Principles of political economy, with some of their applications to social philosophy

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Introduction

The best Introduction to tlie Prmci'ples of Political Economy of John Stuart Mill is Mill's own account of his economic studies. They began at the age of thirteen ; when he was approaching the end of that unique educational process, enforced by the stern will of his father, which he has described in his Autobiography for the amazement and pity of subsequent generations.

" It wa? ' "'^''^ that he took me through a complete course of pohtical - -^y. His loved and intimate friend, Eicardo, had shortly before published the book which formed so great an epoch in pohtical economy ; a book which would never have been pubUshed or written, but for the entreaty and strong encouragement of my father. ... No didactic treatise embodying its doctrines, in a manner fit for learners, had yet appeared. My father, therefore, commenced instructing me in the science by a sort of lectures, which he dehvered to me in oui walks. He expounded each day a portion of the subject, and I gave him next day a written account of it, which he made me rewrite over and over again until it was clear, precise, and tolerably complete. In this manner I went through the whole extent of the science ; and the written outhne of it which resulted from my daily compte rendu served him afterwards as notes from which to write his Elements of Political Economy. After this I read Eicardo, giving an account daily of what I read, and: discussing . . . the collateral points which ofiered themselves in our progress.

"On Money, as the most intricate part of the subject, he made me read in the same manner Eicardo's admirable pamphlets, written during . . . the Bulhon controversy ; to these succeeded, Adam Smith ; and ... it was one of my father's main objects to make me apply to Smith's more superficial view of pohtical economy the superior fights of Eicardo, and detect what, was i^,liLJx^UUliUi'^ fallacious in Smith's arguments, or erroneous in any of his conclusions. Such a mode of instruction was excellently calculated to form a thinker ; but it required to be worked by a thinker, as close and vigorous as my father. The path was a thorny one, even to him, and I am sure it was so to me, notwithstanding the strong interest I took in the subject. He was often, and much beyond reason, provoked by my failures in cases where success could not have been expected ; but in the main his method was right, and it succeeded.*' i

After a year in France, during which he " passed some time in the house of M. Say, the eminent political economist, who was a friend and correspondent" of the elder Mill,^ he went a second time over the same ground under the same guidance.

*' When I returned (1821), my father was just finishing for the press his Elements of Political Economy, and he made me perform an exercise on the manuscript, which Mr. Bentham practised on all his own writings, making what he called * marginal contents ' ; a short abstract of every paragraph, to enable the writer more easily to judge of, and improve, the order of the ideas, and the general character of the exposition." s This was soon after reaching the age of fifteen. Four years later, in 1825, he made a systematic survey of the field for the third time. Though he was still only nineteen, he was now fully embarked upon his career as an economist, and was contributing articles on currency and commercial policy to the Westminster Review. Yet when, in that year, John Mill and a number of his youthful friends entered upon "the joint study of several of the branches of science" which they " wished to be masters of," it was once more the work of the elder Mill which served as the basis.

" We assembled to the number of a dozen or more. Mr. Grote lent a room of his house in Threadneedle Street. . . . We met two mornings in every week, from half-past eight till ten, at which hour most of us were called off to our daily occupations. Our first subj ect was PoHtical Economy. We chose some systematic treatise as our text-book ; my father's Elements being our first choice. One of us read a chapter, or some smaller portion of the book. The discussion was then opened, and anyone who had an objection, or other remark to make, made

INTRODUCTION vii

it. Our rule was to discuss thorougiily every point raised . . . until all who took part were satisfied with the conclusion they had individually arrived at ; and to follow up every topic . . . which the chapter or the conversation suggested, never leaving it until we had untied every knot." ^

The figure of James Mill has been singularly obscured by the more attractive personality of his son. It may possibly be open to discussion how far James Mill was a trustworthy interpreter of Ricardo. But what cannot be doubted is the extent and penetrating character of his influence. The evidence of his son may certainly be relied upon :

" My father's writings and conversation drew round him a number of young men who had already imbibed, or who imbibed from him, a greater or smaller portion of his very decided poHtical and philosophical opinions. The notion that Bentham was surrounded by a band of disciples who received their opinions from his lips, is a fable. . . . The influence which Bentham exercised was by his writings. Through them he has produced, and is producing, eflects on the condition of mankind, wider and deeper than any which can be attributed to my father. He is a much greater name in history. But my father exercised a far greater personal ascendency. He was sought for the vigour and instructiveness of his conversation, and did use it largely as an instrument for the diffusion of his opinions. . . . " It was my father's opinions which gave the distinguishing character to the Benthamic or utilitarian propagandism of that time. They fell singly, scattered from him, in many directions, but they flowed from him in a continued stream principally in three channels. One was through me, the only mind directly formed by his instructions, and through whom considerable influence was exercised over various young men, who became, in their turn, propagandists. A second was through some of the Cambridge contemporaries of Charles Austin . . . some of. the more considerable of whom afterwards sought my father's i acquaintance. . . . The third channel was that of a younger: generation of Cambridge undergraduates, contemporary . . . with Eyton Tooke, who were . . . introduced by him toi my father. ...

