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William Petty
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This article is about the
English economist and scientist. For his great
grandson the
British Prime Minister and
Irish peer, see William Petty, 2nd Earl of
Shelburne.
Full name William Petty
Born 27 May 1623
Died 16 December 1687
Era 17th-
century philosophy
(Modern philosophy)
Region Western philosophers
School Classical economics
Main interests Political
philosophy, ethics, economics
Notable
ideas
Division
of
labour,
the
growth
of
London,
fiscal
theory,
monetary
theory, national
income accounting, economic statistics
Influenced by[show]Aristotle, Hobbes,
Francis Bacon
Influenced[show]Mandeville, Adam Smith,
Keynes, Karl Marx
Sir
William
Petty
(27
May
1623
–
16
December
1687)
was
an
English
economist,
scientist
and
philosopher.
He
first
became
prominent
serving
Oliver
Cromwell
and
Commonwealth
in
Ireland.
He
developed
efficient
methods
to
survey
the
land
that
was to be confiscated and given to
Cromwell's soldiers. He also managed to remain
prominent
under
King
Charles
II
and
King
James
II,
as
did
many
others
who
had
served Cromwell.
He
was
Member
of
the
Parliament
of
England
briefly
and
was
also
a
scientist,
inventor, and entrepreneur, and was a
charter member of the Royal Society. It is for
his
theories
on
economics
and
his
methods
of
political
arithmetic
that
he
is
best
remembered,
however,
and
he
is
attributed
as
having
started
the
philosophy
of
'laissez-faire' in relation to
government activity. He was knighted in 1661. He
was the
great-grandfather of the future
Prime Minister, William Petty Fitzmaurice, 2nd
Earl of
Shelburne and 1st Marquess of
Landsdowne.
[edit] Life and influences
Petty
was
a
founder
member
of
The
Royal
Society.
He
was
born
and
buried
in
Romsey
and
was
a
contemporary
and
friend
of
Samuel
Pepys.
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:
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
WILLIAM
PETY
.
1
Petty's
father
and
grandfather
were
clothiers.
He
was
a
precocious
and
intelligent
youngster,
and
became
a
cabin
boy
in
1637,
but
was
set
ashore
in
Normandy
after
breaking
his
leg
on
board.
After
this
setback,
he
applied
in
Latin
to
study
with
the
Jesuits in Caen,
supporting himself by teaching English. After a
year, he returned to
England and had by
now a thorough knowledge of Latin, Greek, French,
mathematics
and astronomy.
After an uneventful period in the Navy,
he 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
Hobbes
allowing
him
contact
with
Descartes,
Gassendi
and
Mersenne.
In
1646,
he
returned
to
England
and,
after
developing
a
double-writing instrument
with little success in sales, he studied medicine
at Oxford
University. He befriended
Hartlib and Boyle, and he became a member of the
London
Philosophical
Society,
and
possibly
met
John
Milton.
By
1651,
he
had
risen
to
Professor of Anatomy at
Brasenose College, Oxford and was also Professor
of Music
in London.
William Petty,
c. 1652, he left on a leave of absence and
traveled with Oliver
Cromwell's
army
in
Ireland,
as
physician-general.
His
opposition
to
conventional
universities,
being
committed
t
o
‘new
science’
as
inspired
by
Francis
Bacon
and
imparted by his afore-mentioned
acquaintances, perhaps pushed him from Oxford. He
was pulled to Ireland perhaps by sense
of ambition and desire for wealth and power.
His breadth of interests was such that
he successfully secured the contract for charting
Ireland in 1654, so that those who had
lent funds to Cromwell's army might be repaid
in
land
-
a
means
of
ensuring
the
army
was
self-financing.
This
enormous
task
he
completed
in 1656 and became known as the Down Survey, later
published (1685) as
Hiberniae
Delineatio.
As
his
reward,
he
acquired
approximately
30
000
acres
(120
km?
)
in
Kenmare,
in
southwest
Ireland,
and
?
9
000.
This
enormous
personal
advantage to Petty led to persistent
court cases on charges of bribery and breach of
trust until his death. None were ever
proven.
Now
back
in
England,
as
a
Cromwellian
supporter,
he
ran
unsuccessfully
for
Parliament
in
1659
for
West
Looe.
