I. English Navigation Acts.—Macpherson's “Annals,” ii, pp. 442, 484; Scobell, “Collection of Acts,” p. 176; Ruffhead, “Statutes at Large,” iii, p. 182; Roger Coke, “Treatise on Trade” (1671), p. 36; Sir Josiah Child, “New Discourse on Trade” (1671); Sir Matthew Decker, “Essay on the Causes of the Decline of Foreign Trade” (1744); Joshua Gee, “Trade and Navigation of Great Britain” (1730); Lindsay, “History of Merchant Shipping and Ancient Commerce”; McCulloch, “Dictionary of Commerce” (new edition), articles “Navigation” and “Colonial Trade”; ibid., edition of Adam Smith, note xii, p. 534; Huskisson, speeches, iii, 13, 351; Levi, “History of British Commerce,” p. 158.
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II. Navigation Laws of the United States.—“United States Statutes at Large,” i, 27, 287, 305; Act of 1817, Statutes, iii, 351; Revised Statutes (1878), “Commerce and Navigation,” p. 795; Lord Sheffield, “Observations on the Commerce of the United States”; Pitkin, “Statistical View of the Commerce of the United States,” chap, i; D. A. Wells, “Our Merchant Marine,” chap. v; Seybert's “Statistical Annals”; Macgregor, “Commercial Statistics of America.”
III. Growth of American Shipping.—Rapid growth, 1840-1856. Levi, “History of British Commerce,” p. 582; Bigelow, “Tariff Question,” Appendix No. 57; “Harper's Magazine,” January, 1884, p. 217; Lindsay, “History of Merchant Shipping,” iii, p. 187; for ship-building, see Report of the United States Bureau of Statistics, “Commerce and Navigation,” 1881, p. 927; for tonnage, ibid., pp. 928-930; also, see “United States Statistical Abstract”; Dingley's Report to House of Representatives, December 15, 1882, No. 1,827, Forty-seventh Congress, second session, pp. 5, 8, 254.
IV. Steam and Iron Ships.—Preble, “History of Steam Navigation”; Colden, “Life of Fulton”; Porter, “Progress of the Nation,” section 3, chap. iv; Nimmo, “Report to the Secretary of the Treasury in Relation to the Foreign Commerce of the United States and the Decadence of American Shipping” (1870); Dingley's Report, pp. 4, 23; Kelley, “The Question of Ships,” Appendix ii, p. 208.
V. Decline of American Shipping.—“Report on Commerce and Navigation” (1881), pp. 927, 928; Lindsay, ibid., iii, pp. 83, 187, 593, 645; ibid., iv, pp. 163-180, 292, 316, 376; “North American Review,” October, 1864, p. 489; “Report on Commerce and Navigation,” 1881, lxv, pp. 915, 916, 922, 934; Lynch, Report to House of Representatives on “Causes of the Reduction of American Tonnage,” February 17, 1878, pp. ix, 80, 176, 195-213; remission of duties, Revised Statutes of the United States (edition of 1878), section 2,513; Report on “Commerce and Navigation,” xi, 83, 210; Dingley's Report; Nimmo, “Decadence of American Shipping” (which gives several charts), p. 17, “The Practical Workings of our Relations of Maritime Reciprocity” (1871); Kelley, ibid.; Reports of the New York Chamber of Commerce; Sumner, “Shall Americans own Ships?” in “North American Review,” June, 1880; Codman, “Free Ships”; for high-rate profit in the United States, Dingley's Report, p. 4.
VI. Burdens on Ship-Owners.—Tonnage duties, Wells, p. 179; sailors' wages, Revised Statutes, sections 4,561, 4,578, 4,580-4,584, 4,600; consular fees, Dingley's Report, p. 9; pilotage, taxation, Wells, p. 172, et seq.; see also Act of 1884, abolishing many of these burdens.
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The following problems and questions have been arranged to indicate to the reader the character of examinations set by English374 and American universities. They have been taken in each case from papers actually given. It is hardly necessary to state, perhaps, that these questions do not exhaust the subject, and are only some of a kind of which many more might be added:
Definitions.
1. Define briefly, Fixed Capital; Unproductive Consumption; Law of Diminishing Returns; Effective Desire of Accumulation; Law of Increase of Labor; Communism; Wages Fund; Wages of Superintendence; Real Wages; Value; Price; Demand; Medium of Exchange; Gresham's Law.
2. Explain carefully the following terms: Productive Consumption, Effectual Demand, Margin of Cultivation, Cost of Production, Value of Money, Cost of Labor, Wealth, and Abstinence.
3. Explain the following terms: Real Wages, Fixed Capital, Allowance System, Margin of Cultivation, Price, Demand, Medium of Exchange, Seignorage, Value of Money, and Bill of Exchange.
4. Define Supply, Value of Money, Productive Consumption, Cost of Production, Cost of Labor, Exchange Value, Law of Production from Land, Rate of Profit, Capital, and Gresham's Law.
5. Define Political Economy: State the parts into which it may be divided, and show how they are mutually related.
Labor.
6. Distinguish between direct and indirect labor, and give an illustration of the distinction.
7. Apply the distinction between productive and unproductive labor, and productive and unproductive consumption, respectively, to each of [pg 638] the following persons: a tailor, an architect, an annuitant, a sailor, and a brick-layer.
8. Is an actor to be classed as a productive laborer? The inventor of a machine? A confectioner?
9. In which of the two classes of laborers, productive and unproductive, would you place the following?
(1.) The officers of our Government.
(2.) The maker of an organ.
(3.) An organist.
(4.) A schoolmaster.
(5.) An artist.
(6.) He who makes an article for which there is no use.
10. Classify as productive or unproductive the following laborers: a clergyman, musical-instrument maker, actor, soldier, and lace-maker.
Capital.
11. Explain fully what you understand by capital, and what function it discharges in production. Consider whether or not the following ought to be included in capital: (1) the original and acquired powers of the laborer, (2) the original properties of the soil, (3) improvements on land, (4) credit, (5) unsold stock in the hands of a merchant, (6) articles purchased but still in the consumer's hands.
12. Does a national loan add to the capital of a country?
13. Inquire how far, or in what cases, or in what sense, it may be said that a common dwelling-house, an hotel, a school-house, a police-station, a theatre, and a fortification, constitute part of the capital of the country.
14. Discuss carefully the question whether money lying in a bank (or corn lying in a granary) is always capital, or whether its economic nature depends upon the intentions of the owner.
15. Are railway-shares, stocks of wine, wheat, munitions of war, and land, to be considered capital, or not?
16. Explain fully whether you consider that United States bonds are capital or not.
17. Is an investment in government funds capital, or not? Give your reasons.
18. In what manner does a large expenditure for military purposes affect the operations of capital and labor?
19. Distinguish between wealth and capital. Show that there is no assignable limit to the employment of capital in bettering the condition of the members of a community.
20. “If there are human beings capable of work, and food to feed them, they may always be employed in producing something.” Explain the meaning of this fully.
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21. What is meant by saying wealth can only perform the functions of capital by being wholly or partially consumed?
22. Explain and illustrate the statement that demand for commodities is not demand for labor.
23. Show that expenditure of money does not necessarily increase the demand for labor.
24. In what way would a general demand for luxuries affect productive laborers and the wealth of the community?
25. In a community where capital is all employed, what would be the effect if one employer gradually withdrew some of his capital, and spent this for personal luxuries?
26. It is contended that “the demand for commodities, which can only be got by labor, is as much a demand for labor as a demand for beef is a demand for bullocks.” Criticise this position.
27. “It is often said that, though employment is withdrawn from labor in one department, an exactly equivalent employment is opened for it in others, because what the consumers save in the increased cheapness of one particular article enables them to augment their consumption of others, thereby increasing the demand for other kinds of labor.” Point out the fallacy.
28. A college undergraduate, with the applause of shopkeepers, bought twenty waistcoats, under the plea that he was doing good to trade. Examine the economical soundness of his act.
29. A man invested a portion of his capital in a loan to a state which subsequently repudiated its debts. The man thereupon gave up his carriage, discharged superfluous gardeners, and reduced the number of his domestic servants. Examine the effect of these changes on the employment of labor in the district where he resides.
30. In the sixteenth century a great change in the mode of expenditure took place. Retainers were dismissed, households were reduced and a demand for commodities was substituted for a demand for labor. How would this change affect wages, and why?
31. It is supposed by some persons that expenditure by the rich in costly entertainments is good for trade. What is your opinion on the subject?
32. A is an absentee who spends his income abroad. B spends his income chiefly on American pictures and other works of art. C spends most of his income on American servants. D saves and buys United States bonds. E employs most of his income in the production of manufactures. Explain the various effects of these different modes of expenditure on the amount of wealth in the United States, and on the working-classes of the country.
33. Compare the economic effects of defraying war expenditure (1) by loans, (2) by increased taxation.
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34. Define the term capital, and distinguish between fixed and circulating capital, giving instances of each.
35. Distinguish between fixed and circulating capital, and point out how far, or in what manner, each of the following articles belongs to one kind or the other: a dwelling-house, a crop of corn, a wagon, a load of coal, an ingot of gold, a railway-engine, a bale of cotton goods.
36. Of the following, which would you class under fixed and which under circulating capital: cash in the hands of a merchant, a cotton-mill, a plow, diamonds in a jeweler's shop, a locomotive, a nursery-gardener's seeds, greenhouses, manures; a carpenter's tools, woods, nails?
37. If in a country like this a large amount of capital becomes fixed in the building of railroads, what effect will this change taken by itself have upon the laboring-class, supposing the capital to be (1) domestic, or (2) borrowed wholly or in part from abroad?
38. What conclusion is reached by Mr. Mill respecting the objections to the use of labor-saving machinery?
39. Is the extension of machinery beneficial to laborers?
40. What is “the conclusive answer to the objections against machinery”?
Efficiency of Production.
41. Explain briefly the chief causes on which the productiveness of labor depends.
42. What are the principal ways in which advantage arises from the division of labor?
43. What are the principal advantages of division of labor? In what cases and why is it better to carry on a productive enterprise on a large scale?
44. Under what circumstances, and in what callings, can the division of employment be carried out to the fullest extent?
45. Show how the amount of available capital and the extent of the market for products limit division of labor.
Population.
46. Give a brief statement of Malthus's theory of population, explaining the different checks on population in different stages of civilization.
47. Enunciate Malthus's law of population, and give an outline of the reasoning by which he established it. Give an account of any objections that have been brought against Malthus's position, and criticise those objections.
48. When the growth of population outstrips the progress of improvements, what are the means of relief for the laborer?
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49. Does the increased facility of emigration nullify the Malthusian law of population in your opinion or not, and why?
50. Explain the law of diminishing return and the Malthusian doctrine of population; and trace the connection between them.
Increase of Production.
51. Compare the motives to saving in the case of savages, and of a country like the United States. State the causes of diversity in the strength of the effective desire of accumulation.
52. Capital is said to be accumulated by saving; what is saving? Is hoarded money a saving while hoarded?
53. How far does the increasing productiveness of manufacturing industry tend to neutralize the effect on profits of the diminishing productiveness of agricultural industry?
54. What conclusion as to the limit to the increase of production does Mr. Mill deduce from his investigation of the laws of the various requisites of production?
Property.
55. What are the essential elements of property? Are the grounds of property in land the same as those of property in movables?
56. Give what you conceive to be the chief arguments in favor of the institution of private property, as opposed to common ownership.
57. What arguments does Mr. Mill suggest in favor of some redistribution of landed property?
58. What are the economic arguments for and against Communism?
59. In what way, and by what means, do Socialists want to alter the present distribution of wealth?
60. Sketch the principal forms of Communistic and Non-communistic Socialism.
61. Should the power of bequest be limited?
Wages.
62. On what, according to Mill, does the rate of wages depend? Hence, show the fallacy of the popularly proposed remedies for low wages.
63. State and examine the principal theories which have been put forward as to the circumstances which regulate the general rate of wages, saying which you deem to be correct, and why so.
64. Mr. Thornton argues that the wages-fund is neither “determined” nor “limited”: not “determined,” because there is no “law” to compel capitalists to devote any portion of their wealth to the payment [pg 642] of labor, nor are they morally “bound” to do so; and not “limited,” because there is nothing to prevent them from adding to the portion of their wealth so applied. Criticise this argument, and, if you dissent from Mr. Thornton's view, state the causes which “determine” and “limit” the fund in question.
