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attains after ages of laborious research. If anybody doubts
this, he has only to consider what the ultimate principles
governing economic phenomena are.' First among these
' ultimate principles ' he places ' the general desire for physical
well-being, and for wealth as the means of obtaining it.' Yet
the desire for physical well-being is so far from being identical
with the desire of wealth, that they are often in direct antago-
nism to each other. And the title of such an abstraction as
the desire for wealth to rank as an ultimate principle has been,
it is hoped, sufficiently refuted.

The abstract a priori method, it ought not to be overlooked,
has almost entirely lost credit in Grermany, and has never had
undisputed possession of the field in either England or France.
It is repudiated by M. de Laveleye, and by some of the most
eminent economists in Italy, Malthus and Say, the two most
eminent contemporaries of Eicardo, emphatically protested
against it. Mr. J. S. Mill's treatise on the 'Principles of
Political Economy' often departs from it, and in his later
writings he showed an increasing tendency to question its
generalizations. Nor did the founders of political economy,
either in England or France, intend to separate the laws of the



* Bagebot, Eco)iomic Studies, p. 13. f Logical Method, ^-c, p. 75.



On the PhilosojjJiical Method of Political Economy. 187

economical world from the general laws of society. Their error
lay in the assumption of a simple harmonious and beneficent
order of nature, in accordance with which human wants and
propensities tend to the utmost amount of wealth, happiness,
and good. Mercier de la Riviere, whom Adam Smith calls the
best expositor of the doctrines of the Economistes, entitled his
work * L'Ordre Naturel et Essentiel des Societes Politiques ' ;
and with Adam Smith himself political economy was part of a
complete system of social philosophy, comprising also natural
theology, moral philosophy, and jurisprudence. He regarded
the economical structure of the world as the result of a social
evolution, but the dominant idea of a natural order of things
disposed him to dwell chiefly on 'the natural progress of
opulence'; and led him to regard its actual progress as 'un-
natural and retrograde' wherever it diverged from the imaginary
natural order, in place of being the result of the real laws of
nature at work. He followed, nevertheless, the historical, a&
well as the a idriori, method, the latter being simply an offshoot
of the eighteenth century theory of Natural Law ; and the same
language may be used in reference to political economy, which
Sir H. Maine has employed in describing the influence of that
theory on jurisprudence : ' It gave birth or intense stimulus to
vices of mental habit all but universal, disdain of positive law,
impatience of experience, and the preference of a priori to all
other reasoning. . . . There is not much presumption in
asserting that what has hitherto stood in the place of a science
has, for the most part, been a set of guesses, the very guesses
of the Roman lawyers.'*

Ricardo's fundamental assumption is a 'guess' respecting
the natural principle regulating value and the distribution of
wealth in the early stages of society, or in a state of nature ;
and he proceeds to determine by the same process the ' natui'al'
course of wages, profits, and prices in advanced society. In
proof that every improvement in the processes of manufacture-
which abridges labour is attended with a corresponding fall in

* Ancient Law, pp. 91-113.



188 On the Philosophical Method of Political Economy.

the price of the product, his argument is : * Suppose that, in
the early stages of society, the bow and arrows of the hunter
were of equal value and of equal durability with the canoe and
implements of the fisherman, both being the produce of the
same quantity of labour. Under such circumstances, the value
■of the deer, the produce of the hunter's day's labour, would be
exactly equal to the value of the fish, the produce of the fisher-
man's day's labour. The comparative value of the fish and
the game would be entirely regulated by the quantity of labour
realized in each, whatever might be the quantity of production,
or however high or low general wages or profits might be.'
To prove that profits are equalized in the modern world by the
flow of capital into the more profitable trades, he resorts, in
like manner, to a ' guess' : — * It is perhaps very difficult to trace
the steps by which this change is effected : it is probably by
a manufacturer not actually changing his employment, but
only lessening the quantity of capital he has in that employ-
ment.' How far this conjecture was well founded appears in
his own words in the same chapter. ' The present time appears
to be one of the exceptions to the justice of this remark. The
termination of the war has so deranged the division which
before existed of employments in Europe, that every capitalist
has not found his place in the new division which has now
become necessary.'

