The Principles of Political Economy

Henry Sidgwick


Chapter 2

The Scope of Political Economy

§4. The case is different with Production: and it is to be observed that in the original treatment of Political Economy as a directly practical inquiry it was the improvement of Production rather than Distribution that was taken as its practical end. Thus Adam Smith's opening paragraphs represent as his main object the investigation of the conditions which determine a nation's annual supply of the necessaries and conveniences of life to be abundant or scanty. His first book begins with a discussion of ``the causes of the improvement in the productive powers of labour''; in his second book he is occupied in considering the fundamental importance of ``stock'' to production, and ``the different quantities of labour which it puts in motion, according to the different ways in which it is employed''. In the third he describes the diverse plans that nations have followed in the general direction of labour, with the aim of making its produce as great as possible; and, as we have seen, the ``systems of political economy'' discussed in his fourth book were systems framed with a view to the same end. On the other hand he hardly considers Distribution as a practical problem; and so far as he does raise the question, how a more ``liberal reward of labour'' may be attained, his answer seems to be that it can only be attained by ``increasing the national wealth'', or in other words by solving the practical problem of Production. So again, in the brief but pregnant treatise on the Elements of Political Economy written a generation later by James Mill, it is noticeable that in describing the scope of his chapter on Production he puts prominently forward its directly practical aim: its object is, he says, to ``ascertain by what means the objects of desire may be produced with the greatest ease and in greatest abundance, and upon these discoveries, when made, to form a system of rules skilfully adapted to the end''. Whereas, when he comes to speak of the laws of Distribution, it never occurs to him even to hint that the process investigated admits of being improved, and that the student ought to keep this improvement in view. And in the account of the objects of Political Economy given ten years later by McCulloch, this difference in the treatment of the different enquiries is equally marked.

Nor is it difficult to understand how this difference comes to be maintained. In dealing with questions of Production, the obvious and uncontroverted aim of all rational effort---public or private---is, other things being equal, to produce as much as possible in proportion to the cost. The extent to which this aim is realised is the most interesting point to observe in examining the actual process of production in different ages and countries; and this is also the criterion which we adopt naturally and without reflection, when we judge different methods of production to be better or worse. Hence the transition from the point of view of Science to that of Art is, in this part of the subject, easy and almost imperceptible; the conclusions of the former are almost immediately convertible into the precepts of the latter. Accordingly we find that even the most careful of the writers who, like J. S. Mill, have taken special pains to present Political Economy as primarily a science, give a prominent place in this part of their work to the discussion of the good and bad results of different modes of production. They analyse the gain derived from the Division of Labour, and note the counterbalancing drawbacks; they compare the advantages and disadvantages of the ``grande'' and ``petite culture'' in farming; they consider what kinds of business are adapted to management by joint-stock companies---all topics which clearly belong to the discussion of Production regarded as an Art. I am myself disposed to think that these practical questions should not be discussed at any length in a general exposition of Economic Science; but I have not attempted to draw any sharp line: I regard it as the chief business of a Scientific Theory of Production to investigate the causes by which the labour of any society is rendered more or less productive of wealth: and such an investigation necessarily goes far to supply an answer to the question ``how the produce of labour may be made as great as possible''.

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