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and at home everywhere, we become nothing and are at home

Other German philosophers, — Franz Baader (as early as 1790), J. J.
Wagner, K. C. F. Krause, K. A. Eschemnayer ;— political writers,— Adam
Miiller, Robert von Mohl ; — and economists, — C. A. Struensee, C. F. Ne-
benius, F. B. G. Herrmann, J. G. Busch, — with many others, opposed
the passivity theory in their writings.

Samuel Taylor Coleridge, the illustrious English poet, critic
and philosopher (in his Lay sermon on the existing Distresses
and Discontents, 1817), without entering into details or proposing
any definite economic remedies, deplored the over-balance of
the trade spirit in English politics — theoretical and practical;
and declared his belief that that spirit is " capable of being at
once counteracted and enlightened by the spirit of the state, to
the advantage of both." He called in question the maxims re-
ceived as fundamental by the school, seeing " in them much
that needs winnowing. Thus instead of the position that all
things find, it would be less equivocal and far more descriptive
of the fact, to say that things are always finding, their level;


which might be taken as the paraphrase or ironical definition of
a storm. But persons are not things — but man does not find his
level." Quite in his spirit, his chief disciple F. D. Maurice
speaks (National Education, 1839) of " the mass of doctrines
going under that name" of political economy, " part of them state-
ments of undoubted facts; part of them useful or curious ob-
servations about facts ; part of them more or less successful
attempts to eliminate laws from facts; part of them crude and
heartless apophthegms of morality. "

§ 15. It was the sufferings inflicted on Germany by persist-
ence in the policy of passivity after the peace of 1815, that
led to a general study of the question, and in Frederick List
the German people found one who could state and explain their
needs as a nation, and defend a more national policy on scientific
grounds. After a course of successful agitation, that laid the
foundation of the Zollverein, he came to the United States in
1825, leaving all his books behind him, to study the laws of
social growth in the practical examples offered by the new world.
As the country was then making rapid ad-vances in wealth, under
the protection of a nationalist policy, he had a large field for
study, and repaid what he learnt with his Outlines of American
Political Economy (1827), a brief pamphlet that contains the
germ of his larger work, The National System of Political
Economy, (Das Nationale System cler politischen (Economie,
1841 ; English transl. 1856), which he prepared after his final
return to Germany in 1832. The title well describes the book,
and List's line of thought. In his view nations are industrial
as well as political wholes, characterized by an internal equality
of industrial capacity, and destined to advance in wealth and
prosperity, when they remove all obstacles to the mutual inter-
change of services between their own people. If all nations
stood on the same ground of equality in numbers, capital and
industrial development, no such obstacle would be presented by
the freest trade with all other nations ; but in the actual his-
torical state, a few possess in their enormous wealth both the
power and the will to bring the rest into a state of industrial subor-


dination by the tyrannous power of capital. If, therefore, a
poorer nation wishes to have free trade at home, she cannot
remain passive as to the direction of the national industry.

§ 16. Of native American writers, a very considerable number
defended the nationalist theory of economy, from the beginning
of our union into oue people, and some even earlier. Of these
Alexander Hamilton, Tench Coxe, Matthew Carey and Charles
J. Ingersoll deserve mention. But their aim was not to furnish
a scientific basis for a national economy, but rather to urge a cer-
tain economic policy from reasons of direct and evident utility.

The former work was accomplished by Mr. Henry C. Carey,
in whose writings, as we believe, the science of national economy
passes out of the mechanical into the dynamical stage, i. e. be-
comes a true science. Instead of giving us a mass of empirical
rules and maxims such as we find in the writings of the mercan-
tile school, — or a mass of fine-spun speculations that stand in no
vital relation to the practice and life of nations, as is done by the
school of the Economistes, and (in a less degree) by that of
Adam Smith, — he presents a body of economic teaching, that
rests on a few great and simple principles or conceptions, drawn
by actual observation from life itself, yet nowhere incapable of
direct application to any practical question. These principles
are the laws that govern the constitution -and course of nature
in things economical. They are at once the laws of human
nature, and of that external nature, in harmony with which
man was created.

