historical school of confounding history with economic science, with the result of accumulating historical and statistical material at the expense of all advance in the doctrine of principles.

Even those who are sympathetically disposed towards the dominant tendency have admitted and deplored this defect. For instance, the late professor of political economy at Bordeaux, St. Marc, in his interesting "Étude sur l'enseignement de l'Economie Politique dans les universités d'Allemagne " (1892), pronounces thereupon as follows: "The Historical School will sooner or later have to bear the evil consequences of its indifference with regard to philosophy. Whether we like it or not, we must form an opinion on the great questions of liberty, progress, responsibility, &c.; we must philosophise." And to this St. Marc adds the prophecy: "As long as the Historical School confines itself to mere preparatory work, it will remain united; but as soon as it seeks to advance to a constructive doctrine, we anticipate for it a greater disunion over just those fundamental questions, than that which was brought about by the secession of the Austrian School."

When St. Marc wrote this (1892), people were still led to think that the Historical School was in earnest with regard to attempting eventually "constructive doctrine." In the name of that school G. Schmoller had repeatedly pointed out that the collection of material so far had only been conditioned by the necessity for division of labour, and that as soon as there would be a sufficient amount of matter available, the formation of theory would naturally be proceeded with. This the opponents characteristically called "a bill of exchange drawn on a long term of payment" which would never become due; and recently the doubt thus expressed has been unexpectedly justified. In his inaugural address as Rector of the University of Berlin, delivered on the 15th October, 1897, and entitled "Varying theories. and established truths in politics and sociology, and economic science at the present day in Germany," Schmoller put forward views which are virtually a repudiation of theoretical treatment as such. He maintained that historical research, or the study of particular phenomena, is alone truly scientific, inasmuch as it treats of irrefutable and established knowledge; theories, on the other hand, which must of necessity be modified by change have no claim to this "title of honour." The inference deducible from this point of view is obvious. Schmoller draws it accordingly :-Investigators who deal in "varying theories" do not attain to the highest levels of science and are therefore unworthy of occupying an academical chair. "It would be going against progress and development," Schmoller exclaims, "if we were to place decaying, old-fashioned ideas and methods on a par with such as are superior and more fully developed. Neither the strict followers of Adam Smith, nor those of Karl Marx, can lay claim to being considered as first-rate nowadays. He who does not strive to be on a level with the present state of

research, culture, and method "-that of the historical school is here implied-" is a teacher of no efficiency."

Had this point of view been put forward by any one but Gustav Schmoller, it might have been suffered to pass. So many an assertion is committed to print only to be borne away forthwith as chaff upon the winds, that it would be wrong to lend it the unmerited significance of contradiction. But Schmoller is the head of the German "historical school," and the "battle for the chairs," proclaimed by him from the V ́rectorial desk of the first university in Germany, means no more and

no less than the exclusion from the German professoriate of all scholars in political economy unless they happen to follow his banner. Hence the importance of the point in dispute becomes far greater. The progress of science in general is involved, and in such a case contradiction may become a duty. For the first time in 1895 the deputy, Baron von Stumm, complained in the German diet of the academical chairs for political economy being entirely monopolised at the German universities by members of the clique known as the (historical) "Socialists of the Chair." Whoever belongs to another school is systematically boycotted and lowered in scientific importance. Since this objection was well founded, the matter caused a good deal of noise abroad, and even the Frankfurter Zeitung, an organ not at all well disposed towards Baron von Stumm, wrote on this point (February 11th, 1895):-" At all events there is some truth in Baron von Stumm's assertion, for the way in which vacant professorships are filled up at the universities is worse than any protectionist policy of the worst of governments. Here party spirit is quite done away with. Instead of a dominant cohesive party, one great ruler has become the leading spirit in the different branches of science; he directs all, and everybody obeys him. In most cases he is the chief representative of a particular faculty at the Berlin University. The minister [of public instruction] consults him whenever a vacancy occurs, and on these lords of the university, even the minister himself is dependent. At every social function no one can fail to notice that such a mighty personage is no longer looked upon as a colleague but rather as a superior master, particularly by the younger scholars. It is quite openly discussed that in such and such a branch this one or that one appoints the new professors. In the faculty of Political Economy, Professor Schmoller is generally credited with this function. We cannot help asking where else in all the world does it happen that a man, who is neither in a position of a cabinet minister nor in that of a privy councillor, speaks of himself as if he had to dispose of Government posts."

