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ducers, though it would reduce their nominal capitals. The reduction of his income would be compensated to every individual, by a proportional fall in the price of the commodities consumed by him; and the loss produced by an universal reduction of income, would be instantly repaired by an universal fall of prices.

When the value of money rises, the prices of all goods, the rent of all lands, and the nominal amount of all debts, public and private, ought to be proportionally reduced. The ignorance of some, and the obstinacy of others, is opposed to this comprehensive adjustment. Hence the complaints of the scarcity of money, excess of production, excess of taxation, evils produced by the transition from war to peace, &c. &c. These evils proceed from the unwillingness of capitalists to reduce their prices below the cost of production, of landholders to reduce their rents, of creditors to reduce the debts due to them. They do not perceive, that the deduction from the nominal amount of their incomes takes nothing from their relative value, when compared with the price of goods. A capitalist would sustain no real loss, though he were compelled to sell all his commodities at a nominal loss of 50 per cent., provided the price of all the commodities consumed by him were to fall in the same ratio*. His money would be 50 per cent. less than it was before, but the worth of his money would be the same. The same principle applies to the landlord whose rents are reduced 50 per cent. by the importation of foreign corn. The same principle applies to the public creditor, whose income is diminished in the same ratio, by a reduction of the national debt,-to the private creditor, who is willing to depart from the half of his legal right, &c. &c. It seems to me, that a reduction of private debts might be easily accomplished, with the consent of the creditors, if every insolvent debtor were to be tried by a jury, before he was subjected to imprisonment or loss. A reduction of

debts, with the consent of creditors, is a measure perfectly similar to the reduction of rents with the consent of landholders. The last measure has been accomplished, the former may. The elements of our intellectual and moral nature are the very same in creditors as in landholders. Do we really believe that corn will grow no where but on the rigs of Tillietudlem?

VIII. On Rent.

It seems to me, that the rent of land, and the interest of money, are two words which differ, not in their meaning, but in their application. Rent is the interest paid for the use of land, and interest is the rent paid for the use of money. Thus we say, a pair of gloves, a couple of hounds, a brace of wild-fowl, &c.

The rent of land must, cæteris paribus, be proportioned to the relative value of land, and the value of land to the profits of agriculture. An increase in the profit arising from the cultivation of land will raise the rent of land in the same way that an increase in the profits arising from the employment of money raises the interest or rent of money.

The profit of agricultural industry must be proportioned to the relative value of agricultural produce; the value of land produce must be proportioned to the cost of productiont; and the cost of production must be proportioned to the relative value of labour. It is by the employment or consumption of labour that we obtain the produce of land, and it is by the consumption or employment of land produce that we obtain labour. A rise in the relative value of labour, therefore, will raise the relative value of land produce, by increasing the cost of production; and a rise in the relative value of the land produce consumed by the labourer, will in, the same way, raise the relative value of labour.

The relative value of land, therefore, is proportioned to the relative value of labour; or, in other words,

In other words, a nominal loss of 50 per cent. would produce no real detriment to anybody, provided it were universal.

+ Cheapness of production encourages production, as the cheapness of commodities encourages consumption; and production lowers price, by increasing supply.

the interests of the landholders and those of the labourers are the same. There is a proverb in Hindostan, that "master's favour is of more value than ten thousand rupees." And I wish that the landholders could be persuaded to promote their own interests, by extending this protection to the labourers. The interests of the landholders, and those of the radicals, are in reality the same! Whatever raises the relative value of labour, must increase the cost of production, and consequently raise the relative value of those commodities that are produced rather by human industry than by mechanical contrivance; it must, in the same way, lower the relative value of the commodities that are produced rather by mechanical contrivance than by human industry; it must, therefore, raise the relative value of land produce, and lower the relative value of manufactures; it must, consequent ly, increase the relative wealth of the landlord, and lessen the relative wealth of the master manufacturers*. On the other hand, whatever raises the relative value of the land produce consumed by the labourer, will increase the cost of production, and consequently raise the relative value of labour t.

