of economic science. Ricardo had made a hasty survey, he had propounded sweeping conclusions; these conclusions bore directly upon current politics, they aroused keen controversies. Yet in 1848 orthodox political economy remained substantially what Ricardo had made it in 1817. What explains the scientific sterility of these thirty-one years of writing, teaching, and debating?

It is good for a social theory to be applied in practice, for the exacting test of application reveals imperfections and suggests new developments. But it is bad for a social theory to get into politics. Ricardo's conclusions had the misfortune to become a party platform. Just because his economic laws had been made to solve the political problems of his own day, they could be warped to political uses so long as the problems from which they grew held the political stage. Of course a theory that gets into politics hardens into a dogma. It becomes a target of partisan attack and an article of partisan faith. It ceases to be a working hypothesis tentatively accepted as a guide to further investigations. Men exercise their wits as debaters in making out a case for or against it, not in critical efforts to amend or extend it.

But all this popular use and abuse of classical political economy could not have kept it from growing if its best exponents had not worked out a deadening line of defense. They pointed out that Ricardo's conclusions rested on certain postulates, that the science was hypothetical, that it was a doctrine of "tendencies." To demonstrate that the conclusions of political economy were at variance with notorious facts, therefore did not discredit the conclusions. The tendencies it dealt with really existed though they might not be obvious; these tendencies would stand out clearly if real life answered to the economists' hypothesis; the conclusions were consistent with the postulates however the facts might stand.

Now this line of defense was logically valid, and the men who developed it clarified the situation. But having attained clarity regarding the logical position of their science, they stopped. They were content with a type of economics which dealt with tendencies, which argued from unreal hypotheses, which rested on postulates contrary to fact. The birth rate might fall while the standard of living rose; but Malthus was none the less right. Instead of bringing poorer lands into cultivation English farmers might restrict the cultivated area, but that did not refute Ricardo. Statistics might reveal the greatest diversity of profits, but still profits "really tended to a minimum."

Economists who took this line might be technically right in every

one of their contentions; it matters little whether they were right or wrong. What does matter is that by taking this line they lost the most powerful incentive to further achievement. If economics does. not attempt to explain the concrete facts of economic life, then all that Ricardian economics needed was skillful exposition, the correction of minor lapses, and certain extensions along the original lines. Economic truth had been found and would abide so long as logic lasted, no matter what paradoxical developments appeared in the world of railways, centralized banking, trusts and trade unions; no matter what facts the statisticians pressed, no matter what the anthropologists learned or how the psychologists shifted their ground.

Probably the economists would not have remained long in this stationary state if they had seen how to progress by any other method than Ricardo's. But they did not have the historical knowledge, the statistical data, the psychological insight or the technical methods of analysis which were required to work effectively in a more realistic fashion. It was indeed possible to make a beginning in this direction, and some among Ricardo's contemporaries and successors did so. But their example was not encouraging. What results they reached seemed meager, negative and uncertain in comparison with the large, positive and logically-proved conclusions which Ricardo had excogitated so rapidly. The orthodox economists might feel ill at ease when forced to face some awkward facts, but their self-esteem returned when they dipped into the books of their unorthodox brethren. And in 1848 came John Stuart Mill's great treatise to confirm their faith in the Ricardian tradition.

The foremost logician of his day, the moral leader to whom young liberals like James Bryce and John Morley looked for inspiration, the sympathetic yet constructively critical friend of social reform, the admirable stylist-Mill had an intellectual prestige among contemporaries such as no other economist has ever approached. His Principles of Political Economy had a flavor very different from Ricardo's book. It glowed with a temperate optimism concerning the future, because Mill saw that economic institutions are malleable. He believed that a coöperative management of industry would prove efficient, that capitalists might find it advantageous to lend their funds to coöperative associations for terminable annuities, and that in "some such mode, the existing accumulations of capital might honestly, and by a kind of spontaneous process, become in the end the joint property of all who participate in their productive employment: a transformation which, thus effected, . . . would be the nearest approach to social justice, and the most beneficial ordering of social af

fairs for the universal good, which it is possible at present to foresee." Further he thought that human instincts, particularly the instinct of sex, would be brought under control by education. Thus he escaped from the bugbear of Malthus. But with all his hopefulness and with all his social sympathy Mill yet built his political economy on the Ricardian foundation by the Ricardian methods. And the very merits of his version served to prolong the sway which the classical type of economic theory held over the minds of men.

4. THE MECHANICS OF UTILITY

A new type of economic theory, so its author believed, was announced to the world by Stanley Jevons in 1871. He called it "the mechanics of utility." Unlike Ricardian economics, this new type was based explicitly upon psychology. For his psychology Jevons went back to The Principles of Morals and Legislation printed in 1780 by one of Ricardo's elder friends, Jeremy Bentham. Thus the new economics started with a psychological system which was already ninety years old, or even more antique if we trace it back of Bentham.

