470 REPORT— 1889. 



sets himself to show that the accounts of them can be so arranged and 

 stated as to afford illustrations of Ricardo's law of rent.' This intellec- 

 tual exercise can be best paralleled from the works of Alexandrian 

 writers in the ' theological stage,' who ignored the Old Testament as a 

 record of actual life, but forced it to yield illustrations of imiversal and 

 spiritual truths. ^ The accurate description of early economic organisms 

 is necessary that we may understand the development of modern forms, 

 and the nature of survivals in modern times ; economic history is not 

 merely to be treated as a field from which we can cull additional illustra- 

 tions of universal truths — if we want them ; bat the study may enable 

 us to understand actual life both in the past and the present. So long 

 as economists are prepared to exclude a large range of phenomena from 

 consideration, or take pains to represent the transactions of mediaeval 

 life in such a shape that they shall appear conformable to modern prac- 

 tice, they may expect to be charged with a ' disregard for facts.' ^ 



2. The explanation of observed facts must be a matter of great diffi- 

 culty ; they never speak for themselves. We must interpret them, and 

 the economic facts of the past can only be interiireted in the light of the 

 moral and intellectual conditions of life in the past, not by the mere 

 intuitions of an intelligence formed by a nineteenth-century education. 

 The more the contradictions and inconsistencies of various writers of the 

 historical school are exposed,'' the raore will they be forced to pay atten- 

 tion to method, and to lay down a sound method of procedure, which will 

 approve itself by yielding similar results in the hands of all investigators, 

 and not leave us to trust to the personal intelligence of each. 



But for the exj^lanation of facts in modern times we do possess such 

 a method ; the process of explaining the facts of modern economic life 

 can be carried farther by the use of an hypothesis. In our complicated 

 society we are able to isolate certain phenomena artificially so as to 

 examine the causes which are at work. With this view we may assume 



' Present Posdtion, 49. As I was sorry to learn that Professor Marshall considered 

 himself aggrieved by the criticism contaiued in this sentence, I offered to introduce 

 any disclaimer he might send. 1 gladly append what he has forwarded me. 



Professor Marshall asks me to say that the references which I have made to him 

 imply that he takes a position with regard to the iiistorical school of economists 

 different from that which he does take, and that he considers tlie most important re- 

 marks he made about them in the Present Positwn of Economies were in the fol- 

 lowing passage (p. 39) : — ' It would be difficult to overrate the importance of the 

 work that has been done by the great leaders of this school in tracing the history of 

 economic habits and institutions. It is one of the chief achievements of our 

 age, and is an addition of the highest value to the wealth of the world. It has 

 done more than anything else to broaden our ideas, to increase our knowledge of our- 

 selves, and to help us to understand the central plan, as it were, of the Divine 

 Government of the world.' He desires me to add that, ' in his opinion, Medireval and 

 Indian land tenure systems are of great interest from many points of view, and that 

 the study of the relations in which they stand to the Ricardian theory is an essential 

 part, but only a small part of the duty of the cconomiist in regard to them.' The last 

 sentence gives a little fresh light on Professor Jlarshall's view. His lecture had 

 spoken disparagingly of members of the historic school, and was silent as to any part 

 they might take in the prospective advance of the study ; while the sentences which 

 express enthusiastic admiration for what the ' great leaders ' have done, do not 

 really mitigate the severity of the judgment on the rank and file of the school. I 

 trust that the explanation now given maj' correct any misapprehension which has 

 gone abroad. 



^ Compare the yvucris rpiSiv ypafxfidrwv in JSj>. Parnahas, ix. 



^ Economic Interpretation, vi. 



•* Marshall, Present Position, 39-47. 



