value, which is supposed to be a simple and obvious attribute of wealth, Adam Smith had already exposed one fundamental ambiguity,1 and had lost his way in another; 2 Ricardo had discovered and Mill had expressed other distinctions; but the conception of value was still misty until Cournot and the mathematicians applied their analysis. Long before this point was reached common thought was again left behind. Common thought, for example, has no more accurate conception of things in general' than of a thing in itself.' 3 6 Even labour was not left to bear its natural and obvious meaning, whatever that may be. The first of the notes and dissertations, appended to M'Culloch's edition of the Wealth of Nations, is entitled, Of the Definition of Labour.' By passing with the apparent authority of Adam Smith from labouring men to labouring cattle, and without that authority from labouring cattle to labouring machines and natural agents, labour becomes at last any action that tends to bring about any desirable result,' and thus would include, inter alia, the fermentation of wine in the cask. Similar difficulties arise when labour is regarded, -to make use of terms which suggest of themselves the divergence from common thought, not from the objective, but from the subjective, point of view. Adam Smith himself has declared that the greater part of people understand better what is meant by a quantity of a particular commodity than by a quantity of labour, and that the one is a plain, palpable object, and the other an abstract notion, not altogether so natural and obvious. And the notion appears altogether the reverse of natural and obvious when it is briefly described as disutility, or negative utility. 1 Value in use and value in exchange. 2 Real and nominal price. "By the price of a thing we shall henceforth understand its value in money; by the value, or exchange value of a thing, its general power of purchasing; the command which its possession gives over purchasable commodities in general."- MILL. Sacrifice, the last word in Mill's definition, wealth being held only to include those things which cannot be obtained in sufficient abundance without labour or sacrifice, naturally suggests the abstinence of the capitalist. This well-chosen expression of Mr. Senior, as Mill phrases it, has given rise to a keen controversy, which is still raging. Thus, on analysis, the traditional economic definition of wealth is discovered to contain elements which apparently require more explanation than the concrete reality, just as man himself, who in ordinary life is regarded as a common sort of body with a common sort of soul, without any shadow of mystery, is proved, on examination, to be a creature intricate and wonderful enough to furnish materials for many sciences and religions. It will, however, be found, that in certain parts of the subject this familiar conception of wealth is not only adequate, but is better adapted for the argument than an amalgamation of technical notions, since much of political economy requires rather practical wisdom than scientific. research. From the modern standpoint there is not a single accurate scientific definition in the whole of Adam Smith's work, yet, both for the science of political economy and for the economic policy of nations, Adam Smith has done far more than any of his successors. It would be a grave misfortune if, in striving after technical correctness and scientific analysis, the concrete realities of earlier writers were neglected. At the same time it must be acknowledged that, for other purposes, the most rigorous scientific statement is requisite; in some cases, indeed, whether we like it or not, our ideas and methods must be essentially mathematical, although, it may be, only in the most general way, and without requiring any symbolical statement. And, as might be expected, in the different. departments of political economy, different stress is laid upon the different constituent elements of wealth. In Consumption, for example, utility, in Production, labour, in Distribution, appropriation, and in Exchange, value, are, in turn, of fundamental importance, although in most cases they also overlap, because the division into departments is logical and hypothetical rather than actual and positive. § 4. Political Economy as a Science. Some preliminary discussion of the nature of political economy as a science seems requisite on two grounds; in the first place to make clear the meaning of the much-abused phrase, "laws of political economy," and, secondly, to point out what methods are appropriate for the discovery of these laws. For the purpose in hand it is convenient to follow Mill and divide the sciences into two great groups, those, namely, which have to do primarily with laws of mind, the moral or mental sciences in the widest sense of the terms, and those which are primarily concerned with matter and only indirectly with mental phenomena, and which may, for contradistinction, be called the physical, or natural, sciences. This division is not intended to be sharp and exclusive, nor is the object so much to make a classification as to bring out the salient characteristics of political economy by comparing and contrasting it with other sciences. The real distinction between the two groups is found mainly in the adjustment of emphasis. Thus psychology itself may be studied in some respects from the physiological side. Again, natural philosophy may treat of sounds and notes as vibrations of a certain kind, and yet may be of service to the science of music which is concerned with the mental phenomena which correspond to these physical manifestations. Until recently there was no question that political economy should be placed in the moral or mental group, and the reasoning of Mill and Cairnes was accepted as obvious and conclusive. On this view political economy deals with men as possessing certain mental and moral characteristics; its fundamental notions are desire, effort, satisfaction not matter, motion, energy. -- In certain parts of the subject, however, it is allowed that physical facts are of great importance. Thus, in the department of production, certain general and even special characteristics of the forces and gifts of nature demand investigation, as, for example, in considering the relation of population to the food supply, the conditions favourable, or the reverse, to petite culture, the physical disadvantages of production on a large scale in manufactures, and the influence of climate upon race and accumulation. In the other departments, also, physical facts are often of importance, as in some of the arguments in support of protection, and again in the attempt to discover in sun-spots, or other natural phenomena, the basis of inflations and depressions of trade. It would be easy to multiply examples, but in all it would be found that the end in view is not the mere statement of these physical facts, but their connexion. with men as mental and moral agents. Wealth itself cannot be regarded simply as consisting of things, but must always be considered with an expressed, or implied, reference to human wants. The practical men in the first half of this century, who narrowed the teaching of Adam Smith to a few simple dogmas, in many cases overlooked the human element in wealth. Recently attempts have been made, or rather announced as about to be made, to connect political economy with the general theory of evolution, and more especially with biology. The ideas at the root of evolution are, no doubt, capable of application to economic problems, especially to those which have to do with the progress of society; but apart from this regulative or suggestive function, evolution is only of service when based upon special evidence. The rise and decay of the guilds, for example, and of many other economic institutions, may be compared to the growth and degeneration of organisms, and may be described to some extent in similar phraseology. But there is no general theory which can be an adequate, or, indeed, anything but a delusive, substitute for an appeal to facts. Evolution a priori is nothing better than a hasty and easy anticipation of nature. Again, although man is an animal, and as such falls under the sphere of the biological sciences, biology has about as much to do with political economy as with constitutional history. No manipulation of biological ideas and phrases can bring us in sight of economic problems, such as the rate of interest, the incidence of taxation, the level of prices. Nothing has been so fatal to the progress of the sciences generally as the use of inappropriate conceptions. Medicine made very slow advances as a branch of demonology, and astronomy as a branch of æsthetics; and in the mental and moral sciences to attempt to express mind in terms of matter is to go wrong at the beginning. The moral sciences may again be divided according as they discuss the individual in isolation, or combinations of individuals in societies, though here, also, the division rests mainly upon an adjustment of emphasis. Psychology may be taken as an example of the former, though, in the treatment of the emotions, for instance, it departs in some respects from the individual standpoint, whilst jurisprudence is placed in the social group, though, in some problems, it deals mainly with the individual. It is easy to conceive of a science of wealth which would take the individual as central and discuss the mental and moral characteristics involved in the acquisition and expenditure of wealth; but the term political implies that in political economy man is considered as a member of a state, or, at least, of an industrial society. Sometimes, no doubt, it is convenient to isolate the individual for certain purposes of abstract theory; but such isolation is properly only preliminary and hypothetical. The economic man on his desert island may occasionally be of service in this way, but it is generally dangerous to construct any social science a priori from the individual.1 1 Compare the criticism of recent developments of the theory of utility. Infra, Bk. I., Ch. III. |