| |
| 经济学家日历：纳骚·威廉·西尼尔 |
作者： 发布时间：2007-11-25 15:13:09 来源： 点击数：21
|
Nassau William Senior
(September 26, 1790 - June 4, 1864)
Nassau William Senior 1790–1864
Biography
Senior, a leading economist of the Classical school, was in turn a barrister, the first professor of political economy at University of Oxford and an eminent adviser to successive British governments on foremost issues of economic and social policy.
Of Spanish Jewish descent, Senior’s grandfather was a prosperous merchant engaged in the West Indian sugar trade; his father was a Church of England clergyman with livings in the diocese of Salisbury. Senior had an education as fine as any aristocrat’s: first at Eton where his tutor was John Bird Sumner, later archbishop of Canterbury, then at the age of sixteen he was awarded a Demyship (a scholarship with a right to a fellowship when vacant) at Magdalen College, Oxford. He failed his BA degree through not learning by rote the answers to theology questions but at a second sitting through severe coaching by Richard Whately, afterwards archbishop of Dublin and a popular economist, he obtained first class honours and was granted a fellowship in 1812. He entered Lincoln’s Inn and became a pupil of Edward Sugden, later Lord St Leonard and Lord Chancellor, and was called to the bar in 1819; subsequently he acquired much of his master’s lucrative conveyancing practice.
Senior’s long writing career began with articles in the Quarterly Review in 1821. In a discussion of the Corn Laws he outlined his views on economics; in three articles on Sir Walter Scott he manifested the breadth of his interests. This literary involvement had two consequences. He was nominated by the retiring editor of the Quarterly to succeed him, although not chosen. Also he was elected, on the recommendation of James Mill, to the Political Economy Club in February 1823, remaining a member until December 1849. Senior’s ability as an economist was soon recognized in his appointment in 1825 as the first Drummond professor of political economy at Oxford University. The chair was endowed by a banker, Henry Drummond, a neighbour at Albury of Malthus, to provide an annual income of ?00. Whately in a letter to Mrs Arnold wrote of Senior that he was
… a man of the highest talents and most varied tastes and acquirements, who drudged at conveyancing for his livelihood; and, I may add, had leisure hours for the study of political economy and literary criticism… [Whately, 1866: II, 93]
Senior began his lectures on 6 December 1826. During his first five year tenure of the chair he delivered thirty-eight lectures in four courses, while continuing with his legal practice. He was succeeded to the chair by Whately.
A visit to Paris in 1830, after that year’s French Revolution, began his long association with France. Widespread rural unrest in southern England prompted him to write on the theory of wages, as an explanation of the difficulties of the labouring classes, manifesting his deep interest in many social and economic policies. Crucial to Senior becoming a leading adviser to the government was his extensive social acquaintance with many leading politicians, including Lords Althorp, Lansdowne, Brougham and Sydenham whom he knew through practising the law and participating in the proceedings of the Political Economy Club.
In November 1830 his role as advisor became more formal when Lord Melbourne, the new Home Secretary, asked him to enquire into the state of combinations (trade unions) and strikes with a view to legislative reform. Senior believed that combinations led to a deterioration in wages and working conditions. The form of legislation Senior recommended was a replacement of the common law to recognize ‘... the property of the working man in his strength and skill...’ [Senior 1865: II, 121] and to allow local districts to compensate injured workmen.
Senior’s next assignment was to advise Lord Howick, son of the prime minister Earl Grey, on the poor laws in Ireland. The view that the Anglican establishment in Ireland should part with some of its revenues to help the Irish Roman Catholic church was personally costly for Senior. He had been appointed professor of political economy at King’s College, London in 1831 but that very Anglican establishment, enraged by Senior’s sympathy for Catholics, swiftly dismissed him.
Extensive rural unemployment and a cholera outbreak in 1831, with the consequential pressure on poor law administration and rural riots, prompted the government to investigate the whole issue of the poor laws. In February 1832 a Royal Commission was appointed consisting of Charles J. Blomfield (bishop of London), John Bird Sumner (then bishop of Chester), W. Sturges-Bourne MP (chairman of a Parliamentary Committee on the Poor Laws 1817), Senior, and his friends Walter Coulson and Henry Gawler. Senior also had a strong influence on the Commission as half of the sixteen Assistant Commissioners were his close friends. He assumed a major role in deciding the philosophy of, and shaping the amendment to, the poor laws in 1834. In a letter to de Tocqueville of 18 March 1835 Senior stated:
The Report of the Poor Law Commissioners, or at least 3/4ths of it, was written by me, and all that was not written by me was re-written by me. The greater part of the Act, founded on it was also written by me; and in fact I am responsible for the effects, good or evil… of the whole measure…
The Poor Law Amendment Act of 1834 enshrined Senior’s thinking, although the Government was cautious about implementing all the proposals of the Royal Commission.
With the poor laws reformed, Senior returned in 1835 to Irish matters in his anonymous pamphlet On National Property and on the Prospects of the Present Administration and of their Successors. The following year Lord Melbourne’s government appointed Senior a Master in Chancery at an annual salary of ?,500: this considerable increase in his income enabled him to travel frequently on the Continent. He held the office until 1853 when the office was abolished. In 1837 he also took up an interest in the effect of the Factory Acts in reducing working hours. A tour of the north of England provided him with information; a paper to the Political Economy Club gave him an opportunity to expound his theory that manufacturing profits arise from the last hour of work. However Senior’s arguments in his Letters on the Factory Act failed to convince: in 1847 a Whig government passed the Ten Hours Law. In that year Senior’s involvement in public affairs was also extended by his appointment as a leading member of a Royal Commission to inquire into the condition of handloom weavers. The Commission took four years to reach the bleak conclusion that no help should be given through tariff protection or other means to a declining industry.
