T.E. Cliffe Leslie

Fortnightly Review, January 1, 1879

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 `Great 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 by two contemporaries of Ricardo, 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.(2) 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 his 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 to 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 the 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 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 German `social democrat.' Political economy is, then, emerging from a cloud of petitio principii, bad generalization, and mischievous 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 superstition.

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 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.(3) 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 stimulating 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 priori 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 to their gods, as in later times by the aid of human protectors.

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, distinction, 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 lifethe 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 rats 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 `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 knowledge, 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 individuals, 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 ruling 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 philosophical 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 virtue `in the abstract,' and `in the absence of disturbing causes' would be virtuous; yet, policemen, prisons, and the Divorce Court show that no theory of morals, much less absolute predictions, can be drawn from this abstract principle. That the a priori method in political economy renders positive prediction possible is indeed contrary to the doctrine of its most eminent expositors. Mr. Mill, though he subsequently much enlarged the scope and system of economic investigation, was in his earlier years an advocate of the a priori method; yet in the well-known essay in support of it he emphatically insisted that the conclusions deduced from it are `true only in the abstract,' and `would be true without qualification only in purely imaginary cases.' Mr. Cairnes, in like manner, says, `it is evident that an economist arguing from the desire of wealth and the aversion to labour with strict logical accuracy may be landed in conclusions that have no resemblance to existing realities'; adding that `the economist can never be certain that he does not omit some essential circumstance, and it is indeed scarcely possible to include all; therefore his conclusions correspond with facts only in the absence of disturbing causes, and represent not positive but hypothetic truths.'(4)

The more sagacious adherents to the mere deductive method will therefore probably decline to accept Mr. Lowe as their representative, but his exposition is a reductio ad absurdum ot their own system. He is only more thoroughgoingone cannot say more consistent or logical, for he sometimes includes and sometimes discards the dislike of labourin his elimination of all principles save the desire of wealth, which is the real backbone of their theory as well as his. The other motives and forces to which they nominally concede a place are only admitted at the outset for form's sake, to be afterwards set aside as `disturbing causes' in a manner without precedent or analogy in physical science. The last thing an astronomer would dream of is, that having admitted in general terms the existence of other forces besides those that were taken account of by the earliest observers, he need not concern himself with them further, and may calculate the movements of the heavenly bodies without reference to them. Nor is this the only fundamental objection. No such principle as `the desire of wealth,' in the sense of a single, universal motive, whose consequences are uniform and can be foreseen, really exists. Adam Smith does not use the phrase, and his doctrine respecting the nature of wealth shows the impossibility of using it as a key to the movements of the economic world. Wealth, he says, `consists not in the inconsumable riches of money, but in the consumable goods annually reproduced by the labour of the society.' It includes therefore food, drink, clothing, houses, furniture, plate, ornaments, books, works of art; in short, necessaries, comforts, luxuries, in all their varieties, and all the productions of nature or of human exertion and skill to be had in the market. It includes things which vary in different countries and different ages, and have very different economic effects; and which are objects not only of different but of antagonistic desires. The love of gin is the love of one kind of wealth which too often competes in the mind of a poor man with the love of a decent dwelling. There is a saying about a four- footed animal not without firmness of character but of limited ideas, between two bundles of hay both soliciting his choice. The decalogue shows that this animal was one of divers things which the Israelites were prone to covet. The ox, to which allusion is also made, in the commandment, was, as Sir Henry Maine has explained, the kind of wealth most valued by early agricultural communities; yet even they desired some other kinds, and sometimes the reason why a man was without an ox for his plough, was that he was too fond of strong drink. In modern society there are countless varieties of wealth. Adam Smith has made some excellent remarks on the difference, in respect both of its amount and its distribution, of expenditure on different sorts. But expenditure is simply the method of acquisition by which, under a division of labour, the desires of men for different things are satisfied. Were there no such division, some would build houses and make clothes for themselves, while others in nakedness or rags distilled spirits or brewed ale in mud hovels or caves.

