Page:The American Cyclopædia (1879) Volume XIII.djvu/693

 POLITICAL ECONOMY 673 tionate return ; or in other words, though with every increase of the labor bestowed the aggre- gate return is increased, the increase of the re- turn is not in proportion to the increase of la- bor. Mr. Senior belonged, as can be seen, to the school of Ricardo and Malthus, and believed with them in the limited powers of the earth, although in reality he took issue with Malthus in the consideration of his theory of population. No English writer on political economy du- ring the present century has attracted more attention or been regarded as higher author- ity than John Stuart Mill. He defines it to be "the science which treats of the produc- tion and distribution of wealth, so far as they depend upon the laws of human nature ; or the science relating to the moral or psycho- logical laws of the production and distribu- tion of wealth." Again he says: "Political economy may be defined as follows, and the definition seems to be complete : The science which traces the laws of such of the phe- nomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object." Political economy is "essentially an abstract science," and its method "is the a priori" "It reasons," he contends, and "must ne- cessarily reason, from assumptions, not from facts." " The conclusions of political econo- my, consequently, like those of geometry, are only true, as the common phrase is, in the ab- stract." "That which is true in the abstract is always true in the concrete with proper al- lowances." Not only " the method a priori is the legitimate mode of philosophical investi- gation in the moral sciences," but " it is the only mode." The a posteriori method, or that of specific experience, " is altogether ineffica- cious," although it may be " usefully applied in aid of the a priori. 11 Therefore, " since it is vain to hope that truth can be arrived at, either in political economy or in any other de- partment of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavor to elicit a general law by a process of induction from a comparison of details, there remains no other method than the a priori one, or that of abstract specula- tion." " In all the intercourse of man with nature," proceeds Mr. Mill, " whether we con- sider him as acting upon it or as receiving im- pressions from it, the effect or phenomenon depends upon causes of two kinds, the proper- ties of the object acting and those of the ob- ject acted upon. Everything which can pos- sibly happen, in which man and external things are jointly concerned, results from the joint operation of the law or laws of matter, and the law or laws of the human mind." "^ There are no phenomena," he continues, " which de- pend exclusively upon the laws of mind ; even the phenomena of the mind itself being par- tially dependent upon the physiological laws of the body." Mr. Mill acknowledges that " the laws of the production of objects which constitute Wealth are the subject matter both of political economy and of almost all the physical sciences;" but he considers that po- litical economy "presupposes all the physical sciences," and adds that " it takes for granted that the physical part of the process takes place somehow." In other words, it matters not to political economy why, how, or under what circumstances these laws of matter oper- ate. Mr. Mill's design in writing his " Princi- ples of Political Economy " was to produce " a work similar in its object and general concep- tion to that of Adam Smith; to exhibit the economical phenomena of society in the rela- tion in which they stand to the best social ideas of the present time." He was a full be- liever in the views of Locke, Montesquieu, Hume, and Smith in regard to money ; in those of Ricardo on rent, and Malthus on population. He combats with much energy "protection- ism," but holds that there is one, and only one case, "in which, on mere principles of politi- cal economy, protecting duties can be defensi- ble;" that is, "when they are imposed tem- porarily (especially in a young and rising na- tion), in hopes of naturalizing a foreign indus- try, in itself perfectly suitable to the circum- stances of the country." Mill was long among the ablest and most distinguished supporters of the wage-fund theory, which, stated by him so lately as May, 1869, in the " Fortnightly Re- view," is briefly as follows : " There is supposed to be, at any given instant, a sum of wealth which is unconditionally devoted to the pay- ment of wages of labor. This sum is not re- garded as unalterable, for it is augmented by saving, and increases with the progress of wealth ; but it is reasoned upon as at any given moment a predetermined amount. More than that amount it is assumed that the wages- receiving class cannot possibly divide among them ; that amount, and no less, they cannot but obtain. So that, the sum to be divided being fixed, the wages of each depend solely on the divisor, the number of participants." This theory, with Mill as its especial defend- er, was very vigorously attacked in 1866 by Francis D. Longe, a London barrister, in a pamphlet entitled " A Refutation of the Wage- Fund Theory of Modern Political Economy " (2d ed., 1869). In 1869 W. T. Thornton pub- lished a volume "On Labor, its Wrongful Claims and Rightful Dues," in which he also assailed the wage-fund theory, but, as is be- lieved, by no means so ably as Longe had done. Mill, in the magazine article above cited, entirely recanted his belief in the the- ory on the ground that Thornton had com- pletely refuted it. But Prof. Cairnes, among other English economists, has refused to ac- cept the acknowledgment of Mill as evidence of the falsity of the theory. A careful exam- ination of this theory will show that it is but an elaboration of the doctrine of Adam Smith