"C ́ns mmateur: is he who destroys the value of a product, *r to produce another, or to satisfy his tastes or wants. "Consommation: Consommer: to consume (consommer) is to

the value of a thing, or a portion of its value, by destroying they which it had, or a portion of that utility.

"

"We cannot consume (consommer) that which cannot be destroyed.

we can consume the service of an industry, and not the stral faculty which has rendered this service: the service of -- but not the land itself.

"A value cannot be consumed twice: for to say that a thing nsumed is to say that it does not exist any more.

-Everything which is produced is consumed: therefore every crated is destroyed, and was only created to be destroyed." A he says: "The most immediate effect of every kind sumption (consommation) is the loss of value, and therefore of which follows for the possessor of the product consumed

This effect is constant, inevitable, and we must never t of it in reasoning on these matters. A product consumed m) is a value lost for all the world and for ever." And this meaning of consumption as destruction was adopted by Thus Malthus says, "Consumption, the destruction sor in part of any portions of Wealth," and "Consumption at purpose and end of all production.”

M Culloch says: "By consumption is meant the annihilation these qualities which render commodities useful, or desirable. sume the products of arts or industry is to deprive the of which they consist of utility, and consequently of the able value communicated to it by labour. Consumption t, the end and object of human exertion: and when a is in a fit state to be used, if its consumption be loss is incurred."

sentences are a flagrant example of the thoughtless way Economical writers dump down doctrines in their works the least reflection as to their consistency with facts and It is astonishing that men of ability should maintain such a trus paradox as that everything which is produced is d. that it is only produced for the purpose of being , and that if it is not destroyed a loss is incurred. nsumption is used in its proper sense it is true that in is the object of all Production. Because, as said **on. Production only means offering for sale, and things are for sale for the purpose of being sold. But are all things

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. It what sense is there in speaking of the Production, Distribution, Consumption of Labour?

Again. Say acknowledges that Rights of Action, Credits and its, and the Funds, are Wealth. They are bought and sold or hanged. He also acknowledges that a vast variety of other tract Rights are Wealth. But how is it possible to speak of the dustion, Distribution, and Consumption, of Bank Notes, Bills of Li hange, and the Funds? The copyright of a book or a drama r a song is a saleable commodity. It may be bought and sold.

how are we to speak of the Production, Distribution, and Consumption of Copyrights?

Say acknowledges that the practice of a professional man and the tom of a shop are saleable commodities, and may be bought and

But how are we to speak of the Production, Distribution, Consumption of the practice of a profession or the custom of asp? And so on of a vast variety of other rights.

The fact is that Say quite overlooked the fact that when the En mists devised the term, the Production, Distribution, and Consumption of Wealth, they expressly restricted it to material

རྒྱ་

ducts, 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 nes simply unintelligible jargon. With such a concept it is sible to give an exposition of the principles and mechanism the great system of Mercantile Credit, the colossal business of Banking, and the Foreign Exchanges, which all come naturally der the concept of Economics as the sciences of commerce or es tanges, 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 a. confusion on credit. He begins by recognizing that Rights A ton, Credits or Debts, are Wealth, and in a multitude of places 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 k-goin circulation a greater amount of credit than the quantity of

se it holds in reserve, that is an augmentation of capital, and he ites s who gets the benefit of this new Capital. And yet this very same Nav says elsewhere that to assert that Credit is Capital is to maintan that the same thing can be in two places at once! And multi12 at writers have repeated this silly sarcasm. Whence then is the Æ ̧n 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 possity of so long deferring it is alone a sufficient proof that this vw of the nature of Political Economy is too confined. It is true that in the preceding Books we have not escaped the necessity of antipating 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 dstrbuting agency."

Now let us ask what there is contrary to the laws of Logic in saving that the phenomena of Commerce, or Exchanges, form a Cstinct and positive science, all based on a single general funda

ntal concept, and as capable of being erected into a definite and pretive 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 sence, such as Political Economy, Economics, Catallactics, or any other? This was the universal opinion before J. B. Say, and in

ring this, Mill showed that he was ignorant of the history of Lamics.

M. says that he has not escaped the necessity of anticipating some small portion of the theory of Value before he comes to Exhange. 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; zded, some writers seem to consider that they constitute the we theory of Value.

M. then says "In a state of society, however, in which the ndustrial system is entirely founded on purchase and sale, each dvdual for the most part living not on things in the production

which he himself bears a part, but of things obtained by a & exchange, a sale followed by a purchase-the question of Vae is fundamental. Almost every speculation respecting the ernal interests of society thus constituted implies some theory Valse, the smallest error on that subject infects with corresponding err all our other conclusions; and anything vague or misty in our

on of it creates confusion and uncertainty in everything else."