Their discovery involves a searching criticism of the very pre-
mises of the so-called Industrial School, and of those conclusions
that fairly earned the name of " the dismal science." For it
shows that these natural laws are laws of progress towards wealth
and the equality of wealth. Where they are allowed to act freely
and fully, men rise from poverty, isolation and lawlessness, to
wealth, association and national order. The history of human
economy is the story of man's transition from the savage's sub-
jection to nature, to the citizen's mastery of her forces ; and
with every advance the greater advantage is reaped by the most


numerous class, that is, the poorest. It thus " vindicates the
ways of God to men," and vindicates also the existing frame-
work of our civilization against the destructive criticisms of
socialists and communists.

And wherever the wretchedness of the savage perpetuates
itself or reappears within the sphere of civilization, there is to be
seen, not the effects of natural law, but of its violation. There
some class — at home or abroad, — through some vicious legisla-
tion or defect of legislation, has interfered for selfish ends to
hinder the natural progress toward wealth, equality and the
harmony of interests in the national equilibrium of industries.
To remove such obstacles is the sole function of the state, as
regards the active direction of industry.

Of Mr. Carey's books the chief are Essay on the Rate of Wages (1835) ;
The Past, the Present, and the Future (1848); The Harmony of Interests
(1851); The Slave Trade, Domestic and Foreign (1853); Principles of
Social Science (3 vols. 1858) ; and The Unity of Law (1872). Of these
and others of his works, translations of one or more have appeared in
eight of the principal languages of Europe.

Other members of this school : in America, the late Stephen Colwell
( The Ways and Means of Payment, 1S59), the late Hon. Horace Greeley
(Essays designed to elucidate the Science [Art?] of Political Economy,
1870) ; Hon. E. Peshine Smith (Principles of Political Economy, 1853 and
1872); and Dr. William Elder (Questions of the Day, Economical and
Social, 1870). In Fiance, M. Fontenay, Benjamin Rampal and A. Clapier
(De I'Ecole Anglaite et dc I'Ecole Americaine en Economic Politique, 1S71).
Fred. Bastiat borrowed some of Mr. Carey's ideas (Harmonies Economiques,
1850 and 1851) to fight the socialists, and made a curious mixture of
these with those of the eosmopolitical school. In Italy the statesman
and economist Ferrara gives his adherence to Mr. Carey's first princi-
ples, and censures Bastiat for his half discipleship. He has translated
the Principles into Italian. In Germany Dr. Diihring of the University
of Berlin (Carey's Umw'dlzung der Volkstoirthschaftslehrc und Social-
wissensehaft, 1865; Capital und Arbeit, ncue Antworten atif alle Fragen,
1865; Die Verhleinerer Carey's, und die Krisis der Nationalokonomie,
1867; Kritische Geschichte der Nationalokonomie und Socialismns, 1S71;
Cursus der Nat-tonal- und SocialSkonomie, 1873); and Schultze-Delitzsch,
the great antagonist of socialism, and promoter of co-operation (Capitel
su einem Deutsrhen Arbeiter-Katechismus, 1863; Die Abschaffung des
gesch'dftlivhen Risico darch Herrn Lassatle ; ein neues Kapitel zum Deutschen
Arheiter-Katechismus, 1866 ; besides many smaller works.) (French trans-


lation of these two by Rampal, 1S73.) In England, Judge Eyles
[Sophisms of Free Trade, 1st edition 1849; 9th edition 1870; American
edition 1S72.)

§ 17. The differences that exist between the two schools is
not merely in regard to the details ; it is a difference about
foundations and first principles. Neither can concede to the
teaching of the other the name and rank of a science, without
giving up its own claim to that name and rank.

