POLITICAL ECONOMY.

New Zealand Mail, Issue 18, 27 May 1871, Page 7

POLITICAL ECONOMY.

We have frequently maintained, and do still maintain, that political economy is no science. It may, at some future day, deserve the name—it does not now. If by science is meant a collection of truths ascertained by induction, on which all well-informed men are agreed, then, unquestionably, political economy is not yet a science. We find M. Thiers differs with Stuart Mill, and educated men in England opposed in their views by equally well educated men all over the globe. Whatever may pass for the “ science of political economy” in 1971 will, we predict, be as different in its character and principles from what claims the title now as Mill and M £ Culloch differ from Munn and Gee of one hundred years ago. Before it can be a science its professors must assume a far less arrogant tone. They must learn to tolerate doubt and endure contradiction. They must see many cherished theories ably and eloquently advocated for years by those who have graduated with honors in the “ science,” and just as these have been triumphantly vindicated and shown to be irrefutable, suddenly collapse before the stern logic of facts created by some new power or collocation of circumstances they had never dreamed of in their philosophy. The most beautiful hypothesis may he blown like the soap bubbles of a school boy, and may for a time look round and beautiful, but it will only be to vanish, after a longer or shorter period, into thin air The road to this, as to all sciences, is a slow, painful, and humiliating one. Theory must be tested by experience, experience must suggest a new theory, to be tested as before, and so on for ever, until there is no great elemental truth left to discover. All experimental science is like the game of leap-frog. Theory first makes a run, and then bends its back to inductive experiment, which, in its turn, makes a running, and then, from over its back with a bound, theory again springs forward. Now progress is stopped by a theory not yet tested, now by experiments not sufficiently numerous to yield an induction or suggest a new theory. The whole truths of any experimental science are never discovered till after years of blundering, and are we to suppose we have been favored with sudden

and,preternatural illumination on a subject so complex and difficult as political economy ? Yet several of our contemporaries, the Melbourne “Argus” most conspicuously, speak as if no.one knew anything before Adam Smith, or as if there was nothing left to discover after they themselves forsooth have settled everything of importance. The square on the hypothenuse is equal to the sum of the squares on the other two sides of a right-angled triangle, we were lately told in Wellington, is a perfect illustration of the exactitude of this science as comprehended by a Richmond, and all attempts to contradict what he accepts as its fixed principles by others who have not so learned it—a Vogel to wit—are futile, and of themselves irrational. This, we take leave to sav, is the language of empiricism—not of science. If statesmen are to be guided by a true political economy, it seems to follow, as the simplest induction from what is now taking place all over the globe, that this science is in a very imperfect and rudimentary condition. The home papers by the mail show very unsatisfactory results, even in the country where it has been stamped as a science by the imprimatur of several universities. But what do we learn from these ? We see in one page the record of boundless wealth and hopeless poverty. We read of millions of money bequeathed to the already rich, and millions of men dying paupers and criminals. We read of one end of London becoming every year more devoted to pleasure and frivolity, and the other sinking, year by year, deeper into the abyss of crime and despair. We read of outrages in Ireland becoming more flagrant than ever; after all the legislative measures passed to secure its peace and prosperity. We read of a great deal of displaced labor, that (according to one of the immutable principles of this science) should necessarily find other and more profitable employment, finding nothing to do but in the workhouse and the jail, and the little of it that has found employment only proving in the Dock yards and Arsenals the absurdity of another favorite theory that “ war and invasion are byegone dangers.” We read in one placS that “ the case of the British taxpayer is becoming so bad that no great argument is needed to induce a

general migration to the colonies and in another that “ Mr Macfie’s notice of motion to call attention to the relations between the United Kingdom and her Colonies excited little attention.” All this is very sad; but are there no illustrations at home that true political economy is little better understood ? Have we not, and do we not constantly hear of the great principles of free trade being established by the science of political economy ? and any attempt at a moderate and temporary protection scouted as an exploded folly ? We see Auckland buying, at • a dearer price, Australian flour instead of New Zealand, and when a proposal is made to put £1 per ton on the imported article, a howl of indignation is heard all over the North Island. The cry of “ the poor man’s loaf” is raised by those who think New Zealand flour good enough, forsooth, for the runholders of Canterbury, or the merchants of Otago, but not good enough for “ the poor miner !”

Even granting, for the sake of argument, that the duty of £1 would raise the price of New Zealand flour by £l, it would still be cheaper than the Australian, and their loaf would not be one whit dearer. But. it may be argued, if this duty excluded Australian, there would be no duty paid. Auckland would still use the same quantity of flour, but instead of spending the same amount in flour, the produce of Australia, would spend nearly the same for flour, the produce of New Zealand. Even granted Auckland paid the same amount as before, and the duty yielded no revenue—Australian flour being entirely shut out —even then a decided boon would accrue to the colony in the stimulus that would be given by providing a regular market for the wheat growers of New Zealand, from the Waikato to the Bluff. But unfortunately the difference to New Zealand between consuming New Zealand and Australian commodities these “ political economists” will never consider. Such a duty is against the principles of free trade, and there ends the matter. There can be no discussion —no upsetting of principles as firm and as clear as those of

geometry. Now it may be even from.. Aclam Smith, that this opposition to a moderate protection duty against a country that imposes a protective duty on our exports to it is absurd in the extreme. He lays down very clearly that the whole value of a commodity is spent in its production, and yet reappears in: the shape ot the thing produced. That in its production there is an expenditure, not of the piofit merely, but of the entire value, and that the whole of that expenditure not only maintains landlords, tenants, tradesmen, and workpeople, hut furnishes an effective demand and market for other pioductions. In other words, he means that the clear gain, the spendable revenue, the net income of the producing country, is inreased by the amount of the'entire value of the domestic product, and that the country is so much the richer; for while producing, it spends the entire*gross value, and nevertheless after it has produced, it yet has the entiie gross value left in another shape.” He then goes on, and in effect says “if with Now Zealand commodities you purchase New Zealand commodities, you replace two New Zealand capitals , but if with New Zealand commodities you purchase Australian commodities, you replace only one New Zealand capital.”