of persons of low intellectual faculties in all classes. But what would not be equally credible without experience, is an amount of deficiency in the power of reasoning and calculation, which makes them insensible to their own direct personal interests. Few have considered how any one who could instil into these people the commonest worldly wisdom—who could render them capable of even selfish prudential calculations—would improve their conduct in every relation of life, and clear the soil for the growth of right feelings and worthy propensities.
To know what schools may do, we have but to think of what vthev Scottish Parochial Schools have formerly done. The progress of wealth and population has outgrown the machinery of these schools, and, in the towns especially, they no longer produce their full fruits: but what do not the peasantry of Scotland owe to wthem!w For two centuries, the Scottish peasant, compared with the same class in other situations, has been a reflecting, an observing, and therefore naturally a self-governing, a moral, and a successful human being—because he has been a reading and a discussing one; and this he owes, above all other causes, to the parish schools. What during the same period have the English peasantry been?
Let us be assured that too much opportunity cannot be given to the poor of exercising their faculties, nor too great a variety of ideas placed within their reach. We hail, therefore, the cheap Libraries, which are supplying even the poorest with matter more or less instructive, and, what is of equal importance, calculated to interest their minds. But it is not only, or even principally, books and book learning, that constitutes education for the working or for any other class. Schools for reading are but imperfect things, unless systematically united with schools of industry; not to improve them as workmen merely, but as human beings. It is by action that the faculties are called forth, more than by words—more at least than by words unaccompanied by action. We want schools in which the children of the poor should learn to use not only their hands, but their minds, for the guidance of their hands; in which they should be trained to the actual adaptation of means to ends; should become familiar with the accomplishment of the same object by various processes, and be made to apprehend with their intellects in what consists the difference between the right way of performing industrial operations and the wrong. Meanwhile they would acquire, not only manual dexterity, but habits of order and regularity, of the utmost use in after-life, and which have more to do with the formation of character than many persons are aware of. x Such things would do much more than is usually believed towards converting these neglected creatures into rational beings—beings capable of foresight, accessible to reasons and motives addressed to their understanding; and therefore not governed by the utterly senseless modes of feeling and action, which so much astonish educated and observing persons ywheny brought into contact with them.
But when education, in this its narrow sense, has done its best, and even to enable it to do its best, an education of another sort is required, such as schools cannot give. What is taught to a child at school will be of little effect, if the circumstances which surround the grown man or woman contradict the lesson. zWez may cultivate his understanding, but what if he cannot employ it without becoming discontented with his position, and disaffected to the whole order of things in which he is cast? Society educates the poor, for good or for ill, by its conduct to them, even more than by direct teaching. A sense of this truth is the most valuable feature in the new philanthropic agitation; and the recognition of it is important, whatever mistakes may be at first made in practically applying it.
In the work before us, and in the best of the other writings which have appeared lately on the philanthropic side of the subject, a strong conviction is expressed, that there can be no healthful state of society, and no social or even physical welfare for the poor, where there is no relation between them and the rich except the payment of wages, and (we may add) the receipt of charity; no sense of co-operation and common interest between those natural associates who are now called the employers and the employed. In part of this we agree, though we think the case not a little overstated. A well-educated labouring class could, and we believe would, keep up its condition to a high standard of comfort, or at least at a great distance from physical destitution, by the exercise of the same degree of habitual prudence now commonly practised by the middle class; among whom the responsibilities of a family are rarely incurred without some prospect of being able to maintain it with the customary decencies of their station. We believe, too, that if this were the case, the poor could do very well without those incessant attentions on the part of the rich, which constitute the the new whole duty of man to his poorer neighbour. Seeing no necessary reason why the poor should be hopelessly dependent, we do not look upon them as permanent subjects for the exercise of those peculiar virtues which are essentially intended to mitigate the humiliation and misery of dependence. But the need of greater fellow-feeling and community of interest between the mass of the people and those who are by courtesy considered to guide and govern them, does not require the aid of exaggeration. We yield to no one in our wish that “cash payment” should be no longer “the universal nexus between man and man;”[*] that the employers and employed should have the feelings of friendly allies, not of hostile rivals whose gain is each other’s loss. But while we agree, so far, with the new doctrines, it seems to us that some of those who preach them are looking in the wrong quarter for what they seek. The social relations of former times, and those of the present, not only are not, but cannot possibly be, the same. The essential requirements of human nature may be alike in all ages, but each age has its own appropriate means of satisfying them. Feudality, in whatever manner we may conceive it modified, is not the type on which institutions or habits can now be moulded. The age that produces railroads which, for a few shillings, will convey a labourer and his family fifty miles to find work; in which agricultural labourers read newspapers, and make speeches at public meetings called by themselves to discuss low wages—is not an age in which a man can feel loyal and dutiful to another because he has been born on his estate. Obedience in return for protection, is a bargain only made when protection can be had on no other terms. Men now make that bargain with society, not with an individual. The law protects them, and they give their obedience to that. Obedience in return for wages is a different matter. They will make that bargain too, if necessity drives them to it. But good-will and gratitude form no part of the conditions of such a contract. The deference which a man now pays to his “brother of the earth,” merely because the one was born rich and the other poor, is either hypocrisy or servility. Real attachment, a genuine feeling of subordination, must now be the result of personal qualities, and requires them on both sides equally. Where these are wanting, in proportion to the enforced observances will be the concealed enmity; not, perhaps, towards the individual, for there will seldom be the extremes either of hatred or of affection in a relation so merely transitory; but that sourde animosity which is universal in this country towards the whole class of employers, in the whole class of the employed.
As one of the correctives to this deep-seated alienation of feeling, much stress is laid on the importance of personal demeanour. In the “Claims of Labour” this is the point most insisted upon. The book contains numerous aphorisms on this subject, and they are such as might be expected from the author of “Essays written in the Intervals of Business,”[*] and “Thoughts in the Cloister and the Crowd.”[†] A person disposed to criticise might indeed object, that these earnest and thoughtful sayings are chiefly illustrative of the duty of every one to every one; and are applicable to the formation of our own character, and to human relations generally, rather than to the special relation between the rich and the poor. It is not as concerning the poor specially, that these lessons are needed. The faults of the rich to the poor are the universal faults. The demeanour fitting towards the poor, is that which is fitting towards every one. It is a just charge against the English nation, considered generally, that they do not know how to be kind, courteous, and considerate of the feelings of others. It is their character throughout Europe. They have much to learn from other nations in the arts not only of being serviceable and amiable with grace, but of being so at all. Whatever brings the habitual feelings of human beings to one another nearer to the Christian standard, will produce a better demeanour to every one, and therefore to the poor. But it is not peculiarly towards them that the deficiency manifests itself. On the contrary, speaking of the rich individually (as distinguished from collective conduct in public life), there is generally, we believe, a very sincere desire to be amiable to the poor.
