Jeremy Bentham as an Economist

Author(s): W. Stark
Source: The Economic Journal, Vol. 56, No. 224 (Dec., 1946), pp. 583-608
Published by: Wiley on behalf of the Royal Economic Society
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 JEREMY BENTHAM AS AN ECONOMIST
II. BENTHAM'S INFLUENCE 1
Bentham and the Classical School-Bentham and the Historical
School-Bentham and the School of Marginal Utility.
IN a letter to John Stuart Mill written in 1841, Auguste Comte
expressed the conviction that Bentham must be regarded as
"the main origin of what is called political economy " (Lettres
d'Auguste Comtea John Stuart Mill, 1877, 4). This may sound
a very odd and amazing assertion, as most books on the history
of economic thought do not so much as mention Bentham's name.
Yet there is a great deal of truth in Comte's statement, and
Bentham himself would have heartily approved of it. " I was
the spiritual father of Mill," he said (Works, ed. John Bowring,
1843 X 498), "and Mill was the spiritual father of Ricardo, so
that Ricardo was my spiritual grandson." The claim as it stands
is certainly exaggerated; it would be nugatory to insist on Smith's
share in the paternity of classical economics; but there is un-
doubtedly a strong streak of the Benthamite spirit in Ricardo's
thought, and in all classical economists.
It is not necessary here to furnish concrete proof of the deep
indebtedness of Ricardo and his school to Bentham and his
philosophy: the identity of outlook is obvious to every reader
of the Principles of Political Economyor Mill's Elements. If it is
permitted to use modern jargon, the matter can be summed up
by saying that Bentham and the Ricardians had a common
ideology. They shared the belief that man is essentially a selfish
animal; that it is useless to fight that selfishness,and unnecessary
at the same time, because, where freedom is guaranteed, a conffict
between personal and public welfare is precludedby the admirable
mechanism of modern market relations; that this mechanism
must not be clogged by governmental interference; and that it
I The present paper is a sequel to, or rather the second part of, the study of
Jeremy Bentham's economic thought published by Dr. Stark in this Jou-N4AL
in April 1941. In the meantime, Dr. Stark has made a thorough investigation
of Bentham's unpublished manuscripts on economic matters, and prepared a
critical edition of them which will be published under the aegis of the Royal
Economic Society in the near future. This article is based entirely on Bentham's
printed work, but its conclusions have been confirmed in all points, and invalid-
ated in none, by the study of the unprinted material.

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584 THE ECONOMIC JOURNAL [DEC.

will work the better, the more equality there is in society, because
the free play of equal forces will lead to the most sound and
satisfactory equilibrium. Ricardo clothed these doctrines into
the stern forms of economic theory: Bentham developed their
implications in a host of philosophical, psychological, juris-
prudential, educational and political writings. Their Worksare
complementary,flesh of one flesh and blood of one blood.
Still, though Ricardo was a Benthamite, Bentham was not
exclusively a Ricardian. There are many undercurrents in his
thought which foreshadow later developments in economics and
sociology, and these, though less obvious, are for that very reason
all the more interesting and worthy of close consideration.

The generation which followed upon Nassau Senior and the

younger Mill was not inclined to do Jeremy Bentham justice.
Adolf Held, in his highly characteristic work Zwei BAncherzur
socialen GeschichteEnglands, calls him a typical " Manchester
man " (cf. esp. 263), and this description is an implicit denuncia-
tion. This adverse judgment pronounced by the historioo-
ethical school has stuck, and many who should know better have
thoughtlessly repeated it.
Now, what characterisesthe typical Manchesterman as Adolf
Held and his followers envisaged him, is the conviction that the
system of full economic liberty, as being in harmony with nature
and reason, is always and everywhere unconditionally the best.
In opposition to this view the historical movement upheld the
opinion that no principle can be called absolutely the best, but
that different times and countries demand different forms of
economic and social, political and technical organisation. At the
time when Bentham finished his economic writings, the conflict
between absolutism and relativism had not yet reached the stage
of open conflict, but a deeper study of his doctrine proves that
he would by no means have taken exclusively the part of " per-
petualism " and " universalism ". What led Held to his erron-
eous judgment is the fact that Bentham stood for extreme liberal-
ism; but this liberalism was to him no absolute ideal. He wrote
in England, and only for England, oi at least for England and
her equals (I, 171).

" Among these several classes, agenda, sponte acta, and

non-agenda, the distribution of the imaginable stock of in-
stitutions will differ in a very considerable degree, according
to the different circumstances of the several political com-

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1946] JEREMY BENTHAM AS AN ECONOMIEST 585

munities.... The greater the degree of opulence, the greater

the list of sponte acta-the less, therefore, that of agenda.
In England, abundance of useful things are done by individ-
uals, which in other countries are done either by government,
or not at all. In Russia, under Peter the Great, the list
of sponte acta being a blank, that of agenda was proportionally
abundant " (III, 35).
The fundamental idea of historism lies in these words: the
idea that the principle of perfect abstinence of the State in econ-
omic matters is only applicable to a definite economic stage, the
highest one, which Great Britain has reached, but that in more
primitive conditions its intervention must be regarded as desirable
and indispensable. With this temporal, Bentham combined a
geographical relativism:
" There cannot be any incompatibility between the wealth
of each and the wealth of all: but the same rule does not
apply to subsistence and defence. Individuals may find their
individual profit in commercial operations which may be
opposed to the subsistence of all, or the defence of all. This
particularly may happen to a small community in the neigh-
bourhood of a large one. Establish an unlimited freedom of
trade in the small community, the great one may ruin it by
means of gold. In case of famine it might purchase all its
provisions; at the approach of war, it might purchase all its
arms."

These considerations led Bentham to a principle which is

diametrically opposed to the absolutist postulates of Cobden and
Bright: " The conduct to be pursued ... are infinitely diversified
by the situation, the soil, the climate, and the extent of the
country to which it may refer " (III, 71).
In view of such utterances the question arises whether Bentham
the economist and Bentham the philosopher were not at variance
with each other on this point. Does not the principle of utility
claim to be acknowledged as the only possible road to absolutely
the best system of morals and legislation ? Indeed, this is the
case. But the watchword " the greatest happiness of the greatest
number " indicates only a purely formal principle. It gives
merely-to use a simile-the drawing to the picture of legislation;
its colours, however, necessarily vary from age to age, and from
country to country. This is the tenor of Bentham's Essay on
the Injluence of Time and Place in Matters of Legislation.

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586 THE ECONOMIC JOURNAL [DEC.

