The new tendencies of political economy

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THE

NEW TENDENCIES

OF

POLITICAL ECONOMY,

BY

EMILE DE LAVELEYE,

It

Professor of Political Economy at the University of Lu^e, Belgium.

TRANSLATED FROM THE "REVUE DES DEUX MONDES "
FOR THE "BANKER'S MAGAZINE,"

BY

GEORGE WALKER:

APPENDIX CONTAINING THE REMARKS OF M. DE LAVELEYE AT
THE ADAM SMITH CENTENARY IN LONDON.

THE BANKER'S MAGAZINE*"AND "STATISTICAL REGISTER,

No. 2S1 Broadway, New York.
I879.

TRANSLATOR'S PREFACE.

The recent publication of an American translation of Roscher's Principles of
Political Economy reminded me of Professor de Laveleye's very instructive article on
the New Tendencies of Political Economy and of Socialism, which appeared in the
Revue des Deux Mondes, of July 15, 1876. I had often thought of publishing a
translation of this article, but the time did not seem to me to have arrived for
awakening a proper interest in the subject in this country. The course which public
discussions have taken within the last year, however, and notably the resumption of
specie payments, have brought financial and economical questions to the front, and
give promise of a more intelligent consideration of them than at any recent period.
Coincident with this is the revival of the protectionist and free-trade war in Europe,
a war which has been actively begun in Germany, Austria, France and Italy, and
the mutterings of which have not been unheard even in Great Britain. The dis-
tressed condition of trade in all of these countries and the new political systems
which are being consolidated in Germany, France, and Italy, have made the discus-
sion of economic principles and of systems of fiscal administration more general and
more vital than perhaps ever before. Indissolubly mixed up with them is the social
question in its various aspects. As M. de Laveleye justly observes, in both of the
papers now first offered to American readers, political economy seems to have passed
through its first stage — that which gives instruction as to the accumulation of
national wealth — and to have reached the far more important question of its distri-
bution among the several classes which participate in creating it. The respective
claims of capital and labor present to-day the most difficult and anxious social prob-
lem. Political economy concerns itself with this problem, both because it calls in
question the soundness of its past conclusions respecting the creation of wealth, and
because it lies at the very bottom of its future conclusions as to an equitable distri-
bution.

The "orthodox" political economy, as it is styled by M. de Laveleye, means the
doctrines of the Manchester school of free traders, as generally held in England for
the last quarter of a century ; doctrines which are as firmly established at Oxford
and Cambridge and in the House of Commons, as in Yorkshire or Lancashire.
There have been some dissenters, however, like Cliffe Leslie and Thornton, who
have called down the scoffings, if not the anathemas, of the orthodox camp. Thus,
Professor Rogers says, in his article in the January Princeton, "It is probable that
there is no subject on which English people are practically more united than on
this, for they do not trouble themselves to argue with a few people who are trying
to raise an exploded practice under the new name of reciprocity. They are very
tolerant of what they think is folly, but do not think it strong enough to be mis-
chievous." This is very likely, but when we find such men as Leonard Courtney
boldly advocating an export duty on coal, or the still more stringent measure of a
duty at the pit's mouth, "the intention and justification" of which would be "to
put all English industries under restraint," to put " a drag on industrial progress,"
because it would be a drag on the "multiplication of the population," and "that
the dangerous expansion of national industry should be kept under," we begin to
suspect that all is not harmony in the free-trade camp.

The dogmatism of the Manchester school met, also, with a sharp rebuff in the
address delivered by Professor Ingram, of Edinburgh, before the British Association
at its last annual meeting. Professor Bonamy Price, of Oxford, followed in the
same vein in his paper read before the Social Science Association at a still later

IV TRANSLATOR S PREFACE.

date. Both these economists are, we believe, free traders ; but they warn English
men that the conclusions of economic science are always subject to be reconsidered,
perhaps to be reversed. If this dangerous heresy should gain ground what becomes
of the doctrine of " natural laws," to which man is supposed to be inexorably
bound as the planets to the solar system ?

The papers now translated do not present an issue against free trade. On the
contrary, Professor de Laveleye is a free trader, and Belgium is the most advanced
of all free-trade countries. But his economic and social philosophy is utterly at
variance with those of the Manchester school. Nothing could be wider apart than
Robert Lowe and M. de Laveleye. One believes that man is an atom in the great
family of mankind, too obscure and unimportant to be taken into the account in
settling the question of the well-being of the race. The other holds that man is
not a mere money-getting machine, nor is the selfish gratification of his appetites
his moving impulse. That he is, on the contrary, "a moral being, who recognizes
the obligations of duty, and under the teachings of religion or of philosophy, often
sacrifices his enjoyments, his well-being, or his life even, to his country, to human-
ity, to truth, to God. In different countries, at different epochs, men obey different
motives, because they have formed peculiar conceptions of well-being, of law, of
morality, and of justice."

The doctrines of the historical school in political economy lead to no partisanship
whatever. They are held equally by free traders and by protectionists in Europe.
The underlying motive of their system is the right of individual and of national judg-
ment to determine upon" a given state of facts, what policy, in respect of production
and exchange, it is wise to pursue here and now. It treats political economy as a
science, not of pure principles, but of applied principles, and this alone makes pos-
sible a progressive fiscal policy, moulding itself according to the traditions, the
usages, the aspirations, and the actual condition of a free people. This is eminently
the economic system suited to the wants of the American people. It deals with the
past without contumely, and it welcomes the future without prejudice.

No man who looks at the history of past American legislation on the subject of
the tariff, in a calm and philosophic spirit, can fail to admit that it is full of
ignprance, of vacillation and of mistakes. We might have been abreast of England
in opening our markets freely to the world, if our tariff policy had been consistent
and progressive. If the English House of Commons has legislated for mankind
rather than for man, the American Congress has legislated for man rather than for
mankind. In other words, the Committee of Ways and Means has always been the
center of personal and individual and local interests, instead of consulting and rep-
resenting the average interests of American citizens — occupying a great continent
with different productions and different wants. I do not say that the harmonizing
of those interests is not at all times difficult, but it does seem to me that if the
fiscal policy of the country were put beyond the pale of party, as completely as has
been done in Great Britain since the repeal of the Corn Laws, a system might be
eliminated which should respect traditions, conciliate labor and make rapid strides
in the direction of commercial freedom. In this as in most public questions the
truth lies between the extremes — "Media tutissimus ibis"

GEORGE WALKER.

UlTiyBESITT

THE NEW TENDENCIES OF POLITICAL ECONOMY.*

[ TRANSLATED FROM THE REVUE DBS DEUX MONDES BY GEORGE WALKER.]

The Political Economy which I should describe as ortho-
dox, that is to say, the science as it had been understood
and expounded by its fathers, Adam Smith and J. B. Say,
and by their disciples, has seemed to be definitively settled.
Like the Church of Rome, it had its credo. Certain
truths appeared to be so firmly established, so irrefragably
demonstrated, that they were accepted as dogmas. Those
who doubted them were regarded as heretics, whose igno-
rance alone explained their vagaries. No doubt these truths
had not been formulated without meeting with vigorous
opposition. From the beginning, and down to our own time,
they have been attacked by certain religious writers, who have
charged them with materialism and immorality, and by dif-
ferent socialistic sects, who have reproached them with sacrific-
ing relentlessly the rights of the disinherited classes to the
privileges of the rich ; but the economists have had little diffi-
culty in defending themselves against these classes of adver-
saries, who have been governed chiefly by sentiment, and
have had no just apprehension of the questions which they
ventured to discuss.

At the present day, however, the dogmas of political econ-
omy are meeting with far more formidable antagonists. In
Germany they are found among the professors of political
economy themselves, who, for this reason, have been denomi-
nated Katheder Socialisten, or, " Socialists of the chair." In
England they are those economists who have given the most
attention to the study of history and of law, and who best
understand the facts established by observation and by statis-
tics ; such as Mr. Cliffe Leslie, and Mr. Thornton ; in Italy
they constitute a whole group of distinguished writers,
Luzzati, Forti, Lampertico, Cusmano, A. Morelli, who have
given expression to their ideas in a Congress assembled
last year at Milan, and who have for their organ the
" Giornale degli Economisti" In Denmark there is the
excellent economical repertory published by Messrs. Fred-
ericksen, V. Falbe, Hansen, and Wil. Scharling. It can-
not be doubted, therefore, that there is, in the present
instance, a scientific revolution going on of a very serious
character, which calls for an attentive examination. We shall
endeavor first, to point out the origin and character of these
new tendencies of political economy ; and afterwards, to con-

*Les Tendences nouvelles de L' Economie Politique et du Socialisme. Revue des Deux
Mondes.\~]\\\y, 1875.1 By EMILE DE LAVELEYE.

