METHOD OF DISCOVERING CAUSAL LAWS 191 



tabulated by scientists, in their investigations of the animal king 

 dom, man included ; yet, for the reason just given, it would be rash 

 to hazard an inference that there is any necessary or causal con 

 nexion between these varying phenomena in the departments 

 from which the instances have been taken. But, on the other 

 hand, the data to which we can apply the method are often such 

 that it will yield highly probable, and even practically certain, 

 conclusions. 



The following example, from Adam Smith s Wealth of Nations? illustrates 

 the combined use of Agreement and Concomitant Variations. The lowness 

 of money pi ices for goods in ancient times was regarded as due to the poverty 

 and barbarism of the ancient peoples. The author undertakes to prove that 

 low money prices are not caused by &quot; poverty and barbarism,&quot; but may be 

 due to &quot; the barrenness of the mines supplying the commercial world with gold 

 and silver &quot; : (i) &quot; China is a richer country than any part of Europe, yet the 

 value of the precious metals is higher there than anywhere in Europe,&quot; 

 and the money prices therefore lower. Here we have &quot; low money prices,&quot; 

 without &quot; poverty &quot; ; therefore the latter cannot be the cause of the former. 

 No doubt, within the last four or five centuries Europe has grown more wealthy 

 and its money prices have risen : which may account for the impression that 

 low money prices indicate poverty. The increase in wealth has, however, no 

 real connexion with rise in money prices. (2) Increase of wealth is due to 

 &quot; the fall of the feudal system and the growth of public security &quot; : influences 

 present throughout Europe, except in Poland, where the feudal system still pre 

 vails (an. 1 793) and which is still poor. But low money prices cannot be due to 

 poverty, because in Poland, notwithstanding its poverty, &quot; the money price of 

 corn (its most important single commodity) has risen &quot; just as in the rest of 

 Europe. (3) In Spain and Portugal, which are also poor countries, money 

 prices have risen as in the richer countries during those centuries. Hence 

 poverty does not account for low money prices. (4) Money prices remained 

 low in ancient times because the output of gold and silver from the world s 

 mines was comparatively small, and these metals were therefore comparatively 

 more precious. But since the discovery of America mines have multiplied : 

 gold and silver have become more plentiful : the purchasing power of these 

 metals has diminished : money prices have therefore risen, especially in Spain 

 and Portugal, which, though poor countries, can command large supplies of 

 these metals from the mines of their American colonies at the cost of a com 

 paratively small expenditure of labour. Thus it was proved inductively that 

 low money prices are due, not to &quot; poverty and barbarism &quot; but to the com 

 parative &quot; barrenness of the mines &quot; and the consequent scarcity of the 

 precious metals. The same conclusions could be proved deductively from the 

 general principles that &quot; a poor country cannot afford to give a comparatively 

 large supply of labour or any other commodity in exchange for a comparatively 

 small supply of gold or silver (i.e. a low money price),&quot; and that &quot; the 

 purchasing power of gold and silver depends on the amount of labour, energy, 



1 Bk. i., chap, xi., vol. i., p. 365, 7th edit. 1793 ;apud JOSEPH, op. cit. t p. 417. 