Where there exists the quality, so rare in England, of genuine sociability, combined with as much knowledge of the feelings and ways of the working classes as can enable any one to show interest in them to any useful purpose, the effects obtained are even now very valuable. The author of the “Claims of Labour” has done a useful thing by giving additional publicity to the proceedings of a generous and right-minded mill-owner, whom he does not name, but who is known to be Mr. Samuel Greg, from whose letters to Mr. Leonard Horner[*] he has quoted largely. Mr. Greg proceeded partly in the obvious course, of building good cottages, granting garden allotments, establishing schools, and so forth. But the essence of his plan consisted in becoming personally acquainted with the operatives, showing interest in their pursuits, taking part in their social amusements, and giving to the élite of them—men, women, and young persons—periodical access to the society and intercourse of his own home. He has afforded a specimen and model of what can be done for the people under the calumniated Factory System. And in nothing is he more to be commended, than in the steadiness with which he upholds the one essential principle of all effectual philanthropy. “The motto on our flag,” says he, “is Aide-toi, le ciel t’aidera. It is the principle I endeavour to keep constantly in view. It is the only principle on which it is safe to help anybody, or which can prevent benevolence from being poisoned into a fountain of moral mischief.” [P. 26.] His experiment has, for many years, been well rewarded by success. But, for the cure of great social evils, too great stress must not be laid upon it. The originator of such a scheme is, most likely, a person peculiarly fitted by natural and acquired qualifications for winning the confidence and attachment of untutored minds. If the spirit should diffuse itself widely among the employers of labour, there might be, in every large neighbourhood, some such man; we could never expect that the majority would be such. Even Mr. Greg had to begin, as he tells us, by selecting his labourers. He had to “get rid of his aborigines.” He “endeavoured, as far as possible, to find such families as we knew to be respectable, or thought likely to be so, and who, we hoped, if they were made comfortable, would remain and settle upon the place; thus finding and making themselves a home, and losing by degrees that restless and migratory spirit which is one of the peculiar characteristics of the manufacturing population, and perhaps the greatest of all obstacles in the way of permanent improvement among them.”[*] It is in the nature of things that employers so much beyond the average should gather round them better labourers than the average, and retain them, while so eligible a lot is not to be had elsewhere. But ordinary human nature is so poor a thing, that the same attachment and influence would not, with the same certainty, attend similar conduct, if it no longer formed a contrast with the indifference of other employers. The gratitude of men is for things unusual and unexpected. This does not take from the value of Mr. Greg’s exertions. Whoever succeeds in improving a certain number of the working people, does so much towards raising the class; and all such good influences have a tendency to spread. But, for creating a permanent tie between employers and employed, we must not count upon the results manifested in cases of exception, which would probably lose a part of their beneficial efficacy if they became the rule.
If, on a subject on which almost every thinker has his Utopia, we might be permitted to have ours; if we might point to the principle on which, at some distant date, we place our chief hope for healing the widening breach between those who toil and those who live on the produce of former toil; it would be that of raising the labourer from a receiver of hire—a mere bought instrument in the work of production, having no residuary interest in the work itself—to the position of being, in some sort, a partner in it. The plan of remunerating subordinates in whom trust must be reposed, by a commission on the returns instead of only a fixed salary, is already familiar in mercantile concerns, on the ground of its utility to the employer. The wisdom, even in a worldly sense, of associating the interest of the agent with the end he is employed to attain, is so universally recognised in theory, that it is not chimerical to expect it may one day be more extensively exemplified in practice. In some form of this policy we see the only, or the most practicable, means of harmonizing the “rights of industry” and those of property; of making the employers the real chiefs of the people, leading and guiding them in a work in which they also are interested—a work of co-operation, not of mere hiring and service; and justifying, by the superior capacity in which they contribute to the work, the higher remuneration which they receive for their share of it.a
But without carrying our view forward to changes of manners, or changes in the relation of the different orders of society to one another, let us consider what can be done immediately, and by the legislature, to improve either the bodily or mental condition of the labouring people.
And let it here be remembered that we have to do with a class, a large portion of which reads, discusses, and forms opinions on public interests. Let it be remembered also, that we live in a political age; in which the desire of political rights, or the abuse of political privileges by the possessors of them, are the foremost ideas in the minds of most reading men—an age, too, the whole spirit of which instigates every one to demand fair play for helping himself, rather than to seek or expect help from others. In such an age, and in the treatment of minds so predisposed, justice is the one needful thing rather than kindness. We may at least say that kindness will be little appreciated, will have very little of the effect of kindness upon the objects of it, so long as injustice, or what they cannot but deem to be injustice, is persevered in. Apply this to several of the laws maintained by our legislature. Apply it, for example, to the Corn-Laws. Will the poor thank you for giving them money in alms; for subscribing to build baths and lay out parks for them, or, as Lord John Manners proposes, playing at cricket with them, if you are at the same time taxing their bread to swell your rents? b We could understand persons who said—the people will not be better off whatever we do, and why should we sacrifice our rents or open our purses for so meagre a cresult?c But we cannot understand men who give alms with one hand, and take away the bread of the labourer with the other. Can they wonder that the people say—Instead of doling out to us a small fragment of what is rightfully our own, why do you not disgorge your unjust gains? One of the evils of the matter is, that the gains are so enormously exaggerated. Those who have studied the question know that the landlords gain very little by the Corn-Laws; and would soon have even that little restored to them by the indirect consequences of the abrogation. The rankling sense of gross injustice, which renders any approximation of feeling between the classes impossible while even the remembrance of it lasts, is inflicted for a quite insignificant pecuniary advantage.
There are some other practices which, if the new doctrines are embraced in earnest, will require to be reconsidered. For example, it seems to us that mixing in the social assemblies of the country people, and joining in their sports, would dassortd exceedingly ill with the preserving of game. If cricketing is to be taken in common by e rich and poor, why not shooting? We confess that when we read of enormous game preserves, kept up that great personages may slaughter hundreds of wild animals in a day’s shooting, we are amazed at the puerility of taste which can call this a sport; as much as we lament the want of just feeling which, for the sake of sport, can keep open from generation to generation this source of crime and bitterness in the class which it is now so much the fashion to patronize.
We must needs think, also, that there is something out of joint, when so much is said of the value of refining and humanizing tastes to the labouring people—when it is proposed to plant parks and lay out gardens for them, that they may enjoy more freely nature’s gift alike to rich and poor, of sun, sky, and vegetation; and along with this a counter-progress is fconstantlyf going on, of stopping up paths and enclosing commonsg . Is not this another case of giving with one hand, and taking back more largely with the other? We look with the utmost jealously upon any further enclosure of commons. In the greater part of this island, exclusive of the mountain and moor districts, there certainly is not more land remaining in a state of natural wildness than is desirable. Those who would make England resemble many parts of the Continent, where every foot of soil is hemmed in by fences and covered over with the traces of human labour, should remember that where this is done, it is done for the use and benefit, not of the rich, but of the poor; and that in the countries where there remain no commons, the rich have no parks. The common is the peasant’s park. Every argument for ploughing it up to raise more produce, applies à fortiori to the park, which is generally far more fertile. The effect of either, when done in the manner proposed, is only to make the poor more numerous, not better offh . But what ought to be said when, as so often happens, the common is taken from the poor, that the whole or great part of it may be added to the enclosed pleasure domain of the rich? Is the miserable compensation, and though miserable inot alwaysi granted, of a small scrap of the land to each of the cottagers who had a goose on the common, any equivalent to the poor generally, to the lovers of nature, or to future generations, for this legalized spoliation?
These are things to be avoided. Among things to be done, the most obvious is to remove every restriction, every artificial hindrance, which legal and fiscal systems oppose to the attempts of the labouring classes to forward their own improvement. These hindrances are sometimes to be found in quarters in which they may not be looked for; as a few instances will show.
Some years ago the Society for the Diffusion of Useful Knowledge, in a well-intended tract addressed to the working people, to correct the prejudices entertained by some of them against the “claims of capital,” gave some advice to the labourers, which produced considerable comment at the time. It exhorted them to “make themselves capitalists.”[*] To most labouring people who read it, this exhortation probably appeared ironical. But some of the more intelligent of the class found a meaning in it. It did occur to them that there was a mode in which they could make themselves capitalists. Not, of course, individually; but by bringing their small means into a common fund, by forming a numerous partnership or joint stock, they could, as it seemed to them, become their own employers—dispense with the agency of receivers of profit, and share among themselves the entire produce of their labour. This was a most desirable experiment. It would have been an excellent thing to have ascertained whether any great industrial enterprise, a manufactory for example, could be successfully carried on upon this principle. If it succeeded, the benefit was obvious; if, after sufficient trial, it was found impracticable, its failure also would be a valuable lesson. It would prove to the operatives that the profits of the employer are but the necessary price paid for the superiority of management produced by the stimulus of individual interest; and that if the capitalist be the costliest part of the machinery of production, he more than repays his cost. But it was found that the defects of the law of partnership, as applicable to numerous associations, presented difficulties rendering it impracticable to give this experiment a fair trial. Here, then, is a thing which Parliament might do for the labouring classes. The framing of a good law of Partnership, giving every attainable facility to the formation of large industrial capitals by the aggregation of small savings, would be a real boon. It would be the removal of no ideal grievance, but of one which we know to be felt, and felt deeply, by the most intelligent and right-thinking of the class—those who are most fitted to acquire, and best qualified to exercise, a beneficent influence over the rest.
