WELLINGTON PHILOSOPHICAL SOCIETY.

New Zealand Times, Volume XXXIII, Issue 5397, 15 July 1878, Page 3

WELLINGTON PHILOSOPHICAL SOCIETY.

The regular meeting of the society was held at the Museum at 8 p.m. on Saturday ; Dr. Newman (Vice-President) in the chair. Owing to the inclemency of the weather, the attendance was limited. The CHAIRMAN stated that illness prevented the President from attending. After the confirmation of the minutes, the '• following gentlemen were announced as new members :—Messrs. D. Climie, C. E. Macklin, T. W. Kirk, King, and E. P. Field. Attention was called- to several proposed additions to the Museum and library, plans of which were placed on the table for the inspection of members. ’ Mr. Oabhuthers, C.E., then read a paper on “Some of the Terms used in Political Economy,” The following is a resume of the paper: Not only the members of this society, hut also the people of New Zealand, should be grateful to any clever thinker who trios to solve correctly for them any important problems in political economy. It has often, and perhaps truly, been said that no single book has done so much for the happiness of nations as Adam Smith’s “ Wealth of Nations/* which created a revolution in the study of political econpmy like that effected in biology by Mr. Darwin’s work on the origin of species. Political economy has been called - tho “dismal science” by the groat Seer of Chelsea, but though Corlyloraves agaiustit, and Kuskin raises many shrill effeminate shriek', there is probably no one branch of human thought which is more, ardently loved by its followers, or which does more for tho general welfare of civilised nations. Adam Smith’s statements, though in the' main correct, have in some cases been altered,' and in others proved untrue. Many great thinker % -r-yas Bentbam, Ricardo, Bastiat, Chevalie-, W. ' Tooke, Cairnes, and Fawcett, have each greatly advanced our knowledge and corrected errors. But a greater than these appeared in John Stuart Mill, whoso writings have controlled the views of all modern thinkers. For a long * while Mill’s eloquence, forcible examples, clearness, and severely accurate reasoning kept spell-bound almost a generation of pqjltical economists. There are now, however,’springing > up a number of men who rebel against this great master, and do not hesitate to say that many, of his cardinal propositions and his most firmly established laws are radically wrong. At the head of them is Stanley Javous, and among their number is Mr. Carruthers. Smith, Bentbam, Ricardo, Cairnes, Jevons, and others have put forth statements which disagree, because tho chief terms have not been used with invariably the same meaning. Jevons ha*, however, tried hard to rectify this groat fault by the liberal use of algebraical formulre. In this paper Mr. Carruthers tries to remedy a grave defect in the study of‘political economy by an attempt to accurately define the meaning of such words as “ wealth,” “ capital,” “interest,” &c., and rightly says that unless such is done our knowledge of political eco-

nomy cannot advance. While defining these terms, he tries to show that by reason of insuffic?ent attention to their exact meaning, Mr,

Mill has often been led into very serious errors, which sadly mar his great work. Mill defines wealth to bo “all useful or agreeable things which possess an exchangeable value.” Carruthers suggests. that Robinson Crusoe’s cave and garden were just as much wealth as if he had been able to exchange them for other things, and proposes to alter Mill’s definition so that wealth shall mean

“anything which is useful to man by enabling him to live more comfortably or elegantly than he could without it,” which is, certainly wide, and would take in much that Mill’s definition excludes. He next objects to Mill’s definition of the word “ capital,” viz., “ a stock, previously accumulated of the product of former labor,” and also to its division into “ fixed” and “circulating.” The examples ho brings forward seem to show that the ■ division is absurd, e.y., a steam-engine is “fixed,” while - the coal in it is “circulating” capital, which is equivalent to saying that one shear of a pair of scissors does more work than the other, Oarruthers’ definition of capital is “not wealth itself, but a right to a certain share of the wealth of the community,” He makes a fierce brief onslaught oa that silliest of silly cries, “Protection to native industry,” and shows that the cry benefits the capitalists, but spells almost ruin to the poor laborer. Next he discusses the meaning of those oft used terms “productive labor and capital,” and complains that often what is really meant is “profitable,” not merely “productive,” labor and capital. The public singer, according to Mill’s view, is an unproductive laborer; but . Carrutbers contends that if, as seems like!y, the phonograph is ever so perfected that sounds ; may be stored up, and thus made articles of trade, he will be a productive laborer, because his carefully preserved sounds will then give pleasure of a very high order to tens of thousands, He thinks that Mill,'in his chapter on “ Unproductive Labor,” appears to have in mind production of profits rather than production of wealth, and considers this a mistake. He * also thinks that the exaggerated importance given to saving and accumulation in common estimation, and even by political economists, is due to the use of the word “ capital ”in a sense not covered by its definition. In a communistic society there Is no such thing as capital, the material requisites of production being laborers ' and implements, with one immaterial requisite, viz., the effective wish that wealth be produced. In a rude state of society this wish is • so weak that man will only labor under the

