LECTURE III.

OF THE LOGICAL METHOD OF POLITICAL ECONOMY.

IN adverting, in the opening of this course, to the differences of opinion now existing respecting many fundamental principles in Political Economy, I stated that these discrepancies appeared to me to be chiefly traceable to the more loose and popular method of treating economic questions which has of late years come into fashion;-and I further stated that this change in the character of economic discussions was, as I conceived, mainly attributable to the practical success of economic principles in the experiment of free trade-a success which, while it attracted a new class of adherents to the cause of Political Economy, furnished its advocates also with a new description of arguments.

The method which we pursue in any inquiry must be determined by the nature and objects of that inquiry. I was thus led in my opening lectures to consider the nature and objects of Political Economy. In the present and following lectures I proceed to discuss the method which, having regard to what

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Political Economy proposes to accomplish, it is proper to pursue in its investigations.

Let me recall briefly the description I have given of the nature and objects of Political Economy. You will remember I defined Political Economy as the science which investigates the laws of the production and distribution of wealth, which result from the principles of human nature as they operate under the actual circumstances of the external world. I also stated that those mental principles and physical conditions are taken by the Political Economist as ultimate facts, as the premises of his reasonings, beyond which he is not concerned to trace the causes of the phenomena of wealth. I next considered the nature of those ultimate facts, physical and mental, and found that, although so numerous as to defy distinct specification, there are yet some, the existence and character of which are easily ascertainable, of such paramount importance in relation to the production and distribution of wealth, as to afford a sound and stable basis for deducing the laws of those phenomena. The principal of these I stated to be, 1st, the desire for wealth, and aversion to labour implanted in human beings; 2ndly, the principles of population as derived from the physiological character of man and his mental propensities; and 3rdly, the physical qualities of the natural agents, more especially land, on which human industry is exercised.

I also showed you that the most important of the subordinate principles affecting the production and distribution of wealth, which come in

to modify and sometimes to reverse the operation of the more cardinal principles, are also capable of being ascertained and appreciated, with sufficient accuracy at least to be taken account of in our reasonings, if not to be made the premises of future deductions ; and of these also I gave several examples.

This, then, being the character of Political Economy, we have to consider by what means the end which it proposes the discovery of the laws of the production and distribution of wealth-may be most effectually promoted. The guide to which we here naturally turn is the analogy of the physical sciences. In the application of this analogy, however, we must be careful not to be misled by an appearance of agreement where the circumstances are essentially dissimilar. The propriety of the method must in each case be ultimately determined by the character of the evidence which is in each case available, and we shall find that in this respect the physical sciences and Political Economy are by no means on the same footing.

The first attempts at physical discovery have always been made by the observation and classification of physical phenomena. This classification has generally at first taken place according to the most obvious relations which present themselves to our notice in physical objects. Further examination and analysis of the results thus obtained have led to the discovery of more important and intimate relations, which have been made the grounds of higher and more comprehensive inductions; and this process has been con

tinued, till at length it has become possible to conjecture, and at last to establish by satisfactory proof, the existence and character of the physical causes of which our previous generalizations were merely the result and evidence.

To this indirect and circuitous process physical discoverers have necessarily had recourse, owing to the circumstance that ultimate physical truths are not susceptible of any more direct proof. We can have no direct proof, e. g. of the law of gravitation, or of the laws of motion. We do not find them in our own consciousness, by reflecting on what passes in our minds; nor can they be made apparent to our senses. That every particle of matter in the universe gravitates, each towards the rest, with a force which is directly according to the mass and inversely according to the square of the distance,—or that a body once set in motion will, if unimpeded by some counter force, continue for ever in motion in the same direction and with unimpaired velocity, these are propositions which can only be established by an appeal to the intellect; the proof of all such laws ultimately resolving itself into this, that, assuming them to exist, they account for the phenomena. As, therefore, we are incapable of perceiving directly the ultimate causes of physical phenomena, or the mode of their operation, if these causes are to be discovered at all, they can only be discovered by conjecturing or inferring them from the effects which they produce-in the language of Lord Bacon, by the "interpretation of nature,”

by endeavouring to decipher in the phenomena themselves the causes and laws on which they depend.*

Now in this quality of the higher laws of physical nature-their non-susceptibility of direct proof-we have to note the first and most important point in which the analogy of the physical method becomes inapplicable to Political Economy. In our search after the causes of the production and distribution of wealth, we are not left to conjecture them from the mode of their operation as exemplified in the phenomena of wealth. In order to know why a farmer engages in the

* I may notice here, by the way, the wholly different purpose to which hypothesis is turned in physical and economic science. In the former, hypotheses are the steps by which all great generalizations are accomplished. The several fundamental laws in the different physical sciences, such as the law of gravity, the undulatory theory of light, the atomic theory, were at one time hypotheses in the common acceptation of the word, and have passed through all the gradations of probability, from that of a mere presumption in their favour up to absolute, or nearly absolute, certainty. Even still they differ in no other respect from hypotheses which are more commonly considered as such, than in the greater number and variety of the facts which they explain. In economic science, on the other hand, the ultimate laws (as I have endeavoured to show in the text) being either mental intuitions or physical facts susceptible of direct sensible proof, never pass through the hypothetical stage. Hypothesis here is only useful in the development of principles already established. Thus the diminishing productiveness of the soil being established or admitted, the doctrine of rent is deduced from it by reasoning on a hypothesis framed to suit the object of the inquiry. In the same way, if we desire to ascertain the tendency of any given cause-such, e. g. as the new gold discoveries we resort to some hypothesis, or assumed case, under which we suppose the principle in question to come into operation; and then, from our knowledge of human motives in the pursuit of wealth, observe the result which will ensue.