Mill establishes a foundational theoretical distinction that underpins his entire reformist project: the separation between the laws governing the production of wealth and those governing its distribution.

• Laws of Production: These “partake of the character of physical truths. There is nothing optional or arbitrary in them.” They are determined by natural conditions and the inherent properties of labor and capital. Mankind can work within these laws more or less efficiently, but cannot change their fundamental nature.
• Laws of Distribution: In stark contrast, these are “a matter of human institution solely. The things once there, mankind, individually or collectively, can do with them as they like… The distribution of wealth, therefore, depends on the laws and customs of society.”

This distinction was revolutionary. For thinkers like Ricardo, the laws of wages were as unalterable as the laws of gravity. For Mill, by classifying distribution as a matter of social choice, he opened the door to the possibility of fundamentally reorganizing society to achieve more equitable outcomes without violating any “natural” economic laws.