John Stuart Mill (20 May 1806 – 8 May 1873) was an English philosopher, political economist and civil servant. One of the most influential thinkers in the history of liberalism, he contributed widely to social theory, political theory and political economy. Dubbed "the most influential English-speaking philosopher of the nineteenth century", Mill's conception of liberty justified the freedom of the individual in opposition to unlimited state and social control.
Mill was a proponent of utilitarianism, an ethical theory developed by his predecessor Jeremy Bentham, and contributed significantly to the theory of the scientific method.
A member of the Liberal Party, he was also the first Member of Parliament to call for women's suffrage.
John Stuart Mill was born on Rodney Street in the Pentonville area of London, the eldest son of the Scottish philosopher, historian and economist James Mill, and Harriet Burrow. John Stuart was educated by his father, with the advice and assistance of Jeremy Bentham and Francis Place. He was given an extremely rigorous upbringing, and was deliberately shielded from association with children his own age other than his siblings. His father, a follower of Bentham and an adherent of associationism, had as his explicit aim to create a genius intellect that would carry on the cause of utilitarianism and its implementation after he and Bentham had died.
Mill was a notably precocious child. He describes his education in his autobiography. At the age of three he was taught Greek. By the age of eight, he had read Aesop's Fables, Xenophon's Anabasis, and the whole of Herodotus, and was acquainted with Lucian, Diogenes Laërtius, Isocrates and six dialogues of Plato. He had also read a great deal of history in English and had been taught arithmetic, physics and astronomy.
At the age of eight, Mill began studying Latin, the works of Euclid, and algebra, and was appointed schoolmaster to the younger children of the family. His main reading was still history, but he went through all the commonly taught Latin and Greek authors and by the age of ten could read Plato and Demosthenes with ease. His father also thought that it was important for Mill to study and compose poetry. One of Mill's earliest poetic compositions was a continuation of the Iliad. In his spare time he also enjoyed reading about natural sciences and popular novels, such as Don Quixote and Robinson Crusoe.
His father's work, The History of British India was published in 1818; immediately thereafter, at about the age of twelve, Mill began a thorough study of the scholastic logic, at the same time reading Aristotle's logical treatises in the original language. In the following year he was introduced to political economy and studied Adam Smith and David Ricardo with his father, ultimately completing their classical economic view of factors of production. Mill's comptes rendus of his daily economy lessons helped his father in writing Elements of Political Economy in 1821, a textbook to promote the ideas of Ricardian economics; however, the book lacked popular support. Ricardo, who was a close friend of his father, used to invite the young Mill to his house for a walk in order to talk about political economy.
At the age of fourteen, Mill stayed a year in France with the family of Sir Samuel Bentham, brother of Jeremy Bentham. The mountain scenery he saw led to a lifelong taste for mountain landscapes. The lively and friendly way of life of the French also left a deep impression on him. In Montpellier, he attended the winter courses on chemistry, zoology, logic of the Faculté des Sciences, as well as taking a course of the higher mathematics. While coming and going from France, he stayed in Paris for a few days in the house of the renowned economist Jean-Baptiste Say, a friend of Mill's father. There he met many leaders of the Liberal party, as well as other notable Parisians, including Henri Saint-Simon.
Mill went through months of sadness and pondered suicide at twenty years of age. According to the opening paragraphs of Chapter V of his autobiography, he had asked himself whether the creation of a just society, his life's objective, would actually make him happy. His heart answered "no", and unsurprisingly he lost the happiness of striving towards this objective. Eventually, the poetry of William Wordsworth showed him that beauty generates compassion for others and stimulates joy. With renewed joy he continued to work towards a just society, but with more relish for the journey. He considered this one of the most pivotal shifts in his thinking. In fact, many of the differences between him and his father stemmed from this expanded source of joy.
Mill had been engaged in a pen-friendship with Auguste Comte, the founder of positivism and sociology, since Mill first contacted Comte in November 1841. Comte's sociologie was more an early philosophy of science than we perhaps know it today, and the positive philosophy aided in Mill's broad rejection of Benthamism.
As a nonconformist who refused to subscribe to the Thirty-Nine Articles of the Church of England, Mill was not eligible to study at the University of Oxford or the University of Cambridge. Instead he followed his father to work for the East India Company, and attended University College, London, to hear the lectures of John Austin, the first Professor of Jurisprudence. He was elected a Foreign Honorary Member of the American Academy of Arts and Sciences in 1856.
