Essays in political economy

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PREFATORY NotE, . : ; : ‘ : : ; ; : Vv

I. The Love Of Money.*

Tue Love of Money has always been in more or less disrepute with moralists. They have almost universally assigned to it nearly the lowest place in the scale of human affections. We say of human affections, for it is one which distinguishes man from all other animals, however intelligent. ‘You call me dog,’ said Shylock to the Christian merchant; ‘hath a dog money?’ Phrenologists have indeed laid down that all the propensities—combativeness, destructiveness, philoprogenitiveness, alimentiveness, love of life, &c.—are ‘common to man with the lower animals;’ but we are suprised that they have not discovered a peculiar protuberance on the outside of the human head corresponding with a peculiar propensity for money inside it. It is the more to be regretted that they have not - ascertained the locality of this organ, since a claim has been set up on behalf of the lower animals to a close relationship to the human family. Ifa bump of philargyriveness or philonomismativeness could be shown on the human head, a conspicuous absence of this manifestation on the cranium of the former would enable us to disprove the connection, to the satisfaction at least of believers in phrenology. It would not, however, enable us, without further inquiry, to determine whether the love of money, which distinguishes us from the brutes,

* This Essay was published in November, 1862, in a periodical which has ceased to exist.

\ B places us above or below them in moral character. To satisfy ourselves on this point, we must begin by inquiring what this thing ‘Money,’ of which men, and men only, are so fond, consists of. Sir Robert Peel’s celebrated question—‘ What is the meaning of that word, a Pound, with which we are all familiar ?’—was answered by himself in terms to the effect that a pound of money is a fixed quantity of gold or silver. But this answer, though highly appropriate to a discussion on the currency, is irrelevant to our present inquiry, whether money is a good or an evil; and whether the love of it is a good or a bad quality in mankind. Sir Robert Peel very justly ridiculed the definition given by one writer on the currency of a pound, as ‘a sense of value in reference to currency as compared with commodities.’ Yet in practical life this is really something like what men generally mean and want by money. ‘They mean so much goods; so much of the commodities for sale in the market of the world. A pound to a ‘navvy,’ for instance, is so much beer and tobacco; to his‘mother it is so much tea and sugar. But these two cases are sufficient to show the extreme difficulty of pronouncing any moral judgment whatever upon the love of money, considered as a general human propensity ; for the love of tea and sugar is universally admitted to be in itself an innocent affection, while the love of beer and tobacco is often condemned as combining two most pernicious desires. The love of money is really only a phrase for the love of a vast number of different things, which may be good, bad, or indifferent, regarded from a moral, religious, eesthetical, political, or medical point of view, but which are alike in one respect—namely, that they are all to be had for money, and are not to be had without it. As Solomon said, ‘A feast is made for laughter, and wine maketh merry ; but money answereth all things.’ The love of money is that universal desire for wealth from which political economists have deduced a theory of commercial values, along with several important truths respecting the conditions of industrial energy and prosperity. Everybody wishes for some kind of wealth, and money is convertible into every other kind; and therefore everybody loves money for some purpose or other, from which we get the laws of competition, prices, wages, profits, and rent. Yet this general principle of pecuniary interest or love of riches by no means explains all the phenomena of the economic world. Tor it is, as we have said already, only a single expression for a great variety of wants, wishes, and tastes, which are not always the same from age to age, or from country to country, nor felt alike by every individual in any one age or country, and which, moreover, lead to very different consequences as regards the nature, amount, and distribution of wealth, and as regards the material as well as the moral welfare of human society.

That disease of language which metaphysicians call the realism of the sehools still infests many of the terms and phrases which philosophy must employ. <A host of different things are alike in some one respect, and a common name is given to them in reference to the single quality or ciremustance which they have in common. Itis simply a name for their common feature, but it puts their numerous differences out of sight and out of mind, and they come to be thought of in a lump as one sort of thing. Those moralists, accordingly, who feel themselves the better for heartily denouncing the general principle of the love of money or pursuit of wealth with which political economy sets out, confound, in their horror of a mere abstraction, the love of health, cleanliness, decency, and knowledge, with sensuality, avarice, and vanity. And perhaps political economists have not escaped a bias from their own phraseology, and are apt to imagine in their scientific discussions a much fuller explanation of the complete phenomena of wealth, and a much closer approximation to the complete philosophy of the subject, than lies within their province as commonly circumscribed by themselves at present.

