I hope that I am not too sanguine, but I cannot help believing that in this respect we have improved, and improved by imbibing some of the scientific doctrine. I think that in recent discussions of the most important topics, however bitter and however much distorted by the old party spirit, there is yet a clearer recognition than of old, that widely-spread discontent is not a reason for arbitrary suppression, but for seeking to understand and remove its causes. We should act in the spirit of Spinoza's great saying; and it should be our aim, as it was his care, "neither to mock, to bewail, nor to denounce men's actions, but to understand them". That is equally true of men's opinions. If they are violent, passionate, subversive of all order, our duty is not bare denunciations, but a clear comprehension of the causes, not of the ostensible reasons, of their opinions, and a resolution to remove those causes. I think this view has made some way: I am sure that it will make more way if we become more scientific in spirit; and it is one of the main reasons for encouraging such a spirit. The most obvious difficulty just now is one upon which I must touch, though with some fear and trembling. A terrible weapon has lately been coming into perfection, to which its inventors have given the elegant name of a "boom". The principle is—so far as I can understand—that the right frame of mind for dealing with the gravest problems is to generate a state of violent excitement, to adopt any remedy, real or supposed, which suggests itself at the moment, and to denounce everybody who suggests difficulties as a cynic or a cold-blooded egoist; and therefore to treat grave chronic and organic diseases of society by spasmodic impulses, to make stringent laws without condescending to ask whether they will work, and try the boldest experiments without considering whether they are likely to increase or diminish the evil. This, as some people think, is one of the inevitable consequences of democracy. I hope that it is not; but if it is, it is one of the inevitable consequences against which we, as cultivators of science, should most seriously protest, in the hope that we may some day find Philip sober enough to consider the consequences of his actions under the influence of spiritual intoxication. Professor Huxley, in one of those smart passages of arms which so forcibly illustrated his intellectual vigour, gave an apologue, which I wish that I could steal without acknowledgment. He spoke of an Irish carman who, on being told that he was not going in the right direction, replied that he was at any rate going at a great pace. The scientific doctrine is simply that we should look at the map before we set out for Utopia; and I think that a doctrine which requires to be enforced by every means in our power.

This tendency, of course, comes out prominently in the important discussions of social and economic problems. That is a matter upon which I cannot now dwell, and which has been sufficiently emphasised by many eminent writers. If modern orators confined themselves to urging that the old economists exaggerated their claims to scientific accuracy, and were, in point of fact, guilty of many logical errors and hasty generalisations, I, at least, could fully agree with them. But the general impression seems to be, that because the old arguments were faulty, all argument is irrelevant: that because the alleged laws of nature were wrongly stated, there are no laws of nature at all; and that we may proceed to rearrange society, to fix the rate of wages or the rent of land or the incomes of capitalists without any reference at all to the conditions under which social arrangements have been worked out and actually carried on. This is, in short, to sanction the most obvious weakness of popular movements, and to assure the ignorant and thoughtless that they are above reason, and their crude guesses infallible guides to truth.

One view which tries to give some plausibility to these assumptions is summed up in the now current phrase about the "masses" and the "classes". We all know the regular process of logical fence of the journalist, i.e., thrust and parry, which is repeated whenever such questions turn up. The Radical calls his opponent Tory and reactionary. The wicked Tory, it is said, thinks only of the class interest; believes that the nation exists for the sake of the House of Lords; lives in a little citadel provided with all the good things, which he is ready to defend against every attempt at a juster distribution; selfishness is his one motive; repression by brute force his only theory of government; and his views of life in general are those of the wicked cynics who gaze from their windows in Pall Mall. Then we have the roll of all the abuses which have been defended by this miscreant and his like since the days of George III.—slavery and capital punishment, and pensions and sinecures, and protection and the church establishment. The popular instinct, it is urged, has been in the right in so many cases that there is an enormous presumption in favour of the infallibility of all its instincts. The reply, of course, is equally obvious. Your boast, says the Conservative, that you please the masses, is in effect a confession that you truckle to the mob. You mean that your doctrines spread in proportion to the ignorance of your constituents. You prove the merits of your theories by showing that they disgust people the more they think. The Liberalism of a district, it has been argued, varies with the number of convictions for drunkenness. If it be easy to denounce our ancestors, it is also easy to show how they built up the great empire which now shelters us; and how, if they had truckled, as you would have us truckle, to popular whims, we should have been deprived of our commerce, our manufactures, and our position in the civilised world. And then it is easy to produce a list of all the base demagogues who have misled popular impatience and ignorance from the days of Cleon to those of the French Convention, or of the last disreputable "boss" bloated with corruption and the plunder of some great American city. This is the result, it is suggested, of pandering to the mob, and generally ostracising the intelligent citizen.

I merely sketch the familiar arguments which any journalist has ready at hand, and, by a sufficient spice of references to actual affairs, can work up into any number of pointed leading articles. I will only observe that such arguments seem to me to illustrate that curious unreality of political theories of which I have spoken. It seems to be tacitly assumed on both sides, that votes are determined by a process of genuine reasoning. One side may be ignorant and the other prejudiced; but the arguments I have recapitulated seem to imply the assumption that the constituents really reflect upon the reasons for and against the measures proposed, and make up their minds accordingly. They are spoken of as though they were a body of experts, investigating a scientific doctrine, or at least a jury guided by the evidence laid before them. Upon that assumption, as it seems to me, the moral would be that the whole system is a palpable absurdity. The vast majority of voters scarcely think at all, and would be incapable of judging if they did. Hundreds of thousands care more for Dr. Grace's last score or the winner of the Derby than for any political question whatever. If they have opinions, they have neither the training nor the knowledge necessary to form any conclusion whatever. Consider the state of mind of the average voter—of nine men out of ten, say, whom you meet in the Strand. Ask yourselves honestly what value you would attach to his opinion upon any great question—say, of foreign politics or political economy. Has he ever really thought about them? Is he superficially acquainted with any of the relevant facts? Is he even capable of the imaginative effort necessary to set before him the vast interests often affected? And would the simple fact that he said "Yes" to a given question establish in your mind the smallest presumption against the probability that the right answer would be "No"? What are the chances that a majority of people, of whom not one in a hundred has any qualifications for judging, will give a right judgment? Yet that is the test suggested by most of the conventional arguments on both sides; for I do not say this as intending to accept the anti-democratic application. It is just as applicable, I believe, to the educated and the well-off. I need not labour the point, which is sufficiently obvious. I am quite convinced that, for example, the voters for a university will be guided by unreasonable prejudices as the voters for a metropolitan constituency. In some ways they will be worse. To find people who believe honestly in antiquated prejudices, you must go to the people who have been trained to believe them. An ecclesiastical seminary can manage to drill the pupils into professing absurdities from which average common sense would shrink, and only supply logical machinery for warring against reason. The reference to enlightened aristocracies is common enough; but I cannot discover that, "taken in a lump," any particular aristocracy cannot be as narrow-minded, short-sighted, and selfish, as the most rampant democracy. In point of fact, we all know that political action is determined by instinct rather than by reason. I do not mean that instinct is opposed to reason: it is simply a crude, undeveloped, inarticulate form of reason; it is blended with prejudices for which no reason is assigned, or even regarded as requisite. Such blind instincts, implying at most a kind of groping after error, necessarily govern the majority of men of all classes, in political as in other movements. The old apologists used to argue on the hypothesis that men must have accepted Christianity on the strength of a serious inquiry into the evidences. The fallacy of the doctrine is sufficiently plain: they accepted it because it suited them on the whole, and was fitted, no doubt, to their intellectual needs, but was also fitted to their emotional and moral needs as developed under certain social conditions. The inference from the general acceptance of any theory is not that it is true, but that it is true enough to satisfy the very feeble demand for logic—that it is not palpably absurd or self-contradictory; and that, for some reason or other, it satisfies also the imagination, the affections, and the aspirations of the believers. Not to go into other questions, this single remark indicates, I think, the attitude which the scientific observer would adopt in regard to this ancient controversy. He would study the causes as well as the alleged reasons assignable for any general instinct, and admit that its existence is one of the primary data which have to be taken into account. To denounce democracy or aristocracy is easy enough; and it saves trouble to assume that God is on one side and the devil on the other. The true method, I take it, is that which was indicated by Tocqueville's great book upon democracy in America; a book which, if I may trust my own impressions, though necessarily imperfect as regards America, is a perfectly admirable example of the fruitful method of studying such problems. Though an aristocrat by birth and breeding, Tocqueville had the wisdom to examine democratic beliefs and institutions in a thoroughly impartial spirit; and, instead of simply denouncing or admiring, to trace the genesis of the prevalent ideas and their close connection with the general state of social development. An inquiry conducted in that spirit would not lead to the absolute dogmatic conclusions in which the superficial controversialist delights. It would show, perhaps, that there was at least this much truth in the democratic contention, that the masses are, by their position, exempt from some of the prejudices which are ingrained in the members of a smaller caste; that they are therefore more accessible to certain moral considerations, and more anxious to promote the greatest happiness of the greater number. But it might also show how the weakness of the ignorant and untrained mind produces the characteristic evils of sentimentalism and impatience, of a belief in the omnipotence of legislation, and an excessive jealousy of all superiorities; and might possibly, too, exhibit certain merits which are impressed upon the aristocrat by his sense of the obligations of nobility. I do not in the least mean to express any opinion about such questions; I desire only to indicate the temper in which I conceive that they should be approached.

