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THE following Essays have been the products of leisure hours being merely written out thoughts which have arisen from study of the subjects to which they refer. They do not pretend to be a treatise, and are now pub- . lished only with a view of suggesting to other minds for consideration the questions which have presented themselves to mine in the course of my reading and experi
During twenty years of official life, in seven Colonial Governments-most of them in different parts of the world, and all under dissimilar conditions-it has been my duty to deal with many public financial and economical questions, and it has often occurred to me that facts and circumstances did not coincide with principles of political economy, which I had been taught to believe well-established; though what was the true cause of the discrepancy I was unable at the time to pronounce.
More lately, with greater leisure at my disposal for inquiry into a subject which must always possess interest in connexion with public affairs, I have devoted some
time and care to a review of the general doctrines of the economists; and I now believe that the error may be seen of which the effects penetrate almost every branch of economical science, and to which is due the confusion and obscurity so often obvious in discussions concerning capital and labour, commercial policy, culpable luxury, and other cognate questions.
All this prevailing cloudiness and paradox arises apparently from the inconsistency of writers of which the effects are very surprising when examined-in first insisting that gold is a commodity like all other articles of exchange, which is quite true, and then proceeding to treat money as not property at all, but only a 'circulating medium.'
According to the principles laid down, an ingot of gold is an article of value which may be exchanged or sold like any other goods; but when once coined into pieces of ascertained quality and weight, which we call money, it must immediately be disregarded as having no effect upon the exchanges accomplished by it, and in which it is one of the articles exchanged. It is as though a cask of sugar should be considered merchandize but parcels of 5 lbs. put up at the grocer's treated as valueless.
The manner in which the subject is dealt with reminds one of the old story of the question said to have been put by Charles II. to the Royal Society of his dayWhy a bowl of water with a fish in it, weighed no more
than without the fish? The learned body had excellent scientific reasons ready for His Majesty, why the presence of the fish should make no difference in the weight of the contents of the bowl; but were disconcerted, when recommended by the King to try the experiment, at finding that in fact a difference was made of exactly the weight of the fish. Now, the professors of economical science have assumed, on the authority of inconsistent statements and opinions of Adam Smith, that the value of gold and silver makes no difference in the amount of the world's wealth: as money they are only machinery for exchanging other things; and, consequently, all problems in Political Economy are to be worked out without the intervention of money.' The results are very curious.
In these essays, I attempt to trace the effects of this error in some branches of inquiry. In doing so, I have referred more frequently to Mr. John Stuart Mill than to any other writer, because his work may be considered to be the standard text-book on economical science. I am aware that a controversial tone is undesirable in treating any subject, and I have endeavoured to avoid this so far as possible; but in dealing with doctrines which are believed to be controvertible, it is difficult to evade the necessity of appearing controversial.
I am conscious, too, that an unknown writer should feel some diffidence in questioning the doctrines of an eminent teacher like the late Mr. Mill respecting a subject to which he had given especial attention. But even
great men are not protected from the possibility of overlooking, and thus aiding to perpetuate, a fallacy which is assumed to be a truth because they failed to detect it. This is a period when many previously accepted dogmas in science of all kinds are being freely questioned. Those of political economy cannot escape, and Mr. Mill himself has referred to the fatal habit of thinking through only one set of technical phrases.'
It does not follow because I point out what I conceive to be errors-which if they are such, must fatally affect theories based upon them-that I therefore profess to furnish an explanation of all perplexing economical and social phenomena. I only urge that, as it appears to me, we have not got the right clue by which to follow our investigations in search for the truth. And the truth in economical science is practically most important to us. Errors in this influence what may be called commercial legislation, and many matters of administrative policy, as well as others in different fields of human action. They touch the effects of loans for public purposes and of taxation-questions of much moment to any community. And this is certain, that the truth in any science will not be discovered so long as one decided error vitiates its fundamental doctrines.
Adelaide, 31st August, 1874.