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JUNE 13, (938

Printed by BALLANTVNE, HANSON & Ca jit the BaUantyne Press


The appearance of a treatise like the present, on a subject on whiob so many works of merit already exist, may be tbougbt to require some explanation.

It might perhaps be sufficient to say, that no existing treatise on Political Economy contains the latest improvements which have been made in the theory of the subject. Many new ideas, and new applica- tions of ideas, have been elicited by the discussions of the last few years, especially those on Currency, on Foreign Trade, and oiw the important topics connected more or less intimately with Colonization : and there seems reason that the field of Political Economy should be re- surveyed in its whole extent, if only for the purpose of incorporating the results of these speculations, and bringing them into harmony with the principles previously laid down by the best thinkers on the subject.

To supply, however, these deficiencies in former treatises bearing a similar title, is not the sole, or even the principal object which the autlior has in view. The design of the book is different from that of any treatise on Political Economy which has been produced in England sin^ the work of Adam Smith.

The most characteristic quality of that work, and the one in which it most differs from some others which have equalled and even surpassed it as mere expositions oi the general principles of the subject, is that it invariably associates the principles with their applications. This of itself implies a much wider range of ideas and of topics, than are included in Political Economy, considered as a branch of abstract specu- lation. Por practical purposes. Political Economy is inseparably inter- twined with many other branches of social philosophy. Except on matters of mere detail, there are perhaps no practical questions, even among those which approach nearest to the character of purely econo- mical questions, which admit of being decided on economical premises alone. And it is because Adam Smith never loses sight of this truth; because, in hia applications of Political Economy, he perpetually appeals to other and often far larger considerations than pure Political Economy affords that he gives that well-grounded feeling of command over the



principles o^ the subject for purposes of practice, owing to which the " Wealth of Nations," alone among treatises on Political Economy, has not only been popular with general readers, but has impressed itself strongly on the minds of men of the world and of legislators.

It appears to the present writer, that a work similar in its object aiid general conception to that of Adam Smith, but adapted to the more extended knowledge and improved ideas of the present age, is the kind of contribution which Political Economy at present requires. The " "Wealth of Nations" is in many parts obsolete, and in all, imperfect. Political Economy, properly so called, has grown up almost from infancy since the time of Adam Smith : and the philosophy of society, from which practically that eminent thinker never separated his more peculiar theme, though still in a very early stage of its progress, has advanced many steps beyond the point at which he left it. No attempt, however, has yet been made to combine his practical mode of treating his subject with the increased knowledge since acquire4 of its theory, or to exhibit the economical phenomena of society in the relar tion in which they stand to the best social ideas of the present time, as he did, with such admirable success, in reference to the philosophy of his century.

Such is the idea which the writer of the present work has kept before him.. To succeed even partially in realizing it, would be a sufficiently useful achievement, to induce him to incur willingly all the chances of failure. It is requisite, however, to add, that although his object is practical, and, as far as the nature of the subject admits, popular, he has not attempted to purchase either of those advantages by the sacrifice of strict scientific reasoning. Though he desires that his treatise should be more than a mere exposition of the abstract doctrmes of Political Economy, he is also desirous that such an exposition should be found in it.

The present edition is an exact transcript from the sixth, except that all extracts and most phrases in foreign languages have been translated into English^ and a very smaU number of quotations, or parts of quota- tions^ which appeared superfluous, have been struck out. A reprint of an old controversy with the " Quarterly Review" on the condition of landed property in France, which had been subjoined aa an Appendix, has been dispensed with.







Chapteb T. Of the Bequisitss of Production.

