Copyright
J. R. (John Ramsay) McCulloch.

A discourse on the rise, progress, peculiar objects, and importance, of political economy : containing an outline of a course of lectures on the principles and doctrines of that science online

. (page 6 of 8)
Online LibraryJ. R. (John Ramsay) McCullochA discourse on the rise, progress, peculiar objects, and importance, of political economy : containing an outline of a course of lectures on the principles and doctrines of that science → online text (page 6 of 8)
Font size
QR-code for this ebook


the task invariably take a share in the discussion
of public measures ; and by their misdirected zeal,
numbers, and energy, have often insured the tri-
umph of such as were most destructive to them-
selves.

There is a peculiarity in the political and econo-
mical sciences which deserves to be noticed, inas-
much as it serves to show the superior necessity
and importance of general instruction in their prin-
ciples. The peculiarity in question originates in the
circumstance of the politician or economist being
extremely apt to be influenced by other considera-
tions than a regard to the interests of truth and



86 DISCOURSE ON

the public welfare. The cultivators of the mathe-
matical and physical sciences can very rarely have
any motive to bias their judgments, or to induce
them to conceal or pervert the truth. But such is
not the case with those who discuss political or
economical questions. Every abuse, and every vi-
cious and unjust institution and regulation, operates
as a bounty on the production of false theories ;
for, though injurious to the public, they are almost
always productive of advantage to a greater or
smaller number of individuals, who, to preserve
this advantage, enlist a portion of the press into
their service, and labour, by means of perverted
and fallacious statements, to make the public be-
lieve that the abuse is really beneficial to them, and
that they are interested in its support. These at-
tempts to make the worse appear the heifer cause,
or to make the most flagrant abuses be viewed as na-
tional benefits, have very often been attended with
complete success. And there are plainly no means
of obviating this evil, of correcting what is really
disadvantageous in the influence of the press, and
of preventing the public from being misled by the
specious sophistry of those whose interest and ob-
ject is to delude them, except by making them
generally acquainted with the elementary and fun-
damental truths of this science. Few can honestly
say with the poet, Video meliora proboque deteri-
ora sequor ! Ignorance is the impure and muddy
fountain whence nine-tenths of the vice, misery,



POLITICAL ECONOMY.

and crime, to be found in the world are really de-
rived. Make the body of the people once fully aware
of the circumstances which really determine their
condition, and you may be assured that an immense
majority will endeavour to turn that knowledge to
good account. If you once succeed in convincing
a man, that it is Jor his interest to abandon one
line of conduct and follow another, the chances
are ten to one that he will do so. I do not mean
to say, that there is much reason to expect that
any measures, which it is in the power either
of government or individuals to adopt, for diffus-
ing a knowledge of the principles of Political Eco-
nomy, can have any very material immediate effect
on the habits of the multitude. The seeds of in-
struction, though sown under the most favourable
auspices, most frequently require many seasons to
bring them to their full maturity. But if there be
little room for the formation of eager hopes of
early improvement, there is none for despondency.
The harvest of sound instruction, though late,
will, in the end, be most luxuriant ; and will am-
ply reward the labours of those who are not dis-
couraged in their patriotic efforts to make educa-
tion embrace objects of real and palpable utility,
by the difficulties and obstacles they must expect to
encounter in the commencement and progress of
their labours.

In my Course of Lectures, I have frequent oc-
casion to refer to various instances, among the



88 DISCOURSE OX

innumerable variety that might be pointed out,
both in the history of this and other countries, to
show the injurious effects of popular ignorance on
national prosperity. How often, for example,
have all the evils of scarcity been aggravated by the
groundless prejudices of the public against corn-
dealers, and the injudicious interference of govern-
ment ? How often have restrictions and prohi-
bitions been solicited by those to whom they prov-
ed productive only of ruin ? How often have
the labouring classes endeavoured to prevent the
introduction and improvement of machines and pro-
cesses for abridging labour, and reducing the cost
of production, though it is certain that they are
uniformly the greatest gainers by them? How
much has the rate of wages been reduced, and
the condition of the lower classes deteriorated,
by the prevalence of mistaken opinions respecting
the principle of population ; and the mistaken
application of public charities ? The object of the
famous Excise scheme, proposed by Sir Robert
Walpole in 1733, was not to raise the duties on
any commodity whatever, but to introduce the
warehousing and bonding system " To make
London a free port, and by consequence the mar-
ket of the world."* And yet the mere proposal of



* Sir Robert Walpole's speech on the introduction of the
Excise scheme. Coxe's Life of Sir R. Walpole, Vol. I.
p. 372, 4-to ed.



