\> ^ ^ 'V^^ "^^ ^ IMAGE EVALUATION TEST TARGET (MT-3) 1.0 V^^ ■22 lU iM ly IL25IU ■Ld rf'.> .."teiii- CIHM/iCMH Microfiche Series. CIHJVi/ICIVIH Collection de microfiches. Canadian Instituta for Kiatorical Microraproductions / inatitut onadian da microraproductiona historiquaa Taehnical and Bibliographic Notaa/Notat tachniquaa at Mbliograplilquaa Tha inatituta liaa attcmptad to obtain tha boat originai copy availabia foi fiiming. Faaturaa of thia copy which may ba bibliographicaUy uniqua. which may altar any of tha imagaa in tha raproduction. or which may algnifieantly changa tha uaual mathod of filming, ara chackad balow. 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TMs item Is filmed at the reduction ratio checked below/ Ce document eat film* au taux de rMuctkMi IndiquA ci-daa a oua. leX MX 1BX 22X n p« of m Of be th( ai< oti fin ak or Th ahi TIf Ml c!3f ant bai rigl 2SX 30X 2i 12X ItX UX 2tX n ttx Tim eopy filmMl h«r« has b««n raproduead ttMnks to th« gwMroaity of: Univtraity of Alberta Edmonton L'oxomplairo film4 fut roproduit grico i la gAfiAroait* da: Univtnity of Albtrta Edmonton Tha imtgaa appaaring hara ara tha baat quality poaalbia eonaidaring tha oondldon and lagibiHty of tlia original copy and in kaaping witli tlia Aiming eontraot apaeiffleationa. Original eoplaa in printad papar eovara ara fMmad b»jlnning with tha front covar and anding on tha laat paga with a printad or ilkiatratod impraa- •ion. or tha bacic oovar whan appropriata. All othar original copiaa ara fHmad beginning on tha firat paga with a printad or Uiuatratad impraa- •Ion. and anding on tha laat paga with a printad or Uiuatratad impraaaion. 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Mapa, plataa, charts, ate., may ba filmad at dJffarant raduedon ratioa. Thoaa too larga to ba andraly incivdad in ono axpoaura ara filmad beginning in tha uppar laft hand eornar. laft to right and top to bottom, aa many framaa aa raquirad. Tha following dlagrama illuatrata tha Laa cartaa. planchaa. tablaaux. ate. pauvant Atra filmte A daa taux da rMuction diffArants. Lorsqua la document ast trap grand pour ttra raproduit m% un saul cliehA. ii ast f iim* k partir da I'angia supMaur gaucha. dm gaucha i droita. at da haut m% baa, i% pranant la nombra d'imagas nteaasaira. Las diagrammas suivants illuatrant la mAthodo. 1 2 3 1 2 3 4 5 6 ^^m^ y^y^. Z^^:^ '^"tT'^^-^' *-* / THE PROBLEM OF ECONOMIC EDUCATION BY SIMON NEWCOMB Reprinted from the Quarterly Journal of Economics for July, ,893 BOSTON Geo. H. Ellis, Printer, 141 Franklin Street 1893 m A V . -3. THE PROBLEM OF ECONOMIC EDUCATION. Tjfe fact that there is a wide divergence between many of the practical conclusions of economic science, as laid down by its professional exponents, and the thought of the public at large, as reflected in current discussion and in legislation, is one with which all are familiar. In some of its aspc'ts this divergence has become so trite a subject that it might seem doubtful whether anything new and useful could now be said about it. There is, however, one aspect of the case well worthy the consideration of all interested in educational and social progress. What it is will be made clear by first differentiating it from another which has attracted much more attention. The current view of the questions at issue between the contending parties is that the leading economists of the past, especially those of England, constructed an abstract science which rec?nt experience and thought have shown to be inapplicable to the actual state of industrial society. Tliese writers were too eager to make their conclusions the sole guiding principles in economic legislation, ignor- ing the diificulties growing out of the complex conditions of the social organism as it actually existed. Their system has, however, been taught and enforced with such per- sistence that the result is a general rebellion which now threatens to overturn the whole fabric of economic sci- ence. From this point of view the divergence is between a coherent but somewhat antiquated system mostly be- longing to the past and a body of new ideas introduced by a younger generation of thinkers. This may be true so far as it goes; and, were it the whole truth, there would be nothing abnormal or surpris- ing in the situation. All science, properly so called, is, from the nature of the case, more or less abstract. When- over abstract science is applied to human affairs, duo ac- count must be taken of all modifying circumstances, else we shall be led to erroneous conclusions. Each of its doctrines is constantly open to challenge, holding its place only on the same terms that a cliampion holds the bolt : whenever another appears powerful enough to take its place, it must give way. Tlie changes in the industrial world since Ricardo, we might almost say since Mill, liave been so revolutionary that it would be wonderful if aj)- plied economics at least did not med reconstruction. Economists may admit, without detracting from the dig- nity or the value of their science, not