But, supposing a government other than an Absolute Monarchy to have been established, are there any acts or omissions by which it can forfeit the allegiance of its subjects? To answer this question, we must look to the ends of political society and government. Now the great and chief end which men propose to themselves, when they unite into commonwealths, is "the mutual preservation of their lives, liberties, and estates, which I call by the general name, property." A government, therefore, which neglects to secure this end, and still more a government which itself invades the rights of its subjects, is guilty of a breach of trust, and consequently may be lawfully set aside, whenever an opportunity occurs. Hence the community itself must always be regarded as the supreme authority, in abeyance, indeed, while its fiduciary properly and faithfully executes the powers entrusted to him, but ever ready to intervene when he misuses or betrays the trust reposed in him.
On such a theory, it may be objected, of the relations of the people to the government, what is to prevent incessant disturbance and repeated revolutions? Locke relies on the inertia of mankind. Moreover, as he says, with considerable truth, in a previous passage, whatever theories may be propounded, or whatever traditions may have been handed down, as to the origin, nature, and extent of government, a people, which knows itself to be rendered miserable by the faults of its rulers and which sees any chance of bettering its condition, will not be deterred from attempting to throw off a yoke which has become intolerable. "When the people are made miserable, and find themselves exposed to the ill-usage of arbitrary power, cry up their governors, as much as you will, for sons of Jupiter; let them be sacred and divine, descended or authorized from heaven; give them out for whom or what you please, the same will happen. The people generally ill-treated, and contrary to right, will be ready upon any occasion to ease themselves of a burden that sits heavy upon them."
But, though there is much truth in this last remark, there can be little question that absolutist theories of government, especially when clothed with a religious sanction which appeals to the beliefs of the people at large, have much influence in protecting the person of an absolute ruler, as well as in ensuring the execution of his orders; while, on the other hand, theories like those of Locke have a tendency to encourage criticism, and to weaken many of the motives which have usually prevented men from offering resistance to the established government. The practical consequences of Locke's theories, as reproduced and improved on by later writers, would probably be found, if we could trace them, to be represented, in no inconsiderable degree, in the French and American revolutions which occurred about a century after the publication of the Treatises. Nor have his speculations been without their share, probably, in determining much of the political history and still more of the political sentiment of our own country. To maintain that kings have a divine right to misgovern their subjects, or to deny that the people are, in the last resort, the supreme arbiters of the fate of their rulers, are paradoxes which, to Englishmen of our generation, would appear not so much dangerous as foolish. This altered state of sentiment, and the good fruit it has borne in the improved relations between the Legislature and the People, the Crown and the Parliament, may, without undue partiality, be ascribed, at least in some measure, to the generous spirit of liberty which warms our author's pages, and to the Whig tradition which so long cherished his doctrines, till at last they became the common heritage of the English people.
Admirable, however, as, in most respects, are the parts of Locke's treatise which discuss the present relations of governors and governed, his conception of the remote origin of political society is radically false. "The first framers of the government," "the original frame of the government" (ch. xiii.), have never had any existence except in the minds of jurists and publicists. In the primitive stages of human development, governments, like languages, are not made; they grow. The observation of primitive communities still existing, combined with the more intelligent study of ancient history, has led recent writers to adopt a wholly different view of the origin of government (the question of the respective rights of governors and governed is not affected) from that which prevailed in the times of Hobbes, Locke, and Rousseau. The family or the tribe (according to different theories) is the original unit of society. Government, therefore, of some kind or other must always have existed, and the "state of nature" is a mere fiction. In course of time, the family or the tribe, by a natural process of development, would, in many cases, become greatly enlarged, or combine with other units like itself. Out of this growth or aggregation would arise, in most cases gradually and insensibly, the nation or state as known to later history. The constitution, the "frame of government," has generally passed through stages similar to those passed through by the state or nation. A body of custom must gradually have grown up even in the most primitive societies. The "customs" would be interpreted and so administered by the house-father or head of the tribe. But, as the family or tribe changed its abode, or had to carry on its existence under different circumstances, or became enlarged, or combined with other families or tribes, the customs would necessarily be modified, often insensibly and unconsciously. Moreover, the house-father or head of the tribe might be compelled or might find it expedient to act in concert with others, either as equals or subordinates, in interpreting the customs, in taking measures of defence, in directing military operations, or in providing for the various exigencies of the common life. Here there is no formal assent of the governed to the acts of the governors, in our sense of those terms, though, undoubtedly, the whole family or tribe, or its stronger members, might on rare occasions substitute one head for another; no passage from the "state of nature" to political society; no definitely constituted "frame of government." At a further stage, no doubt, political constitutions were discussed and framed, but this stage was long posterior to the period in the progress of society at which men are supposed to have quitted the state of nature, selected their form of government, and entered into an express contract with one another to obey and maintain it. The fault of Locke, like that of the other political speculators of the seventeenth and eighteenth centuries, consisted in assuming that primitive man was impelled by the same motives, and acted in the same manner and with the same deliberate design, as the men of his own generation. As in morals and psychology, so in politics, the historical and comparative methods, so familiar to recent investigators, were as yet hardly known.