In order to complete his statement, the author of the article in the Frankfurter Zeitung ought to have added that appointments to the vacant academical chairs are made as a rule at the annual meetings of the "Verein für Socialpolitik." There the order of precedence of the

candidates is laid down, and everybody present knows whose "turn" it is at the time.

In the end, however, matters got too strong even for the Prussian Government. In order to satisfy a public which clamoured ever more loudly that the representatives of other views should also get a chance of making themselves heard at the universities, the Government in 1897 acted for once on their own initiative, and appointed Assessor Th. Reinhold, an expert in Government service, to the professorship at Berlin University, and Professor Julius Wolf, of Zurich University, to the vacant chair at Breslau.

These appointments were considered by the Historical School as sacrilegious encroachments on their time-honoured rights. At the 25th meeting of the "Verein für Socialpolitik" at Cologne, in September, 1897, Schmoller, who was presiding, fulminated vehemently against this appointing of "punitive professors" (Strafprofessoren), and a few weeks later (October 15), in his rectorial address at Berlin he even made it his object to deprive these new intruders of their credit as scholars. "They are not fit to occupy University chairs "such is the leitmotif running through a manifesto which is an attack on all investigators working along and by what he considers to be "moribund and superannuated lines and methods."

But the results of Schmoller's procedure must have considerably disappointed him. One of the two newly appointed professors boldly took up the gauntlet, and only a few months later, in January, 1898, there appeared the first number of a new monthly review on political economy, edited by Julius Wolf, of Breslau, and published by George Reimer in Berlin, which had for its special object the cultivation of the points neglected on principle by the Historical School. This new periodical-Zeitschrift für Socialwissenschaft-does not intend, like the former, to limit itself to the study of details, but wants to bring natural philosophy and physical science into fruitful touch with political economy. To quote the Introduction :-"If Darwin, according to his own confession, borrowed the fundamental thoughts of his struggle for life from Malthus' work on population, physical science of to-day is on the point of paying back that loan with compound interest. And just as Darwin was the medium of communicating to our forefathers the evolutionary idea within the realms of animal and vegetable life, so Hegel, and before him Herder, founded in Germany the conception of evolution with regard to social life."

The numbers for the first year of its existence have now been issued in volume form, and give the opportunity for judging to what extent it has succeeded in effecting its purpose of serving as an independent organ of scientific theory.

The very first article, written by the editor, and continued through several numbers, under the title, "Illusionisten und Realisten in der Nationalökonomie," bears a decidedly polemical character. It is directed equally against the so-called Socialism of the chair and against No. 35.-VOL. IX.

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pure Socialism, with their common theory of the deterioration of the condition of the working classes against the increasing wealth of the upper classes—a theory which of late, it is true, has not been quite so sharply emphasised. Wolf opposes to this social pessimism a "social optimism," for which he chooses the term "ethical individualism (Ethischer Individualismus). The latter does not at all exclude a positive social policy, but it is quite aware of its natural limits. Then Wolf attacks Schmoller in the following words :-" One need not be of the Manchester school-one can hold, as we do hold, with workmen's insurance, protective legislation for workmen, and other social coercive measures, and yet attach no great importance to the services that socalled social reform can render in comparison to what natural development has accomplished, and will yet accomplish. This is our standpoint. . . The idea that a medical man can perform miracles and, by means of medicine and general treatment, change a sickly or frail constitution into a healthy, elastic one, has vanished long ago. All that the physician can do is only this-in case of illness he is able to help on the working of certain processes that by themselves have begun to make way in the body; he is able to use prevention by organising the mode of living according to hygienic principles; finally he is able to use repression, in removing by operation a morbid member that is of no vital necessity to the organism. . . . Social reform is limited in a similar way. It, too, can help on certain processes which are making way in the economic body, and support and strengthen them in their activity; it, too, may ward off social evils, socially regulate and socially organise much. It may even remove an unhealthy member by means of an operation; but master the development it cannot. It can neither arrest it, undo it, nor guide it into another channel."