Written by a man who was born in the eighteenth century,

this essay, with its firm belief in the power of the legislator over
society, displays strong traits of enlightenment and rationalism.
But this is, after all, only to be expected: what is more important
and quite unexpected is the fact that it exhibits at the same time
the beginnings of the coming conquest of enlightenment and
rationalism by romanticism. Bentham here shows himself in-
fluenced by Montesquieu.
" Before Montesquieu," he says, " a man who had a dis-
tant country given to him to make laws for, would have made
short work of it. Name me the people, he would have said,
reach me down my Bible, and the business is done at once.
The laws they have been used to, no matter what they are,
mine shall supersede them: manners, they shall have mine,
which are the best in nature; religion, they shall have mine
too, which is all of it true, and the only one that is so! "
But since Montesquieu such an absolutism is no longer
possible: his doctrines have proved that the ideal legislator has
fully to take into account the differences of time and space if he
is to fulfill his mission.
" Send the people, he will say, to me, or me to the people;
lay open to me the whole tenor of their life and conversation;
paint to me the face and geography of the country; give me
as close and minute a view as possible of their present laws,
their manners, and their religion " (I, 173).
Only on the basis of this geographical and sociological know-
ledge can a really good and efficient code of law be formulated.
The great thesis of the eighteenth century, that there is a
natural system of right containing for all peoples and periods the
best possible order of social life, was examined by Bentham, and,
for the better part, rejected. Indeed, there is an eternal funda-
mental principle of right elevated above all change, but the out-
ward forms of right, the concrete laws, are subject to the same
changes as all things human.
" The same act which ought to be forbidden in one age
and country, ought it to be forbidden in every other? Yes,
and No; yes, if, in pronouncing the word act, we have in view
a large and general class of acts: no, if a narrow and particu-
lar one. The plain truth of the matter is this: there are
certain acts which admit of laws, which, if worded in a certain
manner, may stand good, and be equally applicable to all

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1946] JEREMY BENTHAM AS AN ECONOMIST 587

places and times; while there are other acts for which no
such laws can be devised. Under the former predicament
come those acts, of which the name is included in a single
word, such as murder.... But laws, while the expression of
them is confined to terms so loose and extensive, will never
be found precise and clear enough for use. The act thus
vaguely described, must, before it can be thoroughly under-
stood and perfectly distinguished, be broken down into
species: the law relating to it must, accordingly, be broken
down into a multitude of laws: the phrase, pure as it stands
now, must be transformed into others, in-which provisions of
an expository, limitative, or exceptive nature will be neces-
sary.... Now, of these qualifying provisions, some, it will
be found, ought, in point of expediency, to be different in one
country from what they are in another; differentin the same
country at one time from what they are at another: and this
is the secret history of the universality and immutability of
these universal and immutable laws.... Were I to choose
to what I would attribute these magnificent prerogatives of
universality and immutability, it should rather be to certain
grounds of law, than to the laws themselves " (I, 192 sq.).
What is here said of the law-giver is true also, mutatismuatandis,
of the law-finder: he who wishes to perceive the anonymous laws
according to which social life is regulated.must keep equally aloof
from the errorsof perpetualismand universalismas he who wishes
to give the political laws according to which social life shall be
regulated.
If we descend from Bentham's philosophy of law to his theory
of knowledge and methodology, the same picture presents itself
to us: Bentham's doctrine was in all its parts a synthesis of
rationalism and empiricism,but a synthesis in which the latter was
much the stronger element. John Stuart Mill justly emphasised
the fact that the perfection of the inductive method was Bentham's
most important contribution to modern philosophy.
" He brought into philosophy something which it greatly
needed, and for want of which it was at a stand.... He
introduced ... those habits of thought and modes of investiga-
tion, which are essential to the idea of science; and the ab-
sence of which made those departments of inquiry, as physics
had been before Bacon, a field of interminable discussion,
leading to no result.... Bentham's method may be shortly
described as the method of detail...."

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588 THE ECONOMIC JOURNAL [DEC.

This method-the method of specialised observation-was,

however, characteristic of the historical school and alien to
classical economics. If it is true that thinkers are to be classified
by their methods-and nothing expressed the contrast of opinions
more sharply than the famous " Methodenstreit " between Menger
and Schmoller-Bentham must be regarded as a representative of
the intellectual type Comte-Schmoller, and not as a representa-
tive of the intellectual typeRicardo-Menger. The maxim, "which
no onebeforeBentham ever so consistently applied,"w-as,according
to Mill (Dissertations and Discussions, 1859, I, 339 sq.), the thesis
" that errorlurks in generalities: that the human mind is not
capable of embracing a complex whole, until it has surveyed
and catalogued the parts of which that whole is made up;
that abstractions are not realities per se, but an abridged
mode of expressing facts, and that the only practical mode
of dealing with them is to trace them back to the facts
(whether of experience or of consciousness)of which they are
the expression."
This creed is more than similar to the basic concept of
Schmoller-it is identical with it. Both endeavoured to replace
the "ratiocination from premissesadopted on a mere rough view "
by "a real inductive philosophy." However Held, the champion
of historism, may have judged, both were links in the long chain of
the development of empiricism which reaches from Bacon, and,
indeed, from Plato, down to the present day.
" Observation and experiment compose the basis of all know-
ledge " (VIII, 424). Even the doctrines of political economy
must therefore be won by a thorough investigation of the facts.
" To allow no more weight to examples that fall close under
our eyes than to those which have fallen at ever so great a
distance," Bentham says (III, 28), " to suffer the judgment
on no occasion to indulge itself in the license of a too hasty
and extensive generalization-these are laws, the complete
observance whereof forms the ultimate, and hitherto perhaps
for ever, ideal term of human wisdom."
But Schmoller's school not only taught that the economic
system was changed by time, they also demanded that it should
be changed by man. They not only rejected the absolutism, but
also the fatalism, of Ricardo. The historical and ethical elements,
economic history and social reform, are indissolubly combined in
their thought. In this respect, too, Bentham occupied a parallel

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1946] JEREMY BENTHAM AS AN ECONOMIST 589

position: while classicists and neo-classicists wanted to malke

economic theory, after the model of the physical sciences, sub-
servient to pure strife after knowledge, Bentham, like the " social-
ists of the chair " in later days, aimed at knowledge only for the
sake of practical purposes-for the advancement of social welfare.
" Political economy," he says (III, 33), " is at once a
science and an art. To Adam Smith, the science alone has
been the direct and constant object in view: the art the
collateral and occasional one. The value of the science
[however] has for its efficient cause and measure, its sub-
serviency to the art."
Even the great historical aim of the " socialists of the chair,"
the raising of the working class by State aid, was shared by
Bentham, the alleged Manchester-liberal. He taught, indeed,
that, in view of the attainment of the maximum of happiness,
the State did best to refrain from all interference, but only " in
so far as this more general end is promoted by the production of
the maximum of wealth " (ibid.). Under a different aspect its
activity may appear justifiable; material riches are not, after al,
the highest good. " Comfort,including security, is the immediate
and only direct object in any estimate with me-and wealth,only
in so far as it contributes to comfort" (80). Social legislation
ought, therefore, at times to take precedence over the interests
of production:
" It is true ... that what ought not to be done with the
intention of supporting an unprofitablebranch of trade, may
yet be properfor preventing the ruin of the workmenactualiy
employed in such business: but these are objects entirely
distinct " (60).
And in a positive sense:
" If a bounty upon production could be justified, it would
seem that it ought to be so in the case where the article thus
favoured was an article of general consumption-as corn in
England, oats in Scotland, potatoes in Ireland, and rice in
India: but it would only appear so as a means of producing
equality, not under any other point of view " (61).
Even before Robert Owen,Bentham demandedState aid for the
unemployed. He advocated " establishments for the occasional
maintenance and employment of the able-bodied among the poor,
viz., of such by whom either the one or the other is unobtainable