65. State precisely what you mean by the “wages-fund,” and explain the conditions on which its growth depends.
66. Explain generally the circumstances which determine the rate of wages. Mention some of the reasons why wages should be higher in one occupation than in another.
67. In what way does dearness or cheapness of food affect money wages?
68. What determines—
(1.) The general rate of wages in a country?
(2.) The relative rates of wages in different employments?
69. What causes different rates of wages in different employments, and by what methods might wages be raised?
70. How do you explain the fact that some of the most disagreeable kinds of labor are the most badly paid?
71. What, according to Mr. Mill, are the most promising means for the improvement of the laboring-classes?
72. In the Island of Laputa a law was passed compelling each workman to work with his left hand tied behind his back, and the law was justified on the ground that the demand for labor was more than doubled by it. Examine this argument.
73. Some coal-workers are calling for a diminution of the output of coal, so as to keep up their wages. Examine how far, if at all, this result would follow from their proposed action.
74. Discuss any remedies for low wages that have been or might be suggested.
75. Why are the wages of women habitually lower than those of men?
Profits.
76. What is the cause of the existence of profits? And what, according to Mr. Mill, are the circumstances which determine the respective shares of the laborer and the capitalist?
77. (1.) What is the lowest rate of profit which can permanently exist? (2.) Why is this minimum variable?
78. Analyze the remuneration received by any of the following: (1) the proprietor of a cotton-mill managing his own mill; (2) a merchant conducting his own business; (3) a railway shareholder; (4) a holder of government funds.
79. Into what portions may we divide the return which is usually [pg 643] called profit? Which of these portions would be received by a merchant carrying on business with borrowed capital?
80. Analyze the payment called profits into its various elements. Point out in what respects the earnings of the employer differ from or resemble the wages paid to other classes of laborers.
81. It is asserted that “profits tend to an equality.” What conditions must be satisfied before this position can be maintained?
82. How is the alleged tendency of profits to equivalence in different employments to be reconciled with the notorious difference in the profit of different individuals?
83. Which one of the elements in profit has the greatest effect on its amount? Explain by comparing the causes which regulate each element.
84. How does Mill reconcile the high wages in America with Ricardo's law of profits?
85. Explain the proposition that the rate of profits depends on the cost of labor, stating carefully what elements are included in cost of labor.
86. Explain what connection there may be between an increase of population and any of the elements entering into cost of labor.
87. What effect would an increase or diminution of population have upon cost of labor?
88. Explain Mill's view as to the cost of labor being a function of three variables, considering the passages in which he says, 1. “If without labor becoming less efficient its remuneration fell, no increase taking place in the cost of the articles composing that remuneration;” 2. “If the laborer obtained a higher remuneration, without any increased cheapness in the things composing it; or if, without his obtaining more, that which he did obtain would become more costly”: profits in the last two cases would suffer a diminution; and discussing—Firstly, if the remuneration of labor falls, what can the cost of the articles composing that remuneration signify to the capitalist? Secondly, if the laborer gets a higher remuneration, what can the increased cheapness of the things composing it signify to the capitalist?
89. Is the contest between capital and labor permanent and fundamental? If not, give your reasons for your answer.
90. What is the effect on wages and profits of the introduction of machinery?
Rent.
91. What connection exists between the law of Malthus and Ricardo's doctrine of rent?
92. What is the reason why land-owners can demand rent?
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93. Explain and illustrate the distinction between rent and profits. In what cases are they nearly indistinguishable?
94. It has often been observed that in America land is much less highly cultivated than in England. Explain the economic reasons for this.
95. How does the theory of rent apply in a country like the United States, where the farmer owns his land instead of hiring it?
96. How is it that some agricultural capital pays rent, even if resort is not had to different grades of land?
97. Give a brief description of the theory of rent, and point out to what payments not usually called rent the theory may be applied.
98. State briefly Ricardo's theory of rent, and show that, if it be true, the following statements of Adam Smith must be false:
“The most fertile coal-mine regulates the price of coals at all the other mines in the neighborhood.”
“In the price of corn one part pays the rent of the landlord, another pays the wages, and another the profit of the farmer.”
99. Why does the farming business pay rent, and the cotton business (ground-rent excluded) pay none? Define rent.
100. “As population increases, rents estimated in corn increase, and the price of corn rises; rents, therefore, doubly tend to increase.” Prove this.
101. Professor Rogers adduces, in refutation of the common theory of rent, the fact that land near New York pays a high rent, while land of the same natural fertility in the Western States pays no rent. How far do you admit the force of this objection?
102. Examine the following doctrine:
“If invention and improvement still go on, the efficiency of labor will be further increased, and the amount of labor and capital necessary to produce a given result further diminished. The same causes will lead to the utilization of this new gain in productive power for the production of more wealth; the margin of cultivation will be again extended, and rent will increase, both in proportion and amount, without any increase in wages and interest. And so, ... will ... rent constantly increase, though population should remain stationary.”—Henry George, “Progress and Poverty” (p. 226).
103. What answer is made to Mr. Carey's objection to Ricardo's theory of rent, that in point of fact the poorer, not the richer, lands are first brought under cultivation?
104. Explain how land, “even apart from differences of situation,... would all of it, on a certain supposition, pay rent.”
105. Explain clearly how it is possible for the land of a country which is all of uniform fertility to pay rent.
106. “If the earth had a perfectly smooth surface the same everywhere, [pg 645] and if it were all tilled and cultivated in exactly the same way, there would be no such thing as rent.” Examine this proposition.
107. Show that rent does not increase the price of bread.
108. How is it shown that “rent does not really form any part of the expenses of production or of the advances of the capitalist?”
109. (1.) What connection exists between the price of agricultural products and the amount of rent paid? (2.) Can rent affect the price?
110. “Rent is the effect and not the cause of price.” Prove this.
111. Does rent enter into the cost of production of the following commodities or not, and why: Corn, cloth, the wine of the best vineyards?
112. “Rent arises from the difference between the least fertile and the most fertile soils, and from the fact that the former have been taken into cultivation.... Rent is the difference between the market price of produce and the cost of production.” Harmonize these statements.
113. In order that the actual payments made by farmers to landlords should generally correspond with “economic rent,” what conditions must be observed?
114. What is assumed, as to competition, in all Mr. Mill's reasoning on wages, profits, and rent? Explain its action in each case.
Value.
115. Enumerate, compare, and criticise any opinions known to you which have been held concerning the nature, origin, or measure of value in exchange.
116. Define precisely what it is which gives value to objects, and point out the causes which vary the value of the same object under differing circumstances.
117. Do men dive to the bottom of the sea to get pearls because they are valuable; or are pearls valuable because men must dive to the bottom of the sea to get them?
118. There are three forms of difficulty of attainment. State the law of value applicable to each.
119. Explain the exact economic meaning of the words supply and demand.
120. When it is said that the value of certain commodities depends upon supply and demand, what is meant by demand?
121. If the supply of all commodities were suddenly doubled, would any changes in their relative values ensue or not, and why?
122. State the laws which regulate the permanent and temporary values of agricultural products.
123. How far does the value of commodities depend on the quantity of labor required for their production?
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124. Has the term exchange value any precise meaning when we are comparing times or places very remote from one another?
125. What is meant by the natural (or normal) price and the market price of commodities? To what extent can they differ?
126. Does a general rise of wages raise the prices of commodities in general or not, and why? Does it tend to cause any change in the relative prices of commodities or not, and why?
127. Suppose that wages were double, would the values of commodities be affected? What would be the effect on prices and profits of such an increase of wages?
128. Are wages and profits influenced by prices?
129. Can employers recoup themselves by a rise of prices for a rise of—
(a.) Wages in particular employments?
(b.) General wages?
How does this question bear on the efficacy of trades-unionism?
130. Do values depend on wages?
131. Explain the following statement: “It is true the absolute wages paid have no effect upon values; but neither has the absolute quantity of labor.”
132. Explain the statement that “high general profits can not, any more than high general wages, be a cause of high values.... In so far as profits enter into the cost of production of all things, they can not affect the value of any.”
133. Explain fully why it is that capitalists can not compensate themselves for a general high cost of labor through any action on values and prices.
134. “The value of a commodity depends on its cost of production.” Under what conditions is this true, and what causes interfere with it?
135. Describe the hindrances which impede the free movement of capital to those fields which apparently offer the highest return for its employment.
136. Give J. S. Mill's analysis of the “cost of production,” and also Professor Cairnes's, with the arguments for and against each.
137. Analyze cost of production. What is its connection with cost of labor?
138. Give an analysis of cost of production of any commodity.
139. Show carefully the distinction between wages, cost of labor, and cost of production.
140. Define clearly value, price, real wages, and cost of production.
141. Define real wages, money wages, cost of labor.
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Money.
142. Point out the difference between the scientific and popular conceptions implied in the terms wealth and money.
143. Show the fallacy of confounding capital with money. Can there be a glut of capital?
144. What is money? To what sort of necessity does it owe its existence? What articles have been used for money? Enumerate the qualities which render a commodity fit to serve as money.
145. What are the qualities requisite in any commodity in order that it may serve as money?
146. Distinguish accurately between the functions of money.
147. How far is a fixed standard of value possible?
148. What effect does the great durability of gold and silver have upon the value of money?
149. How far does the law of demand and supply govern the value of money?
150. Explain fully how it is that the value of the precious metals is affected by “questions of quantity only, with little reference to cost of production.”
151. What is to be said to the following: “Some political economists have objected altogether to the statement that the value of money depends on its quantity combined with the rapidity of circulation; which, they think, is assuming a law for money that does not exist for any other commodity”?
152. Under what conditions is it true that the “value of money is inversely as its quantity”?
153. Explain carefully the following: “The average value of gold is made to conform to its natural value in the same manner as the values of other things are made to conform to their natural value.”
154. In what various meanings is the phrase “the value of money” used? How far does the value of money in each of these meanings depend on (1) the cost of production, (2) supply and demand?
155. Are the values of gold and silver subject to exactly the same natural laws as other commodities?
156. Give the explanations and qualifications required to render the following proposition true: “The quantity of coin in every country is regulated by the value of the commodities which are to be circulated by it.”
157. Would the world be richer if every individual in it suddenly found the quantity of money in his possession doubled?
158. How far, or in what way, do you consider it correct to say that the general level of prices in a country depends upon the quantity of gold coin existing in that country?
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159. A single good harvest causes a considerable fall in the value of wheat; but a great addition to the year's supply of gold from the mines produces little effect on its general value. How do you account for the difference?
160. Show the effect of establishing a double standard.
161. Show how Gresham's law is illustrated by the history of the currency in the United States between 1834 and 1873.
162. What effect had the discovery of gold in this century upon the coinage of the United States?
163. What is the system upon which the small silver currency of the United States is coined and issued?
164. State briefly the aim of the United States coinage act of 1853.
Credit.
165. How do you define credit? Form a classification of credit documents.
166. It has been said that “credit is capital.” Is this so or not?
167. Define capital, and examine the meaning of the term in the following statements:
(a.) Demand for commodities can not create capital.
(b.) Credit is not a creation, but a transfer of capital.
(c.) Wages depend upon the proportion between population and capital.
168. State the law of the value of money which governs general prices. What change is to be made in the statement, if credit is to be taken into consideration?
169. What is the part which instruments of credit, other than bank-notes, play in the exchange of commodities?
170. Mention some of the principal features of a credit crisis.
171. What are inconvertible notes? What objections are there to currency of this description?
172. Can an inconvertible currency be made to maintain the same value as a convertible currency, and, if so, how? Supposing that it can, what objections are there, nevertheless, to it?
173. “Nothing is subject to more variation than paper money, even when it is limited, and has no guarantees; for this simple reason, that, having no value of its own, it depends on the idea that each person forms of those guarantees.” Comment on this passage.
174. How is it that a bad dollar does the work of buying as well as a good one until it is found out? Is it that it makes no difference whether it is made of gold or not?
175. To what extent is a government capable of giving fictitious value to a paper or a metallic currency?
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176. In a country with an inconvertible paper currency, how can it be determined whether the issues are excessive or not, and why?
177. What will be the effect if the circulating medium of a country is increased beyond its natural amount—
(1) when the medium is coin?
(2) when it is coin and convertible paper?
(3) when it is inconvertible paper?
178. What is the error involved in the assumption, frequently made by writers and public speakers, that the currency of a country ought to increase in like ratio with its wealth and population?
