aside." But at the age of sixty-three Mill was past constructive mental work-nor is this surprising, when his early education is borne in mind--and he never formulated any alternative theory of general wages.

Even in his Principles, however, Mill holds only a devitalised wages-fund doctrine." He retains the delusive formula that "wages depend

on the

proportion between population and capital," but he so interprets it as to reduce its significance to that of a truism. No doubt, if, when we speak of "population," we mean the total number of wage-earners, and if, when we speak of "capital," we mean the total sum paid in wages, the formula is correct enough. But then we are simply not speaking English, and furthermore, out of sentimental respect for " the wrong opinions of dead men,” we are making it needlessly hard for the living to form correct opinions. Such " interpretations" have often warped the development of economic theory, and Mill, as one of the earliest writers addicted to such practices, must bear his share of the blame.

His obsession with Malthus' Principle of Population was one of the causes which made him cling to the wages fund formula. For to represent wages as varying inversely as population, was to supply a potent argument for the limitation of working class families. This obsession is evident at many points in Mill's Principles. He can see, for example, no other objection to the establishment by law of a high minimum wage, except that "there would" then "be nothing to hinder population from starting forward at its rapidest rate." From this 1 See Mill's Dissertations and Discussions, IV., pp. 42 ff, and Appendix O to Ashley's edition of the Principles.

Haney, History of Economic Thought, p. 356.

• Principles, p. 343. And again, “if wages are higher at one time

or place than at another, if the subsistence and comfort of the class of hired labourers are more ample, it is for no other reason than because capital bears a greater proportion to population." Ibid, p. 349. • Ibid, p. 363.

F

and other instances it is clear that his view both of the causes and of the effects of the growth of population were far too simple to be true.

§6. Apart from some of the chapters on Currency and International Trade, which do not here concern us, Mill's Book III, on Exchange, is the least original part of the Principles. But this is sufficiently accounted for by his remark that "bappily there is nothing in the laws of value which remains for the present or any future writer to clear up; the theory of the subject is complete." §7. Book IV, concerning the Influence of the Progress of Society on Production and Distribution, deals with the Dynamics," whereas the three preceding Books had dealt with "the Statics of Political Economy."

Mill observes that "the characteristic features of what is commonly meant by industrial progress resolve themselves mainly into three, increase of capital, increase of population, and improvements in production, understanding the last expression in its widest sense to include the process of procuring commodities from a distance, as well as that of producing them." It therefore becomes of interest to determine how these three sorts of changes, taker separately, affect the distribution of the total produce between the three factors of production, that is to say, between wages, profits (or interest) and rent.

Mill is here dealing with problems of real importance, although the solutions he proposes cannot be accepted as they stand-and still less the reasoning, by which the solutions are reached. The chief reason why much of his argument is incorrect is because he is less careful here than elsewhere to "interpret" his wages fund doctrine to mean something which it does not say. When "interpreted" it leads nowhere, but, when taken at its face value, it leads to positive error.

1 Ibid, p. 436.

a Ibid, p. 695.

Ibid, p. 701.

Following the unsatisfactory tradition started by Adam Smith, Mill concerns himself primarily with the effects of these various changes upon wages per head, profits per cent. and rent per acre. Aggregate wages, profits and rent are only considered incidentally, and the relative shares of the three factors of production in the total produce are scarcely considered at all, though later he says that "the ordinary progress of a society which increases in wealth is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater proportion of the wealth of the community." But no evidence is advanced in support of this opinion, which was probably taken uncritically from Ricardo.

2

Mill considers four main cases of industrial progress. In the first, population is increasing, while capital and knowledge are stationary; in the second, capital is increasing, while population and knowledge are stationary; in the third, capital and population are increasing "with equal rapidity," while knowledge is stationary ; in the fourth, capital and population are stationary, while knowledge is increasing. In the first case, he argues, rent and profits rise, while wages fall; in the second, rent and wages rise, while profits fall; in the third, rent rises, profits fall and wages remain stationary; in the fourth, wages will generally rise, profits will remain stationary, and rent will either remain stationary or fall according to circumstances.

