plaining with great clearness the mode in which capital is produced, and the services which it renders, Turgot finds a reason for denying that its profits are fairly to be called disposable. He argues, as Locke and North had already argued, and as Bentham afterwards argued with greater completeness, and from a more purely utilitarian point of view, that the interest paid for money should be determined by the will of the parties without State interference. Now, a revenue with which the State may not tamper is not to be called disposable. The test thus accepted seems to be different from the one previously applied, but its meaning is sufficiently obvious. Turgot, in fact, saw more or less distinctly that the owner of the land enjoyed a monopoly, whilst the capitalist is exposed to free competition; and hence it follows that the State might appropriate parts of the rent of land without setting up any ulterior action; whereas, an interference with the free play of competition will necessarily propagate its effects to classes not immediately affected. The distinction rests upon a real difference; and though it cannot be easily brought into harmony with other parts of the system, it shows that Turgot, at any rate, sometimes approximated very nearly to the theory of each as established by later English writers.

28. It would, however, be out of place to enquire into the details of a system, the general tendencies of which are sufficiently apparent. The French economists, whatever their errors, had impressed an entirely new character upon the study. For a series of detached, though often acute, speculations upon the nature of commerce, they had substituted a coherent theory of the industrial aspect of society. They had recognised the necessity of studying the social organism as a whole instead of attempting explanations of detached series of phenomena. They had shown how intimately the interests of different classes were connected, and had even exaggerated the certainty and rapidity with which any action upon one part of the body politic would be transmitted to others. Their misconceptions, indeed, had led them to state this principle in far too absolute and one-sided a fashion. The doctrine that all taxes must fall upon land is, of course, a very crude solution of a highly complex problem, and overlooks a

whole series of intricate reciprocal actions. Indeed, an excessive love of logical simplicity and symmetry gave some plausibility to the popular objection that their doctrine was rather theoretical than practical. That accusation, though often meaningless enough, rested in that case upon a real weakness. In their anxiety to frame a premature synthesis they overlooked too much the necessity of checking their speculations by constant reference to facts. Confident in the conclusions at which they had leaped, they did not condescend to trace out the process by which the phenomena would be brought to correspond with the general laws enunciated. A more careful analysis was necessary before theory could be brought into due contact with observation; and it was the great work of Adam Smith to apply this essential correction. Meanwhile the economists deserve the glory of having recognised the existence of a certain natural social order, the comprehension of which was an essential preliminary to intelligent interference. If they drew their lines rather too sharply, and conceived of society as bound by a kind of rigid geometrical order rather than as promoting the complex relations of vital growth, they at least gave prominence for the first time to a conception which must underlie all sound social theories. They applied it chiefly to justify the widest application of Free Trade principles; and were thus brought into direct collision with the chief commercial prejudices of the time. For a brief period they succeeded in influencing the administration of the country, and thus gave the first important example of the relation of scientific principles to actual legislation.

IV. ADAM SMITH.

29. Adam Smith passed a year in France in 1765-6. He there made the acquaintance of many of the new school, and especially of Turgot and of Quesnay, the author of the economist system. To Quesnay he owed intellectual obligations, which would have been acknowledged by a dedication of the Wealth of Nations,' had not the French philosopher died before its appearance. For ten years after his return, Smith devoted himself to solitary study at Kirkaldy. In

1

1776 the result of his labours appeared; welcomed by all intelligent contemporaries, and described long afterwards by an eloquent panegyrist as 'probably the most important book which has ever been written.' We shall, perhaps, be slow to agree with that enthusiastic phrase, when we remember one or two other masterpieces of the human intellect. We may, however, admit that no more important book than the 'Wealth of Nations' was published in Great Britain during the last half of the eighteenth century. Few writers have ever done for any study what Smith did for Political Economy. If he did not found a science, he brought a great body of theory into close relation with facts, and may be said to have first brought about a union between abstract reasoners and practical statesmen. To marry science to practice is the great problem of politics; and from the appearance of the 'Wealth of Nations' the main outlines and the chief methods of one important branch of political science were distinctly marked out. Much had been done, and much still remained to do; but Smith took the significant step and is rightly regarded as the intellectual ancestor of a race of theorists, whose influence, though not uniformly beneficial, has at least been of great importance towards constituting the still rudimentary science of sociology.

