andthatallvalueisinproportiontothelabourfellinwiththeSocialisttheory。Ifvalueiscreatedbylabour，oughtnot’labour’topossesswhatitmakes?Therighttothewholeproduceoflabourseemedtobeanaturalconclusion。RicardomightanswerthatwhenIbuyyourlabour，itbecomesmine。Imayconsidermyselftohaveacquiredtherightsoftherealcreatorofthewealth，andtoembodyallthelabourers，whose’accumulatedlabour’
　　iscapital。Still，thereisadifficulty。Thebeaveranddeercasehasanawkwardethicalaspect。Tosaythattheyareexchangedatsucharateseemstomeanthattheyoughttobeexchangedattherate。Thisagainimpliestheprinciplethatamanhasarighttowhathehascaught；thatis，tothewholefruitsofhislabour。JamesMill，aswehaveseen，startshispoliticaltreatisebyassumingthisasobvious。43Hedidnotconsiderthepossibleinferences；foritiscertainlyadaringassumptionthattheprincipleiscarriedoutbytheeconomicsystem。AccordingtoRicardorentispaidtomenwhodon’tlabouratall。Thefundholderwasaweightuponallindustry，andasdeadaweightasthelandlord。Thecapitalist，Ricardo’ssocialmainspring，requiredatleastcross-examination。Herepresents’accumulatedlabour’insomefashion，butitisnotplainthattheslicewhichhetakesoutofthewholecakeisproportionedaccuratelytohispersonallabour。Therightandthefactwhichcoincidedinthedeerandbeaverperiodhavesomehowcometodiverge。
　　Here，then，weareatapointcommontothetwoopposingschools，Bothareabsolute’individualists’
　　indifferentsenses。Societyisbuiltup，andallindustrialrelationsdetermined，bythecompetitionofamultitudeofindependentatoms，eachaimingatself-preservation。Malthus’sprincipleappliesthistothegreatmassofmankind。Systematicallyworkedout，ithasledtoRicardo’sidentificationofvaluewithquantitiesoflabour。Keepingsimplytothematteroffact，itshowshowasmallminorityhavemanagedtogetadvantagesinthestruggle，andtoraisethemselvesupontheshouldersofthestrugglingmass。Malthusshowsthattheresultinginequalitypreventsthestrugglefromloweringeveryonetostarvationpoint。Buttheadvantagewasnotobvioustothestrugglingmasswhichexemplifiedthestruggleforexistence。Ifequalitymeantnottheinitialfactsbutthepermanentright，societywasbuiltuponinjustice。Applythepoliticaldoctrineofrightsofmantotheeconomicrighttowealth，andyouhavetheSocialistdoctrineofrighttothewholeproduceoflabour。Itistruethatitisexceedinglydifficulttosaywhateachmanhascreatedwhenheisreallypartofacomplexmachinery；butthatisaproblemtowhichSocialistscouldapplytheiringenuity。Therealanswerofthepoliticaleconomistswasthatalthoughtheexistingorderimpliedgreatinequalitiesofwealthitwasyetessentialtoindustrialprogress，andthereforetoanimprovementinthegeneralstandardofcomfort。
　　This，however，wasthelessevidentthemoretheyinsistedupontheindividualinterest。Thenetresultseemedtobethatbyaccidentorinheritance，possiblybyfraudorforce，asmallnumberofpersonshavegotamuchlargershareofwealththantheirrivals。Ricardomayexpoundthescienceaccurately；
　　and，ifso，wehavetoask，Whataretherightethicalconclusions?