91. Kequisites of production, what 15

2. The function of labour defined 16

3. Does nature contribute more to the efidcacy of labour in some occu-

pations than in others ? 17

4. Some natural agents limited, others practically unlimited, in

quantity 17

Chapter II. Of Labour as on Agent of Production^'—

§ 1. Labour employed either directly about the thing produced, or in

operations preparatory to its production 19

2. Labour employea in producing subsiBtenoe for subsequent labour . 20

8. in producing materials 21

4. or unplements 22

6. in the protection of labour 23

6. in the transport and distribution of the produce 24

7. Labour which relates to human beings 25

8. Labour of invention and discovery 26

9. Labour agricultural, manufacturing, and commercial 27

Chapter III. Of Unproductive Labour, ^f^ ^

1 1. Labour does not produce objects, but utilitieB 28

2. which are of three kinds 29

3. Productive labour is that which produced^ utilities fixed and em-

bodied in material objects 30

4. All other labour, however useful, is classed as unproductive . . 31

6, Productive and Unproductive Consumption 32

6i. Labour for the supply of Productive Consumption, and labour \sx

the supply of Unproductive Consumption 33

Chaptbe IV. Of CoipitaL

§ 1. Capital is wealth appropriated to reproductive employment . . . 34

2. More capital devoted to production than actually employed in it . 36

3. Fixamination of some cases illustrative of the idea of capital . . 87

a 2

viii COi^TENTS.

Chapter V. Fundamental Propositions respecting Capital.


g 1. Industry is limited by Capital 39

2. but does not always come up to that limit 41

3. Increase of capital gives increased employment to labour, without

assignable bounds 41

4. Ciipit«3 is the result of saving 43

5. All capital is consumed 44

6. Capital is kept up, not by preservation, but by perpetual repro-

duction 46

7. Why countries recover rapidly from a state of devastation ... 47

8. Effects of defraying government expenditure by loans .... 47

9. Demand for commodities is not demand for labour 49

10. FaUaoj respecting Taxation 55

Chapter VI. Of Circulating and Fixed Capital,

% 1. Fixed and Circulating Capital, what 57

2. Increase of fixed capital, when at the expense of circulating, might

be detrimental to the labourers 58

3. but this seldom if ever occurs 61

Chapter VII. On what depends the degree of Productiveness of Productive Agents,

§ 1 . Land, labour, and capital, are of different productiveness at diffe- rent times and places 63

2. Causes of superior productiveness. Natural advantages ... 63

3. greater energy of labour 65

4. superior skill and knowledge 66

&. superiority of intelligence and trustworthiness in the commu- nity generally 67

6. superior security 70

Chapter VIII. Of Co-operation^ or the Combination of Labour, ^^

§ 1. Combination of Labour a principal cause of superior productiveness 71

2. Effects of separation of employments analysed 73

3. Combination of labour between town and country , 74

4. The higher degrees of the division of labour 75

6. Analysis of its advantages 77

6. Limitations of the division of labour 80

Chapter IX. Of Production on a Large, and Production on a Small Scale.

§ 1. Advantages of the large system of production in manufactures . 81

2. Advantages and disadvantages of the joint-stock principle ... 84

3. Conditions necessary for the large system of production . . . , 87

4. Large and small farming compared 89

Chapter X, Of the Law of the Increase of Labour. -/

8 1. The law of the increase of production depends on those of three

elements, Labour, Capital, and Land 96

2. The Jjaw of Population 97

3. By what checks the increase of population is piHctically limited . 98


Chaptee XI. Of the Lava of the Increase of Capital,

1. Means and motives to saving, on what dependent 100

2. Causes of diversity in the effective strength oF the desire of accu-

mulation ^ 102

3. Examples of deficiency in the strength of this desire 103

4. Exemplification of its excess .... 107

OHAPTBJi XII, ()fthe Law of the Increase of Production from Land.

1. The limited quantity and limited productiveness of land, the real

limits to production 108

2. The law of production from the soil, a law of diminishing return

in proportion to the increased application of labour and capital . 109

3. Antagonist principle to the law of diminiBliiag return; the pro-

gress of improvements in production 1 11

Chaftes XIII. CoTuequences qf the foregoing Laws. ^^^

1 . Bemedies when the limit to production is the weakness of the

principle of accumulation 117

2. Necessity of restraining population not confined to a state of

inequality of property 117

3. nor superseded by free trade in food 119

4. nor in general by emigration r 121


Chapter I. Of Property.

