Chapter III

Political Economy(1*)

I. Mill's Starting-Point

    Mill's decision to abandon 'ethology' in favour of political
economy, had one clear advantage. The function of a philosophical
pioneer in the vast and vague region indicated by the new science
was beset with difficulty. It was doubtful whether the proposed
science could be constructed at all; and any conclusions
attainable would certainly have belonged to a region remote from
specific application to the questions of the day. Political
economy offered a field for inquiry with a narrower aim of easier
achievement. The greatest problems of the time were either
economical or closely connected with economical principles. Mill
had followed the political struggles with the keenest interest:
he saw clearly their connection with underlying social movements;
and he had thoroughly studied the science or what he took to be
the science -- which must afford guidance for a satisfactory
working out of the great problems. The philosophical Radicals
were deserting the old cause and becoming insignificant as a
party. But Mill had not lost his faith in the substantial
soundness of their economic doctrines. He thought, therefore,
that a clear and full exposition of their views might be of the
highest use in the coming struggles. Hence arises one broad
characteristic of his position. Mill was steeped from childhood
in the principles of Malthus and Ricardo. In that capacity he had
been a champion of their views against the followers of Owen. But
he had come to sympathise with the aims, though he could not
accept the theories, of the Owenites. Hence he was virtually
asking how, given Ricardo's premises, are we to realise Owen's
aspirations? The groundwork of argument, however, remained
throughout. Though a more favourable estimate of Socialism was
introduced in one chapter of his book, as I have already noticed,
no corresponding changes were made in the remainder.
    The Political Economy speedily acquired an authority
unapproached by any work published since the Wealth of Nations.
In spite of many attacks, it still holds a position among
standard textbooks; and in the case of textbooks, fifty years may
be counted as remarkable longevity. During the first half of that
period, a large school looked up to Mill as an almost infallible
oracle. If in the later half that belief has vanished, we ought
to recognise merits, sometimes overlooked by his assailants. The
most undeniable is the singular skill of exposition. Mill had an
admirable sense of proportion; each topic is taken up in
intelligible order and treated with sufficient fulness; general
principles are broadly laid down and clearly illustrated; and
applications to actual cases are sufficiently indicated, without
those superfluous digressions into minuter details which often
entangle or break the main thread of an argument. The style is
invariably lucid, and Mill, while free from arrogance and
singularly courteous to opponents, wears his magisterial robes
with the dignity of acknowledged authority. Whatever fallacies
lie beneath the equable flow of didactic wisdom, we can
understand what was the charm which concealed them from early
readers. The book seemed to be a unique combination of scientific
reasoning and practical knowledge, while the logical apparatus,
so harshly creaking in the hands of Ricardo, not only worked
smoothly but was in the hands of one whose opposition to
'sentimentalism' was plainly no cynical mask for coldness of
heart.
    Mill states his aim in the preface. He wished to expound the
doctrine of Adam Smith with the 'latest improvements.' But he
would take Smith for his model in combining economics with 'other
branches of social philosophy.' Smith, he says, by never losing
sight of this aim, succeeded in attracting both the general
reader and the statesman. Mill certainly achieved a similar
result. If he did not emulate Smith's wide researches into
economic history, and had not Smith's curious felicity of
illustration, he took a comprehensive view of the great issues of
the time, and spared no pains in filling his mind with the
necessary materials. His surprising power of assimilating
knowledge had been strengthened by official experience. No one
had a more vigorous digestion for blue-books, or -- what is
perhaps rarer -- less desire to make a display by pouring out the
raw material.
    Although Mill's work upon pure political economy, lies mainly
beyond my province, it illustrates one important point. Mill
speaks as one expounding an established system. The speed with
which the book was written shows that it did not imply any
revision of first principles. Mill is working in general upon
Ricardo's lines, in whose 'immortal Principles,' for example, he
finds the first philosophical account of international trade.(2*)
He assumes too easily that a mere modification of old doctrines
is needed, where later writers have demanded a thoroughgoing
reconstruction. He has incurred some ridicule, for example, by an
utterance characteristic of his position . He says,(3*) that
'there is nothing in the laws of Value which remains for the
present or any future writer to clear up; the theory of the
subject is complete.' The phrase was rash. Apparently
unassailable theories have an uncomfortable trick of suddenly
exploding. Later economists often take this for a case in point.
They have, they think, made a specially successful breach in this
part of Mill's doctrine, and his confidence was singularly
infelicitous. Mill's luckless boast was suggested by his
rectification of an ambiguity in the terminology of the science.
How, he asked, could there be a 'proportion' between two
disparate things, a 'quantity' (supply) and a 'desire'
(demand)?(4*) He proceeds to remove the ambiguity by an account
of the 'equation' between demand and supply, explaining the
process by which values adjust themselves so that the quantity
supplied at the current price will be equal to the quantity
demanded at that price. I take it that his account of the facts
is substantially correct, and that, by removing certain
inconsistencies of language, he had purified the theory from one
at of fallacies. But he himself seems to regard the improvement
as merely one of terminology. He thinks that his predecessors
meant to state the same facts, and, indeed, that they must have
seen the truth, though he could not find in them an express
statement. We may ask whether later improvements of Mill himself
amount to a substantial change in the theory, or merely to a
better mode of expression. I do not doubt that modern economists
have much improved the language in which the theory is expressed.
Nor, again, can it be doubted that the logic is rectified by
rectifying the language. The only question can be as to the
importance of the improvement. What strikes the sceptic is that,
after all, when we approach any practical application of the
theory, the old and the new theorists seem to be guided by pretty
much the same reasoning. The improvement in elegance and
consistency of the language does not bring with it a
corresponding improvement in the treatment of actual problems.
The obvious reason is that political economy has not reached, if
it ever will reach, the stage at which the application of a
refined logical method is possible or fruitful. The power of
using delicate scientific instruments presupposes a preliminary
process. We must have settled distinctly what are the data to be
observed and measured; and the use of mathematical formulae is
premature and illusory till we know precisely what we have to
count and how to count it. The data and the psychological
assumptions of economists are still far too vague and disputable
to admit of such methods, except by way of illustration.
Meanwhile rough and even inaccurate statements may be adequate to
convey the knowledge which we can really apply. We are really
making use of facts admitted on all hands, and known with
sufficient accuracy, though the principles upon which they depend
have not been clearly defined. 

