as a complete treatise, and it requires immense development. But it lays down the broad general outlines of true Economics. Smith's work and Condillac's were published in the same year. Smith's obtained universal celebrity in a very short time. Condillac's was as far as we can find out, quite neglected. Nevertheless, the whirligig of time is now bringing about its revenges; for all the best European and American Economists are now gravitating to the opinion that Condillac's is the true conception of Economics. The beautiful clearness and simplicity, the instinct of the true physicist are visible throughout; at length he will receive justice, and after the neglect of 95 years he will emerge as the true founder of modern Economics.

49. The next writer whom we know of to have adopted this conception of Economics is Archbishop Whately, when Professor of Political Economy at Oxford. In his lectures delivered in 1831, he says p. 3.-" A. Smith has designated his work a treatise on the 'Wealth of Nations;' but this supplies a name only for the subject-matter, not for the science itself. The name I should have preferred as the most descriptive, and, on the whole, least objectionable is that of CATALLACTICS, or the "Science of Exchanges."

"Man might be defined, 'An animal that makes Exchanges'; no other even of those animals which in other points make the nearest approach to rationality, having, to all appearance, the least notion of bartering, or in any way exchanging one thing for another. And it is in this point of view alone that Man is contemplated by Political Economy. This view does not essentially differ from that of A. Smith; since in this science the term Wealth is limited to Exchangeable commodities and it treats of them so far forth only as they are, or are designed to be, the subject of exchange. But for this reason it is perhaps the more convenient to describe Political Economy as the science of Exchanges, rather than as the science of national Wealth. For the things themselves of which the science treats, are immediately removed from its province, if we remove the possibility, or the intention, of making them the subject of exchange: and this, though they may conduce in the highest degree to happiness, which is the ultimate object for the sake of which wealth is sought. A man, for instance, in a desert island, like

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§ 48-50]

BASTIAT.

Alex. Selkirk, or the personage his adventures are supposed to
have suggested, Robinson Crusoe, is in a situation of which
Political Economy takes no cognizance: though he might figur-
atively be called rich, if abundantly provided with food, raiment,
and various comforts: and though he might have many com-
modities at hand, which would become exchangeable, and would
constitute him strictly speaking rich, as soon as fresh settlers
should arrive."

"In like manner a musical talent, which is wealth to a pro-
fessional performer who makes the exercise of it a subject of
exchange, is not so to one of superior rank who could not with-
out degradation so employ it. It is in this last case, therefore,

though a source of enjoyment, out of the province of Political Sozial,

Economy."

This is enough to shew Whately's general conception of the science; we shall have to cite him on several occasions in future, to shew how clearly he saw the fundamental fallacy of the Ricardian system of Economics. His lectures, however, fell like the good seed on barren ground in England; and Ricardo's system gained a temporary popularity by being adopted and expanded by Mr. J. S. Mill.

50. The next most illustrious propagator of this system was
FREDERIC BASTIAT, who revived and popularized the doctrines
of Condillac in France. We regret that we cannot in this place
give an account of the most popular writings of this brilliant
genius, because they are destructive, they were written to com-
bat Protection and Socialism with which kindred errors France
was entirely imbued. But we have given an account of them
in our Dictionary of Political Economy. All that we can state
here is that Bastiat held Political Economy to be the Science of
Exchanges. He says
He says "Exchange is Political Economy."1—
"The causes, the effects, the laws of these Exchanges constitute
Political Economy." And speaking of persons rendering each
other services, he says-" There true Political Economy begins,
because it is there we see the first appearance of VALUE."

Bastiat also places the source of value in the mind, as fully
shewn in the chapter on Value.

Harmonies Economiques. Exchange, p. 83,

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Statement of the Argument in Favour of the third School of Economists.

51. Having thus given an historical account of the progress of ideas as to the nature and limits of Economic Science, we may state the argument in favour of the superiority of the views held by the third school of Economists.

Ever since certain enlightened and far-seeing men discerned that there is a definite body of science to which they gave the name of Political Economy, or Economics, they have said that it is a Physical Science, and that its investigations are to be pursued in a manner analogous to those of the other Physical Sciences. If then this be admitted, it follows that it must be constructed in a manner somewhat similar to the various Physical Sciences, which have already been reared up, and serve as models for the construction of new sciences.

