Quiz: Principles of Political Economy

15 questions drawn at random. Score 80% for a silver medal.

1. 1. In Mill’s comparison, money is to commerce what oil is to machinery. What does he mean?

   Without abundant money, trade between nations breaks down entirely Money only reduces friction and leaves the laws unchanged Money wears out like lubricant and must be constantly replaced by fresh supplies from the mines Money is the fuel that drives all trade, and without it exchange would stop
2. 2. How do the laws of distribution differ from the laws of production, according to the Preliminary Remarks?

   Distribution depends partly on human institutions, the laws and usages of each society Distribution is mere accident and so not a subject for scientific enquiry at all Distribution is fixed by nature, like production, and no society can alter it Distribution depends only on the quantity of money in circulation
3. 3. What does Mill cite France to show about peasant proprietorship?

   That it raises the birth rate while lowering the death rate among the peasant population That it has reduced French agriculture to the worst in Europe That it leads inevitably to a ‘pauper warren’ of tiny plots, subdivided again at every death That it need not cause rapid growth, since France’s population grows slowest in Europe
4. 4. In the preface to the third edition (1852), what does Mill call the only objection to socialism to which he now attaches great importance?

   That it would destroy the motive of profit on which all saving and accumulation depend That it contradicts the law of diminishing returns from land The unprepared state of mankind, especially of the labouring classes That it has been condemned by every political economist since Adam Smith
5. 5. What two theories of the social position of manual labourers does Mill contrast?

   The theory of communism, and that of Fourierism or the phalanstery The theory of dependence and protection, and that of self-dependence The theory of free trade, and that of protection to native industry The theory of the wages fund, and that of the reserve army of labour
6. 6. According to Mill, what set the crisis of 1847 apart from that of 1825?

   It was caused by an over-issue of inconvertible paper money by the country banks No credit boom preceded it; a drain on loanable capital caused it It resulted from a general overproduction of manufactured goods for export It began with the failure of a large bank in the United States and then spread to the London market
7. 7. Which two measures does Mill propose to raise a whole generation of labourers out of poverty?

   Abolishing the poor law and restricting the trade unions by law State-aided colonization and small freeholds made from common land A legal minimum wage and allotments of land for every labourer Restoring the allowance system and protective corn duties
8. 8. What did H. C. Carey claim, against the law of diminishing return?

   That settlers till poor uplands first, rich bottoms later That machinery would soon replace all agricultural labour in America That rent is caused by the monopoly of landowners rather than by differences of fertility That population grows only arithmetically while food grows geometrically
9. 9. What does Mill say the railway speculation of 1844 and 1845 probably did for Britain?

   Saved it from a depression of profits that would have led to wilder speculation Had no economic effect, being a mere transfer of capital from hand to hand Drained the wages fund and caused the distress of the working classes in 1847 Ruined the money market permanently and forced the export of capital
10. 10. According to Mill’s Equation of International Demand, at what values does a country’s produce exchange with other countries?

    At the ratio of the labour costs of the goods in the exporting country At values that make its exports exactly pay for its imports At the average of the costs of production of the goods in all of the countries that trade together At whatever values bring the most gold and silver into the country
11. 11. What general rule does Mill draw from his objections to government agency?

    Government should intervene wherever its intervention would be useful No general rule can be stated, so each case must be decided on its merits without any presumption Government should confine itself strictly to protecting person and property against force and fraud, and nothing more Laisser-faire should be the general practice; every departure not required by some great good is a certain evil
12. 12. What image does Mill use to separate a measure of value from the regulator of value?

    The balance-scales and their weights The clock and the sun The thermometer and the fire The compass and the magnetic pole
13. 13. Why, in Mill’s hypothetical example, might workers need a law to obtain a shorter working day that they all want?

    Because employers are forbidden by the Combination Laws to agree to shorter hours Because workers cannot judge their own interest and must be protected like children Because each gains by working longer while others keep the limit, so only an enforced agreement holds Because shorter hours always reduce wages and so must be imposed against the workers’ will
14. 14. In this treatise, which labour does Mill agree to call productive?

    Only labour that is paid for in money wages by a capitalist employer Only manual labour performed on the land or in the mines Labour producing material wealth, directly or as its ultimate result Any labour that produces a benefit or pleasure worth more than its cost
15. 15. Whose testimony on the metayer system does Mill value most, because it comes from a resident proprietor rather than a traveller?

    McCulloch’s, on France Sismondi’s, on Tuscany Arthur Young’s, on France and Italy Châteauvieux’s, on Lombardy and Piedmont