 II. CONTEMPORARY MOVEMENTS

    To appreciate Mill's position, it is necessary briefly to
notice the prejudices which he had to encounter and the
sympathies upon which he could reckon. Political economy had been
exultant in the days of James Mill. He and his allies were
entering the promised land. They took the science to be in the
same stage as astronomy just after the publication of Newton's
Principia. The main truths were established, though prejudice and
sentiment still blinded the outside world to the clearest
demonstration. A narrow and unpopular circle naturally retorts
dislike by fanaticism. The Utilitarians were, and knew themselves
to be, bitterly hated; though they took the hatred to be an
unconscious tribute to their real authority -- the homage of the
stupid to irresistible logic. Richard Jones in the preface to his
Treatise on Rent (1831), says, that the Ricardians had not only
put forward 'startling and in some instances, unhappily,
disgusting and most mischievous paradoxes,' but that they had
thus alienated mankind and caused a distrust of political
economy. When J. S. Mill's treatise appeared, this position was
modified. The 'philosophical Radicals' had declined as a party;
but the assault upon protectionism in which they had acted as
forlorn hope had conquered a much wider circle. Their ideas had
spread, whether by stress of argument or congeniality to the
aspirations of the newly enfranchised classes. The conspicuous
instance, of course, is the free trade movement. The triumph over
the corn-laws seemed to establish the truth of the economic
theory. Doctrines preached by professors and theorists had been
accepted and applied by politicians on a grand scale. The result,
as Cairnes, one of Mill's chief followers observes, was not
altogether an advantage to the science.(5*) The popular mind
identified political economy with free trade, and thought that
all difficulties could be solved by a free use of the sacred
words 'supply and demand.' The strict economic doctrine had been,
as Cairnes held, adulterated in order to suit the tastes of the
exoteric audience. This remark suggests the problem, not strictly
soluble, as to the causes of the free trade victory. Did it mark
a triumph of logic, or was it due to the simple fact that the
class which wanted cheap bread was politically stronger than the
class which wanted dear bread? Cobden admitted fully that the
free trade propaganda was a 'middle-class agitation.'(6*) The
genuine zealots were the manufacturers and merchants; and it was
so far a trial of strength between the leaders of industry and
the owners of the soil -- a class struggle not between rich and
poor, but between the 'plutocracy' and the 'aristocracy.' Cobden
was proud of the order to which he belonged, and held that the
aristocracy represented blind prejudice. Some verses often quoted
by popular orators declared that the landowners' motto was 'down
with everything' (including health, wealth, and religion) 'and up
with rent'; and Bright in 1842 told the workmen that 'the
greatest enemy of the remorseless aristocracy of Britain must
almost of necessity be their firmest friend.'(7*) As usual in
such cases, a legend arose which regarded the victory as due
exclusively to the force of truth. Beyond all doubt, argument
played its part as well as class prejudice. Cobden, though little
interested in abstract theories, was an admirable, cogent, and
clear reasoner. He was fully competent to assimilate so much
political economy as was required for his purpose, and used it
most effectively. Later history, however, has shown that in such
matters pure reason cannot by itself win the battle against
interested prejudice. For the time, the victory, taken by the
winners to be a victory of reason, reflected glory upon the
economists who from the days of Adam Smith had been labouring to
indoctrinate the public mind. The triumph of the agitation was
thus due to sheer force of argument and the Consequent
recognition of the principles of justice to the poor and goodwill
to all mankind. Science and philanthropy had joined hands. The
enthusiasm which soon afterwards greeted the Exhibition of 1851
showed the widespread conviction that the millennium of peace and
liberty, of which the Wealth of Nations marked the dawn, was at
last appearing in full daylight. And Mill was regarded as the
authorised representative in philosophy of the principles now at
last fully applied to practice.
    Mill himself did not fully shire the optimistic exultation
which helped to strengthen his authority; nor was it accepted by
the class most immediately affected. The 'big loaf' was a cry, it
might be thought, which should appeal most strongly to the
hungriest. Yet the Chartists, whose agitation was beginning when
the Anti-Corn Law League was founded, were lukewarm or positively
hostile. They interrupted free trade meetings and looked askance
at the agitation.(8*) The Chartists thought that the middle
class, having got into power by their help, were throwing them
over and monopolising all the fruits of victory. Their ablest
leaders admitted, indeed, that free trade would be desirable, but
desirable only on condition that the charter should first be
conceded and democracy invested with political power to guard
against misappropriation of the economic advantages. The
employers, as they suspected, wanted cheap bread, because, as
Lord Shaftesbury once put it, 'cheap bread means low wages.'(9*)
The free-traders, indeed, had constantly to meet this argument.
Cobden constantly and earnestly denied the imputation. He desired
free trade, as he asserted with unmistakable sincerity, above all
in justice to workmen, and ridiculed the notion that wages sank
with the price of corn.(10*) Cobden, however, appeals rather to
obvious facts than to economic theorems; and Chartists who read
Ricardo and M'Culloch might find some excuse for their opinion.
If the 'iron law' held good, free trade in multiplying the
labourers might only multiply the mass of misery. It might
increase the aggregate wealth without raising the average
welfare. The economical purists might reply that the poor would
profit by the change on condition of also accepting the gospel
according to Malthus. But the very name of Malthus stank in the
nostrils of all Chartist leaders.
    Another agitation gave special importance to this view. The
credit which accrued to political economists from free trade was
affected by their responsibility for the new poor-law. The
passage of this measure in 1834 might be taken as a victory not
merely of the economists in general, but specifically of the
hated Malthus. He and his followers had denounced the old system
most effectually, and had denounced it in the name of his
principles. To Malthus and to Ricardo the only remedy seemed to
be the ultimate abolition of the poor-laws. Their disciples were
prominent in carrying the new law. Nassau Senior (already
mentioned) had resolved when a young man to reform the poor-laws.
He had lectured in 1828 on the Principles of Population as an
adherent (with some modification) of Malthus. As an early member
of the Political Economy Club he was at the very focus of sound
doctrine. He was an active member of the commission of 1832, and
is said to have drawn up the famous report upon which the new
measure was founded.(11*) The measure itself hid therefore the
highest credentials that strict political economists could
desire. Brougham as Lord Chancellor helped Miss Martineau, a most
orthodox adherent of the school, and a personal friend of
Malthus, to prepare the public mind by a continuation of her
Tales.
    The new poor-law, though placed to the credit of Malthusians,
was by no means a pure and simple application of the Malthus
theory. The gross abuses, rate-aided wages, and so forth, were
suppressed in accordance with his views; but the complete
abolition of the poor-law, to which he had looked forward, was
out of the question. The position was already critical. An
experienced magistrate told the commission(12*) that if the
system went on for another ten years 'a fearful and bloody
contest must ensue.' A generation of superfluous labourers, he
said, had grown up demanding support. To maintain the system was
dangerous, but simply to abolish it was to provoke a social war.
The alternative was a cautious and gradual remodelling of the
system; and the transmutation of a demoralising into a
disciplinary system. This meant so great a deviation from the
extreme proposals that it might even tend to perpetuate the
system by removing its abuses. Many of the evils resulted from
the very fact which, in the eyes of Ricardo, was its chief
palliation -- the obligation of each parish to keep its own
paupers. It had produced not economy but chaos. The commission
recommend that the power of making regulations, now exercised 'by
upwards of fifteen thousand unskilled and (practically)
irresponsible authorities liable to be biased by sinister
interests' (Bentham's sacred phrase) should, now be confided to
the central board of control, on which responsibility is most
strongly concentrated, and which will have the most extensive
information.'(13*) The competition between the parishes had
produced the tangled laws of settlement, leading to endless
litigation: the depopulation of some places, the overcrowding of
others, the peculations and jobbery due to the 'sinister
interests' of petty local authorities, and the utter absence of
any uniform or rational system. To compel the fifteen thousand
bodies to substitute co-operation for competition, to check their
accounts,and to enforce general rules, it was necessary to create
a central board with wide administrative authority. For such a
scheme, now obvious enough, the commissioners found their only
precedent in a measure by which a barrister had been appointed to
inspect savings banks and friendly societies.(14*)
    The new poor-law was thus a 'centralising' measure, and
marked a most important step in that direction. It was denounced
for that reason on both sides, and among the orthodox economists
by M'Culloch. J. S. Mill defended it warmly against this
'irrational clamour'; and but for certain restraining influences,
especially the teaching of Tocqueville, would he thinks have gone
into the opposite excess.(15*) It seems, however, that the
Utilitarians generally accepted the law as a judicious
application of Malthus, tempered by proper regard for
circumstances. They were indeed bound in principle to be shy of
the direct application of a priori formula. Yet it may also be
briefly noted that this was one of the cases on which the
Utilitarians unconsciously forwarded a tendency to which they
objected in general terms. They wished to codify and simplify the
poor-law, and found it necessary to introduce a central
regulating body. Though they meant to stimulate local activity,
they were calling the central authority into fresh activity.
    Meanwhile their opponents were equally ready to see nothing
in it but Malthus, and to denounce it with corresponding
bitterness. It was contrary to Christianity to the rights of man,
and to the good old laws of England. It was a part of the
machinery by which cold-blooded economists were enslaving the
poor. The operative, says the Chartist historian,(16*) thought
that it broke the last link in the chain of sympathy between rich
and poor. Prison-like workhouses were rising to remind the poor
of their 'coming doom.' They could expect nothing but 'misery in
the present, and the Bastille in the future, in which they were
to be immured when their rich oppressor no longer required their
services.' The historian of the factory movement(17*) confirms
this statement. The poor man was to work or starve. Poverty,
then, was to be treated as a crime. The parochial system was to
be broken up, and the clergy thus separated from the poor. The
whole system was anti-Christian: had not the commissioners put
out a warning against alms-giving?(18*) The commissioners again
proposed the emigration of pauperised agricultural labourers into
manufacturing districts, and were so playing into the hands of
the capitalists. Cobbett's view gave the keynote to another
version of the case. He saw as clearly as any one the evils of
pauperisation, but the old law at least admitted the poor man's
right to support. In good old times he had been supported by the
church. The great robbery at the Reformation had been partly
compensated by the poor-law. To abolish or restrict the old right
was to consummate the abominable robbery and to fleece the poor
man more thoroughly at the bidding of 'parson Malthus.' Cobbett's
view not only commended itself to his own class, but was more or
less that of the 'Young Englanders,' who aspired to a
reconstruction of the old social order. The Times denounced the
new law bitterly, and its proprietor, Walter, thought (as Kydd
says), and no doubt thought rightly, that the indignation roused
by the measure had done much to foster Chartism.(19*) Meanwhile,
to Mill and his friends the whole of this declamation came under
the head of the later 'sentimentalism.' They held with Malthus
that an unlimited right to support meant an indefinite
multiplication of poverty. To admit the right was to undertake an
impossible task and provoke a revolution on its inevitable
failure. Right must be based upon fact; and it is idle to neglect
the inevitable conditions of human life. This position might be
logically unassailable; and the measure supported on the strength
of it is now admitted to have been a vast reform. It came to be
cited as one of the claims to gratitude of the economists. Their
science had arrested an evil which appeared to be almost
incurable. Sound reason had again triumphed over vague
sentimentalism. The new law was, however, still given as an
illustration of the heartlessness of political economists. Mill,
who might claim justly that he was as anxious as any one to raise
the poor, had sorrowfully to admit that the masses were too
ignorant and their leaders too sentimental to recognise his good
intentions. They took the surgeon for an assassin.
    Among the enemies of the new poor-law were the keenest
agitators for factory legislation. The succession of leaders in
that movement is characteristic. The early measures introduced by
the first Sir Robert Peel and supported by Owen had been
tentative and of limited application. As a demand arose for more
drastic measures, the first bill was introduced in 1831 by John
Cam Hobhouse (1786-1869), afterwards Lord Broughton. Hobhouse's
election for Westminster in 1820 had been a triumph for the
Benthamites; and he was afterwards one of the members through
whom Place tried to influence legislation. Hobhouse was too much
of the aristocrat to be up to Place's standard of Radicalism, and
on this point he was too much of an economist to lead the
movement. He declared the demands of the agitators to be
hopelessly unpractical; or, as Oastler put it, gave in to 'the
cold, calculating, but mistaken Scottish philosophers,' who had
an overwhelming influence on the country.(20*) The lead passed to
Michael Thomas Sadler (1780-1835). Sadler, a Tory and an
evangelical, had proposed to introduce the poor-law system into
Ireland. He had attacked Malthus (1830) in a book to be presently
noticed. He declared that Hobhouse had surrendered to the
economists, who were 'the pests of society and the persecutors of
the poor.'(21*) He now proposed a more stringent measure, which
led to the appointment of a committee of the House of Commons in
1832. The report (presented 8th August 1832) startled and shocked
the public. A royal commission was appointed in 1833 to collect
further evidence. Sadler had meanwhile been defeated by Macaulay
in a sharp contest for Leeds. His health soon afterwards broke
down, under the strain of carrying on the agitation, and the lead
fell to Lord Shaftesbury (then Lord Ashley). Shaftesbury, again,
as an aristocrat and an evangelical, was a natural enemy of the
Utilitarian. He was heartily approved by Southey, from the study
of whose works he professed himself to have 'derived the greatest
benefit.' He thought that the country was 'drooping under the
chilly blasts of political economy,' and regarded the millowner
as 'the common enemy of the operatives and the
country-gentleman.'(22*) Richard Oastler, the most effective and
popular organiser of the agitation outside of parliament, was
also a Tory, a churchman, and a protectionist. He had joined in
the anti-slavery movement, and now thought that the factory
system involved a worse slavery than that of the negro. He
accepted the title of 'king of the factories,' given in ridicule
by his enemies.(23*) He became a martyr to his hatred of the new
Poor-law by resigning his place as agent to an estate rather than
enforce its provisions. He, too, hated the economists, and
denounced , the horrible Malthusian doctrine,' which he took to
be that the 'Creator sent children into the world without being
able to find food for them.'(24*) John Fielden, who became the
parliamentary leader in 1846, upon Shaftesbury's temporary
retirement from the House, had been brought up as a Quaker and a
Tory. He became a Utilitarian and a Radical. The typical Radical
for him was not Place but Cobbett, his colleague for Oldham in
the first reformed parliament. 'Honest John Fielden' made a
fortune by cotton-spinning, but wrote a tract called the Curse of
the Factory System, and no doubt shared Cobbett's hatred of the
Scottish 'philosophers' and Parson Malthus.
    These brief indications may be sufficient for one point. The
agitators on behalf of the factory movement took the political
economists, 'Malthusians,' and Utilitarians to be their natural
and their most dangerous enemies. They assumed that the economist
doctrine might be condensed into the single maxim 'do nothing.'
Whether it were a question of encouraging trade or supporting the
poor, or putting down 'white slavery' in a factory, government
was to leave things alone or, in other words, to leave them to
the devil. Chalmers, though an ultra-Malthusian in some respects,
approved the factory movement, because, as he said, it was a
question between free trade and Christianity.(25*) Christianity
orders us to help our neighbours, and political economy to let
them alone. Mill, of course, would have repudiated this doctrine.
Political economy, he would have replied, does not forbid us to
do good, or it would be opposed to Utilitarianism as well as to
Christianity. It only shows us what will do good by pointing out
the consequences of our actions, and Christianity can scarcely
forbid us to disregard consequences. Nor, in fact, was it true
that the economists unequivocally condemned the factory acts.
Malthus had approved them, and M'Culloch wrote warmly to
Shaftesbury to express his sympathy.
    Undoubtedly, however, the opposition to the factory
legislation appealed to the principles accepted and most
vigorously enforced by the Utilitarians. It came from the
free-traders, and from the inner circle of orthodox theorists. In
the later debates, Bright and Cobden, Villiers and Milner-Gibson,
Bowring, Bentham's trusted disciple, Roebuck, a wayward, though
at first an eager, follower, and the sturdy Joseph Hume were
jealous opponents. The Edinburgh and the Westminster Reviews
rivalled each other in orthodoxy.(26*) The Edinburgh declared
(July 1835) that Sadler's famous report was full of false
statements, if not wholly false; and the Westminster (April 1833)
thought that it was 'a stalking horse' to divert attention from
the agitation against the corn-laws and slavery. Fraser's
Magazine, on the contrary, which was attacking the economists in
a series of articles, made a special point of the horrors
revealed by the report. They might be summed up as 'child murder
by slow torture.' The Tory organs, the Quarterly and Blackwood,
took the same side. The manufacturers denied the existence of the
evils alleged, complained of spies and unfair reports, and
taunted the landowners with neglect of the suffering agricultural
labourers. Shaftesbury says(27*) that the argument most
frequently used was a famous statement by Senior. That high
authority had declared that all the profits of manufacturers were
made in the last two hours of the twelve. Cut down the twelve to
ten, and profits would disappear, and with them the manufacturing
industry.(28*) The same doctrine, in fact, worked into a variety
of forms, sometimes fitted for practical men, and sometimes
seeking the dignity of scientific formulation, was the main
argument to be met. This is, in fact, typical of the economists'
position. Some of them made concessions, and some of the Whigs
shrank from the rigid doctrine.(29*) But it was more in their
way, at least, to supply 'chilling blasts' of criticism than to
give any warm support. One qualification must be noticed. The
agitation began from the undeniable cruelty to children. The
enthusiast's view was put into epigrammatic form by Michelet. The
monster Pitt had bought the manufacturers' support by the awful
phrase, 'take the children.'(30*) In reality the employment of
children had at first appeared desirable from a philanthropic
point of view; but it had developed so as to involve intolerable
cruelty. The hideous stories of children worked to death, or to
premature decrepitude, revealed by the commissions had made a
profound impression. So far the Utilitarians as moralists were
bound and willing to protest. They hated slavery, and to do
nothing was to permit the most detestable slavery. A child of
tender years might be worked to death by brutal employers with
the help of careless parents. This was fully admitted, for
example, by Cobden, who said that he entirely approved of
legislation for children, but held equally that adults should be
encouraged to look for help to themselves and not to
government.(31*) Even the straitest economists seem to have
admitted so much. The problem, however, remained as to the
principle upon which the line must be drawn. If helpless children
should be protected, have not women, or even working men in
dependent positions, an equal right to protection? Moreover, can
interference in one case be practically carried out without
involving interference in the whole system?
    The economic position was thus assailed on many points,
though by enemies mutually opposed to each other. The general
tendency of the economists was against government interference,
and their most popular triumph on application of the do-nothing
principle. In the free-trade agitation, their main opponents were
the interested classes, the landowners, and the merely stupid
Conservatives. Elsewhere they were opposed by a genuine, even if
a misguided, philanthropy; by Conservatives who wished to meet
revolution not by simple obstruction, but by rousing the
government to a sense of its duties. Southey's 'paternal
government' might be ridiculed by Macaulay and the Whigs;
Cobbett's good old times might be treated as the figment of an
ignorant railer. The Young Englanders who found their gospel in
Disraeli's Sibyl might be taken to represent mere fanciful
antiquarianism masquerading as serious politics; and Carlyle,
with his fierce denunciations of the 'dismal science' in Chartism
and the Latter-Day Pamphlets set down as an eccentric and
impatient fanatic naturally at war with sound reason. The
appropriate remedy, as Mill thought, was a calm, scientific
exposition of sound principles. His adversaries, as he thought,
reproduced in the main the old sentimentalism against which
Bentham and James Mill had waged war, taking a new colouring from
a silly romanticism and weak regrets for a picturesque past. But
there was a perplexing fact. Churchmen and Tories were acting as
leaders of the very classes to whom Radicals look for their own
natural allies. Shaftesbury complained that he could not get the
evangelicals to take up the factory movement.(32*) They had been
the mainstay of the anti-slavery movement, but they did not seem
to be troubled about white slavery. The reason, no doubt, was
obvious; the evangelicals were mainly of the middle class, and
class prejudices were too strong for the appeals to religious
principles. On the other hand, the Radical artisans would accept
men like Sadler or Shaftesbury for leaders as a drowning man may
accept help from an enemy. The point of agreement was simply that
something should be done, and that was enough to alienate the
poor man from Whigs and Utilitarians, who were always proving
that nothing should be done.
    While these controversies were in the foreground the
remarkable movement of which Mr and Mrs Sidney Webb (33*) are the
first historians, was developing itself. Workmen were learning
how to organise effective trades-unions, and co-operators were
turning into a more practicable channel some of the aspirations
of which Owen had been the prophet. What Mill thought of such
movements will appear presently . Meanwhile it is enough to say
that the economists generally confined themselves to throwing
cold water upon what they held to be irrational schemes. The
working classes could not raise their position by combination,
though they had an undeniable right to try fruitless experiments.
They were going astray after false prophets, and blind to the
daylight of a true science. The co-operative movement, indeed,
received a warmer welcome when it came to be known. But the
remarkable point is once more the wide gap between the
'philosophical Radicals' and the classes whom they aspired to
lead. The aspirations of the poorer class took a form condemned
as simply absurd and illogical by the theories of their would-be
leaders.(34*) 

 III. MALTHUSIAN CONTROVERSY

    Popular instinct recognised its natural enemy in Malthus.
'Malthusian' was a compendious phrase for anti-Christian,
hard-hearted, grovelling, materialist, fatalistic. The formal
controversy was dying out. One of the last 'confutations' was by
the enthusiastic Sadler, which provoked a slashing attack in the
Edinburgh by the rising light Macaulay.(35*) Alison had prepared
a ponderous treatise(36*) by 1828, which, however, did not appear
till 1840, when his popularity as a historian encouraged its
publication. Thomas Doubleday (1790-1870), an amiable man and a
sturdy reformer, published his True Law of Population in
1831.(37*) Sadler, the churchman and philanthropist, Alison, the
ponderous Tory, and Doubleday, the Radical, are agreed upon one
point. They are all defending the beneficence of the deity, and
take Malthus to be a devil's advocate. Sadler, who was a
mathematician, devotes the greatest part of his book to a
discussion, helped by elaborate tables, of the famous geometrical
progression. Alison, of course, rambles over all the articles of
the Tory faith, defending the corn-laws, protection, and slavery
along with the factory acts, the poor-law, and the allotment
system, and expounding his simple philosophy of history and the
inevitable currency question. The real difficulty is to assign
the precise point at issue. If Malthus is taken as asserting
that, as a matter of fact, population actually and invariably
doubles every twenty-five years, or at any rate always multiplies
to starvation point, it is easy to 'confute' him; but then he had
himself repudiated any such doctrine. If, on the other hand, you
only say that over-population is in fact restrained by some
means, Malthus had said so himself. It was common ground, for
example, that great towns were unfavourable to population; and
Macaulay could fairly tell Sadler that this was admitted by
Malthus, and was really a case of the famous 'positive
checks.'(38*) Alison takes similar ground in much of his
argumentation. The difference seems to be that Sadler and
Doubleday assume a pre-established harmony where Malthus traces
the action of 'checks.' Sadler,(39*) for example, agrees with the
opinion of Muret, ridiculed by Malthus, that God had made the
force of life 'in inverse ratio to fecundity.' Sadler and
Doubleday agree that 'fecundity' is diminished by comfort. Men
multiply less as they become richer, instead of becoming richer
as they multiply less. J. S. Mill says that Doubleday alone among
the Anti-Malthusians had some followers, but thinks that this
argument is sufficiently confuted by a glance at the enormous
families of the English upper classes.(40*) Macaulay had taken
more trouble to reply by statistics drawn from the Peerage. The
one obvious point is that none of the disputants could properly
talk of 'scientific laws.' What Malthus had indicated was a
'tendency,' or a consequence of the elasticity of population
which might arise under certain conditions, and to which it was
important to attend. But this gives no approach to a formula from
which we can infer what will be the actual growth under given
conditions. Macaulay showed clearly enough the futility of
Sadler's reasoning. It was hopeless to compare areas, taken at
random, large and small, heterogeneous or uniform, in different
countries, climates, and social states, and attempt by a summary
process to elicit a distinct 'law.' All manner of physiological,
psychological, and sociological questions are involved; not to be
set aside by a hasty plunge into a wilderness of statistics. To
discover a tenable 'law of population' we shall have to wait for
the constitution of hitherto chaotic sciences.
    Meanwhile, it may be noticed that the Whigs as represented by
Macaulay were upon this matter as dogmatic as James Mill himself,
whose dogmatism Macaulay had censured as roundly as he censured
Sadler. Malthus, in fact, had triumphed; and Mill's Malthusianism
dominates his whole treatise. He had been brought up as an
uncompromising Malthusian; in youth he had become something of a
martyr in the cause, and he never flinched from upholding the
general principle. What was it? In an early chapter(41*) of his
treatise he lays down the Malthusian propositions. 'Twenty or
thirty years ago,' he says, they might have been in need of
enforcement. The evidence is, however, so incontestable that they
have steadily made way against all opposition, and may now be
regarded as 'axiomatic.' This incontestable doctrine, as Mill
here explains, is, firstly, that the human race can double itself
in a generation; and, secondly, that the obvious consequences can
be avoided only by limiting this power through Malthus's positive
or preventive checks that is, by prudence on the one hand, and
starvation and disease on the other.(42*) This prudential
restraint, then, is, if not the one thing necessary, the
universal condition without which no other scheme of improvement
can be satisfactory. It is the focus upon which his whole
argument converges. Mill, however, gives a characteristic turn to
the argument. The doctrine that the progress of society must 'end
in shallows and in miseries'(43*) was not, as had been thought, a
'wicked invention' of Malthus. Implicitly or explicitly, it was
the doctrine of his 'most distinguished predecessors' and can
only be successfully combated on his principles. The publication
of his essay is the era from which better views of this subject
must be dated.'(44*) It gives the really fundamental principle.
Mill agrees with Malthus that the root of social evil is not the
inequality of property. Even an unjust distribution of wealth
does not aggravate, but at most accelerates, the advent of
misery. 'With the existing habits of the people' an equal
division of property would only cause them to populate down to
the former state.(45*) And yet Mill here parts company from.
Malthus in the spirit, if not in the logic, of his argument.
Malthus no doubt was thoroughly benevolent, and like many amiable
country clergymen desired to see the spread of savings banks,
friendly societies, and schools; but he was painfully conscious
of the difficulty of infusing ideas into the sodden, sluggish
labourers of his time, and hoped rather for the diminution of
abuses than for the regeneration of mankind. Mill, on the
contrary, sympathised with the revolutionists who had alarmed
Malthus. He tells them, indeed, with Malthus, that their schemes
must conform to actual and inevitable conditions. But he also
holds that the 'existing habits' of the 'people' can be
materially modified; and believes that a 'just distribution of
wealth' would tend to modify them. Malthus emphasises the point
that nothing can be done unless the standard of life be raised.
Mill dwells on the other aspect: if the standard be raised, an
indefinite improvement can be effected. What Malthus took to be a
difficult though not impassable barrier Mill took to represent a
difficulty which men might be trained to recognise and surmount.
His sanguine belief in the educability of mankind enabled him to
regard as a realisable hope what to Malthus in his early days had
seemed a mere vision, and even in later days a remote ideal. The
vis medicatrix is the same for Mill as for Malthus, but Mill has
a far more vivid expectation of the probability of curing the
patient. 

