This doubtless is the reason why since the year 1760, almost all the French writers of any celebrity on subjects connected with political economy, without absolutely being enrolled under the banners the of economists, have nevertheless, been influenced by their opinions. Raynal, Condorcet, and many others, will be found among this number. Condillac may also be enumerated among them, notwithstanding his endeavours to found a system of his own in relation to a subject which he did not understand. Many useful hints may be collected from amidst the ingenious trifling of his work;* but like the economists, he almost invariably founds a principle upon some gratuitous assumption. Now, an hypothesis may indeed be resorted to, in order to exemplify and elucidate the correctness of an author's general reasoning, but never can be sufficient to establish a fundamental truth. Political economy has only become a science since it has been confined to the results of inductive investigation.

Turgot was himself too good a citizen, not sincerely to esteem as good citizens the economists; and accordingly, when in power, he deemed it advantageous to countenance them. The economists, in their turn, found their account in passing off so enlightened an individual and minister of state as one of their adepts; the opinions of Turgot, however, were not borrowed from their school, but derived from the nature of things; and although on many important points of doctrine he may have been deceived, the measures of his administration, either planned or executed, are amongst the most brilliant ever conceived by any statesman. There can not therefore be a stronger proof of the incapacity of his sovereign, than his inability to appreciate such exertions, or if capable of appreciating them, in not knowing how to afford them support.

The economists not only exercised a particular sway over French writers, but also had a very remarkable influence over many Italian authors, who even went beyond them. Beccaria, in a course of public lectures at Milan,† first analysed the true functions of productive capital. The Count de Verri, the countryman and friend of Beccaria and worthy of being so, both a man of business and an accomplished scholar, in his Meditazione sull' Economia politica, published in 1771, approached nearer than any other writer before Dr. Smith, to the real laws which regulate the production and consumption of wealth. Filangieri, whose treatise on political and economical laws was not given to the public until the year 1780, appears not to have

Du Commerce et du Governement considèrès l'un relativement à l'autre. + See the syllabus of his lectures, which was printed for the first time in the year 1804, in the valuable collection published at Milan by Pietro Custodi, under the title of Scrittori classici italiani di economia politica. It was unknown to me until after the publication of the first edition of this work in 1603.

been acquainted with the work of Dr. Smith, published four years before. The principles de Verri laid down are followed by Filangieri, and even received from him a more complete development; but although guided by the torch of analysis and deduction, he did not proceed from the most fortunate premises to the immediate consequences which confirm them, at the same time that they exhibit their application and utility.

But none of these inquiries could lead to any important result. How, indeed was it possible to become acquainted with the causes of national prosperity, when no clear or distinct notions had been formed respecting the nature of wealth itself! The object of our investigations must be thoroughly perceived before the means of attaining it are sought after. In the year 1776, Adam Smith, educated in that school in Scotland which has produced so many scholars, historians and philosophers of the highest celebrity, published his Inquiry into the Nature and Causes of the Wealth of Nations. In this work, its author demonstrated that wealth was the exchangeable value of things; that its extent was proportional to the number of things in our possession having value; and that inasmuch as value could be given or added to matter, that wealth could be created and engrafted on things previously destitute of value, and there be preserved, accumulated or destroyed*

In inquiring into the origin of value, Dr. Smith found it to be derived from the labour of man, which he ought to have denominated industry, from its being a more comprehensive and significant term than labour. From this fruitful demonstration he deduced numerous and important conclusions respecting the causes which, from checking the development of the productive powers of labour, are prejudicial to the growth of wealth; and as they are rigorous deductions from an indisputable principle, they have only been assailed by individuals either too careless to have thoroughly understood the principle, or of such pervert ed understandings as to be wholly incapable of seizing the connexion or relation between any two ideas. Whenever the In

During the same year that Dr. Smith's work appeared, and immediately before its publication Browne Dignan, published in London, written in the French language, his Essai sur les principes de l'Economie publique, containing the following remarkable passage: "The class of reproducers includes all who, uniting their labour to that of the vegetative power of the soil, or modifying the productions of nature in the processes of their several arts, create in some sort a new value, of which the sum total forms what is called the annual reproduction.”

