like a foreign language of exceptional difficulty, because he is constantly meeting with words which suggest to his mind a whole world of associations quite different from those with which economic theory has clothed them. The refinements of economic analysis, as distinguished from its broader achievements, should be reserved for special studies, in which a technical scientific terminology, specially devised, can be used without danger of misconception. But in a subject like economics obscurity and an awkward terminology are not marks of scientific merit.
Economic studies should be as relevant to existing needs as those of engineering and other applied sciences. The scientific study of practical problems and difficulties is (generally speaking, and with honourable exceptions) far more advanced in almost every civilized country than it is in England, where the limited scale upon which such work is carried on, the indifference of statesmen, officials and business men, and the incapacity of the public to understand the close relation between scientific study and practical success, contrast very unfavourably with the state of affairs in Germany or the United States. The backwardness of economic science has been an index of the danger threatening the industrial and commercial supremacy of the United Kingdom. There are very few questions of public or commercial importance upon which the best and most recent investigations are to be found amongst English works. This would matter very little, perhaps, if Englishmen had a firm belief, established by actual experience, in the soundness of their policy, the present security of their position, and the sufficiency of their methods to strengthen or maintain it. But this is very far from being the case. If we take, for example, the corner-stone of the British commercial system in the 19th century, namely, the policy of “free trade” (q.v.), the public do not now read the economic works which supplied the theoretical basis of that policy, and, indeed, would Economic problems in Great Britain.not be convinced by them. The great men of the period, Cobden and Bright, are merely historical figures. Long before his death, Bright’s references in public speeches to the achievements of the Anti-Corn Law League were received with respectful impatience, and Peel’s famous speech on the repeal of the corn laws would not convince the German Reichstag or a modern House of Commons. The result is that free trade had become by the end of the 19th century in the main an old habit, for which the ordinary English manufacturer could give no very reasonable explanation, whatever may be its influence in commerce and public affairs. The doctrine of free trade only prevailed in so far as it could be restated in terms which had a direct relevance to the existing position of England and existing conditions of international trade. And it was directly challenged by the representatives of Mr Chamberlain’s school of Imperialist thought (see Chamberlain, Joseph). It thus became the work of economic science ruthlessly to analyse the existing situation, explain the issues involved in the commercial policy of different countries, and point out the alternative methods of dealing with present difficulties, with their probable results.
The commercial policy of a state is merely the reflex of its system of public finance (see e.g. English Finance). The absence of conviction in regard to British commercial policy naturally had its counterpart in the attitude of many men to the financial system of the country. The eulogies showered upon it in the past were no longer considered adequate. The great increase in recent years in British military and naval expenditure, made necessary by the exceptional demands of a state of war and the great development of foreign powers, was partly responsible for the new difficulties; partly it was due to the great extension of the functions of the state during the latter part of the 19th century. The former causes may be considered partly permanent, partly temporary; but those of a permanent character are likely to increase in force, and those of a temporary character will leave Commerce and finance.a deposit in the shape of an addition to the normal expenditure of the central government. The extension of government functions appeared much more likely to continue than to be checked. Normal expenditure might therefore be calculated to rise rather than fall. In spite of the vast increase in national wealth, it was found a matter of increasing difficulty to meet a comparatively slight strain without recourse to measures of a highly controversial character; and the search for new sources of revenue (as in 1909) at once raised, in an acute form, questions of national commercial policy and the relations between the United Kingdom and the colonies.
The development of the powers of the central government has been less than that of the functions of local governing authorities. This, again, is a movement much more likely to extend than to be checked. Local governing authorities now discharge economic functions of enormous importance and complexity, involving sums of money larger than sufficed to run important states a generation ago. The scientific study of the economics of local administration is, however, in its infancy, and requires to be taken up in earnest by economists. These questions of commercial policy and local government are closely bound up with the scientific study of the transport system. Although the British Empire contains within itself every known species of railway enterprise, the study of railways and other means of transport, and their relation to the business, the commerce and the social life of the country, is deplorably backward. It is obvious that no inquiry into commercial policy, or into such social questions as the housing of the poor, can be effective unless this deficiency is remedied.
The whole social and political fabric of the British Empire depends upon the efficiency of its industrial system. On this subject many monographs and larger works have been published in recent years, but dealing rather with such questions as trade unionism, co-operation and factory legislation, than the structure and organization of particular industries, or the causes and the results of the formation of the great combinations, peculiarly characteristic of the United States, but not wanting in England, which are amongst the most striking economic phenomena of modern times.
These are some of the questions which must absorb the energies of the rising generation of economists. The claim of economics for recognition as a science and as a subject of study must be based on its relevance to the actual life of the economic world, on its ability to unravel the practical difficulties of each generation, and so contribute to the progress of nations.
Literature.—See also Free Trade; Protection; Tariff; Commercial Treaties; Trusts; Money; Finance; &c. The bibliography of economics as a whole would include a history of all the writers on the subject, and is beyond our scope here; see the numerous articles on economic subjects throughout this work. The article by Dr J. K. Ingram in the ninth edition of the Encyclopaedia Britannica is still a valuable historical account. It is only possible to mention here a few of the more recent text-books. The most important general work published in English is Marshall’s Principles of Economics, vol. i. (1st edition, 1890; 4th edition, 1898). J. Shield Nicholson’s Principles of Political Economy (3 vols.) not only gives a survey of economic principles since Mill’s time, but contains much suggestive and original work. The writer of this article is much indebted to the works of Schmoller, particularly his Grundris der allgemeinen Volkswirtschaftslehre (1900), and Adolph Wagner, particularly his Grundlegung der politischen Ökonomie. On the history of economic theory, Cannan’s History of the Theories of Production and Distribution (1776–1848) is an admirable criticism, from a purely objective standpoint, of the works of the English classical writers. The most important English works published in recent years on general English economic history are W. Cunningham’s Growth of Industry and Commerce, and W. J. Ashley’s Economic History, while Vinogradoff’s Villenage in England and The Growth of the Manor, as well as Maitland’s Domesday Studies, are of great importance to the student of early economic institutions. D’Avenel’s Histoire économique de la propriété, &c. (1200–1800), is a monumental work on the history of prices in France. Other books dealing with special subjects are likely to take a very high place in economic literature. We may mention particularly Charles Booth’s Life and Labour of the People in London, B. S. Rowntree’s Poverty, Sidney and Beatrice Webb’s History of Trade Unionism and Industrial Democracy, and Dr Arthur Shadwell’s Industrial Efficiency (1906). These books are generally regarded as typical of the best English work of recent years in economic investigation. We may also mention Schloss’s Methods of Industrial Remuneration, a most important contribution to the study of the wages question; C. F. Bastable’s works on International Trade and Public Finance; George Clare on the Money Market and the Foreign Exchanges; and A. T. Hadley’s Economics: An Account of the Relations between Private Property and Public Welfare (1896). Studies of particular questions, both concrete and theoretical, in foreign languages are too numerous
