Jean-Baptiste Say, Introduction to the Treatise on Political Economy (1803)

Jean Baptiste Say, A Treatise on Political Economy; or the Production, Distribution, and Consumption of Wealth, ed. Clement C. Biddle, trans. C. R. Prinsep from the 4th ed. of the French, (Philadelphia: Lippincott, Grambo & Co., 1855. 4th-5th ed. ).


A SCIENCE only advances with certainty, when the plan of inquiry and the object of our researches have been clearly defined; otherwise a small number of truths are loosely laid hold of, without their connexion being perceived, and numerous errors, without being enabled to detect their fallacy.

For a long time the science of politics, in strictness limited to the investigation of the principles which lay the foundation of the social order, was confounded with political economy, which unfolds the manner in which wealth is produced, distributed, and consumed. Wealth, nevertheless, is essentially independent of political organization. Under every form of government, a state, whose affairs are well administered, may prosper. Nations have risen to opulence under absolute monarchs, and have been ruined by popular councils. If political liberty is more favourable to the development of wealth, it is indirectly, in the same manner that it is more favourable to general education.

In confounding in the same researches the essential elements of good government with the principles on which the growth of wealth, either public or private, depends, it is by no means surprising that authors should have involved these subjects in obscurity, instead of elucidating them. Stewart, who has entitled his first chapter “Of the Government of Mankind,” is liable to this reproach; the sect of “Economists” of the last century, throughout all their writings, and J. J. Rousseau, in the article “Political Economy” in the Encyclopedie, lie under the same imputation.

Since the time of Adam Smith, it appears to me, these two very distinct inquiries have been uniformly separated, the term political economy2 being now confined to the science which treats of wealth, and that of politics, to designate the relations existing between a government and its people, and the relations of different states to each other.

The wide range taken into the field of pure politics, whilst investigating the subject of political economy, seemed to furnish a much stronger reason for including in the same inquiry agriculture, commerce and the arts, the true sources of wealth, and upon which laws have but an accidental and indirect influence. Thence what interminable digressions! If, for example, commerce constitutes a branch of political economy, all the various kinds of commerce form a part; and as a consequence, maritime commerce, navigation, geography—where shall we stop? All human knowledge is connected. Accordingly, it is necessary to ascertain the points of contact, or the articulations by which the different branches are united; by this means, a more exact knowledge will be obtained of whatever is peculiar to each, and where they run into one another.

In the science of political economy, agriculture, commerce and manufactures are considered only in relation to the increase or diminution of wealth, and not in reference to their processes of execution. This science indicates the cases in which commerce is truly productive, where whatever is gained by one is lost by another, and where it is profitable to all; it also teaches us to appreciate its several processes, but simply in their results, at which it stops. Besides this knowledge, the merchant must also understand the processes of his art. He must be acquainted with the commodities in which he deals, their qualities and defects, the countries from which they are derived, their markets, the means of their transportation, the values to be given for them in exchange, and the method of keeping accounts.

The same remark is applicable to the agriculturist, to the manufacturer, and to the practical man of business; to acquire a thorough knowledge of the causes and consequences of each phenomenon, the study of political economy is essentially necessary to them all; and to become expert in his particular pursuit, each one must add thereto a knowledge of its processes. These different subjects of investigation were not, however, confounded by Dr. Smith; but neither he, nor the writers who succeeded him, have guarded themselves against another source of confusion, here important to be noticed, inasmuch as the developments resulting from it, may not be altogether unuseful in the progress of knowledge in general, as well as in the prosecution of our own particular inquiry.

In political economy, as in natural philosophy, and in every other study, systems have been formed before facts have been established; the place of the latter being supplied by purely gratuitous assertions. More recently, the inductive method of philosophizing, which, since the time of Bacon, has so much contributed to the advancement of every other science, has been applied to the conduct of our researches in this. The excellence of this method consists in only admitting facts carefully observed, and the consequences rigorously deduced from them; thereby effectually excluding those prejudices and authorities which, in every department of literature and science, have so often been interposed between man and truth. But, is the whole extent of the meaning of the term, facts, so often made use of, perfectly understood?

It appears to me, that this word at once designates objects that exist, and events that take place; thus presenting two classes of facts: it is, for example, one fact, that such an object exists; another fact, that such an event takes place in such a manner. Objects that exist, in order to serve as the basis of certain reasoning, must be seen exactly as they are, under every point of view, with all their qualities. Otherwise, whilst supposing ourselves to be reasoning respecting the same thing, we may, under the same name, be treating of two different things.

The second class of facts, namely, events that take place, consists of the phenomena exhibited, when we observe the manner in which things take place. It is, for instance, a fact, that metals, when exposed to a certain degree of heat, become fluid.

The manner in which things exist and take place, constitutes what is called the nature of things; and a careful observation of the nature of things is the sole foundation of all truth.

Hence, a twofold classification of sciences; namely, those which may be styled descriptive, which arrange and accurately designate the properties of certain objects, as botany and natural history; and those which may be styled experimental, which unfold the reciprocal action of substances on each other, or in other words, the connexion between cause and effect, as chemistry and natural philosophy. Both departments are founded on facts, and constitute an equally solid and useful portion of knowledge. Political economy belongs to the latter; in showing the manner in which events take place in relation to wealth, it forms a part of experimental science.3

But facts that take place may be considered in two points of view; either as general or constant, or as particular or variable. General facts are the results of the nature of things in all analogous cases; particular facts as truly result from the nature of things, but they are the result of several operations modified by each other in a particular case. The former are not less incontrovertible than the latter, even when apparently they contradict each other. In natural philosophy, it is a general fact, that heavy bodies fall to the earth; the water in a fountain, nevertheless, rises above it. The particular fact of the fountain is a result wherein the laws of equilibrium are combined with those of gravity, but without destroying them.

In our present inquiry, the knowledge of these two classes of facts, namely, of objects that exist and of events that take place, embraces two distinct sciences, political economy and statistics.

Political economy, from facts always carefully observed, makes known to us the nature of wealth; from the knowledge of its nature deduces the means of its creation, unfolds the order of its distribution, and the phenomena at tending its destruction. It is, in other words, an exposition of the general facts observed in relation to this subject. With respect to wealth, it is a knowledge of effects and of their causes. It shows what facts are constantly conjoined with; so that one is always the sequence of the other. But it does not resort for any further explanations to hypothesis: from the nature of particular events their concatenations must be perceived; the science must conduct us from one link to another, so that every intelligent understanding may clearly comprehend in what manner the chain is united. It is this which constitutes the excellence of the modern method of philosophizing.

Statistics exhibit the amount of production and of consumption of a particular country, at a designated period; its population, military force, wealth, and whatever else is susceptible of valuation. It is a description in detail.

Between political economy and statistics there is the same difference as between the science of politics and history.

The study of statistics may gratify curiosity, but it can never be productive of advantage when it does not indicate the origin and consequences of the facts it has collected; and by indicating their origin and consequences, it at once becomes the science of political economy. This doubtless is the reason why these two distinct sciences have hitherto been confounded. The celebrated work of Dr. Adam Smith can only be considered as an immethodical assemblage of the soundest principles of political economy, supported by luminous illustrations; of highly ingenious researches in statistics, blended with instructive reflections; it is not, however, a complete treatise of either science, but an irregular mass of curious and original speculations, and of known demonstrated truths.

A perfect knowledge of the principles of political economy may be obtained, inasmuch as all the general facts which compose this science may be discovered. In statistics this never can be the case; this latter science, like history, being a recital of facts, more or less uncertain, and necessarily incomplete. Of the statistics of former periods and distant countries, only detached and very imperfect accounts can be furnished. With respect to the present time, there are few persons who unite the qualifications of good observers with a situation favourable for accurate observation. The inaccuracy of the statements we are compelled to have recourse to, the restless suspicions of particular governments, and even of individuals, their ill-will and indifference, present obstacles often in surmountable, notwithstanding the toil and care of inquirers to collect minute details with exactness; and which after all, when in their possession, are only true for an instant. Dr. Smith accordingly avows, that he puts no great faith in political arithmetic; which is nothing more than the arrangement of numerous statistical data.

Political economy, on the other hand, whenever the principles which constitute its basis are the rigorous deductions of undeniable general facts, rests upon an immoveable foundation. General facts undoubtedly are founded upon the observation of particular facts; but upon such particular facts as have been selected from those most carefully observed, best established, and witnessed by ourselves. When the results of these facts have uniformly been the same, the cause of their having been so satisfactorily demonstrated, and the exceptions to them even confirming other principles equally well established, we are authorised to give them as ultimate general facts, and to submit them with confidence to the examination of all competent inquirers, who may be again desirous of subjecting them to experiment. A new particular fact, when insulated, and the connexion between its antecedents and consequents not established by reasoning, is not sufficient to shake our confidence in a general fact; for who can say that some unknown circumstance has not produced the difference noticed in their several results? A light feather is seen to mount in the air, and sometimes remain there for a long time before it falls back to the ground. Would it not, nevertheless, be erroneous to conclude that this feather is not affected by the universal law of gravitation? In political economy it is a general fact, that the interest of money rises in proportion to the risk run by the lender of not being repaid. Shall it be inferred that this principle is false, from having seen money lent at a low rate of interest upon hazardous occasions? The lender may have been ignorant of the risk, gratitude or fear may have induced sacrifices, and the general law, disturbed in this particular case, will resume its entire force the moment the causes of its interruption have ceased to operate. Finally, how small a number of particular facts are completely examined, and how few among them are observed under all their aspects? And in supposing them well examined, well observed, and well described, how many of them either prove nothing, or directly the reverse of what is intended to be established by them.

Hence, there is not an absurd theory, or an extravagant opinion that has not been supported by an appeal to facts;4 and it is by facts also that public authorities have been so often misled. But a knowledge of facts, without a knowledge of their mutual relations, without being able to show why the one is a cause, and the other a consequence, is really no better than the crude information of an office-clerk, of whom the most intelligent seldom becomes acquainted with more than one particular series, which only enables him to examine a question in a single point of view.

Nothing can be more idle than the opposition of theory to practice! What is theory, if it be not a knowledge of the laws which connect effects with their causes, or facts with facts? And who can be better acquainted with facts than the theorist who surveys them under all their aspects, and comprehends their relation to each other? And what is practice5 without theory, but the employment of means without knowing how or why they act? In any investigation, to treat dissimilar cases as if they were analogous, is but a dangerous kind of empiricism, leading to conclusions never foreseen.

