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pearls round their necks finer than any Lord Mayor's chain.*
This allusion to the surviving finery of English official dress
illustrates a change which has taken place since the French
Revolution in the ordinary dress of men in Western Europe.
Another description of a reception of native chiefs at Calcutta a
few months ago seems to give indication of the beginning of a
similar change in India. While one Maharajah, ' dressed in
black satin and silver lace, wore a cap which was literally
covered with diamonds, said to be worth £100,000,' and another
was ' resplendent in a dress of mauve, embroidered with gold,'
Holkar and Sir Salar Jung ' presented a striking contrast from
the extreme simplicity of their attire.' It is no unimportant
example of the mutation in the nature of wealth, in the progress
of society, that diversities exist in Western Europe, in respect
of splendour and costliness of apparel, between masculine and
feminine wealth, which did not manifest themselves conspicu-
ously before the present century. The accounts of the dresses
of the princes and nobles of India, during the Prince's visit,
read like one of the dresses of a number of great ladies at a
London ball ; but even in England the fashion of wearing silks,
satins, velvets, diamonds, and jewels, was formerly not confined
to one sex. There was a time when men ' wore a manor on
their backs.' The remark of Addison in the ' Spectator ' that
'. one may observe that women in all ages have taken more pains
than men to adorn the outside of their heads' is inaccurate.
An Eastern prince still sometimes wears precious stones on his
turban to the value of half a million ; and probably no lady
ever wore such a weight of diamonds as the Shah of Persia
displayed in London. It is at least conceivable that the attire of
an English lady may one day rival in simplicity and inexpen-
-siveness that of a gentleman. The wealth of all but the



166 On the PJiilosojjJiical Method of Political Economy.

stationary part of mankind of both sexes undergoes various
changes in the nature as well as in the number of its con-
stituents ; and the differences and changes in the character
of Eastern and Western, mediseval and modern, masculine and
feminine wealth, of which some indications have been given,
ought surely to meet with investigation, as regards both cause
and effect, in a true Science of "Wealth. The definition already
referred to, that wealth comprehends all things which possess
exchangeable value, is a mere abstraction throwing no light on
these differences and mutations, or on the laws of society and
social evolution by which they are governed. It originated in
opposition to the Mercantile theory, and amounts in fact to
little more than a negation of the doctrine, erroneously imputed
to the Mercantile School, that money only is wealth. What
that school really taught was that money is the most durable
and generally useful kind of movable wealth, and their chief
error lay in the measures by which they sought artificially
to increase its amount. Money really had acquired great ad-
ditional usefulness by its substitution for barter and payments
in kind, and by the extension of international trade ; and
money is one of the kinds of wealth the invention and variations
of which form a most instructive chapter in economical history.
Adam Smith, it should be observed, did not fall into the error
of later antagonists to the Mercantile theory. His doctrine was
that wealth consists chiefly, not in money, but in consimiable
commodities ; in the necessaries, conveniences, and luxuries of
life. Although he did not systematically investigate the subject,
he has in several passages indicated important differences in the
economic effects of different sorts of wealth, and pointed out
some essential changes which have taken place in its component
elements, in the progress of society.

Closely connected with the illusory exposition of the nature
of wealth to which attention has been drawn is the doctrine of
abstract political economy, that the mental principle which
leads to its production and accumulation ' is the desire of
wealth.' No other branch of philosophy is still so deeply
tinctured with the reahsm of the schools as economic science.