In 1841 Senior became a regular contributor to the Edinburgh Review, beginning with the budget of 1841 which had been defeated for its free trade stance, then writing again on the poor laws. His fame in France brought him a corresponding membership of the Academy of Moral and Political Sciences of the French Institute in 1843. His contributions to current debates also appeared in articles for the London newspapers the Globe, Morning Chronicle and Examiner; moreover he wrote leading articles for the Economist. He also extended his literary output to cover reviews of novels and comments on current political debates in England and France. The production of a solid ‘Principles of Economics’, like the compendium of his contemporary John Stuart Mill, eluded him as the more ephemeral task of producing lectures recurred with his re-election in 1847 to a second five-year term as Drummond Professor of Political Economy; also his work as examiner in both law and political economy at the University of London, continued until 1860. In 1857 he failed to obtain a third period as Drummond professor.
As his academic and legal responsibilities declined, Senior embarked on extensive travels, mainly to France where he had an extensive political acquaintance, especially with Alexis de Tocqueville. In visits to Ireland in 1852, 1856, 1858 and 1862 Senior discussed the Irish situation with his lifelong friend Richard Whately and with his brother Edward, a Poor Law Commissioner in Dublin. His furthest journeys were to Egypt, Greece and Asia Minor. The conversations he had with the great and the good were carefully recorded and later published: in them literary and political observations abound but economic discussions are rare.
The last policy issue to concern Senior was education. His interest arose from his investigation of the poor laws. Visits to workhouses convinced him that the antidote to much pauperism was state education outside of the debilitating ambience of the workhouse. In 1858 he was appointed a member of a Royal Commission on the state of popular education in England. Transcripts of the oral evidence and Senior’s own submissions show him to have been more progressive than his fellow commissioners. Robbins credits Senior with having paid more attention to educational problems than other classical economists, recognising a child’s right to be educated and the State’s duty to provide education. [Robbins 1968: 79]
Senior is important in the history of economics for his development of economic theories and policy analysis. He had strong views on the methodology of the subject, pioneered the notion of abstinence as a justification for profits, presented a value theory based on utility, redesigned the Poor Laws and contributed to contemporary debates on Ireland and education.
Economic Methodology
As has long been the practice of professors, in their inaugural lectures they raise issues of the methodology of their subject, especially if the professor is the first holder of the chair. His 1826 address to the University of Oxford clearly stated his view that political economy should explain differences in wealth between countries and over time. To do this the two branches of the subject need to be considered:
The first, or theoretic branch, that which explains the nature, production, and distribution of wealth, will be found to rest on a very few general propositions, which are the result of observation, or consciousness, ... the practical branch of the science, that of which the office is to ascertain what institutions are most favourable to wealth ... Many of its premises, indeed, rest on the same evidence as those of the first branch; for they are the conclusions of that branch: – but it has many which depend on induction from phenomena, numerous, difficult of enumeration, and of which the real sequence often differs widely from the apparent one. [Senior 1827: 7–8]
For the most part it seemed that Senior was to practise an empirical, positive science, although he allowed another source for economic theory – ‘consciousness’ – which enables a priori reasoning to be used.
Senior also wanted to demonstrate that political economy is a moral science: by showing how to accumulate and diffuse wealth the subject adds to moral improvement [Senior 1827: 12–13]. He was confident that the considerable contemporary poverty could be alleviated by the application of the principles of his science.
‘Commonsense’, he observed, is a faulty guide in economic matters, as the examples of mercantilism and Napoleon’s protectionism show. Instead what is needed is a political economy based on a few general propositions:
Firstly. That wealth consists of all those things, and of those things only, which are transferable; which are limited in quantity; and which, directly or indirectly, produce pleasure or prevent pain: or, to use an equivalent expression, which are susceptible of exchange; (including under exchange, hire, as well as absolute purchase;) or, to use a third equivalent expression, which have value.
Secondly. That every person is desirous to obtain, with as little sacrifice as possible, as much as possible of the articles of wealth.
Thirdly. That the powers of labour, and of the other instruments which produce wealth, may be indefinitely increased by using their products as the means of further production.
Fourthly. That, agricultural skill remaining the same, additional labour employed on the land within a given district, produces a less proportionate return. And,
Fifthly. That the population of a given district is limited only by moral or physical evil, or by deficiency in the means of obtaining those articles of wealth, or, in other words, those necessaries, decencies, and luxuries, which the habits of the individuals of each class of the inhabitants of that district lead them to require. [1827: 35–6]
These propositions are based on empirical study, excepting the second which depends on introspection, although of a psychological nature so as testable as the others. The fourth proposition showed Senior’s acceptance of the popular classical view that agricultural production is subject to diminishing returns. However, the first and fifth propositions reveal Senior’s dissenting stance. Value is to be related to scarcity and utility, not labour; population growth is determined by more than subsistence and the checks expounded by Malthus. It is not surprising that Senior sees himself following Jean-Baptiste Say, with some help in logic from Whately, rather than Adam Smith. Bowley, in her careful study of Senior’s methodology, praises this use of postulates:
… the most significant difference between his treatment of method and that of most of his predecessors. Not merely were they selected so as to cover all at once the main phenomena which could affect economic data, but he went into their validity and universality with the greatest care. [Bowley 1936: 287]
Schumpeter applauded Senior, too, for being the first to put economic theory on an axiomatic basis [Schumpeter 1954: 575].