Again, it is often complained of, as one of the saddest features of the constitution of society in the rural districts, that the class of yeomanry has died out; that there is no longer any intermediate connecting link between the mere labourer and the large farmer—no class somewhat above his own, into which, by industry and frugality, a labourer can hope to rise; that if he makes savings, they are less a benefit to him than a burden and an anxiety, from the absence of any local means of investment; unless indeed by becoming a shopkeeper in a town or village, where an additional shop is probably not wanted, where he has to form new habits, with great risk of failure, and, if he succeeds, does not remain an example and encouragement to others like himself. Is it not strange, then, that supposing him to have an opportunity of investing this money in a little patch of land, the Stamp-office would interfere and take a toll on the transaction? The tax, too, which the State levies on the transfer of small properties, is a trifling matter compared with the tax levied by the lawyers. The stampduty bears some proportion to the pecuniary amount; but the law charges are the same on the smallest transactions as on the greatest, and these are almost wholly occasioned by the defects of the law. There is no real reason why the transfer of land should be more difficult or costly than the transfer of three per cent stock, except thatj more of description is necessary to identify the subject-matter; all the rest is the consequence of mere technicalities, growing out of the obsolete incidents of the Feudal System.k
Many of the removable causes of ill-health are in the power of Government; but there is no need to enlarge upon a subject to which official Reports have drawn so much attention. The more effectual performance by Government of any of its acknowledged duties; the more zealous prosecution of any scheme tending to the general advantage, is beneficial to the labouring classes. Of schemes destined specially to give them employment, or add to their comforts, it may be said, once for all, that there is a simple test by which to judge them. Is the assistance of such a kind, and given in such a manner, as to render them ultimately independent of the continuance of similar assistance? If not, the best that can be said of the plans is, that they are harmless. To make them useful, it is an indispensable condition that there be a reasonable prospect of their being at some future time self-supporting. Even upon the best supposition, it appears to us that too much importance is attached to them. lGivenl education and just laws, the poorer class would be as competent as any other class to take care of their own personal habits and mrequirementsm .n
DE QUINCEY’S LOGIC OF POLITICAL ECONOMY
Westminster Review, XLIII (June, 1845), 319-31. Signed “A”; not republished. Original heading: “Art. II.—The Logic of Political Economy. By Thomas De Quincey. [Edinburgh:] Blackwood, 1844.” Running heads: “De Quincey’s / Logic of Political Economy.” Identified in JSM’s bibliography as “A review of De Quincey’s Logic of Political Economy in the Westminster Review for June 1845” (MacMinn, 58). No corrections or variants in Somerville College copy. When JSM turned later in 1845 to the writing of his Principles of Political Economy, De Quincey’s work was fresh in his mind (see 783 below).
De Quincey’s Logic of Political Economy
this book can be interesting only to the very few who aspire to scientific thinking, on a subject essentially practical; who are not content with being, as they think, substantially right on those special topics of inquiry, the connexion of which with practice may have been brought into strong light by the political controversies of the day; but who feel an intellectual necessity for the co-ordination of those detached opinions; for fixing the relation of each to the others, and to the deeper principles which ought to be at the foundation of all.
To that limited class, who however are the ultimate teachers of the rest, such writings as the one before us are both pleasant and useful; tending eminently to clear up the ideas of the reader, whether he be led to adopt those of the writer or not. The title, however, of the book, is a misnomer. Its subject is not “the Logic of Political Economy.” By the logic of a science we understand its method; its particular modes of investigation, and the nature of its evidence. Of these things Mr. De Quincey does not treat. What he does treat of shall be told in his own words:—
That the reader may not seek in this little work anything other or more than was designed, I will briefly state its primary object. Political Economy does not advance. Since the revolution effected in that science by Ricardo (1817), upon the whole it has been stationary. But why? It has always been my own conviction that the reason lies, not in any material defect of facts (except as to the single question of money), but in the laxity of some amongst the distinctions which are elementary to the science. If it were possible that but three elementary definitions, or axioms, or postulates, in geometry, should be liable to controversy and to a precarious use (a use dependent upon petition and momentary consent), what would follow? Simply this—that the whole vast aërial synthesis of that science, at present towering upwards towards infinity, would exhibit an edifice eternally, perhaps, renewing itself by facts, but eternally tottering in some parts, and in other parts mouldering eternally into ruins. . . . . Such, even to this moment, as regards its practical application, is the science of Political Economy. Nothing can be postulated—nothing can be demonstrated; for anarchy, even as to the earliest principles, is predominant. [Pp. iii-v.]
To give greater clearness and precision, therefore, to the elementary distinctions, is the author’s object. We agree in his estimate of its importance, though not for the reason which he indicates. We dissent from the opinion that political economy does not advance. We think it is in a state of most rapid progression. But, as with some other sciences in certain of their stages, the superstructure seems to be overgrowing the foundation. The science is growing at the extremities, without a proportional and suitable enlargement of the main trunk. Many important new views—new, at least, in having been previously overlooked—have dawned upon political economists during the last twenty years. But for want of sufficiently careful habits of systematic thought, these new views have been too frequently promulgated as contradictions of the doctrines previously received as fundamental; instead of being, what they almost always are, developments of them; corollaries flowing from these fundamental principles, certain conditions of fact being supposed. We may notice, as cases in point, Mr. Wakefield’s theory of colonization (to which full justice is incidentally done by our author),[*] and the doctrines, so far as they are tenable, of Professor Jones’s “Essay on the Distribution of Wealth.”[†] From any such error Mr. De Quincey is free. One of his merits is his early and consistent appreciation of Ricardo, the true founder of the abstract science of political economy, and whose writings are still, after all that has been since written, its purest source. What has been added to the science since Ricardo, does not need to be substituted for his doctrines, but to be incorporated with them. They do not require alteration or correction, so much as fuller exposition and comment.
Mr. De Quincey has very partially supplied this want; but his book will be useful to whoever may undertake to supply it. There is always a benefit done to any department of knowledge, by digging about the roots of its truths. Truths which have been long planted, are apt to die or become unproductive, if we do not occasionally let in the air, and turn up the soil which surrounds them. In plainer terms, it is a good service to revivify old truths, by new illustrations and by altering the language in which they are expressed. They then come out with the force, because with the freshness, of discoveries; and are better understood and more consistently followed to their consequences, for some time after. And if mere novelty in the statement and exposition of principles has a beneficial effect, still better is it when the new mode of statement has any advantage over the old; when it brings prominently forward some aspect of the truth, or some distinction between it and a neighbouring error, which was liable to escape notice, or which the modes of exposition previously in use tended in any degree to disguise.
Mr. De Quincey is well qualified to render this kind of service to any branch of speculation with which he is conversant. His mind has a natural tendency to drawing distinctions; in doing which he frequently manifests real subtlety, and occasionally that turn for subtleties, which is not the same thing, but which simulates it. By means of his subtlety he is often enabled to see very exactly in what respect some received mode of expressing a scientific principle misses the mark—failing to convey the whole truth, or conveying, under some particular circumstances, more than the truth. A practised and skilful wielder of philosophical terms, he is often happy in finding a form of language, or a combination of several forms of language, which shall just convey the whole of the intended meaning, and no more. In bringing an abstract thought home to an unpractised comprehension, he is very successful, and would be more so if he had not a strange delight in drawing illustrations from subjects ten times more abstruse than what they are designed to illustrate. He makes amends, however, by drawing largely upon topics the most homely and familiar; of which his miscellaneous knowledge furnishes him with an abundance, and which are continually starting up and crossing the path of his dissertation in the most unexpected and surprising manner. There is apparently something of design in this; either from a notion of relieving the dryness of a metaphysical discussion, or in connexion with a certain air of self-consciousness, if not self-complacency, which considerably alloys the pleasure arising from his liveliness and ingenuity. He never surmounts any obstacle in the line of his course, without letting you hear him soliloquize before he attempts the leap, and see him turn round to measure it after it is done.
