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THE TEMPLARS' DIALOGUES

DIALOGUES

ORIGINAL ADVERTISEMENT, IN APRIL, 1824

I have resolved to fling my analysis of Mr. Ricardo's system into the form of Dialogues. A few words will suffice to determine the principles of criticism which can fairly be applied to such a form of composition on such a subject. It cannot reasonably be expected that dialogues on Political Economy should pretend to the appropriate beauty of dialogues as dialogues, by throwing any dramatic interest into the parts sustained by the different speakers, or any characteristic distinctions into their style. Elegance of this sort, if my time had allowed of it, or I had been otherwise capable of producing it, would have been here misplaced. Not that I would say even of Political Economy, in the words commonly applied to such subjects, that "Ornari res ipsa negat, contenta doceri:" for all things have their peculiar beauty and sources of ornament—determined by their ultimate ends, and by the process of the mind in pursuing them. Here, as in the processes of nature and in mathematical demonstrations, the appropriate elegance is derived from the simplicity of the means employed, as expressed in the "Lex Parcimonić" ("Frustra fit per plura, quod fieri fas erat per pauciora"), and other maxims of that sort. This simplicity, however, must be looked for in the order and relation of the thoughts, and in the steps through which they are trained to lead into each other, rather than in any anxious conciseness as to words; which, on the contrary, I have rather sought to avoid in the earlier Dialogues, in order that I might keep those distinctions longer before the reader from which all the rest were to be derived. For he who has fully mastered the doctrine of Value is already a good political economist. Now, if any man should object, that in the following dialogues I have uniformly given the victory to myself, he will make a pleasant logical blunder: for the true logic of the case is this: Not that it is myself to whom I give the victory; but that he to whom I give the victory (let me call him by what name I will) is of necessity myself; since I cannot be supposed to have put triumphant arguments into any speaker's mouth, unless they had previously convinced my own understanding. Finally, let me entreat the reader not to be impatient under the disproportionate length (as he may fancy it) of the opening discussions on Value: even for its own sake, the subject is a matter of curious speculation; but in relation to Political Economy it is all in all; for most of the errors (and, what is much worse than errors, most of the perplexities) prevailing in this science take their rise from this source. Mr. Ricardo is the first writer who has thrown light on the subject; and even he, in the last edition of his book, still found it a "difficult" one (see the Advertisement to the Third Edition). What a Ricardo has found difficult, cannot be adequately discussed in few words; but, if the reader will once thoroughly master this part of the science, all the rest will cost him hardly any effort at all.

* * * * *

INTRODUCTORY DIALOGUE

(SPEAKERS THROUGHOUT THE DIALOGUES ARE PHĆDRUS, PHILEBUS, AND X. Y. Z.)

Phćdrus. This, Philebus, is my friend X. Y. Z., whom I have long wished to introduce to you; he has some business which calls him into this quarter of the town for the next fortnight; and during that time he has promised to dine with me; and we are to discuss together the modern doctrines of Political Economy; most of which, he tells me, are due to Mr. Ricardo. Or rather, I should say, that I am to become his pupil; for I pretend to no regular knowledge of Political Economy, having picked up what little I possess in a desultory way amongst the writers of the old school; and, out of that little, X. obligingly tells me that three fourths are rotten. I am glad, therefore, that you are in town at this time, and can come and help me to contradict him. Meantime X. has some right to play the tutor amongst us; for he has been a regular student of the science: another of his merits is, that he is a Templar as well as ourselves, and a good deal senior to either of us.

Philebus. And for which of his merits is it that you would have me contradict him?

Phćd. O, no matter for his merits, which doubtless are past all computation, but generally as a point of hospitality. For I am of the same opinion as M——, a very able friend of mine in Liverpool, who looks upon it as criminal to concede anything a man says in the process of a disputation: the nefarious habit of assenting (as he justly says) being the pest of conversation, by causing it to stagnate. On this account he often calls aside the talking men of the party before dinner, and conjures them with a pathetic earnestness not to agree with him in anything he may advance during the evening; and at his own table, when it has happened that strangers were present who indulged too much in the habit of politely assenting to anything which seemed to demand no particular opposition, I have seen him suddenly pause with the air of the worst-used man in the world, and exclaim, "Good heavens! is there to be no end to this? Am I never to be contradicted? I suppose matters will soon come to that pass that my nearest relations will be perfidiously agreeing with me; the very wife of my bosom will refuse to contradict me; and I shall not have a friend left on whom I can depend for the consolations of opposition."

