THE MONTHLY REVIEW. FEBRUARY, 1826. ART. I. 1. The Principles of Political Economy, with a Sketch of the don. 1825. 2. A Discourse delivered at the opening of the City of London Literary and Scientific Institution, 30th May, 1825. By J. R. McCulloch, Esq. 8vo. pp. 30. London, Richardson. 1825. THERE is no study that is more perplexing, or from which one rises with less satisfaction, than Political Economy. No matter with what temper one commences it, or what portion of cool, patient, and persevering diligence one pursues it, he is almost sure to be disheartened by difficulties which start up at every step, and appear the more insuperable the more narrowly they are examined. Since the publication of the "Wealth of Nations" great facilities have been afforded, for proving and perfecting the theories of Dr. Smith. Men of undoubted talents have availed themselves of the greatest commercial convulsions, and the most sudden transitions in public affairs, that any people ever experienced, to elucidate his deductions, and correct his errors; and yet it is impossible not to perceive that they have in many instances obscured or rendered more problematical, what it was their object to simplify and establish. It is no conclusive argument, certainly, against the truth of a science, that its numerous professors are at variance regarding some of its subordinate doctrines, but it evinces something like prima facie evidence of immaturity, when scarcely any two of them are agreed upon any one elemental principle. This is tacitly admitted by the author whose works we propose to examine. He says, Since the science has become an object of more general attention and enquiry, the differences which have subsisted among the most eminent of its professors have proved exceedingly unfavourable to its progress, and have generated a disposition to distrust its best established conclusions." VOL. I. NO. II. were The work of Dr. Smith, although it exhibited the research of an acute mind, and an extensive practical knowledge of the principles of trade and commerce, did not, as has been imagined, invent any new theory of wealth. He did little more than give to preconceived notions the advantage of luminous arrangement. The same principles had been repeatedly enforced by writers who preceded him, and by none with greater clearness than the celebrated Locke, in an age when manufactures were comparatively in their infancy, and when agriculture was held to be the chief if not primary source of wealth. Our ancestors in their simplicity supposed that the indigenous products of the soil, such at least as formed the staple aliment of the people, infinitely more valuable than those of exotic growth, not that the soil rendered them so, not that they were more valuable in exchange, but because they considered domestic cultivation to be the only sure basis of national independence. Dr. Smith first taught that our ancestors were in error, and that it was the interest of a country to confine itself to that trade or occupation in which it excelled, and purchase its food at the cheapest market. He nevertheless ascribed a certain value to the soil, and considered agriculture to be the most useful and advantageous pursuit. Not so his followers. They assign to a nation no boundaries; they recognise no separate interests among different states; they attach no value to the sun, the soil, or the climate; with them the mountain-peaks of Argyleshire are equally valuable as the plains of Kent; they assume that the passions of men are universally subservient to the narrow objects of selfishness; and affirm that that employment, which yields the highest profits, is the most conducive to national prosperity. (Principles, &c. p. 163.) As the science therefore has become more popular, it has become more complicated. The doctrines of Smith have been subjected to so much logical refinement that they are scarce intelligible. His system has been so analysed, and so undermined, that were he to rise from the grave he would not find in modern political economy a single trace of the theory he founded; and we question much if, with all his erudition, he would be able to comprehend the scholastic phraseology in which his simple inductions are clothed, or unravel the paradoxes which are employed to illustrate them. Whatever proposition it was the object of Smith to establish or controvert, he never sought to hide the weakness of his argument in ambiguous language. He may be prolix, but we never misapprehend his meaning. His conclusions are drawn with a perspicuity and tact, which are rarely imitated. We may doubt his facts, we may reject his deductions, we may even impugn his theory, without any fear of exposing ourselves to the charge of having all the while misunderstood his argument. But who can affirm this of the works of Say, Sismondi, Malthus, Ricardo, Mill, or Lord Lauderdale? In almost every page of these we stumble on something that is obscure, periphrastical, or contradictory. We are bewildered in ascertaining whether the conclusion we have acceded to, and the fact we are disposed to admit, be those which it is the aim of the author's reasoning to establish. We find the translator correcting the author; the pupil criticising the master; the one calling cause effect, and the other effect cause. The explanations which are given by one writer of the doctrines of another, are found frequently to have reference to the casual implications only of the original; and, oftentimes, when we turn up the text-book which is appealed to, and on which no inconsiderable research has been expended, and no little dependence placed, we are astonished to find the reasoning distorted and the facts misapplied.* Amid this discordancy of opinion relative to a science which one would think as susceptible of perfection as any other, that of pure mathematics excepted, we are happy to see an attempt made to regulate its limits and define what are now its doctrines. If from this chaos of jarring sentiments light do not arise, we shall at least perhaps be enabled to grope our way with more safety in the dark. Should Mr. M'Culloch fail in conducting us out of the labyrinth, it will be gratifying if he is able to point out some of the obstacles which beset us. If undivided attention to a subject can render it familiar to the mind, and thereby be the means of simplifying its intricacies, we ought to expect this much from him. Political Economy has been nearly his exclusive study for many years. It has been the theme of almost all his literary and preceptorial efforts; and if he do not stand at the head of its professors, it has not been from a slight or mere desultory dedication of his time and talents to its mysteries. Several of our contemporaries have long borne witness, if not to the brilliancy of his midnight lamp, at least to its continual use; and since his appearance in the metropolis as a public lecturer, if his discourses have not acquired for him the laurels which his friends might