Mr. Cairnes defines political economy as ' the science which
traces the phenomena of the production and distribution of
wealth up to their causes in the principles of human nature and
the laws and events, physical, political, and social, of the
external world.'* This process has been exactly reversed by
the a priori and deductive method. The economist ' starts,'
according to it, with the assumption of a * knowledge of ultimate
•causes,' and deduces the phenomena from the causes so assumed.
What has still to be done is to investigate the actual pheno-
mena, and discover their ultimate causes in the laws of social
■evolution and national history. The bane of political economy

* Logical Method of FolUical Economy, 2nd ed., p. 57.



On the Philosophical Method of Poliiical Economy. 189

Las been the haste of its students to possess themselves of a
complete and symmetrical system, solving all the problems
before it with mathematical certainty and exactness. The very
attempt shows an entire misconception of the nature of those
problems, and of the means available for their solution. The
phenomena of wealth may be made the subject of a special
inquiry by a special set of inquirers, but the laws of coexistence
and sequence by which they are governed must be sought iu
the great Science of Society, and by the methods which it holds
out. And that science itself is still in its infancy. Auguste
Comte's ' System of Positive Philosophy ' (not his * System of
Positive Polity ') is a work of prodigious genius, yet it did but
suggest and illustrate, it did not create, the science — that could
not be done by a single mind, nor in his time ; still less did it
work out the connexion between the economic and the other
phases of the social evolution. If Political Economy, under
that name, be not now bent to the task, it will speedily be
taken out of the hands of its teachers by Sociology.

Inadequate as is the exposition contained in this Essay,
it is submitted as establishing, on the one hand, that the
abstract and a jjriori method yields no explanation of the laws
determining either the nature, the amount, or the distribution
of wealth ; and, on the other hand, that the philosophical
method must be historical, and must trace the connexion between
the economical and the other phases of national history. As
regards the nature of wealth, it has been shown that essential
differences in its kinds and constituents, profoundly affecting
the economical condition of mankind, manifest themselves at
different stages of progress, and that their causes must be sought
in the entire state of society — physical, moral, intellectual, and
civil. The amount of wealth has been proved to depend on all
the conditions determining the direction and employments of
human energies, as well as on the state of the arts of production,
and the means of supply. And the distribution of wealth has
been shown to be the result, not of exchange alone, but also
of moral, religious, and family ideas and sentiments, and the
whole history of the nation. The distribution effected by



190 On the PJiilosophical Method of Political Economy.

-exchange itself demonstrably varies at different stages of social
progress, and is by no means in accordance with the doctrines
of a jyriori political economy. Every successive stage — the
hunting, the pastoral, the agricultural, the commercial stages,
for example — has an economy which is indissolubly connected
•with the physical, intellectual, moral, and civil development;
and the economical condition of English society at this day is
the outcome of the entire movement which has evolved the
political constitution, the structure of the family, the forms of
religion, the learned professions, the arts and sciences, the state
•of agriculture, manufactures, and commerce. The philosophical
method of political economy must be one which expounds this
•evolution.



XVI.

POLITICAL ECONOMY AND SOCIOLOGY.*

Philosophical, like religious and political history, is the history
of change and reform, of the decline of old and the rise of new
systems, and the reformers encounter the same opposition in
the world of philosophy as in that of religion and politics, being
accused of attempts to destroy what they seek to regenerate and
preserve. Those whose interest or pride is on the side of the
old system resist the new one as an attack on themselves, but
they call it an attack on religion, on the constitution, on
science, or on some venerable name. The upholders of an
ancient worship did not cry publicly that their craft was in
danger to be set at nought, but ' Grreat is Diana of the
Ephesians.' So a cry is now heard in reply to Mr. Ingram
from an old sect of economists of the greatness of Adam Smith.
And it is well that the cry is now for him instead of Ricardo.
Not long ago Adam Smith's name was seldom heard; his
reputation was eclipsed by Ricardo's ; the ' "Wealth of Nations '
was treated as almost obsolete. A sort of mythical glory
surrounded Ricardo, and we may realize in his instance the
process by which the ballads of a number of singers came to be
ascribed to one bard, and the exploits of a line of chiefs and
warriors to a single hero. A theory to which a contemporary
of Adam Smith was led by his own experience and observation
of farming in Scotland, and which was afterwards reproduced

