readers. But the best introduction which can possibly be given of him is to present them with the opening paragraph of the work :

"The following essay is an attempt to solve some yet disputed problems in political economy, and impart a more regular and systematic form to the elementary principles of that science. It professes to give merely the outlines of a theory, and has no pretensions to be considered a practical treatise. I might, perhaps, without much impropriety, have entitled it the Physiology of Trade; for my design is rather to describe the laws which regulate the operations of trade, in its healthy and unfettered state, than to discuss the origin, symptoms, and cure of those derangements to which it is subject from the action of extrinsic causes. Throughout the entire argument I have taken for granted that commerce is free from external interference of every kind, even from the influence of taxes imposed upon commodities for the sake of revenue. I have assumed that the sovereign power of a state in no case does more than afford protection to industry and security to property, preserving strictly the standard of money once established, enforcing covenants, and thereby maintaining credit; but leaving demand and supply to perform their appropriate functions, without restraint or encouragement."-Preface, pp. v-vi.

It will let the reader at once into the character of the work, if we but announce to him the title of the first chapter of its first book, or, as it may be termed, the first and outset proposition of this strictly argumentative treatise, and which, though we call it a proposition, has as much the precision and self-evidence of a truism as the first axiom of Euclid. The subject of this first book is Value, a subject that has been sadly mystified and controverted amid the different views or representations which have been given of it by economical writers. The proposition is, that "parts of the same commodity cannot rise or fall in value in respect of each other;" reminding us of the axiom, that things which are equal to the same thing are equal to each other. It is impossible to strengthen one's conviction in the truth of this averment by any process of reasoning whatever; and if required to do so, we should be at a loss what to say upon it. All that Mr. Stirling has done, all he was called upon to do, is to bestow upon it a few sentences of lucid illustration. The principle is so exceedingly obvious, that one might readily wonder why it should be made the subject of a formal proposition at all. But the following important extract, taken from a foot-note which the author has here subjoined, will shew that there is often a practical necessity for the verbal statement of what is no sooner read than it must be recognised by all men. We gather from it how apt practical men are to go astray even from the most obvious first principles; and, for the purpose of recalling them, it is often necessary that they should be subjected to the infantile

treatment which is proper for those who have yet but reached the mere infancy of their understandings. It is instructive to observe, and it is of a piece with what has often been observed in the business of legislation, by what a succession of authors the same lesson had to be repeated for more than a century before it was practically acted on, or before the lesson was transmuted into a law and admitted into the statute book :

"This proposition may seem at first sight to be a mere truism; but it is in truth an important elementary principle, from which Mr. Locke has deduced the great practical conclusion, that one metal alone can be the money of account and contract and the measure of commerce in any country.' He says, 'Rising and falling of commodities is always between several commodities of distinct worths. But nobody can say that tobacco (of the same goodness) is risen in respect of itself. One pound of the same goodness will never exchange for a pound and a quarter of the same goodness. And so it is in silver; an ounce of silver will always be of equal value to an ounce of silver, nor can it ever rise or fall in respect of itself.' And again, 'Two metals, as gold and silver, cannot be the measure of commerce both together in any country, because the measure of commerce must be perpetually the same, invariable, and keeping the same proportion in all its parts; but so only one metal does, or can do, to itself; so silver is to silver, and gold to gold; but gold and silver change their value one to another, for supposing them to be in value as sixteen to one now, perhaps the next month they may be as fifteen and three quarters, or fifteen and seveneighths to one. And one may as well make a measure, namely, a yard, whose parts lengthen and shrink, as a measure of trade of materials that have not always a settled invariable value to one another.' -See Locke's Further Considerations concerning raising the Value of Money, Works, vol. ii., p. 72, (fol. edit. 1722.) The same principle is noticed by Sir W. Petty, Political Anatomy of Ireland, ch. 10; and by Mr. Harris in his Essay on Money and Coins, Part I., p. 57. A practical suggestion, founded on this view of the subject, made by Adam Smith, Wealth of Nations, b. i., ch. 5, was afterwards adopted, and pressed upon the attention of Government by the late Earl of Liverpool, in his Treatise on the Coins of the Realm, p. 13. But it was not till 1816 (by statute 56 Geo. III. c. 68,) more than ten years after the publication of Lord Liverpool's treatise, that this fundamental principle was acted upon, and gold made, practically and in reality, the sole standard measure of commerce, which it certainly was not while the silver coin was legal tender, by tale, to the amount of £25, and by weight, at the mint price, for any greater sum."-Footnote, pp. 4-5.

In his next proposition, which affirms the value of one commodity in relation to another, there is the same danger as before of the truth being underrated in respect of its importance, because of its extreme clearness. But, as if effectually to guard the reader against this, he applies it to the refutation of a great theoretical error in the reasonings of an economical treatise

VOL. VI. NO. XI.

G

(Lord Lauderdale on Wealth)-even as he had applied the former to the refutation of a great practical error in the conduct of Government.

There are certain terms which rank among the voces signate of political economy, and the meaning of which he sets forth with singular clearness and precision-in refreshing contrast to the obscurity of many other writers, who, in discussing the same terms, such as price and value, have given the impression of theirs being the most precarious and unsettled of all the sciences. They are mere terms of relation—the one being a particular term, and signifying the amount of money for which any determinate quantity of a commodity is given in exchange; the other a general term, and signifying the amount of any other commodity for which it might be given in exchange. Every commodity has but one price, but as many values as there are other commodities wherewith it may be bartered. greatly prefer his "par of value" to natural price or natural value. We could even, after having admitted into our nomenclature the par of value, dispense with his equivalent expression of intrinsic value altogether-making use of no other words than those which are purely expressive of relation. But let us not quarrel on a definition. The value at par of any commodity, or that which obtains, when the products of equal capitals at the same time exchange for one another, is also termed by Mr. Stirling its natural or intrinsic value.