The notion of political economy as a hypothetical science lacked appeal to Senior and was a reason for the distance between him and leading classical economists. He wrote
… neither the reasoning of Mr Mill nor the example of Mr Ricardo might induce us to treat Political Economy as a hypothetical science [1848: 302]
for three reasons. Such reasoning is unattractive compared with what actually took place; economists employing this method forget the unsubstantial foundations of their reasoning as Ricardo did when discussing rent; a hypothetical approach is likely to cause errors through illogical inferences or omission of necessary incidental conditions. But Senior did grudgingly admit that hypothetical examples could clarify concepts and adds the waspish comment,
The absence of such illustrations is one of the great defects of Adam Smith: though perhaps this very defect contributes to the popularity of his work. [1848: 304]
Senior’s discussion of the nature of political economy was expanded, but not significantly altered, in his Outline of the Science of Political Economy (1836; 1938 reprint). The emphasis of the subject is still the nature, production and distribution of wealth to avoid having to consider within political economy a study of government, legislation and social conditions. Again he asserts that economics is based on a few propositions:
The business of a Political Economist is neither to recommend nor to dissuade, but to state general principles, which it is fatal to neglect, but neither advisable, nor perhaps practicable, to use as the sole, or even the principal, guides in the actual conduct of affairs. [1938: 3]
which suggests that political economy had a limited role in advising governments. In his late Four Introductory Lectures on Political Economy (1852), he argues that the principal application of political economy is in the ‘art of government’ as it can indicate the probable effects of taxation and public expenditure (p. 10) and that great political issues such as protection of agriculture, free trade and paper currency are discussed according to economic principles.
Senior realized contemporary political economy was too undeveloped to claim its position among the sciences. Political economy as a science ‘states the laws regulating the production, accumulation, and distribution of wealth’ [1852: 52] and
The time I trust will come, perhaps within the lives of some of us, when the outline of this science will be clearly made out and generally recognised, when its nomenclature will be fixed, and its principles form a part of elementary instruction. [1852: 52–3]
He thought that despite the great contributions of Turgot and Ricardo to the creation of pure science the subject needed to be stated in a form with ready applications.
In his second tenure of the Drummond chair of political economy, Senior considered again the nature of his subject. Again a French writer is the source of his stance but it is Quesnay rather than Say; Adam Smith is generously praised for his broad and accurate knowledge.
Value
The first issue which arises from Senior’s view of his subject was value. He believed that value is conditioned by utility, transferableness and limitation in supply. Utility is ‘…no intrinsic quality in the things which we call useful; it merely expresses their relations to the pains and pleasures of mankind’ [Senior 1938: 7]. The most important condition is limitation of supply as it determines relative value.
Value denotes a relation reciprocally existing between two objects, and the precise relation which it denotes is the quantity of the one which can be obtained in exchange for a given quantity of the other. [Senior 1938: 14]
This leads him to attempt a demand and supply analysis, defining the former as ‘the utility of a commodity’ and the latter as ‘the quantity of a commodity actually brought to market’ [1938: 15]. To emphasize his anti-Ricardian position Senior mentions that for very few articles of wealth is labour the principal determinant of value; scarcity (‘limitation of supply’) determines the value of both labour and its products [1938: 24]. However the extent to which the cost of production regulates price depends on the degree of monopoly: it is the regulator under free competition [Senior 1938: 102].
Senior is a transitional figure in the theory of value. The ancestry of utility theories of value has occasioned much debate. Schumpeter reluctantly agreed with Walras that it was Senior who established the notion of marginal utility [Schumpeter 1954: 600]. In his exposition of the law of diminishing marginal utility he was a precursor of Jevons, as Marshall recognized [Marshall 1920: 77n.]. Although Senior did not go as far as Marshall, he laid much of the foundation of future price theory. As Bowley explains [1937: 98–100] Senior was able to relate demand to cost of production in an equilibrium analysis by considering five cases distinguished by the degree of monopoly present in the production of each commodity.
Distribution
Senior’s treatment of rent, profits and wages indicates both his departure from Ricardian economics and his own originality, especially in the treatment of profits.
Like Ricardo, Senior began his analysis of rent with the assumption that agricultural production is characterized by diminishing returns as an increase in production leads to the use of less fertile land. But he admitted exceptions to this universal principle: drainage schemes, changes in the title to estates permitting longer leases which make land improvement more attractive and, most importantly, labour skills which increase agricultural productivity [Senior 1938: 86–7]. He suggests that rent can be defined as
…the surplus produce arising from the use of an appropriated natural agent, or the amount by which the price of the produce of an appropriated natural agent exceeds the costs of its production. [Senior 1938: 135]
By using this principle, Senior is able to refute the central Ricardian assertion that rent arises only from land being progressively infertile: without a surplus, rent cannot be paid.
