unjust, because it disregards the natural rights of mankind, and impolitic because it hinders the natural development of the agencies by which men's wants are supplied. The sympathetic instincts are valuable as suppressing the tendency of each man to invade his neighbour's equal rights to life, liberty, and enjoyment. Where they are not sufficiently strong, there and there only, government may rightfully interfere. These doctrines do not often come to the surface in Smith's writings, because he aims everywhere at dealing rather with facts than with these primary principles. But they are so definitely implied that the 'Wealth of Nations' may be regarded as one continuous illustration of their value, as regulating principles in all the industrial relations of mankind.2

35. The merits and the shortcomings of Smith's theory may be indicated from these reflections. The tendency to regard government in general as a kind of artificial restriction imposed from without, and as mischievous because in some sense not 'natural,' was perhaps less defective in economical than in purely political speculation. The restrictions actually in existence were calculated to defeat their own object, and were merely a disguised method of plundering mankind for the benefit of a particular class or country. Denunciations of government interference might be perfectly right as applied to the actual system, though needing qualification as absolute universal propositions; and Smith, indeed, cannot be charged with falling into revolutionary extremes, for his treatmentalways tempered by respect for facts-leads him to err chiefly on the side of moderation. He permits the legislator, for example, to fix the rate of interest;3 an error which gave occasion to Bentham's crushing assault upon the usury laws. But though Smith dealt over-delicately with some existing

See, for example, an interesting passage in which the Marquis de Chastellux expresses the theory in a few words. Man, he says, is born for liberty; and 'si l'on agoute que cette liberté est indefinie par sa nature et qu'elle ne peut être limitée dans chaque individu que par celle d'un autre individu, c'est encore exprimer une vérité que trouvera peu des contradicteurs dans ce siècle éclairé.' Quoted in Lavergne ('Economistes Français,' p. 287).

2 The French economists, indeed, differed from the revolutionary school by their absolutist tendencies; but, so far as trade was concerned, they were equally in favour of reducing government interference to a minimum.

Smith's Wealth of Nations,' p. 204.

restrictions, his conclusions could in such cases be refuted from his own principles. His view, when logically developed, implied the unreserved adoption of the let-alone doctrine. The exceptions which he admits are remnants of old prejudices rather than anticipations of any new principle. The sole remedy for the evils which he describes was the thorough demolition of restrictions which had long lost whatever justification they might have once possessed, and which were doomed to destruction by the force of events still more than by the force of his arguments.

36. Economists, indeed, are generally condemned for a different failing. That they should condemn the arbitrary regulations by which a statesman sought to hamper the free play of men's instinctive desire to attend to their own interests was right enough. It was better that sellers and buyers should be allowed to meet each other's wants without having to pay toll to the greediness of their rulers. The instinct of barter, which Smith rather oddly treats as possibly a primitive element of human nature, or that self-bettering instinct of which it is one manifestation, were at least respectable impulses; and, if duly restrained, all moralists who do not belong to the most ascetic type, would propose rather to regulate than suppress their development. But when economists proceed a step further and declare this self-regarding instinct to be the only force which governs, or ought to govern, human relations, a moralist of less exalted views may begin to be suspicious. Adam Smith, as I have already hinted, assigns to supply and demand a more extensive dominion over conduct than can be altogether admitted. He is a philosopher after the fashion of his day; and we can see that he had sate at the feet of Hume. The chapter, for example, upon Church establishments is curious and significant. He quotes the authority of Hume, by far the most illustrious philosopher and historian of the present age' for the opinion that rich endowments supplied the best means of keeping the clergy quiet. Smith appears to support the opinion that a number of small competing sects, without endowments or privileges, would be the ideal arrangement. But the end which he con

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1 A. Smith, p. 354.

templates is the same-the production, namely, 'of philosophical good temper and moderation with respect to every religious creed.' The religious sentiments, in fact, were a troublesome and expensive force, which could not be kept too quiet. An equilibrium of forces, general indifference, and room for every man to do his work and earn his wages in peace, was the most desirable continuous motive.

