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Siberia. While people were reading accounts of the climate, soil, and low price
of town lots in Victoria, there came rumours of rich gold sands on the banks
of the Frazer River in British Columbia. Two or three small coasting vessels
had previously sailed with coloured passengers ; but the demand for passages
by white people ^became so great, that large steamships departed every lew

C



18 The Wealth of Nations and the Slave Power.

circumscribed. This its own advocates admit, but with a
singular inference : ' Slavery has, by giving to the laws of
nature free scope, moved over a thousand miles of territory,,
leaving not a slave behind. Why should good men attempt ta
check it in its progress ? If the laws of nature pass slavery
fartlier and farther south, why not let it go, even though, in
process of time it should, by the operation of natural laws, pass-
away altogether from the territory where it now exists ? ' Why,
we may ask, should devastation be suffered to spread ? Should
fires in a city be suffered to burn themselves out by advancing
from street to street until not a house remains to feed the con-
flagration ? The slaveholder, as he moves southward or west-
ward, not only carries moral and material destruction with him,,
but leaves it behind for those who come after him. The rich
slavebreeder follows him with his abominable trade, and the poor
white sinks back into barbarism in the wilderness the slaveholder
has made. The order of European progress has been reversed.
In Europe, justice, liberty, industry, and opulence grew together,
as Adam Smith described. In the Slave States of America, as
Mr. Cairnes has shown, the Slave Power constitutes ' the most
formidable antagonist to civilized progress which has appeared
for many centuries, representing a system of society at onco

days with from 300 to 1000. Among them were some coloured people, and
they have increased in niimher until, I think, we may safely estimate them at
500. The occupations of these coloured people in Victoria are, to the best of my
recollection, porters, sawyers, draymen, day-labourers, barbers, and bathkeepers ;
eating-house keepers ; one hosier, as black as a coal, with the best stock in the
town ; and two or thi-ee grocers. Some of them went to the mines, and were-
moderately successful. Their favourite investment is in a plot of ground, on which
they build a neat little cottage and cultivate vegetables, raise poultry, &c.
Nearly all had been prosperous, and a few had so judiciously invested that they
were in receipt of from £10 to £40 a month from rents. They are industrious,
economical, and intend to make tlie colony their permanent home ; the outskirts
of the town are well sprinkled with their humble but neat dwellings, and their
land is yearly increasing in value. By this showing they are a quiet, industrious,
and law-abiding people; but there is a drawback, taking them altogether as
citizens, which arises from their earnest desire to be on a perfect social equality
with the whites at church, the theatre, concerts, and other public places of
assembly. "When you consider the strong disinclination for their company, not
only of our large American population, but also of Englishmen, who very quickly
imbibe the American prejudice, you can readily conceive that a number of
disagreeable scenes occur.'



The Wealth of Nations and the Slave Potver. 19

retrograde and aggressive — a system which, containing within
it no germ from which improvement can spring, gravitates
inevitably towards barbarism, while it is impelled by exigencies
inherent in its position and circumstances to a constant extension
of its territorial domain.'

&vt)i woTafiuv iepHv x^^povfi irayal
Ka\ d'lKa Kal irduTa ird\iv arpfcperai.

For the perpetuation and extension of the system to which
is owing this retrogressive movement of the English race, in
a region endowed with every natural help to progress, the slave-
holders are in arms. They have not been slow to point, indeed,
at General Butler's misrule in a southern city, and to ask if the
cause of their adversaries is the cause of liberty ? But such
men as Greneral Butler are living arguments against a Slave
Power. General Butler was absolute master at New Orleans ;
and, even in the words of an ardent apologist for slavery, ' that
cruelties may be inflicted by the master upon the slave, that
instances of inhumanity have occurred and will occur, are ne-
cessary incidents of the relation which subsists between master
and slave, power and weakness.' * There was never a more
striking example of the ease with which men are cheated by
words than the generous sympathy given in England to the
cause of the slaveholders, as the cause of independence, and
therefore of liberty ! It is the cause of independence, such as
absolute power enjoys, of every restraint of justice upon pride
and selfish passions. The power of England is in a great
measure a moral power, founded on the respect of the civilized
world for the courageous opposition of her people for centuries
to such independence both at home and abroad. And, if the
public opinion of England and the leaning of her policy be found
ultimately upon the side of the maintenance and extension of
the Slave Power in America, she will sustain in the end as great
a loss of actual power, as well as of moral dignity, as if she
entered into a league with the despots of Europe, and closed her

