William Petty
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Sir William Petty FRS (26 May 1623 – 16 December 1687) was an English economist, physician, scientist and philosopher. He first became prominent serving Oliver Cromwell and the Commonwealth in Ireland. He developed efficient methods to survey the land that was to be confiscated and given to Cromwell's soldiers. He also remained a significant figure under King Charles II and King James II, as did many others who had served Cromwell.
Petty was also a scientist, inventor, and merchant, a charter member of the Royal Society, and briefly a member of the Parliament of England. However, he is best remembered for his theories on economics and his methods of political arithmetic. He was knighted in 1661.
Life
Early life
Petty was born in
After an uneventful period in the Navy, Petty left to study in Holland in 1643, where he developed an interest in anatomy. Through an English professor in Amsterdam, he became the personal secretary to Thomas Hobbes, allowing him contact with René Descartes, Pierre Gassendi, and Marin Mersenne. In 1646, he returned to England and developed a double-writing instrument with little success in sales. After his brother died, he approached his cousin, John Petty, offering to set him up in business on the understanding that John would be a trusted friend and help him in his chemistry and anatomy work.
Career
At Oxford
After the
Academic and surveyor
By 1651, Petty was an anatomy instructor at
In 1652, he took a leave of absence and travelled with
Back in England, as a Cromwellian supporter, he ran successfully for Parliament in 1659 for West Looe.[6]
Projector
Petty gained possession of the three baronies of
Natural philosopher
Despite his political allegiances, Petty was well-treated at the
In 1661 he was elected as a Member of Parliament for Inistioge in the Parliament of Ireland. In 1662, he was admitted as a charter member of the Royal Society of the same year. This year also saw him write his first work on economics, Treatise of Taxes and Contributions. Petty counted naval architecture among his many scientific interests. He had become convinced of the superiority of double-hulled boats, although they were not always successful; a ship called the Experiment reached Porto in 1664, but sank on the way back.
Ireland and later life
Petty was knighted in 1661 by Charles II and returned to Ireland in 1666, where he remained for most of the next twenty years. He was a friend of Samuel Pepys.
The events that took him from Oxford to Ireland marked a shift from medicine and the physical sciences to the social sciences, and Petty lost all his Oxford offices. The social sciences became the area that he studied for the rest of his life. His focus became greater income from Irish colonization, and his works describe that country and propose many remedies for what he characterized as its backward condition. He helped found the Dublin Society in 1682. Returning ultimately to London in 1685, he died in 1687. He was buried in Romsey Abbey.
Family
William Petty married
- Charles Petty, 1st Baron Shelburne
- Henry Petty, 1st Earl of Shelburne
- Anne, who married Thomas Fitzmaurice, 1st Earl of Kerry.
Neither Charles nor Henry had male issue and the Shelburne title passed by a special remainder to Anne's son
Economic works and theories
Two men crucially influenced Petty's economic theories. The first was Thomas Hobbes, for whom Petty acted as personal secretary. According to Hobbes, theory should set out the rational requirements for "civil peace and material plenty". As Hobbes had centred on peace, Petty chose prosperity.[citation needed]
The influence of Francis Bacon was also profound. Bacon, and indeed Hobbes, held the conviction that mathematics and the senses must be the basis of all rational sciences. This passion for accuracy led Petty to famously declare that his form of science would only use measurable phenomena and would seek quantitative precision, rather than rely on comparatives or superlatives, yielding a new subject that he named "political arithmetic". Petty thus carved a niche for himself as the first dedicated economic scientist, amidst the merchant-pamphleteers, such as Thomas Mun or Josiah Child, and philosopher-scientists occasionally discussing economics, such as John Locke.
He was indeed writing before the true development of political economy. As such, many of his claims for precision are of imperfect quality. Nonetheless, Petty wrote three main works on economics, Treatise of Taxes and Contributions (written in 1662), Verbum Sapienti (1665) and Quantulumcunque Concerning Money (1682). These works, which received great attention in the 1690s, show his theories on major areas of what would later become economics. What follows is an analysis of his most important theories, those on fiscal contributions, national wealth, the money supply and circulation velocity, value, the interest rate, international trade and government investment.
Many of his economic writings were collected by Charles Henry Hull in 1899 in The Economic Writings of Sir William Petty.