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I ought not to dismiss this book without noticing Locke's remarks on the necessity of Parliamentary Reform. "To what gross absurdities the following of custom, when reason has left it, may lead, we may be satisfied when we see the bare name of a town, of which there remains not so much as the ruins, where scarce so much housing as a sheepcote or more inhabitants than a shepherd is to be found, sends as many representatives to the grand assembly of law-makers as a whole county numerous in people and powerful in riches."
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The writings of Locke on Trade and Finance are chiefly interesting to us on account of the place which they occupy in the History of Political Economy. They consist of three tracts, the occasions and consequences of which have already been described. The main positions which he endeavours to establish are three. First, interest, or the price of the hire of money, cannot, ordinarily speaking, be regulated by law, and, if it could so be regulated, its reduction below the natural or market rate would be injurious to the interests of the public. Secondly, as silver and gold are commodities not differing intrinsically in their nature from other commodities, it is impossible by arbitrary acts of the Government to raise the value of silver and gold coins. You may, indeed, enjoin by Act of Parliament that sixpence shall henceforth be called a shilling, but, all the same, it will only continue to purchase six-penny-worth of goods. You will soon find that the new shilling is only as effective in the market as the old sixpence, and hence, if the Government has taken the difference, it has simply robbed its subjects to that amount. The third position, which he only maintains incidentally in discussing the other two, is that the commercial prosperity of a country is to be measured by the excess of its exports over its imports, or, as the phrase then went, by the balance of trade. The two former of these propositions are simple, but long-disputed, economical truths. The latter is an obstinate and specious economical fallacy.
To understand Locke's contention on the first point, it must be borne in mind that in his time, and down even to the middle of the present reign, the maximum rate of interest allowable in all ordinary transactions was fixed by law. By the statute 12 Car. II. (passed in 1660) it had been reduced from eight to six per cent. Sir Josiah Child, whose Observations concerning Trade had been reprinted in 1690, and who probably represented a very large amount of mercantile opinion, advocated its further reduction to four per cent. He maintained, quoting the example of Holland, that low interest is the cause of national wealth, and that, consequently, to lower the legal rate of interest would be to take a speedy and simple method of making the country richer. Against this proposal Locke argued that the example of Holland was entirely beside the question; that the low rate of interest in that country was owing to the abundance of ready money which it had formerly enjoyed, and not to any legal restrictions; nay, in the States there was no law limiting the rate of interest at all, every one being free to hire out his money for anything he could get for it, and the courts enforcing the bargain. But, further, suppose the proposed law to be enacted; what would be the consequences? It would be certain to be evaded, while, at the same time, it would hamper trade, by increasing the difficulty of borrowing and lending. Rather than lend at a low rate of interest, many men would hoard, and, consequently, much of the money which would otherwise find its way into trade would be intercepted, and the commerce of the country be proportionately lessened. Excellent as most of these arguments are, Locke unfortunately stopped short of the legitimate conclusion to be drawn from them. He did not propose, as he should have done, to sweep away the usury laws altogether, but simply to maintain the existing law fixing the maximum of interest at six per cent. Sir Dudley North, in his admirable pamphlet, Discourses on Trade, published in 1691, just before the publication of the Considerations, but too late, perhaps, to have been seen by Locke, takes a much more consistent view as to the expediency of legal restrictions on the rate of interest. "As touching interest of money, he is clear that it should be left freely to the market, and not be restrained by law." Notwithstanding the opposition of men like North and Locke, to whom may be added an earlier writer, Sir William Petty, the arguments of Child partially triumphed in the next reign. By the 12th of Anne, the legal rate of interest was reduced to five per cent., and so continued till the Act of 1854, repealing, with regard to all future transactions, the existing Usury Laws. There can be little doubt that public opinion had been prepared for this measure mainly through the publication of Bentham's powerful Defence of Usury, the telling arguments of which had gradually impressed themselves on the minds of statesmen and economists. Adam Smith, on the other hand, had stopped just where Locke did. "The legal rate of interest, though it ought to be somewhat above, ought not to be much above the lowest market rate." That the rate of interest, whatever it may be, should be fixed by law, he appears to take for granted. Indeed, he seems to write more confidently on this point than Locke had done, and, in this particular at least, appears to be of opinion that the legislator can look after the private interests of individuals better than they can look after their own. Happily, as Bentham points out, the refutation of this paradox was to be found in the general drift and spirit of his work.
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