Now the general fundamental conditions of a Physical Science are these: That it is some great body of phenomena all based upon some single conception, or quality of the most general nature. The purpose of the science is to discover the laws of these phenomena. Furthermore, every science must be based upon certain conceptions which must be perfectly general, and upon certain great principles which must also be perfectly general.

If, then, Political Economy, or Economics, is a Physical Science, as asserted, it must be some large body of phenomena, all based upon some single conception, whatever that may be; and if it is to be a science of the same generality as the other physical sciences, it must be based upon conceptions and axioms. of the same wideness and generality as those of physical science. The question therefore is-What is that body of phenomena, all based upon a single idea, to which the name of Economic Science may be applied? And furthermore, if there should be a certain agreement among Economists as to its general nature -what is the best conception of it-that which most clearly and distinctly marks out its nature and limits, and its separation from other sciences, and that, in fact, which is most in accordance with, and shows its relation to, the great body of Physical Science?

Economists are now agreed that the science treats ex

clusively of Wealth; though they are very far from being agreed as to what Wealth is, or as to what the science of Wealth is. But there are two definitions of the science, each of which has numerous and distinguished adherents; and we have now to consider these two definitions, and to state the reasons which shew that one of them is superior to the other, and that the preference ought to be given to it, as most clearly marking out the character of the science, and its separation from other sciences, and also as shewing most distinctly how it may be brought under the general dominion of the acknowledged laws of Physical Science.

The two definitions of the science which may be said to divide Economists are these:

1st. It is the Science which treats of the Production, Distribution, and Consumption of Wealth,

2nd. It is the Science of Exchanges, or of Value. Now with respect to the first of these definitions we observe that there are four words in it which are wholly unexplained: Production, Distribution, Consumption, Wealth.

Mr. Mill says that every one has a sufficiently distinct notion of what Wealth is. But that is very far from being the case. When we search for a definition of Wealth in the writings of Economists, we find that there is none, and that scarcely two Economists agree as to what Wealth is. So far is it from being clear what wealth is, that it requires a long investigation to trace the differences of ideas on the subject, and to determine what is its true extent.

All persons, however, would agree that corn, and clothes, and furniture, and manufactures, and so on are wealth. The production of corn, and clothes, and furniture, and manufactures is the production of wealth. Therefore when it is said that Political Economy treats of the production of wealth, it would probably strike a person who had not very much considered the question that it related to the production of corn, of clothes, furniture, manufactures, and so on. Therefore it might seem that it is the duty of Political Economy to treat of the business of farming, manufacturing, and so on: and that to learn Political Economy is to learn the whole business of farming, manufacturing, and so on. But every Economist would at once say that it is not so. He would say that Economic Science

has nothing whatever to do with the art and process of farming, or with the arts and processes of manufactures, but only with the price or value of the corn, manufactures, and so on, when produced. Every Economist would at once say that his science has nothing to do with the arts and processes by which things are obtained, but only with the cause of their value, and the changes of their value when produced.

Hence we see that the word Production in Economics must bear some very technical meaning, which is by no means apparent at first, and that is a good and sufficient reason why it should not be made part of the definition of the science.

Again, every lawyer and every merchant knows that a debt is a certain species of property. But it would startle many persons who have not received a legal or commercial education to be told that a debt is Wealth. It is certain that the quantity of debts in circulation amounts to many hundreds, if not thousands of millions of money in value, yet it would startle many persons to tell them that these debts are so much wealth, as much as an equal amount of gold and silver; and yet every lawyer, every merchant, and every Economist knows that they may be made of exactly the same value as money, and perform all the functions of money. A merchant creates a debt by accepting a Bill of Exchange, and a banker creates a debt by issuing a bank-note; it would startle many persons to be told that they were thereby creating wealth!

The business and mechanism of banking is manifestly one of the most important branches of Political Economy. Now banking exclusively consists in buying money and debts, by creating other debts; and it is by no means easy to perceive at once how buying debts by creating other debts comes under the idea of the definition of the Production, Distribution, and Consumption of Wealth.

This is one example of the perplexities and embarrassments that spring up when we consider the words Production of Wealth.

Similar difficulties attend the word Consumption, which by recent Economists is used to mean destruction. Now Economic Science has nothing to do with the way in which a purchaser destroys an article, or whether he destroys it at all, but only with the price he pays for it. Hence, as in the case of