1902 Encyclopedia > Political Economy (Economics) > Political Economy - Conclusion

Political Economy
(Part 17)


Let us briefly consider in conclusion, by the light of the preceding historical survey, what appear to be the steps in the direction of a renovation of economic science which are now at once practicable and urgent.

I. economic investigation has hitherto fallen for the most part into the hands of lawyers and men of letters, not into those of genuinely scientific class. Nor have its cultivators in general had that sound preparation in the sciences of inorganic and vital nature which is necessary whether as supplying bases of doctrine or as furnishing lessons of method. Their education has usually been of a metaphysical kind. Hence political economy has retained much of the form and spirit which belonged to it in the 17th and 18th centuries, instead of advancing with the times, and assuming a truly positive character. It is homogenous with the school logic, with the abstract unhistorical jurisprudence, with the a priori ethics and politics, and other similar antiquated systems of thought; and it will be found that those who insist most strongly on the maintenance of its traditional character have derived their habitual mental pabulum from those regions of obsolete speculation. We can thus understand the attitude of true men of science towards this branch of study, which they regard with ill-disguised contempt, and to whose professors they either refuse or very reluctantly concede a place in their brotherhood.

The radical vice of this unscientific character of political economy seems to lie in the too individual and subjective aspect under which it has been treated. Wealth having been conceived as what satisfies desires, the definitely determinable qualities possessed by some objects of supplying physical energy, and improving the physiological constitution, are left out of account. Everything is gauged by the standard of subjective notions and desires. All desires are viewed as equally legitimate, and all that satisfies our desires as equally wealth. Value being regarded as the result of a purely mental appreciation, the social value of things in the sense of their objective utility, which is often scientifically measurable, is passed over, and ratio of exchange is exclusively considered. The truth is, that at the bottom of all economic investigation must lie the idea of the destination of wealth for the maintenance and evolution of a society. And, if we overlook this, our economic will become a play of logic or a manual for the market, rather than a contribution to social science; whilst wearing an air of completeness, it will be in truth one-sided and superficial. Economic science is something far larger than the catallactics to which some have wished to reduce it. A special merit of the physiocrats seems to have lain in their vague perception of the close relation of their study to that of external nature; and, so far, we must recur to their point of view, basing our economics on physics and biology as developed in out own time. Further, the science must be cleared of all the theologico-metaphysical elements or tendencies which still encumber and deform it. Teleology and optimism on the one hand, and the jargon of "natural liberty" and "indefeasible rights" on the other, must be finally abandoned.

Nor can we assume as universal premises, from which economic truths can be deductively derived, the convenient formulas which have been habitually employed, such as that all men desire wealth and dislike exertion. These vague propositions, which profess to anticipate and supersede social experience, and which necessarily introduce the absolute where relatively should reign, must be laid aside. The laws of wealth (to reverse a phrase of Buckle’s) must be inferred from the facts of wealth, not from the postulate of human selfishness. We must bend ourselves to a serious direct study of the way in which society has actually addressed itself and now addresses itself to its own conservation and evolution through the supply of its material wants. What organs it has developed for those purpose, how they operate, how they are affected by the medium in which they act and by the co-existent organs directed to other ends, how in their turn they react on those latter, how they and their functions are progressively modified in process of time—these problems, whether statical or dynamical, are all questions of facts, as capable of being studied through observation and history as the nature and progress of human language or religion, or any other group of social phenomena. Such study will of course require a continued "reflective analysis" of the results of observation; and, whilst eliminating all premature assumptions, we shall use ascertained truths respecting human nature as guides in the inquiry and aids towards the interpretation of facts. And the employment of deliberately instituted hypotheses will be legitimate, but only as an occasional logical artifice.

II. Economics must be constantly regarded as forming only one department of the larger science of sociology, in vital connexion with its other departments, and with the moral synthesis which is the crown of the whole intellectual system. We have already sufficiently explained the philosophical grounds for the conclusion that the economic phenomena of society cannot be isolated, except provisionally, from the rest,—that, in fact, all the primary social elements should be habitually regarded with respect to their mutual dependence and reciprocal actions. Especially must we keep in view the high moral issued ton which the economic movement is subservient, and in the absence of which it could never in any great degree attract the interest or fix the attention either in the absence of which it could never in any great degree attract the interest or fix the attention either of eminent thinkers or of right-minded men. The individual point of view will have to be subordinated to the social; each agent will have to be regarded as an organ of the society to which he belongs and of the larger society of the race. The consideration of interests, as George Eliot has well said, must give place to that of functions. The old doctrine of right, which lay at the basis of the system of "natural liberty," has done its temporary work; a doctrine of duty will have to be substituted, fixing on positive grounds the nature of the social co-operation of each class and each member of the community, and the rules which must regulate its just and beneficial exercise.

