846 BEPOET— 1893. 



There is another direction in which I think the mathematical economists have 

 wandered far from reality. I allude to the stress laid upon what are called mar- 

 ginal increments. There is a tendency to magnify the eifects of the last portion 

 of supply or the last expression of demand. I will only say that this doctrine is 

 very apt to run into the fallacy which may he popularly described as the tail 

 of the dog fallacy — the idea heing that the tail wags the dog and the tip of the tail 

 wags the tail. 



To resume in a sentence : the method of the so-called orthodox English econo- 

 mists has only been modified and supplemented, not revolutionised and supplanted, 

 by the historical and mathematical methods of recent writers, and this, in my 

 opinion, is being recognised more and more. 



I pass on to consider a closely allied question — the question, namely, of the 

 limitation of the boundaries of the subject-matter of political economy. In my 

 view one of the greatest merits of the orthodox economists was the careful dis- 

 tinction they drew between economic and other social sciences. They refused to 

 merge it in the misty regions of general sociologj', and they excluded from its 

 borders the rocks and quicksands as well as the green pastures of ethics and reli- 

 gions. This specialisation, they ai-gued, was necessary if any real advance was to 

 be made beyond the expression of platitudes and sentiments. They allowed that 

 in practical social problems tliere were in general other considerations besides the 

 purely economic ; but these they left to the jurist, the moralist, or the politician. 

 For a time, however, especially under German influences, attempts were made to 

 break down these boundaries, and the economist was elevated to the position of 

 universal philanthropist and general provider of panaceas. Mill himself was 

 partly to blame for the excursions which he made into the applications of social 

 philosophy to practice. It is to these excursions we are indebted for the fantas- 

 tical notion of the unearned increment, and the curious idea that it is the duty 

 of people to leave the bulk of their money to the State, or rather the duty of the 

 State to take it. Fortunately, however, for the progress of economics, this ideal of 

 breadth without depth has not become dominant, and any force it had is already 

 spent. The advances made in other social or less vaguely human sciences have 

 been so great that the economist is obliged to exclude them from his domain. 



Still to some extent the view prevails, especially in Germany, that it is the 

 business of the economist to discover the general conditions of social well-being, 

 and to show how they may be realised. If such an attempt were seriously made 

 it could only end in the projection of the personality of the writer into an ideal, and 

 one ideal would succeed another like a set of dissolving views. Suppose, for example, 

 that I personally were to attempt to set up an ideal, and, not having imagination 

 enough to create a new one, I were to turn to ancient Greece. There is something 

 very fascinating about the life of the typical Athenian in the best days of Athens. 

 Physical beauty and vigour were considered as essential as keenness of intellect, 

 appreciation of the fine arts, and skill in oratory ; and this intense self-realisation 

 was tempered by ardent patriotism and a strong sense of tbe duties of citizenship. 

 The principal blot, from the modern point of view, was the institution of slavery 

 and the relegation of most industrial functions to slaves. I might as an economist, 

 if this breadth of view were justified, take it on myself to show how modern life 

 might be Hellenised, and by leaving out slavery and introducing a little Christian 

 charity a very pleasing ideal might be made, and then I might go on to show what 

 steps Government should take to realise this ideal. 



In the meantime, however, my friend Dr. Cunningham might take as his type 

 one of the equally fascinating religious communities of the Middle Ages, and, by 

 leaving out some of the superstitions and inserting a few Hegelian contradictions, 

 he might construct an equally attractive ideal and proceed to direct the statesmen 

 how it might be carried into practice. But when all the other economists had 

 worked out similar projects — Professor Sidgwick, for example, on the lines of 

 Bentham, and Professor Edgeworth, with his love of measurements, on the lines 

 of Pythagoras — the difficulty would arise, Who was to be the ultimate arbiter ? 

 And to this question no one would accept the answer of the rest. 



Perhaps it may seem that my illustration goes beyond the argument ; let me, 