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590 THE ECONOMIC JOURNAL [DEC.

from the ordinary sources " (III, 72 sq.)-a postulate which would
never have been put forward by a real Manchester man.
In his Principles of the Civil Code, Bentham even developed
a theoretical justification of social legislation by vindicating it
against the principle of laissez-faire.
" In the highest state of social prosperity, the great mass
of citizens will have no resource except their daily industry;
and consequently will be always near indigence.... This
aspect of society is the saddest of all.... There are only
two means, independently of the laws, of making head against
these evils, viz., savings and voluntary contributions. If
these two resources would always suffice, we ought, by all
means, to avoid any legal interference.... But a slight
examination will be enough to convince us that the two means
of succour, independent of the laws, are not sufficient. With
respect to savings-if the greatest efforts of industry will not
suffice for the daily support of a numerous class, how can
that class lay by for the future? ... In the division of
voluntary contributions, the lot of the honest and virtuous
poor is seldom equal to that of the impudent and obstreperous
beggar.... It seems to me, after these observations, that
we may lay it down as a general principle that the legislator
ought to establish a regular contribution for the wants of
indigence. . ." (ed. Ogden, 127 sq.; Bowring I, 314 sq.).
It is the principle of State aid which is here proclaimed, the
principle of a conservative social policy-not the principle of self-
help characteristic of liberalism. It is true that Bentham shared
the view that there should be no interference with the sphere of
the individual. Viewed from the economic standpoint, liberty and
security of property are the highest good. But there are higher
values than those of economy:
" The title of the indigent as indigent is stronger than the
title of the proprietorof superfluitiesas proprietor. For the
pain of death, which would presently fall upon the starving
poor, would be always a more serious evil than the pain of
disappointment which falls upon the rich when a portion of
his superfluity is taken from him " (132, 316 respectively).
Genuine social policy ought to take precedence over the in-
violability of private property-such was Bentham's conviction.
In view of all this it cannot be doubted that Held's judgment
on Bentham must be regretted as superficialand false. Held saw

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1946] JEREMY BENTHAM AS AN ECONOMIST 591

only the weaker rationalist element, not the stronger empiricist

element in Bentham's thought. Thus he branded a man as an
adversary of his school, who, in reality, had been a predecessor.
One circumstance, however, makes this attitude intelligible.
It is not easy to perceive Bentham's influence on the generation
which governed international economic thought between 1840 and
1870, for this influence was only indirect, operating through two
middlemen, Simonde de Sismondi and Karl von Savigny. They
developed the germs of the inductive-historio-ethical concept
which are to be found in Bentham, and thu$ became the bridge
between him and men like Cliffe Leslie and Wilhelm Roscher.
It was Etienne Dumont, Bentham's tireless editor and en-
thusiastic apostle, who introducedhis fellow-countrymanSismondi
to the intellectual world of utilitarianism. In a " Notice necro-
logique " on this great philanthropist which appeared in the year
1829 in the Revue Encyclop6dique,Sismondi, indeed, expressly re-
jected Bentham's philosophy; but his writings clearly prove how
deeply he had been influenced by it. " The science of govern-
ment," run the first words of his Nouveaux principes d'e6conomie
polittique," proposes, or should propose as its aim, the happiness
of men united in society. It seeks for the means of assuring them
the greatestpossiblefelicity compatible with their nature; it seeks
at the same time those means which make participate in that
felicity the greatestpossible-number of individuals " (1819, 1).
Thus Sismondi's starting-point was the same as Bentham's, the
greatest-happiness principle, and it is only natural that they
arrived at the same fundamental convictions. Thus in eco-
nomics:
" We consider political economy ... as being essentially
the science of government .. . the quest for the means by
which the greatest possible number of men in a given commu-
nity may participate in the greatest possible degree in the
physical well-being which depends on government " (Etudes
sur l'Economiepolitique, II, 1838, 238; Nouveauxprincipes,
II, 248).
This similarity of opinion is also manifest in the basic socio-
logical concept: "A nation is nothing else than the union of
the individuals of whom it is composed " (Nouveauxprincipes, I,
231). And even in methodologyboth show the same disinclination
towards generalisations: " It is in the details that it is essential
to study human conditions " (Etudes I, IV). These utterances
of Sismondi, to which many others could be added, are reminiscent

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592 THE ECONOMIC JOURNAL [DEC.

not only of Bentham's thought, but often even of Bentham's

words.
But even in the one respect in which he is generally credited
with definite originality, in the theory of crises, Sismondi must
be regardedas a disciple of Bentham. Sismondi'smost important
thesis states that the growing mechanisation of industry in one
act increases the productive capacity, and decreasesthe consump-
tive capacity, of society. The same idea had already been
expressed by Bentham:
"The advantage of machines " he said (III, 67, 39),
"consists in the increased efficacy of labour.... If a manu-
facturer found himself thus in a condition to execute, with
one thousand workmen, what had heretofore required two
thousand, it appears, at first sight, that -the natural result
would be, that he would employ the two thousand workmen
to produce the double quantity of work. But unless his
pecuniary capital be augmented, it will be impossible for
him to employ the same number. The new machines, the
new warehousesrequiredfor this increase of produce, require
a proportionateincrease of capital. The most ordinary case,
therefore, will be the reduction of the number of workmen;
and, as respects them, the consequence is a temporary
distress."

It was this idea whose implications Sismondi later developed.

