Principles of Political Economy · John Stuart Mill
FOOTNOTES
1 Yet Blanqui diffusively gives nearly one half of his “History of Political Economy” to the period before the sixteenth century, when politico-economic laws had not yet been recognized. A. L. Perry, “Political Economy” (eighteenth edition, 1883), also devotes thirty-five out of eighty-seven pages to the period in which there was no systematic study of political economy. 2 Xenophon, “Means of increasing the Revenues of Attika,” ch. ix; also see his “Economics;” and Aristotle, “Politics,” b. i, ch. vi, b. iii, ch. i. 3 “Republic,” b. ii. 4 Roscher exhumed this book, entitled “De Origine, Natura, Jure et Mutationibus Monetarum,” and it was reprinted in 1864 by Wolowski at Paris, together with the treatise of Copernicus, “De Monetae Cudendae Ratione.” 5 Sermon at St. Paul’s Cross, 1549 (also see Jacob, “On the Precious Metals,” pp. 244, 245). 6 1530-1596. See II. Baudrillart’s “J. Bodin et son temps” (Paris, 1853). Bodin wrote “Réponse aux paradoxes de M. de Malestroit touchant l’enchérissement de toutes les choses et des monnaies” (1568), and “Discours sur le rehaussement et la diminution des monnaies” (1578). 7 “A Briefe Conceipte of English Policy” (1581). The book was published under the initials “W. S.,” and was long regarded as the production of Shakespere. 8 For information on this as well as a later period, consult Jacob “On the Precious Metals” (1832), a history of the production and influences of gold and silver from the earliest times. He is considered a very high authority. Humboldt’s “Essay on New Spain” gives estimates and facts on the production of the precious metals in America. A very excellent study has been made by Levasseur in his “Histoire des classes ouvrières en France jusqu’à la Révolution.” For pauperism and its history, Nicholl’s “History of the Poor Laws” is, of course, to be consulted.
9 See Cossa, “Guide,” p. 119. 10 See Antonio Serra, “Breve Trattato delle Cause che possono fare abbondare li Regni d’ Oro e d’ Argento,” Naples, 1613. 11 Thomas Mun, “England’s Treasure by Foreign Trade” (published in 1640 and 1664); “Advice of the Council of Trade” (1660), in Lord Overstone’s “Select Tracts on Money”; Sir William Petty, “Political Arithmetic,” etc. (about 1680); Sir Josiah Child, “New Discourse of Trade” (1690); Sir Dudley North, “Discourse on Trade” (1691); Davenant’s Works (1690-1711); Joshua Gee, “Trade and Navigation of Great Britain” (1730); Sir Matthew Decker (according to McCulloch, William Richardson), “Essay on the Causes of the Decline of Foreign Trade” (1744); Sir James Steuart, “An Inquiry into the Principles of Political Economy” (1767). For this period also consult Anderson’s “History of Commerce” (1764), Macpherson’s “Annals of Commerce” (1803), and Lord Sheffield’s “Observations on the Commerce of the American States” (1783). 12 The English Navigation Act of 1651 is usually described as the cause of the decline of Dutch shipping. The taxation necessitated by her wars is rather the cause, as history shows it to us. Sir Josiah Child (1668 and 1690) speaks of a serious depression in English commerce, and says the low rate of interest among the Dutch hurts the English trade. This does not show that the acts greatly aided English shipping. Moreover, Gee, a determined partisan of the mercantile theory, says, in 1730, that the ship-trade was languishing. Sir Matthew Decker (1744) confirms Gee’s impressions. It looks very much as if the commercial supremacy of England was acquired by internal causes, and in spite of her navigation acts. The anonymous author of “Britannia Languens” confirms this view.
