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PART II.

PRECAUTIONS.

"Make to yourselves friends of the mammon of unrighteousness."-LUKE XVI. 9.

CHAPTER I.

POLITICAL ECONOMY AND ITS PREJUDICES.

"Ha! I am feeble.

Some undone widow sits upon mine arm,

And takes away the use of 't; and my sword,
Glued to my scabbard with wrong'd orphans' tears,
Will not be drawn."-MASSINGER.

Political Economy built on Suppositions.

THE distinction between political economy as a body of supposed truths or ascertained sequences of phenomena, and political economy as a body of rules designed to govern practice, without a clear conception of which all reasoning on the subject is apt to become a conglomerate of loose abstractions and distorted facts, was first clearly pointed out by Mr. Senior in 1826, in his introductory lecture on Political Economy before the University of Oxford. Three or four years later, in 1829 or 1830, the same distinction, with all its important consequences, was worked out by Mr. J. S. Mill with a luminous precision which left nothing for others to do, except to build upon his foundation. Twenty-two years have elapsed since that time, and yet it may be safely said, that that fruitful distinction is not yet appreciated by ninety-nine in a hundred of those who profess to hold and act upon the principles of political economy. It is not wonderful that the confusion of ideas thus arising should afford countenance to prejudices of a very mischievous nature. Popular political economy has, in fact, settled itself in many minds as a moral code, by which it is assumed that both nations and individuals are to regulate their conduct. Amongst the English people, as a whole, the principles of this code are very inconsistently, but

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very happily, qualified by that humanity and good sense with which they so often neutralize the vices of erroneous theories. But numerous individuals, with no small influence in the guidance of opinions, are to be found, in whom this absurd amalgam of facts misconceived and theorems misunderstood has all the tenacity of a prejudice and all the virulence of a fanaticism.

If political economy is not to be expelled from rightly constituted minds as a cruel and heartless quackery, it is time that the scandals brought upon it by this vulgar sophistry should be removed, and the conception formed of it by its more enlightened expounders pressed with fresh urgency upon the public mind. Theoretical economy, then, consists properly of a series of inferences, drawn from certain suppositions, and the inferences, however correctly drawn, can never represent the reality of things more nearly than the suppositions from which they are derived. The fundamental supposition is, that man acts steadily from a desire to obtain as much wealth as he can with the least sacrifice. This being assumed, it is concluded that men will proceed in certain ways in their labours to produce wealth, and in exchanging their products. Further assumptions, which are often only implied, or made unconsciously, are such as these—that each member of a community is perfectly aware of what the others are doing,—and that he passes from point to point in space, and from employment to employment, as ghosts are supposed to pass through stone walls and oaken doors without feeling an obstruction. These assumptions are often, indeed, very remote from the truth, but yet under some circumstances, and especially in England, sufficiently near it to render the inferences to which they lead, useful for practical purposes, in a way which, by a stretch of the comparative faculty, may be likened to the use made of geometrical truths in mechanics. But the assumption that inferences drawn in this way correspond to actual realities, can never be safely admitted without the application of that test, or appeal to experience, which Mr. Mill calls the process of

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