* Fortnightly Review, January 1, 1879. — In connexion with this Essay, and
the controversy referred to in it, see The Present Position and Prospects of Political
Economy, by John K. Ingram, F.T.C.D., and an article in the Nineteenth Centun/,
November, 1878, entitled ' Eecent Attacks on Political Economy,' by the Right Hon.
Robert Lowe, M.P. (Lord Shevbrooke).



192 Political Economy and Sociology.

by two contemporaries of Rieardo, came to be called ' Ricardo's
Theory of Rent,' in spite of his own acknowledgment in his
preface and elsewhere that he took it from Malthus and West,
and of the fact that only the exaggerations and inaccuracies
were his own.* Mr. Mill's theory of international values has
in like manner been traced to Ricardo, contrary to its author's
own statement in his Autobiography of its independent origin.
Mr. Mill himself, indeed, though he so qualified and amended
the doctrines of his predecessor that the latter could scarcely
have recognized them, and brought new elements and conditions
within the field of political economy, sometimes spoke with the
piety of a disciple, and has been represented by some of his own
followers as little more ; the giant thus standing on the shoulders
of the dwarf to see over hi^ head. It is a sign, then, that
Ricardo has lost ground when his adherents fall back on Adam-
Smith, just as a victory was gained when theologians could nO'
longer oppose a new doctrine as contrary to the Fathers, and
were driven to contend that it was against the Bible, which
they had before kept in the background. A bold attempt may
be made now and then hereafter to rehabilitate Ricardo, but
practically he is given up. It is to be noted that the phrase
' desire of wealth,' which with some of his successors is made ta
bear the whole weight of political economy, was not used by
Ricardo. But that is only because he dispensed altogether
with psychology, and with all inquiry into the mental forces
at work ; setting out with naked assumptions, such as that it is
* natural ' that the value of things should be proportionate to
the labour of producing them, and that the 'natural' rate of
wages is the price of tlie labourer's subsistence. These nebulous
assumptions are not only both false, but also contradictory ; for
if the cost of the labourer's subsistence determined the rate of
wages, it could not vary in different occupations with the nature

* ' In all that I have said concerning the origin and progress of rent, I have
briefly repeated and endeavoured to elucidate the principles which Mr. Malthus has
so ably laid down, on the same subject, in his Inquiri/ into the Nature and Froffress
of Sent, a work abounding in original ideas.' — Ricardo's Works, M'CuUoch's ed.,
p. 374. Compare the preface to Eicardo's Frincij^ks of Folitical Economy and
Taxation.



Political Economy and Sociology. 193

of the work. A deduction from the assumed relation between
wages and food, on which much of his system was built, was
that a tax on corn could not fall on the labouring class, and
this doctrine, as both Cobden and Sir Robert Peel have borne
witness, was the main cause of the Corn Law. His theory, that
no improvement or economy in production can augment profit
unless it lowers wages, has in like manner done incalculable
harm. * It has been,' he says in his treatise, ' my endeavour
throughout this work to show that the rate of profits can never
be increased but by a fall of wages.' Had he been an English
Lassalle or Karl Marx, and his main object to sow enmity
between capital and labour, he could not have devised a doctrine
better adapted to the purpose. The notion, too, which his
language did much to establish, that all wealth, including
capital itself, is the produce of labour, in the sense of manual
labour, exclusive of the capitalist's enterprise, invention, trouble,
and abstinence, is actually the corner-stone of the creed of the
G-erman ' social democrat.' Political economy is, then, emerging
from a cloud of petitio principii, bad generalization, and mis-
chievous fallacy, when the controversy turns on the system of
Adam Smith. It reminds one of the contest between the spirits
of darkness and light for the body of Moses, to find the
followers of Ricardo claiming Adam Smith for their prophet,
and seeking to make his shrine the prop of a falling super-
stition.