13 This was, in substance, the whole teaching of one of the leading and most intelligent writers, Sir James Steuart (1767), “Principles of Political Economy.” See also Held’s “Carey’s Socialwissenschaft und das Merkantilsystem” (1866), which places Carey among the mercantilists. 14 Forbonnais, “Récherches sur les finances de la France” (1595-1721); Pierre Clément, “Histoire de Colbert et de son administration” (1874); “Lettres, instructions et mémoires de Colbert” (1861-1870); “Histoire du système protecteur en France” (1854); Martin, “Histoire de France,” tome xiii. 15 “Dîme royale” (1707). 16 “Factum de la France” (1707). 17 When Quesnay was sixty-one years old he wrote the article, “Fermiers,” in the “Encyclopædia” (of Diderot and D’Alembert) in 1756; article “Grains,” in the same, 1757; “Tableau économique,” 1758; “Maximes générales du gouvernement économique d’un royaume”; “Problème économique”; “Dialogues sur le commerce et sur les travaux des artisans”; “Droit natural” (1768). “Collection des principaux économistes,” edited by E. Daire (1846), is a collection containing the works of Quesnay, Turgot, and Dupont de Nemours. See also Lavergne, “Les économistes françaises du 18e siècle” (1870); and H. Martin, “Histoire de France.” Quesnay’s “Tableau économique” was the Koran of the school. 18 From χράτησις τῆς φύσεως, as indicating a reverence for natural laws. 19 The words were not invented by Quesnay, but formed the phrase of a merchant, Legendre, in addressing Colbert; although it was later ascribed, as by Perry, “Political Economy” (p. 46), and Cossa (p. 150), to one of the Economists, Gournay. (See Wolowski, in his Essay prefixed to “Roscher’s Political Economy,” p. 36, American translation.)
20 The Margrave Karl Friedrich was the author of “Abrégé des principes de l’économie politique” (1775), and applied the physiocratic system of taxation to two of his villages with disastrous results. 21 He published a first work on “Population” (1756); the “Théorie de l’impôt” (1760); and “Philosophie rurale” (1763). In this latter work Mirabeau adopted the “Tableau économique” as the key to the subject, and classed it with the discovery of printing and of money. 22 In 1742 Turgot, when scarcely twenty, appeared as a sound writer on Paper Money in letters to Abbé Cicé. The physiocratic doctrines were presented in a more intelligible form in his greater work, “Réflexions sur la formation et la distribution des richesses” (1766). Three works of Turgot, on mining property, interest of money, and freedom in the corn-trade, bear a high reputation. For works treating of Turgot, see Batbie, “Turgot, philosophe, économiste et administrateur” (1861); Mastier, “Turgot, sa vie et sa doctrine” (1861); Tissot, “Turgot, sa vie, son administration et ses ouvrages” (1862). 23 He was the editor of the works of Quesnay and Turgot, and wrote a “Mémoire de Turgot” (1817). He opposed the issue of assignats during the French Revolution, and, falling into disfavor, he barely escaped the scaffold. Having been a correspondent of Jefferson’s, when Napoleon returned from Elba, he came to America, and settled in Delaware, where he died in 1817. The connection between the Economists and the framers of our Constitution is interesting, because it explains some peculiarities introduced into our system of taxation in that document. The only direct taxes recognized by the Supreme Court under our Constitution are the poll and land taxes; and it is in this connection that the constitutionality of the income-tax (a direct tax) is doubted.
24 One of the earliest is that of Roger Coke (1675), in which he argues for free trade, and attacks the navigation acts. Sir Dudley North’s “Discourse on Trade” (1691) urges that the whole world, as regards trade, is but one people, and explains that money is only merchandise. 25 Joseph Harris, an official in the London Mint, published a very clear exposition of this subject in his “Essay upon Money and Coins” (1757); but, eighty years before, Rice Vaughan had given a satisfactory statement in his “Treatise of Money.” 26 “Contemporary Review,” January, 1881, “Richard Cantillon.” Adam Smith had quoted Cantillon on his discussion of the wages of labor, b. i, ch. viii, and evidently knew his book. 27 Born in 1723, and died 1790; he was eleven years younger than Hume. A Professor of Logic (1751) and Moral Philosophy (1752) at Glasgow, he published a treatise on ethical philosophy, entitled the “Theory of Moral Sentiments” (1739). Dugald Stewart is the authority as to Smith’s life, having received information from a contemporary of Smith’s, Professor Miller (see Playfair’s edition of Smith’s works); for Adam Smith destroyed all his own papers in his last illness. His lectures on political economy at Glasgow outlined the results as they appeared in the “Wealth of Nations”; it was not until 1764 that he resigned his professorship, and spent two years on the Continent (twelve months of this in France). On his return home he immured himself for ten years of quiet study, and published the “Wealth of Nations” in 1776. (See also McCulloch’s introduction to his edition of the “Wealth of Nations,” and Bagehot’s “Economic Studies,” iii.)
