Page images
PDF
EPUB
[ocr errors]

Smith, namely, the relative abundance and competition of capital.

Dr. Smith,' says Mr. M'Culloch, was of opinion that the rate of profit varied inversely as the amount of capital, or, in other words, that it was always greatest where capital was least abundant, and lowest where capital was the most abundant. He supposed that, according as capital increased, the principle of competition would stimulate capitalists to endeavour to encroach on the employment of each other, and that, in furtherance of this object, they would be tempted to offer their goods at a lower price, and to give higher wages to their workmen. This theory was long universally assented to. It has been espoused by MM. Say, Sismondi, and Storch, by the marquis de Garnier, and, with slight modifications, by Mr. Malthus. But, notwithstanding the deference due to these authorities, it is easy to see that the principle of competition could never be productive of a general fall in the rate of profit. Competition will prevent any one individual from obtaining a higher rate of profit than his neighbours; but no one will say that competition diminishes the productiveness of industry, and it is on this that the rate of profit must always depend. The fall of profits, which invariably takes place as society advances, and population becomes denser, is not owing to competition, but to a very different cause to a diminution of the power to employ capital with advantage, resulting either from a decrease in the fertility in the soil which must be taken into cultivation in the progress of society, or from an increase of taxation.'

"Here," remarks the Quarterly Reviewer, "the opinion of Adam Smith on the subject of profits is not properly understood. It is quite clear, from the context of the passage referred to, that he never meant to state generally, that the rate of profit varies inversely as the amount of capital, without any reference to the difficulty or facility of finding employment for it, which would be saying that England must have lower profits than Holland, on account of the greater quantity of capital employed in England, or that the rate of profits in any country whose capital was increasing must go on falling regularly, and be always lower at every subsequent period, whether new channels of trade, and more productive means of employing capital, were opened to her or not. What Adam Smith says is this (b. ii. c. iv.), As capitals increase in any country the profits which can be made by employing them necessarily diminish. It becomes gradually more and more difficult to find within the country a profitable method of employing any new capital. There arises in consequence a competition between different capitals, the owner of one endeavouring to get possession of that employment which is occupied by another.' This very distinctly implies, not merely absolute amount of capital, but relative difficulty of finding profitable employment for it. Abundance and competition, indeed, always have a relative signification; and, by the abundance and competition of capital, Adam Smith obviously means an increase in the share of the annual produce, which, as soon as it

comes from the ground, or from the hands of the productive laborers, is destined for replacing a capital.' But it is quite certain that, whenever this share increases, profits must fall."

6

Competition certainly cannot diminish the productiveness of industry; but it does not follow that it is on this that the rate of profit must always depend. The rate of profits depends upon the proportion of the whole produce which goes to replace the advances; but this proportion may obviously be the same when the productiveness of industry is very different.' If the prices of calicoes fall, it is quite obvious that, while the workman continues to earn the same money wages, he will obtain a larger proportion of the calicoes produced by him. This does not imply an increased demand for labor, and it is equally certain that it does not imply an increased value of labor. Measured in money, the value of which for short periods is considered as being steady, labor remains of exactly the same value as before, and the additional quantity of calicoes earned by the workman is exclusively owing to the fall in their money price. On the other hand, if, under the same circumstances, calicoes rise in money price, the workman must necessarily earn a smaller proportion of what he produces; but this, so far from implying a decrease in the demand for labor, implies, on the part of the capitalist, both the power and will to employ more than before. Nor does it imply a diminished value of labor. Measured in the steady article of metallic money, labor has continued exactly of the same value; and, though the workman earns a smaller quantity of calicoes, yet this is exclusively owing to the rise in the price of calicoes, while the price of his labor has remained the same. Instances of this kind are occurring all around us every day of our lives; and we believe that there is no political economist who would venture to say, that, in these individual cases, the variations of profits, arising from wages absorbing a greater or smaller proportion of the produce, were occasioned by the rise or fall in the value of the labor, instead of a rise or fall in the value of the produce. But, in reality, the principle is as applicable generally as it is individually, and will be found to be true for periods of considerable length, as well as for those short periods during which we are in the habit of considering metallic money as practically of the same value. If the competition of capital in any particular department of industry may so lower the value of the produce as to occasion a larger proportion of the produce to be paid to the laborer, there seems to be no reason why the competition of increasing capital in all departments should not so lower the value of the mass of commodities, compared with labor, as to award generally a larger proportion of what is divided between the laborers and the capitalists to the laborers, and thus occasion a general fall on profits.

