The converse form of error, which consists in eliminating the economic moment from the concept of practical activity, is criticised by Croce as abstract moralism. The economic moment has been regarded as purely technical, that is, as the theoretical moment that precedes action, action itself being always and only ethical; but some sort of knowledge precedes every action, and the distinction between the useful and the good cannot be reduced to that between knowledge and will; we can consider the useful as the means and the good as the end, only by forgetting that there is as much difference between knowing the useful and willing the useful, as between knowing the good and willing the good. The useful has also been identified with the egotistic and immoral; but the merely useful is amoral, and not immoral, in the same sense in which the pure intuition is alogical, and not either logical or illogical. The imagination of the poet cannot be submitted to the logical judgment, any more than the immediate pleasure of the child, or any action which precedes the awakening of the moral consciousness. And besides, the useful is so far from being immoral, that there is no moral action which is not also useful, as there is no logical truth which can express itself except through language. Finally, the useful has been defined as an inferior form of practical consciousness; but what this definition actually accomplishes is to recognise, though imperfectly, the true distinction, which is a relation of higher and lower only in the metaphorical sense in which these adjectives can be employed for the relation between the intuition and the concept.

Economics and ethics are the double grade of the practical activity: it is possible to conceive of actions having no moral value, and yet economically effective, but not of moral actions which should not at the same time be useful, or economic. Morality lives concretely in utility, as the universal in the individual, the eternal in the contingent. But we can never sufficiently emphasize the true character of the distinction, which, taken as a purely abstract and psychological one, might justify the persistence of morally indifferent actions within the moral consciousness. The moral consciousness, once it is awakened, invests the whole life of the practical mind, as the logical consciousness does for the theoretical mind, and it abolishes that condition of innocence, in which the purely economic is not yet subject to the moral judgment, in the same way as perception and reflection destroy our naïve belief in the reality of purely poetical imaginations. On the other hand, there are no actions which are economically ally indifferent, or, as they are generally called, disinterested; morality requires that the individual should transform a universal interest into his individual one, make of morality itself his personal utility, but it cannot ask for the abolition of all interests, which would mean the abolition of morality as well. The value of a moral action is in direct proportion with the passion and fervour with which we identify our individual ends with ends transcending our empirical individuality.

In the light of this distinction, the old oppositions of pleasure and duty, of happiness and virtue, lose a good deal of their rigour and sharpness. Pleasure as the positive economic activity or feeling can never be in real contrast with duty as the positive moral activity: a moral action brings with itself its own satisfaction or pleasure, and if it brings pain also, either the good action was not entirely good, not willed with all our heart, or it was accompanied by a new practical problem, which has yet to be solved. Similarly, happiness is not necessarily virtue, but there is no virtue which is not happiness; the sorrows of the virtuous are not intrinsic to morality, being but the limits of human activity, which the good share with the wicked. We all can transform our limits into sorrows, by our restlessness and unreasonableness; or, through resignation, our sorrows in limits and conditions of activity. Asceticism, which regards pleasure and happiness as essentially immoral, is the extreme form of moral abstractism; by destroying the economic category, it deprives morality of its reality and concreteness. It is, in fact, in the practical sphere, the counterpart of mysticism in the theoretical, which makes thought impossible by dissociating it from expression.

The recognition of the autonomy of the economic moment as one of the fundamental forms of spiritual activity, and the study of its relations with morality, appears to me as Croce's most important contribution to modern thought. We have seen what light the problems of the ethical will receive, when they are seen in their unity and distinction with the facts of the economic, or individual, will. We shall see in the next chapter what a vast field of human activity, comprising the whole political life of mankind, reveals a new rationality, once it is regarded as a legitimate product of the human mind, to be judged according to its own standards and values, and not to standards and values belonging to a different order of facts. Croce's discovery of the will of the individual as the first grade, the elementary form of the practical spirit, is analogous to Vico's discovery of the purely intuitive activity as the first grade of knowledge; and it establishes between economics and ethics, between politics and morality, the same relation as between æsthetic and logical values. The æsthetically true is the adequately expressive, as the economically good is the useful; but in both cases, we can never repeat it sufficiently, once the logical and the moral consciousness are awakened, neither the æsthetic can be apprehended otherwise than as logically true or untrue, nor the economic otherwise than as morally good or bad. The standards which are illegitimate when applied to art as art, to politics as politics, become rational again in the all pervading light of truth and morality. The predecessors of Croce in this line of his speculation are, on one side, the political writers who, from Aristotle to Machiavelli, attempted to define the relations between politics and morality; on the other side, the economists, who, by isolating a type of value, which was not an æsthetic, intellectual, or ethical value, and which could not be identified with the reverse of the ethical value, or egotism, had prepared the ground for the establishment of a philosophy of economics. As a matter of actual, historical derivation, it was from his study of Marxism, from his meditations on contemporary economic science, that Croce drew, as we saw in one of the first chapters of this book, his conception of economic value as one of the universal values.