* The South Vindicated, p. 82.
C2



20 The Wealth of Nations and the Slave Poioer.

cities of refuge against their victims. The Slave Power figlits
against all the principles of civil and religious liberty on which
England rests her glory, and all the principles of political
economy to which she ascribes her wealth. In policy, as well
as in justice, England must refuse her countenance to that
Power, as the enemy of the liberty as well as of the wealth of
nations.



III.

THE POLITICAL ECONOMY OF ADAM SMITH.*

* Political Economy belongs to no nation ; it is of no country :
it is the science of the rules for the production, the accumulation,
the distribution, and the consumption of wealth. It will assert
itself whether you wish it or not. It is founded on the attributes
of the human mind, and no power can change it.'t In these
words — accompanying an admission that the Irish Land Bill,
which he nevertheless defended on other grounds, ' offended
against the principles of political economy' — Mr. Lowe gave
expression last session to the conception of one school of the
followers of Adam Smith, that Political Economy is, not what
Adam Smith called his own treatise, ' An Inquiry into the
Nature and Causes of the Wealth of Nations,' but a final
answer to the inquiry — a body of necessary and universal truth,
founded on invariable laws of nature, and deduced from the
constitution of the human mind.

I venture to maintain, to the contrary, that political economy
is not a body of natural laws in the true sense, or of universal
and immutable truths, but an assemblage of speculations and
doctrines which are the result of a particular history, coloiu-ed
even by the history and character of its chief writers ; that, so
far from being of no country, and unchangeable from age to
age, it has varied much in different ages and countries, and even
with different expositors in the same age and country ; that, in
fact, its expositors, since the time of Adam Smith, are substan-

* Fortnightly Eeview, November 1st, 1870.

t Speech on the Irish Land Bill, April 4th, 1870.



22 The Political Economy of Adam Smith.

tially divisible into two schools, following opposite methods;
and that the method of one of them, of which the fundamental
conception is, that their political economy is an ascertained body
of laws of nature, is an offshoot of the ancient fiction of a Code
of Nature and a natural order of things, in a form given to
that fiction in modern times, by theology on one hand, and a
revolt against the tyranny of the folly and inequality of such
human codes as the world had known on the other.

No branch of philosophical doctrine, indeed, can be fairly
investigated or apprehended apart from its history. All our
systems of politics, morals, and metaphysics would be different
if we knew exactly how they grew up, and what transformations
they have undergone ; if we knew, in short, the true history of
human ideas. And the history of political economy, at any
rate, is not lost. It would not be diflScult to trace the connection
between every extant treatise prior to the ' Wealth of Nations,'
and conditions of thought at the epoch at which it appeared.
But there is the less occasion, for the purpose of these pages, or
of ascertaining the origin and foundation of the economic
doctrines of our own day, to go behind the epoch of Adam
Smith, that he has himself traced the systems of political
economy antecedent to his own to a particular course of history,
to 'the different progress of opulence in different ages and
nations,' and ' the private interests and prejudices of particular
orders of men.' What he did not see was, that his own system,
in its turn, was the product of a particular history ; that what
he regarded as the System of Nature was a descendant of the
System of Nature as conceived by the ancients, in a form
fashioned by the ideas and circumstances of his own time, and
coloured by his own disposition and course of life. Still less
could he see how, after his time, ' the progress of opulence '
would govern the interpretation of his doctrines, or how the
system he promulgated as the system of liberty, justice, and
divine benevolence, would be moulded into a system of selfish-
ness by 'the private interests and prejudices of particular
orders of men.'