179. On what does the desire to use credit depend? What connection exists between the amount of notes and coin in circulation and the use of credit?
180. Compare the advantages and disadvantages of a metallic and paper currency.
181. A member of Congress advocated expansion of the paper currency by the following argument: “Our currency, as well as everything else, must keep pace with our growth as a nation.... France has a circulation per capita of thirty dollars; England, of twenty-five; and we, with our extent of territory and improvements, certainly require more than either.” State your opinion of this argument.
182. Trace the effects, immediate and ultimate, on general prices of (a) an extended system of credit, (b) an enlarged issue of paper money, and (c) an addition to the stock of precious metals, respectively.
183. What is the error in the common notion that “a paper currency can not be issued in excess so long as every note represents property, or has a foundation of actual property to rest on”?
184. Explain the action of the check and clearing-house system, and state what is meant by the restoration of barter.
Over-Production.
185. State the relation between supply and demand as aggregates, e.g., between the aggregate supply of commodities in a given community and the aggregate demand for them, and show the bearing of the principle involved on the doctrine of “general over-production.”
186. Prove that the increase of capital and the extension of industry can not lead to a general over-production of commodities.
187. What is the error of those who believe in the danger of over-production?
188. Distinguish “excess of supply” from a “commercial crisis.”
189. Give the substance of Mill's examination of the theories of excess of supply.
190. “When production is fully equal to consumption, every discovery in the arts, or in mechanics, is a calamity, because it only adds to [pg 650] the enjoyment of consumers the opportunity of obtaining commodities at a cheaper rate, while it deprives the producers of even life itself.” Discuss this opinion of Sismondi.
191. Explain the difference in the theories of Dr. Chalmers and Mr. Mill on over-production, and the excess of supply.
Peculiar Cases of Value.
192. It costs as much to produce straw as to produce grain; how, then, do you explain the comparatively low value of straw?
193. Suppose a considerable rise in the price of wool to be foreseen, how should farmers expect the prices of mutton to be affected, and why?
194. Explain the operation of the laws of value by which the relative prices of wool and mutton are regulated.
International Trade and Values.
195. What is the meaning of the statement that “it is not a difference in the absolute cost of production which determines the interchange [of commodities between countries], but a difference in the comparative cost”?
196. What are the advantages which a country derives from foreign trade?
197. Explain clearly the following passage: “We may often, by trading with foreigners, obtain their commodities at a smaller expense of labor and capital than they cost to the foreigners themselves.”
198. Is there any essential difference between trade between country and country, and trade between county and county, or even between man and man? What is the real nature of trade in all cases?
199. Why is it necessary to make any different statement of the laws of value for foreign than for domestic products? What is the cause for the existence of any international trade?
200. How would a serious decline in the efficiency of England, as compared with other countries, in the production of manufactures affect the scale of money incomes and prices in England, and why?
201. Mr. Mill refers the value of home products to the “cost of production”; of foreign products to the “cost of acquisition.” Examine the truth of this distinction.
202. It is said that in the home market the value of commodities depends on the cost of production, in the foreign market on the cost of acquisition. Comment on this distinction.
203. Is the cost of production the regulator of international values?
204. Discuss the following statement: “International value is regulated just as inter-provincial or inter-parishional value is. Coals and [pg 651] hops are exchanged between Northumberland and Kent on absolutely the same principles as iron and wine between Lancashire and Spain.”—Ruskin, “Munera Pulveris,” p. 84.
205. What determines the value of imported commodities?
206. Why does cost of production fail to determine the value of commodities brought from a foreign country? Does it also fail in the case of commodities brought from distant parts of the same country?
207. It is on the matter of fact that there is not much migration of capital and labor from country to country that Mr. Mill has based his whole doctrine of “international trade and international values.” Explain and comment on the above statement.
208. What are the causes which determine for a nation the cost of its imports?
209. It follows from the theory of international values, as laid down by Mill, that the permanent residence of Americans in Europe may enhance the cost of foreign imports to Americans residing at home. Explain in what way.
210. Suppose two countries, A and B, isolated from the rest of the world, and a trade established between them. In consequence of the labor of A becoming less effective, the cost of production of every article which can be produced in that country is greatly increased, but so that the relation between the costs of any two articles remains the same. What, if any, will be the effect of the change on the trade between A and B? Does your answer depend upon your using the phrase “cost of production” in a sense different from that given to it by some economists?
211. Show that every country gets its imports at less cost in proportion to the efficiency of its labor.
Foreign Exchanges.
212. What is the ordinary limit to the premium on foreign bills of exchange, and why?
213. What are the chief effects on the foreign exchanges which are produced by the breaking out of a war? Account for the fact that in 1861 the exchanges on England in America fell considerably below specie point.
214. Suppose that the next harvest in England should be very defective, and extraordinary supplies of American grain needed. How would this probably affect the price of bills of exchange between England and America, and the profit on the exportation of English manufactures to the latter, and why?
215. Trace the process by which the precious metals spread from the mines over the world.
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216. Suppose the exchange between England and the United States to be heavily against England, how will this fact affect the export and import trade between the two countries, and why?
217. What is meant by exchanges being against a country?
218. Enumerate the principal circumstances which affect the rate of exchange between two countries. How is the par of exchange ascertained?
219. In what way are gold and silver distributed among the different trading countries? Between different parts of the same country?
220. Trace the effects of large and continuous issues of inconvertible paper currency on the prices of commodities, on importation and exportation, and on the foreign exchanges.
221. State the conditions under which international trade can permanently exist. What will be the ultimate effect of a large movement of foreign gold upon prices, imports, and exports in the receiving country?
222. State the theory of the value of money (i.e., “metallic money”), and clear up any apparent inconsistencies between the following statements: (1.) The value of money depends on the cost of production at the worst mines; (2.) The value of money varies inversely as its quantity multiplied by its rapidity of circulation; (3.) The countries whose products are most in demand abroad and contain the greatest value in the smallest bulk, which are nearest the mines and have the least demand for foreign productions, are those in which money will be of lowest value.
228. The effects of the depreciation of the paper currency in the United States are thus described by Mr. Wells: “It renders it impossible to sell abroad the products which have cost too much at home, and invites from other countries the products of a cheaper labor paid for in a sounder currency. It exaggerates imports, while destroying our ability to pay in kind.” State how far you agree with the deductions here drawn, assigning your reasons where you differ.
224. When the foreign exchanges are manifestly against a country, and a balance of indebtedness is the cause, the equilibrium can be restored in two ways. State and explain the operation of each.
225. What are the conditions which determine for a country a high range of general prices? How far is this advantageous?
226. What is the effect of the imposition of a tribute by one country on another upon the course of trade between them, and the terms on which they exchange commodities; and why?
227. For what reasons may a nation's exports habitually exceed or fall short of its imports?
228. Explain the real and nominal exchange.
229. Expound Mr. Mill's theory of the influence which a convertible currency exercises on foreign trade.
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230. What is the effect of a depreciated currency on (1) foreign trade, and (2) the exchanges?
Interest.
231. How does the general rate of interest determine the selling price of stocks and land?
232. Is there any relation between the rate of interest and the value of money?
233. What are the relations of interest and profit? On what causes does the rate of interest depend?
234. “High interest means bad security.” Comment on this saying.
235. Is the rate of interest affected by the supply of the precious metals?
236. What determines the rate of interest on the loanable funds? Is the “current [or ordinary] rate of interest the measure of the relative abundance or scarcity of capital”?
237. What are the chief causes that determine the rate of interest?
238. If it be true that in America every man, however rich, is engaged in some business, but that in England many rich men have no trade or profession, how is the rate of interest in each country affected in consequence, and why?
239. How does a fall in the purchasing power of money tend to affect, if at all, and why, (1) the rate of interest, (2) the price of land, (3) the price of government bonds, (4) the price of gold and silver ornaments and plate?
Foreign Competition.
240. Explain the grounds of Mr. Mill's proposition that general low wages never caused any country to undersell its rivals, nor did general high wages ever hinder it from doing so. If you think the proposition needs qualification, give your reason.
241. (1.) What is the true theory of one country underselling another in a foreign market? (2.) What weight should be attributed to the fact of generally higher or lower wages in one of the competing countries?
242. Discuss the question whether a high rate of wages necessarily lays the commerce of a country under a disadvantage with reference to a country where the rate of wages is lower.
243. What are the conditions under which one country can permanently undersell another in a foreign market?
244. Point out distinctly the connection between the money wages of laborers in the United States and the productiveness of the soil.
245. In the Eastern States iron-molders earn from fourteen to seventeen dollars a week; in California their wages run from twenty-one to twenty-seven dollars. Account for this variation.
[pg 654]
Progress of Society.
246. What are the reasons for the change in the normal values of manufactured and of agricultural commodities, respectively, during the progress of society?
247. Wages and profits in different employments and neighborhoods are not uniformly proportional to the efforts of labor and abstinence of which they are the respective rewards. Classify the circumstances which prevent this correspondence, and show how far their effect is likely to be reduced (a) by general economical progress, and (b) by the extension of the division of labor.
248. What is the law of diminishing returns? Can you point out any connection between this law and the following phenomena?—
(a.) Density of population.
(b.) Rate of wages.
(c.) Rate of profits in different countries.
249. Sketch the influence on rents and profits of an increase of population and capital concurrently with a stationary state of the arts of production.
250. Is there reason to believe that Mr. Mill has underrated the powers possessed by man of extending the area of production and facilitating the market of food? If such a statement has been made, to what extent is his theory of population modified, and the risks he had indicated rendered distant?
251. Compare the effects on rent, profits, and wages, of a sudden improvement in the production (a) of food, (b) of some manufactured articles largely consumed by the working-classes.
252. Trace the connection between Ricardo's theory of rent and the decline in the general rate of profits as a country increases in population. Explain clearly the connection which exists between wages and profits.
253. What effect is produced upon rents, profits, and wages, respectively, in a country like France, where population is stationary and capital advancing?
254. If capital continued to increase and population did not, explain the proposition that “the whole savings of each year would be exactly so much subtracted from the profits of the next and of every following year,” if improvements were stationary.
255. How does social and industrial progress tend to affect the prices of land, raw produce, and manufactures, respectively, and why?
256. The capitalized value of land rises, in the progress of society, from two causes—from one which affects land in common with all investments; from another which is peculiar to land.
[pg 655]
257. “The tendency of improved communications is to lower existing rents.” How far is this true, and in what directions is it true?
258. What would be the effect on profits, wages, and rents of an improvement in a manufactured article consumed by the laboring-class?
259. Explain the doctrine of the tendency of profits to a minimum, the cause of that tendency, and the circumstances which counteract it.
260. What was Adam Smith's doctrine as to the decline of profit in progressive communities? Criticise his argument.
261. Mention some of the principal causes which, in the ordinary progress of society, respectively tend to increase or to reduce the current rate of profits.
262. Why do profits tend to fall as population increases, and how may this result be retarded or prevented?
263. What is the effect of a general rise of money wages, apart from the consideration of a greater efficiency of labor, in prices, profits, and rent? Give reasons for your answer.
264. How does the general progress of society in wealth and industrial efficiency tend to affect the rate of wages, the rate of profit, and the rate of rent, respectively?
265. What is the general effect of the progress of society on the land-owner, the capitalist, and the laborer?
Future of Laboring-Classes.
266. Examine the influences of machinery on the economic condition of the working-classes.
267. Mention and discuss some of the popular remedies for low wages, and especially the effect of the subdivision of landed property among peasant proprietors.
268. Explain briefly what is meant by co-operation, and indicate the more prominent forms assumed by the co-operative movement.
269. What is meant by the co-operative system of industry? Show ways in which this system may affect, for good or for evil, the productiveness of labor; and mention any moral benefits, or the opposite, in which it may be expected to issue.
270. What are the difficulties in the way of co-operation for the production of salable objects?
271. Explain the advantages of industrial partnership, in which the employÉs share, in proportion to the wages received, half the profits of the business beyond a certain fixed minimum which is assigned to the employers.
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Taxation.
272. How is the state justified in undertaking any manufacture or service which might be performed by private enterprise?
273. Enumerate Adam Smith's canons of taxation.
274. Examine the argument in favor of the resumption by the state of what is called the unearned increment in the value of land arising from the development of society.
275. A picture by Gainsborough and a house in Broadway are sold in the same year at the same price; at the end of fifty years each sells for five times its first cost. Is there any, and, if so, what, reason why the increase should be sequestrated for the public benefit in the one case and not in the other?