In the course of the argument thus summarised, Mill is not wholly lucid. In particular, there is frequent ambiguity as between immediate and ultimate effects. He has really done little more than bring these "dynamic" problems to the notice of subsequent writers.

1 Ibid, pp. 710-20.

The test of equality being that each labourer obtains the same commodities as before, and the same quantity of those commodities." Ibid, p. 714.

$8. "The rapid success of the Political Economy," says Mill," showed that the public wanted, and were prepared for, such a book." But in spite of this evidence of public interest in economic questions, no other economist of the first class arose in England till Jevons published his Theory of Political Economy in 1871.2

The stagnation of the intervening years may be inferred from the fact that the most striking contributions to economic controversy came from literary men, such as Carlyle and Ruskin. But neither the "windy prophesyings" of the one nor the shrill outcry of the other did anything to advance economic thought. They merely confused the issues and shook the confidence of many warm-hearted men in the value of clear thinking on economic questions. They had strayed, as it were, from their own well-settled, old-world country, where art and history flourish and certain sorts of fine writing, into an unfamiliar land, where all the conditions of life were different and the hard work of development had only just begun. And there they proceeded alternately to lecture and to abuse the pioneers. Hardly less successful would be the visit of a cockney vicar to the Canadian prairies, who should propose by the recitation of the litany to bring grain to market, or to make sermons do the work of steam ploughs.3

1 Autobiography, p. 135.

Compare Cannan, Theories of Production and Distribution, Preface to the First Edition, and Foxwell, Introduction to the English translation of Menger's Right to the Whole Produce of Labour, p. lxxviii.

Mr. J. A. Hobson in his John Ruskin, Social Reformer boldly attempts" a vindication of Mr. Ruskin's claim to have placed Political Economy upon a sounder scientific and ethical foundation than it had hitherto possessed, and to have built upon that foundation an ideal of a prosperous human society." It is very strange that a writer with the general outlook of Mr. Hobson should think so highly of one who, as Mr. Hobson himself reminds us, was an admirer of the "game of war as the occupation in which the full personal power of the human creature" finds its noblest expression; who was an enemy of all education of women, holding that " the essentially right life for all womankind is that of the Swiss paysanne"; who hated democracy

44

But, while economic thought, properly so called, was stagnant in England, there were noticeable movements abroad. It is sufficient here to mention Carey in America, Bastiat in France, and in Germany the so-called Historical School and the so-called Scientific Socialists.

§9. Carey was writing on economic matters from 1835 to 1860.1 Although, therefore, much of his work was published before Mill's Principles, in which, indeed, some of his ideas are criticised, it seems most appropriate to deal with him here. His reputation chiefly rests upon his claim to be "the father of American Protection," upon his attack on the law of diminishing returns, as he understood it, and upon his argument that the doctrines of Malthus must be untrue, because otherwise "the Creator would have been inconsistent with Himself."

As regards the theory of distribution, his main conclusions are:-" That labour, when aided by capital, becomes more productive, and is thus improved in its quality.

"

and loved feudalism, even in its modern decrepitude, as the following astonishing sketch of "policy indicates :-" In the case of the great old families, which always ought to be, and, in some measure, however decadent, still truly are, the noblest monumental architecture of the kingdom, so much land ought to be granted to them in perpetuity as may enable them to live thereon with all circumstances of state and outward nobleness; but their incomes must . . . be fixed and paid by the State, as the King's is."

The quality of Ruskin's thought on purely economic questions is exemplified by his petulant desire to "destroy most of the railroads in England, and all the railroads in Wales," and by his proposal that all machinery should be legally prohibited in agriculture and in many branches of industry, because it "throws a number of persons out of wholesome employment, who must thenceforward either do nothing, or mischief."

And yet Mr. Hobson finds in Ruskin a greater economic wisdom and a deeper humanity than in Mill!

1 His Principles of Political Economy were published in three volumes between 1837 and 1840, his Past, Present, and Future in 1848, his Harmony of Interests in 1851, and his Principles of Social Science in three volumes between 1857 and 1860.

"

"

The following quotation is from a summary of conclusions appearing in Chapter IX. of his Principles of Political Economy, I., Pp. 140-3. The italics are all Carey's.