Thorstein Veblen
The Preconceptions of Economic Science
The Quarterly Journal of Economics 13 (1899)


        I

In an earlier paper(1*) the view has been expressed that the
economics handed down by the great writers of a past generation
is substantially a taxonomic science. A view of much the same
purport, so far as concerns the point here immediately in
question, is presented in an admirably lucid and cogent way by
Professor Clark in a recent number of this journal.(2*) There is
no wish hereby to burden Professor Clark with a putative
sponsorship of any ungraceful or questionable generalisations
reached in working outward from this main position, but
expression may not be denied the comfort which his unintended
authentication of the main position affords. It is true,
Professor Clark does not speak of taxonomy, but employs the term
"statics" which is this connection, through its use by Professor
Clark and by other writers eminent in the science, it is fairly
to be questioned whether the term can legitimately be used to
characterize the received economic theories. The word is borrowed
from the jargon of physics, where it is used to designate the
theory of bodies at rest or of forces in equilibrium. But there
is much in the received economic theories to which the analogy of
bodies at rest or of forces in equilibrium will not apply. It is
perhaps not too much to say that those articles of economic
theory that do not lend themselves to this analogy make up the
major portion of the received doctrines. So, for instance, it
seems scarcely to the point to speak of the statics of
production, exchange, consumption, circulation. There are, no
doubt, appreciable elements in the theory of these several
processes that may fairly be characterized as statical features
of the theory; but the doctrines handed down are after all, in
the main, theories of the process discussed under each head, and
the theory of a process does not belong in statics. The epithet
"statical" would, for instance, have to be wrenched somewhat
ungently to make it apply to Quesnay's classic Tableau Economique
or to the great body of Physiocratic speculations that take their
rise from it. The like is true for Books II. and III. of Adam
Smith's Wealth of Nations, as also for considerable portions
generation, for much of Marshall's Principles, and for such a
modern discussion as Smart's Studies in Economics, as well as for
the fruitful activity of the Austrians and of the later
representatives of the Historical School.
    But to return from this terminological digression. While
economic science in the remoter past of its history has been
mainly of a taxonomic character, later writers of all schools
show something of a divergence from the taxonomic line and an
inclination to make the science a genetic account of the economic
life process, sometimes even without an ulterior view to the
taxonomic value of the results obtained. The divergence from the
ancient canons of theoretical formulation is to be taken as an
episode of the movement that is going forward in latter-day
science generally; and the progressive change which thus affects
the ideals and the objective point of the modern sciences seems
in its turn to be an expression of that matter-of-fact habit of
mind which the prosy but exacting exigencies of life in a modern
industrial community breed in men exposed to their unmitigated
impact.
    In speaking of this matter-of-fact character of the modern
sciences it has been broadly characterized as "evolutionary"; and
the evolutionary method and the evolutionary ideals have been
placed in antithesis to the taxonomic methods and ideals of
pre-evolutionary days. But the characteristic attitude, aims, and
ideals which are so designated here are by no means peculiar to
the group of sciences that are professedly occupied with a
process of development, taking that term in its most widely
accepted meaning. The latter-day inorganic sciences are in this
respect like the organic. They occupy themselves with "dynamic"
relations and sequences. The question which they ask is always,
What takes place next, and why? Given a situation wrought out out
by the forces under inquiry, what follows as the consequence of
the situation so wrought out? or what follows upon the accession
of further element of force? Even in so non-evolutionary a
science as inorganic chemistry the inquiry consistently runs on a
process, an active sequence, and the value of the resulting
situation as a point of departure for the next step in an
interminable cumulative sequence. The last step in the chemist's
experimental inquiry into any substance is, What comes of the
substance determined? What will it do? What will it lead to, when
it is made the point of departure in further chemical action?
There is no ultimate term, and no definite solution except in
terms of further action. The theory worked out is always a theory
of a genetic succession of phenomena, and the relations
determined and elaborated into a body of doctrine are always
genetic relations. In modern chemistry no cognisance is taken of
the honorific bearing of reactions or molecular formulae. The
modern chemist, as contrasted with this ancient congener, knows
nothing of the worth, elegance, or cogency of the relations that
may subsist between the particles of matter with which he busies
himself, for any other than the genetic purpose. The spiritual
element and the elements of worth and propensity no longer count.
Alchemic symbolism and the hierarchical glamour and virtue that
once hedged about the nobler and more potent elements and
reagents are almost altogether a departed glory of the science.
Even the modest imputation of propensity involved in the
construction of a scheme of coercive normality, for the putative
guidance of reactions, finds little countenance with the later
adepts of chemical science. The science has outlived that phase
of its development at which the taxonomic feature was the
dominant one.
    In the modern sciences, of which chemistry is one, there has
been a gradual shifting of the point of view from which the
phenomena which the science treats of are apprehended and passed
upon; and to the historian of chemical science this shifting of
the point of view must be a factor of great weight in the
development of chemical knowledge. Something of a like nature is
true for economic science; and it is the aim here to present, in
outline, some of the successive phases that have passed over the
spiritual attitude of the adepts of the science, and to point out
the manner in which the transition from one point of view to the
next has been made.

