but, beyond all doubt, it will happen, that wranglings about cheese-parings and candle-ends, such as we have had so much of, if further continued, will deteriorate the whole moral tone of the nation, and dry up all the sources of those nobler emotions which give strength and elevation to the current of the national life.

Mr. Norman on Taxation.

A writer of much authority and experience has lately published the result of a very careful inquiry into the supposed great pressure of taxation, and his conclusion is, that the cost of the public service is by no means so great in England, either in reference to the work done, or to the resources of the people, as in the chief countries of the Continent. It certainly does appear to me, that no dispassionate man can read the calm and able pamphlet of Mr. Norman without conviction. No attempt worthy of notice has been made to show either error in the facts or fallacy in the reasoning, and however inveterate may be the prejudice against which it is directed, the truth is too hard and penetrating not to break its way through all obstacles at last. It would be useless here to repeat what Mr. Norman has already said so well, and evidently with such complete freedom from party and controversial bias; but fully believing his view to be in the main correct, and differing from him chiefly as to those allowances which he candidly makes against his own argument, on account of depreciation under the Bank restriction, which according to the representation given in the present work did not take place, I rest in, and argue upon, his conclusions as established, and regard them as amongst the most valuable materials for the use and guidance of the legislator that have been produced in our time.

Mr. Ricardo on Taxation.

With respect to the parties upon whom the burthen of taxation, whatever it may be, actually falls, if the purpose of the

present work required a full consideration of the subject, it would not be difficult to show, from the principles explained in the First Part, that most of the received economical conclusions do not rest upon a scientific basis, and also that the popular notions on the subject, though practically nearer to the truth, contain a good deal of error. Here, however, it must suffice to offer a few remarks tending to show the very wide divergence between some of the economical deductions and the facts of common experience. The abstract writers find it necessary from time to time to neglect the consideration of space in their reasonings, which is allowable enough, provided the dropped element is carefully taken up again, before passing out from the region of hypothesis to the region of practice. This last step, however, is sometimes omitted, and, of course, error is inevitable. But errors arising from the abstraction and subsequent oblivion of the element of space, are trifling compared with those which are caused by the wholesale and habitual annihilation of time. A change, for instance, such as a rise of wages effected through an action upon population (one of the rarest of all possible events), is once or twice spoken of with a recognition, more or less distinct, of the fact that it could not be accomplished in less than a generation. That fact being noticed, the conscience of the abstract economist is cleared, and he forthwith proceeds to crush up the long series of painful events involved in that change into a single link, connects it with other links condensed in a similar manner, and then the chain is made to fly backward and forward through every deduction, as easily and frequently as if the rapidity of association in the mind of the reasoner had some sort of correspondence with the actual movement of human affairs. By such extreme abstraction all the friction which is really experienced in the social machinery, and in connection with which many of the most important practical questions arise, is completely thrown out of view, and treated as non-existent. In this respect, Mr. Ricardo is a sinner of the first magnitude. His mind became so absorbed in the relations subsisting between his own abstract ideas, that

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he seemed at times to take them for external realities, as a diseased eye projects an image into the space before it. Candid and truth-loving as he undoubtedly was, this is the only mode of explaining his resistance to a fact of the most common experience. It is almost amusing to see him quarrelling with Say, one of the strictest of theorists, because he was not strict enough in an extreme case to prefer the reasoning to the reality. Both writers started from postulates which warranted the conclusion that a tax imposed upon a commodity falls wholly upon the consumer; a conclusion which would be perfectly true if the premises were true, but which, in fact, is very remote from the truth. Say, to do him justice, was very steady in keeping to the strict logical path; but in this case he had been struck by a common fact, and went out of the straight line to acknowledge it. He said that a manufacturer is not enabled to make the consumer pay the whole tax levied on his commodity, because its increased price will diminish its consumption." There is no seller of a taxed commodity who will not vouch for the truth of this statement. It agreed with the fact, but it did not agree with the theory, and Ricardo, like Mrs. Battle at whist, loved the "rigour of the game." His answer to Say is an example of the most resolute logic that ever rode full tilt Should this be the case," he against a fact. 66 says, 'should the consumption be diminished, will not the supply also speedily be diminished? Why should the manufacturer continue in the trade if his profits are below the general level?" Why, indeed? Answer the question, ye paper-makers and soap-boilers who annually besiege the Chancellor of the Exchequer. According to the strict principles of abstract political economy, the tax ought to be to you a matter of perfect indifference.

