brought labourers under the most absolute bondage to the capitalist, and while a few reaped fortune, the majority reaped misery. The theory had but to be put in the form of general law to be exposed. If a nation sold without buying-or, rather, wished to sell without buying-it would require to force its neighbour to buy without selling; and thus on one side would be prosperity (as it was supposed), but at the expense of ruin on the other. But the blindness of self-interest prevented the detection of this great error, and led to the glorification of money as that which provided for and commanded labour. La richesse, c'est l'argent. Truly the love of money was here the root of all evil. Nor let us think that we ourselves have completely escaped from the fetters of this theory; it is to be found at the root of every objection to free trade.

The excesses and the mistakes of Law, his credit system and his stock-jobbing, acted on France like a storm, sweeping away many abuses, yet leaving disaster behind it. Law, having lived to see the prospects of his system brighten and then become obscured, left the field of reform to Quesnay.

The manufactories established by Colbert were empty; the country was on the verge of bankruptcy. Where was help to be looked for? Sully's dictum revived itself in the minds of many Labourage et pâturage sont les mamelles de l'état. This was the natural cry of reaction; landed property alone had withstood the storm; from it must be expected reparation of France's losses. Here was a sudden transition! But lately men had imagined that gold, and even paper, meant wealth, that full coffers commanded the world; now they saw that the simple multiplication of credit notes was too easy a way of acquiring wealth to be true; not gold,

therefore, or money in any shape, but the soil, produced wealth. This, they thought, was once more gaining terra firma. Ex nihilo nihil fit; dust we are, we and our wealth. Like Brutus, let us kiss our mother earth, and the throne of commerce will be ours.

The system of Quesnay and his followers had the merit of being formulated with precision. It had therefore a second merit-that it was easily apprehended by the common mind. When economists of modern days talk of values and average profits and wages-funds, they are by many supposed to deal with refinements of theory that need not trouble practical men. But to say that the earth furnishes us with all we enjoy, and that only what we receive from it we can call our own, was to say what bears on the face of it an amount of truth appreciable by the simplest understanding. No need of more theorising; we are nearest nature, and therefore nearest order, when cultivating the soil. For observe with what liberal hand nature gives us, not merely bare sustenance, but wealth. The man who bestows a very moderate amount of cultivation upon the soil obtains more than suffices for aliment during his labour; he receives a superabundance or excess, that may be saved for future use. This surplus is the produit net.

But where else is there to be found the same exuberance of reproduction? Manufacturers, agents, shopkeepers-do they by any miracle increase the bread put into their hands by the farmer? Agriculture alone is the creator of goods; all men employed in anything else are not adding to the capital of the world, but merely obtain what suffices for their subsistence during employment. Accordingly, whether agents and the like be few or many, they do not

leave the world the richer for their work.

Here was the first great error. The second was a necessary consequence. Those who do not cultivate the soil do not contribute to the national wealth; but taxes must have their source in the surplus income of the nation; therefore taxes must be levied on the agricultural section of the community alone-must be drawn from the produit net. Thus agriculture fills the state purse. "Pauvres paysans, pauvre royaume; pauvre royaume, pauvre roi. The Sovereign and the nation must never forget that the soil is the only source of riches, and that it is agriculture that increases them. For the augmentation of riches insures that of the population; while men and riches cause agriculture to flourish, extend commerce, revive industry, and once more increase and perpetuate

wealth."

This one-sided view of society was only to be expected. Those disposed to smile at it have only to observe the tendency existing until quite lately among modern economists to bestow exclusive study on production at the expense of consumption. Nor was the extravagance of the system without good fruit. It was partly the result, and assuredly the punishment, of corrupt corporations, customhouses, and guilds. A good market for the produce of the soil was as necessary as good soil itself, all barriers to the freedom of trade were to be struck at: laissez faire, laissez passer. Free trade mu t count the French economists, with a stray Italian or two, for its fathers.

Quesnay and his friends sat in their studies and theorised; Turgot put their doctrines into action. "I will dare to say "-thus he addresses the King when appointed

minister-"I will dare to say that in ten years the nation will not be recognisable." Such was his faith in the freedom of commerce and territorial taxation. How well he fought for his opinions, how these opinions were misunderstood, how he triumphed, and how he failed, is known very well. One thing is certain, that the doctrines of the Economistes in his hands received as fair a trial as the times would have allowed.

