Mill’s Essays on Economics: Collected Works vol. IV

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Source: Editor's introduction to The Collected Works of John Stuart Mill, Volume IV - Essays of Economics and Society Part I, ed. John M. Robson, Introduction by Lord Robbins (Toronto: University of Toronto Press, London: Routledge and Kegan Paul, 1967).

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Introduction by Lord Robbins


the papers collected in this volume have a twofold value. They provide important insights into the evolution of the views of their author on economic and social problems; and, since they come from one of the world’s outstanding economists and social philosophers, they still possess great intrinsic interest. John Stuart Mill’s Principles of Political Economy is one of the great synthetic works of classical economics; anything which throws light on its propositions and their development is therefore of considerable historical importance. The views of the author of On Liberty on any aspect of social and economic policy have still great significance at this stage of human history.

For good scholarly reasons the papers here reproduced are printed in chronological order. For purposes of discussion, however, they are better classified according to subject matter. From this point of view, they may be considered under six main headings: General Economic Theory (other than money and banking); Money and Banking; Public Finance; Labour; Property and Its Social Control; and Socialism. It is under these headings and in this order that they will be discussed in this Introduction.




the papers relating to non-monetary general economic theory begin with a set of three which may be regarded as exposition on the part of the youthful John Stuart of an outlook which he inherited from his father and Ricardo. Their chief value consists in their revelation of the position from which he set out. The review of McCulloch’s Discourse on the Rise, Progress, Peculiar Objects and Importance of Political Economy (reprinted in an Appendix because it was jointly composed with William Ellis) is pure propaganda for the School; it is fairly clear that the eulogy of McCulloch would not have been written later on.1 The paper on “The Nature, Origin, and Progress of Rent,” a straightforward exposition of Ricardian theory, was written as an appendix to McCulloch’s edition of Smith’s Wealth of Nations and well explains the Ricardian critique of Adam Smith’s views on rent. But the most notable thing about the reprint is the footnote on page 178 where Professor Robson reproduces a marginal note from Mill’s copy, now at Somerville College, in which he shows dissatisfaction with the dogmatic insistence on the doctrine that rent does not enter into cost of production, thus foreshadowing possibly the concessions in this respect appearing in the Principles.2

The article from the Westminster Review, “The Quarterly Review on Political Economy,” which is the earliest of the three, is also the most extensive. It is an episode in the war between the two Reviews. The article which it attacks—a review of McCulloch’s Discourse—was actually written by Malthus. But Mill’s review, which was obviously written with this knowledge, pretends that the article in the Quarterly Review was written with a view to making Malthus look ridiculous. As a piece of debating, it is excellent rough stuff. As usual, outside his writings on population, Malthus had put his points so poorly that it was not difficult to make logical mincemeat of them; and this the youthful reviewer does with great relish. The article contains no indication that he was yet aware of the vulnerable point in crude assertions of his father’s and Say’s arguments about the impossibility of general gluts. And to those who have read the thorough trouncing from Torrens, evoked by an earlier effort to sustain his father’s preposterous view that differences in the period of investment might all be reduced to labour,3 the attempt to minimize the differences between this view and Ricardo’s must have interest as almost the one instance in the whole corpus of his writings where Mill was not entirely ingenuous. For any who are interested in the finer shades of the disputes between Malthus and the Ricardians, this article is required reading. For the rest, it is chiefly notable as an exceptionally clear exposition of what the Ricardian theory of value really asserted.


Next comes a central group of essays and reviews in which Mill is to be seen working out his own views on general theory in forms later to appear in the Principles. Of these, the five included in the separate volume entitled Essays on Some Unsettled Questions of Political Economy are by far the most important. Their actual publication did not take place until 1844 and seems to have been stimulated by a desire to set before the world a more systematic and temperate exposition of the rôle of demand in international trade theory than was being expounded with great debating brilliance, but considerable over-emphasis, by Torrens in the famous, or notorious, Budget letters. But they were written in 1829 and 1830 and therefore come first in chronological order as they do in the order of intellectual importance.

The first of the series is the most famous. The background is fairly well known. The theory of comparative cost, invented by Torrens and Ricardo and expounded by Mill’s father, had indicated the nature of the advantages of territorial division of labour and the limiting cost ratios (in a two-commodity model) between which exchanges advantageous to both parties could take place. But it did not decide at what rate these exchanges would actually take place and therefore the way in which the gains of trade would be divided. Indeed, in the first edition of James Mill’s Elements the exposition actually involved a double counting of the gain, only corrected in the third edition after representations by his son and his son’s friend, George Graham. It was doubtless in the course of attempts to fill this gap that there took place those conversations which, as Mill relates in his Autobiography,4 eventually resulted in the writing of the essay, “Of the Laws of Interchange Between Nations; and the Distribution of the Gains of Commerce among the Countries of the Commercial World.”

This essay is surely one of the most powerful contributions ever made to the evolution of economic analysis. The idea of demand as a function of price was not, of course, entirely new: it is easy to find perceptions of this relationship in earlier literature. But this was the first case in which it was systematically set forth and made the analytical basis of important propositions. Moreover, there is involved in this essay the first systematic presentation of the classical theory of international trade in all its main implications. Ricardo, with the theory of comparative costs and the theory of the distribution of the precious metals, had provided two of the most basic ingredients. But until the demand element was explicitly introduced, the theory was necessarily incomplete. In this essay Mill not only meets this need, in models involving both barter and money, but he also provides a systematic working out of the corollaries as regards tariffs and the terms of trade, the export of machinery, the problem of two countries competing in a third, and the payment of international tribute. Not all the solutions are comprehensive. But for the first time the general outline of a comprehensive analysis is set forth; and, although there was some elaboration in the Principles, we have the authority of Edgeworth for the view that not all this was an improvement.5

The second essay, “Of the Influence of Consumption on Production,” is scarcely less remarkable. Classical teaching on this subject had hitherto been represented by Adam Smith’s proposition that “What is annually saved is as regularly consumed as what is annually spent, and nearly in the same time, too,”6 or by the even more doctrinaire Law of Markets, as it was thought to be propounded by J. B. Say and certainly was by Mill’s father, which flatly asserted the identity of aggregate supply and aggregate demand and flatly denied the possibility of general over-production—a principle which, as we shall see later, Mill himself, as a young man, was not unwilling to adduce in a dispute about war expenditure.7 Mill’s essay begins with an assertion of the broad principle that “What a country wants to make it richer, is never consumption, but production” (I.263). But in searching for “scattered particles of important truth” amid “the ruins of exploded error” he is led to reformulations which in fact amount both to a refutation of Say’s Law as usually applied to a money economy, and to a view of the operations of the speculative motive which affords what is in effect a theory of the trade cycle. “In order to render the argument for the impossibility of an excess of all commodities applicable to the case in which a circulating medium is employed, money must itself be considered as a commodity. It must, undoubtedly, be admitted that there cannot be an excess of all other commodities, and an excess of money at the same time.” He continues: “But those who have . . . affirmed that there was an excess of all commodities, never pretended that money was one of these commodities; they held that there was not an excess, but a deficiency of the circulating medium.” What this amounted to was “that persons in general, at that particular time, from a general expectation of being called upon to meet sudden demands, liked better to possess money than any other commodity. Money, consequently, was in request, and all other commodities were in comparative disrepute. . . . But the result is, that all commodities fall in price, or become unsaleable. When this happens to one single commodity, there is said to be a superabundance of that commodity; and if that be a proper expression, there would seem to be in the nature of the case no particular impropriety in saying that there is a superabundance of all or most commodities, when all or most of them are in this same predicament.” (I.277.) For some reason or other this remarkable reconstruction of the classical position has seldom received explicit recognition. It can be detected between the lines in the treatment of speculation in the Principles, but it is nowhere so overtly developed; and from that day to this, the neat side-tracking of the crudities of Say’s Law has passed very little noticed. Yet, as Messrs. Baumol and Becker remark, in their excellent résumé of the historical treatment of the issues, “In reading it one is led to wonder why so much of the subsequent literature (this paper included) had to be written at all.”8

The remaining three essays in this collection are not of the same path-breaking importance, but they have considerable interest nevertheless. The third essay, “On the Words Productive and Unproductive,” is devoted to making clear that the use of these words, in the sense in which they had been employed by the English classical economists—as distinct from the Physiocrats—was to indicate the difference between the production of capital in some form or other, and pure services leaving directly or indirectly no lasting sources of enjoyment behind. Attention to such elucidations should have saved many purely semantic polemics in the literature of the hundred years after they appeared.

The fourth essay, “On Profits and Interest,” consists first of a clarification and amendment of the Ricardian proposition that profits depend upon wages, and then a discussion of the relation between profits and interest, and the influences on the determination of the latter independent of the influence of the former. This part is conspicuous for a very clear exposition of the process of “forced accumulation,” as Mill calls it, through inflationary movements of cash or credit—an exposition which is explicitly stated to be no palliation of the iniquity of the process. “Though A might have spent his property unproductively, B ought not to be permitted to rob him of it because B will expend it on productive labour.” (I.307.)

