I need not pursue these ill.u.s.trations of the awkward results of excessive zeal in a disciple. It is worth noticing, however, that M'Culloch's practical conclusions are not so rigid as might be inferred. His abstract doctrines do not give his true theory, so much as what he erroneously took to be his theory. The rules with which he works are approximately true under certain conditions, and he unconsciously a.s.sumes the conditions to be negligible, and the rules therefore absolute. It must be added that he does not apply his conclusions so rigidly as might be expected. By the help of 'friction,' or the admission that the ride is only true in nineteen cases out of twenty, he can make allowance for many deviations from rigid orthodoxy. He holds, for example, that government interference is often necessary. He wishes in particular for the establishment of a 'good system of public education.'[383] He seems to have become more sentimental in later years. In the edition of 1843 he approves the Factory Acts, remarking that the last then pa.s.sed 'may not, in some respects, have gone far enough.'[384] He approves a provision for the 'impotent poor,' on the principle of the Elizabethan act, though he disapproves the centralising tendency of the new poor-law. Though he is a good Malthusian,[385] and holds the instinct of population to be a 'constant quant.i.ty,'[386] he does not believe in the impossibility of improvement. The 'necessary' rate of wages fixes only a minimum: an increase of population has been accompanied by an increase of comfort.[387] Wages rise if the standard of life be raised, and a rise of wages tends to raise the standard. He cordially denounces the benevolent persons who held that better wages only meant more dissipation. Better wages are really the great spur to industry and improvement.[388] Extreme poverty causes apathy; and the worst of evils is the sluggishness which induces men to submit to reductions of wages. A sense of comfort will raise foresight; and the _vis medicatrix_ should be allowed to act upon every rank of society. He is no doubt an individualist, as looking to the removal of restrictions, such as the Conspiracy Laws,[389] rather than to a positive action of the government; but it is worth notice that this typical economist is far from accepting some of the doctrines attributed to the school in general.

The cla.s.sical school blundered when it supposed that the rules which it formulated could be made absolute. To give them that character, it was necessary to make false a.s.sumptions as to the ultimate const.i.tution of society; and the fallacy became clear when the formulae were supposed to give a real history or to give first principles, from which all industrial relations could be deduced. Meanwhile, the formulae, as they really expressed conditional truths, might be very useful so long as, in point of fact, the conditions existed, and were very effective in disposing of many fallacies. The best ill.u.s.tration would probably be given by the writings of Thomas Tooke (1774-1858),[390] one of the founders of the Political Economy Club.

The _History of Prices_ is an admirable explanation of phenomena which had given rise to the wildest theories. The many oscillations of trade and finance during the great struggle, the distress which had followed the peace, had bewildered hasty reasoners. Some people, of course, found consolation in attributing everything to the mysterious action of the currency; others declared that the war-expenditure had supplied manufacturers and agriculturists with a demand for their wares, apparently not the less advantageous because the payment came out of their own pockets.[391] Tooke very patiently and thoroughly explodes these explanations, and traces the fluctuations of price to such causes as the effect of the seasons and the varying events of the war which opened or closed the channels of commerce. The explanation in general seems to be thoroughly sound and conclusive, and falls in, as far as it goes, with the principles of his allies. He shows, for example, very clearly what were the conditions under which the orthodox theory of rent was really applicable; how bad seasons brought gain instead of loss to the 'agricultural interest,' that is, as Tooke explains, to the landlord and farmer; how by a rise of price out of proportion to the diminution of supply, the farmer made large profits; how rents rose, enclosure bills increased, and inferior land was brought under the plough. The landlord's interest was for the time clearly opposed to that of all other cla.s.ses, however inadequate the doctrine might become when made absolute by a hasty generalisation. I need not dwell upon the free-trade argument which made the popular reputation of the economists. It is enough to note briefly that the error as to the sphere of applicability of the doctrine did not prevent many of the practical conclusions from being of the highest value.

FOOTNOTES:

[294] A life of Ricardo by M'Culloch is prefixed to his _Works_. I cite the edition of 1880. Ricardo's letters to Malthus were published by Mr. Bonar in 1887; his letters to M'Culloch, edited by Mr.

Hollander for the American Economic a.s.sociation, in 1895; and his letters to H. Trower, edited by Mr. Bonar and Mr. Hollander, have just appeared (1900).

[295] He remarks upon this difficulty in the case of Smith's treatment of rent, and gives a definition to which he scarcely adheres.--_Works_, p. 34 ('Principles,' ch. ii., 1888).

