Front matter
^ss©Q©se^e©s5
I LIBRARY OF CONGRESS.
i i UNITED STATES^ OF AMEmCA.
Preface
The following pages were written in hours snatched from a laborious profession, often at wide intervals apart, and generally after a long and exhausting day's work. They were afterwards put together, and partly rewritten, on shipboard, on my way here from the Antipodes. These conditions are not very favourable to that concentration and continuity of thought which a subject of the kind here treated of requires, and this must be my excuse for any defects that may be found in them, which, I have no doubt, are numerous enough.
There is only one thing I take credit for, and that is, that I have endeavoured to put my ideas in as concise a form as possible. There is not a paragraph, sentence, or word, not absolutely necessary to explain my mean-
VI PREFACE.
ing that I have retained, so that, if I do not succeed in convincing my readers, I shall, at all events, have the satisfaction of knowing that I have not wearied their patience.
I have to thank my friend Prof. T. E. Cliffe Leslie for his kindness in reading over the proof sheets, and for some valuable suggestions which he has made to me, although this must not be understood as implying that our views are perfectly in accord on all points.
D, S.
London,
November 1st, 1876.
Contents
PAET I.— MATTEE AND METHOD.
Chapter I. The Subject-mattee
PAGB
Classification of Subject ... ... ... ... ... 1
The Terux Political Economy ... ... ... ... 3
Yarious Definitions of tlie Science ... ... ... ... 5
Is Wealth the Subject-matter ? ... ... ... ... 7
Is Political Economy a Mental or a Physical Science ? ... 7
Professor Cairnes's View- ... ... ... ... 9
Political Economy is a Mental Science ... ... ... 10
What is meant by Industrial Science ... ... ... 12
CHAPTER n.
THE METHOD OF INVESTIGATION^.
Professor Cairnes's View ... ... ... ... ... 14
Mr. Mill's View examined ... ... ... ... ... 17
The Hypothesis of the Maximum of Wealth ... ... 22
Vm CONTENTS.
PAGB
The Hypothesis of a Single Motive ... ... ... ... 23
Mr. Mill admits the Inadequacy of his Hypothesis ... ... 24
Admits the Necessity for Verification... ... ... ... 26
His " Proper- Allowance " Theory inapplicable ... ... 27
Conclusion from the Whole ... ... ... ... ... 27
The Method by Induction ... ... ... ... 28
A Method more applicable to Moral than to Physical Science ... 29
Chapter III. Alleged Sufficiency Of Self-interest
Not in Accordance with the Laws of Man's Nattire ... 33
Chapter IV. On Demand And Supply
Difference between this and Competition ... ... ... 35
Meaning of the Term Demand ... ... ... ... 36
Corollaries from the Law ... ... ... ... ... 38
It ignores Moral Distinctions ... ... ... ... 38
Contest between Wants and Desires ... ... ... 39
Contest between Desires ... ... ... ... 40
Illustrated by the Case of a Wages Dispute ... ... ... 41
Effect of on the Eate of Wages ... ... ... ... 42
Injurious Effects of Low Wages ... ... ... ... 44
The Argument from Enlightened Self-interest ... ... 45
The Ratio of Wages to the Price of Provisions ... ... 47
Distinction between Necessaries and Luxuries ... ... 49
Different Effects of, on Capital and Labour' ... ... 62
CHAPTER Y.
ON COMPETITION.
What the Sufficiency of Self-interest Dogma implies ... ... 55
The Object of Competition ... ... ... .... 56
Custom, Competition, and Co-operation ... ... ... 57
CONTENTS.
IX
The Tendency of Competition
Conditions Necessary to Annihilate Competition
The First Condition — Capital : —
The Case where two Capitals are Unequal . . .
The Case where two Capitals are Equal
Wholesale and Eetail Houses
Small Manufacturers and Wholesale Firms
Sale by Auction ...
Land Sales in the Australian Colonies . . .
National Competition
England and her Dependencies
The Indian Cotton Duties The Second Condition — Absence of Moral Principle :-
Modem Trade Practices ...
Openly tolerated and defended
The Manchester Chamber of Commerce
The Bombay Chamber of Commerce How such Evils right themselves One Cause of High Customs Tariffs ...
The Case of Victoria The Quality of British Exports Industrial Progress does not keep Pace with Social Political Economy and Morals
Economists subordinate Social to Individual Interests The Moral Element Essential
PAGE
..