The subject matter of the last essay in this series is sufficiently indicated by its title, “On the Definition of Political Economy; and on the Method of Investigation Proper to It.” A scrutiny of earlier definitions and successive refinements of tentatives of his own eventually leads Mill to the conclusion that political economy is best defined as “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” (I.323); and what he calls the a priori method of reasoning from general assumptions is declared to be the only legitimate method of reaching general conclusions, although these conclusions need continually to be tested by reference to specific experience. These conceptions have sometimes been thought to have been discarded in the writing of the Principles. But it is doubtful if this is so. The essay makes it abundantly plain that, for purposes of practical recommendations, the use of the abstract propositions of the science as its author conceived it needed to be supplemented by other knowledge. In the world of reality there are many disturbing circumstances which do not fall within the province of political economy, “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” (I.331). The scope of the Principles was intended to cover not only theory but also applications, as is evident even in its full title, The Principles of Political Economy with Some of Their Applications to Social Philosophy, and it is difficult to believe that Mill would have admitted any incompatibility between this objective and his earlier discussion of scope and method. This is not the only time in the history of economic thought that attempts to clarify logical distinctions have been mistaken for prohibitions of catholicity of interest.

There are two other papers, published before the writing of the Principles, which are concerned with questions of general theory.

The first is a review of the concluding number of Harriet Martineau’s Illustrations of Political Economy, that entitled The Moral of Many Fables. Mill did not always speak kindly of this lady—he once referred to her as “a mere tyro”9 —but here, while making plain its limited pretensions, he treats her little book with a measure of respect. But he brings against it the reproach which by that time (1834) he had begun to feel against the political economy he had inherited from his father and his father’s circle, namely that it took the existing institutional framework as a permanent feature of the human situation. “Thus, for instance, English political economists presuppose, in every one of their speculations, that the produce of industry is shared among three classes, altogether distinct from one another. . . . They revolve in their eternal circle of landlords, capitalists, and labourers, until they seem to think of the distinction of society into those three classes, as if it were one of God’s ordinances, not man’s, and as little under human control as the division of day and night.” (I.225-7.) It is easy to see in these strictures the beginnings of the distinction that plays such a predominant rôle in the Principles between the laws of production which were immutable and the laws of distribution which were contingent on human institutions.

The second paper is a review of De Quincey’s Logic of Political Economy. This was written very shortly before the commencement of the Principles and it can well be believed that, in the writing thereof, some of the stimulus of De Quincey’s lively exposition was still present in his mind. De Quincey’s politics were antipathetic to Mill, who candidly avows that he found it difficult “to reconcile this wretched party invective with the respect we sincerely wish to feel” (I.404). But he takes De Quincey’s discussions of the theory of value very seriously and reproduces at length the charming parable of alternative sales of a musical box in London and on a boat on Lake Superior with which De Quincey attempts to illustrate the respective influence of difficulty of attainment and usefulness.10 The paper is also noteworthy for a repudiation of the view, expressed by De Quincey and wrongly attributed by many (including no less an authority than Schumpeter) to Ricardo, that supply and demand are irrelevant to the determination of value.


Mill published very little on general economic theory once the Principles had appeared; his interest thereafter was focused upon more detailed applications. There are two papers appearing in this period which might legitimately be brought under this heading, the review of Newman’s Lectures on Political Economy of 1851 and the review of Thornton’s On Labour and its Claims of 1869. Each of these, however, has its centre of gravity in another universe of discourse. The review of Thornton will accordingly be dealt with below under the heading of Labour, and that of Newman under Socialism.



mill’s papers relating to money and banking fall into two clearly marked groups. There is a group dealing with the controversies and events of the twenties and early thirties—the left-overs, so to speak, of the great bullionist debate; and there is a group, dealing with banking policy and the conduct of the Bank of England, which is part of the controversy concerning the expediency and results of the Bank Act of 1844. As we shall see, there is some evidence of continuity of thought between the two groups. But there is sufficient difference in content to make it useful to deal with them separately.


The first paper of the earlier group is a review of the pamphlet, Observations on the Effects Produced by the Expenditure of Government during the Restriction of Cash Payments, by William Blake. At the height of the bullion controversy Blake had published a short treatise in which the main principles of bullionist orthodoxy were forcibly expressed,11 but he had changed his mind, and in the pamphlet under review had urged that the rise of prices during the war and the subsequent fall were all attributable to the increase and diminution of government expenditure. This pamphlet had been the subject of critical comment by Ricardo shortly before his death12 and had been the subject of an exchange of views between the author and McCulloch.13 It was only to be expected that it should be singled out for critical examination in the Westminster Review, which in this connection, through its association with James Mill and his circle, stood for the unqualified classical position; and it was in character with this position that the task should have been assigned to John Mill.14

It is a crude article imbued with the youthful combativeness and occasional arrogance which we have already noticed in the review of Malthus of about the same period. It begins with a denial of general distress after the war—“We neither saw nor heard it, except in the cant of the agriculturists” (I.3)—and relies on Tooke’s attempts15 to exhibit the Blakean thesis as wholly mistaken. “No general reasoning could have added to the conviction which everyone must feel, who has perused Mr. Tooke’s detail of facts, that Mr. Blake’s theory is totally erroneous.” (I.21.) The attitude is not sympathetic to this modern reader. Historical scholarship, at the present day, would probably hold that Blake had overstated his case. Moreover, at times his arguments are muddled and do not carry conviction. But to contend that there was nothing in the view that the great variations in government expenditure played some part in the inflationary and deflationary movements of prices is implausible to the modern outlook; and it must be admitted that there is something slightly repellent about the confidence with which the youthful reviewer asserts this point of view.

Moreover, Mill’s own view at this stage cannot be regarded as free from error. He regards it as a fallacy to suppose that “expenditure, as contradistinguished from saving, can by any possibility constitute an additional source of demand”; and he similarly denounces the conception that “capital which being borrowed by government becomes a source of demand in its hands, would not have been equally a source of demand in the hands of those from whom it is taken” (I.13), neither of which views can in fact be taken to be inevitably fallacious. We have seen already that, in the essay “On the Influence of Consumption on Production,” Mill was to break the impasse created by the proposition that all that is saved is consumed and in about the same time. It is clear that at the time of this early review he was still in the bondage of this kind of thinking. As a critique of Blake’s general position his paper is radically inferior to the section devoted to that subject in Matthias Attwood’s Letter to Lord Archibald Hamilton.16

The same spirit of somewhat combative dogmatism inspires the paper, written in 1833, entitled “The Currency Juggle.” This is a violent polemic directed chiefly against the position of Thomas Attwood who, in a recent debate with Cobbett, had advocated currency depreciation as a means for lightening the burden of debt and increasing the volume of employment. It is clear from the opening paragraphs of the paper that the object in writing it was to disassociate the radical movement from this propaganda, which it was felt was likely to bring the cause of reform into discredit; and, given the facts that the restoration of a metallic standard had taken place more than twelve years before and that the country was tired of controversy about the currency, it is not difficult to understand this motive. It is not difficult, moreover, to understand the view that Cobbett’s desire for an overt scaling down of debt, although in Mill’s view a mistaken position, should have been regarded as morally superior to a proposal to bring about the same thing by measures which were likely to rob all existing holders of money, whether or not they were creditors, of some of the value of their holding. What, however, is more difficult to understand is the tone of the argument and the apparent unwillingness to admit any force or quality in the position of the writers attacked. After all, from the point of view of modern analysis, during the period before the restoration of the metallic standard when the economy was being crippled by deflation, the position of the Attwoods seems considerably more defensible than that of the contemporary classical orthodoxy; and although by 1833 the economic situation had changed and the balance of argument was then probably against unorthodox changes, it is difficult to regard all their arguments as being as contemptible as they are made to appear in Mill’s attack. At first sight there is lacking the fairness, the willingness to do justice to opposing points of view, characteristic of Mill in his prime. But in fact, where any question of inconvertible paper was concerned, this attitude persisted till the end, as is shown not only by obiter dicta in the Principles, but also by the preservation of this particular effusion in Dissertations and Discussions. Apparently the traumatic experience of inconvertible paper during the Restriction period had left such a deep imprint on the members of the classical school that one and all seem to have been incapable of calm argument rather than of denunciation in this connection—which was a pity, for it left a gap in the literature not well filled even at the present day.

The last paper in this group is the article on “Paper Currency and Commercial Distress” from the Parliamentary Review for the session of 1826. This paper, although somewhat prolix and rambling in form, is probably the most significant of the three, both as regards positive content and as an indication of the lines on which Mill’s future thought was to evolve.

The positive value of the paper consists in its explanation of the course of a speculative boom and its eventual collapse. The vivid account of the origin of such movements in anticipation of shortages of supply, their extension so that the “speculative purchases produce the very effect, in anticipation of which they were made” (I.75), the repercussions of this state of affairs on manufacture, the arrival of increased supplies, and the unloading of swollen stocks—all this is without parallel in the earlier literature; and it is possible to read into it some anticipation of the essay “On the Influence of Consumption on Production” with its masterly invocation of fluctuations in willingness to hold money rather than commodities. Certainly it contains the germs of much of the content of the chapter (III, xii) on the “Influence of Credit on Prices” in the Principles.