I have lived long enough to be utterly unable to believe—though some older politicians than I seem still to believe, especially on the eve of a dissolution—that any of our party lines coincide with the lines between good and bad, wise and foolish. Every one, of course, will repudiate the abstract theory. Yet we may notice how constantly it is assumed; and can see to what fallacies it leads when we look for a moment at the historical questions which no longer unite party feeling. Few, indeed, even of our historians, can write without taking party views of such questions. Even the candid and impartial seem to deserve these epithets chiefly because they want imagination, and can cast blame or applaud alternately, because they do not enter into the real spirit of either party. Their views are sometimes a medley of inconsistent theories, rather than a deeper view which might reconcile apparent inconsistencies. I will only mention one point which often strikes me, and may lead to a relevant remark. Every royalist historian, we all know, labours to prove that Charles I. was a saint, and Cromwell a hypocrite. The view was natural at the time of the civil wars; but it now should suggest an obvious logical dilemma. If the monarchical theory which Charles represented was sound, and Charles was also a wise and good man, what caused the rebellion? A perfect man driving a perfect engine should surely not have run it off the rails. The royalist ought to seek to prove that Charles was a fool and a knave, to account for the collapse of royalty; and the case against royalty is all the stronger, if you could show that Charles, in spite of impeccable virtue, was forced by his position to end on the scaffold. Choose between him and the system which he applied. So Catholics and conservatives are never tired of denouncing Henry VIII. and the French revolutionists. So far as I can guess (I know very little about it), their case is a very strong one. I somehow believe, in spite of Froude, that Henry VIII. was a tyrant; and eulogies upon the reign of terror generally convince me that a greater set of scoundrels seldom came to the surface, than the perpetrators of those enormities. But then the real inference is, to my mind, very different. Henry VIII. was the product of the previous time; the ultimate outcome of that ideal state of things in which the church had its own way during the ages of truth. Must not the system have been wrong, when it had so lost all moral weight as to be at the mercy of a ruffianly plunderer? And so, as we all admit now, the strongest condemnation of the old French regime is the fact that it had not only produced such a set of miscreants as those who have cast permanent odium even upon sound principles; but that its king and rulers went down before them without even an attempt at manly resistance. A revolution does not, perhaps, justify itself; it does not prove that its leaders judged rightly and acted virtuously: but, beyond a doubt, it condemns the previous order which brought it about. What a horrid thing is the explosion! Why, is the obvious answer, did you allow the explosive materials to accumulate, till the first match must fire the train? The greatest blot upon Burke, I need hardly say, is that his passions blinded him in his age, to this, as we now see, inevitable conclusion.

The old-fashioned view, I fancy, is a relic of that view of history in which all the great events and changes were personified in some individual hero. The old "legislators," Lycurgus and Solon and the like, were supposed to have created the institutions which were really the products of a slow growth. When a favourable change due to economical causes took place in the position of the French peasantry, the peasants, says Michelet somewhere, called it "good king Henry". Carlyle's theory of hero worship is partly an application of the same mode of thought. You embody your principle in some concrete person; canonise him or damn him, as he represents truth or error; and take credit to yourself for insight and for a lofty morality. It becomes a kind of blasphemy to suggest that your great man, who thus stands for an inspired leader dropped straight out of heaven, was probably at best very imperfect, one-sided, and at least as much of a product as a producer. The crudity of the method is even regarded as a proof of its morality. Your common-place moralist likes to call everything black or white; he despises all qualifications as casuistical refinements, and plumes himself on the decisive verdict, saint or sinner, with which he labels the adherents and opponents of his party. And yet we know as a fact, how absurd are such judgments. We know how men are betrayed into bad causes from good motives, or put on the right side because it happens to harmonise with their lower interests. Saints—so we are told—have been the cruellest persecutors; and kings, acting from purely selfish ambition, have consolidated nations or crushed effete and mischievous institutions. If we can make up our minds as to which was, on the whole, the best cause,—and, generally speaking, both sides represented some sound principle,—it does not follow that it was also the cause of all the best men. Before we can judge of the individual, we must answer a hundred difficult questions: If he took the right side, did he take it from the right motives? Was it from personal ambition or pure patriotism? Did he see what was the real question at issue? Did he foresee the inevitable effect of the measures which he advocated? If he did not see, was it because he was human, and therefore short-sighted; or because he was brutal, and therefore wanting in sympathy; or because he had intellectual defects, which made it impossible for him to escape from the common illusions of the time? These, and any number of similar difficulties, arise when we try to judge of the great men who form landmarks in our history, from the time of Boadicea to that of Queen Victoria. They are always amusing, and sometimes important; but there is always a danger that they may warp our views of the vital facts. The beauty of Mary Queen of Scots still disqualifies many people from judging calmly the great issues of a most important historical epoch. I will leave it to you to apply this to our views of modern politics, and judge the value of the ordinary assumption which assumes that all good men must be on one side.

Now we may say that the remedy for such illusions points to the importance of a doctrine which is by no means new, but which has, I think, bearings not always recognised. We have been told, again and again, since Plato wrote his Republic, that society is an organism. It is replied that this is at best an analogy upon which too great stress must not be laid; and we are warned against the fanciful comparisons which some writers have drawn between the body corporate and the actual physical body, with its cells, tissues, nervous system, and so forth. Now, whatever may be the danger of that mode of reasoning, I think that the statement, properly understood, corresponds to a simple logical canon too often neglected in historical and political reasonings. It means, I take it, in the first place, that every man is a product as well as a producer; that there is no such thing as the imaginary individual with fixed properties, whom theorists are apt to take for granted as the base of their reasoning; that no man or group of men is intelligible without taking into account the mass of instincts transmitted through their predecessors, and therefore without referring to their position in the general history of human development. And, secondly, it is essential to remember in speaking of any great man, or of any institution, their position as parts of a complicated system of actions and emotions. The word "if," I may say, changes its meaning. "If" Harold had won the battle of Hastings, what would have been the result? The answer would be comparatively simple, if we could, in the old fashion, attribute to William the Conqueror all the results in which he played a conspicuous part: if, therefore, we could make out a definite list of effects of which he was the cause, and, by simply "deducting" them, after Coleridge's fashion, from the effects which actually followed, determine what was the precise balance. But when we consider how many causes were actually in operation, how impossible it is to disentangle and separate them, and say this followed from that, and that other from something else, we have to admit that the might have been is simply indiscoverable. The great man may have hastened what was otherwise inevitable; he may simply have supplied the particular point, round which a crystallisation took place of forces which would have otherwise discovered some other centre; and the fact that he succeeded in establishing certain institutions or laws may be simply a proof that he saw a little more clearly than others the direction towards which more general causes were inevitably propelling the nation. Briefly, we cannot isolate the particular "cause" in this case, and have to remember at every moment that it was only one factor in a vast and complex series of changes, which would no doubt have taken a different turn without it, but of which it may be indefinitely difficult to say what was the precise deflection due to its action.

In trying to indicate the importance, I have had to dwell upon the difficulty, of applying anything like scientific methods to political problems. I shall conclude by trying once more to indicate why, in spite of this, I hold that the attempt is desirable, and may be fruitful.

