THE

QUARTERLY REVIEW.

JANUARY, 1824.

ART. I.-Essay on Political Economy. Supplement to the En cyclopædia Britannica. Vol. VI. Part I. Edinburgh. 1823. THE purpose of this Treatise, as stated by the author, is to de

fine the objects and limits of the science of political economy -to trace its progress—to exhibit and establish the fundamental principles on which it is founded and to point out the relation and dependence subsisting between its different parts.

Much of what is here stated is ably accomplished, particularly a very useful sketch of the progress of the science; and the whole is executed with so much talent and general knowledge of the subject, as to give considerable weight to the opinions advanced. Yet, we think, that the author, in exhibiting the fundamental principles on which he conceives the science of political economy to be founded, has fallen into some most important errors; and as both his ability as a writer, and the depository in which his treatise is found, will necessarily give it a wide circulation, the interests of the science seem to require that these errors should be pointed out.

Of the work of Adam Smith, on the Nature and Causes of the Wealth of Nations, the author says, (p. 233.) that it has done for political economy, what the Principia of Newton did for physics. The principles of a work which will admit of being so characterized, should not certainly be rejected or modified but on grounds which will stand the test of the strictest examination. We should be among the last to check free and continued inquiry in any science, particularly in one which is most justly described in the present treatise as a science, not of speculation, but of fact and experiment. On such a subject, no writer, however great, can be expected to produce a work which may not subsequently We do not therefore require some modifications and corrections.

object to the author of this treatise and the school which he represents, that they differ from Adam Smith; but that, in rejecting some of the fundamental principles of that great master, they propose to substitute others, which not only do not so well account for the facts with which we are surrounded, but are in many cases absolutely inconsistent with them. They seem to have proceeded

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ceeded upon a principle just the very reverse of the position above laid down by the author, and to have altered the theories of Adam Smith upon pure speculation; and not because they do not accord with facts and experience.

The Treatise is divided into four parts

I. The Definition and History of the Science.

II. The Production of Wealth.

III. The Distribution of Wealth.

IV. The Consumption of Wealth.

We shall make some remarks on the principles laid down in each of these parts.

The author begins with a definition of the science, to which we see no objection, although we do not think that it expresses so clearly and happily the precise object in view as the title of Adam Smith's work. He then notices the importance of making a proper distinction between value in exchange, and utility. In this we entirely agree with him, and have always thought that M. Say, whose opinions seem chiefly to be alluded to, by applying utility in a sense altogether inconsistent with the common meaning of the term, has obscured a part of the subject which was before sufficiently clear: we were not, however, aware that Mr. Malthus, whose name is coupled with that of M. Say, had fallen into a similar error. Our impression is, that he has adhered to the distinction stated by Adam Smith, which is plain and intelligible, and requires neither the rejection nor the alteration of common termschanges which it is always desirable to avoid, unless really ne

cessary.

The author next proceeds to the definition of the term wealth; and here he has made a useful addition to the definition of Mr. Malthus. He says, Mr. Malthus has defined wealth to consist of those material objects which are necessary, useful, or agreeable to man'-(p. 217.) but that this definition is too comprehensive, as it would include such material products as atmospheric air, and the heat of the sun, which are highly useful and agreeable, yet, by universal consent, are excluded from the investigations of political economy: he proposes, therefore, to limit the definition of wealth to those objects alone which have exchangeable value, and it will then stand thus, those material products which have exchangeable value, and which are either necessary, useful, or agreeable to man; and to this definition we see no objection.

The author is very decided as to the propriety of confining the definition of wealth to material objects, as the following passage will show. Having observed that some economists had

considered

considered wealth as synonimous with all that man desires as useful and agreeable to him, he goes on to say,

'But if political economy were to embrace a discussion of the production and distribution of all that is useful and agreeable, it would include within itself every other science; and the best Encyclopadia would really be the best treatise on political economy. Good. health is useful and delightful; and, therefore, on this hypothesis the science of wealth ought to comprehend the science of medicine. Civil and religious liberty are highly useful, and, therefore, the science of wealth must comprebend the science of politics. Good acting is agreeable, and therefore, to be complete, the science of wealth must embrace a discussion of the principles of the histrionic art, and so on. Such definitions are worse than useless. They can have no effect but to generate confused and perplexed notions respecting the objects and limits of the science, and to prevent the student ever acquiring a clear, and distinct idea of the nature of the inquiries in which he is engaged.' -p. 217.