Phil. Well, Phćdrus, if X. Y. Z. is so much devoted as you represent to the doctrines of Mr. Ricardo, I shall perhaps find myself obliged to indulge your wishes in this point more than my own taste in conversation would lead me to desire.

X. And what, may I ask, is the particular ground of your opposition to Mr. Ricardo?

Phćd. I suppose that, like the man who gave his vote against Aristides, because it wearied him to hear any man surnamed the just, Philebus is annoyed by finding that so many people look up to Mr. Ricardo as an oracle.

Phil. No: for the very opposite reason; it is because I hear him generally complained of as obscure, and as ambitiously paradoxical; two faults which I cannot tolerate: and the extracts from his writings which I have seen satisfy me that this judgment is a reasonable one.

Phćd. In addition to which, Philebus, I now recollect something which perhaps weighs with you still more, though you have chosen to suppress it; and that is, that you are a disciple of Mr. Malthus, every part of whose writings, since the year 1816 (I am assured), have had one origin—jealousy of Mr. Ricardo, "quem si non aliqua nocuisset, mortuus esset."

X. No, no, Phćdrus; we must not go so far as that; though undoubtedly it is true that Mr. Malthus has often conducted his opposition in a most vexatious and disingenuous manner.

Phil. How so? In what instance? In what instance?

X. In this, for one. Mr. Malthus, in his "Political Economy" (1820), repeatedly charged Mr. Ricardo with having confounded the two notions of "cost" and "value:" I smile, by the way, when I repeat such a charge, as if it were the office of a Ricardo to confound, or of a Malthus to distinguish: but

 
"Non usque adeo permiscuit imis
Longus summa dies, ut non—si voce Metelli
Serventur leges—malint a Cćsare tolli."
 

[Footnote: For the sake of the unclassical reader, I add a prose translation:—Not to such an extent has the lapse of time confounded things highest with things lowest, as that—if the laws can be saved only by the voice of a Metellus—they would not rather choose to be abolished by a Cćsar.]

Phil. "Imis!" Why, I hope, if Mr. Ricardo may do for the Cćsar of the case, Mr. Malthus is not therefore to be thought the Metellus. "Imis," indeed!

X. As to this, he is: his general merits of good sense and ingenuity we all acknowledge; but for the office of a distinguisher, or any other which demands logic in the first place, it is impossible to conceive any person below him. To go on, however, with my instance:— this objection of Mr. Malthus' about "cost" and "value" was founded purely on a very great blunder of his own—so great, that (as I shall show in its proper place) even Mr. Ricardo did not see the whole extent of his misconception: thus much, however, was plain, that the meaning of Mr. Malthus was, that the new doctrine of value allowed for wages, but did not allow for profits; and thus, according to the Malthusian terminology, expressed the cost but not the value of a thing. What was Mr. Ricardo's answer? In the third edition of his book (p. 46), he told Mr. Malthus that, if the word "cost" were understood in any sense which excluded profits, then he did not assert the thing attributed to him; on the other hand, if it were understood in a sense which included profits, then of course he did assert it; but, then, in that sense Mr. Malthus himself did not deny it. This plain answer was published in 1821. Will it be believed that two years after (namely, in the spring of 1823), Mr. Malthus published a pamphlet, in which he repeats the same objection over and over again, without a hint that it had ever met with a conclusive explanation which it was impossible to misunderstand? Neither must it be alleged that Mr. Malthus might not have seen this third edition; for it is the very edition which he constantly quotes in that pamphlet.

Phćd. What say you to this, my dear Philebus? You seem to be in perplexity.