The particular contribution Senior makes to rent theory is to generalize the concept of rent to other factors of production. He does this by considering rent as a surplus not arising from any sacrifice of labour or abstinence:
The payment made by a manufacturer to a patentee for the privilege of using the patent process, is usually termed, in commercial language, a rent; and under the same head must be ranked all extraordinary qualities of body and mind. The surplus revenue which they occasion beyond average wages and profits is a revenue for which no additional sacrifice has been made. [Senior 1938: 91]
Instead of having a class theory of distribution with landlords, capitalists and labourers respectively receiving their peculiar rewards as rent, profits and wages, the capitalist initially receives all the revenue from production and pays out of it rent and wages [1938:94]. But what Senior failed to do was to extend the marginal analysis inherent in his notion of the rent of land to the other factors of production.
Senior is widely praised for his abstinence theory of profits and has few precursors, with the possible exception of Storch [Bowley 1937: 144]. In his Outline of the Science of Political Economy where the theory is expounded, abstinence is defined as
… the conduct of a person who either abstains from the unproductive use of what he can command, or designedly prefers the production of remote to that of immediate results. [Senior 1938: 58]
and exalts abstinence to the status of the third productive principle, after labour and natural agents. Thus abstinence is used to replace the concept of capital. Abstinence is costly because it requires self-denial. The example of storing wine is used to show that after other costs have been met the remainder of the price of wine is profit, the consequence of abstinence. After discussing the different Smithian and Ricardian reasons for distinguishing fixed from circulating capital, Senior suggests capital should be classified as reproductive (e.g. farm animals and coals in a furnace), simply productive (instruments which produce something different, e.g. a lace machine) and unproductive (e.g. gold or jewellery which yields a profit through being retained for a period of time). Capital makes possible the use of implements and the division of labour. Also Senior was keen to refute the central Ricardian idea of an inverse relationship between wages and profits by quoting his empirical finding that high wages and high profits are compatible.
Commentaries on Senior’s theory abound. Marx dismissed abstinence in the course of dismissing the claim of the capitalist to remuneration:
… whatever the merits of his abstinence there is no money there to recompense him, because the value of the product is merely the sum of the values thrown into the process of production. Let him therefore console himself with the reflection that virtue is its own reward. [Marx 1976: I, 299]
Schumpeter notes that Senior’s abstinence is similar to Adam Smith’s parsimony or frugality but that Senior had brought ‘an existing doctrinal tendency to a head’ [Schumpeter 1954: 639]. Blaug recognizes the shortcomings of Senior’s theory: it was a theory of the supply of savings rather than a complete theory of interest and it ignored individual differences in the disutility of saving but in essence contained the notion of time-preference. [Blaug 1978: 201–02].
The central concern of Senior in his discussions of wages was an exposition of the wages fund doctrine. His traditional stance on this question is evident in his Three Lectures on the Rate of Wages (1831), where he seeks to show that the wage rate depends on the extent of the wages fund relative to the number of labourers. If machinery is introduced, then there is a temporary reduction in the wages fund with fewer funds available for employing and paying workers but in the long run the general rate of wages will rise or remain the same, unless there is a limited demand for the machinery’s output. The cure for unemployment suggested is emigration, rather than a fall in wages which could be a consequence of wages fund doctrine. Also Senior was keen to emphasize that wages are essentially the consequence of a bargain between employer and worker, each attending to his own welfare. Individual workers can improve their wages, measured in terms of the amount of commodities they can purchase, by working harder for longer hours.
Senior’s Outline is full of observations about the determination of individual wages. Unlike Adam Smith he is sceptical about the forces of competition bringing about the equalization of remuneration for the same type of labour in a particular place. But like Smith the wages fund doctrine is central to his theory of wages. Realizing that the wages fund depends on both the productivity of labour and the number of persons producing wages fund goods compared with the total number of labouring families, Senior sets out the determinants of productivity which he ascribes to four causes: (1) the diligence, skill and strength of labourers, (2) the climate, soil, situation and extent relative to the population, of natural agents, (3) the extent to which capital is used, and (4) the amount of government interference. The effect on wages of a landlord being absent from his estate is argued to be minimal. Contrary to Ricardo, Senior asserts that it is better for labourers to be employed in producing goods than services as their product adds to the wage fund on which their subsistence depends.
Money and International Trade
It was Senior’s practice to consider these two topics jointly. In his Three Lectures on the Transmission of the Precious Metals from Country to Country (1828). With an assumption of free trade, justified by Adam Smith’s absolute advantage theory that international trade is based on a worldwide application of the division of labour principle, Senior considers the effects of successful exporting on the flow of currencies and then on domestic prices of the exporting country. Using the familiar price-specie flow mechanism previously outlined by David Hume and others, Senior states that a balance of payments surplus is temporary. Exchange rates fluctuate around a stable level with the single exception of mining countries which can permanently have favourable balance of payments and exchange rates. From this simple original position Senior then goes on to explain how a convertible paper currency is more convenient for discharging domestic and international obligations. As commercial confidence is essential to the working of a paper currency system, he explains the nature of banking crises, with 1825 as a pertinent example. His analysis leads him to denounce the mercantile system, with its recommendations that a country keeps its balance of payments in surplus, practises protection, which makes all nations poorer, and treats money as wealth.
