582 TRANSACTIONS OF SECTION F. 
serious workers in the economic field are absolutely at one in this respect. But 
since Henry Sidgwick’s eminently judicial review of the controversy in 1883; since 
the leading representatives of opposing schools in Germany, Wagner and Schmoller, 
have approached each other so nearly in their recognition of the equal validity of 
induction and deduction for ‘the tasks appropriate to each’; since the doyen of 
English economists, Professor Marshall, has come to use, with such hearty 
acquiescence, Schmoller’s metaphor of the two feet equally necessary in walking— 
sweeping assertions like those of John Mill and Cairnes sound antiquated to our 
ears. Let me interpose the remark that a method of observation and generalisa- 
tion—the method, in fact, of historical and statistical inquiry—is peculiarly 
appropriate to a kind of investigation which the older economists hardly con- 
templated, and that is into the structure of industrial organisation and institutions 
and the evolution of that structure. But for this process it is misleading to use 
the term ‘ induction,’ since ‘induction’ suggests a different sort of goal. And, on 
the other hand, it would seem as if less use were being made of ‘deduction’ in 
recent years by abstract economists themselves. Certaiuly, in the various marginal 
theories of distribution which have been pushing the simple Ricardian tenets into 
the background, it is not so easy to disentangle a deductive line of reasoning as it was, 
for instance, in the earlier doctrine of wages or profit. The fashionable modern 
term ‘analysis’ is elastic enough to cover several different kinds of mental opera- 
tion. ‘No one who knows the meaning of terms,’ we have lately been informed in 
a tone of authority, ‘ will call the analytical study of the motives which govern 
men in business a strictly deductive method.’ 
To return, however, to John Mill and the ‘ methodology’ of 1833. Perhaps 
the most curious fact about it, when one comes to reflect, is its totally unhistorical 
character. Cairnes says somewhere that ‘no economic or social truth meriting 
the name of scientific ever has been discovered’ by induction, But it may be 
said with equal positiveness and more accuracy that none of the fundamental 
doctrines of Ricardian economics were actually discovered by deductive or a priori 
reasoning. As Professor Hasbach has so usefully reminded us, they were all of 
them conclusions directly suggested to observers by the facts of life before them— 
observers some of them in past.centuries, some recent, like Anderson and West and 
Malthus. What the Ricardian group did was to work these ‘truths’ into a 
system and support them more or Jess by formal reasoning. Deduction became in 
taeir hands an effective pedagogical method, but it had not really been the instru- 
ment of ‘ discovery.’ 
Yet its unhistorical character only brings out more clearly the place of John 
Mill’s doctrine of method in the history of economic thought. Its appearance 
marks the passage of the Ricardian faith into its third stage—the stage of 
apologetics ; and apologetics, here as elsewhere, tended to mask and misrepre- 
sent the real character of the forces and influences which had actually given rise 
to the doctrine. Nevertheless for some decades it was sufficient for its pur- 
pose. When John Mill came to write his own great text-book in 1848 he ‘ spoke 
as one expounding an established system ;’ and established the system remained for 
at least twenty years longer. Fawcett’s book, which appeared in 1863, which ran 
through many editions and remained the text-book for passmen well into the 
‘eighties,’ was only a simplified Mill. During all this time orthodoxy was a very 
real thing, and the penalties of heresy were not always light. In the bitterness of 
his heart Jevons once declared in a private letter that ‘ the Mill faction never 
serupled at putting their lecturers and examiners wherever they could’ But 
‘faction’ is too harsh a word; it was the body of the Church. 
That the doctrine should remain so long in vogue in academic, civil service 
and journalistic circles, in spite of the assaults of Mr. Ruskin and in spite of the 
just anger of the working classes, is easily explained. It was due chiefly to the 
success, for the time, of the great Free Trade measure of 1846 ; a measure which, 
though dictated by the immediate interests of the manufacturers, was in complete 
accord with the then orthodox economics. English trade was increasing ‘ by 
leaps and bounds’; England was becoming the workshop of the world, and 
seemed likely so to remain, The doubts which even men like Malthus, not to 