One of the most important economic inquiries relates to the changes which take place in the direction of the chief wants of mankind, and the species of wealth which they call into existence. The main object of industry and accumulation on the part of the French nation is landed property; the chief impulse determining the national economy is the desire of it: in England this desire is absent among the nation at large, and the one which takes its place with no small number of Englishmen is the love of beer. Happily in England there is a still more general object of desire in the house, and the house owes its structure, perhaps its very existence, to the institution of the family. Even in the matter of dress, the changes in the nature of the things constituting wealth deeply affect its economic condition. Richard II. wore a coat which cost more than 20,000 in modern money; the Prince of Wales would not take 20,000 to wear it. The stronger passion of women than men in our time for personal decoration is the result not of an original difference in the mental constitution of the two sexes, but of a different social and political history. The formula of demand and supply is still supposed by some economists to explain everything fully, but both demand and supply have in every case a long history. The demand for duelling swords and pistols in France is such that the supply makes no inconsiderable figure in the inventory of French wealth. Were they used only in duels, there would probably not be two swords or a brace of pistols in England. It is a misrepresentation of the Mercantile System that its adherents considered nothing but money as wealth, still they did attach undue importance to it; and the consequence of the excessive estimation in which they hold it demonstrates the absurdity of basing either the economic prosperity of nations or economic science on the abstraction which is the corner-stone of both in the deductive system. The other principle which Mr. Lowe associates with it, the dislike of labour, involves an equal confusion. One might ask, when it is maintained that we can predict the conduct of mankind from these two principles, in what proportion are we to mix them for the purpose? The Jews were always a wealth-loving nation, and many of them industrious, yet there seem to have been not a few sluggards in Solomon's time who would go to no trouble to get it. Can employers tell whether higher weekly earnings or fewer hours of work will be the principal object of their workmen a year hence? The savage has a dislike for regular labour which only some form of slavery can overcome, but with the progress of civilization a love of exertion for its own sake grows up, and employment becomes necessary to the happiness of a great number of men. We are told somewhat abruptly in the Psalms that a man was famous according as he had lifted up axes on the thick trees, yet the most celebrated woodcutter of that period perhaps felled no more trees in a week than Mr. Gladstone will do for mere recreation. The German emperor replied to a deputation that he had felt the pain of his wounds less than the abstinence from his ordinary activity which they compelled. The love of several occupations for their own sake is one of the causes by which Adam Smith explains the small profit to be made in them. Had Mr. Lowe ever watched a French peasant at work in his vineyard, he could hardly have made a universal dislike of toil one of the two pillars of political economy.

Other motives, which eminent advocates of the deductive system propose to take into account, vary in like manner in force, direction, and consequence. Mr. Cairnes refers to the love of men for their own country as the main cause of the diversity of the rates of wages and profit in different countries, and it is a highly complex feeling, varying greatly in strength in different nations and ages. The Fleming was the great emigrant of the middle ages; now he can hardly be got to migrate to an adjoining province for double wages. Patriotism did not exist in England some centuries ago. Different races, nations, and clans had been too recently blended under one government for a strong feeling of nationality; a man belonged to his township, his borough, his guild, not to his country. Had Englishmen been as patriotic as they were brave, William of Normandy might never have got the title of Conqueror. The Germans when they invaded the Roman Empire knew no common fatherland. In 1870 they left lucrative employments in all parts of the world for a soldier's perils and pay, in a manner that shows how much there is on earth that is not dreamt of in Mr. Lowe's philosophy. And this is far from exhausting the principles entitled, even on the admission of distinguished adherents of the deductive method, to a place in the science of wealth. Mr. Cairnes asks, for example, `How far should religious and moral considerations be admitted as coming within the province of political economy?' His answer is that `They are to be taken account of precisely in so far as they are found, in fact, to affect the conduct of men in the pursuit of wealth'; and one need only allude to the influence of mediaeval religion on both the forms and the distribution of the wealth of the community, the changes in both with the change in religion after the Reformation, in proof of the impotence of the a priori method to guide the economist in relation to this class of agencies. Yet a few pages after recognising their title to investigation, Mr. Cairnes argues that induction, though indispensable in physical, is needless in economic science, on the ground that `the economist starts with a knowledge of ultimate causes,' and `is already, at the outset of his enterprise, in the position which the physicist only attains after ages of laborious research'.(5) The followers of the deductive method are, in fact, on the horns of a dilemma. They must either follow Mr. Lowe's narrow path, and reason strictly from the assumption that men are actuated by no motive save the desire of pecuniary gain,. or they must contend that they have an intuitive knowledge of all the moral, religious, political, and other motives influencing human conduct, and of all the changes they undergo in different countries and periods.