It is obvious that the love of money includes a demand for yarious things, the production of which variously affects both the material interests of the consumers and the quality and distribution of the revenue of the whole community. It includes a love of pictures, toys, jewellery, plate, furniture, clothing, opium, soap, bibles, brandy, and, in short, everything in the International Exhibition, and many things not exhibited there. It includes a love of eating and drinking, both in moderation

B2 and in excess; of literature and science; of architecture; of the fine arts; of indolence and ease, and of business and sport; of foreign travel, and of a country house ; of music; of charity, sensuality, cruelty, and power; of horses and dogs. It expresses: sometimes a desire for the comforts of an old bachelor, and some- _times an inclination for matrimony ; and when it takes the latter direction, it means with one young lady love in a cottage, and with another a palace without love; in one man it is fortunehunting—in another, a disinterested attachment to Miss Aurora Penniless. The disciples of Malthus know how to discriminate between the economic consequences of these diverse matrimonial tendencies, and the important differences of their influence on the price of beef. Napoleon III. seems to behold in money the sinews of war; his friend Mr. Cobden connects it with commerce and peace. The poor man’s love of money is a different feeling from the rich man’s, and, accordingly, the writer of this essay never throbs with the emotions which must animate the breasts: of Baron Rothschild and Lord Overstone. The American Southerner worships in the almighty dollar the giver of African slaves; the negro slave of Brazil adores it chiefly as the purchaser of liberty. The wealth which is coveted by men in the East is not that which is most prized by the men of the West. An Indian Rajah’s chief wealth is a plurality of wives, personal attendants and elephants, and a load of gold trappings. on both his elephant’s body and his own—all which, not exclusive. of the wives, would be more than an English duke or prince could bear.

An old writer gives an account of a religious ceremony which he witnessed in Turkey, at which Prince Mustapha—a. boy of eleven years old—‘ was so overloaded with jewels, both himself and his horse, that one might say he carried the value. of an empire about him.’ That is to say, the wealth which, in the hands of English capitalists, would have made a whole territory prosperous, and been distributed in wages through many hundred families, was concentrated upon making one small Turkish child vain and uncomfortable. And the oriental lust for jewels not only has effects upon the economic condition of the world which merit the attention of the political economist, but it has also, in a great measure, sprung from the absence, for many ages, of the conditions essential to general prosperity, and the accumulation of wealth in really useful forms. Wherever insecurity has long prevailed, a spirit of hoarding must exist, with a desire for that sort of wealth which contains much value in a durable and portable form, and which is easily hidden, easily removed, and none the worse for being buried for months or years in the ground. It is probable, therefore, that the love of gold chains and jewels for which the European Jew is remarkable has a Huropean as well as an Asiatic origin, being inherited from his persecuted, plundered, and usurious ancestors in the middle ages, who found it necessary to pack their wealth into the smallest possible compass.

The existence of security, banks, and paper currency, have long exterminated from England that curious animal the genuine miser, with his treasure in a strong box, doing no good to anyone. Dr. Johnson, talking of misers to Boswell, said, ‘A man who keeps his money has, in reality, more use of it than he can have by spending it. Why, sir, Lowther, by keeping his money, had the command of the county, which his family has lost by spending it.’ But an English millionaire does: not keep his money to himself, as the ancient miser, whether he spends it or not. If he saves it, instead of locking it up or carrying it about on his body, he puts it in a bank, and the banker’s customers make use of the wealth he does not himself consume.

But when we say that the form of the love of money which displays itself in a love of dress, ornaments, and jewels, is almost confined to the men of Eastern countries, we must be understood as speaking of men in the narrowest sense, and as making no allusion in that comparison to the ladies of the two hemispheres. Women have everywhere their own peculiar notions of the value of money; and a world of either men alone or of women alone would contain a very different assortment of articles of wealth from that in the great mundane shop for both sexes which exists. With most species of animals, the male is more gorgeously dressed than the female; but so it seems to be with the human species generally, only in its less civilized forms. For we may perceive, with the growth of European civilization, a marked decline in the taste of men for the display of wealth onthe body. A medieval baron was much more expensively got up than his wife or daughter. Even in the last century the toilette of a gentleman was nearly as elaborate and splendid as that of a lady. Now, a gentleman thinks he makes a smart appearance with a flower in his button-hole, at an assembly at which the ladies are blazing with diamonds. It

