John J. (John Joseph) Lalor.

Cyclopædia of political science, political economy, and of the political history of the United States online

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individual liberty a romantic enthusiasm for me-
diaeval relations of dependence, and displayed
great affection for the blessings of feudal sim-



plicity, compared with the beginning development
of modern industry and free commerce. There
were protectionists, like F. List, who in the reg-
ulation of economic relations had an eye first of
all to the advantage of their own nation, and
wished to favor the development of national
wealth and power. The last had powerful allies
in North America, where protection against the
all-powerful English industry is a natural pol-
icy. Romanticists and protectionists were both
on a false road. It was an idle attempt to oppose
a school which corresponded, although incom-
pletely, to modern wants and conditions, by the
resurrection of obsolete views.j Neither set of
economists, therefore, had many followers. But
if we must allow a certain critical merit in the
communists and extreme socialists of France, we
must grant this in a still greater degree to the
romanticists and protectionists. Both oppose
the theory which seeks eternally valid natural
laws in economics, and which considers the nat-
ural condition of unlimited personal freedom as
the only justifiable one, without regard to the
needs of special times and nations. They callfed
our attention to the fact that we must approach
the study of economic relations in an historic
spirit, that the same system is not suited to all.
They declaimed, further, against the exclusive
consideration of the increase of material wealth,
and taught us, that, for the prosperous develop-
ment of even purely economic conditions, the
preservation of the ideal wealth of the nation,
the harmonious development of the whole man
is by no means a matter of indifference. Finally,
they emphasized the fact, that, in a politically reg-
ulated society, there is a difference between the
ruling and the ruled, that the jural order is of
the highest importance to economic development,
that the state is not a necessary evil, but an inde-
pendent factor, an inspiring and regulating ele-
ment of the highest importance to the national
economy. List's agitation for the formation of
the customs union, however false his views of it
in detail, and for the building of the net of
German railways, shows that his fundamental
ideas, in spite of their passionate one-sidedness,
were not unfruitful for the development of the
science. Since 1850 a series of German writers
have followed these earlier Germans, who with-
out breaking with the English school, and without
falling into the eiTors of the Romanticists and
protectionists, have been constantly carrying new
ideas into the old English system. At first sev-
eral famous economists undertook to carry the
historical method inio the dogmatic system of
political economy, and with a complete recogni-
tion of the relative truth in the propositions of
Smith and Ricardo; yet, in the place of the one-
sided, absolutely valid natural laws, to acknowl-
edge everywhere, according to the stage of civ-
ilization of a people, a difference in the actual
forces in economic life, and a difference in the
need of state interference. The labors of Ros-
cher, Hildebrand, Knies and others were epoch-



254



POLITICAL ECONOMY.



making in tliis direction. The right of this his-
torical-school to exist, which had long before
celebrated its victory in the field of jurisprudence,
was recognized by all German economists. Others,
-who had less to do with the introduction of this
historical method, have endeavored, in hearty
sympathy with the spirit of the historical school,
to enlarge and correct the current conception of
the state, and have emphasized the interaction of
economical and other social and political forces.
All the more prominent of the living German
economists have labored in this direction, such as
Stein, Schaffle, Dietzel, Schmoller, etc. Our sci-
ence received a pecuUar and fruitful impulse from
the science of statistics, which since Quetelet's ap-
pearance (1835) had taken a new start, and, by the
extensive activity of some German statisticians, has
strongly influenced the younger economists. Sta-
tistics has oddly enough created here and there the
belief in a strange Utopia, the thought, namely, that
we may discover unassailable, universally valid (
laws of economic life by inductive investigation
upon the basis of exact statistical observations in '^
mass, and so arrive by a new road to a completely
.satisfactory mechanical explanation of social life.
This thought, however, to which the exaggerated
ideas of Quetelet and Buckle led, has been rather
expressed than acted upon, and the influence of
statistics has been, as a matter of fact, a thor-
oughly healthy one. It consists in this, that men
have been led, in all cases where the statistical
material has been sufficient, to leave the basis of
abstract premises in the explanation of present
relations, and to take the carefully observed con-
crete facts as a starting-point and seek to ascertain
their causal connection. On many questions, such
as the bank question, we have thus arrived at highly
satisf actoiy results, and a large number of valuable
special investigations according to this meihod
have given us a very welcome supplement to the
system as elaborated by the historical school.
Finally, the fact must be emphasized that the la-
bor question has had a very great influence upon
the treatment of the whole science of economics
in Germany. Communistic and socialistic ideas
invaded Germany as early as 1880-40. But the
labor question did not acquire a great significance
until after 1848, when the railroads and factories
began to increase rapidly, and the way was broken
for the sway of modern industry. German sci-
ence did not assume the protesting position of the
orthodox French economists. Hildebrand's ' ' Po-
litical Economy of the Present and the Future,"
and Stein's initiative investigations into commu-
nism and socialism, gave immediate evidence of a
desire to do justice to the causes of the movements
of the proletary by impartial and thorough exam-
ination of all claims. The labor question has be-
come the most important chapter of political
economy, and the various tendencies which exist
within the science show themselves clearly in the
treatment of this question. Most of the younger
economists devote their special attention to the
labor question, and following the example of Hil-