In his Three Lectures on the Cost of Obtaining Money (1830), Senior begins with a discussion of the value of wages in different countries and emphasizes ‘the portableness of the precious metals and the universality of the demand for them render the whole commercial world one country, in which bullion is the money and the inhabitants of each nation form a distinct class of labourers’ [1830: 14]. Britain’s industry with its superior productiveness enables it to obtain precious metals at less than the average cost throughout the world. Protection, on the other hand, diminishes the market for English goods, increases the cost of obtaining precious metals and lowers producers’ incomes. Turning to paper currency, Senior asserts that its issue has an effect similar to the mining of precious metals as it is a creation of money. But its excessive issue would raise prices, making exports less attractive to foreign countries and imports more appealing to the domestic economy making the balance of payments more unfavourable. This process would cease when the export of metallic money to finance the unfavourable balance ceased. Then, according to the familiar price-specie flow analysis, the outflow of bullion would bring prices down again. Senior notes that the Directors of the Bank of England were restrained in their note issue during the period of Restriction. He contrasts the prudence of those making private currency issues, like the Bank of England, with the extravagance of governments such as the French which approved the eighteenth century John Law and assignat schemes. Examples from Austria and Denmark also confirm that England managed its inconvertible currency in a responsible way.
In 1829 Senior also lectured on money, eventually publishing them in 1840 as Three Lectures on the Value of Money. He uses a multi-stage explanation of the value of money, beginning with the simplest of economies where there is mainly barter. He analyses in detail the determinants of the proportion of income an individual holds in money. As the economy becomes more advanced a quantity of money is turned over in a shorter time period. He then completes his demand and supply analysis by considering what proportion of gold produced is available. Any permanent change in value can only be effected by a change in the cost of producing gold. The introduction of a paper currency diminishes the demand for gold and makes it unprofitable to work many mines. There would be a fall in the value of precious metals which would make it more attractive to have gold and silver plate. There would be a rise again in the value of precious metals. In the long term the amount of precious metals produced would depend on the joint demand for precious metals to be used as money and plate. If Mexico is the silver producer and it increases its demand for European and Asiatic commodities then it would have to export more silver to pay for them. Mexican prices and wages would fall but European and Asiatic labour would command in exchange more Mexican labour. Senior also notes that as gold is largely produced by unskilled labour but silver production needs skilled labour and more capital, silver is likely to fall in value as a consequence of technological progress.
Senior last turned to considering money in a review of Lord King’s writings for the Edinburgh Review in 1846. Senior examined King’s three tests for the depreciation of the currency during the period of restriction of cash payments – the comparison of the market and mint prices of bullion, the fall in the sterling exchange rate and domestic price inflation. King, Senior asserts, failed to use these tests properly, particularly in not appreciating the economic data of the time but was right in thinking that in the long run paper currency should be convertible into specie.
In some respects there was a similarity between his theories and Ricardo’s on money and international trade. For example, Senior assumed that land was not a separate factor of production and that factors were immobile between countries. However, as Senior had broken free from labour theories of value with his utility-based value theory, he was able to apply a demand and supply approach to the determination of international values and seems to have inspired John Stuart Mill’s famous chapter on that subject [Bowley 1937: 234].
Population and the Poor Laws
His first clear statement of his views on population appears in his Introductory Lecture and is quoted in his lectures on population:
That the population of a given district is limited only by moral or physical evil, or by deficiency in the means of obtaining those articles of wealth; or, in other words, those necessaries, decencies, and luxuries, which the habits of the individuals of each class of the inhabitants of that district lead them to require. [Senior 1829: 2]
By discussing different patterns of consumption he can go on to show that ‘subsistence’ has different meanings in different societies. In a detailed discussion of Malthus’s geometrical progression of population and arithmetical progression of the means of subsistence he generally agrees with the former and attributes the slower growth of the latter to diminishing returns in agriculture. Of the checks to population growth, he ranks highly the instinct to be prudent so that one’s position in society is not threatened:
… habits of considerable superfluous expenditure afford the only permanent protection against a population pressing so closely on the means of subsistence… as a nation advances in opulence, the positive checks are likely to be superseded by the preventive… the evil of a redundant population… is likely to diminish in the progress of improvement. [1829: 34–5]
In a civilized society there is an increase in the means of subsistence; only under misgovernment is there a tendency for population growth to outstrip subsistence.
Immediately after the publication of the Two Lectures on Population Senior and Malthus debated their differences on the population issue. Malthus disputed Senior’s view of subsistence. They reached a compromise agreement in the form of stating that
… no plan for social improvement can be complete, unless it embrace the means both of increasing production, and of preventing population from making a proportionate advance. The former is to be effected chiefly by the higher orders in society; the latter depends entirely on the lower. As a means of improvement, the latter is, on the whole, the more efficient. [Senior 1829: 90]
In his Outline (1836; 1938 reprint) he explained his classification of goods as necessaries, decencies or luxuries and stated that it was the fear of losing decencies which checked population growth [1938: 38] and avoided a population crisis as
… knowledge, security of property, freedom of internal and external exchange, and equal admissibility to rank and power, are the principal causes which at the same time promote the increase of subsistence, and, by elevating the character of the people, lead them to keep at a slower rate the increase of their numbers. [Senior 1938: 49]
The many impediments to emigration, he asserted, make it irrelevant to solving an over-population problem.