28 A glance at Sir James Steuart’s treatise (1767) with the “Wealth of Nations” shows Adam Smith’s great qualities; the former was a series of detached essays, although of wide range, but admittedly without any consistent plan. 29 (_a_.) He went into a vague discussion upon labor as a measure of value. (_b_.) A legal rate of interest received his support, and his argument was answered effectually by Bentham (“Defense of Usury”). (_c_.) While not agreeing with the French school that agriculture is the only industry producing more than it consumes, and so land pays rent, yet he thinks that it produces more in proportion to the labor than other industries; that manufactures came next; and exportation and commerce after them. This error, however, did not modify his more important conclusions. Thorold Rogers and even Chevalier, however, claim that Adam Smith drew his inspiration from the French school. (_d_.) In the discussion of rent, he failed to follow out his ideas to a legitimate end, and did not get at the true doctrine. While hinting at the right connection between price and rent, he yet believed that rent formed a part of price. Of the fundamental principle in the doctrine of rent, the law of diminishing returns, he had no full knowledge, but came very close to it. He points out that in colonies, when the good soil has all been occupied, profits fall. (_e_.) In saying that every animal naturally multiplies in proportion to, and is limited by, the means of subsistence, Adam Smith just missed Malthus’s law of population. In fact, Cantillon came quite as near it.
Book III in his “Wealth of Nations” is concerned with the policy of Europe in encouraging commerce at the expense of agriculture, and has less interest for us. Book V considers the revenue of the sovereign, and much of it is now obsolete; but his discussion of taxation is still highly important. 30 Among the English Liberals carried away by the French Revolution, and by such theories as those of Condorcet, was William Godwin, the author of “Political Justice” (1793) and the “Inquirer” (1797), who advocated the abolition of government and even marriage, since by the universal practice of the golden rule there would come about a lengthening of life. Malthus tells us that his study was brought forward as an answer to the doctrines of the “Inquirer,” and he applied his principles to Condorcet’s and Godwin’s ideas. It was a period when pauperism demanded attention from all. Malthus favored the repeal of the old poor-laws, as destroying independence of character among the poor. Malthus also wrote “Principles of Political Economy” (1821) and “Definitions in Political Economy” (1827), but the former did not increase his reputation. He believed in taxing imported corn, and he gave in his adherence to the doctrine of over-production. But, on the other hand, he was one of several writers who, almost at the same time, discovered the true theory of rent. His father was a friend of Godwin, and a correspondent of Rousseau. (See Bagehot, “Economic Studies,” p. 135.)
31 See Cairnes, “Logical Method,” Lecture VII, for the best modern statement of the question. Also, Roscher, “Principles of Political Economy,” b. v, whose extended notes furnish information on facts and as to books. H. Carey, “Social Science” (edition of 1877), iii, pp. 263-312, opposes the doctrine, as also Bowen, “American Political Economy” (1870), ch. viii, and Henry George, “Progress and Poverty” (1880), pp. 81-134. 32 J. Anderson, “An Inquiry into the Nature of the Corn Laws” (1777), “Agricultural Recreations,” vol. v, p. 401 (1801); Sir Edward West, “Essay on the Application of Capital to Land” (1815); Rev. T. R. Malthus, “An Inquiry into the Nature and Progress of Rent” (1815). The last two appeared after Anderson’s discoveries had been forgotten, but he has the honor of first discovery. 33 Born in 1772 of Jewish parentage, Ricardo died in 1824. A rich banker, who made a fortune on the Stock Exchange, he early in life retired from business. The discussions on the Restriction Act and the corn laws led him to investigate the laws governing the subjects of money and rent. He gained notice first by his “Letters on the High Price of Bullion” (1810). The “Reply to Mr. Bosanquet” (1811), and “Inquiry into Rent” (1815), were followed by his greater work, “Principles of Political Economy and Taxation” (1817). He entered the House of Commons from Portarlington, a pocket borough in Ireland, and was influential in the discussions on resumption. Although he was not on the committee, his views on depreciated paper are practically embodied in the famous “Bullion Report” (1810). Tooke, “History of Prices,” says the results of the restriction were not known until the time of Ricardo’s contributions. Neither Mill nor Say has had so great an influence as Ricardo has gained, through the pages of his “Political Economy.”