I 1. Introductory remarks 123

2. Statement of the question 124

3. Examination of Communism 125

4. of St. Simonism and Fourierism 130

Chaptbb II. The same subject continued.

§ 1. The institution of property implies freedom of acquisition by con- tract 133

2. the validity of prescription 134

3. the power of bequest, but not the right of inheritance. Ques-

tion of inheritance examined 135

4. Should the right of bequest be limited, and how ? 138

5. Grounds of property in land, different from those of property in

moveables 140

6. only valid on certain conditions, which are not always reahzed.

The limitations considered 141

7. Bights of property in abuses . ^ . ; 144


Chapter III. Of the Classes among whom the "Produce is distributed,


§ 1. The produce sonietimes shared among three classes 145 ^

2. sometimes belongs undividedly to one 145 fr

3. sometimes divided between two 146 «^

Chapter IV. Of Competition and Custom,

§ 1. Competition not the sole regulator of the division of the produce . 147 *^

2. Influence of custom on rents, and on the tenure of land . . . 148

3. Influence of custom on prices 149

Chapter V. Qf Slavery,

% 1. Slavery considered in relation to the slayes 151

2. in relation to production 152

8. Emancipation considered in relation to the interest of the slave- owners 153

Chapter VI. Of Peasant Proprietors.

§ 1. Difierence between English and Continental opinions respecting

peasant properties 155

2. Evidence respecting peasant properties in Switzerland .... 156

3. in Norway 159

4. in Germany .161

5. in Belgium 164

6. in the Channel Islands 167

7. in France 168

Chapter VII. Continuation of the same subject,

§ 1. Influence of peasant properties in stimulating industry .... 171

2. in training intelligence 172

3. in promoting forethought and self-control 7 73

4. Their effect on population 174

5. en the subdivision of land 180

Chapter VIII. Of Metayers.

I 1. Nature of the metayer system, and its varieties ..«•.. 183

2. Its advantages and inconveniences 184

3. Evidence concerning its effects in different countries 185

4. Is its abolition desirable ? 191

Chapter IX. Of Cottiers.

§ 1. Nature and operation of cottier tennre 193

2. In an overpeopled coontry its necessary oonseqneiwe it nonnfial

rents 195

3. which are inconsistent with industry, fragality, or restraiirt on

population 196

4 Ryot tenancy of India . . . 197


Chaptes X. Meant of abolishing Cottter Tenawep,


§ 1. Irish cottiers should be converted into peasant proprieton ... 199 2. Present state of this question 204

Chapter XI. Of Wages. —4^

S 1. Wages depend on the demand and supply of labour ^in other

words, on population and capital 207

2. Examination ot some popular opinions reRpPctinp wagfc 9 . . . 208 <«•

3. Certain nire circumstances excepted, high wages imply restraints

on population *^^^ .

4. whicn are in some cases lepal 213

5. in others the effect of particular customs 214

6. Due restriction of population the only safeguard of a labouring

class 216 •-

Chaptbe XII. Of Popular Remedies for Low Wages,

§ 1. A legal or customary minimum of wages, with a guarantee of

employment . ! 218 *^

2. would require as a condition, legal measures for repression of

population 219

3. Allowances in aid of wages 221

4. The Allotment System 223 w

Chaptbb XIII. The Remedies for Loto Wages further considered,

S 1. Pernicious direction of public opinion on the subject of population 2S5

2. Grounds for expecting improvement 227

3. Twofold means of elevating the habits of the labouring people :

by education .• •. ' ^^^ **

4. and by large measures of immediate relief, through forei;;n and

home colonization 231*^

CfiAPTEK XIV. OftJie Differences of Wages in different Employments.

