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THE POPULAR SCIENCE MONTHLY, 



of the Old School," which he recognizes 

 were great, independently of the correct- 

 ness of its doctrines. It did vast service as 

 the pioneer in this field of research, and on 

 this point we quote Dr. Ely's words : " Fur- 

 ther, the present political economy in all 

 parts of the world grew out of the classical 

 political economy, and the former can not 

 be comprehended until the latter has been 

 mastered. It was, indeed, efforts to master, 

 extend, and perfect the older school, as well 

 as other causes, like later developments of 

 industrial life, which gradually led to the 

 most recent economic investigation. Nor 

 does any one now doubt the continued and 

 all-pervading — even if not all-controlling — 

 influence of these motive powers which fur- 

 nish Ricardo, Mill, and Senior, with their 

 major premises ; but this fact was not un- 

 derstood before the coryphei of the older 

 political economy elucidated it, and they de- 

 serve great credit for what may be fairly 

 termed their discoveries. It was, for exam- 

 ple, a service of no mean order to point out 

 all the ramifications of self-interest in eco- 

 nomic life, to set in order the phenomena 

 explained by this principle, and to show 

 how it prompts men to the most diverse 

 deeds, which, undertaken without a view to 

 the welfare of others, nevertheless redound 

 to the common good. And it must be con- 

 fessed that no single principles have been 

 discovered by the German school, which 

 throw such a flood of light on the multi- 

 farious phenomena of economic life as do, 

 for example, the Ricardian theory of rent 

 and the Malthusian doctrine of population." 

 Having made these concessions. Dr. Ely 

 proceeds elaborately in Section V to discuss 

 " The Decline and Fall of the Old School." 

 He objects, first, '' tbat the whole spirit of 

 its practical activity Avas negative." He at- 

 tacks the doctrine of laissez faire^ which he 

 alleges grew out of that negative system, 

 and has turned out to be a total failure. 

 " It never held at any time in any country, 

 and no maxim ever made a more complete 

 fiasco^ when the attempt was seriously made 

 to apply it in the state." His chief illus- 

 trations of the break-down of this doctrine 

 are education and the English factory sys- 

 tem. He next arraigns "another favorite 

 notion of the older economists, and one 

 which leads to great hardship in real life, 



that taxes are shifted so as to be divided 

 fairly between different employments in 

 which capital is engaged." He then con- 

 demns "the supposition that self-interest 

 is the chief force of economic life," which 

 he maintains to be the leading premise of the 

 English school. The doctrine of " equality 

 of wages " is attacked as an error of the old 

 economists, as is also the idea " of the natu- 

 ral laws of political economy," and the prin- 

 ciple of " supply and demand." . 



We can not give the reasonings by which 

 the older political economy is impeached in 

 these several particulars, but their enumer- 

 ation will suffice to inform the reader some- 

 what of the nature and extent of the indict- 

 ment against the old system by which it is 

 to be discredited and put aside to make 

 place for another system. 



In Section VI the new school is taken 

 up and its various claims presented. Chief 

 among these are that facts and statistics are 

 to be more studied, that there is to be greater 

 caution in theorizing, and especially in the 

 use of deduction ; and, above all, that the 

 subject is to be dealt with historically. It 

 seems to be denied that there are any prin- 

 ciples of political economy to be taken as 

 fundamental or universal, or as fitted to 

 form the body of a science to be generally 

 accepted like other sciences. The subject 

 is said to involve changed conditions and 

 constantly changing policy. " It is found 

 that the political economy of to-day is not 

 the political economy of yesterday, while 

 the political economy of Germany is not 

 identical with that of England or America. 

 It is on this account that knowledge of his- 

 tory is absolutely essential to the political 

 economist." 



Now, while Dr. Ely's statements of the 

 general case are most interesting and in- 

 structive, we can hardly acquiesce in the 

 validity of his argument. Much of his criti- 

 cism of the older political economy may be 

 taken as well-based and wholesome, while 

 his argument is overdone. We may freely 

 concede that the earlier expositions of po- 

 litical economy were imperfect, and that 

 much of its subsequent Uterature is open 

 to objection. But science is self-corrective 

 in time, and the labor of generations is 

 necessary for the development of its prin- 

 ciples, especially if they are of a complex 



