Bevan - Sir William Petty (1894)/VI

by Wilson Lloyd Bevan

CHAPTER VI.

PETTY IN RELATION TO CONTEMPORARY ENGLAND, AND HIS PLACE IN ECONOMIC LITERATURE.

Some brief references must be made to the economic environment in which Petty wrote. For the few facts presented here I have relied entirely on secondary sources. They are only offered with the hope that they may illustrate Petty's writings. His tracts were composed with the direct purpose of influencing his own contemporaries. Anything that helps us to grasp his point of view may be useful.^[1] When we hear him pleading for the advantage of increased population, it is well enough to remember that in the last half of the seventeenth century the population of England was only five and a half millions. Again, he dwells with undue exaggeration on the necessity of large towns to the prosperity of England. In his life-time the only town of any considerable size was London. The north of England had practically no towns of importance. Compared with the south that part of the country was in an undeveloped state. Roads were everywhere bad. We can understand why he disapproves of agriculture. The land was usually carelessly cultivated, and its product consumed only by the cultivator. Transportation was impossible. Only in the neighborhood of the London market was it profitable to raise corn. What Petty calls the primitive trade of cow-keeping was everywhere else the most profitable on account of the ease of transporting live-stock to market. The consumption of flesh, butter and cheese by the lower classes of the population was proportionally greater than in the present century. Owing to this fact it was only profitable to raise corn in proximity to the London market, where it found a ready sale. The counties lying nearest to the great capital were in a much more advanced state of industrial development on this account than the rest of the country. Only one-fifth of the country was in a state of tillage, and even from this small portion of tilled land a disproportionately large quantity of inferior and coarse varieties of grain was raised. Cattle-raising was everywhere else the most profitable occupation on account of the greater facility of transporting live-stock to market. A great quantity of flesh, butter and cheese was consumed by the lower classes.

The woolen industry was still the sole department in which English manufactures had any significance. Every year two million pounds of wool were sheared. In a manufactured state this was worth eight millions sterling. Of this six millions were used in England; the rest was exported. Even here England felt severely the effect of foreign competition. Especially Holland, Petty tells us, had by improved methods and better workmanship become England's rival in supplying the Continent with woolens.

The second source of national wealth, next to the woolen industry, was from the shipping trade. Here, again, despite England's favorable position, she was in constant competition with the Dutch. The Navigation Act, passed by the Commonwealth in 1651, with its subsequent alterations, all in more rigorous direction, soon bore fruit. In 1663 the tonnage was 421,582; in 1683 it had risen to 884,995. In everything else England plays a very poor role. Mining was hardly developed. Tin, in which England has a natural monopoly, only shows an output of £1,600. Coals found their principal market in London. That city consumed half the amount mined annually. Salt was not a domestic product at all; it was imported from France. Iron manufacture was in a very rudimentary condition. Only 10,000 tons were annually produced.

These figures leave one with an impression of the insignificance of England's industrial position during the seventeenth century, but it is easy to take too unfavorable a view of them. As a matter of fact, under the Stuart dynasty, England was making steady progress. She had survived a civil war, and everything goes to show that in the Restoration period England was beginning to feel her power.

The main lines of policy initiated by Cromwell were followed during this period. I need only to refer to the Navigation Act, the abolition of the Feudal Rights of the crown, the introduction of the excise, all of which were Commonwealth measures, that were sanctioned by the Restoration government. The commercial growth of the country is indicated by the increased tonnage of the shipping.^[2] In 1663 there were 95,266 tons; in 1688 the total had risen to more than double the amount, 190,533 tons. The customs duties show the same upward tendency. In 1660 the receipts from this source were £421,582; in 1665, £519,072; in 1675, £674,113; in 1685, £701,504; in 1687, the year of Petty's death, they had risen to £884,955. In 1652 the post-office was farmed for £10,000 per annum; in 1663 the sum was more than doubled. In 1685 the revenue from the post-office was estimated at £68,000. The postage on letters was considerably reduced, and by private initiative the first penny post was established in London in 1683. In 1661 a statute was passed for repairing highways, and two years later toll-gates were first established for their maintenance. The reform of the poor law administration was widely discussed. At the close of Charles II's reign the poor rates equalled £665,000. A new departure was inaugurated at the commencement of his reign by the erection of work-houses.