The difference is one of method also. The English school
adopt the deductive method of the mathematical sciences, and
reason down from assumed first principles to the specific facts.
They claim that the necessary data for this are already at hand,
in the known characteristics and tendencies of human nature,
the avarice and the desire of progress, which control and direct
the economic conduct of great masses of men. They leave all
other elements out of account as inconstant, while they regard
these as constant. Theirs is therefore " a science based upon
assumptions" {Saturday Review); it "necessarily reasons
from assumptions, and not from facts " (J. S. Mill).

The American and German school apply the inductive method
of observation and generalization, which has produced such bril-
liant results in the natural sciences. They begin with a wide
study of the actual working of economical forces, and endeavor
to reason upward from the mass of complicated facts to the
general laws that underlie and govern all. They begin by
recognising the existence of an actual constitution and course of
nature, instead of seeking to devise an artificial one on assumed

These differences will be exemplified in the following chapters.


The Development of Society. — The Nation.

§ 18. " Man is a political animal," Aristotle tells us. His
nature has not attained its perfection until he is associated with
his fellows in an organized body politic. Whatever may be the
historical occasion of the origin of the state, this fact of man's
nature is the sufficient cause.

The first type of society is the family. This, like the state,
is a natural form. It is a relationship not constituted by a
reflective act of its constituent parts. No man has a choice
as to whether he will or will not be born into a family, though
he may by his own act cease to belong to it. Like the state,
the family has a moral personality and a distinct life. It is a
whole which contains more than is contained in the parts as
such; that is, it is an organism, not an accretion.

§ 19. The family expanded into the tribe. Related or neigh-
boring families held or drawn together by natural affection or
neighborly good feeling, or a sense of the need of union for the
common defence, but chiefly by the political needs and instincts
of their nature, formed an organic whole. By the legal fiction
of adoption, all were regarded as members of one family and
children of the common patriarch, living or dead. The rever-
ence for the common father whose name they bore became a
hero-worship, and bound them together by religious ties. Their
living head or chief was regarded as inspired with judgment
to pronounce upon disputed cases, which gradually gave rise to
a body of judicial rules or laws revered as of divine authority.

§ 20. The tribe became — though not always — a city. A
hill-fort thrown up for defence against some sudden attack
became the rallying-point and then the residence of its people.
The conquest or adoption of other tribes added to their numbers
and strength, and their home was enclosed by a wall capable of
defence. The tribal gods or the first citizens obtained general


recognition as the defenders of the city, but those of the new-
comers were still worshipped by the clans. The first and the
adopted tribes took the place of power, claiming to be " the
people," and forming an aristocracy who possessed exclusive
knowledge of the laws and religion of the city. Only after pro-
longed struggle were these published in a code, and places of
responsibility opened to the new citizens or plebs.

§ 21. By the conquest of other cities, the city in some cases
attained an imperial rauk. In other cases a number of cities
freely united in a league of offence and defence, and ceded their
power to make war to a central congress, and established a
common treasury. Both movements are in the direction of the
nation, the complete form of the state, as the tribe and the city
are incomplete forms. The nation is scarcely found in ancient
history, save perhaps among the Jews and the Egyptians, and
even among them the tribal divisions perpetuated themselves
within the national unity.

§ 22. The nation in its true form first appears in the king-
doms founded in Western Europe by the Teutonic tribes, after
the destruction of the Roman Empire. The Teuton hated
cities and loved the open country. When he spared a city he
generally left it to its old occupants and made them his tributa-
ries. He divided the open country into marks or communes,
whose occupants were actually or by adoption members of one
family-clan and bore the same name. Several of these were
gathered by force of the political instinct into " hundreds,"
hundreds into "shires." and shires into kingdoms. Over each
of these subdivisions an elder, alderman or chief presided. In
this way the race passed from the tribal to the national consti-
tution, without developing the vigorous municipal life that had
previously thwarted all attempts at establishing any larger body
politic than the city, except a military, imperial despotism.

