either case. Now we must, in order to go along with this reasoning, suppose, that the person who feels himself under temptation, observing somebody punished, concludes himself to be in danger of being punished likewise, and is terrified accordingly. But it is forgotten that if the person punished is supposed to be innocent, or even if there be any doubt of his guilt, the spectator will reflect that his own danger, whatever it may be, is not contingent on his guiltiness, but threatens him equally if he remains innocent, and how, therefore, is he deterred from guilt by the apprehension of such punishment? M. Cousin supposes that people will be dissuaded from guilt by whatever renders the condition of the guilty more perilous, forgetting that the condition of the innocent (also one of the elements in the calculation) is, in the case supposed, made perilous in precisely an equal degree. This is a fallacy of overlooking; or of non-observation, within the intent of our classification.
Fallacies of this description are the great stumbling-block to correct thinking in political economy. The economical workings of society afford numerous cases in which the effects of a cause consist of two sets of phenomena: the one immediate, concentrated, obvious to all eyes, and passing, in common apprehension, for the whole effect; the other widely diffused, or lying deeper under the surface, and which is exactly contrary to the former. Take, for instance, the common notion so plausible at the first glance, of the encouragement given to industry by lavish expenditure. A, who spends his whole income, and even his capital, in expensive living, is supposed to give great employment to labor. B, who lives on a small portion, and invests the remainder in the funds, is thought to give little or no employment. For every body sees the gains which are made by A’s tradesmen, servants, and others, while his money is spending. B’s savings, on the contrary, pass into the hands of the person whose stock he purchased, who with it pays a debt he owed to some banker, who lends it again to some merchant or manufacturer; and the capital being laid out [pg 545] in hiring spinners and weavers, or carriers and the crews of merchant vessels, not only gives immediate employment to at least as much industry as A employs during the whole of his career, but coming back with increase by the sale of the goods which have been manufactured or imported, forms a fund for the employment of the same and perhaps a greater quantity of labor in perpetuity. But the observer does not see, and therefore does not consider, what becomes of B’s money; he does see what is done with A’s; he observes the amount of industry which A’s profusion feeds; he observes not the far greater quantity which it prevents from being fed; and thence the prejudice, universal to the time of Adam Smith, that prodigality encourages industry, and parsimony is a discouragement to it.
The common argument against free trade was a fallacy of the same nature. The purchaser of British silk encourages British industry; the purchaser of Lyons silk encourages only French; the former conduct is patriotic, the latter ought to be prevented by law. The circumstance is overlooked, that the purchaser of any foreign commodity necessarily causes, directly or indirectly, the export of an equivalent value of some article of home production (beyond what would otherwise be exported), either to the same foreign country or to some other; which fact, though from the complication of the circumstances it can not always be verified by specific observation, no observation can possibly be brought to contradict, while the evidence of reasoning on which it rests is irrefragable. The fallacy is, therefore, the same as in the preceding case, that of seeing a part only of the phenomena, and imagining that part to be the whole; and may be ranked among Fallacies of Non-observation.
§ 5. To complete the examination of the second of our five classes, we have now to speak of Mal-observation; in which the error does not lie in the fact that something is unseen, but that something seen is seen wrong.