immediate spur of hunger. His repugnance to make other people work is not so strong, and he makes his wife and slaves work even where . the return from their labor is somewhat distant. The rude beginnings of agriculture are always the result of woman's labor. Carrutbers thiaks it Impossible by reading Mill’s definition to get any clear understanding of what he really means by “capital;” and Carrutbers, after analyzing Mill’s remarks, comes to' the conclusion that “tho whole wealth by the . community belongs to-the capitalists. The laborers have no share in its ownership,” Mr.- Carrutbers, broadly and boldly asserts that “ the object of labor is the bettering of the conditions of life, and the community therefore is the richer hy what it expends oa its enjoyments, and'not the poorer. It is the richer-by what the capitalist saves, simply because this kind of saving is only another name for more equal distribution.” He then attacks Mill’s fourth theorem, that—“ What supports and employs productive labor is the Capital expended in setting it to work, and not the demand of purchasers fur the produce of the labor when completed. Demand for commodities is not demand for labor.” Carrutbers tries to prove that even this important and apparently immoveably established belief is quite wrong, and that Mill, Fawcett, Cairnes, and other great thinkers, have made a huge mistaken We must refer our readers to Mr. Oamither’ paper for the proofs; it will be published in the next volume of the “Transactions of the New Zealand Institute.” Carrutbers holds that Mill has been grievously misled by confounding two widely different things, viz., the action of tho capitalist who expends his income in buying lace with that of the man who expends his income in producing it. He next discusses the meaning of the word “interest,” and defines it as “ that,part of the national direct wealth which capitalists keep for their own use ; it is the reward they receive for investing their wealth instead of expending it.” He fears that there is a tendency of wealth to fall into the hands of a few, and the extremes both of riches and poverty are generally found in the same community ; and that in an extreme case the number of capitalists may become so small that a practical combination may occur -amongst them to reduce the wages fund. Something like this appears to have taken place in the later days of Homo. His final objection is to the phrase “ capital of the country,” -which he says is wrongly supposed to include money, implements, and price of land. So ends a paper in which, whether rightly or .wrongly, Mr, Carrutbers has tried to shatter our moat cherished beliefs. Mr.'MAXWELL said: Aa regards Mill’s definition of wealth, that, “it is anything useful or agreeable which possesses exchangeable value,” I concur with Mr. Oarriithers that, the word “ exchange” should be omitted, because if wo regard tho community in tho world as a whole, since there is no one without the, world with whom this community can exchange its possessions, it would follow from Hill's definition that the community as a whoV possesses no wealth, and this is manifestly absurd. Regarding the divisions proposed by Mr. Carruthers of wealth into direct wealth and imple-

ments, I do not think a distinct line of demarcation can bo drawn. It is impossible to define the point at which bread, for instance, may be described as useful for its own sake, although bread is stated to bo an article which is direct wealth; the whole of the combinations of circumstances and things which go to produce* bread from the plough to tho process of di'geation are so involved, that it seems almost impossibly to state at what particular period tho bread Is useful or not useful for its own sake. A chair may be direct wealth while occupied

for rest, while if its use b? made subservient to the purpose of listening it becomes an implement.

Mr. Martin Chapman considered that the controversy was principally owing to the ambiguity of our common language. Few.people know how ambiguous our ordinary language is. Lawyers know it, and are always trying to guard against it, with very indifferent success. That this does not cause trouble is principally owing to the fact that wo usually converse with persons whose minds have been trained in a manner somewhat similar to our own. When this is not the case trouble ensues, as for instance when a soldier and a- sailor converse they soon think each other fools, because one talks pipeclay, the other pitch. The present difference may be due to a similar reason, viz., that the critic and tho criticised do not look at tho matter from the same standpoint. This indefimtencss appeared in the paper; it did not appear at all clearly what Mr. 0 irruthers meant by a “ man;”- was it the individual, the family, community, or all mankind; because to each of these a different tost would have to be applied 1 The stone which a lunatic thinks will transmute gold cannot bo called weaHh ; but the possession gives him comfort. So tho torpedoes used by a conquering nation to enslave its neighbors increase the happiness of one nation; but pi'obably not of. thy whole world; yet they would bo probably caljod wc.alth by most. Again, it did not clearly appear in what sense Mr. Carruthers used tho words “ wealth of tho world” different from simply wealth. Mr Carruthers spoko also of “ capital” and “ capital of the country.” Mr. Chapman wished to know the difference between capital of the country and wealth of the country. Mr. Carruthers, in reply, said it was not necessary to go into metaphysical nicety in definitions of political economy; that it certainly was impossible, as remarked by Mr, Maxwell, to strictly define the boundary between implements and’wealth which is useful for its own sake. Bread might be said to bo an implement for satisfying hunger, and the satisfaction of hunger an implement for procuring happiness. But the division which he had suggested of wealth was useful, and quite accurate' enough for tho purposes of the science.. He. Said, in reply to Mr. Chapman, that by raaa .be meant any one man,, and that tljo stone Which pleased a lunatic was wealth as fully’as the diamond which pleased people who were not lunatics. A torpedo was wealth, because it was useful to the user; he did not recognise auy algebraical minus sign which would make the discomfort which tho torpedo caused to the person against whom it was used neutralise the advantage which it gave to the user. The wealth of the world .meant the sum total of useful things at any time in existence. He said he did not use the word capital as meaning wealth at .all; he considered it a word which should be .altogether given up by. the political economist, as being too likely to suggest meanings different from tho definition. The Chairman proposed a vote of thanks to Mr. Carruthers, not only for his present papsr, but for the great assistance he had always rendered to the society. He regretted that the society should lose such a valuable member, and ho had hoped to sec Mr. Carruthers one clay president, as he had no doubt lie would have been had he remained in Wellington. The vote of thanks was carried by acclamation, and Mr. Carruthers having returned thanks, the proceedings terminated.