Economy takes no cognisance,' and will only grant that he might be 'figuratively' rich.1 Senior says:

'Colonel Torrens supposes a solitary family, or a nation in which each person should consume only his own productions, or one in which there should be a community of goods, and urges, as a reductio ad absurdum, that in these cases, though there might be an abundance of commodities, as there would be no exchanges, there would, in our sense of the term, be no wealth. The answer is, that for the purposes of Political Economy there would be no wealth; for, in fact, in such a state of things, supposing it possible, the Science of Political Economy would have no application. In such a state of society, Agriculture, Mechanics, or any other of the arts which are subservient to the production of the commodities which are, with us, the subjects of exchange, might be studied, but the Science of Political Economy would not exist.'2

Now it is doubtless true that a very great deal-we might almost, perhaps, say much the greater part-of what has been written on political economy relates only to a state of things where private property is established and exchange is practised. It probably never occurred to Adam Smith to speculate as to the possibility of society existing and enjoying necessaries, conveniences, and amusements without separate property. Separate property was to him a 'natural' institution, which existed in much the same form among savage tribes of hunters and fishermen as in eighteenth century England. Malthus thought separate property a necessary institution which would soon be re-established if its abolition were ever accomplished by followers of Godwin, Ricardo, as became a stockbroker, took it for granted without any consideration. Consequently, in almost the whole of the doctrines of these writers, the existence of private property and the practice of exchange is assumed. Obviously their theories of exchange and distribution could have no application to a communist society, and the keynote of their theory of production is to be found in a conception of 'capital' which is entirely dependent on the existence of private property.

But by the time of Senior and J. S. Mill universality was

1 Introductory Lectures on Political Economy, 1831, 3d ed. 1847, pp. 5, 6. 2 Political Economy, 8vo ed., p. 25.

3 Essay on the Principle of Population, 1798, pp. 194-198.

claimed for at least a part of the teachings of political economy. Senior himself declares that those inferences of the political economist' which relate to the Nature and the Production of Wealth are universally true;" and J. S. Mill asserts that the laws and conditions of the production of wealth partake of the character of physical truths.' 2 If this is so, it is clear that there must be a certain amount of political economy which would remain true, and possibly useful, even if the institution of private property or the practice of exchange ceased to exist.

§ 4. The Nation a Collection of Individuals.

As to the meaning of the word 'nation' in his phrase 'the wealth of nations,' Adam Smith evidently felt no difficulty. By a nation at any particular time he understood a number of individuals who at that time constitute the whole population of a given territory under one government. Now a nation does not die with the individuals who happen to be members of it at any particular time. Every one who belonged to the English nation in 1776 is dead, but the nation still exists. Consequently it has been urged that 'political economy should consider the wealth of a nation in some way or other apart from the wealth of the individuals of whom it is composed. The interests of the individuals who compose the nation at one particular moment may, it is said, sometimes conflict with the permanent interests of the nation. If this had been put before Adam Smith he would doubtless have answered that the future interests of the nation are only the interests of the individuals who will at various future times constitute the nation, just as its present interests are the interests of the individuals who constitute it at present, so that there is nothing in the plan of considering a nation to be at any given time an aggregate of individuals which in any way precludes an economist from taking account of the future as well as of the present. No change in this method of regarding the question was made by his followers.

1 Political Economy, 8vo ed., p. 3.

Principles, bk. II. ch. i. § 1, 1st ed. vol. i. p. 239; People's ed. p. 123 a.

§ 5. Aggregate and Average Wealth.