" Though none of us, probably, agreed in every respect with viii INTRODUCTION

my father, his opinions, as I said before, were the principal element which gave its colour and character to the little group of young men who were the first propagators of what was afterwards called ' Philosophic Eadicalism.' Their mode of thinking was characterized by ... a combination of Bentham's point of view with that of the modern political economy, and with the Hartleian metaphysics. Malthus's population principle was quite as much a banner, and point of union among us, as any opinion specially belonging to Bentham. This great doctrine ... we took up with ardent zeal, ... as indicating the sole means of realizing the improvability of human affairs by securing full employment at high wages to the whole labouring population through a voluntary restriction of the increase of their numbers." ^

What was true of James Mill's personal influence on the entire circle of young Philosophic Radicals and over the whole range of their beliefs, was peculiarly true of his influence on the economic opinions of his son. The impress was deep and indelible. For good or for ill, — and it is not the purpose of this Introduction to interpose between the reader and the author and to assign either praise or blame — John Mill's economics remained those of his father down to the end of his life. His economics, that is to say, in the sense of what he himself afterwards described as " the theoretic principles," ^ or again as the " abstract and purely scientific " ^ element in his writings : the whole, in fact, of the doctrine of Distribution and Exchange in its application to competitive conditions. After reading through the first three Books of the son's Principles of 1848, one has but to turn to the father's Elements of 1821 to realize that, though on outlying portions of the field (like the subject of Currency) John Mill had benefited by the discussions that had been going on during the interval, the main conclusions, as well as the methods of reasoning, are the same in the two treatises. How much of " the deposit " of doctrine, — if we may borrow a theological term, — came originally from Ricardo, how much from Malthus, from Adam Smith, from the French Physiocrats of the eighteenth century, and from the genera] movement of philosophical and political thought, is a subject on which much has been written, but on which we cannot now enter.

INTRODUCTION k

It is sufficient for our purpose to make this one point clear : that it was through James Mill, and, as shaped by James Mill, that it chiefly reached his son.

Yet John Mill certainly thought, when he was writing his book in 1848, and still more evidently when he wrote his Autohiografhy in 1861, that there was a wide difference between himself and those whom he calls, in language curiously anticipating that of our own day, "the political economists of the old school," i or "the common run of pohtical economists." 2 And accordingly it is essential to observe that this difference consisted, not in any abandonment of the " abstract science," but in the placing of it in a new setting In substance he kept it intact ; but he sought to surround it, so to speak, with a new environment.

To make this clear, we must return to Mill's mental history. Though eminently retentive of early impressions, he was also, in a very real sense, singularly open-minded ; and the work of his Hfe cannot be better described than in a happy phrase of his own coinage : it was a constant effort to " build the bridges and clear the paths " which should connect new truths with his " general system of thought," 3 ^'.g. with his Benthamite and Ricardian starting point. Of the influences, later than that of his father, which coloured his thoughts, three must be singled out for notice. They may briefly be summed up — though each name represents much besides — as those of Coleridge, of Comte, and of his wife.

In Coleridge and in the Coleridgians — such as Maurice and Sterhng, whose acquaintance he made in 1828 — he recognised the Enghsh exponents of " the European reaction against the philosophy of the eighteenth century,"* and its Benthamite outcome. That reaction, he came to beheve, was in large measure justifiable ; and in two celebrated articles in the London and Westminster Review in 1838 and 1840 ^ he sought to expound Benthamism and Coleridgism as complementary bodies of truth. He did not, indeed, extend this appreciation to Coleridge's economic utterances, and compounded for the respect he paid to his pohtical philosophy by the vivacity with which he condemned his incursions intc the more sacred field :

* Political Economy. Book iv. chap. vi. § 2.

^ Reprinted in Dissertations and Discussions. Series I.

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*' In political economy he writes like an arrant driveller, and it would have been well for his reputation had he never meddled with the subject. But this department of knowledge can now take care of itself." ^

What Coleridge helped him to realise was, firstly, the historical point of view in its relation to politics, and secondly, and as a corollary, the inadequacy of laissez fake.