 IV. PEASANT-PROPRIETORSHIP

    One of Mill's most characteristic doctrines shows
conspicuously this relation. Malthus had found in Norway and
Switzerland communities which flourished because they
spontaneously practised his principles. 'It is worthy of remark,'
says Mill,(46*) 'that the two countries thus honourably
distinguished are countries of small landed proprietors.' This
coincidence was not accidental; and Mill's Malthusianism falls in
with his admiration for peasant-proprietorship. He diverged in
this respect from the orthodox economical tradition. The
economists generally left it to sentimentalists to regret the
British yeoman, and to weep musically with Goldsmith over the
time 'when every rood of ground maintained its man.' Wordsworth
had dwelt pathetically upon the homely virtues of the
North-country statesman.(47*) Cobbett had in his happiest
passages dwelt fondly upon the old rural life, and denounced in
his bitterest invectives the greedy landowners and farmers who
had plundered and degraded the English peasant. The economists
looked at the matter from the point of view represented by Arthur
Young. Enclose commons; consolidate small holdings; introduce
machinery; give a free hand to enterprising landlords and
substantial farmers, and agriculture will improve like commerce
and manufactures. Small holders are as obsolete as handloom
weavers; competition, supply and demand, and perfect freedom of
trade will sweep them away, new methods will be adopted, capital
introduced, and the wages of the labourer be raised. M'Culloch,
for example, took this view;(48*) denounced small holdings, and
prophesied (49*) that France would in fifty years become the
greatest 'pauper-warren in Europe.' A remarkable advocate of a
similar view was Richard Jones (1790-1855), who in 1835 succeeded
Malthus at Haileybury.(50*) Jones admired Malthus and accepted
with qualifications the account of rent given by Malthus and
West. But he denounced Malthus's successors, Ricardo, James Mill,
and M'Culloch for preferring 'anticipation' to 'induction', and
venturing to start with general maxims and deduce details from
them. Jones deserves the credit of perceiving the importance of
keeping historical facts well in view. He shows sufficiently that
Ricardo's theory, if taken to be a historical statement of the
actual progress of events, is not correct. He refuses to define
rent, but treats historically of the various payments made in
respect of land. After classifying these, he decides that rent of
the Ricardian kind prevails over less than a hundredth part of
the earth's surface. He considers it, however , as representing a
necessary stage of progress. It is far superior to the early
stages, because it supposes the growth of a class of capitalists,
able to direct labour and introduce the best methods of
cultivation. Hence Jones comes by a different route to an
agreement with M'Culloch. He prophesies that peasant-proprietors
will rapidly fall into want and their numbers be limited only by
the physical impossibility of procuring food. They were precisely
in the position least favourable to the action of prudential
checks.(51*)
    Mill upon this matter dissented most emphatically both from
the 'classical' and the historical champion. The point is with
him of vital importance. His French sympathies had prepared him
to see the other side of the question. The most unequivocal
triumph claimed, with whatever truth, for the French revolution
was the elevation of the cultivators of the land. Mill, at any
rate, held emphatically that the French revolution had
'extinguished extreme poverty for one whole generation,'(52*) and
had thereby enabled the French population to rise permanently to
a higher level. Contemporary English history gave the other side.
Poor-law controversies had brought into striking relief the
degradation of the English agricultural labourer. The Morning
Chronicle articles, to which he had devoted six months, combined
with an advocacy of peasant-proprietorship an exposition of the
inadequacy of poor-laws. The excellent W. T. Thornton (1813-1880)
had been from 1836 Mill's colleague in the India House, and was
one of the few friends who communicated freely with him during
his seclusion.(53*) In 1846 Thornton published a book upon Over
Population and its Remedy, in which he declares himself to be a
thoroughgoing Malthusian, and rebukes M'Culloch for saying that
Malthus's work exemplified the 'abuse' of general principles.
Thornton, like Mill, follows Malthus in thinking that
over-population must be checked by preventing imprudent
marriages;(54*) but he makes a special point of the doctrine that
misery is not only the effect but the 'principal promoter' of
over-population.(55*) Hence he is not content with Malthus's
negative position. The evil will not die out of itself. His
favourite remedy at this time was the 'allotment system.' From
this Mill dissents.(56*) They agree, however, upon the merits of
peasant-proprietorship, upon which Thornton published a book in
1848, shortly before the appearance of Mill's treatise.(57*) Mill
says that this ought to be the standard treatise on that side 'of
the question.'(58*) Neither Mill nor Thornton had any firsthand
knowledge of agriculture; but they forcibly attacked the
assumptions then prevalent among English agriculturists. Thornton
had been especially impressed by the prosperity of the Channel
Islands -- a rather limited base for a wide induction; but both
he and Mill could refer to experience on a much larger scale
throughout wide districts on the Continent. The pith of Mill's
position is condensed in Michelet's picturesque passage, where
the peasant is described as unable to tear himself away even on
Sunday from the contemplation of his beloved plot of land. The
three periods when the peasant had been able to buy land were
called the 'good King Louis XII,' the 'good King Henry IV' and
the revolution. Arthur Young's famous phrase of the 'magic of
property' which 'turns sand to gold' was a still more effective
testimony, because Young was the Coryphaeus of the modern ,
English school of agriculturists.'(59*)
    France, then, represented the good effects of Malthusianism
in action. The French peasantry, as Thornton says after
Lavergne,(60*) had not read Malthus, but they instinctively put
his advice in practice. Mill triumphantly quotes the figures
which showed the slow rate of increase of the French
population.(61*) The case of Belgium, as he remarks, showed that
peasant-proprietorship might be consistent with a rapid increase,
but the French case proved conclusively that this was not a
necessary result of the system. The 'pauper-warren' theory at
least is conclusively disproved. M'Culloch's unfortunate
prediction might be explained by his a priori tendencies; but it
is curious to find Mill confuting Jones, the advocate for a
historical method, by an appeal to experience and statistics. The
possession of the soundest method does not make a man infallible.
Jones and M'Culloch, as Mill said, had confounded two essentially
different things. They had argued simply as to the economic
advantages of production on a large and small scale without
reference to the moral effect upon the cultivator. Their
criterion is simply the greatness of the return to a given amount
of capital on different systems. They had therefore treated the
cases of France and Ireland as identical, whereas in one vital
circumstance they are antithetical. France represented the
observance of Malthus's true principle, because the peasant was
moved by the 'magic of property'; he had absolute security in his
little plot; and the vis medicatrix or desire to save was raised
to its highest point. Ireland represents the defiance of Malthus,
because the Irish cottiers, with no security, and therefore no
motive for saving, multiplied recklessly and produced a true
'pauper-warren.' Mill accordingly reaches the conclusion that
while peasant-proprietorship does not of necessity involve rude
methods of cultivation, it is more favourable than any other
existing system to intelligence and prudence, less favourable to
'improvident increase of numbers,' and therefore more favourable
to moral and physical welfare.(62*)
    Jones would admit small culture as a natural stage towards
the development of the English system. Mill considers it to be in
advance of that system, but neither does he consider it to
represent the absolutely best system. In a later passage he
repudiates an opinion which, he says, might naturally be
attributed to him by readers of the earlier chapters.(63*) Though
the French peasant is better off than the English labourer, he
does not hold that we should adopt the French system, nor does he
consider that system to be the ideal one. To cover the land with
isolated families may secure their independence and promote their
industry, but it is not conducive to public spirit or generous
sentiment. To promote those qualities we must aim at
'association, not isolation, of interests.' This view is
significant. Peasant-proprietorship, we are constantly told, is
the great barrier against Socialism. It represents, in fact,
'individualism' in its highest degree. It stimulates the
Malthusian virtues, prudence, industry, and self-help, and makes
each man feel the necessity of trusting to his own energy. Yet
Mill, with all his Malthusianism, thinks that such virtues might
be stimulated too much; and, after preaching the merits of
individualism, shows a leaning towards the antagonistic ideal of
Socialism. He says little -- perhaps it would hardly have been
relevant to say much -- of the historical aspect of the question.
But there is a tacit implication of his argument of no little
importance. According to him, the English labourer had been
demoralised, and the whole Irish peasantry brought to the edge of
starvation, while the French and other peasantries were
prosperous and improving. To what historical causes was this vast
difference due? The French revolution, however important, can
only be understood through its antecedents. Systems of
land-tenure, it is obvious, have been connected in the most
intricate way with all manner of social, industrial, and
political phenomena. Commerce and manufactures may seem in some
sense a kind of natural growth-a set of processes at which
government can look on from outside, enforcing at most certain
simple rules about voluntary contracts. But, in the case of land,
we have at every point to consider the action and reaction of the
whole social structure and of the institutions which represent
all the conflicts and combinations of the great interests of the
state. Consequently neither the results actually attained, nor
those which we may hope to attain, can be adequately regarded
from the purely industrial side alone. Systems have not
flourished purely because of their economical merits, nor can
they be altered without affecting extra-economical interests. To
do nothing is to leave agricultural institutions to be perverted
by political or 'sinister' interests. Mill was very little
inclined to do nothing. He saw in the superiority of the foreign
to the British systems a proof of the malign influence of the
'sinister interests' in our constitution. The landed aristocracy
were the concrete embodiment of the evil principle. The nobility
and the squirearchy represented the dead weight of dogged
obstructiveness. They were responsible for the degradation of the
labourer; and the Ricardian doctrine of rent explained why their
interests should be opposed to those of all other classes.
Although Mill attributed enormous blessings to the revolution in
France, he was far too wise to desire a violent revolution in
England, and he was far too just to attribute to individual
members of the class a deliberate intention to be unjust. Yet he
was prepared to advocate very drastic remedies; and if there were
any human being of moderate cultivation from whom he was divided
by instinctive repulsion and total incapacity to adopt the same
point of view, it was certainly the country squire. The natural
antipathy was quaintly revealed when Mill found himself in the
House of Commons opposed to thick rows of squires clamouring for
protection against the cattle-plague.
    So far Mill's position is an expansion or adaptation of
Malthus. Obedience to Malthus makes the prosperous French
peasant; disobedience, the pauperised English labourer. Malthus,
as Mill interprets him, means that all social improvement depends
upon a diminished rate of increase, relatively to
subsistence;(64*) and to diminish that rate the prudential check
must be strengthened. 'No remedies for low wages,' therefore,
'have the smallest chance of being efficacious which do not
operate on and through the minds and habits of the people';(65*)
and every scheme which has not for its foundation the diminution
of the proportion of the people to the funds which support them,
is 'for all permanent purposes a delusion.'(66*) The two
propositions taken together sum up Mill's doctrine. Social
welfare can be brought about only by stimulating the vis
medicatrix or sense of individual responsibility. Every reform
which does not fulfil that condition is built upon sand. The
application to England is a practical comment. The true remedies
for low wages (67*) are first an 'effective national education'
so designed as to cultivate common-sense. This will affect the
'minds of the people' directly. Secondly, a 'great national
measure of colonisation.' This will at once diminish numbers.
Thirdly, a national system for 'raising a class of
peasant-proprietors.' This will provide a premium to prudence and
economy affecting the whole labouring class. Besides this, Mill
approves of the new poor-law, which has shown that people can be
protected against the 'extreme of want' without the demoralising
influence of the old system.(68*) Mill here accepts, though he
does not often insist upon, the doctrine upon which Thornton had
dwelt in his Over Population: that poverty is self-propagating so
far as it makes men reckless: education, as he remarks, is 'not
compatible with extreme poverty'.(69*) Hence the remedies
themselves require another condition to make them effective. He
declares emphatically that in these cases small means do not
produce small effects, but no effect at all.(70*) Nothing will be
accomplished, unless comfort can be made habitual to a whole
generation. The race must be lifted to a distinctly higher plane,
or it will rapidly fall back. Mill, I fancy, would have been more
consistent if he had admitted that great social changes must be
gradual. But in any case, he was far from accepting the
do-nothing principle. Political economy, he says, would have 'a
melancholy and a thankless task' if it could only prove that
nothing could be done.(71*) He holds that a huge dead lift is
required to raise the labourers out of the slough of despond, and
he demands therefore nothing less than great national schemes of
education, of home and foreign colonisation. He speaks, too, with
apparent approval of laws in restraint of improvident
marriages.(72*) It is, indeed, true that upon his schemes
government is to interfere in order to make the people
independent of further interference. Whether such a compromise be
possible is another question. 