At the same time, in its criticisms of the government’s decision to prohibit the issue of pound notes and the arguments by which that decision was supported, there are to be discovered, at times in a somewhat extreme form, anticipations of Mill’s subsequent position in the controversy between the so-called Banking and Currency Schools. Thus, for instance, he maintains that until paper money has entirely displaced metal there can be no talk of excess. “So long as there remains a sovereign in the country, there has been no over-issue.” (I.83.) To the suggestion that such displacement takes time and that, in the interval, the total circulation may legitimately be described as excessive, he replies by a virtual denial of the existence of any appreciable lags. And he goes on to argue that if there were no paper circulation capable of depreciation in speculative periods, the same effect would be produced by the multiplication of other forms of credit. “It appears, that in periods of speculation, the addition to the circulating medium and the depreciation of its value, are no greater with a local bank paper than without it.” (I.96.) Finally he denies that the movement of interest rates had been in the least influenced by the increased issue of notes.

Certainly the main positions of the Banking School are all here in embryo. But this brings us to the papers bearing directly on the controversy concerned.


This controversy related specifically to the principles appropriate to the regulation of a convertible paper currency. Both the schools of thought involved repudiated any connection with propaganda for inconvertible paper and insisted on the need for convertibility. But, given this degree of common ground, they differed root and branch concerning the need for regulation beyond this requirement. The Currency School, led by Overstone, Norman, and Torrens, argued that regulations were necessary in order that the movements of a mixed circulation might be similar to those which would take place if the currency were wholly metallic: to this end they proposed what was embodied in the famous Bank Act of 1844, a separation of the function of issue from the function of banking in the organisation of the Bank of England, and a rule which brought it about that, beyond a fixed fiduciary issue of an amount smaller than the minimum needs of trade, each note outstanding should be covered by an equivalent gold reserve. The Banking School argued that no such regulation was necessary and further that the separation of the departments imposed undesirable limitations on the proper discharge of the functions of the central bank.

Beyond these practical issues there lay deeper divisions of view regarding the working of the monetary mechanism and the objectives of monetary policy.17

Thus the Banking School regarded the size of the note issue as completely passive to the movement of prices. It did not determine prices; it was determined by them. They contended that it was impossible for bankers to bring about an increased circulation of notes: any attempt to do so was believed to be frustrated by the celebrated principle of reflux. They regarded bank credit as having exactly the same status as convertible notes, not only in relation to prices and incomes but also as part of the total system of circulating media. Their remedy for any menace to the convertibility of the note issue was to increase the central banking reserve. And they argued against the alleged desirability of a system which brought it about that the active circulation was influenced, as the plans of the Currency School held that it should be, by the state of the balance of payments.

Against this, their opponents planted themselves firmly on the norms indicated by the Ricardian theory of the distribution of the precious metals. They urged that the movements of a mixed circulation should be similar to those which would take place were it wholly metallic. They ridiculed the idea that prices were indifferent to the volume of convertible paper. They maintained that the banks could vary the circulation of notes by variations in the terms of lending and contended that, unless the reflux of notes was instantaneous, the fact of a time lag necessarily involved the possibility of temporarily increased issues. They argued that the possibility of variations in the note issue, other than those similar to what would take place if the currency was purely metallic, increased the possibility of adverse variations in bank credit. And they held that the use of a reserve to insulate the circulation from fluctuations which otherwise would be caused by variations in the state of the balance of payments were likely to delay readjustment and increase the danger to convertibility of a prolonged external drain. They denied the accusation that they regarded absolute increases in the note circulation as necessarily the initiating cause of fluctuations in prices and the external balance, contending that the focus of their precautions was on the prevention of relative over-issue—a state of affairs as likely to result from changes originating on the side of goods as from those on the side of money.

As happens so often, the verdict of time on this controversy has not been unequivocally in favour of one side or the other. It is clear that the Currency School erred gravely in regarding control of the note issue as a sufficient control of the volume of credit: there are indications that Torrens at least was beginning to see this by the end of his career.18 The Banking School had more sense of contemporary reality in this respect. It is also clear that, having regard to the possibility of sudden movements on capital account, there was much weight in their plea for a larger reserve. But on matters of deeper analysis, in my judgment, the balance of merit is reversed. The Banking School were wrong about the passivity of issue and the significance of reflux; and they preached a perilous doctrine in urging that the internal circulation should be insulated from changes in the external position. And although it is easy to pick holes in the rigid prescriptions of the Currency School, focused on the current account and relying too heavily on control of the note issue, it is arguable that their assumption of a connection between the internal and external position, only to be violated at peril of continuing disequilibrium, is one which still has relevance to the problems of the present age.

In this dispute, Mill’s general position was that of the Banking School. His connections with Tooke inclined him to a similar mode of approach; and although, as can be seen in “The Currency Question,” he was not unaware of the vulnerability of some of Tooke’s formulations vis-à-vis Torrens’ expert guerilla warfare, he tended to accept the broad implications of his general position. The chapter in the Principles, “Of the Regulation of a Convertible Paper Currency” (III, xxiv) makes some concession to the Currency School in regard to the possibility of increasing note issues in times of buoyant speculation and therefore, in regard to the effectiveness of the Act of 1844, in arresting speculative extensions of credit. But in the main it is the pure milk of the Banking School. Thus, apart from the exception just noted, it minimizes throughout the importance of the note issue and its relation to the creation of credit in general. It endorses Fullerton’s conception of the central rôle of “hoards” in the settlement of disparities of international indebtedness. And it disputes the desirability of arrangements which seek to make the general movements of the circulation vis-à-vis the outside world approximate to what would be the case were it entirely metallic. It was not by accident that it was singled out for a paragraph by paragraph critical examination in Torrens’ major polemic.19

The three papers here reprinted afford useful insights into the evolution and consolidation of this attitude. The first, entitled “The Currency Question,” which appeared in the Westminster Review when the controversy relating to Peel’s proposals for the renewal of the Bank Charter was at its height, is in effect a defence of Tooke against Torrens. The pamphlet, An Enquiry into the Currency Principle, by the respected author of the History of Prices, which was a frontal attack on the whole intellectual basis of these proposals, had elicited a reply from Torrens, An Enquiry into the Practical Working of the Proposed Arrangements for the Renewal of the Charter of the Bank of England, and Mill’s article was an attempt to defend Tooke’s position from what was certainly a highly ingenious and resourceful attack. The main purport of the argument is to demonstrate that “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. . . . 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?” (I.354.) It protests that the separation of the departments will increase rather than diminish the violence of commercial fluctuations and reaches the conclusion 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” (I.361).

The two remaining papers, “The Bank Acts” (evidence before the Select Committee on the Bank Acts of 1857) and “Currency and Banking” (replies to the questions of the French Enquête sur les principes et les faits généraux qui régissent la circulation monétaire et fiducière) come from a date when the Peel Act had been some time in operation; and they exhibit the views and arguments characteristic of the chapter in the Principles which had remained and continued to remain substantially unaltered.

“The Bank Acts,” which is much the longer and more important of the two, involves much repetition, as might be expected when the witness was cross-examined in turn by different members of the committee. But certain positions stand out. Mill is against the separation of the departments because he thinks it inhibits the flexibility of credit policy. He admits the usefulness of the Act in imposing a curb on the expansion of credit at times of speculative excitement. But he urges that in every other respect it is destabilizing. The right way to safeguard convertibility, he urges, is not the separation of the departments but, as Tooke had urged, the keeping of a larger reserve. As for the claim that the movements of a mixed system should conform to the movements which would take place if the currency were wholly metallic, he repudiates it: “no currency can be good of which the permanent average value does not conform to the permanent average value of a metallic currency; but I do not admit the inference that in order to enable it to do this, its fluctuations in value must conform to the fluctuations in the value of a metallic currency; because it appears to me, that fluctuations in value are liable to occur from anything that affects credit; and I think that a metallic currency is liable to more severe revulsions of credit, than a mixed currency, such as ours was before the Act of 1844; and therefore, that a paper currency of the permanent value of a metallic currency, and convertible, but without any other restriction, is liable to less fluctuation than we now have under the Act of 1844” (II.544). And, developing this point, he argues that the advantage of the absence of restriction is that the Bank “will not be obliged to contract credit in cases in which there had been no previous undue expansion of it” (II.544).20

The replies to the questions of the Enquête add very little to all this. They are, however, notable for a particularly forceful statement of the case where, an external drain having been caused by excessive speculation, the authorities of the central bank are under an obligation to contract their issues to prevent a cumulative breakdown. “L’écoulement ainsi produit n’a pas de limite naturelle, et n’a aucune raison de s’arrêter avant la cessation des causes qui l’ont amené. Il ne cesse et ne peut cesser que lorsque les hauts prix qui lui ont donné lieu ont pris fin par un mouvement de baisse, c’est-à-dire lorsque la spéculation a cédé à une réaction. En ce cas, l’écoulement du numéraire est le remède naturel et indispensable de la maladie, et parvinton à le retarder, on ne réussirait qu’à prolonger le mal et à aggraver la crise finale. Si, en ce cas, la Banque s’abstenait d’agir pour défendre son encaisse, si elle continuait d’escompter aussi largement qu’auparavant, en laissant s’écouler sa réserve métallique, les spéculateurs, trouvant à emprunter au cours ordinaire, ne seraient pas réduits à vendre: ils pourraient prolonger pendant quelque temps encore leur lutte contre les lois naturelles; les prix surhaussés ne baisseraient pas, et partant l’écoulement suivrait son cours jusqu’à ce que la réserve même la mieux fournie y eût passé tout entière. A l’approche de cette catastrophe, la Banque, pour ne pas faire faillite, serait dans la nécessité de produire d’un seul coup la réaction qu’elle aurait dû préparer graduellement. Une diminution des escomptes et une élévation du taux de l’intérêt, qui eussent suffi pour arrêter la spéculation dans les commencements de la sortie des métaux précieux, ne suffiraient plus: il faudrait une action non-seulement plus brusque, mais plus excessive et plus violente. De là, écoulement général du crédit, la panique et la peine, qui est loin de frapper seulement les spéculateurs dont l’imprudence a amené le mal.” (II.604.)

