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In secs. 17-18 of Foundations of Economics I show how early occidental and oriental culture met in the Homeric Greeks, who carried civilization forward to the stage of criticism reached in the fifth century B.C., when the formal beginnings of economic science were made (sec. 20). How the oriental and the occidental mind further coalesced in ways and means for promoting and maintaining life may be traced in the progressive Roman republican and the Graeco-Roman imperial economies accompanied by constant and continuous infusions of oriental with occidental elements. The greatest fusing force was Christianity, which welded the direct and powerful contributions of the Jew, the Greek, and the Latin. How the teachings of Jesus were instinct with the realities of the economic system, and many of the accepted usages of the Caesars may be read, for example, by a simple and natural interpretation of the parable of the talents: "Thou oughtest therefore to have put my money to the bankers, and at my coming I should have received back my own with interest."
A simple recital of the foregoing facts of history is ample to show that an ancient economics developed and that it embodied all the elementary principles upon which modern economics has built its superstructure. As the elementary mathematics of the ancient world may be contrasted with the more highly developed mathematics of the modern world as ancient mathematics and modern mathematics respectively, so the elementary economics of the ancient world may be contrasted with the more highly developed economics of the modern world as ancient economics and modern economics.
Matt. 25:27 (Revised Version of 1886, Oxford University Press). A talent in the time of Tiberius Caesar was worth $1,170 in our money as usually reckoned, and a hundred pence was worth about $18, making a silver penny of the New Testament equivalent to about 18 cents in our American money. The parable of the talents is a lesson or suggestion on the possible handling of a large sum of money for investment for productive purposes. This clear recognition of one of the fundamental institutions of economic theory and practice was affirmed to the codes of Theodosius and Justinian, Christian emperors, and although later obscured by the teaching of the mediaeval church it again reappeared with the learning of the jurists and the canonists. After the canonist economics developed, the ecclesiastical opposition to interest virtually ceased and gradually disappeared altogether.
The rise of modern economics has been sufficiently sketched through the foregoing paragraphs of this propaedeutic.
b) Statistics and Accounting: The method of statistics is an application of the principles of the inductive logic to the summation and interpretation of the enumeration of data in any given field or province of phenomena. The steps which must be taken by the careful statistician are observation, enumeration, tabulation or correlation, and inference or the critical estimate of results. Statistics of course is chiefly an art which must rest on a scientific basis. Statistics as a science began with the writers on political arithmetic in the eighteenth century, and with the cameralists, specialists in the examination of financial facts, working for and under the direction of the strong central states, such as Prussia. Among nineteenth-century scientific statisticians, such writers and investigators as Knies, von Mayer, and Meitzen, of Germany; Robert Giffen and Bowley, of Great Britain; and Carroll Wright, of the United States, may be named.
Some training in statistics is an essential adjunct to the equipment of a practical economist. The science of statistics furnishes, e.g., for the science of administration, the very essential facts which concern some specific subject or province of administration. It gives a knowledge of aggregates and a foundation for comparisons, enabling the public office, and private citizen as well, to find the merit and faults in any specific administrative system and to stengthen the weak places. Statisticians are an indispensable and essential part of the corps of officials required for the successful and efficient administration of the government of any state. Trained statisticians are equally essential for efficiency in large private economies.
The science of accounting may be regarded as a constituent part of statistics. It is at present denied recognition as a science by those who would deny this position to logic and mathematics, which may be correct; they certainly are ranked by many careful thinkers merely as methods of conducting thought-processes accurately. But to those who refuse accounting rank as a science on account of the simplicity of elementary thought-processes involved, a rejoinder may be made by urging that the objector
acquaint himself with the degree of mental training and natural endowment required for admission to the rank of professional or approved accountants.
c) History of Economic Literature: This will include encyclopedic economic literature, e.g., Palgrave's Dictionary of Political Economy, certain treatises, and the bibliography of economics. 2. Division II: Pure economics.
a) Principles and Problems of General Economics: To this division of economics I would urge in this brief sketch careful consideration, with a twofold object: First, I would urge a spirit of greater independence, self-reliance, and individual vigor in the study of subjects, topics, ideas, concepts, and laws to be summarized as principles of economics rather than an object, idol-like study of books. In order to do this a real grasp of, or insight into, the meaning of theory must somehow be secured.'