It appears to us that in denying the effects of the relative competition of capital on profits, and referring exclusively to the relative productiveness of labor, the friends of the new school have rejected a principle which will account for

almost every variation of profits which can possibly occur, and have endeavoured to substitute another, which will only account for one class of cases, and those of such a nature that they may not occur in the course of one or two centuries. On the whole the real difference between the new system and that of Dr. Smith may, we are inclined to think, be still further concentrated; and that it will not be incorrect to state that all the peculiar doctrines of the former directly and necessarily flow from the first of the new principles above adverted to, namely, that the exchangeable value of commodities is determined by the quantity of labor worked up in them. Hence it would follow, directly and necessarily, that neither the demand compared with the supply, nor the relative abundance and competition of capital, can have more than a mere temporary effect on values and profits.

Mr. Mill has produced what he terms a school-book of political economy; professing to detach the essential principles of the science from all extraneous topics, to state the propositions clearly and in their logical order, and to subjoin its demonstration to each. I profess, he adds, to have made no discovery.' His work is divided into four classes, devoted respectively to the consideration of production, distribution, interchange, and consumption. Those who are not aware of the degree in which classification has been neglected by able writers on tins science, we should recommend to compare the different orders followed by Mr. Ricardo and Mr. Mill. Mr. Ricardo's treatise contains thirty-one chapters. The first and the twentieth are on value; the second, the twentyfourth, and thirty-first, on rent; the fourth and thirtieth on price; the seventh on foreign trade; the next ten chapters are on taxation (with the exception of one on tithes); the twenty-second and the twenty-fifth take us back to trade; and in the twenty-ninth we are again entangled in the doctrine of taxation. When subjects are discussed in this manner, scrap by scrap, however sound or original the writers' views may be, there is not one reader in twenty who will not be more perplexed than instructed by his work. While great merit belongs on the whole, as we think, to this work as an elementary treatise, there are some points on which the writer has chosen to rest his cause on the most dubious and circuitous kind of reasoning. We instance the following passage, which contains the grounds on which he assents, and calls for the assent of his readers, to Mr. Malthus's proposition-that the natural tendency of the human species to increase is such as would in a very short space of time double the numbers of any society.

The females of those species of animals whose period and mode of gestation are similar to those of the female of our own species, and which bring forth one at a birth, are capable, when placed in the most favorable circumstances, of a birth every year, from the time when the power of producing begins till the time when it ends, omitting one year now and then, which, at the most, amounts to a very small proportion on the whole. The suckling of the infant, in the case of the female of the human species, if con

tinued more than three months, has a tendency to postpone the epoch of conception beyond the period of a year. This, it is to be observed, is the only physiological peculiarity which authorises an inference of any difference in the frequency of the births in the case of the female of the human species, and that of those other species to which we have referred. To reason correctly, we should make an allowance for that peculiarity. Let such ample allowance be made as will include all interruptions; let us say that one birth in two years is natural to the female of the human species. In Europe, to which we may at present confine our observations, the period of childbearing in women extends from sixteen or seventeen to forty-five years of age. Let us make still more allowance, and say it extends only from twenty to forty years of age. In that period, at the great allowance of two years to one birth, there is time for ten births, which may be regarded as not more than the number natural to the female of the human species. Under favorable circumstances, the mortality among children is very small. Mortality among the children of very poor people is unavoidable, from want of necessary means of health. Among the children of people in easy circumstances, who know and practise the rules for the preservation of health, the mortality is small; and there can be no doubt, that, under more skilful modes of managing the food, and clothing, and air, and exercise, and education of children, even this mortality would be greatly diminished.

