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SCIENCE. 



[N. S. Vol. XXIV. No. 609. 



hand, to release ourselves from the cheap 

 empiricism of the historical school, who 

 interpret their task as merely one of gen- 

 eralizing phenomena without analyzing 

 them. In the words of the great philos- 

 opher, Hume, ' Our speculations can scarce 

 ever be too fine, provided they be just. ' 



Science is one. The logic for economic 

 science should be the logic for all science 

 —a combination of induction and deduc- 

 tion. Facts are at once the test and the 

 material of science, but laws are its ulti- 

 mate goal. Laws are not facts, but the 

 relations between facts. Newton's first 

 law of motion, that a body tends to move 

 uniformly in a straight line, is not a fact, 

 nor is it a general expression of facts. 

 Probably no particle in the universe has 

 ever moved exactly in a straight line or 

 with uniform velocity for so much as a 

 single second. Yet it would be an error to 

 conclude that Newton's law is unreal and 

 untrue in actual nature. The law has an 

 'if in it— 'if a body were acted on by no 

 force, or by perfectly balanced forces, its 

 motion would be uniform in both rate and 

 direction.' Withdrawn thus from actual 

 events, Newton's law seems to the non- 

 scientific mind to lose all objective truth. 

 This again is an error. Newton's law is 

 absolutely true to nature. The fact that 

 it is conditional does not make it arbitrary. 

 We are not free to replace it by the me- 

 dieval opinion, viz., 'If a body is let alone 

 it will gradually spend its force and 

 slacken its speed.' This formulation, un- 

 like Newton 's law, would not stand the test 

 of facts. A valid law is true at all times 

 and places, in the sense that should the 

 particular conditions arise, the prescribed 

 result would follow, but not in the sense 

 that the particular conditions must needs 

 ever arise. 



When the relations between scientific 

 and historical truth are more fully real- 

 ized, we may expect economic studies to 



make more rapid strides than have hitherto 

 been possible. We shall recognize the two- 

 fold nature of most practical economic 

 problems, such as the present problems of 

 trades-unions, insurance, railroad rate 

 regulation and the tariff. These problems 

 require first of all the study of historical 

 facts, and secondly, the discovery of the 

 relations to which these facts conform. 

 When these two studies are complete we 

 are prepared to take a third and final step, 

 prediction. It is sometimes said that the 

 ability to predict is the final test of science. 

 But it is not a test of science only. Suc- 

 cessful prediction requires two conditions: 

 one is a knowledge of science— of what will 

 happen under given circumstances ; and the 

 other, equally essential, is a knowledge of 

 history— of the particular circumstances of 

 the present moment, out of which the fu- 

 ture, to be predicted, will grow. Failures 

 of prediction are due to the lack of either 

 of these two essential conditions. 



An example of a failure of prediction 

 due to imperfect knowledge of facts is 

 found in the case of the closure of the 

 Indian mints to silver in 1893. It was ex- 

 pected that the value of the silver rupee 

 would be maintained at 16 pence. But no 

 account was taken of the large coined 

 hoards of silver among the natives. After 

 these had been put into circulation the 

 price of the rupee did eventually rise to 16 

 pence and has remained there ever since. 

 In this case the failure of prediction at 

 first was due, not to any defect in monetary 

 science, but to ignorance of Indian history. 



Usually, however, failures in economic 

 prediction are due to the lack of scientific 

 rather than of historical knowledge. In 

 the civil war, when there was a premium 

 on gold, the scientific explanation of which 

 was really simple, the public attributed the 

 premium to the machinations of specula- 

 tors. Accordingly, Congress was induced 

 to close the Gold Exchange, whereupon. 



