produced destroyed? Are all things produced for the purpose of being destroyed? And is a loss incurred if they are not destroyed as soon as produced?

A young man purchases a gold ring, enriched with diamonds and rubies, for his lady-love. The jeweller is the producer, and the young man is the consumer. Does he buy the ring for the purpose of destroying it? Is there any necessity for its ever being destroyed? It may last to the end of time. Is a loss incurred if it

is not destroyed as soon as it is bought?

Men search for precious stones, diamonds, emeralds, rubies, etc., in the mines. They offer them for sale; they are the Producers. Other persons purchase them, i.e. consume them. Are the diamonds, emeralds, and rubies, destroyed as soon as they are purchased? Were they sought for for the purpose of being destroyed? And is a loss incurred if they are not destroyed?

And innumerable other examples will occur to any reader.

Say himself gives an example, showing the absurdity of his own doctrine: "The English succeed in making very fine glass for mirrors, and could supply them at a very moderate price, if the enormous duties laid on the manufacture of glass in England did not raise the product to a price which many consumers (consommateurs) cannot afford." "The consumers (consommateurs) of products are their buyers."

Now, did the consumers of the mirrors, i.e. their purchasers, smash them? Did they buy them for the purpose of smashing them? And was loss incurred if they were not smashed as soon as they were bought?

It is such fatuous doctrines as these which led a good many persons to say with only too much truth, that Economics is only

a mass of clotted nonsense.

The fact is that Production and Consumption mean simply Supply and Demand, and together constitute Exchange or Com

merce.

By breaking up Economics into three separate departments under the terms Production, Distribution, and Consumption, Say has completely ruined Economics as the Science of Commerce or Exchanges, and broken the back of the Theory of Value. How is it possible to discuss the Theory of Value under the expression, Production, Distribution, and Consumption of Wealth?

Say perfectly acknowledges that Labour is an Economic Quantity, and is bought and sold, and, like Adam Smith, has many interesting discussions on Wages or the price of Labour. Labour is bought

and sold, and its value is determined by the general Law of Value. But what sense is there in speaking of the Production, Distribution, and Consumption of Labour?

Again. Say acknowledges that Rights of Action, Credits and Debts, and the Funds, are Wealth. They are bought and sold or exchanged. He also acknowledges that a vast variety of other abstract Rights are Wealth. But how is it possible to speak of the Production, Distribution, and Consumption, of Bank Notes, Bills of Exchange, and the Funds? The copyright of a book or a drama or a song is a saleable commodity. It may be bought and sold. But how are we to speak of the Production, Distribution, and Consumption of Copyrights?

Say acknowledges that the practice of a professional man and the custom of a shop are saleable commodities, and may be bought and sold. But how are we to speak of the Production, Distribution, and Consumption of the practice of a profession or the custom of a shop? And so on of a vast variety of other rights.

The fact is that Say quite overlooked the fact that when the Economists devised the term, the Production, Distribution, and Consumption of Wealth, they expressly restricted it to material products, and so defined the terms as to mean the commerce or exchanges of the material products of the earth, and of these only.

But when Labour and Rights are introduced into Economics, it becomes simply unintelligible jargon. With such a concept it is impossible to give an exposition of the principles and mechanism of the great system of Mercantile Credit, the colossal business of Banking, and the Foreign Exchanges, which all come naturally under the concept of Economics as the sciences of commerce or exchanges, because all these operations are commerce or exchanges, and come under the Theory of Value.

One of the subjects on which Say's doctrine is the most notorious is his confusion on credit. He begins by recognizing that Rights of Action, Credits or Debts, are Wealth, and in a multitude of places he speaks of them as being capable of being employed as Capital, as well as any other commodities; and he says that if a Bank can keep in circulation a greater amount of credit than the quantity of specie it holds in reserve, that is an augmentation of capital, and he inquires who gets the benefit of this new Capital. And yet this very same Say says elsewhere that to assert that Credit is Capital is to maintain that the same thing can be in two places at once! And multitudes of writers have repeated this silly sarcasm. Whence then is the origin of this flagrant contradiction? It is simply that in these two

places Say has contradictory notions of the fundamental concept of Credit. In one set of passages he treats Credit as the present right to a future payment, and then he allows that this may be bought and sold and employed as Capital. In the other passages he considers the Credit to be the goods "lent "-i.e. sold; and then he asks, How can the same goods be in two places at once, and serve two people at the same time?

We have fully exhibited Say's amazing confusion and self-contradictions under Credit.

There are, no doubt, multitudes of philosophical observations and acute remarks throughout the whole of Say's work, which deserve attention; but, as a whole, as a general treatise on the Science of Economics, it is a chaos of confusion and contradictions, and utterly impossible.

JOHN STUART MILL.