The foreign trade of the country was still in the hand of trading companies. The management of these organizations was an object of great debate. The East India Company met with strong opposition by those who disapproved of the exclusive form which its monopoly took. The older companies, especially the Eastland, were complained of as setting limits on the natural growth of English commerce, although their management gave fuller play for individual effort. The age of the Restoration is also remarkable for the consistent development of the protective system. On the one hand we meet with a succession of commercial treaties with different powers, by which England attempted to gain some special advantages in the extension of her trade that were not open to France and Holland. On the other hand there are a series of measures intended to protect the home market and national trade. The Navigation Act was made by successive changes much more rigid in its terms. The premium on the building of English shipping was increased. Jealousy of France, from which England imported extensively manufactured articles, wines and liquors, prompted in 1678 the passing of an absolute prohibition of all French goods. It was urged against the East India Company that the articles which it imported into England, muslins and calicoes and wrought silks, were highly injurious to English manufactures. Finally all these Indian goods were absolutely prohibited. Every effort was made to preserve the woolen trade. The prohibition of the export of raw wool had never been very effective. This measure was made more rigid, and in order to extend the sale at home the famous order was passed which forbade bodies of the dead to be buried in any other material. Dr. Faber has carefully examined the influences which brought about the application of protective measures in favor of the agricultural classes. I can only notice here that the Restoration is a crucial period in the history of the Corn Laws. The two great principles of prohibition of import, and bounties on export, were inaugurated in this time.

A subject which has not received adequate attention at the hand of historians is the financial history of England during this period. Mr. Buxton, in his "Finance and Politics," lays stress in the preface of that book on the close connection between finance and the constitutional development of England in the seventeenth century. The Civil war, largely brought about by irregular taxation, was the cause of a great increase in public expenditure. In order to meet new demands, new methods of taxation had to be devised. Among the most important measures was the introduction of the excise in 1643. And it is equally necessary to remember that the whole system of financial administration—previously in a most crude state—was reorganized by Cromwell.

The fiscal point of view in the so-called mercantile system is too often ignored. The problem before the men of the seventeenth century was to provide for an increase of national income. The modern national state, with its enlarged sphere of activity, was struggling to supply its coffers by forms of assessment that had come down from the middle ages. The most direct way of accomplishing its purpose, with the smallest danger of exciting rebellion, seemed to be the adoption of the protective measures which we have already enumerated.

This brief review of the economic condition of England gives us a background for Petty's writings. They can only be understood and appreciated as interpreting the questions of his own day; and in the light of the questions of his own day they are most worthy of study.

There is another point of view—rather wider—from which we can regard his work. What place does he hold in the development of English economic literature, as a whole? Some answer to this question I have tried to give by using an arrangement in my paraphrase of his writings that might help us to seize the salient points. A more satisfactory answer can be made when we come to examine his method of thought in relation to his own age, and when we have traced its affinity to the system of Ricardo and Adam Smith.

We have seen from Petty's life that he was an avowed adherent of the new philosophy. He speaks with respect of its founder, Bacon. He had assisted in the founding of the Royal Society, which was devoted to the study of natural science and to the extension of the experimental method of research. What evidence do we find in his works of the influence of the Baconian philosophy? In the preface to the "Anatomy of Ireland," he cites "the judicious parallel" of Sir Francis Bacon "between the body natural and the body politick," and calls his own work the first essay of political anatomy. In his early work on education we find him stating that "the only true method is the method of observation and experiment." A good illustration of the method he here commends is to be found in the "Quantulumcunque." In arguing against the wisdom of forbidding the export of money, he says: Countries which forbid the export have no money; countries which place no restriction on the export are rich. Careful observation and analysis are characteristic of his writings.^[3] Petty was familiar with two continental Countries—Holland and France. In both of these countries he had been an intelligent observer. In Ireland his long residence had made him acquainted with a state of culture different from any that he had met elsewhere. His powers of observation are trained enough to discriminate between what is essential and what is not essential in whatever he is investigating. Petty believed that scientific experiment ought to play a greater role than it did at his time as a guide to industrial progress. He did not confine its sphere solely to the arts. We have seen his proposals for its application to agriculture. To experiment in navigation and land carriage his own time and money were devoted toward the close of his life.