Hence it is, that after having seen the exclusive or restrictive system of commerce, a system founded on the opinion that one nation can only gain what another loses, almost universally adopted throughout Europe after the revival of arts and letters; after having seen taxation without intermission perpetually increasing, and in some countries extending itself to a most enormous amount; and after having seen these same countries become more opulent, more populous, and more powerful, than at the time they carried on an unrestricted trade, and were almost entirely exempt from public burdens, the generality of mankind have concluded that national wealth and power were attributable to the restraints imposed on the application of industry, and to the taxes levied from the incomes of individuals. Shallow thinkers have even pretended that this opinion was founded on facts, and that every different one was the offspring of a wild and disordered imagination.

It is, however, on the contrary, evident that the supporters of the opposite opinion embraced a wider circle of facts, and understood them much better than their opponents. The very remarkable impulse given, during the middle ages, to the industry of the free states of Italy and of the Hanse towns of the north of Europe, the spectacle of riches it exhibited in both, the shock of opinions occasioned by the crusades, the progress of the arts and sciences, the improvement of navigation and consequent discovery of the route to India, and of the continent of America, as well as a succession of other less important events, were all known to them as the true causes of the increased opulence of the most ingenious nations on the globe. And although they were aware that this activity had received successive checks, they at the same time knew that it had been freed from more oppressive obstacles. In consequence of the authority of the feudal lords and barons declining, the intercourse between the different provinces and states could no longer be interrupted; roads became improved, travelling more secure, and laws less arbitrary; the enfranchised towns, becoming immediately dependent upon the crown, found the sovereign interested in their advancement; and this enfranchisement, which the natural course of things and the progress of civilization had extended to the country, secured to every class of producers the fruits of their industry. In every part of Europe personal freedom became more generally respected; if not from a more improved organization of political society, at least from the influence of public sentiment. Certain prejudices, such as branding with the odious name of usury all loans upon interest, and attaching the importance of nobility to idleness, had begun to decline. Nor is this all. Enlightened individuals have not only remarked the influence of these, but of many other analogous facts; it has been perceived by them, that the decline of prejudices has been favourable to the advancement of science, or to a more exact knowledge of the immutable laws of nature; that this improvement in the cultivation of science has itself been favourable to the progress of industry, and industry to national opulence. From such an induction of facts they have been enabled to conclude, with much greater certainty than the unthinking multitude, that although many modern states in the midst of taxation and restrictions have risen to opulence and power, it is not owing to these restraints on the natural course of human affairs, but in spite of such powerful causes of discouragement. The prosperity of the same countries would have been much greater, had they been governed by a more liberal and enlightened policy.6

To obtain a knowledge of the truth, it is not then so necessary to be acquainted with a great number of facts, as with such as are essential, and have a direct and immediate influence; and, above all, to examine them under all their aspects, to be enabled to deduce from them just conclusions, and be assured that the consequences ascribed to them do not in reality proceed from other causes. Every other knowledge of facts, like the erudition of an almanac, is a mere compilation from which nothing results. And it may be remarked, that this sort of information is peculiar to men of clear memories and clouded judgments; men who declaim against the best established doctrines, the fruits of the most enlarged experience and profoundest reasoning; and whilst inveighing against system, whenever their own routine is departed from, are precisely those most under its influence, and who defend it with stubborn folly, fearful rather of being convinced, than desirous of arriving at certainty.

Thus, if from all the phenomena of production, as well as from the experience of the most extensive commerce, you demonstrate that a free intercourse between nations is reciprocally advantageous, and that the mode found to be most beneficial to individuals transacting business with foreigners, must be equally so to nations, men of contracted views and high presumption will accuse you of system. Ask them for their reasons, and they will immediately talk to you of the balance of trade; will tell you, it is clear that a nation must be ruined by exchanging its money for merchandise—in itself a system. Some will assert that circulation enriches a state, and that a sum of money, by passing through twenty different hands, is equivalent to twenty times its own value; others, that luxury is favourable to industry, and economy ruinous to every branch of commerce—both mere systems; and all will appeal to facts in support of these opinions, like the shepherd, who, upon the faith of his eyes, affirmed that the sun, which he saw rise in the morning and set in the evening, during the day traversed the whole extent of the heavens, treating as an idle dream the laws of the planetary world.

Persons, moreover, distinguished by their attainments in other branches of knowledge, but ignorant of the principles of this, are too apt to suppose that absolute truth is confined to the mathematics and to the results of careful observation and experiment in the physical sciences; imagining that the moral and political sciences contain no invariable facts or indisputable truths, and therefore cannot be considered as genuine sciences, but merely hypothetical systems, more or less ingenious, but purely arbitrary. The opinion of this class of philosophers is founded upon the want of agreement among the writers who have investigated these subjects, and from the wild absurdities taught by some of them. But what science has been free from extravagant hypotheses? How many years have elapsed since those most advanced have been altogether disengaged from system? On the contrary, do we not still see men of perverted understandings attacking the best established positions? Forty years have not elapsed since water, so essential to our very existence, and the atmosphere in which we perpetually breathe, have been accurately analyzed. The experiments and demonstrations, nevertheless, upon which this doctrine is founded, are continually assailed; although repeated a thousand times in different countries by the most acute and cautious experimenters. A want of agreement exists in relation to a description of facts much more simple and obvious than the most part of those in moral and political science. Are not natural philosophy, chemistry, botany, mineralogy, and physiology, still fields of controversy, in which opinions are combated with as much violence and asperity as in political economy? The same facts are, indeed, observed by both parties, but are classed and explained differently by each; and it is worthy of remark, that in these contests genuine philosophers are not arrayed against pretenders. Leibnitz and Newton, Linnæus and Jussieu, Priestley and Lavoisier, Desaussure and Dolomieu, were all men of uncommon genius, who, however, did not agree in their philosophical systems. But have not the sciences they taught an existence, notwithstanding these disagreements?7

In like manner, the general facts constituting the sciences of politics and morals, exist independently of all controversy. Hence the advantage enjoyed by every one who, from distinct and accurate observation, can establish the existence of these general facts, demonstrate their connexion, and deduce their consequences. They as certainly proceed from the nature of things as the laws of the material world. We do not imagine them; they are results disclosed to us by judicious observation and analysis. Sovereigns, as well as their subjects, must bow to their authority, and never can violate them with impunity.

General facts, or, if you please, the general laws which facts follow, are styled principles, whenever it relates to their application; that is to say, the moment we avail ourselves of them in order to ascertain the rule of action of any combination of circumstances presented to us. A knowledge of principles furnishes the only certain means of uniformly conducting any inquiry with success.

Political economy, in the same manner as the exact sciences, is composed of a few fundamental principles, and of a great number of corollaries or conclusions, drawn from these principles. It is essential, therefore, for the advancement of this science that these principles should be strictly deduced from observation; the number of conclusions to be drawn from them may afterwards be either multiplied or diminished at the discretion of the inquirer, according to the object he proposes. To enumerate all their consequences, and give their proper explanations, would be a work of stupendous magnitude, and necessarily incomplete. Besides, the more this science shall become improved, and its influence extended, the less occasion will there be to deduce consequences from its principles, as these will spontaneously present themselves to every eye; and being within the reach of all, their application will be readily made. A treatise on political economy will then be confined to the enunciation of a few general principles, not requiring even the support of proofs or illustrations; because these will be but the expression of what every one will know, arranged in a form convenient for comprehending them, as well in their whole scope as in their relation to each other.

It would, however, be idle to imagine that greater precision, or a more steady direction could be given to this study, by the application of mathematics to the solution of its problems. The values with which political economy is concerned, admitting of the application to them of the terms plus and minus, are indeed within the range of mathematical inquiry; but being at the same time subject to the influence of the faculties, the wants and the desires of mankind, they are not susceptible of any rigorous appreciation, and cannot, therefore, furnish any data for absolute calculations. In political as well as in physical science, all that is essential is a knowledge of the connexion between causes and their consequences. Neither the phenomena of the moral or material world are subject to strict arithmetical computation.8

These considerations respecting the nature and object of political economy, and the best method of obtaining a thorough knowledge of its principles, will supply us with the means of appreciating the efforts hitherto made towards the advancement of this science.

The literature of the ancients, their legislation, their public treaties, and their administration of the conquered provinces, all proclaim their utter ignorance of the nature and origin of wealth, of the manner in which it is distributed, and of the effects of its consumption. They knew, what has always been known wherever the right of property has been sanctioned by laws, that riches are increased by economy, and diminished by extravagance. Xenophon extols order, activity, and intelligence, as certain means of obtaining prosperity; but without deducing these maxims from any general law, or without being able to show the connexion between causes and their consequences. He advises the Athenians to protect commerce, and to receive strangers with kindness; yet so little was he aware to what extent this advice would be proper, that, upon another occasion, he expresses doubts whether commerce be really profitable to the republic.

Plato and Aristotle, it is true, notice some invariable relations between the different modes of production, and the results obtained from them. Plato sketches with tolerable fidelity,9 the effects of the separation of social employments; but it is simply with a view to illustrate man’s social character and the necessity he is in, from his multifarious wants, of uniting in extensive societies in which each individual may be exclusively occupied with one species of production. His view is entirely a political one; and he has deduced from it no other conclusion.

In his treatise on Politics, Aristotle goes farther. He distinguishes natural from artificial production. He styles natural, whatever creates those objects of consumption required by a family, or, at most, whatever is obtained by exchanges in kind. No other advantage, according to him, is derived from real production; artificial gain he condemns. Besides, he does not support these opinions by any reasoning founded upon accurate observation. From the manner in which he expresses himself in relation to the effect of savings and loans on interest, it is evident that he knew nothing of the nature and employment of capital.

What can we expect from nations still less advanced in civilization than the Greeks? We may recollect that a law of Egypt obliged the son to adopt the profession of his father. This, in certain cases, was to require the creation of a greater quantity of products than the particular state of society called for; to oblige an individual, in order to obey the law, to ruin himself, and to continue the exercise of his productive functions, whether in possession of capital or not; which is altogether absurd.10 The Romans, in treating every branch of industry, except agriculture (and we know not why,) with contempt, betray the same ignorance. Their pecuniary transactions must be numbered amongst their most unskillful operations.

The moderns, even after having freed themselves from the barbarism of the middle ages, have not for a very long time been more advanced. We shall have occasion to notice the stupidity of a multitude of laws relating to the Jews, to the interest of money, and to money itself. Henry IV. granted to his favourites and mistresses, as favours which cost him nothing, the permission to practise a thousand petty extortions, and to collect for their own benefit, from various branches of commerce, as many petty taxes. He authorized the count of Soissons to levy a duty of fifteen sous upon every bale of merchandise which should be exported from the kingdom.11

In every branch of knowledge, example has preceded precept. The fortunate enterprises of the Portuguese and Spaniards during the fifteenth century, the active industry of Venice, Genoa, Florence, Pisa, the provinces of Flanders, and the free cities of Germany at this same epoch, gradually directed the attention of some philosophers to the theory of wealth.

