The first three chapters of Book 1 deal with Division of Labour. 18 We are in the oldest part of the building, the part already completed in the Draft. Also, presumably because in his teaching Smith had so often gone over this subject, it is by far the most polished part of the whole. Though, as we know, there is nothing original about it, one feature must be mentioned that has not received the attention it deserves: nobody, either before or after A. Smith, ever thought of putting such a burden upon division of labor. With A.Smith it is practically the only factor in economic progress. Alone it accounts ‘for the superior affluence and abundance commonly possessed even by [the] lowest and most despised member of Civilized society, compared with what the most respected and active savage can attain to’ in spite of so much ‘oppressive inequality’ (Draft, see Scott, op. cit. p. 328). Technological progress, ‘invention of all those machines’—and even investments—is induced by it and is, in fact, just an incident of it. We shall consider this feature of A.Smith’s analytic schema at the end of this Reader’s Guide. Division of labor itself is attributed to an inborn propensity to truck and its development to the gradual expansion of markets—the extent of the market at any point of time determining how far it can go (ch. 3). It thus ap-pears and grows as an entirely impersonal force, and since it is the great motor of progress, this progress too is depersonalized. In Chapter 4, A.Smith completes the time-honored sequence: division of labor-barter- money and, falling far below the level reached by many older authors and particularly by Galiani, severs ‘value in exchange’ completely from ‘value in use.’ In Chapter 5 (which starts with Cantillon’s definition of richesse) he undertakes to find a measure of the former that is more reliable than is price expressed in terms of money. Equating value in exchange to price and observing that ‘price in money’ fluctuates in response to purely monetary changes, Smith replaces for purposes of interlocal and intertemporal comparisons this monetary or ‘nominal price’ of each commodity by a real price in the same sense in which we speak, for example, of real wages as distinguished from money wages, 19 that is, by price in terms of all other commodities. And these real prices he in turn replaces, in ignorance of the index-number method already invented in his time, by prices expressed in terms of labor (after having considered corn for the role): in other words, he chooses the commodity labor instead of the commodity silver or the commodity gold as numéraire—to use the phrase brought into general use by L.Walras. This may or may not be helpful, but there is no logical objection to it. But Smith flounders so badly in conveying the idea and, moreover, confuses it with philosophies concerning the nature of value and real price in a different sense—see the famous doctrines about ‘toil and trouble’ as the real price of everything (paragraph 2 of ch. 5) and about labor alone ‘never varying in its own value’ (paragraph 7)—that his fundamentally simple idea was misunderstood even by Ricardo. Accordingly, he was credited with a 18 The reader will please bear in mind that all the more important points of A. Smith’s analysis that can be touched upon at all in this history will be dealt with in their proper places, excepting a few which there is no opportunity to mention elsewhere. This is nothing but a jejune and desperately brief Reader’s Guide. 19 See, e.g., the 9th paragraph of ch. 5. History of economic analysis 182 labor theory of value—or rather with three incompatible labor theories 20 —whereas it is quite clear from Chapter 6 that he meant to explain commodity prices by cost of pro- duction, which in this chapter he divides up into wages, profit, and rent—the ‘original sources of all revenue as well as of all exchangeable value.’ This is no doubt very unsatisfactory as an explanation of value but serves well as an avenue both to a theory of equilibrium price and to the theory of distribution. The rudimentary equilibrium theory of Chapter 7, by far the best piece of economic theory turned out by A.Smith, in fact points toward Say and, through the latter’s work, to Walras. The purely theoretical developments of the nineteenth century consist to a considerable degree in improvements upon it. Market price, defined in terms of short-run demand and supply, is treated as fluctuating around a ‘natural’ price—J.S.Mill’s ‘necessary’ price, A.Marshall’s ‘normal’ price—which is the price that is sufficient and not more than sufficient to cover ‘the whole value of the rent, wages, and profit, which must be paid in order to bring’ to market that quantity of every commodity ‘which will supply the effectual demand,’ that is, the demand effective at that price. There is no theory of monopoly price beyond the meaningless (or even false) sentence that the ‘price of monopoly is upon every occasion the highest which can be got,’ whereas ‘the price of free competition…is the lowest which can be taken’ in the long run—an important theorem though Smith does not seem to have had any notion of the difficulties of a satisfactory proof. Chapters 8 to 11 complete the self-contained argument of the first Book, whose contour lines, though hidden by the luxuriant foliage of illustrative fact that often degenerates into digression, are not without beauty. They deal