The inverse Faraday effect, in which a magnetization is induced in a solution through which is passed a polarized light beam of arbitrary ellipticity, is discussed on the basis of theS-matrix formulation of optical birefringence. It is shown that the Faraday effect and the inverse Faraday effect are topologically identical problems of diagrammatic perturbation theory and so it follows automatically that the magnetization should be proportional to the Verdet constant. The optical Faraday effect is the circular birefringence induced by an intense circularly polarized beam of light propagated colinearly with the weak measuring beam: the electric vector of the circularly polarized beam interacts with the molecule in a way that resembles the interaction of a static magnetic field. The interrelations of these two effects and the normal Faraday effect the self-rotation of the polarization ellipse of an intense beam are discussed.