THE

MERCHANTS' MAGAZINE

AND

COMMERCIAL REVIEW.

FEBRUARY, 186 7.

economy

MR. WALKER'S SCIENCE OF WEALTH.

We recollect but one English and one American treatise on political the author of which derived his knowledge of the laws of wealth from any other source than the depths of his intellectual consciousness, or the accumulated treasure of his predecessors. The former is that of Mr. Ricardo, a banker of London; the latter is the work before us. Mr. Walker, in his preface, claims a continued business experience of twenty years. Mr. Ricardo's specialty, however, was rent, the connection of which with banking is, to say the least, not obtrusively plain. Mr. Walker devotes himself chiefly to the currency, which every day's experience as bank director and merchant would, to an observant and thoughtful mind, illustrate and expound. We feel justified, therefore, in saying that no system of economical science known to us is so largely the result of practical acquaintance with manufacture, banking and trade as this of Mr. Walker. This fact will naturally command, in some degree, the attention and even confidence of the business community, while it has served to relieve the reader from much of the difficulty and perplexity usually attending the study. The science is here divested of that obscurity which has concealed its features to the common eye, an obscurity woven of technical terms in the forms of metaphysical disquisition. Excepting value, we believe no word is here used out of its acceptation in daily life, and no reasons are given more mysterious or foreign than a farmer might give for his crop, or a merchant for his monthly balance.

Mr. Walker's method includes a minute and formal analysis of every special subject treated, the divisions being marked by letters or figures. Of course, much of the smoothness and grace of composition is inevitably sacrificed. In an essay, the transitions should be easy and even imperceptible; the movement should be on springs, suppressing the jolting of each rut and stone in the path of argument; the outlines flowing and rounded, as little as possible suggesting the framework within. But in works designed for actual instruction, especially with unprofessional students and men of limited leisure, it is doubtful whether an author can afford to sacrifice so much to the general effect. Discussions of this kind must be anatomical in their method; and clear definitions and precise divisions will help the reader far more than gracefulness of figure or lines of beauty. Every limb and joint of the argument should be exposed. By this an author certainly effects two results; the first, that he offers more points for the student to take hold of; the second, that he affords the same convenience to his critics. By making a discussion definite and particular, he loses the precious refuge of generalities, and must stand or fall with his reasoning. Each step of the procedure can be examined by itself, and the argument verified, or otherwise, from page to page. With many writers on this, as on other sciences, it is impossible to collect in their own words their cardinal principles within any reasonable compass. Apopthegms are religiously shunued, and the sense is diffused through so many sentences, and around so many lengthened parentheses, that a critic despairs of getting either nails or teeth fastened where he can tear or bite. Such writers are like Mr. Squeers' son Wackford, who could not be shut into any door, and from whose plump skin a pinch slipped off, leaving no sting behind. But if an author affords such opportunities to his enemies, he is fairly compensated by a better understanding with his friends.

We have a painful recollection of some admirable works on political economy, in which the only division was by chapters, which rolled along, an unbroken stream, for forty or fifty pages. The whole was to be taken at a dose. If one was so unfortunate as to be interrupted at a sitting, the chapter must be commenced anew. There was actually no such thing as a resting place, and an effort, which did not bring you to the top, went for nothing.

Mr. Walker's analysis is carried to the point of minuteness, and if it is not accurate, it at least makes its own refutation easy. The volume may be laid down at any moment, and resumed at leisure, without losing the continuity of thought. The rope is knotted at so many points that it cannot unravel far. A brief glance at the previous headings enables one to recover the precise spot reached, not of the page alone, but of the argument. This feature of the work would, however, have its chief value -we beg Mr. Walker's pardon, utility-in its use as a text book, enabling both the scholars to seize the points more firmly in their unpracticed hands, and the instructor to hold them more closely to accuracy and continuity of recitation.

