1146 REPORT—1885. 
not likely on the whole to bring the desired victory, though it may give a partial 
success here and there. And some such conclusion as this is, I think, now pre- 
valent even among those German economists who are most decided in their rejec- 
tion of the claims of dazsser-faie to absolute and unqualified validity. 
So far I have been speaking of the function of economic science in determining 
principles of Governmental intervention in matters of industry, because this is the 
function prominent in the popular view of political economy. But I need hardly 
say to the present audience that this is not the view that English economists gene- 
rally have taken as to their primary business. Indeed, during the last generation 
our leading economists—even those who come nearest to the so-called ¢ orthodox’ 
type—have gone even further than I should myself go in declaring that economic 
science had nothing to do with the doctrine of latsser-faire. No one (e.g.) has stated 
this more strongly than Cairnes, whom I select as a conspicuous and effective adyo- 
cate of Free-trade. ‘The maxim of laissez-faire, he says, ‘has no scientific basis 
whatever ;’ it is a‘ mere handy rule of practice,’ though ‘a rule in the main sound.’ 
According to this view, the ‘laws’ with which economic science is primarily 
concerned are the laws that determine economic quantities—the amount of 
the aggregate of wealth, its annual increase, the relative values of its different 
elements, and the shares of the economic classes that have combined to produce it— 
as they would be apart from special Governmental interference ; and not the rules for 
deciding when and how far such interference is justifiable. 
And it is the additional light that Adam Smith threw on the general deter- 
mination of such economic quantities—and not his advocacy of natural liberty 
which in the view of economists constitutes his chief claim to his place in the his- 
torical development of economic science. And I may observe that, from this point 
of view, the important predecessors of Adam Smith are not the Physiocrats only, 
but even more Cantillon, who wrote a generation before, to whom Jevons drew atten- 
tion some years ago in a remarkable essay ; nor shall we overlook his English prede- 
cessors of a still earlier age, such as Petty and Locke—the former of whom has a 
special interest for us as a pioneer in each of the two lines of investigation of which 
we here maintain the union, since he was the first in England to combine a serious 
effort to establish the general relations of economic quantities by abstract reasoning 
and analysis with patient endeavours to ascertain particular economic facts by 
statistical inquiries, When we trace the gradual evolution of the modern economic 
view as to the manner in which the play of individual self-interests tends to 
determine prices and shares—from the rude beginnings of Petty and Locke, 
through the more systematic and penetrating theory of Cantillon, the fuller analysis 
and exposition of Adam Smith, and the closer reasoning of Ricardo, down to the 
important rectifications and additions of Jevons—we see clearly that the progress 
of the theory has no necessary connection with any doctrine as to the limits of 
the industrial intervention of Government. 
And it is to be observed that neither Adam Smith nor the predecessors to whom 
I have referred had any design of maintaining that the distribution which they were 
endeavouring to analyse satisfied either the claims of ideal equity by giving each 
individual his deserts, or the claims of expediency by giving him what was most 
conducive to general happiness. Nor, since Adam Smith, has any leading English 
economist maintained the former of these propositions ; and so far as the school of 
Ricardo may have seemed to maintain the latter—so far as they certainly have 
taught that direct Governmental interference with distribution was undesirable—it 
has not been from any prevalence among them of the shallow optimism of Bastiat 
and his followers. It is pessimism rather than optimism which is to be laid to 
their charge; not a disposition to underrate or ignore the hardships that the 
‘natural’ rate of wages might entail; but a conviction that, however bad things 
might be naturally, the direct interference of Government could only make them 
worse. Iam not arguing that they did not go too far in this view; I am now 
chiefly desirous to remove a profound and widespread misunderstanding as to the 
general aim and drift of their investigations, which I find in certain German and 
other Continental critics of English political economy, and, I may add, in certain 
English critics who repeat the foreign objections. Such critics either fail to 
