THE FUNDAMENTAL CONCEPTIONS AND METHODS OF 



ECONOMICS 



BY FRANK ALBERT FETTER 



[Frank Albert Fetter, Professor of Political Economy and Finance, Cornell 

 University, since 1901. b. Peru, Indiana, March 8, 1863. Graduated, Indiana 

 University, 1891; Ph.M. Cornell University, 1892; Ph.D. Halle, Wittenberg, 

 1894; The Sorbonne, and Ecole de Droit, Paris, 1892-93; and Halle, 1893- 

 94. Instructor in Political Economy, Cornell, 1894-95; Professor, Indiana 

 University, 1895-98; Professor, Leland Stanford Jr. University, 1898-1900. 

 Secretary and Treasurer of American Economic Association, 1901-05. Author 

 of Versuch ciner Bevoelkerungslchre, Jena, 1894; The Principles of Economics, 

 N. Y., 1904, Rent and Interest, 1904; also of many articles, monographs, etc., 

 on economic subjects.] 



I. Conceptions 



Limitations of the subject. This paper will necessarily be confined 

 to a few of the important aspects presented by this many-sided 

 subject. We proceed from the thought that economics as a science is 

 primarily concerned with the explanation of the process of evaluat- 

 ing objective things, materials and services, that minister to man's 

 welfare. Every such problem of valuation is an economic pro- 

 blem; every fact helping to an understanding of valuation is, in 

 that aspect, an economic fact. The vast and complex world pours 

 ceaseless streams of impressions into men's minds. As men have 

 striven to correlate these impressions according to various principles, 

 they have come to recognize value as one of the recurring and neces- 

 sary relations, and have come to group things according to the 

 economic principle. Historically viewed, the increasing scope and 

 exactness of men's evaluation of the world about them is seen to be 

 the unfolding process of men's thought. A theory of value logically 

 adequate, therefore, must trace the value conception from its genesis 

 through its successive stages of thought to the highest and most 

 complex value relations. 



Good. The primordial conception at the basis of all choice, 

 economic or other, is that of the good. There can be no conceptions 

 until mind has been evolved ; but an embryonic mind was in the first 

 forms of life reacting upon their environment, shrinking from that 

 which harmed and seeking that which helped. Before higher 

 conscious thought-centers existed, nerves in plants and animals 

 reached out toward the favorable and shrank from the unfavorable. 

 Even the protoplasm has its fundamental economic conception. 

 The evolution of higher animal forms is but the development of 

 special organs of selection to choose the good and to flee from the 

 evil. There need be, as to the use of the conception of good, at this 



