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 of economic science. But the subject is not only of immediate concern to the state in its corporate and public capacity. The neglect of it in the domain of private business can now only lead to disastrous results. To quote from a useful work (National Education: a Symposium, 1901), “the commercial supremacy of England was due to a variety of causes, of which superior intelligence, in the ordinary business sense, was not the most important. Her insular position, continuity of political development and freedom from domestic broils played an important part in bringing about a steady and continuous growth of industry and manufactures for several generations before the modern era. The great wars of the 18th and the beginning of the 19th century, which arrested the growth of continental nations, gave England the control of the markets of the world. When peace was restored, England enjoyed something in the nature of a monopoly. The competition of France ceased for a time to be an important factor. What is now the German empire was a mere congeries of small states, waging perpetual tariff wars upon each other. In the old Prussian provinces alone there were fifty-three different customs frontiers, and German manufactures could not develop until the growth of the Zollverein brought with it commercial consolidation, internal freedom and greater homogeneity of economic conditions. The industries of the United States were in their infancy. Thus the productive power of England was unrivalled, and her manufactures and business men, under a régime rapidly approximating to complete freedom of trade, could reap the full advantages to be derived from the possession of great national resources and production by machinery. Commercial supremacy required not so much highly trained intelligence amongst manufacturers and merchants as keen business instinct and a certain rude energy. In the last generation all that has changed, and the change is of a permanent character. The struggle of the future must inevitably be between a number of great nations, more or less equally well equipped, carrying on production by the same general methods, each one trying to strengthen its industrial and commercial position by the adoption of the most highly developed machinery, and all the methods suggested by scientific research, policy or experience. Under these conditions, it is no longer possible for the individual merchant, or for small groups of merchants, to acquaint themselves, by personal experience alone, with more than a fractional part of the causes which affect the business in which they are engaged. The spread of the modern industrial system has brought with it the modern state, with its millions of consumers, its vast area, its innumerable activities, its complicated code of industrial and commercial law. At the same time, the revolution in the means of transport and communication has destroyed, or is tending to destroy, local markets, and closely interwoven all the business of the world. Events in the most distant countries, industrial and commercial movements at first sight unrelated to the concerns of the individual merchant, now exert a direct and immediate influence upon his interests. The technical training of the factory or the office, the experience of business, the discharge of practical duties, necessary as they are, do not infallibly open the mind to the large issues of the modern business world, and can never confer the detailed acquaintance with facts and principles which lie outside the daily routine of the individual, but are none the less of vital importance.” Economics, therefore, under modern conditions, is not only a subject which may usefully occupy the attention of a leisured class of scientific men. It should form part of the training of educated men of all classes, on grounds of public policy and administrative and business efficiency.

The relations between economics and other sciences cannot be stated in a very general form. They vary for different periods, and are not the same for all branches of economics. There is no subject of human study which may not be at some time or other of economic significance, and anything which affects the character, the ideals or the environment of man may make it necessary to modify our assumptions and our reasoning with regard to his conduct in economic affairs. But if the economist, while studying one side of man’s activities, must also cultivate all other branches of human learning, it is obvious that no substantial progress can be made. The economist frankly assumes the reality of the existing world and takes men as they are, or as they have been if he is studying past times. His assumptions are based upon ordinary observation and experience, and are usually accurate in proportion to his practical shrewdness and sagacity, so that he is not interested in the speculative flights of philosophy, except in so far as they influence or have influenced conduct. In times past, and to a less extent in our own day, philosophical conceptions have formed the basis of great systems of politics and economics. The historical relations between philosophy and economics are of great importance in tracing the development of the latter, and have done much to determine its present form. But the modern conception of society or the state owes more to biology than philosophy, and actual research has destroyed more frequently than it has justified the assumptions of the older philosophical school. Experimental psychology may in course of time have an important bearing on economics, but the older science cannot be said to be of much significance except in its historical aspects. Ethics is in much the same position. That is, it is possible to conceive of an ethical science which would extend considerably our knowledge of economic affairs, but no important new principle or original discovery, relevant to economic investigation, has come from that quarter in recent years, and at present ethics has more to learn from economics than the latter has from ethics. It is in the adaptation of biological conceptions and methods, in the positive contributions of jurisprudence, law and history, in the rigorous application, where possible, of quantitative tests, that the explanation of the present position of economics is to be found. Mathematics has influenced the form and the terminology of the science, and has sometimes been useful in analysis; but mathematical methods of reasoning, in their application to economics, while possessing a certain fascination, are of very doubtful utility.

There is no method of investigation which is peculiarly economic or of which economics has the monopoly. In every age economists have applied the methods ordinarily in use amongst scientific men. There would probably have been no controversy at all on this subject but for the fact that economics was elaborated into systematic form, and made the basis of practical measures of the greatest importance, long before the remarkable development in the 19th century of historical research, experimental science and biology. The application of the a priori method in economics was an accident, due to its association with other subjects and the general backwardness of other sciences rather than any exceptional and peculiar character in the subject-matter of the science itself. The methods applied to economics in the 18th and the early part of the 19th century were no more invented with a special view to that subject than the principles of early railway legislation, in the domain of practical policy, were devised with a special view to what was then a new means of transport. As a matter of fact, discussions of method and the criticism of hypotheses and assumptions are very rarely found in early economic works. It is only by reference to the prevailing ideas in philosophy and politics that we can discover what was in the minds of their authors. The growth of a science is much like the growth of a constitution. It proceeds by adaptation and precedent. The scientific and historical movement of the 19th century was revolutionary in character. When it began to affect economics, many people were afraid that the whole fabric of science would be destroyed and the practical gains it had achieved, jeopardized. These fears were justified, in so far as those who entertained them shut their eyes to everything new and assumed an attitude of no compromise. Where the newer methods were assimilated, the position of economics was strengthened and its practical utility increased. General discussion of method, however, is rarely profitable. In all branches of economics, even in what is called the pure theory, there is an implied reference to certain historical or existing conditions of a more or less