Hull, in his scholarly article 'Petty's Place in the History of Economic Theory' (1900) proposed a division of the economic writings of Petty in three (or four) groups:
- the first group, written when Petty had returned to London after finishing his "first Dutch war.
- the second group holds The Political Anatomy of Ireland and Political Arithmetick. These texts were written some ten years later in Ireland. As Hull writes, the "direct impulse to their writing came from Dr. Edward Chamberlayne's Present State of England, published 1669".
- Again ten years later the third group of pamphlets was written, that were contributions to the dispute whether London was a larger city than Paris, and that are titled the Essays in Political Arithmetick by Hull. This group of pamphlets had a close relation to John Graunt's Observations upon the Bills of Mortality of London.
- The Quantulumcunque concerning Money (written in 1682, and printed in 1695, and perhaps in 1682), can probably be considered as belonging to a group of its own.
The division given here was still used by scholars at the end of the twentieth century.[12]
Fiscal contributions
By Petty's time, England was engaged in war with Holland, and in the first three chapters of Treatise of Taxes and Contributions, Petty sought to establish principles of taxation and public expenditure, to which the monarch could adhere, when deciding how to raise money for the war. Petty lists six kinds of public charge, namely defence, governance, the pastorage of men's souls, education, the maintenance of impotents of all sorts and infrastructure, or things of universal good. He then discusses general and particular causes of changes in these charges. He thinks that there is great scope for reduction of the first four public charges, and recommends increased spending on care for the elderly, sick, orphans, etc., as well as the government employment of supernumeraries.
Petty was interested in the extent to which taxes could be raised without inciting rebellion
National income accounting
In making the above estimate, Petty introduced in the first two chapters of Verbum Sapienti the first rigorous assessments of
Statistics
Petty's only statistical technique is the use of simple averages. He would not be a statistician by today's standards but during his time a statistician was merely one that employed the use of
Money supply and circulation
This figure for the stock of wealth was contrasted with a money supply in gold and silver of only £6m. Petty believed that there was a certain amount of money that a nation needed to drive its trade. Hence it was possible to have too little money circulating in an economy, which would mean that people would have to rely on barter. It would also be possible for there to be too much money in an economy. But the topical question was, as he asks in chapter 3 of Verbum Sapienti, would £6m be enough to drive a nation's trade, especially if the King wanted to raise additional funds for the war with Holland?
The answer for Petty lay in the velocity of money's circulation. Anticipating the quantity theory of money often said to be initiated by John Locke, whereby economic output (Y) times price level (p) = money supply (MS) times velocity of circulation (v), Petty stated that if economic output was to be increased for a given money supply and price level, 'revolutions' must occur in smaller circles (i.e. velocity of circulation must be higher). This could be done through the establishment of a bank. He explicitly stated in Verbum Sapienti "nor is money wanting to answer all the ends of a well-policed state, notwithstanding the great decreases thereof which have happened within these Twenty years"[14] and that higher velocity is the answer. He also mentions that there is nothing unique about gold and silver in fulfilling the functions of money and that money is the means to an end, not the end itself:
Nor were it hard to substitute in the place of Money [gold and silver] (were a comptency of it wanting) what should be equivalent unto it. For Money is but the Fat of the Body-Politick, whereof too much doth often hinder its agility, as too little makes it sick... so doth Money in the State quicken its Action, feeds from abroad in the time of Dearth at home.'[15]
What is striking about these passages is his intellectual rigour, which put him far ahead of the
Theory of value
On value, Petty continued the debate begun by Aristotle, and chose to develop an input-based theory of value: "all things ought to be valued by two natural Denominations, which is Land and Labour" (p. 44). Both of these would be prime sources of taxable income. Like Richard Cantillon after him, he sought to devise some equation or par between the "mother and father" of output, land and labour, and to express value accordingly. He still included general productivity, one's "art and industry". He applied his theory of value to rent. The natural rent of a land was the excess of what a labourer produces on it in a year over what he ate himself and traded for necessities. It was therefore the profit above the various costs related to the factors involved in production.
Interest rate
The natural rate of rent is related to his theories on
Laissez-faire governance
This is one of the major themes of Petty's writings, summed up by his use of the phrase vadere sicut vult, from which laissez-faire is derived. As mentioned earlier, the motif of medicine was also useful to Petty, and he warned against over-interference by the government in the economy, seeing it as analogous to a physician tampering excessively with his patient. He applied this to monopolies, controls on the exportation of money and on the trade of commodities. They were, to him, vain and harmful to a nation. He recognised the price effects of monopolies, citing the French king's salt monopoly as an example. In another work, Political Arithmetic, Petty also recognised the importance of economies of scale. He described the phenomenon of the division of labour, asserting that a good is both of better quality and cheaper, if many work on it. Petty said that the gain is greater "as the manufacture itself is greater".