Petty's obligations to the Baconian method are apparent, but they are not so noticeable as his obligations to Hobbes. It is true that Bacon's name is mentioned, and it is also true that no reference is ever made to Hobbes. But it is certain that Hobbes exerted a much greater influence than Bacon over him. In Petty's biography we have seen his early association with Hobbes. This association did not end with Petty's residence in Paris; their friendship remained unbroken. In the contemporary life of Hobbes by Aubrey, in the list of Hobbes' most intimate friends, Petty's name is found. Although Petty depreciated reading, and had rather a contempt for book learning, we know that he was acquainted with Hobbes' works. In a (MS) list of books drawn up by Petty for his son's use, the "De Cive" of Hobbes is the only English book mentioned. Petty's predilection for mathematics is an evidence of the intellectual kinship between Hobbes and himself. Petty follows Hobbes in assigning to mathematical proof the highest place. In the preface to his last "Essay on Political Arithmetick," he says "observations expressed by number, weight and measure" are the data he uses. And, again, "I have taken the course… to express myself in terms of number, weight or measure, to use only arguments of sense" (207). Mathematical proof has the greatest certainty, and as the great aim of investigation is to reach certainty, mathematical reasoning is to be extended as far as possible. We have seen the good results of this principle when Petty took in hand the Bills of Mortality and made them the basis of the new science of statistics. But his consistency did not stop there. His works are full of mathematical computations of a more complex nature.

At this point we must make a distinction. In his purely statistical work it is unjust to criticise results when they are due solely to the want of accurate information. He was conscious of the imperfect sources which he was obliged to use, and he did all in his power to secure trustworthy data. It is quite another thing to object to the method itself, and this in many cases we can fairly do. For example, granting the correctness of his estimate of the population of England, his assumption that the population of a country always increases in the same ratio (107) is one whose falsity he should have seen. Again, in elaborate computations he uses the words "guess" and "suppose" frequently, showing that the whole argument is purely conjectural. Yet he does not hesitate to use such arguments to guide the policy of the State.

Petty's preference and constant use of the deductive method may also be regarded as a sign of Hobbes' influence. In many cases it is difficult to say whether he employs facts simply as illustrations or whether they have been used inductively. I should be inclined to say that the number of purely fictitious illustrations invented to prove or explain general principles, shows that he most frequently used observation to fortify a principle, which he had reached deductively. Taking his great principle that value is determined by labor, it can hardly be said that he derived it from observation. He seems to have worked it out independently, not taking the trouble to find out whether it was objectively true. When he asserts that the price of silver in Russia and in Peru is determined simply by the quantity of labor, it is almost certain that he confidently uses this illustration, without investigating its truth. Statements such as these are—purely a priori—he is constantly making without being aware that they are less trustworthy than what he reports from his own observation in France or in Holland.

As deductions of this kind have played so large a role in the science of economics, it is interesting to scrutinise them in the pages of Petty's works. His employment of deductive method is concerned in reducing complex facts to simplicity. He only means, he says, to consider "such causes as have visible foundations in nature." He does not intend to consider those causes "that depend upon the mutable minds, opinions, appetites, and passions of particular men." And again, he states that he only uses "arguments of sense."^[4] This gives his conception of nature. In order to reach certainty we must leave out all the causes which he has particularized as depending on the mutable properties of human nature. When we analyse these, we must disregard them, and what remains will be in every case the natural state of the object investigated. He shows how he applies this method in detail in the case of rent. The accidental causes which affect rent are enumerated. These are: public security, good administration of justice, pleasure and honor of having land, better titles, size of population. When all these have been accounted for, the only factor left is the land itself; or in other words, the indestructible powers of the soil are what give rise to rent, and when we have found some way of arithmetically estimating these, we have reached an expression for natural rent. In the same way, but not so fully worked out in his writings, he reaches expressions for natural price, for natural measure of exchange, natural rate of wages (338). In the case of interest his use of the word nature is instructive because the advocates of prohibiting usury from Aristotle down also appealed to nature. Money was by nature unproductive, and no charge could be made for its use. Petty takes a directly opposite position. When he says interest is a reward or recompense for forbearing the use of your money, he assumes the contradictory of the mediæval view. There is always a productive use for money. It can be invested in land, and the rent of land gives the standard for the natural rate of interest.