only that due regard must be had to all modifying circumstances in applying its abstract principles, but that economic considerations cannot be the sole guide of the legislator in matters of public policy. So far as the battle is being fought on the lines thus indicated, it is an intelligent one in which econ- omists of opposing views are themselves the leading com- batants. Its consideration is not, however, the object of the present paper. Tlie divergence to which, the attention both of econo- mists and the thinking public is now invited runs on lines essentially different from those just marked out. The disagreement in question is not between different classes of economic students or different schools of thought, but between well-established economic conclusions on the one hand and the ideas of the public on the otlier. These ideas do not spring from a study of the contrast between the present state of industry and that of a century ago, but aie as old as our commercial system. Their fault is precisely that with which many moderns taunt the school of Ricardo : they are based on a few abstract principles or hasty and superficial deductions from assumed principles, with little regard to the actual facts of industry. If they were consistent enough to constitute a system, that system m might be ciillod the popular political oconomy. VVIiiit I first propose to show is that we have to deal with ideas couturios old, on which the thought of professional ocouo- mists has never made any permanent impression except, perhaps, in Great Britain, and that in the every-day appli- cations of purely economic theory our public thought, our legislation, and oven our popular economic nomenclature are what they would have been if Smith, Ricardo, and Mill had never lived, and if such a term as political econ- omy had never been known. One of the most marked points of antagonism between the ideas of the economists since Adam Smith and those which governed the commercial policy f)f nations before his time is found in the case of foreign trade. Before such a thing as economic science was known arose the theory of the " balance of trade." The fundamental doc- trine of this theory was that trade was advantageous or disadvantageous to a nation according as the value of its exports exceeded or fell short of the value of its imports. Accordingly, in the nomenclature of the time, an unfavor- able balance of trade or state of credit meant one in which the imports were supposed to exceed the exports, and a favorable balance the contrary. An immediate corollary from this view was that trade between two nations could not be advantageous to both, because the values which each exported to the other could not both be greater than those received from the other. ♦ This doctrine was denied by the Physiocrats, and shown to be wholly fallacious by Adam Smith. For a century and a half the doctrine entertained and taught by econo- mists is that there can be no trade between two nations which is not advantageous to both ; that men do not buy or sell unless what they receive is to them more valuable than what they give in exchange ; and that what is true of the individual man is, in this respect, true of the nation. And yet the combined arguments of economists 6 for a hundred years have not sufliced to change the noMUMichiture or modify thu ideas of conunorcial nations upon the subject. One who should road that cha[)ter of Smith's work in wliich lie attempts to refute tlic ohl doc- trine would almost suppose tliat lie was reading a discus- sion before a committee of Congress at the present time. The only points in whicli the arguments refuted by Suiith dift'er from those whiclt we liear to-day is that the prin- ciples which lie enunciates in order to refute them are now regarded as so axiomatic that no statement of them is necessary. We accept them as so much a matter of course that we are not struck even by tlieir antagonism to our own humane sentiments. Tliat no nation is so advanced as our own iii treating all nations and peoples as kindred is abundantly shown by the liberality of our contributions, and the activity of our authorities when- ever distress is to be relieved in any part of the world. And yet witliin a year the distress which many industri- ous workmen in England and elsewhere wore said to be suffering in consequence of our legislation, and their con- sequent execration of many of our leading statesmen, not to say of our nation at large, were portrayed everywhere among us in glowing colors, not to make us recede from our position, but as a proof that our policy was well cal- culated to promote our own interests, and should there- fore be persisted in. It has been assumed as an axiom which needs no proof, because none would be so hardy as to deny it, that foreign nations cannot honestly be in favor of any trade with us that is not to our disadvantage ; that the very fact that they want to trade witli us is a good reason for receiving their overtures with suspicion and obstructing their wishes by restrictive legislation. Wc find this opinion reflected not only in public addresses of statesmen, but in documents of the highest official dignity. It may be replied that these were the conclusions of only one political party, and not of the majority. Bub tliis ground will sciircely In^ar exnminiition. The vinws in (lUcHtinn woro not cinlxMlied in tlio itliitfoini of any party; and any political Icudor who hud proclaimed that we wished to injure the industries of foreign nations would have been repudiated by both parties. 