16 ECONOMICS 



Eighteenth century students saw that the same value problem was 

 involved in the case of many agents generally exchanged for money, 

 which chanced to be the products of manufacture in cities; and the 

 term " interest " was thus extended. The concept of interest became 

 thus an illogical cross between a value aspect common to all goods, 

 and the income yielded by a certain objective class of goods. This 

 confusion has been but dimly perceived because of the failure to 

 distinguish consciously the subjective and the objective elements 

 in the so-called " interest problem." 



The methods of subjective study. The specific methods of study- 

 ing economics subjectively can be hardly more than mentioned. 

 It begins with introspection, and pursues the analysis of man's 

 nature and wants by observing and comparing the impressions, the 

 hopes, and the motives that determine acts in relation to gratifica- 

 tions. The method of psychological analysis requires here no 

 defense, and the service of the marginal utility theory, as developed 

 by various writers, will hardly be denied. That service has, perhaps, 

 been exaggerated, for in the enthusiasm over the discovery of a new 

 and exacter mode of economic inquiry it was believed by some that 

 this was the substance and scope of the economic problem. This 

 study must be extended from the individual consciousness to social 

 sentiments and social institutions, to class feelings, to the psychology 

 of the masses, and to the evolving standards of living. Every 

 degree of relationship of motives to gratification must be followed 

 out, and the whole field of human action must be studied from this 

 subjective standpoint. 



Study of the growth of economic theory. A much neglected but 

 fruitful field of subjective economics is the critical study of the 

 evolution of economic thought; not that students have ignored 

 the writings of their predecessors, but they have approached those 

 writings either in the spirit of implicit faith or of partisan opposition 

 to certain social institutions or plans. The scientific, critical spirit 

 has in both cases been 7 lacking. Almost every chapter of the repre- 

 sentative economic works is bristling with logical difficulties and is 

 a challenge to the best critical faculties. As economic thought has 

 unfolded in the past two centuries it has presented errors and ming- 

 ling of errors in kaleidoscopic variety. Progress of the abstract 

 theory toward truth has been in an empirical manner. The whole 

 problem has not at any one time been investigated fundamentally; 

 rather, each new advance of thought has been inspired by a contem- 

 porary need, and has shown, therefore, a temporary character. The 

 analysis of the conceptions employed and close textual criticism 

 give a rare exercise in logical thinking, a conscious mastery of the 

 essential conceptions, and an historical perspective of the highest 

 value to the economic theorist. 



