TKANSACTIONS OF SECTION F. 72o 



Cireat advances liave already been made in this direction. No cue can fail to 

 perceive the contrast between the bareness of the manuals of Senior and Fawcett 

 and — except in some particulars ' — of J. S. Mill's ' Principles ' as compared with the 

 more elaborate presentation of our best modern text-books, liefined analysis of 

 economic motives and critical discussion of abstract theoretical conceptions still 

 hold a very large place ; but the accurate exhibition of the growth of population 

 and of the forms of industrial organisation, the tracing in their natural order of 

 development of the ' village community,' the ' feudal system,' and of commercial 

 land tenure,- do much more to promote the effective progress of scientific economics 

 than the most brilliant efforts at deduction from unduly simplified premises. I 

 would specially insist on the fact that it is the social basis rather than the slighter 

 edifice of half-developed theory that gives life and power to our present work. 

 ^\'e are thus led to the conclusion that one important step in the further progress 

 of economics must be the fuller recognition of its dependence at the outset on, and 

 its close relation all through its inquiries with, general social science, but that this 

 reform does not need any extreme change in attitude — it rather involves the logical 

 carrying out of an already pronounced tendency. No department or section of 

 economics can escape this revision. Questions of value, money, credit, and foreign 

 trade — to take topics that are supposed to be particularly amenable to abstract 

 treatment — are more affected by social conditions than the theoretic economist will 

 formally admit. Only through study of these influences can the materials needed 

 for a correct theoretical solution be obtained, and due weight given to the several 

 elements involved. 



Another reform will be the natural, or rather necessary, consequence of that 

 already urged. As soon as we get thoroughly accustomed to contemplating 

 economic conditions in their actual forms as the special products of social life, it is 

 but a matter of course to notice the remarkable differences and equally remarkable 

 resemblances that different instances of the same economic institution or function 

 will present. The banking system — to take a familiar example — is not the same in 

 England as in France, while in the United States a third variety, or set of varieties, 

 is to be found. Even within the same country there is no absolute uniformity. 

 London banking differs from country banking, and Scotch banking, again, is distinct 

 from either. Differences in environment will supply a partial explanation. A new 

 country does not require and could not maintain the more complex arrangements 

 suited to an old centre of industry and commerce. But peculiarities of social structure 

 and even historical accidents count for much. We must go to history to find the origin 

 of the Bank of England and the system of which it is the foundation, a,nd to some 

 peculiarities of the American Constitution for an explanation of the failure of the 

 two attempts to permanently establish a similar institution in that country.* Now, 

 ■what is true of banking is equally true of the monetary organisation, the economic 

 features of the transport system — in a word, of every part of the economy of a 

 nation or people. The attempts of diflPerent schools of economists to deal with this 

 problem of variations must, I think, strike the unprejudiced observer as at best in- 

 adequate. Senior and McCulloch, representing very fairly the average economic 

 opinion of their day, admitted the existence of diversities, but escaped their con- 

 .sideration by placing them outside the ring fence that bounded pure economics, or 

 by regarding them as certain to disappear with the diffusion of sound views on the 



' Mill's treatment of the earlier and ruder forms of land tenure is much more 

 realistic and better ' nourished with specific facts ; ' but this departure, as he deemed 

 it, from scientific precision was partly due to his strong interest in the Irish land 

 question, and, as Whewell pointed out, is really an imitation of the method pursued 

 bj' R. Jones in his admirable but premature book on Rent (1832). 



- For population see the treatment by Marshall, Principles, Book IV., chaps, iv. 

 and v.; for industrial organisation, v J. chaps, -s-iii.-xii. ; for the village community 

 and feudalism, Nicholson, Principles, Book II., chaps, vi. and vii. ; and compare with 

 both the fuller treatment in the new edition of A. Wagner's Grundlagen dcr Volks- 

 n-irthschaft (1892-3). 



^ See the several articles on ' Banking ' in the new Dictionary of Political Ecoywmy ; 

 also C. F. Ferraris, Scien:a Bancaria. 



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