　　Forthepresent，theUtilitariansseemtohaveconsideredthisquestionassuperfluous。Theywerecontenttotaketheexistingorderforgranted；andthequestionremainshowfartheirconclusionsuponthatassumptioncouldbereallysatisfactory。
　　IV。THECLASSICALPOLITICAL
　　ECONOMY。
　　Ricardohadworkedoutthemainoutlinesofthe’ClassicalPoliticalEconomy’：Thesystemwhichtohisdisciplesappearedtobeasclear，consistent，anddemonstrableasEuclid；andwhichwasdenouncedbytheiropponentsasmechanical，materialistic，fatalistic，anddegrading，Aftertriumphingforaseason，ithasbeenoflateyearsoftentreatedwithcontempt，andsometimesbanishedtothelimboofextinctlogomachies。Itiscondemnedas’abstract。’Ofalldelusionsonthesubject，repliesaveryableandseverecritic，44thereisnonegreaterthanthebeliefthatitwas’whollyabstractandunpractical。’
　　Itsmeritslayinitstreatmentofcertainspecialquestionsoftheday；
　　whileinthepurelyscientificquestionsitwashopelesslyconfusedandinconsistent。Undoubtedly，asIhavetriedtopointout，MalthusandRicardowerereasoninguponthecontemporarystateofthings，thedoctrinestartedfromobservationoffacts；itwastoo’abstract’sofarasitneglectedelementsintheconcreterealitieswhichwerereallyrelevanttotheconclusions，Onecauseofconfusionwasthenecessityofstartingfromtheclassificationimpliedinordinaryphrases。Itisexemplifiedbythevagueuseofsuchwordsas’capital，’’value，’’supplyanddemand。’Definitions，asisoftenremarked，45comeattheendofaninvestigation，thoughtheyareplacedatthebeginningofanexposition。Whentheprimaryconceptionstobeusedwerestillsoshiftingandcontradictoryasisimpliedinthecontroversiesoftheday，itisnowonderthattheformulashouldbewantinginscientificprecision。Untilwehavedeterminedwhatismeantby’force’
　　wecannothaveacompletescienceofdynamics。Theeconomistsimaginedthattheyhadreachedthegoalbeforetheyhadgotridofambiguitieshiddenintheacceptedterminology。MeanwhileitwillbeenoughifItrytoconsiderbroadlywhatwasthenatureofthebodyofstatementswhichthusclaimedtobeanelaboratedscience。
　　Ricardo’spurposewastoframeacalculus，togiveamethodofreasoningwhichwillenableustoclinchoureconomicreasoning。Wearetobesurethatwehavefollowedoutthewholecycleofcauseandeffect。Capitalists，landowners，labourersformpartsofaroundedsystem，implyingreciprocalactionsandreactions。
　　Theimpositionofataxoratariffimpliescertainchangesinexistingrelations：thatchangeinvolvesotherchanges；andtotraceoutthetotaleffect，wemustunderstandwhataretheultimateconditionsofequilibrium，orwhataretheprocessesbywhichthesystemwilladjustitselftothenewconditions，todescribe，again，theplayofanumberofreciprocalforces，wehavetofindwhatmathematicianscallan’independentvariable’；
　　someoneelementinthechangesonwhichallotherchangeswilldepend。
　　Thatelement，roughlyspeaking，ultimatelycomesouttobe’labour。’Thesimplicityofthesystemgaveanimpressionbothofclearnessandcertainty，whichwastransferredfromthereasoningtothepremises。Thefactsseemedtobeestablished，becausetheywerenecessarytothesystem。Thefirststeptoanestimateofthevalueofthedoctrinewouldbetodrawupastatementofthe’postulates’implied。Amongthem，weshouldhavesuchformulaeasthesinglerateofprofitsandwages；whichimplythe’transferability’
　　oflabourandcapital，ortheflowofeitherelementtothebest-paidemployment。
　　WeshouldhaveagaintheMalthusiandoctrineofthemultiplicationoflabouruptoacertainstandard；andthefactthatscarcitymeansdearnessandplentycheapness。Thesedoctrinesatleastaretakenforgranted；anditmayperhapsbesaidthattheyareapproximationswhichonlyrequirequalifications，thoughsometimesveryimportantqualifications，toholdgoodofthesocietyactuallycontemplated。
　　Theyweretrueenoughtogivethereallyconclusiveanswertomanypopularfallacies。ThetypeofsophistrywhichRicardospeciallyassailedwasthatwhichresultsfromneglectingthenecessaryimplicationsofcertainchanges。Theargumentsfortheold’mercantiletheory’——for’protection’ofindustry，forthepoor-law，forresistingtheintroductionofmachinery，thefearof’gluts’
　　andallmannerofdoctrinesaboutthecurrencywerereallyexposedbytheeconomistsupontherightgrounds。Itwasabsurdtosupposethatbysimplyexpandingthecurrency，orbymakingindustrylessefficient，orforcingittotheleastprofitableemployments，youwereincreasingthenationalwealth；ortooverlookthedemoralisingeffectsofarighttosupportbecauseyouresolvedonlytoseetheimmediatebenefitsofcharitytoindividuals。
