POLITICAL ECONOMY. 



: 



The imperative, which properly expresses a command, may 

 be used BO oa to imply a concession or pcrmiiuiion (imperativut 

 \ an, TOVTO tru Awy rtf 8^ fikov, let thii take ill 

 course a* God pleases. 



As a representative of tho imperative, you may, with a 

 softened import, employ tho HU!.. ;.tativo, 



with of, \vhc-n hr.-it:iti.i:i U intended. Sum tim<M :i ijn- 



:stoad of a command, aa in the phni >, au /t' taatit ; 

 won't you let me alone f 



POLITICAL ECONOMY. VII. 



BY J. E. THOROLD IIOOEU8, M.A. 



TAXATION AND PUBLIC DEBTS. 



IT ia very rarely tho case that a Government makes a direct addi- 

 tion to the wealth of tho community whose affairs it administers. 

 It is seldom tho case that, oven when it can do so, it is expe- 

 dient for it to make tho attempt. But there are occasions when 

 it may undertake this duty. For example, the sovereigns of 

 Ceylon or Candy, who ruled that island before Europeans got 

 possession of it, constructed huge tanks for purposes of irriga- 

 tion, and thereupon conferred a great benefit on the country. 

 It is to tho discredit of the British Government that these arti- 

 ficial lakes have boon suffered to go to ruin. So, in tho present 

 generation, tho British Government in India has constructed 

 railways. On the Continent, tho railways have partly been 

 mado by Government ; in tho United Kingdom, they have been 

 a product of private enterprise. Tho fact is, there aro great 

 works of public utility, which individuals cannot singly effect. 

 In order that a community should possess them, either indi- 

 viduals must associate, or Government must undertake the 

 duty. Tho extent to which the aid of the hitter is required 

 denotes the weakness of the joint-stock principle in the former. 

 There is an advantage in dispensing with the immediate action 

 of Government to tho greatest possible extent. A community 

 which is able to manage industrial operations of tho largest 

 kind by its own power of voluntary organisation, has developed 

 its civilisation to a greater extent than one whose power 

 of such organisation is weak, because the former has developed 

 those moral qualities which aro an antecedent condition of all 

 corporate or combined action. The essence of these associa- 

 tions is mutual trust or credit, and credit is tho mainstay 

 of industrial civilisation. 



But though thcso works aro not and should not be, except to a 

 very limited extent, the province of Government, there aro certain 

 functions which can be performed by nothing but an adminis- 

 tration. Tho public authorities of a country must provide tho 

 means of defence against foreign foes and domestic enemies ; 

 mast administer law ; must define rights ; must correct wrongs ; 

 must, in general, protect the weak against the strong. In tho per- 

 formance of these duties, the State is, or is supposed to be, wholly 

 disinterested, just, impartial, as well as competent to execute or 

 enforce the decisions at which it arrives. It is not difficult to 

 see tho reason why all these functions aro interdicted to pri- 

 vate individuals and conferred on Government. Society would 

 become a chaos if everybody were constrained to defend himself 

 against wrong ; such, indeed, is the condition of the very 

 lowest savages. But the private vindication of rights would 

 lead to intolerable wrong-doing, for there is hardly any person 

 who is a competent judge of his own right when his private 

 interest clashes with that of another. Men who wish to bo just 

 and fair take very various views of what is just and fair to 

 themselves and to their neighbours, and therefore need a per- 

 manent tribunal to which they may appeal in order to settle a 

 difference, the adjudication of which they aro utterly incompe- 

 tent to supply by themselves. So thoroughly is this understood, 

 that even an indolent or partial administration is bettor than no 

 administration at all ; and men will submit to tho tyranny 

 or caprice of one man, rather than risk tho disorder and con- 

 fusion which would ensue were all authority abrogated. 



