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(1873) "Review of Macleod's Economical Philosophy", Manchester
Guardian, 20 June, 1873, p.7 [Note on HET version: This is an unsigned review of H.D. Macleod's Economical Philosophy. Michael V. White (2003) has argued, convincingly in our opinion, attribution of authorship to W.S. Jevons. See:
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PRINCIPLES OF ECONOMICS There is much difficulty in knowing how to regard and characterise the economical works of Mr. Macleod. No doubt can exist as to the extraordinary earnestness and perseverance with which he has followed up his studies of political economy in the face of little or no encouragement from other English economists. He has published a large, and in some respects useful, treatise on the 'Theory and Practice of Banking'. He has undertaken single-handed a 'Dictionary of Political Economy', of which the first volume has been published, and the second is in progress. Although in France, and even in Belgium, large dictionaries of the kind have long been in use, in England, which is par excellence the country of economists, Mr. Macleod is the only one who has tried to supply a like want. In 1858, he brought out his 'Elements of Political Economy', and now we are presented with the first volume of a second edition of the work, under the somewhat formidable title 'The Principles of Economical Philosophy'. When we add that this first volume contains 676 rather closely printed pages, the industry of the writer will be apparent. To what is it due that Mr. Macleod is practically ignored by English economists, and has to seek for approval across the Channel, where his reputation is much greater than in his own country? In the first place we shall be doing a service to Mr. Macleod in suggesting that he injures himself by his own self assertion. A treatise on a science must stand upon its own merits, and it is none the better because Mr. Macleod's father was a Scotch landed proprietor, or he himself was employed by the Royal Commission for forming a digest of the law of England. We trust that no one will imitate Mr. Macleod in the style of his preface, which contains a sketch of his past history and labours, together with a selection of testimonials which he apparently obtained when a candidate for the political economy chair in Edinburgh, now held by Dr. W.B. Hodgson. Testimonials are sufficiently distressing documents to all parties concerned, when applied to their intended purpose; but we hope never again to see them republished for the edification of readers in general. But to come to the merits of the work itself. How is it that Mr. Macleod's economical views have obtained so little currency in England? One possible reason is that he is in dire opposition to Mr. J.S. Mill. No small part of this volume is devoted to a bold and unsparing criticism of Mr. Mill's political economy. He quotes, for instance, Mr. Mill's remark that it is no purpose of his treatise to aim at metaphysical nicety of definition where the ideas suggested by a term are already as determinate as practical purposes require; and that every one has a notion sufficiently correct for common purposes of what is meant by wealth. He then proceeds to adduce from several parts of Mill's treatise apparently different and inconsistent statements as to what constitutes wealth. In one place it is 'everything which has power of purchasing', a definition which Mr. Macleod himself accepts as satisfactory and in harmony with the ancient definitions of Aristotle and the Roman jurists. Nevertheless, in a later page Mr. Mill distinctly asserts that by wealth he understands only material wealth; that it must be extracted from the soil, and have a certain permanence and capability of accumulation. Are, then, a man's faculties wealth, for they can be hired out and exchanged, though they do not agree with the other conditions laid down by Mr. Mill? To quote the words of Mr. Macleod, Mr. Mill Defines wealth to be anything which has power of purchase. In speaking of credit, he says that it is purchasing power and therefore wealth by his own definition. He then says that bank notes, bills, and cheques are of the same value as money and perform all the functions of money; and are therefore wealth by his own definition; and he several times calls bank notes productive capital. Now, are bank notes material, and extracted from the materials of the globe? * * But we have placed before our readers enough to show them the contradiction of Mr. Mill's ideas in different passages on the meaning of wealth, and to show that every one has not a sufficiently correct notion of what wealth is. Mr Macleod comes to the conclusion that labour, materiality and permanence, or durability, are not essential to the nature of wealth, but rather accidents of it: and we should be so far inclined to agree with him. He adopts exchangeability as the criterion of what is and what is not wealth. But it is impossible to agree with him when he endeavours to show that utility has nothing to do with the matter. When subsequently treating of value (page 318), he points out satisfactorily that labour, materiality, and some other circumstances, are not essential to the existence of value, and then attempts to get rid of utility on the ground that it is a fluctuating and totally uncertain element. The same thing is of use in one place and not in another:
He comes to the conclusion that utility is so vague an expression that it cannot be made the basis of value and he proposes to substitute the notion of demand:
This may be quite true, but then what gives rise to demand; a thing is not demanded unless there be some reason to desire its possession, and this desire implies the existence of utility in the object with respect to the person. Mr. Macleod, in fact, passes over altogether the ultimate analysis of the circumstances on which the desire of possession depends. He does not see that a true theory of economy must take account of these natural laws relating to the intensity and degrees of satisfaction of human wants. He expressly disclaims any intention to enter upon such subjects:--
This is a plausible way of avoiding the difficulty and it is one which Mr. Mill also adopted in asserting that consumption of wealth has nothing to do with the laws of economy, that the laws of consumption can be nothing but the laws of human happiness in general. But the fact is that the variations of demand cannot be understood unless the variations of human wants or happiness, summed up in the expression utility, are understood; and as there is no other science supplying the requisite information, the economist must himself investigate the subject. A large part of Mr. Macleod's work is occupied with the consideration of incorporeal property, under which he includes various kinds of rights, credit, or property in the produce of the future. His views would greatly delight Mr. Edward Herford, who convulsed the Manchester Statistical Society some years ago by insisting that in the wealth of the country must be included the whole of the incorporeal rights recognised by law. Mr. Macleod enters into some interesting speculations as to the analogy between debt and credit and the negative and positive signs in algebra. He also enters upon the question raised by Peacock, the celebrated algebraist, whether that mysterious entity the square root of a negative quantity might not have some meaning in economical matters, deciding the question however in the negative. We do not think that Mr. Macleod has conceived the matter quite correctly. He takes the product of past labour to be positive, that of future labour to be negative. But in reality he ought to take all possessions to be positive, and all claims to what is not in possession to be negative. This would often include the produce of future labour, because if a man does not possess that which is due from him he must labour to produce it. In this, as in so many other questions, we consider that the value of Mr. Macleod's book rather consists in raising theoretical questions of great interest and importance, than in the answers which he has given, these answers being often, as it seems to us, very wrong-headed. In this point there is a profound difference between the books of Mr. Mill and Mr. Macleod. In Mr. Mill's 'Principles of Political Economy' the reader is presented with a most interesting and luminous discussion of all the principal theories of political economy as applied to questions of the day, and he closes the book with the feeling that it is hopeless to attempt to improve upon doctrines which have been stamped with approval of Ricardo and Mill, and embodied once for all in so able a treatise. There is an air of finality about all the works of Mr. Mill, and, as regards the theory of value, he expressly asserts that there is nothing left for any future writer to discover. Now, Mr. Macleod shows that the whole question is still an open one, and that there are matters of theory in which the utmost inconsistencies are current. We confess that in our opinion Mr. Macleod's attempted solutions of difficulties are very unsatisfactory as a general rule. There can hardly be worse fallacies than to confuse capital and labour as he does; his notions concerning capital seem to be entirely wrong; nevertheless he helps to keep the ball rolling. Truth more often emerges, as the old saying has it, from error than from confusion. The errors of Mr. Macleod are usually too clear to mislead any reader the least acquainted with the subject. His reasoning is close and lucid and usually logical, his information is extensive, and the volume contains incidentally a great mass of new illustrations of economic truths, drawn from the Roman jurists, the Greek and Roman classics, cases in modern law, &c. Mr. Macleod is always independent, vigorous, and often highly original; and we are far from feeling sure that some of his heterodox notions may not ultimately have to be admitted. One such independent writer, although often wrong-headed and absurd in his opinions, may do more good to science than ten slavish commentators who cannot believe that there is any truth beyond the works of the master they are following. In conclusion we will add that this work would prove quite useless or worse than useless to those who do not already possess an acquaintance with political economy. They would merely be perplexed and repelled from the science by the tedious discussion of difficult scientific questions. But we consider that no one who professes to have an acquaintance with the theories and literature of political economy should ignore the writings of Mr. Macleod. They are full of suggestive remarks, acute criticisms, and abundant learning; and however full also of vagaries, will serve to stir up inquiry and direct the reader's thoughts to points requiring solution. Mr. Macleod can acutely criticise others, though still more open to criticism himself; and he can ask difficult and pertinent questions, though his own answers are usually to be rejected.
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