People sometimes say that scientific methods are inapplicable because we cannot try experiments in social matters. I remember being long ago struck by a remark of Dr. Arnold, which has some bearing upon this assertion. He observed upon the great advantage possessed by Aristotle in the vast number of little republics in his time, each of which was virtually an experiment in politics. I always thought that this was fallacious somehow, and I fancy that it is not hard to indicate the general nature of the fallacy. Freeman, upon whose services to thorough and accurate study of history I am unworthy to pronounce an eulogy, fell into the same fallacy, I fancy, when he undertook to write a history of Federal Governments. He fancied that because the Achaean League and the Swiss Cantons and the United States of America all had this point in common, and that they represented the combinations of partially independent States, their history would be in a sense continuous. The obvious consideration that the federations differed in every possible way, in their religions and state of civilisation and whole social structure, might be neglected. Freeman's tendency to be indifferent to everything which was not in the narrowest sense political led him to this—as it seems to me—pedantic conception. If the prosperity of a nation depended exclusively upon the form of its government, Aristotle, as Arnold remarks, would have had before him a greater number of experiments than the modern observer. But the assumption is obviously wrong. Every one of these ancient States depended for its prosperity upon a vast number of conditions—its race, its geographical position, its stage of development, and so forth, quite impossible to tabulate or analyse; and the form of government which suited one would be entirely inapplicable to another. To extricate from all these conflicting elements the precise influence due to any institutions would be a task beyond the powers of any number of philosophers; and indeed the perplexity would probably be increased by the very number of experiments. To make an experiment fruitful, it is necessary to eliminate all the irrelevant elements which intrude into the concrete cases spontaneously offered by nature, and, for example, to obtain two cases differing only in one element, to which we may therefore plausibly attribute other contrasts. Now, the history of a hundred or a thousand small States would probably only present the introduction of new and perplexing elements for every new case. The influence, again, of individuals, or accident of war, or natural catastrophes, is greater in proportion as the State is smaller, and therefore makes it more difficult to observe the permanent and underlying influences. It seems to me, therefore, that the study, say of English history, where we have a continuous growth over many centuries, where the disturbing influences of individuals or chance are in a greater degree cancelled by the general tendencies working beneath them, we have really a far more instructive field for political observation. This may help us to see what are the kinds of results which may be anticipated from sociological study undertaken in a serious spirit. The growth, for example, of the industrial system of England is a profoundly interesting subject of inquiry, to which we are even now only beginning to do justice. Historians have admitted, even from the time of Hume, that the ideal history should give less of mere battles and intrigues, and more account of those deeper and more continuous processes which lie, so to speak, beneath the surface. They have hardly, I think, even yet realised the full bearing and importance of this observation. Yet, of late, much has been done, though much still remains to do, in the way of a truly scientific study of the development of institutions, political, ecclesiastical, industrial, and so forth, of this and other countries. As this tendency grows, we may hope gradually to have a genuine history of the English people; an account—not of the virtues and vices of Mary Queen of Scots, or arguments as to the propriety of cutting off Charles I.'s head—but a trustworthy account of the way in which the actual structure of modern society has been developed out of its simpler germs. The biographies of great kings and generals, and so forth, will always be interesting; but to the genuine historian of the future they will be interesting not so much as giving room for psychological analyses or for dramatic portraits, but as indications of the great social forces which produced them, and the direction of which at the moment may be illustrated by their cases. I have spoken of the history of our industrial system. To know what was the position of the English labourer at various times, how it was affected by the political changes or by the great mechanical discoveries, to observe what grievances arose, what remedies were applied or sought to be applied, and with what result,—to treat all this with due reference to the whole social and intellectual evolution of which it formed a part, may well call forth the powers of our acutest and most thoroughgoing inquirers, and will, when it is done, give essential data for some of the most vitally important problems of the day. This is what I understand by an application of the scientific spirit to social and political problems. We cannot try experiments, it is said, in historical questions. We cannot help always trying experiments, and experiments of vast importance. Every man has to try an experiment upon himself when he chooses his career; and the results are frequently very unpleasant, though very instructive. We have to be our own experiments. Every man who sets up in business tries an experiment, ending in fortune or in bankruptcy. Every strike is an experiment, and generally a costly one. Every attempt at starting a new charitable organisation, or a new system of socialism or co-operation, is an experiment. Every new law is an experiment, rash or otherwise. And from all these experiments we do at least collect a certain number of general observations, which, though generally consigned to copybooks, are not without value. What is true, however, is that we cannot try such experiments as a man of science can sometimes try in his laboratory, where he can select and isolate the necessary elements in any given process, and decide, by subjecting them to proper conditions, how a definite question is to be answered. Our first experiments are all in the rough, so to speak, tried at haphazard, and each involving an indefinite number of irrelevant conditions. But there is a partial compensation. We cannot tabulate the countless experiments which have been tried with all their distracting varieties. Yet in a certain sense the answer is given for us. For the social structure at any period is in fact the net product of all the experiments that have been made by the individuals of which it is and has been composed. Therefore, so far as we can obtain some general views of the successive changes in social order which have been gradually and steadily developing themselves throughout the more noisy and conspicuous but comparatively superficial political disturbances, we can detect the true meaning of some general phenomena in which the actors themselves were unconscious of the determining causes. We can see more or less what were the general causes which have led to various forms of associations, to the old guilds, or the modern factory system, to the trades unions or the co-operative societies; and correcting and verifying our general results by a careful examination of the particular instances, approximate, vaguely it may be and distantly, to some such conception of the laws of development of different social tissues as, if not properly scientific, may yet belong to the scientific order of thought. Thus, when distracted by this or that particular demand, by promises of the millennium to be inaugurated to-morrow by an Act of Parliament, or threats of some social cataclysm to overwhelm us if we concede an inch to wicked agitators, we may succeed in placing ourselves at a higher point of view, from which it is possible to look over wider horizons, to regard what is happening to-day in its relations to slow processes of elaboration, and to form judgments based upon wide and systematic inquiry, which, if they do not entitle us to predict particular events, as an astronomer predicts an eclipse, will at least be a guide to sane and sober minds, and suggest at once a humbler appreciation of what is within our power, and—I think also—a more really hopeful anticipation of genuine progress in the future.

All scientific inquiry is an interrogation of nature. We have, in Bacon's grand sententious phrase, to command nature by obeying. We learn what are the laws of social growth by living them. The great difficulty of the interrogation is to know what questions we are to put. Under the guidance of metaphysicians, we have too often asked questions to which no answer is conceivable, like children, who in first trying to think, ask, why are we living in the nineteenth century, why is England an island, or why does pain hurt, or why do two and two make four? The only answer is by giving the same facts in a different set of words, and that is a kind of answer to which metaphysical dexterity sometimes gives an air of plausibility. More frequently our ingenuity takes the form of sanctioning preconceived prejudices, by wrapping up our conclusion in our premisses, and then bringing it out triumphantly with the air of a rigorous deduction. The progress of social science implies, in the first place, the abandonment of the weary system of hunting for fruitful truths in the region of chimeras, and trying to make empty logical concepts do the work of observation of facts. It involves, again, a clear perception of the kind of questions which can be profitably asked, and the limits within which an answer, not of the illusory kind, can really be expected. And then we may come to see that, without knowing it, we have really been trying a vast and continuous experiment, since the race first began to be human. We have, blindly and unconsciously, constructed a huge organism which does, somehow or other, provide a great many millions of people with a tolerable amount of food and comfort. We have accomplished this, I say, unconsciously; for each man, limited to his own little sphere, and limited to his own interests, and guided by his own prejudices and passions, has been as ignorant of more general tendencies as the coral insect of the reef which it has helped to build. To become distinctly conscious of what it is that we have all been doing all this time, is one step in advance. We have obeyed in ignorance; and as obedience becomes conscious, we may hope, within certain narrow limits, to command, or, at least, to direct. An enlarged perception of what have been the previous results may enable us to see what results are possible, and among them to select what may be worthy ends. It is not to be supposed that we shall ever get beyond the need of constant and careful experiment. But, in proportion as we can cultivate the right frame of mind, as each member of society requires wider sympathies and a larger horizon, it is permissible to hope that the experiments may become more intelligent; that we shall not, as has so often been done, increase poverty by the very remedies which are intended to remove it, or diverge from the path of steady progressive development, into the chase of some wild chimera, which requires for its achievement only the radical alteration of all the data of experience. "Annihilate space and time, and make two lovers happy," was the modest petition of an enthusiast; and he would probably have been ready to join in the prayer, "make all men angels, and then we shall have a model society". Although in saying this my immediate moral is to preach sobriety, I do not intend to denounce enthusiasm, but to urge a necessity of organising enthusiasm. I only recommend people not to venture upon flying machines before they have studied the laws of mechanics; but I earnestly hope that some day we may be able to call a balloon as we now call a cab. To point out the method, and to admit that it is not laborious, is not to discourage aspiration, but to look facts in the face: not to preach abandonment of enthusiasm, but to urge that enthusiasm should be systematic, should lead men to study the conditions of success, and to make a bridge before they leap the gulf.