debrand and Stein, seek to leam from socialism
instead of holding themselves aristocratically
aloof from it. Various principles, which are to
be found among the earlier German economists,
have acquired a new significance from the labor
question. The pressing problem of state-help or
self-help, led necessarily to a more careful study
of the functions of the state in economic matters.
The observation of the war of classes waged be-
tween the proletary and the propertied classes,
placed the importance of public spuit in a new
light. The pressing cry for a solution of the labor
question directed attention from the search after
natural laws ruling in economics, to the question,
what ouglit to prevail, what should be done ? As
a natural consequence, in opposition to the ration-
alistic explanation of what is, the teaching of the
moral duty of men in economic actions became
more prominent. The opposition of the German
science of Roscher, Hildebrand, Knies, Schaffle,
Stein, etc., to Manchesterism, expresses itself in
the great stress laid on the ethical element, and
' this has become more marked in the younger econ-
ornists, from Adolph Wagner down to Brentano.
Thus by various roads German political economy
has advanced far beyond Adam Smith, Ricardo
atd J. B. Say. It has attained to new views,
n|ew methods and new results, and its advances
have been far more consistent and complete than
the acquisitions of even a John Stuart MiU, let
alone the ideas of a Bastiat and a Carey, which
p.re new rather in form and terms of expression
tii^nuiji content. German science has not, it is
ti^"e, as yet evolved any entirely new system of eco-
iloWp^J yhich independent in form and content,
aan ,lpoHi down on Adam Smith as obsolete, as the
latwVtco'tild look down on the mercantile system.
Thejffi|ative truth of the results of the English
masters, as well as the relative justiflableness of
their method, is fully recognized, because, as a
inatter of fact, in many economical matters the
uncontrolled freedom of the individual leads to
the best results for society as a whole; because, as
a matter of fact, particularly in the sphere of com-
mercial activity, egoism is naturally the prevail-
ing motive; and because our observations of con-
crete phenomena are still too incomplete to allow
us to dispense entirely with the method of ab-
stract deduction. The English masters have deter-
mined for us thus far the general limits of the
science as a whole, and of various fundamental
questions. But as German science advances with
success by independent roads from the basis al-
ready laid, it forms a sharp contrast to that slavish
dependence upon the English and upon Manches-
terism which delights in following to their great_
est extremes the weaknesses and one-sidedness of
those great masters. — Recent English political
economy has been enriched by the writings of
Prof. Cairnes, Hearn, Musgrave, Shadwell, Je-
vons, Fawcett, W. T. Thornton, H. D. Macleod,
Bagehot, J. E. Thorold Rogers, Cliffe Leslie and
J. K. Ingram. J. 8. Mill's great work, which w
still the best general treatise on economics in Eng- ,



POLITICAL ECONOMY.