It is clear that Petty's studies in natural science had a great influence on his conception of nature. His method is indeed from Hobbes, but in his conception of the validity of natural laws he diverges from that thinker. Petty shows decided traces of that reverence for natural conditions which characterizes Locke and the philosophic school of the next century. If one has an optimistic view of nature it is probable that one will use arguments against the existing state of things, if they seem to violate the natural order. Petty's writings show evidences of this tendency. He tells us it is against nature to prohibit the export of money (Quantulumcunque). In another place (35) he remarks that "making civil and positive laws against the laws of nature" is vain and fruitless.

It is evident that Petty was no stranger to the political ideal of Hobbes. In the "Treatise on Taxes" we are put in the way of tracing Petty's own conception of the functions of the State. The widest interpretation is given to its powers. There is no limitation to its interference. In education and in religion, it stands supreme over the individual. The subject has a subordinate position. He must be treated with an enlightened policy, because the prosperity of the State is dependent upon the prosperity of the subject. Every man is valuable because he represents a certain fraction of that labor power by which the State is enriched. The State should take care in no way to impair this energy, but at the same time it can interfere to secure the benefit to itself of the labor of its subjects.

Whenever Petty speaks on religious subjects we are conscious of a cynical strain in his thoughts. He uses the canting terms of his Puritan friends in an ironical way (3, 62). In the same sentence he significantly joins together ale-houses and monks, recommending that in Ireland the number of each should be diminished. In his will he again betrays Hobbes' influence, where his words mean that the authority of the state in religion is supreme; and in other places he recognizes no individual right in matters of conscience, against the state. An extension of this characteristic is to be found in his complete disregard of any principles of public morality. The obedience of the subjects of a government depends on the power of their rulers to reward or punish them (2). In his tract on Naval Philosophy he calmly asks the question whether it would not be better, instead of employing seamen in trade, to use the same number on the high seas to take prizes from those with whom we are at war. Would not the commercial value of the prizes be greater than the proceeds of legitimate trade? He argues with great complacency on the possibility of transporting the whole population of Ireland into England. He would erect his whole educational reform on a ground which must have been subversive of all family life. The members of all the professions, and the official class, were to be recruited from children educated in asylums and schools under the care of the state. In his fearless consistency in carrying out an enlightened sensualistic principle to its extreme, he can be compared with the great Italian political writer of the sixteenth century. Outside of moral questions he shows a certain narrowness of mind. The origin of this defect is to be sought for in the facts of his own life. He was a successful man, and from the road by which he had himself attained wealth he could not allow any divergence. To the claim of culture his training had not inclined him to be sympathetic. Masson, in his "Life of Milton,"^[5] has remarked on the great difference between the educational reforms of Petty and Milton. Both men were alike dissatisfied with the prevalent methods of education; both approved of radical reforms. But the line that Petty followed in his proposals is far less broad and humanizing than that of the poet. He boasted that he had read almost nothing since he was twenty-five years old. He had few books himself, and in a letter to Boyle he discourages the habit of excessive reading, and questions its value. In the preface to the "Anatomy of Ireland" he laments, as Bacon has done in the "De Augmentis," the excessive number of books that were being sent forth. Whether he read the classic writers whom he mentions may be uncertain. It is interesting to see that he selects from Aristotle three books, which Hobbes himself recommends as alone valuable. In his printed works the only important names we find are those of Bacon, Des Cartes, and Sir Thomas More.