I 1. Differences of wages arising from different degrees of attractive- ness in different employments 233

2. Differences arising from natural monopolies 236

8. Effect on wages of a class of subsidized competitors . . . . « 238

4. of the competition of persona with independent means of sup-

port .... 240

5. \^ ages of women, why lower than thos^of men 242

6. Differences of wages arising from restrictive laws, and from oombi'

nations 248

7. Caoes in which wages are fixed by custom •••««<.. 244

Chaptbe XV. Of ProflU.

I 1. Profits resolvable into three parts; interest, insurance, and wages

of superintendence 245

2. The minimum of profits ; and the variations to which it is liable . 246




§ 3. Differences of profits arising from the nature of the particular em>

ployment . 247

4. General tendency of profits to an equality 248 V

5. Profits do not depend on prices, nor on purchase and sale . . . 251 (X

6. The advances of the capitalist consist ultimately in wages of labour 2t52 ^

7. The rate of profit depends on the Cost of Labour 263 ^X'

Chaptee XVI. Of Bent.

§1. Rent the effect of a natural monopoly 255

2. No land can pay rent except land of such quality or situation, as

exists in less quantity than the demand 255

3. The rent of land consists of the excess of its return above the

return to the worst land in cultivation 257

4. or to the capital employed in the least advantageous circum-

stances 2r)S

5. Is payment for capital sunk in the soil, rent, or profit ? . . . . 259

6. Rent does not enter into the cost of production of agricultural

produce 262


CHiLPTEE I. Of Value,

§ I. Preliminary remarks 264

2. Definitions of Value in Use, Exchange Value, and Price .... 265

3. What is meant by general purchasing power . 265

4. Value a relative term. A general rise or fall of Values a contra-

diction 266

5. The laws of Value, how modified in their application to retail

transactions 267

Chaftes H. Cf Demand and Stipply, in their relation to Value.

§ 1. Two conditions of Value : Utility, and Difficulty of Attainment . 268

2. Three kinds of Difficulty of Attainment .^ 269

3. Commodities which are absolutely limited in quantity .... 270

4. Law of their value,, the Equation of Demand and Supply . . . 271

5. Miscellaneous cases falling under this law . 272

Ohaftbe III. Of Cost of Production, in its relation to Value.

§ 1. Commodities which are Busceptible of indefinite multiplication

without increase of cost. Law of their Value, Cost of Production 274

2. operating through potential, but not actual, alterations of supply 275

Chaptee IV. Ultimate Analysis of Cost of Production,

§ 1. Principal element in Cost of Production Quantity of Labour . . 277 ^^

2. Wages not an element in Cost of Production 278


§ 3. except in so far as they yary from employment to emplojrment 279 4. Profits an element in Cost of Production, in so far as tney vary

from employment to employment 280

6. or are spread oyer unequal lengths of time 281

6. Occasional elements in Cost of Production : taxes, and scarcity

▼alue of materials 283

Chafteb y. Of Rent, in its Belation to Value,

1 1. Commodities which are susceptible of indefinite multiplication, but not without increase of cost. Law of their Value, Cost of Pro- duction in the most unfayourable existing circumstances . . . 285

2. Such commodities, when produced in circumstances more fayoui^

able, yield a rent equal to the difference of cost ^ 286

3. Kent of mines and fisheries, and ground-rent of buildings . . 288

4. Cases of extra profit analogous to rent 289

Chafteb YI. Bummary of the Theory qf Value.