255



lish, marked a turning point in Englisli political
ficonomy. It summed up all the contributions to
the science which had up to that time been made
by the Smith-Ricardo school of economists. In
that very work, however, Mill showed signs of dis-
agreement with some of the fundamental tenets of
the school. His views of distribution and of the
limits of state interference mark a sharp contrast
to those of some of his immediate predecessors.
Before his death he gave signs of a still more
fundamental difference in giving up the wages-
fund theory, upon which he had laid such stress in
his great work. He was moved to this by an able
work of W. T. Thornton's on "Labor." ClifEe
Leslie and Professor Ingram may be said to be-
long to the historical school, and have distin-
guished themselves by their opposition to the or-
thodox economists. To these latter belong Cairnes
and Fawcett, the former of whom in his works on
the " Logical Method of Political Economy," and
"Some Leading Principles of Political Economy
Newly Expounded," has made valuable additions
and corrections in the science. Rogers' ' ' History
of Agriculture and Prices in England," Jevons'
"Theory of Political Economy," and "Money
and the Mechanism of Exchange," and Macleod's
and Bagehot's writings on financial subjects, are
among the most valuable contributions of English
writers to economic science in the last twenty
years. — Recent {i. e., since 1850) French political
economy has not received the attention it deserves
from foreign vraters. Several economic periodi-
■cals are maintained, and many valuable mono-
graphs have been published during the last thirty
years. In 1851-3 the Dictionnaire de I'Eeonomie,
edited by Coquelin and Guillaumin, was published
— a vast treasure-house of economic science.
Among recent economists Michel Chevalier stands
first. He wrote chiefly on financial questions,
though he published also a " Course of Political
Economy." Wolowski was a vigorous opponent
of Chevalier, an adherent of the historical school,
and a prolific writer on monetary questions. He
favored a double standard. Among other econ-
omists we may mention the following: Passy,
Reybaud; De Parieu, the author of an excellent
treatise on taxation; Gamier, a writer on finance;
Baudrlllart, Cournot and Walras, the last two
■devoted believers in the mathematical method of
investigating economic phenomena; A. Cl&ment,
and Paul Leroy-Beaulieu. The tendencies of these
writers are as various, and in general the same, as
those already noticed in Germany and England.
Among the recent economists in the other conti-
nental countries we may mention Prof. Ferrara,
Boccardo, Mora, Bianchini, Messedaglia, Nazzani
and Cossa, in Italy; Brasseur, P^rin, De Molinari
and De Lavelaye, in Belgium; Cherbuliez and
Sismondi, in Switzerland; Estrada, Colmeiro and
Santillan, in Spain; and Porjaz de Sampajo, in
Portugal. Of these, Ferrara was a man of re-
markable ability, and did ihe science great service
by his acute and brilliant criticism ; and by his
■enthusiasm for economic studies he contributed



greatly to that widespread interest in such branch-
es which is characteristic of the new Italy. Cher-
buliez was an economist of great ability, and his
Precis de la aoienee economiqtm is the ablest exposi-
tion of political economy in the French language.
— The history of political economy in America is
yet to be written. American economists, even
still more than their English brethren, have de-
voted their attention rather to practical than to
theoretical questions. Most of our economical
works have been written to defend one view or
the other of our great political and economical
problems. In general the same tendencies are ob-
servable here as in other countries. "We have our
irreconcilable free-traders, our bitter and bigoted
protectionists, our laissezfaire, laissez passer school,
and our defenders of a paternal government.
With the exception of Henry Carey, our economists
have attracted no particular attention abroad, and
exercised no considerable infiuence. The study of
economics is becoming daily more and more wide-
spread, and the foundation of departments of
political science in connection with our colleges is
becoming quite common. Few countries in the
world offer as many advantages to the inductive
student of economics as America. Here every-
thing is on such a grand scale, and the machinery
of society is still so simple, that extraordinary op-
portunities are offered to study the fundamental
elements of the great national economy in their
simplicity. There is but little doubt that the near
future will see valuable original work done in
economics by American students. Among our
early writers on economics, Benjamin Franklin
may fairly lay claim to having anticipated, by a
full generation, Adam Smith's theory that labor is
the only proper measure of value, and also Mal-
thus' theory of population, that man tends to in-
crease in numbers in a greater ratio than the
means of subsistence. Alexander Hamilton dis-
cussed in his reports many economic questions
with great ability. Daniel Raymond published
his "Elements of Political Economy" in 1819.
He took decided ground against Adam Smith,
emphasizing the distinction between individual
and national wealth, niaintaining that our aim
should be to increase the latter even at the expense
of the former. He opposed Malthus' thera-y, and
demanded protection for home manufactures by
means of a tariff. Cooper's " Lectures on the
Elements of Political Economy," published in
1836, to6k exactly opposite ground, and insisted
on the necessity of free trade. The word ' ' nation, "
he says, is an empty word. The wealth of a
nation is nothing but the wealth of the individuals
who compose it, etc. — The most important, orig-
inal and acute American economist was Henry
C. Carey. Men oftentimes further the progress
of a science quite as much by their errors as by
the new truth they discover. Carey is one of
those writers whose views, although they are not
tenable either as a whole or in detail, have been
received with attention and appreciation by the
whole scientific world. He has had devoted fol-