His deficiencies of character and intellect he is always ready to reveal. There is no hypocrisy. He has great self-confidence. Whether we find him publishing a list of cheap experiments for the use of the Dublin Society, or whether we find him estimating the value of each individual, he never assumes an apologetic tone.^[6]

Apart from his value as an economist, Petty must be given a high place among the political writers of his age. His remarks are generally judicious. He interprets clearly the meaning of what he saw about him. His digression on the growth of London is a proof of his shrewdness in foretelling the continued westward progress of that city. Equally far-sighted is he, when he indicates the probability of the separation of the American colonies from the mother country (263). As an authority on Ireland his value is testified by the respect with which he meets from those who have handled Irish history. His arguments for the Act of the Union between England and Ireland are forcibly expressed. When a century later the Union was accomplished, its promoters reproduced much that Petty had already brought forward. His attitude toward the native Irish cannot be called sympathetic. Yet it was an intelligent attitude. He was not indifferent to Ireland's troubles. He had studied the needs of the people. The policy which he regarded as best for Ireland was, as we might expect, in the interest of the English settlers. It was, however, a well defined and enlightened policy. It was the result of careful consideration, not a blind following of racial and religious antipathy.

We have traced in a general way the debt Petty owed to Hobbes. We believe his influence is apparent chiefly on Petty's method and in the characteristics of his thoughts. It is possible to find actual resemblances; for example, in the analysis of wealth into land and labor.^[7] But I do not think that verbal identity is so likely to prove Hobbes' influence over him as does the kind of affinity upon which I have already commented. Petty is hardly the man who could be a mere copyist.

In Sir William Temple we meet with a political writer who can well be compared with our author. His tracts on the Low Countries and on Irish trade deal with subjects treated fully by Petty. When two very intelligent men are both reviewing the same ground, it is probable that we shall find remarks in one easily paralleled by the other. The smallness of the Irish trade, Temple tells us, is due to revolutions, political intrigue, bad government and absenteeism.^[8] All this is familiar, but we look in vain for the peculiarities of Petty. There is no use made of statistical information; there are no attempts to interpret the facts in any but the ordinary way of intelligent observation. I can find nothing in Petty's works which induces me to believe that he owed anything to his temporary connection with Harrington's Club, in 1659. To a man of Petty's way of thinking Harrington's learned historical disquisitions would carry little weight. His political system was too speculative to find favor with the practical bent of Petty's intellect.

With Sir Joshua Child Petty can be more justly compared. They both were strongly practical men, but Petty's scientific acquirements place him on a level which Child, with his mercantile interests, never reached. Child, when he holds up Holland as a model, is only doing what every one did who was surprised at the rapid progress of that country in the seventeenth century. Sir William Temple approached this subject in a much more scientific spirit than either Petty or Child. In his "Observations upon the United Provinces of the Netherlands," he shows that he appreciated the necessity of studying the unique position of Holland in the light of her historical development. In the very point where Child reveals superficial treatment by exaggerating the importance of a low rate of interest, Petty is immeasurably above him. Petty knows well enough that a low rate of interest is an effect and not the cause of industrial prosperity. Child indeed shows ability in his treatment of the balance of trade. He saw the impossibility of testing the welfare of a country by simply looking at the table of exports, and ingeniously pointed out the sources of error. In the controversy between the East India Company and its older rivals Petty had no share. In the dispute Child wrote as a partisan of the East India Company. Petty approved of trading companies, but he says nothing on the merits of either form of organization, joint stock or open companies.

Samuel Fortrey is once mentioned by name. With Fortrey's crude notion of estimating England's wealth by the quantity of coined money in the realm Petty disagreed. The controversy that arose over the supposed decadence of England called forth one of Petty's Essays on Political Arithmetic. He only notices the group of writers whom Fortrey represented to condemn their whole position as fallacious.

The economic works of Mun and Locke fall outside of Petty's lifetime. With Mun (Posthumous Treatise, 1662) there are resemblances. His reasons for allowing the export of money are re-echoed in Petty, and his proposal of a State treasure is virtually approved of by Petty's arguments. The many proposals for poor-law reform noticed in the first volume of Eden testify to the fact that Petty's own remarks on this topic are by no means original. In fact, whenever Petty takes up this question he betrays his acquaintance with More's great work, nor are his direct obligations to any other author so apparent.