X. But an instance of far greater disingenuousness is this: Mr. Ricardo, after laying down the general law of value, goes on to state three cases in which that law will be modified; and the extraordinary sagacity with which he has detected and stated these modifications, and the startling consequences to which they lead, have combined to make this one of the most remarkable chapters in his books. Now, it is a fact, gentlemen, that these very restrictions of his own law—so openly stated as restrictions by Mr. Ricardo—are brought forward by Mr. Malthus as so many objections of his own to upset that law. The logic, as usual, is worthy of notice; for it is as if, in a question about the force of any projectile, a man should urge the resistance of the air, not as a limitation of that force, but as a capital objection to it. What I here insist on, however, is its extreme disingenuousness. But this is a subject which it is unpleasant to pursue; and the course of our subject will of itself bring us but too often across the blunders and misstatements of Mr. Malthus. To recur, therefore, to what you objected about Mr. Ricardo—that he was said to be paradoxical and obscure—I presume that you use the word "paradoxical" in the common and improper sense, as denoting what has a specious air of truth and subtlety, but is in fact false; whereas I need not tell you that a paradox is the very opposite of this—meaning in effect what has a specious air of falsehood, though possibly very true; for a paradox, you know, is simply that which contradicts the popular opinion—which in too many cases is the false opinion; and in none more inevitably than in cases as remote from the popular understanding as all questions of severe science. However, use the word in what sense you please, Mr. Ricardo is no ways interested in the charge. Are my doctrines true, are they demonstrable? is the question for him; if not, let them be overthrown; if that is beyond any man's power, what matters it to him that the slumbering intellect of the multitude regards them as strange? As to obscurity, in general it is of two kinds—one arising out of the writer's own perplexity of thought; which is a vicious obscurity; and in this sense the opponents of Mr. Ricardo are the obscurest of all economists. Another kind—

Phćd. Ay, now let us hear what is a virtuous obscurity.

X. I do not say, Phćdrus, that in any case it can be meritorious to be obscure; but I say that in many cases it is very natural to be so, and pardonable in profound thinkers, and in some cases inevitable. For the other kind of obscurity which I was going to notice is that which I would denominate elliptical obscurity; arising, I mean, out of the frequent ellipsis or suppression of some of the links in a long chain of thought; these are often involuntarily suppressed by profound thinkers, from the disgust which they naturally feel at overlaying a subject with superfluous explanations. So far from seeing too dimly, as in the case of perplexed obscurity, their defect is the very reverse; they see too clearly; and fancy that others see as clearly as themselves. Such, without any tincture of confusion, was the obscurity of Kant (though in him there was also a singular defect of the art of communicating knowledge, as he was himself aware); such was the obscurity of Leibnitz (who otherwise was remarkable for his felicity in explaining himself); such, if any, is the obscurity of Ricardo; though, for my own part, I must acknowledge that I could never find any; to me he seems a model of perspicuity. But I believe that the very ground of his perspicuity to me is the ground of his apparent obscurity to some others, and that is—his inexorable consistency in the use of words; and this is one of the cases which I alluded to in speaking of an "inevitable obscurity;" for, wherever men have been accustomed to use a word in two senses, and have yet supposed themselves to use it but in one, a writer, who corrects this lax usage, and forces them to maintain the unity of the meaning, will always appear obscure; because he will oblige them to deny or to affirm consequences from which they were hitherto accustomed to escape under a constant though unconscious equivocation between the two senses. Thus, for example, Mr. Ricardo sternly insists on the true sense of the word Value, and (what is still more unusual to most men) insists on using it but in one sense; and hence arise consequences which naturally appear at once obscure and paradoxical to M. Say, to Mr. Malthus, to the author of an Essay on Value; [Footnote: I forget the exact title; but it was printed for Hunter, St. Paul's Church-yard.] and to all other lax thinkers, who easily bend their understandings to the infirmity of the popular usage. Hence, it is not surprising to find Mr. Malthus complaining ("Polit. Econ.," p. 214) of "the unusual application of common terms" as having made Mr. Ricardo's work "difficult to be understood by many people;" though, in fact, there is nothing at all unusual in his application of any term whatever, but only in the steadiness with which he keeps to the same application of it.

