theory. God is unchangeable, and so is the mind, sometimes runs the argument, hence deductions drawn from the nature of God and the mind are of the same absolute character. They are good for all times (perpetualism) and for all places (cosmopolitanism). "Political economy," said an English economist of a former generation,1 "belongs to no nation; it is of no country; it is founded on the attributes of the human mind, and no power can change it." And it was such a spirit which led another English economist (Torrens) to state that the period of doubt and controversy was passing away, so that within a generation all men would believe alike in economic theory.2 There have been many revolts against this method of thought, - a method which, it will have been observed, goes easily with the philosophy of idealism. Socrates and Bacon led such revolts in their days, and about the middle of the last century the Historical School arose in Germany. This stood for the inductive method, that is, the method which leads a thinker to look without to the external world for facts to serve as the basis for the conclusions which are to be his premises. The Historical School, as will be seen more in detail, denied that economic doctrines, especially in their practical application as policies, are good for all times and places. Human nature itself is not unchangeable. Told that selfishness is the guiding principle of man in his economic actions, they refused to adopt this idea as a premise before they had investigated the phenomena of actual life and searched into the manifestations of human motives. 1 Lowe (Robert), Recent Attacks on Political Economy," Nineteenth Century, November, 1878. 2 Essay on Production of Wealth, 1821. True, Socrates told man to study himself. But in his day that was a step in the direction of the concrete and inductive. The apparatus and method for the study of nature were not developed, and the abstract speculation of his time was concerned with the actual physical universe, etc. It was in Bacon's spirit, then, that Socrates urged observation in study of man. Induction works out from the observation of special individual cases to the general rule or "law" which explains and which may serve as a basis for deductions. Socrates himself was both deductive and inductive. He objected merely to the exclusive and abstract use of deduction. As one looks back over the course of economic thought and examines its changing methods, one is reminded of attempts that have been made to distinguish certain stages in the evolution of human thought in general, notably the three stages of Comte. These stages were called by Comte 1 the theological, the metaphysical, and the positive. In the first stage men seek a "cause" for phenomena, and find it to lie in the immediate action of supernatural beings. In the second, one great entity, "nature," is substituted as the cause, and phenomena are said to be due to abstract "essences" or forces within the objects, but separate from them: sleep is caused by a "soporific principle"; water rises in the tube because "nature abhors a vacuum." In the positive stage, men classify phenomena and establish sequences in the nature of cause and effect; they discover quantitative relations and seek to represent all phenomena as aspects of a single general fact. During the theological and metaphysical stages, the deductive method is predominant. Early investigators may be regarded as overwhelmed by a multiplicity of facts, to gather together and classify which required time. Meanwhile it was necessary to regard them simply as more or less isolated facts,-which left the mind's desire for unity unsatisfied,—or seek an explanation from within the thinker's own consciousness. The result was the dogma that it is God's will, or some metaphysical law of "nature." Those who thus traced all phenomena to a few easily grasped "causes " bore everything before them.2 The triumph of such abstract deductive methods was only temporary. Becoming weary of empty speculations, as their slight foundations were perceived, men turned to follow those who confined their attention to the knowable and attempted to explain that by more rational and concrete methods. Thus there came about a condition similar to Comte's positive stage. It is, however, improper to speak of these methods as stages in the sense of their following one another in chronological order; for they overlap, and cases may be found of the contemporaneous 1 Positive Philosophy, Chap. I; Martineau's translation, p. 26. 66 2 Cf. Hobhouse on Comte's Three Stages" in the Sociological Review for July, 1908. existence of all the stages, even in the field of a single science. There are "theological" economists to-day, perhaps, and certainly there are economists whose mode of thought places them in the metaphysical stage. An extreme illustration will serve to make the meaning clear. The American economist, Henry C. Carey, in speaking of the Malthusian theory of population, asks how a good God could allow such things as it teaches. He declares the doctrine incompatible with God's character; therefore it is untrue. Of course he does not stop here in his argumentation, but the point is that he introduces this reasoning as an essential support for his ideas. Political economists of the metaphysical type, a type preeminently English, tend to deduce all economic phenomena from so-called fundamental principles of human nature, axioms, and definitions. Their earmark is a certain use of the word natural." Glib explanations that this or that is according to a law of nature or that human nature is thus and so, are the danger signals. The legal thought of the past generation is a notable lingering place of this taint; and those economists who argue about natural rates (for wages, railway charges, etc.), maintaining that competition is natural, for instance, show a similar tendency. As already stated, the method of thought of such men is necessarily deductive. It remains to be observed that cycles in method seem to have existed. The deductive or philosophical-abstract method prevailed in all early economic thought of a formal character that is recorded. Then the Mercantilists and Kameralists of the sixteenth and seventeenth centuries showed some tendency toward an inductive, though rather empirical, method. But the early French economists and Adam Smith were primarily deductive, and the "Epigones" who followed degenerated into dogmatism. The early historical economists then arose as an inductive school, perhaps even going to extremes; and, after a generation given to the collection and comparison of facts, the need for deduction became effective. The Austrian school of economists and Professor Marshall in England then came to the front; but their method is not that of the older deductionists, being based upon the preceding era of induction and largely free from theological or metaphysical tendency. The cycle has not been a circle, but a spiral, rising to higher planes. At the present time economists are largely engaged in concrete investigations, historical and statistical; but numerous treatises are appearing, indicating the concomitant and scientific use of both methods. Induction and deduction, the concrete and the abstract, must go hand in hand. CHAPTER II THE ORIGIN AND TARDY DEVELOPMENT OF ECONOMIC THOUGHT THE origin of economic thought is lost in the past. In its simplest form it must have always existed wherever thinking beings sought to gain a living. Economic ideas of any definiteness find their earliest expression, however, in rules of conduct or moral codes formulated by priests or lawgivers. These moral codes, like the Mosaic law, for example, in dealing with man's place in the world, with life and death, and the ends of existence,1 necessarily touch upon economic ideas. If it be said that custom ruled the early civilizations and that these codes are the expression of custom, the same conclusion holds. The philosophy underlying is broad and simple, and economic concepts are presented with ethics and religion as one whole. Not until group life begins to move in the new and complicated ways of money economy do economic ideas begin to become sharply differentiated. It is when problems of colonies, international trade, money, taxation, etc., arise, that the Greeks begin to discuss economic questions. The reasons for the tardy development of important economic ideas among the ancients are significant, for they throw light upon the origin of the science and the factors essential to its growth. These reasons, being partly subjective, partly objective, fall into two great classes, though the close interrelation between them is noteworthy. Among the subjective or psychological causes, perhaps the first to be noted is the tendency of the ancient thinkers to look ). down upon physical wants. Material pleasures and the gratification of bodily desires were frequently frowned upon. rates thought that to have few wants was godlike, and that 1 Schmoller, Grundriss der allgemeinen Volkswirthschaftslehre, S. 69 ff. Soc |