Shut out by their own method from the investigation of the true problems of political economy, the deductive school have devoted themselves to a fictitious solution of others which the ablest among them have nevertheless admitted to be insoluble. `If you place a man's ear within the ring of pounds, shillings, and pence, his conduct can be counted on to the greatest nicety,' according to Mr. Lowe. Mr. Cairnes on the other hand, as we have seen, concurs with Mr. Milk that positive, unconditional conclusions are beyond the reach of the economist, since he does not take into account, or even know, all the forces at work, much less can measure them with precision. An entire lecture in Mr. Caines' `Logical Method of Political Economy' is devoted to proof that quantitative exactness is unattainable in the science, and that its conclusions being only hypothetically true, and representing only several tendencies `in the absence of disturbing causes,' ought not to affect the semblance of numerical exactness. Mr. Lowe s proposition is nevertheless true in the sense that the deductive system does affect the power not only of absolute prediction but of prediction with mathematical accuracy. Take any treatise following the deductive method, and it will be found to consist mainly of propositions respecting wages, profit, prices, rent, and taxation, which profess to determine with arithmetical exactness on whom a given tax, say on a box of lucifer matches, will fall, how much it will add to the price of the box, and what profit both the manufacturer and the retailer will net on its advance. In a previous article(6) the present writer has exposed the fallacies involved in the whole chain of reasoning, and shown that it cannot be foreseen whether a trader will ever recover a so-called indirect tax at all; that it may be a direct tax on himself, may drive him and all other small capitalists from the business, and ultimately give a lucrative monopoly instead of `average profit' to a few great capitalistshalf-a-dozen distillers and brewers, for example. The deductive theory of wages, profits, prices, rent, and taxation, is substantially a set of predictions respecting the distribution of wealth, which affect to foretell exactly the gain in every business, and the rates at which goods of every kind may be .sold. It has been well said that before predicting the future, we must learn to predict the past; and before predicting the past, it might be added, we should learn to predict the present, by studying the forces at work in the world around us, the conditions under which they operate, and their actual results. A striking instance of the failure of the deductive economist to predict even the present, is Mr. M'Culloch's assertion in several editions of the `Wealth of Nations' that the local inequalities of wages, of which Adam Smith spoke, had almost disappeared with the improvement in the means of communication. In point of fact, they had greatly increased; agricultural wages varying from 6s. to 16s. a-week when his first edition was published, and from 9s. to 22s. at the date of the last, varying, too, from causes which inductive investigation had enabled Adam Smith to discover, namely, the unequal local development of manufactures, commerce, the greater demand and competition for labour in some places than in others, and the obstacles to its migration.

The history of the last few years gives disastrous proof of the falsity of the predictions of both present and future involved in the theory of the equality of profits, which assumes that the gains in different employments can he foreseen with a close approximation to accuracy, and that competition accordingly keeps them nearly at a level. If there was a man in the country who might have been supposed capable of foresight in such matters, by reason of the widest information and great financial skill, it was Mr. Gladstone, when a few years ago he described the trade of the country as advancing by leaps and bounds. Did he see that they were leaps in the dark Did the capitalists who rushed into the businesses in which prices and profits were trebling see that they were bounds that would end in a fall on the other side? Have the capitalists in other businesses, who were heavily mulcted by the rise of coal and iron, recovered their losses `with average profit'? Adam Smith, reasoning from observation, rigorously and emphatically confined the tendency of profits to equality to long, established well-known trades in the same neighbourhood, unaffected by new discoveries, by speculation, fluctuations of credit, accident, or political events, carried on, not by directors and shareholders with other business to mind, but by persons whose sole occupations they were. In other words, from an induction he predicted inequality where the deductive economist predicts equality. Mr. Cairnes, indeed, though adhering to the general truth of the doctrine of equality, was of opinion that the new gold would, by its unequal distribution over different trades, disturb the level of profits for many years. The actual course of the distribution was, however, very different from that which a priori reasoning led him to predict, the chief rise of prices being in foreign countries, where railways, industrial progress, and the opening of the English market raised them suddenly from a low scale towards the English range.(7) The new gold was only one of many new conditions of modern trade. In an age of companies there is a very imperfect division of labour: credit and speculation have made trade a lottery, in which `the absurd presumption of every man in his own abilities, and the still more absurd presumption in his own good fortune,' of which Adam Smith speaks, have full play.

The recurrence of commercial crises alone defeats all attempts to predict the course of prices and profits, and would do so even if the doctrine of decennial cycles had a solid foundation; for if the periods of inflation and depression could be foretold, and the occurrence of each crisis timed with precision, the particular movements of credit, speculation, and prices, and the gains and losses in each business, could not. The theory of a decennial cycle, like that of the equality of profits, and the whole a priori system, with its seeming simplicity, symmetry, and roundness, owes its attractions to that idol of the tribe which, as Bacon says, leads the spirit of man to suppose and feign in nature a greater equality and uniformity than is in truth, and to mark the hits of his system, but not the misses. An ingenious attempt has lately been made to account for the imaginary decennial cycle by the supposition that about every ten years there is a change in the management of business through a younger generation taking the place of the older, as though the commercial world were composed of successive ranks of men born together at the beginning of successive decades, and all in each rank reaching sixty, and retiring together. But the commercial class, like the army, the bar, and the whole nation, is recruited with fresh blood every year, not only every tenth year. Lord Bacon himself showed a strong tendency to believe in both a political and an economical cycle, and supposed his own age of the world on the descent of the wheel, though he judiciously thought it `not good to look too long on these turning wheels of vicissitude, lest we become giddy.' Adam Smith, too, leaned to the notion of a code of nature regulating the movement of the economic world with perfect equality and uniformity. Perhaps, therefore, one need not wonder that Mr. Jevons, whose philosophical powers have enabled him to make real discoveries, should be fascinated by the idea of commercial cycles recurring with the regularity of astronomical phenomena, and traceable to astronomical causes. But one is driven to suspect that Mr. Lowe can never have made a discovery, when he argues that Adam Smith's method was wholly deductive, because in the `Wealth of Nations' he puts his conclusions first; supporting them afterwards by the instances which he deems most convincing, instead of setting before his readers a vast number of historical and statistical facts, and working out the principle which they establish under their eyes. A library would not contain the books he would have written, had he attempted to convey to other minds by such a method the knowledge he had himself reached by long and laborious investigation. A discoverer would be avoided like a pestilence or the ancient mariner, were he to relate all the steps by which he got to his journey's end, after many misfortunes and failures, it may be, and often burning his fingers in the crucible. Results, it is well said, not processes, are for the public eye. How little Adam Smith was disposed to publish all his processes appears from his direction to Hume, in 1773, to burn all the papers, with one exception, found in his house at his death, and from his own destruction of them a few days before his end. The advantage of the division of labourto which Mr. Lowe refers as a proof that he proceeded by assumption, because the number of examples he gives is smallwas not a new doctrine; but his chapter on its limitation by the extent of the market bears all the marks of wide research and induction. The work of induction in relation to the division of labour is, moreover, by no means complete. There are plain symptoms in modern economy of tendencies to an amalgamation, instead of a division, of occupations. And the most arduous problem respecting the separation of occupations has never even occurred to the deductive schoolnamely, What are the causes governing its actual course, determining the directions of the national energies, the employments of different classes and of both sexes, in different countries and ages?