On the Philosophical 3Iethod of Political Economy. 167

A host of different things resemble each other in a single aspect,
and a common name is given to them in reference to the single
feature which they have in common. It is, properly speaking,
only an indication of this common feature, but it puts their
essential differences out of mind, and they come to be thouglit
of in the lump as one sort of thing. The desire of wealth is a
general name for a great variety of wants, desires, and senti-
ments, widely differing in their economical character and effect,
undergoing fundamental changes in some respects, while
preserving an historical continuity in others. Moralists have
fallen into a similar error, though from an opposite point of
view, and, in their horror of an abstraction, have denounced,
under the common name of love of wealth, the love of life,
health, cleanliness, decency, knowledge, and art, along with
sensuality, avarice, and vanity. So all the needs, appetites,
passions, tastes, aims, and ideas which the various things
comprehended in the word ' wealth' satisfy, are lumped together
in political economy as a principle of human nature, which is the
source of industry and the moving principle of the economic
world.* * That every man desires to obtain additional wealth,
with as little sacrifice as possible, is in political economy,' says
Mr. Senior, ' what gravitation is in Physics, or the dictum de
oinni et nulla in Logic, the ultimate fact beyond which reason-
ing cannot go, and of which almost every other proposition is
merely an illustration.' The division of labour, the process of
exchange, and the intervention of money, have made abstract
wealth or money appear to be the motive to production, aud
veiled the truth that the real motives are the wants and desires
of consumers ; the demands of consumers determining tlie
commodities supplied by producers. After all the reproach cast
on the Mercantile School, modern economists have themselves
lapsed into the error they have imputed to it. If every man
produced for himself what he desires to use or possess, it would
be patent and palpable how diverse are the motives summed up

* Many years ago I endeavoured to draw attention to the error of both
economists and moralists on this subject, in an Essay on the Love of Money,
reprinted at the beginning of the present volume.



168 On the Philosophical Method of Political Economy.

in the phrase ' desire for wealth ' — motives which vary in
different individuals, different classes, different nations, different
sexes, and different states of society. Hunger and thirst were
the first forms of the desire of wealth. A desire for cattle is its
principal form at the next social stage. A desire for land
comes into existence with agriculture ; but the desire for land is
itself a name for different feelings, aims, and associations, in
different ages, countries, classes, and individuals, producing at
this day widely different effects in two countries so close to each
other as England and France. A.dam Smith's historical and
inductive mind here again preserved him from the realistic
error. He has even attempted to indicate the actual order in
which the desires of wealth succeed one another in the progress
of history ; and although his generalizations on this point are
scanty and inaccurate, they ought to have suggested a fruitful
line of investigation to his followers, and doubtless would have
done so but for the dominion over their minds which the abstract
method acquired. His illustrious successor, John Stuart Mill,
has indeed made some instructive observations on the point in
the Preliminary Remarks of his * Principles of Political Eco-
nomy,' but he had been brought up in the straitest sect of the
abstract economists, and his method was formed before his mind
was matured ; so that there is no systematic application of
historical and inductive investigation in his treatise, although it
abounds in luminous suggestions, and corrections of the crude
generalizations of the school in which he was taught. An
investigation of the diverse and varying desires confounded in
the phrase ' desire of wealth ' would be requisite, were we even,
with some of that school, to regard Political Economy as a mere
theory of exchanges and value. For the value of commodities
rises and falls with changes in the degree and direction of these
desires. Both in England and France, the love of land, for ex-
ample, raises its price out of proportion to the income it yields ;
but this may not always be, as it has not always been, the case ;
or, on the contrary, it may display itself hereafter in increased
price. At this day it is a national passion in France, but felt
only by a limited number in England. Works of art, again,



0)1 the Philosophical Method of Political Economy. 169

undergo extraordinary variations in value with the currents of
fashion and taste ; and diamonds would lose almost all their
value were the indifference towards them, already felt by one
sex in this country, to extend to the other, and to become
general throughout the world.

It is true that a love of accumulation or of property, an
acquisitive propensity, a desire for wealth apart from its
immediate or particular uses, is a principle of social growth of
which the economist must take account. But this principle
opens up another neglected chapter in the science of wealth, for
the love of property, or of accumulation, takes very different
concrete forms in different states of society. Were there no
division of labour, it would take forms — land, cattle, houses,
furniture, clothing, jewels, &c. — determined by the existing or
anticipated wants of the accumulator himself, or his family.
In the actual commercial world in which we live its forms are
determined, either by the wants and demands of other con-
sumers, or the accumulator's own desires, anticipations, and
associations. The holder of a share in a mine may never see
his investment, and may have no desire for the coal, iron, or
silver it contains, yet the form of his accumulation is determined
by the demand for these particular kinds of wealth on the part
of surrounding society.