with ‘the circumstances which naturally determine’ the rate of wages and the rate of profit and 20 Though it will be necessary to return to A.Smith’s view on value both in ch. 6 of this Part and in the third Part, a brief clarification of the matter in this place may prove helpful. In itself, the choice of hours or days of labor as units by which to express commodity values or prices—on the (invalid) ground that labor never varies in its own value or on any other ground—no more implies any particular theory of exchange value or price than the choice of oxen as units by which to express commodity values or prices implies an ox theory of exchange value or price. But Smith (just as R.Owen and other sponsors of the plan to make labor notes the medium of circulation) does not seem to have seen this clearly and undoubtedly argued in several places as if his use of labor as numéraire did imply a theory of value. Moreover, he repeatedly seems to confuse the quantity of labor a commodity will exchange for with the quantity of labor this commodity costs to produce— which is what Ricardo criticized. The quantity a commodity costs to produce then comes to the front in the famous beaver-deer example at the beginning of ch. 6, though it is but just to add that Smith confines the proposition that this quantity ‘regulates’ price expressly to that ‘early and rude state of society’ in which there are no other distributive shares to take into account. Finally, there is the ‘toil and trouble’ which is the ‘real price of everything’ and which, at least if interpreted as equivalent to the later concept, disutility of labor, agrees with neither of the two other measures. These, then, are the three labor theories of value or price which A.Smith is supposed to have held. However, since the first is logically incapable of serving as an explanation of the phenomenon of value—the reader will perceive that, considered as such, it spells circular reasoning—and since we may neglect the third, because A.Smith made no effort to develop the theme of disutility, we are really left with the second or labor-quantity theory of value. And, finally, since A.Smith—unlike Ricardo and Marx—claimed no validity at all for this except in a special case, we come to the conclusion that, in spite of his emphasis on the labor factor, his theory of value is no labor theory at all. The fact that the first sentence of the introduction makes the whole of the National Dividend a ‘produce of labor,’ does not affect this conclusion as a little reflection should show. The consultant administrators 183 ‘regulate’ the rent of land (p. 56). 21 These chapters, summing up and co-ordinating, handed down the theory of distribution of the eighteenth century to the economists of the nineteenth, who found it all the easier to start from them because the very looseness of Adam Smith’s doctrines invited development on many different lines: Smith’s very weaknesses conspired to qualify him for his type of leadership. It must suffice to draw the reader’s attention to the following points. Chapter 8 on wages contains not only the rudiments of both the wage fund (p. 61) and the minimum-of-existence (pp. 71, 76) theories, which might have been derived from Turgot and the physiocrats and which have been made the most of by A.Smith’s English successors, but also another element, the full importance of which these successors failed to see. This is enshrined in his pithy sentence that the ‘liberal reward of labour’ is both ‘the necessary effect’ and ‘the natural symptom of increasing [J.A.S.’s italics] national wealth’ (p. 65) which, though inadequately motivated, sheds a light on the problem of wages quite different from that in which Ricardo saw it. Chapter 9 on profit offers many points about the factors that determine the rate of profit (for instance on p. 83), especially relatively to wages, but fails to face the fundamental problem. So far as Smith can be credited with having had a theory of ‘profit’ at all, it must be pieced together from indications, mostly vague and even contradictory, that are scattered over the first two Books. First, he definitively sanctioned and helped to victory the doctrinal tendency that was to prevail in nineteenth-century economics, particularly in England: profit, treated as the basic income of the capitalist class, is (substantially) the return from the use in business of physical goods (labor’s means of subsistence included) which that class supplies; and interest on loans is simply a derivate from it. Excepting the case of the mere lenders (‘monied men’), there is no distinctive function of the entrepreneurs—though Smith does speak of the ‘undertaker’—or industrialists, who, ‘inspection and direction’ being brushed aside, are fundamentally capitalists or masters ‘setting to work industrious people’ and appropriating part of the product of ‘their work’ (ch. 6). The Marxist implications of this, which moreover Smith goes out of his way to underline, are obvious. Nevertheless, it cannot be said that Adam Smith held an exploitation theory of profit, though it can be said that he suggested it. For he also emphasized the element of risk and spoke of employers’ advancing ‘the whole stock of materials and wages’ (p. 42), which points in an entirely different direction. Moreover, nobody who thought as highly of the social importance of saving as did A.Smith can complain if he be associated with