The real issue, of course, is not what Adam Smith's system
was, but what is the true one ; the two questions, however, are
not unrelated. * Whom ye ignorantly worship, him declare I
unto you,' the true disciple of Adam Smith may say to those
who raise altars to his name, but to whom he is virtually an
unknown being. Not only is the phrase ' desire of wealth '
not to be found in the ' Wealth of Nations,' and Adam Smith
guiltless of a vicious abstraction that has done much to darken
economic inquiry; he introduced into his theory of the motives
to exertion and sacrifice various desires and sentiments besides
those which have wealth for their object. A writer from whom
something more may be learned than was known in the days

o



194 Political Economy and Sociology.

of Plato respecting the philosophy of society, history, and law,
has observed, with respect to the deductive economists' practice
of setting aside a number of forces as ' friction,' that the best
corrective would be a demonstration that this so-called friction
is capable of scientific analysis and measurement.* Friction is
not, one may remark, a very appropriate or an adequate term,
indicating neither the strength nor the mode of operation of
the forces included under it. It would hardly seem correct to
say that the earth is prevented by friction from falling into
the sun. The motives, too, ' eliminated ' in this fashion act in
opposite ways, sometimes counteracting and sometimes stimu-
lating by an additional object the love of gain. But Adam
Smith was so far from ' eliminating ' them, that he has set the
example of an attempt to carry out Sir Henry Maine's idea
of subjecting them not only to analysis, but to measurement.
The assertion of a recent advocate of the a ^^riori and deductive
method, that the whole science of political economy is based on
the desire of wealth and aversion from labour, is contrary not
only to the spirit but to the letter of Adam Smith's ' Wealth
of Nations.' It is characteristic, indeed, of the laxity of the
deductive method, in spite of its pretence of rigorous logic,
that immediately after laying down the foregoing proposition
Mr. Lowe drops one of the two abstractions contained in it,
and affirms that Adam Smith's method was successful because
the subject admitted of the elimination of all motives save the
single one of pecuniary interest. And at the centenary of the
* Wealth of Nations ' he pronounced that ' the result of Adam
Smith's investigation amounts to this, that the causes of wealth
are two, work and thrift, and the causes of poverty two,
idleness and waste ' ; adding that, in his own opinion, no more
need be known, or perhaps could be known, on the subject.
Nearly three thousand years before Adam Smith, Solomon had
said as much ; summing up in his proverbs on the subject the
results of sagacious observation and induction, while men in
general sought to grow rich by shorter methods, such as prayer

* Village Communities in the Hist and West. Third Edition, p. 232.



Political Economy and Sociologi/. 195

to their gods, as in later times by the aid of human pro-
tectors.

But to set aside all other motives to exertion besides riches
is quite opposed to Adam Smith's rationale of the choice of
employments, and the different rates of wages and profit.
Observing that these were everywhere in Europe extremely
different in different occupations, he traced the diversities to
various circumstances ' which, either really or in imagination,
make up for a small pecuniary gain in some, and counterbalance
a great gain in others ' — the desire, for instance, of credit, dis-
tinction, or health, the love of independence, power, or country
life, the interest in certain pursuits for their own sake, the
dislike of others on various accounts. The cases in which such
influences come into play in his system are by no means
abnormal or uncommon. He examined their operation in many
of the ordinary employments of life — the farmer's, the weaver's,
the smith's, the collier's, the carpenter's, the painter's, the
butcher's, the jeweller's, the soldier's, the sailor's, the barrister's,
the author's ; and sought to measure them by a pecuniary
standard. Honour, he said, formed a great part of the reward
of all honourable professions. The farmer's profit was lower
than the merchant's or the manufacturer's in proportion to the
other attractions of his business. So far from building a science
of the production and distribution of wealth on Mr. Lowe's two
abstractions, the famous tenth chapter of his first book involves
a complete refutation of such a system ; as it does also of the
assertion that its leading principles were not obtained by
induction. The notion of evolving from his own consciousness
the circumstances and motives that diversify the employments
of a nation, and the remuneration obtained in them, would be
preposterous, even if Adam Smith himself had not expressly
stated at the beginning of the chapter that he had gathered
them from observation. His exposition of the causes that lead
men to accept a comparatively low rate of profit in farming
shows both the closeness of that observation, and the delicate
analysis to which he subjected influences which have been either
disregarded altogether, or lumped together as ' friction ' or