These inquiries, like almost every other in the arts and sciences, after the revival of letters, originated in Italy. As far back as the sixteenth century, Botero was engaged in investigating the real sources of public prosperity. In the year 1613, Antonio Serra composed a treatise, in which he particularly noticed the productive power of industry; but the title of his work sufficiently indicates its errors. Wealth, according to his hypothesis, consisted only of gold and silver.12Davanzati wrote upon money and upon exchange; and at the beginning of the eighteenth century, fifty years before the time of Quesnay, Bandini of Sienna had shown, both from reasoning and experience, that there never had been a scarcity of food, except in those countries where the government had itself interfered to supply the people. Belloni, a banker at Rome, in the year 1750, published a dissertation on commerce, evincing his intimate acquaintance with the nature of money and exchanges, although at the same time infected with the theory of the balance of trade. His labours were rewarded by the Pope with the title of marquess. Carli, before Dr. Smith, demonstrated that the balance of trade neither taught nor proved any thing. Algarotti, whose writings on other subjects Voltaire has made known, wrote also upon the science of political economy; and the little he has left exhibits the accuracy and extent of his knowledge, as well as his acuteness. He confines himself so strictly to facts, and so uniformly founds his speculations on the nature of things, that although he did not get possession of the proof of his principles, and of their relation to each other, he has, nevertheless, guarded himself against every thing like hypothesis and system. In 1764, Genovesi commenced a course of public lectures on political economy, in the chair founded at Naples by the care of the highly esteemed and learned Intieri. In consequence of this example, other professorships of political economy were afterwards established at Milan, and more recently in most of the universities in Germany and Russia.

In 1750, the abbé Galiani, so well known since from his connexion with many of the French philosophers, and by his Dialogues on the Corn Trade, although at that time a very young man, published a Treatise on Money, which discovered such uncommon talents and information, as to induce a belief that he had been assisted in the composition of his work by the abbé Intieri and the Marquess of Rinuccini. Its merits, however, appear to be of a description similar to those the author’s writings always afterwards displayed; genius united with erudition, carefulness in uniformly ascending to the nature of things; and an animated and elegant style.

One of the most striking peculiarities of this work, is its containing some of the rudiments of the doctrine of Adam Smith; among others, that labour is the sole creator of the value of things or of wealth;13 a principle although not rigorously true, as will be made manifest in the course of this work, but which, pushed to its ultimate consequences, would have put Galiani in the way of discovering and completely unfolding the phenomena of production. Dr. Smith, who was about the same time a professor in the university of Glasgow, and then taught this doctrine, which has since acquired so much celebrity, in all probability had no knowledge of a work in the Italian language, published at Naples by a young man then hardly known, and whom he has never quoted. But even had he known it, a truth cannot with so much propriety be said to belong to its fortunate discoverer, as to the inquirer who first proves that it must be so, and demonstrates its consequences. Although the existence of universal gravitation had been previously conjectured by Kepler and Pascal, the discovery does not the less belong to Newton.14

In Spain, Alvarez Osorio, and Martinez-de-mata, have delivered discourses on political economy, the publication of which we owe to the enlightened patriotism of Campomanes. Moncada, Navarette, Ustaritz, Ward, and Ulloa, have written on the same subject. These esteemed authors, like those of Italy, entertained many sound views, verified various important facts, and supplied a number of laborious calculations; but from their inability to establish them upon fundamental principles of the science, which were not then known, they have often been mistaken both as to the end as well as the means of prosecuting this study; amidst a variety of useless disquisitions, have only cast an uncertain and deceptive light.15

In France, the science of political economy, at first, was only considered in its application to public finances. Sully remarks correctly enough, that agriculture and commerce are the two teats of the state; but from a vague and indistinct conception of the truth. The same observation may be applied to Vauban, a man of a sound practical mind, and although in the army, a philosopher and friend of peace, who, deeply afflicted with the misery into which his country had been plunged by the vain-glory of Louis XIV., proposed a more equitable assessment of the taxes, as a means of alleviating the public burdens.

Under the influence of the regent, opinions became unsettled; bank-notes, supposed to be an inexhaustible source of wealth, were only the means of swallowing up capital, of expending what had never been earned, and of making a bankruptcy of all debts. Moderation and economy were turned into ridicule. The courtiers of the prince, either by persuasion or corruption, encouraged him in every species of extravagance. At this period, the maxim that a state is enriched by luxury was reduced to system. All the talents and wit of the day were exerted in gravely maintaining such a paradox in prose, or in embellishing it with the more attractive charms of poetry. The dissipation of the national treasures was really supposed to merit the public gratitude. The ignorance of first principles, with the debauchery and licentiousness of the duke of Orleans, conspired to effect the ruin of the kingdom. During the long peace maintained by cardinal Fleury, France recovered a little; the insignificant administration of this weak minister at least proving, that the ruler of a nation may achieve much good by abstaining from the commission of evil.

The steadily increasing progress of different branches of industry, the advancement of the sciences, whose influence upon wealth we shall have occasion hereafter to notice, and the direction of public opinion, at length estimating national prosperity as being of some importance, caused the science of political economy to enter into the contemplation of a great number of writers. Its true principles were not then known; but since, according to the observation of Fontenelle, our condition is such, that we are not permitted at once to arrive at the truth, but must previously pass through various species of errors and various grades of follies, ought these false steps to be considered as altogether useless, which have taught us to advance with more steadiness and certainty?

Montesquieu, who was desirous of considering laws in all their relations, inquired into their influence on national wealth. The nature and origin of wealth he should first have ascertained; of which, however, he did not form any opinion. We are, nevertheless, indebted to this distinguished author for the first philosophical examination of the principles of legislation; and, in this point of view, he, perhaps, may be considered as the master of the English writers, who are so generally esteemed as being ours; just in the same manner as Voltaire has been the master of their best historians, who now furnish us with models worthy of imitation.

About the middle of the eighteenth century, certain principles in relation to the origin of wealth, advanced by Doctor Quesnay, made a great number of proselytes. The enthusiastic admiration manifested by these persons for the founder of their doctrines, the scrupulous exactness with which they have uniformly since followed the same dogmas, and the energy and zeal they displayed in maintaining them, have caused them to be considered as a sect, which has received the name of economists. Instead of first observing the nature of things, or the manner in which they take place, of classifying these observations, and deducing from them general propositions, they commenced by laying down certain abstract general propositions, which they styled axioms, from supposing them to contain inherent evidence of their own truth. They then endeavoured to accommodate the particular facts to them, and to infer from them their laws; thus involving themselves in the defence of maxims evidently at variance with common sense and universal experience,16 as will appear hereafter in various parts of this work. Their opponents had not themselves formed any more correct views of the subjects in controversy. With considerable learning and talents on both sides, they were either wrong or right by chance. Points were contested that should have been conceded, and opinions, unquestionably false, acquiesced in; in short, they combated in the clouds. Voltaire, who so well knew how to detect the ridiculous, wherever it was to be found, in his Homme aux quarante ecus, satirised the system of the economists; yet, in exposing the tiresome trash of Mercer de la Riviere, and the absurdities contained in Mirabeau’s L’ami des Hommes, he was himself unable to point out the errors of either.

The economists, by promulgating some important truths, directing a more general attention to objects of public utility, and by exciting discussions, which, although at that time of no advantage, subsequently led to more accurate investigations, have unquestionably done much good.17 In representing agricultural industry as productive of wealth, they were not deceived; and, perhaps, the necessity they were in of unfolding the nature of production, caused the further examination of this important phenomenon, which conducted their successors to its entire development. On the other hand, the labours of the economists have been attended with serious evils; the many useful maxims they decried, their sectarian spirit, the dogmatical and abstract language of the greater part of their writings, and the tone of inspiration pervading them, gave currency to the opinion, that all who were engaged in such studies were but idle dreamers, whose theories, at best only gratifying literary curiosity, were wholly inapplicable in practice.18

No one, however, has ever denied that the writings of the economists have uniformly been favourable to the strictest morality, and to the liberty which every human being ought to possess, of disposing of his person, fortune, and talents, according to the bent of his inclination; without which, indeed, individual happiness and national prosperity are but empty and unmeaning sounds. These opinions alone entitle their authors to universal gratitude and esteem. I do not, moreover, believe that a dishonest man or bad citizen can be found among their number.

This doubtless is the reason why, since the year 1760, almost all the French writers of any celebrity on subjects connected with political economy, without absolutely being enrolled under the banners of the economists, have, nevertheless, been influenced by their opinions. Raynal, Condorcet, and many others, will be found among this number. Condillac may also be enumerated among them, notwithstanding his endeavours to found a system of his own in relation to a subject which he did not understand. Many useful hints may be collected from amidst the ingenious trifling of his work;19 but, like the economists, he almost invariably founds a principle upon some gratuitous assumption. Now, an hypothesis may indeed be resorted to, in order to exemplify and elucidate the correctness of an author’s general reasoning, but never can be sufficient to establish a fundamental truth. Political economy has only become a science since it has been confined to the results of inductive investigation.

Turgot was himself too good a citizen, not sincerely to esteem as good citizens as the economists; and accordingly, when in power, he deemed it advantageous to countenance them. The economists, in their turn, found their account in passing off so enlightened an individual and minister of state as one of their adepts; the opinions of Turgot, however, were not borrowed from their school, but derived from the nature of things; and although on many important points of doctrine he may have been deceived, the measures of his administration, either planned or executed, are amongst the most brilliant ever conceived by any statesman. There cannot, therefore, be a stronger proof of the incapacity of his sovereign, than his inability to appreciate such exertions, or if capable of appreciating them, in not knowing how to afford them support.

The economists not only exercised a particular sway over French writers, but also had a very remarkable influence over many Italian authors, who even went beyond them. Beccaria, in a course of public lectures at Milan,20 first analysed the true functions of productive capital. The Count de Verri, the countryman and friend of Beccaria, and worthy of being so, both a man of business and an accomplished scholar, in his Meditazione sull’ Economia politica, published in 1771, approached nearer than any other writer, before Dr. Smith, to the real laws which regulate the production and consumption of wealth. Filangieri, whose treatise on political and economical laws was not given to the public until the year 1780, appears not to have been acquainted with the work of Dr. Smith, published four years before. The principles de Verri laid down are followed by Filangieri, and even received from him a more complete development; but although guided by the torch of analysis and deduction, he did not proceed from the most fortunate premises to the immediate consequences which confirm them, at the same time that they exhibit their application and utility.

