CHAPTER VI.

NATURE OF ECONOMIC LAW. METHODS OF STUDY.

Uses of the machinery of science.

§ 1. THE part which systematic scientific reasoning plays in the production of knowledge resembles that which machinery plays in the production of goods. For when the same operation has to be performed over and over again in the same way, it generally pays to make a machine to do the work; and where there is so much changing variety of detail that it is unprofitable to use machines, the goods must be made by hand. Similarly in knowledge, when there are any processes of investigation or reasoning in which the same kind of work has to be done over and over again in the same kind of way, then it is worth while to reduce the processes to system, to organize methods of reasoning and to formulate general Laws.

It is true that there is so much variety in economic problems, economic causes are intermingled with others in so many different ways, that exact scientific reasoning will seldom bring us very far on the way to the conclusion for which we are seeking. But it would be foolish to refuse to avail ourselves of its aid, so far as it will reach :-just as foolish as would be the opposite extreme of supposing that science alone can do all the work, and that nothing will remain to be done by practical instinct and trained common

sense.

In every practical problem common sense is the ultimate arbiter. It is for common sense to propose a particular aim; to collect appropriate material from each department of knowledge; to combine the various elements, and assign to

each its proper place and importance; and finally to decide what course is to be adopted. It is not the function of any science to lay down practical precepts or to prescribe rules of life.

And there is a general agreement among the leading English economists, that economics is to be regarded as a science; and that therefore its laws are statements in the indicative mood of relations between causes and effects, and not precepts in the imperative mood1.

A Law of social science, or a SOCIAL LAW, is a statement that a certain course of action may be expected under certain conditions from the members of a

social group.

Social law.

ECONOMIC LAWS are those Social Laws which relate to branches of conduct in which the strength of the

Economic

motives chiefly concerned can be measured by a law. money price.

Following our definition of an economic law, we may say that the course of action which may be expected under certain conditions from the members of an industrial group is the NORMAL action of the members of that group2.

Normal action is not always morally right; very often it is action which we should use our utmost efforts

Normal.

to stop. For instance, the normal condition of many of the very poorest inhabitants of a large town is to be devoid of enterprise, and unwilling to avail themselves of the

1 Of course an economist retains the liberty, common to all the world, of expressing his opinion that a certain course of action is the right one under given circumstances; and if the difficulties of the problem are chiefly economic he may speak with a certain authority. But so may a chemist with regard to other problems, such for instance as some of those connected with Sanitation and with Dyeing; and yet the laws of chemistry are not precepts.

2 Corresponding to the substantive "law" is the adjective "legal." But this term is used only in connection with "law" in the sense of an ordinance of government; not in the sense of a scientific statement of connection between cause and effect. The adjective used for this purpose is derived from "norma," a term which is nearly equivalent to "law," and might perhaps with advantage be substituted for it in scientific discussions.

opportunities that may offer for a healthier and less squalid life elsewhere; they have not the strength, physical, mental and moral, required for working their way out of their miserable surroundings. The existence of a considerable supply of labour ready to make match-boxes at a very low rate is normal in the same way that a contortion of the limbs is a normal result of taking strychnine. It is one result, a deplorable result, of the action of those laws which we have to study.

The action of a law.

[The phrase just used--the action of a law-is convenient on account of its brevity. But a law itself does not take action, it merely records action. When we speak of the action of law, what we mean is the action of those causes, the results of which are described by the law.] Further, the laws of economics as of other sciences are statements as to the effects which will be assumed in all produced by certain causes, not absolutely, but reasonings. subject to the condition that other things are equal, and that the causes are able to work out their effects undisturbed'.

$ 2.

Conditions are

It is sometimes said that physical laws are more universally true and less changeable than economic laws. It would be better to say that an economic law is often applicable only to a very narrow range of circumstances which may exist together at one particular place and time, but quickly pass away. When they are gone, the law, though still true as an abstract proposition, has no longer any practical bearing; because the particular set of causes with which it deals are nowhere to be found acting together without important disturbance from other causes. Though economic reasoning is of wide application, we cannot insist too urgently that every age and every country has its own problems; and that every

1 There is, however, no reason for regarding economics as a hypothetical science in any sense, in which the physical sciences are not also hypothetical. See Principles I. VI. 2.

change in social conditions is likely to require a new development of economic doctrines.

The progress of economics as of every other science can be effected only by the reason acting on observed facts; while the ultimate basis of every particular statement, and of every general proposition, or "law," of economics is a study of facts. And in this study nothing can be done by the reason alone, and very little can be done well except by the trained reason. Facts by themselves are silent, they teach nothing until they are interpreted by reason1.

1 This point is argued at some length in Principles I. VI. 3, 4; and it is urged that economics has no special method of its own, but must use in turn every method of scientific inquiry known to man.

CHAPTER VII.

SUMMARY AND CONCLUSION.

§ 1. ECONOMICS has then as its purpose firstly to acquire Relation of knowledge for its own sake, and secondly to economic science to throw light on practical issues. But though we practice. are right before entering on any study to consider carefully what are its uses, we should not plan out our work with direct reference to them. For by so doing we are tempted to break off each line of thought as soon as it ceases to have immediate bearing on that particular aim which we have in view at the time: the direct pursuit of practical aims leads us to group together bits of all sorts of knowledge, which have no connection with one another except for the immediate purposes of the moment; and which throw but little light on one another. Our mental energy is spent in going from one to another; nothing is thoroughly thought out; no real progress is made.

The grouping, therefore, which is best for the purposes of science is that which collects together all those facts and reasonings which are similar to one another in nature: so that the study of each may throw light on its neighbour. By working thus for a long time at one set of considerations, we get gradually nearer to those fundamental unities which are called nature's laws: we trace their action first singly, and then in combination; and thus make progress slowly but surely. The practical uses of economic studies should never be out of the mind of the economist, but his special business is to study and interpret facts and to find out what are the effects of different causes acting singly and in combination.