844 BEPORT— 1893. 



•wonders, and traditions, as the mud of a river embeds what happens to fall in it. 

 The facts are the fossils of the historian, and he has to make a very few go a long- 

 way. In economic literature we have an example of this method in the ' Annals 

 of Commerce ' of Anderson and Macpherson. The simple device is to collect all the 

 facts and opinions about Commerce all the world over, and arrange them under 

 the year in which they happened. The basis of classification is time pure and 

 simple, and at the best we have an imperfect collection of materials which must 

 be sifted and weighed to be of any service. 



Now compare this method of simple accumulation — this attempt to write a 

 biography of Father Time as a man of business — with the historical method 

 adopted by Adam Smith ; at least two-thirds of the ' Wealth of Nations ' is history, 

 and it is history of the first rank, and it is so because it is history that is introduced 

 for the illustration, confirmation, or qualification, as ths case may be, of principles. It 

 does not follow because the principles are fundamental that the facts are warped 

 and distorted ; it simply means that the facts are made intelligible. Take, for 

 example, his account of the economic aspects of the feudal system. He brushes 

 away the technicalities and looks into the inner life as easily as William the Con- 

 queror f»t the Council of Salisbury. Or, to take a modern instance, he is like a 

 naturalist who puts aside the parts of the creature he does not want in order that 

 lie may see what he does want more clearly. This is a very difierent matter from 

 suppressing truth and warping facts to suit preconceived opinions. It is needless to 

 say that Adam Smith made some mistakes, e.(/., in the treatment of the mercantilists ; 

 it ought to be equally needless to say that he made some remarkable discoveries of 

 the processes of economic development. Adam Smith also made large use of the 

 comparative method ; he literally ranged from China to Peru in his survey of 

 mankind. AVhat is the underlying assumption in this procedure ? It is simply 

 that in economic affairs, in matters of buying and selling in the widest sense of the 

 terms, in satisfying wants by labour, in the accumulation of wealth, there are certain 

 characteristics of human nature that may be regarded as fundamental. These are 

 no doubt subject to modifications by other influences, but modification is not total 

 suppression or eradication. How long would it take tlie Ethiopian to change his 

 skin under a different climate? And is it not proverbial that human nature is 

 more than skin-deep ? I think the Ethiopian might become very pale in complexiori 

 long before he would learn to prefer low wages to high wages, and much labour to 

 little labour. Economists may learn something from the poets. Why do the 

 creations of the greatest poets live and move ? Why do we assent at once to their 

 reality? Simply because they are like ourselves, and we feel with Goethe that 

 we ourselves could commit the same crimes in debasement, and achieve the same 

 glory in exaltation, of spirit. The gods and goddesses, the sylphs and fairies, are 

 only shadows. Can any man read Shakespeare or Homer — to say nothing of un- 

 doubted historical records — and deny that a large part of human nature, especially 

 that part with whicli economists have to deal, is subject to but little variation"? 

 Knowledge grows and is handed on from age to age, and the power of man over 

 nature steadily increases, but the feelings are renewed with every generation. The 

 children of the nineteenth century may be precocious and priggish, but they are not 

 nineteen centuries old. Let me remind you, though I am anticipating my argument, 

 that the latest and most advanced scientitic economics — that which the Austrian 

 economists have evolved out of the conception of utility — in reality lays more 

 stress than Adam Smith did on the universality of the feelings of mankind. The only 

 difference is that he knew that he was speaking plain prose, and they sometimes 

 think they are only speaking subjective philosophy. In consequence, Adam Smith's 

 men and women are more real and less uniform than the offspring of the new 

 analysis. But the point of importance is the recognition of certain characteristics 

 of human nature as fundamental ; there is no other justification for the use of the 

 comparative and historical methods in the broad manner of Adam Smith. 



There are, however, still evidences in recent writers of the influence of that 

 narrow view of history which tries to avoid principles, in order to make an im- 

 pressionist record of facts. Impressionism may be good art, but it is bad science. Too 

 much stress, for example, is laid on the mere enumeration of statutes and preambles. 



