necessarily ambiguous, and the condemnation has no value until the ambiguity has been removed. Laws of political economy, in the popular sense of the term, vary in force from the laws of nature to the opinions of dead men. § 5. The Methods of Political Economy. The methods of political economy are closely connected with the view taken of the subject-matter, and as the result of a prolonged controversy between rival schools, it may now happily be taken for granted that we ought to adopt different methods according to the particular problem, or department, under discussion. Speaking broadly these methods may be divided into two great groups, different names being employed according to the stress laid on certain special characteristics. The most general opposition is implied in the terms deductive and inductive. In the deductive method we start with certain general principles either axiomatic, or derived from other sciences; we deduce, or draw out, particular laws; and, in order not to be left in the land of hypotheses, we add the process of verification with the view to the discovery of any disturbing causes. The great advantage of this method is found in the complexity of social phenomena, and in the difficulty of making experiments. A good example is furnished by the theory of money and prices. It would be manifestly hopeless to begin with a collection of tables of prices - the greater the accumulation the greater would be the confusion. Before we can arrange the facts we must have certain guiding principles. We may assume, for example, that given certain conditions, and certain modes of dealing with money and goods, the range of prices will vary with the quantity of standard money. With this as a provisional hypothesis, we may refer to the broad facts of monetary history, and thus be led to discover a number of supplementary, counteracting, or disturbing causes. It may happen, indeed, that some of these causes are of greater importance than the original principle; but the fact still remains that a working hypothesis of some kind is re quired. The great danger of the deductive method lies in the natural aversion to the labour of verification. When a principle appears to be obviously true the exponent is apt to consider that one illustration is sufficient, the illustration itself often being hypothetical. Another danger is that sufficient attention may not be given to the selection of principles, and that especially with the aid of mathematics these principles may be elaborated beyond the possibility of practical application. At the same time, however, it must be remembered that in all the deductive sciences advances have been often made without reference to narrow views of utility, and yet in the end these advances have been of great practical value. Political economy is certainly indebted to some of the labours of mathematicians which for a time were neglected as curious and visionary.1 In the inductive method we are supposed to start with particular facts and ascend to general principles. Here the danger is that the facts are accumulated without any rational system of classification, and that we never get beyond a collection of materials. Hitherto, however, it must be confessed that in political economy this danger has not received any conspicuous illustration, and in most cases when induction has been attempted the result has been of theoretical, as well as of practical, importance. This is especially true of those forms of induction usually styled historical and comparative. Even the Annals of Commerce of Anderson and Macpherson, although the method of arrangement is merely chronological, have borne good fruit, and the works of Thorold Rogers, although his guiding principles were too often taken from an extreme form of current politics, are of the highest value. The attention which has been recently bestowed upon economic history, as will be shown by numerous examples in the course of this work, has led to important modifications 1 See the interesting and pathetic preface to Cournot's Revue Sommaire. of previously accepted theories. It must be observed, however, that the field of economic history is far too wide to be included in a survey of principles. An attempt to introduce at every point the corresponding history, even of one country, could only lead to confusion. In conclusion1 the reader may be warned that in the study of political economy he will meet with difficulties of various kinds. The analysis of complex conceptions, the definition of terms, and the statement of abstract principles, will demand at one time the kind of intellectual strain that is required in mathematics or analytical jurisprudence, whilst at another time it will be necessary to consider and balance a reasoned classification of a number of details drawn from history and statistics. 1 Compare for more elaborate treatment of the whole subject of this chapter, Scope and Method of Political Economy, by Dr. Keynes. |