Mill's career as a colonial administrator at the British East India Company spanned from when he was 17 years old in 1823 until 1858, when the Company was abolished in favor of direct rule by the British crown over India. In 1836, he was promoted to the Company's Political Department, where he was responsible for correspondence pertaining to the Company's relations with the princely states, and in 1856, was finally promoted to the position of Examiner of Indian Correspondence. In On Liberty, A Few Words on Non-Intervention, and other works, Mill defended British imperialism by arguing that a fundamental distinction existed between civilized and barbarous peoples. Mill viewed countries such as India and China as having once been progressive, but that were now stagnant and barbarous, thus legitimizing British rule as benevolent despotism, "provided the end is [the barbarians'] improvement." When the crown proposed to take direct control over the colonies in India, he was tasked with defending Company rule, penning Memorandum on the Improvements in the Administration of India during the Last Thirty Years among other petitions. He was offered a seat on the Council of India, the body created to advise the new Secretary of State for India, but declined, citing his disapproval of the new system of rule.
In 1851, Mill married Harriet Taylor after 21 years of an intimate friendship. Taylor was married when they met, and their relationship was close but generally believed to be chaste during the years before her first husband died. Brilliant in her own right, Taylor was a significant influence on Mill's work and ideas during both friendship and marriage. His relationship with Harriet Taylor reinforced Mill's advocacy of women's rights. He cites her influence in his final revision of On Liberty, which was published shortly after her death. Taylor died in 1858 after developing severe lung congestion, after only seven years of marriage to Mill.
Between the years 1865 and 1868 Mill served as Lord Rector of the University of St. Andrews. During the same period, 1865–68, he was a Member of Parliament for City and Westminster. He was sitting for the Liberal Party. During his time as an MP, Mill advocated easing the burdens on Ireland. In 1866, Mill became the first person in the history of Parliament to call for women to be given the right to vote, vigorously defending this position in subsequent debate. Mill became a strong advocate of such social reforms as labour unions and farm cooperatives. In Considerations on Representative Government, Mill called for various reforms of Parliament and voting, especially proportional representation, the single transferable vote, and the extension of suffrage. In April 1868, Mill favoured in a Commons debate the retention of capital punishment for such crimes as aggravated murder; he termed its abolition "an effeminacy in the general mind of the country."
He was godfather to the philosopher Bertrand Russell.
In his views on religion, Mill was an agnostic.
Mill died in 1873 of erysipelas in Avignon, France, where he was buried alongside his wife.
Mill joined the debate over scientific method which followed on from John Herschel's 1830 publication of A Preliminary Discourse on the study of Natural Philosophy, which incorporated inductive reasoning from the known to the unknown, discovering general laws in specific facts and verifying these laws empirically. William Whewell expanded on this in his 1837 History of the Inductive Sciences, from the Earliest to the Present Time followed in 1840 by The Philosophy of the Inductive Sciences, Founded Upon their History, presenting induction as the mind superimposing concepts on facts. Laws were self-evident truths, which could be known without need for empirical verification. Mill countered this in 1843 in A System of Logic, Ratiocinative and Inductive, Being a Connected View of the Principles of Evidence, and the Methods of Scientific Investigation. In Mill's Methods of induction, like Herschel's, laws were discovered through observation and induction, and required empirical verification.
Mill's On Liberty addresses the nature and limits of the power that can be legitimately exercised by society over the individual. However Mill is clear that his concern for liberty does not extend to all individuals and all societies. He states that "Despotism is a legitimate mode of government in dealing with barbarians".
Mill states that it is acceptable to harm oneself as long as the person doing so is not harming others. He also argues that individuals should be prevented from doing lasting, serious harm to themselves or their property by the harm principle. Because no one exists in isolation, harm done to oneself may also harm others, and destroying property deprives the community as well as oneself. Mill excuses those who are "incapable of self-government" from this principle, such as young children or those living in "backward states of society".