THE SPHERE OF POLITICAL ECONOMY.

There seem to be at present many conflicting views as to the nature of Political Economy. There is a popular impression that Political Economy, or, at any rate, the so-called "classical" doctrine, the doctrine which was made most definite by Ricardo, and accepted with modifications by J. S. Mill, is altogether exploded. Their main doctrines, it is suggested, were little better than mares' nests, and we may set aside their pretensions to have founded an exact science. What, then, is to come in its place? Are we simply to admit that there is no certainty about economical problems, and to fall back upon mere empiricism? Everything,—shall we say?—is to be regarded as an open question. That is, perhaps, a common impression in the popular mind. Yet, on the other hand, we may find some very able thinkers applying mathematical formulae to economics; and that seems to suppose, that within a certain region they obtain results comparable in precision and accuracy to those of the great physical sciences. The topic is a very wide one; and it would be presumptuous in me to speak dogmatically. I wish, however, to suggest certain considerations which may, perhaps, be worth taking into account; and, as I must speak briefly, I must not attempt to supply all the necessary qualifications. I can only attempt to indicate what seems to me to be the correct point of view, and apologise if I appear to speak too dogmatically, simply because I cannot waste time by expressions of diffidence, by reference to probable criticisms, or even by a full statement of my own reasons.

A full exposition would have to define the sphere of Political Economy by describing its data and its methods. What do we assume, and how do we reason? A complete answer to these questions would indicate the limits within which we can hope for valid conclusions. I will first refer, briefly, to a common statement of one theory advocated by the old-fashioned or classical school. Economic doctrine, they have said, supposes a certain process of abstraction. We have to do with what has been called the "economic man". He is not, happily, the real man. He is an imaginary being, whose sole principle of action is to buy in the cheapest and sell in the dearest market: a man, more briefly, who always prefers a guinea—even a dirty guinea—to a pound of the cleanest. Economists reply to the remonstrances of those who deny the existence of such a monster, by adding that they do not for a moment suppose that men in general, or even tradesmen or stockbrokers, are in reality such beings,—mere money-making machines, stripped bare of all generous or altruistic sentiment—but simply that, as a matter of fact, most people do, ceteris paribus, prefer a guinea to a pound; and that so large a part of our industrial activity is carried on from motives of this kind, that we may obtain a fair approximation to the actual course of affairs by considering them as the sole motives. We shall not go wrong, for example, in financial questions, by assuming that the sole motive of speculators in the Stock Exchange is the desire to make money. Now, it is possible, perhaps, to justify this way of putting the case, by certain qualifications. I think, however, that, if strictly interpreted, it is apt to cover a serious fallacy. The "economic man" theory, we may say, assumes too much in one direction, and too little in another. It assumes too much if it is understood as implying that the desire for wealth is a purely selfish desire. A man may desire to make money in order simply to gratify his own sensual appetites. But he may also desire to be independent; and that may include a desire to do his part in the work of society, and probably does include some desire to relieve others of a burden. The wish to be self-supporting is not necessarily or purely "selfish". And obviously, too, one great motive in all such occupations is the desire to support a family, and one main inducement to saving is the desire to support it after your own death. Remove such motives, and half the impulses to regular industrial energy of all kinds would be destroyed. We must, therefore, give our "economic man" credit for motives referring to many interests besides those which he buttons into his own waistcoat. And therefore, too, as I have said, the assumption is insufficient. The very conception of economic science supposes all that is supposed, in the growth of a settled order of society. The purest type of the "economic man," as he is sometimes described, would be realised in the lowest savage, as sometimes described, who is absolutely selfish, who knocks his child on the head because it cries, and eats his aged parent if he cannot find a supply of roots. But such a being could only form herds, not societies. Political Economy only becomes conceivable when we suppose certain institutions to have been developed. It assumes, obviously, and in the first place, the institution of property; it becomes applicable, with less qualification, in proportion to the growth of the corresponding sentiments; it takes for granted all that highly elaborate set of instincts which induce me, when I want something, to produce an equivalent in exchange for it, instead of going out to take it by force. The more thorough the respect for property, the more applicable are rules of economics; and that respect implies a long training in that sense of other people's rights, which, unfortunately, is by no means so perfect as might be desired.

It follows, then, that the economist really assumes more—and rightly assumes more—than he sometimes claims. He assumes what Adam Smith assumed at the opening of his great treatise: that is, the division of labour. But the division of labour implies the organisation of society. It implies that one man is growing corn while another is digging gold, because each is confident that he will be able to exchange the products of his own labour for the products of the other man's labour. This, of course, implies settled order, respect for contracts, the preservation of peace, and the abolition of force throughout the area occupied by the society. And this, again, is only possible in so far as certain political and ecclesiastical and military institutions have been definitely constructed. The economic assumption is really an assumption—not of a certain psychological condition of the average man, but—of the existence of a certain social mechanism. A complete science would clear up fully a problem which must occur often to all of us: How do you account for London? How is it that four or five millions of people manage to subsist on an area of a few square miles, which itself produces nothing? that other millions all over the world are engaged in providing for their wants? that food and clothes and fuel, in sufficient quantities to preserve life, are being distributed with tolerable regularity to each unit in this vast and apparently chaotic crowd? and that, somehow or other, we struggle on, well or ill, by the help of a gigantic commissariat, performing functions incomparably more complex than were ever needed for military purposes? The answer supposes that there is, as a matter of fact, a great industrial organisation which discharges the various functions of producing, exchanging, distributing, and so forth; and that its mutual relations are just as capable of being investigated and stated as the relations between different parts of an army. The men and officers do not wear uniforms; they are not explicitly drilled or subject to a definite code of discipline; and their rates of pay are not settled by any central authority. But there are capitalists, "undertakers" and labourers, merchants and retail dealers and contractors, and so forth, just as certainly as there are generals and privates, horse, foot, and artillery; and their mutual relations are equally definable. The economist has to explain the working of this industrial mechanism; and the thought may sometimes occur to us, that it is strange that he should find the task so difficult. Since we ourselves have made, or at any rate constitute, the mechanism, why should it be so puzzling to find out what it is? We are cooperating in a systematic production and distribution of wealth, and we surely ought not to find any impenetrable mystery in discovering what it is that we are doing every day of our lives. Certain economists writing within this century have often been credited with the discovery of the true theory of rent, or, which is equally good for my purpose, of starting a false theory. Yet landowners and agents had been letting farms and houses for generations; and surely they ought to have known what it was that they were themselves doing. One explanation of the difficulty is, that whereas an army is constituted by certain regulations of a central authority, the industrial army has grown up unconsciously and spontaneously. Its multitudinous members have only looked each at his own little circle; the labourer only thinks of his wages, and the capitalist of his profits, without considering his relations to the whole system of which he forms a part. The peasant drives his plough for wages, and buys his tea as if the tea fell like manna from the skies, without thinking of the curious relation into which he is thus brought with the natives of another hemisphere. The order which results from all these independent activities appeared to the older economists as an illustration of the doctrine of Final Causes. Providence had so ordered things that each man, by pursuing his own interests, pursued the interests of all. To a later school it appears rather as an illustration of the doctrine by which organisms are constructed through the struggle for existence and the survival of the fittest. In either case, it seems as though the mechanism were made rather for us than by us; that it is the product of conditions which we cannot control, instead of being an arrangement put together by conscious volitions. And, therefore, when the economist shows us what in fact are the existing arrangements and their mutual relations, he appears to be making a discovery of a scientific fact as much as if he were describing the anatomy of some newly-discovered animal or plant.