The human being or `individual' from whose assumed tendencies the conclusions of the deductive system are drawn, and its predictions made, is a fiction, not a realitya personification of two abstractions, the desire of wealth and aversion for labourfeelings differing, as has been shown, in different countries, ages, and personsdiffering much, for example, in men and women. Mr. Bagehot felt so strongly the inapplicability of the assumptions of the system to the greater part of the world, that he actually limited political economy to England at its present state of commercial development, and to the male sex in England. Such a limitation involves a complete surrender of the position that the system is based on universal laws or principles of human nature; it involves also an admission that it is only by inductive investigation that we can determine what the actual economy of society is, and what the causes that govern its structure and movement. Enough has been said, too, to show that the fundamental assumptions of the deductive economist are really as fallacious in reference to modern Englishmen as to Frenchmen, Germans, Asiatics, or Africans. The economy of English society can, no more than that of any other nation, be explained by assuming that Englishmen are personifications of the love of wealth and ease. But this is only one of the fundamental shortcomings of the system Looking only to the assumed motives of individuals, it ignores altogether the collective agency of the community, through its. positive institutions as an organized political body or state, its history and traditions, and the social environment with which it encompasses every man and woman within it, from the cradle to the grave.

Adam Smith's philosophy was not, like the little system that pleases some of his successors, if I may use a Horatian phrase, `complete in itself, smooth, and round.'(8) There was, it is true, in his mind an ideal order of things which he called `natural,' as being that which would take place if certain tendencies of human nature were allowed to operate without interference. Even in this ideal world, however, he saw that there must be laws relating to property, succession, tenure, and other subjects, although, in accordance with both the political and the theological philosophy of his time, there was a `natural' type to which these institutions ought to conform. Mr. Macleod has urged, on behalf of confining the scope of political economy to commercial exchange, that the `distribution' of wealth contemplated by the French Physiocrates was that effected by exchange, or by the process of distribution as distinguished from that of production. The Physiocrates, it may be observed, were not the first to use the term in this sense; it was so employed by English writers on commerce a hundred years earlier. But one might as reasonably exclude all agencies save water from geology on the ground that Werner did not take them into account, as limit the investigations of the economist to the mode of distribution taken cognizance of in either the seventeenth or the eighteenth century, in either England or France. The very word `distribution,' moreover, which Adam Smith applies in his first book to the partition effected by exchange, is in his third book applied to that effected by succession; though in both cases we may perceive the influence of the ideal code of nature on his opinions and language. Long before his time, indeed, the term was applied to the distribution of wealth by law, as the Statute of Distributions shows. He sets before us both the `natural,' as he called the ideally best, order of things, and the actual order resulting from positive institutions, historical events, and the constitution of human nature with its various and conflicting propensities; among which, as he points out, the love of dominion is apt to prevail over the desire of gain. The third book of the `Wealth of Nations' is mainly an investigation into the action and reaction of political and economic history, the progress of agriculture, manufactures, and commerce, and of the different classes of society in both country and town, until out of mediaeval Catholic and feudal Europe had issued the Europe of his own time with an economy moulded and fashioned by centuries. The word `evolution' had not come into use in Adam Smith's day, and social philosophers did not call the historical order of events the natural order, or the actual sequences resulting from the whole constitution of human society and the surrounding world the results of natural law: the word `Nature,' in their terminology, having a purely ideal meaning. Yet in substance Adam Smith shows that the economic condition of the nations of modern Europe was the outcome of a long historical evolution, and could not otherwise be accounted for or understood, although a better state of things, which in the language of his time he called the natural state, would have resulted from better human government and institutions. Whoever compares the last three books of the `Wealth of Nations' with the announcement, at the end of the `Theory of Moral Sentiments,' of the author's intention `in another discourse to give an account of the general principles of law and government, and of the different revolutions they have undergone in different ages and periods of society, not only in what concerns justice, but in what concerns police, revenue, arms, and whatever else is the subject of law,' will find evidence that political economy was not the only branch of political science in which Adam Smith had advanced beyond Plato, in whose days Mr. Lowe affirms that knowledge in all other branches of moral and political philosophy came to a standstill. Adam Smith saw that `the revolutions of law and government' had followed a determinable order; that the whole movement of society, including even that of positive law, was subject to law in the scientific sense of regular and intelligible sequence; and that the economic state of a nation at every period of its history was only a particular aspect of the whole social development. This is the fundamental conception on which the Science of Society rests, although the modern social philosopher calls the actual succession of social phenomena the natural one, while Adam Smith used the word `natural' in a different sense.