A later comment on the population issue shows Senior had even less in common with the central Malthusian predictions. He noted that increased poverty usually occurs when population is falling and that
… the increased demand for food and the increase of population are usually accompanied, or rather preceded, by improvements in production which occasion the increased quantity to be obtained, not at a greater, not merely the same, but actually at a less proportionate expense of labour. [Senior 1848: 319]
Senior, like Malthus, inevitably saw the Poor Laws as part of the population problem. Any help to the poor could encourage them to expand their families and add to the excess of population.
In a lecture of 1828 on the Corn Laws and Poor Laws Senior made clear what was to be his lifelong objection to the Poor Laws:
To weaken and often I fear to destroy, the industry, the providence, the self-respect and the social affections of the labourer. To reduce him, in fact, to a slave fed not according to his merits but his wants; paid for his services not because they are valuable but because they must be accepted. [Levy 1970: 233]
He amplified this view in a letter to Lord Brougham, then Lord Chancellor, on 14 September 1832 [Levy 1970: 247–54], reporting that the Allowance System which used the local rates to supplement wages was not confined to southern England but was extensive throughout England and Wales and had a corrupting influence on workers:
He need not study to please his master, he need not bestir himself to seek work, he need not put any restraint on his temper, he need not ask relief as a favour, he need not fear that his idleness, or drunkenness will injure his family – he has in short a slave’s security for subsistence without his liability to punishment. [Levy 1970: 248]
Senior recommended the establishment of well-regulated workhouses as a means of reclaiming pauperized parishes and questioned the merit of continuing with the Law of Settlement which sent paupers back to their original parishes. In a further letter to Brougham of 7 January 1833 [Levy 1970: 255–62] he recommended a Central board and inspectors, and pauper relief financed out of a property tax.
The Royal Commission reported in 1834. Its central recommendations followed Senior’s views in confining relief for the able-bodied to the workhouses and creating a central board to administer the Poor Laws whose powers included the amalgamation of parishes for workhouse management purposes. Parliament was cautious in its implementation of the report. It limited the operation of the Act to five years and would not give the Commissioners powers to dissolve local corporations to form convenient unions of parishes, to compel the provision of workhouses and to appoint auditors of parish and union accounts [Nicholls 1904: 271].
Part of Senior’s tasks as a member of the Royal Commission was to make an international survey of the provision for the poor. His findings, published as Statement of the Provision for the Poor and of the Condition of the Labouring Classes in a Considerable Portion of America and Europe (1835) concluded that with the exception of the canton of Berne, Switzerland there was no compulsory poor relief in foreign countries producing the effects evident in England. Replies to questionnaires from nine of the United States of America and from twenty European countries showed that population was regulated according to demand for labour:
… by subjecting the labouring classes… to strict regulation and control, by restraining their marriages, forcing them to take service, and prohibiting their change of abode unless they have the consent of the commune in which they wish to settle… in the countries which have not adopted the compulsory system the same results are produced without interference or restriction. [Senior 1835a: 205]
In an anonymous pamphlet under the pseudonym of ‘A Guardian’ in 1841 Senior explained why it was essential to abolish the allowance system. The allowances necessitated poor rates which meant that it was unprofitable to take out leases on land even at low rents. Uncultivated land and a demoralized population demanding more and more resulted in rural unrest. Both the number of paupers and their misery increased. Thus the system of a Central Board and assistant commissioners had to be retained with no return to the parish system.
Later in a conversation during travels to France and Italy in 1850, he summed up his views on the poor law:
… a poor-law is an engine of enormous power both for good and evil; that the security it gives to the poor man that neither he nor his wife nor his children shall starve is a great tranquilliser; but that the indefinite claim on property which it gives to those who have none is a great irritant… [Senior 1871: I, 276]
Senior’s contribution to poor law reform has been frequently examined. Robbins noted the principal difference between Senior’s views and the concept of the welfare state in Britain by the 1970s was in the form of relief for the able-bodied and their dependents: Senior wanted them worse off than the employed through following the Principle of Less Eligibility [Robbins 1976: 128–9]. Boyer has less praise for Senior’s contribution to poor law reform, having discovered that Senior and his fellow commissioner Edwin Chadwick ignored much of the evidence with the result that their recommendations on outdoor relief did little more than expand the 1817 House of Commons Report on the Poor Law [Boyer 1990: 61]. Nevertheless Senior made a permanent mark on English social policy.
Ireland
This explosive policy issue of the mid-nineteenth century was to recur many times in Senior’s writings. The personal connections with the country in the form of his brother’s residence there and the appointment of his university tutor Richard Whately to the archbishopric of Dublin enabled him to test his theories on the ground. He was keen to discuss policy within the broad context of Catholic Emancipation rather than with the narrow focus of helping the Irish poor.
In 1831 he published his advice to the government in A Letter to Lord Howick on a Legal Provision for the Irish Poor based on evidence to the Committee on the State of the Poor in Ireland and a pamphlet of Dr Doyle. Senior noted that most of the Irish population had avoided extreme poverty as the subsistence of the population had not declined during a period of population growth. As for relief to the poor, only medical provision for the sick and help for the infirm was approved in order to preserve work incentives. Senior was opposed to financial aid for the elderly, as that would discourage savings, and to public charity for orphans and abandoned children as that would encourage population growth. In the case of crop failure the government should provide general relief, perhaps financed by a county rate.
