April 23, 1886.] 



SCIENCE. 



381 



permeated with the narrow political philosophy of 

 the time. But the labor question proved the rock 

 on which the old school split. They lost supporter 

 after supporter who saw the hollowness of the 

 arguments, the inadequacy of the results. The 

 professors and journals, in their very exaggeration 

 of such opinions, began to be discredited. The 

 science itself was fast losing its hold on thinking 

 men, who were not satisfied with mere abstrac- 

 tions and what seemed to them practical obstruc- 

 tions to progress. The laborers looked upon 

 economics as a science necessarily hostile to them- 

 selves ; and this, too, notwithstanding the eloquent 

 pleas of Bastiat, who attempted to prove that all 

 interests are harmonious by natural law, and that 

 it would be the height of folly to interfere with 

 this beneficent progress. The economists were 

 optimistic : the laymen grew pessimistic. 



7. The first isolated mutterings of discontent 

 came from France. Simonde de Sismondi already, 

 in 1819, accused the orthodox school of "forget- 

 ting the men for the things ; of sacrificing the end 

 to the means;" of producing a beautiful logic, 

 but a total forgetfulness of man and human na- 

 ture. The positive side of Sismondi's arguments 

 was, however, far less strong than the critical 

 portion ; and his protests, hence, fell on careless 

 ears, although he led a small band of enthusiastic 

 followers. Friedrich List, again, with his theory 

 of nationality and of productive forces, did a good 

 work in calling attention to the historic, relative 

 element in all economic progress, but vitiated the 

 effect of his ' national system ' by turning it into 

 an exaggerated plea for protection. The socialists, 

 such as Weitling, Mario, and Proudhon, uttered 

 energetic and effective protests against the pre- 

 vailing systems ; and even in England able men 

 like Thompson and Jones wrote large works to 

 countervail the exaggerations of the orthodox 

 school. But the new ideas first obtained a truly 

 scientific basis about thirty-five years ago, when 

 three young German economists — Roscher, Knies, 

 and Hildebrand — proclaimed the necessity of 

 treating economics from the historical stand-point. 

 They initiated the new movement whose leading 

 principles' may be thus formulated : 1. It discards 

 the exclusive use of the deductive method, and 

 intonates the necessity of historical and statistical 

 treatment. 2. It denies the existence of immuta- 

 ble natural laws in economics, calling attention to 

 the interdependence of theories and institutions, 

 and showing that different epochs or countries 

 require different systems. 3. It disclaims belief 

 in the beneficence of the absolute laissez-faire 

 system ; it maintains the close interrelation of 

 law, ethics, and economics; and it refuses to 

 acknowledge the adequacy of a scientific explana 



tion, based on the assumption of self-interest as 

 the sole regulator of economic action. 



An entirely new impulse was thus given to sci- 

 entific research. 'Freed from the yoke of a method 

 which had now become sterile, the new school, 

 devoid of all prepossessions, devoted itself to the 

 task of grappling with the problems which the 

 age had brought with it. The amount of actual 

 knowledge, historical and theoretical, imparted by 

 Schmoller, Held, Brentano, Wagner, and the host 

 of younger economists, cannot be underestimated 

 or neglected by any student. In Italy the entirely 

 new spirit infused into economics is attested by a 

 number of able writers ; and even England has 

 not lagged behind in the work. With Fawcett 

 and Bagehot the last important representatives of 

 the old school practically disappeared ; Mill himself 

 had gone through an evolution, and was sincere 

 enough to express his disbelief in the old economy, 

 and to a certain extent in his own book ; while 

 Leslie, Toy n bee, and our contemporaries, Marshall, 

 Ingram, and Cunningham, are thoroughly imbued 

 with the new ideas. 



What, then, has this historical resume estab- 

 lished ? It has proved, in the first place, the rela- 

 tivity of economic doctrines. To maintain that 

 all previous generations and countries have erred, 

 and that we alone possess the truth, is an egotistic 

 assumption, based, moreover, on the untenable 

 hypothesis of the identity of human nature and 

 the similarity of outward conditions. Our eco- 

 nomic system is not necessarily the only true one : 

 there will be and have been as many systems as 

 correspond with the current conceptions and insti- 

 tutions. Many of our economic ideas are based 

 on the postulate of absolute right of property, or 

 on the supposition of the necessary division of 

 producers into employers and employees. And yet 

 we know to-day that private property is not an 

 absolute natural right, but that it is, on the con- 

 trary, a comparatively recent conception, an insti- 

 tution justifiable only on the grounds of expedi- 

 ency, and whose extent may be limited again by 

 these same considerations of expediency; it is a 

 question, not of right, but of arrangements which 

 will inure to the greatest possible social prosperity. 

 Again : the distinction between employer and em- 

 ployee is not a necessary one, inherent in the 

 nature of things : the very basis of the mediaeval 

 guild system, in so far as it had a distinctive 

 characteristic, was the identity of employer and 

 employee, the amalgamation of capitalist and 

 laborer in the same individual. How, then, can 

 we speak of the unchangeable laws, good for 

 all times and all climes? In antiquity we have 

 seen an economic system based on the complex 

 household and the undoubted omnipotence of 