'I'lie fai't was that one party wanted to gain votes, and sagacious leaders believed the nation to bo so strongly ind)ued with tlu! notion that the distress of another nation meant the gain of our own that they could gain votes by setting it forth. It must be Cftnfessed that this contention was not met by the oi)posite party in the way that would have been most accei)table to economists. Indeed, we fear that, had an orator for the other side been instructed to teach the people that the alleged distress was rather a proof that we also suffer, and that trade would be as advantageous to us as to those we traded with, he would have been a little afraid of prejudicing his hearers against his doctrine. Probably he would have thought it wiser to say nothing on the subject, or, if he could do so with truth, to proclaim that the distress painted by the opposite party had been greatly exaggerated. If evidence could have been adduced to show that the tin manufacturers of Wales were more l)rosperous under our MoKinley tariff than they had ever been before, e made as useful as possible to the comni'iaity, and that tliese classes should be trained into habits of regularity and industry. And yet laws have been passed in the State of New York, and seem to have a good proijpcct of passage in many other States, prohibiting the employment of convicts in making articles useful to the public. Moreover, this movement deixves all its vitality from the puiely eco- nomic consideration that the goods manufactured by these convicts are sold in competition with things manufact- ured by honest producers. The inconsistency of this policy with the theory of socialism is very instructive. If in a Shaker commu- nity it were proposed that offenders should be supported at the public expenL"", and not allowed to perform any labor in return, the sanity of the mover of the proposal would be gravely doubted. Yet such is the influence of the commercial system upon our ways of thinking that an equivalent measure, tfiken by society at large, is ear- nestly supported by the very class that is most injured by it. The goods manufactured by convicts are for the most part just those of which the poor labc»rer stands most in need ; and, if the management of our prisons were con- ducted on philanthropic principles, convicts could advan- tageously be employed in making shoes and coarse cloth- ing for free distribution, or sale at a nominal price, to the poorest classes. Yet such a measure has never been seri- ously proposed. It may, indeed, be feared that a mover of this proposal would be received in labor circles much as the mover of the opposite one would have been in the Shaker community. 11 Tho wide prevalence of usury laws among us affoj'ds another example of tlie persistence of the ideas of a former age long after they have been shown fallacious, not only by thoughtful investigation, but by general busi- ness experience. It is not necessary that we should con- demn every attempt to regulate the rate of interest, any more than to regulate other contracts in exceptional cases. The point to which we ask attention is the gen- eral belief throughout the community that the rate of in- terest can practically be regulated by law. Not dissimilar from I'ns is the wide general belief that laws making it difficult to collect rents and enforce tiie payment of debts are for the benefit of the poorer classes. They are un- doubtedly for the benefit of those classes who do not ex- pect to pay. But the fact, so obvious to the business economist, that everything gained in this way comes out of the pockets of the poor, who are going to pay in the form of insurance, is something which the law-making public have not yet apprehended. The spirit in which economic doctrines are often re- ceived is also worthy of consideration. A single in- stance of this spirit will suffice. Probably no phrase ever used by Carlyle has met with wider currency than the epithet "dismal science" which he applied to political economy. And yet a little consider.ation will show that political economy is dismal only in the sense that every conclusion as to what man cannot do may be called dismal. A stormy voyage across the Atlantic is very dismal ; but no one froiii that premise ever drew the conclusion that boys ought not to learn anything about the Atlantic Ocean, or censured the raeteorologist who tells us that the ocean is rough in winter, and will make the Isnidsman seasick. That you cannot eat your cake and have