they met, were better equipped for offensive than for defensive warfare; and if the author of the Essay on Government had himself replied to his assailant, the conflict would probably have been bloody, but indecisive. But when Macaulay's article came out, the split between Bowring and the Mills had taken place, and the management of the Westminster had passed into the hands of Colonel Perronet Thompson, who accepted to the full Bowring's view of utilitarian ethics, and in fact regarded the coincidence of utilitarian duty with self-interest properly understood as Bentham's cardinal doctrine. Colonel Thompson was a writer of no mean talents, and if he had only had to defend his own view of the "greatest happiness principle" he might have come off with tolerable success. Unfortunately the conditions of the controversy rendered it incumbent on him to defend James Mill's at the same time; and against the compound doctrine that it is demonstrably the interest of kings and aristocracies to govern well, and yet demonstrably certain that they will never think so, Macaulay's rejoinder was delivered with irresistible force.

Macaulay's articles had other consequences, more important than that of exhibiting the ambiguities of the greatest happiness principle. His spirited criticism of the deductive politics of James Mill, though it was treated with contempt by its object, had a powerful effect on the more impartial and impressible mind of the younger Mill; and the new views of utilitarian method which were afterwards propounded in the latter's Logic of the Moral Sciences owe their origin in some measure to the diatribes of the Edinburgh. If space allowed, it would be interesting to trace the changes that Bentham's system underwent in the teaching of his most distinguished successor, under the combined influences of Comtian sociology, Associational psychology, and Neo-Baconian logic. But such an undertaking would carry us far beyond the limits of the present historical sketch, and right into the midmost heats of contemporary controversy.

1 Cf. J. S. Mill's Logic, B. vi. ch. vii. viii.; and his Autobiography, p. 158.

VII

THE SCOPE AND METHOD OF ECONOMIC

SCIENCE

AN ADDRESS DELIVERED ΤΟ THE ECONOMIC SCIENCE AND STATISTICS SECTION OF THE BRITISH ASSOCIATION AS PRESIDENT OF THE SECTION IN 1885.

I HAVE chosen for the subject of the discourse, which by custom has to be delivered from the chair that I am called upon to occupy, the scope and method of economic science, and its relation to other departments of what is vaguely called social science.' If the abstract and academic nature of the subject, together with my own deficiencies as an expositor, should render my remarks less interesting to the audience than they have a right to expect, I trust that they will give me what indulgence they can; but, above all, that they will not anticipate a corresponding remoteness from concrete fact in the discussions that are to follow. I see from the records of the Association that it has been the custom in this department and it seems to me a good custom-to give to the annual addresses of the presidents the variety that naturally results when each speaker in turn applies himself unreservedly to that aspect of our complex and many-sided inquiry which his special studies and opportunities have best qualified him to treat; and as my own connection with economic science has been in the way of studying, criticising, and developing theories, rather than collecting and systematising facts, I have thought that I should at any rate have a greater chance of making a useful contribution to our discussions if I allowed myself to

deal with the subject from the point of view that is most familiar to me.

I have the less scruple in adopting this course because I do not think that any who may listen to my remarks are likely to charge me with overrating the value of abstract reasoning on economic subjects, or regarding it as a substitute for an accurate and thorough investigation of facts instead of an indispensable instrument of such investigation. There is indeed a kind of political economy which flourishes in proud independence of facts; and undertakes to settle all practical problems of Governmental interference or private philanthropy by simple deduction from one or two general assumptions of which the chief is the assumption of the universally beneficent and harmonious operation of selfinterest well let alone. This kind of political economy is sometimes called 'orthodox,' though it has the characteristic unusual in orthodox doctrines of being repudiated by the majority of accredited teachers of the subject. But whether orthodox or not, I must be allowed to disclaim all connection with it; the more completely this survival of the à priori politics of the eighteenth century can be banished to the remotest available planet, the better it will be, in my opinion, for the progress of economic science. Since, however, this kind of political economy is still somewhat current in the market-place, since the language of newspapers and public speakers still keeps up the impression that the professor of political economy is continually laying down laws which practical people are continually violating, -it seems worth while to try to make clear the relation between the economic science which we are concerned to study and the principles of Governmental interference-or rather non-interference-which are thought to have been of late so persistently and in some cases so successfully outraged.

It must be admitted at once that there is considerable excuse for the popular misapprehension just mentioned; since for more than a century the general interest taken in the analysis of the phenomena of industry has been main1

due to the connection of this analysis with a political movement towards greater industrial freedom. No researches into the historical development of economic studies before Adam Smith can displace the great Scotchman from his position as the founder of modern political economy considered as an independent science, with a well-marked field of investigation and a definite and characteristic method of reasoning. And no doubt the element of Adam Smith's treatise which makes the most impression on the ordinary reader is his forcible advocacy of the "system of natural liberty"; his exposition of the natural "division of labour" -tending, if left alone, to become an international division of employments as the main cause of the "universal opulence" of "well-governed" societies; and of the manner in which, in this distribution of employments, individual capitalists seeking their own advantage are led "by an invisible hand" to "prefer that employment of their capital which is most advantageous to society."

At the same time Adam Smith was too cool and too shrewd an observer of facts to be carried, even by the force and persuasiveness of his own arguments, into a sweeping and unqualified assertion of the universality of the tendency that he describes. His advocacy of natural liberty in no way blinds him to the perpetual and complex opposition and conflict of economic interests involved in the unfettered efforts of individuals to get rich. He even goes the length

of saying that "the interest of the dealers in any particular branch of trade or manufacture is always in some respects different from, and even opposite to, that of the public." To take a particular case, he is decidedly of opinion that the natural liberty of bankers to issue notes may reasonably be restrained by the laws of the freest Governments. He is quite aware, again, that the absence of Governmental interference does not necessarily imply a state of free competition, since the self-interest of individuals may lead them, on the contrary, to restrict competition by "voluntary associations and agreements." He does not doubt that Governments, central or local, may find various ways of employing wealth

-of which elementary education is one of the most important-which will be even economically advantageous to society, though they could not be remuneratively undertaken by individual capitalists. In short, however fascinating the picture that Adam Smith presents to us of the continual and complex play of individual interests constituting and regulating the vast fabric of social industry, the summary conclusion drawn by some of his disciples that the social production of wealth will always be best promoted by leaving it altogether alone, that the only petition which industry should make to Government is the petition of Diogenes to Alexander that he would cease to stand between him and the sunshine, and that statesmen are therefore relieved from the necessity of examining carefully the grounds for industrial intervention in any particular case this comfortable and labour-saving conclusion finds no support in a fair survey of Adam Smith's reasonings, though it has been no doubt encouraged by some of his phrases. To attribute to him a dogmatic theory of the natural right of the individual to absolute industrial independence as some recent German writers are disposed to dois to construct the history of economic doctrines from one's inner consciousness.

It is true, as I have said, that among Adam Smith's disciples there were not a few who rushed to the sweeping generalisations that the master had avoided. In England, in particular, the influence of the more abstract and purely deductive method of Ricardo tended in this direction. It was natural, again, that in the heat of a political movement absolute and unqualified statements of principle should come into vogue, since the ease and simplicity with which they can be enunciated and apprehended makes them more effective instruments of popular agitation: hence it is not surprising to find the anti-corn-law petitions declaring the "inalienable right of every man freely to exchange the result of his labour for the productions of other people," to

1E.g. v. Scheel, in Schönberg's Handbuch der politischen Ockonomie, p. 89, speaks of "Die naturrechtliche Wirthschaftstheorie oder der Smithianismus."