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not easy to surmise. One is almost tempted to believe that his acquaintance with the eminent masters in the science was confined to the author of the “ Wealth of Nations.” Had he known, for example, and to mention no other instances, Turgot's brief but pregnant “ Essai sur la Formation et la Distribution des Richesses”
-a work for which his biographer Condorcet, not unreasonably, prefers the claim of being “the germ of the Wealth of Nations'" —or Ricardo's “Principles of Political Economy and Taxation,” it is not easy to believe that he could have committed himself to a distinction, not less unjust than invidious. Two works more thoroughly saturated with the severest spirit of the Positive Philosophy would not easily be found in the literature of scientific speculation.
But, passing from the personal question, M. Comte proposes to try the Positive character of economical speculation by two tests— “continuity” and “ fecundity.” These qualities, he remarks, are the least equivocal symptoms of really scientific conceptions. “When the work of the present time, instead of presenting itself as the spontaneous sequel and gradual consummation of former
work, takes, in the case of each new author, a character essentially · personal; and the most fundamental notions are incessantly brought
into question ; when the dogmatic constitution of a science, far from engendering any sustained progress, results habitually in the sterile reproduction of illusory controversies, ever renewed, never advancing; when these indications are found, there we may be certain we have to do, not with positive science, but with theological or metaphysical dissertation. Now is not this the spectacle which Political Economy has presented for half a century? If our economists are in reality the scientific successors of Adam Smith, let them show us in what particulars they have effectively improved and completed the doctrine of that immortal master, what discoveries really new they have added to his original felicitous aperçus ?”
The tests proposed are indubitably sound. The challenge is a fair one. If Political Economy cannot make good its pretensions by the criteria of continuity and fecundity, it deserves to be relegated to the limbo to which M. Comte consigns it.
But in proceeding to the ordeal it is necessary to distinguish. There would, it must at once be admitted, be no difficulty in showing that a great deal of writing on economical subjects, now no less than when M. Comte published his criticisms, is of the sort which he describes as metaphysical, — that is to say, vague, “personal,” full of “ sterile and illusory controversies;" it must further be acknowledged that this style of writing prevails to a far larger extent in the discussions of Political Economy than in those of any physical science. The least reflection, however, will show, what has often been pointed out, that this incident of economic speculation is
quite inevitable. It results from two circumstances : first, the intimate relation in which social questions, economic included, stand to personal and class concerns, and through them to general politics, and the keen interest consequently felt in such questions by the general public; and, secondly, the absence of a technical nomenclature and the necessity which hence arises for employing popular language in the exposition of the doctrines of social and economic science. The inevitable consequence of this state of things has been to draw into the arena of this branch of controversy a crowd of unqualified persons. The incident, however, is not peculiar to Political Economy; and, if a science is to be made responsible for all the unscientific and superficial argumentation to which it gives occasion, Sociology would have quite as much, perhaps rather more, to answer for than economic science. The question, therefore, cannot be decided by extracts drawn at random from the miscellaneous literature of economic discussion: it is not by extracts from such sources, but by the doctrines of the science as expounded in the works of acknowledged masters, that the issue must be determined. From the writings of M. Comte's avocats and littérateurs I must appeal to those of Malthus, of Say, of Ricardo, of Tooke, of Senior, of Mill. These I take to be the veritable scientific successors of Adam Smith-after him and Turgot, the true founders and accredited expositors of economic doctrine. Limiting the controversy to this arena, I venture to assert that a more remarkable example of continuity of doctrine, of development of seminal ideas, of original aperçus extended, corrected, occasionally re-cast, of new discoveries supplementing, sometimes modifying, the old-in short, of all the indications of progressive science—will not easily be found even in the history of physical speculation.?.