POLITICAL ECONOMY. 89

this scheme had well nigh lighted up the flames of
rebellion in the country, and its abandonment by the
minister was hailed with the most earnest and en-
thusiastic demonstrations of popular rejoicing : And
such is the strength of vulgar prejudice, that it was
not until 1803 that the warehousing system -the
greatest improvement that has perhaps ever been
made in the financial and commercial policy of the
country could be safely adopted.

But where examples of this sort are so numerous
and striking as to arrest the attention of every one,
it is unnecessary to specify them. I shall only,
therefore, further observe, that the war of 1756,
the American war, and the greater part of the
wars of last century, with the exception of those
that grew out of the French Revolution, were
waged for the purpose of preserving or acquiring
some exclusive commercial advantage. But does
any one suppose that these contests could have
been carried on, at such an infinite expence of
blood and treasure, had the mass of the people
known that their object was utterly unattainable ?
had they known that it is impossible for any one
country to monopolize wealth and riches ; and that
every such attempt must ultimately prove ruinous
to itself, as well as injurious to others ? It is to
Political Economy that we owe an incontrovertible
demonstration of these truths ; truths that are
destined to exercise the most salutary influence on



90 DISCOURSE ON

humanity to convince mankind that it is for their
interest to live in peace, to deal with each other on
fair and liberal principles, and not to become the
dupes of their own short-sighted avarice, or the
willing instruments of the blind ambition, or petty
animosities, of their rulers.

" A commercial war," says a writer who had
the honour to be employed to compose a treatise
on trade for the particular use of his late Majesty,
" whether crowned with victory or branded with
defeats, can never prevent another nation from be-
coming more industrious than you are ; and if they
are more industrious, they will sell cheaper ; and,
consequently, your customers will leave your shop
and go to theirs. This will happen though you
covered the ocean with fleets and the land with
armies. The soldier may lay waste, the privateer,
whether successful or unsuccessful, will make poor ;
but it is the eternal law of Providence, that ' the
hand of the diligent can alone make rich. 9 "*



England is the native country of Political Eco-
nomy ; but she has not treated it with a kind and
fostering hand : She cannot boast of being the first
to perceive the advantage of rendering it a branch



* Dean Tucker's Four Tracts on Commercial and Political

Subjects, p. 41, 3d edit.

10



POLITICAL ECONOMY. 91

<>f popular instruction, or to form establishments for
that purpose. It is to Italy, or rather to an Italian
citizen, Bartholomew Intieri, a Florentine, cele-
brated by his countrymen for the variety of his use-
ful attainments, and the benevolence of his charac-
ter, that this honour is due. Having resided long
in Naples, in the capacity of manager of the estates
of the Corsini and Medici families, Intieri ne-
cessarily became familiar with many of the abuses
with which every part of the internal administra-
tion of that country was infected ; and being
strongly impressed with a conviction, that the
easiest, safest, and most effectual reform of these
abuses, would be produced by rendering the pub-
lic generally acquainted with the genuine sources
of national wealth and prosperity, and of poverty
and misery, he determined to show his grati-
tude to the Neapolitans for the kindness he
had experienced during his residence amongst
them, by instituting a course of lectures on this
science. For this purpose, Intieri applied to the
Neapolitan government to be permitted to found a
professorship of Political Economy in the University
of Naples, to which a salary of 300 scudi should be
attached, stipulating that the lectures should be
given in the Italian language ; that his distin-
guished friend Genovesi should be the first pro-
fessor ; and that, after his death, no individual in
holy orders should be appointed to the chair.