§ 1. The theory of Value recapitulated in a series of propositions . . 290

2. How modified by the case of labourers cultiyating for subsistence . 292 ^"^

3. by the case of slave labour 293^^

Chapteb VIL Of Money.

i 1. Purposes of a Circulating Medium 293

2. Gold and Silver, why fitted for those purposes 294

3. Money a mere contrivance for facilitating exchanges, which does

not affect the laws of Value 296

Chaptbb YTTL Of the Value of Money, cu dependent on Demand and Supply,

§1. Value of Money, an ambiguous expression 297

2. The value of money depends, caeteris paribus, on its quantity . . 298

3. together with the rapidity of circulation 300

4. Explanations and limitations of this principle 301

Ghaptxb IX. Of the Value of Money, as dependent on Cost of Production.

§ 1. The value of money, in a state of freedom, conforms to the value of

the bullion contained in it 303

2. which is determined by the cost of production 304

3. This law, how related to the principle laid down in the preceding

chapter 306

Chapteb X. Of a Double Standard, and Subsidiary Coins.

§ 1. Objections to a double standard 307

2. The use of the two metals as money, how obtained without making

both of them legal tender 308



Chaptbr XI. Of Credit, as a Substitute for Money.


5 1. Credit not a creation but a transfer of the means of production . . 309

2. In what manner it assists production 310

3. Function of credit in economizing the nse of money . . . . . 311

4. Bills of exchange 312

5. Promissory notes , . 314

6. Deposits and cheques 315

Chaptek XTI. Influence of Credit on Prices,

§ 1. The influence of bank notes, bills, and cheques, on price, a part of

the influence of Credit 316

2. Credit a purchasing power similar to money 317

3. Eflects of great extensions and contractions of credit. Phenomena

of a commercial crisis analysed 318

4. Bills a more powerful instrument for acting on prices than book

credits, and bank notes than bills 320

5. the distinction of little practical importance 322

6. Cheques an instrument for acting on prices, equally powerful with

banknotes / . . 324

7. Are banknotes money? 326

8. No generic distinction between bank notes and other forms of credit 327

Chapter XIII. Cfan Inconvertible Paper Cv/rrency.

§ J. The value of an inconvertible paper, depending on its quantity, is

a matter of arbitrary regulation 328

2. If regulated by the price of bullion, an inconvertible currency

might be safe, but not expedient 330

3. Examination of the doctrine that an inconvertible currency is safe

if representing actual property 331

4. of the doctrine that an increase of the currency promotes

industry 332

6. Depreciation of currency a tax on the community, and a fraud on

creditors 334

6. Examination of some pleas for committing this fraud . . - 334

Chapteb XIV. Of Excess of Supply,

§ 1. Can there be an oversupply of commodities generally? .... 336

2. The supply of commodities in general, cannot exceed the power of

purchase ^ 337

3. never does exceed the inclination to consume 338

4 Origin and explauation of the notion of general oversupply . . . 339

Chapteb XV. €fa Measure of Value.

§ 1. A Measure of Exchange Value, in what sense possible .... 841 2. A Measure, of Cost of Production 342

Chapteb XVI. Of some Peculiar Cases qf Value.

§ 1. Values of commodities which have a joint cost of production . . 845 2. Values of the different kinds of agricultural produce 344


Chafteb XVII. Of Intemaii&nal Trade,

rAOM § 1. Cost of prodaction not the regulator of international yalues . . . 347

2. InterchaDge of commodities between distant places, determined by

differences not in their absolute, bat in their oomparatiye, cost

of production 348

3. The direct benefits of commerce condit in increased efiBciency of

the productive powers of the world 349

4. not in a vent for exports, nor in the gains of merchants . . . 350

5. Indirect benefits of commerce, eoouomical and moral ; still greater

than the direct 851

Chaptbb XVin. Of IntenuUional Valuei,

$ 1. The values of imported commodities depend on the tenna of iniep-

national interchange 352

2. which depend on the Equation of International Demand . . . 353

3. Influence of cost of carriage on international values 356

4. The law of values which holds between two countries, and two

commodities, holds of any greater number 356

6. Effect of improvements in production, on international values . . 358

6. The preceding theory not complete 360

7. International values depend not solely on the quantities demanded,

but also on the means of production avafiable in each country

for the supply of foreign markets 361

8. The practical result little affected by this additional element . . 363

9. The cost to a country of its imports, on what circumstances

dependent 866

Chaptbb XIX. Of Money, eonsidered cu cm Imported Commodity,

% I. Money imported in two modes ; as a commodity, and as a medinm

of exchange 367

2. As a commodity, it obeys the same laws of value as other imported

commodities , , . , 367

8. Its value does not depend exclusively on its cost of production at

the mines 369

Chaptbb XX. Of the Foreign Exchanges.

