Political Economy and John Stuart Mill

HIS WORK IN POLITICAL ECONOMY BY PROF. J. E. CAIRNES 1873

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The task of fairly estimating the value of Mr. Mill's achievements in political economy—and indeed the same remark applies to what he has done in every department of philosophy—is rendered particularly difficult by a circumstance which constitutes their principal merit. The character of his intellectual, no less than of his moral nature, led him to strive to connect his thoughts, whatever was the branch of knowledge at which he labored, with the previously existing body of speculation, to fit them into the same framework, and exhibit them as parts of the same scheme; so that it might be truly said of him that he was at more pains to conceal the originality and independent value of his contributions to the stock of knowledge than most writers are to set forth those qualities in their compositions. As a consequence of this, hasty readers of his works, while recognizing the comprehensiveness of his mind, have sometimes denied its originality; and in political economy in particular he has been frequently represented as little more than an expositor and popularizer of Ricardo. It cannot be denied that there is a show of truth in this representation; about as much as there would be in asserting that Laplace and Herschel were the expositors and popularizers of Newton, or that Faraday performed a like office for Sir Humphrey Davy. In truth, this is an incident of all progressive science. The cultivators in each age may, in a sense, be said to be the interpreters and popularizers of those who have preceded them; and it is in this sense, and in this sense only, that this part can be attributed to Mill. In this respect he is to be strongly contrasted with the great majority of writers on political economy, who, on the strength, perhaps, of a verbal correction, or an unimportant qualification, of a received doctrine, if not on the score of a pure fallacy, would fain persuade us that they have achieved a revolution in economic doctrine, and that the entire science must be rebuilt from its foundation in conformity with their scheme. This sort of thing has done infinite mischief to the progress of economic science; and one of Mill's great merits is that both by example and by precept he steadily discountenanced it. His anxiety to affiliate his own speculations to those of his predecessors is a marked feature in all his philosophical works, and illustrates at once the modesty and comprehensiveness of his mind.

On some points, however, and these points of supreme importance, the contributions of Mill to economic science are very much more than developments—even though we understand that term in its largest sense—of any previous writer. No one can have studied political economy in the works of its earlier cultivators without being struck with the dreariness of the outlook which, in the main, it discloses for the human race. It seems to have been Ricardo's deliberate opinion that a substantial improvement in the condition of the mass of mankind was impossible. He considered it as the normal state of things that wages should be at the minimum requisite to support the laborer in physical health and strength, and to enable him to bring up a family large enough to supply the wants of the labor-market. A temporary improvement, indeed, as the consequence of expanding commerce and growing capital, he saw that there might be; but he held that the force of the principle of population was always powerful enough so to augment the supply of labor as to bring wages ever again down to the minimum point. So completely had this belief become a fixed idea in Ricardo's mind, that he confidently drew from it the consequence that in no case could taxation fall on the laborer, since—living, as a normal state of things, on the lowest possible stipend adequate to maintain him and his family—he would inevitably, he argued, transfer the burden to his employer, and a tax, nominally on wages, would, in the result, become invariably a tax upon profits. On this point Mill's doctrine leads to conclusions directly opposed to Ricardo's, and to those of most preceding economists. And it will illustrate his position, as a thinker, in relation to them, if we note how this result was obtained. Mill neither denied the premises nor disputed the logic of Ricardo's argument: he accepted both; and in particular he recognized fully the force of the principle of population; but he took account of a further premiss which Ricardo had overlooked, and which, duly weighed, led to a reversal of Ricardo's conclusion. The minimum of wages, even such as it exists in the case of the worst-paid laborer, is not the very least sum that human nature can subsist upon; it is something more than this: in the case of all above the worst-paid class it is decidedly more. The minimum is, in truth, not a physical, but a moral minimum, and, as such, is capable of being altered with the changes in the moral character of those whom it affects. In a word, each class has a certain standard of comfort below which it will not consent to live, or, at least to multiply—a standard, however, not fixed, but liable to modification with the changing circumstances of society, and which in the case of a progressive community is, in point of fact, constantly rising, as moral and intellectual influences are brought more and more effectually to bear on the masses of the people. This was the new premiss brought by Mill to the elucidation of the wages question, and it sufficed to change the entire aspect of human life regarded from the point of view of Political Economy. The practical deductions made from it were set forth in the celebrated chapter on "The Future of the Industrial Classes"—a chapter which, it is no exaggeration to say, places a gulf between Mill and all who preceded him, and opens an entirely new vista to economic speculation.