"The Germano-Coleridgian school produced ... a philosophy of society in the only form in which it is yet possible, that of a philosophy of history." ^ And again :

" That series of great writers and thinkers, from Herder tc Michelet, by whom history . . . has b«en made a science of causes and effects, ... by making the events of the past have a meaning and an intelligible place in the gradual evolution of humanity, have afforded the only means of predicting and guiding the future." ^ Similarly, after pointing out that Coleridge was

*' at issue with the let alone doctrine, or the theory that governments can do no better than to do nothing," he remarks that it was

" a doctrine generated by the manifest selfishness and incompetence of modern European governments, but of which, as a general theory, we may now be permitted to say that one-half of it is true and the other half false." *

It is not wonderful that the Bentham and Coleridge articles should " make a temporary alienation between Mill and his old associates and plant in their minds a painful misgiving as to his adhering to their principles," as we learn from Professor Bain, who became an intimate friend of Mill shortly afterwards.^ As early as 1837 Mrs. Grote had been " quite persuaded that the [London and Westminster] Review would cease to be an engine of propagating sound and sane doctrines on Ethics and PoHtics under J. M." ^ But it is a little surprising, perhaps, that by 1841 Mill was ready to describe himself in the privacy of correspondence as having definitely withdrawn from the Benthamite school ** in

* Dissertations and Discussions, I. p. 452.

^ Alexander Bain, John Stuart Mill, A Criticism : with 'personal recollections, X 66. 6 ii)id, p. 57 n.

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which I was brought up and in which I might almost say I waa born." 1

The letter was that in Which Mill introduced himself to Comte^ the first of a remarkable series which has only recently seen the light. By the time he wrote it, the influence of Coleridge had been powerfully supplemented by that of the French philosopher. Indeed, with that tendency to run into extremes which was seldom quite absent from him, Mill even declared, in addressing Comte, that it was the impression produced as far back as 1828 by the reading of a very early work by Comte which had " more than any other cause determined his definite withdrawal from the Benthamite school." In his eager enthusiasm, he probably ante-dated Comte's influence. It seems to have been the first two volumes of the Positive Philosophy (of which the second appeared in 1837) that first interested Mill at all deeply in Comte's views ; though, as we shall notice later, he had long been familiar with ideas akin to them in the writings of the St. Simonians.

However this may have been, it is abundantly clear that during the years 1841-3, when he was engaged in completing his great treatise on Logic, Mill was fascinated by Comte's general system, as set forth in the Positive Philosophy. In October, 1841, he wrote to Bain that he thought Comte's book, in spite of '* some mistakes," was " very near the grandest work of this age." 2 In November, in the letter to Comte already quoted, he took the initiative and wrote to the French philosopher to express his " sympathy and adhesion." " I have read and re-read your Cours with a veritable intellectual passion," he told him.

" I had indeed already entered into a line of thought somewhat similar to your own ; but there were many things of thy first importance which I had still to learn from you and I hope to show you, by and by, that I have really learnt them. There are some questions of a secondary order on which my opinions are not in accord with yours ; some day perhaps this difference will disappear ; I am not flattering myself when I ' believe that I have no ill-founded opinion so deeply rooted as to resist a thorough discussion," such as he hoped to engage Comte in. It was for this reason

^ L. L^vy-Bruhl, Lettres Inedites de John Stuart 31 ill a Auguste Comte (Paris, 1899), p. 2. Writing to Comte, Mill naturally employs Comtean phraseology, and speaks of *' ma sortie definitive de la section benthamiste de I'ecole revolutionnaire." a Bain, J. S. Mill, p. 63.

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that he ventured to put himself into communication with " that I

one of the great minds of our time which I regard with most esteem and admiration," and beheved that their correspondence might be " of immense value " for him. And in the first edition of his Logic^ which appeared in 1843, he did not scruple to speak of Comte as " the greatest Hving authority on scientific methods in |

general." ^ Into the causes of this enthusiasm it is unnecessary to enter. Mill was tired of Benthamism : a masterly attempt to construct a philosophy of Science and of Humanity, which paid attention at the same time to historical evolution and to the achievements of modern physical and biological science (a side on which the Benthamite school had always been weak), and yet professed to be " positive," i.e. neither theological nor metaphysical — such an attempt had, for the time, an overmastering charm for him. The effect of his reading of Comte on his conception of the logic of the physical and biological sciences falls outside our present range. What we have now to notice are Comte's views with regard to poUtical economy. They cannot but have shaken, at any rate for a time, Mill's confidence that what he had learnt from his father could " take care of itself."