Despite
his
political
allegiances,
he
was
well-
treated at the Restoration, although he lost some
of his Irish lands. In 1662, he
was
invited
to
join
the
'Invisible
College',
a
club
of
intellectuals
and
was
a
charter
member of the Royal
Society of the same year. This year also saw him
write his first
work on economics, his
Treatise of Taxes and Contributions. Petty counted
among his
many
scientific
interests
naval
architecture:
he
had
become
convinced
of
the
superiority
of
double-hulled
boats,
although
they
were
not
always
successful;
the
Experiment
reached
Porto
on
1664,
but
sank
on the
way
back.
He
was
knighted
in
1661 by Charles II and returned to
Ireland in 1666, where he remained for most of the
next twenty years.
2
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
primary
interest became Ireland’s prosperity
and his works describe that country and propose
many remedies for its then backward
condition. He helped found the Dublin Society
in 1682. Returning ultimately to London
in 1685, he died in 1687.
He regarded his
life in
bittersweet
terms.
He had risen from
humble
origins
to
mix
with
the
intellectual
elite
and
was
by
35
a
considerably
wealthy
man
and
leading
member
of
the
'progressive
sciences'.
Nonetheless,
he
was
insecure
about
his
land
holdings and his ambitions of obtaining
important political posts remained frustrated.
Perhaps
he
expected
the
astronomical
rise
he
experienced
in
his
early
years
to
continue throughout his
life. Contemporaries described him, nonetheless,
as humorous,
good-natured and rational.
He is most well known for
economic history and statistic writings, pre-Adam
Smith.
Of
particular
interest
were
Petty's
forays
into
statistical
analysis.
Petty's
work
in
political
arithmetic,
along
with
the
work
of
John
Graunt,
laid
the
foundation
for
modern
census
techniques.
Moreover,
this
work
in
statistical
analysis,
when
further
expanded by
writers like
Josiah Child, documented some of the first
expositions
of
modern
insurance.
Vernon
Louis
Parrington
notes
him
as
an
early
expositor
of
the
labor theory of value as discussed in
Treatise of Taxes in 1692. [1]
[edit] Economic works and theories:
overview
Before discussing Petty's
economic theories, it is important to point out
two crucial
influences in his life. The
first is 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
centered
on
peace,
Petty
chose
prosperity.
Secondly, the influence of
Francis Bacon was 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 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),
all
3
refreshingly concise.
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.
[edit] Fiscal
contributions
Fiscal
contributions
were
of
prime
concern
to
policymakers
in
the
17th
century,
as
they
have
remained
ever
since,
for
the
wise
country
would
not
spend
above
its
revenues. 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.
On the issue of raising taxes, Petty
was a definite proponent of consumption taxes. He
recommended that in general taxes
should be just sufficient to meet the various
types
of
public
charges
that
he
listed.
They
should
also
be
horizontally
equitable,
regular
and proportionate.
He
condemned poll taxes
as
very unequal
and excise on
beer
as
taxing
the
poor
excessively.
He
recommended
a
much
higher
quality
of
statistical
information, in
order to raise taxes more fairly. Imports should
be taxed, but only in
such
a
way
that
would
put
them
on
a level
playing
field
with
domestic
produce.
A
vital
aspect
of
economies
at
this
time
was
that
they
were
transforming
from
barter
economies to money
economies. Linked to this, and aware of the
scarcity of money,
Petty recommends
that taxes be payable in forms other than gold or
silver, which he
estimated to
be less than 1% of national
wealth. To him, too
much
importance was
placed on money, 'which
is to the whole effect of the Kingdom… not [even]
one to
100'.
[edit] National income accounting
In
making
the
above
estimate,
Petty
introduces
in
the
first
two
chapters
of
Verbum
Sapienti the first
rigorous assessments of national income and
wealth. To him, it was
all
too
obvious
that
a
country’s
wealth
lay
in
more
than
just
gold
and
silver.
He
worked off an estimation
that the average personal income was ?
6
13s 4d per annum,
with a population of
six million, meaning that national income would be
?
40m. Petty
produces
estimates,
some
more
reliable
than
others,
for
the
various
components
of
national
income,
including
land,
ships,
personal
estates
and
housing.
He
then
distinguishes between the stocks
(?
250m) and the flows yielding from
them (?
15m).
The
discrepancy
between
these
flows
and
his
estimate
for
national
income
(?
40m)
4