    As has been suggested in the paper already referred to, the
characteristic spiritual attitude or point of view of a given
generation or group of economists is shown not so much in their
detail work as in their higher syntheses -- the terms of their
definite formulations -- the grounds of their final valuation of
the facts handled for purpose of theory. This line of recondite
inquiry into the spiritual past and antecedents of the science
has not often been pursued seriously or with singleness of
purpose, perhaps because it is, after all, of but slight
consequence to the practical efficiency of the present-day
science. Still, not a little substantial work has been done
towards this end by such writers as Hasbach, Oncken, Bonar,
Cannan, and Marshall. And much that is to the purpose is also due
to writers outside of economics, for the aims of economic
speculation have never been insulated from the work going forward
in other lines of inquiry. As would necessarily be the case, the
point of view of the enlightened common sense of their time. The
spiritual attitude of a given generation of economists is
therefore in good part a special outgrowth of the ideals and
preconceptions current in the world about them.
    So, for instance, it is quite the conventional thing to say
that the speculations of the Physiocrats were dominated and
shaped by the preconception of Natural Rights. Account has been
taken of the effect of natural-rights preconceptions upon the
Physiocratic schemes of policy and economic reform, as well as
upon the details of their doctrines.(3*) But little has been said
of the significance of these preconceptions for the lower courses
of the Physiocrats' theoretical structure. And yet that habit of
mind to which the natural-rights view is wholesome and adequate
is answerable both for the point of departure and for the
objective point of the Physiocratic theories, both for the range
of facts to which they turned and for the terms in which they
were content to formulate their knowledge of the facts which they
handled. The failure of their critics to place themselves at the
Physiocratic point of view has led to much destructive criticism
of their work; whereas, when seen through Physiocratic eyes, such
doctrines as those of the net product and of the barrenness of
the artisan class appear to be substantially true.
    The speculations of the Physiocrats are commonly accounted
the first articulate and comprehensive presentation of economic
theory that is in line with later theoretical work. The
Physiocratic point of view may, therefore, well be taken as the
point of departure in an attempt to trace that shifting of aims
and norms of procedure that comes into view in the work of later
economists when compared with earlier writers.
    Physiocratic economics is a theory of the working-out of the
Law of Nature (loi naturelle) in its economic bearing, and this
Law of Nature is a very simple matter.

Les lois naturelles sont on physiques ou morales.
    On entend ici, par loi physique, le cours regie de tout
evenement physique de l'ordre naturel, evidemment le plus
avatageux au genre humain.
    On entend ici, par loi morale, the regle de toute action
humaine de l'ordre morale, conforme a l'ordre physique evidemment
le plus advantageux au genre humain.
    Ces lois forment ensemble ce qu'on appelle la loi naturelle.
Tous les hommes et toutes les puissances humaines doivent etre
soumis a ces lois souveraines, instituees par l'Etre-Supreme:
elles sont immuables et irrefragables, et les meilleures lois
possible.(4*)