`In love, or war, or politics, or religion, or morals,' Mr. Lowe argues, `it is impossible to foretell how men will act, and therefore it is impossible to reason deductively;' whereas, `in matters connected with wealth, deviations arising from other causes than the desire of it maybe neglected without perceptible error.' The truth is that all these causeswar, love, religion, morals, and politicsdo profoundly influence the conduct and condition of mankind in relation to wealth, and the economic structure of society. It is one of Mr. Buckle's incorrect generalizations that in the middle ages there were but two engrossing pursuitswar and religionand only two professions the church and the army. It is, on the other hand, a no less superficial philosophy that overlooks the influence of war and religion on the economy of modern Europe, the occupations of its inhabitants, and the nature, amount, distribution, and consumption of their productions. At no period of the middle ages was so large a proportion of the population of the Continent trained to war as at the present day. An immense part of the wealth of modern Europe, England included, consists of weapons, warlike structures and stores, and the appliances of armies and fleets. What would be the worth of a treatise deducing the economy of Germany from the assumption that every man is occupied solely in the acquisition of wealth, `the actual deviations being so slight that they may be treated as practically non-existent?' Were astronomers able to discover certain indications of human life in another planet, on Mr. Lowe's principle we should know all that need interest or could instruct us respecting the economy of the planetary world from `the two ruling passions of mankindwealth and ease.' Would not the questions arise :` Does war exist, and if so, is every man a soldier, or is there a distinct military profession?' `Have the inhabitants of the planet any religion, and if so, is there a wealthy priesthood?' `Are the institutions of marriage and the family established?' `What are the checks to the increase of population?' `Is land held in common, or does private property in it exist?' `What are the laws and customs with respect to succession?' `Have the people of this planet the same kinds of wealth as those of the earth, and have different countries in it different kinds, as in our own world?' It has been shown that the mundane economist possesses no such powers of prediction as Mr. Lowe ascribes to him, just because politics, war, religion, morals, and love, do all powerfully affect human conduct in matters connected with wealth. Nevertheless, the philosophy of society is not so undeveloped that no regular sequence or natural law is discoverable in these very influences, or prediction altogether impossible in relation to them. It can be foretold, with a close approximation to accuracy, how many marriages there will be between the 1st of January, 1879, and the next census. A well-known economist is said to maintain that marriage is nothing but a commercial contract; but Edmund Burke's complaint that the age of chivalry was gone, and that of economists and calculators had succeeded, was not quite so well grounded. Love, chivalrous sentiment, morals, religion, do still deeply affect marriage, even among a nation of shopkeepers; and it is because they do that we can nearly foretell the number of such unions, and the number of children born and reared. We should be altogether without data for calculating the advance of population, the supply of labour, the movement of rent, the accumulation of capital, and its distribution by marriage and succession as well as exchange, if men and women, or even men alone, were influenced by no other than mercantile motives.

The economic structure of any given community, the direction taken by national energies, the occupations of the different classes and of both sexes, the constituents and the partition of movable and immovable property, the progressive, stationary, or retrogressive condition in respect of productive power and the quantity and quality of the necessaries, comforts, and luxuries of life, are the results not of special economic forces, but of all the social forces, political, moral, and intellectual, as well as industrial. The very wants and aims summed up in `the desire of wealth' arise not from innate, original, and universal propensities of the individual man, but from the community and its history. Hunger and thirst, desire of shelter from cold and heat, are probably the only forms of the economic impulse that a human being isolated altogether from social influences would feel. The very kinds of food sought in civilized society are determined by a long national history, and are not the same in England and France. The predominant form which the love of wealth takes in the last country is, as already said, the love of landed property, a form non-existent in primitive humanity, and which in civilized countries is so much the result of national history, that it is extinct in our own as a motive to labour and thrift on the part of the nation at large, though once widely diffused through all classes in both country and town.