70 70 75 79
. 86
... 92
PAET IL— PEINCIPLES.
CHAPTER YI.
INDUSTRIAL FORCES.
Adam Smith's Premisses in the Wealth of Nations
In his Moral Sentwients
Difference between him and Modern Deductionists
The Method of Social Science
The Method of Ethics
The Isolation of Motives
X CONTENTS.
PAGE
Difference between a Force and a Law ... ... ... 102
Different Kinds of Forces ... ... ... ... 103
Classification of Industrial Forces ... ... ... ... 105
The Eelative Importance of Industrial Forces ... ... 10/
The Egoistic : —
The First Division, or Wants ... ... ... 107
The Second Division, or Desires ... ... ... 109
The Hemeistic or Social Forces ... ... ... ... Ill
The AUostio or Moral Forces ... .,. ... ... 113
CHAPTER yil.
ON VALUE.
Value in Use and in Exchange ... ... ... ... 115
Various Definitions of Value ... ... ... ... 115
Exchangeability not an Essential Element in Value ... ... 116
Utility and Difl&culty of Attainment in Relation to Value . . . 118
The Essential Character of Value ... ... ... ... 120
Difficulty of Attainment Subordinate to Utility ... ... 120
CHAPTER YIII.
ON PRICE.
Difference between Value and Price ... ... . ... ... 123
How Price is determined ... ... ... ... 124
Demand and Supply in relation to Price ... ... ... 125
Mr. Mill's Definition of the Terms Demand and Su;pply . . . 125
The Terms Unsuitable ... ... ... ... ... 127
Quantitativeness not an Essential Element in Price ... ... 129
The Case of a Deficiency ... ... ... ... 129
The Effect of a Deficiency or Surplus ... ... ... • 131
Fluctuations in the Money Market ... ... ... ... 132
Quantity in relation to Price ... ... ... ... 133
CONTENTS. XI
CHAPTER IX.
ON PEICE (continued).
PAGE
Instruments of Production ... ... ... ... 136
Labour : —
The Wages -fund Theory ... ... ... ... 137
Is based on two Erroneous Assumptions ... ... 138
That the Capital of a Country is a Fixed Quantity... 138
That Wages are paid out of Capital... ... ... 139
The Eolation of Profits to Wages ... ... ... 140
The Case of the Coal and Iron Trades ... ...* ... 141
Variations in the Eate of Wages in Different Countries 145
Special Causes of Variation ... ... ... ... 146
Variations in the same Country ... ... ... 149
Eegulated by Profits ... ... ... ... ... 149
Capital : —
The Eolation of Profits to Interest .. . ... ... 151
The Price of Money in New and in Old Countries . . . 152
Land : —
The Eelation of Profits to Eenfc ... ... ... 153
PAET III.— KELATIONS.
CHAPTER X.
EELATION TO SOCIOLOGY.
Points of Agreement between Industrial and Social Science ... 157
The Deductionists' Hypothesis ... ... ... ... 158
The Family as the Unit ... ... ... ... ... 159
The Standpoint of the Sociologist ... ... ... 160
Structure of the Social and Industrial Organism ... ... 162
Subordination of Industrial to Social Science ... ... 163
The Sphere of Social and Industrial Forces ... ... ... 165
Xli CONTENTS.
CHAPTER XI.
EELATION TO ETHICS.
FAGB
Insufficiency of the Henaeistic Forces ... ... ... 166
The Lancashire Cotton Spinners ... ... ... ... 166
Manufactnrers and Middlemen ... ... ... ... 168
Views of Plato and Aristotle ... ... ... ... 171
Industry based on the Ethical Sentiment ... ... ... 172
As in the Case of Property ... ... ... 172
Why the Ethical Sentiment is Essential ... ... ... 174
Helation of Industrial to Social and Ethical Science ... ... 175
CHAPTER XII.
RELATION TO ART.
DiflPerence between Science and Art ... ... ... ... 176
The Art of Legislation... ... ... ... ... 176
Industrial Art ignored ... ... ... ... ... 177
Mental Phenomena incapable of Prevision ... ... 178
Notwithstanding this a Moral Science exists ... ... ... 179
The Deductionists insist on Prevision ... ... ... 180
State Interference Necessary ... ... ... ... 182
Legislative Art follows Nature's Method ... ... ... 183
One Cause of Industrial Supremacy ... ... ... ... 186
Buying in the Cheapest Market ... ... ... ... 187
Society the Best Judge of its own Interests ... ... ... 188
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