DISCOURSE ON

The Government having, greatly to its credit,
agreed to these conditions, Genovesi opened his
class on the 5th of November 1754. His lec-
tures, which were very successful, were published
in 1764 in two volumes octavo, under the title of
Lezioni di Commercio o sia di Economia Civile.*
In 1769, the Empress Maria Theresa founded a
similar chair in the University of Milan, and ap-
pointed the justly celebrated Marquis Beccaria its
first professor. But it is not in countries subject-
ed to arbitrary governments, and deprived of the
freedom of the press, that lectures on Political
Economy can be of any considerable service. The
timid and jealous rulers of Naples and Austria
speedily took fright at the existence of institutions
which the enemies of improvement taught them to
fear might have the effect to excite dissatisfaction ;
and the chairs founded by Intieri and Maria The-
resa were in consequence suppressed.

It is due, however, to the Emperor Alexander to

state, that he has given considerable encouragement

. to the study of Political Economy in Russia. M.

Henri Storch composed, at his request, a course of



* See the article Genovesi, written by Salfi, in the Bio-
graphic Universelle ; and the notice of his life prefixed to
his economical works in the 14?th volume of the Scrittorl
Classici Italiani di Economia Politico,. Intieri died in 1757 >
in hih 80th year.



POLITICAL ECONOMY. 93

lectures for the Grand Dukes Nicholas and Mi-
chael, which were published in 1815 under the
title of Cours d* Economic Politique.* This work
reflects the greatest credit on its author, and
does honour to the liberality of the government,
at whose expence it was published. Besides a clear
and able exposition of the most important princi-
ples respecting the production of wealth and the
freedom of commerce and industry, M. Storch's
work contains many excellent disquisitions on sub-
jects that have engaged but little of the attention
of the English and French Economists. His ac-
counts of the slave system of ancient Rome and
modern Russia, and of the paper money of the
different continental states, are exceedingly inter-
esting and instructive. Without the remotest in-
tention of depreciating the labours of others, I con-
ceive that I am fully warranted in placing the work of
M. Storch at the head of all the works on Political
Economy ever imported from the Continent into
England.

But while arbitrary princes have appointed pro-
fessors to instruct their subjects in the principles of
this master science of civil life, it has been left to
struggle in this country without any public patron-



* The Petersburgh edition of this work is in 6 vols. 8vo.
An edition was published at Paris in 1823, with notes by M.
Say, in 4 vols.



94 DISCOURSE ON

age against the prejudices of ignorance, interest,
authority, and fashion. The nation which of all
others is most interested in the progress of Politi-
cal Economy, whose finanical and commercial
system is most complicated, and where public opi-
nion has the greatest influence on the conduct of
government, is almost the only one in Europe
that has made no effort to facilitate its general ac-
quisition ; or to introduce it, under the superin-
tendence of separate professors, into those esta-
blishments where it would be recommended by so
many old associations, and adventitious attractions
to the future Legislators of the country. This de-
fect in our system of public education is undoubt-
edly the cause why so many of those who have fill-
ed the highest stations, and who have had to de-
cide on the most important financial and commer-
cial questions, should, though otherwise possessed of
the greatest talents and acquirements, have been so
very ill acquainted with the principles and doc-
trines of this science. It is not their fault, but the
fault of their instructors, if it may be truly said of
them, that Plerique ad honor es adipiscendos, etad
Rempublicam gerendam nudi venirent atque iner-
mes ; nulld cognatlone rerum, nulld scientid ornatL
There is good reason, however, for thinking that Po-
litical Economy will not be much longer subjected
to such unmerited neglect. The public have, on
many recent occasions, derived the most essential



POLITICAL ECONOMY. 95

benefit from the labours and researches of its
cultivators ; and its paramount importance is now
universally admitted. The ascendancy, too, which
those statesmen who are supposed to be familiar
with its principles have obtained in Parliament
and in the country, is a most gratifying circum-
stance. It shows that science is at last meeting
with that consideration to which it has so many
and such powerful claims ; that the taste for decla-
mation is on the wane ; and that it is now begin-
ning to be thought quite as necessary to under-
stand the principles on which the decision of all
questions connected with the public economy of
the country ought to depend, as it is to be able to
embellish them with the choicest and most splendid
diction.