Phil. These distinctions of yours on the subject of obscurity I am disposed to think reasonable; and, unless the contrary should appear in the course of our conversations, I will concede them to be applicable to the case of Mr. Ricardo; his obscurity may be venial, or it may be inevitable, or even none at all (if you will have it so). But I cannot allow of the cases of Kant and Leibnitz as at all relevant to that before us. For, the obscurity complained of in metaphysics, etc., is inherent in the very objects contemplated, and is independent of the particular mind contemplating, and exists in defiance of the utmost talents for diffusing light; whereas the objects about which Political Economy is concerned are acknowledged by all persons to be clear and simple enough, so that any obscurity which hangs over them, must arise from imperfections in the art of arranging and conveying ideas on the part of him who undertakes to teach it.

X. This I admit: any obscurity which clouds Political Economy, unless where it arises from want of sufficient facts, must be subjective; whereas the main obscurity which besets metaphysics is objective; and such an obscurity is in the fullest sense inevitable. But this I did not overlook; for an objective obscurity it is in the power of any writer to aggravate by his own perplexities; and I alleged the cases of Kant and Leibnitz no further than as they were said to have done so; contending that, if Mr. Ricardo were at all liable to the same charge, he was entitled to the same apology; namely, that he is never obscure from any confusion of thought, but, on the contrary, from too keen a perception of the truth, which may have seduced him at times into too elliptic a development of his opinions, and made him impatient of the tardy and continuous steps which are best adapted to the purposes of the teacher. For the fact is, that the laborers of the Mine (as I am accustomed to call them), or those who dig up the metal of truth, are seldom fitted to be also laborers of the Mint—that is, to work up the metal for current use. Besides which, it must not be forgotten that Mr. Ricardo did not propose to deliver an entire system of Political Economy, but only an investigation of such doctrines as had happened to be imperfectly or erroneously stated. On this account, much of his work is polemic; and presumes, therefore, in the reader an acquaintance with the writers whom he is opposing. Indeed, in every chapter there is an under reference, not to this or that author only, but to the whole current of modern opinions on the subject, which demands a learned reader who is already master of what is generally received for truth in Political Economy.

Phil. Upon this statement it appears at any rate that Mr. Ricardo's must be a most improper book as an elementary one. But, after all, you will admit that even amongst Mr. Ricardo's friends there is a prevailing opinion that he is too subtle (or, as it is usually expressed, too theoretic) a writer to be safely relied on for the practical uses of legislation.

X. Yes. And, indeed, we are all so deeply indebted to English wisdom on matters where theories really are dangerous, that we ought not to wonder or to complain if the jealousy of all which goes under that name be sometimes extended to cases in which it is idle to suppose any opposition possible between the true theory and the practice. However, on the whole question which has been moved in regard to Mr. Ricardo's obscurity or tendency to paradox or to over refinement and false subtlety, I am satisfied if I have won you to any provisional suspension of your prejudices; and will now press it no further— willingly leaving the matter to be settled by the result of our discussions.

Phćd. Do so, X.; and especially because my watch informs me that dinner—an event too awfully practical to allow of any violation from mere sublunary disputes—will be announced in six minutes; within which space of time I will trouble you to produce the utmost possible amount of truth with the least possible proportion of obscurity, whether "subjective" or "objective," that may be convenient.

X. As the time which you allow us is so short, I think that I cannot better employ it than in reading a short paper which I have drawn up on the most general distribution of Mr. Ricardo's book; because this may serve to guide us in the course of our future discussions.