Before proceeding to discuss the special views of the author, we will notice the general idea of economic freedom which pervades the work, not alone brought formally out in the technical question of free trade, but cropping out at every point of the discussion, whether of industrial association, of luxurious consumption, of property transfer, of bequest, or of

usury laws. Mr. Walker evidently does not regard either straight jackets or apron-strings as an essential part of human equipment. He has faith in the instincts of man, and in the disposition of social forms.

"Government cannot furnish a new power in man, or a new agency in nature. It can, to a certain extent, control the exercise of existing power and the use of existing agencies; but it can only control by limiting them." (p. 1.) "There is no sense so subtile as that with which a man detects his own wants. There is no spur so sharp as that which urges him to satisfy them. The wants of a people are the sole proper, the sole possible, motives for production. Nothing can be substituted for them. Anything that seems to take their place is merely a debasement of them." (pp. 92-3.)

Mr. Walker declares the definition of Value to be cardinal in is philosophy. And this definition he assumes irrespective of proof. He takes it because he likes it and does not think of asking the reader's assent to its truthfulness. "No apology is to be given for the definition, and no substitute offered."

This seems rather arbitrary to Americans, but Mr. Walker appears to think that if he is to write a book of 500 pages on Political Economy, he is at least entitled to say what he means by one word, Value. We said irrespective of proof, but not without proof. The definition is defended and the seasons illustrated at great length, chiefly by selections from the "Harmonies" of Frederick Bastiat. We believe that no intelligent student at the present day can reject the theory of Value so luminously revealed by that eminent French Economist.

As Mr. Walker puts it, the term "always expresses precisely power in exchange, and no other power or fact. Desirableness is not value. Utility is not value. *** The use of this term in its strictest sense is of the utmost importance. If confounded with anything, or taken into any partnership, the whole science is thrown into confusion." (pp. 8-9.)

It may be fair to suggest whether Mr. Walker's strenuous assertion that this, and only this, is value, is not in part caused by the relation of the definition to his subsequent development of the laws of currency. Of course, this is no reason against it. Definitions, to be of scientific efficiency, must be rigidly correct, and the more important the use to be made of them, the more occasion for an author to enforce an unyielding conformity.

Our pen stops to pay its tribute to that illustrious name which no scholar of social philosophy can ever pass without an act of homage. If Bastiat had lived to the common age of man, it may almost be said there would have been no need for another to write. The fragments into which poverty, disease and early death broke the pure crystal of that perfect globe of social order which his mind alone has been able to fashion, are yet, in their wreck, the royal gems of Political Economy.

The department of Production contains nothing specially novel. Very much the usual method is pursued, the division of labor being treated at great length and with various illustrations. Only the primary and simple principles which control the creation of wealth are here discussed, and these, fortunately, are beyond controversy. The most marked exception, perhaps, is a satisfactory refutation of the distinction between productive and unproductive labor.

We pass, therefore, to the book on Exchange.

The author could not be expected to add much to the argument for Free Trade. "The territorial division of labor" is the ground work of his scheme of national industry. The illustration drawn from the iron manufactures of the United States forms a novel feature, and is especially satisfactory because "a stronger argument can be made in favor of its receiving governmental protection than any other."

But while in the direct treatment of the question of "Protection," he has only put in new form the wearied argument of half a century, he yet, on reaching the subject of currency, casts back a light that amounts about to revelation. We refer to the tables exhibiting the law which governs importations. The common belief is, and tariffs are established on the supposition, that the amount of importations is governed by the rate of duties. Diagram No. 7, shows geometrically the prevailing imposts for 42 years, with the actual statistics of the Custom-house as to the amount of foreign goods passed. The lines correspond just about as nearly as two very irregular lines might be expected to, if drawn by different persons independently; sometimes they come together, sometimes they go to the very antipodes. No principle whatever seems to govern their relations. Diagram No. 8 exhibits the volume of currency and the amount of imports for each of 26 years. The lines are drawn on a field checked with exact and equal squares, so that the reader can by counting with his finger prove the justice of the proportions, while the figures of the official returns are given at the side. The correspondence is perfectly wonderful. Convinced as we have for years been, that our tariffs were essentially neutralized by a defective currency, and our domestic manufactures kept at constant disadvantage, we could not have believed, without this demonstration, that the result could be so unmistakeably shown to the eye.