The real assumption of the economist therefore is, as I think, simply the existence of a certain industrial organisation, which has a real existence as much as an army or a church; and there is no reason why his description should not be as accurate as the complexity of the facts allows. He is giving us the anatomy of society considered as a huge mechanism for producing and distributing wealth, and he makes an abstraction only in the sense that he is considering one set of facts at a time. The military writer would describe the constitution of an army without going into the psychological or political conditions which are of course implied, and without considering the soldiers in any other relations than those implied in their military services. In the same way, the economist describes the army of industry, and classifies its constituent parts. In order to explain their mutual relations, he has to make certain further assumptions, of which it would be rash to attempt a precise summary. He assumes as a fact, what has of course always been known, that scarcity implies dearness and plenty cheapness; that commodities flow to the markets where they will fetch the highest prices; that there is a certain gravitation towards equalisation of profits among capitalists, and of wages among labourers; so that capital or labour will flow towards the employments in which they will secure the highest reward. He endeavours to give the greatest accuracy to such formulae, of which nobody, so far as I know, denies a certain approximate truth. So long as they hold good, his inferences, if logically drawn, will also hold good. They take for granted certain psychological facts, such as are implied in all statements about human nature. But the economist, as an economist, is content to take them for granted without investigating the ultimate psychological laws upon which they depend. Those laws, or rather their results, are a part of his primary data, although he may go so far into psychological problems as to try to state them more accurately. The selfishness or unselfishness of the economic man has to be considered by the psychologist or by the moralist; but the economist has only to consider their conclusions so far as they affect the facts. So long as it is true, for example, that scarcity causes dearness, that profits attract capital, that demand and supply tend to equalise each other, and so forth, his reasonings are justified; and the further questions of the ethical and psychological implications of these facts must be treated by a different science. The question of the play of economic forces thus generally reduces itself to a problem which may be thus stated: What are the conditions of industrial equilibrium? How must prices, rates of wages, and profit be related in order that the various classes concerned may receive such proportions of produce as are compatible with the maintenance of the existing system of organisation? If any specified change occurs, if production becomes easier or more difficult, if a tax be imposed, or a regulation of any kind affects previous conditions, what changes will be necessary to restore the equilibrium? These are the main problems of Political Economy. To solve, or attempt to solve them, we have to describe accurately the existing mechanism, and to suppose that it will regulate itself on the assumption which I have indicated as to demand and supply, the flow of capital and labour, and so forth. To go beyond these assumptions, and to justify them by psychological and other considerations, may be and is a most interesting task, but it takes us beyond the sphere of Economics proper.

I must here diverge for a little, to notice the view of the school of economists which seems to regard scientific accuracy as attainable by a different path. Jevons, its most distinguished leader in England, says roundly, that political science must be a "mathematical science," because "it deals throughout with quantities"; and we have been since provided with a number of formulae, corresponding to this doctrine. The obvious general reply would be, that Political Economy cannot be an exact science because it also deals throughout with human desires. The objection is not simply that our data are too vague. That objection, as Jevons says, would, perhaps, apply to meteorology, of which nobody doubts that it is capable of being made an exact science. But why does nobody doubt that meteorology might become an exact science? Because we are convinced that all the data which would be needed are expressible in precise terms of time and space; we have to do with volumes, and masses, and weights, and forces which can be exactly measured by lines; and, in short, with things which could be exactly measured and counted. The data are, at present, insufficiently known, and possibly the problems which would result might be too complex for our powers of calculation. Still, if we could once get the data, we could express all relevant considerations by precise figures and numbers.

Now, is this true of economic science? Within certain limits, it is apparently true: Ricardo used mathematical formulae, though he kept to arithmetic, instead of algebra. When Malthus spoke of arithmetical and geometrical ratios, the statement, true or false, was, of course, capable of precise numerical expression, so soon as the ratios were assigned. So there was the famous formula proving a relation between the number of quarters of corn produced by a given harvest, and the number of shillings that would be given for a quarter of corn. If, again, we took the number of marriages corresponding to a given price of corn, we should obtain a formula connecting the number of marriages with the number of quarters of corn produced. The utility of statistics, of course, depends upon the fact that we do empirically discover some tolerably constant and simple numerical formulae. Such statistical statements are useful, indeed, not only in economical, but in other inquiries, which are clearly beyond the reach of mathematics. The proportion of criminals in a given population, the number of suicides, or of illegitimate births, may throw some light upon judicial and political, and even religious or ethical problems. Nor are such formulae useless simply because empirical. The law of gravitation, for example, is empirical. Nobody knows the cause of the observed tendency of bodies to gravitate to each other, and therefore no one can say how far the law which represents the tendency must be universal. Still, the fact that, so far as we have observed, it is invariably verified, and that calculations founded upon it enable us to bring a vast variety of phenomena under a single rule, is quite enough to justify astronomical calculation.

If, therefore, we could find a mathematical formula which was, as a matter of fact, verifiable in economical problems about prices, and so forth, we should rightly apply to mathematicians to help us with their methods. But, not only do we not find any such simple relations, but we can see conclusive reasons for being sure that we can never find them. Take, for example, the case of the number of marriages under given conditions. I need hardly say that it is impossible for the ablest mathematician to calculate whether the individual A will marry the individual B. But, by taking averages, and so eliminating individual eccentricities, he might discover that, in a given country and at a given time, a rise of prices will diminish marriages in certain proportion. Our knowledge of human nature is sufficient to make that highly probable. But our knowledge also shows that such a change will act differently in different cases: there will be one formula for France, and another for England; one for Lancashire, and another for Cornwall; one for the rich, and another for the poor; and both the total wealth of a country and its distribution will affect the rule. Differences of national temperament, of political and social constitution, of religion and ecclesiastical organisation, will all have an effect; and, therefore, a formula true here and now must, in all probability, fail altogether elsewhere. The formula is, in the mathematical phrase, a function of so many independent variables, that it must be complex beyond all conception, if it takes them all into account; while it must yet be necessarily inaccurate if it does not take them into account. But, besides this, the conditions upon which the law obviously depends are not themselves capable of being accurately defined, and still less of being numerically stated. Ingenious thinkers have, indeed, tried to apply mathematical formulae to psychology; but they have not got very far; and it may, I think, be assumed, without further argument, that while you have to deal both with psychological and sociological elements, with human desires, and with those desires modified by social relations, it is impossible to find any data which can be mathematically stated. There is no arithmetical measure of the forces of love, or hunger, or avarice, by which (among others) the whole problem is worked out.

It seems to me, therefore, that we must accept the alternative which is only mentioned to be repudiated by Jevons, namely, that Political Economy, if not a "mathematical science," must be part of sociology. I should say that it clearly is so; for if we wish to investigate the cause of any of the phenomena concerned, and not simply to tabulate from observations, we are at once concerned with the social structure and with the underlying psychology. The mathematical methods are quite in their place when dealing with statistics. The rise and fall of prices, and so forth, can be stated precisely in figures; and, whenever we can discover some approximation to a mathematical law (as in the cases I have noticed) we may work out the results. If, for example, the price of a commodity under certain conditions bears a certain relation to its scarcity, we can discover the one fact when the other fact is given, remembering only that our conclusions are not more certain than our premisses, and that the observed law depends upon unknown and most imperfectly knowable conditions. Such results, again, may be very useful in various ways, as illustrative of the way in which certain laws will work if they hold good; and, again, as testing many of our general theories. If you have argued that the price of gold or silver cannot be fixed, the fact that it has been fixed under certain conditions will of course lead to a revision of your arguments. But I cannot help thinking that it is an illusion to suppose that such methods can justify the assertion that the science as a whole is "mathematical". Nothing, indeed, is easier than to speak as if you had got a mathematical theory. Let x mean the desire for marriage and y the fear of want, then the number of marriages is a function of x and y, and I can express this by symbols as well as by ordinary words. But there is no magic about the use of symbols. Mathematical inquiries are not fruitful because symbols are used, but because the symbols represent something absolutely precise and assignable. The highest mathematical inquiries are simply ingenious methods of counting; and till you have got something precise to count, they can take you no further. I cannot help thinking that this fallacy imposes upon some modern reasoners; that they assume that they have got the data because they have put together the formulae which would be useful if they had the data; and, in short, that you can get more out of a mill than you put into it; or, in other words, that more conclusions than really follow can be got out of premisses, simply because you show what would follow if you had the required knowledge. When the attempt is made, as it seems to me to be made sometimes, to deduce economical laws from some law of human desire—as from the simple theorem that equal increments of a commodity imply diminishing amounts of utility—I should reply not only that the numerical data are vaguely defined and incapable of being accurately stated, but that the attempt must be illusory because the conclusions are not determinable from the premisses. The economic laws do not follow from any simple rule about human desires, because they vary according to the varying constitution of human society; and any conclusion which you could obtain would be necessarily confined to the abstract man of whom the law is supposed to hold good. Every such method, therefore, if it could be successful, could only lead to conclusions about human desire in general, and could throw no light upon the special problems of political economy, which essentially depend upon varying industrial organisation.

