However this may be,he certainly places himself habitually at the point of view of the individual,whom he treats as a purelyegoistic force,working uniformly in the direction of private gain,without regard to the good of others or of the communityat large.(2)He justifies this personal attitude by its consequences,presenting the optimistic view that the good of thecommunity is best attained through the free play of individual cupidities,provided only that the law prevents the interferenceof one member of the society with the self-seeking action of another.He assumes with the negative school at large-thoughhe has passages which are not in harmony with these propositions --that every one knows his true interest and will pursue it,and that the economic advantage of the individual coincides with that of the society.
To this last conclusion he is secretlyled,as we have seen,by a priori theological ideas,and also by metaphysical conceptions of a supposed system of nature,natural right,and natural liberty.(3)By this reduction of almost every question to one of individual gain,he is led to a tooexclusive consideration of exchange value as distinct from wealth in the proper sense.This,whilst lending a mechanicalfacility in arriving at conclusions,gives a superficial character to economic investigations,divorcing it from the physical andbiological sciences,excluding the question of real social utility,leaving no room for a criticism of production,and leading toa denial,like J.S.Mill's,of any economic doctrine dealing with consumption --in other words,with the use of wealth.(4)Incondemning the existing industrial policy,he tends too much towards a glorification of non-government and a repudiation ofall social intervention for the regulation of economic life.(5)He does not keep in view the moral destination of our race,norregard wealth as a means to the higher ends of life,and thus incurs,not altogether unjustly,the charge of materialism,in thewider sense of that word.Lastly,(6)his whole system is too absolute in its character;it does not sufficiently recognie thefact that,in the language of Hildebrand,man,as a member of society,is a child of civilization and a product of history,andthat account ought to be taken of the different stages of social development as implying altered economic conditions andcalling for altered economic action,or even involving a modification of the actor.Perhaps in all the respects hereenumerated,certainly in some of them,and notably in the last,Smith is less open to criticism than most of the later Englisheconomists;but it must,we think,be admitted that to the general principles which lie at the basis of his scheme the ultimategrowth of these several vicious tendencies is traceable.
Great expectations had been entertained respecting Smith's work by competent judges before its publication,as is shown bythe language of Ferguson on the subject in his History of Civil Society .(31)That its merits received prompt recognition isproved by the fact of six editions having been called for within the fifteen years after its appearance.(32)From the year 1783itwas more and more quoted in Parliament.Pitt was greatly impressed by its reasonings;Smith is reported to have said thatthat Minister understood the book as well as himself,Pulteney said in 1797that Smith would persuade the then livinggeneration and would govern the next.(33)Smith's earliest critics were Bentham and Lauderdale,who,though in general agreement with him,differed on special points.
Jeremy Bentham was author of a short treatise entitled A Manuel of Political Economy and various economic monographs,the most celebrated of which was his Defence of Usury (1787).This contained (Letter xiii)an elaborate criticism of apassage in the Wealth of Nations ,already cited,in which Smith had approved of a legal maximum rate of interest fixed but avery little above the lowest market rate,as tending to throw the capital of the country into the hands of sober persons,asopposed to "prodigals and projectors."Smith is said to have admitted that Bentham had made out his case.He certainlyargues it with great ability;(34)and the true doctrine no doubt is that,in a developed industrial society,it is expedient to letthe rate be fixed by contract between the lender and the borrower,the law interfering only in case of fraud.
Bentham's main significance does not belong to the economic field.But,on the one hand,what is known as Benthamism wasundoubtedly,as Comte has said,(35)a derivative from political economy,and in particular from the system of natural liberty;and,on the other,it promoted the temporary ascendency of that system by extending to the whole of social and moral theorythe use of the principle of individual interest and the method of deduction from that interest.This alliance between politicaleconomy and the scheme of Bentham is seen in the personal group of thinkers which formed itself round him,--thinkersmost inaptly characterised by J.S.Mill as "profound,"but certainly possessed of much acuteness and logical power,andtending,though vaguely,towards a positive sociology,which,from their want of genuinely scientific culture and theirabsolute modes of thought,they were incapable of founding.
Lord Lauderdale,in his Inquiry into the Nature and Origin of Public Wealth (1804),a book still worth reading,pointed outcertain real weaknesses in Smith's account of value and the measure of value,and of the productivity of labour,and threwadditional light on several subjects,such as the true mode of estimating the national income,and the reaction of thedistribution of wealth on its production.