 V. CAPITALISTS AND LABOURERS

    Meanwhile a wider problem has to be considered. Unless some
remedy can be found for the existing evils, he says, the
industrial system of this country -- the dependence, that is, of
the whole labouring class upon the wages of hard labour -- though
regarded by many writers as the ne plus ultra of civilisation,
must be 'irrevocably condemned.'(73*) The agricultural labourer
can be taken out of that position. By making him a proprietor he
can be brought -- within the range of new motives. The
independent peasant has in visible form before his eyes the base
from which he and his family must draw supplies. It requires no
abstract reasoning to show him that, if he brings more mouths
into existence, his fields will not therefore bear double crops.
But for the artisan who is a minute part of a vast organisation,
whose wages come out of an indefinite, unexplored reservoir which
may be affected by changes in commerce of the origin and exact
nature of which he is completely ignorant, there is no such
palpable limit. The springs from which his subsistence flows may,
for anything he sees, be inexhaustible. He is a unit in a large
multitude, which, taken as a whole, must undoubtedly be somehow
dependent upon the general resources of the nation. But how to
explain the intricate relations of the different classes is a
problem puzzling to the best economists, and capable of all
manner of fallacious solutions. As an individual, the artisan
might learn like other people to be prudent; but to know what is
prudent he must understand his position. Can the labourer
rightfully demand or reasonably expect to get a larger share of
the wealth which he produces, or must he confine himself to
limiting his numbers, and trusting to supply and demand to bring
his right share? Here the workman was misled by all manner of
false lights; and it became incumbent upon Mill to explain the
position.
    A population entirely dependent on wages never, says
Mill,(74*) refrains from over-population unless from 'actual
legal restraint,' or some 'custom' which 'insensibly moulds their
conduct.' The English agricultural labourer seems to multiply
just as far as he can.(75*) All 'checks' have gone or are going.
If the artisan is better off, it is due to the rapid expansion of
our trade. Should the market for our manufactures -- not actually
fall off but cease to expand as rapidly as it has done for fifty
years, we may fall into the state of Ireland before 1846. He
hopes, indeed, that the factory population may be intelligent
enough to adapt itself to circumstances. The fact that so large a
part of our population is composed of middle classes or skilled
artisans is the only security for some restraint. Yet Mill's
opinion even of the artisan was low. English experience confirms
the evidence of Escher of Zürich.(76*) The head of the English
artisan is turned by the idea of equality. 'When he ceases to be
servile, he becomes insolent.'(77*) There is nowhere, he says
elsewhere,(78*) any friendly sentiment between labourers and
employers. The artisan, swamped by the growing multiplication of
unskilled labour, will too probably, we may infer, take a false
view of the situation, and ascribe his poverty not to his own
neglect of Malthus, but to the greed and hard-heartedness of the
capitalist. Such an anticipation was likely enough to be
realised.
    This leads to the great problem of the true relation between
capital and labour. The distinctive peculiarity of England was
the dependence of the masses upon wages. How, as Mill has asked,
is this state of things reconcilable with improvement? He will
assume, as his predecessors had substantially done, that the
capitalist and labourers are separate classes, and that the
labourer derives his whole support from the capitalist. Though
this is not everywhere true, it is for him the really important
case. Moreover, he seems to think that the rule derived from
considering the classes separately will not be altered when the
two characters are united in individuals. The labourer, so far as
he has 'funds in hand,' is also a capitalist; and that part of
his income is still decided by the general law of profits.(79*)
The assumption of a complete separation, made for convenience of
argument, might no doubt be confounded with a statement of fact.
At any rate, it is merely an explicit avowal of the tacit
assumption of the orthodox economists.
    Here, then, we pass from Malthus to Ricardo. Mill adopts the
Ricardian scheme, though trying to make it more elastic.
Ricardo's doctrine of a 'minimum' rate of wages to which the
'general rate' constantly approximates has enough truth for the
'purposes of abstract science.'(80*) The rate indeed varies with
the standard of living, and that, as we have seen, is a critical
point. Yet the main outlines of the theory remain. As population
presses upon the land, the landlord gets the benefit of his
'monopoly of the better soil,' and capitalist and labourer divide
the remainder. Profits and wages, as Ricardo had said, vary
inversely; a 'rise of general wages falls on profits; there is no
possible alternative.'(81*) Here, indeed, an important
modification must be made in Ricardo's words, in order to state
what Ricardo 'really meant.'(82*) Profit depends, not upon wages
simply, but upon the 'cost of labour.' The labourer is not a
fixed quantity, representing so many 'foot-pounds' of energy; his
efficiency, as Mill argued, may vary indefinitely with his moral
and intellectual qualities; (83*) it may be profitable to pay for
the effective labour double the wages of the ineffective; and, in
point of fact, 'the cost of labour is frequently at its highest
where wages are lowest.'(84*)
    Thus interpreted, Ricardo, like Malthus, admits of progress.
By improving in efficiency, and by maintaining his standard of
life, the labourer's position may be improved. Still, however,
improvement supposes a due regard to the interests of the
capitalists, who make all the advances and receive all the
produce. Here we have the old doctrine of the 'tendency of
profits to a minimum.'(85*) This theory, admitted though
inadequately explained by Adam Smith, had been illustrated by E.
G. Wakefield, and as Mill thinks, most scientifically treated by
his friend Ellis. Another writer, to whom Mill refers with his
usual generosity, was John Rae, whose New Principles of Political
Economy had, he thinks, done in regard to accumulation of capital
what Malthus had done in regard to population.(86*) The necessity
of resorting to inferior soils, which enriches the landowner,
causes the difficulty of raising the labourer's 'real wages.'
Profits are lowered not by the 'competition of capitalists,' but
by the limitation of the national resources. As the difficulty of
raising new supplies becomes more pressing, the 'cost of labour'
rises, and the capitalist's profits diminish. Now, in every
country, as Rae had shown, there is a certain 'effective desire
of accumulation.'(87*) It varies widely, and corresponds, we may
say, to the principle which limits population -- the 'effective
desire' of propagation. There is a certain rate of profit which
will induce men to save, and saving is the one source of capital.
Hence, if the rate obtainable falls to this point, saving will
cease, the capital which supports labour will not increase, and
the country will be in the 'so-called stationary state.' Such a
state, no doubt, is possible and often actual. Given a nation
forced to draw its resources from a fixed area, and unable to
improve its methods of cultivation, it is obvious that it may
reach a point at which it can only just maintain its actual
position. Mill holds not only that such a result is possible, but
that it is always imminent. In an 'old country,' he says, 'the
rate of profit is habitually within, as it were, a hair's-breadth
of the minimum, and the country therefore on the very verge of
the stationary state.'(88*) He does not mean, he explains, that
such a state is likely soon to be reached in Europe, but that, if
accumulation continued and nothing occurred to raise the rate of
profit, the stationary state would be very quickly reached. We
have still the Malthusian view. We are always 'within a
hair's-breadth' of the dead wall which will absolutely limit
progress. Improvements are in fact constantly staving off the
impending catastrophe. We are drifting, so to speak, towards a
lee-shore, where, if not wrecked, we shall at least come to a
standstill. Again and again we manage to make a Little way, and
by new devices to weather another dangerous point. By prudence,
too, we may turn each new advantage to account, and improve our
condition by refraining from increasing our numbers. But the
danger is always threatening.
    One noteworthy result is Mill's chapter upon the stationary
state.(89*) He has, it seems, been so impressed by the
probability that he will find refuge from his fears by facing the
worst. After all, are not the grapes sour? If we are unable to
grow richer, is the loss of wealth so great a misfortune? He
turns to think of the 'trampling, crushing, elbowing, and
treading on each other's heels which form the existing type of
human life.'(90*) Is such a state desirable? In America, where
all privileges are abolished, poverty unknown, and the six points
of the Chartists accepted, the main result achieved is that 'the
whole of one sex is devoted to dollar-hunting and the whole of
the other to breeding dollar-hunters.' (91*) Coarse stimuli are
needed for coarse minds; but a better ideal should be possible.
We might aim at an order quite compatible with the 'stationary
state,' where labourers should be comfortable, no enormous
fortunes accumulated, and a much larger part of the population
free from mechanical toil and enabled to 'cultivate freely the
graces of life.' Nor is it desirabLe that cultivation should
spread to every corner of the world, every flowery waste ploughed
up and all wild animals extirpated. 'A world from which solitude
is extirpated is a very poor ideal.'
    Mill agreed with Ruskin, though Ruskin did not agree with
Mill, and, indeed, called him a goose. A stationary state of
wealth need not, says Mill, imply a stationary state of the 'art
of living.' That art was more likely to improve when we were not
all engrossed by the 'art of getting on.' How far that is true I
do not presume to say . It seems possible that in such a state
the struggle to be stationary might be as keen, though advance
would be hopeless. But, without criticising a theory which
represents rather a temporary protest than a settled conviction,
we may be content to notice how far removed was this typical
economist from the grovelling tendencies often ascribed to his
kind. Mill, as even Carlyle would have admitted, was not a mere
devotee of 'pig's-wash.'
    This vision of a stationary state comes in the book in which
Mill passes from the 'statics,' as he calls it, to the 'dynamics'
of political economy. His purpose is to trace the influence of
industrial progress. His first chapter (92*) notices the vast
mechanical discoveries, the increased security of society and
greater capacity for united action, which give reasons for hoping
indefinite growth of aggregate wealth There is, he thinks, 'not
much reason to apprehend' that population will outrun, though we
must sadly admit the possibility that it will keep up with,
production and accumulation. This leads to the chapters in which
he discusses the effect of progress upon the various classes
concerned.(93*) How does the 'progress of industry' affect the
three classes -- landowners, capitalists, and labourers? Land is
a fixed quantity; but population may increase, capital may
increase, and the arts of production may improve by supposing
each to increase separately and then together. A long and careful
analysis gives us the general result. It is enough to notice the
conclusion.(94*)
    Land represents the fixed 'environment' of the race. The
proprietors of the land will be enriched by economical progress
and the growing necessity for resort to inferior soils. The cost
of raising the labourer's subsistence increases, and profits
therefore tend to fall. The improvement of the arts of
agricultural production acts as a 'counteracting force.' It
relaxes the pressure and postpones the stationary state. For the
moment the improvement may diminish (as Ricardo had argued), but
in the long run must promote, the 'enrichment of landlords,' and,
if population increases, will transfer to them the whole benefit.
Mill, as we have seen, was fully alive to the enormous increase
in past times of the general efficiency of labour and to the
indefinite possibilities of the future. Yet the improvement seems
here, again, to be regarded rather as checking the gravitation
towards the stationary state, than as justifying any confident
hopes of improvement. Meanwhile the elevation of the labouring
classes depends essentially upon their taking advantage of such
improvements to raise their standard, instead of treating an
addition to their means 'simply as convertible into food for a
greater number of children.'(95*)

