840 REPORT — 1892. 



SATURDAY, AUGUST 6. 



The following Papers were read : — 



1. Adam Smith and his Belations to recent Economics. 

 . B^j L. L. Price, M.A. 



There are difficulties in discussing the writings of Adam Smith, and it is not 

 easy to say anything new. Some rumours have been recently current of charges 

 of plagiarism, but these require special knowledge, if they are to be treated satis- 

 factorily, and are easier to advance than refute. It is more agreeable to indicate 

 some of the qualities which seem to have given the ' "Wealth of Nations ' its unique 

 place in economic literature. First among these should be ranked its literary 

 merits, and these are largely due to the strong motive by which the book is in- 

 spired. Adam Smith felt a passion for freedom, which has been ascribed to the 

 circumstances of his age, and considered by some critics to be now out of date. But 

 the argument for liberty has a perpetual application. Adam Smith appeals to the 

 layman as well as the economic expert, and the qualities which attract the one might 

 have been supposed to deter the otlier. But by writers of almost every school in 

 England he has been regarded as the parent of modern economics. In the genera- 

 tion after him Malthus and Ricardo, differing on method, agreed in ownino- his 

 teaching. At a later time representatives of the historical school, like Cliffe Leslie, 

 Lave highly esteemed him, and considered him an employer of the inductive 

 method ; and Professor Marshall has traced back to him the beginnings of the 

 theory of measurable motives, and regarded him as largely deductive. Nor is it 

 merely the central theory of value which may be found in germ in the ' Wealth of 

 Nations ' ; but it is surprising to find how close Adam Smith is to the latest results 

 of inquiry on the laws governing the distribution of wealth — on wages, on profits, 

 and even on rent. His exposition of free trade has been subjected to much able 

 criticism on various grounds, but he seized hold of the most important and endur- 

 ing arguments. His insistance on the true character and real functions of money is 

 a touchstone to which there are few protectionist arguments that can be brought 

 without destructive results to their validity. 



2. The Effects of Consumption of Wealth on Distrihution. By William 

 Smart, M.A., Lecturer on Political Economy in Queen Margaret College, 

 Glasgow. 



The most pressing question of economics is that of distribution. Its most 

 hopeful solution seems to be in the direction of distribution according to product, 

 as likely to give an equal rational basis for all kinds of income. Our recognition 

 of the current want of proportion between income and wealth produced is due 

 mostly to Socialist theory ; but as this founds it on a superficial theory of value, 

 we have to find another basis for its quite just conclusions. The first problem 

 stated. How is the contribution of each factor to product to be measured, consider- 

 ing that what has to be distributed is not product but value of product P But 

 another problem concerns, not the sharing, but the total value to be shared:— 

 1. Value is not in the producers hand; while production is going on value is 

 changing. Is it desirable that the wage earner should follow the change ? 2. In 

 virtue of the progress of invention and organisation the kst comer sets the pace for 

 his trade, reduces prices, and yet maintains wage. If reduced prices sweep away 

 the remuneration of those whose capital is fixed, how can the worker continue to 

 be paid the former wage ? 



These difficulties suggest, however, that distribution is not altogether dependent 

 on income received, but on the uses to which incomes are put. Consumption of 

 wealth, theoretically in our hands, practically is dictated by the merchant; the 

 importance of this as regards the disposition of social wealth ; the true meaning of 



