as wages do, for land is separable from the owner and does not have to be persuaded to work by some offer of advantage.1 Moreover, Professor Carver lays more stress upon the Malthusian theory of population in connection with the theory of wages than do the preceding writers. In substantial accord with Carver's thought are the Wisconsin and Chicago groups. But the names of the great body of American Economists will be found among those who have written some monograph or article upon some special branch of economics. On the subject of monopolies and trusts there are Professors Ely, Jenks, and H. C. Adams. Professor Ely, in his Monopolies and Trusts (1900), presents an early and notable classification, and argues against the idea that large capital, as such, is a cause of monopoly. He formulates a law of monopoly price as follows: "The greater the. intensity of customary use, the higher the general average of . economic well-being, and the more readily wealth is generally expended, the higher the monopoly price." Professor Jenks' book, The Trust Problem (1900), is notable for its concrete discussion of the wastes of competition and its contention that capitalistic monopolies are real. Professor Adams, in his monograph on The State in Relation to Industrial Action (1887), holds that a law of increasing returns exists which operates to make the industries concerned monopolistic. This monograph has had a deep influence, and has done much to break down laisser faire in theory. In the monetary field Andrew, J. F. Johnson, Kinley, Laughlin, Scott, F. M. Taylor, and White are well known. In public finance Seligman, H. C. Adams, and Bullock, are most noteworthy, Professor Seligman's works on taxation having been translated into several languages. In the transportation field Hadley, E. R. Johnson, B. H. Meyer, and W. Z. Ripley have earned permanent recognition. And Commons, T. S. Adams, and Seager have just fame as writers upon the economics of the labor problem. Nor is industrial history slighted, as monographs too numerThe most notable works are Dewey's ous to mention attest. 1 Financial History of the United States (1903), Taussig's Tariff History of the United States (1901), Hammond's The Cotton Industry (1897),' and Day's History of Commerce (1907). Books on the general industrial history of the United States have been written by Bolles, Wright, Coman, and Bogart. A hopeful sign as to the future significance of economics, apparent in America, as notably in Germany and Italy, is the employment of economists by the government. As early as 1893, Professor Folwell could say before the American Economic Association: "We seem already to have made some impression on the public. One of our members has been called to assist in framing a system of taxation; a second to assist the national railway commission; a third to give testimony in a case involving municipal ownership of gas works." 2 This tendency has grown. Among the men who have done notable work are H. C. Adams of the Bureau of Statistics and Accounts of the Interstate Commerce Commission; J. W. Jenks as agent for the United States Industrial Commission (1899-1901), special commissioner for the War Department to investigate currency, labor, etc., in the Orient, and in other capacities; W. F. Willcox as census statistician; E. D. Durand in the Bureau of Corporations and now heading the Census Bureau; C. P. Neil in the Bureau of Labor; Andrew of the National Monetary Commission, now Assistant Secretary of the Treasury; Hollander in adjusting Porto Rican finance; B. H. Meyer first as head of the Wisconsin State Railway Commission, later as a member of the Interstate Commerce Commission; and many others might be mentioned. In fact, in America it is quite generally the case that academic economists have had some experience in some branch of government service, state or federal. 1 A. E. A. Pubs. 2 Ibid., VIII, pp. 31-32. The men so employed were, respectively, R. T. Ely, H. C. Adams, and E. W. Bemis. CHAPTER XXXIII CONCLUSION General Résumé. All the history of economic thought may be divided into two parts: one of these embraces the era before the establishment of economics as a science; the other extends from the rise of that science to the present time. In the earlier era, economic thought was mingled. with religious and ethical doctrines and with laws, and did not exist as a distinct body of theory. This was the case in the ancient world and in the Middle Ages. Nor was there sufficient separate interest in economic matters to cause further development; for with Hebrew and Hindu, Greek and Roman, and Scholastic alike, we find, on the one hand, but a rudimentary development of such stimulating economic phenomena as those concerning public finance and the labor problem, while, on the other, hostile ethical and religious concepts so dominated as to hinder speculation about such economic problems as existed. Wealth was little appreciated by the leading thinkers. Throughout the period, men for