    The settled course of material facts tending beneficently to
the highest welfare of the human race, -- this is the final term
in the Physiocratic speculations. This is the touchstone of
substantiality. Conformity to these "immutable and unerring" laws
of nature is the test of economic truth. The laws are immutable
and unerring, but that does not mean that they rule the course of
events with a blind fatality that admits of no exception and no
divergence from the direct line. Human nature may, through
infirmity or perversity, willfully break over the beneficent
trend of the laws of nature; but to the Physiocrat's sense of the
matter the laws are none the less immutable and irrefragable on
that account. They are not empirical generalisations on the
course of phenomena, like the law of falling bodies or of the
angle of reflection; although many of the details of their action
are to be determined only by observation and experience, helped
out, of course, by interpretation of the facts of observation
under the light of reason. So, for instance, Turgot, in his
Reflections, empirically works out a doctrine of the reasonable
course of development through which wealth is accumulated and
reaches the existing state of unequal distribution; so also his
doctrines of interest and of money. The immutable natural laws
are rather of the nature of canons of conduct governing nature
than generalisations of mechanical sequence, although in a
general way the phenomena of mechanical sequence are details of
the conduct of nature working according to these canons of
conduct. The great law of the order of nature is of the character
of a propensity working to an end, to the accomplishment of a
purpose. The processes of nature working under the
quasi-spiritual stress of this immanent propensity may be
characterised as nature's habits of life. Not that nature is
conscious of its travail, and knows and desires the worthy end of
its endeavors; but for all that there is a quasi-spiritual nexus
between antecedent and consequent in the scheme of operation in
which nature is engaged. Nature is not uneasy about interruptions
of its course or occasional deflections from the direct line
through an untoward conjunction of mechanical causes, nor does
the validity of the great overruling law suffer through such an
episode. The introduction of a mere mechanically effective causal
factor cannot thwart the course of Nature from reaching the goal
to which she animistically tends. Nothing can thwart this
telological propensity of nature except counter-activity or
divergent activity of a similarly teleological kind. Men can
break over the law, and have short-sightly and willfully done so;
for men are also agents who guide their actions by an end to be
achieved. Human conduct is activity of the same kind -- on the
same plane of spiritual reality or competency -- as the course of
Nature, and it may therefore traverse the latter. The remedy for
this short-sighted traffic of misguided human nature is
enlightenment, -- "instruction publique et privee des lois de
l'ordre naturel."(5*)
    The nature in terms of which all knowledge of phenomena --
for the present purpose economic phenomena -- is to be finally
synthesised is, therefore, substantially of a quasi-spiritual or
animistic character. The laws of nature are in the last resort
teleological; they are of the nature of a propensity. The
substantial fact in all the sequences of nature is the end to
which the sequence naturally tends, not the brute fact of
mechanical compulsion or causally effective forces. Economic
theory is accordingly the theory (1) of how the efficient causes
of the ordre naturel work in an orderly unfolding sequence,
guided by the underlying natural law -- the propensity immanent
in nature to establish the highest well-being of mankind, and (2)
of the conditions imposed upon human conduct by these natural
laws in order to reach the ordained goal of supreme human
welfare. The conditions so imposed on human conduct are as
definitive as the laws and the order by force of which they are
imposed; and the theoretical conclusions reached, when these laws
and this order are known, are therefore expressions of absolute
economic truth. Such conclusions are an expression of reality,
but not necessarily of fact.
    Now, the objective end of this propensity that determines the
course of nature is human well-being. But economic speculation
has to do with the workings of nature only so far as regards the
ordre physique. And the laws of nature in the ordre physique,
working through mechanical sequence, can only work out the
physical well-being of man, not necessarily the spiritual. This
propensity to the physical well-being of man is therefore the law
of nature to which economic science must bring its
generalisations, and this law of physical beneficence is the
substantial ground of economic truth. Wanting this, all our
speculations are vain; but having its authentication they are
definitive. The great, typical function, to which all the other
functioning of nature is incidental if not subsidiary, is
accordingly that of the alimenation, nutrition of mankind. In so
far, and only in so far as the physical processes contribute to
human sustenance and fullness of life, can they, therefore,
further the great work of nature. Whatever processes contribute
to human sustenance by adding to the material available for human
assimilation and nutrition, by increasing the substantial
disposable for human comfort, therefore count towards the
substantial end. All other processes, however serviceable in
other than this physiological respect, lack the substance of
economic reality. Accordingly, human industry is productive,
economically speaking, if it heightens the effectiveness of the
natural processes out of which the material of human sustenance
emerges; otherwise not. The test of productivity, or economic
reality in material facts, is the increase of nutritive material.
Whatever employment of time or effort does not afford an increase
of such material is unproductive, however profitable it may be to
the person employed, and however useful or indispensable it may
be to the community. The type of such productive industry is the
husbandman's employment, which yields a substantial (nutritive)
gain. The artisan's work may be useful to the community and
profitable to himself, but its economic effect does not extend
beyond an alteration of the form in which the material afforded
by nature already lies at hand. It is formally productive only,
not really productive. It bears no part in the creative or
generative work of nature; and therefore it lacks the character
of economic substantiality. It does not enhance nature's output
of vital force. The artisan's labors, therefore, yield no net
product, whereas the husbandman's labors do.
    Whatever constitutes a material increment of this output of
vital force is wealth, and nothing else is. The theory of value
contained in this position has not to do with value according to
men's appraisement of the valuable article. Given items of wealth
may have assigned to them certain relative values at which they
exchange, and these conventional values may differ more or less
widely from the natural or intrinsic value of the goods in
question; but all that is beside the substantial point. The point
in question is not the degree of predilection shown by certain
individuals or bodies of men for certain goods. That is a matter
of caprice and convention, and it does not directly touch the
