TRANSACTIONS OF SECTION F. 1149 
never gone so far as to maintain that this can be constructed @ prior?, any more 
than any other history ; and if a generation ago he was sometimes wont to dog- 
matise with insufficient information as to the causes of industrial changes and the 
economic effects of political measures in other ages and countries, he has grown 
wiser, like other persons, through the great development of historical study—and 
of what I may call the common historic sense of educated persons—which has taken 
place in the interval. Indeed, I think the danger now is rather that we should go 
into the opposite extreme, and not give sufficient attention to the more latent and 
complicated but very effective manner in which competition is found operating 
even in states of society where the barriers of custom are strongest. 
But further, even as regards the present condition of industry in the more advanced 
countries, to which the theory of modern economic science primarily relates, there 
is, I conceive, no dispute as to the need of whatis called a ‘ realistic’ or ‘inductive ’ 
method—z.e. as to the need of accurately ascertaining particular facts when we are 
inquiring into the particular causes of particular values, or of the shares of particular 
economic classes at any given place and time. All that the deductive reasonings 
of English economists supply is a method of analysing the phenomena and a state- 
ment of the general causes that govern them, and of the manner of their operation. 
In this analysis, no doubt, the assumption is fundamental that the individuals con- 
cerned in the actual determination of the economic quantities resulting from free 
exchange will aim, ceteris paribus, at getting the most they can for what they sell 
and giving the least they can for what they buy. And when we find the legitimacy 
of this assumption, and the scientific value of the analysis based upon it, broadly 
assailed by Hildebrand,’ Knies,? and others, we are no doubt seriously con- 
cerned to meet their criticism. 
For my own part, I can only say that, having searched their works with the 
interest and respect which are due to the indefatigable research and the scientific 
fertility of the German intellect, I am quite unable to discover what other scientific 
treatment of the general theory of distribution and exchange they propose to sub- 
stitute for the treatment which they sweepingly criticise. I cannot perceive that 
their higher view of man as a moral, sympathetic, public-spirited being, habitually 
rising above the sordid huckstering considerations by which English economists 
assume him to be governed, has any material effect on their theory of the deter- 
mination of economic quantities when it comes to be actually worked out. When 
Knies, for instance, is discussing the nature and functions of capital, money, and 
credit, or when he is arguing with more subtlety than success against the Ricardian 
doctrine of rent, we find that the capitalists and landlords, the lenders and borrowers, 
whose operations are contemplated, exhibit throughout the familiar features of the 
old economic man. So, again, when, in the Encyclopedia of Political Economy * 
recently published by this school, we examine the definitions of fundamental notions, 
or the explanation of prices, or the theory of distribution, we meet, indeed, with some 
interesting variations on the old doctrines, but we find everywhere the old economic 
motives assumed and the old method unhesitatingly applied. The proof of the 
pudding, as the oe says, is in the eating ; but our historical friends make no 
attempt to set before us the new economic pudding which their large phrases 
seemed to promise. It is only the old pudding with a little more ethical sauce and 
a little more garnish of historical illustrations. 
In saying this I should be sorry to seem to underrate the debt that economic 
science owes tu the labours of the school now dominant in Germany. Much of the 
positive work that they have produced is in its way excellent; even their criticism 
of the older method has been, in my opinion, most useful; and if I complain that 
they have by no means done what they announced, with some flourish of trumpets, 
1 See two papers on ‘ Die gegenwartige Aufgabe der Wissenschaft der politischen 
Oekonomie,’ in the first volume (1863) of Hildebrand’s Jahrbuch fiir National- 
Ochonomie u. Statistik, p. 5ff. and p. 137ff.: especially his criticism of J. S. Mill 
(p. 23), quoted with approval by Schonberg in the introduction to his Handbuch. 
? See his Politische Ochkonomie vom geschichtlichen Standpunkte, iii. § 3. 
* See his Geld und Credit—in particular, Credit, pt. ii. ch. xii. § 2. 
4 See Schonberg’s Handbuch, iv. v. and xi, 
