AMERICAN QUARTERLY REVIEW.

No. II.

JUNE, 1827.

ART. I.-Lectures on the Elements of Political Economy. By THOMAS COOPER, M. D., President of the South Carolina College, and Professor of Chemistry and Political Economy. Columbia, S. C. 1826. pp. 280.

THIS is the second general treatise which has appeared in the United States, on what may be considered as the favourite science of the day; and we may congratulate the public not only on the growing esteem in which the study of political economy is held among us, but on the doctrinal superiority of the present work over that of Mr. Raymond. It is, however, much inferior in the dress in which it is exhibited to the public, which, it must be confessed, does no credit to the state of the typographical arts in Columbia. The author of the treatise now under consideration, has not thought it necessary for ensuring success to his own work, to deny merit to every other; but has wisely, as well as candidly, admitted that Smith and Say, and Malthus and Ricardo, whom the world had concurred in pronouncing adepts in the science of political economy, were not entirely ignorant of its first principles, and were not always mistaken in their doctrines. On the contrary, while he shows a mind very capable of discriminating between just and false reasoning, and an uncompromising boldness in defending the opinion he has once formed, he seems, in this book, much more desirous of propagating useful truths than of originating them. There is scarcely, indeed, in the whole work, any attempt at discovery, though the simple, clear and forcible manner in which he often states the principles VOL. I.-NO. 2.

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he has adopted, may claim almost equal merit with originality, as the difference between seeing things clearly, and seeing them dimly or confusedly, is often as great as that between perception and total blindness.

If the present age has at length become sensible that amongst the most useful subjects of speculation, are those which treat of the production and distribution of, the materials of human subsistence and comfort-that they are safe guides to legislators and statesmen that they afford a sure test of their failure or successand that above all, they teach them the danger of too much regulation; they certainly deserve peculiar encouragement here, where every man, however humble his situation in life, may, by the favour of his countrymen, be selected to manage their public concerns; and where popular opinion, more than in any other country, sooner or later controls the legislature and the government. We are therefore pleased to see this science introduced into our colleges, and pleased to see a work containing so much liberal and sound doctrine as Dr. Cooper's, adapted to the use of schools.

Ever since the science of political economy has been separated from that of government, it has shared the fate of all those subjects of speculation in which our reasoning is founded on observation, by becoming the fruitful parent of controversy. This has been the case in morals, metaphysics, and in almost every branch of physical science. Different minds see the same object with different eyes and in different lights; and even where their views coincide, they not unfrequently dispute, either because they use the same words to express different things, or different words to express the same things. The consequence is, that Truth slowly achieves her conquest over Error, and though she is steadily gaining ground, she has to fight every step of her way.

Let no one then hastily conclude, as some are inclined to do, in consequence of the many disputes which have ever existed among the writers on political economy, that all is doubt and uncertainty in the science. It has, in spite of these disputes, and sometimes, we may say, by reason of them, been steadily progressive. The principles of the French Economistes, in favour of the freedom of trade, though at first opposed to the practice of every statesman in Europe, are now generally received as orthodox. But their doctrine that the only productive labourers are those who cultivate the soil, was successfully refuted by Adam Smith, and it has long ceased to have any advocates. In like manner, it is now considered as settled, that the only effectual way of increasing the population of a country is to increase the means of its subsistence-that a country may be improving in wealth though its imports exceed its exports, and even, because

of such excess-that gold and silver cannot be kept in a country by laws, and if they could, the public would thereby lose more than it would gain-that the national wealth will be more effectually promoted by the self-interest of individuals, when left to its own efforts, than by the provident wisdom of any government-that every species of industry which adds to the stock of innocent enjoyment, is beneficial to the nation, in the same proportion as it is productive to individuals—that the luxury which is supported by industry can never be dangerous, and seldom injurious that every community has a direct interest in the prosperity of its neighbours. These propositions, with many others. deemed heretical much less than a century ago, are now generally received as maxims; and are never called in question except by that class of persons (of which there have always been a few,) who deny that the figure of the earth is spheroidal, that the moon influences the tides, and that Franklin-rods afford a defence against lightning.

While the preceding questions in political economy have been finally decided by the concentrated light of different minds, and yet more, perhaps, by the impartial decision of those who look coolly on, they have been succeeded by new controversies on the measure of value, the origin of rent, &c.; and it is not improbable that they in turn may be settled by the same agency of keen and ingenious disputants on the one hand, and of unprejudiced arbiters on the other. If, in this event, we may naturally expect new questions to arise, it is consoling to reflect that the subsequent controversies will be of a more refined character; will have far less bearing on the welfare of society than those which preceded them; and that the interest which these collisions at once indicate and keep alive, is perhaps indispensable to make the science progressively improve, or even to keep it as it is.

Some of these questions, which may be considered as still on their trial, Dr. Cooper, adapting his work to the use of the student, and aiming both at brevity and simplicity, has judiciously abstained from discussing. But he has, in most instances, declared himself in favour of one side or the other, with seeming impartiality; sometimes adopting the opinions of Adam Smith, sometimes those of Ricardo, and sometimes of Mr. Malthus.