2 NEW TENDENCIES OF POLITICAL ECONOMY.

sider carefully the writings of some of the authors who
best represent the different shades of the movement, as well
as those of the Socialists whom it is their mission to combat.

I.

The new political economy takes a different view from the
old, of the fundamental principles, the methods, the mission,
and the conclusions of the science. The starting point of the
Socialists of the chair, is entirely different from that of the
orthodox economists, whom they designate under the name of
Manchester-thum, or sect of Manchester ; because it is, in
fact, the school of the free traders, which has expounded
most logically, the dogmas of the ancient credo. Let us see
how the new economists themselves indicate the points which
separate them from the generally received doctrines.*

Adam Smith, and more especially, his successors, such as
Ricardo, McCulloch, J. B. Say, and all the so-called English
school, followed the deductive method. They started out with
certain ideas respecting man and nature, and thence deduced
certain consequences. Rossi characterizes this method clearly
when he says that " political economy, regarded from a general
stand-point, is rather a science of reason than of observation.
It has for its object a thorough knowledge of the relations
which proceed from the nature of things. ... It seeks
for laws, by taking • its stand on the general and constant
facts of human nature." In this system, man is considered
as a being who everywhere and always pursues his private
interest ; under the impulse of this motive, good in itself
( since it is the principle of his preservation ), he searches
after that which is useful to him, and no one is able to dis-
cover it better than himself. If, therefore, he is free to act
as he pleases, he will, in the end, procure for himself all the
satisfactions which it is given to him to attain. Down to the
present time, the State has always put restraints upon the full
expansion of economic forces ; do away with these restraints
and as all men will apply themselves freely to the
pursuit of their well-being, the true order will establish itself
in the universe. Competition, general and unrestricted
enables every individual to reach the place which is best
suited to him, and to reap the just reward of his labors. As
Montesquieu has observed, " it is competition which puts a
just price on merchandise." It is the infallible regulator of
the industrial world. It is like a providential law, which, in
the highly complicated relations of mankind united by the
bonds of society, causes order and justice to be enthroned. If
the State will only abstain from all interference with human
transactions, and accord entire freedom to property, to capi-
tal, to labor, to exchanges, to vocations, the production of

* We shall follow in this connection principally the writings of Adolph Held, Gustav Schon-
berg, Gustav Schmoller, Contzen, Wagner, and L. Luzzati.

NEW TENDENCIES OF POLITICAL ECONOMY. 3

wealth will be carried to its highest point, and the general
well-being will thus become as great ,as possible. The legis- ^
lator has no occasion to occupy himself with tne distribution
of wealth ; it will be made conformably to natural laws and to
contracts freely entered into.

A phrase of Gournay, enunciated in the last century,
embodies the whole doctrine : laissez faire, laissez passer.
Under this theory, the problems which have relation to the
government of societies, were found to be greatly simplified.
The statesman has only to fold his arms. The world goes
on of itself towards its end. It is [the optimism of Leibniz,
and of HegeQtransferred to the domain of politics.

[Resting on these philosophic doctrines, the economists 4
enunciated certain general principles applicable in all times,
and to all peoples, because of their absolute verity]] The
orthodox political economy was essentially cosmopolitan. It
took no account of the division of mankind into separate
nations ; nor of the different interests which might result there-
from any more than it concerned itself with the necessities, or
the particular conditions resulting from the history of differ-
ent States. Qt regarded only the good of mankind considered
as a single great familyj] precisely as does every abstract
science, and every universal religion, Christianity most of all.

Having thus set forth the old doctrine, the new economists
proceed to criticise it as follows : They accuse it of seeing
things from only one side. They admit that man pursues his
own interest, but they assert that more than one motive acts
upon his moral nature, and regulates his conduct. Apart from
self-interest, there is the sentiment of collectivity, the gemein
si'nn, the social instinct, which manifests itself in the forma-
tion of the family, of the community, and of the State. Man
is not like the lower animals, which know nothing beyond
the satisfaction of their appetites ; he is a moral being, who
recognizes the obligations of duty, and under the teachings
of religion or of philosophy, often sacrifices his enjoyments,
his well-being, and his life even, to his country, to humanity,
to truth, to God. It is a mistake, therefore, to predicate a
series of deductions upon the aphorism that man acts onlyv.
under the control of a single motive — individual interest/'
Those " general and constant facts of human nature," from
which Rossi would have us deduce economic laws, are only
a conception of the imagination. In different countries, at
different epochs, men obey different motives, because they
have formed peculiar conceptions of well-being, of law, of
morality, and of justice. The savage procures his subsistence
by chasing and if need be, devouring, those of his own kind :
the citizen of antiquity by reducing them to slavery, in order
to live on the fruits of their labor ; the man of modern times
by paying them wages.
LMankind having, according to their several conditions of y

4 NEW TENDENCIES OF POLITICAL ECONOMY.

civilization, different wants, different motives, different methods
of producing, of distributing, and of consuming wealth, it
' follows thence that economic problems do not admit of those
general and a priori solutions, which are usually demanded of
the science, and which it has too often ventured to supply. We
ought always to examine the question relatively to a given
country, and in so doing to seek the aid of statistics
and of history. Hence arises the historical or Realistic method,
as it is denominated by the Socialists of the chair, that is
to say, the method founded on facts.^]]

According to the Socialists of the chair, it is also a mis-
take to maintain, as Bastiat has done in his Harmonies Econo-
miqueS) that general order results from the free play of indi-
vidual selfishness, and that consequently it is only necessary
to remove all hindrances in order that each person shall
attain to the well-being to which his efforts entitle him.
But selfishness leads men to wickedness and to spoliation ; it
is necessary, therefore, to restrain it and not to give it free
play ; this is, in the first place, the proper mission of moral-
ity, and afterwards, the mission of the State, as the organ
of justice. Without doubt, if men were perfect and desired
only good, liberty would suffice to insure the reign of order;
but constituted as they are, unrestrained interests result in
antagonism, and not in harmony. The employer desires to
reduce wages, the workman to raise them. The landowner
is constantly endeavoring to advance rent, the farmer to
reduce it. Everywhere the strongest and the most capable
triumphs, and in the conflict of opposing interests, no one
troubles himself about the teachings of morality or of justice.

It is in England, especially, where all restraints have been
abolished, and where the most perfect freedom of industry
prevails, that the war of classes, the antagonism of masters
and workmen presents itself in the most determined way, and
under aspects the most alarming. It is in that country, also,
— the country, par excellence, of laissez faire — that, for a con-
siderable time past, the interference of Government has been
most frequently invoked, to repress the abuses of the strong
and to protect the weak. After having disarmed power,
*they are daily conferring upon it new privileges. Is not this
a proof that the economic doctrine of absolute freedom
does not afford a complete solution of the questions at
issue ?

The new economists do not profess that horror of the
State which led their predecessors to declare sometimes
that the State was a canker and sometimes that it was a
necessary evil. To them, on the contrary, the State, which

* Although in France no new economic school has been established, as in Germany, in Eng-
land and in Italy, many writers are pursuing the historical or realistic method with a confi-
dence of learning and a richness of information which are nowhere else surpassed. It will
suffice us to mention MM. Leonce de Lavergne, L. Reybaud, Wolowski, Victor Bonnet, and
Paul Leroy-Beaulieu.

NEW TENDENCIES OF POLITICAL ECONOMY. 5

represents the unity of the nation, is the supreme organ of
law and the instrument of justice. Being itself the emana-
tion of the vital forces and of the intellectual aspirations of
a country, it is charged with the duty of fostering the devel-
opment of these in all directions. As history proves, it is
the most powerful agent of civilization and of progress.
The liberty of the individual ought to be respected and
even stimulated, but it should remain in subjection to the
rules of morality and of justice, and those rules, which
become more and 'more strict in proportion as the ideas of
goodness and justice become more pure, should be made
obligatory by the State.