The poor laws, the combination laws, and all other laws or habits of thinking, that tend, either directly or indirectly, to lower the relative value of labour, must, in the same degree, lower the relative value of land. The landed aristocracy is the class which possesses the greatest political power in almost all countries; the labour ers are the class that possess the least political power; and the interests of the first class are the same with the interests of the second. We have therefore obtained, from the science of Political Economy, a purchase or security in favour of the rights of the labourers, which we could never have obtained from the science of Political Government. See Edinburgh Review, Vol. XIII., p.. 196,

&c. This passage is too long to be quoted, but it is a very important one, and the reader is requested to peruse it attentively.

IX. On Labour, considered as a Measure of Value.

In order that labour may be an accurate measure of value, it is necessary that its own value should be invariable, or nearly so. But this is not true, either of the real or of the exchangeable value of labour; and it is evident that there is no other sort of value.

The real value of labour is proportioned to the real happiness which it gives to the consumer; and this depends much more on the consumer's own dispositions, and on his physical and moral capacity of enjoyment, than on the quantity or nature of the industry exerted in his favour. The real value of labour varies with every change in the physical and moral condition of the employer; and it is evident that nothing can be more variable than the physical and moral condition of so capricious and unaccountable a being as man.

The exchangeable value of labour is nearly proportioned to its productive power; or, at least, the productive power of labour cannot be increased without raising, more or less, its value, when exchanged for other commodities. But every new invention in art increases the productive power of labour, and consequently raises, more or less, its exchangeable value. To employ labour, therefore, as a measure of value, is as absurd as to employ the foot of a growing child as a measure of length.

For the same reason, corn cannot be an accurate measure of value. Every rise in the exchangeable value of agricultural labour, and every obstacle to the extension of agriculture over the inferior or exhausted soils, must raise the relative value of corn, by increasing the cost of production. Do we need a measure of value?

It will not lessen their absolute wealth. They will grow richer, but not in the same degree that the landlords and labourers will grow richer. Their absolute wealth will be greater, but their relative wealth will be less.

+ There will be no rise in the value of labour relatively to land produce, nor in the value of land produce relatively to labour. But the value, both of labour and of the produce that subsists the labourer, will rise, relatively to manufactures.

Can we obtain it? I conceive that both these questions ought to be answered in the negative. The object of Political Economy is not to measure quantities, but to ascertain their relations. The subjects of inquiry are not absolute, but relative values. The calculations are algebraical, not arithmetical; the notation is literal, not numeral. The combination of letters in an algebraic formula, discovers to us the relations of numbers, but not the numbers themselves. It is the same in those general reasonings which constitute the science of Political Economy. We cannot measure the value of any commodity, but by comparing it with the value of every other commodity for which it is exchangeable. And as we cannot collect the price of all the commodities that are mutually exchangeable, we cannot obtain an accurate measure of the exchangeable value of any commodity whatever. As for an accurate measure of real value, the absurdity of measuring it is too obvious to require illustration.

It is common in Political Economy to inquire into the causes that regulate certain events. But for this word "regulate," I think that we ought always to substitute the word influence. One event cannot be the regulating cause of another event, unless it is the only cause; because the occurrence of a second cause must modify, if it does not change altogether, the operation of the first. The first cause, therefore, will cease to regulate the event; but it never can cease to influence it, if it has any operation at all *.

"Toutes choses étant causées et causantes, aidées et aidantes, médiatement et immédiatement, et toutes s'entretenent par un lien naturel et insensible, qui lie les plus eloignées, et les plus differentes, je tient impossible de connoitre les parties, sans connoitre le tout, non plus que de connoitre le tout sans connoitre en detail les parties." (Pascal.) It it evident that this knowledge, at once minutely accurate and comprehensive, cannot be obtained but by

the mutual intercourse of speculative men, with men of observation and business. What are the causes which obstruct this intellectual intercourse? The first step towards freedom of trade must be to remove, or at least lessen, the obstacles which obstruct the commerce of the mind.

