TRANSACTIONS OF SECTION F. 729 



I know tliat they are not the only features of our time ; there is a revival of 

 national sentiment in many quarters, and national aspirations, if they are more 

 than the idlest sentimentality, involve a desire to create economic life that is 

 national too ; in many lands there are increasing attempts to protect native in- 

 dustry. The Nationalists of 1784 were enthusiasts for stimulating native industry 

 in Ireland, and for prohibiting the importation of British goods : and the prospects 

 of protection do not seem to daunt the advocates of Home Rule to-day. Nationalism 

 cannot but be a living power in an age which has seen the union of Italy and the 

 formation of the German Empire. I do not ignore these facts though I lay stress 

 on another side, and say that, so far as industrial life is concerned, it is, on the 

 whole, becoming more and more cosmopolitan and international, and less and 

 less fettered by national barriers all over the world. We in England have for 

 good or for evil committed ourselves to the cosmopolitan scheme, and have definitely 

 .and deliberately discarded the nationalist system. 



III. 



1. This striking change in economic life and commercial practice must, one 

 would suppose, be reflected sooner or later in economic doctrine. Of course it 

 cannot be felt all at once ; economists, like other men of science, can only observe 

 what has actually occurred and reflect upon it. The science grows as new forms 

 of industrial and commercial life appear, and demand that they shall be taken into 

 account. But we can at least see the manner in which modification must come 

 into the science as conceived by Mill; in accordance with these new phenomena we 

 shall have to entertain additional hypotheses about human nature and human 

 institutions. The whole science is, as everyone now seems to agree, hypothetical.* 

 The method which Ricardo pursued and Mill formulated has been generally adopted 

 by English economists, and they are ready to admit that all their results rest on 

 certain assumptions in regard to the physical world and human nature. But while 

 the facts of physical nature may on tlie whole be regarded as constant for the period 

 of human life on the globe, the historian knows that it is not so with the facts of 

 human nature; human institutions, and the characters which are formed by them 

 are modified from age to age ; if ive ivisk to study the economic condition of any 

 actual people at any time, we 7nmt xcork with conceptt07is that are appropriate to 

 their habits of life. To Mill it seemed sufficient to assume a single type of 

 human nature — one in which self-interest predominated ; and one kind of society — 

 where free competition was usual ; all other economic phenomena he dismissed as 

 unsusceptible of scientific treatment. But we do not alter the logical form or 

 change the scientific character of our study if, instead of framing a single hypothesis 

 in regard to human nature and society, and restricting our attention to such 

 phenomena as can be convenientlj' studied in connection with it, we are pre- 

 pared to investigate all economic phenomena by making such assumptions in 

 regard to men as are appropriate to the various ages with which we may have to 

 deal. Professor Edgeworth has rightly pointed out that economists often blunder 

 in treating something as constant that is really variable,^ and I should like to add 

 that the most common illustration of this error may be found in arguments which 

 seem to assume that human nature is a constant,' and that the variations, even in 

 long periods, may be neglected. Such is the discussion of the applicability of 

 Ricardo's law, vdth all it involves,* to rents, several centuries ago ; but perhaps 

 this is meant as a sort of scientific witticism ; it is not always easy to tell when 

 a Professor of the dismal science is making a joke. 



Pardon me if I dwell on this point with some iteration ; in all economic study 

 hypothesis is necessary ; it is only by stating some hypothesis that we can artificially 

 isolate a group of facts, and thua give a clear explanation of a portion of the com- 



' Keynes, Scope, 209, 293. 2 Mathematical Psychics, p. 127, note. 



' Marshall, Present Position, 15. 



* See my article, ' What did our Forefathers mean by Kent 1 ' Lipj'incoU' s Magazine, 

 Feb. 1890. 



