UNCONSCIOUS ASSUMPTIONS IN ECONOMICS. 533 



production under a system of competition among small capitalists.' 

 But in such an industry as sugar-refining, in the United States, this 

 condition does not hold good. ' There is no normal level of com- 

 petitive price based on the cost of production.'* The whole industrial 

 organization takes other forms, and the mechanism of competition does 

 not work in the fashion which English economists would assume. We 

 have need to be doubly on our guard, since unconscious assumptions 

 may not only affect our powers of observation, but may also be present 

 to color the language we use in describing unfamiliar phenomena. 



III. It is not easy to overrate the services which the classical econo- 

 mists rendered in their day to the progress of economic science, owing 

 to the clearness of the conceptions they applied to the limited field they 

 studied, and to the accuracy they endeavored to introduce in regard to 

 the use of familiar languages. It was their misfortune, rather than 

 their fault, that their manner of treating individual human nature 

 and the mechanism of society has given some excuse for the popular 

 misuse of their teaching. In the public mind, principles which had 

 been legitimately put forward as convenient hypotheses for the investi- 

 gation of a particular sphere have been transmuted into axioms of 

 universal applicability. But when we turn to other subjects of eco- 

 nomic inquiry, the limitations, and consequent defects, of the classical 

 school become more apparent. The idea of the growth of society was 

 not easily brought within the limits of a system which makes so much 

 use of terminology borrowed from physics. Some of the precursors 

 of economic science in England had treated national life as organic, 

 and had relied on biological conceptions. Hobbes had devoted a chap- 

 ter of the ' Leviathan ' to the nutrition and procreation of States ; f 

 and Sir William Petty, who had held the chair of anatomy in the Uni- 

 versity of Oxford, entitled an important statistical work ' The Political 

 Anatomy of Ireland.' But another and less fruitful habit of thought 

 existed side by side; the mercantilists, in discussing the benefits of 

 commerce, wrote much of the balance of trade; and the physical anal- 

 ogies they introduced — especially the notion of equilibrium — exerted a 

 dominating influence over the form which the science took in the hands 

 of the classical economists. These last were so much absorbed in the 

 discussion of the mechanism of exchange and the mechanism of society 

 that they failed even to recognize that it is essentially organic. As has 

 been well said, " the classical economists belonged to the pre-Darwinian 

 age. We differ from them in our whole view of life and of the ends 

 of life — in our whole mental method as well as in our possession of the 

 practical experience of the last sixty years." J It is only in recent 



• 



J. W. Jenks, ' The Trust Problem,' p. 141. 

 f Pt. II., Ch. XXIV., Camb. Univ. Press edition, p. 175. 

 % C. L. Garvin, ' Principles of Constructive Economics,' in ' Compatriots' 

 Club Lectures,' I., p. 2. 