Political economy is thus a department of the science of society which selects a special class of social phenomena for special investigation, but for this purpose must investigate all the forces and laws by which they are governed. The deductive economist misconceives altogether the method of isolation permissible in philosophy. In consequence of the limitation of human faculties, not that the narrowing of the field is in itself desirable or scientific, it is legitimate to make economic phenomena, the division of labour, the nature, amount, and distribution of national riches, the subject of particular examination, provided that all the causes affecting them be taken into account. To isolate a single force, even if a real force and not a mere abstraction, and to call deductions from it alone the laws of wealth, can lead only to error, and is radically unscientific. The development of the positive law of a nation, for example, is in all its bearings on industry, commerce, accumulation, and the distribution of property, a subject demanding the economist's investigation. The primitive ownership of things in common, the evolution of the separate possession of both chattels and land; of slavery, serfdom, and free labour; the changes in the law of intestate succession; the growth of the testamentary power, and of the law of contract in its different forms, are at once jural and economic facts, which the jurist regards from one point of view and the economist from another. The field of human society is so large and complex, man's capacity so limited, that it is by a number of investigations in relation to different aspects of the subject, that the science of society, as a whole, is most likely to be advanced, and its ultimate generalizations and laws at last reached. The history of political economy is a warning against all attempts to reach them per saltum, and to construct at once a complete and symmetrical system. A radical error with respect to the history of both science in general, and political economy in particular, lies at the root of Mr. Lowe's notion, that `science means knowledge in its clearest and most absolute form, the test of which is prediction'; and that the fabric of economic science, under the hand of Adam Smith, `rose up, like Jonah's gourd, in a single night.' If science meant only knowledge in its clearest and most absolute form, no science could have a beginning or a youth: it must spring into life fully grown and armed, like Minerva from the head of Jove; and only a science founded, like deductive political economy, on fiction, could do so. Had political economy grown up, like Jonah's gourd, in a night, it would like it have perished in a day, and could not have borne the light. A long line of inquirers had preceded Adam Smith, to some of whom he has acknowledged his debt. Nearly a century before the publication of the `Wealth of Nations,' Dudley North, himself a merchant, had expounded the policy of commercial liberty, going on some points even beyond his illustrious successor. Adam Smith's own language respecting the French economists answers a question raised by Auguste Comte's remark, that he made no pretence of founding a new and special science of wealth. He did not pretend to be its founder, but he did regard such a science as not only founded, but far advanced, by Quesnay and his followers, whose system of political economy he describes as, `with all its imperfections, the nearest approach to perfection that had yet been made in that important science.' At the same time,, like his French contemporaries, he regarded it as a branch of a wider science, which they called Physiocratie, or the science of the government and laws of nature, and which he called Moral Philosophy.

Science is patient and progressive, never, therefore, reaching perfection; its essence consists in a right method of investigation more than in the extent of its progress. The same misconception that leads Mr. Lowe to admire the a priori political economy, with its fictitious completeness, symmetry, and exactness, and to deny a science of society, because it is yet in an inchoate state, shows itself in his assertion that no more is known now in psychology, morals, or politics, than was known in the days of Plato. No such realistic abstraction as the `Ideas of Plato' now deludes the psychologist, though something akin to it lingers in the deductive economist's notion of `the desire of wealth.' The association of ideas is a psychological law which alone places mental philosophy far beyond the point it had reached with the Greeks; and the change in the course of social progress, on the one hand, and the inheritance, on the other, of cerebral qualities can hardly be known to Mr. Lowe, or he could not refuse to admit a great recent advance in our knowledge of the laws of the human mind. In the science of law and politics the superiority of Adam Smith himself over Plato is evident. His remarks on the Athenian tribunals show that he could have saved Pericles from a blunder which not only deprived Athens of a system of jurisprudence, but did much to corrupt and undermine the State; yet Plato failed to discover it, though its consequences were under his eyes, and the constitution of courts was one of the subjects that engaged his attention. And the perception of revolutions in law and government following a regular sequence, and evolving successive economic as well as political states, to which Adam Smith attained, not only never dawned on Plato's mind, but may be said in itself to be a long step towards the foundation of a true science of society. The attempt to raise a prejudice against such a science, on account of the difficulty of naming it otherwise than sociology, a compound of Latin and Greek, is not only captious and frivolous, but displays an extraordinary forgetfulness of scientific nomenclature. To say nothing of the admission of such combinations in Germany, the fatherland of philology, in words such as Socialpolitik, English philosophical terminology itself abounds in them. Natural philosophy, moral philosophy, are names compounded of Latin and Greek, which, according to German usage, would be written in one word, like Socialpolitik; and the term `natural law' is a mixture of Latin and English. One wonders, indeed, that Mr. Lowe, who is so shocked at sociology, does not shudder at the name of Adam Smith, as a combination, not from cognate tongues like Latin and Greek, but from Hebrew and English.