Though this principle seems clear, there are a number of complications. For example, Mill explicitly states that "harms" may include acts of omission as well as acts of commission. Thus, failing to rescue a drowning child counts as a harmful act, as does failing to pay taxes, or failing to appear as a witness in court. All such harmful omissions may be regulated, according to Mill. By contrast, it does not count as harming someone if – without force or fraud – the affected individual consents to assume the risk: thus one may permissibly offer unsafe employment to others, provided there is no deception involved. (Mill does, however, recognise one limit to consent: society should not permit people to sell themselves into slavery). In these and other cases, it is important to bear in mind that the arguments in On Liberty are grounded on the principle of Utility, and not on appeals to natural rights.
The question of what counts as a self-regarding action and what actions, whether of omission or commission, constitute harmful actions subject to regulation, continues to exercise interpreters of Mill. It is important to emphasise that Mill did not consider giving offence to constitute "harm"; an action could not be restricted because it violated the conventions or morals of a given society.
On Liberty involves an impassioned defense of free speech. Mill argues that free discourse is a necessary condition for intellectual and social progress. We can never be sure, he contends, that a silenced opinion does not contain some element of the truth. He also argues that allowing people to air false opinions is productive for two reasons. First, individuals are more likely to abandon erroneous beliefs if they are engaged in an open exchange of ideas. Second, by forcing other individuals to re-examine and re-affirm their beliefs in the process of debate, these beliefs are kept from declining into mere dogma. It is not enough for Mill that one simply has an unexamined belief that happens to be true; one must understand why the belief in question is the true one. Along those same lines Mill wrote, "unmeasured vituperation, employed on the side of prevailing opinion, really does deter people from expressing contrary opinions, and from listening to those who express them."
Mill believed that "the struggle between Liberty and Authority is the most conspicuous feature in the portions of history". For him, liberty in antiquity was a "contest... between subjects, or some classes of subjects, and the government." Mill defined "social liberty" as protection from "the tyranny of political rulers". He introduced a number of different concepts of the form tyranny can take, referred to as social tyranny, and tyranny of the majority.
Social liberty for Mill meant putting limits on the ruler's power so that he would not be able to use his power on his own wishes and make decisions which could harm society; in other words, people should have the right to have a say in the government's decisions. He said that social liberty was "the nature and limits of the power which can be legitimately exercised by society over the individual". It was attempted in two ways: first, by obtaining recognition of certain immunities, called political liberties or rights; second, by establishment of a system of "constitutional checks".
However, in Mill's view, limiting the power of government was not enough. He stated, "Society can and does execute its own mandates: and if it issues wrong mandates instead of right, or any mandates at all in things with which it ought not to meddle, it practices a social tyranny more formidable than many kinds of political oppression, since, though not usually upheld by such extreme penalties, it leaves fewer means of escape, penetrating much more deeply into the details of life, and enslaving the soul itself."
John Stuart Mill's view on liberty, which was influenced by Joseph Priestley and Josiah Warren, is that the individual ought to be free to do as he wishes unless he harms others. Individuals are rational enough to make decisions about their well being. Government should interfere when it is for the protection of society. Mill explained:
The sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant. He cannot rightfully be compelled to do or forbear because it will be better for him to do so, because it will make him happier, because, in the opinion of others, to do so would be wise, or even right...The only part of the conduct of anyone, for which he is amenable to society, is that which concerns others. In the part which merely concerns him, his independence is, of right, absolute. Over himself, over his own body and mind, the individual is sovereign.
An influential advocate of freedom of speech, Mill objected to censorship. He says:
I choose, by preference the cases which are least favourable to me – In which the argument opposing freedom of opinion, both on truth and that of utility, is considered the strongest. Let the opinions impugned be the belief of God and in a future state, or any of the commonly received doctrines of morality... But I must be permitted to observe that it is not the feeling sure of a doctrine (be it what it may) which I call an assumption of infallibility. It is the undertaking to decide that question for others, without allowing them to hear what can be said on the contrary side. And I denounce and reprobate this pretension not the less if it is put forth on the side of my most solemn convictions. However, positive anyone's persuasion may be, not only of the faculty but of the pernicious consequences, but (to adopt expressions which I altogether condemn) the immorality and impiety of opinion. – yet if, in pursuance of that private judgement, though backed by the public judgement of his country or contemporaries, he prevents the opinion from being heard in its defence, he assumes infallibility. And so far from the assumption being less objectionable or less dangerous because the opinion is called immoral or impious, this is the case of all others in which it is most fatal.