All of which would have delighted the hearts of Colonel Torrens and the others of his persuasion. But they would have added that there were other cases when to allow an external drain to continue without affecting the internal circulation might lead to equivalent dangers. And if we have regard to the possibility of adverse turns in the terms of trade and to the Ricardian Theory of the distribution of the precious metals, it is not at all certain that they would not have been right.



the papers on public finance in this collection fall into two entirely distinct groups: a group written in the twenties attacking various aspects of the protective duties of the day, and a group chiefly consisting of evidence on income and property taxation tendered to government committees in the years after the publication of the Principles.


The two principal papers in the first group are both concerned with the Corn Laws and may be regarded as a repository of the classical doctrine on these duties. The first, taking for granted the interest of the community as a whole in cheap imports, makes great use of standard Ricardian analysis to isolate the interests of the landlords in this respect from those of all other classes. It might be thought that protection to agriculture benefited the farmers. But, in so far as the farmer is a capitalist, in the long run he suffers with the rest, other than the landlords: a high price of corn means higher wages to cover the higher costs of subsistence, and this in turn leads to a lower rate of profit. Moreover, a lower rate of profit, it is noted, means a lower rate of accumulation; and “it is on the accumulation of capital that the advancement of the national wealth is wholly dependant” (I.50; italics added). It is therefore only the landlords who gain from this kind of protection, and the high rents they receive are not merely a transfer from other classes. In order that they may receive this kind of benefit, the community has to suffer the losses due to using resources to produce high-cost corn rather than importing it from lower-cost areas abroad. It would clearly be better to impose direct taxes to provide the subsidy to the landlords.

The second paper, written three years later apropos of the New Corn Law with its sliding scales, continues the attack. The first article had elaborated the proposition that the existing duties aggravated price fluctuations. This one argues that the sliding scales which were intended to deal with this evil will not do so, and that “the benefit intended to be conferred upon our own consumers by the gradually decreasing scale of duties from 12s. downwards, will be reaped principally, if not wholly, by foreigners” (I.146). It goes on to develop a frontal attack on the whole position that there is something especially sacrosanct about agriculture. “Before we offer up our substance to an allegorical idol, let us hear what title it has to our worship. What is this ‘agriculture,’ of which you speak? When you say that no country was ever prosperous without agriculture, do you mean, that no country was ever prosperous without procuring food? If this be all, the truth of the proposition is not very likely to be disputed. But if you mean that no country was ever prosperous unless it procured food by digging and ploughing, instead of procuring it by spinning and weaving, your assertion is altogether destitute of truth: since the Dutch republic, which procured the greater part of its food without digging or ploughing was one of the most prosperous communities which the world ever saw.” (I.149-50.)

He then asks: “when you speak of the necessity of protecting agriculture, do you mean the necessity of protecting the mere turning up of the ground? or the necessity of protecting the procuring of food for the people? If you mean the first, show us, if you can, any reason for desiring to procure food by turning up the ground, when we can procure more with the same quantity of labour in any other way. But if, by protection to agriculture, you mean protection to procuring food, there is no dispute about that. We are as desirous as you are, to afford protection to the procuring of food; provided always, that the procuring of food needs protection. But what is this contrivance of yours for protecting it? Simply this: to force the people to obtain ten bushels of corn by turning up the ground, when with the same degree of labour they might obtain twelve by growing it in their looms and in their cotton mills. If this be protection (which it is not, but privilege) it is protection only to the owners of the ground. A prohibition of gas-lights might be called, without any great impropriety, protection to the oil-companies; but would the oil-companies be permitted to term it protection for lighting? Yes; if lighting be protected by being rendered more expensive and more difficult. No, if this be, as it evidently is, the very reverse of protection. If agriculture means only turning up the ground, it deserves no protection. Turning up the ground is not a bonum per se. If it means procuring food, it is protected by excluding cheap corn, precisely in the same manner as the lighting of the streets of London would be protected by imposing a heavy duty upon gas.” (I.150.)21

The remaining papers in this group, the article on “The Silk Trade” and the “Petition on Free Trade,” have not the same intellectual interest. The “Petition” exemplifies Mill’s capacity for lucid and forceful draftsmanship; the disquisition on the silk duties, his capacity for bringing general principles to bear on the argument of particular instances. The only addition to the general position developed in the papers on the Corn Laws is the argument in the paper on the silk trade that “the high rate of wages occasioned by our corn laws, though highly prejudicial to all classes of capitalists, by lowering the general rate of profit, is not more prejudicial to those who are exposed to foreign competition than to those who are not; and that nothing, therefore, can be more utterly unwarranted than the claim of the silk manufacturers to peculiar protection on account of it” (I.135).


The bulk of the material in this collection which relates to income and property taxation is in the form of evidence before the two parliamentary committees of 1852 and 1861—the review of Baer of 1873, although valuable as evidence of Mill’s continued capacity to consider new ideas, is not of great significance. This material is intensely interesting as providing a spectacle of Mill under cross-examination by some of the acutest intellects of the day, from Gladstone downwards. But it is extremely unsystematic. The questions and answers pass from one aspect of the subject to another as the interrogation is passed round the members of the committees; and these in turn choose their own order and focus of attention. To realize the significance of what is going on it is necessary, with the aid of the relevant chapters of the Principles, to have a more systematic picture of Mill’s main positions on this group of subjects.22

There are three outstanding features of Mill’s attitude to the problems of the taxation of incomes and property. First, he opposed the graduation of taxes on incomes. Secondly, he favoured the exemption of savings. Thirdly, he favoured stringent limitations on inheritance and steep graduation of death duties.

Mill’s opposition to the graduation of the income tax was based both on grounds of equity and incentive. He was in favour of exemption at the lower end of the scale—which, of course, arithmetically involved a certain degree of graduation since the lump sum exempted must be a diminishing proportion of the actual income taxed. But beyond “the amount . . . needful for life, health, and immunity from bodily pain,”23 he saw no equitable reason for differentiation. The doctrine that £100 from £1,000 was a heavier (proportionate) impost than £1,000 from £10,000 seemed to him “too disputable altogether, and even if true at all, not true to a sufficient extent, to be made the foundation of any rule of taxation.” But beside that, he argued that to “tax the larger incomes at a higher percentage than the smaller, is to lay a tax on industry and economy; to impose a penalty on people for having worked harder and saved more than their neighbours.”24

This did not mean that he opposed any differentiation of tax rates. As will be seen from his evidence before the two government committees, he devoted much thought and energy to the search for a just differentiation between “earned” and “unearned” incomes. And this search led him to the conclusion which is the second of the salient features of his principles of taxation, that a just income tax would exempt all savings. He argued this on the ground that what distinguishes the recipients of temporary incomes from those who enjoy incomes in perpetuity is the necessity governing the planning of the former, of saving to provide for themselves and their families when their temporary incomes cease. But he also argued it on the general ground which, despite the opposition of the protagonists of “common sense,” has been argued since by so many high authorities, from Irving Fisher downwards, that the taxation of savings in fact hits income twice. That a non-graduated income tax which exempted savings would be in effect a proportional tax on expenditure did not worry him in the least, since his conception of justice in the taxation of income was exactly that.25

But while considerations both of equity and incentive led Mill to oppose graduation where the direct results of work and saving were concerned, they led him in just the opposite direction when it was a matter of property passing at death. He believed in freedom of bequest. But he did not believe in freedom of inheritance. He believed with Bentham that, if anything was to be done to diminish inequality, the moment of death was the appropriate time. And in this connection he went further than any of his predecessors, and most of his successors, in this field. He was in favour of setting an absolute upper limit on the amount which might be received by inheritance or gift. But failing this, he regarded progressive duties as highly appropriate. “The principle of graduation (as it is called,) that is, of levying a larger percentage on a larger sum, though its application to general taxation would be in my opinion objectionable, seems to me both just and expedient as applied to legacy and inheritance duties.”26

It is the appearance of these principles and their defence under cross-examination which lend continuing interest and importance to these records of Mill’s evidence.



we now come to papers in which, in contrast to his more technical preoccupations in the items already discussed, Mill is concerned with economic organization and its evolution in the light of general social philosophy. The first group of these is concerned with labour and its future.