Yet, although neither the objection that sociology has not attained to the perfection of astronomy, nor that it is a hybrid word, is entitled to a serious consideration, it would be a grave error to regard it as otherwise than a science still in its infancy. Its students should take warning from the history of political economy against hasty induction, and attempts to rise at once to the deductive stage. Two men of extraordinary genius, Auguste Comte and Herbert Spencer, though differing considerably on some points, have struck out some luminous generalizations and aperçus; but great circumspection and caution are needed in their application: they cannot safely be made to support trains of deduction, still less can they be treated as constituting the supreme inductions and fundamental laws of a science of society. Mr. Spencer's theorem, for example, that `a movement from the homogeneous to the heterogeneous characterizes all evolution,' in both the physical and the social world, is true in a number of instances; and he has connected it with verae causae, with ascertained natural forces and conditions, indubitably creating diversity where there had been similarity, and evolving new kinds and species of phenomena. Yet it is not a universal law, or an invariable truth from which inferences respecting the course of social development can with certainty be drawn.(9) The movement of language, law, and political and civil union, is for the most part in an opposite direction. In a savage country like Africa, speech is in a perpetual flux, and new dialects spring up with every swarm from the parent hive. In the civilized world the unification of language is rapidly proceeding; probably no Celtic tongue will be spoken in any part of Europe, Brittany or Wales not excepted, in a few generations. The diversities of English speech were so great four hundred years ago, that Caxton found them a great obstacle to printing; four hundred years hence the same English will be spoken over half the globe, and will have few competitors, there is reason to believe, over the other half. The movement of political organization is similar; already Europe has nearly consolidated itself into a Heptarchy, the number of States into which England itself was once divided; and the result of the American war exemplifies the prevalence of the forces tending to homogeneity over those tending to heterogeneity. Two systems of civil law, againthe French and the Englishnow extend over a great part of the civilized world; and Sir Henry Maine has established many grounds for the proposition that `all laws, however dissimilar in their infancy, tend to resemble each other in their maturity.' In customs and fashion civilized society is likewise advancing towards uniformity. Once every rank, profession, and district had a distinctive garb; now all such distinctions, save with the priest and the soldier, have almost disappeared among men; and among women the degree of outlay and waste is becoming almost the only distinction in dress throughout the West. In the industrial world a generation ago a constant movement towards a differentiation of employments and functions appeared; now some marked tendencies to their amalgamation have begun to disclose themselves. Joint- stock companies have almost effaced all real division of labour in the wide region of trade within their operation. Improvements in communication are fast eliminating intermediate trades between producers and consumers in international commerce; and the accumulation and combination of capital, and new methods of business, are working the same result in wholesale and retail dealing at home. Many of the things for sale in a village huckster's shop were formerly the subjects of distinct branches of business in a large town; now the wares in which scores of different retailers dealt are all to be had in great establishments in New York, Paris, and London, which sometimes buy direct from the producers, thus also eliminating the wholesale dealer. These changes are among the causes that baffle the supposed prevision on which the doctrine of the equality of profits rests.

In the early stages of social progress, again, a differentiation takes place, as Mr. Spencer has observed, between political and industrial functions, which fall to distinct classes: now a man is a merchant in the morning and a legislator at night; in mercantile business one year, and the next perhaps head of the navy, like Mr. Goschen or Mr. W. H. Smith. There is even a strong tendency to sink the representative into the delegate, and to give every male householder a direct and immediate part in the government of the country. Improvements in both manufactures and the art of war seemed to Adam Smith, with good reason, to necessitate a separation between the military and industrial occupations: now every able-bodied man is a soldier -on the Continent. And here one of Auguste Comte's great generalizations also comes into question. Were a tendency to division of labour and differentiation of functions still to display itself on all sides, it would not give us a fundamental law determining the directions of human energies and their actual occupations. To take the case of another planet inhabited by human beings, astronomers might conceivably discover marks of a diversity of employments, and yet get no clue to the nature or course of the division of labour. We should need to know, for example, whether war and religion had any influence on their occupations. One of Comte's inductions affords an example of the kind of fundamental law needed to give us an insight into the causes and directions of the movement. Theology and war, according to Comte, are the ruling powers governing, in the early stages of society, human energies and employments; science and industry the chief powers in the more advanced stages. Undoubtedly the grounds on which this induction rests go to the root of the matter, and bring some great changes in the political, moral, and economic state of society under scientific law. Theology has long been a declining force,. and, though its indirect influence is still great, has now little direct control over the economic structure of Western society. But the military element is more powerful now in Europe, and its power rests on less accidental causes than in Auguste Comte's own day. The very improvements in manufacture and the military art which tended, in Adam Smith's view, to wean the mass of mankind from war, the very agencies represented by steam and gunpowder, to which Buckle triumphantly `traced its extinction in the civilized world, have brought nations so close together, and armed them with such deadly weapons, that every man may almost be said now to sleep with arms at his side, ready to do battle in the morning. Science and industry themselves, along with pacific tendencies, have others of the opposite character, both in the effects already referred to and in the higher pride, rivalry, ambition, and patriotism of nations,. developed by intellectual and industrial progress. When Buckle pointed to the Russians as the only warlike people in Europe, except the Turks, because the least civilized, they were really a most unwarlike people under a warlike government. Now a military spirit is fast rising among them. Who shall say, too, that when the people of the United States have fully assimilated their present territory, and are at the same time brought into close proximity to the old world, their energies may not take a military direction for a time? `The Americans,' said Tocqueville, `have no neighbours, consequently no great wars to fear; they have almost nothing to dread from military glory.' When they are within four days of Europe they may find they have neighbours beyond sea; but, without crossing it, the whole continent north and south of the isthmus may tempt their ambition. Although a fundamental truth underlies the generalization referred to, it is not, then, a law from which deductions can be made. There are, moreover, diversities in the course of social evolution in different countries, which must be closely investigated before the sociologist can be in a condition to lay down universal canons; and after these are reached, much will remain for inquiry respecting the special development of particular races and nations.

