was to be subsequently formed. Men of acute genius, with their sagacity whetted by a pervading love of gain, addressed themselves to the analysis of wealth, of the social arrangements which led to its production, of the institutions that retarded its increase, of the natural agents that assisted labor, of the principles of barter, of the facilities of intercourse, of the influences of population, and of the nature and utility of the various modes of human employment.

Who were the first authors that treated systematically of these points, it would exhaust our space to enumerate. Both in Italy and England tracts were from time to time put forth in elucidation of the commercial difficulties and troubles that successively arose. Many of these were written with skill, and foreshadowed faintly the great doctrines of later writers.* But they are disfigured by the immaturity and prejudices that marked the opinions of the times, and are only valuable as they indicate the progress of inquiry. Like the dry leaves upon the shores of a stream, they are marks of the swelling and falling of the tide of public feeling, as it was swayed hither and thither by one delusion or one conviction after another. In this respect they are interesting to those who carry their researches into the minuter channels of knowledge. To others, and to the general reader, it is sufficient to be informed of the greater incidents that modify the advancement of opinion. Political Economy has had three or four several important epochs, which diversify the history of its course, while they distinguish the conspicuous changes through which modern society has passed. These may be separated as (1.) The era of the rise and decline of the mercantile or manufacturing systems; (2.) The era of the prevalence of the economists or the agricultural system; (3.) The advent of Adam Smith; and (4.) the succession of Malthus, Ricardo, and the more recent authors. These we shall touch upon briefly in turn-more briefly than we could desire.

I. The constant use that was made, from the earliest ages, of gold and silver, both as a medium of exchange and a measure of value, naturally led to the idea that they were the chief constituents of wealth. As the opulence of individuals and nations was estimated by the amount of money in their possession, it became the policy of states to accumulate as great an amount of the precious metals as possible within their respective domains. Laws were everywhere framed, by repressing every species of trade which might lead to a diminution of the precious metals, to prohibit the subtraction of coin." In Spain and Portugal these enactments were carried to such a severity as to make the exportation of gold and silver a penal offence,

* Notices of the more important may be found in McCullough's Introduction to Adam Smith, an essay abounding in learning and judicious reflection, the first, and we believe the most complete, history that has been given of the rise and progress of the science.

punishable with the most cruel tortures and death. But as the spirit of commerce came to prevail, merchants found this system of restraint to be irksome and inconvenient, and sought by a variety of expedients to lessen the burdens it imposed. The East India Company, in particular, which had long carried on a lucrative traffic with the Indies, the main part of which was effected by means of the precious metals, protested against the fetters which had been placed upon their exportation. They did not, however, arraign the prevailing doctrine, that money was the sum and substance of wealth, but endeavored, by a complex series of reasonings, to prove that, under certain circumstances, the exportation of it was beneficial, in producing what was termed a favorable balance of trade. Their argument was this:-that it was idle to attempt to prohibit the exportation of gold and silver, if there was a demand for them abroad, because the great value concentrated in a small bulk enabled them to be easily smuggled, and because the foreign goods often imported in their place by being re-exported might increase their quantity. So plausible was this view, and so strenuously was it defended by a class supposed to be acquainted with the operations of commerce, it was not long in obtaining a general adoption. The efforts of the state were then turned to bringing about an advantageous foreign trade. To extend the exports of domestic, and to diminish the imports of foreign, goods, became the great end. In this view, a system of restrictive measures was advanced, which at once perfected the mercantile theory. High duties, sometimes amounting to absolute prohibitions, were laid upon the introduction of all goods that could not be produced at home, and especially upon those coming from nations with which there was supposed to be an unfavorable balance of trade. At the same time, to encourage exportation, bounties and drawbacks were granted either to stimulate new kinds of home production, or to favor such as was held of special Commercial treaties were instituted, securing to the merchants of particular nations trading privileges above the merchants of other nations, and colonies were established, with the same design, in distant and fertile parts where the merchants of certain nations might possess themselves of an entire monopoly of their trade. By this method, fetters and obstacles were set round the energies of commerce. The spirit of exclusiveness pervaded every branch of itbut, as it afterward turned out, only to narrow the circle of its exertions, and to impair its profitableness as well as its utility. Experience taught those most directly interested, that by consenting to the notion that the precious metals were wealth, they had sanctioned an error, and the discovery of this mistake led them to question the solidity of other parts of their theory. Gold and silver came to be considered of the same nature with other commodities, and the restraints put upon the exportation of these were in consequence, after no little controversy, gradually abandoned. But many absurdities, generated

use.

by the original doctrine, were reserved to be exploded at a later day. Had these men carried their researches further, they might have ascertained that not only was their fundamental principle wrong, but the whole superstructure reared upon it was false. The object of commerce is not to augment the sum of the precious metals in a country, but to multiply and enlarge the comforts and conveniences of its population, an effect best accomplished by permitting to individuals the largest freedom, both in the selection and management of their pursuits. Bounties, duties, monopolies, and restrictive regulations, of what kind soever, have but one effect, either to divert capital and labor from the objects to which they would naturally be directed, to those less advantageous, or to tax productive employments generally, for the sake of sustaining one or two enterprises which, without assistance, would be unprofitable. For if these enterprises were of themselves profitable, they would be undertaken without external help, and if they were not profitable, they could only be made so by drawing aid from more useful and lucrative sources.