The functions of Government, then, arise from a real and 

 permanent necessity. An administration is only another 

 illustration of the need that there exists for tho division of 

 labour or employments ; only that in this cose tho need is 

 marked, urgent, and continual. A Government exists for tho 

 public good, and ia perpetually tried by this standard. Ages 

 ago, it was thought a paradox of tho great Greek philosopher, 



when he said that the governor has only one object, and * 

 have one only the good, namely, of those he governs. Up to 

 within comparatively recent times, people have frequently spoken 

 of tho hereditary, inalienable, or divine right* of r*^*"'tr 



individual* in particular families, and of other men *M*"f *>u4r 

 natural or necessary subjects. Bat thu language is BOW be- 

 coming obsolete, not because men are leM loyal to the frrrtrhi 

 lions under which they live, but beoMue they have beeome 

 competent to interpret the reason why these fowtihitioat are 

 maintained. There is nothing which rivet* the attachment of a 

 people to ita government BO closely, an the clear apprehension 

 that great and enduring benefits arise from its action, and ttmt 

 these are capable of being rationally expounded. And it may 

 be added that no science baa contributed so much s. j irishnvpt 

 towards interpreting the real (significance of Government as 

 Political Economy, because it baa always detected and ex- 

 posed those false theories by which the general beneficence 

 which Government purposes haa been perverted to the selfish 

 interests of particular classes in the community. The political 

 economist has taught mankind that obedience is due to autho- 

 rity, because tho very existence of society, with the enormous 

 advantages which accrue to the individual by his connection 

 with a civilised society, lepends on order. 



But, like any other service which ia of value to man, the ser- 

 vice which Government renders is costly. The benefits of order 

 and civilisation are not obtained without sacrifice, and the sacri- 

 fice must be submitted to. An administration may call upon the 

 members of a community to give their labour. In England, the 

 highest function that of debate and legislation ia performed 

 gratuitously. So, in great measure, another very important 

 service that of giving a judicial decision on facts and motives 

 is performed by unpaid jurymen, who are liable to conscription 

 for this end. In theory the State still claims (what a few 

 years ago it enforced in practice), the right, namely, of compel- 

 ling seamen to serve in the navy, if a publio necessity super- 

 vened. Nor has the State renounced indeed, it could not 

 renounce the right of calling on all the inhabitants of a 

 country to tako up arms at their own charges in order to 

 supply the means for public defence. Again, there have been 

 times in which labourers have been impressed for the perform- 

 ance of publio works. Tho corvee a custom which prevailed in 

 France before tho Eevolution, by which the peasantry were con- 

 strained to render BO many days' annual labour to tho repair 

 of the public roads, and which was odious because it waa a 

 partial impost had its counterpart in this country. Tho mili- 

 tary systems of France and Prussia, by which the males of these 

 respective countries aro required to furnish either a quota to 

 the army, or to uniformly undergo military training, are similar 

 examples of the payment of Government expenditure in kind, or 

 by contributions of compulsory labour. In this country, for the 

 most part, people contribute in money to the expenses of the 

 State, but each kind of contribution is equally a tar. And 

 generally it may be said, that the form of payment with which 

 we are familiar that of a money contribution is the least 

 onerous charge, or at least that which is least likely to inter- 

 rupt those industrial energies which are characteristic of the 

 United Kingdom. 



A tax, then, is a contribution which tho community pays to Go- 

 vernment, in order that certain services may be performed which 

 joint-stock enterprise could not supply, and private interests 

 would not adequately comprehend and satisfy. As the service 

 which the State renders is universal, tho contribution should bo 

 universal also. If everybody is benefited by tho outlay, every- 

 body should do his part towards meeting the charge imposed. 

 Such a proportionate payment must be regulated by tho resources 

 at the command of the person who is liable to tho claim. People 

 are not to bo taxed according to their comparative weakness or 

 strength. A woman or a child appear to enjoy more protection 

 at tho hands of society than a vigorous and active man does ; 

 but, in reality, the difference between tho two, in point of weak- 

 ness and strength, when estimated by the protection which 

 society confers on both, is not considerable. Tako away tho 

 securities to labour and property which tho police of society 

 provides, and tho strong man is as helpless as a child as much 

 paralysed as if ho had suddenly been bereft of his strength. 

 The more abundant tho resources which a person has when 

 a Government gives efficient guarantees of order, tho more 

 indebted u he to the organisation which confirms him in tha 