Mill outlines the benefits of 'searching for and discovering the truth' as a way to further knowledge. He argued that even if an opinion is false, the truth can be better understood by refuting the error. And as most opinions are neither completely true nor completely false, he points out that allowing free expression allows the airing of competing views as a way to preserve partial truth in various opinions. Worried about minority views being suppressed, Mill also argued in support of freedom of speech on political grounds, stating that it is a critical component for a representative government to have in order to empower debate over public policy. Mill also eloquently argued that freedom of expression allows for personal growth and self-realization. He said that freedom of speech was a vital way to develop talents and realise a person's potential and creativity. He repeatedly said that eccentricity was preferable to uniformity and stagnation.
The belief that the freedom of speech will advance the society was formed with trust of the public’s ability to filter. If any argument is really wrong or harmful, the public will judge it as wrong or harmful, and then those arguments cannot be sustained and will be excluded. Mill argued that even any arguments which are used in justifying murder or rebellion against the government shouldn’t be politically suppressed or socially persecuted. According to him, if rebellion is really necessary, people should rebel; if murder is truly proper, it should be allowed. But, the way to express those arguments should be a public speech or writing, not in a way that causes actual harm to others. This is the Harm Principle.
That the only purpose for which power can be rightfully exercised over any member of a civilised community, against his will, is to prevent harm to others.
At the beginning of the twentieth century, Associate Justice Oliver Wendell Holmes Jr. made the standard of "clear and present danger" based on Mill's idea. In the majority opinion, Holmes writes:
The question in every case is whether the words used are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent.
Shouting out "Fire!" in a dark theatre, which makes people panic and gets them injured, is a case of that. But if the situation allows people to reason by themselves and decide to accept it or not, any argument or theology should not be blocked.
Nowadays, Mill's argument is generally accepted by many democratic countries, and they have laws about the harm principle. For example, in American law some exceptions limit free speech such as obscenity, defamation, breach of peace, and "fighting words".
Mill, an employee for the British East India Company from 1823 to 1858, argued in support of what he called a 'benevolent despotism' with regard to the colonies. Mill argued that "To suppose that the same international customs, and the same rules of international morality, can obtain between one civilized nation and another, and between civilized nations and barbarians, is a grave error....To characterize any conduct whatever towards a barbarous people as a violation of the law of nations, only shows that he who so speaks has never considered the subject."
In 1850, Mill sent an anonymous letter (which came to be known under the title "The Negro Question"), in rebuttal to Thomas Carlyle's anonymous letter to Fraser's Magazine for Town and Country in which Carlyle argued for slavery. Mill supported abolition in the United States.
In Mill's essay from 1869, "The Subjection of Women", he expressed his opposition to slavery:
This absolutely extreme case of the law of force, condemned by those who can tolerate almost every other form of arbitrary power, and which, of all others, presents features the most revolting to the feeling of all who look at it from an impartial position, was the law of civilized and Christian England within the memory of persons now living: and in one half of Angle-Saxon America three or four years ago, not only did slavery exist, but the slave trade, and the breeding of slaves expressly for it, was a general practice between slave states. Yet not only was there a greater strength of sentiment against it, but, in England at least, a less amount either of feeling or of interest in favour of it, than of any other of the customary abuses of force: for its motive was the love of gain, unmixed and undisguised: and those who profited by it were a very small numerical fraction of the country, while the natural feeling of all who were not personally interested in it, was unmitigated abhorrence.
Mill's view of history was that right up until his time "the whole of the female" and "the great majority of the male sex" were simply "slaves". He countered arguments to the contrary, arguing that relations between sexes simply amounted to "the legal subordination of one sex to the other – [which] is wrong itself, and now one of the chief hindrances to human improvement; and that it ought to be replaced by a principle of perfect equality." With this, Mill can be considered among the earliest male feminists. His book The Subjection of Women (1861, published 1869) is one of the earliest written on this subject by a male author. In The Subjection of Women Mill attempts to make a case for perfect equality. He talks about the role of women in marriage and how it needed to be changed. There, Mill comments on three major facets of women's lives that he felt are hindering them: society and gender construction, education, and marriage. He argued that the oppression of women was one of the few remaining relics from ancient times, a set of prejudices that severely impeded the progress of humanity.
The canonical statement of Mill's utilitarianism can be found in Utilitarianism. This philosophy has a long tradition, although Mill's account is primarily influenced by Jeremy Bentham and Mill's father James Mill.