The questions we have been discussing are immediately
connected with the conditions which govern the amount of
wealth. The abstract theory on this subject is of the most
fragmentary character. It exists only in the form of a few
propositions and doctrines, such as that, under the influence of
the desire of wealth, human energy and effort are constantly
devoted to its acquisition ; that its amount is largely augmented
by the division of labour ; that of the three great instruments
of production, the supply of two— labour and capital— tends to
increase, but that of the third— land— remains stationary, while
its productiveness tends to decrease with the growth of popula-
tion ; that wealth is increased by productive and diminished by
unproductive expenditure and consumption. The first of these
propositions really throws as little liglit on the amount as on



170 On the PhilosopJiical Method of Political Economy.

the nature of wealth. The desire for it is by no means neces-
sarily an incentive to industry, and still less to abstinence.
War, conquest, plunder, piracy, theft, fraud, are all modes of
acquisition to which it leads. The robber baron in the reign of
Stephen, and the merchant and the Jew whom he tortured,
may haye been influenced by the same motives. The prodigal
son who wastes his substance in riotous living is influenced by
the same motives — the love of sport, sensual pleasure, luxury,
and ostentatious display — which impel many other men to
strenuous exertion in business. Good cheer, meat, beer, and
tobacco, are the chief inducements to labour with the majority
of working men, and to beggary and crime with another part
of the population. Unproductive expenditure and consumption,
on the other hand, do not necessarily tend to diminish wealth.
They are the ultimate incentives to all production, and without
habits of considerable superfluous expenditure, as Mr. Senior
himself has observed, a nation would be reduced to destitution.
Moreover, the effect of expenditure on the amount of wealth
depends on the direction which it takes, for example, whether
of services and perishable commodities, or, on the contrary, of
durable articles. Here, once more, Adam Smith opened the
way to a Hne of investigation which abstract political economy
afterwards closed. He observed that a man of fortune may
spend his revenue, either in a profuse and sumptuous table, or
in maintaining a great number of menial servants and a multi-
tude of dogs and horses, or in fine clothes, or in jewels and
baubles ; or, again, in useful and ornamental buildings, furni-
ture, books, statues, pictures. ' Were two men of equal fortune
to spend their revenue, the one chiefly in the one way, tha
other in the other, the former would, at the end of the period,^
be the richer man of the two : he would have a stock of goods
of some kind or other. As the one mode of expense is more
favourable than the other to the opulence of an individual, so
is it likewise to that of a nation. The houses, the furniture,
the clothing of the rich become useful to the inferior and
middling ranks of the people.' Consumption and expenditure
in abstract political economy have become misleading terms..



