216 HISTORY OF ECONOMIC INSTITUTIONS 



of supremacy, and sunk into the company of the minor doctrines 

 that are plainly limited by time and space. 



The resulting changes in mental attitude are in a large measure 

 due to the efforts of the historical economists, who taught the limit- 

 ations to which all economic doctrines are subjected. Yet in spite 

 of a breadth of view and great command of facts, they did not destroy 

 the old School, but merely compelled its adherents to make more 

 modest statements. This failure was due to the lack of a method of 

 historical interpretation in harmony with the facts they were using 

 and the conditions they were investigating. 



Economic history and the economic interpretation of history 

 are different concepts, and have been forced upon public attention 

 by two different groups of thinkers. Economic history is a question 

 of facts of the discovery and utilization of those facts of yesterday 

 of which the economist of to-day avails himself. The economic 

 interpretation of history is a study of these data and of the method 

 of utilizing them. It enables us to reason about past events in the 

 same way we reason about present events, and to find common prin- 

 ciples that will apply to both. Economic dogmatism concentrates 

 attention on the dominant features of a given age or nation. Economic 

 interpretation eliminates dogmatism by comparing the dominant 

 features of many ages, and clearly presents their points of difference 

 and similarity. In this way a new theory arises, with a broader basis 

 and more closely in touch not only with history but also with the 

 sciences from which the economic premises come. 



There are, however, two diverging lines of thought, each of which 

 is called an economic interpretation of history. One group of men 

 ask: What light can history throw on present events? Their interest 

 is in the present, and they use history as a method of interpreting 

 it. The other group ask: What light can our knowledge of present 

 events and conditions throw on those of past ages? The first group 

 assumes a knowledge of the past superior to that of the present 

 and hopes to use this knowledge to clear away the difficulties of 

 interpreting contemporary events. The second group contends that 

 our knowledge of present economic conditions is greater than that 

 of past ages and hence that it can help us to supplement our meagre 

 knowledge of the past. 



If we wish to be accurate in the use of terms, this first viewpoint 

 should not be called an economic interpretation of history, but an 

 historical interpretation of the present. That which is interpreted 

 is not history but current events, while the method used is not eco- 

 nomic but historical. It is only the second viewpoint that attempts 

 to interpret history, and does it by an economic method. 



It will add to the clearness of the contrast if the term " history " 

 be eliminated. History in both cases is used in a popular way, and 