The doctrine of the science with which Mill's name has been most prominently associated, within the last few years, is that which relates to the economic nature of land, and the consequences to which this should lead in practical legislation. It is very commonly believed that on this point Mill has started aside from the beaten highway of economic thought, and propounded views wholly at variance with those generally entertained by orthodox economists. No economist need be told that this is an entire mistake. In truth there is no portion of the economic field in which Mill's originality is less conspicuous than in that which deals with the land. His assertion of the peculiar nature of landed property, and again his doctrine as to the "unearned increment" of value arising from land with the growth of society, are simply direct deductions from Ricardo's theory of rent, and cannot be consistently denied by any one who accepts that theory. All that Mill has done here has been to point the application of principles, all but universally accepted, to the practical affairs of life. This is not the place to consider how far the plan proposed by him for this purpose is susceptible of practical realization; but it may at least be confidently stated that the scientific basis on which his proposal rests is no strange novelty invented by him, but simply a principle as fundamental and widely recognized as any within the range of the science of which it forms a part.

There is one more point which ought not to be omitted from even the most meagre summary. Mill was not the first to treat political economy as a science, but he was the first, if not to perceive, at least to enforce the lesson, that, just because it is a science, its conclusions carried with them no obligatory force with reference to human conduct. As a science it tells us that certain modes of action lead to certain results; but it remains for each man to judge of the value of the results thus brought about, and to decide whether or not it is worth while to adopt the means necessary for their attainment. In the writings of the economists who preceded Mill it is very generally assumed that to prove that a certain course of conduct tends to the most rapid increase of wealth suffices to entail upon all who accept the argument the obligation of adopting the course which leads to this result. Mill absolutely repudiated this inference, and, while accepting the theoretic conclusion, held himself perfectly free to adopt in practice whatever course he preferred. It was not for political economy or for any science to say what are the ends most worthy of being pursued by human beings: the task of science is complete when it shows us the means by which the ends may be attained; but it is for each individual man to decide how far the end is desirable at the cost which its attainment involves. In a word, the sciences should be our servants, and not our masters. This was a lesson which Mill was the first to enforce, and by enforcing which he may be said to have emancipated economists from the thraldom of their own teaching. It is in no slight degree, through the constant recognition of its truth, that he has been enabled to divest of repulsiveness even the most abstract speculations, and to impart a glow of human interest to all that he has touched.

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Socialist Theories & Literary Utopias

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Communist Theories and Utopias By Theodore Dwight Woolsey 1880

PLATO—SIR THOMAS MORE—CAMFANELLA,

The communities hitherto noticed had at their foundation no direct purpose of acting upon general society or upon the state. Their object, rather, was to keep away from their members the influences of the outside world as far as possible, and in all liberty to develop their own social and religious views. To society, as at the time constituted, they entertained no such hatred as the most modern socialists feel. They thought only that they had reached a better form of society, yet one which it would not be possible for all men to adopt; one that all men would not willingly adopt. Their plans thus ended in a great degree with themselves and with separation from the rest of mankind.

But might not principles similar to theirs, in some respects, be carried out upon a larger scale and by the state itself? In every old society there have been and must perhaps always be evils, growing out of institutions as old and as much revered as the state. There is, especially in a society which is growing corrupt in consequence of its prosperity, and which is advanced enough in reflection to think upon the causes of social evils, a tendency to search for some cure of these evils, which lies beyond the reach of individuals and can only be applied by the highest authority. And it is not strange that inexperienced, speculative thinkers, who saw how much evil arose from private property, from family life, from the unrestricted action of the individual, should seek for a cure of such evil in a complete transformation of society. Men are not just. The city or the state is not a unity, but is split up by factions and strifes of classes. How can such evils be removed save by the state itself, the only power sufficient for the undertaking? Such questions would be asked not so much by men of an ordinary stamp as by those who had strong moral sensibilities and a high ideal of the ends aimed at by life in the world. If such men had a practical spirit and any hope of success, they would become reformers. If they were of another sort, they would construct Utopias.