X. On Tyranny.

It is remarked by Dr Chalmers, that "the success produced by a more vigorous administration of the poor laws, has suspended the desire for a reformation of them." (Christian and Civil Economy, Vol. II. p. 268, &c. p. 277, &c.) It is evident, that an unnatural law cannot be executed at all, if it is not enforced with severity. The error in the principle necessarily produces severity in the execution; and, in proportion as the good sense or humanity of those who administer the law, or of those who witness its operation, prevents the recourse to tyranny, in the same proportion is the inefficacy of the law manifested, and the progress of political improvement accelerated. If the humanity of the people prevents the continuance of a harsh or oppressive law, and if their good sense prevents the continuance of a law that is absurd and useless, all such laws will be repealed; other laws will be substituted which are effectual, without being oppressive; and if no such laws can be devised, the cure of the evils will be committed to Nature.

Tyranny subdues or conceals the natural re-action of popular reason against an ineffectual law, and of popular sentiment against an unjust law; and this re-action is as useful in guiding the legislator, as the motion of the compass in directing the mariner. The lawgiver who has recourse to tyranny, acts like the mariner who throws his compass into the sea. Severity may sometimes lessen, and more frequently conceal, the immediate evils produced by bad laws; but it perpetuates all these evils, by perpetuating all

For the same reason, the political economist ought to be content with pointing out tendencies, without attempting to produce effects. We cannot predict with certainty the effects of one cause, till we have discovered all the causes by which it is promoted or impeded.

the laws that produce them. It converts all the acute diseases of the body politic into chronic ones. It would not be easy to do mischief in a more compendious way.

XI. Securities for the payment of Debt.

What would be the effect of a law, making it legal for a lender to accept a higher rate of interest, provided he surrenders his right of prosecuting his debtor for the payment of the debt? We should see, by the number of such loans, (which might be recorded in a public register) and from the rate of interest stipulated, the exact difference between the natural and the artificial securities for the payment of debt. We should obtain a political barometer, which would shew us the rise or fall of mercantile confidence, and from which we might infer the rise or fall of mercantile prudence and integrity. It seems to me that this would be a very useful instrument, both to the philosopher, who speculates on the political condition of the country, and to the statesman, who wishes to bring the results of speculation to practice. Every political improvement ought to be preceded by moral improvement; and the philosopher ought not to recommend a hazardous measure, or the statesman to attempt it, till his barometer indicates that the moral improvement has been accomplished.

If the legal securities for the payment of debt were abolished, the risk which now falls on the borrower would be transferred to the lender; and if the usury laws were abolished, the interest of the debt would rise in proportion to the risk. I do not perceive in what way the prudential and moral securities, which Nature has provided for the security of the lender, are either less effectual in their operation, or more objectionable in principle, than the securities

provided by law. Debts of honour, contracted at the gaming-table, are more punctually paid than any other debts whatever; and there is no good reason why the honour of traders should be less than that of gamesterst. Their religious and moral principles cannot surely be worse, and the temptations of their situation are much less violent. And if the natural securities of the lender are effectual in their operation, they cannot be objectionable in principle, because the goodness of the principle consists altogether in its being effectual to the production of the desired effects. To say that a political arrangement, which is effectual in its operation, is, nevertheless, objectionable in its principle, is to affirm that a clock is objectionable in principle, which accurately tells the hours of the day. "If the prophet had bid thee do some great thing, wouldst thou not have done it? How much rather, then, when he saith to thee, Wash, and be clean!" If the laws for securing the rights of creditors were repealed, there would be no loans without confidence,-no confidence without honour,-and the progress of mercantile accommodation would be exactly proportioned to the progress of mercantile morality. The demand for mercantile honour would rise; and I perceive no reason why the supply should not increase proportionally. The demand for military honour has always been accompanied with a proportional supply; and the demand for mercantile honour would produce the same effects, if we would trust more to the wisdom of Nature, and less to our own contrivances. The difficulty of borrowing might, for some time, be greater, and the interest of money would rise; but of what consequence would be this temporary inconvenience, when a permanent good must arise from it? And of what conse

The names of those who violate such engagements ought to be recorded in the same register, and published in the newspapers. This would be a sufficient compulsitor to ensure the payment of debt.