The portion of economic science which Adam Smith carried furthest, and in which he left least for his successors to correct or supplement, is probably the theory of production. With true instinct he fixed on labour and land as the great original sources of wealth. Of these, the factor furnished by nature being a constant force, he saw that the progress of wealth must depend on the progressive efficiency of that other agency which man contributed. The problem of production thus resolved itself into ascertaining the conditions determining the efficiency of human industry. These conditions he grouped under three leading categories—division of labour, machinery, and the accumulation of capital. Such, stated in a few
(1) “ L'économie politique,” says M. Courcelle Seneuil, “ bien que jeune encore, présente une suite de travaux dont l'objet, le but et la méthode, sont les mêmes, qui forment un corps, établissent une tradition et des croyances communes, une science enfin dans laquelle les conceptions, même fautives et imparfaites servent à éléver des théories moins fautives et moins imparfaites; dans laquelle chaque vérité découverte est recueillie et conservée et chaque erreur signalée comme un écueil à éviter.”
words, is the theory of production propounded in the “Wealth of Nations.” It has been submitted by his successors to a searching criticism ; but it has emerged from the ordeal, in the main, unaffected as regards the essence of the doctrines, though more or less modified in detail. Land—though, without doing much violence to language, we may extend the term to cover all that the land contains, all the material objects, therefore, which form the subjectmatter of wealth, and even those productive powers resident in the earth—can yet scarcely be understood as comprising the forces in general of physical nature. Adam Smith, at all events, did not so employ the term; and, accordingly, his generalisation of the sources of wealth into land and labour is defective in not paying sufficient regard to the part performed in production by these latter agencies. As he overlooked their co-operation, so he necessarily failed to perceive the conditions on which it was rendered, and the consequences involved in the varying efficacy of those conditions—an omission which has been supplied by his successors, with important consequences in the general theory of economic development. Again, his conception of capital has been carefully sifted by more than one later writer, and has been cleared in the process of discussion of some extraneous elements which obscured the true nature of the functions performed by that agent of production. Division of labour, again, which he regarded mainly in its more obvious applications, has been shown to be a particular case of a larger principle, co-operation, which embraces not merely the class of phenomena adverted to by Adam Smith, but the great transactions of international commerce, and industrial organisation in its most extended sense. Subject to modifications of this minor kind, however, the doctrines of Adam Smith, in the theory of production, have been retained, and remain an integral portion of the existing body of economic science.
Passing to another field, and turning to his speculations on the phenomena of exchange value, one may with great truth apply to them what M. Say has said of his entire work: “ The more we extend our knowledge of Political Economy, the more highly we shall appreciate both what he has done and what he has left for others to do.” There are passages in the “Wealth of Nations” which touch the very core of the true theory of value. When, for example, he says: “The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What everything is really worth to the man who has acquired it, and who wants to dispose of it, is the toil and trouble which it can save to himself, and which it can impose upon other people: ”—when, again, he says: “Labour was the first price—the original purchase money that was paid for all things,” I
(1) Turgot also saw in industrial production the original act of exchange: “L'homme est encore seul; la nature seule fournit à ses besoins, et déjà il fait avec elle un premier
he expressed truths which had only need to be firmly grasped to unlock for him the secrets of this most intricate order of phenomena. But he hardly lays hold on the key when he lets it go, and proceeds to exclude from the operation of the principle he had enunciated all stages of social existence except the earliest—that “rude state of society which precedes the accumulation of stock and the appropriation of land." The doctrine of value, as he finally developed it, though vitiated by a defective analysis of the elements of cost, nevertheless, had the great merit of connecting the phenomena with cost as its governing principle, and the further still higher meritin which I think he was entirely original—of bringing into view the conception of “natural,” as distinguished from “market” values—that “central price towards which the prices of all commodities are continually gravitating." These were considerable achievements, as those will acknowledge who are acquainted with the failure of even the most able of his predecessors to get beyond superficial generalisations—one might say the commonplaces of the subjectin this fundamental branch of Political Economy,' or who observe the futile efforts to excogitate a theory of the numerous modern writers who rush into economic speculations with no better guidance than the light of nature. In this form the theory was accepted by Sayo without substantial change, but in the hands of Ricardo, it underwent important modifications, and in effect was recast. Starting from Adam Smith's conception of “natural price," and of cost as the regulator of this, he did much to elucidate the position by simply excluding from his exposition of the subject all that was inconsistent with these primary assumptions. But he did more than this. His clearer view of the nature of exchange value, and the firmer grasp he commerce où elle ne fournit rien qu'il ne paie par son travail, par l'emploi de ses facultés et de son temps.”—Valeurs et Monnaies, quoted by M. Courcelle Seneuil, vol. i. 304, note.
