THE CHIEF LAWS OF POLITICAL

ECONOMY.

The name of Political Economy has been given to the science which treats of wealth, in the same careful and systematic manner as arithmetic and algebra treat of number, geometry of extension, chemistry of the elementary substances, or physiology of the functions of living bodies. Political Economy may be defined as the science which treats of the laws of the production and distribution of wealth; in other words, it is the science which investigates the conditions according to which wealth is produced by human labor from surrounding objects, and is then shared among the classes in society who own the requisites of production. To this science belongs the consideration of the various questions relating to wealth. It is the province of political economy to consider the manifold influences which affect the wealth of nations, classes, or individuals; the causes of riches and poverty; the causes which promote or impede the production of wealth, and influence its distribution; which determine the value and price of commodities, making one commodity cheap and another dear, &c.

The laws of the production of wealth naturally consist of the laws or properties of human beings by whom it is produced, and those of material objects from which it is produced. The production and the increase of wealth depend on the efforts to attain it, and its attainability; on the amount and efficiency of labor and capital on the one hand, and the powers of the soil, &c., on the other. The laws of the distribution of wealth, again, (in a country where, as in our own, the requisites of production are owned by three separate classes, namely, the laborers, the capitalists, and the landlords), consist of the laws of wages, of profits, and of rent: wages signifying the remuneration of labor, profits the remuneration of capital, and rent the remuneration of land. Besides these laws of the production and distribution of wealth, the science treats also the laws of its exchange; that is, of the laws which determine how much of one article of wealth will be given for another, and which include the laws of value and price.

In order to understand the above definition of political economy, it is necessary to have a clear idea of what is meant by wealth.

Wealth is defined by political economists as consisting of all those objects which possess an exchange value; that is, all objects which cannot be obtained gratuitously, and for which anything useful or agreeable would be given in exchange. The word "value as used in political economy, means exchange value, or purchasing power, and not mere usefulness. The air we breathe has a high value in use, but it has no value in exchange. It is not therefore included among the objects of wealth, of which the science treats, and which consist solely of those articles (for instance, corn, clothes, money, diamonds, land, &c.) which have an exchange value or power of purchasing.

With these preliminary remarks on the nature and objects of political economy, I shall proceed to give, in the first place, a brief outline of the laws of production, as they are treated by Mr. Mill in the first book of his great work. I shall then examine the three laws of distribution, and consider in what way the condition of the laborers, capitalists, and landlords, is respectively affected by the population principle, through the medium of these laws. Lastly, I shall consider the three laws of value and price, and the effect produced by the population principle, through their instrumentality, on the value and price of the two great classes of commodities, namely, raw produce, whether agricultural or mineral, and manufactured articles. This, as shown by Mr. Mill, is the natural order in which the subjects of production, distribution, and exchange, should be considered; for it is evident that wealth must be produced before it is distributed among the producers, and distributed before it is exchanged.

PRODUCTION

The requisites of production are two; namely, labor, and the appropriate material objects.

Labor in the outward world is always employed in setting things in motion. The only mode in which man can act upon matter is by moving it; the properties of matter, or in other words, the powers of nature, perform the rest. The weaver, for example, moves his thread across the loom, and the cloth which is thus formed, is held together by the tenacity of its fibres; the sower moves the seed into the earth, but the development and growth of the plant are entirely the result of the natural forces. Human labor may be economised by using other motive powers, such as those of the steam-engine, or of the beasts of burden.

With regard to the material objects on which labor is exercised, it is to be remarked, as a distinction of primary importance, that some of them are limited in quantity, while others are, practically speaking, unlimited. The land, for example, in all old countries, is strictly limited in quantity; while the supply of water in some localities, and of atmospheric air over the whole globe, is practically unlimited. Now as long as any natural agent exists in unlimited abundance, it cannot, unless susceptible of an artificial monopoly, bear any value

in the market; but as soon as the supply of it is less than would be used, if it could be had gratuitously, it acquires an exchange value, and a rent can be obtained for its use.

Labor is either employed directly upon the object intended to be produced, as for example, the labor of the baker or the tailor; or indirectly, in previous operations destined to facilitate its production. With the exception of the labor of the hunter and fisher, there are few kinds of labor to which the returns are immediate.

One very important part of the past labor which is necessary to enable present labor to be carried on, is employed in preparing food for the laborers engaged in production. The remaining kinds of preparatory or indirect labor may be classified under the following five heads. Firstly, the labor of those workmen who produce materials, as for instance the miner and the flax-grower. Secondly, of those who make the tools, implements, and machinery. Thirdly, of those who protect industry, such as policemen, soldiers, shepherds, and also the workmen who erect buildings for industrial purposes. Fourthly, of those who help to render the produce accessible; to which class belong carriers, railway laborers, &c., and also the large and important body of tradesmen or dealers. The latter are often termed the distributing class, and are supplementary to the class of producers. They perform a valuable office in the economy of society, as there would be a great loss of time and convenience if the consumers had to deal directly with the producers. When production has increased beyond a certain point, a division of the distributing class into wholesale and retail dealers is found convenient; the former buying from the manufactories and supplying many retail shops.