Plato has left in his "Republic" an image of a state which is intended to set forth the reign of justice in a community. Whether it was to him a mere Utopia, or whether it was something more, has been long made a question. His scholar, Aristotle, treats his means for attaining to the great end of political justice, as if they were to be realized in an actual state. On the other hand, in his "Book of Laws" there is another republic contemplated—one in which the ordinary relations of society are to be protected and defended; in which, on the existing basis, society is to be made as just, pure, and reverential, as laws and institutions can make it. Taking the two works together, we must either say that Plato regarded the picture of a just state which appears in his "Republic" as a mere illustration of the same harmonious action which can be traced in the just individual; or we must say that he regarded his institutions in the "Republic" as desirable in themselves, and saw nothing immoral in them, so long as they conduced to the common good, to the unity and exemption from selfishness in the classes of which his "Republic" consists. That this last explanation is the true one appears from a passage in the "Laws," where he says that the first or best state and the best laws would be formed where "nothing existed that is separate and not common; where wives were common and children and everything that could be used." "Such a state, whether gods or children of gods inhabited it, would be a happy abode." But the state which he is treating of would be next in its immortality, and the first in a second class. So, then, to some degree we must make the genial philosopher responsible, and deserving of Aristotle's severe rebukes.

The state, however, in the "Republic" is not worked out in all its features. The classes are three in number—the rulers, the guards, and the workingmen or artificers and cultivators; answering to the reason, the soul as the seat of courage and feeling, and to desire or the desires. And, as the regular action of each of these departments of the spiritual being insures right conduct or justice, so the right action, unity, and justice of the state is preserved by the orders of society, each fulfilling its part. But Plato, in developing his subject, says very little in regard to the first and the third class. The former would, of course, be small; and its recruits were to be taken from the most trusty among the guards. The third class may, for aught that appears, own property, live in families, and be like the same class in other commonwealths; and if among their children some should show conspicuous ability, they are to be transferred to the class of guards; as also, if there are children of the guards who fall below the qualities proper for that class, they are to be thrust down into the third class, for we sometimes find, says Plato, that a golden father has an iron son.

The guards themselves, whose especial office it is to protect the state from foreign enemies and from domestic seditions, are to have no houses, nor lands, nor anything which they can call their own. The women who are selected to continue the race of the guards are to be wives of no one in particular, but of the whole class; and care is to be taken by the rulers that, when children are born to this or that woman, no one of the guards shall be able to say, This child is mine. All the children belong to all; and thus separate and exclusive relations to wives and children, the causes of disunion in a state, are to be obliterated.

The criticisms of Aristotle on this kind of polity show not only how Plato failed to gain his end; how he would destroy the state by removing differences; and how that in which the greatest numbers share receives the least care from each; but also how abhorrent this scheme was to the Greek mind. That such changes in society could be seriously proposed is to be accounted for by the prevailing Greek view, that the state had nearly unrestricted power; that it was the sovereign, which held the fortunes and destinies of the citizens in its hands. That they had little chance of being accepted may be gathered from the ridicule which they met with from the leading comic poet of Athens.

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Socialism, Communism and Economics

The "Republic" of Plato may have suggested the Utopia of Sir Thomas More, written in Latin, and first published in or earlier than the year 1516, in the first part of the reign of Henry VIII. and before the author had come into political importance. It is, perhaps, to be regarded as a mere dream; for, at the close of the work, it is said by one of the interlocutors: "If, on the first hand, I cannot adhere to all that has been said by Hythlodeus [the discoverer of the Island of Utopia]; on the other, I readily confess that there are among the Utopians many things which I could wish to see established in our cities. I wish this more than I hope for it." The name Utopia, also, meaning no place, seems to point at something outside of the real world, to the imaginary seat of an imaginary republic. Some of his sentiments were either mere fancies or were belied by his conduct afterward. Thus all religions are equally tolerated and equally bound to tolerate one another. Pure deism is the predominant faith; but those who deny the being of God or the immortality of the soul are incapacitated for holding office. This book was printed but a year or so before the first outbreak of the Keformation; yet its author, when he became chancellor, fourteen years afterward, consented to measures of severity against the Protestants.