John Stuart Mill was the friend and disciple of Jean Baptiste Say, and having already published a small volume of Essays on some Unsettled Questions in Political Economy, published in 1848 his Principles of Political Economy, which was immediately received with unbounded applause as the ne plus ultra of Economics. One writer in the Edinburgh Review went so far as to style it a κτῆμα ἐς αἴει.

Now of all the persons who lavished such unbounded applause on this work there was not a single one who had the faintest knowledge of Mercantile Law, nor of practical business, nor of the method of applying the principles of Natural Philosophy to the phenomena of Economics.

Mill was a disciple of Say in so far as this, that he in agreement with Say deliberately rejected the fundamental concept of Economics as being the Science of Commerce, or Exchanges, or the Theory of Value.

He says,1 1 "The subject upon which we are now about to enter [Exchange] fills so important and conspicuous a position in Political Economy, that in the apprehension of some thinkers its boundaries confound themselves with those of the science itself. One eminent writer [Whately] has proposed as a name for Political Economy, "Catallactics," or the Science of Exchanges, by others [McCulloch] it has been called the Science of Values. If these denominations

1 Princ. of Pol. Econ. bk. iii. chap. i.

had appeared to me logically correct, I must have placed the discussion of the elementary laws of value at the commencement of our enquiry instead of postponing it to the third part; and the possibility of so long deferring it is alone a sufficient proof that this view of the nature of Political Economy is too confined. It is true that in the preceding Books we have not escaped the necessity of anticipating some small portion of the theory of Value, especially as to the Value of labour and land. It is nevertheless evident that of the two great departments of Political Economy, the production of wealth and its distribution, the consideration of Value has to do with the latter alone [the Economists unanimously declared that production and distribution constitute Exchange, or Value]; and with that only so far as competition, and not usage or custom, is the distributing agency."

Now let us ask what there is contrary to the laws of Logic in saying that the phenomena of Commerce, or Exchanges, form a distinct and positive science, all based on a single general fundamental concept, and as capable of being erected into a definite and positive science exactly in the same way as the phenomena of Force, Light, or Heat, or any other physical science? And what is there contrary to the laws of Logic in giving a distinct name to this science, such as Political Economy, Economics, Catallactics, or any other? This was the universal opinion before J. B. Say, and in ignoring this, Mill showed that he was ignorant of the history of Economics.

Mill says that he has not escaped the necessity of anticipating some small portion of the theory of Value before he comes to Exchange. But in the books preceding Exchange he discusses Wages, Profits, and Rent, and these are not a very small portion of the theory of Value, as Mill says, but a very large portion of it; indeed, some writers seem to consider that they constitute the whole theory of Value.

Mill then says-"In a state of society, however, in which the industrial system is entirely founded on purchase and sale, each individual for the most part living not on things in the production of which he himself bears a part, but of things obtained by a double exchange, a sale followed by a purchase-the question of Value is fundamental. Almost every speculation respecting the economical interests of society thus constituted implies some theory of Value; the smallest error on that subject infects with corresponding error all our other conclusions; and anything vague or misty in our conception of it creates confusion and uncertainty in everything else."

Here Mill has completely cut the ground from under his own feet, as he has done in almost every other case. Because the very purpose of Economics is to consider a state of society in which the industrial system is entirely founded on purchase and sale, in which each individual for the most part lives not on the things which he himself produces, but on things obtained by a double exchange, therefore by Mill's own showing Economics is nothing but the Theory of Value.

We have now shown enough to shake the confidence of any intelligent and impartial reader in the infallibility of Mill, because his own admission condemns the whole of his own system of Economics. But we have now to exhibit something more startling still if that be possible.

In Book I., chap. i., we have shown Mill's astounding self-contradiction as to the proper method of Investigation in Economics. We have shown that in eloquent passages in his Logic he maintains that Economics is an Inductive Science, and that the backward state of the Moral Sciences can only be remedied by applying to them the methods of Physical Science duly extended and generalised. That the only hope of reducing such studies into a science is by the employment of stricter rules of Induction than are commonly recognised, and consciously and deliberately applied to these more difficult inquiries. Brave and eloquent words indeed! And now we have to see how far Mill has followed the course marked out by himself.

In his Essays upon some unsettled questions of Political Economy, he strenuously maintains that Economics is an à priori science, that it reasons, and must necessarily reason, from assumptions and not from facts! That any Economist who denies this places himself in the wrong! That this is its character as understood and taught by all its most distinguished teachers! And that the à priori method is not only a legitimate mode of philosophical investigation in Economics, but it is the only one!

Now here Mill is in flat rebellion against his master Say, and in flat contradiction to himself.

An à priori science is a science which a man can concoct out of his own brains, or evolve out of his own inner consciousness, sitting at his desk without any reference to external nature, or to facts, as Mill himself says-such as Geometry, Trigonometry, Conic Sections, the Differential Calculus, or any other purely mathematical science.

Now, if a man were to set himself down at his desk and write a large volume on the Geology of Australia, or any other country,