Comte's ultimate object was, of course, the creation of " the Social Science " or " Sociology." To-day there are almost as many different conceptions of the scope of " sociology " as there are eminent sociologists ; so that it is perhaps worth while to add that Comte's ideal was a body of doctrine which should cover the life of human society in all its aspects. This science could be created, he held, only by the " positive " method — by the employment of the Art of Observation, in its three modes. Direct Observation or Observation proper, Experiment, and Comparison.^ Each of these modes of Observation would necessarily assume a character appropriate to the field of enquiry. As to Observation proper : while the metaphysical school of the eighteenth century had grossly exaggerated its difficulties, on the other hand there was no utihty in mere collections of disconnected facts. Some sort of provisional hypothesis or theory or anticipation was necessary, if only to give direction to our enquiries. As to Experiment : direct Experiment, as in the physical sciences, was evidently impracticable, but its place could be taken by a consideration of " pathological " states Df society such as might fairly be called " indirect " Experiment.

1 Cf. Bain, p. 72.

' Cours de Philosophie Positive, vol. iv. (1839), pp. 412 seq.

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And as to Comparison : there was a form of this procedure, viz. the comparison of " the different consecutive conditions of humanity," — " the historical method " in the true sense of the term, — so fruitful in sociological enquiry as to constitute the distinguishing characteristio of this particular branch of science.

To this social science of his vision Comte appHed the distinction he had already appHed to the preUminary sciences, between the static and the dynamic.^ The difference between " the fundamental study of the condition of existence of society " and " the study of the laws of its continuous movement " was so clear, in his judgment, that he could foresee the ultimate division of Sociology into Social Statics and Social Dynamics. But to attach, in the formative stage of the science, any very great importance to this convenient distribution of the subject matter would, he thought, be positively dangerous, since it would tend to obscure " the indispensable and permanent combination of the two points of view."

Comte's attitude towards poUtical economy, as it was then taught was the natural result of his views as to the proper method of creating, a science of society.^ As part of the general movement of revolutionary thought, it had had a " provisional " function, and had rendered a transitory service in discrediting the industrial pohcy of the ancien regime after that policy had become a mere hindrance to progress. It had prepared the way for a sound historical analysis by calling attention to the importance of the economic side of Ufe. Its practical utihty, however, was by this time a thing of the past : and it was now an actual obstacle to social advance. Like the rest of the revolutionary philosophy, it now tended to prolong and systematise social anarchy. It led people to regard the absence of all regulating intervention in economic affairs on the part of society as a universal dogma ; and it met all the difficulties arising out of modern industrial changes, such as " the famous and immense economic question of the effect of machinery," with " the sterile aphorism of absolute industrial Hberty." And these practical consequences were but, in Comte's judgment, the consequences of its underlying scientific defects. From this sweeping condemnation Comte excepts Adam Smith, from whose example, according to him, ; the creators of the contemporary poUtical economy had completely! departed. But of the contemporary poUtical economy he declares that it was fundamentaUy metaphysical : its creators had no real xiv INTRODUOTION

understanding of tlie necessity and character of scientific observation. Its "inanity" was proved by the absence in economic literature of tbe real tests of all truly scientific conceptions, viz. continuity and fecundity. Its sterile disputes on the meaning of terms such as value, and utility, and 'production were like the worst debates of medieval schoolmen. And the very isolation of economics from other fields of social enquiry which economists had sought to justify was its decisive condemnation.

" By the nature of the subject, in social studies the various general aspects are. quite necessarily, mutually inter-connected and inseparable in reason, so that the one aspect can only be adequately explained by the consideration of the others. It is certain that the economic and industrial analysis of society cannot be positively accomplished, if one leaves out all intellectual, moral and political analysis: and therefore this irrational separation furnishes an evident indication of the essentially metaphysical nature of the doctrines based upon it." Now Mill was immensely attracted, and for the time possessed, hj Comte's general conception of the Social Science or Sociology ; and in the concluding chapters of his Logic he took this over bodily, together with Comte's distinction between Social Statics and Social Dynamics.^ Just as Comte rejected the " metaphysical " political philosophy of France, so Mill made clear his opinion of the inadequacy of " the interest-philosophy of the Bentham school " in its appHcation to " the general theory of government." That philosophy, as he explained, was " founded on one comprehensive premiss : namely, that men's actions are always determined by their interests." But as this premiss was not true, what were really " the mere polemics of the day," and useful enough in that capacity, were quite erroneously *' presented as the scientific treatment of a great question." And quite in the spirit of Comte he added :

