JOHN STUART MILL I. METHOD FOR ANALYSIS: A.

Due to his exposure to several lines of argument, Mills works and contributions to economic thought reflect the same waves of ideology that he went through 1. Rationalism Mill was exposed to practical and objective reasoning during his Utilitarianism pursuits (when Jeremy Bentham was still his hero) a. utilized induction and deduction but sooner realized the limitation of deductive reasoning in the social sciences human behavior can never be easily generalized 2. Romanticism after going through several emotional bouts, Mill allowed himself to be influenced by this wave of thinking after being disillusioned of the beauties and the sanctity of utilitarianism II. SALIENT POINTS OF MILLS CONTRIBUTIONS A. Mill believed that in the general process of answering the basic economic questions of What, How and How Much and For Whom, Production and Distribution are two isolated concepts. This is because the two are determined by different things 1. production is exclusively determined by universal occurrences (or is simply Natural BUT Mill was not directly lifting his reasoning from Natural Law) and is described as consequential: production will happen without the need for human intervention 2. distribution goods were distributed through the general nature of the societys members: human nature determined how goods are to be divided among sectors B. Mill was the first economics writer who was very conscious of the difference in orientation of positive and normative economics C. On Taxes Mill (like Smith) strongly opposed a progressive ( higher income levels are taxed more) tax system because he believed that it discouraged working longer hours and higher productivity it is like taxing society members that were contributing more to the welfare of the community 1. Mill endorsed a proportionate tax system instead the same percentage of taxes is deducted from all income levels 2. As amendments to his proposal, Mill said that the poor should be exempted from taxes and that inheritance taxes should be raised radically D. On Government Intervention belonging to the Classical School, Mill believed in the doctrine of laissez-faire BUT he amends that should the government find the need to intervene in a certain issue (this is on a case-to-case basis), government should be able to justify their coming into the picture and, if

their being in the scene is for the general good, then they can intervene. Otherwise, laissez-faire was the economic way to go E. On Education was a prime issue for Mill. State provided education is important, if this is the best means to make education both accessible and affordable for all. In addition to the basic skills taught in school (reading, writing and arithmetic), Mill found the need for forms of capitalist / entrepreneurial training be offered in school too. He reasoned that this is to ensure that the capitalist market economy that society is constantly striving for a sustained growing momentum in the future F. Mills Stationary State Unlike Ricardo, Mills stationary state was a goal that all societies should be striving for. This is a social condition wherein all necessities are will provided for and that not one society member is in need for anything. In this case, all efforts can be concentrated on the human aspect (of being human). This means being more involved in activities that nurtured the details of our culture. The Stationary State is not fully realized until all societies around the world are experiencing this paradisio state.