Granting that a nation is only a collection of individuals, we are immediately confronted by the question whether the wealth of this collection of individuals, when considered as an amount susceptible of increase and decrease, is their aggregate or their average wealth. Are we to say that the German nation has much more wealth than the Dutch because the wealth of all Germans taken together is much larger than that of all Dutchmen taken together? or are we to say that the Dutch nation is richer or has more wealth than the German, because the aggregate of Dutchmen's wealth divided by the number of Dutchmen is greater than the aggregate of Germans' wealth divided by the number of Germans? In computations' like that of Petty1 the national wealth was always understood to be the aggregate and not the average wealth, and to general opinion in the first half of the eighteenth century the plan of creating an imaginary average individual as the representative of the nation would have appeared strange and almost incomprehensible. But in the second paragraph of the Wealth of Nations Adam Smith speaks as if the wealth of a nation should be measured by its average and not by its aggregate wealth. According as the produce of labour, he tells us, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniences for which it has occasion.' A nation well supplied with all the necessaries and conveniences for which it has occasion is presumably considered by Adam Smith to be a wealthy nation, and so we have the wealth of nations measured by the proportion which their produce bears to their populations. But in most cases Adam Smith forgets, so to speak, to divide by the population. He has, for example, a theory that the wealth of a country may be very great in spite of wages being very low, although he very properly insists on the fact that 'servants, labourers, and workmen of different kinds make up the far greater part of every great political society.' Now if the great majority are 3 Ibid. p. 36 a.

1 Above p. 4.

2 Bk. 1. ch. viii. p. 32.

claimed for at least a part of the teachings of political economy. Senior himself declares that those inferences of the political economist' which relate to the Nature and the Production of Wealth are universally true;" and J. S. Mill asserts that the laws and conditions of the production of wealth partake of the character of physical truths.'2 If this is so, it is clear that there must be a certain amount of political economy which would remain true, and possibly useful, even if the institution of private property or the practice of exchange ceased to exist.

§ 4. The Nation a Collection of Individuals.

As to the meaning of the word 'nation' in his phrase 'the wealth of nations,' Adam Smith evidently felt no difficulty. By a nation at any particular time he understood a number of individuals who at that time constitute the whole population of a given territory under one government. Now a nation does not die with the individuals who happen to be members of it at any particular time. Every one who belonged to the English nation in 1776 is dead, but the nation still exists. Consequently it has been urged that political economy should consider the wealth of a nation in some way or other apart from the wealth of the individuals of whom it is composed. The interests of the individuals who compose the nation at one particular moment may, it is said, sometimes conflict with the permanent interests of the nation. If this had been put before Adam Smith he would doubtless have answered that the future interests of the nation are only the interests of the individuals who will at various future times constitute the nation, just as its present interests are the interests of the individuals who constitute it at present, so that there is nothing in the plan of considering a nation to be at any given time an aggregate of individuals which in any way precludes an economist from taking account of the future as well as of the present. No change in this method of regarding the question was made by his followers.

1 Political Economy, 8vo ed., p. 3.

1 Principles, bk. II. ch. i. § 1, 1st ed. vol. i. p. 239; People's ed.

§ 5. Aggregate and Average Wealth.

Granting that a nation is only a collection of individuals, we are immediately confronted by the question whether the wealth of this collection of individuals, when considered as an amount susceptible of increase and decrease, is their aggregate or their average wealth. Are we to say that the German nation has much more wealth than the Dutch because the wealth of all Germans taken together is much larger than that of all Dutchmen taken together? or are we to say that the Dutch nation is richer or has more wealth than the German, because the aggregate of Dutchmen's wealth divided by the number of Dutchmen is greater than the aggregate of Germans' wealth divided by the number of Germans? In computations' like that of Petty1 the national wealth was always understood to be the aggregate and not the average wealth, and to general opinion in the first half of the eighteenth century the plan of creating an imaginary average individual as the representative of the nation would have appeared strange and almost incomprehensible. But in the second paragraph of the Wealth of Nations Adam Smith speaks as if the wealth of a nation should be measured by its average and not by its aggregate wealth. According as the produce of labour, he tells us, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniences for which it has occasion.' A nation well supplied with all the necessaries and conveniences for which it has occasion is presumably considered by Adam Smith to be a wealthy nation, and so we have the wealth of nations measured by the proportion which their produce bears to their populations. But in most cases Adam Smith forgets, so to speak, to divide by the population. He has, for example, a theory that the wealth of a country may be very great in spite of wages being very low, although he very properly insists on the fact that 'servants, labourers, and workmen of different kinds make up the far greater part of every great political society.'s Now if the great majority are 1 Above p. 4. 2 Bk. 1. ch. viii. p. 32. 3 Ibid. p. 36 a.