While it is easy to prove Bentham's influence on French
thought, it is much more difficult to show his influenceon German
historism. Fr. K. v. Savigny was here the medium. Although
a jurist, he deeply influenced German economic thought; it was
the application of his mode of thinking to economic phenomena
which determined Wilhelm Roscher to break away from the
tradition of abstract and deductive economic theory. Now, the
influence of the English Tory theoreticians on Sav'ignyis beyond
doubt, and besides Burke, Bentham, too, must here be named in
the first place.
The conquest of the law of nature completed by Savigny had
been begun by Bentham. He rejected and opposed the sentence
of the French Declaration of Rights, that " the end im view of
every political association is the preservation of the natural and
imprescriptiblerights of man " as an " anarchical fallacy."
" There are no such things as natural rights.... Who is
this same Queen Nature, who makes such stuff under the

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1946] JEREMY BENTHAM AS AN ECONOMIST 593

name of laws? In what year of her own, or anybody else's

reign, did she make it? and in what shop is a copy of it to
be bought, that it may be burnt by the hands of the common
hangman, and her majesty well disciplined at the cart's
tail? " (II, 500 sq., 598).
But is the agreement between the older Bentham and the
younger Savigny not confined to their negative -views? Is there
not a contradiction between them in their positive principles?
What gives Savigny's famous pamphlet, Vom Beruf unserer Zeit
fi)r Gesetzgebung und Bechtswissenschaft,its general importance is,
according to Rudorff, his disciple (Zeitschriftfitr Bechtsgeschichte,
1863, I, 35), " the new doctrine of the creation of the civil law not
alone by the legislation of the State, as it passed for an article of
faith -with the older school, the Macanaz and Bentham, but
originally and predominantly by the national consciousness."
This new doctrine, far from being irreconcilablewith -Bentham's
ideas, is in fact contained in his works: only that Bentham con-
ceived the national consciousness not as the expression of a
mystical national spirit, but as the product of the historical
national experience. The contrast only pertains to idealism and
materialism, not to rationalism and historism.
Particularly interesting in this connection is what Bentham
says on the rise of the law of obligations:
" In their origin, all services must have been free: it is
only by degrees that the laws have intervened to convert the
more important into positive rights. It is thus that the
institution of marriagehas converted into legal obligationsthe
connexion which formerlywas voluntary.... The same plant
might grow in the common, and even be protected by certain
conventions; but it would always be subject to more hazards
than in this particular boundary traced by the law, and
guaranteed by the public force " (I, 338).
Thus the " duties purely social " precedethe " political duties,"
and the " legislative code " only defines with more precision what
the " moral and social code " had already ordained. Even the
origin of the State is explained in a similar vein:
"Government supposes the disposition to obedience
this disposition may have had for its cause either habit or
convention. . . . Habit is the result of a system of conduct
of which the commencement is lost in the abyss of time"
(III, 219).

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594 THE ECONOMIC JOURNAL [DEC.

The idea of a social contract, however, is rejected in another

connection as a " chimera " (I, 268).
Lastly, the fundamental idea of Savigny's historical school-
the idea of the relativity of law-was equally present in Bentham.
He did not favour the transmissionof institutions of a more highly
developed and better-organised country to a younger and more
primitive territory.
" It may happen," he says (I, 178), " that the law which
prevails in the country to be regulated, shall be better for
that country than it would be in the standard country: while
the law that obtains with relation to the same point in the
standard country, is better for that country than it would be
in the country to be regulated."
This relativism provides him also with the key to an under-
standing of the past. What is nonsense to-day must once have
been sense. In this vein he explained the historical privilege of
the aristocracy:
" To the peers, their right of being tried by their own
body in capital cases was of use when peers were in a state
of perpetual hostility with the crown, and juries were at its
devotion. It is now a burthen to the nation and of use to
nobody, unless it be to the Lord Chamberlain,and to make
a raree-show" (IV, 321).
And as legal institutions have only relative value, so legal
ideas:
" As to the OriginalContract ... and other fictions, there
was once a time, perhaps, when they had their use. With
instruments of this temper, I will not deny but that some
political work may have been done, and that useful work,
which, under the then circumstances of things could hardly
have been done with any other. But the season of Fiction
is now over. . ." (I, 268 sq.).

The age of positivism, so we may complete the argument, has

arrived-the age of positivism, which took its origin in men like
Bentham and reached its perfection in men like Schmoller and his
school.

" When we reflect upon the series of events which ...

constitute the production, the distribution, and the con-
sumption of wealth ... it becomes at once evident, that
whatever may be the natural laws which govern each of these

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1946] JEREMY BENTHAM AS AN ECONOMIST 595

phenomena, the thing governed is the mutual relation, direct

or indirect, of two simultaneous events, one occurringin the
provinceof human nature, and the other in the external world.
. . . It will probably be found, on a reference to the best
treatises of Political economy, that the physical conditions of
matter with which the science is concerned, have alone been
hitherto investigated.... There appear to remain still un-
explored ... the mental conditions of the subject...."
In these words Richard Jennings described in 1855 (Natural
Elements of Political Economy, 9 sq.) what Ricardo and Mill had
done in the past, and predicted what Jevons and Mengerwere to
do in the future. In either field, in the description of the extra-
human as well as in the analysis of the inner-psychic phenomena,
Jeremy Bentham achieved fundamental results: not only Ricardo
and Mill, but also Jevons and Mengerhad to learn from him.
From Bentham's main axiom, accordingto which man must be
conceived as a pleasure-seeking and pain-fleeing animal, it not
only follows that all his actions, but equally that all his ideas, must
be interpreted in the light of the basic sensations. Psychology,
in the hedonist form in which Bentham envisaged it, is therefore
the basis of the system of sciences- all other disciplines, the
Chrestomathiat teaches, must grow out of, and harmonise with,
its perceptions.
" Directly or indirectly, well-being ... is the subject of
every thought.... Constantly and unpreventably it actually
is so.... This being admitted, Eudaemonics . . may be
said to be the object of every branch of art and the subject
of every branch of science.... Eudamonics [in a narrower
sense] is the art of well-being. Necessary to well-being is
being. In every part, therefore, of the common field, con-
comitant and correspondentto Eudaemonicsconsideredas an
art, runs Ontology, considered as a science " (VIII, 82 sq.).
But the social sciences which include theoretical and practical
economics not only serve, like all branches of knowledge, the
maximation of happiness, but they are, in addition, directly con-
cerned with its determinants, the feelings of pleasure and pain;
within the special-Bentham says in his bizarre terminology:
idioscopic-ontology they do not belong to the somatoscopic (i.e.,
body regarding), but to the pneumatoscopic (i.e., mind regarding)
class; and within pneumatoscopic ontology again not to the
nooscopic (i.e., intellectual faculty regarding) but to the patho-
scopic (i.e., sensitive faculty regarding) group. Thus already

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596 THE ECONOMIC JO3UNAL [DEC.

