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