We may conclude, therefore, that in the most favorable circumstances, ten births are the measure of fecundity in the female of the human species; and that, of the children born, a small proportion would die before the age of maturity. For occasional instances of barrenness, and for this small degree of mortality, let us make much more than the necessary allowance, a deduction of one-half, and say, that every human pair, united at an early age, commanding a full supply of every thing necessary for physical welfare, exempt from the necessity of oppressive labor, and sufficiently skilled to make the best use of their circumstances for preventing disease and mortality among themselves and their children, will, one with another, rear five children. If this is the case, it is needless to exhibit an accurate calculation, to show that population would double itself in some moderate portion of years. It is evident, at once, that it would double itself in a small number of years.' (p.31-33.)

Mr. Mill fairly admits, at the same time, that the statements, respecting the rate of procreation in different countries, will be found to be either suppositions with respect to matters of fact, upon the conformity of which suppositions to any real matters of fact we can have no assurance, or statements of fact of such a nature as prove nothing with regard to the points in dispute. But see our article POPULATION.

We might question whether Mr. Mill has succeeded in showing, that the propensity towards frugality is too rare and too feeble to permit the rapid accumulation of capital. When we look at the immense accumulation which has taken place in our own country within the last

thirty years, in spite of the enormous amount of loans and taxes which have been consumed in the service of the public, we cannot help suspecting that, so far as the accumulation of capital depends on individual frugality, it would increase much more rapidly than our author allows. We might further suggest that the rate of profit on capital will not necessarily fall, unless the demand for the employment of capital does not keep pace with the increase of its disposable amount; and that even if profits should be lowered, yet a lower rate of profits on a greater mount of capital may produce a larger fund for savings thar higher rate of profit on a less capital. It is therefore clear that Mr. Mil has here trusted to a long line of argument, in which there appear to be many weak points. We should even be disposed to question what he appears to take for granted as self-evident-that the funds applied in the maintenance of labor depend entirely on the amount of the savings. That which is saved may be such that it cannot be employed reproductively with advantage. To be so employed, it must be capable of putting in motion industry which will produce a value greater than its own. Now, what evidence is there, that every thing which is saved is necessarily capable of being immediately employed in the production of something which will be of superior value? And, if all savings are not capable of being immediately so applied, is there not in every stage of society a limit set to the ate of accumulation, totally independent of the propensity of man to lay up in store or to consume?

Savings do not become capital, unless they are employed reproductively; and it is the difficulty of finding modes of so applying them, not the strong inclination of man to spend all that he can obtain, that opposes a bar to the rapid accumulation of capital. Any plan, therefore, of increasing the capital of a country by an artificial diminution of the consumption, proceeds upon a supposition of very dubious truth. You may, by such means, diminish the amount of the unproductive consumption of the country, but you will not necessarily increase its productive consumption. The more probable result will be, either that the amount of annual production will be lessened, or that a proportion of the unproductive consumption will be shifted from one class of commodities to another. We are, therefore, not a little surprised that Mr. Mill should be inclined to look upon sumptuary laws as good in themselves, and to object to them chiefly on the ground of the difficulty of carrying them into effect.

The prosperity of a country depends on two things; the amount of its annual consumption, and consequently of its annual production, and the greatness of the unproductive consumption in relation to the reproductive. The greater the annual production, and the less the quantity of labor which gives it, the more flourishing is the state of the country. Sumptuary laws, considered in a political, not a moral view, assume, that it is the duty of the legislator to diminish the unproductive consumption; in other words, to diminish that which the happiness of the

world requires should be increased. They further assume that to diminish the unproductive consumption is a certain means of increasing the reproductive. To both of these assumptions Mr. Mill, in his doctrine of capital, has paid too much deference.