it, too, is a maxim taught the school-boy from earliest infancy. But, when the economist applies the same maxim to the nation, he is met with objections and arguments, not only on the 12 part of the thoughtless masses, but of influential and intel- ligent men. An apology may seem requisite for devoting attention to a phrase so puerile. Certainly, there is no other branch of human thought in which such an epithet would be considered worthy of consideration. I allude to it because the satisfaction with which it is received, the unction with which it is quoted by those opposed to the conclusions of the economists, and vhe wide currency given ',. ) it, show that it has been received as a valid reason why the conclusions of economists should be ignored. Before we can reach a final judgment on this conflict of doctrine there are several points to be examined. The first question which may arise is whether, after all, the actual divergence of views may not be less than it appeara, and may not arise from a consciousness on the part of the public that economic considerations should not alone direct our public policy. It must be admitted that economists have not always remembered that the statesman must take into account considerations of political expediency, education, develop- ment, and even sentiment, as well as economic ones. Diversification of industries, independence of foreign na- tions, and the education of the people in the mechanic arts are all legitimate objects to be taken account of in regulating foreign trade. Even a pleasure so purely sen- timental as that supposed to arise from the possession of metallic wealth drawn wholly from American mines need not be wholly despised, were it really felt by the masses. Economists who are said to have opposed the laws regu- lating child's labor in factories were perhaps right from a merely economic standpoint; yet a higher order of con- siderations, looking to the development of the rising gen- eration, justly turned the scale. But an examination of public utterances on the tariff 13 show conclusively that these are not the controlling factors which have led the public to favor what we call the system of protection. If the farmers and the public were told that many of the necessaries of life actually cost them more in consequence of the tariff, but that this is only the price they pay for the benefits of a wider diversi- fication of industries, and a general diffusion of skill in the mechanic arts, they would soon rebel. The real poj)ular strength of the system is founded'on purely eco- nomic considerations, — on the doctrine that foreign com- petition is injurious to American industry ; that more em- ployment is given to every class of American producers when they are compelled to produce anything at home in- stead of allowing foreigners to make it for us ; and that a real danger may exist of our economic condition being impaired by the excessive import of foreign goods, to which we might be tempted under a rSgime of free trade. These doctrines are not peculiar to our time c country : they are a part of the heritage of the race, which a'century of teaching has not sufficed to eradicate. The unique character of this state of things is still further emphasized when we inquire whether there is not an evident prospect that with the advance of intelligence the views of the economists will meet with a better recep- tion. It seems to the writer that during the last thirty years the prospects of this reception have distinctly retro- graded, even after making due allowance for the recent reaction in our own country. Not for fifty years has the idea that every nation does well for itself in restricting foreign trade been so strongly upheld as it is to-day. Garfield could scarcely say now what he said in Congress twenty years ago, that the intelligence of the world was on the side of free trade. At no epoch in our history has the idea of preventing competition with organized labor been so strong as it is among us now. It is not even true that the line of division can be drawn by education. It 14 cannot bo said that even that small percnntage of the male population who have received a college education is largely on the side of the economists; but it is said, I do not know whether with good foundation, that the majority of students who have been trained in economic theories reject those theories when they enter the active business of life. Of the nature of the situation as we have depicted it there can, we conceive, be no doubt. Admitting that pro- fessed economists have in several instances erred in the applications of theii* doctrine, either through not making sufficient allowance for its modification by circumstances or through applying it to questions not purely economic, the fact remains that the practical maxims which their sci- ence inculcates are unheeded by the great mass of the public, and have little or no influence in guiding legisla- tion. It must also be conceded that we see in recent times a growing disposition among