In our own country also the way had been partially prepared for Adam Smith's system. In the earlier part of the eighteenth century two men were winning the name of great philosophersButler and Hutcheson. These, more especially the latter, gave to ethics a practical application which had been, perhaps, too strange to systems immediately preceding; and moral philosophy, during their time, and for a considerable space after, comprehended not only an investigation of duties and capacities, moral law, and the relation of man to God; but the theory of government, of trade, education, and the like; in a word, ethics became equivalent to the "politics" of Plato or Aristotle. Locke had long before thrown out some useful hints, suggestive rather than sound, upon political science, and leaves mention of some good books on the subject, as Hooker's "Ecclesiastical Polity," Algernon Sydney's "Discourses concerning Government," Paxton's "Civil Polity," Puffendorff's "De Officio Hominis et Civis" and "De Jure Naturali et Gentium." In his "Thoughts concerning Reading and Study" he recommends for perusal, with the honest confidence of an Englishman, his own two "Treatises of Government." One can go far enough back, and yet find works in which lay germs of our modern systems. Some of these germs never

took root in the minds of reformers; others did. It is likely that, in the writings of Henry More and Sir Thomas More, Smith found hints sufficient to set him thinking to purpose. Mun, too, in his "Increase of Foreign Trade" and other works, dispelled some popular errors regarding the precious metals considered as wealth. Petty discussed political economy in a way that drew upon him the attention of many; and Sir Joshua Child, albeit a man groping out of the darkness, threw out some valuable hints on trade, on population, money, and monopolies. Sir Dudley North's "Discourse (1691) was aimed at the jealousies of nationality and was really a prelude to free trade.

But Hutcheson's was the influence that most powerfully

directed the current of Smith's

speculations. Property, labour, and such topics were soundly dealt with in the lectures delivered at Dublin, and afterwards at Glasgow. In these lectures, above all, were some remarks on Value, which could not have failed to stimulate their author's successor in the moral philosophy chair to inquiry. Such sentences as the following have plainly an echo in the "Wealth of Nations": "The natural ground of all value or price is some sort of use which goods afford in life; this is prerequisite to all estimation.' "Prices of goods depend on these two jointly the demand

:

on

account of some use or other which many desire, and the difficulty of acquiring or cultivating for human use. When goods are equal in these respects, men are willing to interchange them with each other; nor can any artifice or policy make the value of goods depend on anything else. When there is no demand, there is no price, were the difficulty of

acquiring never so great; and were there no difficulty or labour requisite to acquire, the most universal demand will not cause a price. Where the demand for two sorts of goods is equal, the prices are as the difficulty; where the difficulty is equal, the prices are as the demand." So upon coinage, interest, and other subjects, there are many observations well worthy quotation here, were space available. It only remains to refer to Hume's essays as the source of some enlightenment to our author. The essays of Hume on Commerce, Money, Interest, Balance of Trade, Taxes, and Public Credit are as shrewd as we should naturally expect. In that on Commerce, the Economistes were already struck at, perhaps unconsciously. Thus, among first of its sentences is, "The bulk of every State may be divided into husbandmen and manufacturers ;" and in the sequel he makes them alike producers. Another suggestive sentence is this, "Every thing in the world is purchased by labour, and our passions are only causes of labour." Again he says: "Foreign trade increases the stock of labour in the nation.... by its imports, it furnishes materials for new manufactures; and by its exports, it produces labour in particular commodities which could not be consumed at home. In short, a kingdom that has a large import and export must abound more with labour, and that upon delicacies and luxuries, than a kingdom which rests contented with its native commodities." Here is the finger pointing to free trade. Once more: "We lost the French market for our woollen manufactures, and transferred the com

merce of wine to Spain and Portugal, where we buy much worse liquor at a higher price (thanks to the Methven Treaty).

"There are few Englishmen who would not think their country absolutely ruined were French wines sold in England so cheap, and in such abundance, as to supplant, in some measure, all ale and home-brewed liquors; but, would we lay aside prejudice, it would not be difficult to prove that nothing could be more innocent, perhaps advantageous. Each new acre of vineyard planted in France, in order to supply England with wine, would make it requisite for the French to take the product of an English acre, sown in wheat or barley, in order to subsist themselves and 'tis evident we have thereby got command of the better commodity." Such extracts show an exactitude of notions in regard to economical matters which would not by some be thought likely to exist prior to the birth of the "Wealth of Nations."

