The English Utilitarians, Volume 2 (of 3) / James Mill

by Leslie Stephen

The economists had constructed a kind of automaton which fairly represented the actual working of the machinery. But then, each element of their construction came to represent a particular formula, and to represent nothing else. The landlord is simply the receiver of surplus value; the capitalist the one man who saves, and who saves in proportion to profit; and the labourer simply the embodiment of Malthus's multiplying tendency. Then the postulates as to the ebb and flow of capital and labour are supposed to work automatically and instantaneously. Ricardo argues that a tax upon wages will fall, not, as Buchanan thought, upon the labourer, nor, as Adam Smith thought, upon rent, but upon profits; and his reason is apparently that if wages were 'lowered the requisite population would not be kept up.'[339] The labourer is able to multiply or diminish so rapidly that he always conforms at once to the required standard. This would seem to neglect the consideration that, after all, some time is required to alter the numbers of a population, and that other changes of a totally different character may be meanwhile set up by rises and falls of wages. Ricardo, as his letters show,[340] was well aware of the necessity of making allowance for such considerations in applying his theorems. He simplified the exposition by laying them down too absolutely; and the doctrine, taken without qualification, gives the 'economic man,' who must be postulated to make the doctrine work smoothly. The labourer is a kind of constant unit—absolutely fixed in his efficiency, his wants, and so forth; and the same at one period as at another, except so far as he may become more prudent, and therefore fix his 'natural price' a little higher. An 'iron law' must follow when you have invented an iron unit. In short, when society is represented by this hypothetical mechanism, where each man is an embodiment of the required formula, the theory becomes imperfect so far as society is made up of living beings, varying, though gradually, in their whole character and attributes, and forming part of an organised society incomparably too complex in its structure to be adequately represented by the three distinct classes, each of which is merely a formula embodied in an individual man. The general rules may be very nearly true in a great many cases, especially on the stock-exchange; but before applying them to give either a history or a true account of the actual working of concrete institutions, a much closer approximation must be made to the actual data.

I need not enlarge, however, upon a topic which has been so often expounded. I think that at present the tendency is rather to do injustice to the common-sense embodied in this system, to the soundness of its aims, and to its value in many practical and immediate questions, than to overestimate its claim to scientific accuracy. That claim may be said to have become obsolete.

One point, however, remains. The holders of such a doctrine must, it is said, have been without the bowels of compassion. Ricardo, as critics observe with undeniable truth, was a Jew and a member of the stock-exchange. Now Jews, in spite of Shylock's assertions, and certainly Jewish stockbrokers, are naturally without human feeling. If you prick them, they only bleed banknotes. They are fitted to be capitalists, who think of wages as an item in an account, and of the labourer as part of the tools used in business. Ricardo, however, was not a mere money-dealer, nor even a walking treatise. He was a kindly, liberal man, desirous to be, as he no doubt believed himself to be, in sympathy with the leaders of political and scientific thought, and fully sharing their aspirations. No doubt he, like his friends, was more conspicuous for coolness of head than for impulsive philanthropy. Like them, he was on his guard against 'sentimentalism' and 'vague generalities,' and thought that a hasty benevolence was apt to aggravate the evils which it attacked. The Utilitarians naturally translated all aspirations into logical dogmas; but some people who despised them as hard-hearted really took much less pains to give effect to their own benevolent impulses. Now Ricardo, in this matter, was at one with James Mill and Bentham, and especially Malthus.[341] The essential doctrine of Malthus was that the poor could be made less poor by an improved standard of prudence. In writing to Malthus, Ricardo incidentally remarks upon the possibility of raising the condition of the poor by 'good education' and the inculcation of foresight in the great matter of marriage.[342] Incidental references in the Principles are in the same strain. He accepts Malthus's view of the poor-laws, and hopes that, by encouraging foresight, we may by degrees approach 'a sounder and more healthful state.'[343] He repudiates emphatically a suggestion of Say that one of his arguments implies 'indifference to the happiness' of the masses,[344] and holds that 'the friends of humanity' should encourage the poor to raise their standard of comfort and enjoyment. The labourers, as he elsewhere incidentally observes, are 'by far the most important class in society.'[345] How should they not be if the greatest happiness of the greatest number be the legitimate aim of all legislation?

