370 POLITICAL ECONOMY objections of Hildebrand and others to the entire historical j development of doctrine which the Germans designate as ; " Smithianismus " are regarded by those critics as applic- | able, not merely to his school as a whole, but, though in a ! less degree, to himself. The following are the most ; important of these objections. It is said (1) Smith s con ception of the social economy is essentially individualistic. In this he falls in with the general character of the nega tive philosophy of his age. That philosophy, in its most typical forms, even denied the natural existence of the j disinterested affections, and explained the altruistic feel- i ings as secondary results of self-love. Smith, however, j like Hume, rejected these extreme views ; and hence it has been held that in the Wealth of Nations he consciously, though tacitly, abstracted from the benevolent principles in human nature, and as a logical artifice supposed an " economic man ; actuated by purely selfish motives. However this may be, he certainly places himself habitu ally at the point of view of the individual, whom he treats j as a purely egoistic force, working uniformly in the direc tion of private gain, without regard to the good of others or of the community at large. (2) He justifies this per sonal attitude by its consequences, presenting the optimis tic view that the good of the community is best attained through the free play of individual cupidities, provided only the law prevents the interference of one member of the society with the self-seeking action of another. He assumes with the negative school generally though he has passages which are not in harmony with these proposi tions that every one knows his true interest and will pursue it, and that the economic advantage of the indi vidual coincides with that of the society. To this last conclusion he is secretly led, as we have seen, by a priori theological ideas, and also by metaphysical conceptions of a supposed system of nature, natural right, and natural liberty. (3) By this reduction of every question to one of individual gain, he is led to a too exclusive consideration of exchange value as distinct from wealth in the proper sense. This, whilst lending a mechanical facility in arriv ing at conclusions, gives a superficial character to economic investigation, divorcing it from the physical and biological sciences, excluding the question of real social utility, leaving no room for a criticism of production, and leading to a denial, like J. S. Mill s, of any economic doctrine dealing with consumption in other words, with the use of wealth. (4) In condemning the existing industrial policy, he tends too much towards a glorification of non-govern ment, and a repudiation of all social intervention for the regulation of economic life. (5) He does not keep in view the moral destination of our race, nor regard wealth as a means to the higher ends of life, and thus incurs, not altogether unjustly, the charge of materialism, in the wider sense of that word. Lastly, (6) his whole system is too absolute in its character ; it does not sufficiently recognize the fact that, in the language of Hildebrand, man, as a member of society, is a child of civilization and a product of history, and that account ought to be taken of the different stages of social development as implying altered economic conditions and calling for altered economic action, or even involving a modification of the actor. Perhaps in all the respects here enumerated, certainly in some of them and notably in the last, Smith is less open to criticism than most of the later English economists ; but it must, we think, be admitted that to the general principles which lie at the basis of his scheme the ultimate growth of these several vicious tendencies is traceable. Great expectations had been entertained respecting Smith s work by competent judges before its publication, as is shown by the language of Ferguson on the subject in his History of Civil Society. That its merits received prompt recognition is proved by the fact of six editions having been called for within the fifteen years after its appearance. 1 From the year 1783 it was more and more quoted in parliament. Pitt was greatly impressed by its reasonings ; Smith is reported to have said that that minister understood the book as well as himself. Pulteney said in 1797 that Smith would convince the then living generation and would rule the next. Smith s earliest critics were Bentham and Lauderdale, who, though in general agreement with him, differed on special points. Jeremy Bentham was author of a short treatise entitled A Manual of Political Economy (1843), and various economic monographs, the most celebrated of which was his Defence of Usury (1787). This contained (Letter xiii.) an elaborate criticism of a passage in the Wealth of Nations, already cited, in which Smith had approved of a legal maximum rate of interest fixed but a very little above the lowest market rate, as tending to throw the capital of the country into the hands of sober persons, as opposed to " prodigals and projectors." Smith is said to have admitted that Bentham had made out his case. He certainly argues it with great ability ; and the true doctrine no doubt is that, in a developed industrial society, it is expedient to let the rate be fixed by contract between the lender and the borrower, the law interfering only in case of fraud. Bentham s main significance does not belong to the economic field. But, on the one hand, what is known as Benthamism was undoubtedly, as Comte has said, a derivative from political economy, and in particular from the system of natural liberty ; and, on the other, it pro moted the temporary ascendency of that system by extend ing to the whole of social and moral theory the use of the principle of individual interest and the method of deduc tion from that interest. This alliance between political economy and the scheme of Bentham is seen in the personal group of thinkers which formed itself round him, thinkers most inaptly characterized by J. S. Mill as "profound," but certainly possessed of much acuteness and logical power, and tending, though vaguely, towards a positive sociology, which, from their want of genuinely scientific culture and their absolute and unhistorical modes of thought, they were incapable of founding. Lord Lauderdale, in his Inquiry into the Nature and Origin of Public Wealth (1804), a book still worth read ing, pointed out certain real weaknesses in Smith s account of value and the measure of value, and of the productivity of labour, and threw additional light on several subjects, such as the true mode of estimating the national income, and the reaction of the distribution of wealth on its pro duction. Smith stood just at the beginning of a great industrial revolution. The w r orld of production and commerce in which he lived was still, as Cliffe Leslie has said, a "very 1 Five editions of the Wealth of Nations appeared during the life of the author: the second in 1779, the third in 1784, the fourth in 1786, and the fifth in 1789. After the third edition Smith made no change in the text of his work. The principal editions containing matter added by other economists are those by David Buchanan, with notes and an additional volume, 1814; by J. 11. M Culloch, with life of the author, introductory discourse, notes, and supplemental disser tations, 1828 (also, with numerous additions, 1839; since reprinted several times with further additions); by the author of England and A mer ica Edward Gibbon Wakefield), with a commentary, which, how ever, is not continued beyond the second book, 1835-9 ; by James E. Thorold Rogers, now professor of political economy at Oxford, with biographical preface and a careful verification of all Smith s quota tions and references, 1869 (2d ed., 1880) ; and by J. S. Nicholson, professor at Edinburgh, with notes referring to sources of further information on the various topics handled in the text, 1884. There is a careful Abridgment by W. P. Emerton (2d ed., 1881), founded
on the earlier Analysis of Jeremiah Joyce (3d ed., 1821).