276. Explain the incidence of taxes laid on wages.
277. Why should a tax on profits, if no improvements follow, fall on the laborer and capitalist?
278. Explain what effect, if any, will be produced on the price of corn by—
(1) a tax upon rent;
(2) a tithe;
(3) a tax of so much per acre, irrespective of value;
(4) a tax of so much per bushel.
279. On whom does a tax of a fixed proportion of agricultural produce fall?
280. Discuss the question whether the income-tax ought to be a tax upon income and property, or upon expenditure.
281. Discuss the expediency of a graduated income-tax.
282. State the arguments which you think strongest both for and against exempting savings from the income-tax.
283. Explain the conditions which should be observed in imposing taxes on commodities.
284. What taxes does a tradesman get back in the price of the articles he sells, and what does he not?
285. Test by Adam Smith's four maxims of taxation the policy of indirect taxes on the necessaries of life.
286. All indirect taxation violates Adam Smith's fourth canon.
287. Discuss the following:
“A man with $100,000 in United States bonds comes to Boston, hires a house...; thus he lives in luxury.... I am in favor of taxing idle investments such as this, and allowing manufacturing investments to go untaxed.”
288. Compare the advantages and disadvantages of direct and indirect taxation.
[pg 657]
289. On what principles is this country now taxed?
290. Explain the arguments for and against the policy of maintaining a surplus for the purpose of redeeming a national debt.
291. In estimating the ability of the United States to pay its public debts, it is usual to include among the data of the question the increased productiveness of industry in that country. How far is this a pertinent consideration?
Protection.
292. Mention some of the principal arguments brought forward in favor of protective tariffs.
293. Connect the principle of the division of employments (or labor) with the policy of free trade and the functions of government.
294. Sketch the effects of discriminating duties, including the operation of the corn laws.
295. Examine the following argument, emending, if you think it necessary, the free-trader's doctrine on the point raised: The free-trader's belief is that a customs duty is added to the price of the article upon which it is imposed. If the article is imported, according to his theory, the increase of the price goes into the public treasury; if the article is made in the country, the increase of the price goes into the pocket of the producer. But in the former case there is no protection; and competition will prevent the latter. Therefore protection does not increase the price of the protected article. If a customs duty is imposed upon a commodity, and its price is not raised in consequence, what inference can you draw?
296. Under what circumstances did Mr. Mill think nascent states might be justified in adopting a policy of protection? Criticise his opinion, and, if you agree with it, give some examples of its application.
297. American protectionists allege that the high rate of wages prevailing in the United States disables them from competing with “the pauper labor” of Europe. Examine the grounds of this statement, and consider how far it forms a justification for protection to American industry.
298. A high rate of wages indicates, not a high, but a low cost of production for all commodities measured in which the rate of wages is high.
Explain and prove this proposition, and illustrate it from the circumstances of the United States.
299. State under what limitations the proposition is correct, that profits vary inversely with wages. Explain the circumstances which cause both a higher rate of wages and profits to prevail in a young country, such as the United States, than in England.
300. In America wages are much higher than in England, yet the [pg 658] general rate of profits is higher also, according to Mr. Mill. How do you reconcile the two facts?
301. Examine the following:
“It seems to me that protection is absolutely essential to the encouragement of capital, and equally necessary for the protection of the American laborer.... He must have good food, enough of it, good clothing, school-houses for his children, comforts for his home, and a fair chance to improve his condition. To this end I would protect him against competition with the half-paid laborers of European countries.”—Congressional Globe.
302. An American newspaper has said of the burning of Chicago: “The money to replace what has been burned will not be sent abroad to enrich foreign manufacturers; but, thanks to the wise policy of protection which has built up American industries, it will stimulate our own manufactures, set our mills running faster, and give employment to thousands of idle working-men.” Comment on this passage.
303. On whom does a tax on imports, if not prohibitory, fall?
304. In what cases would duties on imported commodities fall on the producers?
305. Are taxes on imports in any way paid by foreigners?
306. Discuss the effects of duties on exports.
307. Trace the effects of duties on the importation of raw materials, and distinguish, with examples, between duties that violate and duties which do not violate the principle of free trade.
308. Is it possible for any country by legislative enactments to engross a larger share of the advantages of foreign trade than it would naturally have? Discuss the question fully.
309. “Those are, therefore, in the right who maintain that taxes on imports are partly paid by foreigners; but they are mistaken when they say it is by the foreign producer. It is not on the person from whom we buy, but on all those who buy from us, that a portion of our customs duties spontaneously falls.” Explain and examine the reasons for this conclusion.
310. State the principle which determines the relation between the amount of a country's imports and that of its exports, and show how this relation is affected by a system of protective duties.
THE END.
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SCIENCE.
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Anthropology: An Introduction to the Study of Man and Civilization. By Edward B. Tylor, D.C.L., F.R.S. With 78 Illustrations. 12mo. 448 pages.
Science Primers. Edited by Professors Huxley, Roscoe, and Balfour Stewart.
Chemistry: H. E. Roscoe.
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Astronomy: J. N. Lockyer.
Botany: J. D. Hooker.
Logic: W. S. Jevons.
Inventional Geometry: W. G. Spencer.
Pianoforte: Franklin Taylor.
Political Economy: W. S. Jevons.
Natural Resources of the United States: J. Harris Patton.
Scientific Agriculture: N. T. Lupton.
D. APPLETON & CO., Publishers,
NEW YORK, BOSTON, CHICAGO, SAN FRANCISCO.
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PHYSICS.
Quackenbos's Natural Philosophy. Embracing the most Recent Discoveries in the Various Branches of Physics. 12mo. 455 pages.
The revised edition of this standard text-book continues to be a favorite in the schools. Its numerous illustrations (338 in number) and full descriptions of experiments adapt it specially for use in institutions that have little or no apparatus, and it is particularly happy in showing the application of scientific principles in every-day life.
Ganot's Natural Philosophy. For Schools and General Readers. Translated and edited by E. Atkinson, Ph.D., F.C.S. Revised edition. 12mo. Copiously illustrated. 575 pages.
Arnott's Elements of Physics; or, Natural Philosophy. Seventh edition, edited by Alexander Bain, LL.D., and Alfred Swaine Taylor, M.D., F.R.S. 873 pages.
Elementary Treatise on Natural Philosophy. By A. Privat Deschanel, formerly Professor of Physics in the LycÉe Louis-le-Grand, Inspector of the Academy of Paris. Translated and edited, with Extensive Additions, by J. D. Everett, Professor of Natural Philosophy in the Queen's College, Belfast. In Four Parts. 12mo. Flexible cloth. Part I. Mechanics, Hydrostatics, and Pneumatics. Part II. Heat. Part III. Electricity and Magnetism. Part IV. Sound and Light. Complete in one volume, 8vo. 1,156 pages. Illustrated with 783 fine Engravings on Wood and Three Colored Plates.
Experimental Series. By Alfred M. Mayer and Charles Barnard.
Light: A Series of Simple, Entertaining, and Inexpensive Experiments in the Phenomena of Light. By Alfred M. Mayer and Charles Barnard. 12mo. 112 pages.
Sound: A Series of Simple, Entertaining, and Inexpensive Experiments in the Phenomena of Sound, for the Use of Students of every Age. By Alfred M. Mayer. 12mo. 178 pages.
D. APPLETON & CO., Publishers,
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Charts.
Illustration: Chart XII.
Chart XII. Fluctuations in the Price of Gold, from January 1st 1862, to December, 1865.
[pg 662]
Illustration: Chart XVIII.
Chart XVIII. Graphical Presentation of the Comparative Areas of the States and Territories of the United States and the Countries of Europe, omitting Russia and Alaska.
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Illustration: Chart XIX.
Chart XIX. Giving the actual figures, compiled from the accounts of two Cotton-Mills in New England by Edward Atkinson, of Wages, Cost of Labor, etc., from 1830 to 1884, working on Standard Sheetings, No. 14 yarn.
[pg 664]
Illustration: Chart XX.
Chart XX. Comparison of 1840 with 1883-1884, of the Relations of Labor and Capital in the same Mills.
[pg 665]
Illustration: Chart XXI Part 1.
Chart XXI Part 1.
[pg 666]
Illustration: Chart XXI Part 2.
Chart XXI Part 2.
[pg 667]
Illustration: Chart XXII.
Chart XXII. Outstanding Principal Of The Public Debt From 1791 To 1881.
(a.) He went into a vague discussion upon labor as a measure of value. (b.) A legal rate of interest received his support, and his argument was answered effectually by Bentham (“Defense of Usury”). (c.) While not agreeing with the French school that agriculture is the only industry producing more than it consumes, and so land pays rent, yet he thinks that it produces more in proportion to the labor than other industries; that manufactures came next; and exportation and commerce after them. This error, however, did not modify his more important conclusions. Thorold Rogers and even Chevalier, however, claim that Adam Smith drew his inspiration from the French school. (d.) In the discussion of rent, he failed to follow out his ideas to a legitimate end, and did not get at the true doctrine. While hinting at the right connection between price and rent, he yet believed that rent formed a part of price. Of the fundamental principle in the doctrine of rent, the law of diminishing returns, he had no full knowledge, but came very close to it. He points out that in colonies, when the good soil has all been occupied, profits fall. (e.) In saying that every animal naturally multiplies in proportion to, and is limited by, the means of subsistence, Adam Smith just missed Malthus's law of population. In fact, Cantillon came quite as near it.
Book III in his “Wealth of Nations” is concerned with the policy of Europe in encouraging commerce at the expense of agriculture, and has less interest for us. Book V considers the revenue of the sovereign, and much of it is now obsolete; but his discussion of taxation is still highly important.
Among the English Liberals carried away by the French Revolution, and by such theories as those of Condorcet, was William Godwin, the author of “Political Justice” (1793) and the “Inquirer” (1797), who advocated the abolition of government and even marriage, since by the universal practice of the golden rule there would come about a lengthening of life. Malthus tells us that his study was brought forward as an answer to the doctrines of the “Inquirer,” and he applied his principles to Condorcet's and Godwin's ideas. It was a period when pauperism demanded attention from all. Malthus favored the repeal of the old poor-laws, as destroying independence of character among the poor.
Malthus also wrote “Principles of Political Economy” (1821) and “Definitions in Political Economy” (1827), but the former did not increase his reputation. He believed in taxing imported corn, and he gave in his adherence to the doctrine of over-production. But, on the other hand, he was one of several writers who, almost at the same time, discovered the true theory of rent. His father was a friend of Godwin, and a correspondent of Rousseau. (See Bagehot, “Economic Studies,” p. 135.)
See Cairnes, “Logical Method,” Lecture VII, for the best modern statement of the question. Also, Roscher, “Principles of Political Economy,” b. v, whose extended notes furnish information on facts and as to books. H. Carey, “Social Science” (edition of 1877), iii, pp. 263-312, opposes the doctrine, as also Bowen, “American Political Economy” (1870), ch. viii, and Henry George, “Progress and Poverty” (1880), pp. 81-134.
J. Anderson, “An Inquiry into the Nature of the Corn Laws” (1777), “Agricultural Recreations,” vol. v, p. 401 (1801); Sir Edward West, “Essay on the Application of Capital to Land” (1815); Rev. T. R. Malthus, “An Inquiry into the Nature and Progress of Rent” (1815). The last two appeared after Anderson's discoveries had been forgotten, but he has the honor of first discovery.
Born in 1772 of Jewish parentage, Ricardo died in 1824. A rich banker, who made a fortune on the Stock Exchange, he early in life retired from business. The discussions on the Restriction Act and the corn laws led him to investigate the laws governing the subjects of money and rent. He gained notice first by his “Letters on the High Price of Bullion” (1810). The “Reply to Mr. Bosanquet” (1811), and “Inquiry into Rent” (1815), were followed by his greater work, “Principles of Political Economy and Taxation” (1817). He entered the House of Commons from Portarlington, a pocket borough in Ireland, and was influential in the discussions on resumption. Although he was not on the committee, his views on depreciated paper are practically embodied in the famous “Bullion Report” (1810). Tooke, “History of Prices,” says the results of the restriction were not known until the time of Ricardo's contributions. Neither Mill nor Say has had so great an influence as Ricardo has gained, through the pages of his “Political Economy.”