Foreign exchange and control of trade
On the efflux of specie, Petty thought it vain to try to control it, and dangerous, as it would leave the merchants to decide what goods a nation buys with the smaller amount of money. He noted in Quantulumcunque concerning money that countries plentiful in gold have no such laws restricting specie. On exports in general, he regarded prescriptions, such as recent Acts of Parliament forbidding the export of wool and yarn, as "burthensome". Further restrictions "would do us twice as much harm as the losse of our said Trade" (p. 59), albeit with a concession that he is no expert in the study of the wool trade.
On prohibiting imports, for example from Holland, such restrictions did little other than drive up prices, and were only useful if imports vastly exceeded exports. Petty saw far more use in going to Holland and learning whatever skills they have than trying to resist nature. Epitomizing his viewpoint, he thought it preferable to sell cloth for "debauching" foreign wines, rather than leave the clothiers unemployed.
Division of labour
In his Political Arithmetick, Petty made a practical study of the division of labour, showing its existence and usefulness in Dutch shipyards. Classically the workers in a shipyard would build ships as units, finishing one before starting another. But the Dutch had it organised with several teams each doing the same tasks for successive ships. People with a particular task to do must have discovered new methods that were only later observed and justified by writers on political economy.
Petty also applied the principle to his survey of Ireland. His breakthrough was to divide up the work so that large parts of it could be done by people with no extensive training.
Urban society
Petty projected the growth of the city of London and supposed that it might swallow the rest of England – not so far from what actually happened:
Now, if the city double its people in 40 years, and the present number be 670,000, and if the whole territory be 7,400,000, and double in 360 years, as aforesaid, then by the underwritten table it appears that A.D. 1840 the people of the city will be 10,718,880, and those of the whole country but 10,917,389, which is but inconsiderably more. Wherefore it is certain and necessary that the growth of the city must stop before the said year 1840, and will be at its utmost height in the next preceding period, A.D. 1800, when the number of the city will be eight times its present number, 5,359,000. And when (besides the said number) there will be 4,466,000 to perform the tillage, pasturage, and other rural works necessary to be done without the said city.[17]
He imagined a future in which "the city of London is seven times bigger than now, and that the inhabitants of it are 4,690,000 people, and that in all the other cities, ports, towns, and villages, there are but 2,710,000 more". He expected this some time around 1800,
Legacy
Petty is best remembered for his
He influenced several future economists, including
Karl Marx imitated Petty's belief that the total effort put in by the aggregate of ordinary workers represented a far greater contribution to the economy than contemporary ideas recognised. This belief led Petty to conclude that labour ranked as the greatest source of wealth. By contrast, Marx's conclusions were that surplus labour was the source of all profit, and that the labourer was alienated from his surplus and thus from society. Marx's high esteem of Adam Smith is mirrored in his consideration of Petty's analysis, testified for by countless quotations in his major work Das Kapital. John Maynard Keynes demonstrated how governments could manage aggregate demand to stimulate output and employment, much as Petty had done with simpler examples in the 17th century. Petty's simple £100-through-100-hands multiplier was refined by Keynes and incorporated into his model.
Some consider Petty's achievements a matter of good fortune. Petty was a music professor before being apprenticed to the brilliant
Monument
In 1858 Henry Petty-Fitzmaurice, 3rd Marquess of Lansdowne, one of Petty's descendants, erected a memorial and likeness of Petty in Romsey Abbey. The text on it reads: "A true patriot and a sound philosopher who, by his powerful intellect, his scientific works and indefatigable industry, became a benefactor to his family and an ornament to his country". A monumental slab on the floor of the south choir aisle of the Abbey reads "HERE LAYES SIR WILLIAM PETY". The third Marquess also erected the Lansdowne Monument on Cherhill Down in Wiltshire.
Publications
- 1647: The Advice to Hartlib
- 1648: A Declaration Concerning the newly invented Art of Double Writing
- 1659: Proceedings between Sankey and Petty
- 1660: Reflections upon Ireland
- 1662: A Treatise of Taxes & Contributions (later editions: 1667, 1679, 1685, etc.)