Freedom of industry is, doubtless, an excellent thing. Free
exchange, freedom of labor and of contracts have contrib-
uted very greatly to increase the production of wealth. It
is necessary, therefore, to strike off from liberty all fetters,
if any still exist ; but it is the duty of the State to inter-
pose whenever the evidences of individual interest appear
to conflict with the humane mission of political economy,
by the oppression and degradation of the lower classes.
Thus it is, that the State has a double duty to perform :
first, to maintain liberty in the limits marked out for it by
morality and law ; next, to lend its support in every case
where the object in view (which is social progress) can be
better attained in this way than by individual effort. Cases
in point are the improvement of harbors, the opening of
ways of communication, the fostering of education, of the
sciences, of the arts, or of any other object of general utility.
The interference of the State ought not always to be withheld,
as the economists d outrance desire, nor always invoked, as
the Socialists, on the other hand, demand ; each case should
be examined by itself, taking into account the wants to be
satisfied and the ability of private enterprise to meet them.
But it is a mistake to suppose that the duty of the
State grows less important as civilization advances; that duty
is by no means the same at the present day as under the
patriarchal or despotic systems of government. The functions
of the State are constantly growing larger wherever new
paths are opened to human activity and in proportion as the
appreciation of what is lawful and of what is unlawful
grows purer. The same doctrine has been also propounded
in France, with much force, by M. Dupont-White in his book
on the Individual and the State.

The Socialists of the chair also accuse the orthodox econ-
omists of being too exclusively occupied with questions relat-
ing to the production of wealth, and with neglecting those
which concern its distribution and consumption. They allege
that the economists have treated man merely as a producing
agent, without giving due consideration to his destiny and
his obligations as a moral and intelligent being. In their

6 NEW TENDENCIES OF POLITICAL ECONOMY.

view, owing to the marvelous results of science applied to
industry, the latter might even now furnish a sufficiency of
products, if all the labor were usefully employed and if so
many human efforts were not frittered away in the procur-
ing of false, if not vicious, indulgences.

The great problem of our times is what is called the social
question ; that is to say, the question of distribution. The
working classes seek to better their condition and to obtain
a laager share of the goods which are produced by the joint
action of capital and labor. Within what limits and under
what conditions is this possible? This is the question. In
presence of the dangers which disturb and threaten the
social body, three systems present themselves : that which
advocates a return to the past, and the reestablishment of
the old order of things — socialism, which looks to a radical
change in the social order — and finally, the orthodox politi-
cal economy, which holds that everything will find its solu-
tion in liberty and in the action of natural laws. According
to the Socialists of the chair, no one of these three systems
is capable of solving all the difficulties which agitate our
times. A return to the past is impossible ; a general and
hasty remodeling of society is no less so ; and to invoke the
action of liberty is only a mockery of words, since the ques-
tion at issue is one of law, of the civil code, and of social
organization. The distribution of products is made not only
in virtue of contracts, which ought evidently to be free, but
still more in accordance with civil laws and with moral senti-
ments, the influence of which must be understood and the
justice of which must be determined. Economic problems
cannot be justly considered apart from other things ; they are
allied intimately with psychology, with religion, with morality,
with law, with customs, with history. Account should, there-
fore, be taken of all these elements, and we should not rest-
contented with the uniform and superficial formula of laissez
faire. The antagonism of classes, which has always been at
the bottom of political revolutions, is reappearing at the
present day with aspects more formidable than ever before.
It seems to put in peril the future of civilization. We can-
not deny the evil ; but it becomes us, rather, to study it in
all its phases, and to endeavor to find a remedy for it in
progressive and rational reforms. The sources of inspiration
must be sought in morality, in the sentiment of justice, and
in Christian charity.

In short, the elder economists, starting from certain abstract
principles, endeavored, by the deductive method, to arrive at
conclusions well settled and universally applicable. The
Socialists of the chair, on the other hand, taking as their
basis a knowledge of past and present facts, draw from them,
by the inductive and historical method, certain conclusions
which are only relatively true and are modified by the state

NEW TENDENCIES OF POLITICAL ECONOMY. 7

of society to which they are applied. The one party con-
siders that the natural order, which presides over physical
phenomena, ought also to govern human societies, and main-
tain that, if all artificial fetters were removed, there would
result from the free play of inclinations a harmony of inter-
ests, and from the complete enfranchisement of individuals
a better social organization and a greater measure of gen-
eral well-being. The other party, on the contrary, maintains
that the same law holds good in the domain of human
economy which prevails among animals, namely, that in the
struggle for existence and the conflict of selfishness, the
strong are -certain to crush out, or at least to take advantage
of, the weak, unless the State, which is the organ of justice,
comes in to award to each one the return to which he is
legitimately entitled. They also hold that the State ought
to contribute directly to the progress of civilization. So far,
in short, from admitting, with the orthodox economists, that
uncontrolled liberty is sufficient to put an end to social con-
flicts, they maintain that progressive reforms and ameliora-
tions, inspired by sentiments of justice, are indispensable to
society, if it hopes to escape civil discord and the despotism
which is certain to follow in its train.

The new school of economists has made the greatest
progress in Germany, the reason being that political economy
is there ranked among the departmental sciences, {sciences
camerales} that is to say, sciences which pertain to Govern-
ment. They have never, therefore, treated it as an independ-
ent subject governed by special laws. Even the orthodox
disciples of the English school, like Rau, have never failed to
recognize the close bonds which unite it with other social
sciences, notably with politics ; and they have habitually
resorted to facts in support of their positions. Ever since
the principles of Adam Smith and his followers began to
take root in Germany, they have met with objectors like
Professor Lueder and Count von Soden, who maintained that
the increase of wealth was not the only thing to be consid-
ered, but the general progress of civilization. Subsequently
to these authors have arisen List, Stein, Roscher, Knies, Hil-
ebrand, and at the present day their name is legion : Nasse,
Schmoller, Held, Contzen, SchafBe, Wagner, Schonberg, G.
Hirth, V. Bohmert, Brentano, Cohn, Von Scheel, Samter.

II.

Let us now endeavor to sift out what there is of good in
the views of the new school. In the first place, it is clear
that we have not yet arrived at the point of determining
accurately the fundamental principle, the characteristics and
the limitations of political economy, nor its relations to other
sciences of the same order. " Though we may blush for the
science," said M. Rossi, "the economist must, nevertheless,

8 NEW TENDENCIES OF POLITICAL ECONOMY.

avow, that the first question to be examined is still this :
What is political economy, what are its objects, its extent,
its limitations ? " This observation is well founded ; even in
the Dictionaire ^Economic Politique, the writer on whom
devolved the duty of exactly defining it, M. C. Coquelin, is
unable to decide whether it is an art or a science. He desires
to establish it as a science, defining it with Destutt de
Tracy, as the resultant of truths which come from the exam-
ination of a given subject. He adopts the language of
Rossi, that " science has no object : the moment we begin
to consider the uses which can be made of it, we fall from
science into art. Science is in all things only the possession
of truth." And M. Coquelin adds, " To observe and describe
actual phenomena, that is science ; it neither counsels, nor
prescribes, nor directs." Nevertheless, after having settled
upon this definition, the embarrassment of M. Coquelin is
great, and he avows it frankly. The very dictionary in which
he wrote contains a variety of articles, and those among the
most important, which do not content themselves with
observing and describing, but on the contrary, counsel and
prescribe ; which condemn this institution or that law, and
demand its repeal.

According to these articles, political economy would seem
to be only an art, and not a science. M. Coquelin admits
that it is, at the same time, both the one or the other ; but
when he tries to draw the line of demarcation, he is forced
to make this singular confession of impotence : " Shall we
endeavor, at present, to make a clear separation between the
science and the art by bestowing on them different names ?
No, it is enough for us to note the distinction; time and a
better understanding of the subject will do the rest."

The uncertainty and the obscurity which we find in most
authors when they endeavor to define the objects of political
economy, may perhaps arise from their endeavor to make it
either a science of observation, like natural history, or an
exact science, like mathematics, and because they have
assumed to find in it fixed and immutable laws, like those
which govern the physical universe. Let us endeavor to clear
up these two points, inasmuch as they are fundamental ; the
true character of political economy will be made plainer by
the discussion.

Three classes of sciences are generally recognized to exist,
the exact sciences, the natural sciences, and the moral and
political sciences. The exact sciences are so termed because
they have to do with clearly defined abstract data, such as
numbers, lines, points and geometrical figures, and by a process
of reasoning arrive at conclusions which are rigorously exact
and unassailable ; such are the sciences of arithmetic, algebra,
and geometry. The natural sciences observe and describe the
phenomena of nature, and seek to discover the laws which

NEW TENDENCIES OF POLITICAL ECONOMY. 9

govern them ; such are the sciences of astronomy,
physics, botany, and physiology. The moral and political
sciences deal with ideas, with the actions of man and the
creations of his will — with institutions, laws, and religion ;
such are the sciences of philosophy, morality, law, and
politics. In which of these categories shall we rank political
economy ?