'The Wealth of Nations,' says Mr. Buckle, 'is entirely



The Political Economy of Adam Smith. 23

deductive. Smith generalizes the laws of wealth, not from the
phenomena of wealth, but from the phenomena of selfishness.
He makes men naturally selfish ; he represents them as pursu-
ing wealth for sordid objects, and for the narrowest personal
pleasures.'* This description is not misapplied to a political
economy of later days, which has guided Mr. Buckle's inter-
pretation of the system of Adam Smith ; but with respect to
that system itself, it involves two fundamental misconceptions.
Selfishness was not the fundamental principle of Adam Smith's
theory ; and his method, though combining throughout a vein
of unsound a priori speculation, was in a large measure inductive.
The investigation which establishes this will be found also to
exhibit the connection between his economic system and the
chief problems pressing for solution in his time ; the methods
which the philosophy of the age provided for their solution ;
and the history and phenomena of the economic world in which
he lived, and from which his ideas, his inductions, and his
verifications were drawn.

One consideration to be carried in mind in the interpretation of
the ' Wealth of Nations' is that its author's system of philosophy
ought to be studied as a whole ; his economic system was part of
a complete system of social, or, as he called it, moral philosophy.
Mr. Buckle, who on other points has much misconceived the
* Wealth of Nations,' properly says of it, and the ' Theory of
Moral Sentiments,' that the two must be taken together and
considered as one, both forming part of the scheme embraced
in his course of moral philosophy at Grlasgow — a course which,
it is important to observe, began with Natural Theology, and
included, along with Ethics and Political Economy, the
Philosophy of Law. Again, as his social philosophy should be
considered as a whole, so the whole should be considered in
connection with the philosophical systems or methods of
investigation of his time. Two essentially opposite systems
of reasoning respecting the fundamental laws of human society
were before the world at that epoch, which may be respectively

* History of Civilization in England, i. 228 ; ii. 449.



24 TJie Political Economy of Adam Smith.

designated as the theory of a Code of Nature, and the inductive
system of Montesquieu — the former speculating a priori about
' Nature,' and seeking to develop from a particular hypothesis
the ' Natural ' order of things ; the latter investigating in history
and the phenomena of the actual world the different states of
society and their antecedents or causes — or, in short, the real,
as contrasted with an ideal, order of things. The peculiarity of
Adam Smith's philosophy is, that it combines these two opposite
methods, and hence it is that we have two systems of political
economy claiming descent from him — one, of which Mr. Bicardo
was the founder, reasoning entirely from hypothetical laws or
principles of nature, and discarding induction not only for the
ascertainment of its premises, but even for the verification of
its deductive conclusions ; the other — of which Malthus in the
generation after Adam Smith, and Mr. Mill in our own, may
be taken as the representatives — combining, like Adam Smith
himself, the a priori and the inductive methods, reasoning some-
times, it is true, from pure hypotheses, but also from experience^
and shrinking from no corrections which the test of experience
may require in deductions. Of the two schools, distinguished
by their methods, the first finds in assumptions respecting the
nature of man, and the course of conduct it prompts, a complete
' natural ' organization of the economic world, and aims at the
discovery of ' natural prices,' ' natural wages,' and ' natural
profits.'

An examination of Adam Smith's philosophy enables us to
trace to its foundation the theory upon which the school in
question has built its whole superstructure. We shall see that
the original foundation is in fact no other than that theory of
Nature which, descending through Koman jural philosophy
from the speculations of Greece, taught that there is a simple
Code of Nature which human institutions have disturbed,
though its principles are distinctly visible through them, and
a beneficial and harmonious natural order of things which
appears wherever Nature is left to itself. In the last century
this theory assumed a variety of forms and disguises, all of
them, however, involving one fundamental fallacy of reasoning