It is true that in his argument Ricardo constantly assumes that his 'natural price' will also be the real price of labour. The assumption that the labourers' wages tend to a minimum is a base for his general arguments. The inconsistency, if there be one, is easily intelligible. Ricardo agreed with Malthus that, though the standard might be raised, and though a rise was the only way to improvement, the chances of such a rise were not encouraging. Improved wages, as he says,[346] might enable the labourer to live more comfortably if only he would not multiply. But 'so great are the delights of domestic society, that in practice it is invariably found that an increase of population follows an amended condition of the labourer,' and thus the advantage is lost as soon as gained.

I have tried to show what was the logical convenience of the assumption. Ricardo, who has always to state an argument at the cost of an intellectual contortion, is content to lay down a rule without introducing troublesome qualifications and reserves. Yet he probably held that his postulate was a close approximation to the facts. Looking at the actual state of things at the worst time of the poor-law, and seeing how small were the prospects of stirring the languid mind of the pauper to greater forethought, he thought that he might assume the constancy of an element which varied so slowly. The indifference of the Ricardo school generally to historical inquiry had led them no doubt to assume such constancy too easily. Malthus, who had more leaning to history, had himself called attention to many cases in which the 'prudential check' operated more strongly than it did among the English poor. Probably Ricardo was in this, as in other cases, too hasty in assuming facts convenient for his argument. The poor man's character can, it is clear, be only known empirically; and, in fact, Ricardo simply appeals to experience. He thinks that, as a fact, men always do multiply in excess. But he does not deny that better education might change their character in this respect. Indeed, as I have said, an even excessive faith in the possible modification of character by education was one of the Utilitarian tenets. If Ricardo had said broadly that a necessary condition of the improvement of the poor was a change of the average character, I think that he would have been saying what was perfectly true and very much to the purpose both then and now. The objection to his version of a most salutary doctrine is that it is stated in too narrow terms. The ultimate unit, the human being, is indeed supposed to be capable of great modification, but it is solely through increasing his foresight as to the effects of multiplication that the change is supposed to be attainable. The moral thus drawn implied a very limited view of the true nature and influence of great social processes, and in practice came too often to limiting possible improvement to the one condition of letting things alone. Let a man starve if he will not work, and he will work. That, as a sole remedy, may be insufficient; though, even in that shape, it is a doctrine more likely to be overlooked than overvalued. And meanwhile the acquiescence in the painful doctrine that, as a matter of fact, labourers would always multiply to starvation point, was calculated to produce revolt against the whole system. Macaulay's doctrine that the Utilitarians had made political economy unpopular was so far true that the average person resented the unpleasant doctrines thus obtruded upon him in their most unpleasant shape; and, if he was told that they were embodied logic, revolted against logic itself.

V. THE RICARDIANS

It will be quite sufficient to speak briefly of the minor prophets who expounded the classical doctrine; sometimes falling into fallacies, against which Ricardo's logical instinct had warned him; and sometimes perhaps unconsciously revealing errors which really lurked in his premises. When Ricardo died, James Mill told M'Culloch that they were 'the two and only genuine disciples' of their common friend.[347] Mill wrote what he intended for a Schoolbook of Political Economy.[348] Brief, pithy, and vigorous, it purports to give the essential principles in their logical order; but, as his son remarks,[349] had only a passing importance. M'Culloch took a more important place by his writings in the Edinburgh Review and elsewhere, and by his lectures at Edinburgh and at London. He was one of the first professors of the new university. His Principles of Political Economy[350] became a text-book, to be finally superseded by John Stuart Mill. Other works statistical and bibliographical showed great industry, and have still their value. He was so much the typical economist of the day that he has been identified with Carlyle's M'Crowdy, the apostle of the dismal science.[351] He writes, however, with enough vivacity and fervour of belief in his creed to redeem him from the charge of absolute dulness. An abler thinker was Colonel (Robert) Torrens (1780-1864).[352] He had served with distinction in the war; but retired on half-pay, and was drawn by some natural idiosyncrasy into the dry paths of economic discussion. He was already confuting the French economists in 1808; and was writing upon the Bank-charter Act and the Ten Hours' Bill in 1844. Torrens held himself, apparently with justice, to be rather an independent ally than a disciple of Ricardo. His chief works were an essay upon the 'External Corn-trade' (1815)[353] and an 'Essay on the Production of Wealth' (1821). Ricardo pronounced his arguments upon the Corn-trade to be 'unanswered and unanswerable,'[354] and he himself claimed to be an independent discoverer of the true theory of rent.[355] He was certainly a man of considerable acuteness and originality. In these writings we find the most sanguine expressions of the belief that political economy was not only a potential, but on the verge of becoming an actual, science. Torrens observes that all sciences have to pass through a period of controversy; but thinks that economists are emerging from this stage, and rapidly approaching unanimity. In twenty years, says this hopeful prophet, there will scarcely exist a 'doubt of its' (Political Economy's) 'fundamental principles.'[356] Torrens thinks that Ricardo has generalised too much, and Malthus too little; but proposes, with proper professions of modesty, to take the true via media, and weld the sound principles into a harmonious whole by a due combination of observation and theory. The science, he thinks, is 'analogous to the mixed mathematics.'[357] As from the laws of motion we can deduce the theory of dynamics, so from certain simple axioms about human nature we can deduce the science of Political Economy. M'Culloch, at starting, insists in edifying terms upon the necessity of a careful and comprehensive induction, and of the study of industrial phenomena in different times and places, and under varying institutions.[358] This, however, does not prevent him from adopting the same methods of reasoning. 'Induction' soon does its office, and supplies a few simple principles, from which we may make a leap to our conclusions by a rapid, deductive process.