Certain writers, among whom are M. Du Mesail-Marigny,
in France, M. Walras, in Switzerland, and Mr. Jevons, in
England, have endeavored to resolve some of the problems
of political economy by putting them into algebraic formu-
las.* It does not seem to me that they have, in this way,
thrown much light on the difficult points to which they have
applied this method of demonstration. Economic phenomena
are subject to a great variety of diverse and variable influ-
ences which are not capable of being represented by figures ;
they do not admit, therefore, of those rigorous deductions
which belong to mathematics. The facts which have to be
considered, the wants of mankind, the value of commodities,
wealth, have in them nothing absolutely fixed, and the diver-
sities in them depend on opinion, fashion, custom, climate,
and an infinity of circumstances which it is impossible to
embrace in an algebraic equation.

Political economy cannot, therefore, be ranked among the
exact sciences. This has been one of the grounds of com-
plaint against it, and it has even been denied the name of
science altogether, because it is not capable of i arriving at
results which are mathematically exact. But it is to this, on
the contrary, that it owes, in certain aspects, its superiority
and its greatness. It cannot pretend to arrive at conclusions
which are absolutely exact, because its speculations have to
do, not with abstract and perfectly defined elements, but
with the wants and with the actions of man, a free and
moral being, " ondoyant et divers, who is obedient to motives
which are alike incapable of being precisely determined, or
especially of being measured by figures.

The generalty of economists, either by the definition which
they give to the object of their studies, or by the conception
which they have of their mission,, make it a science of observ-
ation and of description, or, as M. Coquelin says, " a branch
of the natural history of man." This writer gives the follow-
ing clearer expression of his idea: "Anatomy studies man in
the physical constitution of his being ; physiology in the play
of his organs ; natural history ( according to the practice of
Buffon and his successors), in his habits, his instincts, his wants,
and in reference to the place which he occupies in the scale of

*M. A. Walras published in 1831 a work entitled The Nature of Wealth and the Origin of
Value, in the eighteenth chapter of which he endeavors to demonstrate "that political economy
is a mathematical science." See also Stanley Jevons' Theory of Political Economy, 1871.
Leon Walras, Elements of Pure Political Economy, 1874. Cournot published in 1830 his
Researches into the Mathematical Principles of the Theory of Wealth.

10 NEW TENDENCIES OF POLITICAL ECONOMY.

being ; political economy considers him in the combination
of his works. One of the most interesting studies of the
naturalist is to watch the labors of the bee in its hive, to
study its order, its combinations, and its progress. The
economist, in so far as he cultivates the science only, does
exactly the same in respect to that intelligent bee called
man ; he observes the order, the progress, and the combina-
tion of his labors. The two studies are of precisely the same
nature."

According to this, it is obvious that political economy is
not a moral science. It does not deal with a good to be
realized, nor with an ideal to be attained, nor with duties to
be fulfilled ; it suffices for it to observe and to describe the
methods by which the human animal labors for the satisfac-
tion of his wants. Such was the impression of J. B. Say,
when he placed at the beginning of his famous treatise, and
as a title to that renowned work, this definition which has
been ever since repeated, Treatise on Political Economy, or a
simple Explanation of the manner in which wealth is created, dis-
tributed, and consumed. Bastiat, with that precision of language,
that vivacity and brilliancy of style which often conceal the
want of profundity of his ideas, insists strongly on making
political economy a purely descriptive science. " Political
economy," he says, " exacts nothing, and indeed counsels
nothing, it describes how wealth is created and distributed, in
the same way that physiology describes the action of our
organs." Bastiat endeavored to increase the authority of
economical principles by attributing to them the objective,
disinterested, impersonal character of the natural sciences. He
forgot that of free trade all his writings and his active pro-
pagandism contradicted his definition.

In a very well written book, but one in which the exact-
ness of the reasoning makes only the more apparent the.
error of the premises when they are false, Antoine-Elisee
Cherbuliez expresses the idea of J. B. Say, of Bastiat, and of
Coquelin, with still greater clearness. " Political economy,"
he says, " is not the science of human life, nor of social life,
nor even that of the well-being of mankind. It would still
exist, and would change neither its object nor its end, if
riches, instead of contributing to our well-being, did not
enter into it at all, provided that they continued to be pro-
duced, to circulate, and to be distributed."*

This author, in order to give to the science an absolute
character, which it cannot have, enunciates an hypothesis
which is clearly contradictory. He forgets that a given
object is definable as wealth only because it answers to some

*See Cherbuliez, Precis de la Science Economique, vol. i. M. Cherbuliez held strongly to
the idea of constituting a pure political economy similar to pure mathematics. " Economical
science," said he, " has for its object the discovery of truth, not the production of a practical
result; of enlightening men, not of rendering them better or happier; and the truths which it
discovers can only be theories, or conclusions based on those theories, not imperative rules, nor
precepts of individual conduct, nor of administration."

NEW TENDENCIES OF POLITICAL ECONOMY. II

one of our wants, and contributes to our well-being. To con-
ceive of wealth which does not enter into our well-being is to
admit that there is wealth which is not wealth.

The economists who ascribe to political economy the rigor
of the exact sciences, or the objective character of the natural
sciences, forget that it is a moral science. Now, the moral .
sciences do not confine themselves to discussing what is, but I
declare also what ought to be. A strange moralist would he /
be who should content himself with analyzing the passions/
of man, and who should neglect also to speak to him of hi3
duties ! The object of morality is precisely this, to deter-
mine what we owe to God, to our fellows, and to ourselves ;
what things we ought to do or to avoid doing, in order to
arrive at the degree of perfection which it is given us to
attain. So of political science, it is not enough to enumerate
the different forms of government which exist, nor even to
trace an ideal constitution for perfect men ; it must also
teach us what are the institutions fitted to a given people, or
a given situation, and what are those most favorable to the
progress of the human race. Thus, it will not only place
despotism, which stifles human spontaneity, on a different
footing from liberty, which develops our most noble qualities,
but it ought also to declare the conditions on which free
institutions can endure, and what errors and what weak-
nesses render a despotic government inevitable.

In like manner, the economist cannot stop with describing
how riches are produced and distributed. That of itself
would be a long study, and a much more difficult one than
Say and his disciples seem to suspect ; for it is not enough
to ' learn what is going on in a single country, since the
modes of production and distribution vary in different
nations. But that is only the smallest part of the task of
the true economist ; he must also show how men ought to
organize themselves, how they ought to produce and dis-
tribute wealth, to the end that they may be as well provided
as possible with the things which constitute their well-being.
Nor is this all ; he must also search out the practical methods
of attaining the object which he indicates. Thus he finds in
a certain country inland customs duties between province and
province, or octrois which arrest exchanges at the entrance at
all cities ; shall he confine himself to a mere statement of
these facts, as a naturalist would do, or as Bastiat and Cher-
buliez advise ? Evidently not ; he must point out the per-
nicious consequences of these institutions ; he must counsel
the abolition of them, and endeavor to show how it can be
done. If he lives in a country which endeavors to increase
its power and happiness by making itself distrusted by its
neighbors, through the extent of its military armaments, he
will not hesitate to point out that a people can have no
interest in rendering others subservient to it, or in weakening

12 NEW TENDENCIES OF POLITICAL ECONOMY.

them ; and that a nation cannot sell its costly products to
advantage, unless it has rich neighbors who are in a condi-
tion to pay for them. Have not economists themselves, M.
Bastiat at their head — forgetting their definitions, devoted
their whole energy to recommending, and to demanding the
abolition of protective tariffs ? Were they content to observe
and to describe only, when they founded their system of Free
Trade, and were running from meeting to meeting to secure
demonstrations in its favor?