Mill’s fundamental attitude on this problem is enshrined in the famous chapter “On the Probable Futurity of the Labouring Classes” in the Principles (IV, vii). This chapter, according to his account27 , owed much to the influence of Mrs. Taylor, who eventually became his wife. But whatever the inspiration it must always be regarded as one of the most authoritative statements of his general social philosophy and his hopes and fears for the future. The opening sections, with their fine contrast between what he calls the theory of dependence and protection and the theory of self-dependence,28 are indeed among the most outstanding pronouncements on the fundamental principles of classical liberalism; and the fact that in the present age we seem to have chosen as a basis of social policy the former principle rather than the latter does not render them any less relevant. But the two essays here reprinted and to be discussed under this heading throw much useful supplementary light on the thought underlying the chapter.

The germs of such thought are very clearly to be discerned in the article, from the Edinburgh Review of 1845, on the then-fashionable handbook of benevolent paternalism, Arthur Helps’ The Claims of Labour. The intentions of this article are well stated in an extract from a letter from Mill to Macvey Napier which is reprinted with the editorial note prefatory to the present reproduction. However well intentioned, the tendency of works such as Helps’ book, Mill argues, 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,” and he goes on to maintain that it is “very necessary to make a stand against this sort of spirit while it is at the same time highly necessary . . . 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.364).

The article certainly fulfils these intentions. After a preliminary survey of the influences from Malthus to Carlyle and the revelations of the great commissions which had led to increased interest in the “condition of the people question,” he plunges into a statement of the paternalist theory which he was proposing to criticize. “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.” He contends that 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” (I.372-3).

Now, if things are to be run this way, he asks, are we prepared to accept the inevitable accompaniments? The states of society which have assumed such duties on the part of the wealthy have been states in which the condition of the poor has been one of virtual unfreedom. Paternal care implies paternal authority. “The higher and middle classes might and 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 persons 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.” (I.375.)

The fact is, he contends, that until there is proper restraint upon numbers, there can be no hope of permanent relief of poverty. “And how is this change to be effected, while we continue inculcating” upon the working classes “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.” (I.375-6.)

The remainder of the article is devoted to the author’s own proposals for improvement of the condition of the people. It expatiates on the need for education, both at school and beyond, and, with a footnote reference to the experiments of M. Leclaire which figure so largely in the pivotal chapter in the Principles, it hints at Mill’s own solution, “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” (I.382).

It is arguable that the very uncompromising nature of parts of this article is different in tone and temper from what it would have been if written after the movement towards some sort of socialism which took place in Mill’s thinking after the events of 1848. But on the essential core of the argument against paternalism, there is no reason to believe that Mill’s position altered greatly, and it is a very significant circumstance that he should have still thought it worthy of preservation and republication when in 1859 he came to collect his papers in Dissertations and Discussions.

The second paper here reprinted, the article on Mill’s friend Thornton’s book On Labour, is of much greater historical significance, for it contains both the celebrated retractation regarding the wages fund and Mill’s most mature reflections on the ethics and economics of collective bargaining and trade unionism.

The retractation of belief in the existence of a determinate wages fund caused some sensation at the time of its appearance, and indeed it may be held to be one of the influences bringing about the end of the ascendency of classical theory in Great Britain. The treatment of wages in the Principles had followed classical tradition in this respect. In the long run, wages depended on the tendencies of population increase; in the short run, given the labour force, they depended upon a fund of determinate size destined for the employment of labour. Now, confronted with Thornton’s argument that if individual employers’ demand for labour was not thus inelastic, the aggregate demand could not be inelastic either, Mill abandoned this position, saying: “The doctrine hitherto taught by all or most economists (including myself), which denied it to be possible that trade combinations can raise wages, or which limited their operation in that respect to the somewhat earlier attainment of a rise which the competition of the market would have produced without them,—this doctrine is deprived of its scientific foundation, and must be thrown aside.” Thornton’s critique had destroyed “a prevailing and somewhat mischievous error. It has made it necessary for us to contemplate, not as an impossibility but as a possibility, that employers, by taking advantage of the inability of labourers to hold out, may keep wages lower than there is any natural necessity for; and è converso, that if work-people can by combination be enabled to hold out so long as to cause an inconvenience to the employers greater than that of a rise of wages, a rise may be obtained which, but for the combination, not only would not have happened so soon, but possibly might not have happened at all. The power of Trades’ Unions may therefore be so exercised as to obtain for the labouring classes collectively, both a larger share and a larger positive amount of the produce of labour; increasing, therefore, one of the two factors on which the remuneration of the individual labourer depends. The other and still more important factor, the number of sharers, remains unaffected by any of the considerations now adduced.” (II.646.)

It is clear that the practical implications of this admission fully justified the sensation which it caused. Its intellectual status, however, in the history of economic analysis, is not so impressive. Thornton’s critique had been preceded by a general attack on current formulations of the laws of supply and demand; and in dealing with this, Mill had shown masterly insight and analytical ability. But when he comes to the matter of the wages fund, it is as though the realization that his earlier formulations had been wrong deprived him of his habitual critical insight and compelled merely a bold admission of error. As Taussig has well shown, the analysis at this point becomes faltering and jejune.29 Of course, it was right to admit that the money demand for labour at any moment was much less determinate than the rigid formulations of the wages fund theory had assumed. But it was not helpful to speak as if all that had been said of the dependence of real wages on the real accumulations of the past lost all relevance in the light of Thornton’s strictures; and it is arguable that from the theoretical, as distinct from the practical point of view, the retractation brought as much confusion as clarification. It is not without significance that in the seventh edition of the Principles, the last to appear in his lifetime, Mill made little alteration of what he had said before. A sentence on the power of combinations to raise wages, which earlier had predicted that unemployment would follow any attempt to raise the rate of wages above that which “distributes the whole circulating capital of the country among the entire working population,” was rewritten in terms of the narrow limits “of obtaining . . . an increase . . . at the expense of profits.”30 And in the Preface there is a reference to recent “instructive discussion” between himself and Thornton, the results of which, “in the author’s opinion, are not yet ripe for incorporation in a general treatise on Political Economy.”31

After the drama of the retractation, the second part of the paper, with its reflections on the ethics and economics of collective bargaining and trade unionism, comes as something of an anti-climax. But it is valuable, nevertheless, as affording a more extended treatment than elsewhere of the difficult questions with which it deals. The opening sections, with their illuminating contrast between the a priori and the utilitarian approaches to the problems of productive organization and distributive justice, are as good as anything Mill ever wrote on this matter. And the statement of his attitude to the various problems presented by the activities of combinations of labourers is more thorough and systematic than the treatment of these matters in the Principles. There are no conspicuous departures from the views expressed in that treatise, but there is much more elaboration; and the total effect is a complex one. Mill is desperately anxious to be fair; and because he felt that the unions of that time performed valuable functions in raising the self-respect of their members and providing (perhaps) organizations which might eventually transcend the status of mere sellers of hired labour in the form of self-governing associations of co-operative producers—“a transformation” which “would be the true euthanasia of Trades’ Unionism” (II.666)—he was prepared to find excuses for practices which one would expect him to condemn. Practices restrictive of output are indeed roundly denounced. But in contrast, practices which raise wages in some sectors at the expense of the general body of workers receive a qualified extenuation: “all such limitation inflicts distinct evil upon those whom it excludes—upon that great mass of labouring population which is outside the Unions; an evil not trifling, for if the system were rigorously enforced it would prevent unskilled labourers or their children from ever rising to the condition of skilled” (II.662). But it is urged that there are “two considerations, either of which, in the mind of an upright and public spirited working man, may fairly legitimate his adhesion to Unionism.” The first is the educational and evolutionary value of unionism; the second, “a less elevated, but not fallacious point of view,” namely the Malthusian, is that the unions at least preserve something which would otherwise be swallowed up by the indiscriminate increase of the unreflecting: “As long as their minds remain in their present state, our preventing them from competing with us for employment does them no real injury; it only saves ourselves from being brought down to their level” (II.664).

