Other Possible Influences on Paley's Economic Thought
By the third quarter of the eighteenth century, a great deal of what become ‘political economy’ in the nineteenth century and ‘economics’ in the twentieth had begun to circulate in informed circles in France, Italy, Scotland, and England, and the outlines of a common body of knowledge can be identified:
- (a) Agriculture normally affords more food than is necessary to feed those who produce it.
- (b) The cost of production—of food as of all other commodities—will not normally be incurred unless there is an expectation of an adequate return: ‘effectual demand’ is thus a necessary condition of production.
- (c) Since manufactured goods need inputs from agriculture (food to sustain manufacturers), an urban manufacturing sector can provide a demand for the agricultural surplus.
- (d) In the same way, a rural agricultural sector can provide demand for a manufacturing surplus, hence the two sectors are mutually sustaining.
- (e) Labour needed in production is produced by human beings supplied with food (and manufactured necessities).
- (f) A certain per capita average of food and other necessities will keep the population and workforce stationary. At higher incomes than this, these will grow and vice versa.
Proposition (f), sometimes thought of as ‘Malthusian’ but actually commonplace among all eighteenth-century authors, is at the centre of Smith’s theory of wages (Smith 1776 [1976]: Book I, Chapter viii, 39). Propositions (c), (d), and (f) are classically illustrated in Smith’s (ibid.: Book III, Chapter i) ‘Of the Natural Progress of Opulence’, which describes and discusses the standard eighteenth- century, two-sector general equilibrium model of the interdependence of ‘town’ and ‘country’ (Waterman 2001). Proposition (b) was noted by the Physiocrats among others, and proposition (a) seems to have been take for granted by all. Though it is evident that Paley was familiar with these ideas and indeed made them the focus of his own analysis, he gave us no help in discovering his sources.
In addition to this common core associated in particular with Mandeville, Richard Cantillon, Francois Quesnay, and Smith, Paley is also seemingly aware of many other elements of eighteenth-century economic thought to be found in John Locke, Hume, Berkeley, Steuart, and Josiah Tucker. Paley’s treatment of money, for example, like Hey’s (ibid.: volume III: 1,324—1,325), seems obviously to depend on Hume, but whereas Hey acknowledged this source, Paley did not. Paley’s understanding of the effects of technical progress (Paley 1785: 629-631) as also his ranking of export industries by labour intensity (ibid.: 612-614) may have come from Steuart. Yet only Berkeley’s ‘walls of brass, fifty cubits high’ appear with attribution (as they do in Malthus). What Paley seems not to know about, or at any rate not to think important enough to teach his undergraduates, are: (a) price theory as found incipiently in Smith, (b) general equilibrium in competitive markets as pioneered by Pierre Le Pesant, sieur de Boisguilbert, and (c) the virtues of laissez-faire as taught by the Physiocrats. The last is in marked contrast to his somewhat older (Oxonian) contemporary, the Reverend Josiah Tucker (1713-1799), whose praise of the self-regulating market economy was later echoed by Smith.
Although Paley’s lectures were delivered at the latest one year before the appearance of The Wealth ofNationsin March 1776 (the year he left Cambridge), the occurrence of certain passages in Principles which read like summaries of Smith’s work suggests the possibility that Paley did read it sometime between 1776 and 1785, and incorporated some of its ideas in his revision. For example, Paley’s remark that population may double in 20 years (Paley ibid.: 590) resembles that in Smith (1776 [1976]: Book I, Chapter viii, 23) where the period is 25 years. His account of money, property, and power (Paley ibid.: 604) could be a digest of a similar argument in Smith. Smith’s famous trio, ‘the butcher, baker, brewer’ crops up in Paley, as does the assumption that ‘the only spring which keeps human labour in motion’ is ‘the exclusive right to the produce’ (ibid.: 606, 602). However, any conclusion on the basis of such evidence can only be conjectural, for Paley explicitly declined to acknowledge his sources:
I have scarcely ever referred to any other book, or mentioned the name of the author whose thoughts, and sometimes, possibly, whose very expressions, I have adopted. My method of writing has constantly been this; to extract what I could from my own stores and my own reflections in the first place; to put down that; and afterwards to consult upon each subject such readings as fell in my way: which order, I am convinced, is the only one whereby any person can keep his thought from sliding into other men’s trains (ibid.: xi).
As Paul Samuelson (1946: 197) said of Lord Keynes: ‘[H]is was one of those original minds which never accepts a thing as true and important unless he has already thought it through for himself’.