I will not, however, go further. You must either, I hold, limit Political Economy to the field of statistical inquiry, or admit that, as a part of sociology, it deals with questions altogether beyond the reach of mathematics. Like physiology, it is concerned with results capable of numerical statement. The number of beats of the pulse, or the number of degrees of temperature of the body, are important data in physiological problems. They may be counted, and may give rise to mathematically expressible formulae. But the fact does not excuse us from considering the physical conditions of the organs which are in some way correlated with these observed phenomena; and, in the case of Political Economy, we have to do with the social structure, which is dependent upon forces altogether incapable of precise numerical estimates. That, at least, is my view; and I shall apply it to illustrate one remark, which must, I think, have often occurred to us. Political Economy, that is, often appears to have a negative rather than a positive value. It is exceedingly potent—so, at least, I think—in dispersing certain popular fallacies; but it fails when we regard it as a science which can give us positive concrete "laws". The general reason is, I should say, that although its first principles may be true descriptions of facts, and any denial of them, or any inconsistent applications of them, may lead us into error, they are yet far from sufficient descriptions. They omit some considerations which are relevant in any concrete case; and the facts which they describe are so complex that, even when we look at them consistently and follow the right clue, we cannot solve the complicated problems which occur. It may be worth while to insist a little upon this, and to apply it to one or two peculiar problems.

Let me start from the ordinary analogy. Economic inquiry, I have suggested, describes a certain existing mechanism, which exists as really as the physical structure described by an anatomist. The industrial organism has, of course, many properties of which the economist, as such, does not take account. The labourer has affections, and imaginations, and opinions outside of his occupation as labourer; he belongs to a state, a church, a family, and so forth, which affect his whole life, including his industrial life. Is it therefore impossible to consider the industrial organisation separately? Not more impossible, I should reply, than to apply the same method in regard to the individual body. Were I to regard my stomach simply as a bag into which I put my food, I should learn very little about the process of digestion. Still, it is such a bag, and it is important to know where it is, and what are its purely mechanical relations to other parts of the body. My arms and legs are levers, and I can calculate the pressure necessary to support a weight on the hand, as though my bones and muscles were made of iron and whipcord. I am a piece of mechanism, though I am more, and all the principles of simple mechanics apply to my actions, though they do not, by themselves, suffice to explain the actions. The discovery of the circulation of the blood explained, as I understand, my structure as a hydraulic apparatus; and it was of vast importance, even though it told us nothing directly of the other processes necessarily involved. In this case, therefore, we have an instance of the way in which a set of perfectly true propositions may, so to speak, be imbedded in a larger theory, and may be of the highest importance, though they are not by themselves sufficient to solve any concrete problem. We cannot, that is, deduce the physiological principles from the mechanical principles, although they are throughout implied. But those principles are not the less true and useful in the detection of fallacies. They may enable us to show that an argument supposes facts which do not exist; or, perhaps, that it is, at any rate, inconsistent because it assumes one structure in its premisses, and another in its conclusions.

I state this by way of illustration: but the value of the remark may be best tested by applying it to some economical doctrines. Let us take, for example, the famous argument of Adam Smith against what he called the mercantile theory. That theory, according to him, supposed that the wealth of nations, like the wealth of an individual, was in proportion to the amount of money in their possession. He insisted upon the theory that money, as it is useful solely for exchange, cannot be, in itself, wealth; that its absolute amount is a matter of indifference, because if every coin in existence were halved or doubled, it would discharge precisely the same function; and he inferred that the doctrine which tested the advantages of foreign commerce by the balance of trade or the net return of money, was altogether illusory. His theory is expounded in every elementary treatise on the subject. It may be urged that it was a mere truism, and therefore useless; or, again, that it does not enable us to deduce a complete theory of the functions of money. In regard to the first statement, I should reply that, although Smith probably misrepresented some of his antagonists, the fallacy which he exposed was not only current at the time, but is still constantly cropping up in modern controversies. So long as arguments are put forward which implicitly involve an erroneous, because self-contradictory, conception of the true functions of money, it is essential to keep in mind these first principles, however obvious they may be in an abstract statement. Euclid's axioms are useful because they are self-evident; and so long as people make mistakes in geometry, it will be necessary to expose their blundering by bringing out the contradictions involved. As Hobbes observed, people would dispute even geometrical axioms if they had an interest in doing so; and, certainly, they are ready to dispute the plainest doctrines about money. The other remark, that we cannot deduce a complete theory from the axiom is, of course, true. Thus, for example, although the doctrine may be unimpeachable, there is a difficulty in applying it to the facts. As gold has other uses besides its use as money, its value is not regulated exclusively by the principle assigned; as other things, again, such as bank-notes and cheques, discharge some of the functions of money, we have all manner of difficult problems as to what money precisely is, and how the most elementary principles will apply to the concrete facts. A very shrewd economist once remarked, listening to a metaphysical argument, "If there had been any money to be made out of it, we should have solved that question in the city long ago". Yet, there is surely money to be made out of a correct theory of the currency; and people in the city do not seem to have arrived at a complete agreement. In fact, such controversies illustrate the extreme difficulty which arises out of the complexity of the phenomena, even where the economic assumption of the action of purely money-loving activity is most nearly verified. The moral is, I fancy, that while inaccurate conclusions are extremely difficult, we can only hope to approach them by a firm grasp of the first principles revealed in the simplest cases.

Even in such a case, we have also to notice how we have to make allowance for the intrusion of other than purely economic cases. The doctrine just noticed is, of course, closely connected with the theory of free trade. The free trade argument is, I should mention, perfectly conclusive in a negative sense. It demonstrates, that is, the fallacy which lurks in the popular argument for protection. That argument belongs to the commonest class of economic fallacies, which consists in looking at one particular result without considering the necessary implications. The great advantage of any rational theory is, that it forces us to look upon the industrial mechanism as a whole, and to trace out the correlative changes involved in any particular operation. It disposes of the theories which virtually propose to improve our supply of water by pouring a cup out of one vessel into another; and such theories have had considerable success in economy. So far, in short, as a protectionist really maintains that the advantage consists in accumulating money, without asking what will be the effect upon the value of money, or that it consists in telling people to make for themselves what they could get on better terms by producing something to exchange for it, his arguments may be conclusively shown to be contradictory. Such arguments, at least, cannot be worth considering. But, to say nothing of cases which may be put by an ingenious disputant in which this may not quite apply, we have to consider reasons which may be extra-economical. When it is suggested, for example, that the economic disadvantage is a fair price for political independence; or, on the other hand, that the stimulus of competition is actually good for the trade affected; or, again, that protection tends naturally to corruption; we have arguments which, good or bad, are outside the sphere of economics proper. To answer them we have to enter the field of political or ethical inquiry, where we have to take leave of tangible facts and precise measures.