The major problem of the able-bodied unemployed Senior believed was not to be solved by applying the English policy of paying wages out of local rates. Senior had no objection to the migration of Irish labourers to English rural areas short of labour. He admitted that Irish wages were less than forty per cent of the English level but to equalize them would only encourage population growth and diminish the wages fund. He linked the solution to the poverty problem to a reform in the Irish church:
tithes are commuted for land, and provision is made for the Catholic clergy, and no compulsory provision is made for the able-bodied poor. [Senior 1832: 80]
These controversial recommendations, which helped to precipitate a crisis in the Church of England and the foundation of its Oxford movement, entailed the ending of the hated system of requiring a largely Catholic population to tithe their rural incomes to the Protestant Church of Ireland by granting land to the former recipients of tithes. Part of the revenue of the established Church of Ireland would be used to finance Catholic priests. The unusual theory of Senior’s was that Catholic clergy maintained their fee income by encouraging early marriages thereby creating an excess population. In On National Property (1835) Senior argued that the property of the Church of Ireland is national property so should be applied for the welfare of the community through financing the Catholic clergy. (Realizing that there would be opposition in the House of Lords to the proposal, Senior recommended the creation of life peers to get the measure passed.) Better-paid clergy would be less dependent on the Irish disaffected population. He summed up this proposal as ‘troops are more expensive than priests’ [1835b: 106].
The great Irish crisis of the 1840s, including the potato famine, encouraged Senior to continue writing on Ireland in 1844, 1846 and 1849 in the Edinburgh Review. The earliest of these articles criticized the civil and criminal laws which through oppressing the landless and the Catholic population inevitably led to insurrection. Also laws such as the prohibition of the importation of semi-finished goods destroyed Irish industry. In addition, indolence was encouraged by trade unions insisting on work being paid by the day at the same rate for skilled and unskilled workers. Again Senior recommended the diversion of the revenues of the Church of Ireland to the Catholics. Also he detailed a scheme for national education and reforms including the appointment of professional magistrates and a Secretary of State for Ireland to replace the lord lieutenant and chief secretary with parliamentary sessions in Dublin. Full emancipation of Irish Catholics was seen to be essential.
In a review of George Poulett Scrope’s Letters to Lord John Russell, on the Expediency of Enlarging the Irish Poor Law to the Full Extent of the Poor Law of England (1846), Senior rejected Scrope’s proposal to tax landlords in order to finance public works schemes. This would constitute help to the able-bodied, bring to an end agricultural improvement and lead to the abandonment of farms unprofitable after paying the rates. Instead Senior recommended the collection of aid from voluntary charities whose assistance would follow to the rulings of the Poor Law Commissioners; the maximum financed by rates would be one-third of the amount raised by the charities.
Senior returned to the problems of Ireland in an examination of Irish distress in 1847 and 1848. He noted that the differences between Ireland and England, especially with regard to the indolence of the Irish, the absence of a large Irish middle class and a system of landholding which discouraged investment in agriculture, made Ireland a special policy case. The policies should be education by remunerated Catholic clergy and the sale of estates while they still had value.
In a lecture of 1847 Senior again ruled out an English-style poor law for Ireland as the countries had such different histories, especially with respect to race, religion and habits [1852: 20].
Factory Acts
A visit to manufacturers in the north of England in 1837 caused Senior to write three letters to his friend Charles Poulett Scrope, member of parliament for Manchester and president of the Board of Trade, discussing the consequences of Lord Ashley’s proposed Ten Hours Bill and the effects of the previous Althorp Act of 1833.
The principal controversial element in his analysis, in the first of Letters on the Factory Act, was concerned with the effect of reducing hours on profits:
I find the usual computation to be that the fixed capital is in the proportion of four to one to the circulating… I find also that the whole capital is supposed in general to be turned over (or, in other words, that goods are produced and sold representing the value of the whole capital, together with the manufacturer’s profit) in about a year. I find also that the net profit annually derived may be estimated at ten per cent… Under the present law, no mill in which persons under eighteen years of age are employed (and therefore, scarcely any mill at all) can be worked more than eleven and a half hours a-day, that is, twelve hours for five days in the week and nine on Saturday… in a mill so worked, the whole net profit is derived from the last hour… [1837: 11–12]
An arithmetical example is given to explain his assertion. Moreover he argued that technical advance through increasing the ratio of fixed to circulating capital was making the consequences of reducing the working day more serious. If working hours were reduced, manufacturers would increase their prices by sixteen per cent causing a loss of sales in domestic and foreign markets. Leonard Horner, a Factory Inquiry Commissioner under the 1833 Act, disputed Senior’s views on the basis of more extensive evidence and questioned the lowness of Senior’s figure for net profits.
Senior’s ‘last hour’ hypothesis has been much debated. DeLong [1986] challenged Senior’s assumption that capital is turned over only once a year with the consequence that his profit rate was wrongly calculated. Anderson, Ekelund and Tollison rose to Senior’s defence although not defending the details of his analysis:
He recognised that any sort of restrictions on labour contracts which reduced or limited work hours would have a negative effect upon the marginal efficiency of capital. Senior also knew that textile interests (both those of the masters and those of the operatives) were aimed at wealth enhancement at the lowest possible cost. [Anderson, Ekelund and Tollison 1989: 78]
Pullen [1989] demonstrated, using a later annotation by Senior to the third edition of the Letters in 1844, that his arithmetic and logic were sound with respect to a reduction of working hours.