There is another mode of forcing the accumulation of capital, which Mr. Mill has suggested, and of which he has examined the consequences with more minuteness than it deserves.

"There is certainly one course by which the legislature might produce considerable effects upon the accumulation of capital; because it might lay hold of any portion which it pleased of the net produce of the year, and convert it into capital. We have only, therefore, to enquire in what manner this could be performed, and what effects it would produce. The mode of taking whatever portion it might find expedient is obvious and simple. An income tax of the proper amount would effectually answer the purpose.

'The legislature might employ the capital thus forcibly created in one or other of two ways: it might lend it to be employed by others; or it might retain the employment in its own hands. The simplest mode, perhaps, would be, to lend it to those manufacturers and capitalists who might apply for it, and could give security for the repayment. The interest of what was thus laid out in one year might be employed as capital the next. Every annual portion would thus make compound interest, and, so long as the interest remained pretty high, would double itself in a small number of years. If wages appeared likely to fall, a higher income tax would be required. If wages rose higher than seemed to be necessary for the most desirable condition of the laborer, the income tax might be reduced.'P. 45, 46.

Our author is far from recommending this plan. But we think that he might have gotten rid of it much more briefly than he does. Government might compel the payment of the tax; but it could not create facilities of employing what was thus forcibly accumulated in the production of commodities of increased value; and, unless such facilities constantly existed, accumulation would be of no avail. It might depress and discourage reproductive industry, but could not promote it.

On the subject of value Mr. Mill follows, of course, in the steps of Mr. Ricardo; but on that of the value of money he singularly contradicts the sentiments of his school.

If

It is not difficult,' he says, ' to perceive that it is the total quantity of the money in any country which determines what portion of that quantity shall exchange for a certain portion of the goods or commodities of that country. we suppose that all the goods of the country are on one side, all the money on the other, and that they are exchanged at once against one another, it is obvious that one-tenth, or onehundredth, or any other part of the goods, will exchange against one-tenth, or any part of the whole of the money; and that this tenth, &c., will be a great quantity or small, exactly in proportion as the whole quantity of the money in the country is great or small. If this were the state of the facts, therefore, it is evident

that the value of money would depend wholly upon the quantity of it.

It will appear that the case is precisely the same in the actual state of the facts. The whole of the goods of a country are not exchanged at once against the whole of the money; the goods are exchanged in portions, often in very small portions, and at different times, during the course of the whole year. The same piece of money which is paid in one exchange to-day may be paid in another exchange to-morrow. Some of the pieces will be employed in a great many exchanges, some in very few, and some, which happen to be hoarded, in none at all. There will, amid all these varieties, be a certain average number of exchanges, the same which, if all the pieces had performed an equal number, would have been performed by each; that average we may suppose to be any number we please; say, for example, ten. If each of the pieces of the money in the country perform ten purchases, that is exactly the same thing as if all the pieces were multiplied by ten, and performed only one purchase each. The value of all the goods in the country is equal to ten times the value of all the money; as each piece of the money is equal in value to that which it exchanges for, and as it performs ten different exchanges in a year."

He was bound to have maintained, that the value of money is regulated by the quantity of labor employed in producing it. It is perhaps of more importance to remark that he has not proved the principle on which he proceeds. He supposes the whole of the money in the country (or, if each piece of money performs ten exchanges, ten times the whole of the money) to be equal in value to the whole of the commodities in it: and from this supposition it will doubtless follow that, other things remaining the same, the value of money will vary inversely as its quantity. The truth of the doctrine, however, depends entirely on the accordance of the supposition with fact; and that accordance is by no means self-evident. On the subject of the rate of profit, Mr. Mill has given a clear exposition of the doctrine of Mr. Ricardo.

