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the value of Free Labour and Free Trade, and now, a hundred years after the publication of his great book, there ought not to be so many mistaken people vainly acting in opposition to his lessons. It is certain that if people do not understand a true political economy, they will make a false one of their own. Hence the imperative need that no one, neither man nor woman, should grow up without acquiring some comprehension of the science which we are going to study.
3. Divisions of the Science. I will begin by stating the order in which the several branches or divisions of the science of economy are to be considered in this little treatise. Firstly, we must learn what wealth, the subject of the science, consists of. Secondly, we proceed to inquire how wealth is used or consumed; nothing, we shall see, can be wealth, unless it be put to some use, and before we make wealth we must know what we want to use. Thirdly, we can go on to consider how wealth is produced or brought into existence; and how, in the fourth place, having been produced, it is shared among the different classes of people who have had a hand in producing it. Briefly, we may say that political economy treats of (1) The Nature, (2) The Consumption, (3) The Production, and (4) The Distribution of Wealth. It will also be necessary to say a little about Taxation. A part of the wealth of every country must be taken by the government, in order to pay the expenses of defending and governing the nation. But taxation may come, perhaps, under the head of distribution.
4. Wealth and Natural Riches. We do not learn anything by reading that political economy is the science of wealth, unless we know what science is, and what wealth is. When one term is defined by means of other terms, we must understand these other terms, in order to get any light upon the subject. In the Primer of Logic "I have already
attempted to explain what science is, and I will now attempt to make plain what wealth is.
Doubtless many people think that there is no difficulty in knowing what wealth is; the real difficulty is to get it. But in this they are mistaken. There are a great many people in this country who have made themselves rich, and few or none of them would be able to explain clearly what wealth is. In fact it is not at all easy to decide the question. The popular idea is that wealth consists of money, and money consists of gold and silver; the wealthy man, then, would be one who has an iron safe full of bags of gold and silver money. But this is far from being the case; rich men, as a general rule, have very
little money in their possession. Instead of bags of money they keep good balances at their bankers. But this again does not tell us what wealth is, because it is difficult to say what a bank balance consists of; the balance is shown by a few figures in the bankers' books. As a general rule the banker has not got in his possession the money, which he owes to his customers.
Perhaps some one will say that he is beyond question rich, who owns a great deal of land. But this depends entirely upon where and what the land is. A man who owns an English county is very wealthy; a man might own an equal extent of land in Australia, without being remarkably rich. The savages of Australia, who held the land before the English took it, had enormous quantities of land, but they were nevertheless miserably poor. Thus it is plain that land alone is not wealth.
It may be urged that, in order to form wealth, the land should be fertile, the soil should be good, the rivers and lakes abounding in fish, and the forests full of good timber. Under the ground there should be plenty of coal, iron, copper, reefs of gold, &c. If. in addition to these, there is a good climate, plenty of sunlight, and enough, but not too much, water, then the country is certainly rich. It is true that these things have been called natural riches; but I mention them in order to point out that they are not in themselves wealth. People may live upon land full of natural riches, as the North American Indians lived upon the country which now forms the United States ; nevertheless they may be very poor, because they cannot, or they will not labour, in such a way as to turn the natural riches into wealth. On the other hand, people like the Dutch live upon very poor bits of land, and yet become wealthy by skill, industry and providence. The fact is that wealth is more due to labour and ingenuity than to a good soil or climate; but all these things are needed in order that people shall become as rich as the inhabitants of England, France, the United States, or Australia.
5. What is Wealth ? Nassau Senior, one of the best writers on political economy, defined wealth in these words : Under that term we comprehend all those things, and those things only, which are transferable, are limited in supply, and are directly or indirectly productive of pleasure, or preventive of pain. It is necessary to understand, in the first place, exactly what Senior meant. According to him, whatever is comprehended under wealth must have three distinct qualities, and whatever has these three qualities must be a part of wealth. If these qualities are rightly chosen, we get a correct definition, which, as explained in the Logic Primer (section 44), is a precise statement of the qualities which are just sufficient to make out a class, and to tell us what things belong to it and what do not. Instead, however, of the long phrase “directly or indirectly productive of pleasure or preventive of pain,” we may substitute the single word useful, and we may then state the definition in this simple way :
(1) transferable. Wealth = what is (2) limited in supply.
We still need to learn exactly what is meant by the three qualities of wealth; we must learn what it is to be transferable, limited in supply, and useful.
6. Wealth is transferable. By being transferable, we mean that a thing can be passed over (Latin, trans, across, and fero, I carry) from one person to another. Sometimes things can be literally handed over, like a watch or a book; sometimes they can be transferred by a written deed, or by legal possession, as in the case of land and houses; services, also, can be transferred, as when a footman hires himself to a master. Even a musician or a preacher transfers his services, when his auditors have the benefit of hearing him. But there are many desirable things which cannot be transferred from one person to another; a rich man can hire a footman, but he cannot buy the footman's good health ; he can hire the services of the best physician, but if these services fail to restore health, there is no help. So, too, it is impossible really to buy or sell the love of relatives, the esteem of friends, the happiness of a good conscience. Wealth may do a great deal, but it cannot really ensure those things which are more precious than pearls and rubies. Political economy does not pretend to examine all the causes of happiness, and those moral riches which cannot be bought and sold are no part of wealth in our present use of the ward. The poor man who has a good conscience, affectionate friends, and good health, may really be much happier than the rich man, who is deprived of such blessings; but, on the other hand, a man need not lose his good conscience, and his other sources of happiness when *he becomes rich and enjoys all the interesting occupations and amusements which wealth can give. Wealth, then, is far from being the only good thing : nevertheless it is good, because it saves us from too severe labour, from the fear of actual want, and enables us to buy such pleasant things and services as are transferable.
7. Wealth is limited in Supply. In the second place, things cannot be called wealth unless they be limited in supply; if we have just as much of any substance as we want, then we shall not esteem a new supply of it. Thus the air around us is not wealth in ordinary circumstances, because we have only to open our mouths and we get as much as we
What air we do actually breathe is exceedingly useful, because it keeps us alive ; but we usually pay nothing for it, because there is plenty for all. In a diving bell, or a deep mine, however, air becomes limited in supply, and then may be considered a part of wealth. When the tunnel under the English Channel is completed, it will be a great question how to get air to breathe in the middle of it. Even in the Metropolitan Railway tunnel a little more fresh air would be very valuable.
On the other hand diamonds, though much valued, are used for few purposes; they make beautiful ornaments and they serve to cut glass or to bore rocks. Their high value chiefly arises from the fact that they are scarce. Of course scarcity alone will not create value. There are many scarce metals, or minerals, of which only a few little bits have ever yet been seen; but such substances are not valuable, unless some special use has been found for them. The metal iridium is sold at a very high price because it is wanted for making the tips of gold pens, and can be got only in small quantities.
8. Wealth is useful. In the third place, we can easily see that everything which forms a part of wealth must be useful, or have utility, that is, it must serve some purpose, or be agreeable and desirable in some way or other. Senior said correctly that useful things are those which directly or indirectly produce pleasure or prevent pain. A well tuned and well played musical instrument produces pleasure; a dose of medicine prevents pain to one who is in need of it. But it is often impossible to decide