RISE AND PROGRESS OF THE SCIENCE. Definition of the Science-Its Importance-Causes of its being neglected in Greece and Rome, and in the Middle Ages-Evi- dence on which its Conclusions are founded-Rise of the Science in Modern Europe-Mercantile System-System of M. Quesnay and the French Economists-Publication of the "Wealth of Nations"-Distinction between Politics and Sta- tistics and Political Economy. POLITICAL Economy is the science of the laws * Economy, from oixos, a house, or family, and vouds, a law- the government of a family. Hence Political Economy may said to be to the State what domestic economy is to a single Α When it is said that an article or product is possessed of exchangeable value, it is meant that one or more individuals are disposed to give a certain quantity of labour, or a certain quantity of some other article or product, obtainable only by means of labour, in exchange for it. The power or capacity which particular articles or products have of satisfying the various wants and desires of which man is susceptible, constitutes their utility, and renders them objects of demand. An article may be possessed of the highest degree of utility, or of power to minister to our wants and enjoyments, and may be universally made use of, without possessing exchangeable value. This is an attribute or quality of those articles only which it requires some portion of voluntary human labour to produce, procure, or preserve. Without possessing utility of some species or other, no article can ever become an object of demand; but how necessary soever any particular article may be to our comfort, or even existence, still, if it be a spontaneous production of nature if it exists independently of human agency and if every individual can command indefinite quantities of it without any voluntary exertion or labour of any sort, it is destitute of value, and can afford no basis for the reasonings of the economist. A commodity or a product is not valuable because it is useful; but it is valuable because it can only be procured by the intervention of labour. It cannot justly be said, that the food with which we appease the cravings of hunger, or the clothes by which we defend ourselves from the inclemency of the weather, are more useful than atmospheric air; and yet they are possessed of that exchangeable value of which it is totally destitute. The reason is, that food and clothes are not, like air, gratuitous products: they cannot be had at all times, and in any quantity, without exertion; on the contrary, labour is always required for their production, or appropriation, or both; and as no one will voluntarily sacrifice the fruits of his industry, without receiving an equivalent in return, they are truly said to possess exchangeable value. The Economist does not investigate the laws which determine the production and distribution of such articles as exist, and may be obtained in unlimited quantities, independently of all voluntary human agency. The results of the industry of man form the only objects with which he is conversant. Political Economy might, indeed, be defined to be the science of values; for, nothing which is not possessed of exchangeable value, or which will not be received as an equivalent for something else which it has taken some labour to produce or obtain, can ever properly be brought within the scope of its inquiries. The word value has been very frequently employed to express, not only the exchangeable worth of a commodity, or its capacity of exchanging for other commodities, but also its utility, or capacity of satisfying our wants, and of contributing to our comforts and enjoyments. But it is obvious, that the utility of commodities-that the capa city of bread, for example, to appease hunger, or of water to quench thirst-is a totally different and distinct quality from their capacity of exchanging for other commodities. Dr Smith perceived this difference, and showed the importance of carefully distinguishing between the utility, or, as he expressed it, the "value in use," of commodities, and their value in exchange. But he did not always keep this distinc tion in view, and it has been very often lost sight of by subsequent writers. There can be no doubt, indeed, that the confounding together of these opposite qualities has been one of the principal causes of the confusion and obscurity in which many branches of the science, not in themselves difficult, are still involved. When, for instance, we say that water is highly valuable, we unquestionably attach a very different meaning to the phrase from what we attach to it when we say that gold is valuable. Water is indispensable to existence, and has, therefore, a high degree of utility, or of "value in use;" but as it can generally be obtained in large quantities, without much labour or exertion, it has, in most places, but a very low value in exchange. Gold, on the other hand, is of comparatively little utility; but, from its existing only in limited quantities, and from a great deal of labour being necessary to procure a small supply of it, it has a comparatively high exchangeable value, and may be exchanged or bartered for a proportionally large quantity of most other commodities. To confound these different sorts of value would evidently lead to the most erroneous. conclusions. And hence, to avoid all chance of error from mistaking the sense of so important a word as value, I shall never use it except to signify exchangeable worth, or value in exchange; and shall always use the word utility to express the power or capacity of an article to satisfy our wants, or gratify our desires. Political Economy has been frequently defined to be" the science which treats of the production, distribution, and consumption of wealth ;" and if by wealth be meant those articles or products which possess exchangeable value, and are either necessary, useful, or agreeable, the definition is quite unexceptionable. But if we understand the term wealth in a more enlarged or contracted sense, it will be faulty. Mr Malthus, for example, has supposed wealth to be identical with " those material objects which are necessary, useful, and agreeable to man.*” And though we should waive any objections which may, perhaps, be justly taken to the introduction of the qualifying phrase material objects, still it is evident that the definition is essentially defective. In proof of this, it is sufficient to mention, that atmospheric air, and the heat of the sun, are both material, necessary, useful, and agreeable products; though their independent existence, and their incapacity of special appropriation, by depriving them of exchangeable value, excludes them, as we have already shown, from the investigations of this science. *Principles of Political Economy, p. 28. |