.— ee might be an instructive inquiry how far this difference in the desire for wealth is traceable to a radical difference in the natural mental constitutions of the sexes, and how far to restraints which confine the ambition of women in general to paltry objects, leading them to waste their time in hunting husbands, while men hunt seats in parliament, and foxes. Addison remarks, in the ‘ Spectator,’ that ‘One may observe that women in all ages have taken more pains than men to adorn the outside of their heads.’ Perhaps one reason for this is, that men have in all ages prevented them from taking so much pains to adorn the inside. While we are on the subject of dress as one of the equivalents of money, and one of the objects of its pursuit, we may make a remark upon that singular revolution of the human mind through which it has come to be thought, by all men of a certain rank, in the Western world, becoming to attire themselves every evening in black from head to foot, as if for a funeral; and by most men, of all ranks, in that civilized region, becoming to clothe themselves in the dingiest hues all day long. The male apparel which is the last product of civilization appears to display a remarkable mixture of good sense and bad taste. The mistake made by the ladies of our time seems to be that of aiming at show and accomplishing waste; while the mistake of the gentlemen is that of aiming at plainness and accomplishing gloom.

Many other illustrations might be given of the curious turns taken by the fancy for clothing, as one of the uses of money. In the north of Ireland, for example, it is common to see a girl on the road with a smart bonnet, an extensive petticoat, and a gay parasol carried in the usual manner, but with a pair of shoes not upon her feet, but in her hands. Five-and-twenty years ago such a girl would have no more minded the effect of the sun on the skin of her face, than she now minds the effect of the earth on the skin of her foot; and five-and-twenty years hence it may be safely predicted that such a girl will not only think it advisable to wear her shoes on her feet, but will discover that they really hurt less there, when one is used to them, than the stones upon the road. At the same time, we must admit that the shoemakers of mankind—and of womankind, too, we pre- - sume—haye left nothing undone to perpetuate a prejudice against their own particular production, and to weaken the force of the love of money for the sake of obtaining it. There is, again, in the inventory of modern wealth, and among the civilized uses of money, another article of dress of so obvious and simple a character that many persons may naturally suppose that it descends from the most remote antiquity. Yet, some centuries ago, all the wardrobes in England did not comprise a single night-dress for lady or gentleman, king or queen. Take again, another institution of the modern dressing-room—the bath. There is a history of civilization in the Tale of a Tub.

There is a letter to the old ‘Spectator,’ on the effects of the love of money, in which the writer says that it is to that we owe the politician, the merchant, and the lawyer; ‘Nay,’ he adds, ‘I believe to that also we are indebted for our ‘ Spectator.’ We are not prepared to explain the various motives which inspire the pens of authors. Did Shakspeare write for money? Did Pope? Did Dr. Johnson? Did Lord Macaulay? Does Sir Edward Bulwer Lytton? We are concerned at present with the motives of consumers rather than producers; and one thing at least is clear, that it is highly to the credit of the former to elicit such productions from the latter, and that the love of money in the modern world is to a great extent the love of good, elevating, and instructive objects—a love which meets with its return. New desires for health, decency, knowledge, refinement, and intellectual pleasures, have, in fact, revolutionised production. The antithesis to modern wealth is not so much poverty as a different kind of wealth. The change is more remarkable in the quality than in the quantity. No inconsiderable part of human wealth, it is true, still consists of the means of unhappiness rather than of happiness, and of the gratification of vice rather than of virtue. On the whole, however, there is a transformation in the moral character of wealth, and of the desires involved in the general love of money. For the most part, instead of representing wickedness, brutal delight, and idle pomp, or conquest, tyranny, and plunder, the wealth of Europe represents peace, culture, liberty, and the comfort of the many rather than the magnificence of the few. Where man’s treasure is, there his heart is also; and the treasures of modern civilization seem,to us to show as remarkable an improvement in the moral as in the intellectual and physical condition of society. ‘ Riches,’ said Milton, ‘ growin hell;’ for even in his time much of the wealth that grew on earth bore many marks of being the property of bad and unhappy beings. But we may venture now to ask those well-meaning persons who, without regard to time and place, and without discrimination between good and evil, repeat ancient warnings against the love of money and the pursuit of wealth, whether they mean fo praise dirt under the name of poverty, and whether they think idleness better than industry, ignorance better than science and art, and barbarism better than civilized progress? ‘To political economists, on the other hand, we venture to suggest the cultivation of a department of the philosophy of riches which has never been scientifically investigated. ‘The laws which regulate the value of the supply forthcoming from producers have been almost exhaustively developed in political economy ; but the deeper laws which regulate the demand of the consumers, and which give the love of money all its force and all its meaning, have never yet received the regular attention of any school of philosophers.

IL.