substantial ground of the economic life. The question of value is
a question of the extent to which the given item of wealth
forwards the end of nature's unfolding process. It is valuable,
intrinsically and really, in so far as it avails the great work
which nature has in hand.
    Nature, then, is the final term in the Physiocratic
speculations. Nature works by impulse and in an unfolding
process, under the stress of a propensity to the accomplishment
of a given end. The propensity, taken as the final cause that is
operative in any situation, furnishes the basis on which to
coordinate all our knowledge of those efficient causes through
which Nature works to her ends. For the purpose of economic
theory proper, this is the ultimate ground of reality to which
our quest of economic truth must penetrate. But back of Nature
and her works there is, in the Physiocratic scheme of the
universe,the Creator, by whose all-wise and benevolent power the
order of nature has been established in all the strength and
beauty of its inviolate and immutable perfection. But the
Physiocratic conception of the Creator is essentially a deistic
one: he stands apart from the course of nature which he has
established, and keeps his hands off. In the last resort, of
course, "Dieu seul est producteur. Les hommes travaillent,
receuillent, economisent, conservent; mais economiser n'est par
produire."(6*) But this last resort does not bring the Creator
into economic theory as a fact to be counted with in formulating
economic laws. He serves a homiletical purpose in the
Physiocratic speculations rather than fills an office essential
to the theory. He comes within the purview of the theory by way
of authentication rather than as a subject of inquiry or a term
in the formulation of economic knowledge. The Physiocratic God
can scarcely be said to be an economic fact, but it is otherwise
with that Nature whose ways and means constitute the
subject-matter of the Physiocratic inquiry.
    When this natural system of the Physiocratic speculation is
looked at from the side of the psychology of the investigators,
or from that of the logical premises employed, it is immediately
recognised as essentially animistic. It runs consistently on
animistic ground; but it is animism of a high grade, -- highly
integrated and enlightened, but, after all, retaining very much
of that primitive force and naivete which characterise the
animistic explanations of phenomena in vogue among the untroubled
barbarians. It is not the disjected animism of the vulgar, who
see a willful propensity -- often a willful perversity -- in
given objects or situations to work towards a given outcome, good
or bad. It is not the gambler's haphazard sense of fortuitous
necessity or the housewife's belief in lucky days, numbers or
phases of the moon. The Physiocrat's animism rests on a broader
outlook, and does not proceed by such an immediately impulsive
imputation of propensity. The teleological element -- the element
of propensity -- is conceived in a large way, unified and
harmonised, as a comprehensive order of nature as a whole. But it
vindicates its standing as a true animism by never becoming
fatalistic and never being confused or confounded with the
sequence of cause and effect. It has reached the last stage of
integration and definition, beyond which the way lies downward
from the high, quasi-spiritual ground of animism to the tamer
levels of normality and causal uniformities.
    There is already discernible a tone of dispassionate and
colorless "tendency" about the Physiocratic animism, such as to
suggest a wavering towards the side of normality. This is
especially visible in such writers as the half-protestant Turgot.
In his discussion of the development of farming, for instance,
Turgot speaks almost entirely of human motives and the material
conditions under which the growth takes place. There is little
metaphysics in it, and that little does not express the law of
nature in an adequate form. But, after all has been said, it
remains true that the Physiocrat's sense of substantiality is not
satisfied until he reaches the animistic ground; and it remains
true also that the arguments of their opponents made little
impression on the Physiocrats so long as they were directed to
other than this animistic ground of their doctrine. This is true
in great measure even of Turgot, as witness his controversy with
Hume. Whatever criticism is directed against them on other
grounds is met with impatience, as being inconsequential, if not
disingenuous.(7*)
    To an historian of economic theory the source and the line of
derivation whereby this precise form of the order-of-nature
preconception reached the Physiocrats are of first-rate
importance; but it is scarcely a question to be taken up here, --
in part because it is too large a question to be handled here, in
part because it has met with adequate treatment at more competent
hands,(8*) and in part because it is somewhat beside the
immediate point under discussion. This point is the logical, or
perhaps better the psychological, value of the Physiocrats'
preconception, as a factor in shaping their point of view and the
terms of their definitive formulation of economic knowledge. For
this purpose it may be sufficient to point out that the
preconception in question belongs to the generation in which the
Physiocrats lived, and that it is the guiding norm of all serious
thought that found ready assimilation into the common-sense views
of that time. It is the characteristic and controlling feature of
what may be called the common-sense metaphysics of the eighteenth
century, especially so far as concerns the enlightened French
community.
    It is to be noted as a point bearing more immediately on the
question in hand that this imputation of final causes to the
course of phenomena expresses a spiritual attitude which has
prevailed, one might almost say, always and everywhere, but which
reached its finest, most effective development, and found its
most finished expression, in the eighteenth-century metaphysics.
It is nothing recondite; for it meets us at every turn, as a
matter of course, in the vulgar thinking of to-day,- in the
pulpit and in the market place,- although it is not so ingenuous,
nor does it so unquestionedly hold the primacy in the thinking of
any class to-day as it once did. It meets us likewise, with but
little change of features, at all past stages of culture, late or
early. Indeed, it is the most generic feature of human thinking,
so far as regards a theoretical or speculative formulation of
knowledge. Accordingly, it seems scarcely necessary to trace the
lineage of this characteristic preconception of the era of
enlightenment, through specific channels, back to the ancient
philosophers or jurists of the empire. Some of the specific forms
of its expression - as, for instance, the doctrine of Natural
Rights - are no doubt traceable through medieval channels to the
teachings of the ancients; but there is no need of going over the
brook for water, and tracing back to specific teachings the main
features of that habit of mind or spiritual attitude of which the
doctrines of Natural Rights and the Order of Nature are specific
elaborations only. This dominant habit of mind came to the
generation of the Physiocrats on the broad ground of group
inheritance, not by lineal devolution from any one of the great
thinkers of past ages who had thrown its deliverances into a
similarly competent form for the use of his own generation.