Jeremy Bentham's famous formulation of utilitarianism is known as the "greatest-happiness principle". It holds that one must always act so as to produce the greatest aggregate happiness among all sentient beings, within reason. Mill's major contribution to utilitarianism is his argument for the qualitative separation of pleasures. Bentham treats all forms of happiness as equal, whereas Mill argues that intellectual and moral pleasures (higher pleasures) are superior to more physical forms of pleasure (lower pleasures). Mill distinguishes between happiness and contentment, claiming that the former is of higher value than the latter, a belief wittily encapsulated in the statement that "it is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, are of a different opinion, it is because they only know their own side of the question."
Mill defines the difference between higher and lower forms of pleasure with the principle that those who have experienced both tend to prefer one over the other. This is, perhaps, in direct contrast with Bentham's statement that "Quantity of pleasure being equal, push-pin is as good as poetry", that, if a simple child's game like hopscotch causes more pleasure to more people than a night at the opera house, it is more imperative upon a society to devote more resources to propagating hopscotch than running opera houses. Mill's argument is that the "simple pleasures" tend to be preferred by people who have no experience with high art, and are therefore not in a proper position to judge. Mill also argues that people who, for example, are noble or practice philosophy, benefit society more than those who engage in individualist practices for pleasure, which are lower forms of happiness. It is not the agent's own greatest happiness that matters "but the greatest amount of happiness altogether".[incomplete short citation]
The qualitative account of happiness that Mill advocates thus sheds light on his account presented in On Liberty. As Mill suggests in that text, utility is to be conceived in relation to humanity "as a progressive being", which includes the development and exercise of rational capacities as we strive to achieve a "higher mode of existence". The rejection of censorship and paternalism is intended to provide the necessary social conditions for the achievement of knowledge and the greatest ability for the greatest number to develop and exercise their deliberative and rational capacities.
Mill's early economic philosophy was one of free markets. However, he accepted interventions in the economy, such as a tax on alcohol, if there were sufficient utilitarian grounds. He also accepted the principle of legislative intervention for the purpose of animal welfare. Mill originally believed that "equality of taxation" meant "equality of sacrifice" and that progressive taxation penalised those who worked harder and saved more and was therefore "a mild form of robbery".
Given an equal tax rate regardless of income, Mill agreed that inheritance should be taxed. A utilitarian society would agree that everyone should be equal one way or another. Therefore, receiving inheritance would put one ahead of society unless taxed on the inheritance. Those who donate should consider and choose carefully where their money goes—some charities are more deserving than others. Considering public charities boards such as a government will disburse the money equally. However, a private charity board like a church would disburse the monies fairly to those who are in more need than others.
Later he altered his views toward a more socialist bent, adding chapters to his Principles of Political Economy in defence of a socialist outlook, and defending some socialist causes. Within this revised work he also made the radical proposal that the whole wage system be abolished in favour of a co-operative wage system. Nonetheless, some of his views on the idea of flat taxation remained, albeit altered in the third edition of the Principles of Political Economy to reflect a concern for differentiating restrictions on "unearned" incomes, which he favoured, and those on "earned" incomes, which he did not favour.
Mill's Principles, first published in 1848, was one of the most widely read of all books on economics in the period. As Adam Smith's Wealth of Nations had during an earlier period, Mill's Principles dominated economics teaching. In the case of Oxford University it was the standard text until 1919, when it was replaced by Marshall's Principles of Economics.
Mill promoted economic democracy instead of capitalism, in the manner of substituting capitalist businesses with worker cooperatives. He says:
The form of association, however, which if mankind continue to improve, must be expected in the end to predominate, is not that which can exist between a capitalist as chief, and work-people without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves.
Mill's major work on political democracy, Considerations on Representative Government, defends two fundamental principles, extensive participation by citizens and enlightened competence of rulers. The two values are obviously in tension, and some readers have concluded that he is an elitist democrat, while others count him as an earlier participatory democrat. In one section he appears to defend plural voting, in which more competent citizens are given extra votes (a view he later repudiated). But in chapter 3 he presents what is still one of the most eloquent cases for the value of participation by all citizens. He believed that the incompetence of the masses could eventually be overcome if they were given a chance to take part in politics, especially at the local level.