The Utopia opens with a sad account of the social state of England, which is attributable to the number of non-producers, to the rich who take from the poor, to the idle who prevent the industrious from prospering. To this the speaker who had discovered Utopia replies, that in all states where individual property exists, where everything is measured by money, justice can never reign nor secure the public prosperity. In order to establish a just balance in human affairs, property must be abolished. As long as this right of property lasts, the largest and best class can only bear the burden of unrest, misery, and sorrow. Palliatives for this evil may be found— such as laws fixing a maximum of possessions in land or money; but they cannot remove the evil so long as individual property exists. The sole remedy is community of goods, such as prevails in Utopia.

In this island, separated from the main-land by an artificial channel, there is a capital, with fifty-four other towns, all built on the same plan and calculated for 6,000 families, with many large farm-houses scattered through the country, and able, each, to accommodate at least forty persons. All the inhabitants must work on the farm or in some branch of industry; and, as no one can be idle, a day's work consisting of six hours will suffice for all the wants of the island. Then the rest of the day may be devoted to study in the public colleges, and the evening to recreation.

In the island markets for provisions are established, and public magazines for manufactures. Every head of a family finds there, without cost, all necessary articles. Meals are taken in common. There are also common hospitals and common nurseries, where mothers may nurse their children. Marriage is the law and usage of the land; but the number of children in separate dwellings is equalized, by taking away the excess from one family, and placing them in another.

Money is unknown among the Utopians except as an aid to external intercourse. Nor is travelling into the interior allowed, except by permission of the magistrates; in which case the traveler pays for the conveyance and provisions furnished to him by laboring wherever he stops.

The government is simple. Every thirty families choose a magistrate; every ten of these divisions, a superior magistrate; and a prince is elected by the inferior magistrates out of four candidates proposed by the people. Every town sends three deputies to a legislature, invested with legislative powers and sitting at the capital. The magistrates have it for their principal office to keep people at work. But would the system encourage work or idleness? This important inquiry is proposed in the course of the dialogue, but meets with no sufficient answer.

I have mentioned some of the details of More's plan, because the socialists of the more modern times have seen the same difficulties, and proposed some of the same expedients for their removal. The Utopia may be regarded as written long before the era when social changes were called for with a loud voice, yet as foreseeing the course which such changes would take.

Another ideal reformer, more according to Plato's pattern, Thomas Campanella, flourished about a century after More; his "City of the Sun" having been first published in 1623. This man, a learned philosopher of Italy and a Dominican monk, incurred the jealousy of the Spaniards, and was sentenced, after being put seven times to the rack, to perpetual imprisonment; but was liberated after some twenty-six years of confinement, and spent the end of his life in France. There is little in his communistic scheme that is worthy of notice, and it has had little influence on the minds of men disposed to speculate in that direction. In fact, it has been rescued from oblivion only in comparatively recent times. As another has remarked: "The monastery is the type of the social organization which he extols; the pontifical power and the ecclesiastical hierarchy serve as the basis of the government of his new society." The two main points of his system are community of property and of wives, and a government lodged in the hands of philosophers; in both of which he follows Plato. In regard to the first, he perceives the connection between the abolition of private property and the abolition of the family. He says, in a passage which I borrow from another, that "the spirit of property increases among us only because we have each a house, a wife, and children of our own. Thence comes selfishness, for, in order to raise a son to honors and riches and to make him heir of a great fortune, we dilapidate the public treasure, if we can control others by our wealth and power; or, if we are feeble, poor, and of an obscure family, we become avaricious, perfidious, hypocrites." And, in carrying out this kind of community, he follows Plato in endeavoring to improve the breed of men by measures of government, expressing his astonishment that races of animals should receive attention in this respect, while the race of men is neglected.

