Petty William (1623-1687) - English economist, scientist and philosopher. He became famous when he served Oliver Cromwell and the English Republic. The scientist has developed effective methods for surveying land intended for confiscation. After Cromwell, he served under Charles II and James II. For several years he sat in the English parliament. However, the economic views of William Petty are best known. He is credited with upholding the principle of laissez-faire in public policy.
William Petty: biography
The future famous economist of the pre-Smith era was born in a family of tailors. He grew up an inquisitive and intelligent child and in 1637 got a job as a young boy on a ship. However, he soon broke his leg and was landed in Normandy. After this year, Petty William studied Latin and worked as an English teacher for the local population. Then he returned to England. By this time, the future economist was well versed in Latin, Greek, French, mathematics and astronomy. After a short period of service in the navy, he left for Holland, where he became interested in anatomy. In Amsterdam, William worked as Hobbes's personal secretary, which allowed him to meet Descartes, Gassendi and Mersenne.
In 1646, he returned to England and began studying medicine at the University of Oxford. He managed to invent and patent his own copy machine, however, to establish its sale failed. In 1652, he took leave and went to Ireland with the army of Cromwell. He sat in parliament, served under two kings. After 1660, his scientific interest shifted from physical sciences to social ones. In 1667, he married Elizabeth Voller. The economist died in 1687 in London, where he returned from Ireland shortly before his death.
Economic views
The scientist's theory was influenced by two sources:
- Thomas Hobbes. William was his personal secretary for some time and managed to remember well the rational requirements of "civil peace and material abundance." Therefore, most of his life he was looking for sources of prosperity for Ireland.
- Francis Bacon. The scientist agreed that mathematics and intuition should be the basis of all rational sciences. Therefore, in his scientific research he always sought to search for quantitative indicators. So the so-called political arithmetic appeared.
William Petty is often called the first real economist. The depth of his research put him above Thomas Mans, Josiah Child and John Locke. Petty's work preceded political economy. His most famous theories are related to taxation, national wealth, money supply and the speed of its circulation, value, interest rate, international trade and public investment. Petty was one of the first to oppose the views of the mercantilists. He believed that the cost of any product should be based on the labor expended on its production. The national wealth of the country, in his opinion, consists not only in gold and silver, but not only the lack of money is harmful, but also their surplus.
Taxes, statistics and national income accounting
In Petty's time, the dominant concept in England was mercantilism. England fought with Holland, and she needed money. Therefore, Petty was looking for the right principles of taxation. They were supposed to help fill the treasury for the war. Petty identified six areas of levying. He believed that they should be regular and proportionate. Petty advocated collecting taxes in the form of not only precious metals, but also money. He used the same principle when calculating national income. He believed that the wealth of the state consists not only in gold and silver, but also in money. According to his calculations, the national income of England in the 1660s was 667 million pounds.
In statistics, Petty used simple averages. However, in those days it was a great achievement. Almost no one before him used quantitative indicators at all. Census data, also from Ireland, was very difficult to obtain. Therefore, Petty came up with his own way of estimating the number of people. He believed that an increase in exports of 30% leads to a proportional population growth, and one out of thirty people dies every year. So estimated the number of residents of London. In the whole country, according to Petty, there were eight times more people. It should be noted that this method was criticized during the life of the scientist.
Theory of value and interest
Petty William continued the discussion begun by Aristotle. He continued the theory of value, which was based on the resources spent on production. He identified two factors: land and labor. Both were a source of taxable income. Petty wanted to create an equation that would result in the right value of goods. He also considered overall performance to be an important component. Petty applied his cost theory to calculating rents. As for the interest rate, in those days, many still considered such a profit to be sinful. However, Petty did not agree with this interpretation. He introduces the concept of rewards for refusing to use money on the part of the borrower.
Non-Intervention Management
One of the important topics that Petty William raised in his work is the laissez-faire philosophy of government. Here he relied on the medical principle of non-interference in a healthy body. He applied it to monopolies, and to control the export of money, and to trade in goods. He believed that government regulation does more harm than good.
William Petty: Theories
During his life, the scientist turned to many areas of future economic science. In the works you can find the views of William Petty on taxes, the calculation of national income, statistics, money supply and the speed of their circulation, the theory of value and interest, public administration, regulation of exchange rates and trade, full employment, division of labor and many other topics. His theories influenced the views of many famous economists. In a sense, such great minds as Adam Smith, Karl Marx and John Maynard Keynes became his followers. Extremely broad areas of interest helped Petty stay relevant for a long time.
Works and Heritage
William Petty is the founder and member of the Royal Society. He is best known for his work on economic history and statistics. The founder of modern census techniques is William Petty. The works of the scientist include such works:
- A Treatise on Taxes and Fees (1662).
- Political Arithmetic (1676).
- Verbum Sapienti (1664).
- "Political Anatomy of Ireland" (1672).
- “On Money” (1682).
- "Essay on the augmentation of mankind" (1682).