templates is the same-the production, namely, of philosophical good temper and moderation with respect to every religious creed.' The religious sentiments, in fact, were a troublesome and expensive force, which could not be kept too quiet. An equilibrium of forces, general indifference, and room for every man to do his work and earn his wages in peace, was the most desirable continuous motive.

37. And thus the peculiar doctrine of the economists receives an interpretation which has been too common in later times. The natural order of society which they proclaimed, and which they held to be injuriously affected by every application of government interference, was identified with the actual industrial structure of society. Smith would abolish all restraints upon trade; but nobody could be less inclined to sanction any theory for reconstructing society, or substituting any new principle for the régime of universal competition. He implicitly adopts the doctrine of some modern economists that the existing order is the only order conceivable. He would abolish all monopolies and all endowments, and leave religious and educational needs to be satisfied, like industrial needs, by the free action of supply and demand. The laws which he announced were to be regarded not only as determining the actual order from which any future development must proceed, but also as fixing conditions which could never be materially altered. It had been already assumed by some writers, and it was systematically assumed by later writers, as, for example, by Ricardo, that the lowest classes must always receive the smallest remuneration consistent with the bare support of life. The assumption, which is highly convenient as simplifying many arguments, takes for granted that the most important aim of all sound economics is for ever impracticable. Smith takes a more historical view of the question than his predecessors, and his remarks upon the varying rate of wages are valuable and interesting. But in the Wealth of Nations' he assigns but a very small space to the discussions which rightly fill a principal part of all modern enquiries. He does not discuss the policy of the poor-laws, though such an investigation might seem to come naturally within his scope; and he is not troubled by any of 1 A. Smith, p. 356. Eg. Locke, Turgot, sec. 6.

those discussions as to the necessary limits of population, which were already coming to the surface, and were presently to provoke a vehement controversy. In the whole sphere of speculation to which these topics belong Smith is still a stranger. He represents the calm intellect which has seen through the superstitions of the antiquated restricted system, but is not prescient of the troubles that were to come with the bursting of the ancient barriers.

38. Here, too, we come upon the main speculative defect of the 'Wealth of Nations.' We are sensible, after reading his always lucid and ingenious, and often most acute, though rather too discursive enquiries, that there is something wanting. The arguments are not properly clenched. The complexity of Smith's enquiries has prevented him from drawing them to a focus. Price, he tells us, is fixed by supply and demand; supply and demand act through the 'higgling of the market;' the buyer wants things cheap, and the seller wishes them to be dear; and so at last an agreement is struck out. But, if we go a little further, if we ask what general causes determine the precise rate of exchange, how it happens that a certain weight of yellow metal exchanges for a certain bulk of the seeds of a vegetable, we can get no definite answer, though here and there are glimpses of an answer. There is a whole side of the question which is left in obscurity. Roughly speaking we may say that Smith's conclusions are satisfactory if we assume that a certain social equilibrium has been somehow established, and seek to trace the process by which slight disturbances are propagated from one part to another. But to the further questions, what are the forces which are thus balanced? what is the true nature of the blind struggle which rages around us? and what are the ultimate barriers by which its issues are confined? we get a rather cursory and perfunctory answer. The difficulty is analogous to that which meets us in the Moral Sentiments.' We there follow the play of sympathy till we are perplexed by the intricacy of the results, but we do not perceive what is the ultimate ground which determines the limits and the efficacy of sympathy. And here, after tracing hither and thither the complex actions and reactions of supply and demand, we somehow feel that we have gone over all the ropes and pulleys

by which force is transmitted, but have not fairly come in sight of the weights by which the force is originated.