abstinence-theory ideas. In treating of the differences ‘Of Wages and Profits in the different Employments of Labour and Stock’ (ch. 10), Smith, reveling in facts and arguments of a somewhat trite sort, improved upon Cantillon and succeeded in creating a standard chapter of the nineteenth-century textbook. Chapter 11, ‘Of the Rent of Land’—Smith, and following him, practically all the English economists to Marshall’s epoch, confined the concept of rent to land and mines—is swollen by a gigantic digression (or a cluster of digressions or monographs) that makes up about 7.6 per cent of the whole work. If the vast materials and the almost innumerable disquisitions on particular points be boiled down, a 21 [The page references in this Reader’s Guide are to the Everyman’s Library Edition published by J.M.Dent, London, and E.P.Dutton & Co , New York (1910), of which there was a copy in the library in Taconic. Elsewhere J.A.S. used the, Cannan edition referred to in note 15.] History of economic analysis 184 mosaic of ideas emerges of which these are the outstanding elements. First, reasoning from his cost theory of value, Smith not unnaturally—though wrongly—arrives at the conclusion that the phenomenon of rent can be due only to a ‘monopoly’ in land (p. 131), thus starting on its career an idea that was to find sponsors again and again and has not even yet died out. But second, we find (p. 132) the statement that, whereas ‘high or low wages and profit are the causes of high or low price; high or low rent is the effect of it,’ which fits but ill with the monopoly theory and points in the Ricardian direction: the so- called Ricardian theory of rent might have emerged from an effort to put logical order into the Smithian jumble. And, third, there is even a suggestion that might have induced a disciple to straighten out that jumble by means of a productivity theory (see, e.g., p. 133). All this is intermingled with other ideas, good and bad—for example, the old idea which was as persistent as it was useless and which we encounter again in Malthus, that the production of foodstuffs holds a unique position in that it creates its own demand because people will multiply as it expands—that enter and leave the stage much as does the Falstaff crowd in Henry IV. Even before the reader gets to the digressions on the value of silver and on the relation between the values of silver and gold, the chapter contributes much to Smith’s theory of money, which cannot however be fully mastered without reading the whole work (see especially ch. 2 of the second Book and the important Digression Concerning Banks of Deposit in ch. 3 of the fourth). Two more points should be added: at the end of the digression on silver Smith tries to show why, at least on the whole, the price—the real price—of agrarian products will rise in consequence of the Progress of Improvement (pp. 198 et seq.) and, in an additional digression (pp. 224 et seq.), that the real price of manufactures will fall. In a sense, this foreshadows the nineteenth-century doctrine of decreasing returns in agriculture and increasing returns in industry toward which he may be said to have cautiously felt his way and which might have been distilled from his pages. Furthermore, he arrived at the Ricardian conclusion (p. 229), though it does not follow cogently from his muddled argument, that landowners benefit in the process directly, both because the real value of the products of the land rises and because they receive a larger relative share of these products; and in addition indirectly, owing to the fall of the real price of manufactures. Laborers also benefit (p. 230) because their wages rise and the prices of part of the commodities they buy fall. But the third class, the ‘merchants and master manufacturers’ (p. 231), suffer, because, as A.Smith said, the rate of interest tends to be low in rich countries and high in poor countries, so that the interest of this class conflicts both with the interests of the other two and with the ‘general interest of the society.’ This was evidently intended for a schema of economic class interests such as many later economists tried to construct, possibly inspired by A.Smith’s example and by a desire to correct his mistakes. The second Book presents the theory of capital, saving, and investment that, however much transformed by development and criticism, remained the basis of practically all later work until, and partly even beyond, Böhm-Bawerk. It certainly looks like a new wing added to an old structure. In spite of the weak attempt made in the introduction to link it to the first Book by means of another and quite unconvincing appeal to ‘division of labour,’ there is no reason to believe that any essential part of it was either written or planned before A.Smith’s stay in France. Specifically physiocrat influence is much more definitely recognizable than it is in any part of the first Book, both in many details and in the conception as a whole. This statement must not be misunderstood, however. A.Smith The consultant administrators 185 was not in the habit of accepting passively what he read or heard: he read and listened judicially, criticized vigorously, and in so doing arrived at a conception of his own. This is why I have spoken of physiocrat influence only, and not also of his being influenced by Turgot. Turgot holds priority in essential points, but it does not follow that Smith derived his