In the editor's article here sketched in outline the scope is that of "social politics." But, in a series of articles entitled "Das Adam Smith Problem," the present writer has taken the "Historical School" roundly to account on grounds both scientific and historical. Here he has tried to show, in view of the constant depreciation of classical economics by the Socialists of the Chair, that the latter either do not know the writings of the classicists at all, or purposely misrepresent their contents in order to raise their own importance. The concluding sentences of the above-named treatise may be cited as characteristic of the effrontery of their procedure. The words run thus :

"In the article "Volkswirthschaft," of the Handwörterbuch der Staatswissenschaften, a treatise of which the author, Gustav Schmoller, . himself says that it is "the summing up of his work in general scientific theory," we read: "A. Smith is a good observer of economic. life in detail; as for the rest he was a scholar with limitations, though one who knew how to work up derived material into something significant. Ricardo was a man of no scientific culture (!), but of wide practical business experience." Contrariwise-thus Schmoller continues-men like Galiani, Necker, T. G. Hoffmann, Thünen, Rümelin, .

and others, because they combined practical with theoretical training, had accomplished "perfect" work. We cannot believe our eyes! Smith and Ricardo placed in scientific gradation below T. G. Hoffmann, Rümelin, &c. And the same author, in his Berlin rectorial address, dated the beginning of all political economy only from the year 1870, when Socialism of the Chair organised itself in the Verein für Socialpolitik, with Schmoller at its head. All former work must be considered as mere birth throes, germs, and embryos. So far science has not protested against a classification so ill-founded and so conceited. Silence on many occasions is golden, but here it was uncalled for. We have, therefore, thought it to be simply our duty, since others who perhaps had a better call for it have not spoken, to try to re-establish historical truth in its proper place in view of the misrepresentations and violations it has been exposed to for so long. In spite of Gustav Schmoller, Adam Smith will take a higher place in posterity than T. G. Hoffmann and Rümelin; in spite of Schmoller those that come after us will make pilgrimages to the shrine of Adam Smith, but not to that of Hoffmann or Rümelin; to Adam Smith as a source of truth pure and undefiled, and-measured by the conditions of his time-of a perfectly sympathetic understanding for every department, and every class of political and social economy."1

Evidently frightened by the sensation which his utterances, especially in his rectorial address, had caused among the scientific world, Schmoller has subsequently thought it wise to assume a more modest tone. In a work which appeared lately under the title Umrisse und Untersuchungen zur Verfassungs, Verwaltungs und Wirtschaftsgeschichte (Outlines and Investigations in Constitutional, Administrative and Economic History), 1898, we find him in the preface defending himself against certain critics. Amongst other passages we read: "A professor of jurisprudence in this city (Berlin) exclaimed that when reading Schmoller's monographies we cannot help quoting "er hält die Teile in der Hand, fehlt leider nur das geistige Band" ('he holds the parts in his hand, but, alas! the intellectual connection is wanting.') . . . It would be childish to complain of such criticism, since in other quarters 1 have found recognition far beyond my merits. Nor was it my intention here to deprecate such friendly criticism on the part of a colleague. I desired only to use it in order to justify my way of working by the side of other scholars holding equal privileges." We reply to this that nobody ever attempted to deny Schmoller the common privilege of serving science in his own way. It is he who has done so with nearly all investigators on lines different from his own; and this he has not only done recently in his rectorial address, but of old. I need only remind my readers of his dispute with Karl Menger. Schmoller's school moved in exactly the same orbit. He who did not suffer the Verein für Social-politik to direct his studies, was outlawed, hauled over the coals, or suppressed. We must take this sudden and more modest way of speaking as a symptom of the consciousness that the old dominant position has reached a crisis.

At the same time Schmoller surprises the public with the information that he will shortly come forward with a work on the Principles of Political Economy. (Grundriss der allgemeinen Volkswirtschaftslehre) at which he has been working for the last ten years. Considering that only a few months previously-Preface to the collective vol. Ueber einige Grundfragen der Socialpolitik und der Volkswirtschaftslehre, 1898 (On Some Fundamental Questions of Social and Political Economy")-he declared the article "Volkswirtschaft" (1893) in the Handwörter.