The above are the modes in which labor, when employed on external nature, is indirectly subservient to production. All of them, with one exception, receive their remuneration from the commodity which is ultimately produced; although this remuneration is usually paid in advance by the capitalists. The single exception is in the case of that labor which is employed in producing food for the productive workmen; as this labor is remunerated from the food itself, or from the money which it brings.

Fifthly; the last kind of indirect or preparatory labor is that which is expended on human beings, in the technical or industrial training of the community. This labor also has to receive its remuneration from the future produce. Many other kinds of mental labor, as for instance that of the surgeon, the mechanical inventor, and even the speculativo thinker, are often indirectly of service to production.

There is much and very valuable labor, which has not for its object the production of wealth. Labor is therefore divided by economists into productive and unproductive-a distinction which does not imply any invidious comparisons between these two kinds of labor, as has often been erroneously supposed, but which has been adopted merely with a view to accurate classification.

Unproductive labor, in the language of political economy, is that which, however important and valuable it may be, does not aid in the

production of material wealth, the special subject of the science; but I which consists in a service rendered, or an immediate pleasure afforded. The labor, for example, of the judge, the poet, the actor, a the musician, is unproductive. Productive labor on the contrary i that which adds to the material resources of a country; including of course not only the labor of the workmen themselves, but also of those who direct their operations.

The consumption of wealth is in like manner divided into productive and unproductive. Although all the members of society are not la borers, yet all are consumers, and consume either productively or unproductively. The only productive consumers are the productive laborers; whilst all those who contribute nothing, either directly or indirectly, to production, are unproductive consumers. It should be observed, moreover, in order to have a full view of the subject, thats part of the consumption even of the laborers themselves, namely, what they consume on luxuries, is unproductive. From this it will be seen that there is a distinction even more important to the wealth of a community than that between productive and unproductive labor; the distinction, namely, between the labor which is destined for the supply of production, and that which is occupied in supplying the wants of unproductive consumers.

"It would be a great error," says Mr. Mill, "to regret the large proportion of the annual produce, which, in an opulent country, goes to supply unproductive consumption. It would be to lament that the country has so much to spare from its necessities, for its pleasures, and for all higher uses. The things to be regretted and to be remedied are-the prodigious inequality with which this surplus is distributed, the little worth of the objects to which the greater part of it is devoted, and the large share which falls to the lot of those who render no equivalent service in return."

Capital, which we next proceed to consider, is that part of the produce of industry which is engaged in carrying on fresh production. It is of great importance to understand thoroughly the function which capital performs in production, as there are many serious errors currently entertained on this point.

Capital must not be confounded with money. It is no more synony mous with money than wealth is. It consists of the tools, materials, industrial buildings, machinery, wages, &c., with which laborers are supplied to enable them to carry on fresh production. It is that portion of the produce of past labor which is employed in the support of present labor. The whole income of a capitalist is not capital, since a part of it is consumed unproductively by himself and his family; but that part alone is capital which he devotes to productive purposes. The sum of all the values so destined by their respective possessors forms the capital of a country.

All laborers are subsisted on capital, and without this essential pre-requisite no work could be carried on. The capital, however, need not be furnished by a capitalist, but the laborers may live upon their own funds, as in the case of the independent artizan, the peasant

oprietor, or the members of a co-operative association. The folwing four fundamental propositions respecting capital, may help to nvey a clear conception of its functions as an instrument of pro

ction:

1st. Industry is limited by capital.-This proposition is so obviously ae, that it must be admitted as soon as it is distinctly understood. mere cannot possibly be more laborers in a country than are supplied th materials to work upon and food to eat. And yet opinions inmpatible with this have been, and still are, very frequently adnced by political writers, especially on the continent. These -iters believe that it is in the power of government, by protective vs, to create additional industry without creating capital. But ough protective laws may create a new kind of industry, it is only withdrawing capital from an old one.

Government, however, has the power, to a certain extent, of creating pital. This it can do by levying taxes, and using them either in oduction or in paying off debt. Taxes are generally paid, not out what people would have saved and used as capital, but out of what ey would have spent.

Every increase of capital can give increased employment to labor, d this without any assignable limits. If materials and food can be pplied, laborers may always be employed in producing something. is is in direct opposition to a belief which is very commonly prevat, and which was entertained even by some celebrated writers, as, instance, Mr. Malthus and M. de Sismondi; the belief, namely, at there may be a general over-production of wealth, and that the unoductive expenditure of the rich is necessary to the employment of e poor. This view, however, can readily be shown to be erroneous. hatever part of their incomes the rich do not spend unproductively, ey merely transfer in the shape of additional wages to the produce laborers. The latter may either increase their consumption, in ich case the capital will be turned to the production of luxuries them; or they may increase their numbers, in which case the pital will be employed in producing additional necessaries. It is ver, therefore, from a want of consumers that production is limited, t solely from want of producers, or of capital to support them. 2nd. All capital is the result of saving. It is the part of the produce ich is not expended in immediate indulgence, but is set aside for purposes of production. The immense capital of a country like gland, has been gradually accumulated by successive generations of pitalists, constantly making larger aud larger additions to their vings.

3rd. Although saved, and the result of saving, all capital is neverthes consumed.-The word "saved" implies only that it is not consumed the person who saves it. The capital which is saved by its owner, consumed by the productive laborers. Money or goods which are t employed at all, but are laid by for future use, are said to be arded.

This is a point on which there is an inveterate popular error. A