Turning now from the question of the theoretic constitution of economics, and viewing the science with respect to its influence on public policy, we need not at the present day waste words in repudiating the idea that "non-government" in the economic sphere is the normal order of things. The laissez faire doctrine, coming down to us from the system of natural liberty, was long the great watchword of economic orthodoxy, and it had a special acceptance and persistence in England, in consequence of the political struggle for the repeal of the corn laws, which made economic discussion in this country turn most altogether on free trade—a state of things which was continued by the effort to procure a modification of the protective policy of foreign nations. But it has now for some time lost the sacrosanct character with which it was formerly invested. This is a result not so much of scientific thought as of the pressure of practical needs—a cause which has modified the successive forms of economic opinion more than theorists are willing to acknowledge. Social exigencies will force the hands of statesman, whatever their attachment to abstract formulas; and politicians have practically turned their backs on laissez faire. The state has with excellent effect proceeded a considerable way in the direction of controlling, for ends of social equity or public utility, the operations of individual interest. The economists themselves have for the most part been converted on the question; amongst theorists Mr Herbert Spencer finds himself almost a vox clamantis in deserto in protesting against what he calls the "new slavery" of Governmental interference. He will protest in vain, so far as he seeks to rehabilitate the old absolute doctrine of the economic passivity of the state. But it is certainly possible that even by virtue of the force of the reaction against that doctrine there may be an excessive or precipitate tendency in the opposite direction. With the course of production or exchange considered in itself there will probably be in England little disposition to meddle. But the dangers and inconveniences which arise from the unsettled conditions of the world of labours will doubtless from time to time, as elsewhere, prompt to premature attempts at regulation. Apart, however, from the removal of evils which threaten the public peace, and from temporary palliations to ease off social pressure the right policy of the state in this sphere will for the present be one of abstention. It is indeed certain that industrial society will not permanently remain without a systematic organization. The mere conflict of private interests will never produce a well-ordered commonwealth of labour, Freiheit ist keine Lösung. Freedom is for society, as for the individual, the necessary condition precedent of the solution of practical problems, both as allowing natural forces to develop themselves and as exhibiting their spontaneous tendencies; but it is not in itself the solution. Whilst, however, an organization of the industrial world may with certainly be expected to arise in process of time, it would be a great error to attempt to improvise one. We are now in a period of transition. Our ruling powers have still an equivocal character; they are not in real harmony with industrial life, and are in all respects imperfectly imbued with the modern spirit. Besides, the conditions of the new order are not yet sufficiently understood. The institutions of the future must be founded on sentiments and habits, and these must be the slow growth of thought and experience. The solution, indeed, must be at all times largely a moral one; it is the spiritual rather than the temporal power that is the natural agency for redressing or mitigating most of the evils associated with industrial life.1 In fact, if there is a tendency—and we may admit that such a tendency is real or imminent—to push the state toward an extension of the normal limits of its action for the maintenance of social equity, this is doubtless in some measure due to the fact that the growing dissidence on religious questions in the most advanced communities has weakened the authority of the churches, and deprived their influence of social universality. What is now most urgent is not legislative interference on any large scale with the industrial relations, but the formation, in both the higher and lower regions of the industrial world, of profound convictions as to social duties, and some more effective mode than at present exists of diffusing, maintaining, and applying those convictions. This is a subject into which we cannot enter here. But it may at least be said that the only parties in contemporary public life which seem rightly to conceive or adequately to appreciate the necessities of the situation are those that aim, on the one hand, at the restoration of the old spiritual power, or, on the other, at the formation of a new one. And this leads to the conclusion that there is one sort of Governmental interference which the advocates of laissez faire have not always discountenanced, and which yet, more than any other, tends to prevent the gradual and peaceful development of a new industrial and social system,—namely, the interference with spiritual liberty by setting up official types of philosophical doctrine, and imposing restrictions on the expression and discussion of opinions.

It will be seen that our principal conclusion respecting economic action harmonizes with that relating to the theoretic study of economic phenomena. For, as we held that the latter could not be successfully pursued except as a duty subordinated branch of the wider science of sociology, so in practical human affairs we believe that no partial synthesis is possible, but that an economic reorganization of society implies a universal renovation, intellectual and moral non less than material. The industrial reformation for which western Europe groans and travails, and the advent of which is indicated by so many symptoms (though it will come only as the fruit of faithful and sustained effort), will be no isolated fact, but will form one part of an applied art of life, modifying our whole environment, affecting our whole culture, and regulating our whole conduct—in a word, consciously directing all our resources to the conservation and evolution of humanity.


FOOTNOTES (page 401)

(1) The neglect of this consideration, and the consequent undue exaltation of state action, which, though quite legitimate, is altogether insufficient, appears to us the principal danger to which the contemporary German school of economists is exposed.

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