have hoped, they have certainly given rise to new and we trust valuable institutions, and have attracted the attendance of numerous auditories and many distinguished individuals. It is not assuming too much, therefore, when we view the present publications as contain * Mr. M'Culloch in his Principles, &c. quotes Locke to show that that great philosopher entertained nearly the same opinion that modern economists do respecting labour being the only source of wealth, when he says in his Essay on Civil Government, I think it will be but a very modest computation to say, that of the products of the earth useful to the life of man, nine tenths are the effects of labour.' Locke, indeed, assigned a still higher value to labour, and he did so upon just grounds; but however small the moiety he left to the credit of the soil, he was too discriminating an observer to say that it possessed none. His reserve, however, on this point, is with much self-complacency ascribed to his ignorance! ing his most matured opinions, and as being the recognised classbooks of the science. But a word as to the history of the works themselves. The first on our list is a' transcript of the article on Political Economy in the Supplement to the Enclyclopædia Britannica, which the author says he has extended and improved by the aids derived from subsequent reflection and the suggestions and criticisms of others.' The second is exactly what its title imports, and consists chiefly of excerpts from the former, rendered applicable to the concise nature of the address, and the occasion on which it was delivered. Our remarks shall, therefore, have reference to the first work only. Those who have paid any attention to the subject will at once recognise its leading terms. One section of the work treats of the Production of Wealth, the next of the Distribution of Wealth, and the last of Consumption of Wealth. Under these heads every branch of the science is discussed. The first question which this arrangement will naturally suggest to the student is,- What is wealth? He is first told what it is not. It is not earth nor water; it is neither sun nor soil. In short, it is not matter; and why? Because,' replies our author, matter is very rarely possessed of immediate and direct utility, and is consequently always destitute of value.' It is only,' he adds, by means of the labour which must be laid out in appropriating matter, and in fitting and preparing it for our use, that it acquires exchangeable value and becomes wealth.' (Principles, &c. p. 48.) 6 Thus is wealth' defined by the economists; or, in other words, this is their standard of the "measure of value." Let it be carefully recollected that this definition involves a principle, which is a fundamental one in the science, and from which a multiplicity of important corollaries proceed, the soundness of which depends, of course, on that of the premises from which they are deduced. If the definition be correct, it will bear a strict scrutiny; and if it be fallacious it will vitiate the whole system. It is our object to demonstrate that it is an erroneous one, that it is opposed to observation, and the conviction of our senses; and that to the innumerable absurdities into which it has led, and still leads those who have adopted it, may be mainly ascribed the tardy progress of the science, and the contradictory opinions of its adherents. If accumulated labour be wealth, and labour the only source of wealth, it is strange that we should be compelled to measure it inversely from any other substance. It is strange that it should uniformly possess the least value where it is most exerted, and that where the largest portion of it is expended it should be productive of the least share of wealth. If it were said that gold or corn was wealth, simple arithmetic would teach us that the more we possessed of either of these the greater would be the amount of our wealth. But if we adopt this hypothesis, that labour is the sole source of wealth, we are compelled to admit that it is valuable in an exactly opposite ratio. The corn that a farmer grows on an indifferent soil is seldom so valuable as that which is raised on the best soil, and yet if labour be the measure of value, the poorest soil must be held to be the most valuable, and the corn which it produces the most available in the accumulation of wealth! But, says the economist, the value of the article is measured by the highest standard, the most inferior soil; and the difference in the returns, between the good and the bad soil, forms what is called rent. This would be satisfactory and conclusive, if it could be shown that the different soils in question possessed originally an equal degree of fertility; for then we might conceive that the superior fertility of the first was the effect of labour; in which case we might comprehend how that which required the least share of labour in cultivating it, and accumulated the largest quantum of wealth, only did so apparently. We might conceive that the labour, which had formerly been expended in improving it, was a tax upon its present superior fertility to an amount exactly equivalent to the additional labour required to be expended on the inferior soil. But are we to reason on an impossibility? Are we to concede that all soils were originally equally prolific, merely to support a theory, when the experience of our senses tells us that the fact is otherwise? Ad It will perhaps be rejoined, that the difference in the value of the produce raised by the same amount of labour, does not arise from the increase or diminution of labour, but from the misapplication of it. We are told that restrictions on commerce may force inferior lands into cultivation, but that if trade were unshackled, and the markets of the world thrown open to the interchange of all the products of a country, inferior lands would not be cultivated, and consequently the price of commodities would not be regulated by monopoly but by the cost of their production. mitting this to be true to a certain extent, it nevertheless does not remove the objection as to the disparity of soils. It surely will not be affirmed, that if such restrictions did not prevail, only certain soils in every country, and these of a similar quality, would be cultivated. To what specific quality would the culture of corn, for instance, be restricted? For if the market is to be supplied from three or four qualities of land, the first producing thirty bushels per acre, the second twenty-eight, the third twenty-six, and the poorest twenty-four, it can never be said that the labour expended on the last, which is the measure of value for the whole, is misapplied because it is not a source of accumulative wealth. That labour cannot be misapplied which repays itself, and far less can it be a correct measure of value which has no relation to the thing measured. We cannot measure distance by weight. We cannot call that the source of wealth which is uniformly dependent on soils, |