In all the colonies a complete departure from principles laid down by the leading political economists of the 1 th century was dig P 9 Y made when acts were passed subjecting every branch of domestic industry to the control of specially constituted tribunals, which were empowered among other important functions to fix the minimum rate of wages to be paid to all grades of workmen.
The European ferment of ideas which preceded the French Revolution expressed itself in men like Alfieri, the fierce denouncer of tyrants, Beccaria, the philosopher of criminal jurisprudence, Volta, the physicist, and numerous political economists of Tuscany.
He soon, however, became entirely engrossed with colonial affairs, and, having impressed John Stuart Mill, Colonel Torrens and other leading economists with the value of his ideas, became a leading though not a conspicuous manager of the South Australian Company, by which the colony of South Australia was ultimately founded.
This system, which for many years subsequently was regarded as authoritative, has been subjected to vigorous criticism by later economists, and it is perhaps not too much to say that it now possesses mainly an historical interest.
In this article we propose therefore to confine ourselves to discussing the character and subject-matter of the science, indicating its relation to other sciences, and explaining the methods by which economists reach their conclusions.
It is also possible to find in them many anticipations of the views of the economists of later times; but such statements were as a rule generated merely by the heat of controversy on some measure or event of practical importance, and when the controversy died down were seldom regarded or incorporated in a scientific system.
In every age economists have applied the methods ordinarily in use amongst scientific men.
Whether such large numbers have the character of the " economic man " of the early economists matters very little.
Any one who has taken the trouble to trace the history of one of the modern schools of economists, or of any branch of economic science, knows how difficult it is to say when it began.
It must be clear to every observer that the economists of the classical period, with the one exception of Adam Smith, will speedily share the fate of nearly all scientific writers.
Moreover, modern economists, while accepting in the main the general tenor of Malthus's theory of population, would not agree with his statement of it.
It would be of immense advantage from a scientific point of view if this could be taken for granted, if for a time the work of the classical economists could be considered final so far as it goes, and for the purposes of investigation regarded as the theoretical counterpart of the modern industrial system.
This assumption, however, has been made quite impossible, not by the historical school, but by the criticism and analysis of economists in the direct line of the Ricardian succession.
If the Ricardian school of economists had been merely philosophers, or even a group like the French physiocrats, this state of things might be regarded with equanimity.
In the same way the doctrines of the classical economists may be adapted by interpretation clauses and qualifications the exact force of which cannot be tested or explained, so that we do not know whether the original proposition is to be considered substantially correct or not.
Some doctrines of the earlier economists, such as the Wages Fund Theory, are now practically abandoned, though it may be said that they contained a certain amount of truth.
If they could, by some happy chance, have been left for discovery by modern economists, they would without doubt have received different treatment, to the great advantage of economic science.
The opinions of present-day economists appear to fluctuate between these two extremes.
If we go to Mill to discover what it is, we find that " it is not pretended that the law of diminishing return was operative from the beginning of society; and though some political economists may have believed it to come into operation earlier than it does, it begins quite early enough to support the conclusions they founded on it."
When the aim of the man of affairs and the hypothesis of the economist was unrestricted competition, and measures were being adopted to realize it, general theory such as the classical economists provided was perhaps a sufficiently trustworthy guide for practical statesmen and men of business.
It is true that at present very little work of this kind has been done in England, but innumerable books, many of them about England, have been written by thoroughly competent economists, in French, German and other languages.
It was hailed with satisfaction by the Unionists, but the pure economists complained that he had thrown sobriety and thrift to the winds.
This position he founded on the law of wages formulated by Ricardo, and accepted by all the leading economists, that wages are controlled by the ordinary relations of supply and demand, that a rise in wages leads to an increase in the labouring population, which, by increasing the supply of labour, is followed by a corresponding fall of wages.
The work of Cobden, and what is now called "Cobdenism," has in recent years been subjected to much criticism from the newer school of English economists who advocate a "national policy" (on the old lines of Alexander Hamilton and Friedrich List) as against his cosmopolitan ideals.
He was also a supporter of the principles of the economists, and Quesnay called him his wellbeloved disciple.
This is a good thing because it means that high degrees of utility (the economists' word for "happiness") can be achieved with a wide variety of goods.
The second way trade is able to create value is because most goods have what economists call "decreasing marginal utility."