Bentham's doctrine of the system of sciences, and of the position

of the social disciplines in it, makes the postulate of choosing the
analysis of the individual psyche as starting-point for the analysis
of all economic phenomena.
But Bentham did more than that. "The whole of our actions
in industry and trade," says Stanley Jevons, developing the
foundations of his Theory of Political Economy (ed. 1931, 10),
" depend upon comparing quantities of advantage and dis-
advantage." This important statement implies two propositions
which constitute the whole differencebetween classicism and neo-
classicism: first, the demand that economic science must build
on the foundations of psychology, because the comparison in
question is an act of the human mind; and secondly, that eco-
nomic science is mathematical in character and must be so
consciously, for it is always concrete magnitudes.which are being
weighed against each other. Both theses on which the whole
edifice of the doctrine rests, sprang, as Jevons well knew, from
Bentham's philosophy.
The first proposition contained in Jevons's dictum, according
to which all economic actions result from a calculus of gain and
loss, is, in fact, only a special case of the generallaw which Bentham
had formulated, accordingto which all actions without distinction
are determined by a calculus of the feelings of pleasure-and pain
to be expected. "'Pleasure and pain," he says (I, 1), " govern
us in all we do." All human actions have a motive, and all motives
have a feeling of pleasure or pain for their basis., We act always
so As to procure ourselves a feeling of pleasure or to ward off a
feeling of pain.
" To take an exact account, then, of the general tendency
of any act ... proceed as follows: sum up all the values of
all the pleasures on the one side, and those of all the pains on
-
the other. The balance, if it be on the side of pleasure, will
give the good tendency of the act upon the whole, with respect
to the interests of that individual person; if on the side of
pain, the bad tendency of it upon the whole " (I, 16).
According to the result of the computation, the act is under-
taken or omitted. Any practical judgment of man, the moral no
less than the economic, is therefore simply a judgment on (positive
or negative) quantities of pleasure.
This leads us to Jevons's second proposition: to the question
whether and how the basic feelings can be comprehendedin their
magnitude. The best Bentham experts disagree as to whether

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1946] JEREMY BENTHAM AS AN ECONOMIST 597

Bentham regarded pleasure and pain as measurable: Leslie

Stephen asserts that he did and points to the same utterance of
the great utilitarian from which Oskar Kraus deduced the oppos-
ite conclusion (cf. The English Utilitarians, I, 1900, 250; Die
Werttheorien,1937, 106 and 383). But however this may be,' it
cannot be doubted that Bentham thought a doctrine of the magni-
tude, or value, of pleasures and pains possible on which Jevons
could later build.
An objective comprehensionof the psychic magnitudes would
make economic theory an exact science. It is a mathematical
discipline even without it:
" We only employ units of measurement in other things
to facilitate the comparison of quantities," Jevons explains
(l.c., 12 sq.). " And if we can comparethe quantities directly,
we do not need the units. . . . Now the mind of an individual
is the balance which makes its own comparisons,and it is the
final judge of quantities of feeling.... Even if we could
compare the feelings of different minds, we should not need
to do so. . . . The motive in one mind is weighed only
against the motives in the same mind, never against the
motives in other minds.... Hence the weighing of motives
must always be confined to the bosom of the individual."
But as a people is only an " aggregate of individuals "-here
appears an atomistic sociology which Jevons and Menger equally
received from Bentham-this psychic comparison of advantage
and disadvantage, gain and loss, pleasure and pain, is decisive also
for the socio-economicactions, and its analysis for the understand-
ing of the whole economic system.
This analysis of the individual psyche was undertaken by
Bentham. In us, he teaches, pleasure and pain appear and act
as definite magnitudes. " To a certain person, considered by
himself," he says (I, 16), " the value of a pleasure or pain, con-
sidered by itself, will be greater or less, according to the four
following circumstances: (1) Its intensity. (2) Its duration.
(3) Its certainty or uncertainty. (4) Its propinquity or remote-
ness." Present feelings, therefore, have two dimensions:
" The magnitude of a pleasure is composedof its intensity
and its duration: to obtain it, supposing its intensity repre-
The solution of the problem seems to lie in the following sentence:
" Considered with reference to an individual, in every element of human
happiness ... the dimensions of value ... are four: Intensity, duration,
propinquity, certainty.... Of these . . -. the first, it is true, is not susceptible
of precise expression: it not being susceptible of measurement. But the . . .
others are " (IV, 642).
No. 224.-VOL. LVI. T T

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598 THE ECONOMIC JOURNAL [DEC.

sented by a certain number of degrees, you multiply that

number by the numberexpressive of the moments or atoms of
time contained in its duration. Suppose two pleasuresat the
same degreeof intensity-give to the secondtwice the duration
of the firsft,the second is twice as great as the first" (IV, 540).
This is a solid basis, on which it is well possible "to apply
arithmetical calculations to the elements of happiness ":
" The quantity or degree of well-being experienced during
any given length of time is directly as the magnitude (i.e.,
the intensity multiplied by the duration) of the sum of the
pleasures, and inversely as the magnitude of the sum of the
pains experienced during that same length of time " (VIII,
82).
The doctrine of the dimensions of pleasure and pain Bentham
describedas an " application of arithmetic to questions of utility "
(IV, 542). With the same words one could characterise the
economic teachings of Jevons and Menger, Walras and Clark.
Bentham's philosophical and psychological theory of value has
been the root from which their economic theory of value has
sprung.
But not only as a philosopher, even as an economist Bentham
preparedthe utility theory of value. He viewed and formed the
notions of economic science in-a subjectivist sense. Most interest-
ing in this connection is his doctrine of the factors of production,
even though it remained undeveloped. "For the development of
industry," he says (I, 310), " the union of power and will is re-
quired." In another place he makes a more elaborate distinction:
he divides power in the wider sense of the word into knowledge,
i.e., " power so far as it depends upon the mental condition of the
party whose power is in question," and power in the narrower
sense, which " depends upon the state and condition of external
objects." " Power, knowledge, or intelligence, and inclination:
where these requisites concur on the part of him on whom the
production of the desirable effect in question depends, it is pro-
duced; when any one of them is waniting, it is not produced "
(III, 34). Comparedwith Smith's doctrine of the factors of pro-
duction, this conception is the purest subjectivism: not the
objective categories land, labour and capital are distinguished,
but subjective categories: the power of man over the forces of
nature (in soil and capital goods), the knowledge how to use this
power and the will to do it.

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1946] JEREMY BENTHAM AS AN ECONOMIST 599