Altogether, he is a person who has a full right to be heard on any subject connected with political economy, and who may be heard, even by those best versed in the subject, with profit.
The larger half of the volume is occupied with the theory of Value; which he rightly esteems the master-key to the principal difficulties of the science. On this subject he claims to have thrown light upon “a source of confusion which never has been exposed, and which, at the very vestibule, has hitherto defeated all attempt at a systematic theory of value.” [P. vii.] This confusion is one affecting the relation between what is called, in the terminology of Adam Smith, value in use, and value in exchange.
Although we cannot concede, to our author’s speculations on this subject, all the originality which he ascribes to them, the merit must be allowed him of having brought out into full theoretical explicitness what was known to all clear thinkers, but might easily be overlooked by the less advanced student. His exposition, though somewhat prolix, is so clear and effective that we need no apology for citing a considerable portion of it.
Almost all writers have agreed substantially, and have rightly agreed, in founding exchangeable value upon two elements—power in the article valued to meet some natural desire or some casual purpose of man, in the first place, and in the second place, upon difficulty of attainment. These two elements must meet, must come into combination, before any value in exchange can be established. They constitute the two co-ordinate conditions, of which where either is absent, no value in the sense of exchange value can arise for a moment. Indeed, it is evident to common sense, that any article whatever, to obtain that artificial sort of value which is meant by exchange value, must begin by offering itself as a means to some desirable purpose; and secondly, that even though possessing incontestably this preliminary advantage, it will never ascend to an exchange value in cases where it can be obtained gratuitously, and without effort—of which last terms both are necessary as limitations. For often it will happen that some desirable object may be obtained gratuitously; stoop, and you gather it at your feet; but still, because the continued iteration of this stooping exacts a laborious effort, very soon it is found, that to gather for yourself virtually is not gratuitous. In the vast forests of the Canadas, at intervals wild strawberries may be gratuitously gathered by ship-loads: yet such is the exhaustion of a stooping posture, and of a labour so monotonous, that everybody is soon glad to resign the service into mercenary hands.
The same idea, the same demand of a two-fold conditio sine qua non as essential to the composition of an exchange value, is otherwise expressed (and in a shape better fitted for subsequent reference) by the two following cases, marked Epsilon and Omicron.
Case Epsilon.—A man comes forward with his overture: ‘Here is a thing which I wish you to purchase; it has cost me in labour five guineas, and that is the price I ask.’ ‘Very well,’ you reply; ‘but tell me this, what desire or purpose of mine will the article promote?’ Epsilon rejoins, ‘Why, as candour is my infirmity, none at all. But what of that? Useful or not, the article embodies five guineas’ worth of excellent labour.’ This man, the candid Epsilon, you dismiss.
Case Omicron.—Him succeeds Omicron, who praises your decisive conduct as to the absurd family of the Epsilons. ‘That man,’ he observes, ‘is weak—candid, but weak; for what was the cost in your eyes but so much toil to no effect of real service? But that is what nobody can say of the article offered by myself; it is serviceable always—nay, often you will acknowledge it to be indispensable.’ ‘What is it?’ you demand. ‘Why simply, then, it is a pound of water, and as good water as ever you tasted.’ The scene lies in England, where water bears no value except under that machinery of costly arrangements which delivers it as a permanent and guaranteed succession into the very chambers where it is to be used. Omicron accordingly receives permission to follow the candid Epsilon. Each has offered for sale one element of value out of two, one element in a state of insulation, where it was indispensable for any operative value, i.e. price, to offer the two in combination; and without such a combination it is impossible (neither does any economist deny this by his principles) that value in exchange, under the most romantic or imaginary circumstances, ever should be realized. [Pp. 13-15.]
Thus far, as the author observes, is plain sailing; but in the next step, he asserts, “a difficulty arises to all appearance insurmountable . . . which seems, when stated, to include a metaphysical impossibility.” [Pp. 15-16.] After what appears to us a most inordinate over-statement of this metaphysical perplexity, he proceeds to state the doctrine, in his opinion a novel one, which resolves it. This doctrine is, that while both usefulness and difficulty of attainment are necessary conditions to the existence of any exchange value, the amount of the value is determined not by both jointly, but either wholly by one or wholly by the other, according to the nature of the case.
The two elements are U and D. If both elements are to be present, and both are to be operative, then indeed we have a contradiction in terms such as never will be overcome. But how if both be uniformly present, one only being at any time operative? How if both be indispensably present, but alternately each become inert? How if both act as motives on the buyer for buying at all, but one only (each in turn under its own circumstances) as a force operating on the price?
This is the real case: this is the true solution; and thus is a difference obtained—such a difference as will amply sustain a two-fold subdivision from elements substantially the same. Both are co-present, and always. Neither can be absent; for, if so, then the common idea of exchange value would vanish, the case Epsilon or the case Omicron would be realized. But each of the two is suspended alternately. Thus, by way of illustration, walk into almost any possible shop, buy the first article you see; what will determine its price? In ninety-nine cases out of a hundred, simply the element D—difficulty of attainment. The other element, U, or intrinsic utility, will be perfectly inoperative. Let the thing (measured by its uses) be, for your purposes, worth ten guineas, so that you would rather give ten guineas than lose it; yet, if the difficulty of producing it be only worth one guinea, one guinea is the price which it will bear. But still not the less, though U is inoperative, can U be supposed absent? By no possibility; for, if it had been absent, assuredly you would not have bought the article even at the lowest price. U acts upon you, though it does not act upon the price. On the other hand, in the hundredth case, we will suppose the circumstances reversed: you are on Lake Superior in a steam-boat, making your way to an unsettled region 800 miles a-head of civilization, and consciously with no chance at all of purchasing any luxury whatsoever, little luxury or big luxury, for the space of ten years to come: one fellow-passenger, whom you will part with before sunset, has a powerful musical snuff-box; knowing by experience the power of such a toy over your own feelings, the magic with which at times it lulls your agitations of mind, you are vehemently desirous to purchase it. In the hour of leaving London you had forgot to do so; here is a final chance. But the owner, aware of your situation not less than yourself, is determined to operate by a strain pushed to the very uttermost upon U, upon the intrinsic worth of the article in your individual estimate for your individual purposes. He will not hear of D as any controlling power or mitigating agency in the case: and finally, although at six guineas a-piece in London or Paris, you might have loaded a waggon with such boxes, you pay sixty rather than lose it when the last knell of the clock has sounded, which summons you to buy now or to forfeit for ever. Here, as before, only one element is operative: before it was D, now it is U. But, after all, D was not absent, though inoperative. The inertness of D allowed U to put forth its total effect. The practical compression of D being withdrawn, U springs up like water in a pump, when released from the pressure of air. Yet still that D was present to your thoughts, though the price was otherwise regulated, is evident; both because U and D must coexist in order to found any case of exchange value whatever, and because undeniably you take into very particular consideration this D, the extreme difficulty of attainment (which here is the greatest possible, viz., an impossibility), before you consent to have the price racked up to U. The special D has vanished; but it is replaced in your thoughts by an unlimited D. Undoubtedly you have submitted to U in extremity as the regulating force of the price; but it was under the sense of D’s latent presence. Yet D is so far from exerting any positive force, that the retirement of D from all agency whatever on the price—this it is which creates as it were a perfect vacuum, and through that vacuum U rushes up to its highest and ultimate gradation. [Pp. 23-8.]