It would be inaccurate to suggest that Senior in his analysis of the Factory Acts and other policy issues took a minimal view of the state. He thought the work of many European governments in education, road-building and direction of industry was impressive: governments can be passively wrong as well as actively wrong as
One of the worst of errors would be the general admission of the proposition that a Government has no right to interfere for any purpose except for that of affording protection… [Senior 1848: 332]
Conclusion
It is firmly established that Senior was an important figure in classical economics, both for his contribution to its central theoretical debates and for applying classical theory to the policy problems of the time. Although he did not achieve the originality and influence of the leading economists of the classical school – Smith, Ricardo and Malthus – he did make an enduring contribution on the development of economics. His leading theoretical contributions, a utility-based value theory and an abstinence theory of capital, gave him stature. His policy recommendations, however, have not had a long term influence. The unusual circumstances of a life which combined legal practice, occasional academic appointments and extensive writing on many subjects were not conducive to producing a full-blown Principles of Economics. Nevertheless few aspects of economics were unconsidered by him.
Donald Rutherford
University of Edinburgh, 1998
Bibliography
Anderson, Gary M., Ekelund, Robert B. and Tollison, Robert D. (1989): ‘Nassau Senior as Economic Consultant: The Factory Acts Reconsidered’, Economica, 56: 71–81.
Blaug, M. (1978, 3rd ed.): Economic Theory in Retrospect, Cambridge: Cambridge University Press.
Bowley, M. (1936): ‘Nassau Senior’s Contribution to the Methodology of Economics’, Economica, 3 ns: 281–305.
Boyer, G. R. (1990): An Economic History of the English Poor Law 1750–1850, Cambridge: Cambridge University Press.
DeLong, J. Bradford (1986): ‘Senior’s ‘last hour’: suggested explanation of a famous blunder’, History of Political Economy, 18: 325–333.
Levy, S. Leon (1970): Nassau W. Senior, Newton Abbot: David & Charles.
Marx, K. (1976, trans. Ben Fowkes): Capital, Harmondsworth, Middlesex: Penguin.
Nicholls, Sir G. (1904): A History of the English Poor Law, vol. 2, 1714–1853. London: P. S. King & Son.
Pullen, J. M. (1989): ‘In Defence of Senior’s Last Hour-and-Twenty-Five Minutes, with a Reply by J. Bradford DeLong, and a Rejoinder by Pullen’, History of Political Economy, 21: 299–312.
Robbins, L. (1968): The Theory of Economic Development in the History of Economic Thought, London: Macmillan.
—— (1976): Political Economy: Past and Present, London: Macmillan.
Schumpeter, J. A. (1954): History of Economic Analysis, London: George Allen & Unwin.
Senior, Nassau W. (1827): An Introductory Lecture on Political Economy, London: J. Mawman.
—— (1828): Three Lectures on the Transmission of the Precious Metals from Country to Country, London: John Murray.
—— (1829): Two Lectures on Population to which is Added a Correspondence Between the Author and the Rev. T. R. Malthus, London: Saunders and Otley.
—— (1830): Three Lectures on the Cost of Obtaining Money, London: John Murray.
—— (1831): Three Lectures on the Rate of Wages, London: John Murray.
—— (1832, 3rd ed.): A Letter to Lord Howick on a Legal Provision for the Irish Poor, London: John Murray.
—— (1835a): Statement of the Provision for the Poor and of the Condition of the Labouring Classes in a Considerable Portion of America and Europe. Being the preface to the foreign communications contained in the appendix to the Poor-Law Report, London: B. Fellowes.
—— (1835b, 1st ed.): On National Property and on the Prospects of the Present Administration and of their Successors, London: B. Fellowes.
—— (1836; 1938 reprint): An Outline of the Science of Political Economy, London: George Allen & Unwin.
—— (1837): Letters on the Factory Act, as it Affects the Cotton Manufacture, London: B. Fellowes.
—— (1840): Three Lectures on the Value of Money, London. B. Fellowes.
—— (1841): Remarks on the Opposition to the Poor Law Amendment Bill, by a Guardian, London: John Murray.
—— (1844): ‘Ireland’, Edinburgh Review, 79: 189–266.
—— (1846a): ‘Proposals for Extending the Irish Poor-Law’, Edinburgh Review, 84: 267–314.
—— (1846b): ‘Speeches and Writings of the Late Lord King’, Edinburgh Review, 84: 315–43.
—— (1848): ‘J. S. Mill on Political Economy’, Edinburgh Review, 88: 293–339.
—— (1849): ‘Relief of Irish Distress’, Edinburgh Review, 89: 221–68.
—— (1852): Four Introductory Lectures on Political Economy, London: Longman, Brown, Green, and Longmans.
—— (1865): Historical and Philosophical Essays, 2 vols., London: Longman, Green, Longman, Roberts and Green.
—— (1871): Journals Kept in France and Italy 1848–52, with a Sketch of the Revolution of 1848. Edited by his daughter M. C. M. Simpson, 2 vols., London: H. S. King.
Tocqueville, A. de (1991): Correspondance Anglaise: Correspondance et Conversations d’ Alexis de Tocqueville et Nassau William Senior, Paris: Gallimard.
Whately, E. Jane (1866): Life and Correspondence of Richard Whately, Lord Archbishop of Dublin, London: Longmans, Green.
|
| |
|
|
|
|