economists to abandon this particular field of conflict, with the expressed or im- plied admission that, after all, the wisdom of the public and th*) common sense of the masses may be a better guide than the theories of students and philosophers. It would be quite foreign to our present purpose to argue the question which side of the controversy is in the right, or to repeat the reasonings by which economists reach their conclusions. Yet there are certain positions taken by those who are more or less inclined to abandon the field, or who conceive economists to be in the wrong, which should by no means be ignored. The proposition that the common sense of the masses is better than the wisdom of the learned is one that should not be either wholly ac- cepted or wholly rejected. The fact is that there are some cases in which the proposition is true, and others in which it is not true. Perhaps we may make a contribution to the discussion by seeking to define certain cases in which it may be true, and contrasting them with others in which it is 16 undoubtedly false. The political history of the nineteenth century seems to show that public opinion, founded on the natural instincts and tendencies of men at large, has guided the great political and social movements which have made our age what it is. The success which has hitherto been won by liberal institutions may suffice to prove the suffi- ciency of this guide in the great field of public policy. At first dight, all the questions at issue between the econo- mists and the public appear to pertain to public policy. Reasoning in a broad way from the analogy of the case, the conclusion might seem quite natural that we have here a contest in which the public must win, because there is no other criterion of soundness than success in sha[)ing public thought and guiding the course of events, and that the economist would therefore do better to abandon the field. But before accepting this conclusion we must point out another class of questions, in which public opinion and the instincts of the masses have proved so insufficient that progress has been possible only by com- pletely ignoring them. These questions include all that can in any way be called scientific. The question has fre- quently been asked, and discussed with all the resources of learning, why the ancients made no advances in physical science, and why it was left to the moderns to learn such elementary facts as the expp.nsive power of steam and the laws of force and motion, and to apply these facts to the daily needs of life. The really difficult question might be stated as the converse of this. We should rather ask, Why is it that we moderns have been able to study and apply the expansive power of steam and to formulate the laws of force and motion, when the history of the whole human race would seem to show its incapacity for such achieve- ments ? Only those who make a special study of the sub- ject have any conception of how unnatural and how foreign to all ordinary modes of thought were the mental proc- esses by which these discoveries were made. For thou- 16 sands of years mankind universally accepted the opinion that every object in motion had an inherent tendency to come speedily to a state of rest. The experiments and reasonings which would have shown the falsity of this law were within the power of every one to make : no expensive apparatus was needed ; nothing but a little study of the phenomena going on around us, and a few experiments suggested by this study. And yet, up to three or four centuries ago, no one ever thought of making the experi- ments and observations necessary to decide the question; and we might almost say that after the truth was estab- lished more than a century was required to make it evident even to the learned. Coming to our own times, we may take, as an instance out of hundreds, those developments of electrical and mechanical science which have made the steamship, the railway and the telegraph what they are. To these devel- opments public opinion and the instincts of the masses have contributed absolutely nothing. As guides or judges, they would have been worthless until the results were reached. Any one who should have proposed to submit the question of the double expansion of steam, or that of quad- ruplex telegraphy, to a popular vote, in order that the common sense of the masses might be brought to bear on the subject, would have been classed as a wag. Prom the point of view which we are now taking, the whole question must turn on the category to which we shall assign the mattera at issue between the economist and the public. That these matters belong rather to the scientific than the political class ought to be quite clear to all who fully comprehend them. True, they are in a certain sense political, in that they involve questions of public policy ; yet they are essentially scientific in their nature. The scientific character of all the questions in- volved in constructing and operating gas-works to supply a city would