Robert Torrens (1780-1864), in a life span of 84 years, encompassed successfully the occupations of professional soldier, newspaper proprietor, member of Parliament, and promoter of schemes for the colonization of Australia. He was also a founding member of the Political Economy Club and took the chair at its inaugural meeting. These activities apart, he maintained throughout his career, beginning in the early 1800s and ending in the late 1850s, a vast literary output ranging from political tracts to economic treatises, and he even managed to write two delightfully naive novels.
It is not, however, as the hero of Anhalt, nor as the proprietor of The Globe, a newspaper, nor as the instigator of the development of New South Wales (although we still have Lake Torrens) that he deserves a place in this encyclopedia. Torrens is important as a representative figure of the Ricardian era of English political economy.
It is important to note that Torrens was born in Ireland, for the economic and social (including religious) problems of that country clearly dominated much of his thinking, especially with regard to the causes and cures of poverty.
Torrens was not of the same intellectual caliber as Ricardo or Senior, but he was unquestionably a cut above James Mill and McCulloch; and in monetary matters he ranks with the best economists of his generation. However, after his death, his contributions were forgotten; here we must agree with Lionel Robbins’ view: “There can be no rewriting the verdict that any direct influence that Torrens may have had, ceased almost altogether with his death; even in regard to the theory of tariffs and the terms of trade, in some respects his most important theoretical construction, the main influence came from Mill rather than Torrens” (Robbins 1958, p. 232).
Value, production, and distribution. Torrens sided with Lauderdale and Samuel Bailey in arguing that it is useless to search for an absolute measure of value, and he also objected to the simple labor theory of value as outlined in Chapter 1 of Ricardo’s Principles. But undoubtedly his most original work in the sphere of price theory is found in his analysis of the gains from trade. In The Economist Refuted (1808) he came close to the principle of comparative advantage, and in his Essay on the External Corn Trade (1815) the distinction between absolute and comparative advantage is unambiguous. Seligman, in his famous article “On Some Neglected British Economists” (1903), claimed for Torrens the discovery of comparative advantage; he certainly published the principle before Ricardo did in his Principles of 1817.
Theory of colonization. Like his contemporaries, Torrens rejected the earlier view that colonies were of no economic value. He regarded colonization as basically a method of overcoming the problem of overpopulation, his particular concern being the effect of Irish immigration to Great Britain. Like Wakefield, he thought that giving free land to colonial immigrants was fraught with danger, and he advocated a system akin to Wakefield’s “sufficient price” system to enable immigrant laborers to have sufficient capital stock to enter the ranks of the independent cultivators, and so prevent the overdispersion of the labor force.
Commercial policy. In the field of commercial policy theory, Torrens is widely known—through the efforts of Jacob Viner—for his modification of the doctrine that a regime of free international trade is necessarily optimally advantageous for individual countries. He was among the first to point to the possibility that a country might alter the terms of trade in its favor by use of an import tariff. In a series of letters, reprinted as The Budget (1841-1842), he enunciated the theory of reciprocity; the climax of his exposition is to be found in Letter n, addressed to Lord John Russell. There he argued that if some countries had tariffs, unilateral free trade was a mistaken policy, and that in such circumstances reciprocal tariffs should be adopted. This modification of the orthodox free trade position brought charges that he was abandoning the central classical position entirely. He himself believed, however, that he was only applying the logic of the Ricardian position.
Theory of money and banking. As an economist Torrens was probably best known to the public as a leader of the currency school, and he could justly claim to be one of the initiators of the scheme, made law in the Bank Charter Act of 1844, that separated the issue and the banking departments of the Bank of England. He also wrote a classic defense of that bizarre piece of legislative enactment, The Principles and Practical Operation of Sir Robert Peel’s Bill of 1844 (1848).
There is an unexplained break in Torrens’ development as a monetary controversialist that has intrigued and worried students of his work. Torrens began his monetary writing as an extreme antibullionist: his 1812 Essay on Money and Paper Currency had a strong inflationist ring about it and emphasized vividly the virtues of a paper currency. However, he later appeared to make a complete about-face and to end his career as defender of the currency school. This contradiction has been partly resolved by the recent discovery by D. P. O’Brien of an unpublished paper written by Torrens in 1826 entitled “On the Means of Establishing a Cheap, Secure and Uniform Currency” (1826). Here Torrens outlined a modification of Ricardo’s plan for a gold exchange standard, hoping thereby to achieve the elasticity of currency that he had hankered for as an antibullionist and avoid the dangers of excess that (presumably) had forced him into the bullionist camp.
[For the historical context of Torrens’ work, see the biographies of Lauderdale; Ricardo; Senior; Wakefield; for discussion of the subsequent development of his ideas, see Banking, Central; Colonialism; International Trade Controls, article on Tariffs and Protectionism.]
(1808) 1858 The Economist Refuted. London: Longmans. 1812 An Essay on Money and Paper Currency. London: Johnson.
(1815) 1829 An Essay on the External Corn Trade. 5th ed. London: Longmans.
1821 An Essay on the Production of Wealth, With an Appendix, in Which the Principles of Political Economy Are Applied to the Actual Circumstances of This Country. London: Longmans.
(1826) 1965 On the Means of Establishing a Cheap, Secure and Uniform Currency. Economica New Series 32:286-301. -> Written in 1826; published posthumously.
(1833) 1958 Letters on Commercial Policy. London School of Economics and Political Science, Series of Reprints of Scarce Works on Political Economy, No. 14. London School of Economics and Political Science.
(1835) 1836 Colonization of South Australia. 2d ed. London: Longmans.
1841-1842 The Budget: A Series of Letters on Financial, Commercial, and Colonial Policy. London: Smith.
(1848) 1858 The Principles and Practical Operation of Sir Robert Peel’s Bill of 1844, Explained and Defended. 3d ed. London: Longmans.
Fetter, Frank W. 1962 Robert Torrens: Colonel of Marines and Political Economist. Economica New Series 29:152-165.
Menai, S. A. 1956 Robert Torrens: 1780-1864. Economica New Series 23:49-61.
O’brien, D. P. 1965 The Transition in Torrens’ Monetary Thought. Economica New Series 32:269-286.
Robbins, Lionel 1958 Robert Torrens and the Evolution of Classical Economics. New York: St. Martins; London: Macmillan.
Seligman, Edwin R. A. 1903 On Some Neglected British Economists. 2 parts. Economic Journal 13:335-363, 511-535.