this sect of philosophers filled all Europe with their speculations, an observer of more depth and ability directed his researches to the same subject, and laboured to establish, on a true and lasting foundation, the doctrines of political economy.
Dr. Smith succeeded in discovering a great truth, – the most fruitful in consequences, the most useful in practice, the origin of all the principles of the science, and one which unveiled to him all the mysteries of the growth and distribution of wealth. This great man perceived, that the universal agent in the creation of wealth is labour; and was thence led to analyse the powers of this agent, and to search after the causes to which they owe their origin and increase.
The great difference between the doctrine of Smith and of the economists, lies in the point from which they set out, in the reduction of their consequences. The latter go back to the soil as the primary source of all wealth; while the former regards labour as the universal agent which, in every case, produces it. It will appear, at first sight, how very superior the school of the Scotch professor is to that of the French philosophers, with regard to the practical utility, as well as to the application of its precepts. Labour is a power of which man is the machine; and, of course, the increase of this power can only be limited by the indefinite bounds of human intelligence and industry; and it possesses, like these faculties, a susceptibility of being directed by design, and perfected by the aid of study. The earth, on the contrary, if we set aside the influence which labour has over the nature and quantity of its productions, is totally out of our power, in every respect which can render it more or less useful – in its extent, in its situation, and in its physical properties.
Thus the science of political economy, considered according to the view of the French economists, must be classed with the natural sciences, which are purely speculative, and can have no other end than the knowledge of the laws which regulate the object of their researches; while, viewed according to the doctrine of Smith, political economy becomes connected with the other moral sciences, which tend to ameliorate the condition of their object, and to carry it to the highest perfection of which it is susceptible.
A few words will suffice to explain the grounds of the doctrine of Smith. The power by which a nation creates its wealth is its labour; and the quantity of wealth created will increase in direct proportion as the power increases. But the increase of this last may take place in two ways – in energy, and in extent. Labour increases in energy, when the same quantity of labour furnishes a more abundant product; and the two great means of effecting the increase, or of perfecting the productive powers of labour, are the division of labour, and the invention of such machines as shorten and facilitate the manual operations of industry. Labour increases in extent, when the number of those engaged in it augments in proportion to the increasing number of the consumers, which can take place only in consequence of an increase of capitals, and of those branches of business in which they are employed.
Now, to accomplish the increase of labour in both these ways, and to conduct it gradually to the utmost pitch of energy and extent to which it can reach in any nation, considering the situation, the nature, and the peculiarities of its territories, what are the exertions to be made by its government? The subdivision of labour, and the invention and perfecting of machines. These two great means of augmenting the energy of labour, advance in proportion to the extent of the market, or, in other words, in proportion to the number of exchanges which can be made, and to the ease and readiness with which these can take place. Let the government, then, direct all its attention to the enlargement of the market, by forming safe and convenient roads, by the circulation of sterling coin, and by securing the faithful fulfilment of contracts; all of which are indispensible measures, at the same time that, when put in practice, they will never fail to attain the desired end. And the nearer a government approaches to perfection in each of these three points, the more certainly will it produce every possible increase of the national market. The first of the three means is, without doubt, the most essential, as no other expedient whatever can possibly supply its place.
The gradual accumulation of capitals is a necessary consequence of the increased productive powers of labour, and it becomes also a cause of still farther increase in these powers; but, in proportion as this accumulation becomes greater and greater, it serves to increase the extent of labour, inasmuch as it multiplies the number of labourers, or the sum of national industry. This increase, however, of the number of hands in the nation employed, will always be regulated by the nature of the business to which the capitals are dedicated.
Under this second head of the increase of the products of labour, the exertions of government are much more easy. In fact, it has only to refrain from doing harm. It is only required of it, that it shall protect the natural liberty of industry; that it shall leave open every channel into which, by its own tendencies, industry may be carried; that government shall abandon it to its own direction, and shall not attempt to point its efforts one way more than another; for private interest, that infallible instinct which guides the exertions of all industry, is infinitely better suited than any legislator to judge of the direction which it will with most advantage follow. Let government, then, renounce alike the system of prohibitions and of bounties; let it no longer attempt to impede the efforts of industry by regulations, or to accelerate her progress by rewards; let it leave in the most perfect freedom the exertions of labour and the employment of capital; let its protecting influence extend only to the removal of such obstacles as avarice or ignorance have raised up to the unlimited liberty of industry and commerce; – then capitals will naturally develope themselves, by their own movement, in those directions which are at once most agreeable to the private interest of the capitalist, and most favourable to the increase of the national wealth.
Such are the results of the doctrine of Smith, and the fruits we are to reap from his immortal work. The proofs of the principle upon which his opinions are grounded, and the natural and easy manner in which his deductions flow from it, give it an air of simplicity and truth, which render it no less admirable than convincing. This simplicity, however, to be fully perceived, requires much study and consideration; for it cannot be denied that the 'Wealth of Nations' exhibits a striking instance of that defect for which English authors have so often been blamed, viz. a want of method, and a neglect, in their scientific works, of those divisions and arrangements which serve to assist the memory of the reader, and to guide his understanding. The author seems to have seized the pen at the moment when he was most elevated with the importance of his subject, and with the extent of his discoveries. He begins, by displaying before the eyes of his reader the innumerable wonders effected by the division of labour; and with this magnificent and impressive picture, he opens his course of instructions. He then goes back, to consider those circumstances which give rise to or limit this division; and is led by his subject to the definition of values – to the laws which regulate them, to the analysis of their several elements, and to the relations subsisting between those of different natures and origin; all of which are preliminary ideas, which ought naturally to have been explained to the reader before exhibiting to him the complicated instrument of the multiplication of wealth, or unveiling the prodigies of the most powerful of its resources.
On the other hand, he has often introduced long digressions, which interrupt the thread of his discussion, and, in many cases, completely destroy the connection of its several parts. Of this description is the digression
On the variations in the value of the precious metals during the four last centuries, with a critical examination of the opinions that their value is decreasing – book 1, chap. xi.
Upon banks of circulation and paper money – book 2, chap. ii.
Upon banks of deposit, and particularly that of Amsterdam – book 4, chap. iii.
Upon the advantage of seignorage in the coining of money – book 4, chap. vi.
Upon the commerce of grain, and the laws regarding this trade – book 4, chap. v.
These different treatises,