Johann Heinrich von ThÜnen, a rich land-owner of Mecklenburg, in his “Der isolirte Staat in Beziehung auf Landwirthschaft und National-Oekonomie” (1826), worked entirely by himself, but reached practically the same law of rent as Ricardo's. In spreading the doctrines of Adam Smith he has influenced later German writers.
The first distinct recognition of this important physical law, according to McCulloch (Introduction to “Wealth of Nations,” lv), was in a fanciful work of two volumes, entitled “Principes de tout gouvernement,” published in 1766: “Quand les cultivateurs, devenus nombreux, auront dÉfrichÉ toutes les bonnes terres; par leur augmentation successive, et par la continuitÉ du dÉfrichement, il se trouvera un point ou il sera plus avantageux À un nouveau colon de prendre À ferme des terres fÉcondes, que d'en dÉfricher de nouvelles beaucoup moins bonnes” (I, p. 126). The author was, however, unaware of the importance of his discovery.
Carey, “Social Science” (I, ch. iv, v), and Bowen, “American Political Economy” (ch. ix), have denied Ricardo's doctrine of rent. Thesupposed connection between free trade and Ricardo's teachings on rent has prejudiced protectionists against him. Free trade follows from the theory of international trade, and has nothing to do with Ricardo's main doctrines. It is true, Ricardo was a vigorous free-trader. Of opposing views on rent, Carey's argument is the most important.
Say drew considerable attention by his theory of “gluts.” He based his idea of value wholly on utility, which has lately been taken up again by Professor Jevons. Say was answered on this point by Ricardo in a later edition of his “Political Economy.” See Cairnes, “Leading Principles,” p. 17. As a free-trader and opponent of governmental interference, he went further than his master, Adam Smith. Napoleon did not like this part of Say's teaching, saying that it would destroy an empire of adamant, and tried to induce him to modify his position, but in vain. The second edition was not allowed to be published until 1815.
Educated at Bologna, he went to Geneva in 1816, and was called (1833) by the French Government to succeed Say in the CollÉge de France. In 1845 he was sent as minister to Rome, led the revolutionary movement there, and was assassinated in 1848. His lectures were taken down in short-hand by one of his disciples, PorÉe, and later published.
Malthus, who held that the unproductive consumption of the rich was desirable for the poor, supported Sismondi. The latter was answered by Say and McCulloch (“Edinburgh Review,” March, 1821), to which Sismondi replied in his second edition, in 1827, and then withdrew from economic discussion.
A native of Riga, educated in Germany, Storch was charged by the Czar Alexander with the duty of instructing his sons, the Grand Dukes Nicholas and Michael, and his treatise is the collection of his lectures. Knowing little of Malthus or Ricardo, he made a near approach to the doctrine of rent. His unsparing denunciation of Russian administrative corruption caused the Government to forbid the publication of the Russian translation.
Cossa, “Guide” (p. 173), points out Sartorius, LÜder, Kraus, and SchlÖzer as teachers of Adam Smith, in Germany, followed later by G. Hufeland, J. F. E. Lotz, and L. H. von Jakob; Count Hogendorp and Gogel, in Holland; Count Szecheny, in Hungary, and (pp. 211-213) Cagnazzi, Bosellini, Ressi, Sanfilippo, and Scuderi (the last two protectionists), in Italy. Fuoco (1825-1827), in Italy, first saw the value of Ricardo's theory of rent, while Gioja opposed Adam Smith and Say. But K. H. Rau (died 1870), in his “Lehrbuch der politischen Oekonomie” (1826, fifth edition 1864), had the most extensive influence in Germany in expounding Adam Smith's system, with proper improvements. Another important writer of this school was F. B. W. von Hermann, “Staatswirthschaftliche Untersuchungen” (1832).
From 1810 to 1840, political economy was a favorite study in England, and many writers deserve mention. There were Huskisson, a great financier; Thomas Tooke (1773-1858), who began his matchless “History of Prices” (1823); Lord Overstone (Samuel Jones Loyd), “Tracts and other Publications on Metallic and Paper Currency” (1858); Robert Torrens (1784-1864), “Essay on the Production of Wealth” (1821); Archbishop Whately, “Introductory Lectures” (1831), and “Easy Lessons on Money Matters”; Cobden and Sir Robert Peel; N. W. Senior (1790-1864), Professor of Political Economy at Oxford, article on “Political Economy” (1836) in the “EncyclopÆdia Metropolitana,” and “Lectures on the Cost of obtaining Money” (1830). Senior showed great ability in analyzing cost of production, and stands far above McCulloch in real ability. J. R. McCulloch (1789-1864), who preceded Mill, wrote a good but dry textbook, “Principles of Political Economy” (1825), “A Treatise on the Principles, Practice, and History of Commerce” (1833), an excellent “Dictionary of Commerce” (last enlarged edition, 1882), “Literature of Political Economy” (1845). He edited Ricardo's works, with a biography, published a “Select Collection of Scarce and Valuable Tracts on Money” (1856), “A Treatise on the Principles and Practical Influence of Taxation and the Funding System” (1845). He contributed nothing practically new to the study. Miss Harriet Martineau (1802-1876) gave some admirable although somewhat extended stories in illustration of the various principles of political economy, entitled “Illustrations of Political Economy” (1859). This period in England was signalized by the abolition of the Corn Laws (1846), and the Navigation Laws (1849), the passage of the Bank Act (which separated the issue from the banking department, 1844), and the general abandonment of protective duties. Cf. Noble, “Fiscal Legislation, 1842-1865” (1867).
Born in 1806, he died in 1873. For his extraordinary education see his “Autobiography.” When thirteen years old, he began the study of political economy through lectures from his father while walking; he then (1819) read Ricardo and Adam Smith, and at fourteen he journeyed to France, where he lived for a time with J. B. Say. He entered the East India Office at seventeen, was occupied finally in conducting the correspondence for the directors, where he remained until 1858. When about twenty, Mill met twice a week in Threadneedle Street, from 8.30 to 10 a.m., with a political economy club, composed of Grote, Roebuck, Ellis, Graham, and Prescott, where they discussed James Mill's and Ricardo's books, and also Bailey's “Dissertations on Value.” In these discussions, chiefly with Graham, Mill elaborated his theory of international values. In 1865 he entered Parliament for Westminster, and for three years had a singular, characteristic, independent, but uninfluential career. His adherence to two radical reforms, woman suffrage and changes in the tenure of land, lost him any considerable influence.
He (1773-1836) wrote the “History of India” (1817-1819), and “Elements of Political Economy” (1821). He was intimate with Ricardo, Bentham, Austin, and Zachary Macaulay.
In his “infant industries” argument, and his statement on navigation laws (B. v, ch. x, §1), he conceded a great deal of free-trade ground; but in a private letter, 1866 (see New York “Nation,” May 29, 1873), he denied that he intended the “infant industries” argument to apply to the United States. He did not consider New England and Pennsylvania any longer as young countries within the limits of his meaning. See also Taussig's “Protection to Young Industries” (1883).
W. T. Thornton (1813-1880), in a volume “On Labor: its Wrongful Claims and Rightful Dues” (1869), attacked Mill's position on demand and supply, and on wages, so that Mill in consequence abandoned his doctrine of wages, in the “Fortnightly Review,” May 1, 1869. Mr. Cairnes, however, rescued the Wages-Fund theory from Mr. Mill in his “Leading Principles” (1874). Thornton also wrote “Over-Population, and its Remedy” (1846), and an excellent book, “Plea for Peasant Proprietorship” (1848). See also “Nineteenth Century,” August, 1879, for an answer by Thornton to Mr. Cairnes on the wages question.
James Eliot Cairnes was born at Drogheda, 1824; was educated at Trinity College, Dublin, and made Whately Professor there in 1856. Having been Professor of Political Economy in Queen's College, Galway, he left Ireland in 1866 to accept the chair of Political Economy in University College, London. In that year, through an attack of inflammatory rheumatism, he fell under the power of a painful and growing malady which rendered him physically helpless, and portended certain death in the near future. The three years before his death, while working only in hopeless pain, was the period of his greatest literary activity. He collected his “Essays in Political Economy, Theoretical and Applied” (1873), in which he traced with great ability the effect of the gold-discoveries; brought out his “Leading Principles” (1874), and an enlarged edition of his “Logical Method” (second edition, 1875). The first edition of this last book was the result of lectures delivered in Dublin about 1858. In his earlier years the interest he felt in the United States led him into a very vigorous and masterly study of “The Slave Power; its Character, Career, and Probable Dangers” (1862); “The Revolution in America” (1862). He then wrote “Colonization and Colonial Government” (1864), and “Negro Suffrage” (1866). He finally succumbed to his fatal disease, and passed away prematurely, July 8, 1875. A short sketch of his personal character was written by Professor Fawcett, in the “Fortnightly Review,” August 1, 1875, p. 149.
Professor Jevons (1835-1882) was educated at University College, London, and spent the years from 1854 to 1859 in the Australian Royal Mint, where he became interested in the gold question. He wrote a study on “A Serious Fall in the Value of Gold ascertained” (1863), which attracted great attention. A fine metaphysician and mathematician, he did not give his whole time to economic work. In 1866 he became Professor of Logic and Cobden Lecturer on Political Economy in Owens College, Manchester, but later became Professor of Political Economy in University College, London. In 1881 he gave up academic teaching, to devote himself to literature. He investigated the permanence of the English coal-supply in “The Coal Question” (second edition, 1866). “The Theory of Political Economy” (1871) contains his application of the mathematical method, and a bibliography of similar attempts. “The Railways and the State” are to be found in his “Essays and Addresses” (1874). He prepared an elementary book, “Primer of Political Economy” (second edition, 1878). He was a contributor to the journals, and especially to the “London Statistical Journal.” His last books were “The State in Relation to Labor” (1882), which deals with the question of state interference; and “Methods of Social Reform” (1883), containing a paper on industrial partnerships. He also advanced the theory that the presence of sun-spots affected agriculture unfavorably, and that, coming somewhat regularly, they produced a constant succession of commercial crises. (See “Nature,” xix, 33, 588.) At the early age of forty-seven he was unfortunately drowned while bathing near Bexhill, England (1882).
Like Cairnes, Thomas Edward Cliffe Leslie was a native of Ireland, and educated at Trinity College, Dublin. He was called to the bar, but gave up the law when offered the professorship of Political Economy in Queen's College, Belfast. Besides his discussion of land tenures, he published “Political and Moral Philosophy” (1874). He long suffered from bad health, and died January 28, 1882. His volume of “Land Systems” is now (1884) out of print, and scarce. He had also devoted himself to financial reform.
Born 1826, died 1877. He was early made familiar with banking in connection with the Stuckey Banking Company, in Somersetshire; was educated at University College, London. In 1858 he married the daughter of James Wilson, the editor of the London “Economist,” whom he succeeded. He was a political student of a rare kind, as is shown by his “English Constitution” (second edition, 1872), “Physics and Politics” (1872), “Literary Studies” (second edition, 1879). He also wrote “Depreciation of Silver” (1877).
Born 1833. His eye-sight was lost by an accidental shot in 1858, but he was chosen Professor of Political Economy at Cambridge in 1863. His “Manual” and the “Economic Position of the British Laborer” (1865) gave him reputation, in 1865 he entered Parliament, and since 1880 he has been Postmaster-General in Mr. Gladstone's administration. He has published “Pauperism, its Causes and Remedies” (1871), “Speeches” (1878), “Free Trade and Protection” (1878). His wife (born 1847), Millicent Garret Fawcett, reduced his “Manual” into “Political Economy for Beginners” (1869), and also wrote “Tales in Political Economy” (1874). Died November 13, 1884.
He has also published “Social Economy” (1872); a small “Manual of Political Economy” (third edition, 1878); and a very considerable work, “Six Centuries of Work and Wages: the History of English Labor,” 1250-1883 (1884). He has edited Adam Smith's “Wealth of Nations,” and written “Cobden and Modern Political Opinion” (1873), and “The Colonial Question,” in the Cobden Club Essays (1872).
Of other books, mention should be made of G. J. Goschen's most admirable “Theory of Foreign Exchanges” (eighth edition, 1875); “Reports and Speeches on Local Taxation” (1872); T. Brassey's “Work and Wages” (third edition, 1883); E. Seyd, “Bullion and the Foreign Exchanges” (1868); H. D. McLeod, an eccentric writer, “Dictionary of Political Economy” (only one vol., A-C, 1863, published); and “Theory and Practice of Banking” (second edition, 1875-1876); H. Sidgwick, “Principles of Political Economy” (1883); J. Caird, “Landed Interest” (fourth edition, 1880); L. Levi, “History of British Commerce” (1872).
