Nassau Senior - Scientific Economics

Nassau Senior and the Emergence of "Scientific" Economics

In the nineteenth century there were three Englishmen whose works provided the main stepping-stones between Adam Smith and John Stuart Mill: Ricardo, Malthus, and Nassau Senior. Born in 1790 in Berkshire, Senior was the eldest son of the Vicar of Durnford. He was educated at Eton and later at Oxford, where he obtained a law degree in 1815, the year in which Malthus, West, Ricardo, and Torrens published their pamphlets on rent. Law practice did not suit Senior's temperament, however, and after some postgraduate work in po­litical economy, he was named to the first endowed chair of political economy at Oxford in 1825. Appointed to various governmental commissions in the 1830s and 1840s, Senior was instrumental in shaping legislative reforms in ed­ucation, factory conditions, and the Poor Law.

Chief among his published works was An Outline of the Science of Political Economy, first printed in 1836 and revised by Senior in 1850. Political Econ­omy suffers from a lack of organization and consistency, and yet it is an im­portant milestone in the history of economics, not only for its criticism of Ricardian economics but also for its original contributions. We shall examine those contributions under two major headings: (1) Senior's formulation of the scope and method of economic inquiry and (2) his important modifications of the Ricardian theories of value and costs.

Senior on Economic Method

Senior was totally engrossed in that unexciting though necessary stage of development of any academic discipline: identifying basic principles and organizing them, along axiomatic lines, into a genuinely scientific framework. This qualifies him, in the view of Joseph Schumpeter, as the first "pure theorist" in economics. Certainly his subjective originality and his tireless attempts to unify and systematize economic theory entitle Senior to a more prominent place in the history of economics than he is generally accorded.

Senior began his Political Economy by defining the boundaries of economic inquiry. Political economy, he avowed, is "the science which treats of the na­ture, the production, and the distribution of wealth." He warned that other writers had used the term "political economy" in a much wider sense—to in­clude government, for example—but that the outcome of their efforts had been decidedly unscientific. Economic inquiry was to be essentially positive (i.e., devoid of value judgments), in Senior's view, since the province of the econ­omist is "not happiness, but wealth" (Political Economy, p. 2).
Senior clarified his methodological position in the following passage:

[The economist's] premises consist of a very few general propositions, the result of observation, or consciousness, and scarcely requiring proof, or even formal statement, which almost every man, as soon as he hears them, admits as familiar to his thoughts, or at least as included in his previous knowledge; and his inferences are nearly as general, and, if he has reasoned correctly, as certain, as his premises.

But his conclusions, whatever be their generality and their truth, do not authorize him in adding a single syllable of advice. That privilege belongs to the writer or statesman who has considered all the causes which may promote or impede the gen­eral welfare of those whom he addresses, not to the theorist who has considered only one, though among the most important, of those causes. The business of a Po­litical Economist is neither to recommend nor to dissuade, but to state general prin­ciples, which it is fatal to neglect, but neither advisable, nor perhaps practicable, touse as the sole, or even the principal, guides in the actual conduct of affairs___To decide in each case how far these conclusions are to be acted upon, belongs to the act of government, an act to which Political Economy is only one of many subser­vient Sciences (Political Economy, pp. 2-3).

The too ready confusion by many writers of the science of economics with the art of government was responsible, in Senior's view, for the unfavorable pub­lic prejudices in his day against political economy and political economists.
Essentially, economics was to be an exercise in reasoning, not a fact-gathering expedition, and Senior was prepared to state the facts on which the general prin­ciples of economics rest in a few sentences, "and indeed in a very few words." The difficulty of mastering economics, according to Senior, lay not in observing and stating these few propositions but in reasoning from them correctly