On the PJiilosojjJiical Method of Political Economjj. 171

Botli have come to denote the using up and destruction of
things, whereas expenditure properly denotes simply the pur-
chase, and consumption simply the use, of the article in question.
If the things purchased be of a durable kind, unproductive
consumption so called may amount in reality to a form of
accumulation. It was, in fact, one of the chief forms down
to recent times. In the fifteenth century, and long afterwards,
one of the chief modes of laying by for a man's wife and family
was the purchase of plate, furniture, household stuff, and even
clothing. Some modes of expenditure, although intended
simply as such, may be actually productive, as in the case of
articles which, like rare works of art, or lands for purposes of
enjoyment and amusement, acquire increased value with time
and the growth of surrounding wealth. Even a stock of wine
in a private cellar may, on the death of the owner, prove to
have been a good investment for his family. The main questions
respecting the influence alike of the ' desire of wealth ' and of
expenditure and consumption are: To what kinds of wealth,
what modes of acquisition, and what actual uses do they lead in
different states of society, and under different institutions, and
other surrounding conditions ? To what laws of social evolution
are they subject in the foregoing respects? On these points
we learn nothing from abstract political economy. A distin-
guished English economist and man of science has lately
admitted, in the following passage, the absolute necessity for a
true theory of consumption : ' We, first of all, need a theory
of the consumption of wealth. J. S. Mill, indeed, has given an
opinion inconsistent with this. " Political economy," he says,
*' has nothing to do with the consumption of wealth, further
than as the consideration of it is inseparable from that of pro-
duction, as from that of distribution. We know not of any
laws of the consumption of wealth, as the subject of a distinct
science ; they can be no other than the laws of human enjoy-
ment." But it is surely obvious that economics does rest upon
the laws of human enjoyment, and that if those laws are
developed by no other science, they must be developed by
economists. We labour to produce with the sole object of



172 On the Philosophical Method of Political Economy,

consuming, and the kinds and amounts of goods produced must
be determined with regard to what we want to consume. Every
manufacturer knows and feels how closely he must anticipate
the tastes and needs of his customers : his whole success depends
upon it, and in like manner the theory of economics must begin
Avith a correct theory of consumption.' * No such theory,
however, respecting the effect of consumption on either the
nature or the amount of wealth, can be forthcoming without a
study of the history and the entire structure of society, and the
laws which they disclose.

But further, in order to form any approach to an adequate
estimate of the influence of human desires on the amount of
wealth, it must surely be evident that we need an investigation,
not only of the motives and impulses which prompt to the
acquisition of wealth, but also of those which withdraw men
from its pursuit, or give other directions to their energies.
What abstract political economy has to teach on this subject is
stated by Mr. Mill in his Essay on the Definition and Method
of Political Economy, and also in his Logic, as follows: —

' Political economy is concerned with man solely as a being
who desires to possess wealth. It makes entire abstraction of
every other human passion or motive, except those which may
be regarded as perpetually antagonizing principles to the desire
of wealth, namely, aversion to labour, and desire of the present
enjoyment of earthly indulgences. These it takes to a certain
extent into its calculation, because these do not merely, like
other desires, occasionally conflict with the pursuit of wealth,
but accompany it always as a drag or impediment, and are
therefore inseparably mixed up in the consideration of it.'
Abstraction has here clouded the reasoning of the most celebrated
logician of the century. Had Mr. Mill looked to actual life, he
must have at once perceived that among the strongest desires
confounded in the abstract ' desire of wealth ' are desires for the
present enjoyment of luxuries ; and that the aversion to labour
itself has been one of the principal causes of inventions and

* The Theory of Folxtical Economy. By "William Stanley Jevons. 2nd ed.,
pp. 42, 43.



On the Philosophical 3IetJiod of Political Econojnij. 173

improvements which abridge it. Frugality, as Adam Smith
has observed, has never been a characteristic virtue of the
inhabitants of England ; commodities for immediate consump-
tion and luxuries have always been the chief motives to exertion
on the part of the bulk of the English population. The love of
ease is the motive which has led to the production of a great
part of household furniture, and is one of the chief sources of
architecture.

' A great part of the machines,' says Adam Smith, * made
use of in those manufactures in which labour is most subdivided,
were originally the inventions of common workmen, who
naturally turned their thoughts towards finding out easier and
readier methods of performing it. ... One of the greatest
improvements (in the steam engine) was the discovery of a boy
who wanted to save his own labour.' By what logical principle^
moreover, can economists justify the admission of * two antago-
nizing principles ' into their theory while excluding or ignoring
others ? In fact, no economist has ever been able to limit his
exposition in this manner. Mr. Mill, in his own ' Principles of
Political Economy,' follows Adam Smith in including in his
doctrine of the causes which govern the choice of occupations
and the rates of wages and profits, many other motives, such as
the love of distinction, of power, of rural life, of certain pursuits
for their own sake, of our own country, the consequent indis-
position to emigrate, &c.