 VI. THE WAGE-FUND

    This doctrine led to one of the strangest of controversial
catastrophes. In his chapter upon 'wages' (96*) Mill had begun
with an unlucky paragraph. He introduced the word 'wage-fund' to
describe the sums spent in 'the direct purchase of labour'; and
stated that wages necessarily depended upon the proportion of
this fund to the labouring population. This doctrine was assailed
by Thornton in 1869.(97*) Mill, reviewing Thornton, astonished
the faithful by a complete recantation; and, though a disciple or
two -- especially Cairnes and Fawcett -- continued to uphold the
doctrine, or what they took to be the doctrine, political
economists have ever since been confuting it, or treating it as
too ridiculous for confutation. If we are to assume that the
wage-fund was at once an essential proposition of the old
'classical' economy and a palpable fallacy, the whole structure
collapses. The keystone of the arch has crumbled. Nor, again, is
it doubtful that this catastrophe marked a critical change in the
spirit and methods of political economy. And yet, when the actual
discussion is considered, it seems strange that it should have
had such importance. What was this 'wage-fund theory'? The answer
is generally given by quoting the passage already mentioned from
M'Culloch, a paragraph from Mill, and Fawcett's reproduction of
Mill. Mill's sentences, says Professor Taussig, 'contain all that
he ever said directly and explicitly on the theory of the
wage-fund.'(98*) It is strange that so vital a point should have
been so briefly indicated. Then Mill's ablest follower, Cairnes,
declares that though he had learned political economy from Mill,
he had never understood the wage-fund theory in the sense which
Thornton put upon it and which Mill accepted.(99*) But for Mill's
admission, he says, he would 'have confidently asserted' that not
only no economist but 'no reasonable being' had ever asserted the
doctrine. We are left to doubt whether it be really a
corner-stone of the whole system or an accidental superstructure
which had really no great importance. At any rate it was rather
assumed than asserted; and yet is so closely connected with the
system that I must try to indicate the main issue.
    In the first place, the 'wage-fund' is Mill's equivalent for
Adam Smith's 'fund which is destined for the maintenance of
servants';(100*) and Mill, again, starts from a proposition
inherited from Smith. 'Industry,' he says, 'is limited by
capital' -- a doctrine, as he adds, perfectly obvious though
constantly neglected.(101*) Undoubtedly an industrial army
requires its commissariat: its food, clothes, and weapons. Its
very existence presupposes an accumulation of such supplies in
order to the discharge of its functions. A more doubtful
assumption is stated by Adam Smith. 'The demand,' he says,(102*)
'for those who live by wages naturally increases with the
increase of national wealth, and cannot possibly increase without
it.' The growth of the national wealth, that is, 'naturally'
involves the growth of the wealth of every class. Machinery
increases the efficiency of labour and therefore increases the
power at least of supporting labourers. Moreover, in the long
run, and generally at the moment, this power will certainly be
exercised.(103*) The interests of the capitalist will lead him to
support more labourers. The identity of interest between the
classes concerned might thus be taken for granted. Hence, we may
trust to the spontaneous or 'natural' order of things to bring to
all classes the benefit of improved industrial methods. This
natural order, again, including the rate of wages, is understood
to imply, at least, the absence of state interference. Political
rulers must not tamper with the industrial mechanism. It will
spontaneously work out the prosperity of the whole nation and of
each class. Left to itself the industrial organism generates
those economic harmonies upon which the optimist delighted to
dwell. 'Natural' seems to take the sense of 'providential.' The
'economic harmonies' are, like the harmonies perceived by Paley
or the Bridgewater Treatise writers in external nature, so many
proofs of the divine benevolence; any attempt to interfere with
them could only lead to disaster. To show in detail the mischiefs
involved, to expose the charlatans whose schemes implied such
interference, was the grand aim of most economists. Mill, as we
shall see, was very far from accepting this view without
qualification. He thought with the Utilitarians generally that
the 'sovereign' had enormous powers, and moreover was bound to
apply them for the redress of social evils. Society, he held, was
full of injustice. Laws aggravated many evils and could suppress
others. Still the normal function of government is to prevent
violence, see fair play, and enforce voluntary contracts. When it
exceeds these functions, and tries by sheer force to obtain
results without considering the means, it may do infinite
mischief. It acts like an ignorant mechanic, who violently moves
the hands of the clock without regard to the mechanism. Erroneous
conceptions of the very nature of the machinery had led to the
pestilent fallacies which Smith and his successors had been
labouring to confute. The free-traders(104*) had often to expose
one sophistry which deluded the vulgar. Its essence is, as Mill
puts it, that we attend to one half of the phenomenon and
overlook the other.(105*) The protectionist thinks of the
producer and forgets the consumer. Half the popular fallacies
imply the failure to take into account all the actions and
reactions which are implied by a given change. The processes by
which industry adapts itself to varying conditions --
compensating for an ebb in one quarter by a flow in another -- is
mistaken for a change in the whole volume. From the neglect to
trace out the more remote, though necessary consequences, all
manner of absurd doctrines had arisen. The doctrine of 'gluts'
and 'over-production' confounded the case of a production of the
wrong things with an excess of production in general. Improved
machinery was supposed not merely to displace one class of
labourers for a time, but to supersede 'labour' in general. We
should forbid the substitution of power-looms and steam-ploughs
for hand-weaving and spades, or try to increase wealth by
depriving workmen of their tools. A strange confusion of ideas is
involved. People, said Whately,(106*) ask for 'work' when what
they want is really 'wages.' They assume that because more labour
is required, more wages will be forthcoming. The fire of London,
as Mandeville observed, was an excellent thing for the builders.
If their wages had simply dropped out of the skies, it might have
been good for everybody. So, again, Mill has to labour the point
(107*) that society does not gain by unproductive expenditure,
that is, by the support of horses and hounds, but by
'production'; that is, by expenditure on mines and railways. He
lays down a principle which, he says, is most frequently
overlooked, that , demand for commodities is not demand for
labour.' His doctrine has been ridiculed and treated as
paradoxical. It implies at any rate an important distinction. It
is intended to draw the line between changes which merely mean
that a different employment is being found for labourers, and
changes which mean that a greater sum is being devoted to the
support of labourers in general.(108*) The argument against such
fallacies might naturally be summed up by saying that the real
point to be considered was the effect of any change upon the
'wage-fund.' The error, common to all, is the confusion between
the superficial and the more fundamental -- the functional, we
may say, and the organic changes. They are exposed by tracing the
secondary results, which have been overlooked in attending to the
more palpable but less conspicuous part of the phenomenon. Then
we see that some changes imply not a change in the quantity of
labour supported; only a redistribution of the particular
energies. They do not affect the 'wage-fund.' The phrase was
useful as emphasising this point; and useful, though it might be
in some sense a truism. Truisms are required so long as
self-contradictory propositions are accepted. But a further
problem is suggested. What, after all, is the wage-fund? What
determines its amount? If this or that phenomenon does not imply
a change in the fund, what does imply a change, and what are its
laws? To this we get, in the first place, the old Malthusian
answer. Whatever the fund may precisely be, the share of each man
will be determined by the whole number depending upon it. This is
obviously true, but does not answer the question, What actually
fixes the sum to be divided? That problem seems to drop out of
sight or to be taken as somehow implicitly answered. The answer
should, however, be indicated by Mill's treatment of the most
important cases.
    The distribution problem, made prominent by Ricardo, was
emphasised by controversies over the poor-law or the factory acts
and trades-unionism. The economists had been constantly
endeavouring to expose quack remedies for poverty. The old
attempts to regulate wages by direct legislation had been too
long discredited to be worth powder and shot. Mill, in discussing
'popular remedies for low wages,' (109*) argues that competition
'distributes the whole wage-fund among the whole labouring
population.' If wages were below the point at which this happens
there would be 'unemployed capital'; capitalists would therefore
compete and wages would be raised. If, on the other hand, law or
'opinion' fixes wages above the point, some labourers will be
unemployed, or the 'wage-fund' must be forcibly increased.
'Popular sentiment,' however, claimed that 'reasonable wages'
should be found for everybody. Nobody, he says, would support a
proposal to this effect more strenuously than he himself, were
the claim made on behalf of the existing generation.(110*) But
when the claim extends to all whom that generation or its
descendants chooses 'to call into existence' the case is altered.
The result would be that the poor-rate would swallow up the whole
national income, and the check to population be annihilated.
Here, again, instead of hearing clearly why or how the wage-fund
is fixed, we are at once referred to Malthus. The factory
legislation suggests the same question. The rigid economists had
maintained that here again the attempt to interfere must be
injurious. It would hamper the growth of capital, and therefore
injure those dependent upon capital. Mill treats the case with
remarkable brevity. He apparently regarded the whole movement as
savouring of quackery. But he discusses the question briefly from
the moral point of view. Children, he says, should of course be
protected from overwork, for in their case , freedom of contract
is but another word for freedom of coercion.'(111*) Women, he
notes, are protected by the factory acts; but this is only
excusable, if excusable at all, because, as things now are, women
are slaves. If they were free, it would be tyrannical to limit
their labour. The old political economy still suffices. Meanwhile
the problem was coming up in other shapes. The Utilitarians have
been active in procuring the repeal of the laws against
combination. They had thought, indeed, that the workmen, once set
free, would find combination needless, and would learn to act by
means of individual competition. Trades-unionism, on the
contrary, had developed, and was producing long and obstinate
struggles with the capitalist. Were these struggles attempts to
interfere with a 'natural' order? Were they wasteful modes of
attempting to secure a share of the 'wage-fund' which would come
to them in any case by the spontaneous play of the industrial
machinery? Socialists were beginning to declare that instead of
an identity there was a radical opposition of interests. The
answer made by orthodox economists implies some wage-fund theory
. They were never tired of declaring that all attempts to raise
wages by combination were fallacious. The struggle was always
costly, and, even if successful, could only benefit one section
of workmen at the expense of others. What precise assumption
might underlie this doctrine is another question not so easily
answered. It is taken for granted that there is a definite fund,
such that no struggling can wring more from the capitalist; and
all the rugging and riving of labourers and unions can only
succeed in one body getting a larger share out of the mouth of
the others. Mill's final view seems to be given in his discussion
of erroneous methods of government interference. Legislation
against combinations to raise wages is most vigorously
condemned.(112*) The desire to keep wages down shows 'the
infernal spirit of the slave-master,' though the effort to raise
them beyond a fixed limit is doomed to failure. We ought to
rejoice if combination could really raise the rate of wages; and
if all workmen could combine such a result might be possible. But
even then they could not obtain higher wages than the rate fixed
by 'supply and demand' -- the rate which distributes the 'whole
circulating capital of the country among the labouring
population.'(113*) Combinations are successful at times, but only
for small bodies. The general rate of wages can be affected by
nothing but the 'general requirements of the labouring people.'
While these requirements (corresponding to the standard of
living) remain constant, wages cannot long fall below or remain
above the corresponding standard. The improvement, indeed, of
even a small portion would be 'wholly a matter of satisfaction'
if no general improvement could be expected. But as such
improvement is now becoming possible, it is to be hoped that the
better artisans will seek advantage in common with, or 'not to
the exclusion of, their fellow labourers.' The trades-union
movement, therefore, is taken to be equivalent to the formation
of little monopolies through which particular classes of
labourers benefit at the expense of others. Yet Mill is evidently
anxious to make what concessions he can. Strikes, he thinks, have
been the 'best teachers of the labouring classes' as to the
'relation between labour and the demand and supply of labour.'
They should not be condemned absolutely -- only when they are
meant to raise wages above the 'demand and supply' limit; and,
even then, he remembers that 'demand and supply' are not
'physical agencies'; that combinations are required to help poor
labourers to get their rights (the 'demand and supply' rate) from
rich employers; and, that trades-unions tend to advance the time
when labourers will regularly 'participate in the profits derived
from their labour.' Finally, it is desirable, as he
characteristically adds, that 'all economical experiments,
voluntarily undertaken, should have the fullest licence.'
    Mill, unlike his rigid predecessors, is anxious to make out
as good a case as he can for trades-unions. His sympathies are
with them, if only the logic can be coaxed into approval. To
elevate the labouring class is the one worthy object of political
action. Yet he is hampered by the inherited scheme. However
modified, it always involves the assumption of a fixed sum to be
distributed by 'supply and demand.' Limit the supply of labour,
and you raise the price. No other plan will really go to the
bottom of the problem. The rate of wages is fixed by 'supply and
demand'; and the phrase seemed to imply that the rate of wages
was fixed by a bargain, like the price of corn or cloth at a
given time and place. Error, as Mill truly observes,(114*) is
often caused by not 'looking directly at the realities of
phenomena, but attending only to the outward mechanism of buying
and selling.' Are we looking directly at realities when we take
for granted that 'labour' is bought and sold like corn and
cotton? Are we not coming in sight of more fundamental changes,
questions of the structure as well as the functions of industrial
organism, which cannot be so summarily settled? Thornton argues
as though workmen secreted 'labour' as bees secrete honey, and
the value of the product were fixed by the proportion between the
quantity in the market and the quantity which purchasers are
prepared to take at the price. He only tries to show that the
price may still be indeterminate. The 'equation' between supply
and demand of which Mill had spoken might be brought about at
varying rates of exchange. The whole supply might conceivably be
taken off either at a high or at a low price. We need not go
behind the immediate motives which govern a set of buyers meeting
a set of sellers at an auction. Mill accepts the same
assumptions. It is quite true, he says, that in the case of wages
various rates may satisfy the 'equation.' The whole labouring
population may be forced to put up with starvation allowance or
may be able to extort enough to raise their standard of life.
This, he says, upsets the 'wage-fund' doctrine, hitherto taught
by nearly all economists 'including myself.'(115*) Moreover, the
employer has the advantage in the 'higgling,' owing to what Adam
Smith had already called 'the tacit combination of
employers.'(116*) This depressing influence can be resisted by a
combination of the employed; and therefore the doctrine which
declared the necessary incapacity of trades-unions to raise wages
must be thrown aside. 
    Mill has received, and fully deserves, high praise for his
candour in this recantation. We must, however, regret the
facility with which he abandoned a disagreeable doctrine without
sufficiently considering the effects of his admission upon his
whole scheme.(117*) To what, in fact, does the argument amount to
which he thus yielded? He says that the capitalist starts with
the 'whole of his accumulated means, all of which is potentially
capital.' Out of this he pays both his labourers and his family
expenses. No 'law of nature' makes it impossible for him to give
to the labourer all 'beyond the necessaries of life', which he
had previously spent upon himself. The only limit to possible
expenditure on wages is that he must not be ruined or driven out
of business.(118*)
    This surely is obvious. No law of nature or of man forbids me
from giving all that I have to my labourers, though I cannot give
more than I have. If I have a balance at my bankers, I may pay my
wage-bill by a cheque for any smaller sum, and live on the
difference. Difficulties at once arise when we look at the
'realities' of the phenomena and turn from 'money wages' to 'real
wages.' It is easy for an individual to give what he pleases, but
not so easy to make such a change in the whole concrete
industrial machinery as to apply it all to the production of
labourers' commodities. What, in any case, was precisely the
economical dogma inconsistent with Mill's statement? According to
him, it was the doctrine that, at any given time, there is a
certain fund in existence which is 'unconditionally devoted' to
the payment of wages. This was taken to 'be at any given moment a
predetermined amount.' (119*) But how was it supposed to be
predetermined? All events are predetermined by their causes, and
to treat political economy as a possible science is to assume
that wages, among other things, are somehow determinate. Mill
means apparently to deny a determination by something in the
nature of the capital itself. The capital might mean something
which could not, even if everybody wished it, be applied in any
other way. The circulating might bear to the fixed capital the
same relation as wool, for example, to mutton. Save at all, and a
certain part of your savings will be wages, as a certain part of
the sheep will be wool. Unless you waste it, you will employ it
on the only purpose for which it is adapted.
    Such a 'predetermination' is of course a fiction. Was it ever
taken for a fact? (120*) It was rather, I believe, an assumption
which has slipped into their reasoning unawares. Starting from
the old proposition that 'industry is limited by capital,' and
remarking that some capital did not go directly to wages, they
simply amended the proposition by saying that wages depended on
'circulating' capital, and thought that the corrected formula
would do as well as the old. Perhaps they assumed roughly that
'circulating' must bear a fixed proportion to capital in general;
or that, at any rate, the proportion was somehow determined by
general causes. The doctrine thus understood tends to become a
merely identical proposition: the 'wage-fund' means simply the
wages, and the rate of wages is given by the total paid divided
by the number of receivers. The economists continued to lecture
the labourers upon the futility of their aims with the airs of
professors exploding the absurdity of schemes for perpetual
motion. It must, however, be observed that neither Mill nor his
disciples held that the rate of wages was unalterable. They had
the strongest belief that it could be raised, and raised through
the agency of trades-unions. Mill's disciple, Fawcett, as
Professor Taussig remarks,(121*) lays down the old wage-fund
formula, and yet proceeds to argue about strikes raising wages
without reference to this supposed impossibility. In an early
article,(122*) highly praised by Mill, Fawcett discussed strikes.
He appeals to the wage-fund doctrine throughout, and yet he
approves of trades-unions, and only exhorts men to strike when
trade is improving, instead of striking when it is falling off.
It does not for a moment occur to him that 'supply and demand' or
the wage-fund theory determine every particular case. Undoubtedly
men, by combining and taking advantage of the 'conjuncture', may
get the best of a bargain. Fawcett holds, indeed, that the
immediate advantage will be temporary or limited to one trade.
Still combination will, for the time, enable the men to get an
earlier share of the improved profits. Then, he argues, and it is
of this that Mill approves, that such a system, by interesting
the men in business and letting them perceive the conditions of
success, will lead to the consummation most ardently desired by
Mill and himself; to a perception of an ultimate identity of
interests and a final acceptance of some system of co-operation.
Thus, by listening to Malthus and raising the standard of life,
the artisan will himself become a capitalist or a sharer in
profits.
    The wage-fund doctrine, so understood, included a reference
not to the immediate bargain alone but to a more remote series of
consequences. The 'predetermination' refers to the whole set of
industrial forces which work gradually and tentatively. The
ablest defender of the wage-fund, understood in this sense, was
J. E. Cairnes (1823-1875),(123*) who, like Thornton, was a
personal friend of Mill; and, though an acute and independent
thinker, was an admiring disciple. He met Mill's recantation by
applying Mill's earlier faith. He does not believe in that
'economic will-o'-the-wisp,' (124*) as Thornton calls it, the
wage-fund, which supposes that in the bargain between men and
masters there is a 'predetermined' amount which must be spent in
wages. It is only predetermined, he says, in so far as all men
act from certain motives which, under given circumstances, must
bring about certain results. Thornton, he says, has talked as if
'supply and demand' meant a power which forced men to act in a
certain way, instead of being merely a general phrase indicating
the normal operation of these motives. To determine the general
rate of wages we have to look at the whole mechanism, not at the
special bargain. To explain that action Cairnes starts again from
the Ricardian scheme. On the one hand we have, of course,
Malthus; and on the other, the relation between wages and
profits, the effective desire of accumulation, the necessity of
resorting to inferior soils, with the consequent 'tendency of
profits to a minimum' (for the proof of which he refers to Mill
himself), and the accepted statement that profits are already
within a hand's-breadth of the minimum.(125*) Cairnes modifies
the scheme in various ways, upon which I need not dwell: as by
admitting , non-competing industrial groups,' and arguing that
the amount of the fixed and circulating capital is more or less
determined by the direction of the national industries. Such
conditions, he argues, determine the permanent rate of gages,
though for a time oscillations within comparatively narrow limits
may of course take place. Mill, in his unregenerate days, had
argued, as we have seen, that the whole 'wage-fund' must be
distributed, without giving any precise reason for the necessity.
He now held, with Thornton, that a 'conspiracy of employers ,
might retain any part of it. Cairnes holds this conspiracy to be
a fiction. It is not, as is often said, a question of rich men
bargaining with poor men, but of rich men competing with each
other. The competition of capitalists, as he holds, will always
take place, not from any mysterious characteristic of
'circulating capital,' but because, as things are, they are
always on the look-out for profitable employment of their
capital. That process keeps wages up as the competition of
labourers keeps them down, and, though it may act slowly, will
inevitably keep wages approximating to an average.(126*)
    In this view Cairnes takes himself to be only expanding the
doctrine which pervades Mill's whole treatise: in spite of the
occasional obiter dicta about the wage-fund. He does not abandon
-- he declares that nobody ever held -- the 'will-o'-the-wisp, --
the absolute predetermination.(127*) Certainly a doctrine which
struck so thorough a student as one of which he had never even
heard, and which appeared to him to be palpably absurd, could
hardly have had the prominence usually assigned to it. When it
has disappeared, the real point at issue is changed. Cairnes
maintains that Thornton, though denouncing the sham doctrine,
still virtually holds the old doctrine. Thornton said (128*) that
'unionism could not keep up the rate (of wages) in one trade
without keeping it down in others.' And this, as Cairnes says,
implies some sort of 'predetermination,' though not the absolute
predetermination of the abandoned wage-fund. The main difference
is that Cairnes holds that capitalists will always compete;
whereas Thornton holds that they will ultimately combine and then
be certain of victory.(129*)
    This, I think, indicates the true underlying difficulty. The
'natural' rate of wages, said the economists, is fixed by 'supply
and demand.' 'Supply and demand' suggests the ordinary processes
which level prices in the market. Thornton declares that 'labour'
is bought and sold like corn or cotton. The analogy might be
denied. Mr Frederic Harrison observed that 'labour' is not 'a
thing' which can be bought and sold. Thornton treats this as a
purely verbal distinction, and expects even his antagonist to
admit that 'hiring' is simply a case of 'buying,' and therefore
governed by the same laws.(130*) If so, we may apply formula
derived from the case of the market. Then we tacitly introduce
the ordinary economic assumptions. The proposition that wages are
fixed by 'supply and demand' is taken to mean that the rate can
be deduced from the simple process of bargaining. The whole
theory of distribution can be worked out by considering the
fluctuations of the labour market: the value of labour being
fixed by the number of labourers, and the demand for capital
being represented by the rate of profit. The doctrine, it may be
admitted, is approximately true at a given time and place. It
simply generalises the arguments used in every strike. Capital
may be driven from a trade if wages be excessive; the influx or
efflux of capital will raise or lower wages in a given district,
and so forth. The facts may often be inaccurately stated by
interested parties, but their relevance is undeniable. The forces
of which Cairnes speaks, the competition of capitalists for
profits, of labourers for gages, and their effect upon
accumulation and population are undoubtedly the important
factors. It was precisely because the economists recognised these
obvious phenomena that they convinced themselves and persuaded
others. They talked a great deal of undeniable common-sense. They
could, again, fairly demand that some allowance should be made
for 'friction' -- for the fact, that is, that competition and the
various changes which it implies do not take place so rapidly and
automatically as they assumed. They took, it is true,
considerable liberties; they spoke as if capital could be changed
by magic, and a thousand quarters of corn transformed into a
steam-engine; or as if the population could instantaneously
expand or contract in proportion to its means of support. They
could forget at times that such phrases involve a kind of logical
shorthand, and suppose a 'fluidity' of capital, a rapidity in the
processes by which adaptations are carried out, which is unreal,
and may cover important errors.
    Still, with whatever allowances, we may accept the
approximate truth of the assumptions, as describing the process
by which immediate variations in wages are actually determined.
The real difficulty comes at the next stage. Granting the
approximate truth of the formulae at any given time and place,
can they give us a general theory of 'distribution' -- formulae
which can be applied to determine generally what share of the
total produce will go to labourers and what to capitalists? That
is, in other words, can the purely economic formula become also a
'sociological' formula? Will it not only assign the conditions
which govern the particular bargains, but enable us to determine
the whole process by which the industrial mechanism is built up?
That, as I take it, is the point at which the old economists
broke down. Their doctrines, applicable and important within the
appropriate sphere, become totally inadequate when they are
supposed to give a complete theory of industrial development.
    The unreality of the whole theory becomes obvious when we
give it the wider interpretation. The excuse of 'friction'
becomes insufficient. That may be applicable when the error is
simply due to a permissible simplification of the data; not when
the data are themselves wrongly stated. Ricardo, we have seen,
had virtually made an assumption as to the social order. The
labourers, we may say, are a structureless mass; a multitude of
independent units, varying in numbers but otherwise of constant
quality; the value of labour was thus dependent simply on the
abundance or scarcity of the supply, and the labourers were
assumed to be wholly dependent for support upon the capitalist.
The formula applicable upon such a hypothesis might be correct so
far as the data were correct. They would require a complete
revision when we consider the actual and far more complex social
state. Every difference of social structure will affect the play
of competition; the degree in which population is stimulated or
retarded; and the general efficiency of industry. A lowering of
wages instead of producing an increase of profit and an
accumulation of capital may lead to social degeneration, in which
labour is less efficient and the whole organism is slack and
demoralised. Conversely, rise of wages may lead to a more than
corresponding increase of production. The effect, again, of
accumulation of capital cannot be expressed simply by the
increased demand for labour. That seems plausible only so long as
capital is identified with money. It really implies an alteration
of the industrial system and conditions under which the bargain
is made. It may, again, be true that in any particular trade,
capital will be attracted or repelled by fluctuations in the rate
of profit; but it is by no means clear that we can infer that a
general rise or fall of profit will have the same effect upon
accumulation generally. For such reasons, as I take it, an
investigation of the laws of distribution would require us to go
beyond the abstractions about 'supply and demand,' however
appropriate they may be to immediate oscillations or relatively
superficial changes. No such short cut is possible to a real
sociological result. 'To follow out all the causes or conditions
involved would be,' as Professor Taussig says,(131*) 'to write a
book not only on distribution but on social philosophy at large.'
Mill, and especially Cairnes, were sensible of the need of taking
a wider set of considerations. Still no satisfactory conclusion
could be reached so long as it was virtually attempted to solve
the problem by bringing it under the market formula, instead of
admitting that the play of market is itself determined by the
structure behind the market. You have really assumed an
abnormally simple structure, and erroneously suppose that you
have avoided the necessity of considering the structure at all.
The wage-fund controversy brought out the inadequacy of the
method. One result has perhaps been to encourage some writers to
fall back into simple empiricism; to assume that because the
supposed laws were not rightly stated there are no laws at all;
that the justice of the peace can after all fix wages
arbitrarily; and that political economy should shrink back to be
'political arithmetic,' or a mere collection of statistics. The
more desirable method, one must hope, would be to assign the
proper sphere to the old method, and incorporate the sound
elements in a wider system. 

