William Cunningham

“ So far as 'political economy considered as a branch of a science of a statesman' was concerned, it was now possible to regard material wealth as a main object in view; and if this was the main object in view, then the systems of policy which had preferred one kind of wealth to another, or one kind of trade to another, on political grounds, had simply lost their raison d'être. The system of natural liberty was the necessary outcome of the new turn which Adam Smith had given to the old problem. ”

“ The growth of the National Debt and the impossibility of finding new sources of taxation alarmed more than one statesman, and there were not a few economists who took a pessimistic view of the condition of the country. Their writings, however, are of far more interest from the light they throw on passing events, and from the statistics they contain, than from any very remarkable advance in economic doctrine. They all start from the old standpoint. ”

“ The latter had aimed at, though he did not attain, an ideal scheme of national economy, while Adam Smith held that no such system was necessary. His predecessors had believed that the statesman must play upon private interests so as to force them to conduce to the public good, and the maintenance of national power. In Sir James Steuart this guiding aim becomes a mere abstraction, and the chief point to be considered in adjusting that aim is another abstraction—the spirit of the people. ”

“ Whether consciously or unconsciously, he gave the turn to economic problems which has brought about the development of modern economic theory.
The progress that has been made in this direction amply justifies the line which Adam Smith took in isolating the study of material wealth; but however complete our analysis may be, it is well to remember that we have merely analysed a group of phenomena which we have first isolated as a matter of convenience. We cannot forecast at all unless we go outside economics and take a wider view of human life. ”

“ It was not till the progress of the industrial revolution had demonstrated the frightful mischief of a partial adoption of natural liberty—that is to say, the adoption of this principle in regard to one factor of production, while it is wholly disregarded in relation to another—that the conditions of society were rendered more completely accordant to those which Adam Smith's principle assumes. ”

“ THE PROGRESS OF ECONOMIC DOCTRINE IN ENGLAND IN THE EIGHTEENTH CENTURY
By universal consent Adam Smith stands out as the founder of modern political economy. He so entirely recast it that the ordinary student of economic doctrine is satisfied to trace the progress from his time, just as the astronomer marks a new departure in the system of Copernicus, and modern philosophy took a new shape at the hands of Kant. In each of those cases, however, it is possible to note anticipations and suggestions in the thoughts of previous writers ”

“ Pownall also criticised Adam Smith's account of the production of wealth. In this he had apparently followed Locke. The fertility of this master mind is strangely shown in the fact that his writings contain the germ of the Physiocratic doctrine of taxation as well as the germ of Smith's doctrine of the production of wealth and the measure of value. 'Labour,' he had said, 'puts the difference of value on everything,' or as he corrects it, 'labour makes the far greater part of the value of things we enjoy,' [33] but Adam Smith uses the principle in its most absolute form. ”

“ In the seventeenth century, it was supposed to measure the possible accumulations of treasure; in the eighteenth it was treated as a criterion of the flourishing condition of our industry. If we parted with more goods than we received, it was clear that we were supplying ourselves successfully and had something over to sell; if we were buying more goods than we sent abroad, it seemed to show that we were unable to provide for our own subsistence. ”

“ The principle of competition is abundantly recognized throughout his treatise as usually operative in all commercial transactions. 'The best way to govern a society, and to engage everyone to conduct himself according to a plan, is for the statesman to form a system of administration, the most consistent possible with the interest of every individual, and never to flatter himself that his people will be brought to act in general, and in matters which purely regard the public from any other principle than private interest. ”

“ We cannot detect the characteristic feature in his work by comparing him, not always to his advantage, with some previous writer who wrote brilliantly upon a special point; and we can only hope to discover it by reviewing the progress of economic doctrine for many years before he wrote, and thus attempting to mark the precise nature of the new contribution which enabled him to transform the study so completely. ”

“ It is of course clear, that circumstances favoured a great advance in economic doctrine during the eighteenth century, since there was so much progress in industrial, commercial, and agricultural afairs. The phenomena connected with the increase of wealth were more obvious, and a keen observer like Adam Smith who had frequent intercourse with practical men, was in an excellent position for reflecting on the causes of this progress ”

“ Were miracles wrought every day the laws of nature would no longer be laws: and were everyone to act for the public and neglect himself the statesman would be bewildered, and the supposition is ridiculous.
'I expect, therefore, that every man is to act for his own interest in what regards the public, and, politically speaking, every one ought to do so. ”