The real defect of the treatment by economists of these
other principles is, that it is superficial and unphilosophical ;
that no attempt has been made even to enumerate them
adequately, much less to measure their relative force in different
states of society; and that they are employed simply to prop up
rude generalizations for which the authority of ' laws' is claimed.
They serve, along with other conditions, to give some sort of
support to saving clauses — such as ' allowing for differences in
the nature of different employments,' * cceteris paribus,' ' in the
absence of disturbing causes,' ' making allowance for friction' —
by which the ' law ' that wages and profits tend to equality
eludes scrutiny. Had the actual operation of the motives in



174 On the Philosophical Method of Political Economy/.

question been investigated, it would have been seen to vary
widely in different states of society, and under different con-
ditions. The love of distinction or social position, for example,
may either counteract the desires of wealth, or greatly add to
their force as a motive to industry and accumulation. It may
lead one man to make a fortune, another to spend it. At the
head of the inquiry into the causes on which the amount of the
wealth of nations depends is the problem, What are the con-
ditions which direct the energies and determine the actual
occupations and pursuits of mankind in different ages and
countries ? A theory surely cannot be said to interpret the laws
regulating the amount of wealth which takes no account, for
instance, either of the causes that make arms the occupation of
the best part of the male population of Europe at this day, or,
on the other hand, of those which determine the employments of
women.

Enough has been said in proof that the abstract a 2iriori
and deductive method yields no explanation of the causes
which regulate either the nature or the amount of wealth.
With respect to distribution, it furnishes only a theory of
exchange (or of wages, profits, prices, and rent), which will be
hereafter examined. The point calling for immediate atten-
tion is, that such a theory, even if true, must be altogether
inadequate to explain the distribution of wealth. One has
but to think of the different partition of land in England and
France, of the different partition of real and personal property
in England, of the different partition of both between the two
sexes, of the influence of the State, the Church, the Family, of
marriage and succession, to see its utter inadequacy. Take
land, for example. Sir Henry Maine has justly observed that
exchange lies historically at the source of its present distribution
in England to a greater extent than most modern writers on
the subject seem aware. The purchase and sale of land was
active, both in the Middle Ages and in the age of the Refor-
mation ; and the original root of the title of the existing holder,
in a vast number of cases, is a purchase either in those ages or
since. But it is only by historical investigation that we can



On the PhilosopJiical Metliod of Political Economy. 17



/



mount up in this manner to purcliase ; and the present distri-
bution of land, descending from such a source, is none the less
the result of another set of causes, among which that great
historical institution, the Family, which has never ceased to be
one of the chief factors in the economy of human society, holds
a principal place.

The truth is, that the whole economy of every nation, as
regards the occupations and pursuits of both sexes, the nature,
amount, distribution, and consumption of wealth, is the result of
a long evolution, in which there has been both continuity and
change, and of which the economical side is only a particular
aspect or phase. And the laws of which it is the result must
be sought in history and the general laws of society and social
evolution.

The succession of the hunting, pastoral, agricultural, and
commercial states is commonly referred to as an economic
development ; but it is, in fact, a social evolution, the economical
side of which is indissolubly connected with its moral, intel-
lectual, and political sides. To each of these successive states
there is a corresponding moral and intellectual condition with
a corresponding polity. With the changes from savage hunting
life to that of the nomad tribe, thence to fixed habitations and
the cultivation of the soil, and thence to the rise of trade and
towns, there are changes in feelings, desires, morals, thought and
knowledge, in domestic and civil relations, and in institutions
and customs, which show themselves in the economic structure
of the community, and the nature, amount, and distribution of
its wealth.

The celebrated German economist, Wilhelm Eoscher, has
remarked that every economical system has a corresponding



Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 16 of 41)