The political economy of Adam Smith has been to other systems what the Scottish philosophy of common sense was to other philosophies. Very properly Buckle has remarked that the "Wealth of Nations should be taken as a part only of Smith's system of philosophy. In the theory of "Moral Sentiments," man's sympathy is examined; in the "Wealth of Nations," his selfishness. Political economy formed part of a course of lectures delivered in Glasgow by Smith, which comprised natural theology, ethics, and the philosophy of law.

It should further be borne in mind that in Adam Smith's time there were before the public two theories of society widely differing from each other-the one ideal, à priori, natural, deductive; the other (that of Montesquieu) inductive, investigating history, contenting itself with the real, as contrasted with the ideal. Adam

Smith's method is such an odd mixture of both of these that Buckle is almost justified in saying that "The Wealth of Nations' is entirely deductive," while we should also be justified in calling it inductive. In the principle of which the keynote is struck in the famous sentence about "truck, barter, and exchange," selfishness (not necessarily in a bad sense) is laid down as the basis of economies. On the other hand all that is valuable in the book is not this vein of à priori reasoning, but the constant appeal to facts, the suggestive gleanings from history, the illustrations drawn from everyday trade and commerce. It is interesting to see how this combination of methods reproduced itself in Malthus and Mill. Ricardo, indeed, adopted the deductive method entirely, discarding induction either for premises or for verification of the conclusion of his argument; but Malthus and Mill, while their tendency was first to theorise deductively, always took pains to compare results with actual fact.

"The great and leading object of his speculations," says Stewart of his friend, "is to illustrate the provisions made by nature in the principles of the human mind, and in the circumstances of man's external situation, for a gradual and progressive augmentation in the means of national wealth, and to demonstrate that the most effectual means of advancing a people to greatness is to maintain that order of things which nature has pointed out."

This theory of nature was old enough; it descended from Greek philosophy through Roman law, and taught that there is a code of nature which human nature has disturbed. Shortly before Smith's time, as in the speculations (philosophical and political) of the Economistes-in his time, as in the

writings of Rousseau-and after his time, as in the brilliant invective of Godwin, this theory was insisted upon with peculiar force. It never did any good, and even in Smith it worked mischief. No man ever had a feebler scent for the à priori than Smith. His "Theory evinces this; like the "Wealth of Nations" it abounds in entertaining disquisition, and presents varied accumulations of learning; but its pure philosophy is scarcely worth that name. So, when in the "Wealth of Nations we are told that, according to nature, the State has but three duties to attend to -the protection of the nation from foreign aggression, the administration of justice, and the maintenance of certain great institutions beyond the reach of private enterprise-we smile at Nature as at the vox humana of the Delphic Oracle.

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Sometimes Smith takes a higher stand, but one which contains quite as much assumption. In the Theory of Moral Sentiments" he says: "The rich consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life which would have been made had the earth been divided into equal portions among its inhabitants," &c.

The grand ally which Smith found for the nature hypothesis was Liberty. Labour and liberty are the two themes upon which Adam Smith has discoursed to us best. In the seventeenth century

this idea of civil and religious liberty was rapidly leavening society, perhaps too rapidly; its slower progress might have been surer. The eighteenth century, in its first half, developed this liberty as theoretically applied to trade and commerce; the Economistes never rested till the seeds of the Revolution were sown. But the Economistes were not practical enough; they preached eloquently about natural rights and divine order, but were apt to content themselves with unverified deductions, and begin vapouring with philosophico-political notions. Smith, too, had been fitting together a system of nature. When he went to France, he was surprised to find Quesnay and others so much in accord with him. But he also saw the weakness of their method, and the insufficiency of its end. All that they said of liberty he approved and adopted; but he went further, and, above all, he took care to verify every deduction by appeal to fact. The Economistes built a castle in the air; he put a solid foundation beneath it. And now there are few countries but have such a castle and such a foundation.

Thus it was the inductive method of Montesquieu which most of all helped Smith on to success and fame. He answered well enough (we must remember that the answer is ultimately one of philosophy) the question, "What is the prime origin of opulence?" but he answered better the other question, "What is the actual history of opulence? history of opulence?" His faculty for accumulating and selecting facts bearing on his subject was wonderful. Any man ordinarily informed on economics at the present day understands it with greater theoretical accuracy than did Smith himself; but none could,