This is a more prominent element as we approach the more human side (if I may so call it) of Political Economy. Consider, for example, the doctrine which made so profound an impression upon the old school—Malthus's theory of population. It was summed up in the famous—though admittedly inaccurate—phrase, that population had a tendency to increase in a geometrical ratio, while the means of subsistence increased only in an arithmetical ratio. The food available for each unit would therefore diminish as the population increased. The so-called law obviously states only a possibility. It describes a "tendency," or, in other words, only describes what would happen under certain, admittedly variable, conditions. It showed how, in a limited area and with the efficiency of industry remaining unaltered, the necessary limits upon the numbers of the population would come into play. If, then, the law were taken, or in so far as it was taken, to assert that, in point of fact, the population must always be increasing in civilised countries to the stage at which the lowest class would be at starvation level, it was certainly erroneous. There are cases in which statesmen are alarmed by the failure of population to show its old elasticity, and beginning to revert to the view that an increased rate is desirable. It cannot be said to be even necessarily true that in all cases an increased population implies, of necessity, increased difficulty of support. There are countries which are inadequately peopled, and where greater numbers would be able to support themselves more efficiently because they could adopt a more elaborate organisation. Nor can it be said with certainty that some pressure may not, within limits, be favourable to ultimate progress by stimulating the energies of the people. In a purely stationary state people might be too content with a certain stage of comfort to develop their resources and attain a permanently higher stage. Whatever the importance of such qualifications of the principle, there is a most important conclusion to be drawn. Malthus or his more rigid followers summed up their teaching by one practical moral. The essential condition of progress was, according to them, the discouragement of early marriages. If, they held, people could only be persuaded not to produce families until they had an adequate prospect of supporting their families, everything would go right. We shall not, I imagine, be inclined to dispute the proposition, that a certain degree of prudence and foresight is a quality of enormous value; and that such a quality will manifest itself by greater caution in taking the most important step in life. What such reasoners do not appear to have appreciated was, the immense complexity and difficulty of the demand which they were making. They seem to have fancied that it was possible simply to add another clause—the clause "Thou shalt not marry"—to the accepted code of morals; and that, as soon as the evil consequences of the condemned behaviour were understood,—properly expounded, for example, in little manuals for the use of school children,—obedience to the new regulation would spontaneously follow. What they did not see, or did not fully appreciate, was the enormous series of other things—religious, moral, and intellectual—which are necessarily implied in altering the relation of the strongest human passion to the general constitution, and the impossibility of bringing home such an alteration, either by an act of legislation or by pointing out the bearing of a particular set of prudential considerations. Political Economy might be a very good thing; but its expositors were certainly too apt to think that it could by itself at once become a new gospel for mankind. Should we then infer from such criticisms that the doctrine of Malthus was false, or was of no importance? Nothing would be further from my opinion. I hold, on the contrary, that it was of the highest importance, because it drew attention to a fact, the recognition of which was essential to all sound reasoning on social questions. The fact is, that population is not to be treated as a fixed quantity, but as capable of rapid expansion; and that this elasticity may at any moment require consideration, and does in fact give the explanation of many important phenomena. The main fact which gave importance to Malthus's writings was the rapid and enormous increase of pauperism during the first quarter of this century. The charitable and sentimental writers of the day were alarmed, but proposed to meet the evil by a reckless increase of charity, either of the official or the private variety. Pitt, we know, declared (though he qualified the statement) that to be the father of a large family should be a source of honour, not of obloquy; and the measures adopted under the influence of such notions did in fact tend to diminish all sense of responsibility, encouraged people to rely upon the parish for the support of their children, and brought about a state of things which alarmed all intelligent observers. The greatest check to the evil was given by the new Poor-law, adopted under the influence of the principles advocated by Malthus and his friends. His achievement, then, was not that he laid down any absolutely correct scientific truth, or even said anything which had not been more or less said by many judicious people before his time; but that he encouraged the application of a more systematic method of reasoning upon the great problem of the time. Instead of simply giving way to the first kindly impulse, abolishing a hardship here and distributing alms elsewhere, he substantially argued that society formed a complex organism, whose diseases should be considered physiologically, their causes explained, and the appropriate remedies considered in all their bearings. We must not ask simply whether we were giving a loaf to this or that starving man, or indulge in a priori reasoning as to the right of every human being to be supported by others; but treat the question as a physician should treat a disease, and consider whether, on the whole, the new regulations would increase or diminish the causes of the existing evils. He did not, therefore, so much proclaim a new truth, as induce reformers to place themselves at a new and a more rational point of view. The so-called law of population which he announced might be in various ways inaccurate, but the announcement made it necessary for rational thinkers to take constantly into account considerations which are essential in any satisfactory treatment of the great problems. If it were right to consider pauperism as a gulf of fixed dimensions, we might hope to fill it by simply taking a sufficient quantity of wealth from the richer classes. If, as Malthus urged, this process had a tendency to enlarge the dimensions of the gulf itself, it was obvious that the whole problem required a more elaborate treatment. By impressing people with this truth, and by showing how, in a great variety of cases, the elasticity of the population was a most important factor in determining the condition of the people, Malthus did a great service, and introduced a more systematic and scientific method of discussing the immensely important questions involved.

I will very briefly try to indicate one further application of economic principles. A critical point in the modern development of the study was marked by Mill's abandonment of the so-called "wage fund theory". That doctrine is now generally mentioned with contempt, as the most conspicuous instance of an entirely exploded theory. It is often said that it is either a falsity, or a barren truism. I am not about to argue the point, observing only that some very eminent Economists consider that it was rather inadequate than fallacious; and that to me it has always seemed that the theory which has really been confuted is not so much a theory which was ever actually held by Economists, as a formula into which they blundered when they tried to give a quasi-scientific definition of their meaning. It is common enough for people to argue sensibly, when the explicit statements of their argument may be altogether erroneous. At any rate, I think it has been a misfortune that a good phrase has been discredited; and that Mill's assailants, in exposing the errors of that particular theory of a "wage fund," seemed to imply that the whole conception of a "wage fund" was a mistake. For the result has been, that the popular mind seems to regard the amount spent in wages as an arbitrary quantity; as something which, as Malthus put it, might be fixed at pleasure by her Majesty's justices of the peace. Because the law was inaccurately stated, it is assumed that there is no law at all, and that the share of the labourers in the total product of industry might be fixed without reference to the effect of a change upon the general organisation. Now, if the wage fund means the share which, under existing circumstances, actually goes to the class dependent upon wages, it is of the highest importance to discover how that share is actually determined; and it does not even follow that a doctrine which is in some sense a truism may not be a highly important doctrine. One of the ablest of the old Economists, Nassan Senior, after laying down his version of the theory, observes that it is "so nearly self-evident" that if Political Economy were a new science, it might be taken for granted. But he proceeds to enumerate seven different opinions, some of them held by many people, and others by writers of authority, with which it is inconsistent. And, without following his arguments, this statement suggests what I take to be a really relevant defence of his reasons. At the time when the theory was first formulated, there were many current doctrines which were self-contradictory, and which could, therefore, best be met by the assertion of a truism. When the peace of 1815 brought distress instead of plenty, some people, such as Southey, thought it a sufficient explanation to say that the manufacturer had lost his best customer, because the Government wanted fewer guns and less powder. They chose to overlook the obvious fact that a customer who pays for his goods by taking money out of the pockets of the seller, is not an unmixed blessing. Then, there was the theory of general "gluts," and of what is still denounced as over-production. The best cure for commercial distress would be, as one disputant asserted, to burn all the goods in our warehouses. It was necessary to point out that this theory (when stated in superficial terms) regarded superabundance of wealth as the cause of universal poverty. Another common theory was the evil effect of manufacturers in displacing work. The excellent Robert Owen stated it as an appalling fact, that the cotton manufacture supplanted the labour of a hundred (perhaps it was two hundred) millions of men. He seems to assume that, if the machinery had not been there, there would still have been wages for the hundred millions. The curious confusion, indeed, which leads us to speak of men wanting work, when what we really mean is that they want wages, shows the tenacity of an old fallacy. Mandeville argued long ago that the fire of London was a blessing, because it set at work so many carpenters, plumbers, and glaziers. The Protestant Reformation had done less good than the invention of hooped petticoats, which had provided employment for so many milliners. I shall not insult you by exposing fallacies; and yet, so long as they survive, they have to be met by truisms. While people are proposing to lengthen their blankets by cutting off one end to sew upon the other, one has to point out that the total length remains constant. Now, I fancy that, in point of fact, these fallacies are often to be found in modern times. I read, the other day, in the papers, an argument, adduced by some advocate, on behalf of the Eight Hours Bill. He wished, he said, to make labour dear, and would therefore make it scarce. This apparently leads to the conclusion that the less people work the more they will get, which I take to be a fallacy. So, to mention nothing else, it is still apparently a common argument in favour of protection in America, that the native labourer requires to be supported against the pauperised labour of Europe. Americans in general are to be made richer by paying higher prices, and by being forced to produce commodities which they could get with less labour employed on the production of other things in exchange. I will not go further; for I think that no one who reads the common arguments can be in want of sufficient illustrations of popular fallacies. This, I say, is some justification for dwelling upon the contrary truisms. I admit, indeed, that even these fallacies may apply to particular cases in which they may represent partial truths; and I also agree that, as sometimes stated, the wage fund theory was not only a truism, but a fruitless truism. It was, however, as I believe, an attempt to generalise a very pertinent and important doctrine, as to the way in which the actual competition in which labourers and employers are involved, actually operates. If so, it requires rather modification than indiscriminate denunciation; and it is, I believe, so treated by the best modern Economists.