Within the Teutonic mark towns grew up by the same pro-
cess as in the ancient world, and the antipathy of the race to
the town life wore off. But before these new municipalities
were powerful enough to hinder the national growth, the nation


had become an established fact. A secoud enemy of the
national unity was the feudal system, which conferred large
powers upon the local barons, in countries that had been con-
quered rather than occupied. Everywhere save in Germany
itself the joint efforts of the king and the people overthrew this
local power, and made the central government supreme. Thus
the national consciousness superseded all other political attach-

§ 23. The nation is the normal type of the modern state, as
the city was that of ancient society, and the tribe that of the
prehistoric times. Besides many inaccurate definitions of its
nature, several that deserve our notice have been given from
different stand-points.

(1) Geographically the nation is a people speaking one lan-
guage, living under one government, and occupying a continuous
area. This area is a district whose natural boundaries designate
it as intended for the site of an independent people.

No one point of this definition is essential, save the second.

(2) Politically the nation is an organization of the whole
people for the purposes of mutual defence from outside inter-
ference and of doing justice among themselves. It is a people
who " will to be one " in a body politic, for the purpose of re-
alizing and making positive those natural rights which inhere in
man's nature.

(3) Ethically the nation is a moral personality vested with
responsibility and authority, and endowed with a life peculiar to
itself, i. e., not possessed by the parts as individuals.

§ 24. All these notions, and others besides, are elements of
the historical conception of the nation. The historical nation is
an organism, a political body animated by a life of its own. It
embraces not one generation but many, the dead and the unborn
as well as the living. It contemplates its own perpetuity, making
self-preservation the first law, and being incapable of providing
for its own death or dissolution. There is in its own nature no
reason why it should ever cease to exist, and the analogies often
drawn from the life and death of the individual man are falla-
cious. The end of the nation is its own perfection ; towards


that it tends by a continual progress to a larger and freer life.
Thus, in its laws it continually aims to make political rights
more and more the realization of natural right. In its gradual
or sudden modifications of the form of government, it tends to
make it more and more the exponent of the wants and the
powers of the governed. Industrially it continually aims to
develop the resources of its soil aud the activities of its people,
uutil they become in all necessary things independent and self-

§ 25. The nation as a moral personality must have had the same
ultimate origin as other moral personalities, whether we conceive
of it as the direct creation of God or as the work of His crea-
tures. The traditions of all ancient cities with which we are
acquainted, point to the first of these alternatives, that is, to a
divine origin of their unity and their laws; and no one who be-
lieves in the continual government of the world by the Divine
Will can doubt that nations exist in consequence of that will.
" He setteth the solitary in families. . . . He fixeth the bounds
of the nations." Then national laws are authoritative because
they set forth that Will, though its agency be concealed by reason
of its working through and by the will of man. Hence the
right of the nation over the lives and persons, as well as the pos-
sessions, of its members. It has a delegated authority from the
Giver of life.

§ 26. The state is either the creature of God, with authority
limited because delegated, or is an uncreated entity with au-
thority unlimited because original. In the latter case it can
confess none of its acts to be wrongful, since it owns no law or
morality above or beyond its own will. It must punish all appeals
to " the higher law " as treasonable. The atheistic theory of the
state thus necessarily leads to the despot's construction of its
powers. Those who hold it have generally been in modern times,
by a happy inconsistency, on the liberal side in politics, but
when they attain to power, the logic of their position must lead
them on to despotic measures. The only lasting and inviolable
guarantee of personal freedom is in the doctrine of the state's
divine origin and authority, though even this doctrine may be


abused to serve the purpose of despots, when the state is con-
ceived as constructed ah extra by the imposition of a govern-
ment by a divine authority from without. But the doctrine
of the Old Testament is that the state is constituted through
the people themselves being drawn into national unity, aud that
the government is the result and exponent of this fact. The
governor, as the word originally signified, is the steersman of
the vessel, giving direction to its course. But it is not his
function to furnish the moving force of the ship of state. That
is furnished by the vital force of the whole body politic.