views from him. For these views are such as would naturally emerge in Smith’s mind from a creative criticism of Quesnay’s teaching so that, in the absence of cogent evidence to the contrary, it seems more just to speak of parallelism than of dependence. Space forbids our presenting more than a single illustration. The Scotsman’s common sense took offense at Quesnay’s statement that only agricultural (and extractive) labor was productive. From Turgot he might have learned how to shrug his shoulders at this vagary and to pass on with a graceful bow. This, however, was not his way. He took things not only seriously but also literally. He had to embark upon ponderous refutation. But in his meditations on the subject it may have occurred to him that there was something to the distinction between productive and unproductive labor. 22 And so he worked out his own interpretation of it and substituted it for Quesnay’s. In a sense it was suggested to him by Quesnay—this is indicated by the fact that there is no hint of it in the first Book though it would naturally belong there—but in another sense it was his own. Chapter 1 of the second Book distinguishes that part of a man’s—and society’s—total stock of goods that is to be called capital (not only physical goods, since ‘the acquired and useful abilities of all the inhabitants’ are capital) from the rest; introduces the concepts of fixed and circulating capital; and classifies the goods that are to come under both headings, including in circulating capital money but not the means of subsistence of productive laborers, although Smith’s argument calls for and actually implies inclusion of the latter. The long Chapter 2, one of the most important of the work, contains the bulk of A.Smith’s theory of money. It is much above Chapter 4 of the first Book and certainly the result of a late stage of A.Smith’s labors. But it displays no physiocrat influence—all recognizable influence is English. Chapter 3 (which introduces the distinction between productive and unproductive labor), with its tremendous emphasis on the propensity to save as the true creator of physical capital (‘Parsimony, and not industry, is the immediate cause of the increase of capital,’ p. 301; ‘every prodigal appears to be a public enemy, and every frugal man a public benefactor,’ p. 304), marks the victory for more than 150 years to come of a pro-saving theory. ‘What is annually saved is as regularly consumed as what is annually spent, and nearly in the same time too; but it is consumed by a different set 22 It may be just as well to state at once what that something was, because both A.Smith’s clumsy and inconsistent handling of it and the nineteenth-century controversy on this distinction have needlessly obscured its meaning. Productive laborers reproduce the value of the capital that employs them with a profit; unproductively employed laborers either sell their services or else produce something that does not yield profit. This may be considered as the embryo of Marx’s theory of surplus value. Interpreted in this sense, this distinction is not irrelevant. But Smith himself has to take the blame if this meaning of it, which is quite clear from the first paragraph of ch. 3, did not stand out from all the irrelevancies with which he associated it. From another but cognate standpoint the distinction is between labor that does and labor that does not produce something that must be sold in order to complete the transaction: when a personal servant has sold his services to his employer and has received payment out of the latter’s income, there is no further step in the process; if the same man secures employment in a shoe factory, he is paid out of capital and the process in which his work is an element is not completed until the shoes have found a buyer. History of economic analysis 186 of people’ (p. 302), namely, productive laborers whose wages and employment are thus positively related to the rate of saving which is identified or at least equated to the rate of increase of capital, that is, investment. In this chapter, revenue means profit plus rent, exactly as it does with Marx. Chapter 4 tackles the problem of interest. Since, as indicated above, profit is treated as the fundamental phenomenon and this is taken for granted here, interest simply follows from the fact that money—but, as Smith holds, really the producers’ goods and services that can be bought for it—always meets with demand at a premium motivated by the expectation of profits. Smith as well as all his successors until recent times simply saw no difficulty in explaining interest per se: the difference between him and his nineteenth-century successors was only that he did not see much of a problem in business profit either, whereas, as time went on, an increasing number of the latter began to worry about it. There are thus but three points to mention: first, his unconvincing explanation of the tendency of the rate of interest to fall by the increasing competition between increasing capitals; second, his vigorous, and for 150 years successful, argument against the monetary theories of interest that attempt to explain that tendency by the increase in the quantity of monetary metals; third, his moderate and judicious argument about legal maxima which called forth an entirely unjustified attack from Bentham. [The Reader’s Guide was not completed. There is, for example, no discussion of ch. 