Mr. Ricardo's Principles of Political Economy consisted in the second edition of thirty-one chapters, to which, in the third edition, was added another, making thirty-two. These thirty-two chapters fall into the following classification:—Fourteen are on the subject of Taxation, namely, the eighth to the eighteenth, [Footnote: The eleventh is on Tithes; and the eighteenth on Poor Rates; but these of course belong to the subject of Taxation properly defined. The present Lord Chancellor (late Earl of Eldon) said on some cause which came before him about a year ago, that Tithes were unjustly called a Tax; meaning only that Tithes were not any arbitrary imposition of the government, but claimed by as good a tenure as any other sort of property. In this doctrine no doubt the Chancellor was perfectly right; and only wrong in supposing that any denial of that doctrine is implied by the Political Economists in calling Tithes a Tax; which, on the true definition of a Tax (as I shall show hereafter), they certainly are.] inclusively, the twenty- second, twenty-third, and twenty-ninth; and these may be entirely omitted by the student, and ought at any rate to be omitted on his first examination of the work. For, though Mr. Ricardo has really been not the chief so much as the sole author of any important truths on the subject of Taxation, and though his fourteen chapters on that head are so many inestimable corollaries from his general doctrines, and could never have been obtained without them, yet these general doctrines have no sort of reciprocal dependency upon what concerns Taxation. Consequently, it will greatly lighten the burden to a student if these fourteen chapters are sequestered from the rest of the work, and reserved for a separate and after investigation, which may furnish a commentary on the first. The chapters on Taxation deducted, there remain, therefore, seventeen in the second edition, or eighteen in the third. These contain the general principles, but also something more— which may furnish matter for a second subtraction. For, in most speculations of this nature it usually happens that, over and above the direct positive communication of new truths, a writer finds it expedient (or, perhaps, necessary in some cases, in order to clear the ground for himself) to address part of his efforts to the task of meeting the existing errors; hence arises a division of his work into the doctrinal or affirmative part, and the polemic [Footnote: Polemic.—There is an occasional tendency in the use and practice of the English language capriciously to limit the use of certain words. Thus, for instance, the word condign is used only in connection with the word punishment; the word implicit is used only (unless by scholars, like Milton) in connection with faith, or confidence. So also putative is restricted most absurdly to the one sole word, father, in a question of doubtful affiliation. These and other words, if unlocked from their absurd imprisonment, would become extensively useful. We should say, for instance, "condign honors," "condign rewards," "condign treatment" (treatment appropriate to the merits)—thus at once realizing two rational purposes: namely, giving a useful function to a word, which at present has none; and also providing an intelligible expression for an idea which otherwise is left without means of uttering itself, except through a ponderous circumlocution. Precisely in the same circumstances of idle and absurd sequestration stands the term polemic. At present, according to the popular usage, this word has some fantastic inalienable connection with controversial theology. There cannot be a more childish chimera. No doubt there is a polemic side or aspect of theology; but so there is of all knowledge; so there is of every science. The radical and characteristic idea concerned in this term polemic is found in our own parliamentary distinction of the good speaker, as contrasted with the good debater. The good speaker is he who unfolds the whole of a question in its affirmative aspects, who presents these aspects in their just proportions, and according to their orderly and symmetrical deductions from each other. But the good debater is he who faces the negative aspects of the question, who meets sudden objections, has an answer for any momentary summons of doubt or difficulty, dissipates seeming inconsistencies, and reconciles the geometrical smoothness of a priori abstractions with the coarse angularities of practical experience. The great work of Ricardo is of necessity, and almost in every page, polemic; whilst very often the particular objections or difficulties to which it replies are not indicated at all—being spread through entire systems, and assumed as precognita that are familiar to the learned student.] or negative part. In Mr. Ricardo's writings, all parts (as I have already observed) have a latent polemic reference; but some, however, are more directly and formally polemic than the rest; and these may be the more readily detached from the main body of the work, because (like the chapters on Taxation) they are all corollaries from the general laws, and in no case introductory to them. Divided on this principle, the eighteen chapters fall into the following arrangement:

Chap. Affirmative Chapters. 1. 4. on Value; 30.

2. on Rent; 3.

5. on Wages; 6. on Profits; 7. on Foreign Trade; 19. on Sudden Changes in Trade; 21. on Accumulation; 25. on Colonial Trade; 27. on Currency and Banks; 31. on Machinery.