    In leaving the Physiocratic discipline and the immediate
sphere of Physiocratic influence for British ground, we are met
by the figure of Hume. Here, also, it will be impracticable to go
into details as to the remoter line of derivation of the specific
point of view that we come upon on making the transition, for
reasons similar to those already given as excuse for passing over
the similar question with regard to the Physiocratic point of
view. Hume is, of course, not primarily an economist; but that
placid unbeliever is none the less a large item in any inventory
of eighteenth-century economic thought. Hume was not gifted with
a facile acceptance of the group inheritance that made the habit
of mind of his generation. Indeed, he was gifted with an alert,
though somewhat histrionic, skepticism touching everything that
was well received. It is his office to prove all things, though
not necessarily to hold fast that which is good.
    Aside from the strain of affectation discernible in Hume's
skepticism, he may be taken as an accentuated expression of that
characteristic bent which distinguishes British thinking in his
time from the thinking of the Continent, and more particularly of
the French. There is in Hume, and in the British community, an
insistence on the prosy, not to say the seamy, side of human
affairs. He is not content with formulating his knowledge of
things in terms of what ought to be or in terms of the objective
point of the course of things. He is not even content with adding
to the teleological account of phenomena a chain of empirical,
narrative generalisations as to the usual course of things. He
insists, in season and out of season, on an exhibition of the
efficient causes engaged in any sequence of phenomena; and he is
skeptical - irreverently skeptical - as to the need or the use of
any formulation of knowledge that outruns the reach of his own
matter-of-fact, step-by-step argument from cause to effect.
    In short, he is too modern to be wholly intelligible to those
of his contemporaries who are most neatly abreast of their time.
He out-Britishes the British; and, in his footsore quest for a
perfectly tame explanation of things, he finds little comfort,
and indeed scant courtesy, at the hands of his own generation. He
is not in sufficiently naive accord with the range of
preconceptions then in vogue.
    But, while Hume may be an accentuated expression of a
national characteristic, he is not therefore an untrue expression
of this phase of British eighteenth-century thinking. The
peculiarity of point of view and of method for which he stands
has sometimes been called the critical attitude, sometimes the
inductive method, sometimes the materialistic or mechanical, and
again, though less aptly, the historical method. Its
characteristic is an insistence on matter of fact.
    This matter-of-fact animus that meets any historian of
economic doctrine on his introduction to British economics is a
large, but not the largest. feature of the British scheme of
early economic thought. It strikes the attention because it
stands in contrast with the relative absence of this feature in
the contemporary speculations of the Continent. The most potent,
most formative habit of thought concerned in the early
development of economic teaching on British ground is best seen
in the broader generalisations of Adam Smith, and this more
potent factor in Smith is a bent that is substantially identical
with that which gives consistency to the speculations of the
Physiocrats. In Adam Smith the two are happily combined, not to
say blended; but the animistic habit still holds the primacy,
with the matter-of-fact as a subsidiary though powerful factor.
He is said to have combined deduction with induction. The
relatively great prominence given the latter marks the line of
divergence of British from French economics, not the line of
coincidence; and on this account it may not be out of place to
look more narrowly into the circumstances to which the emergence
of this relatively greater penchant for a matter-of-fact
explanation of things in the British community is due.
    To explain the characteristic animus for which Hume stands,
on grounds that might appeal to Hume, we should have to inquire
into the peculiar circumstances - ultimately material
circumstances - that have gone to shape the habitual view of
things within the British community, and that so have acted to
differentiate the British preconceptions from the French, or from
the general range of preconceptions prevalent on the Continent.
These peculiar formative circumstances are no doubt to some
extent racial peculiarities; but the racial complexion of the
British community is not widely different from the French, and
especially not widely different from certain other Continental
communities which are for the present purpose roughly classed
with the French. Race difference can therefore not wholly, nor
indeed for the greater part, account for the cultural difference
of which this difference in preconceptions is an outcome. Through
its cumulative effect on institutions the race difference must be
held to have had a considerable effect on the habit of mind of
the community. but, if the race difference is in this way taken
as the remoter ground of an institutional peculiarity, which in
its turn has shaped prevalent habits of thought, then the
attention may be directed to the proximate causes, the concrete
circumstances, through which this race difference has acted, in
conjunction with other ulterior circumstances, to work out the
psychological phenomena observed. Race differences, it may be
remarked, do not so nearly coincide with national lines of
demarcation as differences in the point of view from which things
are habitually apprehended or differences in the standards
according to which facts are rated.
    If the element of race difference be not allowed definitive
weight in discussing national peculiarities that underlie the
deliverances of common sense, neither can these national
peculiarities be confidently traced to a national difference in
the transmitted learning that enters into the common-sense view
of things. So far as concerns the concrete facts embodied in the
learning of the various nations within the European culture,
these nations make up but a single community. What divergence is
visible does not touch the character of the positive information
with which the learning of the various nations is occupied.
Divergence is visible in the higher syntheses, the methods of
handling the material of knowledge, the basis of valuation of the
facts taken up, rather than in the material of knowledge. But
this divergence must be set down to a cultural difference, a
difference of point of view, not to a difference in inherited
information. When a given body of information passes the national
frontiers it acquires a new complexion, a new national, cultural
physiognomy. It is this cultural physiognomy of learning that is
here under inquiry, and a comparison of early French economics
(the Physiocrats) with early British economics (Adam Smith) is
here entered upon merely with a view to making out what
significance this cultural physiognomy of the science has for the
past progress of economic speculation.
    The broad features of economic speculation. as it stood at
the period under consideration, may be briefly summed up,
disregarding the element of policy, or expediency, which is
common to both groups of economists, and attending to their
theoretical work alone. With the Physiocrats, as with Adam Smith,
there are two main points of view from which economic phenomena
are treated: (a) the matter-of-fact point of view or
preconception, which yields a discussion of causal sequences and
correlations; and (b) what, for want of a more expressive word,
is here called the animistic point of view or preconception,
which yields a discussion of teleological sequences and
correlations, a discussion of the function of this and that
"organ," of the legitimacy of this or the other range of facts.
The former preconception is allowed a larger scope in the British
than in the French economics: there is more of "induction" in the
British. The latter preconception is present in both, and is the
definitive element in both but the animistic element is more
colorless in the British, it is less constantly in evidence, and
less able to stand alone without the support of arguments from
cause to effect. Still, the animistic element is the controlling
factor in the higher syntheses of both; and for both alike it
affords the definitive ground on which the argument finally comes
to rest. In neither group of thinkers is the sense of
substantiality appeased until this quasi-spiritual ground. given
by the natural propensity of the course of events, is reached.
But the propensity in events, the natural or normal course of
things, as appealed to by the British speculators, suggests less
of an imputation of willpower, or personal force, to the
propensity in question. It may be added, as has already been said
in another place, that the tacit imputation of will-power or
spiritual consistency to the natural or normal course of events
has progressively weakened in the later course of economic
speculation, so that in this respect, the British economists of
the eighteenth century may be said to represent a later phase of
economic inquiry than the Physiocrats.