34 Johann Heinrich von Thünen, a rich land-owner of Mecklenburg, in his “Der isolirte Staat in Beziehung auf Landwirthschaft und National-Oekonomie” (1826), worked entirely by himself, but reached practically the same law of rent as Ricardo’s. In spreading the doctrines of Adam Smith he has influenced later German writers. 35 The first distinct recognition of this important physical law, according to McCulloch (Introduction to “Wealth of Nations,” lv), was in a fanciful work of two volumes, entitled “Principes de tout gouvernement,” published in 1766: “Quand les cultivateurs, devenus nombreux, auront défriché toutes les bonnes terres; par leur augmentation successive, et par la continuité du défrichement, il se trouvera un point ou il sera plus avantageux à un nouveau colon de prendre à ferme des terres fécondes, que d’en défricher de nouvelles beaucoup moins bonnes” (I, p. 126). The author was, however, unaware of the importance of his discovery. 36 Carey, “Social Science” (I, ch. iv, v), and Bowen, “American Political Economy” (ch. ix), have denied Ricardo’s doctrine of rent. Thesupposed connection between free trade and Ricardo’s teachings on rent has prejudiced protectionists against him. Free trade follows from the theory of international trade, and has nothing to do with Ricardo’s main doctrines. It is true, Ricardo was a vigorous free-trader. Of opposing views on rent, Carey’s argument is the most important.
37 Say drew considerable attention by his theory of “gluts.” He based his idea of value wholly on _utility_, which has lately been taken up again by Professor Jevons. Say was answered on this point by Ricardo in a later edition of his “Political Economy.” See Cairnes, “Leading Principles,” p. 17. As a free-trader and opponent of governmental interference, he went further than his master, Adam Smith. Napoleon did not like this part of Say’s teaching, saying that it would destroy an empire of adamant, and tried to induce him to modify his position, but in vain. The second edition was not allowed to be published until 1815. 38 Educated at Bologna, he went to Geneva in 1816, and was called (1833) by the French Government to succeed Say in the Collége de France. In 1845 he was sent as minister to Rome, led the revolutionary movement there, and was assassinated in 1848. His lectures were taken down in short-hand by one of his disciples, Porée, and later published. 39 Malthus, who held that the unproductive consumption of the rich was desirable for the poor, supported Sismondi. The latter was answered by Say and McCulloch (“Edinburgh Review,” March, 1821), to which Sismondi replied in his second edition, in 1827, and then withdrew from economic discussion. 40 A native of Riga, educated in Germany, Storch was charged by the Czar Alexander with the duty of instructing his sons, the Grand Dukes Nicholas and Michael, and his treatise is the collection of his lectures. Knowing little of Malthus or Ricardo, he made a near approach to the doctrine of rent. His unsparing denunciation of Russian administrative corruption caused the Government to forbid the publication of the Russian translation.
41 Cossa, “Guide” (p. 173), points out Sartorius, Lüder, Kraus, and Schlözer as teachers of Adam Smith, in Germany, followed later by G. Hufeland, J. F. E. Lotz, and L. H. von Jakob; Count Hogendorp and Gogel, in Holland; Count Szecheny, in Hungary, and (pp. 211-213) Cagnazzi, Bosellini, Ressi, Sanfilippo, and Scuderi (the last two protectionists), in Italy. Fuoco (1825-1827), in Italy, first saw the value of Ricardo’s theory of rent, while Gioja opposed Adam Smith and Say. But K. H. Rau (died 1870), in his “Lehrbuch der politischen Oekonomie” (1826, fifth edition 1864), had the most extensive influence in Germany in expounding Adam Smith’s system, with proper improvements. Another important writer of this school was F. B. W. von Hermann, “Staatswirthschaftliche Untersuchungen” (1832).
