Review (1888) of Gustave de Molinari’s
Natural Laws of Political Economy (1887)

by John Bates Clark (1847-1938)

Les lois naturelles de l’économie politique. By G. DE MOLINARI, correspondent de l’Institut, rédacteur en chef du Journal des Économistes. Guillaumin et Cie, Paris. – 8vo, 329 pp.

GM-LNP.1 This work contains, perhaps, a larger amount of vigorous orthodoxy than can elsewhere be found in so small a compass. It is a plea for a laissez-faire policy, and is full of wisdom of a kind that is needed, in view of the drift of opinions toward “stateism.” Its effect on public policy will be like that of an anchor planted on a shoal on one side of a channel in order to warp a vessel off from an opposite shoal. Yet in one way it brings economics and politics into close connection; it discusses government as an economic function, a process of creating and selling the product security. Though opposing governmental interference in industry, it emphasizes the action of economic law upon government.
GM-LNP.2 The natural laws that are the subject of this treatise are those of “the economy of forces, competition, and the progression of values.” Impelled as man is by a desire to increase his pleasures and diminish his sacrifices, he seeks to get the largest possible product by the smallest outlay of physical and mental energy. In exchange he seeks to buy cheaply and sell dearly. In this is seen the action of the first of these three laws.
GM-LNP.3 Competition arises from the scarcity of useful articles resulting from labor, and consists in the effort of rivals to get possession of these articles. The struggle appears in three forms, namely, animal, political, and industrial competition. In the first of these forms the contest ensures the survival of the highest animal type; in the second it develops the best political organization; and in the third it perfects industrial methods, and ensures to society products that are both good and cheap.
GM-LNP.4 As the quantity of a particular article offered in the market is increased or diminished in an arithmetical ratio, the price of it falls or rises in a geometrical ratio. This is the law of the progression of values. The statement is a sweeping generalization, but serves, if true, to account for the rapid tendency toward an equality of profits in different occupations that is a marked feature of modern industry. In a subtler application, the law is made by M. de Molinari to account for the maintenance of a just equilibrium between the reward of capital and that of labor.
GM-LNP.5 The origin and extension of markets is rapidly sketched in the book, as is the growth of a certain solidarity between different states, which results from international commerce. The political effects of modern industry are noted, and the doctrine is maintained that “political servitude,” an institution adapted to the old régime of constant warfare, continues after its day of usefulness is past, and creates a necessary antagonism of interest between the “producers of public services” and the consumers of them. Members of the former class are interested in maintaining hostile relations toward other states, and in extending the prerogatives of their governments; while those of the latter are interested in maintaining peace, and in diminishing governmental prerogatives. The latter policy must prevail, but only after the cost of governments shall have outgrown the tax-paying capacity of the subject classes. Markets will become world-wide, and, in the general competition that will ensue, victory will come to the peoples that are least burdened with imposts and restrictions. A small army and navy, a cheap civil service and free trade will be the keys to wealth and political preponderance. Disturbing influences springing from the imperfections of human nature will continue; but they will be more and more effectually opposed by the action of free competition “in the production of public security.” Civilization is not and will not be left at the mercy of men. Natural law impels the human race toward a goal that its members do not see. In the belief that they are accelerating this progress, men more frequently retard it; and science has to limit itself to the modest and thankless task of pointing out the true way to assist the natural movement, and thus securing a certain economy of time and effort.
GM-LNP.6 It is the chief merit of the work that it places in an especially clear light principles that are fundamentally sound, and that need emphasizing in view of the present drift of public thought. Its most striking defect is that it goes beyond the ordinary standard of the school that it represents in banishing ethical consideration from its scientific territory. It is phenomenally free from the suspicion of confusing morals with political economy. Its “economic man” is characterized in terms, and his actions are definitely referred to the law of “economy of forces,” which is a principle of bald self-interest. Moreover, in treating of government in its economic aspect, the author is obliged to follow this being into a political sphere of action; and the picture that is presented of modern political life is as free from an undue admixture of ethical elements as is the picture drawn of industrial life. For the American reader this is most strikingly apparent in the description of the political development of the United States. Our national portrait is drawn in a manner that is grotesquely like the reality. As a caricature it is a success; and as the serious view of an eminent European publicist it contains a sharp and salutary lesson; but it is in fact a representation of what our political organism might be if it were transplanted bodily to Hades, and left unhindered to work out its evil tendencies. Yet the extension of economic principles to the governmental field is one of the valuable features of the book. It must be done consistently if at all. If one believes that a Tartarus under good police regulations offers the ideal condition for a natural economic development, there is no reason why he should set a higher ideal for governmental economics. A consistent course in this respect certainly does not place the system advocated in an attractive light; and it is quite likely to convert readers to the opposing doctrine. The work of M. de Molinari will be regarded by many adherents of the more progressive school as an argument in favor of their own views; yet it will stimulate and benefit readers of every school by the clear light in which it places the principles that are most in danger of being forgotten.

Political Science Quarterly 3, no. 1 (March 1888), pp. 190-92.

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