+ I have heard it objected to this argument, that gamesters, notwithstanding their vices, and the temptations to which they are peculiarly exposed, have generally more of the spirit of gentlemen than traders have. The reason (I conceive) is, because they are less subject to the degrading authority of the laws. The insolvency law is the cause of the evil, not the remedy.

"This only I have seen, that God made man upright, but he hath found out many inventions."

VOL. XIV.

Ce

quence is any commercial evil, when it is productive of moral good?

In order to prevent an injury to those who have already lent their money under the security of the existing law, and who may conceive that their security would be lessened by a repeal of the law, I would propose, that every creditor, who could prove before a court of justice that his debtor was able to pay, but not willing, should be indemnified at the expense of the state, and that the name of the debtor should be published in the newspapers. I conceive that this would be a sufficient compulsitor where the payment of the debt was possible; and where it is not possible, the creditor does not gain much by confining the person of his debtor within four walls. The dread of infamy would be as strong a motive to prevent the contraction of debts which cannot be paid, and to enforce the discharge of debts which can be paid, as the dread of confiscation and imprisonment; and it would have the advantage of bringing a nobler principle of our nature into operation. I will quote a passage from Milton's Preface to his "Doctrine and Principle of Divorce," and support my opinion by the authority of the greatest Christian and civil economist, as well as the most sublime poet, which this country has produced.

"What middle way can be taken, (may some interrupt,) if we must neither turn to the right nor to the left, and that the people hate to be reformed? Mark, then, Judges and Lawyers, and ye whose office it is to be our teachers, for I will utter now a doctrine, if ever any other, though neglected or not understood, yet of great and powerful importance to the governing of mankind: He who wisely would restrain the reasonable soul of man within due bounds, must first himself know perfectly how far the territory and dominion extends of just and honest liberty. As little must he offer to bind that which God hath loosened, as to loosen that which He hath bound. The ignorance and mistake of this high point hath heaped

up one huge half of all the misery that hath been since Adam. In the Gospel, we shall read a supercilious crew of masters, whose holiness, or rather whose evil eye, grieving that God should be so facile to man, was to set straiter limits to obedience than God hath set, to enslave the dignity of man, to put a garrison upon his neck of empty and over-dignified precepts; and we shall read our Saviour never more grieved and troubled than to meet with such madness in men against their own freedom. How can we expect," &c. I am aware that those who admit the principle laid down by Milton may question the propriety of my application of that principle; but the passage is so characteristic, that I could not resist the temptation of going a little out of my way to quote it. Near the conclusion of the "Defensio Secunda," in his eloquent address to Cromwell, he says, "Tum, si leges non tot rogaveris novas, quot abrovageris veteres; sunt enim saepe in republica, qui multas leges ferendi, est versificatores multa carmina fundendi, impetigine quadam pruriunt; sed leges quo sunt plures, eò fere sunt deteriores, &c. Leges enim ad frenandam malitiam solum sunt comparatæ, virtutis libertas formatrix optima atque matrix est. Deinde si juventutis institutioni ac moribus melius prospexeris, &c. Milton's opinions on political and religious economy are remarkably like those of Dr Chalmers, with this inportant difference, that he was much less aided by the wisdom of his contemporaries t. Were it not for a certain peculiarity of manner which marks the originality of his thoughts, one would have almost imagined that Dr Chalmers had borrowed his opinions from Milton. But, at all ́events, the exact coincidence between the opinions of these two men is the best proof of the justness and importance of these opinions. There are instances of prospective sagacity in the works of Milton, not inferior to that of Bacon himself, as in Paradise Lost, Book viii. 484.

"First crept the parsimonious comet, &c."

If the debtor could pay any portion of the debt, by surrendering a part of his property, he would certainly relinquish as much as the law ought ever in justice to take from him.

+ See his "Reason of Church Government," Book II. Chap. 3.

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