all other Englishmen were very much like those whom they knew in the city. Partly indeed for the sake of simplicity, they argued as though everyone were quick to find out where his own pecuniary interest lay, and to seek it to the neglect of all other considerations. They often spoke of labour as a commodity without staying to throw themselves into the point of view of the workman; and without dwelling upon the allowances to be made for his human passions, his instincts and habits, his sympathies and antipathies, his class jealousies and class adhesiveness, his want of knowledge and of the opportunities for free and vigorous action. They therefore attributed to the forces of supply and demand a much more mechanical and regular action than is to be found in real life: and they laid down laws with regard to profits and wages that did not really hold even for England in their own time. But their most vital fault was that they did not see how liable to change are the habits and institutions of industry. In particular they did not see that the poverty of the poor is the chief cause of that weakness and inefficiency which are the causes of their poverty: they had not the faith that modern economists have in the possibility of a vast improvement in the condition of the working classes. Mill and mics. § 4. When we come to compare the modern view of the vital problem of the Distribution of Wealth with modern econo- that which prevailed at the beginning of the century we shall find that over and above all changes in detail and all improvements in scientific accuracy of reasoning, there is a fundamental change in treatment; for, while the earlier economists argued as though man's character and efficiency were to be regarded as a fixed quantity, modern economists keep constantly in mind the fact that it is a product of the circumstances under which he has lived. This change in the point of view of economics is partly due to the fact that the changes in human nature during the last fifty years have been so rapid as to force themselves on the attention; partly to the direct influence of individual writers, socialists and others; and partly to the indirect influence of the general growth of scientific knowledge, and especially of biology'. The first important indication of the new movement was seen in John Stuart Mill's admirable Principles of Political Economy2. Mill's followers have continued his movement away from the position taken up by the immediate followers of Ricardo; and the human as distinguished from the mechanical element is taking a more and more prominent place in economics. The new temper is shown alike in Jevons' subtle analysis of utility and other many-sided and original work, in Cliffe Leslie's historical inquiries, and in the writings of Bagehot, Cairnes, and others who are yet living. England has recently made great advances in wealth and in knowledge, in temperance and in earnestness. A higher notion of social duty is spreading everywhere. In Parliament, in the press and in the pulpit, the spirit of humanity speaks more distinctly and more earnestly than it did. Mill and the economists who have followed him, have helped onwards this general movement, and they in their turn have been helped onwards by it. At the same time the historical basis of the science is becoming broader, and its reasonings more careful and precise. This greater exactness is showing that many of the older applications of general reasoning were invalid, because no care had been taken to think out all the assumptions that were implied and to see whether they could fairly be made in the special cases under discussion; and many dogmas have been destroyed which appeared to be 1 On this point see Principles I. IV. 7. 2 He had been educated by his father in the straitest tenets of Bentham and Ricardo; and in 1830 he wrote an essay on economic method in which he proposed to give increased sharpness of outline to the abstractions of the science. But in his Principles, written in 1848, he took account of all sides of human nature, and adhered closely to the facts of life. simple only because they were loosely expressed; but which, for that very reason, served as an armoury with which partisan disputants (chiefly of the capitalist class) have equipped themselves for the fray. This destructive work might appear at first sight to have diminished the value of processes of general reasoning in economics: but really it has had the opposite result. It has cleared the ground for newer and stronger machinery, which is being steadily and patiently built up. It has enabled us to take broader views of life, to proceed more surely though more slowly, to be more scientific and much less dogmatic than those good and great men who bore the first brunt of the battle with the difficulties of economic problems; and to whose pioneering work we owe our own more easy course. But this brings us to consider the scope and the methods of economics as they are now understood1. 1 In America, in Austria and France, in Italy and the Netherlands, and above all in Germany, the last fifty years have seen important contributions to economic science. Germans have taken the lead in the "comparative" study of economic, as well as of general history. They have brought side by side the social and industrial phenomena of different countries and of different ages; have so arranged them that they throw light upon and interpret one another, and have studied them all in connection with the suggestive history of jurisprudence. It would be difficult to overrate the value of the work which they and their fellow workers in other countries have done in tracing and explaining the history of economic habits and institutions. It is one of the great achievements of our age; and an important addition to our real wealth. It has done more than almost anything else to broaden our ideas, to increase our knowledge of ourselves, and to help us to understand the central plan, as it were, of the Divine government of the world. On the recent progress of economics abroad, see Principles I. IV. 8. CHAPTER V. THE SCOPE OF ECONOMICS. Relation of economics to other branches of social science. 1. All aspects of social life are connected with one another: none can be studied profitably without taking some account of the others. But when the attempt is made to discuss them in one unified social science, the results are not satisfactory. One thinker after another proposes broad generalizations, which fascinate men's minds for a time, but seldom endure for long the test of severe scrutiny. Thus, in social as well as physical science, experience shows that solid progress can be made only by breaking up broad problems into parts, and working at each separately: and the economist is following the best examples that have been set by other scientific students when he gives his chief attention to certain limited aspects of social life, while yet taking some account of all others1. § 2. What then are the limits of those social studies which the economist regards as his special domain? To answer this we must first consider what are the advantages which have enabled economics, though far behind the more advanced physical sciences, yet to outstrip every other branch of social 1 As Mill says (On Comte, p. 82):-"A person is not likely to be a good economist who is nothing else. Social phenomena acting and re-acting on one another, they cannot rightly be understood apart; but this by no means proves that the material and industrial phenomena of society are not themselves susceptible of useful generalizations, but only that these generalizations must necessarily be relative to a given stage of social advancement." On the whole subject see Dr Keynes' Scope and Method of Political Economy. science. For it would seem reasonable to conclude that any broadening of the scope of the science which brings it more closely to correspond with the actual facts, and to take account of the higher aims of life, will be a gain on the balance provided it does not deprive the science of those advantages: but that any further extension beyond that limit would cause more loss than gain. Economics chiefly concerned with measurable motives. The advantage which economics has over other branches of social science appears to arise from the fact that it concerns itself chiefly with that class of actions the motives of which are measurable, and therefore specially suited for scientific treatment. An opening is made for the methods and the tests of exact science as soon as the force of a person's motives can be measured by the sum of money, which he will just give up in order to secure a desired satisfaction, or again the sum which is just required to induce him to undergo a certain fatigue. But here a little explanation is needed. The economist does not attempt to weigh the real value of the higher affections of our nature against those of our lower: he does not balance the love for virtue against the desire for agreeable food. But he estimates the incentives to action by their Such measurement corre- effects just in the same way as people do in comsponds to the mon life. He makes no strange assumptions, practice of ordinary life. no arbitrary hypotheses; but he follows the course of ordinary conversation, differing from it only in taking more precautions to make clear the limits of his knowledge as he goes. These precautions are laborious, and make some people think that economic reasonings are artificial. But the opposite is the fact. For he does but bring into prominence those assumptions and reservations, which everyone makes unconsciously every day. For instance, if we find a man in doubt whether to spend a few pence on a cigar, or a cup of tea, or on riding home |