256



POLITICAL ECONOMY.



lowers in Germany, France and Italy, and al-
though his views have not been generally accepted,
yet they have exercised considerable influence in
a negative way, leading those whose theories he
attacked to a more careful formulation of what-
ever truth they contain. Carey, like Bastiat, pro-
ceeds in all his writings upon the assumption of a
complete harmony between natural and social in-
terests. In self-interest and in the innate desire
of man to better his external condition, he finds
the surest road to prosperity, the natural basis of
the moral progress of society. He not only denies
any antagonism between labor and capital, but
sees in the co-operation of these two factors the
most powerful means of promoting an increased
production, which will surely and continually
improve the condition of the laboring classes. He
boldly proclaims the possibility of an endless and
boundless growth. He starts with a thorough dis-
cussion of the ideas of -calue, labor and production.
He bases value upon labor, and makes the cost
of reproduction the standard of value. He then
passes to the theory of distribution, and makes his
harmony of interests the fundamental principle.
The tendency of man to increase is surpassed by
that of capital to multiply. The productivity of
labor is conditioned by the density of the popula-
tion. The more numerous the people, the more
extensive man's control over nature, and the more
rapid the increase of capital. The share of the
laborer in tlie product becomes absolutely and rela-
tively greater, and that of the capitalist, although
relatively decreasing, is becoming absolutely larger
all the while. A constant diminution in the un-
productive classes follows this continued devel-
opment. Gary is, as will be seen, an opponent
of Malthus. He urges the possibility of emigra-
tion, the possibility of a fairer distribution of
wealth and the immense tracts of unoccupied
land in the world as proof of the falsity of Mal-
thus' view. In his earlier writings Cary (in
agreement with Ricardo) assumed that cultivation
proceeds from the most productive to the less and
less productive lands. The increasing produc-
tivity of labor, however, causes a depreciation in
the value of the capitar expended on lands in
early times, and consequently in the value of the
lands tjjemselves. Lands rent at any given time
only for such a sum as represents the interest on
the capital required at that time to bring similar
lands into cultivation. This sum is always far
less than the sum actually expended on any piece
of ground. The value of land is consequently
controlled by the same laws as the value of all
other kinds of property. In his later works he
maintains that cultivation does not proceed from
the most productive to the less productive, but
in just the contrary order, from the least produc-
tive to the most productive. With the establish-
ment of this proposition, he proposes to over-
throw the whole doctrine of rent as set forth by
Ricardo. Carey's writings are permeated with a
feeling of bitter hostility to England, and are full
of gross errors of fact. In striking contrast with