II. While the commercial system was undergoing a fierce discussion in England and on the Continent, an opposite system obtained in France, under the direction of M. Quesney, a physician of the time of Louis the Fifteenth. He had been led to investigate the depressed condition of agriculture, and in the course of his inquiries the whole subject of wealth came under review. He examined into its sources, and attempted a systematic analysis of its elements. His partiality for agricultural pursuits conducted him to the doctrine that the earth is the only source of production. He was confirmed in this view, by observing that of all classes engaged in industry those who cultivated the soil were alone able to pay rent for the mere use of natural agents, or to realize from their products a nett surplus above the cost of production. Other classes he allowed were useful in conducting the economy of society, but their business produced no value, because the value accruing from manufacturing or transporting their products only replaced the original capital they consumed in the operation. The community he therefore divided into three orders: the first, proprietors of land, who contribute to production by the expenses incurred in improving their lands, in draining, enclosures, building, and such other ameliorations as tended to render the land more prolific ; the second, the cultivators of the soil, farmers and their dependents, whose actual labor in ploughing, sowing, planting, and reaping, added to the variety and amount of the annual produce; and third, mechanics, artificers, and merchants, who added nothing to the wealth of society, because the value they added to commodities was only equivalent to the stock which employed them, together with its ordinary profits. A natural deduction from this theory was, that the productive classes, as they were termed, bore all the expenses of the state; and it was accordingly proposed that the taxes laid by the civil

authorities should be made to fall directly upon the nett produce or rent of land. Quesney's reasoning wrought conviction in the minds of a large body of disciples, among the more eminent of whom were Turgot, Marquis de Mirabeau, and Dupont de Nemours, who, by the exclusiveness of their zeal and the persistency with which they maintained their doctrines, acquired the name of the Economists. The weakness of their system is obvious enough. Production does not consist, as they imagined, either in materials themselves or in the creation of materials, but in the creation of utility, which can only be effected by human exertion. Land is without value until the hand of industry has been applied to it, and then only, because by means of its products the wants and comforts of human beings are supplied. The utility of anything is its adaptability to the gratification of human desires, and whether this property has been given to it by the labor of the husbandman, the artificer, or the merchant, whether by raising it from the soil, or by modifying it through some process of manufacture, or by conveying it from place to place, it is equally fitted to human use, and equally possesses a value for which other values will be given in exchange. The source of its value, then, is the labor expended upon it in the course of bringing it to the condition or place where it can be made of immediate use.

III. The advent of Adam Smith, in 1776, like the rising of the sun, dissipated the clouds that had been gathered in the twilight of economical science. To his great work on the Wealth of Nations is the glory due of having demonstrated the errors of his forerunners, and of erecting a system of truth and consistency in their place. He was fitted above all the men of his time for the peculiar task his genius accomplished. He belonged to that school of free inquirers and independent thinkers, just then in its vigor, who carried an unsparing analysis into all the institutions and notions of the past. The friend of Hume and many of the more celebrated French Philosophers, he was thoroughly imbued with that spirit of reform, which in their cases was carried to such a pernicious extreme, but which in his case was restrained by his sympathy with those researches only that concerned the physical well-being of society, and his want of interest in the higher inquiries connected with our moral and religious welfare. Like them, his mind was rather clear-sighted than comprehensive; what he saw at all he saw distinctly; he grasped it with great tenacity, and adhered to it with a firmness of purpose which was a proof both of the penetration of his vision and the energy of his will. But unlike them, he was not fond of the glitter of paradox, had no rage for mere innovation, and in what direction soever he subverted, was prepared with materials and instruments in hand, to undertake the labor of reconstruction. Accordingly he was not content with merely picking to pieces the fabrics raised by those who had gone before him, but in all instances set about rebuilding what he had de

stroyed, on the very spot of its former glory. He was acute, subtle, and well-informed in the particular sphere in which he labored. He was extensively possessed of all that had been written and said upon the problems of Political Economy. A life of alternate practical observation and abstract study had imparted to him a knowledge of details, while it qualified him for the business of investigation. By practice as a writer upon general subjects, he became skilful in the art of communicating the results of his meditations to others, and habits of literary intercourse had taught him the secrets of simplicity, grace and ease of style, an attainment quite as necessary to the construction of a great work on any science, as diligence of research, compass of view, or soundness of reasoning. With small deference for authority, he had still enough of it to keep him from fantastic theorizing, and to give his writings that practical cast which obtain for them a ready hearing in the audience of general society. Had he been more abstruse, he would have been less popular, and had he been less bold, he would have been not so much adapted to the spirit and tendency of his age.

His wreat work is a formal treatise on the science of national wealth. It is divided into five parts, under the minor arrangements of which he has managed to touch almost all the questions that relate to the great and peculiar objects of the science. The first book is devoted to an exposition of the causes that assist the productive powers of labor, and of the laws which regulate the distribution of the results of that labor among the different classes composing the community. This topic, it will be perceived, includes the question as to the effect of the division of employments, the functions and uses of money, the nature and influences of price, the wages of industry, the profits of capital, the rent of land, and the various subordinate inquiries involved in the more general subjects. The second book is but an expansion of the first, on so much of his theme as comprehends an investigation of the nature, accumulation, and employment of stock. He explains the different kinds of capital, the methods by which it is increased, the origin of interest, and the comparative profits of the many branches of enterprise in which capital is used. The third is more theoretical in its views, designed to illustrate by a series of observations and arguments the natural progress of opulence, as the discouragements to agricultural and commercial industry are gradually renewed. The fourth book is an examination of pre-existing systems of political economy, in which the principles of free-trade are developed at length, particularly in their application to the fetters placed upon external commerce and internal production. And the fifth book treats of the revenue of the sovereign, by which is meant the principles which govern taxation and the other modes usually resorted to for supplying the expenses of government. In each of these books there are numerous and extended digressions on points suggested in the course of treating the more general topics. Some of these unfold his most important doc