In a similar subjectivist and psychological vein Bentham

interpreted also exchange:
" Some advantage results from every exchange. Other-
wise such exchange would not be made.... This advantage
for each of the contracting parties is the difference between
the value which they put upon what they give up and the
value of what they acquire. . . . In each transaction of this
kind there are two masses of new enjoyments " (III, 70, cf.
also I, 330 sq.).
Most strongly manifest is Bentham's subjectivism in his con-
cept of value. " Value is subserviency to well-being-Value is
subserviency to use " (III, 36, 39). With these definitions
Bentham from the very beginning takes a course different from
that of Smith and Ricardo. He makes, indeed, the traditional
distinction between value-in-exchange and value-in-use, but it is
the latter concept which he regards as the more important.
" Value may be distinguished into (1) General, or say
value in the way of exchange, and (2) Special, or say idio-
syncratical-value in the, way of use in his own individual
instance.... The value of a thing in the way of exchange
arises out of, and dependsaltogetherupon, and is proportioned
to its value in the way of use:-for no man would give anything
that had a value in the way of use in exchange for anything
that had no such value," (III, 226).
While Ricardo and Marx make the value-in-use only the pre-
supposition of value-in-exchange, it is with Bentham also its
source and its measure-just as later with Jevons and Menger.
Another of the most typical doctrines of the Austrians is
equally foreshadowed in Bentham: Bdhm-Bawerk's theory of
interest. The thesis that present things are more highly valued
than future things is an essential part of Bentham's doctrine of
the value of sensations (cf. supra, point 4: Propinquity and
remoteness). "Putting money out at interest," he says (III, 4),
" is exchanging present money for future." But " a given sum
is worth the less, as the time for receiving it is more distant " (III,
143). Hence the necessity of interest.
" The magnitude of a pleasure," we read in another place
(IV, 340), " supposing it present, being given, the value of
it, if not present, is diminished by whatever it falls short of
being present. . . . Take ... two sums of the same magni-
tude, say 20 pounds, the one sum receivable immediately, the

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600 THE ECONOMIC JOURNAL [DEC.

other not till at the end of ten years from the present time,
interest of money being (suppose) at five per cent. The
value of the second sum will be but half that of the first."
The same train of thought in opposite direction gives B6hm-
Bawerk's fundamental idea.
But Bentham not only prepared the theory of marginal
utility; he even pronouncedit. The psychological facts on which
it rests were known to the time. " Pleasures, by repetition, lose
their relish," wrote Paley in 1785 (The Principles of Moral and
Political Philosophy, ed. 1814, I, 24). " It- is a property of the
machine for which we know no remedy, that the organs, by which
we perceive pleasure, are blunted and benumbed by being
frequently exercised in the same way." In this vein Bentham
investigated in his " Pathological Propositions upon which the
Good of Equality is founded" (Ogden, 102 sq.; Bowring I, 304
sq.) " the effect of a portion of wealth when it enters for the first
time into the hands of a new possessor," and expresses in this
connection the idea of the margin: " The portion of wealth may
be so far divided as to produce no happiness at all for any of the
participants. This is what would happen, rigorously speaking, if
the portion of each was less in value than the smallest known
coin." The smallest coin is accordingly to be regarded as the
marginal value.
The law that marginal u-tility decreases if the quantity of a
commodity increases was equally formulated by Bentham: " The
loss of a portion of wealth will produce, in the total happiness of
the loser, a defalcation greater or less, accordingto the proportion
of the part lost to the part which remains " (Ogden, 106; Bowring,
306). Or, in another context:
" How indubitable soever the title may be, of any object
to be considered as belonging to the list of these. . . causes
[or sources of pleasure], the magnitude of the pleasure pro-
duced by it does not increase in so great a ratio as that in
which the magnitude of the cause increases. Take, for
instance .., money. Take thereupon any individual: give
him a certain quantity of money, you will producein his mind
a certain quantity of pleasure. Give him again the same
quantity, you will make an addition to the quantity of his
pleasure. But the magnitude of the pleasure produced by
the second sum will not be twice the magnitude of the
pleasure produced by the first. While the sums are small,
the truth of this position may not be perceivable. But let

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1946] JEREMY B:ENTHAMAS AN ECONOMIEST 601

the sums have risen to a certainmagnitude it will be altogether

out of doubt. . . . As it is with money, so is it with all other
sources or causes of pleasure " (IV, 541).
And lastly, more clearly still, in a third place:
"The effect of wealth in the production of happiness goes
on diminishing, as the quantity by which the wealth of one
man exceeds that of another goes on increasing: in other
words, The quantity of happiness produced by a particle of
wealth (eachparticle being of the same magnitude)will be less
and less at everyparticle: the secondwill produceless than the
first, the third than the second, and so on " (III, 229).
In this connection Bentham makes an interesting remark:
"It is to this head that the evils of deep play ought to
be referred. Though the chances, so far as relates to money,
are equal, in regardto pleasure they are always unfavourable.
I have a thousand pounds. The stake is five hundred. If I
lose, my fortune is diminished one-half; if I gain, it is in-
creased only by a third. Suppose the stake to be a thousand
pounds. If I gain, my happiness is not doubled with my
fortune; if I lose, my happiness is destroyed."
This remark is interesting because already a considerabletime
before Bentham similar ideas had -been developed on a similar
example: by the Swiss mathematician Daniel Bernoulli. It is
probable, though it cannot be proved, that Bentham knew the
Specimen theoriaenovae de mensurasortis (published 1738), which
Keynes rightly describes as " the first explicit attempt to take
account of the important conception known to modern economists
as the diminishing marginal utility of money " (A Treatise on
Probability, ed. 1929, 318). More interesting than the question
if Bernoulli influenced Bentham is, however, at any rate in our
context, the question if Jevons and Menger were influenced by
Bentham-a question which it is simple to answer with respect
to Jevons, and difficult with respect to Menger.
Stanley Jevons in his Theory of Political Economy quotes
Bentham several times. But-although the CodificationProposal
is mentioned in one place (l.c., XXVI)-he depended only on the
Principles of Morals and Legiskation,in which there is hardly any
allusion to the law of decreasing marginal utility.
Nevertheless, it is no exaggeration to say that Bentham, or
rather Benthamism, was the source from which the theory of
marginal utility sprang. Jevons and his contemporarieslived in

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602 THE ECONOMIC JOURNAL [DEC.

an atmosphere charged with sensationalist psychology aiid utili-

tarian ethics which both came from the great man of Queen's
Square Place; it is only natural that they drew parallel economic
conclusions from identical philosophical propositions. "No ...
extinction has yet overtaken Bentham," Sidgwick wrote in 1877.
" His system is ... an important element of our current political
thought;- hardly a decade ... has elapsed since it might almost
have been called a predominant element " (Miscellaneous Essays
and Addresses, ed. 1904, 135). And Sidgwick is a competent
witness: his own life-work had its roots in Bentham's doctrines.
When twenty-three years old, he told his friend Dakyns in 1862:
" I think I see a reconciliationbetween the moral sense and utili-
tarian theories " (A Memoir by A.S. and E.M.S., 1906, 75). All
he wrote in later years is admirably summed up in these words.
And as England's leading philosopher drew his ideas from the
deep well of Bentham's thought, so did England's leading
economist. When, in his criticism of Jevons, Marshall described
it as " a familiartruth that the total utility of any commodityis not
proportionalto its final degree of utility " (Memorials, ed. Pigou,
1925, 95), he can only have thought of Bentham and Bernoulli,
and no one else.
However, the' theory of marginal utility is not the work of
Jevons alone. The names of Marshall and Edgeworth should
never be separated from his when the rise of modern economics
is considered. To prove our thesis we have therefore to establish
the influence of Bentham on the two great pioneers of Cambridge
and Oxford.
As far as -Edgeworth is concerned, this is no difficult task.
Edgeworth's economic doctrine is an application of Sidgwick's
psychological theory. " Sidgwick," says the index to his New
and Old Methods of Ethics (1877, 92), "quasepars non plena?"
His fundamental conceptions are radically Benthamite:
" The first principle of economics is that every agent is
actuated only by self-interest. . . . The principal inquiries in
social science may be viewed as maximum-problems. . . . As
electro-magnetic force tends to a maximum energy, so also
pleasure force tends to a maximum energy " (Mathematical
Psychics, 1881, 16, 6, 13).
It is to him an axiom that " all pleasures are commensurable;
so much of one sort of pleasurefelt by one sentient being equateable
to so much of other sorts of pleasure felt by other sentients " (59
sq.). But here his adherence to Bentham's egalitarianism stops