his doctrine of the perfect harmony of all humim
interests and of the advantages of freedom, Ca
rey is a pronounced protectionist, maintaining
that English competition would ruin American
industry, and that in order to insure that diversity
of employments necessary to the highest civiliza.
tlon, the active interference of the government
is necessary. — Most American economists agree
with Carey in rejecting the doctrines of Mal-
thus and Ricardo, though on various grounds.
Among recent economists the following deserve
especial mention : Prof. A. L. Perry of Williams
college, Prof. Francis A. Walker of the Boston
technological school. Prof. Sumner of Yale col-
lege. Prof. Thompson of Philadelphia, and Prot.
Henry George of California. Prof. Perry is a
pronounced free trader of the Bastiat type. His
text book on political economy has been perhaps
more widely used than any other recent publica-
tion in America. It contains some valuable
chapters on the history of the sciences, on value,
and on the tariff and currency. Prof. Walker's
works on "Money "and "Wages" have placed
him in the front rank of American ecoaomists.
His father's work on the "Science of Wealth"
is one of the best economic works which has ap-
peared in America. Prof. Thompson has pub-
lished a work, written to set forth the doctrines
of the Carey school in a more scientific form.
Among American economists Mr, David A. Wells
also occupies an exalted position. His earliest
economic writing was a cogent examination of
the debt and resources of the country, written
during the rebellion. This tract brought him
into notice as a statistican, and led to his appoint-
ment to the position of special commissioner of
the revenue (1865-9), and the reports he prepared
in these years are models of clear reasoning and
close application of general principles to facts.
While in this position he became convinced of
the many inconsistencies of the protective system,
and he has since become one of the leaders of a
movement for a reform of the tariff, and the
greater part of his writings have had reference
to this subject. As one of the commissioners to
revise the laws for the assessment and collection
of taxes in New York state, he made two re-
ports, the great merits of which have been widely
recognized, and greatly enhanced his reputation as
a writer on taxation. Mr. Wells' writings, which
are scattered in many periodicals, are marked by
great clearness and accuracy, and form valuable
contributions to the economic literature of the
country. He belongs to no particular school of
economists. He has edited a volume of Bastiat s
essays, and prepared, in 1881, a " History of the
American Merchant Marine," a work which ad
mirably illustrates his methods. Among con-
temporary economists in America, Pi'of. W. G-
Sumner of Yale college occupies a very hig'i
rank. His chief published economic works are
his "History of American Currency," 1874; his
"History of Protection in the United States,
1877; his collection of papers on " What the social



POLITICAL SCIENCE.



257



classes owe to each other," 1883. Prof. Sum-
ner's strongest work, however, is not seen in his
published books. It has been in his oral instruc-
tion. Prof. Greorge's principal work is entitled
"Progress and Poverty," and is mainly devoted
to a discussion of distribution. There are many
able writers on economics connected with the
press of the country. But America is still waiting
for the man to appear who shall make her con-
tributions to the science as great and valuable as
those of any other nation. — Litbeatdkb. Die
gMchichtliclie Entwickelung der Nationaldkonomik
und ihrer Literature, by Julius Kautz ; Die 6e
acAichte der Nationalokonomih, by H. Eisenhardt;
Eistmre de VEeonomie 'politique en Europe, by
Ad. Blanqui; Oeschichie der Nationalokonomik in
Deutschkmd, by W. Roscher, and the Guide to tTie
Study of Political Economy, by L. Cossa, are the
works which, aside from the original authorities,
have been chiefly consulted in compiling the pre-
ceding article. Some of the expositions of the
doctrines held by the various schools have been
taken with but little change from the above-named
works. Prof. Cossa's little work, based on the
larger special works in French, German and
Italian, is a very convenient summary of the most
valuable works on political economy in all lan-
guages. E. J. James.

POLITICAL SCIENCE is that part of social
science which treats of the foundations of the
state and of the principles of government. It is
closely connected with political economy, or, as it
is sometimes called, the science of wealth ; with
law, be it natural or positive, which has princi-
pally to do with the relations of citizens to one
another ; with history, which furnishes it with
the facts of which it has need; with philosophy,
and, above all, with morality, which supply it
with a part of its principles. Political science is
either theoretical or applied. In theory it estab-
lishes general laws, which it draws either from
experience or from reason, and which are as much
the generalized expression of facts as the pure con-
ception of an ideal more or less possible of reali-
zation. As applied science, it seeks the means of
reducing to practice these general principles, tak-
ing into consideration time, place, manners, re-
sources, in a word, circumstances. We shall
speak here only of theoretical political science,
and our intention is not to propound any particu-
lar doctrine, but to give a » summary, following
the order of time, of the principal theories which



Online LibraryJohn J. (John Joseph) LalorCyclopædia of political science, political economy, and of the political history of the United States → online text (page 66 of 290)