It would be difficult, we think, to cite a specimen of exposition on an abstract subject, more transparently clear, and at the same time so scientifically precise. But can Mr. De Quincey be serious in maintaining that the doctrine which this passage embodies is a novel one? Have not all political economists distinguished between articles which can be multiplied to an indefinite extent by labour, and articles naturally or artificially limited to a quantity short of the demand; and have they not all, from Ricardo downwards, affirmed that in the former, and more common case, the value conforms on an average to the cost of production, while in the latter there are no limits to the value except the necessities or desires of the purchaser? It is true that, as to some part of the theory of this latter case, there would be a difference. They would not, we conceive, agree with Mr. De Quincey in what follows:—
Suppose not D, but U, to become the ruling force; D has become infinite (as in the case of the musical toy in Canada), that is, the difficulties in the way of supplying the market by a continued reproduction of the article (in one word, the resistance) must be supposed so vast as to be quite beyond the power of any individual to overcome. Instantly, under these circumstances, U springs up to its utmost height. The rare holders of the article, as surviving from past times or regions now inaccessibly distant, will fix a strain upon the few purchasers by means of the intrinsic or U value; each of the candidates must submit to see his own outside or extreme esteem for the article made operative against himself as the law of the price. He must ascend to the very maximum of what he will pay, under the known alternative of losing the article for ever if he will not pay it. [P. 30.]
Now we apprehend that political economists generally (and common sense can judge of this question as well as political economy) would deny that, in the case supposed, the utmost price which the purchaser would consent to pay, would necessarily be the actual price. They would say, that it would be merely a possible price; the extreme limit of price; which would be attained or not attained, according to something else. And to what else? In the opinion of all political economists, to the relation which might happen to subsist between the demand and the supply. And this brings us to our chief point of difference with the author. That supply and demand can of themselves in any case regulate price, is a notion of which he speaks with unbounded contempt. It is one of the delusions which he takes to himself most credit for dissipating.
People fancy [he says in his preface] that the relation of supply to demand could by possibility, and that in fact it often does, determine separately per se the selling price of an article. Within a few months this monstrous idea has been assumed for true by Colonel Torrens, in an express work on Economic Politics; by Lord Brougham, in relation to the foreign corn trade; and by almost every journal in the land that has fallen under my own eye.[*] [And again (p. 127):—] A crazy maxim has got possession of the whole world; viz., that price is, or can be, determined by the relation between supply and demand.
We think it can be shown that Colonel Torrens, Lord Brougham, every journal in the land, and finally the whole world, happen in this particular case to be in the right, and Mr. De Quincey in the wrong. To prove this we must be allowed to add one or two circumstances to his hypothesis of the single musical box in the wilds of America.
Suppose, first, that the steam-boat contains not one, but two musical boxes, and only one person anxious to be a purchaser. Suppose, too, that neither of the possessors desires to keep the box; that both possess it only for the purpose of sale. The buyer is in the same emergency as before; willing to pay sixty guineas rather than lose the opportunity. But the situation of the sellers is different. Supposing no combination between them, and assuming that the purchaser wants only one of the boxes—the competition between the two thus coming fully into action—what will now be the price? No longer the highest which the buyer could be induced to give, but the lowest which the seller would take; the lowest, which would be a sufficient motive to him for selling the article then and there, rather than taking it back to New York when he returns by the steam-boat.
Suppose, secondly, instead of competition, the strictest monopoly, but without limitation of quantity. Let there be only one passenger who has any musical boxes, but let him possess not one but two. He can now, if he pleases, as our author expresses it, strain U to the utmost; he can obtain for one of his commodities the sum (supposed to be sixty guineas) which is the very utmost that the buyer would pay, rather than forego the purchase. But suppose that, by putting a somewhat lower price upon his article, he can prevail on his customer to take both boxes off his hands instead of one. The ordinary price, as determined by cost of production, being by supposition only six guineas, if the seller receives sixty-six for both, he gains as much as by receiving sixty for one: if he receives seventy, he gains more. It may be his interest therefore to fix thirty-five guineas, instead of sixty, as the price of his commodity. Sixty, which Mr. De Quincey calls the affirmative value[*] (six in this case being the negative), is therefore only the limit of value. Beyond that amount the price cannot go. But it may stop short at any intermediate point between the affirmative value and the negative.
The two cases which we have put represent two large classes of cases, of continual occurrence, in which, we apprehend, demand and supply do regulate value; and even (within the admitted limits, of the cost price on one side, and on the other the highest price which any one would consent to give) are the sole regulators of it. Surely, then, there can be no preliminary objection against listening to Colonel Torrens, or any one who professes to be able to point out other cases of a like description. The proposition may safely be generalized. Wherever cost of production does not regulate the price, there demand and supply do regulate it.
But we have not yet stated through what singular concatenation of ideas this, which by his own admission seems obvious to “all the world,” [p. 127] appears to so ingenious a man as Mr. De Quincey a portentous absurdity. He thinks there is a metaphysical impossibility in the very idea.
Try to extract price for wheat from the simple relation of the supply to the demand. Suppose the supply to be by one-tenth part beyond the demand, what price will that indicate for eight imperial bushels of the best red wheat, weighing sixty-four pounds a bushel? Will the price be a shilling, or will it be a thousand pounds? You guess that the first would be too little, and the second too much. Perhaps so; but what makes you ‘guess’ this? Why, simply, your past experience. You fancy yourself ascertaining the price by the relation of supply to demand, and in fact you are ascertaining the price by privately looking for the cost in past years; the very thing that you had pledged yourself to dispense with. [P. 127.]
That Mr. De Quincey should find anything insuperable in such a difficulty, is a mortifying example how little the acutest intellect can be depended on for being always present. “Suppose the supply to be by one-tenth part beyond the demand, what price will that indicate?” Why, the price, whatever it happens to be, which will increase the demand by one-tenth. If the harvest exceeds by one-tenth its ordinary amount, corn will fall just as much below its ordinary price as will create a market for the surplus, either through the increased consumption consequent on cheapness, or by inducing dealers to buy corn for the purpose of exporting it or storing it for future years. To that price, and that price exactly, which will restore the equality between demand and supply, will the commodities fall; unless some of the sellers, rather than submit to so great a reduction, keep their corn unsold, and thus re-establish the equilibrium in the other possible mode, by withdrawing the excess of supply. This is, we apprehend, the law of value, in the cases where cost of production is inoperative. The value (or price) will so adjust itself that the demand shall be equal to the supply. But if so, our author’s ingeniously expressed theory, that “whilst natural price (the contradiction of market price) is always a mononomial, price founded on the relation of supply and demand must always be a binomial,” [p. ix] is, together with all that he says in its behalf [pp. 118ff.], without meaning or reason.
We find scarcely anything else from which to dissent, in the economical doctrines of the book. The chapters on Wages, Rent, and Profits, are all they profess to be, a useful commentary on Ricardo; a thing much wanted, and which very few persons could have done so well, or indeed done at all. Ricardo, though in point of mere style by no means an obscure writer, was as little fitted by nature and habit as Mr. De Quincey is eminently so, for the popular exposition of his own doctrines. Mr. De Quincey thoroughly understands his master, and is therefore able to supply new developments and illustrations of the master’s doctrines. But the most interesting, as well as the most original, of these developments and illustrations are on the subject already touched upon, that of value. As an example what pleasant reading he can make of a dry scientific discussion, we will quote some passages from the fourth section of the first chapter; which is devoted to the analysis of some apparently anomalous cases of exchangeable value as influenced by U, the capability of the object to serve a purpose, instead of D, the cost of production.
