life-and in many instances visibly confirmed by experience, this doctrine obtained an extraordinary hold upon the minds of men. It became identified with Political Economy as a practical science. Later economists, like Mill and Cairnes, have indeed modified it; but just as the belief in a natural or divine arrangement of human instincts lent power to it at first, so an elaborate analogy between the individual and social organism, which is the latest product of our philosophy, bids fair to give fresh power to it in our own days. And yet this theory of the sufficiency of individual self-seeking for the salvation of the race, with its practical outcome in the precept of Laissez Faire, includes within itself, like other generalisations of the early economists, some unwarrantable assumptions. It assumes not only that the economic interest of the individual is in fact identical with that of the community, but that he knows his own interest and follows it. But it is perfectly clear that, in the case of adulteration, of jerry-building, and of the hundred and one devices of modern trade by which a man may grow rich at the expense of his neighbours, the first of these assumptions breaks down. Whatever may be the case with his higher moral interests, the economic interest of the individual is certainly not always identical with that of the community. Neither can it be said that he always even knows his economic interest, especially under the complex conditions of modern industry and commerce. That he follows his interest, or what he conceives to be his interest, is no doubt a safer assumption, though even this truth lacks the universality attributed to it in this mechanical conception of human action.

The whole theory, indeed, of the identity of individual and common interests is a perfect instance of the reckless abstractness of the old kind of Political Economy. There is a truth underlying it, but it is a truth which the theory overstates. The truth in question is, that under a system of division of labour each man can only live by finding out what other people want. The pressure of competition does undoubtedly tend to the satisfaction of the greatest number of wants at the lowest cost, but not without innumerable evils in the process-evils which, as we now see, the wise regulation of the competitive impulse may, in a number of instances, avert. But as long as the identity of the individual and general interest was preached as a universal truth, every attempt to regu

late competition was decried as an unwise and even an impious interference with the providential scheme for making each man's selfishness subservient to the good of all his neighbours.

Another conception which strengthened the belief in individual liberty-the mere freedom from restrictions-as the great economic truth, was the idea of invariable law. This was one of the chief bulwarks of Laissez Faire. It is in Malthus that the idea of invariable law in the economic world first makes its appearance. A little later we find in Ricardo the first instance of that comparison of economic laws to the law of gravity which has been echoed with wearisome iteration ever since. Economists have failed to distinguish between laws of physical and laws of social science. They have refused to see that whilst the former are inevitable and eternal, the latter-though some of them too, like that of" diminishing returns," are immutable-express, for the most part, facts of human nature, which is capable of modification by self-conscious human endeavour.

It must be admitted, however, that this idea of law produced one great effect. It made men patient-those men at least who believed in it. To this fact must be attributed the singular confidence exhibited by economists in the result of teaching Political Economy to the working classes. Teach them, it was said, that the rate of wages is not the result of accidental causes within the control of man, but of great natural laws beyond his control, and all will be well. But, so far from having the desired effect, it was just the insistence on this doctrine which brought Political Economy into conflict with the working classes. The wage-fund theory, of which Malthus is the undoubted author, and the consequent denunciation of combinations of workmen as useless, was the great cause of feud. In this case the law, so far from being of universal validity, was not true at all. This is now generally recognised. But the popular expounders of economic principles, especially in the newspapers, were prompt to accept it, and thus Political Economy entered into alliance with the capitalists against the labourers.

But it was not only that Political Economy asserted the existence of laws that did not exist. More misleading still was the failure of ordinary economic writers to distinguish between laws and precepts, between general statements of fact and the practical

maxims based upon them. It is true that writers like Cairnes have striven to make it clear that the laws of economics are as distinct as possible from rules of action, that Political Economy is "neutral." But they forget that the laws of Political Economy are converted into rules by sheer force of necessity, and that the maintenance of this neutrality is practically impossible. Some answer must be given to the pressing questions of the day, and if Political Economy did not lay down rules and become a practical science, journalism would. And, as a matter of fact, while affecting the reserved and serious air of students, political economists have all the time been found brawling in the market-place.