Chap. Negative (or Polemic) Chapters. 20. on Value and Riches: against Adam Smith, Lord Lauderdale, M. Say; 24. Rent of Land: against Adam Smith; 26. Gross and Net Revenue: against Adam Smith; 28. Relations of Gold, Corn, and Labor, under certain circumstances: against A. Smith; 32. Rent: against Mr. Malthus.

Deducting the polemic chapters, there remain thirteen affirmative or doctrinal chapters; of which one (the twenty-seventh), on Currency, &c., ought always to be insulated from all other parts of Political Economy. And thus, out of the whole thirty-two chapters, twelve only are important to the student on his first examination; and to these I propose to limit our discussions.

Phćd. Be it so, and now let us adjourn to more solemn duties.

* * * * *

DIALOGUE THE FIRST

ON THE ELEMENTARY PRINCIPLE OF POLITICAL ECONOMY

Phćd. To cut the matter short, X. Y. Z., and to begin as near as possible to the end—is there any one principle in Political Economy from which all the rest can be deduced? A principle, I mean, which all others presuppose; but which itself presupposes none.

X. There is, Phćdrus; such a principle exists in the doctrine of Value—truly explained. The question from which all Political Economy will be found to move—the question to which all its difficulties will be found reducible—is this: What is the ground of exchangeable value? My hat, for example, bears the same value as your umbrella; double the value of my shoes; four times the value of my gloves; one twentieth of the value of this watch. Of these several relations of value, what is the sufficient cause? If they were capricious, no such science as that of Political Economy could exist; not being capricious, they must have an assignable cause; this cause—what is it?

Phćd. Ay, what is it?

X. It is this, Phćdrus; and the entire merit of the discovery belongs to Mr. Ricardo. It is this; and listen with your whole understanding: the ground of the value of all things lies in the quantity (but mark well that word "quantity") of labor which produces them. Here is that great principle which is the corner- stone of all tenable Political Economy; which granted or denied, all Political Economy stands or falls. Grant me this one principle, with a few square feet of the sea-shore to draw my diagrams upon, and I will undertake to deduce every other truth in the science.

Phćd. Take it and welcome. It would be impossible for most people to raise a cabbage out of the sea-shore, though the sand were manured by principles the noblest. You, therefore, my dear friend, that promise to raise from it, not a cabbage, but a system of Political Economy, are doubly entitled to your modicum of sand, and to your principle beside; which last is, I dare say, a very worthy and respectable principle, and not at all the worse for being as old as my great-grandfather.

X. Pardon me, Phćdrus; the principle is no older than the first edition of Mr. Ricardo's book; and when you make me this concession so readily under the notion that you are conceding nothing more than has long been established, I fear that you will seek to retract it, as soon as you are aware of its real import and consequences.

Phćd. In most cases, X., I should hesitate to contradict you peremptorily upon a subject which you have studied so much more closely than myself; but here I cannot hesitate; for I happen to remember the very words of Adam Smith, which are—

X. Substantially the same, you will say, as those which I have employed in expressing the great principle of Mr. Ricardo: this is your meaning, Phćdrus; and excuse me for interrupting you; I am anxious to lose no time; and therefore let me remind you, as soon as possible, that "the words" of Adam Smith cannot prove any agreement with Mr. Ricardo, if it appears that those words are used as equivalent and convertible at pleasure with certain other words not only irreconcilable with Mr. Ricardo's principle, but expressing the very doctrine which Mr. Ricardo does, and must in consistency, set himself to oppose. Mr. Ricardo's doctrine is, that A and B are to each other in value as the quantity of labor is which produces A to the quantity which produces B; or, to express it in the very shortest formula by substituting the term base, as synonymous with the term producing labor, All things are to each other in value as their bases are in quantity. This is the Ricardian law: you allege that it was already the law of Adam Smith; and in some sense you are right; for such a law is certain to be found in the "Wealth of Nations." But, if it is _ex_plicitly affirmed in that work, it is also _im_plicitly denied: formally asserted, it is virtually withdrawn. For Adam Smith everywhere uses, as an equivalent formula, that A and B are to each other in value as the value of the labor which produces A to the value of the labor which produces B.