　　Itistrue，nodoubt，thatinsomecasestheremightbeotherarguments，andthattheeconomistswereapttotakeanarrowviewofthefacts。Yettheydecisivelyexplodedmanybadarguments，andbytherightmethodofenforcingthenecessityoftracingoutthewholeseriesofresults。Itwaspartlytotheirsuccessinconfutingabsurddoctrinesthattheirconfidencewasdue；thoughtheconfidencewasexcessivewhenitwastransferredtotheaxiomsfromwhichtheyprofessedtostart。Adoctrinemaybetrueenoughtoexposeanerror，andyetnotcapableofyieldingdefiniteandpreciseconclusions。IfIknowthatnothingcancomeoutofnothing，Iamonthewaytoagreatscientificprincipleandabletoconfutesomepalpablefallacies；
　　butIamstillaverylongwayfromunderstandingtheprincipleofthe’conservationofenergy，’thetruththatscarcitymeantdearnesswasapparentlywellknowntoJosephinEgypt，andappliedveryskilfullyforhispurpose。
　　Economistshaveframeda’theoryofvalue’whichexplainsmorepreciselythewayinwhichthisisbroughtabout，Aclearstatementmaybevaluabletopsychologists；butformostpurposesofpoliticaleconomyJoseph’sknowledgeisquitesufficient，itisthedoctrinewhichisreallyusedinpracticewhatevermaybeitsultimatejustification。
　　Thepostulates，however，weretakenbytheeconomiststorepresentsomethingmorethanapproximatestatementsofthefact。Theyimplycertainpropositionswhichmightberegardedasaxioms。Mendesirewealthandprefertheirowninterests。Thewholetheorymightthenberegardedasadirectdeductionfromtheaxioms。
　　Itthusseemedtohaveakindofmathematicalcertainty。Whenfactsfailedtoconformtothetheorythedifficultycouldbemetbyspeaking，asMalthusspoke，of’tendencies，’orbyappealingtotheanalogyof’friction’inmechanics。Theexcusemightbeperfectlyvalidinsomecases，butitoftensanctionedaseriouserror。Itwasassumedthattheformulawasstillabsolutelytrueofsomething，andthatthecheckorfrictionwasareallyseparableandaccidentalinterference。Thusitbecameeasytodiscard，asirrelevant，objectionswhichreallyappliedtotheprincipleitself，andtoexaggeratetheconformitybetweenfactandtheory。Theeconomiccategoriesaresupposedtostatetheessentialfacts，andthequalificationsnecessarytomakethemaccuratewereapttoslipoutofsight。Ricardo，46tomentionafamiliarinstance，carefullypointsoutthatthe’economicrent，’whichclearlyrepresentsanimportanteconomiccategory，isnottobeconfounded，asin’popular’use，withthepaymentsactuallymade，whichoftenincludemuchthatisreallyprofit。Thedistinction，however，wasconstantlyforgotten，andtheabstractformulasummarilyappliedtotheconcretefact。
　　Theeconomistshadconstructedakindofautomatonwhichfairlyrepresentedtheactualworkingofthemachinery。Butthen，eachelementoftheirconstructioncametorepresentaparticularformula，andtorepresentnothingelse。Thelandlordissimplythereceiverofsurplusvalue；thecapitalisttheonemanwhosaves，andwhosavesinproportiontoprofit；andthelabourersimplytheembodimentofMalthus’smultiplyingtendency。Thenthepostdatesastotheebbandflowofcapitalandlabouraresupposedtoworkautomaticallyandinstantaneously。
　　Ricardoarguesthatataxuponwageswillfall，not，asBuchananthought，uponthelabourer，nor，asAdamSmiththought，uponrent，butuponprofits；
　　andhisreasonisapparentlythatifwageswere’loweredtherequisitepopulationwouldnotbekeptup。’47Thelabourerisabletomultiplyordiminishsorapidlythathealwaysconformsatoncetotherequiredstandard。Thiswouldseemtoneglecttheconsiderationthat，afterall，sometimeisrequiredtoalterthenumbersofapopulation，andthatotherchangesofatotallydifferentcharactermaybemeanwhilesetupbyrisesandfallsofwages。Ricardo，ashislettersshow，48waswellawareofthenecessityofmakingallowanceforsuchconsiderationsinapplyinghistheorems。Hesimplifiedtheexpositionbylayingthemdowntooabsolutely；andthedoctrine，takenwithoutqualification，givesthe’economicman，’whomustbepostulatedtomakethedoctrineworksmoothly。
　　Thelabourerisakindofconstantunit——absolutelyfixedinhisefficiency，hiswants，andsoforth；andthesameatoneperiodasatanother，exceptsofarashemaybecomemoreprudent，andthereforefixhis’naturalprice’
　　alittlehigher。An’ironlaw’mustfollowwhenyouhaveinventedanironunit。Inshort，whensocietyisrepresentedbythishypotheticalmechanism，whereeachmanisanembodimentoftherequiredformula，thetheorybecomesimperfectsofarassocietyismadeupoflivingbeings，varying，thoughgradually，intheirwholecharacterandattributes，andformingpartofanorganisedsocietyincomparablytoocomplexinitsstructuretobeadequatelyrepresentedbythethreedistinctclasses，eachofwhichismerelyaformulaembodiedinanindividualman。Thegeneralrulesmaybeverynearlytrueinagreatmanycases，especiallyonthestock-exchange；butbeforeapplyingthemtogiveeitherahistoryoratrueaccountoftheactualworkingofconcreteinstitutions，amuchcloserapproximationmustbemadetotheactualdata。