A science of society thus does not exist in the sense of `knowledge in its clearest and most absolute form, of which the test is prediction.' That, however, is not a scientific definition of science, and the sociologist may answer it with Bacon's words, prudens interrogatio dirnidium scientiae. Nor is it the science of society in its entirety only that is yet in its youth, and has a long and arduous future before it; it is so also with the department of it relating to the economic condition of mankind in different countries and ages. The labourer in this field, too, must go to work in a modester frame of mind than that of `the Political Economist,' as he called himself in capitals, of twenty years ago. Mr. Lowe arrogates `triumphs' for his own economic method: those he refers to were achieved by the opposite method of reasoning from observation and experience. But the scientific spirit is not a triumphant and boastful one, fired with a sort of intellectual Chauvinism, seeking polemical distinction and a path to promotion in the field of party war. A cavalry officer of the period before the Crimean War, when that branch of the army was distinguished by the glory of a moustache, used to say that no man could conceive the pitch to which human conceit could soar unless he had served in a light dragoon regiment. He was, however, mistaken. There was a being yet more elate with a sense of superiority over his fellow-creatures in the economist who had Bastiat at his fingers' ends, and who looked on political economy as a weapon by which he could discomfit political adversaries, and on free trade as a personal triumph; though he had as much claim to renown for it as a passenger in a Cunard steamer to the fame of Columbus.

Some of the earlier economistsAdam Smith, Malthus, Tooke, and John Millhad a true claim to honour and reputation as discoverers. But the generalizations and conceptions that do credit to one period may discredit the next, just as it would disgrace the navigators of our time to follow the same course, and sail in the same kind of ship, as Columbus. The deductive economists of the present generation have contented themselves with the repetition of doctrines and formulas which once caused the light of science to dawn where all had been confusion and darkness. Clouds of abstraction and a priori reasoning nearly extinguished the promise of day; but fresh light is beginning to break. A few years ago Mr. Ingram's Address could hardly have been delivered, and the `orthodox' economist, who now receives it with sullen respect, would have scoffed at it. it is suggested, indeed, by way of diminishing its effect, that its author is a follower of Auguste Comte; but it expresses the views of many who, like the present writer, are not, however highly some of them, like him, may think of Comte's genius.


1. 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 Century, November, 1878, entitled `Recent Attacks on Political Economy,' by the Right Hon. Robert Lowe, M.P. (Lord Sherbrooke).

2. `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 Inquiry into the Nature and Progress of Rent, a work abounding in original ideas.'Ricardo's Works, M'Culloch's ed., p. 374. Compare the preface to Ricardo's Principles of Political Economy and Taxation.

3. Village Communities in the East and West. Third Edition, p. 232.

4. Logical Method of Political Economy, p. 49.

5. Logical Method of Political Economy, p. 76.

6. `The Incidence of Imperial and Local Taxation on the Working Classes.' Fortnightly Review, February 1st, 1874.

7. An example of this was cited lately by the eminent French economist, M. Leroy-Beaulieu, in the Économiste Français, from statistics compiled by Mr. Newmarch, showing that between 1830 and 1870 the price of corn fell 14 per cent. in England, while it rose 17 per cent, in France, 88 per cent, in Belgium, 133 per cent, in Hungary, 142 per cent. in Austria.

8. `In se ipso totus, teres atque rotundus.'HOR.

9. [In an article published in the Academy of October 23rd, 1880, Mr. Leslie wrote as follows `The movement of society, designated by Mr. Herbert Spencer as from " the homogeneous to the heterogeneous," is highly important in its economic aspects; and the present writer acknowledges that Mr. Spencer's recent reply"(Appendix to First Principles, dealing with criticisms)"to some comments of his own on the doctrine so formulated is in the main substantially just and sufficient.']