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That the writer should have been led to deliver himself of such a jejune notion about "the natural progress of human reason," as well as about his surprise that diversity of opinion on the subject could ever exist, is, indeed, a matter both for astonishment and lamentation, seeing that the whole course of his voluminous writings on the subject, comprehending as they do, both his own views and reasonings, and the views and reasonings of other men, present a tissue of admissions of diversity of opinions as well as of failure of human view and reason.
Referring, again, to the opinions held by the people of the ancient nations of the world against the practice of usury, Dugald Stewart has written as follows: "In those nations of antiquity with whose history we are best acquainted, and to whom the foregoing observations relate, there does not seem to have been any thing that bore a resemblance to the commerce of modern Europe. The Tyrians, indeed, the Sidonians, and the Carthaginians, were commercial nations; but what were their notions concerning money loans we are left to conjecture, having no records to guide our researches. The sentiments which prevailed at Athens and Rome on the subject of trade are well known. Plato asserts, in his book 'De Legibus,' that it had been better for the Athenians to have continued to send annually the sons of seven of their principal citizens to be devoured by the Minotaur, than to have changed their ancient manners, and to have become a maritime power! and Aristotle, although he frequently discovers a predilection for opinions contrary to those of his master, does not venture to contradict him in this particular. The prejudices of the Romans against the lucrative arts and professions were still more inveterate. Among such nations, accordingly, money loans would be much less regarded in their relations to commercial speculations, than as subservient to the wants of the necessitous; and the epithet 'barren,'
which Aristotle applies to money, shows plainly that it was in this point of view he considered them. Discreditable, however, as the trade of a money lender was at Rome, a certain rate of interest was permitted by law, and a variety of regulations with respect to it established, which M. Dupuy has illustrated with much learning in the Appendix to his Memoir on the Roman Money. An interesting abstract of this essay may be found in Pancton's Métrologie.' Usury is called by Mr. Gibbon, the inveterate grievance of Rome. After being discouraged, he observes, by the Twelve Tables, and abolished by the clamours of the people, it was revived by their wants and idleness, tolerated by the discretion of the prætors, and finally determined by the Code of Justinian. Persons of illustrious rank were confined to the moderate profit of four per cent.; six was pronounced to be the ordinary and legal standard of interest; eight was allowed for the convenience of manufacturers and merchants; and twelve were granted to nautical insurance; but except in this perilous adventure, the practice of exorbitant interest was severely restrained.'"*
Having referred, by means of the foregoing and other matter, to the opinions and judgment, or "prejudices,” as he calls them, which prevailed on the subject of usury, amongst the people of the ancient nations of the world, and some of the reasons given for advocating the laws against usury, are, undoubtedly, of a very extraordinary and ridiculous character, -the writer has then approached the subject in its reception. and treatment by the writers, statesmen, and people of modern times. He has directed his chief notice to the view propounded respecting it by Adam Smith, expressing his surprise that the author of "The Wealth of Nations," should,
* Gibbon, vol. viii. ch. 44.
after his advocacy of the free principle of trade, have taken such an extraordinary, diverging, and contrary course, as that of supporting the laws against usury.
The writer, Dugald Stewart, having referred to the different classes of persons in general society, who have recourse to borrowing the money of other men for the purpose of using it for their own imagined profit or convenience, introduces Adam Smith's views in the passages following: "With respect to the second class of men, whose rashness the anti-usurious laws may have a tendency to restrain (I mean projectors), the operation of these laws will require more ample consideration; because, in this instance, they have found an advocate in no less an author than Mr. Smith, whose general principles concerning the freedom of trade and of industry, one should naturally have expected, would have inclined him to the opposite opinion. Here, however, Mr. Smith has met with a very acute and able antagonist in Mr. Bentham, who has subjoined to his defence of usury, a letter addressed to Mr. Smith, containing a variety of remarks on the pernicious effects of our present laws, in consequence of the discouragements which they oppose to the progress of inventive industry. These remarks seem to me to present unanswerable objections to this part of Mr. Smith's system."
The passage in "The Wealth of Nations," in which the opinion in question is stated, is as follows:
"The legal rate, it is to be observed, though it ought to be somewhat above, ought not to be much above, the lowest market rate. If the legal rate of interest in Great Britain, for example, was fixed so high as eight or ten per cent., the greater part of the money which was to be lent would be lent to prodigals and projectors, who alone would be willing to give the high interest. Sober people, who will give for the use of money no more than a part of what they are likely to
make by the use of it, would not venture into the competition. A great part of the capital of the country would thus be kept out of the hands which were most likely to make a profitable and advantageous use of it, and thrown into those which were most likely to waste and destroy it. Where the legal interest, on the contrary, is fixed but a very little above the lowest market rate, sober people are universally preferred as borrowers to prodigals and projectors. The person who lends money gets nearly as much interest from the former as he dares to take from the latter, and his money is much safer in the hands of the one set of people than in those of the other. A great part of the capital of the country is thus thrown into the hands in which it is most likely to be employed with advantage."
Thus the professor of Political Economy, speaking in the person of Dugald Stewart, has justly opposed Adam Smith's views on the ground of their inconsistency, seeing that of two contrary courses, one, if not both, must, in the nature of things, be wrong. He has next, in an attempt to set aside as fallacious the views and conclusions of Dr. Smith, turned against them matter contained in a treatise written by Mr. Bentham; fancying that, as the reasonings of Mr. Bentham have for their foundation the free principle of trade, as assumed and contended for by Adam Smith; and being correct inductions from the premises thus supplied, present the truth of the whole subject-matter involved, so that Bentham is assumed by him to have done that for Adam Smith which Adam Smith ought to have done, but so signally failed in doing, for himself.
But this mere substitution of logic for philosophy, this assumption of premises-where no sound premises have been found, and then, from premises thus begged and granted,
* The Wealth of Nations, by Adam Smith, book 2, ch. iv.
inductions being correctly worked must be allowed, and further conclusions being drawn with equal correctness, are to be allowed by us also,-must not be permitted to pass, any more than we should receive as solid and genuine money a counterfeit sovereign, because it presents to our sight a thin surface of gold. Such a course as that under examination has neither preparation nor quality fitting it for a place within the province of science. They who profess and assume to adduce evidence, and to impart to evidence its due arrangement, and so to construct sound argument, must do so in a manner far better than this before they can claim to have the wreath of Science awarded them.
On another occasion I shall have to enter upon a more particular examination of the controversy thus raised between Adam Smith and Mr. Bentham, and to show more fully and clearly the untenable and false position in which both these writers have placed themselves, and how little either of them has done towards a just and masterly treatment of the great subject.
I now conclude my adducement of evidence from the writings of Dugald Stewart, maintaining that by the evidence thus collated and commented on, additional proof is afforded that the science of Political Economy has been placed, and left, by our modern schoolmen in a most lamentable state of confusion and error.