On the subject of the measure of value, which has been so fruitful a theme of ingenious controversy among late writers on political economy, Dr. Cooper remarks

"Two theories of exchangeable value have been proposed of late years. That of Dr. Adam Smith and Malthus, which considers it as varying with scarcity or abundance of capital, and scarcity or abundance of demand and supply.

That of Mr. Ricardo, which considers the labour accumulated on any commodity, as the measure of its exchangeable value: and considers that as a standard of value, which invariably requires the same quantity of labour to produce it.

According to Smith and Malthus, the fluctuation in value of the commodity, depends on variation in its own value or utility.

According to Ricardo, on the varying value of labour.

The measure of value, according to Smith and Malthus, is the quantity of labour the commodity will purchase.

According to Ricardo, it is the quantity of labour worked up into it.

It is evident from what I have said, that I do not entirely agree with Ricardo. No purchaser cares a cent what the prime cost of an article is: that is not his look out. His only inquiry can be, is it worth to me the price asked for it?

It is true, the natural or necessary price must be obtained, or the market will not be permanently supplied. What then? If the buyers do not want the article at the price demanded, they will leave the market to its own hazard.

Hence it follows, that although the natural or necessary price-the amount of labour worked up in an article brought to market, is the permanent regulator of its market value, this value will fluctuate in all cases with the fluctuation of demand and supply. These fluctuate by means of commercial restrictions and prohibitions-by means of monopolies and exclusive privileges-by improvements in the mode of production-by speculation.

Thus, what raised the price of cotton in 1825? Surely not the expense attending the cultivation of it, but the speculations in the cotton market."

Whilst we cannot but think that the discussion on this question has been pushed farther than its intrinsic importance deserves, it seems to us, that according to the plainest principles of barter and exchange, neither Malthus's nor Ricardo's theory of prices is correct to the extent that is laid down; but that one or the other is to be preferred, according to the species of commodities to which it is applied.

It is clear that value, taken in its most enlarged sense, means that property which any thing possesses of imparting pleasure to man, or of relieving him from pain; and it is immaterial whether the pleasure or pain be bodily or mental. But the commercial or exchangeable value of any commodity depends partly on its power of affording gratification, and partly on the difficulty of procuring it, since no one would give any thing in exchange for what he could procure without trouble or cost. Thus air, water, and light have, in general, from the liberality with which nature has supplied them, no exchangeable value or price; but let them cease to be abundant, and their intrinsic utility immediately makes them articles of traffic, like any thing else. Thus we pay a great price for light in lamps, candles, &c. and in glass windows for our houses. Even fresh air would have commanded a high price from those who were confined in the Black Hole of Calcutta; and in some of the islands of the West Indies, where they are obliged to use rain water, in great droughts, a hogshead of rum has been given for an equal quantity of water.

Every exchange or sale, (which is but a species of exchange), supposes two parties, each wanting something that the other possesses, and possessing something that the other wants. The remote cause of these exchanges is to be found partly in the diversity of human tastes, but principally in the different productive

powers of different climates and soils, and the different degrees of industry and species of talent in different men. One country has an abundance of cattle and sheep; another produces sugar, and another wine. One nation finds it easier to make cloth or hardware than to raise corn, while another can more easily raise corn than manufacture cloth. One man excels in working iron; another, wood; and a third, leather. One is a writer, another a preacher, schoolmaster, or physician and by exchanging the products of one country or individual for those of another, both parties are benefited.

While the parties thus seek their mutual accommodation, according to their respective wants and means, the terms on which their exchanges are made will be materially affected by the number of persons desiring to exchange, and by the proportion between the quantity desired and the quantity furnished; which two circumstances it may not be amiss to consider more in detail.

When there are only two persons seeking to make an exchange, each one compares the value of the commodity he possesses with that which he wants, that is, the gratification they will severally afford him; and if, after this comparison, each is willing to give as much as the least the other will take, the exchange is made. But it often happens that one party is willing to give more than this, or what is the same thing, will take less than the most the other will give. In this case there is room for the parties to chaffer about the terms, and the price may vary accordingly. Thus, suppose an Indian, having two. buffalo robes and wanting food, were to meet another Indian, who had killed a deer, but was in want of clothing; in the barter which would naturally take place between them, while each would endeavour to make the best bargain he could, it might happen that one would be willing to give both of his robes for a part of the deer, if he could do no better; and the other, rather than not exchange, would give the whole deer for one robe. Between these limits the price may consequently range; and the point at which their conflicting demands would be finally adjusted, would depend on the relative strength of their desires, their address, sincerity, sense of justice, and other intellectual and moral qualities..

But if, instead of a single person, there are several who wish to make an exchange with one, the limits which previously existed for the price to range in, are immediately narrowed; and he whose commodity is in such demand will be sure of the highest price which any of the competitors will give, or rather, any except one; as, suppose the Indian who had killed the deer to be met by a hunting party, each of whom had several skins, and that, either from the difference in their desire for food, or the different values they set on their peltry, the individuals who