[296] _Works_, p. 378. Ricardo, it should be said, complained when Malthus interpreted him to mean that this opposition of interests was permanent and absolute.

[297] Malthus admits the general principle of free trade, but supports some degree of protection to corn, mainly upon political grounds. He holds, however, with Adam Smith, that 'no equal quant.i.ty of productive labour employed in manufactures could ever occasion so great a reproduction as in agriculture' (_Grounds of an Opinion, etc._, p.

35)--a relic of the 'physiocrat' doctrine.

[298] _Works_, p. 385.

[299] _Ibid._ p. 386.

[300] See also _Letters to Malthus_, p. 175.

[301] 'Your modern political economists say that it is a principle in their science that all things find their level; which I deny, and say, on the contrary, that it is the true principle that all things are finding their level, like water in a storm.'--Coleridge's _Table-Talk_, 17th May 1833.

[302] _Letters to Malthus_, p. 96; and see the frequently quoted pa.s.sage where he complains that Malthus has taken his book as more 'practical' than he had intended it to be, and speaks of his method of imagining 'strong cases.'--_Ibid._ p. 167.

[303] _Works_, p. 40 _n._ (ch. ii.).

[304] _Works_, p. 53 (ch. v.), and p. 124 (ch. xvi.), where he quotes from the _Wealth of Nations_ (M'Culloch), p. 390 (bk. v. ch. ii. art.

3).

[305] _Works_, p. 131.

[306] _Wealth of Nations_ (M'Culloch), p. 31 (bk. i. ch. viii.).

[307] _Works_, p. 41 (ch. ii.).

[308] _Wealth of Nations_ (M'Culloch), p. 36.

[309] _Works_, p. 51 (ch. v.).

[310] _Letters to Malthus_, p. 98.

[311] _Works_, p. 239 (ch. x.x.xi., added in third edition, 1821).

[312] _Ibid._ p. 50 (ch. v.).

[313] _Ibid._ p. 52.

[314] _Ibid._ p. 15 (ch. i. sec. ii.).

[315] There is, indeed, a difficulty which I happily need not discuss.

Undoubtedly the doctrine of gluts was absurd. There is, of course, no limit to the amount of wealth which can be used or exchanged. But there certainly seems to be a great difficulty in effecting such a readjustment of the industrial system as is implied in increased production of wealth; and the disposition to save may at a given time be greater than the power of finding profitable channels for employing wealth. This involves economical questions beyond my ability to answer, and happily not here relevant.

[316] _Letters to Malthus_, p. 101.

[317] _Ibid._ p. 52.

[318] _Works_, p. 174 (ch. xxi.).

[319] _Works_, p. 66 (ch. vi.).

[320] _Works_, p. 240 (ch. x.x.xi.).

[321] Ricardo, _Works_, p. xxiv.

[322] Menger's _Das Recht auf den vollen Arbeitsertrag_ (1891), p. 38.

[323] _Works_, p. 228 (ch. xxviii.).

[324] _Works_, pp. 29, 60.

[325] _Ibid._ p. 166.

[326] _Works_, p. 170 (ch. xx.).

[327] _Ibid._ p. 7.

[328] So he tells Malthus (_Letters_, pp. 173, 174) that the buyer has 'the least to do in the world' with the regulation of prices. It is all the compet.i.tion of the sellers. 'Demand' influences price for the moment, but 'supply follows close upon its heels, and takes up the regulation of price.'

[329] _Works_, p. 234.

[330] Bentham's _Works_, x. 498.

[331] _Works_, p. 250 (ch. x.x.xii.).

[332] Stewart's _Works_, x. 34.

[333] See Bagehot's remarks upon J. S. Mill's version of this doctrine in _Economic Studies_: chapter on 'Cost of Production.'

[334] Another ill.u.s.tration of the need of such considerations is given, as has been pointed out, in Adam Smith's famous chapter upon the variation in the rate of wages. He a.s.sumes that the highest wages will be paid for the least agreeable employments, whereas, in fact, the least agreeable are generally the worst paid. His doctrine, that is, is only true upon a tacit a.s.sumption as to the character and position of the labourer, which must be revised before the rule can be applied.

[335] J. S. Mill, too, in his _Political Economy_ makes the foundation of private property 'the right of producers to what they themselves have produced.' (Bk. ii. ch. ii. -- 1.)

[336] Mr. Edwin Cannan, in _Production and Distribution_ (1894), p.

383.

[337] A definition, says Burke in his essay on the 'Sublime and Beautiful' (introduction) 'seems rather to follow than to precede our inquiry, of which it ought to be considered as the result.'