то

NATHAN APPLETON,

ONE OF THE MOST EMINENT LIVING REPRESENTATIVES

OF A HIGHLY HONORED CLASS,

THE MERCHANT PRINCES OF
OF BOSTON,

WHO HAVE EARNED SUCCESS

BY SAGACITY, ENTERPRISE, AND UPRIGHTNESS IN ALL THEIR UNDERTAKINGS,

AND HAVE DIGNIFIED IT

BY THE MUNIFICENCE OF THEIR CHARITIES,

AND BY THEIR LIBERAL SUPPORT OF LETTERS, SCIENCE, AND THE ARTS,

THIS WORK IS RESPECTFULLY INSCRIBED.

a*

PREFACE.

“POLITICAL ECONOMY," says Mr. Samuel Laing, "is not a universal science, of which the principles are applicable to all men under all circumstances, and equally good and true for all nations; but every country has a Political Economy of its own, suitable to its own physical circumstances of position on the globe, climate, soil, products, and to the habits, character, and idiosyncrasy of its inhabitants, formed or modified by such physical circumstances."

I am not prepared to accept this remark in all its generality, for if it were true, it would follow, not only that Political Economy is not a universal science, but that it is no science at all, inasmuch as universal applicability, as Mr. Laing himself observes, is "the distinguishing characteristic and test of every branch of knowledge that claims the dignity of real science." But the habits and dispositions of men, as manifested in the pursuit of wealth, may be reduced to general principles, and thus become subjects of legitimate scientific classification and inquiry, just as much as those other habits and dispositions which are manifested in the constitution and conduct of organized society, and which, when generalized and classified, become the science of Politics. There is a general science of Human Nature, of which the special sciences of Ethics, Psychology, Esthetics, Politics, and Political Economy are so many departments, all founded upon the essential unity of the human mind and character, and the consequent similarity of its manifestations under similar circumstances. These sciences may be studied either inductively or deductively; that is, either by observing the phenomena, the conduct of men under given circumstances, — and tracing these up to their causes,

the motives in which they must have originated; or by assuming the motives from our general knowledge of human nature, and tracing these down to the outward conduct which they cause and govern. In this sense, then, there is a universal science of Political Economy, equally applicable, not only to France, England, and America, but to China, Tartary, and New Holland, to all nations under the sun.

But it must be admitted that these universal principles are comparatively few and unimportant, often being little more than truisms; and if the science were limited to them, it would be of rather narrow compass and limited utility. Political Economy, as it is commonly understood, embraces a great number of corollaries and deductions from these principles, and of applications of them to the analysis and explanation of complex social and commercial phenomena. It is thus that the science, or rather any particular system of it, becomes obnoxious to Mr. Laing's censure; having been suggested by the peculiar circumstances and condition of one country, relating almost exclusively to the experience of one nation, and deriving, in truth, most of its utility for them from this very fact, it is at least partially inapplicable and unsound in every other case. The Political Economy of England is even more peculiar and characteristic than her civil polity and social organization; it is conformed to that polity and organization, and it is also adapted to the physical condition and industrial pursuits of an insular people. As circumstances vary from age to age, as well as between different countries, it is continually necessary to review and modify the leading doctrines of the science, so as to preserve their conformity to the habits and the institutions of the people. If Adam Smith were living in our own day, it may be doubted whether he would be the uncompromising advocate that he was, of the principles of Free Trade. He flourished at a time when the system of monopolies and restraints was in full action and vigor; when nothing had been done to limit or reform the colonial system, the guilds of trade, the East India Company, the Universities, or the abuses of municipal corporations. It was natural that he should utter an earnest protest against these odious restrictions and monopolies, and carry his argument against them too far, by neglecting to mention the exceptions and limitations to which his own principles were liable.

I have endeavored in this work to lay the foundations at least, leaving it for others to raise the superstructure, of an American system of Po

litical Economy, and for this purpose, have subjected to a rigorous examination the leading doctrines of the science as taught by English writers, in order not only to test their general soundness and applicability to the condition and the institutions of the American people, but to trace out and analyze the peculiar circumstances which first suggested them. Among these doctrines may be enumerated those of Adam Smith upon free trade, of Malthus upon population, of Ricardo upon rent and profits, of Torrens and Loyd upon the currency, and of McCulloch upon the laws of inheritance. It is not the light of American experience alone which has induced me to modify or reject these theories; I have attempted to show that they are indefensible even upon the principles of those who continue to support them, and to this end, have fortified my reasoning by frequent citations from English and French authorities.

The work was not designed to be wholly controversial and original; besides suggesting the doctrines which are to take the place of those which have been rejected, it was intended to contain a summary of what is most valuable in other treatises upon the subject, so as to form a convenient text-book of instruction in American colleges. Most teachers will probably accept the conclusion which I have formed, after many years' experience, that it is a wearisome and hopeless task to attempt to instruct a class of pupils from any of the English or French treatises upon the science. This volume contains the substance of a course of lectures upon Political Economy, first delivered before the Lowell Institute in Boston five years ago, and afterwards repeated, with many changes and additions, before successive classes in college. It also comprises all that was deemed worthy of preservation in a series of articles upon various topics in the science, which have been published during the last ten years in the North American Review. I have not deemed it necessary to rewrite what was at first carefully prepared for publication, when time and further reflection had not suggested any change of doctrine, or any material improvements in illustration or phraseology.

The nature of the subject has compelled me to make a kind of comparative survey of the workings and results of the social and political institutions of England and America. It is hoped that the results of this comparison, as here presented, will not seem to have been suggested by national prejudice, or to be unduly tinctured with national self-esteem.