42 From 1810 to 1840, political economy was a favorite study in England, and many writers deserve mention. There were Huskisson, a great financier; Thomas Tooke (1773-1858), who began his matchless “History of Prices” (1823); Lord Overstone (Samuel Jones Loyd), “Tracts and other Publications on Metallic and Paper Currency” (1858); Robert Torrens (1784-1864), “Essay on the Production of Wealth” (1821); Archbishop Whately, “Introductory Lectures” (1831), and “Easy Lessons on Money Matters”; Cobden and Sir Robert Peel; N. W. Senior (1790-1864), Professor of Political Economy at Oxford, article on “Political Economy” (1836) in the “Encyclopædia Metropolitana,” and “Lectures on the Cost of obtaining Money” (1830). Senior showed great ability in analyzing cost of production, and stands far above McCulloch in real ability. J. R. McCulloch (1789-1864), who preceded Mill, wrote a good but dry textbook, “Principles of Political Economy” (1825), “A Treatise on the Principles, Practice, and History of Commerce” (1833), an excellent “Dictionary of Commerce” (last enlarged edition, 1882), “Literature of Political Economy” (1845). He edited Ricardo’s works, with a biography, published a “Select Collection of Scarce and Valuable Tracts on Money” (1856), “A Treatise on the Principles and Practical Influence of Taxation and the Funding System” (1845). He contributed nothing practically new to the study. Miss Harriet Martineau (1802-1876) gave some admirable although somewhat extended stories in illustration of the various principles of political economy, entitled “Illustrations of Political Economy” (1859). This period in England was signalized by the abolition of the Corn Laws (1846), and the Navigation Laws (1849), the passage of the Bank Act (which separated the issue from the banking department, 1844), and the general abandonment of protective duties. Cf. Noble, “Fiscal Legislation, 1842-1865” (1867).
43 Born in 1806, he died in 1873. For his extraordinary education see his “Autobiography.” When thirteen years old, he began the study of political economy through lectures from his father while walking; he then (1819) read Ricardo and Adam Smith, and at fourteen he journeyed to France, where he lived for a time with J. B. Say. He entered the East India Office at seventeen, was occupied finally in conducting the correspondence for the directors, where he remained until 1858. When about twenty, Mill met twice a week in Threadneedle Street, from 8.30 to 10 A.M., with a political economy club, composed of Grote, Roebuck, Ellis, Graham, and Prescott, where they discussed James Mill’s and Ricardo’s books, and also Bailey’s “Dissertations on Value.” In these discussions, chiefly with Graham, Mill elaborated his theory of international values. In 1865 he entered Parliament for Westminster, and for three years had a singular, characteristic, independent, but uninfluential career. His adherence to two radical reforms, woman suffrage and changes in the tenure of land, lost him any considerable influence. 44 He (1773-1836) wrote the “History of India” (1817-1819), and “Elements of Political Economy” (1821). He was intimate with Ricardo, Bentham, Austin, and Zachary Macaulay. 45 In his “infant industries” argument, and his statement on navigation laws (B. v, ch. x, §1), he conceded a great deal of free-trade ground; but in a private letter, 1866 (see New York “Nation,” May 29, 1873), he denied that he intended the “infant industries” argument to apply to the United States. He did not consider New England and Pennsylvania any longer as young countries within the limits of his meaning. See also Taussig’s “Protection to Young Industries” (1883).