In all this we agree with the author, and the author agrees with Adam Smith: we were, therefore, greatly surprised to find him afterwards totally differing on a point so very closely connected with the definition of wealth, as the definition of productive labour. To us, indeed, it appears that the term productive labour, when used in an Inquiry into the Nature and Causes of the Wealth of Nations, is absolutely unmeaning and useless, unless it be applied, according to the intention of Adam Smith, to signify the labour which is directly productive of wealth; and if the term wealth be confined to material products, this must be the labour which is so fixed and realized on these products as to be estimated in their value when they become the subjects of exchange. But, according to our author, this distinction is illfounded: let him, however, speak for himself. Having quoted the passage of Adam Smith, in which he clearly explains the difference between what he has denominated productive, and what unproductive labour, he thus proceeds :

Such are the opinions of Dr. Smith, and it will not we think be very difficult to show the fallacy of the distinctions he has endeavoured to establish between the labour, and consequently, also the consumption of the different classes of society. To begin with the case of the menial servant :-Dr. Smith says that his labour is unproductive, because it is not realized in a vendible commodity, while the labour of the manufacturer is productive, because it is so realized. But of what, may we ask, is the labour of the manufacturer really productive ? does it not consist exclusively of comforts and conveniences required for the use and accommodation of society? The manufacturer is not a producer of matter, but of utility only; and is it not obvious that the labour of the menial servant is also productive of utility? If, for ex

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ample, the labour expended in converting the wool of the sheep into a coat be, as it unquestionably is, productive; then surely the labour expended in brushing and cleaning the coat, and rendering it fit to be worn, must be so too. It is universally allowed that the labour of the husbandman in raising corn, beef, and other articles of provision is pro“ductives; but, if so, why is the labour of the inenial servant, who performs the necessary and indispensable task of preparing and dressing these articles, and fitting them to be used, to be stigmatized as unproductive? It is clear to demonstration, that there is no difference whatever between the two species of industry, that they are both productive or both unproductive. To produce a fire, is it not just as necessary that coals should be carried from the cellar to the grate, as that they should be carried from the bottom of the mine to the surface of the earth? and if it be said that the miner is a productive labourer, inust wè 'nőt also say the same of the servant who is employed to make and mend the fire? The whole of Dr. Smith's reasoning proceeds on a false hypothesis. He has made a distinction where there is none, and where there can be none. The end of all human exertion is the same-that is, to increase the sum of necessaries, comforts, and enjoyments; and it must be left to the judgment of every man to determine what proportion of these comforts he will have in the shape of menial services, and what in the shape of material products. It is an error to suppose that a man is impoverished by maintaining menial servants, any more than by indulging in any other species of expense. It is true he will be ruined if he keeps more servants than he has occasion for, or than he can afford to pay; but his ruin would be equally cer tain were he to purchase an excess of food or clothes, or to employ more workmen in any branch of manufacture than are required to carry it on, or than his capital can employ. To keep two ploughmen when one might suffice, is just as improvident and wasteful expenditure as to keep two footmen to do the business of one. It is in the extravagant quantity of the commodities we consume, or of the labour we employ, and not in the particular species of commodities or labour that we must seek for the causes of impoverishment."--p. 274.

This passage appears to us to be totally inconsistent with that which we before quoted respecting wealth, and to merit all the severity of remark which was applied by the writer to those political economists who do not confine wealth to material objects. If the production of utility and enjoyment, as here stated, be the point in question, then, beyond all doubt, not only the labour of the mental servant is productive, as well as that of the manufacturer, but the exertion necessary to learn to dance, to get to a pleasant party, to read the public papers, or to acquire any useful or agreeable kind of accomplishment or information, must come under the same denomination.

But when Adam Sinith gave his definition of productive labour, he obviously did not mean to refer simply to utility and enjoyment,

but

but to wealth; that is, to the utility and enjoyment resulting from material products. He most expressly, indeed, notices the high utility and importance of many other kinds of labour besides those which he has denominated productive, and had not the slightest idea of stigmatizing them, as the use of this expression by the author would imply. Could he, indeed, for a moment doubt that the labours of a just magistrate, a skilful physician, or an able legislator, were, beyond comparison, more useful than the labour of the lace-maker? We have not the least objection to agree with the author in saying that the end of all human exertions is the same; that is, to increase the sum of necessaries, comforts and enjoyments:' but if political economy be, as he states, the science of the laws which regulate the production, distribution and consumption of those material products which have exchangeable value, and are either necessary, useful, or agreeable to man,' then it is certain that the term production, or productive labour, as it ought to be used in the science of political economy, can only apply to the labour which increases the quantity or value of material products.

That in this classification there may be a few anomalous cases we are perfectly ready to admit, but we hardly know what classification is without them. It is true that the labours of some menial servants sometimes increase the value of material products; but the amount of this value, as it affects the wealth of the society, never comes to be estimated, like the labours of the agriculturist, the manufacturer, the carrier, and the shopman; and even if it could be estimated, it would be found so trifling compared with the material products consumed by them, that as a class their labour may most fairly be denominated unproductive. In fact, menial service, when most like productive labour, may be characterized as assisting in the convenient and agreeable consumption of wealth, and not essentially in its production. But what puts the matter beyond doubt, and makes a very marked and striking distinction between them is, that menial service is always employed by revenue with a view to consumption and enjoyment, and never by capital with a view to production and profit; and as this is the only intelligible and useful distinction between unproductive and productive consumption, it is clear that menial servants, even when they most resemble productive labourers, must come under the head of unproductive consumers. It may be true, as stated by the author, that to keep two ploughmen where one only might suffice, is just as improvident and wasteful expenditure as it is to keep two footmen to do the work of one.' But the agriculturists who raise corn with a view to profit are in no danger of offending in this way; whereas