" These philosophers would have appHed and did apply their principles with innumerable allowances. But it is not allowances that are wanted. There is little chance of making due amends in the superstructure of a theory for the want of sufficient breadth in its foundations. It is unphilosophical to construct a science out of a few of the agencies by which the phenomena are determined, and leave the rest to the routine of practice or the sagacity of conjecture. We ought either not to pretend to scientific forms or

* Mill's Logic, book vi, chaps. 6, 10.

we ought to study all the determining agencies equally, and endeavour, as far as can be done, to include all of them within the pale of the science ; else we shall infalHbly bestow a disproportionate attention upon those which our theory takes into account, while we misestimate the rest and probably underrate their importance." ^

How, then, about poHtical economy, which Comte had criticised in precisely the same spirit ? Mill was not at all disposed to throw overboard the Ricardian economics received from his father. In the first place, he maintained that a distinction could be drawn between the ^'general Science of Society" or ^^ general Sociology " and " the separate compartments of the science, each of which asserts its conclusions only conditionally, subject to the paramount control of the laws of the general science." The ground for this contention he sets forth thus :

" Notwithstanding the universal consensus of the social phenomena, whereby nothing which takes place in any part of the operations of society is without its share of influence on every other part; and notwithstanding the paramount ascendency which the general state of civiHsation and social progress in any given society must hence exercise over the partial and subordinate phenomena ; it is not the less true that different species of social facts are in the main dependent, immediately and in the first resort, on different kinds of causes ; and therefore not only may with advantage, but must, be studied apart. . . .

" There is,/or examfle, one large class of social phenomena of which the immediately determining causes are principally those which act through the desire of wealth ; and in which the psychological law mainly concerned is the familiar one that a greater gain is preferred to the smaller ... A science may be thus constructed which has received the name of Political Economy." 2

In spite of the "for example" with which political economy is introduced, it is clear that the generalisation was formulated for the sake of that one subject, subject to a quahfication to be shortly mentioned.

" I would not here undertake to decide what other hypothetical or abstract sciences, similar to PoHtical Economy, may admit of being carved out of the general body of the social science;

XiUXiVWJ^OOXXVJXK what other portions of the social phenomena are in a sufficiently close and complete dependence, in the first resort, on a particular class of causes, to make it convenient to create a preliminary science of those causes ; postponing the consideration of the causes which act through them or in concurrence with them to a later period of the enquiry." i

But Mill was not content with this " departmental" view, taken by itself : he proceeded to build two further " bridges " between his new and his old opinions. In an essay, written for the most part in 1830, and pubhshed in the London and Westminster Review in 1836,2 Mill had laid down with the utmost stringency that the only method appropriate to poUtical economy, i.e. to the Eicardian economics, was the a priori or deductive one. Between this and the method of Observation recommended by Comte it might have been thought that there was a sufficiently wide gulf. But Mill now proceeded to describe "the historical method," — whereby "general" Sociology was to be built up according to Comte and himself aUke, — in such terms as permitted him to designate even that a "Deductive Method," though indeed an ^^ Inverse Deductive Method." Thus the evident contrast in method was softened down into the difierence simply between " direct " and " inverse " deduction.^

The other bridge was to be a new science, or couple of sciences, still to be created. Mill explained at length in his Logic that there was need of what he denominated " Ethology " or a Science of Character.* Built upon this, there ought to be a Political Ethology, or " a theory of the causes which determine the type of character belonging to a people or to an age." ^ The bearing of Political Ethology on Political Economy is thus summarily indicated :

" The most imperfect part of those branches of social enquiry which have been cultivated as separate sciences is the theory of the manner in which their conclusions are affected by ethological considerations. The omission is no defect in them as abstract or hypothetical sciences, but it vitiates them in their practical appHcation as branches of a comprehensive social science. In poUtical economy, for instance, empirical laws of human nature are tacitly assumed by English thinkers, which are calculated only for Great Britain and the United States. Among other

Mill's Logic, ii. p. 486.

Reprinted in Essays on some Unsettled Questions of PoUtical Economy {ISii),

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tilings an intensity of competition is constantly supposed, wliich, as a general mercantile fact, exists in no country in the world except those two. An EngUsh political economist . , . has seldom learned that it is possible that men, in conducting the business of selling their goods over the counter, should care more about their ease or their vanity than about their pecuniary gain." 1

In spite once more of the introductory " for instance," it is clear that it is only poUtical economy that Mill has in his mind ; and it is primarily to remedy its " imperfections " that PoUtical Ethology is to be created. PoHtical Ethology, Hke Ethology itself, Mill conceived of as directly deductive in its character.