There is a fundamental difference between the natural
sciences and political economy, which has not been suffi-
ciently emphasized. The former are occupied with the
phenomena of nature, irresistible forces which we can only
indicate but cannot modify. The moral sciences, and politi-
cal economy among them, are occupied with human facts,
emanations of our free will, which we have power to modify
in such a manner as to render them more conformable to
the requirements of justice, of duty, and of our well-being.
Observe also that the economists and the naturalists proceed
by a different method. The latter observe the overthrow of
cities by earthquakes, the increasing rigor of the climate of
planets, and the disappearance in them of every trace of
animal or vegetable life. They seek to discover the causes
of these phenomena, but they make no pretense of modifying
them. Economists, on the contrary, when they encounter
laws, ordinances, or customs, prejudicial to the growth of
human welfare, contend with them and try to accomplish their
overthrow. Like the physician, who, after having made a
diagnosis of the disease, points out the remedy, so the econo-
mist should first satisfy himself of the nature of the evils
from which society suffers, and afterwards point out the
methods by which those evils may be cured. TRoscher
declared that political economy was the physiology of the
social body. It is indeed that, but it is something more, it
is also its therapeutics.j[

What has entailed grave errors and essentially narrowed the
range of economic studies, is the fundamental idea, common
to Adam Smith, and to most of the philosophers of his time,
that social phenomena are regulated by natural laws, which,
but for the vices of institutions, would lead men to happi-
ness. The philosophers of the eighteenth century believed in
the innate goodness of man, and in a natural order. It was
the fundamental dogma of their philosophy and of their pol-
itics. Sir Henry Maine has shown that this theory sprang
from the Greek philosophy passing under the influence of the
Roman jurists, and of the Renaissance. Rousseau is continu-
ally repeating that "everything is good which comes from the
hands of nature." "Man is naturally good," says Turgot. It
was upon this idea, applied to the government of societies,
that Quesnay and his school founded their doctrine, which they

NEW TENDENCIES OF POLITICAL ECONOMY. 13

very properly styled Physiocratic, or the government of nature;
that is to say, the empire restored to natural laws by the abol-
ition of all human laws which interfere with the application of
them. Adam Smith borrowed from the Physiocrates the fund-
amental ideas of his famous treatise on the Wealth of Nations,
a work which he would have dedicated to Quesnay, if the
death of that learned man had not prevented. He believes,
with the Physiocrates, in the order of nature. "Suppress all
hindrances," said he, "and a simple system of natural liberty
will establish itself." Mr. Cliffe Leslie, in his excellent work
on the Political Economy of Adam Smith, has explained how
this system of unlimited freedom, which was founded on the
idea then entertained of the goodness of man and the per-
fectness of nature, came to be established in the eighteenth
century. Out of it sprang that grand movement of civiliza-
tion which aspires after religious and civil liberty, and the
equality of human rights, and which is ever in revolt against
the tyranny of priests and kings. Perceiving that governments
and bad laws impoverished nations by iniquitous taxation,
enthralled labor by absurd ordinances, and ruined agriculture
by crushing exactions, the philosophers of that era occupied
themselves with social questions, and arrived, of necessity, at
the point of demanding the abolition of all those human insti-
tutions, with a view to the attainment of that better order
which they called natural right, natural liberty, the code of
nature. It was under the inspiration of those ideas that
the Physiocrates in France, and Adam Smith in England,
traced the progress of economic reforms, and that the French
revolution attempted its political ameliorations. The starting
point of this profound evolution, which, for a time, led all
Europe captive, people and ' sovereigns alike, from Naples to
St. Petersburg, was an enthusiastic confidence in reason and
in the sentiments of man, as well as in the order of the
universe ; it was the optimism of Leibnitz, descended from
the clouds of philosophic abstraction, and made applicable to
the organization of society. The good sense of Voltaire led
him to perceive the falsity of this system, and he wrote
Candide and la Destruction de Lisbonne. Rousseau, in a letter
of touching eloquence, defended optimism, which is the basis
of his philosophy as well as of that of his epoch, and of the
French revolution. Strangely enough, it was Fourier who
deduced the ultimate consequences of the physiocratic opti-
mism of the economists. The selfishness and the vices of man-
kind seemed to give the lie to the system which maintains
that all is well, and that with liberty everything arranges
itself for the best, in the best of worlds. It had been truly
said that the vices of individuals contributed to the general
well-being. Adam Smith had also maintained that men, sim-
ply by pursuing their own interests, uniformly did the things
most advantageous to the nation ; and that the rich, for

14 NEW TENDENCIES OF POLITICAL ECONOMY.

example, in seeking merely the satisfaction of their caprices,
accomplished the most favorable distribution of products,
'cas though they were led by an invisible hand." Notwith-
standing this, men continued to say that selfishness must be
resisted and vice suppressed. This was the recognition of a
disturbing element ; things did not then arrange themselves
for the best, in virtue of absolute freedom. Fourier, whose
logic was restrained neither by the absurd nor the immoral,
constructed, like Plato, an ideal city, the phalanstery, where
all the passions were made use of as productive forces, and
the vices transformed into elements of order and stability ;
where, consequently, there was no longer anything to repress.
This was, in truth, natural liberty, the reign of nature. Order
was created out of disorder. Like M. Caussidiere, in 1848,
Pierre Leroux has clearly shown that Fourier found the
germ of his system in the voyages of Bougainville, which pre-
sented to the eighteenth century, in the paradise of the island
of Otaheite, a picture of the happiness which the natural man
enjoys when emancipated from laws and human convention-
alities. Diderot echoed the enthusiasm which this piquant
sketch of primitive manners evoked. It wras a logical con-
clusion: if all is well in nature, it is the natural man who
ought to be our model. Absolute laissez faire conducts us, at
last, to the island of Tahiti.

Down to the present day, the majority of economists have
remained in subjection to the ideas of physiocratic optimism,
which prevailed at the birth of their science, as well in
France as in England. They constantly speak of the natural
order ,of societies and of natural laws. They invoke these
only and desire to see only these prevail. Not to multiply
citations, I shall borrow only a single passage from one of
the most eminent and least systematic of contemporary econ-
omists, M. Hyppolite Passy. " Political economy," says M.
Passy, " is the science of the laws in virtue of which wealth
is created, distributed, and consumed. We have only to
ascertain these laws and to apply them. The object to be
attained is the greatest good of all, but the most enlightened
economists do not hesitate to believe that natural laws con-
duce to this result and that they alone conduce to it, and that
it is impossible for men to substitute their individual con-
ceptions for Divine wisdom." This is a perfect summing up
of the pure doctrine of the economists on this point. Now, it
will be easy to show, that an idea embodied in it is utterly
unsound, that it answers to nothing real, and is in radical
opposition to Christianity and to facts.

I search for these "natural laws" which the economists are
constantly talking about, and I do not find them. I understand
that these words are employed where the question concerns
the phenomena of the physical universe, which do, in fact,
from the infinitely little which we know of them, seem to

NEW TENDENCIES OF POLITICAL ECONOMY. 15

obey immutable laws. I will admit, also, that we invoke
natural laws for animals, which, live and obtain their suste-
nance in a similar manner, but not for man, that perfectible
being, whose manners, customs, and institutions are changing
ceaselessly. The laws which govern the production and
especially the distribution of wealth, are very different in
different countries, and in different times. Where, then, are
these natural laws in force ? Is it, as Rousseau, Diderot, and
Bougainville supposed, in those islands of the Pacific where
the spontaneous 'products of the soil permit men to live
without labor, in the bosom of an innocent community of
goods and of women ? Is it in antiquity, where the slavery
of the laborer procured for a chosen elite of citizens, the
means of attaining to the ideal of a genuine aristocracy ? Is it
in the middle ages, under the reign of feudalism and of cor-
porations, in that golden age when the papacy dominated
over nations and over kings ? Is it in Russia, where the land
belongs to the Czar, to the nobles, and to the communes
which parcel out the territory, at stated intervals, among all
the inhabitants ? Is it in England, where, owing to primo-
geniture, the soil is monopolized by a small number of fami-
lies, or in France, where the laws of the revolution divide
the territory among five millions of proprietors, at the risk
of crumbling it into particles ?

