of the Old School," which he recognizes were great, independently of the correctness of its doctrines. It did vast service as the pioneer in this field of research, and on this point we quote Dr. Ely's words: "Further, the present political economy in all parts of the world grew out of the classical political economy, and the former can not be comprehended until the latter has been mastered. It was, indeed, efforts to master, extend, and perfect the older school, as well as other causes, like later developments of industrial life, which gradually led to the most recent economic investigation. Nor does any one now doubt the continued and all-pervading—even if not all-controlling—influence of these motive powers which furnish Ricardo, Mill, and Senior, with their major premises; but this fact was not understood before the coryphei of the older political economy elucidated it, and they deserve great credit for what may be fairly termed their discoveries. It was, for example, a service of no mean order to point out all the ramifications of self-interest in economic life, to set in order the phenomena explained by this principle, and to show how it prompts men to the most diverse deeds, which, undertaken without a view to the welfare of others, nevertheless redound to the common good. And it must be confessed that no single principles have been discovered by the German school, which throw such a flood of light on the multifarious phenomena of economic life as do, for example, the Ricardian theory of rent and the Malthusian doctrine of population." Having made these concessions. Dr. Ely proceeds elaborately in Section V to discuss "The Decline and Fall of the Old School." He objects, first, "that the whole spirit of its practical activity was negative." He attacks the doctrine of laissez faire which he alleges grew out of that negative system, and has turned out to be a total failure. "It never held at any time in any country, and no maxim ever made a more complete fiasco, when the attempt was seriously made to apply it in the state." His chief illustrations of the break-down of this doctrine are education and the English factory system. He next arraigns "another favorite notion of the older economists, and one which leads to great hardship in real life, that taxes are shifted so as to be divided fairly between different employments in which capital is engaged." He then condemns "the supposition that self-interest is the chief force of economic life," which he maintains to be the leading premise of the English school. The doctrine of "equality of wages" is attacked as an error of the old economists, as is also the idea "of the natural laws of political economy," and the principle of "supply and demand.".
We can not give the reasonings by which the older political economy is impeached in these several particulars, but their enumeration will suffice to inform the reader somewhat of the nature and extent of the indictment against the old system by which it is to be discredited and put aside to make place for another system.
In Section VI the new school is taken up and its various claims presented. Chief among these are that facts and statistics are to be more studied, that there is to be greater caution in theorizing, and especially in the use of deduction; and, above all, that the subject is to be dealt with historically. It seems to be denied that there are any principles of political economy to be taken as fundamental or universal, or as fitted to form the body of a science to be generally accepted like other sciences. The subject is said to involve changed conditions and constantly changing policy. "It is found that the political economy of to-day is not the political economy of yesterday, while the political economy of Germany is not identical with that of England or America. It is on this account that knowledge of history is absolutely essential to the political economist."
Now, while Dr. Ely's statements of the general case are most interesting and instructive, we can hardly acquiesce in the validity of his argument. Much of his criticism of the older political economy may be taken as well-based and wholesome, while his argument is overdone. We may freely concede that the earlier expositions of political economy were imperfect, and that much of its subsequent literature is open to objection. But science is self-corrective in time, and the labor of generations is necessary for the development of its principles, especially if they are of a complex