Mill is one of the few political philosophers ever to serve in government as an elected official. In his three years in Parliament, he was more willing to compromise than the "radical" principles expressed in his writing would lead one to expect.
Mill demonstrated an early insight into the value of the natural world – in particular in Book IV, chapter VI of "Principles of Political Economy": "Of the Stationary State" in which Mill recognised wealth beyond the material, and argued that the logical conclusion of unlimited growth was destruction of the environment and a reduced quality of life. He concluded that a stationary state could be preferable to unending economic growth:
I cannot, therefore, regard the stationary states of capital and wealth with the unaffected aversion so generally manifested towards it by political economists of the old school.
If the earth must lose that great portion of its pleasantness which it owes to things that the unlimited increase of wealth and population would extirpate from it, for the mere purpose of enabling it to support a larger, but not a better or a happier population, I sincerely hope, for the sake of posterity, that they will be content to be stationary, long before necessity compel them to it.
Mill regarded economic development as a function of land, labour and capital. While land and labour are the two original factors of production, capital is "a stock, previously accumulated of the products of former labour." Increase in wealth is possible only if land and capital help to increase production faster than the labour force. It is productive labour that is productive of wealth and capital accumulation. "The rate of capital accumulation is the function of the proportion of the labour force employed productively. Profits earned by employing unproductive labours are merely transfers of income; unproductive labour does not generate wealth or income". It is productive labourers who do productive consumption. Productive consumption is that "which maintains and increase the productive capacity of the community." It implies that productive consumption is an input necessary to maintain productive labourers.
Mill supported the Malthusian theory of population. By population he meant the number of the working class only. He was therefore concerned about the growth in number of labourers who worked for hire. He believed that population control was essential for improving the condition of the working class so that they might enjoy the fruits of the technological progress and capital accumulation. Mill advocated birth control. In 1823 Mill and a friend were arrested while distributing pamphlets on birth control by Francis Place to women in working class areas.
According to Mill, supply is very elastic in response to wages. Wages generally exceed the minimum subsistence level, and are paid out of capital. Hence, wages are limited by existing capital for paying wages. Thus, wage per worker can be derived by dividing the total circulating capital by the size of the working population. Wages can increase by an increase in the capital used in paying wages, or by decrease in the number of workers. If wages rise, supply of labour will rise. Competition among workers not only brings down wages, but also keeps some workers out of employment. This is based on Mill's notion that "demand for commodities is not demand for labourers". It means that income invested as advances of wages to labour creates employment, and not income spent on consumer goods. An increase in consumption causes a decline in investment. So increased investment leads to increases in the wage fund and to economic progress.
In 1869, Mill recanted his support of the Wage-Fund Doctrine due to recognition that capital is not necessarily fixed in that it can be supplemented through "income of the employer which might otherwise go into savings or be spent on consumption." (Spiegel,[who?] p. 390) Walker[who?] also states in "The Wages Question" that the limits on capital and the growth in population "were accidental, not essential" to the formation of the doctrine. The limitation on the growth of industrial capacity placed a limit on the number of workers who could be accommodated more than the limit on capital. Furthermore, English agriculture "had reached the condition of diminishing returns." (Walker); therefore, each additional worker was not providing more output than he needed for himself for survival. Given the improvements in technology and productivity that followed 1848, the original reasons that gave rise to the doctrine were seen to be unusual and not the basis for a universal law.
According to Mill, the rate of capital accumulation depends on: (1) "the amount of fund from which saving can be made" or "the size of the net produce of the industry", and (2) the "disposition to save". Capital is the result of savings, and the savings come from the "abstinence from present consumption for the sake of future goods". Although capital is the result of saving, it is nevertheless consumed. This means saving is spending. Since saving depends on the net produce of the industry, it grows with profits and rent which go into making the net produce. On the other hand, the disposition to save depends on (1) the rate of profit and (2) the desire to save, or what Mill called "effective desire of accumulation". However, profit also depends on the cost of labour, and the rate of profit is the ratio of profits to wages. When profits rise or wages fall, the rate of profits increases, which in turn increases the rate of capital accumulation. Similarly, it is the desire to save which tends to increase the rate of capital accumulation.
According to Mill, the ultimate tendency in an economy is for the rate of profit to decline due to diminishing returns in agriculture and increase in population at a Malthusian rate .