Wherever he treats of capital or profits we think this writer most deficient; generally, and especially in the chapter on interchange, his reasonings are both perspicuous and concise. His work is one from which even he who has made considerable proficiency in the science may learn much. It will assist him in methodising his opinions; it will point out to him connexions which hitherto have probably escaped his notice; it will aid him in bringing his notions in complete review before the mind, and in taking from time to time a comprehensive survey of the science. To those who are unimbued with the principles of political economy, Mr. Mill's Elements present great facilities for the acquisition of valuable knowledge.

The history of the science is brief but interesting. It is to be dated from the publication of Dr. Smith's Wealth of Nations. If he has not left us a perfect work,' says Mr. M'Culloch, he has, at all events, left us one which contains a greater number of useful truths than have ever

been given to the world by any other individual and he has pointed out and smoothed the route, by following which, subsequent philosophers have been enabled to perfect much that he had left incomplete, to rectify the mistakes into which he had fallen, and to make many new and important discoveries. Whether, indeed, we refer to the soundness of its leading doctrines, to the liberality and universal applicability of its prac tical conclusions, or to the powerful and beneficial influence it has had on the progress and perfection of economical science, and still more on the policy and conduct of nations, Dr. Smith's work must be placed in the foremost rank of those that have helped to liberalise, enlighten, and enrich mankind.'

[ocr errors]

This writer ranks Mr. Malthus's Essay on the Principle of Population, published in 1798, a the next great contribution to the science subsequently to the publication of the Wealth of Nations. The fact,' he says, that the population of every country has a natural and constant tendency not only to rise to the level of the means of subsistence, but to exceed them, had been frequently observed by previous writers, and had been strikingly illustrated by Mr. Townsend, in his Dissertation on the Poor Laws, published in 1786. But, though not the original discoverer of the principle of population, Mr. Malthus was certainly the first to establish it on a secure foundation [whether he has done this, by the way, we wholly doubt], and to show its vast conse quence to a right understanding of almost all the great questions connected with the essential interests of society; and especially of those respecting the governing causes of the rate of wages and the condition of the poor. He has demonstrated, by an extensive and careful exz mination of the state of population in different countries, and in every stage of society, that an increase in the means of subsistence is the only sure criterion of a real, and permanent, and be neficial increase in the numbers of any people.'

[ocr errors]

'The Traité d'Economie Politique of M. J. B. Say of Paris, the first edition of which appeared in 1802, would deserve,' adds our author, to be respectfully mentioned in a sketch of the progress of political economy, were it for nothing else than the effect that his well digested and luminous exposition of the principles of Dr. Smith has had in accelerating the progress of the science on the continent. But in addition to the great and unquestionable merit that it possesses from its clear and logical arrangement, and the felicity of many of its illustrations, it is enriched with several accurate, original, and profound discussions.'-Preface to Mr. Ricardo's Principles of Political Economy. Of these, the explanation of the real nature and causes of gluts is de cidedly the most important and valuable. M. Say has shown that no conceivable increase of the powers of production can ever occasion a ge neral glut, or overloading of the market. much of one commodity may occasionally be produced; but it is quite impossible, he contends, there can be too great a supply of every species.

Too

In 1815 the real nature, origin, and causes of rent were ably treated in two pamphlets, pub

lished nearly at the same moment, by A Fellow of University College, Oxford, and Mr. Malthus. But the appearance of Mr. Ricardo's work on the Principles of Political Economy and Taxation, in 1817, is regarded as forming a new and memorable era in the history of the science. Exclusive of correlative discussions, Mr. Ricardo has here analysed the principles which determine the exchangeable value of commodities, and has given a full view of the science of the distribution of wealth.

The fundamental principle maintained by Mr. Ricardo, that the exchangeable value, or relative worth of commodities, as compared with each other, depends exclusively on the quantities of labor necessarily required to produce them, we have discussed to the full extent of our limits.

