Senior, Nassau William
Senior, Nassau William
Nassau William Senior (1790–1864), British economist, was the eldest son of the vicar of Durnford in Wiltshire. He was educated at Eton and at Magdalen College, Oxford. At Oxford he met Richard Whateley (later archbishop of Dublin), a rugged opponent of tradition who became Senior’s lifelong friend and exerted considerable influence on him. Senior entered Lincoln’s Inn in 1813 to read for the bar; in 1817 he became a certified conveyancer and was called to the bar two years later. Although he earned his living by the practice of his profession, the law was by no means his only interest.
Senior’s childhood and youth had been spent in his father’s country parish, which meant that early in his life he had become familiar with the poverty and pauperization of agricultural laborers that had occurred during the Napoleonic wars. This experience made a deep impression on him and was undoubtedly one of the reasons for his enduring interest in economics. In 1823 he became a member of the Political Economy Club, to which he was introduced by James Mill; he was active there in discussions with his fellow economists. Shortly after, in 1825, he became the first holder of the Drummond professorship of political economy at Oxford. During his five-year term he published a number of important short works on economics, starting with an analysis of ambiguous economic terms that was published as an appendix to Whateley’s Elements of Logic (Senior 1826). He published some of his lectures, on such subjects as methodology (1827), the theory of money and international trade (1830a), and population and wages (1829; 1830fc). These lectures, together with the others given during his first term in the Drummond chair, were assembled and published as An Outline of the Science of Political Economy in 1836. As soon as they appeared, they established Senior’s reputation as an economist.
By 1830 Senior was well known to leading Whig politicians; he was invited by Lord Melbourne to investigate the laws relating to trade combinations, and Lord Howick suggested he examine the problems of Ireland. His memorandum on trade combinations was not published, but that on Ireland appeared in 1831 as A Letter to Lord Howick: On a Legal Provision for the Irish Poor, Commutation of Tithes, and a Provision for the Irish Roman Catholic Clergy. In this pamphlet he advocated the transfer of some of the property of the Anglican church to the Roman Catholic church in Ireland, and as a consequence he was forced to resign the chair of political economy at King’s College, London, to which he had only quite recently been appointed.
For the next ten years Senior was constantly engaged in public affairs. He was chief adviser to the Whig party on economic problems, although his advice was by no means always followed. A pamphlet he wrote in 1835, On National Property and on the Prospects of the Present Administration and Their Successors, can be regarded as an unofficial manifesto of the more advanced Whigs: it urged, inter alia, the reform of municipal corporations and the admission of dissenters to universities, and again recommended the transfer of some property of the Anglican church to the Roman Catholic church in Ireland. Senior was also a member of several commissions: the Poor Law Inquiry Commission, in 1833; the commission that investigated factory conditions, in 1837; the Royal Commission on the Distress of the Hand-loom Weavers, in 1841; and later, in 1857, the Royal Commission on Popular Education. Each time he was a member of a commission he wrote a substantial part of the commission’s report. In his work for the Poor Law Commission, which won great praise, one of his closest collaborators was Edwin Chadwick.
With the fall of the Whig administration in 1841, Senior returned to more theoretical economics. In 1847 he was appointed to the Drummond chair of political economy at Oxford for a second five-year term. His intention of organizing his ideas into a treatise on political economy during these years was not to be fulfilled. Only a few of the lectures were published (1847; 1852), but a large part of the unpublished lectures of this period survive in manuscript. They are remarkable for their attack on the hypothetical economic man of Ricardo’s imagination (Bowley 1937).
In the later years of his life Senior was a keen traveler; he was particularly interested in the revolutionary disturbances of 1848 in France and Italy, where he had numerous friends among the liberals. He also visited Greece, Turkey, Egypt, and Malta. He kept journals of these visits and of those to Ireland, some of which were subsequently published.
Senior’s wide circle of friends included most of the leading Whigs of his day as well as such intellectuals and writers as Lord Jeffrey, Sidney Herbert, Macaulay, and Thackeray. Among the “philosophical radicals,” his closest friends were the Austins and Grotes and, among men with whom he worked, Sir George Cornewall Lewis, Lord Howick, Chadwick, Sir James Stephen, and, of course, Archbishop Whateley. He knew well such French liberals as Alexis de Tocqueville, Guizot, and Faucher, and in Italy he was much appreciated by Cavour.
Senior was a Whig rather than a philosophical radical, but his conviction that man has a natural tendency to improve himself, provided unwise institutions do not discourage him, may well have developed from his association with the disciples of Bentham. It was this view that led to his controversy with Malthus. Senior’s proposals for poor-law reform included the abolition of outdoor relief to the able-bodied, for he believed this sapped the virtues of thrift and independence and also depressed wages. However, he hoped the destitute sick, the aged, and children would be looked after out of public funds in hospitals, almshouses, and orphanages, not in mixed workhouses. In general, he believed that the government had a duty to intervene whenever it could do good: expediency should determine the occasions, not a priori rules.
During his life Senior’s activity in the sphere of social and economic reform was more visible than his work on economic theory. His contribution to the latter, however, was considerable. In contrast to his younger and more famous contemporary, J. S. Mill, Senior’s approach to Ricardian theory was essentially critical. His analysis of definitions in the appendix to Whateley’s Logic (1826) shows how important precision in definition was to him. Concern with rigorous definition led him to make significant changes in the theory of value. Jevons was greatly impressed with this work and considered that he had anticipated the theory of marginal utility in important respects. Senior was clearly influenced by J. B. Say, and in connection with the analysis of degrees of competition in relation to value, he was also influenced by Samuel Bailey.