the most part believed in an objective just price for goods and services, a belief normally accompanied by minute regulation of industry. Perhaps the other most notable points in the pre-scientific stage of economic thought are the discussion by Greek philosophers of division of occupation, "natural" uses, and communism; the Roman jurists' treatment of money; and the medieval doctrines concerning value and usury. With the rise of nations and the growth of money economy came Mercantilism and the dawn of Economics as a science, though it was but the first faint flush announcing what was soon to be. Economic topics were given more frequent, extended, and, above all, more distinct attention. Wealth was highly appreciated. Its chief source was considered to be commerce, partly no doubt on account of an overemphasis of " treasure." In their empirical studies and policies concerning foreign trade, balance of trade, and taxation the Mercantilists laid the foundation for further development. In general theory, some fragmentary discussions of value and the analysis of the factors of production are noteworthy. The real founding of the science of Economics, which marks the rise of the second era, came to pass about the middle of the eighteenth century, being closely associated with the contemporaneous revolution in social philosophy. Then it was that the Physiocrats, or Économistes, in reaction against Mercantilistic policies, elaborated the old Greek idea of nature and natural freedom as handed down through the Middle Ages. Wealth, they held, comes from Nature, and arises from her bounty. Agriculture, instead of commerce, thus took the center of the stage. And in the place of regulation, laisser faire became the watchword. Naturally the service of the Physiocrats was largely negative, consisting in greater freedom from hampering regulations and taxes. More positively, their scheme of distribution became the father of succeeding attempts to trace the round of production/ exchange, distribution, and consumption. Their emphasis of land and its surplus (produit net) was an influential conception. And, above all, their attempt to formulate a body of exact principles separate from morals, politics, and jurisprudence gave economics its first claim to be a science. Adam Smith clinched that claim. Building upon the thought of English predecessors and the Physiocrats, and influenced by a different environment, he turned from "nature" or agriculture as the source of wealth, and gave to labor that position. While, on the whole, a believer in free trade and laisser faire, he was more of an opportunist, and was less rigid and absolute in applying his doctrines. Smith's work was fuller and more comprehensive than that of Quesnay or Turgot, and the firm establishment of Political Economy may justly be dated from 1 Above, pp. 154 f. the Wealth of Nations (1776). Smith took the sole emphasis away from production, putting the consumer more to the front, and in doing so prepared the way for a broader treatment of economics. He also presented a more comprehensive discussion of value and the shares in distribution than any predecessor. Although some of his followers wrote more accurately and consistently than he, Adam Smith excels the great majority of them in breadth of view, and there came a time when many economists turned back to the Father of Political Economy rather than to his immediate successors. Much of what is here written concerning the Classical School will apply to him only in part. The Wealth of Nations soon gained ascendency in the leading countries, and the followers are mostly to be classed as members of the Classical School. There were, however, three main branches, corresponding to as many different national environments. In England, a group of economists, with whom the designation" classical school " is generally associated and chiefly of whom what follows is written, centered around Ricardo, accepting his doctrines of rent and adding the Malthusian principle of population. With this group, the problems of distribution of wealth were for the first time given chief attention; the main framework of their economic thought consisted of the theory of value and the shares of the factors of production, land, labor, and capital. In their reasoning, the interests of these factors were made more or less antagonistic, and their views tended toward pessimism, a tendency logically connected with materialism and individualism. Value was regarded as cost-determined, and was treated as an objective phenomenon by the dominant element. In France, J. B. Say (1803) contributed to the arrangement and classification of the new science. There, a larger element of the eighteenth-century nature philosophy remained, and the general tendency was toward idealism and optimism. This general tendency being in logical accord with the philosophy of Socialism, it is easy to explain the fact that in France the earliest nineteenth-century socialistic propaganda flourished. |