The problems appear to be too simple to require long preliminary investigations of fact. Torrens speaks of proving by 'strictly demonstrative evidence' or of 'proceeding to demonstrate' by strict analysis.[359] This is generally the preface to one of those characteristic arithmetical illustrations to which Ricardo's practice gave a sanction. We are always starting an imaginary capitalist with so many quarters of corn and suits of clothes, which he can transmute into any kind of product, and taking for granted that he represents a typical case. This gives a certain mathematical air to the reasoning, and too often hides from the reasoner that he may be begging the question in more ways than one by the arrangement of his imaginary case. One of the offenders in this kind was Nassau Senior (1790-1864), a man of remarkable good sense, and fully aware of the necessity of caution in applying his theories to facts. He was the first professor of Political Economy at Oxford (1825-1830), and his treatise[360] lays down the general assumption of his orthodox contemporaries clearly and briefly. The science, he tells us, is deducible from four elementary propositions: the first of which asserts that every 'man desires to obtain additional wealth with as little sacrifice as possible'; while the others state the first principles embodied in Malthus's theory of population, and in the laws corresponding to the increasing facility of manufacturing and the decreasing facility of agricultural industry.[361] As these propositions include no reference to the particular institutions or historical development of the social structure, they virtually imply that a science might be constructed equally applicable in all times and places; and that, having obtained them, we need not trouble ourselves any further with inductions. Hence it follows that we can at once get from the abstract 'man' to the industrial order. We may, it would seem, abstract from history in general. This corresponds to the postulate explicitly stated by M'Culloch. 'A state,' he tells us, 'is nothing more than an aggregate of individuals': men, that is, who 'inhabit a certain tract of country.'[362] He infers that 'whatever is most advantageous to them' (the individuals) 'is most advantageous to the state.' Self-interest, therefore, the individual's desire of adding to his 'fortune,' is the mainspring or causa causans of all improvement.[363] This is, of course, part of the familiar system, which applies equally in ethics and politics. M'Culloch is simply generalising Adam Smith's congenial doctrine that statesmen are guilty of absurd presumption when they try to interfere with a man's management of his own property.[364] This theory, again, is expressed by the familiar maxim pas trop gouverner, which is common to the whole school, and often accepted explicitly.[365]

It will be quite enough to notice one or two characteristic results. The most important concern the relation between the labourer and the capitalist. Malthus gives the starting-point. Torrens, for example, says that the 'real wages of labour have a constant tendency to settle down' to the amount rendered necessary by 'custom and climate' in order to keep up his numbers.[366] Mill observes in his terse way that the capitalist in the present state of society 'is as much the owner of the labour' as the manufacturer who operates with slaves. The only 'difference is in the mode of purchasing.'[367] One buys a man's whole labour; the other his labour for a day. The rate of wages can therefore be raised, like the price of slaves, only by limiting the supply. Hence the 'grand practical problem is to find the means of limiting the number of births.'[368] M'Culloch is equally clear, and infers that every scheme 'not bottomed on' the principle of proportioning labour to capital must be 'completely nugatory and ineffectual.'[369]