CHAP. XXIII.

POLITICAL ECONOMY.

History of Political Economy :-Objects of-Writers in, how classed. Na ture and Effects of Wealth-Definitions of Wealth-The passion for wealth is universal-Various systems concerning the sources of wealth.

POLITICAL ECONOMY is a science peculiarly entitled to the attention of persons possessing the advantages of a liberal education, being that which relates chiefly to the production, augmentation, and distribution of wealth. The acquisition of wealth has at all times been an object of interest to mankind. Yet it was not for a long time reduced. to a science, but was left to the exertions and practical observation of men engaged in the different branches of industry. Among the ancient writers there is scarcely any thing to be found that even bears upon the subject of the "Wealth of Nations." Among them, Agriculture was much more respected and attended to than either de or manufactures, the latter being, indeed, almost entirely abandoned to slaves. During the middle ages, the feudal system was hostile to a regular system of improvement in agriculture, and absolutely precluded any important progress in manufactures and commerce. These took refuge in the large and flourishing towns, whose fortifications could secure the inhabitants from lawless

inroads; and a regular police could, in a good measure, secure the persons and property of individuals. The gradual growth of these towns led to the civilization of modern Europe. Articles of beautiful workmanship which were produced, and the various means which ingenuity discovered for multiplying the accommodations of life, in time, brought about a complete change in the habits of the landed proprietors. Till now, power, not wealth, had been their chief object; and to promote this, they spent almost all their revenues in maintaining a crowd of idle retainers. But when, by improvement in the arts they had acquired a taste for luxury, the gratification of which required an augmentation of wealth, their object came to be, how they could turn their estates to the most advantage, which led to a better system of agriculture. The same tastes drew them to large towns; this led to extravagant habits, which frequently brought their estates to market, and placed them in the hands of those who were engaged in commerce and manufactures. Hence it has been inferred, that the improvement of modern Europe, began with the manufacturing and commercial classes, and was by them carried to the agricultural part of the community. It was on this account that commerce and manufactures were long looked upon as the grand source of wealth, and the objects claiming the peculiar favour of the legislature. From this circumstance arose the mercantile system, which was so long predominant in Europe; and which has been ably illustrated in the writings of many of our countrymen, such as Davenant, Petty, and Child.

This system had a powerful influence on the legislation of different countries. In France, more than in any other nation, it reigned with absolute sway. Colbert, the prime minister under Lewis XIV. in his zeal for the promotion of trade and manufactures, not only neglected, but even depressed agriculture, by laying restraints on the exportation of corn. This led many thinking men to attend to the consequences to which such a system seemed to tend, and in their view, agriculture

was the only source of wealth. This opinion was first publicly avowed by M. Quesnai, a physician in Paris, who was looked up to as a leader of a new theory, by many, who espoused his doctrine with all the enthusiasm of devotees to a sect. They assumed the name of "Economists." M. Turgot, in the reign of Lewis XVI., in the reforms which he undertook during his short administration, was chiefly guided by the principles of the Economists.

Dr. Adam Smith, about the middle of the last century, as one of the professors at the University of Glasgow, began to illustrate and explain the principles of political economy. After a few years he travelled into France, and became intimately acquainted with the leading members of the Economical school. On his return he spent nine or ten years in preparing his great work, entitled "An Inquiry into the Nature and Causes of the Wealth of Nations," in which he has shewn the errors of the mercantile system; and pointed out in a masterly manner many defects of the opposite, or economical theory. This great work was first published in 1776, and for many years it was referred to by politicians and statesmen of the highest rank, as containing the most salutary and undeniable principles, which, if adopted in practice, would infallibly lead to public and national prosperity.

According to Dr. Smith, by whom we shall be chiefly guided in this and the following chapters, Political Economy is the science in which the Wealth of Nations is considered. Its object is to ascertain, in the first place, in what wealth consists, and then to explain the causes of its production, its increase and diminution, and the principles on which it is distributed through the different orders of society. It likewise, in practice, endeavours to point out the tendency which any political regulations may have to augment or diminish wealth.

The writers on political economy, as we have seen, have been usually arranged in two great classes: the former composed of those who regard commerce, and the latter of those who consider agriculture, as the principal source of national

wealth. The commercial system of political economy is very ably explained and illustrated by Dr. Smith in the "Wealth of Nations."

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A striking and very important difference between the tems of political economy, as detailed a century ago, and that introduced by Adam Smith, consists in this: that the former are calling, upon all occasions, for the regulation and control of laws; regarding the legislature as best qualified to estimate the value of any particular branches of trade, or modes of conducting business; while by the latter the merchant is supposed to be the best judge of the most eligible method of conducting his own affairs. The former has been rightly denominated a system of restrictions and encouragements, in which little is left to the choice and sagacity of individuals: in the latter it is supposed that national wealth, which is the aggregate of individual wealth, will increase most rapidly, where, while private property is rendered sacred by the laws, talent and enterprize are under the least possible restraint. Having spoken thus generally on the subject, we shall advance to particular details, beginning with an inquiry into

The Nature and Effects of Wealth.-Whatever be the nature of wealth, it cannot be denied, that it is the object of the ambition of individuals and nations, the cause of their quarrels and contentions, and not unfrequently the reward of violence, of fraud, and injustice.

Some writers, as Sir William Petty, state the wealth of a nation to consist in the totality of the private property of its individuals; others in the abundance of its commodities. Some, distinguishing public from private wealth, assign to the former a value in use, but no value in exchange; and to the latter an exchangeable value, but no value in use; and these make public wealth to consist in the exchangeable value of the net produce. Others say, that wealth consists of all the material commodities which man may use to supply a want, or to procure an enjoyment either to his sensuality, his fancy

or his vanity. One defines wealth to be whatever is superfluous. M. Canard, a modern French writer, in his "Principes d'Economie Politique," calls wealth the accumulation of superfluous labour. To common apprehensions, wealth in the simplest and most general acceptation of the term, consists in the surplus of produce above consumption, or of income above expenditure. The extent both of public and private wealth depends, it should seem, on the accumulation of this surplus, and on the manner in which it is managed and applied. When individuals and nations have not enough to supply their wants, they are poor; when their means are adequate to all their wants, they are equally removed from poverty and wealth; and when they have a surplus left, after supplying all their wants, this surplus constitutes wealth.

The passion for wealth is universal, and the history of man and civil society, shews that it is always active and enterprising. It is the spring of almost all our actions. It has been the principal promoter of the intellectual faculties, of liberal and mechanical talents, of ingenious and active industry. It has afforded mankind ample means and vast resources; secured them against want, procured them conveniences, comforts and enjoyments the most exquisite; and extended, as it were, the dominion which nature destined for man, so that the distance which separates mankind from the animal creation, might be measured by the distance of the most refined enjoyments from the ordinary wants, or, in other words, by the distance of wealth from poverty.

This passion for wealth, which nature designed for the most useful and beneficial purposes, has also been a constant source of disorder, violence, and calamities, among individuals and nations. Ancient history, and the records of the middle ages, continually exhibit the passion for wealth, as an obstacle to the safety, the liberty, and happiness of individuals to the independence and prosperity of nations, and to the increase and welfare of mankind. It was ever arm