    Unfortunately, but unavoidably, if this question as to the
cultural shifting of the point of view in economic science is
taken up from the side of the causes to which the shifting is
traceable, it will take the discussion back to ground on which an
economist must at best feel himself to be but a raw layman, with
all a layman's limitations and ineptitude, and with the certainty
of doing badly what might be done well by more competent hands.
But, with a reliance on charity where charity is most needed, it
is necessary to recite summarily what seems to be the
psychological bearing of certain cultural facts.
    A cursory acquaintance with any of the more archaic phases of
human culture enforces the recognition of this fact,- that the
habit of construing the phenomena of the inanimate world in
animistic terms prevails pretty much universally on these lower
levels. Inanimate phenomena are apprehended to work out a
propensity to an end; the movements of the elements are construed
in terms of quasi-personal force. So much is well authenticated
by the observations on which anthropologists and ethnologists
draw for their materials. This animistic habit. it may be said,
seems to be more effectual and far-reaching among those primitive
communities that lead a predatory life.
    But along with this feature of archaic methods of thought or
of knowledge, the picturesqueness of which has drawn the
attention of all observers, there goes a second feature, no less
important for the purpose in hand, though less obtrusive. The
latter is of less interest to the men who have to do with the
theory of cultural development, because it is a matter of course.
This second feature of archaic thought is the habit of also
apprehending facts in non-animistic, or impersonal, terms. The
imputation of propensity in no case extends to all the mechanical
facts in the case. There is always a substratum of matter of
fact, which is the outcome of an habitual imputation of causal
sequence, or, perhaps better, an imputation of mechanical
continuity, if a new term be permitted. The agent, thing, fact,
event. or phenomenon, to which propensity, will-power, or
purpose, is imputed, is always apprehended to act in an
environment which is accepted as spiritually inert. There are
always opaque facts as well as self-directing agents. Any agent
acts through means which lend themselves to his use on other
grounds than that of spiritual compulsion, although spiritual
compulsion may be a large feature in any given case.
    The same features of human thinking, the same two
complementary methods of correlating facts and handling them for
the purposes of knowledge, are similarly in constant evidence in
the daily life of men in our own community. The question is, in
great part, which of the two bears the greater part in shaping
human knowledge at any given time and within any given range of
knowledge or of facts.
    Other features of the growth of knowledge, which are remoter
from the point under inquiry, may be of no less consequence to a
comprehensive theory of the development of culture and of
thought; but it is of course out of the question here to go
farther afield. The present inquiry will have enough to do with
these two. No other features are correlative with these, and
these merit discussion on account of their intimate bearing on
the point of view of economics. The point of interest with
respect to these two correlative and complementary habits of
thought is the question of how they have fared under the changing
exigencies of human culture; in what manner they come, under
given cultural circumstances, to share the field of knowledge
between them; what is the relative part of each in the composite
point of view in which the two habits of thought express
themselves at any given cultural stage.
    The animistic preconception enforces the apprehension of
phenomena in terms generically identical with the terms of
personality or individuality. As a certain modern group of
psychologists would say, it imputes to objects and sequences an
element of habit and attention similar in kind, though not
necessarily in degree, to the like spiritual attitude present in
the activities of a personal agent. The matter-of-fact
preconception, on the other hand, enforces a handling of facts
without imputation of personal force or attention, but with an
imputation of mechanical continuity, substantially the
preconception which has reached a formulation at the hands of
scientists under the name of conservation of energy or
persistence of quantity. Some appreciable resort to the latter
method of knowledge is unavoidable at any cultural stage, for it
is indispensable to all industrial efficiency. All technological
processes and all mechanical contrivances rest, psychologically
speaking, on this ground. This habit of thought is a selectively
necessary consequence of industrial life, and, indeed, of all
human experience in making use of the material means of life. It
should therefore follow that, in a general way, the higher the
culture, the greater the share of the mechanical preconception in
shaping human thought and knowledge, since, in a general way, the
stage of culture attained depends on the efficiency of industry.
The rule, while it does not hold with anything like extreme
generality, must be admitted to hold to a good extent; and to
that extent it should hold also that, by a selective adaptation
of men's habits of thought to the exigencies of those cultural
phases that have actually supervened, the mechanical method of
knowledge should have gained in scope and range. Something of the
sort is borne out by observation.
    A further consideration enforces the like view. As the
community increases in size, the range of observation of the
individuals in the community also increases; and continually
wider and more far-reaching sequences of a mechanical kind have
to be taken account of. Men have to adapt their own motives to
industrial processes that are not safely to be construed in terms
of propensity, predilection, or passion. Life in an advanced
industrial community does not tolerate a neglect of mechanical
fact; for the mechanical sequences through which men, at an
appreciable degree of culture, work out their livelihood, are no
respecters of persons or of will-power. Still, on all but the
higher industrial stages, the coercive discipline of industrial
life, and of the scheme of life that inculcates regard for the
mechanical facts of industry, is greatly mitigated by the largely
haphazard character of industry, and by the great extent to which
man continues to be the prime mover in industry. So long as
industrial efficiency is chiefly a matter of the handicraftsman's
skill, dexterity, and diligence, the attention of men in looking
to the industrial process is met by the figure of the workman, as
the chief and characteristic factor; and thereby it comes to run
on the personal element in industry.
    But, with or without mitigation, the scheme of life which men
perforce adopt under exigencies of an advanced industrial
situation shapes their habits of thought on the side of their
behavior, and thereby shapes their habits of thought to some
extent for all purposes. Each individual is but a single complex
of habits of thought, and the same psychical mechanism that
expresses itself in one direction as conduct expresses itself in
another direction as knowledge. The habits of thought formed in
the one connection, in response to stimuli that call for a
response in terms of conduct, must, therefore, have their effect
when the same individual comes to respond to stimuli that call
for a response in terms of knowledge. The scheme of thought or of
knowledge is in good part a reverberation of the scheme of life.
So that, after all has been said, it remains true that with the
growth of industrial organization and efficiency there must, by