§ 27. As God made the state, he had a purpose in making
it, a purpose which includes some elements common to all states
and others that are peculiar to the particular state. Each state,
like each man, has a calling, a vocation. Every nation is an
elect or chosen people. It has a peculiar part to play in the
moral order of the world. When it recognises this purpose, it
is, in Hebrew phrase, a people in covenant with God. The
leading purpose of the Old Testament is to set forth the manner
of such a national life, and the moral laws that govern it. It
gives the essential features of such a life, in connection with
some that are peculiar to the Jewish nation.

§ 28. The universal element in the vocation of a state is ex-
pressed in the statement that it is the institution of rights.
This differentiates it from the family, which is the institution of
the affections; also from mankind at large, as rights are realized
and made positive through the existence of the state. Justice
or Righteousness, Plato discovered, is of the essence of the
state. It can therefore attain to the purpose of its vocation
only by complying with the ideal of justice as apprehended by
the national conscience, — an ideal ever advancing in clearness
and completeness as the nation tries to realize it. At the first
this ideal requires only the righteous treatment of its own
citizens as alone invested with the rights it recognises. After-
wards men are brought by analogy to feel that as the state
judges between man and man, God is judging between nation
aud nation. Hence originates a body of law between the nations.


If justice be of the essence of the state, any wilful and con-
scious violation of it, i. e., any national unrighteousness that
does not spring from and find its palliation in a low ideal of
righteousness, must be a blow at the national life and existence.
It must weaken the bonds which bind men to one another.
Hence to plead the necessity of the national life as the excuse
for such acts, is to plead that the state can only be saved by
being destroyed. A state that has ceased to aim at righteous-
ness has given up its raison d'etre, and is a practical contra-
diction. It has ceased to be a body politic, and has become a
band of pirates.

§ 29. Justice has two aspects. (1) It is the state's function
to do justice upon evil-doers within (and sometimes without) its
own boundaries, by punishing them for past and deterring
them from future invasions of the rights of others. (2) It is
also called upon to do itself justice ; that is, to secure the
fullest and freest development of the national life in all worthy
directions. As self-preservation is its first duty, there is in-
volved in that duty this obligation — to progress in national life.
" The end of the state is not only to live, but to live nobly."

§ 30. In the order of nature, progress is attained through
the differentiation of the parts of a living organism from each
other and from the whole. " The higher a living being stands
in the order of nature, the greater the difference between its
parts, and between each part and the whole organism. The
lower the organism, the less the difference between the parts,
and between each part and the whole" (Goethe).

" The investigations of Wolf}', Goethe, and Von Baer, have
established the truth that the series of changes gone through
during the development of a seed into a tree, or an ovum into
an animal, constitute an advance from homogeneity of structure
to heterogeneity of structure. . . . The first step is the ap-
pearance of a difference between two parts of its substance. . . .
This law of organic progress is the law of all progress.
Whether it be in the development of the earth, in the develop-
ment of life upon its surface, in the development of Society, of


Government, of Manufactures, of Commerce, of Language,
Literature, Science, Art— this same evolution of the single into
the complex, through successive differentiations, holds through-
out. From the earliest traceable cosmical changes down to the
latest results of civilization [it] is that in which progress
essentially consists. ... As we see in existing barbarous tribes,
society in its first and lowest forms is a homogeneous aggrega-
tion of individuals having like powers and like functions, the
only marked difference of functions being that which ac-
companies difference of sex. Every man is warrior, hunter,
fisherman, tool-maker, builder; every woman performs the same
drudgeries; every family is self-sufficing, and, save for purposes
of aggression and defence, might as well live apart from the
rest" (Herbert Spencer).

See also Coleridge's Idea of Life. (Works, Vol. I., esp. p. 38S.)

This is true less of the spiritual than of the material side of
the national life. It applies especially to those relations to
nature, which are the theme of social science in the sense that
we take it, — relations which come very directly under the action

Online LibraryRobert Ellis ThompsonSocial science and national economy → online text (page 3 of 38)