In these respects where Petty touches the economic thought of his time, and where he reproduces it, he cannot be said to reveal his greatest strength. In the method which he adopted, in the way he pointed out for a minute analysis of facts, he stands unique. His contemporaries, as a rule, worked in a popular way. They never looked at economic phenomena as a whole. They did not try to penetrate beneath the surface of what they saw. Petty apprehended his subject in a different spirit. He believed that his investigations ought to be guided by a rigorous method. Notwithstanding the occasional character of his works, they show evidences of systematic care in their production. His "Treatise on Taxes" is a much more ambitious attempt to grasp the science of finance, than can be found in any work of his contemporaries in England. The "Anatomy of Ireland" must also be praised for its breadth of conception, although, as he worked it out, there is too much of the political pamphleteer and of ex parte argument in its pages.

In Petty there are two elements strongly marked. He shows himself in many ways distinctly under the limitations of his own age. To the prejudice and feeling of his contemporaries, he concedes a great deal. As a politician he is distinctly connected with the age of the Restoration. But there is throughout his writings a more permanent element; an element in which the systematic school of political economy is foreshadowed, both in its method, and in its point of view. In his application of statistical data, in his desire to widen the realm of knowledge by principles of research approved in the sciences, he is the father of English economic science. In his attempt to mark out the road by which the whole field of economic phenomena was to be approached, in his laying down what method was to be followed in analysing economic facts, even in some of the results he himself attained, he brings himself into close contact with the school of Adam Smith and Ricardo. McCulloch, in his "Literature of Political Economy," has already pointed out an anticipation of Ricardo's doctrine of price, which he had noticed in Petty. Petty quite as strongly as Ricardo insists that labor alone enters into price. Any attention to capital was almost entirely out of Petty's view, but in the "Verbum Sapienti" he expressly says that the stock of a nation is the result or effect of past labor. Again, as to rent, Petty would quite agree with Ricardo's definition of rent as the payment for indestructible powers of the soil.

Leaving these verbal likenesses out of the question, there is a distinct intellectual affinity between Petty and Ricardo. In both we see the results of a mathematically trained mind. They both aimed at applying the rigorous method of that science to the study of social phenomena. Both were men who had made large fortunes. In both their practical training had not been supplemented by the broadening influence of education. Petty, like Ricardo, regarded man solely as a labor unit. He, as well as Ricardo, is open to the reproach of dealing with human beings as if they were nothing more than algebraic symbols. Petty's very frank attempt to discover the value of each human being is only a crude example of that insensibility, which might find its parallel in Ricardo's more refined arguments. The differing conditions of their respective times naturally creates a divergence between them. Petty's political ideal was antagonistic to Ricardo. With Petty the vital question is how to make the State rich and powerful. Ricardo was purely individualistic. It must of course be remembered that in Petty's days the problem of distribution had as yet really not arisen. The revolution caused by machinery had not altered the face of the industrial world. Allowing for all this, it must, I think, be conceded that in a remarkable way Petty reproduces under a seventeenth century garb those features of Ricardo's work, which have exerted so potent an influence on English thought in this century. Finally, it is extremely curious to compare Petty's tendency towards using fictitious illustrations to explain a general principle, with Ricardo's employment of the same sort of help. Petty here deviates from the rule he had set himself, of always relying on accurate facts, and what is especially important to notice, in so doing he is overcome by the superior clearness and cogency of deductive reasoning, and, like Ricardo, gives to these illustrations the force of objective reality.

