TRANSACTIONS OF SECTION F. 731 



tensely patriotic.^ The intercourse has come about, but it has not drawn nations 

 more closely together as nations: it has drawn the elements which composed 

 separate nations into new relationships so as to form cosmopolitan ties and inter- 

 ests, and to break down national barriers and weaken national sentiments. Neither 

 the political economy of Adam Smith nor the political economy of Richard Cob- 

 den took much account of the cosmopolitan character of economic life ; it has 

 sprung up since their time, but I think that we ought to take account of it, and to 

 make sure that the fundamental conceptions of our science are appropriate to the 

 industrial and commercial phenomena of the present day. We need to think 

 more of the world as a whole ; for the practical economic interests of the present 

 are no longer so exclusively national as they used to be. The nation will doubtless 

 continue to have great importance for many economic purposes, just as imder the 

 nationalist regime municipalities have been useful organisations, which have at 

 present an increasing importance. But the reality of the change is most obvious 

 when werpmember the diminished importance of national prosperity with refei-ence 

 to the sources of taxation. In days when national prosperity was the recognised 

 basis of national power. Parliament desired to increase the ' funds ' from which it could 

 draw for the expenses of the realm. For this purpose the limits of the nation have 

 ceased to be of exclusive importance. Capital flows into all lands, and the income 

 returns to London, and the Income Tax Commissioners collect their quota with 

 remorseless impartiality. English capital invested in the United States pays in- 

 come tax in just the same way as capital invested here; the maintenance of the 

 national revenue is, to some extent, dissociated from the development of our own 

 national resources or the material prosperity of our own realm ; this is a curious 

 phenomenon of modern life which was first clearly brought out, as I believe, by 

 Sir Charles Wood in his Budget speech^ of 1847. The decreasing importance of 

 national prosperity for political purposes presents an analogy with the decline of 

 municipal economy. In old days the townsmen had been bound together by their 

 obligations to contribute to the royal exchequer ; it was this that united the 

 municipalities into a single body for economic purposes ; their decline coincided 

 with the development of a national system of taxation, which in turn called forth 

 a system of fostering the national sources of wealth. There was a great advance 

 in economic doctrine in the fourteentli century when it was losing its old form 

 and men began to deal with national and not merely with civic interests, and it 

 seems to me that we might do well to let national wealth take a subordinate place 

 in our economic discussions, and to frame our inquiries with direct reference to the 

 bearing of economic changes on the world as a whole. 



{b) At all events the assumption in regard to individual human nature, which 

 is explicitly or implicitly made in current economic treatises, requires to be recon- 

 sidered. The isolated individual, who acts out of self-interest, still holds a promi- 

 nent place in economics, implicitly at least ; for we still hear about the measurement 

 of motives which act on the individual will as if they were the sole object of 

 scientific economic study, not merely a single though an important factor. Motives 

 which affect the collective will of an association act in a different plane and can- 

 not be easily co-ordinated with the others ; the individual self-interest of the work- 

 man and the collective interest of the trade-union to which he belongs often 

 conflict, and most economists have found it convenient to leave these associated 

 and corporate movements in the background and to justify themselves for concen- 

 trating attention on individualist motives by the assertion that ' now, as ever, the 

 main body of movement depends on the deep, silent, strong stream of the tendencies 

 of normal distribution and exchange.' It is, of course, the simplest assumption 

 to make, and for short periods in recent times it may be sufficiently satisfactory ; 

 but there is a danger of falling into grave error if we rely on this assumption 

 for simplicity's sake and take individual earnings to gauge the labourer's standard 

 of comfort in different centuries of English history.^ It is not difficidt to general- 

 ise from the past so as to make it appear that this mode of treatment, by isolating 

 the individual, is less inappropriate now than it has been in some earlier ages ; 



' Political Writiriffs, p. 144. ' Hannard, xc, 318, 320. 



' Rogers, Agriculture and Prio'-i, V., 018. 