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Of course, if it were true that capital could be transferred as a liquid is poured from one vessel to another without spilling most of it in the process, and if all-powerful habit did not keep men, while a gleam of hope remains, in the employments in which their lives have been spent, and, above all, if capital

created its own return, so that there was not always a fund looking out in vain for new investment, then the Ricardo dogma would be impregnable; but the first and second assumptions being very wide of the truth, and the third in direct contradiction to it, we cannot wonder that both that dogma, and all others built upon the same foundations, have to be abandoned as untenable whenever they are wanted for any practical purpose.

Real Incidence of Taxation.

The truth is, that the incidence of a particular tax can no more be determined than the pressure of a particular tub of water after it has been flung into the river, or the exact limits of a morsel of infectious matter when once placed within an animal body. The moment a new tax is imposed, the sensitive spot which is struck, begins to work it off into the surrounding region, and the new weight soon coalesces with the whole preexisting mass, to be moved to and fro under the influence of an immense concurrence of causes. If, therefore, the question be, upon whom a certain tax fell when it was originally imposed, the answer may be, one particular class. If the question be, upon whom, after existing for one or more generations, it now falls, that is to say, whose income is now less than it would have been if no such tax had been imposed, the answer will point to quite a different class. If, lastly, the question be, as to whom the removal of an old tax will immediately benefit, the answer, paradoxical as it may seem, must carry us to a class different from that on which, in the sense of the second reply, the tax does actually press.

If, for the purpose of science, it were allowable to disregard the element of time, and confining our view to the main line of causation, to combine its extreme limits in a single proposition, then the general truth would be, under our monetary system, that all taxation falls upon the receivers of landed, funded, and official incomes, or upon foreigners. In other words, if

there had been no taxation in England during the last fifty years, then neither the labourer nor the capitalist would at this moment receive a larger share of the produce than he actually does; and there being of course no funded or official incomes, the aggregate of what now goes in taxation would be enjoyed to some small extent by foreigners, but, with that exception, wholly by the owners of land. This result would have been brought about by the twofold competition of capitalists and labourers. Taking periods of considerable length, wages stand at the moral minimum, being kept up to that point by the existence of a certain standard of comfort in the minds of the people which makes them struggle hard to secure it; but being also forced down to the same point, or prevented from rising above it, by the competition of the labourers. In like manner, profits are habitually at a minimum, kept up to that point because capitalists will not go on if profits sink much below it, and kept down to the same point by a competition even more intense than that of the labourers. Hence, in a scientific sense, and taking those long periods into view which are usual with economists, the incidence of the bulk of taxation must be upon the receivers of what may be called residuary incomes. If a tax now seems to go out of wages, the absence of that tax would have allowed the same forces which fixed wages at the present point, to fix them so much lower. In like manner, a tax which seems to go out of profits, if it had not been imposed, would have left a surplus to be worked off by competition in the same manner, and profits and wages being thus habitually pared down each to its minimum, the whole remainder of the national produce must have gone to the landlords. All incomes and calculations being computed in money, the landlords would have obtained in this way higher money rents, and not only that, but with equal sums a greater proportionate command over commodities, from the constant lowering of prices. In the actual state of things, the latter benefit is shared by the possessors of funded and official incomes. Hence, upon the same assumptions as before, every remission of taxation tends to pass