Treating，in the first part，of the influence of external conditions，of race，and of culture on liberty in this wider sense，heproceeds to divide all productive effort into two great classes，according as the action is exercised on things or on men，andcensures the economists for having restricted their attention to the former.He studies in his second and third partsrespectively the conditions of the efficiency of these two forms of human exertion.In treating of economic life，strictly socalled，he introduces his fourfold division of material industry，in part adopted by J.S.Mill，as "(1)extractive，(2)voiturière，(3)manufacturièure，(4)agricole，"a division which is useful for physical economics，but will always，when the larger socialaspect of things is considered，be inferior to the more commonly accepted one into agricultural，manufacturing，andcommercial industry，banking being supposed as common president and regulator.Dunoyer，having in view only action onmaterial objects，relegates banking，as well as commerce proper，to the separate head of exchange，which，along withassociation and gratuitous transmission (whether inter vivos or mortis causa)，he classes apart as being，not industries，in thesame sense with the occupations named，but yet functions essential to the social economy.The industries which act on manhe divides according as they occupy themselves with (1)the amelioration of our physical nature，(2)the culture of ourimagination and sentiments，(3)the education of our intelligence，and (4)the improvement of our moral habits；and heproceeds accordingly to study the social offices of the physician，the artist，the educator，and the priest.We meet in Dunoyerthe ideas afterwards emphasised by Bastiat that the real subjects of human exchange are services；that all value is due tohuman activity；that the powers of nature always render a gratuitous assistance to the labour of man and that the rent of landis really a form of interest on invested capital.Though he had disclaimed the task of a practical adviser in the often-quotedsentence"Je n'impose rien；je ne propose même rien；j'exposé，"he finds himself，like all economists，unable to abstain fromoffering counsel.And his policy is opposed to any state interference with industry.Indeed he preaches in its extreme rigourthe laisser faire doctrine，which he maintains principally on the ground that the spontaneous efforts of the individual for theimprovement of his condition，by developing foresight，energy，and perseverance，are the most efficient means of socialculture.But he certainly goes too far when he represents the action of Governments as normally always repressive and neverdirective.He was doubtless led into this exaggeration by his opposition to the artificial organizations of labour proposed byso many of his contemporaries，against which he had to vindicate the principle of competition；but his criticism of theseschemes took，as Comte remarks，too absolute a character，tending to the perpetual interdiction of a true systematisation ofindustry.(64)
AMERICA
At this point it will be convenient to turn aside and notice the doctrines of the American economist Carey.Not much hadbeen done before him in the science by citizens of the United States.Benjamin Franklin，otherwise of world-wide renown，was author of a number of tracts，in most of which he merely enforces practical lessons of industry and thrift，but in somethrows out interesting theoretic ideas.Thus，fifty years before Smith，he suggested (as Petty，however，had already done)human labour as the true measure of value (Modest Inquiry into the Nature and Necessity of a Paper Currency ，1721)，andin his Observations concerning the Increase of Mankind (1751)he expresses views akin to those of Malthus.AlexanderHamilton，secretary of the treasury，in 1791presented in his official capacity to the House of Representatives of the UnitedStates a Report on the measures by which home manufactures could be promoted.(65)In this document he gives a criticalaccount of the theory of the subject，represents Smith's system of free trade as possible in practice only if adopted by allnations simultaneously，ascribes to manufactures a greater productiveness than to agriculture，and seeks to refute theobjections against the development of the former in America founded on the want of capital，the high rate of wages，and thelow price of land.The conclusion at which he arrives is that for the creation of American manufactures a system of moderateprotective duties was necessary，and he proceeds to describe the particular features of such a system.There is some reasonto believe that the German economist List，of whom we shall speak hereafter，was influenced by Hamilton's work，having，during his exile from his native country，resided in the United States.