The Folitical Economy of Adam Smith. 25

a priori from assumptions obtainedj not by the interrogation
but by the anticipation of Nature ; what is assumed as Nature
being at bottom a mere conjecture respecting its constitution
and arrangements. The political philosophy flowing from this
ideal soiu'ce presents to us sometimes an assumed state of nature
or of society in its natural simplicity ; sometimes an assumed
natural tendency or order of events, and sometimes a law or
principle of human natui-e ; and these different asj^ects greatly
thicken the confusion perpetually arising between the real and
the ideal, between that which by the assumption ought to be
and that which actually is. The philosophy of Adam Smith,
though combining an inductive investigation of the real order
of things, is pervaded throughout by this theory of Nature, in
a form given to it by theology, by political history, and by the
cast of his own mind. ' The great and leading object of his
speculations,' says Dugald Stewart, by no means intending a
criticism, for Mr. Maine had not then explored the fallacies
lurking in the terms Nature and Natural Law, ' is to illustrate
the provisions made by Nature in the principles of the human
mind, and in the circumstances of man's external situation, for
a gradual and progressive augmentation in the means of
national wealth, and to demonstrate that the most effectual
means of advancing a people to greatness is to maintain that
order of things which Nature has pointed out.' At the end of
Book IV. of the ' Wealth of Nations' we find the Code of Natm^e
and its institutions definitely marked out : ' All systems either
of preference or restraint being completely taken away, the
obvious and simple system of natural liberty establishes itself
of its own accord. According to the system of natural liberty,
the State has only three duties to attend to : ' namely, to pro-
tect the nation from foreign aggressions, to administer justice,
and to maintain certain great institutions beyond the reach of
individual enterprise — a supposed natural limitation of the
province of law and government which has been the cause of
infinite error in both theoretical political economy and practical
legislation.

The same fundamental conception pervades both Smith's.



26 The Political Economy of Adam Smith.

system of etHcs and his philosophy of law. Investigating the
character of virtue, he treats first of ' the order in which Nature
recommends objects to the care of individuals' for their own
personal happiness ; next, of ' the order which Nature has
traced out for the direction of our powers of beneficence : first,
towards other individuals; and, secondly, towards societies.'
So, in the description given by himself of his proposed history
of jurisprudence, he states that ' every system of positive law
may be regarded as a more or less imperfect attempt towards a
system of natural jurisprudence ;' and that the main end of jural
inquiry is to ascertain ' what were the natural rules of justice,
independent of all positive institutions' — a description, perfectly
coinciding with Mr. Maine's, of the jolace which the law of
Nature filled in the coneeptiou of the Roman jurist. * After
Nature had become a household word, the belief gradually
prevailed among the Eoman lawyers that the old Jus G-entium
was in fact the lost Code of Nature. The Roman conceived
that, by careful observation of existing institutions, parts of
them could be singled out which either exhibited already, or
could by judicious purification be made to exhibit, the vestiges
of the reign of Nature.'*

But abstraction would never have played so great a part in
Adam Smith's philosophy, would never have resulted in such
sweeping generalizations respecting the beneficent and equitable
economy resulting from the play of the natural inclinations
and individual interests of men, had not the classical conception
of Nature's harmonious code become blended with the theological
conception of ' that great, benevolent, and all- wise Being, who
directs all the movements of Nature, and who is determined to
maintain in it at all times the greatest possible quantity of
happiness.' Ideas thus derived from early philosophy became
converted into the plans of Providence. Mr. Buckle displays
less than his customary erudition when he states that theology
had been finally separated from morals in the seventeenth
century — from politics before the middle of the eighteenth.

* Ancient Laic, pp. 56, 88.