But none of these inquiries could lead to any important result. How, indeed, was it possible to become acquainted with the causes of national prosperity, when no clear or distinct notions had been formed respecting the nature of wealth itself? The object of our investigations must be thoroughly perceived before the means of attaining it are sought after. In the year 1776, Adam Smith, educated in that school in Scotland which has produced so many scholars, historians, and philosophers, of the highest celebrity, published his Inquiry into the Nature and Causes of the Wealth of Nations. In this work, its author demonstrated that wealth was the exchangeable value of things; that its extent was proportional to the number of things in our possession having value; and that inasmuch as value could be given or added to matter, that wealth could be created and engrafted on things previously destitute of value, and there be preserved, accumulated, or destroyed.21

In inquiring into the origin of value, Dr. Smith found it to be derived from the labour of man, which he ought to have denominated industry, from its being a more comprehensive and significant term than labour. From this fruitful demonstration he deduced numerous and important conclusions respecting the causes which, from checking the development of the productive powers of labour, are prejudicial to the growth of wealth; and as they are rigorous deductions from an indisputable principle, they have only been assailed by individuals, either too careless to have thoroughly understood the principle, or of such perverted understandings as to be wholly incapable of seizing the connexion or relation between any two ideas. Whenever the Inquiry into the Wealth of Nations is perused with the attention it so well merits, it will be perceived that until the epoch of its publication, the science of political economy did not exist.

From this period, gold and silver coins were considered as only constituting a portion, and but a small portion, of national wealth; a portion the less important, because less susceptible of increase, and because their uses can be more easily supplied than those of many other articles equally valuable; and hence it results that a community, as well as its individual members, are in no way interested in obtaining metallic money beyond the extent of this limited demand.

These views, we conceive, first enabled Dr. Smith to ascertain, in their whole extent, the true functions of money, and the applications of them, which he made to bank-notes and paper money, are of the utmost importance in practice. They afforded him the means of demonstrating, that productive capital does not consist of a sum of money, but in the value of the objects made use of in production. He arranged and analyzed the elements of which productive capital is composed, and pointed out their true functions.22

Many principles strictly correct had often been advanced prior to the time of Dr. Smith;23 he, however, was the first author who established their truth. Nor is this all. He has furnished us, also, with the true method of detecting errors; he has applied to political economy the new mode of scientific investigation, namely, of not looking for principles abstractedly, but by ascending from facts the most constantly observed, to the general laws which govern them. As every fact may be said to have a particular cause, it is in the spirit of system to determine the cause; it is in the spirit of analysis, to be solicitous to know why a particular cause has produced this effect, in order to be satisfied that it could not have been produced by any other cause. The work of Dr. Smith is a succession of demonstrations, which has elevated many propositions to the rank of indisputable principles, and plunged a still greater number into that imaginary gulph, into which extravagant hypotheses and vague opinions for a certain period struggle, before being forever swallowed up.

It has been said that Dr. Smith was under heavy obligations to Stewart,24 an author whom he has not once quoted, even for the purpose of refuting him. I cannot perceive in what these obligations consist. In the conception of his subject, Dr. Smith displays the elevation and comprehensiveness of his views, whilst the researches of Stewart exhibit but a narrow and insignificant scope. Stewart has supported a system already maintained by Colbert, adopted afterwards by all the French writers on commerce, and steadily followed by most European governments; a system which considers national wealth as depending, not upon the sum total of its productions, but upon the amount of its sales to foreign countries. One of the most important portions of Dr. Smith’s work is devoted to the refutation of this theory. If he has not particularly refuted Stewart, it is from the latter not being considered by him as the father of his school, and from having deemed it of more importance to overthrow an opinion, then universally received, than to confute the doctrines of an author, which in themselves contained nothing peculiar.

The economists have also pretended, that Dr. Smith was under obligations to them. But to what do such pretensions amount? A man of genius is indebted to everything around him; to the scattered lights which he has concentrated, to the errors which he has overthrown, and even to the enemies by whom he has been assailed; inasmuch as they all contribute to the formation of his opinions. But when out of these materials he afterwards embodies enlarged views, useful to his contemporaries and posterity, it rather behoves us to acknowledge the extent of our own obligations, than to reproach him with what he has been supplied by others. Moreover, Dr. Smith has not been backward in acknowledging the advantages he had derived from his intercourse with the most enlightened men in France, and from his intimate correspondence with his friend and countryman Hume, whose essays on political economy, as well as on various other subjects, contain so many just views.

After having shown, as fully as so rapid a sketch will permit, the improvement which the science of political economy owes to Dr. Smith, it will not, perhaps, be useless to indicate, in as summary a manner, some of the points on which he has erred, and others which he has left to be elucidated.

To the labour of man alone he ascribes the power of producing values. This is an error. A more exact analysis demonstrates, as will be seen in the course of this work, that all values are derived from the operation of labour, or rather from the industry of man, combined with the operation of those agents which nature and capital furnish him. Dr. Smith did not, therefore, obtain a thorough knowledge of the most important phenomenon in production; this has led him into some erroneous conclusions, such, for instance, as attributing a gigantic influence to the division of labour, or rather to the separation of employments. This influence, however, is by no means inappreciable or even inconsiderable; but the greatest wonders of this description, are not so much owing to any peculiar property in human labour, as to the use we make of the powers of nature. His ignorance of this principle precluded him from establishing the true theory of machinery in relation to the production of wealth.

The phenomena of production being now better known than they were in the time of Dr. Smith, have enabled his successors to distinguish, and to assign the difference found to exist, between a real and a relative rise in prices;25 a difference which furnishes the solution of numerous problems, otherwise wholly inexplicable. Such, for example, as the following: Does a tax, or any other impost, by enhancing the price of commodities, increase the amount of wealth?26The income of the producer arising from the cost of production, why is not this income impaired by a diminution in the cost of production? Now it is the power of resolving these abstruse problems which, nevertheless, constitutes the science of political economy.27

By the exclusive restriction of the term wealth to values fixed and realized in material substances, Dr. Smith has narrowed the boundary of this science. He should, also, have included under its values which, although immaterial, are not less real, such as natural or acquired talents. Of two individuals equally destitute of fortune, the one in possession of a particular talent is by no means so poor as the other. Whoever has acquired a particular talent at the expense of an annual sacrifice, enjoys an accumulated capital; a description of wealth, notwithstanding its immateriality, so little imaginary, that, in the shape of professional services, it is daily exchanged for gold and silver.

Dr. Smith, who with so much sagacity unfolds the manner in which production takes place, and the peculiar circumstances accompanying it in agriculture and the arts, on the subject of commercial production presents us with only obscure and indistinct notions. He, accordingly, was unable to point out with precision, the reason why, and the extent to which, facilities of communication are conducive to production.

He did not subject to a rigid analysis the different operations comprehended under the general name of industry, or as he calls it, of labour, and, therefore, could not appreciate the peculiar importance of each in the business of production.

His work does not furnish a satisfactory or well connected account of the manner in which wealth is distributed in society; a branch of political economy, it may be remarked, opening an almost new field for cultivation. The too imperfect views of economical writers respecting the production of wealth precluded them from forming any accurate notions in relation to its distribution.28

Finally, although the phenomena of the consumption of wealth are but the counterpart of its production, and although Dr. Smith’s doctrine leads to its correct examination, he did not himself develope it; which precluded him from establishing numerous important truths. Thus, by not characterizing the two different kinds of consumption, namely, unproductive and reproductive, he does not satisfactorily demonstrate, that the consumption of values saved and accumulated in order to form capital, is as perfect as the consumption of values which are dissipated. The better we become acquainted with political economy, the more correctly shall we appreciate the importance of the improvements this science has received from him, as well as those he left to be accomplished.29

Such are the principal imperfections of the Inquiry into the Nature and Causes of the Wealth of Nations, in relation to its fundamental doctrines. The plan of the work, or, in other words, the manner in which these doctrines are unfolded, is liable to no less weighty objections.

In many places the author is deficient in perspicuity, and the work almost throughout is destitute of method. To understand him thoroughly, it is necessary to accustom one’s self to collect and digest his views; a labour, at least in respect to some passages, he has placed beyond the reach of most readers; indeed, so much so, that persons otherwise enlightened, professing both to comprehend and admire his doctrines, have written on subjects he has discussed, namely, on taxes and bank-notes as supplementary to money, without having understood any part of his theory on these points, which, nevertheless, forms one of the most beautiful portions of his Inquiry.

His fundamental principles, too, are not established in the chapters assigned to their development. Many of them will be found scattered through the two excellent refutations of the exclusive or mercantile system and the system of the economists, but in no other part of the work. The principles relating to the real and nominal prices of things, are introduced into a dissertation on the value of the precious metals during the course of the last four centuries; and the author’s opinions on the subject of money are contained in the chapter on commercial treaties.

Dr. Smith’s long digressions, have, moreover, with great propriety, been much censured. An historical account of a particular law or institution as a collection of facts, is in itself, doubtless, highly interesting; but in a work devoted to the support and illustration of general principles, particular facts not exclusively applicable to these ends, can only unnecessarily overload the attention. His sketch of the progress of opulence in the different nations of Europe after the fall of the Roman empire, is but a magnificent digression. The same remark is applicable to the highly ingenious disquisition on public education, replete as it is with erudition and the soundest philosophy, at the same time that it abounds with valuable instruction.

Sometimes these dissertations have but a very remote connexion with his subject. In treating of public expenditures, he has gone into a very curious history of the various modes in which war was carried on by different nations at different epochs; in this manner accounting for military successes which have had so decided an influence on the civilization of many parts of the earth. These long digressions at times, also, are devoid of interest to every other people but the English. Of this description is the long statement of the advantages Great Britain would derive from the admission of all of her colonies into the right of representation in parliament.

The excellence of a literary composition as much depends upon what it does not, as upon what it does contain. So many details, although in themselves useful, unnecessarily encumber a work designed to unfold the principles of political economy. Bacon made us sensible of the emptiness of the Aristotelian philosophy; Smith, in like manner, caused us to perceive the fallaciousness of all the previous systems of political economy; but the latter no more raised the superstructure of this science, than the former created logic. To both, however, our obligations are sufficiently great, for having deprived their successors of the deplorable possibility of proceeding, for any length of time, with success on an improper route.30

We are, however, not yet in possession of an established text-book on the science of political economy, in which the fruits of an enlarged and accurate observation are referred to general principles, that can be admitted by every reflecting mind; a work in which these results are so complete and well arranged as to afford to each other mutual support, and that may everywhere, and at all times, be studied with advantage. To prepare myself for attempting so useful a task, I have thought it necessary attentively to peruse what had been previously written on the same subject, and afterwards to forget it; to study these authors, that I might profit by the experience of so many competent inquirers who have preceded me; to endeavour to obliterate their impressions, not to be misled by any system; and at all times be enabled freely to consult the nature and course of things, as actually existing in society. Having no particular hypothesis to support, I have been simply desirous of unfolding the manner in which wealth is produced, distributed, and consumed. A knowledge of these facts could only be acquired by observing them. It is the result of these observations, within the reach of every inquirer, that are here given. The correctness of the general conclusions I have deduced from them, every one can judge of.

