688 . REPORT— 1902. 



Section F.— ECONOMIC SCIENCE AND STATISTICS, 

 President of the Section — Edwin Cannan, M.A., LL.D. 



THUBSDAY, SEPTEMBER 11. 



The President delivered the following Address : — 



If it happened every year that the President of this Section undertook to justify 

 his own existence, I am afraid the Section would become weary. But my four 

 distinguished predecessors have all been drawn from the Civil Service, and though 

 each of us may have doubts about particular branches of the Civil Service, we are 

 mostly willing to allow that as a whole it is at least a necessary evil, so that we 

 do not get apologies from the Presidents who, so to speak, represent the practice 

 of political economy. I hope, therefore, that you will bear with me if I offer 

 some reasons for thinking that the teaching and study of the theory of economics 

 is not, as many people seem to suppose, a wholly unnecessary evil, but, on the 

 contrary, a thing of very great practical utility. 



I do not mean to argue that a knowledge of economic theory will enable a 

 man to conduct his private business with success. Doubtless many of the par- 

 ticular subjects of study which come under the head of economics are useful in the 

 conduct of business, but I doubt if economic theory itself is. It does not indeed 

 in any way disable a man from successful conduct of business ; I have never met a 

 competent economist who was in a position of pecuniary embarrassment, and many 

 good economists have died wealthy. But economic theory does not tell a man the 

 exact moment to leave off the production of one thing and begin that of another ; 

 it does not tell him the precise moment when prices have reached the bottom or 

 the top. It is, perhaps, rather likely to make him expect the inevitable to arrive 

 far sooner than it actually does, and to make him underrate, not the foresight, but 

 the want of foresight of the rest of the world. 



The practical usefulness of economic theory is not in private business but in 

 politics, and I for one regret the disappearance of the old-name ' political economy,' 

 in -which that truth was recognised. 



One of the commonest complaints of the time is that there is no text-book of 

 economics which commands any really wide approval, and you may therefore, I 

 think, fairly ask me to explain what I mean by the teaching and study of economic 

 theory before I undertake to prove its practical usefulness in the discussion of 

 legislative and administrative measures. I will therefore endeavour to sketch as 

 shortly as possible the course of instruction which the modern teacher of economic 

 theory, if unhampered by too close adherence to traditional standards, puts before 

 those who come to him for instruction. 



The first, or almost the first, thmg he will do is to try to open the eyes of his 

 pupils to the wonderful way in which the people of the whole civilised world now 

 co-operate in the production of wealth. He may perhaps read them Adam 

 Smith's famous description of the making of the labourer's coat, a description which 