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1946] JEREMY BENTHAM AS AN ECONOMIST 603

short. In fact, he fought "the democratic or isocratic tendencies

implicit in utilitarianism" and expressed himself " in favour of
aristocratical privilege-the privilege of man above brute, of
civilized above savage, of birth, of talent, and of the male sex"
(117, 77).
" If sentients differin capacity for happiness," he suggests,
implying that this is the case, " under similar circumstances
some classes of sentients experiencing on an average more
pleasure (e.g., of imagination and sympathy) and less pain
(e.g., of-fatigue) than others-there is no presumption that
equality of circumstancesis the most felicific arrangement....
Supposing the number of distributees fixed, and ... a fixed
distribuend, might not the sum-total of happiness be greatest
when the greatest part of the sum-total, or at any rate larger
portions, were held by a few?'. . . The principle of greatest
happiness may have gained its popularity, but it lost its
meaning, by the addition 'of the greatest number'" (VII,
118).
It is a surprisingfact that Alfred Marshall, although likewise
under Sidgwick's influence, accepted exactly those tenets of
Benthamism which Edgeworth rejected, and vice versa. " The
solution of economic problemswas for Marshallnot an application
of the hedonistic calculus,"Keynes states in his classical apprecia-
tion of the master (Memorials,9), while it was just this to Edge-
worth. In fact, Marshallwas most definite on this point.
" Whenever we get a glimpse of -the economic man," he
asserts (i.c., 160 sq.), " he is not selfish. . . If we analyse
all the infinite variety of motives that are commonly grouped
together under the term 'love of money' we see that they
are of all kinds. They include many of the highest, the most
refined, and the most unselfish elements in our nature."
Of course, Marshall admitted that egoism was an important
spring of action; but there are other motives, he held, that must
equally be acknowledged: above all " hot impulses " and " com-
bative instincts " (212). And as he rejected Bentham's doctrine
that self-love is the only psychic mptive, so he declined the thesis
that pleasure is the only real aim of men. He urged that know-
ledge and work (as " the healthy exercise of faculties ") are also
values of a primary character, ends desired for themselves (106,
115). Nor did he accept the maximisation of enjoyment as the
summumbonum: " A deep full character is the only true source
of happiness " (345).

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604 THE ECONOMIC JOURNAL [DEC.

But, for all that, Marshall was not less convinced that Ben-
tham's propositionas to the diminishingmarginalutility of money
with increasing quantity was an undeniable truth of fundamental
importance to economic analysis. " The same sum of money
measures a greater pleasure for the poor than for the rich," he
stated in his inaugural lecture at Cambridge,and in 1917, many
years after his retirement, he wrote: " The happiness of the rich
does not exceed that of the poor nearly in proportionto the differ-
ence in their commands of material wealth" (162, 347). This
view makes Marshall a Benthamite. Personally, he would not
have liked this statement: he purged his books consistently from
all references to the philosopher who had come to be despised
as the apostle of egoism. Discussing the connection between
the size of income and the amount of pleasure derived from it,
the first; edition of the Principles had quoted Bentham as an
authority; the second edition no longer does so. The second and
third editions contain the following admission: "The notion of
Consumers'Rent was suggested to the present writer by a study
of the mathematical aspects of demand and utility under the
influence of Cournot, von Thuenen and Bentham " (book III,
chap. VI, 3). This passage disappeared in the fourth edition.
Indeed, even the word pleasure was eliminated because it was
too utilitarian: its place was taken by the terms benefit, gratifica-
tion, and, above all, utility. But all this does not change the
facts. Can there be a clearer confession of Benthamism (if not
of indebtednessto Bentham) than the following words of Marshall?

"Wealth exists only for the benefit of mankind. . . . Its

true measure lies only in the contribution it makes to human
well-being. Now, when bricks and sand and lime and wood
are built up into a house, they constitute a greater aggregate
of wealth than they did before, even though their aggregate
volume is the same as before: and, if the house is overthrown
by an earthquake, there is indeed no destruction of matter,
but there is a real destruction of wealth, because the matter is
distributed in a manner less conducive to human well-being.
Similarly, when wealth is very unevenly distributed, some
have more of it than they can turn to any very great account
in promoting their own well-being; while many others lack
the material conditions of a healthy, clean, vigorous, and
effective family life. That is to say the wealth is distributed
in a manner less conducive to the well-being of mankind than
it would be if the rich were somewhat less rich, and the poor

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1946] JEREMY BENTHAM AS AN ECONOMIST 605

were somewhat less poor: and real wealth would be greatly

increased, even though there were no change in the aggregate
of bricks and houses and clothes and other material things,
if only it were possible to effect that change without danger
to, freedom and to social order and without impairing the
springs of initiative, enterprise and energy " (366).
It is far more difficultto prove Bentham's influence on Menger.
We do not possess any tangible indication, and it has even been
asserted that there was no connection between them (Boucke,
The Developmentof Economics, 1921, 260). But this is going too
far. It is not possible here to follow the chain of thinkers which
links the two men. Beneke and Bolzano, Herbart and Lotze,
can only be mentioned in passing. It must suffice to consider
briefly the most important personality that stands between
Bentham and Menger: Gustav Theodor Fechner.
Fechner published in the year 1846 a small essay, iiber das
hochsteGut,which can be described as a paraphraseof Bentham's
ideas. Apart from a more positive attitude towards God and
Christianity, it contains no thought that could not be found in
one of Bentham's works,' and thus even the thesis of the decreas-
ing marginalutility of money with increasingriches is not wanting.
" A means of pleasure heaped beyond a certain degree on one
individual never produces so much pleasure as divided -among
several people," we read (ed. Platz, 1923, 64, 55). For it is a
fact " that the first penny weighs heavier in pleasure than the
twenty-fifth."
This psychologicalobservation made by Bentham has the same
factual foundation as the physiological perception propounded
by Weber, which is generally known as the "basic law of psycho-
physics." Weber teaches: "The relation of the increase of
stimulus at which an increase of the sensation is just taking place,
to the initial stimulus is constant." That is to say: the greater
any given. stimulus, the greater must be the increase of that
stimulus to become perceivable. What is this but Bentham's
1 The agreement reaches at times even
A parallelism in the very wording.
The following corresponding passages prove that Fechner must have known
Bentham: Fechner 11, 30-31-Bentham IX, 123 (only hedonism is a clear
principle of morals, 'since everybody knows what happiness is); Fechnerl8-.
Bentham II, 537 (only in one point all men agree, the longing for happiness);
Fechner 34-35-Bentham I, 48, 211 (there is no motive that has not the pro-
duction of a pleasure or the suppression of a pain for its end); Fechner 38-
Bentham II, 537 (men are led to realise that the greatest and truest happiness
can only be secured by working for the happiness of all), etc. Cf. also Fechner's
conception of value (Vorschule der Ae8thetik, 2nd ed., 1897, 24).