 VII. SOCIALISM

    Meanwhile, the over-confidence of the economists only
encouraged Socialists to revolt against the whole doctrine. It
might be a true account of actual facts; but, if so, demonstrated
that the existing social order was an abomination and a
systematic exploitation of the poor by the rich. The 'iron
necessity' was a necessity imposed by human law -- not, that is,
a legitimate development of social order, but something imposed
by force and fraud. In some directions Mill sympathised with such
doctrines. He professed to be in some sense a 'Socialist,' though
he was not acquainted with some of the works published during his
lifetime. He makes no reference to Marx or Lassalle and other
German writers. Possibly a study of their writings might have led
to modifications of his teaching. To him the name suggested Owen,
Fourier, St. Simon, or his friend Louis Blanc.(132*) Socialism,
as understood by the early leaders, commended itself to Mill,
because it proposed the formation of voluntary communities, like
Fourier's Phalansteries or Owen's New Harmony. They are capable
of being tried on a moderate scale, with no risk to any one but
the triers.(133*) They involve simply social experiments which
could only injure those who tried them. But a different view was
showing itself. Cairnes, commenting upon his master's so-called
Socialism, says that the name now implies the direct interference
of the state for the instant realisation of 'ideal
schemes.'(134*) He objects to this, and therefore, by
anticipation, to 'state Socialism.' Here Mill's position is
ambiguous. In the first place, while agreeing with the aims of
the Socialists, he 'utterly dissents from the most conspicuous
and vehement part of their teaching, their declamations against
competition.'(135*) 'Where competition is not,' he adds,
'monopoly is'; and monopoly means 'the taxation of the
industrious for the support of indolence, if not of plunder.'
Competition raises wages, if the supply of labourers is limited,
and can never lower them, unless the supply is excessive. As
Cobden is reported to have said, the real question is simply
whether two masters are running after one man, or two men after
one master. No one could speak more emphatically or forcibly upon
this. point, nor does he seem to have ever abandoned it. Both
Mill and his disciples saw the only solution in a different
direction. Co-operation is their panacea; and they are never
tired of appealing to the cases of its successful operation,
beginning with M. Leclaire's experiment in France and the
Rochdale pioneers in England. The pith of the doctrine was
already given in the famous chapter (136*) upon 'the probable
futurity of the labouring class' due to Mrs Mill's influence. His
hope for them lay in cooperation, and later editions only
differed from the first by recording new experiments. Cairnes
deduces the same conclusion from his wage-fund. The labourer can
only improve by ceasing to be a 'mere labourer'; profits must
're-inforce' the wage-fund; co-operation shows how this is to be
done, and, constitutes the one and only solution of our present
problem.'(137*) Thornton reaches the same conclusion,
co-operation giving the only compromise which can end the
internecine contest. He can only express his feelings in poetry,
and his last chapter upon 'labour's Utopia' is written with
creditable skill in the difficult terza rima. Fawcett fully
shared this enthusiasm; and the reason is sufficiently obvious.
Co-operation, in their sense, means simply the joint effort of
independent individuals. Competition is assumed to remain in full
force. All combinations, as Mill says of trades-unions, must be
voluntary. That is an 'indispensable condition of tolerating
them.'(138*) The member of a co-operative society is as free to
join or to leave as the shareholder in any commercial company.
The societies compete with each other and with capitalists at
every point. 'Supply and demand' regulate every part of their
transactions. The motive for joining is simply the desire of each
member to invest his savings, and therefore the vis medicatrix is
duly stimulated. Each man can thrive better by working in
concert; but he resigns none of his rights as an individual. He
has not enlisted in an army bound by discipline, but has joined
in a voluntary expedition.
    So far we have what seems to be the logical and consistent
result of the individualist view. But Mill, though he remains an
'individualist' philosophically, is also led to conclusions very
far from the ordinary individualist theory. The last part of his
treatise is devoted to a discussion of the limits of government
interference. He urges energetically that there should be some
space in human 'existence entrenched round and sacred from
authoritative intrusion,'(139*) a doctrine inherited from his
teachers and eloquently expanded in his Liberty. It marks the
point of transition from his economic to his ethical and
political teaching. After repeating the ordinary arguments
against excessive interference by way of protection, usury laws
and the like, he states as a general principle that the burden of
proof is on the advocates of interference, and that 'letting
alone should be the general practice.'(140*) All coercion, as
Bentham had said, is an evil, but, in certain cases, it is the
least possible evil; and Mill, as becomes an empiricist,
declining to lay down an absolute rule, only asks what are the
particular cases in which the evil is over-balanced by the good
of interference. But, here, if we consider the list of
exceptions, we must admit that the general principle is
remarkably flexible. Some cases have been already noticed. Mill
not only allowed but strongly advocated a national system of
education.(141*) He approved a great national scheme of
emigration (142*) and a scheme for home colonisation, and this
expressly with a view to lifting the poor, not gradually but
immediately into a higher level of comfort. He held that laws in
restraint of imprudent marriage were not wrong in principle,
though they might be inexpedient under many or most
circumstances. He approved of measures tending to equalisation of
wealth. He proposed that the right of bequest should be limited
by forbidding any one to acquire more than a certain sum, and so
counteracting the tendency to the accumulation of large
fortunes.(143*) He held that government should take measures for
alleviating the sufferings of labourers displaced by new
inventions or the excessive change of 'circulating', into 'fixed
capital.'(144*) He not only approved of measures for forming a
peasant-proprietary, but, in his last years, became president of
an association for altering the whole system of land tenure. He
thought that government should retain a property in canals and
railways, though the working should be leased to private
companies. He approved, as I have said, of the poor-law in its
new form. The factory legislation alone was still uncongenial to
his principles, though on moral grounds he accept the protection
of children. Even in this direction he incidentally makes a
remarkable concession. A point to which political economists had
not, he thinks, sufficiently attended is illustrated by the case
of the 'Nine Hours Bill.'(145*) Assuming, though only for the
sake of argument, that a reduction of labour hours from ten to
nine would be to the advantage of the workmen, should the law, he
asks, interfere to enforce reduction? The do-nothing party would
reply, No; because if beneficial, the workmen would adopt the
rule spontaneously. This answer, says Mill, is inconclusive. The
interest of the individual would be opposed to the interest of
the 'class collectively.' Competition might enforce the longer
hours; and thus classes may need the assistance of the law, to
give effect to their deliberate collective opinion of their own
interest.' Here again Mill seems to be admitting as an
'exception' a principle which goes much further than he observed.
He is mainly interested by the ethical problem, Is it ever right
to force a man to act against his own wishes in a matter
primarily concerning himself alone? He concludes that it may be
right, because each man may wish for a rule on condition that
every one else obeys it. In that case, the law only gives effect
to the universal desire. But the argument really involves an
exception to the beneficent action of competition. The case is
one in which, upon his assumptions, free competition of
individuals may lead to degeneration instead of a better
development. In such cases, it is possible that association,
enforced by law, may lead to benefits unattainable by the
independent units. This admission would go far in the Socialist
direction. It would justify the principle of 'collective
bargaining' to sanction the collective interests. In the same way
his justification of the factory acts in the case of children
leads beyond the moral to economic grounds. Mill's view, so far
as he goes, would fall in with the opinion that there was here a
necessary conflict between Christian morality and political
economy; or the admission that economic loss must be incurred for
moral considerations. But, in the long run, the two views
coincide; for practices which stint and degrade the breed must be
ultimately fatal to economic efficiency. As was often said at the
time, to forbid interference for economic reasons was to suppose
that the country could only flourish by treating children as it
might conceivably be necessary to treat them under stress of some
deadly and imminent peril. When economists looked beyond the
instantaneous advantage of the market, and remembered that
children were made of flesh and blood, it was obvious that on the
purest economic grounds, a system which implied the degradation
of the labourer must be in the end pernicious to every interest.
In this case, therefore, the interference of the law was
desirable from the economic as well as from the moral point of
view.
    Nobody, of course, would have admitted this more cordially
than Mill, and the admission would imply that we must here look
beyond mere , supply and demand , or individual competition. When
we sum up these admissions, it appears that Mill was well on the
way to state Socialism. Lange, the historian of materialism,
praises him warmly upon this ground.(146*) Lange is enthusiastic
about Mill's Liberty, as well as about his Political Economy. He
praises the Economy on the ground that Mill's great aim is to
humanise the science; and, especially, that in the various
proposals which I have noticed Mill desires an active
interference of government towards raising the moral level of
society. Mill, in short, would have sympathised, had he come to
know it, with the Socialism of the Chair, which was beginning at
the time of his death to make a mark in Germany. Lange's
appreciation was, I think, in great part correct; and suggests
the question, How or how far was Mill consistent? Could a system
essentially based upon Malthus and Ricardo be reconciled with
modern Socialism?
    Mill once more was an individualist in the philosophical
sense. He assumes society to be formed of a number of independent
units, bound together by laws enforced by 'sanctions.' The
fundamental laws should be just; and justice presupposes
equality; equality, at at least in this sense, that the position
of each unit should depend upon his own qualities, and not upon
mere outward accidents. In his articles upon Socialism Mill
declared most emphatically that in the present state of society
any idea of such justice was 'manifestly chimerical';(147*) and
that the main conditions of success were first birth, and
secondly accident. In his first edition his discussion of
Socialism ends by justifying 'private property.' The best scheme
is that which lets every man's share of the produce depend on his
own exertions. He complains, however, that the principle has
'never yet had a fair trial in any country.' Inequalities have
been created and aggravated by the law.(148*) This passage
disappeared when he rewrote his views of Socialism. From the
first, however, he asserts a principle for which he gives the
chief credit to his wife.(149*) Laws of production, he says, are
'real laws of nature'; methods of distribution depend on the
human will, or, as he says in the Political Economy, 'the
distribution of wealth depends on the laws and customs of
society.'(150*) Can the laws secure a just distribution?
    Here, then, is a critical problem. As a Utilitarian he would
reply that government should make fair rules for the general
relations of individuals, and trust to the best man winning in an
open competition. Mill's point of difference from the Socialists
was precisely that he believed in competition to the last, and
was so far a thorough 'individualist.' Yet, as a matter of fact,
vast inequalities of wealth and power had developed, and exiled
justice from the world -- if, indeed, justice had ever existed
there. So far as this could be attributed to laws, unjust because
made by force and fraud, the remedy might lie in reforming the
laws. That case was exemplified by land. 'Landed property', he
says, in Europe, derives 'its origin from force.'(151*) English
land laws were first designed 'to prop up a ruling class.'(152*)
By force, in fact, the landowners had secured the best places at
Malthus's feast, and were enabled to benefit by, without
contributing to, the growth of the national wealth. Rent, says
Cairnes, is 'a fund ever growing, even while its proprietors
sleep.'(153*) Mill, of course, admitted that part of rent is due
to the application of capital; and he does not propose to
confiscate the wealth of the actual proprietors who had acquired
their rights fairly under the existing system. But he is
convinced that land differs radically from movable property.
Capital diminishes in value, as society advances; 'land alone...
has the privilege of steadily rising in value from natural
causes.' (154*) Hence we have the famous proposal of taking the
'unearned increment.'(155*) If the landowner was dissatisfied, he
should be paid the selling price of the day. A good many
landlords may regret that they had not this offer at the time
that it was proposed (1873). Thus land was to be nationalised;
the state was to become the national landlord, as in India,(156*)
and at any rate nothing was to be done by which more land could
get into private hands. He seems, indeed, still to believe in a
peasant-proprietary,(157*) but does not ask how far the doctrine
is compatible with nationalisation.
    If, then, the forcible acquisition of land by its first
owners be still a taint upon the existing title, is property in
other wealth altogether just? Mill admits in his discussion of
Thornton's book that something is to be said against capitalists.
'Movable property,' indeed, has, on the whole, a purer 'origin
than landed property.' It represents industry , not simply force.
There has, indeed, been a good deal of fraud, and many practices
at which 'a person of delicate conscience' might scruple.(158*)
This is a gentle adumbration of the view of some recent
Socialists. Is not capital, they would say, precisely the product
of fraud, and stained through and through by cheating? If Mill
was far from the doctrine of Marx, and did not hold that capital
was a mere name for the process of exploitation, he admitted at
least that there was no such thing as justice in the actual
industrial order. Wealth clearly represents something very
different from a reward given in proportion to industry. In the
first place, it is inherited, and Mill, as I have said, proposed
therefore to limit inheritances; and, in the next place, nobody
can suppose that a poor man who grows rich, even by purely
honourable means, gets a prize proportioned to his virtue or to
his utility; while, finally, the poor man certainly does not
start on equal terms with his richer rival. He that hath not may
not lose that which he hath; but he has small chances of climbing
the ladder, and if he climbs, his success means devotion to his
private interest.(159*) Mill's abandonment of the wage-fund,
again, involved the acceptance of the 'tacit conspiracy.' The
poverty of the mass is not due to a 'law of nature'; and
therefore it is due, partly at least, to the combination of
capitalists, which enables them to bring their power to bear in
keeping down the rate of wages to an indefinite extent.
    The social injustice against which he protests exists under a
system in which the laws are substantially equal. They no longer
recognise class distinctions explicitly; they have ceased to
forbid combinations or to fix the rate of wages; the paternal
theory of government is gone, as he says, for ever, and the old
relation of protector and protected supplanted by a system of
equality before the law.(160*) And yet monstrous inequalities and
therefore injustices remain. What is the inference? Here we have
the real inconsistency or, at least, failure to reconcile
completely two diverging principles. Mill and all his disciples
place their hopes in 'co-operation.' Co-operation can, they
think, be reconciled with the 'liberty' which they regarded both
as desirable in itself and as equivalent to the absence of law.
Co-operation, on this showing, implies first absolute freedom to
join or to leave the co-operative body. The individual joins with
other individuals, but does not sacrifice his individuality. The
relation is still, so to speak, 'external,' and the various
associations compete with each other as fully and unreservedly as
the component individuals. And yet there is an obvious
difficulty. Co-operation must involve a loss of 'liberty,' though
the loss may be compensated. If I co-operate, I undertake
obligations, enforcible by law, though not originally imposed by
law. Mill throws out the conjecture that the choice between
Socialism and individualism will 'depend mainly on one
consideration, viz., which of the two systems is consistent with
the greatest amount of human liberty and spontaneity.' (161*) Now
all association limits action in fact. When great companies take
up an industrial function of any kind, they put a stress upon the
individual, not necessarily the less forcible because not legally
imposed. A great railway, for example, soon destroys other
private enterprises, and makes itself practically necessary. It
is equally governed by a body in which most individual
shareholders exercise as little influence as though they were
appointed by the state. As the industrial machinery, human or
material, is developed, it becomes as much a part of social order
as if it were created by the legislature. The point upon which
Mill insists, that all associations must be 'voluntary,' then
becomes insignificant. I may be legally at liberty to stand
aside; but, in fact, they become imperative conditions of life.
That is to say, that the distinction drawn by the old
individualism between the state institutions and those created by
private action ceases to have the old significance. When a
society once develops an elaborate and complex structure, it
becomes almost pedantic to draw a profound distinction between a
system which is practically indispensable and one which is
legally imperative.
    I will not inquire further whether Mill's position could be
made logically coherent. One thing is pretty clear. If his views
had been actually adopted; if the state educated, nationalised
the land, supported the poor, restrained marriage, regulated
labour where individual competition failed, and used its power to
equalise wealth, it would very soon adopt state Socialism, and
lose sight of Mill's reservations. Mill, as I believe, had been
quite right when he insisted on the vast importance of
stimulating the sense of individual responsibility. That is, and
must always be, one essential moment of the argument. His
misfortune was, that having absorbed an absolute system in his
youth, and accepting its claims to scientific validity, he was
unable when he saw its defects to see the true line (if any one
yet sees the true line) of conciliation. His doctrine, therefore,
contained fragments of opposite and inconsistent dogmas. While
fancying that he was developing the individualist theories, he
adopted not only Socialism, but even a version of Socialism open
to the objections on which he sometimes forcibly insisted. Mill
and the Socialist are both individualists; only the Socialist
makes right precede fact, and Mill would make fact precede right.
Every individual, says the Socialist, has a right to support; the
consequences of granting the right must be left to Providence.
This, says Mill following Malthus, would be fatal, because the
individual would have no motive to support himself. He must only
have such a right as implies personal responsibility. But then,
as facts also show, many individuals may be unable to support
themselves even if they wish it, and their responsibility becomes
a mockery. If we enforce duties on all, must we not make the duty
possible? Must not every one be so trained and so placed that
work will be sure of reward? There is the problem, which he sees
and feels, though his answer seems to imply a doubtful shifting
between antagonistic theories. 

