EXPENDITURE OF THE WORKING CLASSES. 527 



THE EXPENDITURE OF THE WORKING CLASSES*. 



BY HENRY HIGGS. 



THE prime concern of the economist and of the statistician is the 

 condition of the people. Other matters which engage their at- 

 tention — particular problems, questions of history, discussions of 

 method, developments of theory — all derive their ultimate importance 

 from their bearing upon this central subject. The statistician measures 

 the changing phenomena of the production, distribution and consump- 

 tion of wealth, which to a large extent reflect and determine the ma- 

 terial condition of the people. The economist analyzes the motives of 

 these phenomena, and endeavors to trace the connection between cause 

 and elt'ect. He is unable to push his analysis far without a firm mastery 

 of the theory of value, the perfecting of which has been the chief stride 

 made by economic science in the nineteenth century. When we read 

 the 'Wealth of Nations' we are forced to admit that in sheer sagacity 

 Adam Smith is unsurpassed by any of his successors. It is only when 

 we come to his imperfect and unconnected views upon value that we 

 feel the power of increased knowledge. J. S. Mill supposed in 1848 

 that the last word had been said on the theory of value. In his third 

 book he writes: "In a state of society in which the industrial system 

 is entirely founded on purchase and sale . . . the question of value is 

 fundamental. Almost every speculation respecting the economical 

 interests of a society thus constituted implies some theory of value; the 

 smallest error on this subject infects with corresponding error all our 

 other conclusions, and anything vague or misty in our conception of it 

 creates confusion and uncertainty in everything else." And he adds: 

 "Happily, there is nothing in the laws of value which remains for the 

 present or any future writer to clear up; the theory of the subject is 

 complete." 



We know now that he was wrong. Thanks in the main to econ- 

 omists still alive, and especially to the mathematical economists, we 

 have at length a theory of value so formally exact that, whatever may 

 be added to it in the future, time can take nothing from it; while it is 

 sufficiently flexible to lend itself as well to a regime of monopoly as to 

 one of competition. Yet our confidence in this instrument of analysis 

 is far from inspiring us with the assurance which has done so much to 

 discredit economics by provoking its professors to dogmatize upon 



* Address by the President to the Economic Science and Statistics Section at the Dover meet- 

 ing of the British Association for the Advancement of Science. 