It was but reasonable to expect from the lights of the age, and from that method of philosophizing which has so powerfully contributed to the advancement of other sciences, that I might at all times be able to ascend to the nature of things, and never lay down an abstract principle that was not immediately applicable in practice; so that, always compared with well established facts, any one could easily find its confirmation by at the same time discovering its utility.

Nor is this all. Solid general principles, previously laid down, must be noticed, and briefly but clearly proved, those which had not been laid down must be established, and the whole so combined, as to satisfy every one that no material omission has taken place, nor any fundamental point been overlooked. The science must be stript of many false opinions; but this labour must be confined to such errors as are generally received, and to authors of acknowledged reputation. For what injury can an obscure writer or a discredited dogma effect? The utmost precision must be given to the phraseology we employ, so as to prevent the same word from ever being understood in two different senses; and all problems be reduced to their simplest elements, in order to facilitate the detection of any errors, and above all, of our own. In fine, the doctrines of the science must be conveyed in such a popular31 form, that every man of sound understanding may be enabled to comprehend them in their whole scope of consequences, and apply their principles to all the various circumstances of life.

The position maintained in this work, that the value of things is the measure of wealth, has been especially objected to. This, perhaps, has been my fault; I should have taken care not to be misunderstood. The only satisfactory reply I can make to the objection, is to endeavour to give more perspicuity to this doctrine. I must, therefore, apologize to the owners of the former editions, for the numerous corrections I have made in the present It became my duty in treating of a subject of such essential importance to the general welfare, to give it all the perfection within my reach.

Since the publications of the former editions of this work, various authors, some of whom enjoy a well merited celebrity,32 have given to the world new treatises on political economy. It is not my province, either to pronounce upon the general character of these productions, or to decide whether they do, or do not, contain a full, clear, and well digested exposition of the fundamental principles of this science. This much I can with sincerity say, that many of these works contain truths and illustrations well calculated greatly to advance the science, and from the perusal of which I have derived important benefit. But, in common with every other inquirer, I am entitled to remark how far some of their principles, which at first sight appear to be plausible, are contradicted by a more cautious and rigid induction of facts.

It is, perhaps, a well founded objection to Mr. Ricardo, that he sometimes reasons upon abstract principles to which he gives too great a generalization. When once fixed in an hypothesis which cannot be assailed, from its being founded upon observations not called in question, he pushes his reasonings to their remotest consequences, without comparing their results with those of actual experience. In this respect resembling a philosophical mechanician, who, from undoubted proofs drawn from the nature of the lever, would demonstrate the impossibility of the vaults daily executed by dancers on the stage. And how does this happen? The reasoning proceeds in a straight line; but a vital force, often unperceived, and always inappreciable, makes the facts differ very far from our calculation. From that instant nothing in the author’s work is represented as it really occurs in nature. It is not sufficient to set out from facts; they must be brought together, steadily pursued, and the consequences drawn from them constantly compared with the effects observed. The science of political economy, to be of practical utility, should not teach, what must necessarily take place, if even deduced by legitimate reasoning, and from undoubted premises; it must show, in what manner that which in reality does take place, is the consequence of other facts equally certain. It must discover the chain which binds them together, and always, from observation, establish the existence of the two links at their point of connexion.

With respect to the wild or antiquated theories, so often produced, or reproduced by authors who possess neither sufficiently extensive nor well digested information to entitle them to form a sound judgment, the most effectual method of refuting them is to display the true doctrines of the science with still greater clearness, and to leave to time the care of disseminating them. We, otherwise, should be involved in interminable controversies, affording no instruction to the enlightened part of society, and inducing the uninformed to believe that nothing is susceptible of proof, inasmuch as everything is made the subject of argument and disputation.

Disputants, infected with every kind of prejudice, have, with a sort of doctorial confidence, remarked, that both nations and individuals sufficiently well understand how to improve their fortunes without any knowledge of the nature of wealth, and that this knowledge is in itself a purely speculative and useless inquiry. This is but saying that we know perfectly well how to live and breathe, without any knowledge of anatomy and physiology, and that these sciences are, therefore, superfluous. Such a proposition would not be tenable; but what should we say if it were maintained, and by a class of doctors, too, who, whilst decrying the science of medicine, should themselves subject you to a treatment founded upon antiquated empiricism and the most absurd prejudices; who, rejecting all regular and systematic instruction, in spite of your remonstrances, should perform upon your own body the most bloody experiments; and whose orders should be enforced with the weight and solemnity of laws, and, finally, carried into execution by a host of clerks and soldiers?

In support of antiquated errors, it has also been said, “that there surely must be some foundations for opinions, so generally embraced by all mankind; and that we ourselves ought rather to call in question the observations and reasonings which overturn what has been hitherto so uniformly maintained and acquiesced in by so many individuals, distinguished alike by their wisdom and benevolence.” Such reasoning, it must be acknowledged, should make a profound impression on our minds, and even cast some doubts on the most incontrovertible positions, had we not alternately seen the falsest hypotheses now universally recognized as such, everywhere received and taught during a long succession of ages. It is yet but a very little time, since the rudest as well as the most refined nations, and all mankind, from the unlettered peasant to the enlightened philosopher, believed in the existence of but four material elements. No human being had even dreamt of disputing the doctrine, which is nevertheless false; insomuch that a tyro in natural philosophy, who should at present consider earth, air, fire, and water, as distinct elements, would be disgraced.33 How many other opinions, as universally prevailing and as much respected, will in like manner pass away. There is something epidemical in the opinions of mankind; they are subject to be attacked by moral maladies which infect the whole species. Periods at length arrive when, like the plague, the disease wears itself out and loses all its malignity; but it still has required time. The entrails of the victims were consulted at Rome three hundred years after Cicero had remarked, that the two augurs could no longer examine them without laughter.

The contemplation of this excessive fluctuation of opinions must not, however, inspire us with a belief that nothing is to be admitted as certain, and thus induce us to yield up to universal scepticism. Facts repeatedly observed by individuals in a situation to examine them under all their aspects, when once well established and accurately described, can no longer be considered as mere opinions, but must be received as absolute truths. When it was demonstrated that all bodies are expanded by heat, this truth could no longer be called in question. Moral and political science present truths equally indisputable, but of more difficult solution. In these sciences, every individual considers himself not only as being entitled to make discoveries, but as being also authorized to pronounce upon the discoveries of others; yet how few persons acquire competent knowledge, and views sufficiently enlarged, to become assured that the subject upon which they thus venture to pronounce judgment is thoroughly understood by them in all its bearings. In society, one is astonished to find the most abstruse questions as quickly decided as if every circumstance, which, in any way, could and ought to affect the decision, were known. What would be said of a party passing rapidly in front of a large castle, that should undertake to give an account of every thing that is going on within?

Certain individuals, whose minds have never caught a glimpse of a more improved state of society, boldly affirm that it could not exist; they acquiesce in established evils, and console themselves for their existence by remarking, that they could not possibly be otherwise; in this respect reminding us of that emperor of Japan who thought he would have suffocated himself with laughter, upon being told that the Dutch had no king. The Iroquois were at a loss to conceive how wars could be carried on with success, if prisoners were not to be burnt.

Although, to all appearance, many European nations may be in a flourishing condition, and some of them annually expend from one to two hundred millions of dollars solely for the support of the government, it must not thence be inferred that their situation leaves nothing to be desired. A rich Sybarite, residing according to his inclination, either at his castle in the country, or in his palace in the metropolis, in both, at an enormous expense, partaking of every luxury that sensuality can devise, transporting himself with the utmost rapidity and comfort in whatever direction new pleasures invite him, engrossing the industry and talents of a multitude of retainers and servants, and killing a dozen horses to gratify a whim, may be of opinion that things go on sufficiently well, and that the science of political economy is not susceptible of any further improvement. But in countries said to be in a flourishing condition, how many human beings can be enumerated, in a situation to partake of such enjoyments? One out of a hundred thousand at most; and out of a thousand, perhaps not one who may be permitted to enjoy what is called a comfortable independence. The haggardness of poverty is everywhere seen contrasted with the sleekness of wealth, the extorted labour of some compensating for the idleness of others, wretched hovels by the side of stately colonnades, the rags of indigence blended with the ensigns of opulence; in a word, the most useless profusion in the midst of the most urgent wants.

Persons, who under a vicious order of things have obtained a competent share of social enjoyments, are never in want of arguments to justify to the eye of reason such a state of society; for what may not admit of apology when exhibited in but one point of view? If the same individuals were to-morrow required to cast anew the lots assigning them a place in society, they would find many things to object to.

Accordingly, opinions in political economy are not only maintained by vanity, the most universal of human infirmities, but by self-interest, unquestionably not less so; and which, without our knowledge, and in spite of ourselves, exercises a powerful influence over our mode of thinking. Hence the sharp and sour intolerance by which truth has been so often alarmed and obliged to retire; or which, when she is armed with courage, encompasses her with disgrace, and sometimes with persecution. Knowledge is at present so very generally diffused, that a philosopher may assert, without the risk of contradiction, that the laws of nature are the same in a world and in an atom; but a statesman who should venture to affirm, that there is a perfect analogy between the finances of a nation and those of an individual, and that the same principles of economy should regulate the management of the affairs of both, would have to encounter the clamours of various classes of society, and to refute ten or a dozen different systems.

Nor is this all. Writers are found who possess the lamentable facility of composing articles for journals, pamphlets, and even whole volumes, upon subjects, which, according to their own confession, they do not understand. And what is the consequence? The science is involved in the clouds of their own minds, and that is rendered obscure which was becoming clear. Such is the indifference of the public, that they rather prefer trusting to assertions than be at the trouble of investigating them. Sometimes, moreover, a display of figures and calculations imposes upon them; as if numerical calculations alone could prove any thing, and as if any rule could be laid down, from which an inference could be drawn without the aid of sound reasoning.

These are among the causes which have retarded the progress of political economy.

