ECONOMIC HISTORY AND KINDRED SCIENCES 209 



material for its use and demands from it the solution of ever new 

 problems. 



Economic history has been supplemented by ethnology and 

 ethnography. For historical investigation finds its limit long before 

 the beginning of civilization, where tradition fails, while it is of the 

 greatest importance to study the nature of man before he has been 

 influenced by civilization. The savage is an extremely important 

 object of observation for the political economist, though unfortunately 

 too little studied from this point of view. Biicher in Leipzig has cer- 

 tainly rendered a great service in having made the attempt to trace 

 back the first beginnings of economic activity. 



My most important task is, however, to point out the relation of 

 economic history to political economy, which treats of the systematic 

 activity of a people (or of mankind) for the satisfaction of its material 

 wants. Both studies consider the economic life of nations, the former 

 its development, the latter the nature of economic activity in gen- 

 eral, the theory of economic life, and in addition, in the study of 

 economic policy or the special, practical division of political economy, 

 the duties of the state in the furtherance of the national well-being. 

 Hence the especial task of political economy is to grasp the actual 

 conditions of the present, keeping in view at the same time the im- 

 mediate future, whereas economic history deals exclusively with the 

 past. Herein lies the contrast and at the same time the connection 

 between the two studies. The attempt has indeed been made to 

 bridge over the contrast by talking of contemporary history, seeking 

 thus to open to economic history the study of the present. Of course 

 all human activity which we can observe is something which has 

 already happened and therefore belongs to the past. But that is 

 a play upon words. It is indifferent to us what the study is called; 

 the chief thing is that it should be undertaken. 



After what has been said, it will need no further discussion to 

 show that political economy can just as little dispense with the 

 study of history as can any other science. Even in the dispute of the 

 Vienna and Berlin schools of political economy, this has been freely 

 admitted and expressly emphasized by the opponents of the historical 

 school. Opinions are at variance solely as to whether the inductive 

 or the deductive method shall be regarded as the basis of investiga- 

 tion, and as to the extent to which the division of labor is in this 

 respect to be applied. Even upon this point opinions have tended 

 to converge. Opposition was originally made more acute by the 

 radical difference in the personal inclinations and abilities of the 

 leaders. 



Schmoller as historian thought that only through historical 

 studies could he further his science, and while for a time it appeared 

 as if he were inclined to merge political economy in economic history, 