5 (Of the different Employment of Capitals), the concluding chapter of the second Book. The final paragraph was on a separate sheet with no indication as to its intended position.] Before the century was out the Wealth of Nations had run to nine English editions, not counting the ones that appeared in Ireland and the United States, and had been translated (so far as I know) into Danish, Dutch, French, German, Italian, and Spanish (italics indicate more than one translation; the first Russian translation appeared 1802–6). This may be taken to measure the extent of its success in the first stage of its career. For a work of its type and calibre—which entirely lacked the graces of the Esprit des lois—it can, I think, be called spectacular. But this was as nothing compared with the really significant success that is not so easy to measure: from about 1790 on, Smith became the teacher not of the beginner or the public but of the pro-fessionals, especially the professors. The thought of most of them, including Ricardo, started from him and most of them again never got beyond him. For half a century or more, roughly until J.S.Mill’s Principles (1848) started on its career, Adam Smith supplied the bulk of the ideas of the average economist. In England, Ricardo’s Principles (1817) meant a serious check. But outside of England, most economists were not quite up to Ricardo, and Smith continued to hold sway. It was then that he was invested with the insignia of ‘founder’—which none of his contemporaries would have thought of bestowing on him—and that earlier economists moved into the role of ‘precursors’ in whom it was just wonderful to discover what nevertheless remained Smith’s ideas. The consultant administrators 187 5. QUASI-SYSTEMS Lest the reader should conceive an entirely wrong impression—which if it be allowed to settle in his mind the subsequent chapters might be powerless to dispel—it is necessary to supplement without delay the story told in the preceding section by at least some account of the parallel stream of quasi-systems. Most of them, as we know, were programs of industrial and commercial development. Their authors recommended or fought policies appropriate or inimical to those programs, and reasoned in terms of individual problems. But their ideas were not unsystematic in the sense of lacking coherence. They knew how to relate one problem to another and to reduce them to unifying principles—analytic principles, not merely principles of policy. If these analytic principles were not always stated explicitly, they were nevertheless often worked out effectively in a way that suggests the development of English law. In this section, we shall confine ourselves to a selection of seventeenth-century writers, all of whom will have to be mentioned again as we go along. Many more will be introduced in the next and later chapters. The honors of this literature—for the seventeenth century—belong to English businessmen and civil servants but the list is headed by an Italian, Serra. 1 This man must, I think, be credited with having been the first to compose a scientific treatise, though an unsystematic one, on Economic Principles and Policy. Its chief merit does not consist in his having explained the outflow of gold and silver from the Neapolitan Kingdom by the state of the balance of payments but in the fact that he did not stop there but went on to explain the latter by a general analysis of the conditions that determine the state of an economic organism. Essentially, the treatise is about the factors on which depend the abundance not of money but of commodities—natural resources, quality of the people, the development of industry and trade, the efficiency of government—the implication being that if the economic process as a whole functions properly, the monetary element will take care of itself and not require any specific 1 Antonio Serra, Breve trattato delle cause che possono far abbondare li regni d’oro e argento dove non sono miniere (1613; republ. in the Custodi collection and in A. Graziani’s Economisti del cinque e seicento, 1913; by extract also in G.Tagliacozzo’s Economisti Napoletani dei secoli XVII e XVIII, 1937, with summary and appraisal, English trans. in A.E.Monroe’s Early Economic Thought). Nothing is known of the author except that he wrote the treatise in a Neapolitan prison, perhaps in the hope of regaining his freedom thereby, for it is dedicated to the Spanish Viceroy. Again—as in the case of L.Ortiz, who might be claimed as a predecessor of Serra as might also another Spaniard, Gonzáles de Cellorigo (Memoriales. De la politica necesaria…á la república de España, 1600), both of whom, however, lacked Serra’s grasp of principle—the reader is asked to forget the title, which evidently was chosen in order to interest the Viceroy and does not express the gist and importance of the argument at all well. However, there was some justification for it: the author argued at length against the exchange-control policy advocated by De Santis—not entirely successfully—so that the treatise has also a place in the history of the ‘mercantilist’ controversies (see below, ch. 7). On Serra and his work, see R.Benini, ‘Sulle dottrine economiche di Antonio Serra,’ Giornale degli Economisti, 1892. Further references in Tagliacozzo’s edition. History of economic analysis 188 therapy. And this argument contains several contributions to the nascent stock of theoretical tools that will be noticed later. 