Everything, however, announces that this beautiful, and above all, useful science, is spreading itself with increasing rapidity. Since it has been perceived that it does not rest upon hypothesis, but is founded upon observation and experience, its importance has been felt. It is now taught wherever knowledge is cherished. In the universities of Germany, of Scotland, of Spain, of Italy, and of the north of Europe, professorships of political economy are already established. Hereafter this science will be taught in them, with all the advantages of a regular and systematic study. Whilst the university of Oxford proceeds in her old and beaten track,34 within a few years that of Cambridge has established a chair for the purpose of imparting instruction in this new science. Courses of lectures are delivered in Geneva and various other places; and the merchants of Barcelona have, at their own expense, founded a professorship on political economy. It is now considered as forming an essential part of the education of princes; and those who are called to that high distinction ought to blush at being ignorant of its principles. The emperor of Russia has desired his brothers, the grand dukes Nicholas35 and Michael, to pursue a course of study on this subject under the direction of M. Storch. Finally, the government of France has done itself lasting honour by establishing in this kingdom, under the sanction of public authority, the first professorship of political economy.

When the youths who are now students shall be scattered through all the various classes of society, and elevated to the principal posts under government, public affairs will be conducted in a much better manner than they hitherto have been. Princes as well as people, becoming more enlightened as to their true interests, will perceive that these interests are not at variance with each other; which on the one side will naturally induce less oppression, and on the other beget more confidence.

At present, authors who venture to write upon politics, history, and à fortiori upon finance, commerce, and the arts, without any previous knowledge of the principles of political economy, only produce works of temporary success, that do not succeed in fixing public attention.

But what has chiefly contributed to the advancement of political economy, is the grave posture of affairs in the civilized world during the last thirty years. The expenses of governments have risen to a scandalous height; the appeals which they have been obliged to make to their subjects, in order to relieve their exigencies, have disclosed to them their own importance. A concurrence of public sentiment, or at least the semblance of it, has been almost everywhere called for, if not brought about. The enormous contributions drawn from the people, under pretexts more or less specious, not even having been found sufficient, recourse has been had to loans; and to obtain credit, it became necessary for governments to disclose their wants as well as their resources. Accordingly, the publicity of the national accounts, and the necessity of vindicating to the world the acts of the administration, have in the science of politics produced a moral revolution, whose course can no longer be impeded.

The disorders and calamities incident to the same period, have also produced some important experiments. The abuse of paper money, commercial and other restrictions, have made us feel the ultimate effects of almost all excesses. And the sudden overthrow of the most imposing bulwarks of society, the gigantic invasions, the destruction of old governments and the creation of new, the formation of rising empires in another hemisphere, the colonies that have become independent, the general impulse given to the human mind, so favourable to the development of all its faculties, and the great expectations and the great mistakes, have all undoubtedly very much enlarged our views; at first operating upon men of calm observation and reflection, and subsequently upon all mankind.

It is to the facility of tracing the links in the chain of causes and effects that we must ascribe the great improvement in the kindred branches of moral and political science; and hence it is, when once the manner in which political and economical facts bear upon each other is well understood, that we are enabled to decide what course of conduct will be most advantageous in any given situation. Thus, for example, to get rid of mendicity, that will not be done which only tends to multiply paupers; and, in order to procure abundance, the only measures calculated to prevent it will not be adopted. The certain road to national prosperity and happiness being known, it can and will be chosen.

For a long time it was thought that the science of political economy could only possibly be useful to the very limited number of persons engaged in the administration of public affairs. It is undoubtedly of importance that men in public life should be more enlightened than others; in private life, the mistakes of individuals can never ruin but a small number of families, whilst those of princes and ministers spread desolation over a whole country. But, is it possible for princes and ministers to be enlightened, when private individuals are not so? This is a question that merits consideration. It is in the middling classes of society, equally secure from the intoxication of power, and the compulsory labour of indigence, in which are found moderate fortunes, leisure united with habits of industry, the free intercourse of friendship, a taste for literature, and the ability to travel, that knowledge originates, and is disseminated amongst the highest and lowest orders of the people. For these latter classes, not having the leisure necessary for meditation, only adopt truths when presented to them in the form of axioms, requiring no further demonstration.

And although a monarch and his principal ministers should be well acquainted with the principles upon which national prosperity is founded, of what advantage would this knowledge be to them, if throughout all the different departments of administration, their measures were not supported by men capable of comprehending and enforcing them? The prosperity of a city or province is sometimes dependent upon the official acts of a single individual; and the head of a subordinate department of government, by provoking an important decision, often exercises an influence even superior to that of the legislator himself. In countries blessed with a representative form of government, each citizen is under a much greater obligation to make himself acquainted with the principles of political economy; for there every man is called upon to deliberate upon public affairs.

Finally, in supposing that every person in any way connected with government, from the highest to the lowest, could be well acquainted with these principles, without the nation at large being so, which is wholly improbable, what resistance would not the execution of their wisest plans experience? What obstacles would they not encounter in the prejudices of those even who should most favour their measures?

A nation, in order to enjoy the advantages of a good system of political economy, must not only possess statesmen capable of adopting the best plans, but the population must be in a situation to admit of their application.36

It is also the way of avoiding doubts and perpetual changes of principles, which prevent our profiting even from whatever may be good in a bad system. A steady and consistent policy is an essential element of national prosperity; thus England has become more opulent and powerful than would seem to comport with her territorial extent, by an uniform and steadfast adherence to a system, even in many respects objectionable to her, of monopolizing the maritime commerce of other nations. But to follow for any length of time the same route, it is necessary to be able to choose one not altogether bad; unforeseen and insurmountable difficulties would otherwise have to be encountered, which would oblige us to change our course, without even the reproach of versatility.

It is, perhaps, to this cause we must attribute the evils which, for two centuries, have tormented France; a period during which she was within reach of that state of high prosperity she was invited to by the fertility of her soil, her geographical position, and the genius of her inhabitants. With no fixed opinions in relation to the causes of public prosperity, the nation, like a ship without chart or compass, was driven about by the caprice of the winds and the folly of the pilot, alike ignorant of the place of her departure or destination.37 A consistent policy in France would have extended its influence over many successive administrations; and the vessel of the state would at least not have been in danger of being wrecked, or exposed to the awkward manœuvres by which she has so much suffered.

Versatility is attended with such ruinous consequences, that it is impossible to pass even from a bad to a good system without serious inconvenience. The exclusive and restrictive system is without doubt vastly injurious to the development of industry, and to the progress of national wealth; nevertheless, the establishments which this policy has created could not be suddenly suppressed, without causing great distress.38 A more favourable state of things can only be brought about, without any inconvenience, by the gradual adoption of measures introduced with infinite skill and care. A traveller whose limbs have been frozen in traversing the Arctic regions, can only be preserved from the dangers of a too sudden cure, and restored to entire health, by the most cautious and imperceptible remedies.

The soundest principles are not at all times applicable. The essential object is to know them, and then such as are applicable or desirable can be adopted. There can be no doubt that a new community, which in every instance should consult them, would rapidly reach the highest pitch of opulence; but every nation may, nevertheless, in many respects violate them, and yet attain a satisfactory state of prosperity. The powerful action of the vital principle causes the human body to grow and thrive in spite of the accidents and excesses of youth, or of the wounds which have been inflicted on it. Absolute perfection, beyond which all is evil, and produces only evil, is nowhere found; evil is everywhere mixed with good. When the former preponderates, society declines; when the latter, it advances with more or less rapidity in the road of prosperity. Nothing, therefore, ought to discourage our efforts towards the acquisition and dissemination of sound principles. The least step taken towards the attainment of this knowledge is immediately productive of some good, and ultimately will yield the happiest fruits.

If, for the interest of the state, it is important that individuals should know what are the true principles of political economy, who will venture to maintain that the same knowledge will be useless to them in the management of their own private concerns? That money is readily earned without any knowledge of the nature or origin of wealth, I admit. For that purpose, a very simple calculation, within the reach of the rudest peasant, is all that is necessary: such an article will, including every expense. cost me so much: I shall sell it for so much, and, therefore, shall gain so much. Nevertheless, accurate ideas respecting the nature and growth of wealth, unquestionably afford us many advantages in forming a sound judgment of enterprises in which we are interested, either as principals or as parties. They enable us to foresee what these enterprises will require, and what will be their results; to devise the means of their success, and to establish our exclusive claims to them; to select the most secure investments, from anticipating the effects of loans and other public measures; to cultivate the earth to advantage, from accurately adjusting actual advances with probable returns; to become acquainted with the general wants of society, and thus be enabled to make choice of a profession; and to discern the symptoms of national prosperity or decline.

The opinion that the study of the science of political economy is calculated to be useful to statesmen only, fallacious as it is, has been attended with other disadvantages. Almost all the authors on this subject, until the time of Dr. Adam Smith, had imagined that their principal object was to enlighten the public authorities; and as they were far from agreeing among themselves, inasmuch as the facts, and their connexion and consequences, were but imperfectly known to them, and entirely overlooked by the multitude, it is by no means surprising that they should have been regarded as visionary dreamers in relation to the public good. Hence the contempt which men in power always affect towards everything like first principles.

But since the rigorous method of philosophizing, which in every other branch of knowledge leads to truth, has been applied to the investigation of facts, and to the reasonings founded on them, and the science of political economy has been thus confined to a simple exposition of whatever takes place in relation to wealth, it no longer attempts to offer counsel to public authorities. Should they, however, be desirous of ascertaining the good or evil consequences likely to result from any favourite project, they may consult this science, exactly as they would consult hydraulics upon the construction of a pump or sluice. All that can be required from political economy is to furnish governments with a correct representation of the nature of things, and the general laws necessarily resulting from it. Perhaps, until such views be more generally diffused, it may also be required, to point out to them some of the applications of its principles. Should these be despised or neglected, the governments themselves, as well as the people, will be the sufferers. The husbandman who sows tares can never expect to reap wheat.

Certainly, if political economy discloses the sources of wealth, points out the means of rendering it more abundant, and teaches the art of daily obtaining a still greater amount without ever exhausting it; if it demonstrates, that the population of a country may, at the same time, be more numerous and better supplied with the necessaries of life; if it satisfactorily proves that the interest of the rich and poor, and of different nations, are not opposed to each other, and that all rivalships are mere folly; and if from all these demonstrations it necessarily results, that a multitude of evils supposed to be without remedy, may not only be reckoned curable, but even easy to cure, and that we need not suffer from them any longer than we are willing so to do; it must be acknowledged that there are few studies of greater importance, or more deserving the attention of an elevated and benevolent mind.