FrÉdÉric Bastiat (1801-1850) began life in a commercial house at Bayonne, but gained notice first by an article, “De l'influence des tarifs franÇais et anglais sur l'avenir des deux peuples,” in the “Journal des Économistes” of 1844, and consequently had a very short period of literary activity. The corn-law agitation in England and the revolutionary movement of 1848 led him to write chiefly against protection and socialism. He translated Cobden's speeches, “Cobden et la Ligue” (1845). His arguments against protection, “Sophismes Économiques” (1846-1847), have been translated and published in this country; but the more extended exposition of his doctrine of value diminishing with the growth of civilization, and the harmony of all interests is in the “Harmonies Économiques” (1850). In this his position is not much different from Carey's. His other books were “Capital et rente” (1849), directed against gratuitous loans; “Protectionisme et communisme” (1849), showing protection to be communism for the rich; “PropriÉtÉ et loi” (1848), directed against socialism; and “Essais sur l'Économie politique” (1853); “Le Libre-Échange” (1855). “Œuvres complÈtes,” 7 tom. (1855-1864).
Carey, however, claimed, with probable truth, that Bastiat borrowed the idea from him, and Bastiat did not appear well in the controversy. Almost no one has followed the French writer in his theory except Professor A. L. Perry, of Williams College, Massachusetts, who has shaped his general argument according to this view of value. Also see Cairnes, “Essays in Political Economy,” p. 312.
Chevalier (1806-1879) first drew attention in an experiment of Saint-Simonism in 1830-1833. After traveling in the United States, and writing excellent books on the country and its railways, he became professor in the CollÉge de France, where his lectures were collected in a “Cours d'Économie politique” (1842-1850; second edition, 1855-1866). His third volume, “La Monnaie,” is a standard treatise on money, with an extensive bibliography. His treatise “Examen du systÈme commerciale connu sous le nom de systÈme protecteur” (1851) is now somewhat out of date. In his book “De la Baisse, probable de l'or” (1859), translated by Richard Cobden, he held that, unless prevented, gold would drive out the French currency, as against Faucher, who thought the fall temporary, and would progressively diminish. Other books are, “De l'industrie manufacturiÈre en France,” and “La libertÉ du travail” (1848).
Émile Levasseur (born 1828) was professor at AlenÇon, 1852-1854, and elected a member of the Academy of Sciences in 1868. He has published “RÉcherches historiques sur le systÈme de Law” (1854); “La question de l'or” (1858); “Histoire des classes ouvriÈres en France depuis la conquÊte de Jules CÉsar jusqu'À la rÉvolution” (1859); the same history continued, “Depuis 1789 jusqu'À nos jours” (1867); “La France industriale” (1865); “Cours d'Économie rurale, la France et ses colonies” (1868); “PrÉcis d'Économie politique” (fourth edition, 1883).
Born in Berlin in 1816, but since 1821 living in France. He was long connected with the Bureau de Statistique GÉnÉrale, and the Ministry of Agriculture and Commerce, but in 1861 he left office and gave himself wholly to private work. In this year he received the Montyon prize for statistics, not given since 1857. His chief books are: “Des charges de l'agriculture dans les divers pays de l'Europe” (1850), a work crowned by the Institute; “Statistique de la France, comparÉe avec les divers États de l'Europe” (1860); “Le dictionnaire de l'administration franÇaise” (second edition, 1878); “Les finances de la France depuis 1815” (1863); “Les thÉoriciens du socialisme en Allemagne” (1872); and in connection with M. Guillaumin, “L'annuaire de l'Économie politique,” since 1856.
JÉrÔme-Adolphe Blanqui ainÉ (1798-1854) in 1833 succeeded to the chair of J. B. Say in the Conservatoire des Arts et MÉtiers, and was one of the founders of the “
;Journal des Économistes.” Besides his “Histoire de l'Économie politique en l'Europe” (1837-1852), he published a “RÉsumÉ de l'histoire du commerce et de l'industrie” (1826); “PrÉcis ÉlÉmentaire d'Économie politique” (1826); “Rapports, histoire de l'exposition des produits de l'industrie franÇaise en 1827” (1827); “Cours d'economie politique” (2 vols., 1837-1838), and notices of Huskisson and J. B. Say.
Louis Wolowski (1810-1876), of Polish origin, was Chevalier's chief antagonist, and Professor of Legislation at the Conservatoire des Arts et MÉtiers (1839); founded the first CrÉdit Foncier of Paris, and was elected to the Institute in the place of Blanqui. In 1875 he was chosen senator. He was a fertile writer: “Mobilisation du CrÉdit Foncier” (1839); “De l'organisation du travail” (1846); “Études de l'Économie politique et de statistique” (1848); “Henri IV, Économiste, introduction de l'industrie de la soie en France” (1855); “Introduction de l'Économie politique en Italie” (1859); “Les finances de la Russie” (1864); “La question des banques” (1864); his testimony in the “EnquÊte sur les principes et les faits gÉnÉraux qui rÉgissent la circulation monÉtaire et fiduciaire” (1866); “La banque d'Angleterre et les banques d'Écosse” (1867); “La libertÉ commerciale et les rÉsultats du traitÉ de commerce de 1860” (1868); “L'or et l'argent” (1870); “La change et la circulation”; and a translation of Roscher.
Hippolyte-Philibert Passy (1793-1880) was educated for the army, and served at Waterloo. He was more prominent as a statesman than as an economist. In 1838 he entered the Academy in the place of Talleyrand, but politics left him unoccupied, and he wrote “Des systÈmes de culture et de leur influence sur l'Économie sociale” (1846), and “Des causes de l'inÉgalitÉ des richesses” (1849).
M. LÉonce de Lavergne (1809-1880) came from Toulouse to Paris in 1840, elected deputy in 1846, a member of the Institute in 1855, and became professor in the Institut agronomique of Versailles. He was also the author of “L'Économie rurale de l'Angleterre, de l'Écosse, et de l'Irlande” (1854), translated into English (1855); “L'agriculture et la population” (1857), a striking confirmation of Malthusianism; “Les Économistes franÇaises du dixhuitiÈme siÈcle” (1870). He also has contributed largely to the “Revue des Deux Mondes” and the “Journal des Économistes.” For a personal sketch by Cliffe Leslie, see “Fortnightly Review,” February, 1881.
Born at Geneva, 1797, and died at Zurich, 1869. After studying law, he became an advocate, and in 1833 Professor of Law in the place of Rossi. In 1837 he was made Professor of Political Economy and Public Law at Geneva. He was also a member of the Swiss Grand Council. Besides his treatise, he wrote: “Richesse ou pauvretÉ” (1840); “Le socialisme, c'est la barbarie” (1848); “Études sur les causes de la misÈre” (1853); and aided in the “Dictionnaire de l'Économie politique.”
J. G. Courcelle-Seneuil (born 1813) left a commercial career to become a writer, first for the journals, and later for the “Dictionnaire politique” (edited by Pagnerre). In 1848 he was connected with the Ministry of Finance, and called to a professorship of Political Economy in Santiago, Chili, 1853-1863. His chief work is a “TraitÉ thÉorique et pratique d'Économie politique” (1858), but he has also published “La crÉdit de banque” (1840), reforms for the bank of France; “TraitÉ des opÉrations de banque” (1852; sixth edition, 1876); “TraitÉ des entreprises industrielles, commerciales, et agricoles” (1854); “Études sur la science sociale” (1862); “LeÇons ÉlÉmentaires d'Économie politique” (1864); “La banque libre” (1867); “LibertÉ et socialisme” (1868); and articles in the “Dictionnaire de l'Économie politique.”
Professor of Political Economy at the CollÉge de France, author of an extended and able “TraitÉ de la science des finances” (third edition, 1883). He has also published “De l'État moral et intellectual des populations ouvriÈres et de son influence sur le taux des salaires” (1868); “RÉcherches economiques, historiques, et statistiques sur les guerres contemporaines” (1869); “La question ouvriÈre au XIX siÈcle” (second edition, 1882); “L'administration locale en France et en Angleterre” (1872); “Le travail des femmes au XIX siÈcle” (1873); “Essai sur la rÉpartition des richesses” (1880; second edition, 1883); and “De la colonisation chez les peuples modernes” (1882).
He published two volumes on Socialism (see list of books p. 44). In several volumes on the “RÉgime des manufactures” he described the condition of the silk, woolen, cotton, and iron industries.
The most vigorous advocate of monometallism in France. He also wrote well on taxation, “TraitÉ des imp
The first division of Roscher's (born 1817) treatise, also known under the title of “Grundlagen der NationalÖkonomie,” has been translated here by J. J. Lalor, in two volumes, “Principles of Political Economy” (1878), with an essay by Wolowski on the historical method inserted. In 1840 he was made Privat-Docent at GÖttingen, and professor extraordinary in 1843. In 1844 he was called to a chair at Erlangen, but since 1848 he has remained at Leipsic. A list of Roscher's works is as follows:
“Grundriss zu Vorlesungen Über die Staatswirthschaft nach geschichtlicher Methode” (1843); “Kornhandel und Theuerungspolitik” (third edition, 1852); “Untersuchungen Über das Colonialwesen”; “VerhÄltniss der NationalÖkonomie zum klassischen Alterthume” (1849); “Geschichte der englischen Volkswirthschaftslehre im 16. und 17. Jahrhunderts”; “Ein nationalÖkonom. Princep der Forstwirthschaft”; “Ansichten der Volkswirthschaft aus dem geschichtlichen Standpunkte” (second edition, 1861); “Die deutsche NationalÖkonomie an der Grenzscheide des 16. und 17. Jahrhunderts” (1862); “GrÜndungsgeschichte des Zollvereins” (1870); “Betrachtungen Über die WÄhrungsfrage der deutschen MÜntzreform” (1872); “Geschichte der NationalÖkonomie in Deutschland” (1874); “NationalÖkonomie des Ackerbaues” (eighth edition, 1875). His histories of political economy in England and Germany are particularly valuable (see review by Cliffe Leslie, “Fortnightly Review,” July, 1875). But he does not rightly estimate the English writers when he takes McLeod as a type; and Carey is the only American to whom he refers.
Professor at Marburg, then at the University of Friedburg, in Breisgau, and now at Heidelberg. He has also studied railways (1853), and telegraphs (1857), and money and credit, “Geld und Credit” (1873-1879).
By far the ablest is Adolph Wagner, of Berlin, editor of Rau's “Lehrbuch der politischen Oekonomie” (1872). He also published “Die russische PapierwÄhrung” (1868); “Staatspapiergeld, Reichs-Kassen Scheine, und Banknoten” (1874); “Unsere MÜntzreform” (1877); “Finanzwissenschaft” (1877); and “Die Communalsteuerfrage” (1878).
Dr. Eduard Engel was formerly the head of the Prussian Bureau of Statistics. Professor Gustav SchÖnberg, of TÜbingen, with the assistance of twenty-one other economists, produced a large “Handbuch der politischen Oekonomie” (1882). The school have expressed their peculiar doctrines in the “Zeitschrift fÜr die gesammte Staatswissenschaft” (quarterly, founded 1844, TÜbingen), and the “JahrbÜcher fÜr NationalÖkonomie” (established at Jena, 1863). Also, see A. Wagner's “Rede Über die sociale Frage” (1872), H. v. Scheel's “Die Theorie der socialen Frage” (1871), and G. Schmoller's “Ueber einige Grundfrage des Rects und der Volkswirthschaft” (1875). A. E. F. SchÄffle, once Minister of Commerce at Vienna, gained considerable reputation by “Das gesellschaftliche System der menschlichen Wirthschaft” (third edition, 1873).
Émile de Laveleye (born 1822) studied law at Ghent, but since 1848 has given himself up to political economy and public questions. Through the pages of the “Revue des Deux Mondes” he gained attention in 1863, and the next year was made Professor of Political Economy at the University of LiÉge. In 1869 he received an election as corresponding member of the Academy of Sciences. While a fertile writer on political subjects, he has produced “La question d'or” (1860); “Essai sur l'Économie rurale de la Belgique” (1863); a study on “Suisse,” see “Revue des Deux Mondes,” April 15, 1863; “Études d'Économie rurale, la Neerlande” (1864); “La marchÉ monetaire depuis cinquante ans” (1865); “Land Systems of Belgium and Holland,” in the Cobden Club volume on “Land Tenures” (1870); “Bi-metallic Money,” translated by G. Walker (1877); “La socialisme contemporaine” (1881); “ÉlÉments d'Économie politique” (1882), which satisfies a certain modern demand for “ethical political economy.”
