PREFACE

THE purpose of this book is to provide an introduction to economics for university students and general readers. This purpose involves a statement both of orthodox economic principles and of modern economic developments. The contemporary generation of economists have extended the science beyond the boundaries reached by earlier economists, and it is proper that these extensions should be integrated with the main body of traditional economic thought.

Although many new tendencies are included in such an undertaking, nevertheless there is no intent to discard or to slight the great contributions made by classical and neo-classical economists. Their contributions are the foundations upon which must be built whatever additions and extensions modern growth may require. Our heritage of economic thought, in spite of many errors and fallacies, offers the most reliable basis from which to project whatever is new and worthwhile in contemporary economic thought.

The task of merging new with old viewpoints affords many problems for dispute among economists. In a purely critical treatise, to be read only by economists, it would be appropriate to argue each disputed point. But in an introductory text book in economics, this controversial treatment could only lead to confusion and bewilderment among students. Accordingly, the plan of the writer has been to state as clearly and coherently as possible the content of economics when the newer developments are integrated with the older traditions of the science, without complicating the study by technical controversy over disputed issues.

A survey of economic science at the present time reveals a vast fund of research in particular problems, and a literature of countless monographs, technical articles, special volumes, and scientific reports. This fund of material has never found its way into the main body of economic theory. The textbooks state the classical principles of economics. The monographs and technical articles state the findings of current research. Between the two lies a chasm. But this separation is neither necessary nor desirable. The bodies of thought should be brought together; they should be cast into a unified whole.

No attempt has been made to build an entirely new system of economic. thought. System building has had its part to play in the past, but for the present study the creation of some new system of thought has seemed unnecessary. It has seemed sufficient to endeavor simply to integrate the many separate branches of economic investigation, and to unify the growing content of the science. It has been assumed that the

subject matter and the points of view possess a fundamental solidarity and unity.

The task of sifting the material of modern research through one mind. involves a very wide field of study, and the writer can scarcely claim to have absorbed completely the research in all fields. In spite of inevitable limitations, however, it is hoped that the main content of the new material has been assimilated, and made a part of the treatment.

As the title implies, the book deals with problems as well as with principles of economics. The problems are not merely "cases," such as are employed where the so-called "case method" is in vogue. Rather, they are actual economic issues of national or international concern They are basic public problems of the present age.

Some of the salient features of the new material and of the new approach to the subject may be formulated as follows:

1. The presentation of the historical background of economic society has been influenced by the trend of the newer historical and anthropological research.

2. Quantitative methods supplement qualitative, and necessitate the frequent use of statistical measurement.

3. A factual and descriptive content is read into the theories and principles.

4. The relationship between a more or less constant human equipment of emotions, capacities, etc., and a highly variable economic culture is emphasized. The psychological presuppositions are brought into line with modern psychology. The method of treatment does not lead into a theoretical analysis of psychological terms, but depends upon an account of how human nature reacts to its economic environment. Economic behaviorism seeks to discover exactly what men do under the stimulus of given economic circumstances.

5. Institutional growths rather than immutable motives, inexorable laws, and a fixed social order, are looked upon as governing factors in the economic conduct of communities.

6. A frank ethical concern for welfare and well-being is adhered to, instead of an assumed but futile neutrality on the ethical implication of all questions.

7. The "money economy," and the relations between pecuniary and technological performance constitute threads of analysis running through all phases of the subject. Economic institutions reflect the "state of the money arts" as well as the "state of the industrial arts.”

8. The tentative nature of generalizations is stressed, rather than the finality of dogmatic laws. Principles are regarded as hypotheses or inferences, to be tested by experimental and statistical science.

In a treatise where current statistical data play so important a part, the permanence of the work presents a peculiar problem. Data which are now up to date may be considered out of date five or ten years, hence. The writer of a text in pure theory faces no danger that charts

and figures will become out of date, because he makes no use of them, or at most does so sparingly. But in a quantitative treatment, revision of material is more necessary. Recent data are more desired than remote data. But although data may change and statistics may require revision, nevertheless, the fundamental thing is the whole approach to the science which underlies all data and statistics. The method, the content, the body of principles, are the aspects of the treatment which have permanent value. However temporary some of the data may be, it is the significance of the data, of the method of using it for developing the science of economics, and of the meaning which it supplies for the theories of economics, which has the qualities of permanence.

At present, economics is flooded with the piecemeal literature of the many sided developments of the science. Out of this inchoate mass, a synthesis has been made. The new has been consolidated with the old. Widely diffused data have been assembled and interpreted. The presentation has endeavored to keep the style, the outline, and the selection. of material, in a form suited to place modern economics within the reach of the student and the general reader. The purpose has been to make the introduction to economics teachable and understandable, as well as comprehensive and fundamental,

The writer wishes to express deep appreciation of suggestions and criticisms made by all those who have taken an interest in the preparation of the volume. He is indebted particularly to Dr. U. G. Weatherly of Indiana University for suggestions on some of the more important chapters of the work. Professor Seba Eldridge of the University of Kansas has read the entire manuscript, and has offered invaluable criticisms of form and content at every stage of the treatment. My wife has collaborated on the entire work, and has been my main reliance in securing clarity of thought and expression.

January 3, 1926.

LIONEL D. EDIE.

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