not be altered by the fact that the works were 17 to be operated by a municipality. Public opinion is no better qualified to pass upon the questions growing out of the relations between imports and exports than it is to decide upon the best form of locomotive. The question whether restrictions upon the freedom of labor operate favorably or adversely to the general welfare cannot pi>s- sibly be decided except by those who possess the faculty of analyzing the effects of such a policy. We may, from a philosophic point of view, consider all the measures taken by labor unions as a part of the movement of the age ; but the ultimate effects of those movements ujion the produc- tion and distribution of wealth can be determined only by trained thinkers. The vague impressions entertained by the public as to the effects of options and corners on the prices of the necessaries of life are more akin to the mediajval theories of witchcraft than they are to any of the ideas on which the successful movements of our own times are based. In all the points of antered that the rebellion against the older system of political economy, especially that of liicardo, is not the outcome of any popular movement whatever, but is wholly the work of a younger school of economists. Its lirst advocates were found in the uni- versities, and not among the people. I freely admit that this is not true of the labor movement, and that in this movement we have what may be called a rebellion against the older economic principles, which did not come from universities or economists, but from the masses. But, in so far as this movement is directed against the principles of the older political economy, there is, as we have already shown, nothing modern in it. So far as principles are concerned, it is simply a new outburst of ideas which are centuries old. In so far as the later economic movement has been opposed to the school of Kicardo, there is of course a certain sympathy between it and the labor move- ment ; but this sympathy does not result in any wide interest among the laboring chisses in economic principles, new or old. But there is one feature of the case as I have described it which may seem discouraging, and the cause of which is worth inquiring into. I refer to the fact that the popular political economy seems to have taken a greater hold on the public mind, in opposition to the views of the profes- sional economists, during our time, than it ever did before. Perhaps this circumstance, more than any other, might make us doubt whether the principles which we advocate are not farther than ever from general acceptance. Para- 81 (loxicnl tlioii<,'li it may seem, it can, wo conceive, be shown that tlio reaction in question is due to the diifuBion of popuhir education. A certain amount of education and knowledge of tlic world is necessary to the reception even of those principles which I have collectively described under the term *' the popular political economy." When this stage is attained, they are as natural as the belief in witchcraft is at a certain stage of the evolution of thoJight. Education by newspaper is eminently adapted to their promotion. The press has diffused such a ii1<1 lint fail to hou tliiit tlu> tirHt ootulitioii towiirtlH an eiilargtMiient of the uuoiioniiu fiinctioiiH of the State in tlie acceptance by th(^ State of those laww wliich govern tlie production and dlHtrilnition of wealth, aH they have been developed by the econoniic invnBtigatoi-H of the i)aHt and prcHent. It Ih frequently held that popular goveniniont, vn[)e- cially when based on universal Huft'rage, necessarily re- flects the ideas of the inaHsea rather than those of the thinlfing and educated classes. Were this the (iase, our study could scarcely lead us to any practically useful result. But wo should not accept this conclusion with- out testing it by other cases than those now biifore us. The abnormal character of the divergence between public opinion and economic doctrine will be made clear when wo contrast it with the reception by the public of the re- sults of thought in other fields. When the chemist learns the properties of new compounds, when the pathologist discovers that certain agents exercise an injurious influ- ence upon the human system, when the entomologist finds how noxious insects may be destroyed, they have no dilVi- culty in persuading the public of the correctness of their conclusions. When the astronomer mai>s out the path of an eclipse over the earth's surface a hundred years before its occurrence, all his intelligent fellow-citizens believe implicitly that posterity will see the eclipse exactly as bo has predicted it. The general rule has been that the thinking few impress their ideas ui)on the masses, and thus guide the policy of the community, even when there is a direct antagonism between their ideas and those which the masses would naturally be led to adopt. To the natural man no doctrines could appear more repug- nant to reason and experience than those of the earth's rotundity and