30. The peculiar merits of the 'Wealth of Nations' may appear from this point of view. If the value of a book be measured simply by the number of definite propositions which it states for the first time, we should find some difficulty in assigning a very high place to Smith's great work. He was by no means the first author to expose the fallacies of the mercantile theories; he was not the first to advocate complete freedom of trade, and to trace the evil influence of commercial restrictions. He did not discover the true nature of rent, or state with any completeness the laws of population, or detect the relation between price and the cost of production; and the formulæ which express those theories may be said to lie at the base of the modern doctrine of Political Economy. If at frequent intervals he catches a glimpse of the doctrines expounded more fully by his successors, it is still true that any adequate commentator upon the Wealth of Nations'

Buckle's 'Civilisation,' i. 194, ii. 443.

would have to pause at every chapter to point out erroneous assumptions and arguments, the fallacy of which has been explained by his successors. But Smith's vast superiority to all who previously treated of the subject, and even in some respects to all who have treated of it since his day, is still unquestionable. He differs from his English predecessors by completing and correcting their detached remarks, and by mapping out, though not with complete accuracy, a vast field of enquiry, of which they had only examined a few detached fragments. He differs from the French economists, not merely by pointing out some of their fallacies, but, more conspicuously, by tracing out in detail the operation of the laws which they had summarily described in far too absolute a fashion. He differs from both in the vast variety and extent of the information which he brings to bear upon the problems discussed. Nothing is more remarkable in the book than the fertility of illustration and the immense stores of knowledge which it embodies. It was inevitable that he should sometimes commit the error, common to all economists, of laying too much stress upon the economical aspect of phenomena which cannot be adequately understood without calling in the aid of considerations of a higher order. We see that everything which he observes, from the Christian Church to a passing shoeblack, suggests to him some association with supply and demand. But his remarks upon the historical development of societies, upon the condition of contemporary European affairs, upon the industrial circumstances of the British Empire, and upon the minuter facts which had come within his own observation, show a mind of extraordinary width and ingenuity, well able to master a vast accumulation of materials, always dwelling upon them with a lively desire to discover their lessons, and able to expound those lessons in the most effective

manner.

31. Comparing Smith with the French economists, one might be inclined to say that his merit lay in substituting an inductive method for a priori theorising. The statement would be inaccurate; for, as is often remarked, the vast complexity of the phenomena under consideration prevents a direct application of simple induction. But Smith fully appreciates, and it is one of his chief merits, the part which

should be assigned to actual experience in such enquiries. He invariably tests the general theories by their application to particular facts, and avoids many of the errors produced by a too great facility in admitting convenient assumptions. He never takes leave of the solid ground in his most daring flights. Every general maxim is stated in language applicable to cases of actual occurrence. And, therefore, in the hands of Adam Smith, Political Economy passed from the professor's study to the market-place and the exchange. Men who were indifferent to general demonstrations of the futility of commercial restrictions, and thought, with some justice, that the French speculations savoured of metaphysical refinement, were forced to listen respectfully to a man who had all available statistics at his fingers' ends, and was able to show to them in black and white the mode in which the English commercial system had generated certain definite and assignable evils. All Smith's critics have remarked upon the felicity of his illustrations. A man whose mind is always on the alert ends by finding the precise embodiment of a general principle which brings out the particular aspect desired. Other writers, the anonymous author, for example, Mandeville, and Turgot, had recently illustrated the advantages of division of labour. Smith's illustration of the pins struck the popular imagination, to use Burke's phrase, 'between wind and water.' His illustrations generally imply an argument. The often-quoted comparison, for example, of paper money to a 'waggon road through the air,'' not merely expresses his meaning with admirable neatness, but incidentally clears up a confusion which had imposed upon the acute understanding of Hume. The ingenuity with which his conclusions are brought out gives at times a pleasurable shock of surprise like that which we receive from a witticism. Facts which seemed to be anomalous fall suddenly into their right places. It is obvious enough, when it has once been explained, that the contempt to which certain employments are exposed is the cause of their being highly paid. But the first time that we read Adam Smith's statement, by which things are simply put in their right places, we seem to be dexterously unravelling a paradox. We follow him through the whole treatise under

A. Smith, p. 141.