Nassau William Senior was a noted economist who also held several government commissions. He was appointed to the first endowed chair of political economy at Oxford in 1825. After the first edition of An Outline of the Science of Political Economy was published in Encyclopedia Metropolitana in 1836, a revised and expanded edition appeared as a separate volume in 1850. Senior defined political economy as the science that investigates the nature, production, and distribution of wealth. He employs the term wealth as a synonym for value, and, like the economists before him, includes utility as one of the three causes of value. Utility is “the power, direct or indirect, of producing pleasure, including under that term gratification of every kind, or of preventing pain, including under that term every species of discomfort.” This subjective notion of utility reflects the influence of the French economists, such as Condillac and especially J.-B. Say.
Senior is widely regarded as one of the forerunners of marginal utility theory. The satisfaction that we derive from a class of goods, he maintained, “diminishes in a rapidly increasing ratio” as the supply of those goods increases. “Two articles of the same kind will seldom afford twice the pleasure of one. In proportion, therefore, as any article is abundant … the additional supply loses all, or nearly all, its utility.” In his History of Economic Analysis, Joseph Schumpeter calls Senior one of the first “pure” economic theorists, while adding that, in this regard “his performance is clearly superior to that of Ricardo.” This applies to Senior’s attempt to base economic theory on four basic postulates or axioms, on which all of economic reasoning is based. This deductive method led the Austrian economist Murray N. Rothbard to hail Senior as “the most important praxeologist” of his era.
Perhaps Senior’s most important contribution to the science of economics was his theory of time preference, which he called abstinence, as the source of the interest accruing to capital. Senior, wrote Eugen von Böhm‐Bawerk in History and Critique of Interest Theories, “is infinitely superior to his predecessors in the study of interest, in point of profundity, systematic organization and scientific seriousness of purpose.”
Another important feature of Senior’s work was his insistence that economics should be a value‐free discipline—a point he emphasized not only in his book Political Economy, but also in his lecture on “Statistic Science,” which he delivered before the British Association for the Advancement of Science in 1860. “We cease to be scientific as soon as we advise or dissuade, or even approve or censure,” he wrote. “Whenever [the economist] gives a precept, whenever he advises his reader to do anything, or to abstain from doing anything, he wanders from his science into art, generally into the art of morality, or the art of government.”
Senior, Nassau William. An Outline of the Science of Political Economy. Richard Whately, ed. New York: A. M. Kelley, 1965.
———. Three Lectures on the Rate of Wages. New York: A. M. Kelley, 1966.