Industrial wealth was formerly produced under the domes-
tic roof of the artisan assisted by a few companions ; now
it is produced in vast workshops by an army of workmen,
tied to the inexorable movements of machinery propelled by
steam ; which of these two methods is conformable to the
natural order ? In a primitive state of society, the soil was
the undivided property of the tribe, and this disposition of
it was so general that it might, without doubt, have been
recognized as a natural law. At the present time, in countries
which have reached the industrial stage, individual property,
which formerly did not exist except in respect of movables,
is applicable also to the realty : is there, in this change, any
violation of the Providential order? Under the influence of
new ideas of justice and of certain economic necessities, all
social institutions are modified, and it is probable that they
will be modified still further. If we believe them to be still
imperfect, we should not be forbidden to seek to modify them.
" Laissons faire" cry the economists, " liberty meets all wants."
Doubtless, but what shall I do ? Laws do not make them-
selves, it is we, ourselves, who vote them ; and it devolves
upon the economist to show me what the laws are which
ought to be enacted. He will, doubtless, say, with M. Passy,
" It is not for man to substitute his individual conceptions
for those of the Divine wisdom." But is, then, the civil code
which to-day regulates the distribution of property in France
an emanation of the Divine wisdom ? Is it not rather the

l6 NEW TENDENCIES OF POLITICAL ECONOMY.

product of the juridical conceptions of the men of the French
revolution ? When, like M. Le Play, it is sought to restore
the liberty of testamentary disposition, or when it is proposed,
as in the Belgian Chambers, to limit the degrees of consan-
guinity in the succession to intestates, is there, in these, a
violation of the decrees of Divine wisdom ? The economists
forget that the bases of every economic regulation among
civilized peoples are laws framed by legislators, which are,
consequently, subject to be changed, if need be, and not
pretended, immutable, natural laws to which we must submit
blindly and forever.

In societate aut vis, aut lex viget, says Bacon ; if you do not
choose to submit to the dominion of laws, you will fall under
the dominion of force. With men in a state of nature, every-
thing belongs to the strongest. It is the duty of the State,
on the contrary, to cause justice to preside over the distri-
bution of property, in order that each person may enjoy the
fruits of his own labor. Suppress all intervention of the
State, and apply the absolute doctrine of laissez faire, and
everything, as Bonnet says, is subject to be preyed upon;
( tout est en proie^] The best-armed slays the one who is least
prepared for the battle ; and he either feeds upon his flesh
or on the products of his labor. This is precisely what hap-
pens among animals, where, in that strife for existence, of
which Darwin speaks, the best endowed species take the
place of those which are less so. The Positivist economists
also say, following the idea of Darwin, that every superior
position is the consequence of superior aptitudes in him who
has conquered it. Everything which is, is well. Every man
has, everywhere, the well-being to which he is entitled, just
as every country has the government which it deserves. So
much the worse for the weak and the simple, room for the
strong and the able ! Might does not hold dominion over'
right, but might is the necessary attribute of right. Such is
the natural law.

Those who are constantly invoking natural laws, and who
repel what they call artificial organizations, forget that the
government of civilized countries is the result of political and
economic art, and that the natural government is that of
savage tribes. Among them, in fact, the law of Darwin domin-
ates as among the animal species : there are no ordinances, no
State, no restraints, but perfect liberty in all things and for
all men. Such was, indeed, the ideal of Rousseau, ever faith-
ful to the doctrine of the code of nature.' Civilization, on
the contrary, consists in struggling against nature. Just in
the degree that agriculture and industry attain perfection,
more and more employment is given to artificial methods,
invented by science, for procuring for us wherewith to sat-
isfy our needs. Through the art of healing and of main-
taining health, we wrestle with the diseases with which nature

NEW TENDENCIES OF POLITICAL ECONOMY. LJ

afflicts us, and thus prolong an average of twenty years to
forty.

It is by the art of government that statesmen obtain the
supremacy of order and permit men to labor and to better
their condition, instead of endlessly warring on each other
like wolves, either for vengeance or for defense. It is to the
art of making good laws that we owe the security of prop-
erty and of life. It is by fighting against our passions that
we succeed in accomplishing our- duties. Everything is the
product of art, because civilization is in everything the oppo-
site of a state of nature. The. child of nature is not that
good and reasonable being dreamt of by the philosophers ;
he is a, selfish animal, who seeks to satisfy his desires with-
out caring for the rights of others, regardless of wrong, slay-
ing whomsoever makes resistance to him, and it is not
too much to compel him, by all the restraints of morality, of
religion, and of laws, to bend to the exactness of social
order. We. must conquer the savage element in him, or he
puts civilization itself in peril. It is, therefore, a dangerous
error to suppose that w.£ need only to disarm the State, and
to liberate mankind from all restraints, that the supremacy of
order may be established.

I can discover in political economy but one single natural
law, namely, this, that man, in oroler to live, must make a
living. All the rest is governed by habits, by customs, by
laws which are continually changing, and which, just in pro-
portion as justice and morality enlarge their sphere, are fur-
ther and further removed from that natural order over which
force and chance preside. If there is any natural law which
seems to be indisputable, it is that which commands all liv-
ing beings to obtain subsistence by their own efforts. Man-
kind has, nevertheless, succeeded in emancipating itself from
that law, and, by means of slavery and serfdom, the stronger
have been able to live in idleness at the expense of the
weaker. No doubt, whatever happens is the result of cer- /
tain necessities which may, in strictness, be denominated/
natural ; but it is by resisting those necessities that progress /
and perfection are attained in human societies. From the I
mere fact that institutions or laws exist, it by no means fol-
lows that they are necessary, immutable, and alone conform-
able to the natural order.

The physiocratic optimism which has inspired political <.
economy from its inception, and which is interwoven, at the
present time, with all its speculations, is not on-ly contra-
dicted by facts, but is opposed to the fundamental principle
of Christianity. A certain school has reproached political
economy with being an immoral science, because it urges
man to the pursuit of nothing but his own material advant-
age, and to live only for sensual gratification. Since it is
the object of political economy to find cut how societies

l8 NEW TENDENCIES OF POLITICAL ECONOMY.

ought to be i organized, in order to arrive at a condition of
general well-being, it is nothing more than a revolt against
asceticism, and not against Christianity, which, by no means,
requires of us to give up everything; but the idea that order
is established spontaneously in society, as in the universe, by
virtue of natural laws, is entirely opposed to the Christian
idea both of the world and of humanity. According to
Christianity man is so thoroughly depraved that it requires
the direct intervention of God and the constant working of
His grace to keep him in the right way and to accomplish
his salvation ; the world itself is so much a prey to evil that
Christians long ago expected, and in certain sects still expect,
the palingencsia, " new heavens and a new earth," according to
the Messianic promises. The evil that is within us, there-
fore, must be put under subjection by the sentiment of duty,
and that which is outside of us, by laws inspired by a senti-
ment of justice. If we are to hold with the orthodox
economists, that the better order of things arrived at results
spontaneously from unlimited laissez faire, we must suppose
man either to be good, or to be necessarily obedient to
inspirations which make him act in conformity to the general
good. This idea is not only the opposite of Christianity, but
it is also contradicted by facts. If the human animal is let
loose you have the warfare of all against all, the bellum
omnium contra omnes of Hobbes. We find this warfare first in
the caverns of the pre-historic times, the home of cannibalism,
later in the forests of the barbarous age, and at the present
day in the haunts of industry. Even in nature there does
not prevail an order of justice which we could safely take as
our exemplar ; the utmost that we find in her is a rude
species of equilibrium which we call the natural order. In
nature, as in history, injustice often triumphs and justice is
overborne. When a king-fisher has, by patience and address,
succeeded in seizing its prey and is bearing it homeward to
its hungry offspring, and an eagle, freebooter of the air,
pounces on it, and robs it of the fruit of its labors, the
same sentiment of justice is aroused in us, as when an idle
master forces his bondman to maintain him on the product
of his toil. If Cain, the follower of the chase and the war-
rior, kills Abel, the peaceful shepherd, we side with the vic-
tim against the assassin. Thus it is that we are constantly
revolting against facts which take place in nature and in
society. The Chinese, and those excellent women who see
in every event that happens an effect of the Divine will, are
optimists after the manner of the economists who believe in
the empire of natural laws. Physiocratic optimism also puts
its trust in the judgment of God and in the ordeals which are
found among all nations, for the custom of ordeals springs
out of the idea that God always causes the innocent to tri-
umph. Job, on the contrary, protests against this immoral

NEW TENDENCIES OF POLITICAL ECONOMY. 19

doctrine, and the children of Israel, down-trodden and scat-
tered among the nations, do not yet despair of justice, but
await the hour of recompense. The facts which exist and
the present organization of society are, doubtless, the neces-
sary result of certain causes, but those causes are not natural
laws, they are human facts : ideas, manners, beliefs, which
may be modified, and from the modification of which other
laws and other customs will be deduced.