Some profess contempt for theory. But what is theory? The word theory is from a Greek word meaning a beholding, spectacle, speculation, spectator, or to see. Theory and theater are from the same root. To ask a man what is his theory of a certain subject or object is after all simply to ask him how he looks at it. The man who disclaims a theory of a subject or object proclaims or affirms either his modesty or his ignorance. To be modest in such a connection is often evidence of great intelligence.
The following suggestions may be helpful to students and, if heeded, may aid them in developing habits of thoughtful, independent topical study, not only in general economics or introductory economics, but also in the various branches or subdivisions of descriptive and applied economics.
On the use of books.-Many more books must be known than can be read. We must aim to understand subjects rather than books. Books must not become our masters. Bibliography is important in every thorough investigation of a subject, but to reading the student must bring observation and reflection.
On note-taking.—Use the detached leaf or card system of taking notes. If a sheet of ordinary note paper is used it should not be too large. Aim to put one subject only on a given leaf. It may be well at times to turn over and write on both sides if required to complete a reference. Keep your notes, that is, your notebooks, so that you can at any time insert a new leaf or leaves (card or cards) if in your reading, or in the lectures, or in your observation additional material on a given topic becomes available.
On observation.-Do not fail to reckon with the importance of existing facts and experiences in the society of which you form a part.
In the development of a body of economic theory, for your own attainment of the mastery of this fundamental branch of economic knowledge or science, I would urge upon your attention, and even urge your adoption of, a maxim from Cicero Tusculan Dissertations ii. 5: Refellere sine pertinacia et refelli sine iracundia parati sumus, "We are prepared to refute without obstinacy and to be refuted without temper."
"I would not give the snap of my finger to have biology taught in all the schools of the land, if the subject were to be taught through books only," said Thomas Huxley. This remark has significance for our subject. Human society is constantly before us. We are its members. Objective study of it is possible. Nevertheless we cannot dispense with the use of books; we cannot bring economic experiment within the compass of a glass jar, as the chemist can bring his experiment. But we must not fail to observe and reckon constantly with the importance of existing facts and experience.
The scientific spirit is the spirit of comparison. This must be ever present, seeking out resemblances and differences. In this way tendencies of human action may be observed and classified and laws of social action announced. Abstract analysis must be illuminated by history and statistics, yet knowledge without logic, information without reflection and action, remain useless. The scientific method, the method of evolution, the historical method, are phrases which by some are used interchangeably. They have this in common that they all tend to foster the search for truth. Some knowledge of the history of economics is conditioning preparation for advanced study of economics and for advancing economic theory. The opportunity and occasion for advancing economic theory, i.e., principles, exists in finding the solution of economic problems, problems in efficiency, economic organization, administration, and finance.
An advanced course in economic theory that is too far removed from the problems of history and life is likely to be or become a mere study of tradition, encyclopedia. The student who is prepared to take up an advanced course in economic theory enters a new position of advantage in beholding the subject-matter which
he has beheld before. It is not so much like traveling into a new country, or taking a journey into a far-distant land, as it is going over the same journey and revisiting the same places. Of the overambitious author in science we say: Let him first read a book before he undertakes to write one.
Economic history, like political history or general history, may constitute an independent and integral increment in a liberal-arts training. With respect to other courses in economics it may be regarded as a suitable preparation for, or a valuable supplement to, the usual course in the principles of economics. My own preference for such a course in economic history is that it should be given as a supplement to the usual introductory course in economics.
Secondly, I would urge an order of topical investigation for the study of economic theory, not necessarily this or that specific order, but some definite order of investigation in accordance with which we may advance from the simple, definite, and primary principles of economic theory to the more complex and derived principles and problems.1
In urging the value of economics as a college and university study it must be remembered that economics is not an exact science; that it must be placed among the inexact or probable sciences. Personality and mathematics, it may be urged, are not harmonious. Though the will of man is in the main controlled by motives according to an order—that is, in this sense according to laws-yet there is in the very nature of will an arbitrary element which may from time to time assert itself. President Andrews says:
It is perverse to limit science to exact science. Equally as to suppose the best education attainable by drill in the exact sciences alone. That is important, but often carried relatively too far. Not only do action, conduct, life, all lie in the domain of inexact science, making training in this indispensable to every educated person, but even looking from the point of view of an exclusively liberal education, it is a higher attainment, a finer feat of mind, to be expert in the inexact than in the exact sciences.2
2 Institutes of Economics, p. 16, noted. I quote further: "In fitness for place in an educational curriculum, economics perhaps surpasses all other studies through the remarkable combination which it involves of mental discipline with practical utility. Each of its propositions requires careful thought, while certain of its reasonings