If Mr. Walker had made no addition to the Science of Wealth, except these diagrams, overwhelming as their testimony is in regard to two of the most vexed and important subjects of discussion, we should yet pronounce his publication a success. This is the only portion of the work on which we shall pronounce a panegyric, and we may therefore be indulged in some little extravagance; for the discovery of a new law, governing a great mass of seemingly perplexed phenomena, is of real scientific interest, and we recognize such a discovery in these charts of tariffs, imports and currency. We said that the author has not had much opportunity for important discoveries on a field so thoroughly tilled as protection. This is true of the scientific argument, but we think, irrespective of all economical principles or industrial facts, and even granting the whole question to the advocates of high duties, the practical political difficulty which Mr. Walker urges is full, decisive and irreversible. "Injurious as protection is to the best interests of the country, any system of it, however severe, would be preferable to the "open and shut" policy, absolutely unavoidable in a government like ours. It is not within the bounds of reason to suppose that the alternate successes of parties will not continue to convulse our national legislation; and therefore it is with emphasis true, that a consistent system of protection is only possible in a government with great Conservative force and great central powers. A representative body, embracing the most opposite interests, swayed by such influences and intrigues as notoriously possess such an organization, and changed in all its parts

every few years, is not the place in which to adjust accurately and dispassionately the economical parts of a nation, and distribute the agencies of production," (pp. 109-10.)

The present winter opens fair to give the general public an illustration of this, in the way of lobbying, log-rolling and the bullying of members, such as has never before been known. No language that should amount to less than a breach of privilege, would begin to express the eminent un fitness of the American Congress for devising and directing a scheme of national industry.

The question of currency is of course made by Mr. Walker the main feature of his work. While it occupies more than its aliquot share of space, the importance of the subject, the pecuniary and social antagonism provoked, the elaborately confused state of the question in the general mind, and the radical character of the doctrines proposed will probably go far to excuse the violation of bibliographical symmetry.

The whole discussion, at this point, has a jealous tone, as if anticipating attack from every quarter. As you pass from hall to hall you are com pelled to climb over logical barricades, are challenged at every door, and the sulphurous fumes of the argumentative slow match are ever in your nostrils, suggesting an explosion imminent. Hence, the time occupied in traversing this department of enquiry. While these precautions appear at first sight excessive, they are not without some excuse. To say that the author anticipates the most frivolous objections is simply to say that such objections have been urged over and over again to the apparent satisfaction of some classes of the community. He seems to have gone over the field, this time, beforehand, to pick up every decent sized pebble within throwing distance, and the party that will fling stones must bring them a long way with him. While it is philosophical to say that an author should rely on the truth of his own arguments, and not trouble himself greatly as to the character of his assailants or their weapons, we have all probably had a hundred occasions to observe how the most inconsequential objections, if urged volubly and with assurance, will defeat the force to a general audience of a demonstration as faultless and orderly as Euclid's.

We spoke of these views as radical. That is precisely the word to characterize them. To train, to prune, to graft this fast and far-spreading Banyan-tree of credit has been the great effort of theorists and lawmakers. Our author proposes to cut it up from the roots, as always, only and of course mischievous. Just what proportion of credit may be safely introduced into currency has been the Northwest passage of economical adventurers. Mr. Walker believes that this question is simply how many rotten timbers can be put in a bridge without bringing it down, how much the blood can be reduced before fainting, how much poison can be nje ted without death. These are strong expressions, but not stronger than are used in the book. Let us trace the argument.

Industry requires the use of money as a medium of exchange and standard of value. Such an instrument must be, for the whole world, of gigantic dimensions and corresponding cost. But this is no more to be grudged than the food we eat, the clothes we wear, the tools we employ, the materials we consume in our daily life and work. To save the expense would be to lose a hundred times greater value.

If of such importance, the only question is, what best fulfils the office of