§1. Purposes for which money passes from country to country as a

medium of exchange 370

2. Mode of adjusting international payments through the exchanges . 370 8. Distinction between variations m the exchanges which are self- adjusting, and those which can only be rectified through prices . 373

Chaptbb XXI. Of the Distribution of the Precious MetaU through the Commercial World.

% 1. The substitution of money for barter makes no difference in exports

and imports, nor in the law of international values 374

2. The preceding theorem further illustrated 376



§ 3. The precious metals, as money, are of the tame value, and dis- tribute themselves according to the same law, with the precious metals as a commodity 379

4. iDternational payments of a noo-commercial character .... 379

Chaptbs XXII. Influence of Currency en the Exchanges afid on Foreign Trade,

§ 1. Variations in the exchange, which originate in the currency . . 380 2. Effect of a sudden increase of a metallic currency, or of the sudden

creation of bank notes or other substitutes for money .... 381

5. Effect of the increase of an inconvertible paper currency. Real

and nominal exchange 384

Chaptee XXIII. Of the Rate of Interest,

i 1. The rate of interest depends on the demand and supply of loans . 385

2. Circumstances which determine the permanent demand and supply

of loans 386

3. Circumstances which determine the fluctuations 388

4. The rate of interest, how far, and in what sense, connected with

the value of money 390

5. The rate of interest determines the price of land and of securities . 393

Chapteb XXIV. Qfthe Regulation qfa Convertible 'Fajper Cwrrency,

§ 1 . Two contrary theories respecting the influence of bank issaes . . 394

2. Examination of each 395

3. Reasons for thinking that the Currency Act of 1844 produces a

part of the beneficial effect intended by it 397

4. but produces mischiefs more than equivalent 400

5. {Should the issue of bank notes be confined to a single esta-

blishment? 408

6. Should the holders of notes be protected in any peculiar manner

against failure of payment? 409

Chatteb XXV. Ofth9 Competition of different Countries in the same Market,

§ 1. Causes which enable one country to undersell another .... 410

2. Low wages one of those causes 41 1

3. when peculiar to certain branches of industry 412

4. but not when common to all 414

5. Some anomalous cases of trading communities examined . . . . 414

Chapteb XXVI. Qf Distribution, as affected by Exchange,

§ 1. Exchange and Money make no difference in the law of wages . .416

2. in the law of rent 417

3. nor in the law of profits 418




Chaptkb I. General Characteristics qf a Progressive State of Wealth,


<$ 1. Introductory Remarks 421

2. Tendency of the progress of society towards increased command over the powers of nature ; increased security ; and increased capacity of co-operation 421

Chaptbb II. Influence of the Progress of Industry and Population on Values and Prices,

§ 1. Tendency to a decline of the value and cost of production of all

commodities 424

2. except the products of agriculture and mining, which have a

tendency to rise 426

S. that tendency from time to time counteracted by improvements

in production 426

4. Effect of the progress of society in moderating fluctuations of value 427

5. Examination of the influence of speculators, and in particular of

com dealers 428

Chapter III. Influence of the Progress of Industry and Population on Rents, Profits, and Wages,

