VI

THE PROBLEMS OF ECONOMIC AND OF SOCIOLOGICAL SCIENCE

In the "Introduction" to Book IV, entitled "Of Systems of Political Economy," Smith divulges more explicitly than before his conception of political economy as a distinct science. According to his description it is, as we have claimed, a technology of wealth-production, first for the people and second for the state. Political economy, according to this description, is "a branch of the science of a statesman or legislator." As we have seen, all the sciences tributary to statesmanship and all other parts of the theory of conduct were to men of Adam Smith's type details subordinate to an inclusive moral philosophy.1

Book IV is a critique of systems of political economy, or rather of two principal systems; viz., first, "the commercial or mercantile system," second, "the agricultural systems, or those systems which represent the produce of land as

1In another book I shall call attention to the instructive antithesis between Smith's conception of the relations of political economy and that of Von Mohl, Encyklopädie der Staatswissenschaften, 2d ed., pp. 57, 58.

し

either the sole or the principal source of the revenue and wealth of every country."

The thread of Smith's argument in this book is not altogether clear at first sight. The reader might suppose that the book would include a precise account of the system of political economy which the author supposed to be valid. In fact, the discussion is virtually a continued exposition of his own labor theory of political economy, by the indirect method of exposing the errors of the mercantilist and the agricultural theories. When he reaches the second of these systems,2 he assigns as his reasons for treating it briefly that it has never done any great harm, and is never likely to. That is, he was somewhat of the opinion of the boy who defined salt as "the stuff that makes 'taters taste so bad when you don't put any on." By implication Smith justifies his long discussion of the mercantilist theory on the ground that it has done harm, and is likely to do more. In effect, however, these criticisms are merely to fill out his own labor theory of economics which was sketched in the first two books.

The plan of our study does not permit attention to the details of Smith's exposition. We are now interested simply in those indications which betray Smith's opinions about the relations

2 II, 179.

of economic technique to the inclusive moral order.

It is in point, however, to reinforce the observation made in the last paragraph of Section V. While leading up to an argument in support of a certain economic system, Smith artlessly describes notorious types of manipulation of opinion, and of government, to procure legislation favorable to special interests. That is, he shows how the commercial interests retained theorists to formulate philosophies reflecting ! their views, created a tradition which made these special interests the center or foundation of abstract and applied economic systems, and induced Parliament to legislate these special interests into the position of vested and fortified interests. This done, the same interests turned about and demanded, both directly and through their theoretical attorneys, that legislation should henceforth be declared a vice! That is, having secured their own interests by law, it should henceforth be forbidden to other interests to get the same advantage from law! As we have said, this delicious naïveté was not the rule of a nursery game. It was the serious contention of Britain's strongest men for the larger part of a century, and it is still making a strong bid for the rank of economic orthodoxy both in England

and the United States! Referring to the mercantilist theories, Smith says:

Such as they were, however, those arguments convinced the people to whom they were addressed. They were addressed by merchants to parliaments, and to the councils of princes, to nobles, and to country gentlemen; by those who were supposed to understand trade, to those who were conscious to themselves that they knew nothing about the matter. That foreign trade enriched the country, experience demonstrated to the nobles and country gentlemen as well as to the merchants; but how, or in what manner, none of them well knew. The merchants knew perfectly well in what manner in enriched themselves. It was their business to know it. But to know in what manner it enriched the country, was no part of their business. The subject never came into their consideration, but when they had occasion to apply to their country for some change in the laws relating to foreign trade. It then became necessary say something about the beneficial effects of foreign trade, and the manner in which those effects were obstructed by the laws as they then stood. To the judges who were to decide the business, it appeared a most satisfactory account of the matter, when they were told that foreign trade brought money into the country, but that the laws in question hindered it from bringing so much as it otherwise would do. Those arguments heretofore proIduced the wished-for effect. The title of Munn's

to

book, England's Treasure in Foreign Trade, became a fundamental maxim in the political economy not of England only, but of all other commercial countries. The inland or home trade, the most important of all, the trade

in which an equal capital affords the greatest revenue, and creates the greatest employment to the people of the country, was considered as subsidiary only to foreign trade. It neither brought money into the country, it was said, nor carried any out of it. The country therefore could never become either richer or poorer by means of it, except so far as its prosperity or aecay might indirectly influence the state of foreign trade.

The thesis which Smith opposes to the mercantilist assumption is compressed into the following proposition:

It would be too ridiculous to go about seriously to prove that wealth does not consist in money, or in gold and silver; but in what money purchases, and is valuable only for purchasing. Money, no doubt, makes always a part of the national capital; but it has already been shown that it generally makes but a small part, and always the most unprofitable part of it.3

It would be an excursus from the main path of our argument to cite such a proposition, if it were not more pregnant today than it was when it was written. So far as we can judge of the mental content of the most intelligent men of that period, it appears that the proposition must have been much more narrowly technological to them than it is to us. Since psychological and sociological analyses of value, and consequently of wealth, have reorganized the associations which

3 P. 437.