selection and by adaptation, supervene a greater resort to the
mechanical or dispassionate method of apprehending facts.
    But the industrial side of life is not the whole of it, nor
does the scheme of life in vogue in any community or at any
cultural stage comprise industrial conduct alone. The social,
civic, military, and religious interests come in for their share
of attention, and between them they commonly take up by far the
larger share of it. Especially is this true so far as concerns
those classes among whom we commonly look for a cultivation of
knowledge for knowledge's sake. The discipline which these
several interests exert does not commonly coincide with the
training given by industry. So the religious interest, with its
canons of truth and of right living, runs exclusively on personal
relations and the adaptation of conduct to the predilections of a
superior personal agent. The weight of its discipline, therefore,
falls wholly on the animistic side. It acts to heighten our
appreciation of the spiritual bearing of phenomena and to
discountenance a matter-of-fact apprehension of things. The
skeptic of the type of Hume has never been in good repute with
those who stand closest to the accepted religious truths. The
bearing of this side of our culture upon the development of
economics is shown by what the mediaeval scholars had to say on
economic topics.
    The disciplinary effects of other phases of life, outside of
the industrial and the religious, is not so simple a matter; but
the discussion here approaches nearer to the point of immediate
inquiry, -- namely, the cultural situation in the eighteenth
century, and its relation to economic speculation, -- and this
ground of interest in the question may help to relieve the topic
of the tedium that of right belongs to it.
    In the remoter past of which we have records, and even in the
more recent past, Occidental man, as well as man elsewhere, has
eminently been a respecter of persons. Wherever the warlike
activity has been a large feature of the community's life, much
of human conduct in society has proceeded on a regard for
personal force. The scheme of life has been a scheme of personal
aggression and subservience, partly in the naive form, partly
conventionalised in a system of status. The discipline of social
life for the present purpose, in so far as its canons of conduct
rest on this element of personal force in the unconventionalised
form, plainly tends to the formation of a habit of apprehending
and coordinating facts from the animistic point of view. So far
as we have to do with life under a system of status, the like
remains true, but with a difference. The regime of status
inculcates an unremitting and very nice discrimination and
observance of distinctions of personal superiority and
inferiority. To the criterion of personal force, or will-power,
taken in its immediate bearing on conduct, is added the criterion
of personal excellence-in-general, regardless of the first-hand
potency of the given person as an agent. This criterion of
conduct requires a constant and painstaking imputation of
personal value, regardless of fact. The discrimination enjoined
by the canons of status proceeds on an invidious comparison of
persons in respect of worth, value, potency, virtue, which must,
for the present purpose, be taken as putative. The greater or
less personal value assigned a given individual or a given class
under the canons of status is not assigned on the ground of
visible efficiency, but on the ground of a dogmatic allegation
accepted on the strength of an uncontradicted categorical
affirmation simply. The canons of status hold their ground by
force of preemption. Where distinctions of status are based on a
putative worth transmitted by descent from honorable antecedents,
the sequence of transmission to which appeal is taken as the
arbiter of honor is of a putative and animistic character rather
than a visible mechanical continuity. The habit of accepting as
final what is prescriptively right in the affairs of life has as
its reflex in the affairs of knowledge the formula, Quid ab
omnibus, quid ubique creditur credendum est.
    Even this meager account of the scheme of life that
characterises a regime of status should serve to indicate what is
its disciplinary effect in shaping habits of thought, and
therefore in shaping the habitual criteria of knowledge and of
reality. A culture whose institutions are a framework of
invidious comparisons implies, or rather involves and comprises,
a scheme of knowledge whose definitive standards of truth and
substantiality are of an animistic character; and, the more
undividedly the canons of status and ceremonial honor govern the
conduct of the community, the greater the facility with which the
sequence of cause and effect is made to yield before the higher
claims of a spiritual sequence or guidance in the course of
events. Men consistently trained to an unremitting discrimination
of honor, worth, and personal force in their daily conduct, and
to whom these criteria afford the definitive ground of
sufficiency in coOrdinating facts for the Purposes of life, will
not be satisfied to fall short of the like definitive ground of
sufficiency when they come to coordinate facts for the purposes
of knowledge simply. The habits formed in un folding his activity
in one direction, under the impulse of a given interest, assert
themselves when the individual comes to unfold his activity in
any other direction, under the impulse of any other interest. If
his last resort and highest criterion of truth in conduct is
afforded by the element of personal force and invidious
comparison, his sense of substantiality or truth in the quest of
knowledge will be satisfied only when a like definitive ground of
animistic force and invidious comparison is reached. But when
such ground is reached he rests content and pushes the inquiry no
farther. In his practical life he has acquired the habit of
resting his case on an authentic deliverance as to what is
absolutely right. This absolutely right and good final term in
conduct has the character of finality only when conduct is
construed in a ceremonial sense; that is to say, only when life
is conceived as a scheme of conformity to a purpose outside and
beyond the process of living. Under the regime of status this
ceremonial finality is found in the concept of worth or honor. In
the religious domain it is the concept of virtue, sanctity, or
tabu. Merit lies in what one is, not in what one does. The habit
of appeal to ceremonial finality, formed in the school of status,
goes with the individual in his quest of knowledge, as a
dependence upon a similarly authentic norm of absolute truth, --
a similar seeking of a final term outside and beyond the range of
knowledge.
    The discipline of social and civic life under a regime of
status, then, reinforces the discipline of the religious life;
and the outcome of the resulting habituation is that the canons
of knowledge are cast in the animistic mold and converge to a
ground of absolute truth, and this absolute truth is of a
ceremonial nature. Its subject-matter is a reality regardless of
fact. The outcome, for science, of the religious and social life
of the civilisation of status, in Occidental culture, was a
structure of quasi-spiritual appreciations and explanations, of
which astrology, alchemy, and medieval theology and metaphysics
are competent, though somewhat one-sided, exponents. Throughout
the range of this early learning the ground of correlation of
phenomena is in part the supposed relative potency of the facts
correlated. but it is also in part a scheme of status, in which
facts are scheduled according to a hierarchical gradation of
worth or merit, having only a ceremonial relation to the observed
phenomena. Some elements (some metals. for instance) are noble,
