Introduction, Chapter 1, Footnote #05
Note on Ricardo and J. S. Mill.
In the preface to the second edition of Jevons' Theory of Political Economy---the most important contribution to economic theory that has been made in England for a generation---the lamented author announces as a conclusion to which he is ``ever more, clearly coming, that the only hope of attaining a true system of Economics is to fling aside, once and for ever, the mazy and preposterous assumptions of the Ricardian School''. {Ref} He subsequently speaks of the doctrines of this school as ``Ricardo-Mill Economics'', explaining how ``that able but wrong-headed man, David Ricardo, shunted the car of economic science on a wrong line, a line, however, on which it was further urged towards confusion by his equally able and wrong-headed admirer, John Stuart Mill.'' {Ref}
The expression of opinion in these passages appears to me exaggerated and violent, even so far as Ricardo is concerned; while so far as it applies to Mill I cannot but regard it as entirely false and misleading. I certainly should agree with Jevons in deprecating as excessive and overstrained the eulogistic language in which many competent judges have described the work of Ricardo. Though undoubtedly an original and important thinker, I cannot perceive that Ricardo was a thoroughly clear and consistent reasoner; and it has always seemed to me highly unfair to the deductive method of economics to treat Ricardo's writings as a peculiarly faultless specimen of its application. At the same time I hold that many of the characteristic doctrines of Ricardo, stated with proper qualifications and reserves, ought to find a place in any complete exposition of economic theory; and I have been careful to give them, in the present treatise, the place which appears to me to belong to them: though I equally hold that the statement of them by Ricardo himself has frequently serious, and sometimes glaring, deficiencies. In some cases, as in the determination of Wages and Profits, while recognising an element of truth in Ricardo's view, I think that the defects of his doctrine are beyond patching, and that an entirely new treatment of the subject has to be adopted. On the other hand, as regards the relation of Value to Cost of Production, Ricardo's doctrine is of fundamental importance (though requiring to be qualified and supplemented); and any teaching which ignores or obscures it appears to me fatally defective. But, whatever judgment may be passed on the work of Ricardo, it is certainly misleading to say that Mill ``urged the car of economic science further towards confusion'' on the ``wrong line'' on which Ricardo had shunted it. Indeed I am unable to conjecture how Jevons would have supported a statement which appears to me so perverse. He cannot, I think, refer to the general theory of Value, where Mill corrects and supplements Ricardo's view, by giving due place to the operation of Supply and Demand in the determination of market-price; and where he quietly gets rid of Ricardo's serious confusion between Measure of Value and Cause or Determinant of Value. Nor can he have been thinking of the theory of Rent; for here Mill's exposition of the Ricardian doctrine is improved and guarded in several important respects; especially by the account taken of Carey's indisputable limitation of the law of diminishing returns, and by the stress laid on the influence of general industrial progress in counteracting this law. Nor, again, can he have in view the theory of Wages and Profits; in which, among other improvements, Mill reduces to harmlessness Ricardo's dangerous paradox that ``wages cannot rise without profits falling''. Nor, finally, can his statement relate to the theory of International Values; since he expressly says that this is probably the most valuable part of Mill's work. But if Jevons' charge cannot be justified in relation to any of the four topics that I have mentioned, it is difficult to conceive how so strong a statement can possibly be justified at all. It must be admitted that on more than one important point Mill has not made clear to the reader the interval that separates his doctrine from Ricardo's: which, with Cliffe Leslie, I partly attribute to that ``piety of a disciple'' which Mill always manifests towards Ricardo's teaching. This disposition has had some unfortunate consequences, and must be regarded as a weakness; still, in a subject where most writers have shown so marked a tendency to emphasize the novelty of their ideas, and exaggerate their divergence from their predecessors, it appears to me a weakness that ``leans to virtue's side''.