Paley's Method of Thought

The Cambridge Context of Paley's Economic Thought

Since Paley included some analytical treatment of economic matters in Book VI of Principles, and since this is presumably based, like Books I-V, on his college lectures, it seems highly probable that at least some tutors and lecturers in other colleges did the same. A great deal of what we now recognise as ‘economic literature’, both in French and in English, was becoming available to the learned from about the middle of the eighteenth century, and it is unlikely that Cambridge dons— who were an important part of a very small intellectual elite in England at that time—would not have been aware of it. But evidence of this is hard to come by. Hints may be found here and there in correspondence between undergraduates and their parents, for example, such as that between ‘Bob’ Malthus and his father, or Philip Yorke and Lord Hardwicke (Searby 1997: 545-561). However, no one has yet attempted the immense and possibly fruitless task of collecting all surviving correspondence and extracting such information from it.

One straw in the wind has recently come to light, however. A contemporary of Paley’s, John Hey (1734-1815), like him a Yorkshire man and almost certainly a friend and fellow member of the Hyson Club (founded in 1758 by wranglers), was a Fellow and Tutor at Sidney Sussex College from 1758 to 1779. In 1780, he became the first Norrisian Professor of Divinity, and there is evidence that Malthus attended his university lectures in that chair. During the 1770s, Hey gave a series of college lectures on ‘morality’ for his Sidney Sussex pupils which attracted the voluntary attendance of undergraduates from other colleges including William Pitt the Younger, then (1773-1776) at Pembroke College.

In 1997, whilst conducting research for an article on Hey in the New Dictionary of National Biography, I discovered in the archives of Sidney Sussex nine bound volumes of his unpublished ‘Lectures on Morality’ which had been deposited by his brothers after his death in 1815 and which, so far as I have been able to discover, have never been looked at by anyone since. The manuscript had been intended for publication, and volume I (p. 7) contains a ‘Preface’, written in 1814, which includes the following passage:

I do not recollect at what time D^r Paley began to read in morality at X’s College; but as we were contemporary readers, it has always seemed best to me to let our disquisitions be independent of each other. For this reason only I have abstained from reading D^r Paley’s Moral Philosophy, tho’ I have perused all his other works with attention and admiration. I have not in the least thought of setting my lucubrations in any competition with his Moral Philosophy.

Hey’s Norrisian Lectures in Divinity had been highly successful and continued in use throughout the Anglophone world—including both Canada and Australia—into the 1840s. But despite repeated attempts, he could find no publisher for his Lectures on Morality: for alas, Hey’s ‘lucubrations’ were indeed in competition with those of his colleague. Moreover, after 1785 there was room only for one textbook in that field: ‘D^r Paley’s Moral Philosophy’.

It is instructive to compare Hey’s treatment of economic matters with Paley’s. Though there is an answer to Mandeville in volume I, there is no attempt to formulate a macroeconomic model of the interdependence of ‘luxuries’ and necessities. But in volume III, there are seven lectures on ‘per- mutatory contracts’ relating to the exchange of goods and services; to the nature and use of money; to buying and selling; and to the letting and hiring of persons, things, and money. Although the intention is normative and the treatment at times quasi-legal, analysis is never far below the surface:

I confess I have never in any author seen the idea of value or price made clear and satisfactory, tho’ all authors who have written on natural law, have offered explanations of it. This makes me desirous to convey my idea, by way of trying whether it will be more satisfactory (Hey (deposited 1815): volume III, 1,325; underlining in original).

Hey suggests that the best way ‘to conceive the value of anything according to men’s general wants’ would be ‘to suppose all men bidding for it at an universal auction’. Hence ‘the value of any one thing, when x of them are saleable, is the xth part of the least sum which only x persons could be prevailed upon to give up for them all’ (ibid.) In developing this idea Hey’s exposition seems to be a possible source of the first-ever formal demand function, which was specified by Malthus (1800) 24 years later. As with Malthus, Hey seems to have had in mind a demand function of price interacting with a price-inelastic supply curve that may shift from time to time. If there was a characteristically ‘Cambridge’ way of conceiving value theory in the eighteenth century, Hey’s lectures are important evidence of it. He may even perhaps be enrolled, along with Smith and Malthus, among the pioneers of the supply-and-demand approach to value theory that ‘won out ultimately’ (Schumpeter 1954: 482) over the labour theory of value maintained by Ricardo and Marx.

The lectures in volume III on ‘economic’ topics are variously dated from 12 th to 21st November 1776, by which time Paley had quit Cambridge for Cumberland. Neil Hitchin’s recent discovery of a student’s notes of Paley’s lectures suggests that they were delivered, possibly on several occasions between 1775 and 1776, probably in 1775 itself, and that manuscript copies of his lecture notes circulated in Cambridge after his departure (Hitchin n.d.). This evidence is consistent with Hey’s recollection that he and Paley were ‘contemporary readers’. Yet it is remarkable that there could have been so little intellectual contact (at least about their teaching) between two friends working in almost neighbouring colleges, and also that there should have been such dissimilarity in their college lectures on the same topic. Like Hey’s, Paley’s lectures (or at any rate his book which is based on them) contain treatments of contracts: of sale, of hazard, of lending, and of labour (Paley 1785: Book III, Part I, Chapters VI-XIV). But there is no trace of the economic analysis with which Hey informed his exposition of these topics. Paley may have been ‘the first of the Cambridge economists’, but value theory played no part whatsoever in his thinking. Hey, on the other hand, had nothing to say about anything we would now call macroeconomics.