37. And thus the peculiar doctrine of the economists receives an interpretation which has been too common in later times. The natural order of society which they proclaimed, and which they held to be injuriously affected by every application of government interference, was identified with the actual industrial structure of society. Smith would abolish all restraints upon trade; but nobody could be less inclined to sanction any theory for reconstructing society, or substituting any new principle for the régime of universal competition. He implicitly adopts the doctrine of some modern economists that the existing order is the only order conceivable. He would abolish all monopolies and all endowments, and leave religious and educational needs to be satisfied, like industrial needs, by the free action of supply and demand. The laws which he announced were to be regarded not only as determining the actual order from which any future development must proceed, but also as fixing conditions which could never be materially altered. It had been already assumed by some writers, and it was systematically assumed by later writers, as, for example, by Ricardo, that the lowest classes must always receive the smallest remuneration consistent with the bare support of life. The assumption, which is highly convenient as simplifying many arguments, takes for granted that the most important aim of all sound economics is for ever impracticable. Smith takes a more historical view of the question than his predecessors, and his remarks upon the varying rate of wages are valuable and interesting. But in the Wealth of Nations' he assigns but a very small space to the discussions which rightly fill a principal part of all modern enquiries. He does not discuss the policy of the poor-laws, though such an investigation might seem to come naturally within his scope; and he is not troubled by any of A. Smith, p. 356. Eg. Locke, Turgot, sec. 6.

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those discussions as to the necessary limits of population, which were already coming to the surface, and were presently to provoke a vehement controversy. In the whole sphere of speculation to which these topics belong Smith is still a stranger. He represents the calm intellect which has seen through the superstitions of the antiquated restricted system, but is not prescient of the troubles that were to come with the bursting of the ancient barriers.

38. Here, too, we come upon the main speculative defect of the 'Wealth of Nations.' We are sensible, after reading his always lucid and ingenious, and often most acute, though rather too discursive enquiries, that there is something wanting. The arguments are not properly clenched. The complexity of Smith's enquiries has prevented him from drawing them to a focus. Price, he tells us, is fixed by supply and demand; supply and demand act through the 'higgling of the market;' the buyer wants things cheap, and the seller wishes them to be dear; and so at last an agreement is struck out. But, if we go a little further, if we ask what general causes determine the precise rate of exchange, how it happens that a certain weight of yellow metal exchanges for a certain bulk of the seeds of a vegetable, we can get no definite answer, though here and there are glimpses of an answer. There is a whole side of the question which is left in obscurity. Roughly speaking we may say that Smith's conclusions are satisfactory if we assume that a certain social equilibrium has been somehow established, and seek to trace the process by which slight disturbances are propagated from one part to another. But to the further questions, what are the forces which are thus balanced? what is the true nature of the blind struggle which rages around us? and what are the ultimate barriers by which its issues are confined? we get a rather cursory and perfunctory answer. The difficulty is

analogous to that which meets us in the Moral Sentiments." We there follow the play of sympathy till we are perplexed by the intricacy of the results, but we do not perceive what is the ultimate ground which determines the limits and the efficacy of sympathy. And here, after tracing hither and thither the complex actions and reactions of supply and demand, we somehow feel that we have gone over all the ropes and pulley's

by which force is transmitted, but have not fairly come in sight of the weights by which the force is originated.

39. The point to which Smith had thus pushed the enquiry, is that at which 'catallactics' passes into sociology. Omitting a few errors, he has done all that can be done without bringing a theory of commerce into actual contact with the underlying social problems. He has explained with great clearness the ebb and flow of markets, the curious mechanism of paper-money and credit, the manner in which the effects of taxation are propagated to different classes, and many other phenomena of which a good Chancellor of the Exchequer should take an intelligent view. But he illustrates once more the truth so frequently noticed, that theory generally lags behind experience. Society was heaving with new passions, and forces were being generated which were to try the strength of its most intimate structure. As they began to manifest themselves, economists found themselves confronted by new and more difficult problems. To the theory of exchange was to be added a theory which should determine how the wealth acquired by society was to be distributed amongst its different classes, and to what extent the efforts for well-being were confined by irremovable limits. The new doctrines of socialism or communism, tending to a regeneration or a disintegration of society, were beginning to stir in men's minds, and the doctrines of the later investigators begin to take a different colour and to centre round more vital problems. It becomes more evident at each step that a mere theory of commerce, though such a theory may be useful in its place, cannot answer the serious difficulties which are beginning to present themselves to the legislator and the social reformer. The doctrines enunciated by Adam Smith refer chiefly to the superficial phenomena presented by a society of which it has hitherto been the greatest triumph to preserve a decent amount of fair-play between individuals and classes immersed in a blind struggle for existence. Is that struggle always to continue on its present terms? Is it always to be blind? Must starvation and misery be always in the immediate background, and selfishness, more or less decently disguised, and more or less equitably regulated, be the one great force by which to determine the conformation of society?