In the reign of Charles II occurred the first sale of a rhinoceros. The more interesting wild beasts—those distinguished by ferocity, by cruelty, and agility—had long been imported from the Mediterranean; and as some of them were ‘good fellows and would strike’ (though, generally speaking, both the lion and the tiger are the merest curs in nature), they bore tolerable prices, even in the time of Shakspeare. But a rhinoceros had not yet been imported; and in fact that brute is a dangerous connexion to form. As a great lady from Germany replied some twenty years ago to an Englishman who had offered her an elephant, ‘Mit nichten, by no means; him eat too mauch.’ In spite, however, of a similar infirmity, the rhinoceros fetched, under Charles II, more than 2,000l. But why—on what principle? Was it his computed negative value [cost of attainment][*] ? Not at all. A granite obelisk from Thebes, or a Cleopatra’s needle, though as heavy as a pulk of rhinoceroses, would not have cost as much to sling and transport from the Niger to the Thames. But in such a case there are two reasons why the purchaser is not anxious to inquire about the costs. In buying a loaf that is an important question, because a loaf will be bought every day, and there is a great use in knowing the cost, or negative value, as that which will assuredly govern an article of daily reproduction. But in buying a rhinoceros, which it is to be hoped that no man will be so ill-fated as to do twice in one world, it is scarcely to be hoped that the importer will tell any truth at all, nor is it of much consequence that he should; for the buyer cares little by comparison as to the separate question on the negative price of the brute to his importer. He cares, perhaps, not very much more as to the separate question upon the affirmative return likely to arise for himself in the case of his exhibiting such a monster. Neither value taken singly was the practical reply to his anxieties. That reply was found in both values, taken in combination; the negative balanced against the affirmative. It was less important to hear that the cost had been 1,000l., so long as the affirmative return was conjecturally assigned at little beyond 2,200l., than to hear that the immediate cost to the importer had been 2,000l., but with the important assurance that 5,000l., at the very least, might be almost guaranteed from the public exhibition of so delicate a brute. The creature had not been brought from the Barbary States, our staple market for monsters, but from some part of Africa round the Cape; so that the cost had been unusually great. But the affirmative value, founded on the public curiosity, was greater; and when the two terms in the comparison came into collision, then was manifested the excess of the affirmative value, in that one instance, as measured against the negative. An ‘encore’ was hardly to be expected for a rhinoceros in the same generation; but for that once it turned out that a moderate fortune might be raised upon so brutal a basis. [Pp. 61-3.]
Such cases are a sort of praxis to students of the science, to test the completeness of their understanding of its principles.[*] Again:
Hunters, as against race-horses. If a man were to offer you a hunter, master of your weight, and otherwise satisfactory, you would readily give him a fair price. But what is a fair price? That which will reproduce such a hunter—his cost; the total resistance to his being offered in this condition. Such is the value, and such the law of value, for a hunter. But it is no longer such for a racer. When a breeder of horses finds one amongst his stud promising first-rate powers of contending at Newmarket, he is no longer content to receive a cost price for the horse, or anything like it. The man who (as a master of pearl-divers) sells the ordinary seed-pearls at the mere cost and fair profit on the day’s wages which have earned them, when he reaps a pearl fit to embellish the Schah of Persia’s crown, looks to become a petty schah himself. He might sell it with a profit by obtaining even that whole day’s wages, during one hour of which it was produced; but will he? No more than, amongst ourselves, the man who, by a twenty-guinea lottery ticket, drew a prize of 10,000l., would have sold his ticket for a profit of cent per cent upon its cost. The breeder of the race-horse would take into his estimate the numerous and splendid stakes which the horse might hereafter win; sometimes at Epsom, on one Derby day, as much as from 5,000l. to 6,000l.; to say nothing of the Leger at Doncaster, or other enormous prizes. It is true that the chances of mortality and failure must also be weighed: and unluckily no insurance has yet been done on racers, except as regards sea-risk. But after all drawbacks, the owner may succeed finally in obtaining for a first-rate horse (once known for good performances) as much as 4,000l.; whilst the whole value, computed on the resistance, might not have been more than as many hundreds. And this fact, though standing back in the rear as regards public knowledge, we may see daily advertised in effect by that common regulation which empowers the loser in many cases to insist on the winning horse being sold for 200l., or a similar small sum. Were it not for this rule, which puts a stop to all such attempts without hazard of personal disputes, it would be a capital speculation for any first-rater, though beaten at Newmarket, to sweep all the stakes without effort on a tour through the provincial courses; justice would cease for the owners of inferior horses, and sport for the spectators of the competition. [Pp. 77-8.]
Land is another illustration, and of the first rank. . . You may easily bring it under examination, by contrasting it with the case of a machine for displacing human labour. That machine, if it does the work in one hundred days of one hundred men in the same time, will at first sell for something approaching to the labour which it saves—say for the value of eighty men’s labour; that is, it will sell for what it can produce, not for what will produce itself: that is, it will sell for affirmative not for negative value. But as soon as the construction of such a machine ceases to be a secret, its value will totally alter. It will not sell for the labour produced, but for the labour producing. By the supposition, it produces work equal to that of a hundred men for one hundred days; but, if it can itself be produced by twenty men in twenty days, then it will finally drop in value to that price; it will no longer be viewed as a cause equal to certain effects, but as an effect certainly reproducible by a known cause at a known cost. Such is the case eventually with all artificial machines; and for the plain reason, that once ceasing to be a secret, they can be reproduced ad infinitum. On the other hand, land is a natural machine—it is limited—it cannot be reproduced. It will therefore always sell as a power—that is, in relation to the effects which it can produce, not as itself an effect; because no cause is adequate to the production of land. The rent expresses one year’s value of land; and, if it is bought in perpetuity, then the value is calculated on so many years’ purchase—a valuation worthy, on another occasion, of a separate consideration. For the present it is enough to say, that land is not valued on any principle of cost—does not sell at negative value—but entirely on the principle of its powers or intrinsic qualities; in short, it sells for affirmative value—as a power, as a cause, not as an effect. [Pp. 84-5.]
A writer with so wide a range of ideas as Mr. De Quincey, and so unusually disposed to give them out without distinction of occasion, cannot be dismissed with a simple judgment of what his book is in respect of the subject it professedly treats of. His writings treat of a hundred things besides their ostensible subject, and it is necessary to say what their worth is in that more extensive estimation. We will say, then, that this book is enriched with many acute remarks; some of a logical, some of a miscellaneous character; on any subject, important or trifling, from the qualities of turbot to the laws of thought: while it is deformed by ultra-Tory prejudices in a degree of virulence now seldom seen in men at all approaching to his standard of intellect. It might make the angels weep for the pretensions of science and philosophy, when, even on the subject with which he is most scientifically conversant, they cannot inspire such a man with sufficient calmness, impartiality, and candour of judgment, to save him from the incessant use of such phrases as “corn traitors,” “corn-law incendiaries,”[*] and the like, to designate those who think that the trade in food ought to be free; an opinion which the author himself is bound to hold, by every fair deduction from his own principles. We are quite unable to reconcile this wretched party invective with the respect we sincerely wish to feel for Mr. De Quincey. We turn from it with pleasure to an excellent passage with which, rather than any other of the book, we may appropriately conclude, because it is a well-thought and well-expressed explanation and justification of the purpose which such writings as this are intended to serve; and because the lesson it conveys is one which English thinkers in particular have pre-eminently need to learn:—
Although a masculine good sense will generally escape in practice from merely logical perplexities (that is, will cut the knot for all immediate results of practice which it cannot untie); yet errors ‘in the first intention’ come round upon us in subsequent stages, unless they are met by their proper and commensurate solutions. Logic must be freed by logic; a false dialectical appearance of truth must be put down by the fullest exposure of the absolute and hidden truth, since also it will continually happen that a plausible sophism, which had been summarily crushed for the moment by a strong appeal to general good sense upon the absurd consequences arising, will infallibly return upon us when no such startling consequences are at hand. [Pp. 16-17.]
[a-a]36 Philosophical Investigation in that Science
[b-b]36 or [printer’s error]
[d-d]36 first, and then
[e-e]36 deposited therein. They
[h-h]36 imperfect ones
[i-i]+44 [printer’s error?]