Time is the great teacher, and nothing can supply its operation. It alone can fully demonstrate the advantages to be derived from a knowledge of political economy in the general principles of legislation and government. On the one hand, the custom which condemns so many men of sense, at the same time that they admit the principles of this science, to speak and act as if they were wholly ignorant of them,39 and on the other, the resistance, which individual as well as general interests, imperfectly understood, oppose to many of these principles, exhibit nothing that ought either to surprise or alarm individuals animated with a desire of promoting the general welfare. The philosophy of Newton, which, during a period of fifty years was unanimously rejected in France, is now taught in all its schools. Ultimately it will be perceived, that there are studies of still greater importance than this, if estimated by their influence on the happiness and prosperity of mankind.

Still how unenlightened and ignorant are the very nations we term civilized! Survey entire provinces of proud Europe; interrogate a hundred, a thousand, or even ten thousand individuals, and of this whole number, you will hardly, perhaps, find two embued with the slightest tincture of the improved science of which the present age so much boasts. This general ignorance of recondite truths is by no means so remarkable as an utter unacquaintance with the simplest rudiments of knowledge applicable to the situation and circumstances of every one. How rare, also, are the qualifications necessary for one’s own instruction, and how few persons are solely capable of observing what daily happens, and of questioning whatever they do not understand!

The highest branches of knowledge are then very far from having yielded to society all the advantages to be expected from them, and without which they would be mere curious speculations. Perhaps their perfect application is reserved for the nineteenth century. In moral as well as in physical science, inquirers of superior minds will appear, who, after having extended their theoretical views, will disclose methods of placing important truths within the reach of the humblest capacities. In the ordinary occurrences of life, instead of then being guided by the false lights of a transcendental philosophy, mankind will be governed by the maxims of common sense. Opinions will not rest on gratuitous assumptions, but be the result of an accurate observation of the nature of things. Thus, habitually and naturally ascending to the source of all truth, we shall not suffer ourselves to be imposed upon by empty sounds, or submit to the guidance of erroneous impressions. Corruption, deprived of the weapons of empiricism, will lose her principal strength, and no longer be able to obtain triumphs, calamitous to honest men, and disastrous to nations.



(1) From οικος a house, and νομος a law; economy, the law which regulates the household. Household, according to the Greeks, comprehending all the goods in possession of the family; and political, from πόλις, civitas, extending its application to society or the nation at large.

Political economy is the best expression that can be used to designate the science discussed in the following treatise, which is not the investigation of natural wealth, or that which nature supplies us with gratuitously and without limitation, but of social wealth exclusively, which is founded on exchange and the recognition of the right of property both social regulations.


Experimental science, in order to establish why events take place in a certain manner, or to be able to assign a particular cause for a particular effect, to a certain extent must be descriptive. Astronomy, in order to explain the eclipses of the sun, must demonstrate the opacity of the moon. Political economy, in like manner, in order to show that money is a means of the production of wealth, but not the end, must exhibit as true nature.


In France, the minister of the interior, in his exposé of 1813, a most disastrous period, when foreign commerce was destroyed, and the national resources of every description rapidly declining, boasted of having proved by indubitable calculations, that the country was in a higher state of prosperity than it ever before had been.


By the term practice, is not here meant the manual skill which enables the artificer or clerk to execute with greater celerity and precision whatever he performs daily, and which constitutes his peculiar talent; but the method pursued in superintending and administering public or private affairs.


Hence it is that nations seldom derive any benefit from the lessons of experience. To profit by them, the community at large must be enabled to seize the connexion between causes and their consequences; which at once supposes a very high degree of intelligence and a rare capacity for reflection. Whenever mankind shall be in a situation to profit by experience, they will no longer require her lessons; plain sound sense will then be sufficient. This is one reason of our being subject to the necessity of constant control. All that a people can desire is that laws conducive to the general interest of society should be enacted and carried into effect; a problem which different political constitutions more or less imperfectly solve.


“The controversies,” says Col. Torrens, in his ‘Essay on the Production of Wealth,’ published in 1821, “which at present exist amongst the most celebrated masters of political economy, have been brought forward by a lively and ingenious author as an objection against the study of the science. A similar objection might have been urged, in a certain stage of its progress, against every branch of human knowledge. A few years ago, when the brilliant discoveries in chemistry began to supersede the ancient doctrine of phlogiston, controversies, analogous to those which now exist amongst political economists, divided the professors of natural knowledge; and Dr. Priestley, like Mr. Malthus, appeared as the pertinacious champion of the theories which the facts established by himself had so largely contributed to overthrow. In the progress of the human mind, a period of controversy amongst the cultivators of any branch of science must necessarily precede the period of their unanimity. But this, instead of furnishing a reason for abandoning the pursuits of science, while its first principles remain in uncertainty, should stimulate us to prosecute our studies with more ardour and perseverance until upon every question within the compass of the human faculties, doubt is removed and certainty attained. With respect to political economy, the period of controversy is passing away, and that of unanimity rapidly approaching. Twenty years hence there will scarcely exist a doubt respecting any of its fundamental principles.”

And in the preface of the third edition of his ‘Essay on the External Corn Trade,’ published in 1826, Col. Torrens makes these further remarks: “On a former occasion, the author ventured to predict, that at no distant period, controversy amongst the professors of political economy would cease, and unanimity prevail, respecting the fundamental principles of the science. He thinks he can already perceive the unequivocal signs of the approaching fulfillment of this prediction. Since it was hazarded, two works have appeared, each of which, in its own peculiar line, is eminently calculated to correct the errors which previously prevailed. These publications are, ‘A Critical Dissertation on the Nature, Causes, and Measures of Value, by an anonymous author;’ and ‘Thoughts and Details on High and Low Prices, by Mr. Tooke.’ “—American Editor


We may, for example, know that for any given year the price of wine will infallibly depend upon the quantity to be sold, compared with the extent of the demand. But if we are desirous of submitting these two data to mathematical calculation, their ultimate elements must be decomposed before we can become thoroughly acquainted with them, or can, with any degree of precision, distinguish the separate influence of each. Hence, it is not only necessary to determine what will be the product of the succeeding vintage, while yet exposed to the vicissitudes of the weather, but the quality it will possess, the quantity remaining on hand of the preceding vintage, the amount of capital that will be at the disposal of the dealers, and require them, more or less expeditiously, to get back their advances. We must also ascertain the opinion that may be entertained as to the possibility of exporting the article, which will altogether depend upon our impressions as to the stability of the laws and government, that vary from day to day, and respecting which no two individuals exactly agree. All these data, and probably many others besides, must be accurately appreciated, solely to determine the quantity to be put in circulation; itself but one of the elements of price. To determine the quantity to be demanded, the price at which the commodity can be sold must already be known, as the demand for it will increase in proportion to its cheapness; we must also know the former stock on hand, and the tastes and means of the consumers, as various as their persons. Their ability to purchase will vary according to the more or less prosperous condition of industry in general, and of their own in particular; their wants will vary also in the ratio of the additional means at their command of substituting one liquor for another, such as beer, cider, &c. I suppress an infinite number of less important considerations, more or less affecting the solution of the problem; for I question whether any individual, really accustomed to the application of mathematical analysis, would even venture to attempt this, not only on account of the numerous data, but in consequence of the difficulty of characterizing them with any thing like precision, and of combining their separate influences. Such persons as have pretended to do it, have not been able to enunciate these questions into analytical language, without divesting them of their natural complication, by means of simplifications, and arbitrary suppressions, of which the consequences, not properly estimated, always essentially change the condition of the problem, and pervert all its results; so that no other inference can be deduced from such calculations than from formula arbitrarily assumed. Thus, instead of recognizing in their conclusions that harmonious agreement which constitutes the peculiar character of rigorous geometrical investigation, by whatever method they may have been obtained, we only perceive vague and uncertain inferences, whose differences are often equal to the quantities sought to be determined. What course is then to be pursued by a judicious inquirer in the elucidation of a subject so much involved? The same which would be pursued by him, under circumstances equally difficult, which decide the greater part of the actions of his life. He will examine the immediate elements of the proposed problem, and after having ascertained them with certainty, (which in political economy can be effected,) will approximately value their mutual influences with the intuitive quickness of an enlightened understanding, itself only an instrument by means of which the mean result of a crowd of probabilities can be estimated, but never calculated with exactness.

Cabanis, in describing the revolutions in the science of medicine, makes a remark perfectly analogous to this. ‘The vital phenomena,’ says he, ‘depend upon so many unknown springs, held together under such various circumstances, which observation vainly attempts to appreciate, that these problems, from not being stated with all their conditions, absolutely defy calculation. Hence whenever writers on mechanics have endeavoured to subject the laws of life to their method, they have furnished the scientific world with a remarkable spectacle, well entitled to our most serious consideration. The terms they employed were correct, the process of reasoning strictly logical, and, nevertheless, all the results were erroneous. Further, although the language and the method of employing it were the same among all the calculators, each of them obtained distinct and different results; and it is by the application of this method of investigation to subjects to which it is altogether inapplicable, that systems the most whimsical, fallacious, and contradictory, have been maintained.’

D’Alembert, in his treatise on Hydrodynamics, acknowledges that the velocity of the blood in its passage through the vessels entirely resists every kind of calculation. Senebier made a similar observation in his Essai sur l’Art d’observer, (vol. 1, page 81.)

Whatever has been said by able teachers and judicious philosophers, in relation to our conclusions in natural science, is much more applicable to moral; and points out the cause of our always being misled in political economy, whenever we have subjected its phenomena to mathematical calculation. In such case it becomes the most dangerous of all abstractions.


Republic, Book II.


When we find almost every historian, from Herodotus to Bossuet, boasting of this and other similar laws, it will be seen how important it is that all who undertake to write history should have some knowledge of the science of political economy.


See Sully’s Memoirs, Book XVI.


Breve Trattato delle cause che possono far abondare li regni d’oro et d’argento dove non sono miniere


“Entro ora a dire della factica, la quale, non solo in tute le opre qœe sono intieramente dell’ arte come le pitture, sculture, intagli, etc., ma anchi in molti corpi, come sono i minerali, i sassi, le piante spontanee delle selve, etc., é l’unica che d valore alla cosa. La quantità della materia non per altro coopera in questi corpi al valore se non parché aumenta o sema la fatica.” (Galiani, della Moneta. Lib. I, cap. 2.)

“In relation to labour I will remark, that not only in productions which are entirely the work of art, as in painting, sculpture, engraving, etc., but likewise in productions of nature, as on metals, minerals, and plants, their value is entirely derived from the labour bestowed on their creation. The quantity of matter affects the value of things only so far as it requires more or less labour.”