 VIII. LOGICAL METHOD

    I must glance finally at the relation of Mill's method to his
general principles. In an early essay (162*) he declares that the
method must be 'a priori,' that is, as he explains, 'reasoning
from an assumed hypothesis.'(163*) In the Logic it is treated as
a case of the 'direct deductive method.' This involves an
important point in his system. He had derived from Comte, as he
tells us,(164*) only one 'leading conception' of a purely logical
kind, the conception, namely, of the 'historical' or 'inverse
deductive method.' This method, implied in Comte's sociology,
starts, as Mill says, from the 'collation of specific
experience.' Now Mill agrees that this 'historical' method was
appropriate to sociology in general. He agrees, too, with Comte
that it was not the method used by economists. But, whereas Comte
had inferred that political economy must for that reason be a
sham science,(165*) Mill holds that economists were justified in
using a different method. Comte, he thought, had failed to see
that in certain cases the method of 'direct deduction' was
applicable to sociological inquiry. One such case, though he will
not undertake to decide what other instances there may be, is
political economy.(166*) He decides that the difficulties,
regarded by Comte as insuperable, may be overcome. His early
account is still valid; and he therefore explicitly rejects the
'historical' method.
    I confess that the use of these technical phrases appears to
me to be rather magniloquent, and to lead to some confusion.
Setting them aside, Mill's view may be briefly stated. He argues,
in the first place, that we cannot apply the ordinary method of
experiment to economic problems. To settle by experience whether
protection was good or bad, we should have to find two nations
agreeing in everything except their tariffs; and that, of course,
if not impossible, is exceedingly difficult.(167*) It follows
that if there be a true science of political economy, it must
have a different method. We might indeed adopt Comte's answer:
'There is no such science'; a view for which there is much to be
said. Mill, however, being confident that the science existed had
to justify its methods. Political economy, he says, considers man
solely as a wealth-desiring being; it predicts the 'phenomena of
the social state' which take place in consequence; and makes
abstraction of every other motive except the laziness or the
desire of present enjoyment which 'antagonise' the desire of
wealth. Hence it deduces various laws, though, as a fact, there
is scarcely any action of a man's life in which other desires are
not operative. Political economy still holds true wherever the
desire of wealth is the main end. 'Other cases may be regarded as
affected by disturbing causes' -- comparable, of course, to the
inevitable 'friction' -- and it is only on account of them that
we have an 'element of uncertainty' in political economy.
Otherwise it is a demonstrable science, presupposing an
'arbitrary definition' of a man as geometry presupposes an
'arbitrary definition 'of a straight line.'(168*)
    The relation of this doctrine to Mill's general views on
logic is clear, but suggests some obvious criticisms. 'Desire for
wealth,' for example, is not a simple but a highly complex
desire, involving in different ways every human passion.(169*) To
argue from it, as though its definition were as unequivocal as
that of a straight line, is at least audacious. Mill, no doubt,
means to express an undeniable truth. Industry, in general,
implies desire for wealth, and the whole mechanism supposes that
men prefer a guinea to a pound. The fact is clear enough, and if
proof be required can be proved by observation. We must again
admit that whatever psychological theorem is implied in the fact
must be assumed as true. But it does not follow that because we
assume the 'desire for wealth' we can deduce the phenomena from
that assumption. That inference would confound different things.
If we were accounting for the actions of an individual, we might
adopt the method. In some actions a man is guided by love of
money, and in others by love of his neighbour. We may 'deduce'
his action in his counting-house from his love of money, and
consider an occasional fit of benevolence as a mere 'disturbing
cause' to be neglected in general or treated as mere 'friction.'
A similar principle might be applied to political economy if we
could regard it as the theory of particular classes of actions.
But we have to consider other circumstances to reach any general
and tenable theory. We have to consider the whole social
structure, the existence of a market and all that it implies, and
the division of society into classes and their complex relations:
the distribution of functions among them and the creation of the
settled order which alone makes commerce possible. We cannot
argue to the action without understanding the structure of which
the agent is a constituent part, and which determines all the
details of his action. The building up of society implies the
influence not of any single desire, but of all the desires, modes
of thought, and affections of human beings. If, therefore, a
comprehension of existing institutions be necessary to political
economy, the deductive method is clearly unequal to the task
which he, partly following Comte, regards as implied in
'sociology' generally. To deduce, not the social structure at
large, but any social organ, from such an abstraction is
hopeless, because every organ is affected through and through by
its dependence upon other organs. Mill virtually supposes that
because the particular function can be understood by abstracting
from accidental influences, the organ of which it is a function
can be understood by abstracting from its essential relations to
the organism.
    Here, in fact, is the error which I take to be implied in
Mill's individualism. Given the social structure as it is, you
may fairly make some such abstraction as the postulates. You may
consider large classes of actions, exchange of wealth, and all
the normal play of commercial forces, as corresponding to the
rather vague 'desire for wealth,' and ask how an individual or a
number of individuals will act when under the influence of that
dominant motive. That is legitimate, and applies to what is
called 'pure political economy' -- the relatively superficial
study of the actual working of the machinery without considering
how the machinery came to have its actual structure. But directly
you get beyond this, to problems involving organic change, you
get to 'sociology,' and can only proceed -- if progress be
possible -- by the 'historical method,' or, in other words, by
studying the growth of the institutions of which we form a part,
and of which we may be considered as the product. This again
means that the general conception of the Utilitarians, which
recognises nothing but the individual as an ultimate unit, though
capable of combining and grouping in various ways, omits one
essential element in the problem. It regards all social
structures as on the same plane, temporary and indefinitely
alterable arrangements; and involves a neglect of the historical
or general point of view which is essential not only to an
understanding of society, but also of the individuals whose whole
nature and character is moulded by it. I have tried to show the
results upon the legal and political conceptions of Mill's
teachers. We now see how the conception of political economy as a
'deductive' or a priori science naturally misled the school. When
they mistook their rough generalisations for definitive science,
they brought discredit upon the theory, and played into the hands
of their enemies, the sentimentalists, who, finding that the
science was not infallible, resolved to trust to instincts and
defy 'laws of nature' in general. Read as common-sense
considerations upon social questions, the writings of Mill and
his followers were generally to the point and often conclusive.
When read as scientific statements, they fail from their obvious
inadequacy and the vague terminology which takes the airs of
clearly defined conceptions. Yet it is impossible to conclude
without noticing two admirable characteristics of Mill and his
disciples. The first is the deep and thorough conviction that the
elevation of the poorer classes is the main end of all social
inquiries. The second and the rarer is the resolution to speak
the plain truth, and to denounce all sophists who, professing the
same end, would reach it by illusory means. Mill's sympathies
never blinded him to the duty of telling the whole truth as he
saw it. 

NOTES:

1. Mill's Political Economy reached a sixth edition in 1865. A
popular edition was first reprinted in 1865 from the sixth
edition. I quote from the popular edition of 1883 by chapter and
section. This is applicable, with very slight exception, to all
editions. The 'table of contents' is almost identical from the
first to the last edition. Some sections were expanded by adding
later information as to land-tenures and co-operation. The early
chapter upon Ireland was altered on account of changes, which
Mill thought, made it no longer appropriate. An addition was made
to the chapter on "International Values"; and book ii, chap. i
was rewritten in order to give a more favourable estimate of
Socialism. On the whole, the changes were remarkably small.

2. See Unsettled Questions (1877) p. 1.

3. Political Economy, p. 265 (bk. iii. ch. i. section 1).

4. Ibid. p. 270 (bk. iii. ch. ii. section 3).

5. Logical Method of Political Economy (1875), p. 4.

6. See Morley's Life of Cobden (1881), ii. 249.

7. Prentice's Anti-Corn Law League, i. 77, 378.

8. Cobden's famous debate with Feargus O'Connor, the Chartist
leader, took place on 5th August 1844. Cobden's victory is
admitted even by the Chartist historian, who regards it as a
proof of O'Connor's incapacity -- R.C. Gammage's Chartist
Movement (1894), p. 254. Prentice has much to say of the
perverseness of the Chartist leaders.

9. Hodder's Shaftesbury, p. 341. This was in 1841. Shaftesbury
afterwards accepted free trade.

10. See, e.g., Cobden's Political Speeches, i., 119, 197.

11. Reprinted in 1884.

12. Report of 1834, p. 73.

13. Report of 1834, p. 169.

14. Report, p. 167.

15. Autobiography, p. 193.

16. Gammage's Chartist Movement, p. 54.

17. Alfred's Factory Movement, pp. 70-78. Alfred is a pseudonym
for Samuel Kydd.

18. Archbishop Whately is said to have thanked God that he had
never give a penny to a beggar. The view suggests some confusion
between the Political Economy Club and the Christian Church. In
Newman's Idea of a University (1875, p. 88, etc.) there is an
interesting passage upon the contrast between Christianity and
the doctrine of the first professor of Political Economy at
Oxford (Senior), that the accumulation of wealth was 'the
greatest source of moral improvement.' The contrast was
undeniable.

19. Miss Martineau attributes the apostasy of the Times to the
desire of the proprietors to please the country justices. See
History of the Peace (1877), ii. 508.

