ABSTRACT
While there have always been schools of religious and ethical thought favourable to poverty, or a simple life, the general opinion of mankind has always regarded the increasing wealth of an individual or a community as conducive to human happiness. Qualifications have commonly been attached to this judgment in recognition of a certain danger and deceitfulness of riches, especially when rapidly acquired and lavishly expended, but the presumption still stands that wealth in general conduces to well-being. The nature, degree or conditions of this correspondence have, however, received singularly little attention from those thinkers who have given closest study to economic processes. Many of the founders of economic science in this and other countries were manifestly concerned for the general welfare of their fellowmen, and were active workers in many fields of social reform. But, in formulating the concepts and laws of their science, they deemed it unnecessary to give any close or continuous thought to the relations between economic wealth and human welfare. This was due, partly, no doubt to the natural desire to make the subject-matter and the treatment of a new science as definitely concrete and measurable as possible. It was this desire that made monetary valuation paramount in all economic estimates. The innumerable varieties of human effort, physical and mental, that went to the performance of the operations of producing marketable goods and services, the innumerable sorts of satisfaction, or utility, got out of consuming these goods and services, were all brought into relation to what Dr. Pigou terms “the measuring-rod of money.” In the earning and expenditure of money incomes countless diverse pleasures and pains, efforts and satisfactions, were reduced to a common denominator. Scarce and useful things which are purchasable constitute income, and as income affords livelihood, the assumption that growing income involves an increase of well-being seems legitimate. So a sovereign, or any other sum of money, was regarded as representing through its purchasing power a given body of wellbeing. Irrespective of how it was got and how it was spent? Not altogether. From the earliest formulation of the science criticism was directed against economic rent, monopolies and 282certain sweating practices on the one hand, and against wasteful, luxurious expenditure upon the other. But the normal play of economic forces under “the simple system of natural liberty” was held to maintain an economic system that regulated and distributed the flow of wealth, the real income, in substantial accordance with the worth and needs of the contributors. Close scrutiny into the equity and humanity of the system was averted by stressing the natural or inevitable order of its working. Human nature “being as it is” was as immutable as inanimate nature and its laws as unalterable. Political Economy set out to declare these laws, and criticism of their harshness or injustice seemed irrelevant. It is true that economic teachers often padded their essentially mechanical system with humane reflections and extenuating circumstances. This was particularly true of our British economists from J. S. Mill onward. But the assumption that, by the operation of rigorous economic laws, the innumerable acts of buying and selling for private individual gain were woven into an order generally consonant with human welfare, remained substantially intact. Anything that seemed to impugn the regularity or the equity of these laws was disposed of as ‘friction,’ a term of illuminating testimony to the mechanical conception prevailing in all the social sciences.