The foundation of the RICARDO LECTURE on
Political Economy is another circumstance which
may be expected to contribute to accelerate its pro-
gress. The motives which led to the formation of
that Institution are, I believe, pretty generally
known. It is sufficient, therefore, to observe, that
it was intended to do honour to the memory of one
of the greatest Economists and most enlightened
Legislators that this country ever produced, by as-
sociating his name with the future progress of the
science of which he was so great a master ; and to
facilitate the acquisition of a knowledge of that
science, by the establishment of a course of lectures



96 DISCOURSE ON

in the metropolis, in which its leading principles
and conclusions should be briefly, popularly, and
clearly explained. The situation in which the
partial kindness of the Managers of this Institu-
tion has placed me will not allow me to say more
respecting it, than that its foundation is equally
honourable to the memory of Mr Ricardo, and to
the judgment of his friends ; and that, so long as
I have the honour to be connected with it, my
most anxious efforts shall be directed to render it
effectual for the dissemination of a knowledge of
the just principles of the science.

It is unnecessary to say much on the question,
whether Political Economy may be most advanta-
geously learned from oral instructions, or by pri-
vate reading. It cannot be doubted, that it is in
the power of any one, by an attentive perusal and
comparison of the works of the great masters of
the science, to obtain a perfect command over its
principles ; and it is also certain that no oral in-
structions can entirely supersede private study and
reading. Still, however, it seems to me that very
great advantage may be derived from a judicious
course of public prelections. " The hour of lec-
ture enforces attendance ; attention is fixed by the
presence, the voice, and the occasional questions
of the teacher ; the most idle will carry something
away ; and the more diligent will compare the in-
structions which they have heard in the school



POLITICAL ECONOMY. 97

with the volumes they peruse in their chambers."*
A course of lectures has the farther advantage of
being easily made to keep pace with the progress
of the science ; while the discussion of principles
and conclusions, bearing directly on the various
questions that are daily emerging into importance,
excites an unusual interest in the auditors, and
gives the lecture a degree of freshness, and a prac-
tical and immediate incidence, which no published
treatise can possibly possess.

After defining the objects and limits of the
science, I proceed at the outset of my course to
show that labour is the only source of wealth to
prove, in the words of Dr Smith, that " it was not
by gold or by silver, but by labour, that all the
wealth of the world was originally purchased."!



* Gibbon's Memoir of his own Life, Miscellaneous Works,
Vol. I. p. 51, Svo ed.

f Wealth of Nations, I. p. 44. The writer of a late ar-
ticle in the Quarterly Review (No. 60, Art. I.) contends,
that the earth is a source of wealth, because it supplies us
with the matter of commodities. But this, it is obvious, is
just the old error of the Economists reproduced in a some-
what modified shape. Wealth is in no degree dependent on
quantities of matter, but exclusively on value. Nature gra-
tuitously supplies us with the matter of which all commo-
dities are made ; but until labour has been expended in ap-
propriating matter, or in adapting it to our use, it is wholly
destitute of value, and is not, nor ever has been, con-

G



98 DISCOURSE ON

This fundamental principle once established, it ne-?
cessarily follows, that the great practical problem in-
volved in that part of the science which treats of the
production of wealth, must necessarily resolve itself
into a discussion of the means whereby the great-
est amount of necessary, useful, and desirable pro-
ducts may be obtained with the least possible quan-
tity of labour. Every measure which has any ten-
dency to add to the power of labour, or to reduce
the cost of the commodities produced by its agency,
must add proportionally to our power of obtaining
wealth and riches, while every measure or regula-
tion that has any tendency to waste labour, or to
raise the cost of producing commodities, must
equally lessen this power. This is the simple and
decisive test by which we are to judge of the ex-
pediency of every measure affecting the wealth of
the country, and of the value of every invention.
If they render labour more productive if they
have a tendency to reduce the exchangeable value



sidered as forming wealth. We do not call a inan wealthy
because he has an indefinite command of atmospheric air, or
of any other gratuitous product; but we call him wealthy
when, and only when, he possesses the produce of a large
quantity of labour. It would, in truth, be just as correct to
say, that the earth is a source of pictures and statues, be-
cause it supplies the materials made use of by painters and
statuaries, as to say, that it is a source of wealth, because it
supplies the matter of commodities !



