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366 POLITICAL ECONOMY into that work much that relates to the other social aspects, incurring thereby the censure of some of his fol lowers, who insist with pedantic narrowness on the strict isolation of the economic domain. There has been much discussion on the question What is the scientific method followed by Smith in his great work? By some it is considered to have been purely deductive, a view which Buckle has perhaps carried to the greatest extreme. He asserts that in Scotland the induc tive method was unknown, that the inductive philosophy exercised no influence on Scottish thinkers ; and, though Smith spent some of the most important years of his youth in England, where the inductive method was supreme, and though he was widely read in general philo sophical literature, he yet thinks he adopted the deductive method because it was habitually followed in Scotland, and this though Buckle maintains that it is the only appropriate, or even possible, method in political economy, which surely would have been a sufficient reason for choos ing it. That the inductive spirit exercised no influence on Scottish philosophers is certainly not true ; as will be presently shown, Montesquieu, whose method is essentially inductive, was in Smith s time studied with quite peculiar care and regarded with special veneration by Smith s fellow- countrymen. As to Smith himself, what may justly be said of him is that the deductive bent was certainly not the predominant character of his mind, nor did his great excellence lie in the " dialectic skill " which Buckle ascribes to him. What strikes us most in his book is his wide and keen observation of social facts, and his perpetual tendency to dwell on these and elicit their significance, instead of drawing conclusions from abstract principles by elaborate chains of reasoning. It is this habit of his mind which gives us, in reading him, so strong and abiding a sense of being in contact with the realities of life. That Smith does, however, largely employ the deductive method is certain ; and that method is quite legitimate when the premises from which the deduction sets out are known universal facts of human nature and properties of external objects. Whether this mode of proceeding will carry us far may indeed well be doubted; but its soundness cannot be disputed. But there is another vicious species of deduction which, as Cliffe Leslie has shown, seriously tainted the philosophy of Smith, in which the premises are not facts ascertained by observa tion, but the same a priori assumptions, half theological half metaphysical, respecting a supposed harmonious and beneficent natural order of things which we found in the physiocrats, and which, as we saw, were embodied in the name of that sect. In his view, Nature has made provi sion for social wellbeing by the principle of the human constitution which prompts every man to better his condi tion : the individual aims only at his private gain, but in doing so is " led by an invisible hand " to promote the public good, which was no part of his intention ; human institutions, by interfering with the action of this principle in the name of the public interest, defeat their own end ; but, when all systems of preference or restraint are taken away, " the obvious and simple system of natural liberty establishes itself of its own accord." This theory is, of course, not explicitly presented by Smith as a foundation of his economic doctrines, but it is really the secret sub stratum on which they rest. Yet, whilst such latent postulates warped his view of things, they did not entirely determine his method. His native bent towards the study of things as they are preserved him from extrava gances into which many of his followers have fallen. But besides this, as Leslie has pointed out, the influence of Montesquieu tended to counterbalance the theoretic pre possessions produced by the doctrine of the jus naturee. That great thinker, though he could not, at his period- understand the historical method which is truly appropri ate to sociological inquiry, yet founded his conclusions on induction. It is true, as Comte has remarked, that his accumulation of facts, borrowed from the most different states of civilization, and not subjected to philosophic criticism, necessarily remained on the whole sterile, or at least could not essentially advance the study of society much beyond the point at which he found it. His merit, as we have before mentioned, lay in the recognition of the subjection of all social phenomena to natural laws, not in the discovery of those laws. But this limitation was over looked by the philosophers of the time of Smith, who were much attracted by the system he followed of tracing social facts to the special circumstances, physical or moral, of the communities in which they were observed. Leslie has shown that Lord Kaimes, Dalrymple, and Millar contemporaries of Smith, and the last his pupil were influenced by Montesquieu ; and he might have added the more eminent name of Ferguson, whose respect and admiration for the great Frenchman are expressed in striking terms in his History of Civil Society. We are even informed that Smith himself in his later years was occupied in preparing a commentary on the .Esprit des Lois. He was thus affected by two different and incon gruous systems of thought, one setting out from an imaginary code of nature intended for the benefit of man, and leading to an optimistic view of the economic consti tution founded on enlightened self-interest ; the other following inductive processes, and seeking to explain the several states in which human societies are found existing, as results of circumstances or institutions which have been in actual operation. And we find accordingly in his great work a combination of these two modes of treatment inductive inquiry on the one hand, and, on the other, a priori speculation founded on the " Nature " hypothesis. The latter vicious proceeding has in some of his followers been greatly aggravated, while the countervailing spirit of inductive investigation has fallen into the background, and indeed the necessity or utility of any such investigation in the economic field has been sometimes altogether denied. Some have represented Smith s work as of so loose a texture and so defective in arrangement that it may be justly described as consisting of a series of monographs. But this is certainly an exaggeration. The book, it is true, is not framed on a rigid mould, nor is there any parade of systematic divisions and subdivisions ; and this doubtless recommended it to men of the world and of business, for whose instruction it was, at least primarily, intended. But, as a body of exposition, it has the real and pervading unity which results from a mode of thinking homogeneous throughout and the general absence of such contradictions as would arise from an imperfect digestion of the subject. Smith sets out from the thought that the annual labour of a nation is the source from which it derives its supply of the necessaries and conveniences of life. He does not of course contemplate labour as the only factor in production ; but it has been supposed that by empha sizing it at the outset he at once strikes the note of difference between himself on the one hand and both the mercantilists and the physiocrats on the other. The improvement in the productiveness of labour depends largely on its division ; and he proceeds accord ingly to give his unrivalled exposition of that principle, of the grounds on which it rests, and of its greater applicability to manufactures than to agriculture, in consequence of which the latter relatively lags behind in the course of economic development. The origin of the division of labour he finds in the propensity of human nature " to truck, barter, or exchange one thing for another." He shows that a certain accumulation of capital is a condition precedent of this division, and that the degree to which it can be carried is dependent on the extent of the market. When the division of labour has been established, each member of the

society must have recourse to the others for the supply of most of