Senior was less successful with the theory of wages than with the theory of value. He realized that the wages-fund theorem was incomplete, since the determinants of the size of the fund had not been explained, but despite much effort he was unable to solve this difficulty.
His best-known contribution to economic analysis is his abstinence theory of capital. It emerged from his attempt to find a definition of capital that would make capital coordinate with labor in the explanation of the influence of real costs on value; this was an important step in the process of separating the labor theory of value from orthodox economics. The theory stated in his Outline of the Science of Political Economy (1836) became an integral part of English capital theory. It was accepted by Marshall as well as by Jevons; the former, however, substituted the neutral term “waiting” for “abstinence.” The theory also influenced Continental and American economics.
In the Outline, Senior fully accepted Ricardo’s theory of land rent while observing that the laws of increasing and diminishing returns are not logically symmetrical. He generalized the analysis to cover all cases of factors in fixed supply, including natural abilities, and hinted at the concept of quasi rent. This resulted in difficulties in the identification of factor incomes and the relation of rents to costs. Influenced by the German economist Hermann’s review of the Outline, Senior attacked the problem again in the 1847–1852 lectures. He accepted Hermann’s view that land and capital are species of the same genus, arguing that they are indistinguishable in practice and that the distinguishing attribute of land is not its scarcity but its immobility (Bowley 1937).
These theoretical developments necessarily affected the treatment of capital. In the later lectures capital was defined as “any wealth destined to be used productively,” including land. This productive use, i.e., capital accumulation, requires “abstinence” as well as the gifts of nature and industry. Abstinence was explained as “the conduct of a person who either abstains from the unproductive use of what he can command or designedly prefers the production of remote to that of immediate results.” Frugality, Senior explained, is the “mere refraining from the use of a commodity,” but “providence” is “the employment of labour to produce remote results” (quoted in Bowley 1937, pp. 160–161). It must be observed that Senior’s distinction between frugality and providence, although apparently similar to the Keynesian distinction between saving and investment, was not made for the purpose of analyzing the level of economic activity.
Senior’s contributions to the theory of money and international trade are of less interest today than his other analytical work, but they provided a number of useful clarifications and qualifications to the theory of his time. The discussions of scope and method were contained in various published lectures given at the time of his first and second Drummond professorships and in his Outline. His views developed considerably during his life, and the Four Introductory Lectures on Political Economy (1852) are a valuable contribution to the nineteenth-century literature on the subject.
1821 Essay on the Application of Capital to Land, With Observations Showing the Impolicy of Any Great Restriction of the Importation of Corn, and That the Bounty of 1680 Did Not Lower the Price of It, by a Fellow of University College, Oxford. Quarterly Review 25:467–504. → Published anonymously.
(1826) 1951 Appendix: On Certain Terms Which Are Peculiarly Liable to Be Used Ambiguously in PoliticalEconomy. Pages 227–239 in Nassau W. Senior, An Outline of the Science of Political Economy. NewYork: Kelley. → First published as an Appendix toRichard Whateley’s Elements of Logic.
(1827) 1831 Introductory Lecture on Political Economy.3d ed. London: Murray.
(1828) 1931 Three Lectures on the Transmission of the Precious Metals From Country to Country and the Mercantile Theory of Wealth. Series of Reprints of Scarce Tracts in Economic and Political Science, No. 3. London School of Economics and Political Science.
1829 Two Lectures on Population. With a correspondence between the author and the Rev. T. R. Malthus. London: Saunders.
(1830o) 1931 Three Lectures on the Cost of Obtaining Money, and on Some Effects of Private and Government Paper Money. Series of Reprints of Scarce Tracts in Economic and Political Science, No. 5. London School of Economics and Political Science.
(18306) 1959 Three Lectures on the Rate of Wages. With a preface on the causes and remedies of the present disturbances. New York: Kelley.
1831 A Letter to Lord Howick: On a Legal Provision for the Irish Poor, Commutation of Tithes, and a Provision for the Irish Roman Catholic Clergy. London: Murray.
1835 On National Property and on the Prospects of the Present Administration and Their Successors. London: Fellowes.
(1836) 1951 An Outline of the Science of Political Economy. New York: Kelley.
(1837) 1844 Letters on the Factory Act as It Affects the Cotton Manufacture, Addressed to the Right Honourable President of the Board of Trade. London: Fellowes.
1847 A Lecture on the Production of Wealth. Oxford: Combe.
1852 Four Introductory Lectures on Political Economy. London: Longmans.
1859 A Journal Kept in Turkey and Greece in the Autumn of 1857, and the Beginning of 1858. London: Longmans.
Conversations and Journals in Egypt and Malta. London: Low, 1882.
Historical and Philosophical Essays. 2 vols. London: Longmans, 1865.
Industrial Efficiency and Social Economy. Essays edited by S. Leon Levy. New York: Holt, 1928.
Journals, Conversations and Essays Relating to Ireland. London: Longmans, 1868.
Journals Kept in France and Italy From 1848 to 1852: With a Sketch of the Revolution of 1848. 2 vols. London: King, 1871.
Bowley, Marian 1937 Nassau Senior and Classical Economics. London: Allen & Unwin. → Contains a BIBLIOGRAPHY of Senior’s published and unpublished writings.
Levy, S. Leon 1943 Nassau W. Senior: The Prophet of Modern Capitalism. Boston: Humphries.
Robbins, Lionel 1952 The Theory of Economic Policy in English Classical Political Economy. London: Macmillan.
Schumpeter, Joseph A. (1954) 1960 History of Economic Analysis. Edited by E. B. Schumpeter. New York: Oxford Univ. Press.
Taussig, Frank W. (1896) 1932 Wages and Capital: An Examination of the Wages Fund Doctrine. London School of Economics and Political Science.