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MODERN Political Economy may be said to begin with the introduction of taxation as a means of supporting the State, in place of personal service, aids in kind, and revenues from crown property; and taxation begins with the absolute monarchy that superseded the feudal system. Thus Political Economy begins with the growth of States in their modern form. It grows out of the discussions about the relation of the revenue to the monarch, who received it, and who was anxious to find out the best ways of increasing it. Hence its early connection with questions of coinage, currency and débasement. It is connected at this middle stage of its history rather with finance and political philosophy than, as at first and afterwards, with moral philosophy. At the end of the middle ages any alteration in the view of wealth taken by speculative thinkers shows itself rather in sumptuary laws than in measures traceable to the “ Mercantile Theory." Later, when there grew up a special branch of study roughly corresponding to our modern Political Economy, the said study was directed rather to the commercial relations between one nation and another than to the industrial order of one nation within itself, just as the study of natural law, so brilliantly revived by Grotius, was largely a study of international law.
As the notion of natural law, of all the notions of political philosophy, is perhaps the most important economically, we must look somewhat closely at the work of Grotius, and more cursorily at the work of his immediate predecessors in political philosophy—Machiavelli, Sir Thomas More, and Jean Bodin.
Machiavelli (1469-1527) has been said to have “thrown ethics out of politics as Spinoza threw ethics out of ethics." This statement owes its plausibility to the emphasis which, from the needs of his own country, Machiavelli was forced to lay on the need of strength and cohesion in a State and worldly wisdom in the rulers. But, in his Discourses on the First Ten Books of Livy, and even in the Prince, there is proof that he recognized the complexity of the body politic and the presence of factors that were only indirectly of political importance. He would use the study of history as a means of discovering political truth. Human nature is the same, he says, in his day as it was in Livy's (Discourses, III. XLIII.); we can see, for example, that then, as now, the people were less fickle than the princes, and that both needed the restraint of laws and of customs. He recognises the importance of the economical element in the national life. Money, he says, is not, as Quintus Curtius affirmed, the sinews of war, for it is useless without soldiers ; 3 but well-governed and rich provinces are the sinews of a State ; and political security is the sinews of agriculture and commerce on which the riches depend, for every man naturally likes to make what he can himself enjoy in his own person after it is, made- private benefit thus securing public benefit. The wealth procured by commerce and industry is perhaps most durable of all.· Machiavelli recognises the power of self-interest as a motive to action, and the insatiableness of human desires. From his favourite notion that to be successful a man must be either perfectly good or perfectly bad, we can hardly venture to draw economical conclusions where he certainly drew none. He sees in the perpetual failure of the Agrarian laws of Rome a sign that men's desires always outrun their powers of satisfying them. When they cease to fight from necessity they fight for ambition. There are in such passages the beginnings of economic analysis, but it does not go very far. He praises the plain living of Cincinnatus ; l a people may be rich if it reckons by its necessaries, not by the extent of its possessions, also if its money does not go forth of the country to buy foreign goods. Extravagance in a prince is a mischief if it leads to taxation, and public works are less important than a contented people. But idleness is the root of all evil. Christianity has praised humility at the expense of the active virtues. Machiavelli, far from having the modern notion of progress, thinks that there is a fixed quantity of happiness and unhappiness in the world at all times, but distributed differently at different times, so that a man may complain if he likes that he was born in Turkey and not in Italy, but not that he was born in one century and not in another. Such a notion reminds us of the belief of Adam Smith, that, on the whole, happiness was equally distributed among all classes of men. But the latter, though it might weaken the zeal of reformers, could hardly allow one group of men to grieve at the prosperity of another group, whereas Machiavelli's dictum would mean that, in proportion to the wideness of the areas, the gain of one group would be the loss of another. Such a conclusion was indeed in keeping with the prejudices of Machiavelli's times. That in every bargain there is one party which gains and another which loses, or, as Bacon says in his Essay on Seditions, “whatsoever is somewhere gotten is somewhere lost," is the idea that probably first occurs to every man when he first gives any thought at all to such matters. It was the impression of the earliest economical thinkers; or, at least, it was a popular prejudice, which they were not entirely able to throw off. This problem contains the whole question of equitable exchange in miniature. Modern economists, while they reject the view that one party must necessarily be a loser, do not adopt simpliciter the opposite dictum that in a willing bargain both must
1 By Knies, Pol. Dekon. nach d. geschichtlichen Methode (1853), p. 319.
2 Discorsi, I. LVIII. ; cf. LII. v. 3 Discorsi, II. X. 4 Disc. on Livy, II. 11., etc.
5 Ib., I. XXVI., etc. 6 Ib., I. xxxvII. ; cf. xlvi.
1 Disc. on Livy, III. xxv.
Ib., II. 11. 3 Ib., II. I. 4 Moral Sentiments. A “fixed quantity of human life in the world” and “a stationary total of animal and vegetable population" are remoter parallels. Cf. Malthus and His Work, p. 385.
5 Even where there is “no robbery," there may be different “Consumer's Rent.” See Prof. Marshall, Principles of Pol. Ec., Book III., ch. iv. (1st ed.).
equally gain. Such discussions, however, are not to be found at all in our author, and his political philosophy, on the whole, yields scanty gleaning for the economist.
As Machiavelli is driven into political theory by the pressing political problems of Italy in his day, Sir Thomas More (1478–1535) is driven into economics by the social problems of England in his day, which were not only calling for attention, but, as a strong monarchy had already given political security, were able to obtain it. When he wrote his Utopia, he was distressed about the state of England as Plato, when he wrote his Republic, was distressed about the state of Athens; but in More's case the social questions bulk far more largely than the political, and the philosophy, such as it is, does not extend, as in Plato's case, to the deepest problems of Metaphysics. The parallel between the two authors is, however, so close, that we cannot consider the Utopia in a clearer light than by taking its various themes in the order in which we have taken them in the case of Plato, i.e., taking first his conception of Wealth, next, of Production and Distribution, and last, of Civil Society and the State.
The whole island,” or, in other words, the whole ideal commonwealth, is regarded as one great family, and its economy is on the same lines as provision for a large household. Wealth is represented as the abundance of necessaries and commodities, as distinguished from superfluities and luxuries, whether in the way of food, clothing, or other provision for the flesh, including ambition, ostentation, and covetousness. But (as in Plato) the natural pleasures and the pleasures of the mind are distinguished from the false pleasures and the bodily pleasures. No pleasure is forbidden that is not harmful and vicious. The “necessaries and commodities are those of a comfortable, healthy and happy life, the life of men who, like the Athenians, are supposed to "cultivate art without expense and philosophy without effeminacy.” It is a picture not unlike in many ways to the City of Pigs in the Republic, with this difference, that there is universal communism. The
The range of wants, so far as they relate to material goods, is confined, not in some but in all the citizens, within the bounds of sim