[818] Marshall, Principles, Appendix A.
[819] Its influence has been noted by Toynbee in his article on Ricardo and the Old Political Economy. “It was the labour question, unsolved by that removal of restrictions which was all deductive political economy had to offer, that revived the method of observation. Political economy was transformed by the working classes.” Elsewhere he adds: “The Historical method is often deemed conservative, because it traces the gradual and stately growth of our venerable institutions; but it may exercise a precisely opposite influence by showing the gross injustice which was blindly perpetrated during this growth.” (Industrial Revolution, p. 58.)
[820] The first edition appeared in 1857.
[821] We would specially mention Levasseur’s excellent work, Histoire des Classes ouvrières en France (first edition, 1867).
[822] More especially we must mention the group of workers associated with M. Durkheim and the Anné sociologique. But it would be a great mistake to confuse the two methods, the Historical and the Sociological. See Simiand, Méthode historique et Science sociale, in the Revue de Synthèse historique, 1903. See also La Méthode positive en Science économique (Paris, 1912), which contains a study of the methodological problems presented by political economy.
[823] There is one aspect of the critical work of the German school with which we have not dealt in this book—namely, the criticism of laissez-faire. Some of the members, e.g. Hildebrand, have insisted on the ethical criterion, but none of them share in the optimism of either Smith or Bastiat. The emphasis laid upon relativity made this quite impossible. But all the more eminent writers have remained faithful to the Liberal teaching of the founders. See Hildebrand’s confession of faith at the beginning of vol. i of the Jahrbücher für Nationalökonomie, 1863, vol. i, p. 3. And although some of them, e.g. Brentano and Schmoller, seem to be connected with the new current of ideas that gave rise to State Socialism, the association was quite accidental. They never considered it an organic part of their teaching, and they made no very original contribution to that part of the study. Their connection with economics must always depend upon the light which they have thrown upon the question of method.
[824] Cf. Schmoller’s account of Menger’s work published in the Jahrbuch in 1884. The article appears also in the volume entitled Zur Litteraturgeschichte der Staats- und Sozialwissenschaften (1888).
[825] Cf. Menger, loc. cit., pp. 130 et seq. Marshall’s ironical remark is very apposite here: “German economists have done good service by insisting on this class of consideration, but they seem to be mistaken in supposing that it was overlooked by the older English economists.” (Principles, Book I, chap. 6, note.)
[826] Knies, loc. cit., pp. 24-25. Ashley gives an unmistakable expression to the same opinion in his History. “Political economy is not a body of absolutely true doctrines, revealed to the world at the end of the last and the beginning of the present century, but a number of more or less valuable theories and generalisations.… Modern economic theories, therefore, are not universally true; they are true neither for the past, when the conditions they postulate did not exist, nor for the future, when, unless society becomes stationary, the conditions will have changed.” (Preface.)
[827] See Karl Pearson, The Grammar of Science.