Only an enthusiastic person, whose studies have led him to exaggerate the object of his investigation, would be bold enough to speak of Adam Smith being anticipated by Petty. A treatise is different from a tract. Recognizing the wide divergence of aim, method and talent, it is nevertheless fair to point out that some of the principles which Smith used in elaborating his work are already existent in his predecessor. It is in itself important that Smith almost uses Petty's own words when he says that the real wealth of a country is the annual produce of its land and labor. When Dugald Stewart states that the great and leading object of Smith's speculation is "to illustrate the provision made by nature for a gradual and progressive augmentation in the means of national wealth, and to demonstrate the most effectual plan of advancing a people to greatness," he is correct in indicating that Smith's strong point lies in the extensive field of historical illustration, which he makes use of in the course of his book. In the appeal to nature he was only following previous writers, and also in his conception of nature he cannot claim originality. Petty, like Smith, professedly dealing solely with social phenomena, approaches his work with the same optimistic conception of nature, and uses the test of obedience to natural laws with a like confidence. Taking the first book of the "Wealth of Nations," we can see that a large portion of its contents can be found in an undeveloped form in Petty's writings. This statement certainly holds good with regard to division of labor and the principle that occasions it, to price, to the rent of land. The three sources of national wealth are in one of Petty's tracts, the "Verbum Sapienti," distinguished with precision. Petty lays stress upon the distinction as being a valuable basis for improved taxation. It did not enter within his purpose to give this principle a wider application. Whatever Petty has said on the subject of money is so accurate and so penetrating that it is of great permanent value. Smith or any other writer can only follow in his footsteps, and repeat what he has already said in his clear and luminous treatment of currency in the "Anatomy of Ireland," in the "Treatise on Taxes and Contributions," and elsewhere. It is curious that Smith when he takes up interest approximates to Petty's own definition, almost with verbal identity. I shall place the passages side by side:

Smith. "Interest is the compensation which the borrower pays to the lender for the profit which he has an opportunity of making by the use of the money." Bk. 1, ch. 6.

Petty. "Wherefore when a man giveth out his money upon condition that he may not demand it back until a certain time to come, he certainly may take a compensation for this inconvenience which he admits against himself" (34).

The canons of taxation prefixed to the fifth book are to be found either expressly stated or implicitly assumed in the "Treatise on Taxes," with the exception of the final one. As Petty followed Hobbes, and did not agree with Locke's conception of the limited sphere of government, which Smith adopted, we cannot expect a coincidence on this point. I think I can justify the general assertion by the following quotations: "Let the tax be never so great, if it be proportionable unto all, then no man suffers the loss of any riches by it" (17). "Ignorance of the numbers, wealth and trade of the people, causing a needless repetition of the charge" (5). "Another cause which aggravates taxes is the force of paying them in money at a certain time, and not in commodities at the most convenient seasons" (5). One of the causes of irregular taxing, he says in the "Verbum Sapienti," is "the opinion that certainty of rule is impossible" (482). A small but interesting resemblance between the two writers can be seen in the following passages:

Smith: "The rent of a house may be distinguished into two parts, of which the one may very properly be called the building rent, the other is commonly called the ground rent.

"The building rent is the interest or profit of the capital expended in building the house. * * * * This surplus rent [the second] is the price which the inhabitant of the house pays for some real or supposed advantage of the situation." Bk. v, ch. ii.

Petty.—"An house is of a double nature, viz., one, wherein it is a way and means of expence, the other as it is an instrument and tool of gain" (26).

One is very open to errors in endeavoring to prove in a case of this sort that the later writer has copied his predecessor. Often when there is even greater similarity than in the above examples, the coincidence may be accidental. Smith did not recognize that the earlier writers whom he classed as mercantilists contained anything but false principles. At the present day it is possible to take a broader view without detracting from the fame of the "Wealth of Nations." A place in the development of economic doctrine is conceded to Smith's predecessors. Among them there is no one more worthy of recognition, no one whose place is more assured, than Petty. However imperfectly he is interpreted here, enough has been said to establish his claim to the respect and consideration of the students of economic literature.

 

1. My authorities are Cunningham, Faber and Macpherson.
2. Cf. Chalmers, "Critical Estimate of the Nation," reign Charles II.
3. Dr. Cunningham well says that in these respects he shows more power than in deduction.
4. Preface to last "Essay in Political Arithmetic," 207.
5. Vol. iii, 655.
6. A characteristic trait was, we hear, the cause of his failure in the experiments of ship-building, which gave him so much disappointment in his later years. "The cause of the tenderness (of the boat) was an endeavor, besides to introduce a new principle, to make a small passage boat of twelve feet broad, yet enough to carry horses, hoping to have gotten some small matter thereby to have defrayed the charges." From a letter quoted in a life of Petty in "Biographia Brittannia."
7. Cf. Roscher's remarks on Hobbes in his already cited essay.
8. Cf. Essay on Advancement of Trade in Ireland.