(1) Turgot's exposition of the doctrine of value (Formation et Distribution des Richesses, § 33–35) does not go beyond proximate causes, namely, the reciprocal wants and means of buyers and sellers in a given market; in modern phrase, demand and supply. But incidentally in another part of his work (§ 61), he falls into a groove of thought which all but leads him up to the principle of “natural price” and “ cost of production." “C'est lui" (the capitalist], he writes, “ qui attendra que la vente des cuirs lui rende, non seulement toutes ses avances, mais encore un profit suffisant pour le dedommager de ce que lui aurait valu son argent s'il avait employé en acquisition de fonds; et de plus du salaire dû à ses travaux, à ses soins, à ses risques, à son habileté même ; car sans doute, à profit égal, il aurait preféré vivre sans aucune peine d'un revenu d'une terre qu'il aurait pu acquérir avec le même capital.” But having thus touched on the true solution, he afterwards ($ 67) recurs to his former position: “Ce sont toujours les besoins et les facultés qui mettent le prix à la vente,"&c.
(2) M. Say's doctrine of value--so far as a distinct doctrine can be elicited from his very contradictory statements-differed in some respects from Adam Smith's; but Ricardo has shown (Works, p. 172), that where he differed, it was to go wrong. The essentials of Adam Smith's doctrine, that value was governed by cost of production, and that cost of production consisted of wages, profits, and rent, in such sense that a rise or fall of any of these elements necessitated a corresponding rise or fall of value-all this M. Say fully held.
had attained of the bearing of that “first price," that “original purchase-money," on all the secondary results in the play of industrial exchange flowing from the necessity of its payment, enabled him to show that the same principle which governed exchanges in primitive societies, and which Adam Smith imagined was peculiar to such societies, obtained equally, though masked by the more complicated machinery of advanced civilisation, in all stages of industrial development; and finally enabled him to bring within the scope of his general theory a class of phenomena of which the theory, as left by Adam Smith, failed to give any intelligible account—the phenomena of agricultural prices ;—a generalisation from which he was immediately led to his celebrated doctrine of rent. From the facts of value, as presented within the limits of a single industrial community, Ricardo advanced to the more complicated phenomena presented by international exchange; and here, again, with unfailing instinct, he laid his hand on the salient elements of the problem; though it was reserved for Mr. Mill, by his theory of the “equation of international exchange,” first propounded in his “Essays on Unsettled Questions in Political Economy" to complete this portion of the doctrine. In the more important and fundamental speculation, however, on the governing principle of “natural value” in domestic transactions, Ricardo left little for his successors to supply. Mr. Senior improved the exposition by giving a name - Abstinence—to an element of cost, not unrecognised by Ricardo, and implied in his exposition, but not brought into sufficient prominence by him; and Mr. Mill, in his chapter on the “ultimate elements of cost of production,” has effected some modifications in detail, and given greater precision to some of the conceptions involved; but in essentials the doctrine remains as it came from the master's hand.
In the field of foreign trade, Adam Smith achieved important results, though mainly of a negative kind. His onslaught on the mercantile theory of wealth, and his advance from the destruction of that fetish to the establishment of the doctrine of Free Trade, are among his best-known exploits. Yet it is nevertheless true that Adam Smith wholly failed to give a rational account of the principle which occasions and governs the interchange of commodities between nations, and by consequence to explain in what consists, or what measures, the gain of foreign trade. His language on this subject, in not a few passages, exhibits all the vacillation and contradiction of the mercantile school. While alive to the important and fundamental truth that “consumption is the sole end and purpose of production,” and drawing the sound inference that “the interests of producers ought to be attended to only so far as they promote the
(1) "Un travail,” says M. Cherbuliez of Geneva, “le plus important et le plus original dont la science économique se soit enrichie depuis une vingtaine d'années.”