It thus seemed to have a kind of mathematical certainty.When facts failed to conform to the theory the difficulty could be met by speaking,as Malthus spoke,of 'tendencies,'or by appealing to the analogy of 'friction'in mechanics.The excuse might be perfectly valid in some cases,but it often sanctioned a serious error.It was assumed that the formula was still absolutely true of something,and that the check or friction was a really separable and accidental interference.Thus it became easy to discard,as irrelevant,objections which really applied to the principle itself,and to exaggerate the conformity between fact and theory.The economic categories are supposed to state the essential facts,and the qualifications necessary to make them accurate were apt to slip out of sight.Ricardo,46to mention a familiar instance,carefully points out that the 'economic rent,'which clearly represents an important economic category,is not to be confounded,as in 'popular'use,with the payments actually made,which often include much that is really profit.The distinction,however,was constantly forgotten,and the abstract formula summarily applied to the concrete fact.
The economists had constructed a kind of automaton which fairly represented the actual working of the machinery.But then,each element of their construction came to represent a particular formula,and to represent nothing else.The landlord is simply the receiver of surplus value;the capitalist the one man who saves,and who saves in proportion to profit;and the labourer simply the embodiment of Malthus's multiplying tendency.Then the postdates as to the ebb and flow of capital and labour are supposed to work automatically and instantaneously.
Ricardo argues that a tax upon wages will fall,not,as Buchanan thought,upon the labourer,nor,as Adam Smith thought,upon rent,but upon profits;and his reason is apparently that if wages were 'lowered the requisite population would not be kept up.'47The labourer is able to multiply or diminish so rapidly that he always conforms at once to the required standard.This would seem to neglect the consideration that,after all,some time is required to alter the numbers of a population,and that other changes of a totally different character may be meanwhile set up by rises and falls of wages.Ricardo,as his letters show,48was well aware of the necessity of making allowance for such considerations in applying his theorems.He simplified the exposition by laying them down too absolutely;and the doctrine,taken without qualification,gives the 'economic man,'who must be postulated to make the doctrine work smoothly.
The labourer is a kind of constant unit --absolutely fixed in his efficiency,his wants,and so forth;and the same at one period as at another,except so far as he may become more prudent,and therefore fix his 'natural price'a little higher.An 'iron law'must follow when you have invented an iron unit.In short,when society is represented by this hypothetical mechanism,where each man is an embodiment of the required formula,the theory becomes imperfect so far as society is made up of living beings,varying,though gradually,in their whole character and attributes,and forming part of an organised society incomparably too complex in its structure to be adequately represented by the three distinct classes,each of which is merely a formula embodied in an individual man.The general rules may be very nearly true in a great many cases,especially on the stock-exchange;but before applying them to give either a history or a true account of the actual working of concrete institutions,a much closer approximation must be made to the actual data.
I need not enlarge,however,upon a topic which has been so often expounded.I think that at present the tendency is rather to do injustice to the common-sense embodied in this system,to the soundness of its aims,and to its value in many practical and immediate questions,than to overestimate its claim to scientific accuracy.
That claim may be said to have become obsolete.
One point,however,remains.
The holders of such a doctrine must,it is said,have been without the bowels of compassion.Ricardo,as critics observe with undeniable truth,was a Jew and a member of the stock-exchange.Now Jews,in spite of Shylock's assertions,and certainly Jewish stockbrokers,are naturally without human feeling.If you prick them,they only bleed banknotes.They are fitted to be capitalists,who think of wages as an item in an account,and of the labourer as part of the tools used in business.Ricardo,however,was not a mere money-dealer,nor even a walking treatise.He was a kindly,liberal man,desirous to be,as he no doubt believed himself to be,in sympathy with the leaders of political and scientific thought,and fully sharing their aspirations,No doubt he,like his friends,was more conspicuous for coolness of head than for impulsive philanthropy.Like them,he was on his guard against 'sentimentalism'and 'vague generalities,'and thought that a hasty benevolence was apt to aggravate the evils which it attacked.