POLITICAL ECONOMY. 99

of commodities, to render them more easily ob-
tainable, and to bring them within the command
of a greater portion of society, they must be ad-
vantageous ; but if their tendency be different,
they must as certainly be disadvantageous, Con-
sidered in this point of view, that great branch of
the science of Political Economy which treats of
the production of wealth, will be found to be a-
bundantly simple, and easily understood.

I may here observe, that labour, according as it
is applied to the raising of raw produce to the fa-
shioning of that raw produce, when raised, into ar-
ticles of utility, convenience, or ornament and to
the conveying of raw and wrought produce from
one country and place to another is said to be ag-
ricultural, manufacturing, and commercial. An ac-
quaintance with the particular processes, and most
advantageous methods, of applying labour in each
of these grand departments of industry, forms the
peculiar and appropriate study of the agriculturist,
manufacturer, and merchant. It is not consistent
with the objects of the Political Economist to enter
into the details of particular businesses and profes-
sions. He confines himself to an investigation of
the means by which labour in general may be ren-
dered most productive, and how its powers may be
increased in all the departments of industry.

The most careless and inattentive observer of the
progress of mankind from poverty to affluence,



100 DISCOURSE ON

must have early perceived that there are three cir-
cumstances, without whose conjoint existence and
co-operation they never could have emerged from
barbarism. The first, and most indispensable, is
the security of property ; the second, is the intro-
duction of exchange or barter, and the consequent
appropriation of particular individuals to particular
occupations ; and the third, is the accumulation
and employment of the produce of previous labour,
or, as it is more commonly termed, of capital or
stock. Without the first, or security of property,
we can have neither riches nor civilization ; for no
one would ever engage in any laborious or difficult
undertaking, without a thorough conviction that he
was labouring for his own advantage, and not for
that of others, and that he was to be permitted to
enjoy the fruits of his labour without molestation : *
Without the second, or the introduction of barter
and the division of employments, no one would be
able constantly to employ himself in a particular
branch of industry ; his time would be wasted in
shifting from one thing to another ; and it would
be impossible for him to attain that peculiar sleight
of hand, and that degree of skill and dexterity in
any particular calling, so truly astonishing to those



* LA SURETE DE LA PROPRIETE est le fondement essen-
tiel de Vordre economique de la socictc. Quesnay, Physioctaiie,
p. 108.



POLITICAL ECONOMY. 101

who have lived in places where the division of la-
bour was but imperfectly established : And without
the third, or the possession and employment of ca-
pital, the labourer would be destitute of provisions
for his subsistence, and of tools and machines to as-
sist him in his work, and would consequently be
unable to engage in any species of industry that did
not promise an almost immediate return, or that
might not be carried on by the hand alone, without
the aid of any instrument. All the means that ei-
ther have been, or that ever can be, devised for fa-
cilitating the production of wealth, by adding to
the power and efficacy of labour, must be classed
under one or other of these three heads. It is in-
dispensable, therefore, that principles so import-
ant, and which lie at the very bottom of the
science, should be well understood. I endeavour
to set them in the clearest point of view ; to ex-
hibit their mutual action and reaction ; and to treat
fully the various important questions to which their
discussion necessarily gives rise.

Besides that sort of division of labour which en-
ables each individual in a limited society to confine
himself to a particular employment, there is another
and most important branch of the division of labour,
which not only enables particular individuals, but
the inhabitants of entire districts, and even nations,
to addict themselves, in preference, to certain
branches of industry. It is on this territorial di



102 DISCOURSE ON

vision of labour, if I may so term it, that the com-
merce which is carried on between different dis-
tricts of the same country, and between different
countries, is founded. The various soils, climates,
and capacities of production, possessed by the dif-
ferent districts of an extensive country, fit them
for being appropriated in preference to certain
species of industry. A district where coal is abund-
ant, which has an easy access to the ocean, and a
considerable command of internal navigation, is the
natural seat of manufactures. Wheat and other
species of grain are the proper products of rich ar-
able soils ; and cattle, after being reared in moun-


1 2 3 4 6 8

Online LibraryJ. R. (John Ramsay) McCullochA discourse on the rise, progress, peculiar objects, and importance, of political economy : containing an outline of a course of lectures on the principles and doctrines of that science → online text (page 6 of 8)