[[*] ]Stewart, Elements of the Philosophy of the Human Mind. London: Strahan and Cadell, 1792, I, pp. 19-20.
[j-j]36 any material degree
[l-l]36 were not
[n]36 [footnote:] *See the Gorgias of Plato [463b].
[q]36 which is
[r-r]36 far [printer’s error, corrected by JSM in Somerville College copy of 36]
[s]36 [no paragraph]
[t-t]36 in the definition stated
[x-x]36 definites [printer’s error, corrected by JSM in Somerville College copy of 36]
[h-h]36 the highest
[j-j]36 and [printer’s error?]
[k-k]36 if it be
[o-o]36 in kind
[p-p]36 in kind
[s-s]36 human mind
[t]36 what are called
[y-y]36 It is obvious why.
[z-z]36 and [printer’s error?]
[a-a]36 , except the phenomena of the mind itself
[b-b]36 except pure metaphysics
[* ]We say, the production and distribution, not, as is usual with writers on this science, the production, distribution, and consumption. For we contend that Political Economy, as conceived by those very writers, has nothing to do with the consumption [36 consumption] of wealth, further than as the consideration of it is inseparable from that of production, or from that of distribution. We know not of any laws of the consumption of wealth as the subject of a distinct science: they can be no other than the laws of human enjoyment. Political economists have never treated of consumption on its own account, but always for the purpose of the inquiry in what manner different kinds of consumption affect the production and distribution of wealth. Under the head of Consumption, in professed treatises on the science, the following are the subjects treated of: 1st, The distinction between productive and unproductive consumption; 2nd, The inquiry whether it is possible for too much wealth to be produced, and for too great a portion of what has been produced to be applied to the purpose of further production; 3rd, The theory of taxation, that is to say, the following two questions—by whom each particular tax is paid (a question of distribution), and in what manner particular taxes affect production.
[† ]The physical laws of the production of useful objects are all equally presupposed by the science of Political Economy: most of them, however, it presupposes in the gross, seeming to say nothing about them. A [36 them: a] few (such, for instance, as the decreasing ratio in which the produce of the soil is increased by an increased application of labour) it is obliged particularly to specify, and thus seems to borrow those truths from the physical sciences to which they properly belong, and include them among its own.
[h-h]36 as an individual man, and would belong to him
[i-i]36 human beings individually
[l-l]36 taken singly and individually,
[* ]The science of legislation is an incorrect and misleading expression. Legislation is making laws. We do not talk of the science of making anything. Even the science of government would be an objectionable expression, were it not that government is often loosely taken to signify, not the act of governing, but the state or condition of being governed, or of living under a government. A preferable expression would be, the science of political society; a principal branch of the more extensive science of society, characterized in the text.
[[*] ]See Say, Jean-Batiste. “Discours préliminaire,” Traité d’économie politique. Paris: Deterville, 1803, I, pp. i ff.
[s-s]36 signification. Ὀιχονομία πολίτιχὴ, the economy of the πόλις, or commonwealth, must originally have meant the whole of the laws or principles which determine the working of the social machine.
[t-t]36 this extensive
[x-x]36 There are many
[c-c]36 conduce to the greatest increase of
[d-d]36 differences of principle
[e-e]36 philosophic method
[f-f]36 from which
[h-h]36 practice or experience
[i-i]36 two kinds,—if we did not see strong objections to the word we would say two schools—of inquirers into truth: one of these sets of people
[j]36 to us
[n-n]36 which makes such a pretension
[q-q]36 the hypotheses
[t-t]36 the moral sciences
[u-u]36 use Euclid’s Elements as waste paper
[z-z]36 sciences [printer’s error?]
[a-a]36 accorded [printer’s error, corrected by JSM in Somerville College copy of 36]
[e-e]36 , and here alone
[f-f]36 mere [printer’s error] universal [error corrected by JSM in Somerville College copy of 36]
[* ]One of the strongest reasons for drawing the line of separation clearly and broadly between science and art [36 science and art] is the following:—That the principle of classification in science [36 science] most conveniently follows the classification of causes, while arts [36 arts] must necessarily be classified according to the classification of the effects, the production of which is their appropriate end. Now an effect, whether in physics or morals, commonly depends upon a concurrence [36 concurrence] of causes, and it frequently happens that several of these causes belong to different sciences. Thus in the construction of engines upon the principles of the science of mechanics, it is necessary to bear in mind the chemical properties of the material, such as its liability to oxydize; its electrical and magnetic properties, and so forth. From this it follows that although the necessary foundation of all art is science [36 art is science], that is, the knowledge of the properties or laws of the objects upon which, and with which, the art does its work; it is not equally true that every art corresponds to one particular science. Each art presupposes, not one [36 one] science, but science in general [36 general]; or, at least, many distinct sciences.
[h]36 , in our own minds,
[o-o]36 in the abstract
[p-p]+44 [added by JSM in Somerville College copy of 36]
[q-q]36 disturbing cause
[t-t]36 has to think
[u]36 Knowledge of what is called history, so commonly regarded as the sole fountain of political experience, is useful only in the third degree. History, by itself, if we knew it ten times better than we do, could, for the reasons already given, prove little or nothing: but the study of it is a corrective to the narrow and exclusive views which are apt to be engendered by observation on a more limited scale. Those who never look backwards, seldom look far forwards: their notions of human affairs, and of human nature itself, are circumscribed within the conditions of their own country and their own times. But the uses of history, and the spirit in which it ought to be studied, are subjects which have never yet had justice done them, and which involve considerations more multifarious than can be pertinently introduced in this place.
[v-v]36 it is difficult to point out one who has
[w-w]36 greatest misfortunes
[x]36 (a separation unknown to the better days of Greece and Rome, where the practical men were brought up in philosophy, and the philosophers received their education and formed their character in the midst of active life,)
[z-z]36 which compose the furniture of his country-house
[c-c]+44 [printer’s error?]
[d-d]36 generally seek in vain for a man
[e-e]36 , who will long remain the
[l-l]36 we have
[n-n]36 potent [printer’s error, corrected by JSM in Somerville College copy of 36]
[q-q]36 too wide
[y-y]36 prevent, it retards
[[*] ]A History of Prices, and of the State of the Circulation, from 1793 to 1837. 2 vols. London: Longman, Orme, Brown, Green, and Longmans, 1838; and A History of Prices, and of the State of the Circulation, in 1838 and 1839. London: Longman, Orme, Brown, Green, and Longmans, 1840.
[* ]We should have deemed it superfluous to re-assert Mr. Tooke’s claims to attention, if we were addressing only persons in some degree conversant with the subject; but others may have received an erroneous impression from a flippant attack, continued through two numbers of a weekly paper somewhat extensively read. The assailant, who appears to think that strong writing consists in contemptuous language, has not deemed it necessary to prove himself a competent judge, by either answering or showing that he understands any one of Mr. Tooke’s arguments or statements. [See Anon., “Mr. Thomas Tooke on the Currency Principle,” and “Currency Crochets,” Examiner, 13 & 27 Apr., 1844, pp. 226-7, 259-60.]
[[†] ]Inquiry into the Currency Question.
[[*] ]See, e.g., Loyd, Samuel Jones. Thoughts on the Separation of the Departments of the Bank of England. London: Richardson, 1844; Norman, George Warde. Remarks upon Some Prevalent Errors, with respect to Currency and Banking. London: Richardson, 1838.
[[†] ]I.e., part of the title of Torrens’ Inquiry into the Practical Workings. . . .
[[‡] ]See 7 & 8 Victoria, c. 32.
[[*] ]Torrens, Inquiry, p. iv.
[[*] ]Torrens, Inquiry, p. iv.
[[*] ]Tooke, Inquiry, pp. 55 ff.
[[*] ]See Gurney, and Rothschild, “Evidence taken before the Committee of Secrecy on the Bank of England Charter,” Parliamentary Papers, 1831-32, VI, pp. 249-69, 381-93.