Leslie found support in a well-known paper read before the Association for the Advancement of Science (see “London Statistical Journal,” December, 1878; also see “Penn Monthly,” 1879), by J. K. Ingram, who claimed that the old school isolated the study of economic from other social phenomena, and that Ricardo's system was not only too abstract, but that its conclusions were of so absolute a character that they were little adapted for real use. Robert Lowe (Lord Sherbrooke) replied to Leslie and Ingram (“Nineteenth Century,” November, 1878). For most of this literature it will be necessary to consult the magazines. Cliffe Leslie, “Fortnightly Review” (November, 1870), placed Adam Smith among the inductive economists; D. Syme attacked the old methods, “Westminster Review,” vol. xcvi (1871); Cairnes represented the old school, and discussed the new theories, “Political Economy and Comte,” in the “Fortnightly Review,” vol. xiii, p. 579 (1870), “Political Economy and Laissez Faire,” vol. xvi, p. 80 (1871), and in 1872; see also his admirable “Logical Method”; F. Harrison discussed the limits of political economy, ibid. (1865), and answered Cairnes in an article on “Cairnes on Political Economy and M. Comte,”“Fortnightly Review,” vol. xiv, p. 39 (1870). W. Newmarch gave attention to Ingram's paper, “Statistical Journal” (1871). Leslie, “Fortnightly Review” (1875), and G. Cohn, ibid. (1873), wrote on political economy in Germany. Leslie also contributed an article on “Political Economy and Sociology,”“Fortnightly Review,” vol. xxxi, p. 25 (1879), and the “Bicentenary of Political Economy,” in the “Bankers' Magazine,” vol. xxxii, p. 29. Leslie examined the philosophical method, “Penn Monthly” (1877); Jevons saw the only hope for the future in the mathematical method, “Fortnightly Review” (1876); McLeod asks, “What is political economy?” in the “Contemporary Review” (1875); Maurice Block entered the discussion, “Penn Monthly” (1877), and “Bankers' Magazine,” March and November, 1878. Henry Sidgwick answers Leslie in a paper on “Economic Method,” in the “Fortnightly Review,” vol. xxxi (1879), p. 301. See also essay by Wolowski prefixed to Roscher's “Political Economy” (English translation); Roscher's own statement in Chapters II and III of the Introduction to his “Political Economy,” and Laveleye's “New Tendencies of Political Economy” (1879). See also “Penn Monthly,” vol. vii, p. 190, and “Bankers' Magazine,” vol. xxxiii, pp. 601, 698, 761; vol. xxxvi, pp. 349, 422; S. Newcomb for an admirable essay “On the Method and Province of Political Economy,”“North American Review” (1875), vol. cxxi, p. 241, in which the “Orthodox” method is strongly supported; and an extreme position in favor of the historical method in a pamphlet, “The Past and Present of Political Economy,” by R. T. Ely (1884).
Daniel Raymond, “The Elements of Political Economy” (1820). Thomas Cooper, “Lectures on the Elements of Political Economy” (1826); “A Manual of Political Economy” (1834). Willard Phillips, “A Manual of Political Economy” (1828); “Propositions concerning Protection and Free Trade” (1860). President Francis Wayland (1796-1865), “The Elements of Political Economy” (1837). Henry Vethake, “Principles of Political Economy” (1838). From 1840 to the civil war there appeared F. Bowen's “Principles of Political Economy” (1856), since changed to “American Political Economy” (1873), which opposed the Malthusian doctrine and defended protection; John Bascom's “Political Economy” (1859); and Stephen Colwell's “Ways and Means of Payment” (1859). After the war, “Science of Wealth” (1866), by Amasa Walker, a lecturer in Amherst College, and father of F. A. Walker.
Carey (1793-1879) was the son of an Irish exile, and began a business career at the age of twelve. At twenty-eight he was the leading partner in the publishing firm of Carey & Lea, Philadelphia, from which he retired in 1835, to devote himself wholly to political economy. His leading works have been translated into French, Italian, Portuguese, German, Swedish, Russian, Magyar, and Japanese. He has written thirteen octavo volumes, three thousand pages in pamphlet form, and twice that amount for the newspaper press. See “Proceedings of the American Academy of Science” (1881-1882, p. 417), and W. Elder's “Memoir of Henry C. Carey” (January 5, 1880). The latter gives a list of his books.
Bastiat's “Harmonies Économiques” appeared in 1850, and the question of his indebtedness to Carey was discussed, rather unfavorably to Bastiat, in a series of letters in the “Journal des Économistes” for 1851.
His system appears also in the books of disciples: E. Peshine Smith, “A Manual of Political Economy” (1853), William Elder's “Questions of the Day” (1871), and of Robert E. Thompson's “Social Science and National Economy” (1875). A condensation of Carey's “Social Science” has been made by Kate McKean, in one volume, octavo.
The son of Amasa Walker, and formerly Professor of Political Economy and History in the Sheffield Scientific School of Yale College, he has become well known for his statistical work in connection with the United States census. His “Statistical Atlas of the United States” (1874) is unequaled. He has also published “Money” (1878); “Money, Trade, and Industry” (1879); “Political Economy” (1883); and “Land and Rent” (1884). The last book replies to various attacks on Ricardo's doctrine of rent, and particularly to Henry George's “Progress and Poverty.” General Walker in 1883 became President of the Massachusetts Institute of Technology in Boston. He is also well known as an advocate of bimetallism.
Professor of Political and Social Science in Yale College, and author of a “History of American Currency” (1874); “Lectures on the History of Protection in the United States” (1877); “What Social Classes owe to Each Other” (1883). He is a monometallist, and has devoted himself vigorously to the advocacy of free trade. His last book is a study in sociology, not in political economy.
He has written “Political Economy” (eighteenth edition, 1883), and also “Introduction to Political Economy,” an elementary work on the same basis as the former.
Henry George was born in Philadelphia, 1839, ran away to sea, and in 1857 entered a printing-office in San Francisco. In 1871 he was one of the founders of the “San Francisco Post,” which he gave up in 1875, and received a public office. He first began to agitate his views in a pamphlet entitled “Our Land and Land Policy” (1871), but not until the comparative leisure of his occupation (1875) gave him opportunity did he seriously begin the study which resulted in his “Progress and Poverty.” This volume was begun in the summer of 1877, and finished in the spring of 1879. The sale of the book, it is needless to say, has been phenomenal. He has also applied his doctrine of land to Ireland, in a pamphlet entitled “The Irish Land Question” (1882). His last book is a collection of essays entitled “Social Problems” (1884). His home is now in New York.
General Walker (“Political Economy,” Part II, Chap. iv) adopts the same position, although seemingly inconsistent with his doctrine on the rate of wages. The “rate of wages” is, however, a different thing from the source of a laborer's subsistence. See Book II, Chapter II, § 2.
The opinion mentioned above in the text is that of the believers in over-production, of whom the most distinguished are Mr. Malthus, Dr. Chalmers, and Sismondi.
See, for the argument that machinery necessarily injures labor, “Land and Labor,” William Godwin Moody (1883); and for the answer, “North American Review,” May, 1884, p. 510.
See also Edward Jarvis, “Atlantic Monthly,” 1872, and F. A. Walker, “Social Science Journal,” vol. v, 1873, p. 71. For other literature, see “Sketch of the History of Political Economy,” p. 16.
e omitted from his present exposition his evidently inconsistent use of the word.
F. A. Walker (“Political Economy,” pp. 248-259) expands this idea, and makes it the pivotal part of his whole theory of distribution among laborers, capitalists, and landlords.
F. A. Walker, “Political Economy,” p. 363. A German, Count Soden (1805), Joseph Lowe (1822), and G. Poulett Scrope (1833), proposed this scheme. See Jevons, “Money and the Mechanism of Exchange,” chap. xxv.
F. A. Walker defines the demand for money as “the occasion for the use of money in effecting exchanges; in other words, it is the amount of money-work to be done” (“Political Economy,” p. 133); and the supply of money as “the money-force available to do the money-work which the demand for money indicates as required to be done, in the given community, at the given time. The supply of money is measured by ... the amount of money and the rapidity of circulation” (ibid., p. 136).
In his book “De la Baisse probable de l'Or” (1859). See also Cairnes's “Essays.” For authorities on the new gold, see Robinson's “California” (Larkin's and Mason's Reports, pp. 17, 33); Executive Documents of United States, 1848, I, 1; Westgarth's “Colony of Victoria,” pp. 122, 315; Wood, “Sixteen Months in the Gold Diggings,” p. 125; Lalor's “CyclopÆdia,” II, p. 851; Walker, “Money,” part i, chaps. vii, viii. For the probable effects, see “North American Review,” October, 1852; Tooke's “History of Prices,” vi, p. 224; “Statistical Journal,” 1878, p. 230; Levasseur, “Question d
The subjoined extract from the separate essay [“Some Unsettled Questions of Political Economy”] previously referred to will give some assistance in following the course of the phenomena. It is adapted to the imaginary case used for illustration throughout that essay, the case of a trade between England and Germany in cloth and linen.
“We may, at first, make whatever supposition we will with respect to the value of money. Let us suppose, therefore, that, before the opening of the trade, the price of cloth is the same in both countries, namely, six shillings per yard. As ten yards of cloth were supposed to exchange in England for fifteen yards of linen, in Germany for twenty, we must suppose that linen is sold in England at four shillings per yard, in Germany at three. Cost of carriage and importer's profit are left, as before, out of consideration.
“In this state of prices, cloth, it is evident, can not yet be exported from England into Germany; but linen can be imported from Germany into England. It will be so; and, in the first instance, the linen will be paid for in money.
“The efflux of money from England and its influx into Germany will raise money prices in the latter country, and lower them in the former. Linen will rise in Germany above three shillings per yard, and cloth above six shillings. Linen in England, being imported from Germany, will (since cost of carriage is not reckoned) sink to the same price as in that country, while cloth will fall below six shillings. As soon as the price of cloth is lower in England than in Germany, it will begin to be exported, and the price of cloth in Germany will fall to what it is in England. As long as the cloth exported does not suffice to pay for the linen imported, money will continue to flow from England into Germany, and prices generally will continue to fall in England and rise in Germany.
“By the fall, however, of cloth in England, cloth will fall in Germany also, and the demand for it will increase. By the rise of linen in Germany, linen must rise in England also, and the demand for it will diminish. As cloth fell in price and linen rose, there would be some particular price of both articles at which the cloth exported and the linen imported would exactly pay for each other. At this point prices would remain, because money would then cease to move out of England into Germany. What this point might be would entirely depend upon the circumstances and inclinations of the purchasers on both sides. If the fall of cloth did not much increase the demand for it in Germany, and the rise of linen did not diminish very rapidly the demand for it in England, much money must pass before the equilibrium is restored; cloth would fall very much, and linen would rise, until England, perhaps, had to pay nearly as much for it as when she produced it for herself. But, if, on the contrary, the fall of cloth caused a very rapid increase of the demand for it in Germany, and the rise of linen in Germany reduced very rapidly the demand in England from what it was under the influence of the first cheapness produced by the opening of the trade, the cloth would very soon suffice to pay for the linen, little money would pass between the two countries, and England would derive a large portion of the benefit of the trade. We have thus arrived at precisely the same conclusion, in supposing the employment of money, which we found to hold under the supposition of barter.
“In what shape the benefit accrues to the two nations from the trade is clear enough. Germany, before the commencement of the trade, paid six shillings per yard for broadcloth; she now obtains it at a lower price. This, however, is not the whole of her advantage. As the money-prices of all her other commodities have risen, the money-incomes of all her producers have increased. This is no advantage to them in buying from each other, because the price of what they buy has risen in the same ratio with their means of paying for it: but it is an advantage to them in buying anything which has not risen, and, still more, anything which has fallen. They, therefore, benefit as consumers of cloth, not merely to the extent to which cloth has fallen, but also to the extent to which other prices have risen. Suppose that this is one tenth. The same proportion of their money-incomes as before will suffice to supply their other wants; and the remainder, being increased one tenth in amount, will enable them to purchase one tenth more cloth than before, even though cloth had not fallen: but it has fallen; so that they are doubly gainers. They purchase the same quantity with less money, and have more to expend upon their other wants.
