Oeneralization and Economic S cmdctrds 7 



Notwithstanding the apparently extreme limit to which Mill 

 carries the method of regarding society as a unit, the Histori- 

 cal School accused the Orthodox School of insufficient personi- 

 fication. The latter were said to vibrate from extreme individ- 

 ualism to vague cosmopolitanism. The nation was said to be 

 the economic unit, and its welfare was to be studied, rather 

 than that of an indeterminable society. 



The Austrian School again reacted to the orthodox idea of 

 economics as a category of society. A philosophy of consump- 

 tion can no more be limited by the narrow frontiers of the 

 nation than can a philosophy of production. Capital is a con- 

 geries of intermediate instruments of production, set in mo- 

 tion in response to social wants. Products of foreign invest- 

 ment brought within a nation from abroad are like accessions 

 from the moon; they are not accounted for in a mere national 

 economy. They belong to the legal category exclusively; 

 they are merely so many debts paid off. The economic cate- 

 gory can, therefore, only be satisfied by an economic theory of 

 society as a whole. 



In the United States, the economic philosophy of Professor 

 Simon N. Patten has divorced itself as far as possible from the 

 necessity of reasoning from the individual up to the social con- 

 cept, but begins with the latter, and boldly declares that cost 

 is a sum that may be treated as an economic uuit.^ 



Enough has been said, it is hoped, to convince the reader 

 that whatever changes may have taken place in theories of 

 production and distribution, and whatever differences of opin- 

 ion may have existed among students of economics (differ- 

 ences that have usually marked advance rather than dis- 

 sension), the concept of social interests as a single whole has 

 invariably been one of the most useful instruments in the dis- 



" Cost is the pain of production, while surplus is the excess of satisfaction obtained 

 by Rocief.v in the consumption of economic poods above the cost of producing them. 

 I?olh cost and 8ur])lus are snlijective quantities. They are sums to which we can add or 

 from which we can subtract." — 2he Theory ol Dynamic Economics, p. 91. 



169 



