Cournot's Theory of Wealth

4. A favourable event such as the improvement of the condition of the people, might initially be accompanied by a reduction in the mass of values in circulation.

We are tempted to suppose that:

• this event conceals the increase in the general wealth through remote consequences
• it will in this way turn out to the advantage of the country.

Experience shows that this is true in most cases. An incontestable improvement in the condition of the people has kept pace with an equally incontestable increase in the sum total of wealth in circulation.

However, theory is unable to explain why this happens. It is still less able to demonstrate that it must always continue to occur.

This inability is from the impossibility of following up analytically all the consequences of such complex relations*.

Let us avoid confounding:

• what is in the domain of accurate reasoning with what is the object of a happy guess
• what is rational with what is empirical.

It is enough to have to guard against errors in logic on the first score. Let us avoid encountering passionate declamations and insoluble questions on the other.

5. From a standpoint of mere etymology, whatever appertains to the organization of society belongs to the field of Political Economy.

But it has become customary to use “Political Economy” in a sense much more restricted and by so much less precise.

The Political Economist is occupied principally with the material wants of mankind. He only considers social institutions as far as:

• they favour or interfere with labour, thrift, commerce, and population
• they affect the subdivision between the members of society of the gifts of nature and the rewards of labour.

This subject is still far too vast to be properly grasped by any one man*.

It affords inexhaustible material for unripe systems and slow investigations.

How can we abstract the moral influences which enter into all these questions and which are entirely incapable of measurement?

How are we to compare:

• the material welfare of the Alpine shepherd with that of the Spanish idler or the Manchester workingman?
• the convent alms with the poor-rates?
• the drudgery of the farm with that of the workshop?
• the pleasures and expenses of a Norman noble in his feudal manor, with those of a British in a house in London?

If we compare one nation with another, by what invariable tokens shall we determine the progress or decay of their prosperity*?

• Shall it be according to population?
  • In that case China would far excel Europe.
• According to the abundance of coin?
  • Spain turned the world away from this gross error long ago, even before even the first crude notions of the true rôle of coin were developed.
• According to business activity?
  • Then inland peoples would be very unfortunate compared with those whom proximity to the sea invites to a mercantile career.

• According to the high price of goods or of wages?
  • Then some miserable island would surpass the most smiling and fertile countries.
• According to the pecuniary value of what economists call the annual product?
  • A year when this value increases greatly may easily be one of great distress for the greatest number.
• According to the actual quantity of this product reckoned in the appropriate unit for each kind of goods?
  • But the kinds of goods produced and the relative proportions are different for each country.

• According to the rate of movement up or down whether of population or of annual product?
  • Provided that the reckoning covers a sufficient time this is, to be sure, the least equivocal symptom of the welfare or misery of society

But how can this symptom help us except to recognize accomplished facts, and facts which have been produced, not only by economic causes in the ordinary meaning of the words, but also by the simultaneous cooperation of a multitude of moral causes.

We are far from wishing to depreciate the philanthropic efforts of those who seek to throw some light on social economy. It is characteristic only of narrow minds to decry medical science because physiological phenomena cannot be calculated as accurately as the planetary movements.

Political Economy is the hygiene and pathology of the social system. It recognizes as its guide experience or rather observation; but sometimes the sagacity of a superior mind can even anticipate the results of experience.

We only seek to make clear, that Political Economy fails to make progress by theory, towards its noble object of the improvement of the lot of mankind, either because the relations which it has to deal with are not reducible to fixed terms, or because these relations are much too complicated for our powers of combination and analysis.

6. Our concept of wealth is a perfectly deteminate relation.

Like all precise conceptions, it can become the object of theoretical deductions. If these deductions are sufficiently numerous and seem important enough to be collected into a system, it will presumably be advantageous to present this system by itself, except for such applications as it may seem proper to make to those branches of Political Economy with which the theory of wealth is ultimately connected.

It will be useful to distinguish what admits of abstract demonstration from what allows only of a questionable opinion.

Our Theory of Wealth would only be an idle speculation if the abstract idea of wealth or value in exchange on which it is founded, were too far from corresponding with the actual objects which make up wealth in the existing social status.

The same would be true of hydrostatics if the character of ordinary fluids should be too far removed from the hypothesis of perfect fluidity.

However, the influence of a progressive civilization constantly tends to bring actual and variable relations nearer and nearer to the absolute relation, which we attain to from abstract considerations.

In such matters, everything becomes more and more easily valued, and consequently more easily measured. The steps towards finding a market resolve themselves into brokerage, losses of time into discounts, chances of loss into insurance charges, and so on.

The progress of the gregarious tendency and of the institutions related to it, and the modifications which have taken place in our civil institutions, all cooperate towards this mobility, which we would neither apologize for nor detract from, but on which the application of theory to social facts is founded.