I consider, then, that the Economists were virtually attempting to describe systematically the main relations of the industrial mechanism. They showed what were the main functions which it, in fact, discharges. Their theory was sufficient to expose many errors, especially those which arise from looking solely at one part of a complex process, and neglecting the implied reactions. It enabled them to point out the inconsistencies and actual contradictions involved in many popular arguments, which are still very far from being destroyed. Their main error—apart from any particular logical slips—was, namely, that when they had laid down certain principles which belong properly to the prolegomena of the science, and which are very useful when regarded as providing logical tests of valid reasoning, they imagined that they had done a great deal more, and that the desired science was actually constituted. They laid down three or four primary axioms, such as the doctrine that men desire wealth, and fancied that the whole theory could be deduced from them. This, if what I have said be true, was really to misunderstand what they were really doing. It was to suppose that you could obtain a description of social phenomena without examining the actual structure of society; and was as erroneous as to suppose that you could deduce physiological truths from a few general propositions about the mechanical relations of the skeleton. Such criticisms have been made by the historical school of Economists; and I, at least, can fully accept their general view. I quite agree that the old assumptions of the older school were frequently unjustifiable; nor can I deny that they laid them down with a tone of superlative dogmatism, which was apt to be very offensive, and which was not justified by their position. Moreover, I entirely agree that the progress of economic science, and of all other moral sciences, requires a historical basis; and that we should make a very great blunder if we thought that the creation of an economic man would justify us in dispensing with an investigation of concrete facts, both of the present day and of earlier stages of industrial evolution. But to this there is an obvious qualification. What do we mean by investigating facts? It seems to be a very simple rule, but it leads us at once to great difficulties. So, as Mill and later writers have very rightly asked, how are we to settle even the most obvious questions in inquiries where, for obvious reasons, we cannot make experiments, and where we have not such a set of facts as would spontaneously give us the truths which we might seek by experiment? Take, as Mill suggested, such a question as free trade. We cannot get two countries alike in all else, and differing only in respect to their adoption or rejection of a protective tariff. Anything like a thoroughgoing system of free trade has been tried in England alone; and the commercial prosperity of the country since its adoption has been affected by innumerable conditions, so that it is altogether impossible to isolate the results which are to be attributed to the negative condition of the absence of protection. Briefly, the result is that the phenomena with which we have to deal are so complex, and our power of arranging them so as to unravel the complexity is so limited, that the direct method of observation breaks down altogether. Mill confessed the necessity of applying a different method, which he described with great ability, and which substantially amounts to the method of the older Economists. If, with some writers of the historical school, we admit the objections which apply to this method, we seem to be reduced to a hopeless state of uncertainty. A treatise on Political Economy becomes nothing but a miscellaneous collection of facts, with no definite clue or uniform method of reasoning. I must beg, in conclusion, to indicate what, so far as I can guess, seems to be the view suggested in presence of this difficulty.

If I am asked whether Political Economy, understood, for example, as Mill understood it, is to be regarded as a science, I should have to admit that I could not simply reply, Yes. To say nothing of any errors in his logic, I should say that I do not believe that it gives us sufficient guidance even in regard to economic phenomena. We could not, that is, deduce from the laws accepted by Economists the necessary working of any given measure—say, the effect of protection or free trade, or, still more, the making of a poor-law system. Such problems involve elements of which the Economist, purely as an Economist, is an incompetent judge; and the further we get from those questions in which purely economical considerations are dominant, towards those in which other factors become relevant,—from questions as to currency, for example, to questions as to the relations of capitalists and labourers,—the greater the inadequacy of our methods. But I also hold that Political Economists may rightly claim a certain scientific character for their speculations. If their ultimate aim is to frame a science of economics which shall be part of the science—not yet constituted—of sociology, then I should say that what they have really done—so far as they have reasoned accurately—has been to frame an essential part of the prolegomena to such a science. The "laws" which they have tried to formulate are not laws which, even if established, would enable us to predict the results of any given action; but they are laws which would have to be taken into account in attempting any such prediction. And this is so, I think, because the laws are descriptions—within limits accurate descriptions—of actually existing facts as to the social mechanism. They are not mere abstract hypotheses, in the sense sometimes attached to that phrase; but accounts of the plan upon which the industrial arrangements of civilised countries are, as a matter of fact, constructed. Such a classification and systematic account of facts is, as I should suggest, absolutely necessary for any sound historical method. Facts are not simply things lying about, which anybody can pick up and describe for the mere pains of collecting them. We cannot even see a fact without reflection and observation and judgment; and to arrange them in an order which shall be both systematic and fruitful, to look at them from that point of view in which we can detect the general underlying principles, is, in all cases, an essential process before we can begin to apply a truly historical method. Anything, it is said, may be proved by facts; and that is painfully true until we have the right method of what has been called "colligating" facts. The Catholic and the Protestant, the Conservative and the Radical, the Individualist and the Socialist, have equal facility in proving their own doctrines with arguments, which habitually begin, "All history shows". Printers should be instructed always to strike out that phrase as an erratum; and to substitute, "I choose to take for granted". In order to judge between them we have to come to some conclusion as to what is the right method of conceiving of history, and probably to try many methods before reaching that which arranges the shifting and complicated chaos of phenomena in something like an intelligible order. A first step and a necessary basis, as I believe, for all the more complex inquiries will have to be found by disentangling the various orders of laws (if I may so speak), and considering by themselves those laws of industrial growth which are nearest to the physical sciences in certain respects, and which, within certain limits, can be considered apart, inasmuch as they represent the working of forces which are comparatively independent of forces of a higher order. What I should say for Political Economists is that they have done a good deal in this direction; that they have explained, and, I suppose, with considerable accuracy, what is the actual nature of the industrial mechanism; that they have explained fairly its working in certain cases where the economic are practically also the sole or dominant motives; and that they have thus laid down certain truths which require attention even when we take into account the play of other more complex and, as we generally say, higher motives. We may indeed hope and believe that society will ultimately be constituted upon a different system; and that for the organisation which has spontaneously and unconsciously developed itself, another will be substituted which will correspond more closely to some principles of justice, and give freer scope for the full development of the human faculties. That is a very large question: I only say that, in any case, all genuine progress consists in a development of institutions already existing, and therefore that a full understanding of the working of the present system is essential to a rational consideration of possible improvements. The Socialist may look forward to a time—let us hope that it may come soon!—when nobody will have any grievances. But his schemes will be the better adapted for the realisation of his hopes in proportion as he has fully understood what is the part played by each factor of the existing system; what is its function, and how that function may be more efficiently discharged by any substitute. Only upon that condition can he avoid the common error of inventing some scheme which is in sociology what schemes for perpetual motion are in mechanics; plans for making everything go right by condemning some existing portion of the system without fully understanding how it has come into existence, and what is the part which it plays in the whole. I think myself that a study of the good old orthodox system of Political Economy is useful in this sense, even where it is wrong; because at least it does give a system, and therefore forces its opponents to present an alternative system, instead of simply cutting a hole in the shoe when it pinches, or striking out the driving wheel because it happens to creak unpleasantly. And I think so the more because I cannot but observe that whenever a real economic question presents itself, it has to be argued on pretty much the old principles, unless we take the heroic method of discarding argument altogether. I should be the last to deny that the old Political Economy requires careful revision and modification, and equally slow to deny that the limits of its applicability require to be carefully defined. But, with these qualifications, I say, with equal conviction, that it does lay down principles which require study and consideration, for the simple reason that they assert the existence of facts which are relevant and important in all the most vitally interesting problems of to-day.