8 1. First case; population increasing, capital stationary 430

2. Second case ; capital increasing, population stationary .... 432

3. Third case ; population and capital increasing equally, the arts of

production stiationary 433

4. Fourth case ; the arts of production progressive, capital and popu-

lation stationary 433

5. Fifth case ; all the three elements progressive 437

Chaptee IV. Of the Tendency of Profits to a Minimum,

§ 1. Doctrine of Adam Smith on the competition of capital .... 439

2. Doctrine of Mr. Wakefield respecting the field of employment . . 44P

3. What determines the minimum rate of profit 441

4. In opulent countries, profits habitually near to the minimum . . 443

5. prevented from reaching it by commercial revulsions .... 444

6. by improvements in production 445

7. by the imj^ortation of cheap necessaries and instruments . . 446

8. by the emigration of capital 447


Chapter V. Consequences of the Tendency of Profits to a Minimum.


§ 1. Abstraction of capital not neceBsarily a riatlonal loss 448

2. In opulent countries, the extension of machinery not detrimental

but beneficial to labourem 450

Chaptbb VI. Cf the Stationary State.

§ 1. Stationary state of wealth and popalation, dreaded and deprecated

by writers 452

2. but not in itself undesirable 463

CHAPTm VII. On the Probable Futurity of the Labouring


§ 1. ITie theory of dependence and protection no longer applicable to

the condition of modem society 466

2. The future well-being of the labouring classes principally dependent

on their own mental cultiTation 458

3. Probable effects of improved intelligence in causing a better

adjustment of population Would oe promoted by the social independence of women 459

4. Tendency of society towards the disnse of the relation of hiring

and service 459

5. Examples of the association of labourers with capitalists. . , . 461

6. of tne association of labourers among themselves .... * 465

7. Competition not pernicious, bat useful and indispensable . . 476


Chaptbr I. Of the Fwnctions of Government in genenU.

§ 1. Necessary and optional functions of government diatlngaished . . 479 2. Multifarious character of the necessary functions of government . 480 8. Division of the subject 482

Chapter II. Of the General Principles of Taxation.

§1. Four fnndamental rules of taxation 483

2. GrTOunds of the principle of Equality of Taxation 484

8. Should the same percentage be levied on all amounts of income? . 486 4. Should the same percentage be levied on perpetual and on termi>

nable incomes ? 488

6. The increase of the rent of land frcwi natural causes a fit subject of

peculiar taxation . . 492

6. A land tax, in some cases, not taxation, but a rent<;harge in favoor

of the public 493

T. Taxes falling on capital, not necessarily ohgectioDable .... 494



Chaptbb III. Of Direct Tax9B.

1 1. Direct taxes either on income or on expenditure 495

2. Taxes on rent 496

3. onprofita 496

4. on wages 498

5. An Income Tax 499

6 A House Tax 50J

Chaptke IV. Of Taxes on Commodities.

§ 1 . A Tax on all Commodities would fall on profits 504

2. Taxes on particular commodities fall on tne consumer 5U5

3. Peculiar effects of taxes on necessaries 506

4. how modified by the tendency of profits to a minimum . . . 507

5. Effects of discriminating duties 510

6. Eiffects produced on international exchange by duties on exports

and on imports 512

Chaptes v. Of some other Taxes,

9 1 . Taxes on contracts . 517

2. Taxes on commanication . . . . •• 518

8. Law Taxes 519

4. Modes of taxation for looal purposes 520

Chapteb VI. Comparison between Direct and Indirect Taxation.

§ 1. Arguments for and against direct taxation 521

2. Wliat forms of indirect taxation most eligible 623

3. Practical rules for indirect taxation 524

Chaptee VIL Of a National Debt.

§ 1. Is it desirable to defray extraordinary public expenses by loans ? . 526

2. Not desirable to redeem a national debt by a general contribution 528

3. Id what cases desirable to maintain a surplus revenue for the

redemption of debt 529

Chaptbb VIII. Of the Ordinary Functions of Ghvemmeni, considered <w to their Economical JEffects.