We

To many readers, those who are already conversant in the science, Mr. Stirling will appear to be uselessly explicit, or to have fallen into an unnecessary excess of illustration-a most useful property this, however, for an elementary treatise, and invaluable when the perfect clearness is combined with perfect soundness. But we shall greatly mistake the rank or character of this treatise, if we but regard it as a successful exposition of its first and early rudiments for the benefit of those who yet are schoolboys on the subject. It is something far higher than an exposition-it is a rectification of first principles; for he grapples with some of the first and fundamental doctrines of those who have been esteemed the greatest masters in the science, and as we think overturns them. We do not say that in every instance, or even the most important of them, he has met these errors with original views of his own--for most of his corrections had been already given to the world. But if he do not acknowledge them as the rightful products of another, neither does he claim them as novelties from himself-his business being more with the subject than with the literature of the subject. And it is no disparagement to his work, that it may be said to deal with but the alphabet of the science-for such are the

changes which he advocates on the alphabetic characters, as lead to different readings and different lessons throughout, and will help onward to the establishment of a different school from any of those which now are most prized and most resorted to. It is but a subordinate praise, when upon this part of the subject we advert to his felicitous exposition of the manner in which the supply and demand adjust themselves to each other. We think that he has greatly improved upon Dr. Smith's principles of the variations in price as arising from a change in the relative proportions of demand and supply, instead of which Mr. Stirling substitutes the proximate, and, at the same time, more measurable cause of these variations-the relations of the quantities brought to market, whether of commodities to be exchanged for each other, or of a commodity to the money destined for the purchase of it. The question is, how can the venders test the extent or intensity of the demand, so as to proportion the supply to it? We must here allow Mr. Stirling to speak for himself.

"To illustrate this, suppose that a manufacturer, when common and average profits are at ten per cent., employs £1000 in the production of hats, and that for this sum he can produce 1100 hats. It is obvious that he cannot afford to sell these hats for less than £1 each, making the return on the whole £1100, viz., £1000 to replace his capital, with £100, or ten per cent., profits.

"According to the theory of Adam Smith, it would seem that this hat-maker and all other hat-makers must endeavour, as they best can, so to limit and adjust, not only the total number of hats manufactured, but the number of each kind to the tastes and means, the wants and riches of the demanders, that the price of each hat shall amount to exactly £1, leaving all deviations from this the natural price to be corrected by some of the manufacturers withdrawing from the trade, or withdrawing capital from it, when, by reason of excessive supply, the price sinks below £1, and by others entering into this trade, or embarking additional capital in it, when, through a deficient supply, the price rises above £1. But it seems impossible that the price could be adjusted, or, if adjusted, that a deviation of the market from the natural price could be corrected, with any degree of exactness, in the mode here indicated. On the other hand, the manufacturer, by maintaining the natural price, that is, by refusing to part with his hats for less than £1 a-piece, is enabled to discover how many he can dispose of at this price in a certain time, and to regulate the rate of his production accordingly.

"When the market-price of a commodity is above the natural price, competition will instantly reduce the price, and the reduction of price will enlarge the consumption, and make room for an additional supply, as effectually as an enlargement of supply would lower the price; while, on the contrary, an elevation of the price will as effectually limit consumption and check the supply, as an abridgement of the sup ply would raise the price. It is thus apparently that competition ope

rates in most instances, and especially in the case of manufactured products, the supply of which may be enlarged almost indefinitely. Demand and supply are in all cases the agents in the ultimate regulation of price and value, and it will presently be seen that, when the market is once overstocked, natural prices cannot be maintained; but it seems impossible that the market should ever be otherwise than overstocked or understocked, were there no gauge by which to test the extent and intensity of the demand. Were there no index, no guide, such as we have endeavoured to describe, trade would be nothing better than a series of uncertain experiments, and, after all, no possible exertion of human ingenuity could so exactly adjust production to consumption, supply to demand, as that the resulting price should be equal, and no more than equal, to cost and profits."-Pp. 44-47.

It were a mighty disincumbrance for the students of Political Economy, were the mysticism wherewith both Smith and Ricardo have charged the subject of value, conclusively discharged from it-the one representing labour as the measure, and the other representing it as the foundation of value. It is not needed to set up any absolute standard of value, in order to explain either the phenomena or the philosophy of trade; and by quitting the attempt, we get rid of much obscure and useless argumentation. All understand the difference between value in use, and value in exchange; but the latter is the only pertinent and available element when treating of commerce. Value is but expressive of a relation, and nothing more. And it were a great deliverance, a great simplification, if the view advocated by Mr. Stirling were universally proceeded on.

But before taking leave of the subject of value, which occupies the whole of his First Book, made up of twelve chapters, or rather of twelve propositions, all mathematically handled, we cannot refrain from expressing our satisfaction in Mr. Stirling's very able and satisfactory recognition of the limit at which demand must stop, and beyond which, therefore, production will not go. Were this principle but adopted and pursued into its manifold applications, it would chase away a multitude of errors from Political Economy. We should hear no more of the impossibility of gluts, or the indefinite augmentation of capital, or the unlimited power of production, in virtue of which each new product but calls forth another-finding a vent, and creating a market for itself. There is, in truth, a natural and impassable limit beyond which the wealth of a country cannot be carried, which till of late has been marvellously out of sight; and in virtue of their blindness to which, one sanguine speculator after another has come forth with his panacea, by the adoption of which it is fondly imagined that the country might be set forth on an open and unobstructed path of advancement in all the