This striking passage, in which reproduction is more clearly characterised than in any part of Dr. Smith's writings, did not lead its author to any important conclusions, but merely gave birth to a few scattered hints. A want of connexion in his views, and of precision in his terms, have rendered his Essay so vague and obscure, that no instruction whatever can be derived

from it.

quiry into the Wealth of Nations is perused with the attention it so well merits, it will be perceived, that until the epoch of its publication the science of political economy did not exist.

From this period gold and silver coin were considered as constituting only a portion, and but a small portion, of national wealth; a portion the less important, because less susceptible of increase, and because its uses can be more easily supplied than those of many other articles equally valuable; and hence it results that a community, as well as its individual members, are in no way interested in obtaining metallic money beyond the extent of this limited demand.

These views, we conceive, first enabled Dr. Smith to ascertain, in their whole extent, the true functions of money, and the applications of them, which he made to bank notes and paper money, are of the utmost importance in practice. They afford him the means of demonstrating, that productive capital does not consist of a sum of money, but in the value of the objects made use of in production. He arranged and analysed the elements of which productive capital is composed, and pointed out their true functions.*

Many principles strictly correct had often been advanced prior to the time of Dr. Smith;† he, however, was the first author who established their truth. Nor is this all. He has furnished us, also, with the true method of detecting errors; he has applied to political economy the new mode of scientific investigation, namely, of not looking for principles abstractedly, but by ascending from facts the most constantly observed, to the general laws which govern them. As every fact may be said to have a particular cause, it is in the spirit of system to determine the cause; it is in the spirit of analysis, to be solicitous to know why a particular cause has produced this effect, in order to be satisfied that it could not have been produced by any other cause. The work of Dr. Smith is a succession of demonstrations, which has elevated many propositions to the rank of indisputable principles, and plunged a still greater number into that imaginary gulph, into which

This difficult and abstruse subject has not, perhaps, been treated by Dr. Smith with sufficient method and perspicuity. Owing to this circumstance, his intelligent and acute countryman, lord Lauderdale, has composed an entire treatise, in order to prove that his lordship had completely failed in comprehending this part of the Wealth of Nations.

In the article Grains in the Encyclopedie, Quesnay had remarked, that "commodities, which can be sold, ought always to be considered without distinction, either as pecuniary or real wealth, applicable to the purposes of whoever may make use of it." This, in reality is Dr. Smith's exchangeable value. De Verri had observed, (chapter 3,) that reproduction was nothing more than the reproduction of value, and that the value of things constituted wealth. Galiani, as has been already noticed, had said, that labour was the source of all value; but Dr. Smith, nevertheless, made these views his own by exhibiting, as we see, their connexion with all the other important phenomena, and in demonstrating them even by their consequences.

extravagant hypotheses and vague opinions for a certain period struggle, before being forever swallowed up.

It has been said that Dr. Smith was under heavy obligations to Steuart,* an author whom he has not once quoted, even for the purpose of refuting him. I can not perceive in what these obligations consist. In the conception of his subject, Dr. Smith displays the elevation and comprehensiveness of his views, whilst the researches of Steuart exhibit but a narrow and insignificant scope. Steuart has supported a system already maintained by Colbert, adopted afterwards by all the French writers on commerce, and steadily followed by most European governments; a system which considers national wealth as depending, not upon the sum total of its productions, but upon the amount of its sales to foreign countries. One of the most important portions of Dr. Smith's work is devoted to the refutation of this theory. If he has not particularly refuted Steuart, it is from the latter not being considered by him as the father of his school, and from hav ing deemed it of more importance to overthrow an opinion, then universally received, than to confute the doctrines of an author, which in themselves, contained nothing peculiar.