Similarly, while violence, defamation of character, injury to property, or threats of any of these evils in the course of trade disputes is condemned, there is a defence of the social compulsions exercised to induce workers to form a union or take part in a strike. “As soon as it is acknowledged that there are lawful, and even useful, purposes to be fulfilled by Trades’ Unions, it must be admitted that the members of Unions may reasonably feel a genuine moral disapprobation of those who profit by the higher wages or other advantages that the Unions procure for non-Unionists as well as for their own members, but refuse to take their share of the payments, and submit to the restrictions, by which those advantages are obtained. It is vain to say that if a strike is really for the good of the workmen, the whole body will join in it from a mere sense of the common interest. There is always a considerable number who will hope to share the benefit without submitting to the sacrifices; and to say that these are not to have brought before them, in an impressive manner, what their fellow-workmen think of their conduct, is equivalent to saying that social pressure ought not to be put upon any one to consider the interests of others as well as his own. All that legislation is concerned with is, that the pressure shall stop at the expression of feeling, and the withholding of such good offices as may properly depend upon feeling, and shall not extend to an infringement, or a threat of infringement, of any of the rights which the law guarantees to all—security of person and property against violation, and of reputation against calumny.” (II.659-60.) All of which, in the twentieth century, sounds rather naive from the author of On Liberty who foresaw so many inimical trends. But it is a revealing picture of the frame of mind of men of goodwill in the sixties and seventies, when defence of combinations of workers seemed to be defence of one of the better hopes of humanity; and it does not in the least settle the question of what Mill’s attitude would have been to more recent manifestations of what such combinations can do when given special privileges by the law.



next comes a group of papers which, in one way or another, spring from Mill’s interest in various aspects of the institutions of property and their susceptibility to social control. This is a sphere in which his thought was avowedly tentative and experimental. He believed firmly that throughout the greater part of civilized history private property in various forms had served positive functions, functions which must be performed somehow if there is to be order and progress—the preservation of peace, the safeguarding of the fruits of accumulation, the reward of enterprise and initiative. But he did not believe that these institutions were immutable. They depended on opinion and volition and were capable of variety and development. They were also perhaps capable of being superseded by other arrangements, if these arrangements were such as to secure the same fundamental desiderata. The distinction, to which he attached such importance, between the laws of production which partook “of the character of physical truths”32 and the laws of distribution which were of human origin, was fundamental to his thinking here; and as is well known—and as we shall be discussing further in the next section—he was not unwilling to contemplate the eventual emergence of certain forms of collectivist ownership and control. But within the sphere of existing institutions, he believed in development and improvement. “The principle of private property,” he argued, “has never yet had a fair trial in any country; and less so, perhaps, in this country than in some others. The social arrangements of modern Europe commenced from a distribution of property which was the result, not of just partition, or acquisition by industry, but of conquest and violence: and notwithstanding what industry has been doing for many centuries to modify the work of force, the system still retains many and large traces of its origin. The laws of property have never yet conformed to the principles on which the justification of private property rests. They have made property of things which never ought to be property, and absolute property where only a qualified property ought to exist. They have not held the balance fairly between human beings, but have heaped impediments upon some, to give advantage to others; they have purposely fostered inequalities, and prevented all from starting fair in the race. That all should indeed start on perfectly equal terms, is inconsistent with any law of private property: but if as much pains as has been taken to aggravate the inequality of chances arising from the natural working of the principle, had been taken to temper that inequality by every means not subversive of the principle itself; if the tendency of legislation had been to favour the diffusion, instead of the concentration of wealth—to encourage the subdivision of the large masses, instead of striving to keep them together; the principle of individual property would have been found to have no necessary connexion with the physical and social evils which almost all Socialist writers assume to be inseparable from it.”33

We have seen already, in the discussion of Mill’s attitude to problems of taxation, his willingness to alter existing arrangements in regard to the law of inheritance. The papers discussed in the present section illustrate further in various ways this essentially empirical approach to the possible evolution of various aspects of the institution of property.

The minutes of evidence here entitled “The Savings of the Middle and Working Classes” together with the short note on “The Law of Partnership” are a product of Mill’s lively interest in the reform of the law so as to permit industrial investment and association without commitment to unlimited liability of the property of the persons concerned. It was his belief that reform of this sort would serve the double purpose of making available for development a larger volume of saving, and at the same time facilitating, on a much larger scale than that then prevailing, the active participation of the working classes in the organization of industry. This involved changes both in the law relating to partnership and the law relating to joint-stock companies, and to both these movements Mill lent the weight of his support. In the papers here reprinted the main burden of his argument is directed to the law of partnership, in respect of which he contended that the prohibitions of associations en commandite, as in the French law, had as little justification as the ancient laws against usury. On the larger question of the desirability of limited liability for investors in joint-stock companies, he expresses here some slight reserve on the ground that the privilege involved, if granted, should be extended to all individuals. But we know from his discussion of this question in the Principles that he was indeed thoroughly in favour of it. Indeed, his statement of the justification of such arrangements may well be regarded as the classic formulation of the principle. “If a number of persons choose to associate for carrying on any operation of commerce or industry, agreeing among themselves and announcing to those with whom they deal that the members of the association do not undertake to be responsible beyond the amount of the subscribed capital; is there any reason that the law should raise objections to this proceeding, and should impose on them the unlimited responsibility which they disclaim? For whose sake? Not for that of the partners themselves; for it is they whom the limitation of responsibility benefits and protects. It must therefore be for the sake of third parties; namely, those who may have transactions with the association, and to whom it may run in debt beyond what the subscribed capital suffices to pay. But nobody is obliged to deal with the association: still less is any one obliged to give it unlimited credit. The class of persons with whom such associations have dealings are in general perfectly capable of taking care of themselves, and there seems no reason that the law should be more careful of their interests than they will themselves be; provided no false representation is held out, and they are aware from the first what they have to trust to.” When the law has “afforded to individuals all practicable means of knowing the circumstances which ought to enter into their prudential calculations in dealing with the company, there seems no more need for interfering with individual judgment in this sort of transactions, than in any other part of the private business of life.”34

The next set of papers falling within this group are “Leslie on the Land Question” and the manifesto on “Land Tenure Reform.” It is well known from famous passages in the Principles that Mill regarded property in land as needing a justification different in kind from the justification of other forms of property. “The essential principle of property being to assure to all persons what they have produced by their labour and accumulated by their abstinence, this principle cannot apply to what is not the produce of labour, the raw material of the earth.”35 This is not to say that he was hostile to all forms of private land ownership; on the contrary, he attached great, probably exaggerated, value, for instance, to peasant proprietorship. But it does mean that he regarded land, or what Ricardo would have called the original powers of the soil (including position), as having a special significance in economic analysis and a special position in social philosophy: “with property in moveables, and in all things the product of labour . . . the owner’s power both of use and of exclusion should be absolute, except where positive evil to others would result from it: but in the case of land, no exclusive right should be permitted in any individual, which cannot be shown to be productive of positive good.”36 Thus he favoured in certain instances the break-up (with proper compensation) of large estates and their redivision among small proprietors. He favoured special provisions in the law safeguarding the position of tenants. He was fiercely against exclusive rights of access to scenic areas. And he supported special kinds of taxation designed to take from landowners the element of unearned increment in the value of their holdings. “They grow richer, as it were in their sleep, without working, risking, or economizing,” he said. “What claim have they, on the general principle of social justice, to this accession of riches?”37

The two papers reprinted in this collection, although by no means exhausting Mill’s contribution to this subject, for which it is necessary also to go to the Principles and to the speeches, provide a very fair indication of this general attitude. The review of Cliffe Leslie’s Land Systems is devoted largely to illustrations of the principle that the “maxims of free trade, free contract, the exclusive power of everyone over his own property, and so forth” are not applicable, or not applicable without serious limitations, to the control of landed wealth. As Professor R. D. C. Black has shown in his notable study, Economic Thought and the Irish Question,38 Mill had a much better record than other economists of the day in correct insight into the nature of the economic problems of Ireland, and this paper is perhaps especially valuable as a concise statement of his attitude in this respect.

The second paper, the Explanatory Statement of the Programme of the Land Tenure Reform Association—the title used on its initial publication—is valuable as an explicit statement of the actual reforms in the law relating to property in land which Mill’s general views on the subject led him to support. Its content is best summarized by the reproduction of the ten points of the programme on which Mill’s paper is a running commentary:

I. To remove all Legal and Fiscal Impediments to the Transfer of Land.

II. To secure the abolition of the Law of Primogeniture.

III. To restrict within the narrowest limits the power of Tying up Land.

IV. To claim, for the benefit of the State, the Interception by Taxation of the Future Unearned Increase of the Rent of Land (so far as the same can be ascertained), or a great part of that increase, which is continually taking place, without any effort or outlay by the proprietors, merely through the growth of population and wealth; reserving to owners the option of relinquishing their property to the State at the market value which it may have acquired at the time when this principle may be adopted by the Legislature.

V. To promote a policy of Encouragement to Co-operative Agriculture, through the purchase by the State, from time to time, of Estates which are in the market, and the Letting of them, under proper regulations, to such Co-operative Associations, as afford sufficient evidence of spontaneity and promise of efficiency.

VI. To promote the Acquisition of Land in a similar manner, to be let to Small Cultivators, on conditions, which, while providing for the proper cultivation of the land, shall secure to the cultivator a durable interest in it.

VII. Lands belonging to the Crown, or to Public Bodies, or Charitable and other Endowments, to be made available for the same purposes, as suitable conditions arise, as well as for the Improvement of the Dwellings of the Working Classes; and no such lands to be suffered (unless in pursuance of the above mentioned ends, or for peculiar and exceptional reasons) to pass into Private hands.