“ For all questions of history in the past, for all questions of duty now, for all ideals of progress in the future we must not be content to take the phenomena of wealth as if they were isolated, but to take them in their relation to Man. ”

“ He considered that Adam Smith's phraseology tended to foment class hatreds, as it seemed to represent all other classes as paupers who subsisted as mere drones and at the expense of the manual labourers. [38] He argues in opposition that all labour is either directly or indirectly productive, [39] and that the real question is who are more and who are less productive? But his chief point is that the cause of wealth lies not in mere labour, but in effective demand, a doctrine for which he argues with much acuteuess. ”

“ Though the old subjects are discussed and many of the old phrases are retained, there is a marked advance in the thoroughness of economic studies in the middle of the eighteenth century, as compared even with those of the revolutionary period and certainly with the writers of still earlier times.
4. Indeed, while there was the same desire as of old to guide the industry and commerce of the country so as to promote its power, there are general indications that men were beginning to feel a difficulty in applying any of their tests rigidly, and deciding what would prove beneficial. ”

“ The one man who united a profound knowledge of economic literature, as it had grown up in the two preceding centuries, with a keen interest in the practical economic difficulties of his time, was Joseph Massie. ”

“ But though Richardson and Decker are apparently in favour of free trade, the manner in which they talk about the Balance of Trade, goes to show that they were still on the platform of those who were considering the national prosperity as their main object, and chiefly interested in national wealth because it was the primary source of national power. ”

“ Adam Smith in criticising them persistently refuses to take their point of view. He assumes that they were trying to devise means for increasing wealth, or as they would have said, riches, as an end in itself, while every page of their writing showed that they were doing nothing of the kind. ”

“ He shows that the abolition of customs, which might favour trade in some ways, could not be accomplished without repealing all tariffs and thus discarding the instrument by which trade could be directed into channels of national advantage. ”

“ For all these purposes we must seek to 'restore mind to its proper rank;' [41] and even if there be no general formula which adequately describes the relations of moral phenomena to wealth, we may none the less hope to make good progress in all other sides of social study, if we use as our starting-point the vantage ground which Adam Smith has given us by isolating the conception of material wealth. ”

“ The right course, as he conceived, would be to develop agriculture first of all to its fullest extent, [9] with an easy confidence that manufactures and commerce would follow naturally in its wake. But whenever we get this idea of a due proportion between the various parts of the social fabric, we must have some ideal or form to which we desire to make our practice conform. The eighteenth century had a keen eye to proportion in the structure of buildings, and eagerly followed the classical type while adapting it to modern requirements ”

“ But it was also due to the fact that though the theory of rent was not generally understood, there was a clearer apprehension of the truth that the production from the soil was primarily dependent on the capital employed in improvements, and that if capital were plentiful, agriculture and all connected with it would be flourishing too. ”

“ Since these economists dealt primarily with English revenue, there were three main funds to be considered; the increase of treasure which was necessary in order to defray the expenses of war and thus to render the Government secure against emergencies; the increase of commerce and of the customs; and the increase of the wealth of the landed class who contributed such a large proportion of the revenue of the country. ”

“ In this way he believed that he might obtain a science of which the principles were 'universally true,' and it would then be the business of the statesman to direct the industry and commerce of any given people in the closest practicable accord with those principles. ”

“ It was all to be plain sailing for the man of ordinary intelligence; and within a few months of its publication the book had become a considerable power. In 1777 North had borrowed some suggestions [28] which Adam Smith had incorporated from Moreau de Beaumont; Pitt's French policy followed the principles he had laid down, and which he amplified in the edition [29] of 1784; the great minister explicitly referred to the book in introducing his scheme for modifying the pressure of taxation in 1792, and was determined by it in his action on two later occasions. ”

“ These were the main topics of discussion among the economists in the middle of the eighteenth century in so far as they dealt with anything larger than the technique of particular arts or of commercial transactions as a whole. ”

“ Numberless phrases can be culled from their works which anticipate the reasonings of later writers, but the very titles of their chief books show that their view of the subject is restricted. They deal with the expenses of government as the one important topic ”

“ As for the supply, that will always rise with facility to the amount of the demand; except in cases where nature has set limits, universal or local, or meddling statesmen have interposed their foolish restraints.' The Pamphleteer, xvii. ”

“ The principles of Adam Smith were all very well for a maritime country, but would not serve for an agricultural country like France. He appears to have failed to grasp Adam Smith's main position, but his criticism is none the less instructive as showing where The Wealth of Nations struck him as novel. Dr. Smith's System considered, p. ”