If the colonies, notwithstanding their refusal to submit to British taxes, are still to be considered as provinces of the British Empire, their defence in some future war may cost Great Britain as great an expense as it ever has done in any former war. The rulers of Great Britain have, for more than a century past, amused the people with the imagination that they possessed a great empire on the west side of the Atlantic. This empire, however, has hitherto existed in imagination only. It has hitherto been, not an empire, but the project of an empire; not a gold mine, but the project of a gold mine; a project which has cost, which continues to cost, and which, if pursued in the same way it has been hitherto, is likely to cost, immense expense, without being likely to bring any profit; for the effects of the monopoly of the colony trade, it has been shown, are, to the great body of the people, mere loss instead of profit. It is surely now time that our rulers should either realize this golden dream in which they have been indulging themselves, perhaps, as well as the people, or that they should awake from it themselves, and endeavour to awaken the people. If the project cannot be completed, it ought to be given up. If any of the provinces of the British Empire cannot be made to contribute towards the support of the whole empire, it is surely time that Great Britain should free herself from the expense of defending those provinces in time of war, and of supporting any part of their civil or military establishments in time of peace, and endeavour to accommodate her future views and designs to the real mediocrity of her circumstances."

O

CHAPTER V.

CCASION has already been found to advert, in these pages, to the difference between what is called political economy and politics. The characteristic feature of the former is abstraction from all but a particular kind of motive, for example, self-interest, and the deduction of conclusions from the hypothetical premises so found. The process of induction, in so far as it finds a place, is applied in the same way. Certain features are looked at, and certain features only; others, such as the operation of custom and habit, being left out of account. The truth appears to be that this is not a characteristic peculiar to economical science. There is no department of exact knowledge which has not been built up by much the same method. Physical science deals with only one kind of the relationships of things. Anatomy, and even physiology, treat the interdependence of the parts of the organism as if that interpendence were of a mechanical character, and leave out of account what stares the observer in the face in daily life, that these parts derive their distinguishing significance from this, that they are the parts of a whole which controls them in a nonmechanical fashion.

It is one of the qualities of Adam Smith's book, a quality which is at once a virtue and a vice, that it is in a measure free from this abstract character. A virtue, because we have the sense that he is writing of real men and a real world; a vice, because the tendency to take into account a plurality of aspects occasions a confusion. and absence of system. His immediate successors displayed neither the virtue nor the vice. Malthus, although he did not so entirely, as is popularly believed of him, ignore the fact that there is a moral as distinguished from a physical irreducible minimum of comfort, which forms the real limit of the increase of population, a minimum which, just because it is of a moral nature, can be raised by education and the influence of better social surroundings,-nevertheless persisted in regarding human life as a struggle for existence, in which each seeks only his own individual ends, and in which, accordingly, no other motive can be counted on. Ricardo developed this view into a hard and fast system of premises, from which he proceeded to draw a multitude of deductions. The result has been an intense reaction against these premises.

"The only thing that interests us," writes Karl Marx, in reference to America, in his book on 'Capital,' "is the secret discovered in the New World by the political economy of the Old World, and proclaimed on the house-tops; that the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the labourer."

It will have to be recognized that political economy is either a hypothetical science, dealing only with one phase of human existence, and based upon a single set of assumptions, or that it is in the nature of an art rather than a science, and consists of a series of maxims of practice, not one of which can be applied without regard to special circumstances, or apart from a previous consideration of the end sought to be obtained.

The consequence of the attempt to follow out in practice the principles of an abstract science has been to bring into somewhat sharp contrast two opposing schools of thought. The one lays stress on the individual and his rights as such. The other looks mainly to the fact that man is man only in so far as he stands in a close relationship to his fellow men, and to what has been called a social organism, as real, because as important in its influence on the units it embraces, as those units themselves.

Smith was an individualist in the sense that he was the opponent of State interference; but if he was an advocate of the doctrine of laissez faire, it was not as a deduction from any abstract principle. He saw that the State interference of his time was bad, and he wrote his book with reference to his time. The truth is, that his opposition to that system of interference was based on a perception that in his day it not only missed, but was of such a character that it necessarily missed, its mark. There are indications throughout "The Wealth of Nations," such, for example, as those in the chapter on education, that, while no Socialist, he regarded it as

meddle with individual liberty for the better training and discipline even of full-grown men. Again, Smith was a free-trader, not because everybody was in his opinion entitled to trade on the same terms with everybody else, but because he saw that free-trade was the best way of making a nation rich. This is a fact which has been often forgotten since Smith's time. What with him was a result of observation, a rule of practice, a means to an end, has been elevated to the position of a sacred principle. The case for free-trade has been overstated. It is logically, whether practically so or not, quite conceivable that if the end be not the production, but the distribution of wealth in a particular country, its circumstances may be such as to justify protection as a means to this end. The ordinary reasons in favour of free-trade do not touch such a case. For example, if it be desirable to preserve the sugarrefining industry in a condition of prosperity in this country, even at some cost to the general body of consumers of sugar, a departure from free-trade principles would probably be necessary in order to accomplish it, a departure of a kind different from those against which Smith's reasoning is directed. Grant that it is not expedient, in the interests of the commonwealth, that the consumer should thrive at the expense of particular producers, and that an indirect tax on the consumer is justifiable, because, although wasteful, it is more willingly paid than a direct levy for the maintenance of particular manufacturers, and the case for what is called fair-trade becomes very difficult to meet. It is on this question that the battle between free-trade and protection is likely