20. Alfred's Factory Movement, i, 138, 141.

21. See his life in Dictionary of National Biography.

22. Hodde's Shaftesbury, i. 161, 339.

23. Alfred's Factory Movement, i. 258.

24. Alfred's Factory Movement, i. 229.

25. Ibid. ii. 251.

26. See Westminster Review for April and October 1833; Edinburgh
Review for July 1835 and January 1844; Blackwood's Magazine for
April 1833; Fraser's Magazine for April 1833; and the Quarterly
Review for December 1836.

27. Hanzard, lxxiv. 911.

28. The passage was quoted in full by Milner-Gibson, 15th March
1844.

29. Macaulay's speech, 22nd May 1846 (in Miscellaneous Works,
1870, pp. 207-17), arguing that the moral question cannot be
answered by pure economists, and defending the Ten Hours' Bill,
is worth notice.

30. See Alfred's Factory Movement, i, 2.

31. See Cobden's letter at the end of the first volume of Mr
Morley's Life.

32. Holder's Shaftesbury, i, 300, 325.

33. History of Trades-Unionism (1894). See especially chaps. iii
and iv (from 1829 to 1860).

34. For the view of the economists, especially Nassau Senior, and
of a Whig government 'pledged to the doctrines of philosophical
Radicalism', see Mr and Mrs Sidney Webb's Trades-Unionism, pp.
123, etc., and the same writers' Industrial Democracy, p. 249.

35. Sadler's Law of Population, 2 vols. 8vo, appeared in 1830,
and was reviewed in the Edinburgh for July by Macaulay, who in
the number for January 1831 published a 'refutation' of Sadler's
'refutation.' The articles were first collected in Macaulay's
Miscellaneous Works.

36. Principles of Population and their Connection with Human
Happiness, 2. vols. 8vo, 1840.

37. The True Law of Population shown to be connected with the
Good of the People, 1 vol. 8vo, 1841 (second edition, 1847). G.
Poulette Scrope (1797-1876), better known as a geologist than an
economist, declares in his Political Economy (1833) that if every
nation were to be freed from all checks and 'to start off
breeding at the fastest possible rate,' very many generations
would pass 'before any necessary pressure could be felt.' (p.
276) The doctrine that there is an 'iron necessity' for resorting
to inferior soils is in contradiction to 'every known fact.' (p.
266) Scrope was a sentimentalist who starts from the 'natural
rights' of man to freedom, the 'bounties of creation,'
'property,' and 'good government.' Given these 'simple and
obvious principles, 'everything will go right.

38. Miscellaneous Works, p. 193.

39. Sadler's Population, ii, p. 387.

40. Political Economy, bk. i, ch. x, section 3 n. W.T. Thornton,
in his Over Population (p. 121), though a professed disciple of
Malthus, agrees with Doubleday. Mr Herbert Spencer criticises
Doubleday in his Biology, chap. xii, (section 366 n.) in course
of an elaborate discussion of the general question of fertility.

41. Bk. i, ch. x.

42. Political Economy, p. 212 (bk. ii, ch. xi, section 3).

43. One of Mill's rare quotations. See Shakespeare's Julius
Caesar, act iv, sc. iii.

44. Political Economy, p. 452, (bk. iv, ch. vi, section 1).

45. Ibid. p. 118 (bk, i, ch. xiii, section 2).

46. Political Economy, p. 99 (bk. i, ch. x, section 3).

47. See Mill's reference to Wordsworth, Political Economy, p. 155
(bk. ii, ch. vi, section 1 n).

48. See, e.g., his note to the Wealth of Nations, p. 565 seq.

49. As quoted by W.T. Thornton, Plea for Peasant Proprietors
(1874), p. 133.

50. Jones's Essay on the Distribution of Wealth and on the
Sources of Taxation: Book 1, Rent, appeared in 1831. Though
constantly pressed by his intimate friend, Whewell, to complete
the book, Jones never found the time for the purpose. In 1859,
Whewell published Jones's Literary Remains -- chiefly notes for
lectures -- with a life.

51. Rent, pp. 68, 146. Whewell in his preface to Jones's Remains
(p. xvii) seems to charge Mill with approprating Jones's
classification without due recognition of the merits. Mill used
the book freely, and calls it a 'copious repertory of valuable
facts' (Political Economy, bk. ii, ch. v, section 4). If he did
not speak more strongly of the merits of Jones's classification
(into 'labour', 'métayer,' 'ryot,' and 'cottier' rents) it was
probably because he thought Jones responsible for a fatal
confusion between 'cottiers' and 'peasant-proprietors'. In the
Rent this distinction is ignored. In the Remains, which Mill had
not seen, Jones speaks (pp. 208, 217, 438, 522, 537) of the
'peasant-proprietors' as an interesting class, but pronounces no
definite judgment upon the system.

52. Political Economy, p. 230 (bk. ii. ch. xiii, section 3).

53. Bain speaks of Thornton as one of the friends who, like
Sterling, maintained a close intimacy with Mill in spite of
differences of opinion. These differences certainly did not
prevent Thornton from speaking and writing of Mill in the tone of
an ardent and reverential admirer. As little has been told of
Thornton's private life, I will venture to say that, as a young
man, I used often to see him, when he visited Fawcett and
Fawcett's great friend, Mr C.B. Clarke, at Cambridge. Thornton's
extreme amiability, his placid and candid, if slightly
long-winded, discussion of his favourite topics, won the
affection of his young hearers, and has left a charming
impression upon the survivors.

54. Over Population, p. 268.

55. Ibid. p. 121.

56. Political Economy (bl. ii. ch. xii. section 4).

57. Plea for Peasant Proprietors (1874) p. 261 n.

58. Political Economy, p. 223 (bk. ii. ch. vi. section 6).

59. Political Economy, pp. 168, 171, 182 (bk. ii. ch. vi. section
67; vii. sections 1, 5).

60. Peasant Proprietors (1874), p. 159, referring to Lavergne's
Economic Rurale (1860).

61. Political Economy, p. 177 (bk. ii. ch. vii. section 4).

62. Political Economy, p. 182 (bk. ii. ch. vii. section 5).

63. Ibid. p. 460 (bk. iv. ch. vii. section 4).

64. Political Economy, p. 217 (bk. ii. ch. xi. section 6).

65. Ibid. p. 225 (bk. ii. ch. xii. section 4).

66. Ibid. p. 211 (bk. ii. ch. xi. section 3).

67. Ibid. p. 230, etc. (bk. ii. ch. xiii. section 31, 34). Mill,
in the later editions, observes that he has left this as it was
written, although the rapid increase of means of communication
has made the case 'no longer urgent.'

68. Political Economy, p. 221 (bk. ii. ch. xii. section 2).

69. Ibid. p. 230 (bk. ii. ch. xiii. section 3).

70. Ibid. p. 232 (bk. ii. ch. xiii. section 4).

71. Ibid. p. 225 (bk. ii. ch. xiii. section 1).

72. Ibid. p. 213 (bk. ii. ch. xi. section 4).

73. Political Economy, p. 229 (bk. ii. ch. xiii. section 2).

74. Political Economy, p. 213 (bk. ii. ch. xi. section 4).

75. Ibid. pp. 213, 216 (bk. ii. ch. xi. sections 3, 5).

76. Quoted from the report of the Poor-law Commission in 1840. --
Political Economy (bk. i. ch. vii. section 5).

77. Political Economy, p. 68 (bk. i. ch. vii. section 5).

78. Ibid. p. 460 (bk. iv. ch. vii. section 4), where he speaks of
the total want of fairness and justice on both sides.

79. Political Economy, p. 252 (bk. ii. ch. xv. section 6).

80. Political Economy, p. 209 (bk. ii. ch. xi. section 2).

81. Ibid. p. 418 (bk. iii. ch. xxvi. section 3).

82. Ibid. p. 253 (bk. ii. ch. xv. section 7).

83. Ibid. bk. i. ch. vii.

84. Ibid. p. 254 (bk. ii. ch. xv. section 7).

85. Ibid. bk. iv. ch. iv. Cf. Unsettled Questions, pp. 105-6. The
article by Ellis, on the effect of improvements in machinery
(Westminister Review for January 1826), though rather awkwardly
stated, with the old capitalist and his quarters of corn
illustration, puts the point clearly.

86. Political Economy, p. 102 (bk. i. ch. xi. section 2).

87. Ibid. p. 103 (bk. i. ch. xi. section 3).

88. Political Economy, p. 443 (bk. iv. ch. iv. section 4).

89. Ibid. bk. iv. ch. vi.

90. Ibid, p. 453 (bk. iv. ch. vi. section 2).

91. Political Economy (1862), ii. 323. In the later editions this
passage is replaced by a reference to the civil war, which showed
that the struggle for wealth is not necessarily fatal to the
'heroic virtues.'

92. Political Economy, bk. iv. ch. i.

93. Ibid. bk. iv. ch. iii.

94. Ibid. p. 439 (bk. iv. ch. iii. section 5).

95. Political Economy, p. 436 (bk. iv. ch. iii. section 4).

96. Ibid. p. 207 (bk. ii. ch. x. section 1).

97. Thornton's On Labour; its Wrongful Claims and Rightful
Demands. Another work generally mentioned in regard to this
controversy is Longe, Refutation of the Wages-Fund Theory (1866).

98. Professor Taussig, Wages and Capital (1896), p. 23. Professor
Taussig gives a very thorough and candid discussion of the
question, to which I am glad to refer. To follow the many
controversies which he notices would take me into technicalities
beyond the purpose of this book, and, I fear, beyond my
competence.

99. Cairnes's Leading Principles, etc. p. 214.

100. Wealth of Nations (M'Culloch), p. 38. Ricardo (Works, p. 59)
and Senior (Political Economy, p. 153) call it the 'fund for the
maintenance of labour'.

101. Political Economy, p. 39 (bk. i. ch. v. section 1).

102. Wealth of Nations (M'Culloch), p. 31. I do not consider what
was Adam Smith's general doctrine.

103. This is the gist of Ellis's article (see above, p. 200 n.).

104. Mill scandalised the staunch free-traders by admitting an
exception to the doctrine in the case of new countries
'naturalising a foreign industry' by a moderate duty (Political
Economy, bk. v. ch. x. section 1). Such incidental consequences
are obviously possible. A prohibition to import a material of
industry might lead to the discovery of mines at home or to new
methods of manufacture. But such results seem to lie outside of
pure political economy.

105. Political Economy, p. 209 (bk. ii. ch. xi. section 2).

106. As quoted by Cairnes's Leading Principles, p. 302.

107. Political Economy, bk. i. ch. v. section 5.

108. Cairnes's Leading Principles, p. 222. explains the
principle. Taussig (pp. 107 and 274) agrees with Brentano that
Mill's doctrine is simply a corollary from the theory that wages
'are paid out of capital.'

109. Political Economy, p. 219 (bk. ii. ch. xii. section 1).

110. Ibid. p. 219 (bk. ii. ch. xii. section 2).

111. Political Economy, p. 578 (bk. v. ch. xi. section 9)

112. Political Economy, p. 563 (bk. v. ch. x. section 5).

113. Ibid. p. 564 (bk. v. ch. x. section 5).

114. Political Economy, p. 56 (bk. i. ch. v. section 10).

115. Dissertations, iv. 47 (reprint of article in Fortnightly
Review of May 1869).

116. Ibid. iv. 67.

117. Since no edition of the Political Economy appeared between
this time and Mill's death, he had no opportunity of making
alterations in his treatise. His review of Thornton, however,
seems to indicate a failure to appreciate the full bearing of his
concessions.

118. Dissertations, iv. 46.

119. Dissertations, iv. 43.

120. See Taussig, pp. 211-45 for the vagueness of such writers as
M'Culloch and Torrens, 'The point', he says, 'was hardly ever
raised in terms.'

121. Taussig, p. 238.

122. Article in Fortnightly Review for July 1860. See Mill,
Political Economy, p. 565 (bk. v. ch. x. section 5).

123. See Dictionary of National Biography for a short notice.

124. On Labour, p. 292.

125. Leading Principles, p. 257.

126. Leading Principles, p. 277.

127. 'Historically', says Professor Taussig (p. 242), 'there may
be ground for that contention,' viz., that the wage-fund never
meant more than Ricardo's doctrine that profits were the 'leaving
of wages', and that accumulation depended on profits. This, he
adds, is held by many writers who reject the 'wage-fund' proper,
that is, Thornton's 'will-o'-the-wisp.'

128. On Labour, p. 288.

129. On Labour, p. 274.

130. Ibid. pp. 86, 87.

131. Taussig, p. 122.

132. See the posthumous articles in the Fortnightly Review for
February, March, and April, 1879. They were obviously imperfect,
and scarcely justified publication.

133. Political Economy, p. 133 (bk. ii. ch. i. section 4).

134. Leading Principles, p. 316.

135. Political Economy, p. 476 (bk. iv. ch. vii. section 7).

136. Political Economy, p. 476 (bk. iv. ch. vii.) Mill refers to
Babbage's Economy of Machinery and Manufactuers for an incidental
reference to applications of profit-sharing in Cornish mines, and
a suggestion that it would be applicable elsewhere. Babbage gives
little more than a passing suggestion.

137. Leading Principles, pp. 339, 344.

138. Political Economy, p. 566 (bk. v. ch. x. section 5).

139. Political Economy, p. 569 (bk. v. ch. xi. section 2).

140. Ibid. p. 573 (bk. v. ch. xi. section 7).

141. He qualifies this to some extent in the Liberty. The state
should enforce education and pay for it, but not provide schools.
The line is hard to draw.

142. See especially Political Economy, p. 585 (bk. v. ch. xi.
section 14).

143. Political Economy, p. 138 (bk. ii. ch. ii. section 4).

144. Ibid. p. 61 (bk. i. ch. vi. section 3).

145. Political Economy, p. 581 (bk. v. ch. xi. section 12).

146. J.S. Mill's Ansichten uber die Sociale Frage, etc. (1866).

147. Fortnightly Review for February 1879.

148. Political Economy (first edition) i. 252-53.

149. Autobiography, p. 246.

150. Political Economy, p. 123 (bk. ii. ch. i. section 1).

151. Dissertations, iv. 59.

152. Ibid. iv. 240.

153. Leading Principles, p. 333.

154. Dissertations, iv. 263.

155. Ibid. iv. 285.

156. Ibid. iv. 274.

157. Ibid. iv. 269.

158. Ibid. iv. 60. The whole doctrine that the sanctity of
property depends upon the mode of acquisition by remote
proprietors seems to be scarcely reconcilable with sound
Utilitarianism.

159. After giving Adam Smith's famous account of the causes of
the varying rates of wages, Mill points out 'a class of
considerations' too much neglected by his predecessors: cases,
namely, in which unskilled labourers are insufficiently paid; and
remarks that there is almost a 'hereditary distinction of caste.'
-- Political Economy, p. 238 (bk. ii. ch. xiv. section 2).

160. Political Economy, p. 456 (bk. iv. ch. vii. section 1).

161. Ibid. p. 129 (bk. ii. ch. i. section 3).

162. 'On the Definition of Political Economy, and on the Method
of Investigation proper to it.' Reprinted in Unsettled Questions,
and quoted in the Logic, p. 288 (bk. vi. ch. ix. section 3).

163. Unsettled Questions, p. 143.

164. Autobiography, p. 210.

165. See, e.g., Comte's Philosophie Positive, iv. 266-78. The
fourth volume of Comte disappointed Mill, as he says; and this
probably explains one reason.

166. Logic, p. 590 (bk. vi. ch. ix. section 4).

167. Unsettled Questions, p. 148.

168. Ibid. pp. 137-50.

169. Mill makes this remark himself in writing to Comte about
phrenology.