FALLACIES OF OBSERVATION. 351 



example, is equally efficacious in either case. Now we must, 

 in order to go along with this reasoning, suppose, that the 

 person who i eels himself under temptation, observing some 

 body punished, concludes himself to be in danger of being 

 punished likewise, and is terrified accordingly. But it is for 

 gotten that if the person punished is supposed to be innocent, 

 or even if there be any doubt of his guilt, the spectator will 

 reflect that his own danger, whatever it may be, is not con 

 tingent on his guiltiness, but threatens him equally if he 

 remains innocent, and how therefore is he deterred from guilt 

 by the apprehension of such punishment? M. Cousin sup 

 poses that people will be dissuaded from guilt by whatever 

 renders the condition of the guilty more perilous, forgetting 

 that the condition of the innocent (also one of the elements in 

 the calculation) is, in the case supposed, made perilous in pre 

 cisely an equal degree. This is a fallacy of overlooking ; or of 

 non-observation, within the intent of our classification. 



Fallacies of this description are the great stumbling-block 

 to correct thinking in political economy. The economical 

 workings of society afford numerous cases in which the effects 

 of a cause consist of two sets of phenomena : the one imme 

 diate, concentrated, obvious to all eyes, and passing, in common 

 apprehension, for the whole effect ; the other widely diffused, 

 or lying deeper under the surface, and which is exactly con 

 trary to the former. Take, for instance, the common notion 

 so plausible at the first glance, of the encouragement given to 

 industry by lavish expenditure. A, who spends his whole 

 income; and even his capital, in expensive living, is supposed 

 to give great employment to labour. B, who lives on a small 

 portion, and invests the remainder in the funds, is thought to 

 give little or no employment. For everybody sees the gains 

 which are made by A s tradesmen, servants, and others, while 

 his money is spending. B s savings, on the contrary, pass 

 into the hands of the person whose stock he purchased, who 

 with it pays a debt he owed to some banker, who lends it again 

 to some merchant or manufacturer ; and the capital being laid 

 out in hiring spinners and weavers, or carriers and the crews 

 of merchant vessels, not only gives immediate employment to 