02



196 Political Economy and Sociology.

* disturbing causes ' by the deductive school of his successors^
' The beauty of the country,' he said, ' besides the pleasures of
country life, the tranquillity of mind which it promises, and,,
wherever the influence of human laws does not disturb it, the
independence which it really affords, are charms that more or
less attract everybody, and in every stage of his existence man
seems to retain a predilection for this primitive employment.*'
Mr. C. S. Read, speaking the other day from practical know*
ledge, and without thinking of Adam Smith, of the reasons why
men continue to hold farms at rents that leave little or no profit^,
fell into nearly similar language. The fact that Mr. Lowe,,
with Adam Smith on his tongue, can think of no incentive to
exertion save pecuniary gain, is enough to prove the inadequacy^
of the method he follows, of deducing the laws of political
economy from his own mind, instead of from careful induction.
Even Mr. Senior, though ambitious to construct the science
from the fewest possible principles, laid down several besides
the two jumbled into one in his treatise, as a desire to obtain
wealth at the least possible sacrifice. Among these additional
principles is that of population, and Mr. Lowe's mention of
Malthus among the successors of Adam Smith might have
suggested to him the insufficiency of the foundation on which
he builds a science of the production, accumulation, consumption,
and distribution of wealth, as he defines political economy.
Among the chief motives to production, the most powerful of
all to accumulation, and deeply affecting consumption and
distribution, are conjugal and parental affection. The family
finds no place in a system which takes cognizance only of indi-
viduals, and of no motive save personal gain. Yet without the
family, and the altruistic as well as self-regarding motives that
maintain it, the work of the world would come almost to a
standstill ; saving for a remote future would cease ; there would
be no durable wealth ; men would not seek to leave anything
behind them ; the houses of the wealthiest, if there were any
houses at all, would be built to last only for their own time.
In order to solve the problem of political economy, Mr. Lowe
assures us that ' all that is wanted is the knowledge that the



Political Economy and Sociology. 197

Tuling passions of mankind are wealth and ease.' It does not
appear whether, like Mr. Bagehot, Mr. Lowe excludes women
from the sphere of the science ; but the exertions of that
hardest- worked of all labourers, the poor man's wife, can hardly
be explained by the love of wealth and ease. Had not more
than one of Mr. Ingram's opponents contended that the scientific
character and the complete success of the method of eliminating
all other motives, is demonstrated by its enabling the economist
to predict, it would seem too plain to need statement that just
the opposite is the truth. If you know all a man's inclinations
and motives, and their relative force, you may foretell how he
will act under given conditions. But if you set aside all save the
desire of pecuniary gain and aversion from labour, you will to
a certainty go wrong about human conduct in general ; you
will not be right about even the miser, for he has sometimes
some human affections, and, on the other hand, thinks nothing
of trouble. Mr. Jevons, though favourably disposed by philo-
sophical culture and tastes towards historical investigation in
economics, has urged, on behalf of deduction from the acquisitive
principle, that even the lower animals act from a similar motive,
' as you will discover if you interfere between a dog and his
bone.' A bone fairly enough represents the sort of wealth
coveted by a dog, who has a comparatively simple cerebral
system, and few other objects. Yet you cannot predict the
conduct even of a dog from his love of bones, or not one would
be left in the butchers' shops. The dog has a regard for his
master and a fear of the police, and he has other pursuits.

All men, it may be said, desire health, ' and in the absence
of disturbing causes ' will seek it. But can a science of health
be based on this assumption, or the conduct of mankind be
predicted from it ? Everybody, it might be affirmed, loves
vritue * in the abstract,' and 'in the absence of distui'bing causes'
would be virtuous ; yet, policemen, prisons, and the Divorce
Court show that no theory of morals, much less absolute pre-



Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 18 of 41)