POLITICAL ECONOMY 397 the concrete. It is more apposite to remark that Bagehot s view of the reconciliation of the two methods is quite different from that of most " orthodox " economists. They commonly treat the historical method with a sort of patronizing toleration as affording useful exemplifications or illustrations of their theorems. But, according to him, the two methods are applicable in quite different fields. For what he calls the " abstract " method he reserves the narrow, but most immediately interesting, province of modern advanced industrial life, and hands over to the historical the economic phenomena of all the human past and all the rest of the human present. He himself exhibits much capacity for such historical research, and in particular has thrown real light on the less-noticed econo mic and social effects of the institution of money, and on the creation of capital in the earlier stages of society. But his principal efficacy has been in reducing, by the considerations we have mentioned, still further than his predecessors had done, our conceptions of the work which the a priori method can do. He in fact dispelled the idea that it can ever supply the branch of general sociology which deals with wealth. As to the relations of economics to the other sides of sociology, he holds that the " abstract " science rightly ignores them. It does not consider the differences of human wants, or the social results of their several gratifications, except so far as these affect the production of wealth. In its view " a pot of beer and a picture a book of religion and a pack of cards are equally worthy of regard." It therefore leaves the ground open for a science which will, on the one hand, study wealth as a social fact in all its successive forms and phases, and, on the other, will regard it in its true light as an instrument for the conservation and evolution moral as well as material of human societies. Though it will involve a slight digression, it is desirable here to notice a further attenuation of the functions of the deductive method, which is well pointed out in Mr Sidgwick s recent remark able work on political economy. He observes that, whilst J. S. Mill declares that the method a priori is the true method of the science, and that " it has been so understood and taught by all its most distinguished teachers," he yet himself in the treatment of production followed an inductive method (or at least one essentially different from the deductive), obtaining his results by "merely analysing and systematizing our common empirical knowledge of the facts of industry. " To explain this characteristic inconsistency. Mr Sidgwick suggests that Mill, in making his general statement as to method, had in contemplation only the statics of distribution and exchange. And in this latter field Mr Sidgwick holds that the a priori method, if it be pursued with caution, if the simpli fied premises be well devised and the conclusions "modified by a rough conjectural allowance " for the elements omitted in the pre mises, is not, for the case of a developed industrial society, " essentially false or misleading." Its conclusions are hypotheti- cally valid, though " its utility as a means of interpreting and explaining concrete facts depends on its being used with as full a knowledge as possible of the results of observation and induction. " We do not think this statement need be objected to, though we .should prefer to regard deduction from hypothesis as a useful occasional logical artifice, and, as such, perfectly legitimate in this as in other fields of inquiry, rather than as the main form of method in any department of economics. Mr Sidgwick, by his limitation of deduction in distributional questions to "a state of things taken as the type to which civilized society generally approximates," seems to agree with Bagehot that for times and places which do not correspond to this type the historical method must be used a method which, be it observed, does not exclude, but positively implies, "reflective analysis" of the facts, and their interpretation from " the motives of human agents " as well as from other determining conditions. In the dynamical study of wealth of the changes in its distribution no less than its production Mr Sidgwick admits that the method a priori " can occupy but a very subordinate place." We should say that here also, though to a less extent, as a logical artifice it may sometimes be useful, though the hypotheses assumed ought not to be the same that are adapted to a mature industrial stage. But the essential organ must be the historical method, studying comparatively the different phases of social evolution. Connected with the theory of modern industry is one j subject which Bagehot treated, though only in an incidental way, much more satisfactorily than his predecessors, namely, the function of the entrepreneur, who in Mill and Cairnes is scarcely recognized except as tke owner of capital. It is quite singular how little, in the Leading Principles of the latter, his active co-operation is taken into account. Bagehot objects to the phrase " wages of superintendence," commonly used to express his " reward," as suggesting altogether erroneous ideas of the nature of his work, and well describes the large and varied range of his activity and usefulness, and the rare combination of gifts and acquirements which go to make up the per fection of his equipment. It can scarcely be doubted that a foregone conclusion in favour of the system of (so-called) co-operation has sometimes led economists to keep these important, considerations in the background. They have been brought into due prominence of late in the treatises of Profs. Marshall and F. A. Walker, who, however, have scarcely made clear, and certainly have not justified, the principle on which the amount of the remuneration of the entrepreneur is determined. We have seen that Jones had in his dogmatic teaching anticipated in some degree the attitude of the new school ; important works had also been produced, notably by Thomas Tooke and William Newmarch (History of Prices, 1838-1857), and by James E. Thorold Rogers (History of Agriculture and Prices in England, 1866-82), on the course of English economic history. But the first systematic Leslie, statement by an English writer of the philosophic founda tion of the historical method, as the appropriate organ of economic research, is to be found in an essay by T. E. Cliffe Leslie (printed in the Dublin University periodical, Hermathena, 1876; since included in his Essays Moral and Political, 1879). This essay was the most important publication on the logical aspect of economic science which had appeared since Mill s essay in his Unsettled Questions. Though Cairnes had expanded and illustrated the views of Mill, he had really added little to their substance. Leslie takes up a position directly opposed to theirs. He criticizes with much force and verve the principles and practice of the " orthodox " school. Those who are acquainted with what has been written on this subject by Knies and other Germans will appreciate the freshness and originality of Leslie s treatment. He points out the loose and vague character of the principle to which the classical economists profess to trace back all the pheno mena with which they deal namely, the " desire of wealth." This phrase really stands for a variety of wants, desires, and sentiments, widely different in their nature and economic effects, and undergoing important changes (as, indeed, the component elements of wealth itself also do) in the several successive stages of the social move ment. The truth is that there are many different economic motors, altruistic as well as egoistic ; and they cannot all be lumped together by such a coarse generalization. The a priori and purely deductive method cannot yield an explanation of the causes which regulate either the nature or the amount of wealth, nor of the varieties of distribu tion in different social systems, as, for example, in tho. c e of France and England. " The whole economy of every nation is the result of a long evolution in which there has been both continuity and change, and of which the economical side is only a particular aspect. And the laws of which it is the result must be sought in history and the general laws of society and social evolution." The intel lectual, moral, legal, political, and economic sides of social progress are indissolubly connected. Thus, juridical facts relating to property, occupation, and trade, thrown up by the social movement, are also economic facts. And, more
generally, " the economic condition of English " or any