2 For several decades, there was nothing like this anywhere. But in the second half of the century we behold a rich crop of works of a similar type in England, the standard title of which was, as mentioned already, Discourse of Trade. Gradually their authors discovered for themselves pieces of the logic inherent in the economic process: the things which they could have learned from the scholastics and their successors and which, under different circumstances and, accordingly, from the standpoint of different political aims, were to become the rationale of the doctrines of laissez-faire liberalism. A landmark on this way was Child’s Discourse. 3 This outstanding performance was and is usually disposed of as one of the many ‘mercantilist’ writings—which was and (to some extent) still is sufficient to prevent many historians from seeing any merit in it. But quite independently of whether or not that label fits, it should be recognized that this Discourse deals with the practical problems of its time—employment, wages, money, exchanges, exports and imports, and so on—in the light of clearly adumbrated ‘laws’ of the mechanism of capitalist markets; though not explicitly worked out, the tool that we call equilibrium theory is, as it were, present behind the scene. This performance was matched and in many individual points surpassed by such men as Barbon, Davenant, 2 Almost immeasurably inferior to Serra in grasp of economic principle and analytic power, but not dissimilar from him in views on the issues of practical policy, was B.de Laffemas, who wrote around 1600 (for a list of his writings see F.Hayem, Un Tailleur d’Henri IV, Barthélemy de Laffemas, 1905; also see H.Hauser, ‘La liberté du commerce et la liberté du travail sous Henry IV,’ Revue historique, 1902). 3 Sir Josiah Child (1630–99). That work eventually appeared in its final form under the title New Discourse of Trade (1693), but to do justice to its historical merit we must take into account the fact that it took decades to mature into that form. The first draft, Brief Observations concerning Trade and Interest of Money and also A Short Addition were published in 1668. Ten chapters were added, 1669–70. Those years are the relevant ones for questions of priority, because the Discourse about Trade that was published in 1690 did not add or alter very much. The New Discourse of 1693 contains still fewer alterations and adds nothing except a new introduction. A minor publication written in defense of the trade of the East India Company also merits notice. Child’s reputation as an economist, besides suffering from the general prejudice against ‘mercantilist’ writings, also suffered from a fact that is of great interest to the sociologist of science. Child was a leading businessman, in fact the very incarnation of the most hated big business of that age: he was chairman and for some years the undisputed leader of the East India Company, besides being personally very wealthy. Accordingly, he was unpopular in his time, and so he has remained for over 250 years, historians being careful to clear their skirts of the ‘monopolist’ and ‘special pleader’ (scilicet for his personal interest). The consultant administrators 189 North, Pollexfen, and others. 4 In every one of these cases we see more or less awareness of the existence of an analytic apparatus that runs on in essentially the same manner, whatever the practical problem for the sake of which it is set working, and more or less willingness and ability to use it. For us this is what matters: whether we like or dislike the practical recommendations that are supposed by the authors to follow from their analysis is entirely immaterial. I take this opportunity to mention a remarkable though little-known treatise on foreign trade which Professor Foxwell (see Kress Library of Business and Economics, Harvard Graduate School of Business Administration, Catalogue) described as ‘one of the earliest formal systems of political economy, and stating one of the most forcible practical arguments for free trade,’ though the latter part of Foxwell’s statement seems to me more true than the former: Isaac Gervaise, The System or Theory of the Trade of the World (1720). Professor Viner (see below, ch. 7) has done full justice to this remarkable contribution to the theory of international trade whose author outlined in addition—all in the space of 34 pages—the topics of general theory germane to his particular subject, though of course not in any ‘formal’ layout. The common run of these discourses was, however, far below that level. Most of them were merely motivated programs for the industrial and commercial development of England. Since foreign trade occupied the place of honor and most of the space in those programs, a selection of works of this type will be noticed in the last chapter of this Part. For the moment it will suffice to mention by way of example the tracts of the overrated Mun (his title was, however, not Discourse of Trade but England’s Treasure by Forraign Trade, 1664), of 4 References will be given in subsequent chapters. However, Charles Davenant’s contribution must not be appraised from his Discourses on the Publick Revenues, and on the Trade of England (1698), but rather from all his many publications taken together: they sum up to a comprehensive quasi-system. And Pollexfen will be commented on at once. John Pollexfen was a merchant and M.P., who also served on the Board of Trade. In addition to his principal work, A Discourse of Trade, Coyn, and Paper Credit (1697, reprinted 1700), he also wrote England and East India Inconsistent in their Manufactures (1697), a tract that, besides attacking his bête noire, the East India Company, in reply to Davenant’s Essay on the East-India-Trade (1696), complements part of the argument of the Discourse. The latter is an excellent piece of work, precisely as regards analytic ability. It is therefore a question of some interest to ask why he has received so little recognition and especially why such recognition as he received has been tempered in most cases by derogatory comments upon his supposed lack of originality and upon his various ‘mercantilist errors.’ The latter indictment seems without foundation, and concerning the former it is sufficient to ask: if we define eminence in an economist solely by the presence in his writings of entirely new results, where will A.Smith be, or Ricardo, or J.S.Mill? History of economic analysis 190 Cary, and of Petyt. 5 There was no lack of unity about them as to political vision. And this vision was quite comprehensive, embracing all the economic problems of the nation. But there was no analytic work, and faults of reasoning abound. Cary, for instance, besides discussing carefully the conditions and possibilities of English trade with each foreign country, with Ireland, and with the colonies (the most valuable part of the tract) also concerns himself with monopolies (that is, the monopolies of the great trading companies), the causes of and remedies for unemployment, coinage, credit, and many other subjects down to the problem—or was this Mrs. Cary’s contribution?—of how to make maid servants ‘more orderly and governable than now they are’ (p. 162). But every attempt he makes to carry analysis beyond the obvious is a failure. High rents, for instance, are made responsible for England’s being undersold in foreign markets. High interest is held to be another cause of this but without recourse to any argument that might raise this theory above the status of a popular observation. In spite of the emphasis on export surpluses, high prices and high wages are commended on grounds that tax the reader’s capacity for generous interpretation. And so on. Yet there is plenty of shrewd sense about it all—shrewd, narrowly nationalistic, and naïvely brutal (compare, for example, his enthusiasm for the slave trade, England’s ‘silver mine,’ p. 76, or his views about the treatment to be dealt out to Ireland, passim). Once we have learned to discern ‘quasi-systems’ in or behind writings that profess to deal only with particular problems, we find the genus everywhere. In the Netherlands, for instance, Graswinckel’s and de la Court’s 6 writings belong to it, although the former dealt only with the grain trade. Many historians will place them above their English contemporaries on account of their ‘liberal’ views on national and international trade— though de la Court lapsed from grace as to the latter—government interference, medieval corporations, and so on. But we shall arrive at a substantially similar estimate because of those authors’ clear perception of causes and effects in all matters of the price mechanism. A man who in 1651 recognized the economic function of ‘forestalling’ and speculation, as did Graswinckel, knew something that could have been presented as a discovery in 1751—not that it would really have been one—though it was a commonplace in 1851 and will sound altogether wrong now. 5 John Cary, merchant in Bristol, An Essay on the State of England in Relation to its Trade, its Poor, and its Taxes…, 1695, the edition used. There were several others—the one of 1745 bearing the title Discourse on Trade—which points to considerable success. For Locke’s praise of the performance I can only account by the fact that Cary favored recoinage of the currency at the old standard of weight and fineness and that, in 1695, Locke would have welcomed any writer who did so (see below, ch. 6). Perhaps, however, he was also attracted by Cary’s careful discussion of England’s trade with various countries. The other work, Britannia Languens, or a Discourse of Trade…(1680), appeared under the pseudonym Philanglus and is attributed to William Petyt on Professor Foxwell’s authority (see Catalogue of the Kress Library). 6 Dirck Graswinckel (1600–1666), a lawyer and public servant, wrote a treatise on the economics of the food trade under the unpromising title: Placaetbook op het stuk van de Leeftocht (Compilation of regulations concerning food, 1651). Pieter de la Court (1618–85) was a manufacturer. Of his works it is only necessary to mention the Interest van Holland…(1662; 2nd ed. under the title Aanwysing…1669). The consultant administrators 191 . (1910), of which there was a copy in the library in Taconic. Elsewhere J.A.S. used the, Cannan edition referred to in note 15.] History of economic analysis 184 mosaic of ideas emerges of which. place of honor and most of the space in those programs, a selection of works of this type will be noticed in the last chapter of this Part. For the moment it will suffice to mention by way of. presence in his writings of entirely new results, where will A.Smith be, or Ricardo, or J.S.Mill? History of economic analysis 190 Cary, and of Petyt. 5 There was no lack of unity about them as