VIII. All Lands now Waste, or requiring an Act of Parliament to authorize their inclosure, to be retained for National Uses: Compensation being made for Manorial rights and rights of Common.

IX. That while it is expedient to bring a large portion of the present Waste Lands under Cultivation for the purposes and on the principles laid down in the preceding articles, it is desirable that the less fertile portions, especially those which are within reach of populous districts, should be retained in a state of wild natural beauty, for the general enjoyment of the community, and encouragement in all classes of healthful rural tastes, and of the higher order of pleasures; also, in order to leave to future generations the decision of their ultimate uses.

X. To obtain for the State the power to take possession (with a view to their preservation) of all Natural Objects, or Artificial Constructions attached to the soil, which are of historical, scientific, or artistic interest, together with so much of the surrounding land as may be thought necessary; the owners being compensated for the value of the land so taken.

The two papers next to be considered, that on “Corporation and Church Property” and that on “Endowments,” are concerned not only with the question of the right of the state to modify the conditions of foundations and endowments but also with the question of the support and control of higher education. Separate in the time of their writing by more than thirty-five years, the emphasis of the argument differs; but the essential content remains the same.

“Corporation and Church Property” is chiefly concerned to show that “there is no moral hindrance or bar to the interference of the Legislature with endowments, though it should even extend to a total change in their purposes” and then to inquire “in what spirit, and with what reservations, it is incumbent on a virtuous Legislature to exercise this power” (I.195). As a utilitarian, believing that, in the end, only consideration of the happiness of individuals should influence moral judgment, Mill is clear that it is intolerable that the wishes of dead men should be allowed to bind the dispositions of resources for more than a limited period after their death. If circumstances change, rendering their instructions no longer appropriate, then it is in the general interest that the legislature should intervene and impose new conditions. If there is proper compensation to the expectations of any persons enjoying benefits under the original dispensation, then it cannot be argued that anyone is injured by such intervention; the corporation as such has no grievance. If the law assumes “that a man cannot know what partition of his property among his descendants, thirty years hence, will be for the interest of the descendants themselves,” it cannot be assumed that “he may know (though he have scarcely learnt the alphabet) how children may be best educated five hundred years hence; how the necessities of the poor may then be best provided for; what branches of learning, or of what is called learning, it will be most important to cultivate, and by what body of men it will be desirable that the people should be taught religion, to the end of time” (I.199).

This, however, does not mean that endowments and foundations are in themselves undesirable. Much as he admired him, Mill was not in agreement with Turgot, who had taken this view. On the contrary, he urged that they had functions to fulfil particularly in regard to education, in respect of which their existence was a positive good. It was indeed the duty of governments to provide funds for such purposes. But it “is impossible to be assured that the people will be willing to be taxed for every purpose of moral and intellectual improvement for which funds may be required.” If, however, there were “a fund specially set apart, which had never come from the people’s pockets at all, which was given them in trust for the purpose of education, and which it was considered improper to divert to any other employment while it could be usefully devoted to that; the people would probably be always willing to have it applied to that purpose. There is such a fund, and it consists of the national endowments.” (I.216.) While, therefore, it is incumbent on the state to interfere with the conditions of endowments when these have ceased to serve a useful purpose, it is desirable that the interference should involve, not appropriation of the funds for the general purposes of public expenditure, but rather a better discharge of the useful functions originally intended.

Mill returns to this theme in the second paper and develops at greater lengths the argument for the existence of decentralized initiative in regard to education and research. A certain Mr. Fitch, an authority on the abuses of endowments, had made statements which almost implied the abolition of centres of this sort—“a doctrine breathing the very spirit, and expressed in almost the words, of the apologies made in the overcentralised governments of the Continent for not permitting any one to perform the smallest act connected with public interests without the leave of the Government” (II.616). But the “truth needs reasserting, and needs it every day more and more, that what the improvement of mankind and of all their works most imperatively demands is variety, not uniformity” (II.617). “Because an endowment is a public nuisance when there is nobody to prevent its funds from being jobbed away for the gain of irresponsible administrators; because it may become worse than useless if irrevocably tied up to a destination fixed by somebody who died five hundred years ago; we ought not on that account to forget that endowments protected against malversation, and secured to their original purpose for no more than two or three generations, would be a precious safeguard for uncustomary modes of thought and practice, against the repression, sometimes amounting to suppression, to which they are even more exposed as society in other respects grows more civilised.” (II.621.)

Beyond this, in this paper Mill is led to argue the positive benefits, especially to higher education, of the existence of suitably constituted endowments. He is not sanguine that free competition in education will provide what is desirable without the help, example, and stimulus of education provided this way. “It must be made the fashion to receive a really good education. But how can this fashion be set except by offering models of good education in schools and colleges within easy reach of all parts of the country? And who is able to do this but such as can afford to postpone all considerations of pecuniary profit, and consider only the quality of the education . . .? The funds for doing this can only be derived from taxation or from endowments; which of the two is preferable? Independently of the pecuniary question, schools and universities governed by the State are liable to a multitude of objections which those that are merely watched, and, in case of need, controlled by it, are wholly free from; especially that most fatal one of tending to be all alike; to form the same unvarying habits of mind and turn of character.” (II.623.) It is not clear to me that in the twentieth century, with the drying up of so many sources of private endowment, Mill would necessarily have frowned on extensive support of higher education from state sources. But it is very obvious that he would still have been foremost among those who seek, by one means or another, to insulate it as far as possible from direct operation and control from parliaments and ministers; and I suspect that he would have shown more approval to a tax system such as that of the United States, which provides direct and powerful incentives to gifts for educational and cultural endowments through its death duties, than that of Great Britain, which actively resists any movement in that direction.

Finally in this group there comes the short but important paper on “The Regulation of the London Water Supply.” Here is an instance where, the technical conditions of production rendering impossible the existence of such a degree of competition as in his opinion justified the private property system as an agent of supply, Mill was prepared to recommend thoroughgoing municipalization. In such circumstances, he argued, the case for government regulation of some sort was indisputable. Whether this should take the form of control of existing companies or of direct governmental operation, he held, was a matter to be decided on consideration of the technical circumstances in each case arising. So far as London water was concerned, in the absence of a suitable organ of London government, he favoured the appointment of a commissioner with elastic powers of reorganization and control. Had there existed a suitable municipal authority, he would have had “no hesitation in expressing an opinion, that to it . . . should be given the charge of the operations for the water-supply of the capital” (II.435).

This leads conveniently to our last section.



the two papers bearing on Socialism which appear in this collection are of very different importance. The review of Newman’s Lectures on Political Economy, written as Mill was moving into his phase of greatest sympathy with socialism, is important principally as a demonstration of Mill’s strongly negative reaction to what he thought to be unfair criticism of socialist plans and principles; it is of some interest also as the sole example in the classical literature of any discussion of the problem of pricing under socialism. In contrast, “Chapters on Socialism,” written towards the end of his life, are of major importance as an indication of his final views on the subject.

The vicissitudes of Mill’s attitude to socialist proposals for the future organization of society are reasonably well known so far as the documentation is concerned.39 There is a phase of considerable sympathy, coinciding with the period of his revulsion from Benthamism: this is mentioned in the Autobiography, but the authentic contemporary expression thereof is to be found in a letter to Gustave D’Eichthal.40 This is followed by a mood of greater distance exhibited in the relevant chapter (II, i) in the first edition of the Principles—an exposition which, to Mill’s annoyance but not altogether without justification, impressed some readers as being definitely anti-socialistic. Then under the influence of the aftermath of 1848, Mill, now very much under the influence of his wife in this respect, moves into the position of overt, if cautious, sympathy as expressed in the third edition of the Principles—a phase which in the Autobiography Mill said would class them both “under the general designation of Socialists.”41 Finally, in 1869, he sat down to write the chapters here reproduced, which were published after his death by his stepdaughter, Helen Taylor, who can certainly be trusted not to have released anything which did not do justice to his most mature views; and these certainly show much greater reserve than is shown in the phase represented by this third edition of the Principles. But the chapters are incomplete, and the question remains: what does this latest phase amount to?

It is very clear that there had been a sharp recoil from any sort of sympathy with revolutionary socialism in its totalitarian aspects. There is a sharp denunciation of all this in these chapters (see especially II.748-9), and there is a letter to Georg Brandes, of March 1872, on the goings-on of the First International, which makes quite clear the persistence of this mood.42

So far as the more moderate and limited proposals for piecemeal experiment are concerned, I do not doubt that Ashley is right when he contends that there has been some retreat from the position of the chapters in the third edition of the Principles. It would be wrong to suggest that there is now no sympathy: that is certainly not the case. But there is certainly much more caution and, I would judge, more inclination to insist on what can be done by reform within the institutional framework of the private property system. I am reasonably clear that if the details of the treatment of the main problems of socialist organisation discussed respectively in the Principles and in these Chapters were placed in parallel columns and shown to some outside investigator, ignorant of the context of the query, he would judge the second column to show a position much less positive, much more sceptical, than the first.