of its diurnal rotation on its axis. Yet the former was never contested by any one who had occasion to apply it ; and the latter is now universally accepted, not 1 hocnuBo th() mnHNOH hoo Uh truth, but liociiuHe tlioy ncco[it tlu) ui>nuluHit)iiH of tlioHu wlio do boo it. TIk) fact is tliiit II lur^o body, p(>ilm|m a uiajoiity of tliu cMbu-atud few, an; ahuost at oiiu willi thi; jiublU; al largo ill unwittiiijL^ly ao{'«'|itiiig the v twecii the liaiidful of men wlio have iiindo a apucial study of ccouoiiiics and tliu intolligeiico of the country at hirgc. When tliat intelligeiu'o is won over U* tlio side of the economists, wu may expect with entire coiilideneo that the ideas of the masses will soon follow. We must therefore recognize three classes of thinkers, — the professional teachers and students who necessarily number only a few huntlrcds or thousands, the educated cliwses, and the public at large. So far as the professional teacher is concerned, every one who comes within the range of his effective instruction — every one, I mean, whom he really has a clianee to train in methods of syste- matic thought — maybe considered as belonging to the ed- ucated class. The practical question before us is, therefore, how ecouomio science should be taught to the mass of stu- dents in our colleges and schools. This is a question on wliioh the writer touches with great diffidence, for the I'easou that his conclusions are not those of n professional teacher or student of the subject, but only those of oue who has always taken an interest in the study of popular habits of thought. Hence, even should his ideas of the disease be well founded, those of the remedy will neces- sarily lack the basis of positive experience. Still, for the sake of opening a discussion which he hoj)e8 will be con- tinued by abler and more experienced pens, he will vent- ure a few suggestions. First of all, he would submit the question whether the recent reaction aguinst the teaching of abstract principles, and the substitution of wide instruction in history, admin- J! 24 istration, and the general facts of the social organism for a study of those principles, has not served to lessen the influence of economic thinking upon tlie educated public. The popular political economy, not being based upon wide study of any sort, but upon a few Simple principles, can best be met on its own ground by showing the fallacies on which those principles are based. In the very fact that education and intelligence do not seem to have weakened the hold of the popular political economy on the public mind we liave good evidence that mere increase of intel- ligence will not sullice to eradicate it. What we want is better training in the art of right thinking. Tliis training cannot be given by the n.ere teaching of facts. A person can no more be trained '"to a thinker by lecturing to him than he can into a gymnast. A student may know the whole history of money and banking, and be acquainted with the laws of the leading nations relating to these sub- jects, without being able to trace the effect of free coinage of silver upon trade and industry. He may be able to repeat the arguments for and against bimetallism without being able to judge which should prevail in a given case. He may be profoundly acquainted with the economic policies of all the great nations, and yet be unable to refute the fallacies into which the farmer's boy falls in talking of trade and industry. The one thing needful is a thorough drill in following mentally the operations of production, exchange, transportation, distribution, and consumption. The current popular reasoning on eco- nomic subjects is often sound so far as it goes; it fails from considering only a part of the case. The student should be able to point out to the plain man just where this fault begins, and what the result will be when indi- rect as well as direct effects are considered. It is also desirable that the student be taught not only to think rightly and reach correct conclusions, but to ana- lyze and expose popular fallacies. He should be able to ■-:i:: 26 ra point out to the intelligent but not siiecially trained man wherein the latter reasciis wrongly when he reaches such conclusions as that the law requiring all copyright books to be wholly manufactured in this country is a benefit to our industry, and that the employment of the cheap labor of industrious foreigners, like the Chinese, will reduce the standard of living of our own laboring classes. It is a remarkable fact that Bastiat seems to have been almost the only well-known writer who .has thus at- tempted to attack popular fallacies on their own ground, and make them evident by modes of reasoning of the same kind which the public habitually employ. Proba- bly these writings were better known to the students of the last generation than they are to those of the pres- ent time. If this is so, and if, as the writer supposes, they are the only writings of their kind extant, we have a very good explanation of the reaction of our