§2. This brief sketch of the recent history and present condition of Political Economy in England has seemed to me necessary in order to explain the exact object of the present work; which on the one hand does not aim at originality, while on the other hand it is not precisely an elementary treatise. It is written in the belief that the reaction above described against the treatment of Political Economy as an established science was inevitable and even salutary; but that it has been carried too far, so that the waves of disputation are in danger of submerging the really sound and valuable results of previous thought. My primary aim, then, has been to eliminate unnecessary controversy, by stating these results in a more guarded manner, and with due attention to the criticisms and suggestions of recent writers. Several valuable contributions to abstract economic theory have been made by Cairnes, Jevons, and others who have written since Mill; but in my opinion they generally admit of being stated in a form less hostile to the older doctrines than their authors suppose. In the same way I think that the opposition between the Inductive and Deductive Methods has been urged by writers on both sides in needlessly sharp and uncompromising terms. I shall endeavour to show that there is an important part of the subject to which economists generally agreed in applying a mainly inductive or ``realistic'' treatment. On the other hand, few, I think, would deny the utility and even indispensability of deductive reasoning in the Theory of Distribution and Exchange; provided only the assumptions on which such reasoning proceeds are duly stated, and their partially hypothetical character continually borne in mind. I fully admit the importance of this latter proviso; accordingly in those parts of this work in which I have used chiefly deductive reasoning, I have made it my special aim to state explicitly and keep clearly in view the limited and conditional applicability of the conclusions attained by it.
With this view I have been generally careful to avoid any dogmatic statements on practical points. It is very rarely, if ever, that the practical economic questions which are presented to the statesman can be unhesitatingly decided by abstract reasoning from elementary principles. For the right solution of them full and exact knowledge of the facts of the particular case is commonly required; and the difficulty of ascertaining these facts is often such as to prevent the attainment of positive conclusions by any strictly scientific procedure.
At the same time the function of economic theory in relation to such problems is none the less important and indispensable; since the practical conclusions of the most untheoretical expert are always reached implicitly or explicitly by some kind of reasoning from some economic principles; and if the principles or reasoning be unsound the conclusions can only be right by accident. For instance, if a practical man affirms that it will promote the economic welfare of England to tax certain of the products of foreign industry, a mere theorist should hesitate to contradict him without a careful study of the facts of the case. But if the practical person gives as his reason that ``one-sided free trade is not free trade at all'', the theorist is then in a position to point out that the general arguments in favour of the admission of foreign products are mostly independent of the question whether such admission is or is not reciprocated. So again, if it is argued that, in the present agricultural depression, a restriction of freedom of contract and freedom of bequest is imperatively required, it would be presumptuous to affirm dogmatically that such restrictions are undesirable. But if the advocate of these restrictions explains that they are required in order that more farming capital may be applied to the land, it then becomes opportune to show him, that so far as land in England is cultivated, on the average, with an amount of capital larger than that which would give the greatest proportional produce, and so far as the fall in farmers' profits is due to increased facilities of foreign importation, the mere application of more capital to the land would tend to aggravate the fall. And similarly in dealing with other questions of the day, abstract economic arguments almost always come in, and are almost never by themselves decisive.
In thus making prominent the hypothetical character of the deductive reasonings of Political Economy, I am merely following the lines laid down by J. S. Mill in his general account of economic method---as expounded most fully in his Essays on Unsettled Questions in Political Economy (1843). This view of the subject rendered his whole treatment of it more profoundly different from that of Ricardo and James Mill, than is at first apparent to hasty readers; though, as was only natural, the modifications which its consistent application required in the old doctrine were not always carried out with perfect precision and completeness. Still, the work that was actually done by Mill in supplying corrections and limitations to the dogmatism of the earlier Ricardian school, seems to me to have an importance which some recent critics have overlooked; and to which, in my present attempt to carry this work a stage further, I am especially called upon to do justice. {Note}
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