by the same causes. And, in general, we may observe that the dearness of everything from plenty of money is a disadvantage which attends an established commerce, and sets bounds to it in every country by enabling the poorer states to undersell the richer in all foreign markets.’

It is certain that the period has arrived with us when our pre-eminence in manufactures is threatened by the successful competition of other countries.

55

A REVIEW OF MR. MILL'S FUNDAMENTAL
PROPOSITIONS RESPECTING CAPITAL.

6

MR. MILL is generally regarded as the great apostle of the modern doctrines of political economy, and his work is almost universally accepted as the text-book upon the various subjects which collectively form what is known as this science. He tells us that besides the primary and universal requisites of production-labour and natural agents-there is another requisite, without which no productive operations beyond the rude and scanty beginnings of primitive industry are possible, namely, a stock previously accumulated of the products of former labour. This accumulated stock of the produce of former labour is termed "capital."'

Now, for intelligent appreciation of the facts of economical science, it is necessary for students attentively to consider what are stated by Mr. Mill as fundamental propositions respecting capital, the full comprehension of which, as he says, is already a considerable step out of darkness into light.

I believe, on careful examination, many persons will,

like myself, be surprised to see how exceedingly erroneous most of them are.

The first of these propositions he states to be That industry is limited by capital.' The phrase may be objected to for want of precision, as it is susceptible of the construction that capital is antagonistic to industry; but this is clearly not what Mr. Mill intends. He obviously means that without capital there can be no exercise of industry; and he calls it an axiom which until lately was almost universally disregarded by legislators and political writers.

This so-called axiom scarcely appears to have foundation in fact. Industry is only limited by the means of life. If population is starved to death, industry will effectually be limited, but not otherwise. While there is life there may be also industry; otherwise we must suppose that there never could have been any product of industry without pre-existent capital; and as Mr. Mill himself has defined capital to be the accumulated stock of the produce of former labour, we find ourselves involved in a contradiction. Moreover, if the axiom were true, no increase of capital could ever be obtained, supposing it to be pre-existent in certain quantity. That quantity would be necessary for the support of a limited extent of industry, and would maintain no more; and the industry, being so limited and dependent on the pre-existent capital, could not increase the quantity of capital. If it is capable of doing so, then it is obvious that capital proceeds from industry and that no limitation of industry is caused by

capital, which itself is only an effect of industry as a cause. Mr. Mill, in fact, puts the cart before the horse in his first fundamental proposition. He goes on to say, in his explanation of it, that the only productive powers are those of labour and natural agents-that there can be no more industry than is supplied with materials to work up and food to eat that, self-evident as the thing is, it is often forgotten that the people of a country are maintained and have their wants supplied, not by the produce of present labour, but of past—and that, of what has been produced, a part only is allotted to the support of productive labour, and that there will not and cannot be more of that labour than the portion so allotted (which is the capital of the country) can feed and provide with the materials and instruments of production. From these and his subsequent observations it is obvious that he is not alive to the contradictions in which he is involved.

It is true that there can be no more industry than is supplied with materials and food to eat; but he overlooks the fact that all materials are the products of the earth in some form or other, always existing without reference to labour; and that there should be food enough in existence for immediate consumption is an essential condition of any human life at all; no initiatory stage of human transactions is conceivable in which the race as a whole, or any part of it, was without food to support life, even in the shape of wild fowl or animals, or the natural vegetable products of the earth. There was, therefore, no time when the

materials and food to eat were not present to support industry; but these, or at least these in this shape, are not what Mr. Mill or any one else means by capital; and it is plain that so far from industry being limited by capital, the industry must precede and produce the capital in any case where it is accumulated. When Mr. Mill, in the next place, says that it is forgotten that the people of a country are maintained, not by the produce of present labour, but of past, he drops out of sight the fact that this is only true to a very limited extent. If the continuous artificial production of food necessary in present states of society were interrupted for a very short time, we should know that the product of past labour is sufficient only for our support for a very limited period. We should find that whatever else may constitute wealth or productive labour in the eyes of the economists, food is the primary necessity of life, which is not and cannot be accumulated for long, nor in large quantity, and never really can form any great portion of the savings known as capital. Yet without the food capital would be valueless. In fact we know that no one practically accounts food as among his savings. Whoever possesses more food than he needs for the consumption of his own household for such a time as it will probably remain undecayed, is only too glad to part with the surplus to others in exchange for some less perishable property; and I suppose that it will be no exaggeration to assume that at no one time is there much more food in actual existence than would support mankind for