Among the subsequent contributors to the elucidation of this science, we may mention Mrs. Marcet, who, in her Conversations on Political Economy, has illustrated and explained the elementary and leading principles, established by Dr. Smith, Mr. Ricardo, and others, with much ingenuity. Mr. Mill's Elements of Political Economy is a work of a higher order,' says Mr. M'Culloch, and is, perhaps, better calculated for the use of those who are considerably advanced in the science than of beginners. Mr. Mill touches on almost every topic of discussion: he has disentangled and simplified the most complex and difficult questions; has placed the various principles which compose the science in their natural order; and has shown their connexion with and dependence on each other. Mr. Mill's object being only to give a strictly logical deduction of the principles of Political Economy, he has not attempted to illustrate his doctrines by references either to past or present circumstances or institutions; and, though his work may on that account be less generally interesting, it is so much the better calculated to fix the connexion of the great truths of the science in the mind of those who have already studied them in detail.' See also this writer's own able Discourse on Political Economy, 8vo. Edin. 1825.

POLITY, or POLICY, denotes the peculiar form and constitution of the government of any state or nation; or the laws, orders, and regulations, relating thereto. (See GOVERNMENT). Polity differs from politics only, as the theory from the practice of an art.

POLL, n. s. & v. a.~ POLLARD,

belg. polle. pol, the top; Sax. pol and col, POLLENGER, The head; a register of POLL'ER. heads or persons: to poll is to take such a register for election or other purposes; to lop off the top of trees, horns of sheep, hair of the human head, &c.; to mow; crop; plunder: a pollard is a tree lopped; clipped coin: pollenger is brush-wood: a poller, a robber; plunderer.

Neither shall they shave, only poll their heads. Ezekiel. Lop for the fewel old pollenger grown, That hinder the corne or the grasse to be mown. Tusser. Take and exact upon them the wild exactions, coignie, livery, and sorehon, by which they poll and utterly undo the poor tenants. Spenser on Ireland.

Look if the withered elder hath not his poll clawed like a parrot. Shakspeare. Henry IV.

Have you a catalogue

Of all the voices that we have procured
Set down by the poll?

Id. Coriolanus. The muster file, rotten and sound, amounts not to fifteen thousand poll. Shakspeare. He'll go and sowle the porter of Rome gates by the ears he will mow down all before him, and leave his passage polled. Id.

The oft cutting and polling of hedges conduces much to their lasting. Bacon's Natural History.

He told the people that subsidies were not to be granted nor levied for wars in Scotland; for that the law had provided another course by service of escuage, much less when war was made but a pretence to poll and pill the people.

Bacon.

Nothing procureth the lasting of trees so much as often cutting; and we see all overgrown trees are pollards or dottards, and not trees at their full height.

Id.

[blocks in formation]

POLL MONEY, or CAPITATION, a tax imposed by authority on the person or head; either on all indifferently, or according to some known mark or distinction, as quality, calling, &c. Thus, by the statute 18 Car. II. every subject in the kingdom was assessed by the head, or poll, according to his degree; every duke £100, marquis £80, baronet £30, knight £20, esquire £10, &c., and every single private person 12d. This was no new tax, as appears by former acts of parlia

ment.

POLLACHIUS, or POLLACK, in ichthyology. See GADUS.

POLLARD, or crocard, a sort of base money current in Ireland in the time of Edward I. See

Simon's Hist. of Irish Coins, p. 15.

POLLARDS, in rural economy, a kind of coarse wheaten flour; one degree finer than the bran.

POLLEN, in botany, the fecundating or fertilizing dust contained within the antheræ or tops of the stamina, and dispersed upon the female organ when ripe for the purposes of impregnation. See BOTANY. This dust, corresponding to the seminal fluid in animals, is commonly of a yellow color; and is very conspicuous in the summits of some flowers, as the tulip and lily. Its particles are very minute, and of extreme hardness. Examined by the microscope, they are generally found to assume some determinate form, which often predominates, not only through all the species of a particular genus, but also through the genera of a natural family or order.

« PreviousContinue »