The Political Economy of Adam Smith. 27

Natural theology makes the first part of Adam Smith's
course of moral philosoj)hy, and its principles pervade every
other part. The law of Nature becomes with him an article of
religious belief ; the principles of human nature, in accordance
with the nature of their Divine Author, necessarily tend to the
most beneficial employments of mau's faculties and resources.
And as the classical conception of Nature supposed simplicity,
harmony, order, and equality in the moral as in the physical
world, in Adam Smith's philosophy it becomes associated with
divine equity and equal benevolence towards all mankind, and
by consequence with a substantially equal distribution of wealth,
as the means of material happiness. Nothing, therefore, is
needed from human legislation — and this conclusion was power-
fully fortified, as we shall afterwards see, by the political ideas
of the age — beyond the maintenance of equal justice and
security for every man to pursue his own interest in his own
way. In the ' Wealth of Nations,' after laying it down that
■every individual endeavours as much as he can both to employ
his capital in the support of domestic industry, and so to direct
that industry that its produce may be of the greatest value, and
therefore necessarily labours to render the annual revenue of
his own nation as great as he can, Adam Smith adds : ' He
generally, indeed, neither intends to promote the public interest,
nor knows how much he is promoting it. By preferring the
support of domestic to that of foreign industry, he intends only
his own security ; and by directing that industry that its
freedom may be of the greatest value, he intends only his own
gain, and he is in this, as in many other cases, led by an
invisible hand to promote an end which was no part of his
intention.'

So in the ' Theory of Moral Sentiments :'* ' The produce of
the soil maintains at all times nearly that number of inhabitants
which it is capable of maintaining. The rich only select from
the heap what is most precious and agreeable. They consume
little more than the poor, and, in spite of their natural selfish-

* Theory of Moral Sentiments. Part iv., chap. i.



^fc



28 The Politiccd Economy of Adam Smith.

ness and rapacity, though they mean only their own con-
veniency, though the sole end which they propose from the
labours of all the thousands whom they employ he the gratifica-
tion of their own vain and insatiable desires, they divide with
the poor the produce of all their improvements. They are led
by an invisible hand to make nearly the same distribution of
the necessaries of life which would have been made had th&
earth been divided into equal portions among all its inhabitants ;
and thus without intending it, without knowing it, advance the
interest of the society, and afford means to the multiplication
of the species. When Providence divided the earth among a
few lordly masters, it neither forgot nor abandoned those who
seemed to have been left out in the partition.'
( The mischief done in political economy by this assumption
respecting the beneficent constitution of Nature, and therefore
of all human inclinations and desires, has been incalculable. It
became an axiom of science with many economists, and with
all English statesmen, that by a natural law the interests of
individuals harmonize with the interests of the public ; and one
pernicious consequence is, that the important department of the
consumption of wealth has — though Mr. Lowe properly includes
it in his definition of political economy — been in reality either
altogether set aside, as lying beyond the pale of economic
investigation, or passed over with a general assumption, after
the manner of Mandeville, that private vices are public benefits.
The real interests which determine the production, and subse-
quently, in the course of consumption, in a great degree the
distribution, of wealth, are the interests of consumers ; although
the truth is veiled by the division of labour, the process of
exchange, and the intervention of money, which makes wealth
in the abstract, or pecuniary interest, seem the motive of pro-
ducers. If every man produced for himself what he desires ta
consume or use, it would be patent how diverse are the interests
summed up in one vague general term, self-interest— interests
which vary in different individuals, different classes, different
nations, and different states of civilization. And economic
investigation would long since have penetrated beneath the



The Political Econoimj of Adam Smilh. 29

surface of pecuniary interest to the widely different character
of the real aims determining the nature and uses of wealth,
hut for that assumption of an identity between public and
private interest which Adam Smith's authority converted into
an axiom. Under its influence we find him assuming that the
great landowners of the sixteenth century, in enclosing their
manors and dismissing tenants, retainers, and labourers, to
purchase luxuries for themselves, employed no less national
labour than before ; although the land fed sheep instead of men,
and the wool of the sheep, in place of clothing labourers at
home, went from the country to foreigners in exchange for
wines, silks, velvets, and trinkets, for the personal consump-
tion of the lord of the manor. When William tlie Conqueror
afforested at once some three-score parishes, he did only what
landowners have done from the fifteenth century to the present
time. To take the children's food and give it unto dogs is, b}''
this reasoning, to give it back to the children !

The Nature hypothesis had, however, with Adam Smith
another powerful ally besides theology in the idea of liberty.



Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 3 of 41)