So we assert that there is a Theory of Value, and that it is an approximately verified theory under the present system of business. Further, that in 1860, when business was less regulated than it is now, the results were so much nearer verification by experience.
That business is carried on for self-interest on the whole, seems to me a safe approximation to reality—and that the exceptions to it are not chemically explosive of its system as Ruskin says, but can be added to the enquiry afterwards, like friction or the resistance of the air in mechanics.
Whether this is desirable, or the last word of human organization, is quite another question; and the questions are better kept separate. Moral considerations are too important to come in as an incidental qualification to business motives. They should be the dominating influence, and it is better that economic results should not obtain a sort of sanction as being tinctured with righteousness, when only a few drops of the tincture have been administered. It is better that Economics should keep their place as a science of observed facts.
At the present moment when war is being diagnosed as the worst disease of society, there are many voices to point out its origin in economic greed, and through rivalry in the exploitation of backward peoples. Military pomp and pride, the mere ambition of Emperors and Generals, must bear their share of the blame, but greed and oppression are the tap-root of war, and Ruskin, it happens, was foremost in saying so, as is pointed out in a later chapter.
The economic motive is behind many actions where it is not avowed. Since the elementary need of man is, and always has been, to make a living, and he tries to make it as pleasantly as possible, this must be so, and the laws which govern production, distribution and exchange are of prime importance for men in communities.
When Ruskin touched on an economic law, on a doctrine of the science which he thus erroneously blasphemed, he was remarkably correct; he was an orthodox follower after all of much of the doctrine of Mill. He was “an utterly fearless and unscrupulous free trader.”[48] His instinct, the moral sanction to which he always looked—as Mill also did—as a guide to practice, told him that protection was a wicked action, forbidding to workers in other countries their right to earn their living in the way by which they could produce the most. “I mean by co-operation, not only fellowship between trading firms, but between trading nations; so that it shall no more be thought (as it is now, with ludicrous and vain selfishness) an advantage for one nation to undersell another, and take its occupation away from it; but that the primal and eternal law of commerce shall be of all men understood—viz., that every nation is fitted by its character and the nature of its territories for some particular employments and manufactures, and that it is the true interest of every other nation to encourage it in such speciality.”[49] “I do not admit even the idea of reciprocity. Let other nations, if they like, keep their ports shut; every wise nation will throw its own open.”[50] He knew every point of the correct economic theory of free trade. He realized foreign commerce as exchange or barter, with the dependence of exports upon imports. This dependence, showing the true nature of International Trade, follows from the correct doctrine of currency. Ruskin emphasized this doctrine repeatedly. He knew that every fall in the supply of commodities made the gold currency of less value. He knew that inflation by paper money similarly sent prices up. He was enthusiastic for a gold standard, not as being perfect, but being the best available.[51] Mill’s still valuable chapter on International Trade and all current economic doctrine on currency are Ruskinian economy too. Also, when a disciple of the much depreciated Manchester School talked of laisser faire he generally meant: “Let Protection alone.” His phrase was general, but in the days of Gladstone’s chancellorships of the exchequer, the “Manchester” man was thinking mainly of the removal of tariffs. It would not be in accord with human psychology if the principle had not been pushed too far, and by friends and opponents alike the principle of governmental abstention from interference enlarged, and made universal. In calling for government action to determine wages and organize employment, Ruskin was simply uttering a need not yet felt. He was a twentieth century voice, heard too soon.
But we must always avoid the snare into which the earlier economists fell, of assuming that their conclusions were rigid and absolutely correct. There can be no mechanical infallibility about Economics; it is not accurate enough to be mathematically true. It expresses tendencies. In a word, it is a psychological, not a physical science. Its subject is not wealth, simply, but human motive in regard to wealth.
Students of the Political Economy of Adam Smith, Ricardo, Bentham and James Mill, find that these great founders of economic science, in whose debt we shall ever remain, assumed too much mechanical uniformity in men’s actions, and did not give enough weight to the reaction of man upon his circumstances. They counted a man too much as a passively responsive machine. This is what led them to the doctrines since so seriously modified—the existence of a fixed Wages Fund, the “Iron Law of Wages,” the thesis that “A demand for Commodities is not a demand for Labour.”
John Stuart Mill began life under these influences, and his Principles of Political Economy contain them; but in later life he abandoned his Wages Fund theory, gave greater weight to the human side, the variable and uncertain factor in economic problems, and under the influence of Comte and of the Socialists doubted the accuracy of much of his economic argument. This change was published in his review of the work of his friend Thornton, who had attacked the Wages Fund theory in 1869. It is in Mill’s collected Essays.
The Political Economy which Ruskin attacked was that of Mill’s Principles; and to judge fairly of the controversy we must treat the science, not as it was left, in high universal abstraction, by Ricardo; nor as worked up with rich historical material, cautious and well informed, as in Professor Marshall’s writings, but (between these) as Mill left it in his first edition of 1848.