After what has been said of the general relationship between philosophy and science, it will not be difficult to determine the place that economic science occupies in Croce's thought, in relation to his philosophy of economics. Economics as a philosophical science is that branch of philosophy, the object of which is the economic activity in its universality, the determination of the concept of volition or action as the volition or action of the individual, that is, as the predicate of the economic judgment or judgment of utility. The economic judgment, in its turn, is but a form of historical judgment, and, therefore, the concrete form of the philosophy of economics is economic history, the history of the spirit of man as it realizes itself in the individual action or volition. Between that philosophy and that history, there is no place, as we know, for any intermediate form of knowledge, but only for the practical (empirical or abstract) elaboration, of the economic datum. This is what the science of economics actually is: an applied mathematical science, founded on empirical concepts. The postulates and types of economic science are among the most perfect examples of conscious fictions, beginning with the fundamental one of the homo œconomicus: they are empirical concepts by which the economic reality is simplified to such an extent that it becomes possible to submit it to mathematical calculation, and thereby to recognise promptly its necessary aspects and consequences. Economic science partakes, therefore, of the rigour and absoluteness of mathematics, which is obtained, as we know, only by sacrificing the concreteness of its object. Its laws are arbitrary and tautological, consisting, like all scientific laws, in the definition of those characteristics of reality which have been abstracted to form its postulates or empirical concepts; but it is only through the acceptance of such definitions that it succeeds in dominating, ordering, describing, and classifying the mass and variety of economic facts and, most important of all, in treating them quantitively. It has, in fact, the same structure as another science with which it has been frequently compared, and which is here assumed as typical of the proceedings of applied mathematics—mechanics. I believe that very few economists would quarrel to-day with Croce's characterization of economic science, since its mathematical character is now universally recognised; but Croce proves conclusively that even in its non-mathematical phases, economics has always been a purely quantitative science. Volition and action are assumed in it in their indistinction; and moral facts being volitions and actions as well as the economic facts, they can also be included in the economic calculus, because from a merely abstract point of view there is no way of differentiating them from the latter.

Between the philosophy and the science of economics there is neither agreement nor disagreement, but a total heterogeneity, and, therefore, a reciprocal tolerance. It is only when one invades the field, or adopts the methods, of the other, that conflict and error arise. Economics as a science may then deny the legitimacy of the philosophical study of the economic moment; or it may attribute a universal value to its empirical concepts (as it has happened again and again in the disputes between free-traders and protectionists, or as it constantly happens when economic laws are referred to as endowed with a character of absolute necessity); or, finally it may transform its fictions into realities, attributing for instance to the concrete human being, and to the exclusion of any other quality, the qualities it has abstracted for the creation of its homo œconomicus. But, in all such cases, though we may meet these errors among the economists, they are not scientific errors but logical errors; or rather, they are poor science only because they are bad philosophy. The true function of the abstract economic schemes is that of an instrument in the hands of the historical and sociological observer, who needs many other similar instruments, if he wants to gain a concrete and direct knowledge of actual historical and social conditions.

It is now time for us to return, from this discussion of the two different elaborations of the economic datum, to a closer consideration of the second form of the practical activity, or of the ethical principle. In the same way as the empirical concepts of economic science are insufficient to exhaust the infinite wealth of the economic principle, no single action or group of single actions can define the ethical principle, which is universal, and therefore merely formal. By identifying the principle with a series, however vast, of particular determinations, that is, by substituting a material ethics for a formal one, we fall back inevitably into utilitarianism, since the volition of a single object or class of objects is not a volition of the universal but of the particular, not an ethical but an economic act. Even the highest forms of moral ideals, such as benevolence, love, altruism, humanitarianism, etc., once they are apprehended materially, and not as mere verbal approximations to the formal ethical principle, acquire a contingent and utilitarian character, and are apt to come in actual conflict with the truly moral will. The same criticism applies, and with greater force, to institutionalized ideals, such as the family, the state, the social organism, the interest of the race, etc.; none of them can be the object of the moral will without exceptions and restrictions, that is, without losing in the act of the will its institutional character, and appearing as one of the particular conditions under which the particular moral volition takes place. The religious principles themselves are subject to this reduction from the ethical to the economic, when, as in the case of theological utilitarianism, they are taken as empirical limitations, as particular objects, of the ethical will. The material ethical principles are in fact analogous to those material æsthetic principles which we have criticised as rhetorical; they constitute a rhetoric of the virtues not less deadly to the creative moral will than the rhetoric of the arts is to the creative intuition.