Ir has long been a prevalent notion, that political economy is a series of deductions from the principle of selfishness or private interest alone. ‘The common desire of men to grow rich by the shortest and easiest methods—to obtain every gratification with the smallest sacrifice on their own part—has been supposed to be all that the political economist desires to have granted in theory, or to see regulating in practice the transactions of the world, to ensure its material prosperity. A late eminent writer has described as follows the doctrine of Adam Smith, in the “Wealth of Nations’: ‘He everywhere assumes that the great moving power of all men, all interests, and all classes in all ages and in all countries, is selfishness. He represents men as pursuing wealth for sordid objects, and for the narrowest personal pleasures. ‘The fundamental assumption of his work is that each man follows his own interest, or what he deems to be his interest. And one of the peculiar features of his book is to show that, considering society as a whole, it nearly always happens that men, in promoting their own, will unintentionally promote the interest of others.’

But, in truth, the acquisitive and selfish propensities of mankind, their anxiety to get as much as possible of everything they like, and to give as little as possible in return, are in their very nature principles of aggression and injury instead of mutual benefit: the mode of acquisition to which they im-

* Macmillan’s Magazine, February, 1863. t Buckle’s History of Civilization, vol. il.

mediately prompt is that of plunder or theft, and the competition which they tend to induce is that of conflict and war. Their first suggestion is not, ‘I will labour for you,’ but ‘you shall labour for me;’ not, ‘Give me this, and I will give you what will suit you better in exchange,’ but, ‘Give it to me, or else I will take it by force.’ The conqueror rather than the capitalist, the pirate rather than the merchant, the brigand rather than the labourer, the wolf rather than the watch-dog, obey the impulses of nature. The history of the pursuit of gain is far from being the simple history of industry, with growing national prosperity; it is the history also of depredation, tyranny, and rapine. One passage in it is thus given, in the early annals of our own country: ‘Every rich man built his castle, and they filled the land with castles. They greatly oppressed the wretched people by making them work at their castles, and, when they were finished, they filled them with evil men. ‘Then they took those whom they suspected to have any goods, seizing both men and women by night and day; and they put them in prisons for their gold and silver, and tortured them with pains unspeakable. . . . The earth bare no corn; you might as well have tilled the sea; for the land was all ruined by such deeds.’

But if misery and desolation are the natural fruits of the natural instincts of mankind, how has the prosperity of Hurope steadily advanced in spite of the enemy to it which nature seems to have planted in every man’s breast? How has the predatory spirit been transformed into the industrial and commercial spirit ? Under what conditions are individual efforts exerted, for the most part, for the general good? ‘These are the chief problems solved in Adam Smith’s ‘Inquiry into the Nature and Causes of the Wealth of Nations.’ He has been careful to point out that ‘the interests of individuals and particular orders of men, far from being always coincident with, are frequently opposed to, the interests of the public;’ and he observes that ‘all for themselves and nothing for other people seems to have been, in every age, the vile maxim of the masters of mankind.’ The effort of every man to improve his own condition is, it is true, in Adam Smith’s philosophy, a principle of preservation in the body politic; but his aim was to demonstrate that this natural effort is operative for the good of society at large only in proportion to the just liberty secured to every member of it to employ his natural powers as he thinks proper, whether for his own advantage or for that of others. Every infraction of, and every interference with, individual liberty he denounced as being as economically impolitic as morally unjust. His systematic purpose was to expose the losses which a nation suffers, not only from permission of the grosser forms of violence and oppression, but from every sort of restriction whatever upon voluntary labour and enterprise.

Of laws regulating agriculture and manufactures for the supposed advantage of the public, he said, ‘ both were evident violations of natural liberty, and therefore unjust, and they were both too asimpolitic asthey were unjust. That security, he added, which the laws in Great Britain give to every man, that he shall enjoy the fruits of his own labour, is alone sufficient to make any country flourish. The history of Europe, in so far as it is the history of the progress of opulence, is not, in his pages, the history of selfishness, but of improving justice; of emancipated industry, and of protection for the poor and weak. It is, accordingly, the history of strengthening restraints upon the selfish disposition of mankind to sacrifice the happiness and good of others to their advantage or immediate pleasure. The fundamental principles on which the increase of the wealth of nations rests are thus summed up, at the end of Adam Smith’s Fourth Book: ‘ All systems, either of preference or restraint, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, so long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and his capital into competition with those of any man or order of men.’

