Monday, August 22, 2016

The Economics of John Stuart Mill by J.E. Cairnes 1873


HIS WORK IN POLITICAL ECONOMY BY PROF. J. E. CAIRNES

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The task of fairly estimating the value of Mr. Mill's achievements in political economy—and indeed the same remark applies to what he has done in every department of philosophy—is rendered particularly difficult by a circumstance which constitutes their principal merit. The character of his intellectual, no less than of his moral nature, led him to strive to connect his thoughts, whatever was the branch of knowledge at which he labored, with the previously existing body of speculation, to fit them into the same framework, and exhibit them as parts of the same scheme; so that it might be truly said of him that he was at more pains to conceal the originality and independent value of his contributions to the stock of knowledge than most writers are to set forth those qualities in their compositions. As a consequence of this, hasty readers of his works, while recognizing the comprehensiveness of his mind, have sometimes denied its originality; and in political economy in particular he has been frequently represented as little more than an expositor and popularizer of Ricardo. It cannot be denied that there is a show of truth in this representation; about as much as there would be in asserting that Laplace and Herschel were the expositors and popularizers of Newton, or that Faraday performed a like office for Sir Humphrey Davy. In truth, this is an incident of all progressive science. The cultivators in each age may, in a sense, be said to be the interpreters and popularizers of those who have preceded them; and it is in this sense, and in this sense only, that this part can be attributed to Mill. In this respect he is to be strongly contrasted with the great majority of writers on political economy, who, on the strength, perhaps, of a verbal correction, or an unimportant qualification, of a received doctrine, if not on the score of a pure fallacy, would fain persuade us that they have achieved a revolution in economic doctrine, and that the entire science must be rebuilt from its foundation in conformity with their scheme. This sort of thing has done infinite mischief to the progress of economic science; and one of Mill's great merits is that both by example and by precept he steadily discountenanced it. His anxiety to affiliate his own speculations to those of his predecessors is a marked feature in all his philosophical works, and illustrates at once the modesty and comprehensiveness of his mind.

On some points, however, and these points of supreme importance, the contributions of Mill to economic science are very much more than developments—even though we understand that term in its largest sense—of any previous writer. No one can have studied political economy in the works of its earlier cultivators without being struck with the dreariness of the outlook which, in the main, it discloses for the human race. It seems to have been Ricardo's deliberate opinion that a substantial improvement in the condition of the mass of mankind was impossible. He considered it as the normal state of things that wages should be at the minimum requisite to support the laborer in physical health and strength, and to enable him to bring up a family large enough to supply the wants of the labor-market. A temporary improvement, indeed, as the consequence of expanding commerce and growing capital, he saw that there might be; but he held that the force of the principle of population was always powerful enough so to augment the supply of labor as to bring wages ever again down to the minimum point. So completely had this belief become a fixed idea in Ricardo's mind, that he confidently drew from it the consequence that in no case could taxation fall on the laborer, since—living, as a normal state of things, on the lowest possible stipend adequate to maintain him and his family—he would inevitably, he argued, transfer the burden to his employer, and a tax, nominally on wages, would, in the result, become invariably a tax upon profits. On this point Mill's doctrine leads to conclusions directly opposed to Ricardo's, and to those of most preceding economists. And it will illustrate his position, as a thinker, in relation to them, if we note how this result was obtained. Mill neither denied the premises nor disputed the logic of Ricardo's argument: he accepted both; and in particular he recognized fully the force of the principle of population; but he took account of a further premiss which Ricardo had overlooked, and which, duly weighed, led to a reversal of Ricardo's conclusion. The minimum of wages, even such as it exists in the case of the worst-paid laborer, is not the very least sum that human nature can subsist upon; it is something more than this: in the case of all above the worst-paid class it is decidedly more. The minimum is, in truth, not a physical, but a moral minimum, and, as such, is capable of being altered with the changes in the moral character of those whom it affects. In a word, each class has a certain standard of comfort below which it will not consent to live, or, at least to multiply—a standard, however, not fixed, but liable to modification with the changing circumstances of society, and which in the case of a progressive community is, in point of fact, constantly rising, as moral and intellectual influences are brought more and more effectually to bear on the masses of the people. This was the new premiss brought by Mill to the elucidation of the wages question, and it sufficed to change the entire aspect of human life regarded from the point of view of Political Economy. The practical deductions made from it were set forth in the celebrated chapter on "The Future of the Industrial Classes"—a chapter which, it is no exaggeration to say, places a gulf between Mill and all who preceded him, and opens an entirely new vista to economic speculation.

The doctrine of the science with which Mill's name has been most prominently associated, within the last few years, is that which relates to the economic nature of land, and the consequences to which this should lead in practical legislation. It is very commonly believed that on this point Mill has started aside from the beaten highway of economic thought, and propounded views wholly at variance with those generally entertained by orthodox economists. No economist need be told that this is an entire mistake. In truth there is no portion of the economic field in which Mill's originality is less conspicuous than in that which deals with the land. His assertion of the peculiar nature of landed property, and again his doctrine as to the "unearned increment" of value arising from land with the growth of society, are simply direct deductions from Ricardo's theory of rent, and cannot be consistently denied by any one who accepts that theory. All that Mill has done here has been to point the application of principles, all but universally accepted, to the practical affairs of life. This is not the place to consider how far the plan proposed by him for this purpose is susceptible of practical realization; but it may at least be confidently stated that the scientific basis on which his proposal rests is no strange novelty invented by him, but simply a principle as fundamental and widely recognized as any within the range of the science of which it forms a part.

There is one more point which ought not to be omitted from even the most meagre summary. Mill was not the first to treat political economy as a science, but he was the first, if not to perceive, at least to enforce the lesson, that, just because it is a science, its conclusions carried with them no obligatory force with reference to human conduct. As a science it tells us that certain modes of action lead to certain results; but it remains for each man to judge of the value of the results thus brought about, and to decide whether or not it is worth while to adopt the means necessary for their attainment. In the writings of the economists who preceded Mill it is very generally assumed that to prove that a certain course of conduct tends to the most rapid increase of wealth suffices to entail upon all who accept the argument the obligation of adopting the course which leads to this result. Mill absolutely repudiated this inference, and, while accepting the theoretic conclusion, held himself perfectly free to adopt in practice whatever course he preferred. It was not for political economy or for any science to say what are the ends most worthy of being pursued by human beings: the task of science is complete when it shows us the means by which the ends may be attained; but it is for each individual man to decide how far the end is desirable at the cost which its attainment involves. In a word, the sciences should be our servants, and not our masters. This was a lesson which Mill was the first to enforce, and by enforcing which he may be said to have emancipated economists from the thraldom of their own teaching. It is in no slight degree, through the constant recognition of its truth, that he has been enabled to divest of repulsiveness even the most abstract speculations, and to impart a glow of human interest to all that he has touched.

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