The theory of natural laws has had two other unfortunate
consequences : it -has discarded all notion of an ideal to be
attained, and has very considerably narrowed the conclusions
of political economy. In the writings of the orthodox
economists, the final object to be striven for is never men-
tioned, nor the reforms which justice might demand. Does
distribution take place in the way most favorable to the pro-
gress of humanity and to the happiness of all ? Is consump-
tion conformable to moral laws ? Is it not desirable that
there should be less of hardship among the lower classes
and less of luxury among the upper ? Have we not economic
duties to fulfill ? Since the primitive era, the organization of
society has been materially modified ; will it not undergo still
further changes, and in what direction ? These are some of
the questions which official political economy never touches,
because they do not, it is alleged, enter into its domain. We
have seen that Bastiat and Cherbuliez point out the reasons.
The strict science does not concern itself with what ought to
be but only with what is ; it can, therefore, neither propose
an ideal" nor labor to attain it. It simply describes how
riches are produced, distributed and consumed ; and thence
results the poverty of its practical conclusions. In short, if
it were enough simply to proclaim liberty in order that every-
thing should arrange itself in the best way, and that har-
mony might be established, the office of political economy is
very nearly ended in countries which, like England, the
Netherlands ,and Switzerland, have adopted free trade and
free competition. It will, no doubt, nave rendered an import-
ant service in promoting the abolition of the restraints which
prevented the expansion of productive forces, and a better
distribution of labor ; but at the present day its functions
are nearly exhausted. We are approaching the last pages of
the book, and there will soon be nothing left but to close it
and to lay, it respectfully on the shelf.

On this point, I think, the criticisms of the Socialists of
the Chair are well founded. In aiming to make political
economy an exact science its domain has been too often nar-
rowed ; it cannot separate itself from politics, morality, law
and religion. Since it tries to discover how men can best
arrive at the satisfaction of their wants, it ought to tell us
what are the forms of government, of property, of religious
worship, the methods of distribution, and the moral and

20 NEW TENDENCIES OF POLITICAL ECONOMY.

religious ideas most favorable to the production of wealth.
It ought to present to us the ideal to be attained, and point
out the way of reaching it. To obtain liberty is most desir-
able, but we ought to know further what use to make of it.
In .civilized society, not less than in the primitive forest, if
liberty is not put under the restraints and ordinances of
morals and of law, it ends in the oppression of the weak
and the domination of the stronger and more capable : this
will speedily occur not less in the domain of economy than
in that of education. The disciples of Darwin will say that
this is the law of nature and of "selection." Very well; but
if it has the effect of crushing me inexorably, I may, at
least, be excused from giving it my blessing.

Thus, as it seems to me, has the official political economy
been justly reproached with enunciating as absolute truths,
propositions which, in reality, are falsified by facts, just as
though in mechanics we were to formulate laws of motion
without taking any account of resistances and friction.

It is these abstract and general formulas which have
inspired practical statesmen like M. Thiers with a great dis-
trust of economic axioms. Let me cite some examples of
these axioms. Since the time of Ricardo it has been a
dogma of the science that wages, like profits, tend to equal-
ize themselves, because free competition speedily brings an
increased supply to the point where the highest remuneration
is to be obtained. Now Cliffe Leslie has shown, by statistics
gathered both in England and on the Continent, that no
such equality of wages really exists ; but on the contrary,
that the difference of compensations for the same industry,
between one place and another, is greater at the present day
than formerly.*

It is also an economic axiom, often quoted in the recent
discussions of the double standard, that the abundance of
silver is an evil, inasmuch as business is carried on just as
well with a small as with a large quantity of money. And
yet the daily quotations of European money markets prove
that a scarcity of money causes crises, while an abundance of
it lowers the rate of discount, and gives, in consequence, an
impulse to production and to transactions. Free trade holds
that the balance of trade is of no consequence, because prod-
ucts are exchanged against products, and we have only to
congratulate ourselves if foreigners furnish us commodities
cheaper than our own people. This would be true if all
peoples composed only one nation, and if all men were cap-
italists. Take the case, however, of a nation which is
obliged to sell its public securities and shares in private
corporations abroad. Products are exchanged against prod-

* In Belgium the facts are very curious. At the moment I write these lines, near Ypres, I
am paying for cutting hay a franc and a half a day ; in the neighborhood of Liege, they are
paying four francs. There, a day laborer earns three francs or three francs and a half; in
Campine only a franc and a quarter; and yet the farm hand in Campine performs more labor.

NEW TENDENCIES OF POLITICAL ECONOMY. 21

ucts, as before, but it is henceforth the foreigner owning
these securities, who enjoys the income which others labor
to produce. If England were able to furnish to France all
manufactured articles more cheaply than France could pro-
duce them at home, the rich consumers in France would be
the gainers, but French workmen would be deprived of work,
and would either disappear, or would have to go to England
to pursue their occupations. It was thus that in France, after
the suppression of provincial tariffs, industries abandoned the
less favored localities and established themselves in places
where they met with more advantageous conditions. Doubt-
less, if the human race were considered from a cosmopolitan
point of view, and if all nations were regarded as constitut-
ing a single people, it would matter little at what points
population centered or wealth was accumulated, provided
only that a general progress resulted ; but can we reasonably
demand of any people such a disregard of its own peculiar
interests and of its own particular future ?

Moreover, if we consider civilization in all its bearings, and
not merely the accumulation of wealth, is it not desirable
that each nationality should maintain its perfect independence
and its utmost power, in order that each shall contribute its
own peculiar note to the grand harmony of human society ? *

Such, at least, is the position which political economy has
assumed in Germany since the time of List ; and hence in
that country the science is generally called the Science of
National Economy.

It seems to me, also, that the elder economists have
attempted to abridge too much the functions of the State.
When one considers all the injury which bad Governments
have done to the people, especially in France, one under-
stands the desire to abridge their power and to restrict their
functions ; but the laissez faire school, in theory at least, has
overstepped the line, and those countries which should abso-
lutely follow its counsels would have reason to repent of
them, for they would find themselves outstripped by others.
England has come to a recognition of this truth, and although
that country is a model of self government, so far from per-
severing in the course marked out by the economists, it is
every year imposing new functions on the State, which now
intervenes in industrial and agricultural contracts, with a
detail and with restrictions which would be hardly admitted
elsewhere.

In Prussia, everything is under control of the State : its
lands, its military establishment, its agriculture, its industry,
its religion, and, lastly, its education of all grades — that
principal source of its power. From being once no more than

* In a work published as long ago as 1857, I made use of what is called the new method :
I endeavored in it to show that the free traders defended a just cause with bad arguments,
and a useful reform with indef-nsible axioms. See Etudes historiques et critiques sur la,
liberte. du commerce international.

NEW TENDENCIES OF POLITICAL ECONOMY.

the sandy wastes of the Marquis of Brandenburg, the jest of
Voltaire and Frederick II, it is now the Empire of Germany.
Some years ago, a President of New Granada on assuming
the Presidential chair, being imbued with pure economic
doctrines, announced that "thereafter the State would con-
fine itself to its legitimate functions, and would leave all en-
terprises to individual initiation." The economists applauded.
After a short time the highways were impassible, the har-
bors were washed away, personal security was at an end, and
education abandoned to the priests, or, in other words,
reduced to nothing. There was a return to a state of nature
—to the primeval forest. In Turkey and in Greece the State
does nothing, because the public treasuries are empty ; it is
dangerous even to visit the spot in order to attest the bene-
fits of the system. Let us suppose two countries, side by
side, of equal power and resources, in one of which the
Government carefully abstains from all intervention, and, as
a consequence, individual necessities exhaust all its products ;
in the other, the State withholds from the consumption of
individuals, which is often useless and even hurtful, the
wherewithal to pay for all services affecting the public inter-
ests ; it opens highways and harbors, it builds railways,
constructs schoolhouses, endows liberally all scientific estab-
lishments, encourages men of learning, stimulates the higher
arts as was done at Athens, and finally, by means of obliga-
tory education and obligatory military service, takes the ris-
ing generations under its control in order to develop their
bodily and mental forces.

When a half century has passed by, which of these two
peoples will be the more highly civilized, the richest, the
most powerful ? In Belgium, the State, which, since 1833, has
established the railway system, has rendered the economical
existence of the country secure by the development of its
industries, in spite of its separation from Holland, which
deprived it of its principal seaport. It is in a similar man-
ner that Italy is, at the present day, cementing her national
unity, and that Russia is laying the foundations of her future
greatness.

The State has, therefore, a double mission to fulfill. The
first part of it, which no one disputes, but the full scope of
which few persons understand, consists in subjecting society
to the rule of order and of law ; that is to say, in ordain-
ing laws as nearly conformable to distributive justice as the
advancement of social culture will permit. The second con-
sists in providing out of the public purse, through means of
taxes levied proportionately upon individuals, everything
which is indispensable to progress, and for which private ini-
tiative is not sufficient.

