678 KEPOKT— 1889. 



may be called the utilitaviau arrangement, that which is productive of the greatest 

 sum total of advantage for all concerned. This utilitarian determination is clearly- 

 discerned to be by no means necessarily coincident with the settlement towards 

 which competition tends. For instance, the ' vrai prix,' in Condillac's sense, as 

 determined by the play of supply and demand in the labour market, might be 

 such that the entrepreneur class should take the lion's share, leaving the labourer 

 a bare and painful subsistence ; but there is no ground to believe that this is the 

 hest possible arrangement. From an abstract point of view it is by no means 

 evident that a free labour market ' is the only way to equity, that any interference 

 with it must involve injustice.'* Nor need it appear 'a great fundamental 

 principle — as inevitable in its action as gravitation — that a fair day's wages for a 

 fair day's lahour is determined by the proportion which the supply in the market 

 bears to the demand.' ^ It may be true indeed, in a practical sense, tbat perfect 

 competition is ' not less harmonious and beneficent in its operation than gravity ' ; ' 

 but theoretically it is tenable that there is an adjustment of contracts more bene- 

 ficent than that which the mechanical play of competition tends to establish (/). 



To introduce these philosophical conceptions of utilitarianism will doubtless 

 seem irrelevant to those who are immersed in the details of business. But the 

 practical man should be reminded that in other spheres of action, politics and 

 morals, the principle of utility, however badly received at first, has exercised a 

 great influence — though doubtless not so great as was expected by the theorists 

 of Bentham's school, and needing to be largely tempered with common sense. 



Such, I think, are the principal points at which mathematical reasoning is 

 capable of being applied to political economy. In estimating the use of this 

 method it is natural to take as our standard the helpfulness of mathematics in 

 other departments of science. 



As compared with mathematical physics, the mathematical theory of Political 

 Economy shows many deficiencies. First, there is the want of numerical data, 

 which has been already noticed. It is true that there is a faint hope of obtaining 

 what Jevons too confidently expected, statistical data for the relations between 

 demand and price. It is true also that in the higher mathematics conclusions 

 which are quantitative without being numerical are more i'requent than is usually 

 supposed. Some political economy is as exact as some mathematical physics. The 

 fields cultivated by Section A and Section F may overlap, but it must be ad- 

 mitted that the best part of our domain corresponds to what is the worst part of 

 theirs. If you enquire as to the products of our inferior soils, we must confess, if 

 we do not wish to conceal the nakedness of the land, that over a large portion of 

 our territory no crop is produced. We are employed only in rooting out the tares 

 which an enemy has planted. Much of our reasoning is directed to the refutation 

 of fallacies, and a great part of our science only raises us to the zero point of 

 nescience from the negative position of error. ' Sapientia prima stullitia caruisse.' 

 In this introductory portion of Political Economy we have seen that the mathe- 

 matical method is likely to be serviceable.* 



It is not to be supposed, however, that the work of our Sectien is wholly 

 destructive ; that like the islanders of whom it was said that they earned a pre- 

 carious livelihood by washing one another's clothes, so we are occupied only in 

 mangling each other's theories. Like imprudent sectaries, by our mutual recrimina- 

 tions we have obscured the virtues common to our profession. What Jevons said 

 of Cairnes, that his own opinions were much more valuable than his objections 

 against other people's opinions, is true of Jevons himself and other controversial 

 economists. Now, this possibility of mutual misunderstanding by persons who are 

 both in the right is connected with a circumstance which it is not irrelevant here 

 to notice. It is that in our subject, unlike Physics, it is often not clear what is the 

 prime factor, what elements may be omitted in a first approximation. One writer 

 on Rent may emphasise distance from the centres of population as the main attribute, 

 and introduce fertility of soil as a perturbation of the abstract result given by the 



' Danson. » Eupert Kettle on Arbitration. 



^ Walker, Political Economy. * See above, p. 676. 