The ethical principle must be formal, but not formalistic, and therefore Croce is not satisfied with any of the so-called universal laws or categorical imperatives, or with any of the many formulas which attempt to define the moral actions through one constant determination which ought to be present in each of them. Such formulas are mere symbols or metaphors, and can be used as the equivalents of the ethical principle, as some of the categories of material ethics can be used; but their danger consists in giving the illusion of possessing the true principle, while what we are given is an empty and tautological one, which will again give way to purely empirical determinations and therefore to utilitarianism. This empty formalism, or absolute indetermination, of the ethical principle, corresponds to two conceptions of philosophy, which Croce respectively calls partial and discontinuous. According to the first, man may know a portion of reality, but never reality as a whole; as regards morality, he may hear the voice of his own conscience, but never grasp with his intellect the content of the moral law. According to the second, he may know the reason of morality, but not within the sphere of ethics, whose task consists only in establishing the moral law and deducing the moral precepts; the problem of the essence of morality belongs to another science, metaphysics. The reader who has followed us to this point knows that Croce's philosophy is neither partial nor discontinuous; that he does not admit of any limits to human thought, nor of any division in the body of philosophy. The whole of philosophy is already included for him in the first philosophical proposition, and though it may didactically be useful to divide the problems of philosophy in groups, or even to deal separately with the particular philosophical science on one hand, and with general philosophy or metaphysics on the other, yet truth does not belong to the distinctions outside their unity, to the parts outside the whole, to the segments outside the circle. It is this totality and continuity of Croce's philosophy that makes Croce's ethical principle a form, but not an empty one; a form which is full in a philosophical and universal sense, which is at the same time content, and universal as content not less than as form. He has defined the ethical principle, not, tautologically, as a universal form, but as the volition of the universal: a definition which is at the same time the distinction of the ethical from the economical form, or volition of the individual. We may here recall, to test once more the coherence of Croce's thought, and to make this definition clearer, his definition of the concept as knowledge of the universal; by it the concept is distinguished from the intuition, or knowledge of the individual, and the logical principle is seen as unidentifiable either with an abstract logical form or with any particular system of philosophy. The concept is real only in the infinite individual determinations of actual thought, as the ethical principle in the infinite concrete volitions of the human spirit sub specie universalis.

The universal which is the object of the ethical volition is not something that we shall need to define at this point of our exposition, since the whole of Croce's philosophy is nothing but a definition of the universal. The universal is mind or the spirit; it is reality, as unity of will and thought; it is life grasped in its depth as that same unity; it is freedom, since a reality thus conceived is perpetual development, creation, progress. Man, in willing the universal, turns from his individuality to that which transcends it, to the spirit, or reality, or life, or freedom, not as abstract ideals, but as they realize themselves in his individual action. The volition of the individual, of one's individual existence, is necessarily the first step; there is no man, however deeply moral, who does not begin by affirming his own individual life; without this affirmation, he would never be able to transcend it and to deny it. But he who should limit himself to this affirmation, and accept as a place of rest what is only the beginning of his development, would find himself in contradiction with his real, intimate self. He must will not only his individual self, but that self also, which being the same in all selves is their common Father. It is thus that he promotes the realization of reality, lives the full life, and makes his heart beat with the heart of the universe: Cor cordium. The moral individual is conscious that he is working for the Whole. Every action which is in accord with the ethical duty is in accord with Life, and would be contrary to duty and immoral, if instead of promoting life, it should depress and mortify it. The most humble moral action resolves itself into this volition of the spirit in its universality. The soul of a simple and ignorant man wholly devoted to his modest duty is in perfect unison with that of the philosopher whose mind receives within itself the universal spirit. What one does, the other thinks; and both reach by different roads their full satisfaction in an act of life, in a fecund embrace with reality.

It is in pages like the ones from which we have extracted this enthusiastic definition of morality, that the true quality of Croce's philosophy is best perceived. But what is here affirmed as a principle lives as an ever present spirit in innumerable able discussions of particular moral problems in his Filosofia della Pratica, in his moral essays, in his literary criticism (there is no living literary critic who has a keener perception of moral values than this implacable enemy of moralism), in the whole of his work. It is this moral enthusiasm, together with his capacity to see clear and deep, his catholic tolerance for all forms of beauty and truth and goodness, however distant from his tastes and inclinations, and his courageous, outspoken intolerance for all hypocrisies, compromises, half-truths, wilful errors, that has given Croce, in the last twenty years, in Italy, a right to moral as well as intellectual leadership. He is the true heir of an infinitely complex moral tradition, and placed high enough to do justice to all its elements, though apparently contrasting with each other. But when recognizing the symbolical and practical value of the various positive ethical systems that appear to him as gradual approximations to the full concreteness and universality of the ethical principle, he emphasizes the connection of his own ethics with one of those elements in preference to every other, with the religious and Christian element, for which morality is already what it is for the philosopher, the love and will of the universal spirit. There is no truth of ethics which for him cannot be expressed in the words that we have learned as children from our traditional religion. Between the religious man and the philosopher, between religion and philosophy, there is no enmity, but continuity and development; in the affirmation of the ethical principle, which is the crucial test of every philosophy as of every religion, the substantial identity of religion and philosophy is finally established.