Chapter 19

John Stuart Mill

pre--eminent position in the dormain of
a
StuUart Mill occupies
Hc was one of the builders
of
John thought. He of.
classical economics.
onomic at a time whcnthc position classical political econorny
appearcd which Bentham could not complete was
He dwindling. The task
aCcomplished by MilI. Mill represents a
two-faceted personality-
socialist-merged into one.
classicist and
Works
Life and son of James Mill,
nent historian,philosopher and
an eminent
L.S. MilI, the was born on May 5, 1806 in London. He was an
political economist,
extremely
brilliant child. At the age of three he learnt Greek and at the
eight, Latin. When he was twelve he had read the works of
age of of
Greek authors.
At the age he
had studied
thirteen history,
many economy. He received his entire education under
literature, and political of his father. He used to give reports on
and supervision
the guidanceevery on his
studies day to his father when he accompanied him
morning walks. His father used to
his put
certain questions to
him
early
obscure concepts and principles to him. Atthe age of
and explain inore up French and studied the
fourteen he went to France where he picked
came
Boman and English laws. After study for one year in France he
back to England. In 1823 he joined the East India Company and by dint
of hard labour rose to the position of the head of the office in 1856. He
retired in 1858 and until his death he devoted himself to research and
writing. He was an independent member of the House of Commons
for 10 years, i.e., from 1858 to 1868. He died in France in 1873.
Mill's scientific and literary activities were in different fields
philosophy, political science and economics. They appeared in the form
of books and articles in periodicals. His principal works are: Essays on
Unsettled Questions in Political Econony(1844); System of
Logic(1842); Principles of Political Economy(1848); Liberty of
Ihoughts on Parliameniary Reform (1859); Representative
overnment (1861); Uilitarianism (1863); Comte and Positivism
(l864):Examination of Sir William Hamilton 's Philosophy (1865);
nd Subjection of Women (1869). Three of his works were
POSthumously published: The Autobiography
(1873); Three Essays
n Keligion (1874); and Chapters on Socialism (1879).
 396 listoryof
Sources of Influence
leonmie"
wWas largcly indebted
Mill as an ccoOmist to Ricarde,
acknowlcdged on nore tlhan onc 0cCAsion.
frankly But
ovcrestimate his. lcbtto Ricardo. That
makc one to illustrated witlh an CXample:
oforiginality, can bc Ricardo,c
state of things, that thc wages should
be
a normal at \he
sO as to provide plhysical support
subsistence levcl, tothe iiimt
nuse a family large enough to supply
enable him to He was so
much convinccd the dermand
market. of
labour in thc advocated complcte abolition of taxes onthetruth fog
statement that he ofhiN
the yabourers,
at
thcy had to survivc the lowest possiblc level. Ricardo
thought
since on
on the workers will be pasSsed totheentrepreneur,
levied
that thetaxcs share as profit. Mill agreed to divergefrom
his
therebyreducing argument. He said that the wage-minima the
of does
Ricardian line a moral minima. This not
minima but only is not the only
mean a physical with Ricardo, Many such instances
Mill has differed
instance where monumental work Principles. Again, after they
can be traced in his
strict classical tradition, Mill's contribution
up inthe
have been brought Philosophical Radical" can never he
or as a
as a "Reformist'
underestimated.
of Utilitarianism' was another SOurce of
so mut
Benthamn, the father years life he was
the early of his
inspiration to Mill. During recognized self-interest as the
influence of Bentham that he later on, his oun
under the
force behind all human conduct. But him to reject
only motivating phenomenon made
experience of the
complexities of social the reform of the
advocated
the utilitarian
philosophy. Consequently, he interference in several
stood for
government
existing institutions and children, etc. Hisattitude
employment of
fields like child education, Coleridge's objections against
was so much changed that he
accepted
property and admitted that although
commercialisation of landed was noblest idea.'
competition was indispensable, CO-operation the Positivism-the
of
Mill was also influenced lby Comte's philosophy
bettermnent ofhuman
desire for a newgeneral science of society for the between
race. Mill accepted with alacrity Comte's great
distinction
economics as a part
Social Statics and Social
Dynamics, and regarded practical
of a larger science of sociology. He dwelt more on its and
application, expressed deep
sympathly working classes
much
moved further
and further away from his originallindividualism,
:SO
Principles, BookIV,
Chapter VIII, para 7.
 MiI
StrHArt 397
hn called himself a
s(eialist. Hissocialisn was tr be achieved
cooperntion, aided by state actio and iiversal
vofuntary
through His
socinlistic propramne agaifi may he said te have heen
tuctinon. LUilitarianism.
or Bentham's
restlt influence of Comte, Bentham and Ricardo, the revotution
theBesidesthe grOwth ofthe trade union and Chartist movements
and the 1 had
1848 mean contribution in moulding his ideas. L.astly, the infiuence
of upon his intellectual and moral development was
Taylor
Mrs.
of
incalculable.
of Political Economy
Principles
cconomy are chiefly containedlin
on political
i his book entitled
Mll'sidcas of Political Economy with some of their Applications to
Principles Work which represents
Philosophy. It is transitional
a
the apogee
Social
of classical cconomics. He did not add anything new to the
decline
and
doctrines and his task was limited to recasting the theories of
classica] of the changes that were taking place in
predecessors in the light Mill Millhas summed up what has been said
his
society. In hhis Principles,
the has Jaid the track for the developments that were to follow.
before and
Scheme of the Book.
Mill was the first writer to follow the scheme
Adam Smith in his Wealth of Nations and by Say, in his
adopted by book into five.small books, namely
Principles. He has divided the
Production, (if) Distribution, (iii) Exchange, (iv)
Influence of the
ress of theSociety on Productionand Distribution, and (v) On the
i)