The economists have also pretended, that Dr. Smith was under obligations to them. But to what do such pretensions amount? A man of genius is indebted to every thing around him; to the scattered lights which he has concentrated, to the errors which he has overthrown, and even to the enemies by whom he has been assailed; inasmuch as they all contribute to the formation of his opinions. But when out of these materials he afterwards forms enlarged views, useful to his contemporaries and posterity, it rather behoves us to acknowledge the extent of our own obligations, than to reproach him with what he has been supplied by others. Moreover, Dr. Smith has not been backward in acknowledging the advantages he had derived from his intercourse with the most enlightened men in France, and from his intimate correspondence with his friend and countryman Hume, whose essays on political economy, as well as on various other subjects, contain many just views.

After having shown, as fully as so rapid a sketch will permit, the improvement which the science of political economy owes to Dr. Smith, it will not, perhaps, be useless to indicate, in as summary a manner, some of the points on which he has erred, and others which he has left to be elucidated.

To the labour of man alone he ascribes the power of producing values. This is an error. A more exact analysis demonstrates, as will be seen in the course of this work, that all values are derived from the operation of labour, or rather from the industry of man, combined with the operation of those agents

* Sir James Steuart, author of a Treatise on Political Economy.

which nature and capital furnish him. Dr. Smith did not therefore obtain a thorough knowledge of the most important phenomenon in production; this has led him into some erroneous conclusions, such, for instance, as attributing a gigantic influence to the division of labour, or rather to the separation of employments. This influence, however, is by no means inappreciable or even inconsiderable; but the greatest wonders of this description, are not so much owing to any peculiar property in human labour, as to the use we make of the powers of nature. His ignorance of this principle precluded him from establishing the true theory of machinery in relation to the production of wealth.

The phenomena of production being now better known than they were in the time of Dr. Smith, have enabled his successors to distinguish and to assign the difference found to exist between a real and a relative rise in prices; a difference which furnishes the solution of numerous problems, otherwise wholly inexplicable. Such, for example, as the following: Does a tax, or any other impost, by enhancing the price of commodities, increase the amount of wealth? The income of the producer arising from the cost of production, why is not this income impaired by a diminution in the cost of production? Now it is the power of resolving these abstruse problems which, nevertheless, constitutes the science of political economy.‡

* See Chapter third, Book second.

+ Dr. Smith has, in a satisfactory manner, established the difference between the real and nominal prices of things, that is to say, between the quantity of real values which must be given to obtain a commodity, and the name which is given to the sum of these values. The difference here alluded to, arises from a more perfect analysis, in which the real price itself is decomposed.

It is not, for example, until after the manner in which production takes place is thoroughly understood, that we can say how far the circulation of money and commodities have contributed towards it, and consequently what circulation is useful and what is not; otherwise we should only talk nousense, as is daily done, respecting the utility of a quick circulation. My being obliged to furnish a chapter on this subject (Book I, Chap. 16.) must be attributed to the inconsiderable advancement made in the science of political economy, and to the consequent necessity of directing our attention to some of its more simple applications. The same remark is applicable to the twentieth chapter, in the same book, on the subject of temporary and permanent emigration, considered in reference to national wealth. Any person, however, well acquainted with the principles of this science, would find no difficulty in arriving at the same conclusions.

The time is not distant when not only writers on finance, but on history and geography, will be required to possess a knowledge of at least the fundamental principles of political economy. A modern treatise on Universal Geography, (vol. 2, page 602) a work in other respects denoting extensive research and information, contains the following passage: "The number of inhabitants of a country is the basis of every good system of finance; the more numerous is its population, the greater height will its commerce and manufactures attain; and the extent of its military force be in proportion to the amount of its population." Unfortunately every one of these posi tions may be erroneous. National revenue, necessarily consisting either of