SC I EN C E "Supplement. 



FRIDAY, JULY 23, 1886. 



METHODS OF INVESTIGATION IN POLITI- 

 CAL ECONOMY. 



" During the last thirty years," says Sidgwick 

 in his ' Principles of political economy,' '' political 

 economy has risen from the state of controversy 

 on fundamental princijjles and method into that 

 of an apparently established science, and again 

 relapsed into the state of controversy." This 

 statement is borne out by an examination of the 

 literature of political economy during these years. 

 It is full of controversy. Not only do writers 

 fail to agree on practical economic questions, such 

 as free trade and j)rotection, mono- or bi-metallism , 

 direct or indirect taxation, but they quarrel over 

 the fundamental princij^les which are to be taken 

 as the basis for the solution of these problems. 

 We have the doctrine of laissez-faire on the one 

 side, and of social expediency on the other. To 

 some, economics is merely a science of wealth ; to 

 others, it is eminently social ; and to still others, 

 it is, in addition, ethical. Some stick to the 

 principle of self-interest as the only one worth 

 regarding ; others take into account all the 

 motives which influence economic action. Some 

 seek for principles which shall be strictly true of 

 an abstract * economic man,' and then push all 

 practical problems into an ' art ' of political econo- 

 my ; while others desire principles that can be 

 directly and usefully applied to existing human 

 society, taking into consideration time, place, and 

 cu'cumstance. 



It would be too much to say that this contro- 

 versy over principles is at all ended. The concep- 

 tion of pure laissez-faire has, indeed, lost its posi- 

 tion, and will probably never be reinstated ; but the 

 advocates of new and more liberal principles have 

 not been able to agree among themselves. Some 

 of them are nationalist, some socialist, some 

 ethical ; while they differ infinitely in the degree 

 to which they still cHng to the old ideas and the 

 old formulae. 



In regard to method as distinct from principles, 

 on the other hand, we are beginning to see some 

 light through the darkness. Men can acknowl- 

 edge a change in method without giving up the 

 validity of principles which they wish to main-, 

 tain. Here the triumph of the new over the old 

 has been complete ; or rather there has been a 

 vindication of the method of the master-minds 



over thoge disciples who by too close and dogmatic 

 imitation had obscured the work of the fathers. 

 Some of the keenest minds among students of 

 political economy have worked at this topic ; and 

 owing to the efl'orts of such men as Knies, 

 Wagner, Leslie, Jevons, and Ingram, we are 

 reaching a substantial unanimity on the question 

 of method. 



How important this change is, and how fruitful 

 of result it is going to be, will appear if we con- 

 sider for a moment the difference between the old 

 method and the new. Without going into the 

 finer questions, and without being too exact in our 

 definition, we may call the old method the deduc- 

 tive, and the new method the inductive. These 

 terms will cover the other designations, such as 

 ' a priori,'' 'abstract, 'philosophical,' sometimes 

 applied to the old method ; and similar terms, 

 such as 'realistic,' 'historical,' and 'practical,' 

 applied to the new. 



The old method is essentially deductive. It 

 finds certain premises which are true, and reasons 

 from these premises to the solution of specific 

 problems. These premises, as laid down by 

 Cairnes, the most brilliant expounder of this 

 view, and summarized by Cossa (' Guide to politi- 

 cal economy,' p. 38), are as follows : — 



" 1. In the economic order of things the principal motive 

 of human actions is individual self-interest. This induces 

 man (a) to avoid pain (fatigue, worlr) ; (&) to desire pleasure 

 (wealth) ; (c) hence to aim at obtaining the greatest amount 

 of wealth with the least amount of labor, or, in more gen- 

 eral terms, the greatest result with the least effort, which 

 is, as it is now expressed, the law of least resistance. 



"2. The earth, indispensable to man as a place in which 

 to live and work, and as the source whence he may extract 

 food and raw materials, is naturally limited (a) in the prod- 

 ucts which it contains ; (6) in its actual extent ; (c) in its 

 relative fertility (different qualities of soil) ; (d) in its suc- 

 cessive fertility (decreasing productiveness at a certain 

 point with every new application of capital and labor). 



" 3. The physical and psychological tendencies of man 

 lead him to multiply his own species with a rapidity which, 

 if it met with no obstacles, would bring about an unlimited 

 increase of population." 



,; From these premises are deduced the three 

 great theories of value, rent, and population ; and 

 by means of these theories concrete problems, 

 such as free trade and protection, are solved. 



It is not necessary here to describe how this 

 deductive method of political economy has been 

 overthrown. These assumed premises, although 

 containing an element of truth, were in themselves 

 incomplete and sometimes inapplicable. For in- 

 stance, it is a matter of experience that men are 

 actuated by other motives than self-interest, such 