Bentham represented men as dominated by two masters, pain and pleasure. Therefore, said Jevons, pleasures and pains are the ultimate quantities in economics. We value goods because of the pleasures they give us in consumption; we dislike to labor and to wait in producing more goods because these efforts are painful. A science can be erected on this basis, since pleasure and pain are measurable quantities which vary continuously in magnitude according to the amount of goods we possess or of the effort we make. The last hour of the day's work is more painful than the first hour; the goods produced in the last hour give us less pleasure than the goods produced in the first hour. When we come to the moment where the pleasure to be had from further products ceases to exceed the pain of further labor we stop work. Similarly, in exchanging goods, we carry on trading up to the margin where another increment of what we obtain would give us no more pleasure than we should lose by parting with its price. Thus economic life is really systematized by calculations of utility and disutility. By following this clue the economic theorist can explain the phenomena of production, exchange, distribution, and consumption. That is the central idea which Jevons suggested and which others worked out in detail.

About the same time that Jevons brought out his Theory of Political Economy in England, Carl Menger expounded substantially the same ideas in Austria, and Leon Walras in France. A little

later John Bates Clark followed suit in the United States. Utility analysis from these four sources impressed most economists as radically different from Ricardo's type of theory because Ricardo had explained value mainly by cost of production, taking utility for granted. After due deliberation, lasting some twenty years, the economists became excited and began a lively controversy on the relative merits of cost analysis and utility analysis. Zealous spirits took sides, as if the issue were of the either-or variety. But more cautious men like Alfred Marshall, the most conspicuous of later English theorists, refused to subsume cost under utility or utility under cost, and held that both factors in conjunction determine values. Such men were dubbed eclectics for their caution.

I pass lightly over the controversy because it appears in retrospect to concern a minor issue. Jevons, Menger, Walras, Clark and their disciples did not really produce a new species of economic theory; what they had found turned out to be merely a new variety of the Ricardian species. The utility theorists and the cost theorists held the same conception of human behavior, they worked at the same problems, and employed the same methods. Under these circumstances their differences were bound to be superficial. Indeed the two lines of analysis were so much alike that they harmonized admirably when Marshall incorporated both into a single framework.

5. THE "PSYCHOLOGICAL SCHOOL" AND ITS TROUBLES

Less noticed but more important in the long run was the issue Jevons raised by making his doctrine of utility rest explicitly upon Bentham's psychology of pleasure and pain. This foundation began to create uneasiness about the time utility theory came into favor among economists. For certain writers cultivating the borderland between economics and philosophy warned economists that the psychologists were questioning hedonism. Even Henry Sidgwick, who succeeded John Stuart Mill as leader of the English utilitarians, averred that he ate his dinner because he was hungry, not because he anticipated pleasure. The economists were perplexed. They knew no psychology and had not realized that they were implicit hedonists. Yet they did not know how to controvert the statement, and they had to believe that hedonism must be faulty if psychologists said so. What should they do? Could they find a sounder psychological basis for economics than hedonism? Could they prove that their theories remained valid though the alleged psychological foundation crumbled? Could they perhaps dispense with a psychological foundation altogether?

Of course the easiest thing to do was to do nothing; that is, to continue expounding economic theory in the traditional fashion without raising the psychological issue. Menger, Walras, and Clark, in developing utility analysis, had said nothing about hedonism; why not follow their example instead of the example set by Jevons? So Alfred Marshall in the later editions of his Principles contented himself with substituting the word "satisfaction" for the word "pleasure," as if such verbal changes cleaned his skirts of hedonism. Others like Irving Fisher and Herbert J. Davenport expressly repudiated hedonism and professed to dispense with psychology altogether by making economics "the science that treats phenomena from the standpoint of price." They took each individual's scale of price offers ready-made by whatever process the psychologists fancy as the starting point-a starting point which it was their business to use in explaining prices, but which it was not their business to inquire into. Professor F. A. Fetter pursued a third course. In his Economic Principles, 1915, he undertook to present "a quite new statement of the theory of value, one in accord with the modern volitional psychology, thus eliminating entirely the old utilitarianism and hedonism which have tainted the terms and conceptions of value ever since the days of Bentham. The basis of value is conceived to be the simple act of choice, and not a calculation of utility. Even the phrase 'marginal utility' is definitely abandoned." But one finds as he reads Professor Fetter's book that the quite new theory of value is followed by the familiar doctrines of prices, rent, wages, interest, and profits. What an economic treatise says about the psychology of value seems to make no difference in its economic theory.

All this means of course that our orthodox economists have a most inadequate conception of psychology-and economics also for that matter. They write as if the economist's only concern with psychology lies in the problem of motive. If pleasure and pain are not the motives of valuation, then what are the real motives, if any? That is the sole psychological issue they have grasped. When they pass on from the value problem they think themselves out of the quagmire of psychology on firm economic ground. Obviously this is a grand error. Economics is necessarily one of the sciences of human behavior. Whether its votaries recognize the fact or not, it endeavors to show how men deal with each other in getting their livings. Now no man can possibly give an account of economic behavior without having some working notions of human nature in the back of his head if not on his tongue. No one can lay down any proposition