§ 1. Effects of imperfect security of person and property 531

2. Effects of over-taxation 532

^ Effects of imperfection in the system of the laws, and in the admL-

nistration of justice 533

Chaptbb IX. The same subject continued,

g 1 . Laws of Inheritance 526

2. Law and Custom of Primogeniture 537

8. Entaik 539


§ 4. Law of compulsory equal division of inheritances 540

6. Laws of Partiiersnip 641

6. Partnersliips with limited liability. Chartered Companies . . . 642

7. Partnerships in eommandite 545

8. Laws relatmg to insolvency , . 548

Chaptee X. Of Interferences of GoiJenvment grotmded on JErroneous Theories,

§ 1. Doctrine of Protection to Native Industry , 562

2. Usury Laws 658

3. Attempts to regulate the prices of commodities . ...... 661

4. Monopolies . 662

5. Laws against Combination of Workmen 663

6. Bestraints on opinion or on its publication 566

Chaptbb XI. Of the Orotmds and Limits of the Laisser-foM or Non-Interference Principle,

§ 1. Governmental intervention distinguished into authoritative and

unauthoritative 567

2. Objections to government intervention the compulsory character

of the intervention itself, or of the levy of funds to support it . . 568

3. increase of the power and inBuence of government 570

4. increase of the occupations and responsibilities of government . 570

5. superior efficiency of private agency, owing to stronger interest

in the work 571

6. impoi-tance of cultivating habits of collective action in the

people 572

7. Laisserfaire the general rule 573

8. but liable to large exceptions. Cases in which the consumer is

an incompetent judge of the commodity. Education .... 575

9. Case of persons exercising power over others. Protection of chil-

dren and young persons ; of the lower animals. Case of women

not analogous 577

10. Case of contracts in perpetuity 579

11. Cases of delegated management 579

12. Cases in which public intervention maybe necessary to give effect

to the wishes of the persons interested. Examples : hours of

labour ; disposal of colonial lands 5B1

] 3. Case of acts done for the benefit of others than the persons con- cerned. Poor Laws 588

14. Colonization 685

15. other miscellaneous examples 589

16. Government intervention may be necessary in default of private

agency, in cases where nrivate agency would be more suitable . 690




In OTeiy department of human affaira, Practice long precedes Science : sys- tematic enquiry into the modes of action of the powers of nature, is the tardy product of a long course^ of efforts to use those ■j^w^n for practical ends. The conception, aocordinglyy of Political Economy as a branch of science, is extremely modem ; but the subject with which its enquiries are conyersant has in all ages necessarily constituted one of the chief practical interests of mankind, and, in some, a most unduly engrossing one. \ Tht»,t pTiKjftfit iff WAaltb Writers {OnPolitical Economy profess to teach, lor to investigate, the nature of Wealth, '^and the laws of its production and di»- itribution: including, directly or re-, 'motely, the operation of aJl the causes by which the condition of mankind, or of any societ;^ of human beings, in jrespect to tins uniyersal object of 'human desire, is made prosperous or ithe reyerse. Not that any treatise on Political Economy can discuss or eyen enumerate all these causes; but it undertakes to set forth as much as is known of the laws and principles ac- cording to which they operate.

Eyeiy one has a notion, sufiBciently correct for common pmrposes, of what is meant by wealth. The enquiries which relate to it are in no danger of being confounded with those relating to any other of the great human in- terests. All know that it is one thing to be rich, anoUier thing to be enli^tened, braye, or humane; that

the questions how a nation is made wealtny, and how it is made free, or yirtuous, or eminent in literature, in the fine arts,^ in arms, or in PoHty, are totaUr distinct en(]^uiries. Those things, indeed, are all mdirectly con- nected, and react upon one another. A people has sometmieB become free^ because it had first grown wealthy ; or wealthy, because it had first becomA free. The creed and laws of a people act powerfully u^n their economical condition ; and this again, by its influ- ence on their mental deyelopment and social relations, reacts upon their creed