- Political Arithmetic posthum. (approx. 1676, pub. 1690)
- Verbum Sapienti posthum. (1664, pub. 1691)
- Political Anatomy of Ireland posthum. (1672, pub. 1691)
- Quantulumcunque Concerning Money ("something, be it ever so small, about money")[20] posthum. (1682, pub. 1695)[21]
- An Essay Concerning the Multiplication of Mankind. (1682)
Notes
References
- ^ Percy Kirkpatrick, T. Percy C. (Thomas Percy Claude) (1932). Sir William Petty (1623-1687). [Ireland] : [The Irish Journal of Medical Science].
- ^ Dictionary of National Biography. London: Smith, Elder & Co. 1885–1900. .
- ISBN 978-0-19-951014-6. Retrieved 5 November 2012.
- ISBN 0300197683.
- archive.org).
- doi:10.1093/ref:odnb/22069. (Subscription or UK public library membershiprequired.)
- ^ JSTOR 25506081.
- ISBN 978-0-19-166760-2.
- JSTOR 41341249.
- ^ Fraser, Antonia, King Charles II Mandarin edition 1993 p.189
- ^ Burke & Burke 1844, p. 605.
- ^ See for instance for instance (Hutchison 1988, p. 29) and (Yang 1994, p. 62 (footnote 6)). One may wonder why Hull does not mention A Treatise of Ireland in this list. He was the first to have this manuscript, dated 1687, printed. (Hull (1899), p. 545-621).
- ^ Goodacre, Hugh (2018). The Economic Thought of William Petty: Exploring the Colonialist Roots of Economics. Abingdon: Routledge. pp. 46–77.
- ^ Verbum Sapienti, p.113
- ^ Hull 1899: p.113
- ^ Quantumlumque, (p. 48
- ^ OF THE GROWTH OF THE CITY OF LONDON – among the essays downloadable at the Gutenberg link.
- ^ Parrington, Vernon Louis; Levy, David W. The Colonial Mind, 1620–1800. Vol. 1.
- ^ Correspondence of Adam Smith, Letter No. 30, Glasgow Edition
- ^ Translation by Strathern 2001
- ^ Quantulumcunque in: The Economic Writings of Sir William Petty (vol. 2) (1899).
See also
Sources
- Aspromourgos, Tony (1988) "The life of William Petty in relation to his economics" in History of Political Economy 20: 337–356.
- Burke, John; Burke, Sir Bernard (1844). "Fenton of Mitchelstown". A Genealogical and Heraldic History of the Extinct and Dormant Baronetcies of England, Ireland and Scotland (2 ed.). J. R. Smith. p. 605.
- Eli F. Heckscher (2013) [1935]. Mercantilism. Vol. 1. Taylor & Francis. ISBN 978-1-136-15738-7.
- ISBN 0-631-15898-7.
- OCLC 803827975 – via Wikisource.
- Hutchison, Terence (1988). "Petty on Policy, Theory and Method," in Before Adam Smith: the Emergence of Political Economy 1662–1776. Basil Blackwell.
- ISBN 978-1-136-50864-6.
- McCormick, Ted (2009). William Petty And the Ambitions of Political Arithmetic. Oxford University Press. ISBN 978-0-19-954789-0.
- Routh, Guy (1989) The Origin of Economic Ideas. London: Macmillan.
- ISBN 978-1-134-83870-7.
- Strathern, Paul (2001) - Dr Strangelove's Game : a brief history of economic genius. London : Hamish Hamilton.
- Yang, Hong-Seok (1994). The Political Economy of Trade and Growth: An Analytical Interpretation of Sir James Steuart's Inquiry. Edward Elgar. ISBN 9781782543619. (especially section 'Petty's Natural Price', pp. 61–68)
External links
- Archive for the History of Economic Thought: "William Petty" Archived 5 November 2017 at the Wayback Machine
- Works by William Petty at Project Gutenberg
- Works by or about William Petty at Internet Archive
- Political Arithmetick (3rd Edition, 1690
- Petty FitzMaurice (Lansdowne) family tree
- National Portrait Gallery has five portraits of Sir William Petty: Search the collection Archived 19 December 2006 at the Wayback Machine
- Critique of "A Treatise of Taxes and Contributions"
- Kenmare Journal – A Bridge to the Past.