The treatise on the ‘Wealth of Nations’ is, therefore, not to be regarded, as it was by Mr. Buckle, as a demonstration of the public benefit of private selfishness. Adam Smith denies neither the existence nor the value of higher motives to exertion. The springs of industry are various. Domestic affection, public spirit, the sense of duty, inherent energy and intellectual tastes, make busy workmen, as well as personal interest. And personal interest is itself a phrase for many different motives and pursuits, deserving the name of selfishness or not according to their nature and degree ; just as wealth under a single term includes many things of very different moral quality, according to their character and use. The aims of men in life may be high or low; they may seek for riches of very different kinds and for very different purposes. In a recent essay in the ‘ Revue des Deux Mondes,’ the eminent economist, M. de Lavergne, maintains that political economy and religion are, though essentially distinct, related to each other as the soul and body are. Wealth, he says, means food, clothes, and houses; and religion, though it treats of higher things, does not teach that men should be left to perish of hunger and cold. Political economy has for its special end the satisfaction of the bodily wants, and religion that of the spiritual wants, of man. M. de Lavergne seems to have been led astray by the economic use of general terms, such as material wealth, material interests, and material progress.

For wealth is not really or properly limited in political economy to such things as satisfy the bodily or material wants of humanity. It comprehends many things, the use of which is to minister to man’s intellectual and moral life, but which have, notwithstanding, a price or value. Books, for example, as well as bread and meat, are wealth. Spiritual and other instructors are paid for as well as butchers and doctors. Wealth means, in fact, many different things, more or less material or immaterial, in different ages and countries. The highest kinds of wealth will be found where there is most general freedom for the development of the highest powers of humanity, and where no class have a licence for the gratification of their selfish passions at the expense of any other class. But what Adam Smith contended for was, that no class of men, be their motives good or bad, should be suffered, under any pretext, to encroach upon the industrial liberty of other men. The true moving power of the economic world, according to his system, is not individual selfishness, but individual energy and self-control. His fundamental principle is perfect liberty. The ‘ Wealth of Nations’ is, in short, an exhaustive argument for free labour and free trade, and a demonstration of the economical policy of justice and equal laws. Arguing against the law of apprenticeship, the philosopher said: ‘The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable. The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing his strength and dexterity in what manner he thinks proper for his own advantage is a plain violation of that most sacred property. It is a manifest encroachment upon the just liberty both of the workman and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper.’

The system, therefore, which is most subversive of the doctrines of political economy, as taught by Adam Smith, is that most selfish of all possible systems—slavery. The political economist must condemn it as loudly as the moralist. It attacks the life of industry, and prevents the existence of exchange. It robs the labourer of his patrimony; it robs those who would hire him in the market of their lawful profits; and it is a fraudulent abstraction from the general wealth of nations, the quantity and quality of which depend upon the degree of industrial liberty secured to every individual throughout the world for the exercise of his highest powers. Of the property of the slaveholder in the industry of his slaves, the paradox, /a propriété cest le vol, is a literal truth according to political economy as well as common morality, and as regards not only the slaves, but the whole commercial world. Yet slavery is a system within the legitimate range of economic inquiry, which is by no means limited, as has sometimes been contended, to the phenomena of an imaginary world of free exchanges, but extends to all the economic phenomena of the real world, in which wealth is produced and distributed according to very different systems. Injustice and oppression have their natural train of economic consequences as well as liberty and equal laws, and the economist is concerned with both, as the physician studies the laws of disease as well as health. ‘ Writers on political economy,’ says the chief among them in our time, ‘propose to investigate the nature of wealth, and the laws of its production and distribution, including, directly or remotely, the operation of all the causes by which the condition of human beings is made prosperous or the reverse.’

‘There is not a country in Europe at this day, not excepting our own, the economic phenomena of which the principle of exchange would be sufficient to interpret. But, even if pure commercial competition now regulated, throughout the whole of Europe, the production and distribution of every article of wealth, the whole domain of history, and the breadths of Asia, Africa, and America, would remain for the economist to explore, and to account on other principles for the direction and results of human industry, the use of natural resources, and the division of the produce. The economy of the Slave States of America, for example, afforded an opportunity for this inquiry, of which Mr. Cairnes availed himself in his admirable essay on the Slave Power. In an earlier essay, he described political economy as belonging to ‘the class of studies which includes historical, political, and social investigations,’ and defined it as ‘the science which traces the phenomena of the production and distribution of wealth up to their causes in the principles of human nature, and the laws and events of the external world.’* In the later essay, instead of deducing unreal consequences from the hypothesis of industrial liberty, he has traced the origin and consequences of the opposite order of things. Instead of the theory of wages, profit, and rent, applicable to a free society, he lays bare the structure of a society which excludes wages, for the labourer is fed and flogged like a beast of burden; in which there is no profit, according to the economist’s defi-