By these various influences acting upon them from so many sides was the belief in individual freedom, in the uselessness of industrial restrictions, established and confirmed in the minds of the older economists as the central doctrine of their science. But it was just this doctrine which was the chief cause of the fierce antagonism they aroused. If we would probe to the bottom the cause which excited the liveliest invective against economists we always come back to the charge of individualism. Of that continuous storm of denunciation which has been poured down upon the central doctrine of liberalism, the economists have received the largest share. And this is natural; for the conception of men, not as members of families, associations, and nations, but as isolated individuals connected only by pecuniary interests, is essentially the conception of them which pervaded economic science. And not only was this conception the peculiar characteristic of Political Economy as a theoretical science, but it determined its whole bearing as a practical science. I have alluded to the fatal confusion between laws and precepts which made Political Economy appear as the gospel of self-interest. But though it was not the gospel of self-interest in the sense often supposed, it did without doubt place absolute reliance on individual action; it did without doubt practically assert that pecuniary interest was a sufficient bond between men-the primary bond at any rate in the present age. No wonder, then, that against the economists were arrayed philosophers, moralists, even statesmen. All these saw in the doctrine of individualism a solvent of domestic, political and national union-a great disintegrating element of social life. They all saw in the proclamation of the reign of self

interest the universal abolition of feelings of kindliness and gratitude, of filial reverence and paternal care, of political fidelity and patriotism-in short, of all the sentiments which welded society into a whole. Christian ministers lamented the decay of domestic ties, the refusal of children to support parents, the neglect of parents to educate children. Moralists deplored the growing alienation of masters and workmen—the harsh self-seeking of the employers, the indolence and hatred of the employed. Statesmen lamented the destruction of national life, the subordination of national welfare to individual gain, the advocacy of measures which might enrich individuals, but must, they thought, disintegrate the empire. "If an empire were made of dust," said Napoleon," it would be pounded to dust by the economists." "The entire tendency of the modern or Malthusian Political Economy is to denationalise," said Coleridge. "At the very outset," he said on another occasion, "what are we to think of the soundness of this modern system of Political Economy, the direct tendency of which is to denationalise, and to make the law of our country a foolish superstition?" "We have profoundly forgotten," wrote Carlyle some years later, "that cash-payment is not the sole relation of human beings; we think, nothing doubting, that it absolves and liquidates all engagements to man. 'My starving workers?' answers the rich mill-owner; 'did not I hire them fairly in the market? did I not pay them to the last sixpence the sum covenanted for? what have I to do with them more?'” Society," writes his disciple Mr. Froude, " is an aggregate of dust."

Such was the accusation. Political Economy, it was said, destroyed the moral and political relations of men, and dissolved the social union. It is remarkable that this accusation was made not only by philosophers and moralists, but by politicians. And it is still more remarkable that the defects of Political Economy were never more clearly stated than in the days of its greatest influence in the golden era of economic discussion which preceded free-trade. But for all the force with which the accusation was urged, the opponents of Political Economy were defeated. In one memorable point, and in one alone-the regulation of factories were they successful. In their general attack upon individualism they were completely beaten. And the reason was

because they failed to see that the old economic conditions had to be destroyed before new moral relations could come into existence. Right in their general conception, they were wrong in their particular application of it. For the moral relations which they wished to preserve were based upon the dependence of the labourer, and until that dependence was destroyed no new life could be reached. The historical method, the great enemy of the old Political Economy, is here on the side of the old economists against their assailants. For it shows us how the "cash-nexus," which the latter denounced so vehemently, is essential to the independence of the labourer. And that independence is a necessary condition of the new and higher form of social union, which is based on the voluntary association of free men.1

The historical method has revolutionised Political Economy, not by showing its laws to be false, but by proving that they are relative for the most part to a particular stage of civilisation. This destroys their character as eternal laws, and strips them of much of their force and all their sanctity. In this way the historical method has rescued us from intellectual superstitions.

The earlier economists, like Adam Smith, were concerned with production. Increased production was necessary for man as an instrument of social and political progress. And the old economy succeeded in establishing new conditions of production. But when it came to the more delicate task of distribution it failed. A more equitable distribution of wealth is now demanded and required. But this end can only be attained coincidently with moral progress. For such an end a gospel of life is needed, and the old Political Economy had none. This was its great fault, a fault which, now its work is done, has become glaring in the extreme. Such a gospel must now be put forward or all that work will fail. Morality must be united with economics as a practical science. The better distribution which is sought for will then be found in

1 At this point the consecutive MSS., which bears traces of being hastily written in the preceding paragraph, breaks off altogether, and there remain only some fragmentary passages which Toynbee never wove into the thread of his argument.-ED.