In the same chapter Galiani also remarks, that man, that is to say his labour, is the only correct measure of value. This, also, according to Dr. Smith, is a principle; although considered by me as an error.


This same Galiani remarks, in the same work, that whatever is gained by some must necessarily be lost by others; in this way proving, that a very ingenious writer may not even know how to deduce the most simple conclusions, and may pass by the truth without perceiving it. For, if wealth can be created by labour, there may then be a new description of wealth in the world, not taken from anybody. Indeed, this author in his Dialogues on the Corn Trade, published in France a long time afterwards, has himself, in a very peculiar manner, pronounced his own condemnation. “A truth,” he observes, “which is brought to light by pure accident, like a mushroom in a meadow, is of no value; we cannot make use of it, if we are ignorant of its origin and consequences; or how and by what chain of reasoning it is derived.”


From my own inability of judging of the merits of such of these writers whose works have not been translated, I have availed myself of the opinions of one of the translators of this Treatise into the Spanish language, Don Jose Queypo, an individual alike distinguished by his abilities and patriotism, whose remarks I have only copied.


When they maintain, for example, that a fall in the price of food is a public calamity.


Among the discussions they provoked, we must not forget the entertaining Dialogues on the Corn Trade, by the abbé Galiani, in which the science of political economy is treated in the humorous manner of Tristram Shandy. An important truth is asserted, and when the author is called upon for its proof, he replies with some ingenious pleasantry.


The belief that moral and political science is founded upon chimerical theories, arises chiefly from our almost continually confounding questions of right with matters of fact. Of what consequence, for instance, is the question so long agitated in the writings of the economists, whether the sovereign power in a country is, or is not, the co-proprietor of the soil? The fact is, that in every country the government takes, or in the shape of taxes the people are compelled to furnish it with, a part of the revenue drawn from real estate. Here then is a fact, and an important one; the consequence of certain facts, which we can trace up, as the cause of other facts (such as the rise in the price of commodities) to which we are led with certainty. Questions of right are always more or less matters of opinion; matters of fact, on the contrary, are susceptible of proof and demonstration. The former exercise but little influence over the fortunes of mankind; while the latter, inasmuch as facts grow out of each other, are deeply interesting to them; and, as it is of importance to us that some results should take place in preference to others, it is, therefore, essential to ascertain the means by which these may be obtained. The Social Contract of J. J. Rousseau, from being almost entirely founded upon questions of right, has thereby become, what I feel no hesitation in avowing, a work of at least but little practical utility.


Du Commerce et du Gouvernement considérés l’un relativement à l’autre.


See the syllabus of his lectures, which was printed for the first time in the year 1804, in the valuable collection published at Milan by Pietro Custodi, under the title of Scrittori classici italiani di economia politica. It was unknown to me until after the publication of the first edition of this work in 1803.


During the same year that Dr. Smith’s work appeared, and immediately before its publication, Browne Dignan published in London, written in the French language, his Essai sur les principes de l’Economie publique, containing the following remarkable passage: “The class of reproducers includes all who, uniting their labour to that of the vegetative power of the soil, or modifying the productions of nature in the processes of their several arts, create in some sort a new value, of which the sum total forms what is called the annual reproduction.

This striking passage, in which reproduction is more clearly characterised than in any part of Dr. Smith’s writings, did not lead its author to any important conclusions, but merely gave birth to a few scattered hints. A want of connexion in his views, and of precision in his terms, have rendered his Essay so vague and obscure, that no instruction whatever can be derived from it.


This difficult and abstruse subject has not, perhaps, been treated by Dr. Smith with sufficient method and perspicuity. Owing to this circumstance, his intelligent and acute countryman, lord Lauderdale, has composed an entire treatise, in order to prove that his lordship had completely failed in comprehending this part of the Wealth of Nations.


In the article Grains, in the Encyclopedie, Quesnay had remarked, that “commodities which can be sold, ought always to be considered without distinction, either as pecuniary or real wealth, applicable to the purposes of whoever may make use of it.” This, in reality, is Dr. Smith’s exchangeable value. De Verri had observed, (chapter 3) that reproduction was nothing more than the reproduction of value, and that the value of things constituted wealth. Galiani, as has been already noticed, had said, that labour was the source of all value; but Dr. Smith, nevertheless, made these views his own by exhibiting, as we see, their connexion with all the other important phenomena, and in demonstrating them even by their consequences.


Sir James Stewart, author of a Treatise on Political Economy.


See Chapter third, Book second.


Dr. Smith has, in a satisfactory manner, established the difference between the real and nominal prices of things, that is to say, between the quantity of real values which must be given to obtain a commodity, and the name which is given to the sum of these values. The difference here alluded to, arises from a more perfect analysis, in which the real price itself is decomposed.


It is not, for example, until after the manner in which production takes place is thoroughly understood, that we can say how far the circulation of money and commodities has contributed towards it, and consequently what circulation is useful, and what is not; otherwise, we should only talk nonsense, as is daily done, respecting the utility of a quick circulation. My being obliged to furnish a chapter on this subject (Book I, Chap. 16.) must be attributed to the inconsiderable advancement made in the science of political economy, and to the consequent necessity of directing our attention to some of its more simple applications. The same remark is applicable to the twentieth chapter, in the same book, on the subject of temporary and permanent emigration, considered in reference to national wealth. Any person, however, well acquainted with the principles of this science, would find no difficulty in arriving at the same conclusions.

The time is not distant when not only writers on finance, but on history and geography, will be required to possess a knowledge of at least the fundamental principles of political economy. A modern treatise on Universal Geography, (vol. 2, page 602,) a work in other respects denoting extensive research and information, contains the following passage: “The number of inhabitants of a country is the basis of every good system of finance; the more numerous is its population, the greater height will its commerce and manufactures attain; and the extent of its military force be in proportion to the amount of its population.” Unfortunately, every one of these positions may be erroneous. National revenue, necessarily consisting either of the income of the public property, or of the contributions, in the shape of taxes, drawn from the incomes of individuals, does not depend upon the number, but upon the wealth, and above all, upon the incomes of the people. Now, an indigent multitude has the fewer contributions to yield, the more mouths it has to feed. It is not the numerical population of a state, but the capital and genius of its inhabitants, that most conduce to the advancement of its commerce; these benefit population much more than they are benefited by it. Finally, the number of troops a government can maintain depends still less upon the extent of its population than upon its revenues; and it has been already seen that revenue is not dependent upon population.


Witness Turgot’s Reflections sur la formation et la distribution aes richesses, in which he has introduced various views on both these subjects, either entirely erroneous, or very imperfect.


Many other points of doctrine, besides those here noticed, have been either overlooked, or but imperfectly analyzed by Dr. Smith.


Since the time of Dr. Smith, both in England and France, a variety of publications on political economy have made their appearance; some of considerable length, but seldom containing anything worthy of preservation. The greater part of them are of a controversial character, in which the principles of the science are merely laid down for the purpose of maintaining a favourite hypothesis; but from which, nevertheless, many important facts, and even sound principles, when they coincide with the views of their authors, may be collected. The “Essai sur les finances de la Grand-Bretagne,” by Gentz, and apology for Mr. Pitt’s system of finance, is of this description; so also is Thornton’s Inquiry into the nature and effects of paper credit, written with a view to justify the suspension of cash payments by the bank of England; as well as a great number of other works on the same subject, and in relation to the corn laws.


By a popular treatise, I do not mean a treatise for the use of persons who neither know how to read, nor to make any use of it. By this expression, I mean a treatise not exclusively addressed to professional or scientific cultivators of this particular branch of knowledge, but one calculated to be read by every intelligent and useful member of society.


Ricardo, Sismondi, and others. The fair sex begin also to perceive that they had done themselves injustice, in supposing that they were unequal to a branch of study destined to exercise so benign an influence over domestic happiness. In England, a lady (Mrs. Marcet) has published a work, Conversations on Political Economy,” since translated into French, in which the soundest principles are explained in a familiar and pleasing style.


Every branch of knowledge, even the most important, is but of very recent origin. The celebrated writer on agriculture, Arthur Young, after having bestowed uncommon pains in the collection of all the observations that had been made in relation to soils, one of the most important parts of this science, and which teaches us by what succession of crops the earth may be, at all times, and with the greatest success, cultivated, remarked, that he could not find that anything had been written on this subject prior to the year 1768. Other arts, not less essential to the happiness and prosperity of society are still also in their infancy.


In the year 1826, a professorship of political economy was founded at the university of Oxford, and a highly able and instructive course of lectures has since been delivered before that university, by Nassau William Senior, A. M., the first professor of political economy. We have rarely read a more masterly and entertaining performance than the professor’s discussion of the mercantile theory of wealth, which occupies three of his lectures. American Editor.


The present Emperor Nicholas.


I here suppose the higher orders of society to be actuated by a sincere desire to promote the public good. When this feeling, however, does not exist, when the government is faithless and corrupt, it is of still greater importance that the people should become acquainted with the real state of things, and comprehend their true interests. Other wise, they suffer without knowing to what causes their distresses ought to be attributed, or indeed, by attributing them to erroneous causes, the views of the public are distracted, their efforts disunited, and individuals, thus deprived of general support, fail in resolution, and despotism is strengthened; or what is still worse, where the people are so badly governed as to become desperate, they listen to pernicious counsels, and exchange a vicious order of things for one still worse.


In how many instances have not great pains been taken, and considerable capital expended, to increase the evils mankind have been desirous of shunning! How many regulations are just so far carried into execution as to produce all the injury restrictions possibly can effect, and, at the same time, just as far violated as to retain all the inconveniences arising from their infringement!


This arises from our not being able, without serious losses, to displace the capital and talents, which, owing to an erroneous system, have received a faulty direction.


“They would wish, so to express myself, that I might be able to demonstrate that my proofs are conclusive, and that they are not wrong in submitting to them. The soundness of my reasoning has produced a momentary conviction; but they afterwards feel the habitual influence of their former opinions return with undiminished authority, although without any adequate cause, as in the case of the apparent increase in the diameter of the moon at the horizon. They would wish to be freed by me from these troublesome relapses, of whose delusiveness they are sensible, but which nevertheless importune them. In a word, they are desirous that I should be enabled to effect by reason what time alone can accomplish; which is impossible. Every cause has an effect peculiar to itself. Reason may convince, opinions carry us along, and illusions perplex us; but time alone, and the frequent repetition of the same acts, can produce that state of calmness and ease which we call habit. Hence it is, that all new opinions are such a length of time in spreading themselves. If an innovator has ever had immediate success, it is only from having discovered and promulgated opinions already floating in every mind.” Destutt-Tracy, Logique, chap. 8.

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