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606 THE ECONOMIC JOURNAL [DEC.

thesis that, the greater the initial wealth, the less the importance
which is ascribed to a new monetary unit added to it?
Bentham's thesis and Weber's law are combined and form one
propositionin Fechner'sElementederPsychophysik(1860). Bring-
ing the great observation into an exact formula, he teaches: "If
the sensations increase arithmetically, the stimuli belonging to
them mount in a logarithmic curve." This statement can, of
course, be reversed: if the stimuli increase arithmetically, the
accretions of sensation belonging to them fall off in a logarithmic
curve. It is not difficult to perceive herein the fundamental idea
of the theory of marginal utility.
Influenced by Bentham, Fechner clearly realised the import-
ance of this law for social and economic life. "The physical
goods which we possess (fortunephysique)," he says (ElementeT,
236 sq.), postulating a subjective doctrine of value and combining
it with the idea of the-margin, " have no value and no importance
for us as dead matter, but only in so far as they -are external
means of producing in us a sum of valuable sensations (fortune
morale) with respect to which they occupy the position of a
stimulus. Now a dollar has in this regardmuch less value for the
rich, than for the poor. . . . To offer an equal increase to what
Laplace calls the fortune morale, the increase of the fortune
physique must be in relation to this fortune physique." If the
accretionto the fortunephysique,so we may add, is not geometrical,
but arithmeticalonly, the accretionto the fortunemoraleoccasioned
by it falls progressively off.
Whether CarlMenger,the " doctor juris," in pursuing his legal
studies, came into touch with F. E. Beneke's Grundsatzeder Zivil-
und Krirninalgesetzgebung aus den Handschriften des englischen
Bechtsgelehrten Jeremy Bentham (1830), may appear doubtful, but
not that Bentham stimulated Fechner, and Fechner Menger.
In any case Mengeris likely to have known F. A. Lange's famous
essay, Die Arbeiterfrage(1865), which hailed the basic law of
psychophysics as the scientific foundation of the future doctrine
of society.
But although Bentham thus appears connected with Jevons
and Menger,his doctrine was fundamentally different from theirs
in one point: Bentham developed the " all-important point in
economic problems " i.e., the " general law, that the degree of
utility varies with the quantity of commodity, and ultimately
decreases as that quantity increases " (Jevons, l.c., 53) in con-
fronting man with money, i.e., the carrier of purchasing power;
while Jevons and Menger confront him directly with a primary

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1946] JEREMY BENTXAM AS AN ECONOMIST 607

good such as water. At a first glance it might seem that this

difference is without importance. A closer investigation, how-
ever, shows that Bentham's procedure is essentially superior to
that of his followers', and that in three respects:
(1) Jevons and Menger regard man in his relation to one iso-
lated good, Bentham in his relation to the " general source, and
thence representative of pleasure-money " (IV, 540). Now, in
reality the operationof the law of decreasingmarginalutility shows
itself clearly only in the case of general purchasing power, of
which in fact every new unit is continually used for the next
important commodity. As long as Menger's " isolated economic
subject " has to do only with one consumption-good, which, in
addition, is uniformly divisible, all is well. But if we take, let
us say, three commodities into account, all is different: if
Robinson Crusoehas at his disposal besides water also bread and
meat, he will combine the three goods, first probably by quenching
his thirst, then his hunger, then perhaps his longing for cleanli-
ness, and only afterwards gratify his desire for meat. Here is no
continuity: certain wants are partly satisfied, then others, then
he returns to the satisfaction of the first, and so on; they inter-
sect and change with each other. Besides the decrease in utility
of the goods of one kind, the order of precedence of the different
kinds here comes into play. Hence, while Bentham directly
comprehends reality as it is, Jevons and Menger offer only a
(none too fortunate) approximation.
(2) fevons and Mengerconceive man in isolation, as a natural
being, Bentham, however, in the social connection, as a social
being. Now, the law of the decrease of marginal utility is-to
speak with Kant-not only a part of physiological, but also a
part of pragmatic anthropology, i.e., it applies not only to man
as a zoon, but also to man as a zoon politikon. The traveller in
the desert or Robinson Crusoe on his island can certainly be
regarded as true representatives of mankind-they, too, are
confronted with the scarcity of supply-but in the present social
orderthe individual is limited in his provisionof goods, not directly
by natural scarcity, but rather by his social position. It is the
amount of his income which forces him to break off his con-
sumption at a certain point. This point arrives for the poor man
soon, for the rich late-a fact which in Bentham's deduction finds
its expression in the different marginal utility of the smallest
coin for different classes of income, but remains unnoticed by
Jevons and Menger. Here, too, Bentham gives us life in all its
concreteness, Jevons and Menger only an abstraction.

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608 THE ECONOMICJOURNAL [DEC. 1946

(3) The doctrines of Jevons and Menger lead to the result

that-to use Walras' clear words-" under the regime of free
competition, things tend by themselves towards an equilibrium
corresponding to the maximum of effective utility"' (Etudes
d'economiepolitique applique'e,ed. Leduc, 1936, 476). But this
thesis contains only half the truth-: it shows only the great merit,
not also the great fault of modern exchange economy. Certainly,
if one accepts the existing distribution of incomes without dis-
cussion, it is easy to prove that under the given circumstancesfree
competition realises the maximum of happiness in the community.
But if we connect economic theory with social analysis, as is
necessary for a full comprehension of reality, we shall have to
acknowledge that by a change of the present distribution of in-
come the sum-total of well-being in our society could still be
vastly augmented. If the last penny in the income of the nabob
is being used for providing his pet-dog with milk while in the hand
of the beggar-womanit cannot be used in doing the same for her
starving child, then it is clear that by its transmissilonfrom one
pocket into the other more is added to the happiness of the poor
than is taken away from the happinessof the rich. Walras'theory
exposes one truth, Bentham's doctrine two. It leads to the only
just valuation of the social and economic order of capitalism.
W. STARE
Universityof Edinburgh.

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