Campanella carries his dread of property even beyond the points above spoken of. No one has a fixed abode. Every six months the magistrates determine the district or circle, the house and chamber, which each one is to occupy; apparently, lest there should be any local attachments, any home feeling. All the mechanic arts are common to both sexes. All products are distributed by the magistrates in proportion to each one's needs. As for the amount of these needs, since the inhabitants all take a vow of frugality and poverty, and it is assumed by Campanella that four hours' work daily will be adequate for their supply, they cannot be very great.

The magistrates in this republic are all to be philosophers, according to Plato's noted words, in the "Republic," that until kings become philosophers, or philosophers become kings, there can be no end of evils in political communities. The supreme magistrate is the most eminent philosopher in the City of the Sun, and has the title of the Sun, or the great metaphysician. Under him three magistrates—answering to the three attributes of power, wisdom, and love in the individual man—preside respectively over war, over science, and over industry and the arts. Under these, and chosen by them, there is a great body of officers, distinguished for some kind of knowledge, and chosen by the great metaphysician and his three ministers. They are invested with very great executive powers, with which the religious authority also, even that of holding auricular confession, is united. Thus a thorough despotism, the only government possible in a communistic society, if it can subsist, is established.

Why he should want a religious autocrat for his Utopia we can explain; but his union of the two powers, so contrary to Catholic doctrine, his doctrine of marriage, so un-Christian, and the modicum of freedom provided for his republic, when he suffered so much from despotism himself, make him a rare specimen in the history of philosophers.

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Free eBook: Read This Masterful Account of the Rise of Fascism

•  As We Go Marching - Flynn (epub)
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The work of John T. Flynn (1882–1964) is proof that the job of journalist once meant something very serious. As We Go Marching is a work of scholarship by any standard. It is well written, to be sure, but it covers the history and meaning of fascism with fantastic erudition, tracing its permutations from Italy to Germany to the United States.

The passion is not disguised, but it is backed by incredible detail, relentless logic and powerful analytics. It is easy to identify this as Flynn’s greatest work, but actually there is some serious competition for that designation.

Before the New Deal, Flynn thought of himself as a liberal. He was right. And he never changed his mind, either. He was a liberal. He believed in progress, free speech, free inquiry, small government, maximum freedom in every sphere of life. That included the economic sphere. Here is where the crowd that called themselves liberal in the 1930s and ’40s departed from him. Flynn believed the liberalism also meant a free economy. He was an opponent of corporatism, of state intervention, of state-created cartels, of authoritarian rule.
The New Deal was all those things. Flynn shows that it culminated in militarism and war—the New Deal by other means. It was a continuation and not a departure. We were fighting against fascism abroad while imposing it at home. In the end of supporting freedom around the world, the government was taking it away from us at home. In this sense, it is impossible to call Flynn a conservative today. His opposition to war and war socialism was so intense he would never join the “conservatives” in whooping it up for the Cold War. He remained true to his convictions his entire life.

He could not but write and speak the truth. He knew that it would come at a price and it was one he was willing to pay.


It is a marvel that this book was ever published, given the way all governments censor the press during wartime. It did get published—with an advertisement for war bonds on the back cover. At the same time, it meant the end of his career as a writer. He was once nationally famous. After the war, he could hardly find anyone willing to publish his works. He died in obscurity—and this was after an incredible lifetime career of some of the best journalism in American history.

I’ve variously felt a strong sense of sadness for what happened to Flynn. But when you read this book, that sense goes away. He was a man of remarkable courage and brilliance. He could not but write and speak the truth. He knew that it would come at a price and it was one he was willing to pay. And look at his legacy! This book is truth spoken to power, and it speaks still and will continue to do so for generations.

Jeffrey A. Tucker

Jeffrey Tucker is a former Director of Content for the Foundation for Economic Education. He is the Editorial Director at the American Institute for Economic Research, a managing partner of Vellum Capital, the founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, economics adviser to FreeSociety.com, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books.

This article was originally published on FEE.org. Read the original article.