own gen- eration against the fundamental principles of economic science. The direction which the present writer believes that elementary economic teaching should take may be made more evident by so'.ne examples of the propositions which he holds should be taught to or discussed by stu- dents. Such propositions are : — That the exports of a country will, in the long run, approximately balance the imports, no matter what restrictions may be placed upon the latter. That the ultimate effect of such restrictions is to make exports less profitable : hence that the so-called balance of trade needs no regulation, and that there is no danger of our interests suffering from an excess of imports. That no raising of wages is of permanent benefit to the masses unless accompanied by an increase in the production of things for the masses to eat, drink, and wear. That every increase in the production of those necessaries of life which the masses find rt hard to obtain mtkes their command easier to some, and places them within the reach of others; while every cause which has the effect of diminishing such production will compel some class to go with less of them than they would otherwise enjoy. That the value of every industry is to be measured, not by the r '! 26 employment it gives to labor, but by the usefulness of its prod- uct ; in fact, that the employment shows wie cost of the industry, not its utility. That the employment of the unemployed at the public expen&o would be of no permanent benefit, unless the result of their labor could be sold for at least its cost. That there is plenty of employment for e\orybody, if men only had the wages to pay them, so that what is called want of work really means want of money to pay for the work. That the lower the wages demanded in any employment, tiie greater the number of people who can find employiueiit at those wages ; and the higher the wages demanded, the less the number. That the supposed beneficial eifeits of an increase of currency upon business would only prove temporary, and would be followed by a depression corresponding to the stimulus which business had received. That prices are determined, in the general average and the long run, by the quantity of any article produced and the demand of the public for it ; that any attempt to artificially raise the price of any service whatever above the limit thus fixed will result in a diminished consumption, and hence in a diminished production, — in other words, that you cannot get the public to accept more than a certain quantity of service or goods at any definite price, which quan- tity diminishes with the price. That there is no possibility of a general increase in the demand for labor except by measures which would speedily neutralize their own effects, and that attempts to promote or encourage one branch of industry by making it more necessary only result in an equal discouragement to other branches. That a commercial marine is of no benefit to us except thiough bringing to our shores the products of other nations which we wish to enjoy. In general, that industry is of no use to us except by producing things that we need; and that, if we can get those things without the industry, so much the better, because we shall then have more time to produce yet other things which we had not previously enjoyed. That a Chinaman who should work for nothing would therefore be a benefactor to us all, being, in fact, so far as we are concerned, a sort of labor-saving machine. In fine, that the great improvements which the present generation has witnessed in the condition of the laborer are due to cheapened production, whereby everything we need is gained with less industry tha.n was formerly necessary. r" ^ 27 It is not claimed that such propositions should be taught dogmatically, as if they were theorems of geom- etry. Not only sliouid their limitations he pointed out, when necessary, but the student should be encouraged to find or even to imagine conditions under which the max- ims would fail. In doing this, the vice he should be taught to avoid is that of concluding that because he can imagine a state of things under which a maxim would fail, therefore it is worthless. It is also suggested that all branches of economic learning are not equally valuable for the special end in view. Much that is said of such subjects as laws of distribution, utility, disutility, profits, and oost of production, however interesting and valuable to the teacher and professional student, can be of little use to the general student because he has not time to master and digest it. Of still less use t^ him is the history of economic theory, except so far as it may bear upon the problems of our o\(rn time. On the other hand, the study of the life and condition of various classes of men, both past and present, afford valuable lessons which are too much neglected. But, as in the case of all other facts, those of history are valuable only as they afford a means of understanding the present and inferring the future.