39. The point to which Smith had thus pushed the enquiry, is that at which 'catallactics' passes into sociology. Omitting a few errors, he has done all that can be done without bringing a theory of commerce into actual contact with the underlying social problems. He has explained with great clearness the ebb and flow of markets, the curious mechanism of paper-money and credit, the manner in which the effects of taxation are propagated to different classes, and many other phenomena of which a good Chancellor of the Exchequer should take an intelligent view. But he illustrates once more the truth so frequently noticed, that theory generally lags behind experience. Society was heaving with new passions, and forces were being generated which were to try the strength of its most intimate structure. As they began to manifest themselves, economists found themselves confronted by new and more difficult problems. To the theory of exchange was to be added a theory which should determine how the wealth acquired by society was to be distributed amongst its different classes, and to what extent the efforts for well-being were confined by irremovable limits. The new doctrines of socialism or communism, tending to a regeneration or a disintegration of society, were beginning to stir in men's minds, and the doctrines of the later investigators begin to take a different colour and to centre round more vital problems. It becomes more evident at each step that a mere theory of commerce, though such a theory may be useful in its place, cannot answer the serious difficulties which are beginning to present themselves to the legislator and the social reformer. The doctrines enunciated by Adam Smith refer chiefly to the superficial phenomena presented by a society of which it has hitherto been the greatest triumph to preserve a decent amount of fair-play between individuals and classes immersed in a blind struggle for existence. Is that struggle always to continue on its present terms? Is it always to be blind? Must starvation and misery be always in the immediate background, and selfishness, more or less decently disguised, and more or less equitably regulated, be the one great force by which to determine the conformation of society?

What are the conditions which we can hope to modify by combined effort, and what are the irrevocable conditions imposed upon men by virtue of their position in the planet, by accommodating themselves to which they can minimise the evils of their lot, but of which it is in vain to seek the absolute removal? In the coming years such problems were to assume continually greater prominence; and, as yet, we are only on the threshold of the speculations which they suggest. On one side were to range themselves the Utopians, who hoped for an extemporised regeneration of society; on the other, the rigid and sometimes cynical observers who proclaimed too unequivocally the impossibility of ever delivering ourselves from the tyranny of our fate.

40. The two schools found themselves opposed when Godwin announced the perfectibility of man, and Malthus opposed to him the limits presented by the invariable conditions of human existence. This controversy once opened, it was plain that political economy could no longer be regarded as an isolated science. Its assumptions entered into all the great political and social questions of the day. Whatever might be its methods, and whether or not the industrial organisation could by a logical artifice be studied apart from other problems, it was evident that it had a common ground with wider speculations. It must henceforth be regarded not as a separate study, but as a department of sociological theory. Here, as in the history of political speculation, I must stop at the opening of a new era. In the gradual process of generalisation which I have attempted to describe, the true character of problems, which had been attacked only in detached fragments, was beginning to make itself evident. The new theories which were to be introduced are all significant of the wider scope of the dawning science. If Malthus called attention to the limits produced by the struggle of the whole human race against natural forces, Ricardo, and Malthus himself, showed how individuals who had posted themselves in advantageous positions obtained the largest share of its profits; and Ricardo discussed the general connection between the phenomena of exchange and the conditions under which labour is applied to different objects. The doctrines of rent and of population had been partly anticipated, as later writers have

pointed out by various authors; but, as in so many other cases, their observations did not attract general attention until the times were ripe, and the special struggle to whose conditions they referred was making its nature evident in the convulsions of a great revolution.

NOTE TO CHAPTER XI.

The following are the chief authorities for this chapter and the editions cited:

BENTHAM, Jeremy (1747-1852), 'Defence of Usury,' 1787.

DAVENANT, Charles (1656-1714), ' Various Tracts on Trade,' &c., 1695– Works. London: 1771.

1712.

HUME, David (1711-1776), Political Discourses,' 1752. Philosophical Works, by Green and Grose.

LOCKE, John (1632-1704), ‘Treatises on Value of Money,' &c., 1691. Works. London : 1824.

NORTH, Sir Dudley (1641-1691), 'Discourse upon Trade,' 1691. Collection of 'Select Tracts,' by Political Economy Club.

SMITH, Adam (1723-1790), Wealth of Nations,' 1776. Edinburgh : 1863.

STEUART, Sir James (1713-1780), 'Enquiry into Principles of Political Economy,' 1767.

TUCKER, Josiah (1712–1799), ‘Essay on French and English Trade,' c. 1750. 'Scarce and Valuable Tracts,' published by Lord Over stone.

Richardson's 'Decline of Foreign Trade,' 1744, is in the Scarce and Valuable Tracts;' the 'Considerations on the East India Trade,' in the 'Select Tracts.'