An incontestable merit of the new economists is that they
approach the study of the social question with a true senti-

NEW TENDENCIES OF POLITICAL ECONOMY. 2J

ment of Christian charity, but at the same time in a strictly
scientific spirit, supporting themselves throughout by histori-
cal facts, and thus escaping Utopian theories.

In order to combat the socialists, Bastiat and his entire
school have maintained the theory of a natural harmony of
interests, and have thus been obliged to deny the existence
of any problem to be solved. It is a dangerous error. In
truth, the social- question dates very far back ; it had its
origin at the time when real property ceased to be held in
common, and, as a consequence, inequalities of condition
began to show themselves. This it was which disturbed the
Greek republics and hastened their downfall. This it was
which agitated the Roman republic in spite of the palliative
of agrarian laws, again and again renewed in vain. It reap-
peared in the communities of the middle ages, as soon as
industry had acquired some headway among them, and later
when the Reformation had established religious freedom in
society, and when the French revolution made proclamation
of equality and fraternity ; but in our day it presents so
grave and general a character as to compel the attention of
statesmen, of publicists, and especially of economists ; for it
involves the safety of civilization itself, put in peril as it is
oy the demands of the working classes.

Economic interests will always be found among the prin-
cipal causes of the grander evolutions of history — a truth
coarsely expressed by Napoleon when he said : " TJie seat of
revolutions is the belly."

The new economists have published a considerable number
of special studies on the social question in one or another
of its phases, and as they pique themselves on being " real-
ists," that is to say, on supporting their principles by statis-
tics, they must, without doubt, contribute to the advancement
of the science. In its summing up, the new doctrine is still
somewhat vague both as to premises and conclusions, and
when it endeavors to define the relations of political eco-
nomy to morality and to law, it is less original and less new
than some of its more enthusiastic followers are willing to
admit. Referring only to contemporary economists, who are
occupied with this subject, it will suffice to mention the
writings of Dameth, Rondelet, and Boudrillart, and the well-
known though badly translated ( into French ) work of M.
Minghetti, now President of the Council in Italy. It seems
to me, however, that such writers as Cliffe Leslie, Luzzati,
Frederiksen, Schmoller, Held, Wagner, Contzen, and Nasse,
are better equipped than the school of Bastiat, in a con-
test with the existing scientific socialism, which supports
itself in precisely the same way, on abstract formulas and
natural economic laws, in its assaults on social order and in
its demand for a radical reconstruction of society. Bastiat
imperilled his defence at the very outset, by placing himself

24 NEW TENDENCIES OF POLITICAL ECONOMY.

too exclusively on the ground of theory, for he was thus
compelled to contradict facts and to deny doctrines which
are admitted by all economists, as, for example, the classic
theory of rent.

The realistic economists, on the contrary, lay hold on prin-
ciples and fortify themselves by facts, in order that they
may follow up Utopian theories step by step, being careful
to distinguish possible reforms from those which are not pos-
sible, and the rights of the human race from the exactions
of covetousness and envy. Such is the mission of safety
which to-day, more than ever before, is imposed on political
economy in presence of the new aspects and rapid develop-
ment which socialism, especially in Germany, has recently
assumed.

APPENDIX.

On the evening of the 3ist of May, 1876, the Political
Economy Club of London celebrated the icoth anniversary
of the publication of Adam Smith's Wealth of Nations. Mr.
Gladstone presided on the occasion, and speeches were made
by Mr. Lowe, M. Leon Say, the French Minister of Finance,
M. fimile de Laveleye, of Belgium, Professor J. E. Thorold
Rogers, Mr. Newmarch, Mr. Gladstone, Mr. Forster, and Mr.
Leonard Courtney. Professor de Laveleye addressed the
meeting in French. The following is a translation of his
remarks, as reported by the London Times, in its issue of
June 5, 1876 :

"I should hardly venture to address so distinguished an
assembly, in presence of the illustrious statesman who is
presiding over it, and of another statesman who worthily
bears the name of the great French economist, Jean-Baptiste
Say (who might with propriety be called the Adam Smith of
the Continent ), did I not desire, in the name of my country —
Belgium — to do honor to the eminent Scottish economist,
whose doctrines of free trade have been adopted by my
countrymen, to the great benefit of the Belgian people. In
no other country, not even, I believe, in England, have those
benefits been more highly appreciated ; for the Chambers of
Commerce of Belgium have come to demand not only the
abandonment of every species of protection, but the complete
abolition of customs duties.

" The reason why we ought to consider Adam Smith as one
of the great benefactors of the human race, is not merely
because he studied into the ' causes of the wealth of nations,'
and pointed out the methods of increasing production, but
because he demonstrated that the interests of nations are
closely bound together, and has thus given us a rational
basis of human brotherhood, the sublime conception of which
Christianity first introduced into the world.

" In the last century, the most enlightened men, such for
example as Voltaire, were of opinion that the greatness of
one's own country could not be promoted without at the
same time desiring to enfeeble other nations, and this per-
nicious error is still unfortunately widely prevalent.

"Economists, on the contrary, have proved that each State
is interested that every other State should prosper, in order
to furnish as wide a market as possible for its own produc-
tions, an idea happily expressed by a French poet in these
verses :

OF THB

'UNIVERSITY]

26 APPENDIX.

Aimer, aimer c'est etre utile & soi,
Se faire aimer, c'est etre utile aux autres.

" In my estimation, the first part of the programme of the
political economist, that which concerns the production of
wealth, may be considered as almost exhausted. When we
observe the prodigious accumulation of wealth which is to be
everywhere met with in England ; when we note the stupen-
dous figures of its foreign commerce, and of its domestic
exchanges; the 130 or 140 milliards of francs ($26,000,000,000
to $ 28,000,000,000 ) covered by the operation of its Clearing
House ; when we reflect on the other hand, that France has
been able to pay a war indemnity of five or six milliards,
besides spending at least three or four milliards more in a
formidable struggle, and, notwithstanding, finds itself to-day
as prosperous as ever, with a metallic reserve in the Bank of
France of two milliards, an accumulation of the precious
metals wholly without precedent, we are led to believe that,
owing to the marvelous progress of the sciences and arts,
mankind are able, at the present day, to produce all that is
needful to satisfy their rational wants. What is now needed
is to enter upon the second part of the economic programme,
that which concerns /The distribution of wealth^ The object
to be attained, as I think all the world will now admit, is
to ameliorate the condition of the laboring classes in such a
manner that each person may enjoy a measure of well-being
proportioned to the part which he has taken in production,
or, to sum the matter up in a single word^to realize in the
economic world that formula of justice to each according to his
works.")

CT" But it is chiefly upon this point that there has lately
arisen a division in the ranks of the economists. On the one
hand, the elder school, which, for want of a better term, T
shall denominate the orthodox school, holds that every thing
is governed by natural laws. The other school, which its
adversaries have styled the Socialists of the Chair — Katheder-
Socialisten — but which should more properly be called the
historical school, or, as the Germans say, the school of the
realists, maintains that distribution is regulated, in part, no
doubt, by free contract, but still more by civil and political
institutions, by religious beliefs, by moral sentiments, by cus-
toms, and by historical traditions. ^

" You will observe that there is opened here an immense
field of study which comprehends the relations of political
economy with morality, with the idea of justice, with law,
with religion, with history, and which allies it to the whole
circle of the social sciences. Such, in my humble opinion, is
the present mission of political economy. This is the view of
it which has been held by nearly all the German economists,
many of whom have attained a European celebrit)'', such as
Rau, Roscher, Knies, Nasse, Schafler, and Schmoller ; in Italy

APPENDIX. 27

there is also a group of kindred writers already well known,
such as Minghetti, Luzzati, and Forti ; in France, there are
Wolowski, Lavergne, Passy, Courcelle-Seneuil, Leroy-Beaulieu ;
and in England are those who I have need here neither to
mention nor to praise, because they are better known to you
than to me.

17* I will advert, in closing, to the remarkable fact that the
two schools equally invoke the authority of Adam Smith, and
with reason, as it seems to me, since his remarkable work is
such a perfect example, and one so fraught with useful con-
sequences, of the alliance between the two scientific methods*
the deductive method and the inductive method, that one is,
in a certain sense, almost tempted to subscribe to the recent
assertion of an American economist, that after Shakespeare,
it is Adam Smith who has done the greatest honor to

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