Mill and Chadwick on Government Intervention

The social and economic policies of John Stuart Mill and Sir Edwin Chadwick addressed issues of their day, but are surprisingly relevant to current problems facing society. Mill’s ideas on income taxation are still discussed in modern politics. The U.S. Federal Income Tax system is progressive in nature, but Mill stressed equality of sacrifice, which we do not see resulting from our complicated tax code, with its myriad of deductions. The advocates of a flat tax can reach back to Mill’s writings to find support for their arguments. With inheritance taxes, Mill sought to redistribute wealth as a matter of public policy. Mills ideas on the topic of welfare reform are extremely relevant today. Mill regarded welfare dependence as an evil and proposed a self-help system based on economic incentives to encourage work and public education to improve worker skills. Chadwick applied Utilitarianism to bureaucratic practices and produced some interesting results. Chadwick’s view was that the public interest that Bentham agonized over should be defined in terms of improved economic efficiency. For example, the reduction of waste was in the public’s best interest. Chadwick made many useful observations about the utility of crime and the inefficiencies in the economics of justice, especially within the jury trial system. Chadwick noted a distinct correlation between well-compensated police officers and the resulting quality of law enforcement. Chadwick advocated the benefits of a centralized bureau for the collection of crime data. Chadwick promoted the idea of streetlights as a deterrent to crime. Chadwick’s contract management concept is an ingenious way of introducing the discipline of competition into a business enterprise that would otherwise provide services under a natural monopoly. Peel and Gladstone’s ideas about limiting the taxes that could be levied would be very interesting to discuss today. Various governmental entities now assume the right, if not the obligation, to tax every conceivable transaction. Although Mill and Chadwick agreed that government intervention was necessary to achieve optimal results, Mill disagreed with Chadwick’s idea that good could come from centralizing all political and economic authority.

Reference

Ekelund, R. B., Jr., & Hébert, R. F. (1997). A history of economic theory and method (4th ed.). New York: McGraw Hill.