others base; some planets, on grounds of ceremonial efficacy,
have a sinister influence, others a beneficent one; and it is a
matter of serious consequence whether they are in the ascendant,
and so on.
    The body of learning through which the discipline of animism
and invidious comparison transmitted its effects to the science
of economics was what is known as natural theology, natural
rights, moral philosophy, and natural law. These several
disciplines or bodies of knowledge had wandered far from the
naive animistic standpoint at the time when economic science
emerged, and much the same is true as regards the time of the
emergence of other modern sciences. But the discipline which
makes for an animistic formulation of knowledge continued to hold
the primacy in modern culture, although its dominion was never
altogether undivided or unmitigated. Occidental culture has long
been largely an industrial culture; and, as already pointed out,
the discipline of industry, and of life in an industrial
community, does not favor the animistic preconception. This is
especially true as regards industry which makes large use of
mechanical contrivances. The difference in these respects between
Occidental industry and science, on the one band, and the
industry and science of other cultural regions, on the other
hand, is worth noting in this connection. The result has been
that the sciences, as that word is understood in later usage,
have come forward gradually, and in a certain rough parallelism
with the development of industrial processes and industrial
organisation. It is possible to hold that both modern industry
(of the mechanical sort) and modern science center about the
region of the North Sea. It is still more palpably true that
within this general area the sciences, in the recent past, show a
family likeness to the civil and social institutions of the
communities in which they have been cultivated, this being true
to the greatest extent of the higher or speculative sciences;
that is, in that range of knowledge in which the animistic
preconception can chiefly and most effectively find application.
There is, for instance, in the eighteenth century a perceptible
parallelism between the divergent character of British and
Continental culture and institutions, on the one hand, and the
dissimilar aims of British and Continental speculation, on the
other hand.
    Something has already been said of the difference in
preconceptions between the French and the British economists of
the eighteenth century. It remains to point out the correlative
cultural difference between the two communities, to which it is
conceived that the difference in scientific animus is in great
measure due. It is, of course, only the general features, the
general attitude of the speculators, that can be credited to the
difference in culture. Differences of detail in the specific
doctrines held could be explained only on a much more detailed
analysis than can be entered on here, and after taking account of
facts which cannot here be even allowed for in detail.
    Aside from the greater resort to mechanical contrivances and
the larger scale of organisation in British industry, the further
cultural peculiarities of the British community run in the same
general direction. British religious life and beliefs had less of
the element of fealty personal or discretionary mastery and
subservience -- and more of a tone of fatalism. The civil
institutions of the British had not the same rich personal
content as those of the French. The British subject owned
allegiance to an impersonal law rather than to the person of a
superior. Relatively, it may be said that the sense of status, as
a coercive factor, was in abeyance in the British community. Even
in the warlike enterprise of the British community a similar
characteristic is traceable. Warfare is, of course, a matter of
personal assertion. Warlike communities and classes are
necessarily given to construing facts in terms of personal force
and personal ends. They are always superstitious. They are great
sticklers for rank and precedent, and zealously cultivate those
distinctions and ceremonial observances in which a system of
status expresses itself. But, while warlike enterprise has by no
means been absent from the British scheme of life, the
geographical and strategic isolation of the British community has
given a characteristic turn to their military relations. In
recent times British warlike operations have been conducted
abroad. The military class has consequently in great measure been
segregated out from the body of the community, and the ideals and
prejudices of the class have not been transfused through the
general body with the same facility and effect that they might
otherwise have had. The British community at home has seen the
campaign in great part from the standpoint of the "sinews of
war."
    The outcome of all these national peculiarities of
circumstance and culture has been that a different scheme of life
has been current in the British community from what has prevailed
on the Continent. There has resulted the formation of a different
body of habits of thought and a different animus in their
handling of facts. The preconception of causal sequence has been
allowed larger scope in the correlation of facts for purposes of
knowledge; and, where the animistic preconception has been
resorted to, as it always has in the profounder reaches of
learning, it has commonly been an animism of a tamer kind.
    Taking Adam Smith as an exponent of this British attitude in
theoretical knowledge, it is to be noted that, while he
formulates his knowledge in terms of a propensity (natural laws)
working teleologically to an end, the end or objective point
which controls the formulation has not the same rich content of
vital human interest or advantage as is met with in the
Physiocratic speculations. There is perceptibly less of an
imperions tone in Adam Smith's natural laws than in those of the
contemporary French economists. It is true, he sums up the
institutions with which he deals in terms of the ends which they
should subserve, rather than in terms of the exigencies and
habits of life out of which they have arisen; but he does not
with the same tone of finality appeal to the end subserved as a
final cause through whose coercive guidance the complex of
phenomena is kept to its appointed task. Under his hands the
restraining, compelling agency retires farther into the
background, and appeal is taken to it neither so directly nor on
so slight provocation.
    But Adam Smith is too large a figure to be disposed of in a
couple of concluding paragraphs. At the same time his work and
the bent which he gave to economic speculation are so intimately
bound up with the aims and bias that characterise economics in
its next stage of development that he is best dealt with as the
point of departure for the Classical School rather than merely as
a British counterpart of Physiocracy. Adam Smith will accordingly
be considered in immediate connection with the bias of the
classical school and the incursion of utilitarianism into
economics.


NOTES:

1. "Why is Economics not an Evolutionary Science?" Quarterly
Journal of Economics, July, 1898.

2. "The Future of Economic Theory," ibid., October, 1898.

3. See, for instance, Hasbuch, Allgemeine philosophische
Grundlagen der von Francois Quesnay und Adam Smith begrundeten
politischen Oekonomie.

4. Quesnay, Droit Naturel, ch. v. (Ed. Daire, Physiocrates, pp.
52-53).

5. Quesnay, Droit Naturel, ch. v. (Ed. Daire, Physiocrates, p.
53).

6. Dupont de Nemours, Correspondence avec J.-B. Say (Ed. Daire,
Physiocrates, premiere partie, p. 399).

7. See, for instance, the concluding chapters of La Riviere's
Ordre Naturel des Societies Politiques.

8. E.g., Hasbuch, loc. cit.; Bonar, Philosophy and Political
Economy, Book II; Ritchie, Natural Rights.