In the last analysis, however, more important than these nuances is the fact that the position of the third edition is by no means so strong as might be judged, either from the indications of change in the Preface or in the relevant passage in the Autobiography. The discussion of socialism in the chapter on property is not to be judged in isolation. It must be evaluated in conjunction with the chapter “On the Probable Futurity of the Labouring Classes,” a chapter to which we know Mill attached peculiar importance, the more general sections having been written in close conjunction with his wife. And in that chapter, it is clear that Mill’s utopia is not nearly so much in the duo-decimo editions of the new Jerusalem (to use the contemptuous phrase of the Communist Manifesto), which he had discussed with such fairness and attempt at sympathetic understanding in the chapter on property, but in the development of workmen’s co-operatives—self-governing corporations foreshadowed, as he thought, by the experiments of Leclaire and others in Paris and elsewhere. In the last analysis, that is to say, Mill’s socialism proves to be much more like non-revolutionary syndicalism than anything which would be called socialism at the present day.

And that, after all, should not be so surprising if we remember the famous passage in On Liberty alluding to these matters. As we have seen, where there was no competition, Mill was not unwilling to experiment with municipal ownership and control. But on a future in which state ownership had become widespread, his verdict was unequivocal. “If the roads, the railways, the banks, the insurance offices, the great joint-stock companies, the universities, and the public charities, were all of them branches of the government; if, in addition, the municipal corporations and local boards, with all that now devolves on them, became departments of the central administration; if the employés of all these different enterprises were appointed and paid by the government, and looked to the government for every rise in life; not all the freedom of the press and popular constitution of the legislature would make this or any other country free otherwise than in name. And the evil would be greater, the more efficiently and scientifically the administrative machinery was constructed—the more skilful the arrangements for obtaining the best qualified hands and heads with which to work it.”43



the papers collected in these volumes are undoubtedly best read in conjunction with the Principles and the essay On Liberty: they throw light on the evolution and significance of these masterpieces, and are in turn illuminated by them. But taken by themselves, they would still represent a very significant achievement, a body of pronouncements on economic theory and the relations between economics and social philosophy which has no obvious rival among the productions of other writers on these subjects in the literature of the period. As to the two chief essays in Some Unsettled Questions, “Thornton on Labour and Its Claims,” “Corporation and Church Property,” the unfinished “Chapters on Socialism”—we should have to look far to discover productions of parallel weight and stimulus.

When Mill lay dying, it is reported that he said, “My work is done.” By this he obviously did not mean that all the causes he stood for, all the propositions he had advanced, had been triumphant. He meant, rather, that he had had his say, that the circumstances of his life had permitted him adequately to set forth his views on the various matters on which he wished to make a contribution. And that was surely true. He had indeed developed and elaborated a system of thought so comprehensive and impressive that it came to dominate, perhaps more than it should have done, the thought of his generation, and it is not surprising that eventually there should have been some reaction against it, a reaction which we can now see went much too far and ran the risk of losing much of great value. Yet, in the end, the historic value of Mill’s contribution did not reside either in the range or in the finality of the elements of the system; it was rather in the spirit thereof. It is for this reason that for a generation disillusioned with systems, he once more appears as a highly admirable figure: a man with a firm hold on the ultimate values of truth and justice and liberty, with strong principles and a strong belief in their applicability; yet, once the high spirits and arrogance of youth had been transcended, fair in argument, willing to learn from experience, empirical in practical judgment, experimental in action.

  • London School of Economics, December 1966


[1 ]See a letter to Professor Rau (20/3/52), reprinted in Hugh S. R. Elliot, ed., The Letters of John Stuart Mill (London: Longmans, Green, 1910), I, 168-70.

[2 ]Principles of Political Economy with Some of Their Applications to Social Philosophy, in Collected Works (Toronto: University of Toronto Press, 1965; London: Routledge and Kegan Paul), III, 498.

[3 ]See my Robert Torrens and the Evolution of Classical Economics (London: Macmillan, 1958), 70-2. This, Mill’s earliest essay in economic theory, will appear in the forthcoming volume of his works devoted to contributions to newspapers.

[4 ]Autobiography (New York: Columbia University Press, 1924), 85.

[5 ]F. Y. Edgeworth, Papers relating to Political Economy (London: Macmillan, 1925), II, 22-3.

[6 ]The Wealth of Nations, ed. E. G. Wakefield (London: Knight, 1835-9), II, 367.

[7 ]See below, 12. Subsequent references to the present volumes are given in the text.

[8 ]Gary S. Becker and William Baumol, “The Classical Monetary Theory: The Outcome of the Discussion,” Economica, XIX (Nov. 1952), 355-76.

[9 ]Letter to Walter Coulson (22/11/50), in Elliot, ed., Letters of John Stuart Mill, I, 157. This was not one of Mill’s more urbane utterances; presumably some of Harriet’s tittle-tattle about Mrs. Taylor and himself had come to his ears: “Mr. Kingsley’s notions must be little less vague about my political economy than about my socialism when he couples my name with that of a mere tyro like Harriet Martineau.”

[10 ]This passage is retained in the Principles; see II. 462-3.

[11 ]Observations on the Principles which Regulate the Course of Exchange; and on the Present Depreciated State of the Currency (London: Lloyd, 1810), which Huskisson described as containing “the most complete exposition of the whole doctrine of exchange that I have met with in any language.” The Speeches of the Rt. Hon. William Huskisson (London: Murray, 1837), I, 56n.

[12 ]See P. Sraffa, ed., The Works and Correspondence of David Ricardo, IV (Cambridge: At the University Press, 1951), 325-56.

[13 ]Ibid., IX (Cambridge, 1952), 302.

[14 ]For a thorough discussion of Blake’s pamphlet and the controversy arising therefrom, see B. A. Corry, Money, Saving and Investment in English Economics, 1800-1850 (London: Macmillan, 1962), 162-8.

[15 ]Thomas Tooke, Thoughts and Details on the High and Low Prices of the Last Thirty Years (London: Murray, 1823).

[16 ]A Letter to Lord Archibald Hamilton on Alterations in the Value of Money (London, 1823).

[17 ]For a fuller discussion of these issues, see my Robert Torrens and the Evolution of Classical Economics, chap. v.

[18 ]See his unsigned article, “Lord Overstone on Metallic and Paper Currency,” Edinburgh Review, CVII (Jan., 1858), 248-93.

[19 ]See the 2nd and 3rd editions of his Principles and Practical Operation of Sir Robert Peel’s Act of 1844 Explained and Defended (London: Longman, Brown, Green, Longmans, and Roberts, 1857 and 1858). See also my Robert Torrens and the Evolution of Classical Economics, 336-41.

[20 ]It is interesting to see that in this evidence Mill speaks out against the issue of small notes, which he had defended so passionately in his youthful paper on the crisis of 1826, his ground now being that the prohibition of issue retained in the country a quantity of gold which could be used to replenish the reserve in case of necessity. See II. 509-10.

[21 ]This second paper is also notable for the high praise awarded Perronet Thompson’s Catechism on the Corn Laws, one of the leading vehicles of the more popular propaganda on the subject. “Mr. Thompson is master of his subject, and has disposed of the fallacies with great philosophic accuracy” (I.152). But Mill goes out of his way to repudiate any endorsement of Thompson’s pamphlet on rent, which had criticized Ricardo on palpably superficial grounds.

[22 ]On the contemporary discussion of such issues, Dr. Shehab’s useful monograph, Progressive Taxation (Oxford, 1953), may be consulted.

[23 ]Principles, III. 809-10.

[24 ]Ibid., 810-11.

[25 ]So far as I am aware, he made no reference to the minimum standard in this connection. This might have presented difficulties at that time, but in our own day it is easy to conceive of alleviations through the pension system or the issue of vouchers for tax-free goods.

[26 ]Principles, III. 811-12.

[27 ]Autobiography, 174.

[28 ]Principles, III. 758-66.

[29 ]F. W. Taussig, Wages and Capital (New York: Appleton, 1899), chaps. xi and xii.

[30 ]Principles, III. 930.

[31 ]Ibid., II. xciv.

[32 ]Principles, II. 199. See also Autobiography, 174-5.

[33 ]Principles, II. 207-8.

[34 ]Principles, III. 898.

[35 ]Ibid., II. 227.

[36 ]Ibid., 231-2.

[37 ]Ibid., III. 819-20.

[38 ]Cambridge: Cambridge University Press, 1960.

[39 ]There is a chapter discussing these vicissitudes in some detail in my The Theory of Economic Policy in English Classical Political Economy (London: Macmillan, 1961).

[40 ]Autobiography, 161-4; Francis E. Mineka, ed., The Earlier Letters of John Stuart Mill, 1812-1848, in Collected Works (Toronto: University of Toronto Press; London: Routledge & Kegan Paul), 88-9.

[41 ]Autobiography, 162.

[42 ]Elliot, ed., Letters of John Stuart Mill, II, 334-5.

[43 ]On Liberty (London: Parker, 1859), 198-9.