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tendency of the ocean to a level, which is as constant and certain as the law of gravity, though probably no single square yard of its surface may even for a moment actually attain it. In the example, however, which I have given of barley and wheat, though the proportions in which these two articles exchange may never at any given moment strictly conform to their costs of production, still, if the average were struck over an extensive period, the correspondence would probably be found to be in most cases wonderfully accurate; just as the average elevation of a cork thrown on the surface of the ocean would be found to represent the level which the whole surface constantly tended to approach. But, in the other example of the exchange of cotton goods and tobacco between England and America, this would not be the case. As I have already observed, if we were to take the average proportions over a considerable period in which these two articles are exchanged, this average would not be found to correspond with their respective costs of production.

would be in proportion to cost of production, and there would be no point in the argument) but such a case is economically impossible. All Ricardo's reasonings, indeed the reasonings of all economists that I have met with except Mr. Macleod, proceed upon the assumption that self-interest is the motive to production. A case, therefore, which supposes a perseverance in producing" without an adequate remuneration—that is to say, without an adequate motive-is simply out of the pale of Political Economy. Cost of production would not indeed, under the circumstances supposed, regulate value; but no more would demand and supply nor any other principles that can be imagined. Value," in short, would no longer have any meaning, since exchange, with the feelings of self-interest which dictate it, would cease to exist.

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Is it then true that the law fails in this instance? I answer, that it no more fails than the law of gravitation fails when its force is neutralized by the action of friction. The law operates, but its operation is controlled by the force of another principle which intervenes and modifies the resulting phenomena. The case affords an example of a statement which I made on a former occasion, that a law in Political Economy, though logically deduced from indubitable facts of nature, is yet, when applied to external phenomena, true only hypothetically. Thus the law that cost of production regulates the value of freely produced commodities, is a doctrine logically deduced from the unquestionable facts that men desire to obtain wealth, and are averse to labour. Looking simply to these principles, it clearly follows that men desire to obtain wealth at the least possible outlay of labour; and consequently will not continue to give an article the production of which costs a given amount of labour, for an article which may be obtained for less; and this is only in other words to say that cost of production regulates value. But this is only true on the hypothesis that no other principle intervenes to disturb the direct operation of the two principles just described. For example, love of country may intervene to disturb their operation. An Englishman may prefer permanently to exchange a pound of manufactured cotton for a quantity of raw tobacco which cost less labour, rather than to go to America to grow tobacco for himself. In international deal

ings, therefore, a new principle, love of country, comes into play, and modifies the force of the other principles, desire for wealth and aversion to labour; the consequence is, that international values do not follow simply the cost of production. The law of cost of production is here in abeyance, just as the law of gravity may be said to be in abeyance when a weight remains in equilibrio on an inclined plain. But as the law of gravity cannot be said to fail in the latter case, no more can the law of cost of production in the former. Diminish the friction of the plain, and the weight will begin to descend in obedience to the law of gravity. And, in precisely the same way, diminish the obstructions to international communication, diminish the force of international prejudices, and the general laws of value will be found immediately to act, and international values will approach more nearly to the respective costs of production of the articles exchanged.

From this conception of an economic law, as expressing a hypothetical, not a positive, truth; as representing not what actually takes place, but what, putting aside the consideration of all other causes than those from which the doctrine is deduced, tends to take place, we can have no difficulty in perceiving the kind of proof on which an economic law rests, and the kind of arguments, therefore, by which alone, if questioned, it can be refuted.

Not being an assertion respecting the character or sequence of phenomena, it can neither be established

nor refuted by an appeal to the records of phenomena -that is to say, by statistical or documentary evidence; but, expressing a tendency deduced from certain principles of human nature acting under given physical conditions, it can be established only by proving the existence of such principles and conditions, and showing that the tendency asserted follows as a necessary consequence from these data; or, if questioned, can be refuted only by showing, either that the principles and conditions assumed do not exist, or that the tendency which the law affirms does not follow as a necessary consequence from this assumption. In economic reasonings, therefore, supposing the logical portion of the process to be sound, the appeal must in all cases ultimately be to consciousness or to some external fact—to some mental or physical law. And this, in fact, has been the kind of proof by which all those principles of Political Economy that can be considered as received doctrines have been established, and the issue to which, in the works of its ablest cultivators, all controverted questions have been ultimately reduced.

Thus, it was by appealing to the principle of selfinterest as it operates in commercial transactions, and to the physical properties of the precious metals as portable commodities, that Adam Smith overthrew the dogmas of the mercantile system, and established the doctrines of free trade.

"No commodities," he tells us, "regulate themselves more easily or more exactly according to the effectual

demand than gold and silver; because, on account of the small bulk and great value of those metals, no commodities can be more easily transported from one place to another, from the places where they are cheap to those where they are dear." Here we have a statement of the physical properties of the precious metals. "A country," he goes on to add, "that has no mines of its own must undoubtedly draw its gold and silver from foreign countries, in the same manner as one that has no vineyards of its own must draw its wines. A country that has wherewithal to buy wine will always get the wine it has occasion for; and a country that has wherewithal to buy gold and silver will never be in want of those metals. They are to be bought for a certain price like other commodities, and as they are the price of all other commodities, so all other commodities are the price of those metals. We trust with perfect security that the freedom of trade, without any attention of government, will always supply us with the wine which we have occasion for; and we may trust with equal security that it will always supply us with all the gold and silver which we can afford to purchase or to employ, either in circulating our commodities or in other uses:"*-the reason, though not expressed, being clearly implied, that the same self-interest which is sufficient to induce the wine producers in France and Spain to send us their wines, will be sufficient also to induce the producers of gold and silver to send us

* Wealth of Nations, Mc Culloch's edition, 1850, page 190.