46 W. T. Thornton (1813-1880), in a volume “On Labor: its Wrongful Claims and Rightful Dues” (1869), attacked Mill’s position on demand and supply, and on wages, so that Mill in consequence abandoned his doctrine of wages, in the “Fortnightly Review,” May 1, 1869. Mr. Cairnes, however, rescued the Wages-Fund theory from Mr. Mill in his “Leading Principles” (1874). Thornton also wrote “Over-Population, and its Remedy” (1846), and an excellent book, “Plea for Peasant Proprietorship” (1848). See also “Nineteenth Century,” August, 1879, for an answer by Thornton to Mr. Cairnes on the wages question. 47 James Eliot Cairnes was born at Drogheda, 1824; was educated at Trinity College, Dublin, and made Whately Professor there in 1856. Having been Professor of Political Economy in Queen’s College, Galway, he left Ireland in 1866 to accept the chair of Political Economy in University College, London. In that year, through an attack of inflammatory rheumatism, he fell under the power of a painful and growing malady which rendered him physically helpless, and portended certain death in the near future. The three years before his death, while working only in hopeless pain, was the period of his greatest literary activity. He collected his “Essays in Political Economy, Theoretical and Applied” (1873), in which he traced with great ability the effect of the gold-discoveries; brought out his “Leading Principles” (1874), and an enlarged edition of his “Logical Method” (second edition, 1875). The first edition of this last book was the result of lectures delivered in Dublin about 1858. In his earlier years the interest he felt in the United States led him into a very vigorous and masterly study of “The Slave Power; its Character, Career, and Probable Dangers” (1862); “The Revolution in America” (1862). He then wrote “Colonization and Colonial Government” (1864), and “Negro Suffrage” (1866). He finally succumbed to his fatal disease, and passed away prematurely, July 8, 1875. A short sketch of his personal character was written by Professor Fawcett, in the “Fortnightly Review,” August 1, 1875, p. 149.
48 Professor Jevons (1835-1882) was educated at University College, London, and spent the years from 1854 to 1859 in the Australian Royal Mint, where he became interested in the gold question. He wrote a study on “A Serious Fall in the Value of Gold ascertained” (1863), which attracted great attention. A fine metaphysician and mathematician, he did not give his whole time to economic work. In 1866 he became Professor of Logic and Cobden Lecturer on Political Economy in Owens College, Manchester, but later became Professor of Political Economy in University College, London. In 1881 he gave up academic teaching, to devote himself to literature. He investigated the permanence of the English coal-supply in “The Coal Question” (second edition, 1866). “The Theory of Political Economy” (1871) contains his application of the mathematical method, and a bibliography of similar attempts. “The Railways and the State” are to be found in his “Essays and Addresses” (1874). He prepared an elementary book, “Primer of Political Economy” (second edition, 1878). He was a contributor to the journals, and especially to the “London Statistical Journal.” His last books were “The State in Relation to Labor” (1882), which deals with the question of state interference; and “Methods of Social Reform” (1883), containing a paper on industrial partnerships. He also advanced the theory that the presence of sun-spots affected agriculture unfavorably, and that, coming somewhat regularly, they produced a constant succession of commercial crises. (See “Nature,” xix, 33, 588.) At the early age of forty-seven he was unfortunately drowned while bathing near Bexhill, England (1882).
49 Like Cairnes, Thomas Edward Cliffe Leslie was a native of Ireland, and educated at Trinity College, Dublin. He was called to the bar, but gave up the law when offered the professorship of Political Economy in Queen’s College, Belfast. Besides his discussion of land tenures, he published “Political and Moral Philosophy” (1874). He long suffered from bad health, and died January 28, 1882. His volume of “Land Systems” is now (1884) out of print, and scarce. He had also devoted himself to financial reform. 50 See p. 33. 51 Born 1826, died 1877. He was early made familiar with banking in connection with the Stuckey Banking Company, in Somersetshire; was educated at University College, London. In 1858 he married the daughter of James Wilson, the editor of the London “Economist,” whom he succeeded. He was a political student of a rare kind, as is shown by his “English Constitution” (second edition, 1872), “Physics and Politics” (1872), “Literary Studies” (second edition, 1879). He also wrote “Depreciation of Silver” (1877). 52 Established in 1848, and unquestionably the most useful economic publication for English questions. 53 Born 1833. His eye-sight was lost by an accidental shot in 1858, but he was chosen Professor of Political Economy at Cambridge in 1863. His “Manual” and the “Economic Position of the British Laborer” (1865) gave him reputation, in 1865 he entered Parliament, and since 1880 he has been Postmaster-General in Mr. Gladstone’s administration. He has published “Pauperism, its Causes and Remedies” (1871), “Speeches” (1878), “Free Trade and Protection” (1878). His wife (born 1847), Millicent Garret Fawcett, reduced his “Manual” into “Political Economy for Beginners” (1869), and also wrote “Tales in Political Economy” (1874). Died November 13, 1884.
Text from Project Gutenberg, public domain in the United States.