may be stated herhere that whereas his father

Influence of Government. It
Influence
Mill denied a distinct
one part
part of his book to consumption,
devoted came to occupy an
place to consumption. The concept of utility which
important place in the later theories of consumption and
value has been
given a cursory treatment. In fact, the entire
treatment of the subject
appears to be confusing. His analysis of capital and wages is the most
confusing,According tohim, demand for commodities does
not constitute
by
a
demand for labour, since the demand for labour is constituted
capitalonly and that a change in consumption modifies the direction of
the existing demand. While himself recognizing that production is
"stimulated not only by the desire of the producers to augment their
ncans of consumption, but by the increasing number of consumers,
he deliberately committed the mistake
of not giving aproper place to
"consumption' in his book.
 280
The Germans then found that listory
there
theory developed by the classicists. And was a of
the wide
This gap was widening day by clay Conditions
with
new classes and thc followers of thcrise of o
Ricardo
solutionto these. It was the Ihistoricat school wcre new
which prlerne
of
the albstractions of the classical cconomics at
science in conformity with real lifc, andto
recomrik
The Rise of Historicism in Germany
Among the many factors which contributed
Germany, the most important were ore tothe rise.
the Hegelian of historYCHmis
work of Savigny. Hegel was a philosopher philo
philosophy,
who
philosophy inthe University of Berlin:from 1818to delivered and
very powerful and was widely known 1831. \ecturet
for his philosophy Hewas
polticr
Hegel attached great importance to of
the state as
historical studies. He wanted the study of historyan institution
evolutira
of history in a and
fashion. He held that if we want to know philosoghicA y
the course of
should study history with the help of philosophy, since culture,
history We,
unfolding ofthe human spirit. "Hegelianism says 1sacertin
Haney,
theory regards the course of culture as an unfolding asasocia
spirit, as a sort of inherent self-development moving in of the huma
determined cycle." The credit of applying
o:hea
these ideas to erom
goes to Lorenzo von Stein. Stein was a
transitional figure standing
between German Classicisin and Historicism. He developed
theconceçt
of society as distinguished fromn the state.
Besides the Hegelian influence, there were the developments in the
fields of jurisprudence and philosophy which were more immediate
nportance. In the field of jurisprudence, the
of
work of Savigny deserves
cial mention. Savigny emphasized that legal systems and institutions
re the product of the social conditions and were necessarily of reatve
Nalidity. Institutions which are
important for the present may be
outmoded at a later date. Similarly,
the field of languages developments were takilis P
All these and new laws of philology were being framed.
developments studied
with the help of suuggested that economics should be
and political Comparative method, Besides, there were the social
factors which quickened
q
the
Historical
School.The German the development f of
was on nationalism wassdeveloping fast. Industrialization
the increase and the problems especially
resulting therefrom,
Haney, op. cit., p.
537.
 Critics.(Contd.) 281
FHistorical a
nccessitatcd solution which the classical political
se labour.
relatedto not provide, The socialists were also critical of the
those could
andthcy enphasizcdIthe relativity of the institutions
social. order
inheritance. There was, thus, a state of confusion and
eristing and world of ideas. The members of the Historicala
ofey prvailing in the
these points and
all
attempted to formulate them in
on
chaos cnght
Schvol manne. conceitrating chiefly the problem
of method.
prvdseictifie Historical School went on developing and
nembers of the
As the their,ideas, they
became inereasingly critical of the classical
fomulating attitude bccame more militant and they thought that in
Their onomics, they were trying to solve the problems
doctrincs. classical cconomics,
criticizingthe anywhere. During the forties and fifties of the last
cconomic life were mild but in the seventies and eighties, they
criticisms was during this period that the Historical
of
century, the. sharp. It
loud and Their programme of work included an
became
came into existence. of economic
School systematic investigation
of
the development
exhaustive world covering as many countries and as
institutions throughout
the
as possible. They collected the necessary facts, present
period processes. After the collection
long a about the working of economic
and past, to draw up a new set of principles
20 factual data, they plannedformulated by the classical economists.
which would be
superior to those of an
members of the Historical School, the main task
According to the research, either of the pasta
was to devote himself to factual was “to establish
economist In short, their attempt
Orofthe present
conditions.
which would rest upon bedrock, which would be true
new economics a
guide because
of each country, which would afford genuine
tothe facts hypothetical conditions. »1
it represented actual, not
Historical School can be divided into tWO
groups the older
The
younger. The older group was chiefly negative in its
thought.
and the
Its activities were mainly
demolishing the
limited to attacking and younger group,
abstract generalisations of the Classical School. The
while following the path laid down by their predecessors,
made some
positive contributions. It differed from the older
group in so far as it
denied the existence of non-empirical laws in economics. In
referring
to the 'Historical School', in
a
general way we mean a very broad
movement embracing all those economists who emphasize the relativity
of laws and institutions, the inductive method of reasoning from concrete
historical data and the interrelations among human motives and among
the social sciences. 2
Newmann, op. cit., p.
Haney, op. cit., p.
187.
539.