[[*] ]Tooke, Inquiry, p. 71.
[* ]To be scientifically accurate, it must be admitted that if the increased issues were made in advances to employers of labour (for instance, in a loan to a manufacturer, who expends them in the direct payment of wages to his work-people), there would be, to that extent, as long as the expenditure was going on, an increase of the aggregate money income of the community, and hence a corresponding rise of prices. But this supposition is not applicable to our present currency, of which the smallest notes are of too high a denomination to be employed, in any extent worth considering, for the payment of wages.
[† ]We may add, with Mr. Tooke [Inquiry, pp. 68 ff.], that the issues of a Government paper, even when not permanent, will raise prices; because Governments usually issue their paper in purchases for consumption. If issued to pay off a portion of the national debt, we believe they would have no such effect.
[* ]There is (as it seems to us) an almost whimsical exemplification of this common fallacy in Colonel Torrens’s pamphlet, which we have not room to extract, but which those who wish to refer to it may find in pages 10-17. Having assumed, for the purposes of his argument, that Birmingham has a metallic currency composed of one million sovereigns, he says [p. 10], “consequently the prices of commodities within the district would be governed by the power of effecting purchases to an amount not exceeding 1,000,000l.,” forgetting that the million sovereigns may serve, by successive payments, to represent and circulate incomes to the amount of many millions, and that it is this, and not the one million of sovereigns, which constitutes the purchasing power of the community. We admire the ingenuity and polemical acuteness of Colonel Torrens, which have never been more highly manifested than in this pamphlet; but we think in this particular instance he will find, on reconsideration, that he has built an elaborate superstructure upon a foundation of sand.
[* ]See note, infra, page 358.
[[*] ]E.g., Inquiry, pp. 81-2.
[[†] ]E.g., ibid., pp. 76, 123-4.
[[‡] ]E.g., ibid., pp. 22, 32.
[* ]We say likely to take place—not any increase which can take place; because there have been instances, both with joint-stock banks and private bankers, of imprudent advances, on insufficient security, resembling, on a smaller scale, the gigantic mismanagement of the American banks. These must have tended, as we have already admitted, to raise prices: and though it was not peculiarly in their character of issuers that the banks thus misconducted themselves, their issues, no doubt, enabled them to do so on a larger scale.
[[*] ]See Inquiry, pp. 108 ff.
[* ]Mr. Tooke illustrates this statement by some most remarkable instances, which we append, because they are also illustrative of what has formerly been said on the immense purchasing power which may be exercised, and the great rise of prices which may be produced, by credit not represented by bank notes, or even bills of exchange.
[[*] ]See Torrens, Inquiry, p. iv; cf. Tooke, Inquiry, p. 55.
[[*] ]Tooke, Inquiry, p. 106.
[[†] ]Torrens, Inquiry, p. 55.
[a-a]45 [in italics]
[[*] ]Helps, Arthur. The Claims of Labour, pp. 2-3.
[b-b]45 [in italics]
[c-c]45 [in italics]
[d-d]45 [in italics]
[[*] ]Fontenelle, Bernard Le Bovier de. Digression sur les Anciens et les Modernes, in Oeuvres. New ed. Paris: Libraires associés, 1766, IV, p. 177.
[f]45, 59 to
[[*] ]Wealth of Nations, ed. Wakefield, I, pp. 179ff.
[h-h]45 [in italics]
[[*] ]2 & 3 William IV, c. 45.
[[†] ]See 10 George IV, c. 7.
[[*] ]London: Fraser, 1840.
[[†] ]London: Chapman and Hall, 1843.
[k]45 of whom the so-called “Young England” party aspires to be the parliamentary organ, and the Times newspaper makes itself to some extent the representative in the press:—
[[*] ]4 & 5 William IV, c. 76.
[[†] ]Ending with 9 & 10 Victoria, c. 22.
[[*] ]See Carlyle, Past and Present, p. 24, and passim.
[[*] ]See Owen, Robert. The Book of the New Moral World. London: Wilson, 1836.
[r-r]45 or [printer’s error?]
[w-w]45, 59 them?
[x]45 Mr. Aubin’s school at Norwood contains, if reports may be trusted, many features worthy of study and imitation; and there are others to which favourable testimony is borne by competent observers. But we are inculcating principles, not proposing models.
[y-y]45 who are
[[*] ]See Carlyle, Past and Present, p. 44, and passim.
[[*] ]London: Pickering, 1841.
[[†] ]London: Wix, 1835.
[[*] ]Two Letters to Leonard Horner, Esq., on the Capabilities of the Factory System. London: Taylor and Walton, 1840.
[[*] ]Greg, pp. 5-6.
[a]45 [footnote:] *In the able and interesting “Lettres Politiques” of M. Charles Duveyrier [Paris: Amyot, 1843, II, pp. 258 ff.], some account is given of an attempt which has been successfully made to carry this principle into practice, on a small scale, by an employer of labour at Paris. The name of the individual is Leclaire, his occupation that of a house-painter, and he has made his proceedings public in a pamphlet, entitled “Répartition des Bénéfices du Travail en 1842.” M. Leclaire pays his labourers, and other employés, by fixed salaries or weekly wages in the usual manner. He assigns also to himself a fixed allowance. When the year’s accounts are made up, the surplus profits are shared among all concerned, himself included, in the ratio of their fixed allowances. The result has been most prosperous both to himself and to his labourers, not one of whom, who worked as much as three hundred days, obtained, in the year of which he has published the accounts, less than 1500 francs (£60,) and some considerably more.
[b]45 We entreat “Young England” to believe, that as long as they vote for the Corn-Laws, people will never begin to take them and their professions au sérieux; they will be looked upon as they are now, as light-headed young men, momentarily more successful than other dandies in the line of peculiarity which they have chosen; but not as serious thinkers acting upon any consistent intellectual scheme, or from any real conscientious feeling.
[g]45 ; nay, a bill annually introduced into Parliament, with the prospect of success, offering new and unheard-of facilities to the latter operation
[h]45 ; and is particularly uncalled for in the face of a probable abolition of the Corn-Laws, rendering speculations upon the turning up of barren soils at this time especially precarious
[i-i]45 yet seldom
[[*] ]Knight, Charles. The Rights of Industry. London: Knight, 1831, p. 56 and passim.
[j]45 a trifle
[k]45 [paragraph] A great part of the revenue of the country is raised by imposts which stand directly between the labourers and their essential comforts. The window-tax operates to deprive them of light; the excise on soap is a tax on cleanliness; the duties on bricks and timber render building expensive, and directly counteract the attempt to improve the dwellings of the poor. The duty and port dues on coal, exacted by the corporation of London, aggravate, to the inhabitants of the metropolis and surrounding districts, the most distressing of the physical privations incident to poverty.
[l-l]45 Giving [printer’s error; corrected by JSM in Somerville College copy]
[m-m]45 acquirements [printer’s error; corrected by JSM in Somerville College copy]
[n]45 [paragraph] The plans of a more ambitious kind, having in view the alleviation of poverty on a considerable scale, are principally two—the Allotment System, as it is commonly called, and Colonization. The last of these is too complicated a subject, and involves considerations too special, to be properly introduced as a subordinate branch of a more extensive scheme. We may say here, that from it we do expect considerable benefit. Like the other projects, it is only a palliative; but of all palliatives it is attended with the fewest drawbacks, while it far surpasses all others in the measure of its efficiency. With this observation, we reserve the topic for separate treatment.
[[*] ]De Quincey, pp. 137-8.
[[†] ]Jones, Richard. An Essay on the Distribution of Wealth, and on the Sources of Taxation. London: Murray, 1831.
[[*] ]Pp. viii-ix.
[[*] ]See, e.g., pp. 54ff.
[[*] ]JSM’s square brackets
[[*] ]Cf. De Quincey, p. ix.
[[*] ]Pp. 152, 245n; cf. 6n and 192.