“In England, on the contrary, general money-prices have fallen. Linen, however, has fallen more than the rest, having been lowered in price by importation from a country where it was cheaper; whereas the others have fallen only from the consequent efflux of money. Notwithstanding, therefore, the general fall of money-prices, the English producers will be exactly as they were in all other respects, while they will gain as purchasers of linen.
“The greater the efflux of money required to restore the equilibrium, the greater will be the gain of Germany, both by the fall of cloth and by the rise of her general prices. The less the efflux of money requisite, the greater will be the gain of England; because the price of linen will continue lower, and her general prices will not be reduced so much. It must not, however, be imagined that high money-prices are a good, and low money-prices an evil, in themselves. But, the higher the general money-prices in any country, the greater will be that country's means of purchasing those commodities, which, being imported from abroad, are independent of the causes which keep prices high at home.”
“In practice, the cloth and the linen would not, as here supposed, be at the same price in England and in Germany: each would be dearer in money-price in the country which imported than in that which produced it, by the amount of the cost of carriage, together with the ordinary profit on the importer's capital for the average length of time which elapsed before the commodity could be disposed of. But it does not follow that each country pays the cost of carriage of the commodity it imports; for the addition of this item to the price may operate as a greater check to demand on one side than on the other; and the equation of international demand, and consequent equilibrium of payments, may not be maintained. Money would then flow out of one country into the other, until, in the manner already illustrated, the equilibrium was restored: and, when this was effected, one country would be paying more than its own cost of carriage, and the other less.”—Mill.
For an exceedingly good study on the conditions of our foreign trade down to 1873, and a prophecy of the panic of 1873, see Cairnes, “Leading Principles,” pp. 364-374.
I am here supposing a state of things in which gold and silver mining are a permanent branch of industry, carried on under known conditions; and not the present state of uncertainty, in which gold-gathering is a game of chance, prosecuted (for the present) in the spirit of an adventure, not in that of a regular industrial pursuit.—Mill. It is, however, worth recalling that gold and silver mining have not been—for large effects on the value of the metals—anything like a permanent branch of industry, but that, in the main, great additions have been obtained suddenly and by chance discoveries.—J. L. L.
I do not include in the general loan fund of the country the capitals, large as they sometimes are, which are habitually employed in speculatively buying and selling the public funds and other securities.—Mill.
In this illustration I have retained as nearly as possible the form of that given by Mr. Mill for the trade between England and Germany in cloth and linen.
Henry George, however, asserts that, “irrespective of the increase of population, the effect of improvements in methods of production and exchange is to increase rent” (“Progress and Poverty,” p. 220).
Before beginning this discussion the reader is advised to review the relation of profits to cost of labor, and the dependence of the latter on its three factors, Book II, Chap. V, § 5.
Mr. Mill commended, as the most scientific treatment of the subject with which he had met, an “Essay on the Effects of Machinery,” by William Ellis, “Westminster Review,” January, 1826.
Although their needs now attract more attention through the extension of newspapers and cheap books, the condition of the laboring-class is certainly better than it was fifty years ago. See Mr. Robert Giffen's “Progress of the Working-Classes in the Last Half-Century” (1884), referred to in Book IV, Chap. V, § 1.
A comparison of Chart No. XVII with Chart No. VI will furnish some means of learning whether the building of railways has gone on faster than is warranted by the increase of our crops (see supra, pp. 138).
“Progress of the Working-Classes in the Last Half-Century” (1884), being his inaugural address as President of the London Statistical Society, November 20, 1883.
These mills have not been able to pay ten per cent regularly, as mentioned in Chart No. XIX, but it has merely been supposed that ten per cent were demanded by capital, in order to show that, for such a dividend, it required a diminishing proportion of the price to meet that estimate.
For the influences of small properties in restraining an undue increase of population, see supra, p. 119. For a more general account of the benefits arising from such holdings, consult Mill's original work, Book II, Chaps. VI and VII, and T. E. Cliffe Leslie's “Land Systems.”
Mr. Holyoake (“History of Co-operation in England,” p. 99) quotes as follows from another's experience: “My own pass-book shows that I paid on November 3d, of last year (1860), £1 to become a member of a co-operative store. I have paid nothing since, and I am now credited with £3 16s. 6d., nearly three hundred per cent on my capital in a single year. Of course, that arises from my purchases having been large in proportion to my investment. In a co-operative store you get five per cent upon the money which you invest as a shareholder; and, if the store be well conducted, you will get seven and a half per cent addition.”
For a full account of the proper steps to be taken in establishing a store, with many practical details, see Charles Barnard's “Co-operation as a Business,” p. 119.
See Thornton, “On Labor,” p. 370. Also see “Parliamentary Documents,” 1868, 1869, xxxi; “Trades-Unions of England,” by the Count de Paris; Brassey's “Work and Wages,” chap. xiii.
See Walker, “Wages Question,” p. 283. Also see Mill, Book IV, Chap. VII, § 5, for an account of M. Leclaire's experiments in France with house-painters.
See also Von BÖhmert, “Gewinnbetheiligung,” second edition, 1878, and Jevons's “Methods of Social Reform” (1883). Professor Jevons (“The State in Relation to Labor,” pp. 146, 147) has given a brief bibliography, which I reproduce here:
Charles Babbage, “Economy of Manufactures,” chap. xxvi; H. C. Briggs, “Social Science Association,” 1869; H. C. and A. Briggs, “Evidence before the Trades-Union Commission,” March 4, 1868, Questions 12,485 to 12,753 [Parliamentary Documents]; “The Industrial Partnerships Record”; Pare, “Co-operative Agriculture” (Longmans) 1870; Jean Billon, “Participation des Ouvriers aux BÉnÉfices des Patrons,” GenÈve, 1877; Fougerousse, “Patrons et Ouvriers de Paris” (Chaix), 1880; Sedley Taylor, “Society of Arts Journal,” February 18, 1881, vol. xxix, pp. 260-270; also in “Nineteenth Century,” May, 1881, pp. 802-811, “On Profit-Sharing”; J. C. Van Marken, “La Question OuvriÈre: Essai de Solution Pratique” (Chaix) 1881.
In his last edition of his “Manual,” Professor Fawcett thus describes a co-operative experiment in agriculture: “The one that has attracted the most attention was made nearly forty years since by Mr. Gurdon, on his estate at Assington, near Sudbury, in Suffolk. Mr. Gurdon was so much impressed with the miserable condition of the agricultural laborers who were employed on his estate, that he was prompted to do something on their behalf. When, therefore, one of his farms became vacant, he offered to let it at the ordinary rent, £150 a year, to the laborers who worked upon it. As they, of course, had not sufficient capital to cultivate it, he in the first instance loaned them the requisite stock and implements. The laborers were, in fact, formed into a company in which there were eleven shares, and no laborer was permitted to hold more than one share. The plan was so eminently successful that in a few years sufficient had been saved out of the profits to repay all that had been advanced, and the stock and implements became the property of the laborers. Each share greatly increased in value. Mr. Gurdon was so much encouraged, not only by the pecuniary advantages secured to the laborers, but also by the general improvement effected in their condition, that some years afterward he let another and a larger farm on similar terms. Although no statement of accounts has ever been published, the remarkable pecuniary advantages secured to the laborers is proved by the fact that, after enjoying at least as high wages as were paid in the district, they were able in a few years to become the owners of a valuable property, consisting of the stock and implements on the farms. One of the most significant and hopeful circumstances connected with the experiment is, that it was not carried out by a picked body of men; and if so much could be done by laborers who were probably among the worst educated in the country, it maybe fairly concluded, that when the intelligence of our rural population has been better developed, co-operation may be applied in a more complete form to agriculture, and with even more striking results than were obtained at Assington.... In the description which has been frequently given of the system of peasant proprietorship, it is shown how powerfully the industry of the laborer is stimulated by the feeling of property. When he cultivates his own plot of ground, he exerts himself to the utmost, because he knows that he will enjoy all that is yielded by his labor. Each year, with the extended use of machinery in agriculture, it is becoming more advantageous to carry on farming on a large scale. When, therefore, co-operative agriculture becomes practicable, land may be cultivated by associations of laborers, and thus many of the advantages associated with the system of peasant proprietorship may be secured, while at the same time the disadvantages of small farming may be avoided. The progress toward co-operative agriculture will no doubt be slow and gradual.”
Godkin, “North American Review,” 1868. Also see Hermann Schultze-Delitsch, “Die Entwickelung des Genossenschaftswesens in Deutschland” (1870). This eminent philanthropist died April 29, 1883. For other forms of co-operation, building associations, etc., see Barnard, “Co-operation as a Business”; Pajot, “Du ProgrÈs par les SociÉtÉs de Secours Mutuels” (1878).
Another common objection is that large and expensive accommodation is often required, not as a residence, but for business. But it is an admitted principle that buildings, or portions of buildings, occupied exclusively for business, such as shops, warehouses, or manufactories, ought to be exempted from house-tax.
It has been also objected that house-rent in the rural districts is much lower than in towns, and lower in some towns and in some rural districts than in others; so that a tax proportioned to it would have a corresponding inequality of pressure. To this, however, it may be answered that, in places where house-rent is low, persons of the same amount of income usually live in larger and better houses, and thus expend in house-rent more nearly the same proportion of their incomes than might at first sight appear. Or, if not, the probability will be that many of them live in those places precisely because they are too poor to live elsewhere, and have, therefore, the strongest claim to be taxed lightly. In some cases it is precisely because the people are poor that house-rent remains low.—Mill.
Probably the strongest known instance of a large revenue raised from foreigners by a tax on exports is the opium-trade with China. The high price of the article under the Government monopoly (which is equivalent to a high export duty) has so little effect in discouraging its consumption that it is said to have been occasionally sold in China for as much as its weight in silver.—Mill.
A land-tax is, to its extent, an evidence that the state claims a certain right in the soil, and that it stands to the contributor, as it were, in the place of a landlord. This tax, however, is generally so small that it does not materially diminish the rent of land. So far as it goes, it is a tax on rent.
Some argue that the materials and instruments of all production should be exempt from taxation; but these, when they do not enter into the production of necessaries, seem as proper subjects of taxation as the finished article. It is chiefly with reference to foreign trade that such taxes have been considered injurious. Internationally speaking, they may be looked upon as export duties, and, unless in cases in which an export duty is advisable, they should be accompanied with an equivalent drawback on exportation. But there is no sufficient reason against taxing the materials and instruments used in the production of anything which is itself a fit object of taxation.—Mill.
The old condition of things was well described by Sydney Smith: “We must pay taxes upon every article which enters into the mouth or covers the back, or is placed under the foot. Taxes upon everything which is pleasant to see, hear, feel, smell, and taste. Taxes upon warmth, light, and locomotion. Taxes upon everything upon earth and the waters under the earth. On everything that comes from abroad or is grown at home. Taxes on raw material. Taxes on every value that is added to it by the industry of man. Taxes on the sauce which pampers man's appetite and the drug which restores him to health. On the ermine which decorates the judge and the rope which hangs the criminal. On the brass nails of the coffin and on the ribbons of the bride. At bed or at board, couchant or levant, we must pay. The beardless youth manages his taxed horse with a taxed bridle on a taxed road, and the dying Englishman, pouring his medicine (which has paid 7 per cent) into a spoon (which has paid 30 per cent), throws himself back upon his chintz bed (which has paid 22 per cent), makes his will, and expires in the arms of the apothecary (who has paid £100 for the privilege of putting him to death). His whole property is then taxed from 2 to 10 per cent; besides the probate, large fees are demanded for burying him in the chancel: his virtues are handed down to posterity on taxed marble, and he is then gathered to his fathers to be taxed no more.”
Although Mr. Mill had reference to the French wars in the beginning of this century, his words apply also to the circumstances of our own late war, 1861-1865.
Business men constantly use the term “cost of production” when in reality they mean that which to the economist is expressed by “cost of labor.” If cost of labor becomes higher, it takes from profits—the place where they feel the difficulties of competition—but they say that the cost of production has risen: the cost, to them, only has risen, that is, the “cost of labor,” not “cost of production.”
The fact (sufficiently established by Mr. Brassey) is not considered also that England gives higher wages to operatives than the Continent, and yet England is able to undersell France and Germany in neutral markets. It is evident, however, that England can undersell only in occupations in which she has advantages.
