Page:Popular Science Monthly Volume 57.djvu/537

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THE prime concern of the economist and of the statistician is the condition of the people. Other matters which engage their attention—particular problems, questions of history, discussions of method, developments of theory—all derive their ultimate importance from their bearing upon this central subject. The statistician measures the changing phenomena of the production, distribution and consumption of wealth, which to a large extent reflect and determine the material condition of the people. The economist analyzes the motives of these phenomena, and endeavors to trace the connection between cause and effect. He is unable to push his analysis far without a firm mastery of the theory of value, the perfecting of which has been the chief stride made by economic science in the nineteenth century. When we read the 'Wealth of Nations' we are forced to admit that in sheer sagacity Adam Smith is unsurpassed by any of his successors. It is only when we come to his imperfect and unconnected views upon value that we feel the power of increased knowledge. J. S. Mill supposed in 1848 that the last word had been said on the theory of value. In his third book he writes: "In a state of society in which the industrial system is entirely founded on purchase and sale... the question of value is fundamental. Almost every speculation respecting the economical interests of a society thus constituted implies some theory of value; the smallest error on this subject infects with corresponding error all our other conclusions, and anything vague or misty in our conception of it creates confusion and uncertainty in everything else." And he adds: "Happily, there is nothing in the laws of value which remains for the present or any future writer to clear up; the theory of the subject is complete."

We know now that he was wrong. Thanks in the main to economists still alive, and especially to the mathematical economists, we have at length a theory of value so formally exact that, whatever may be added to it in the future, time can take nothing from it; while it is sufficiently flexible to lend itself as well to a regime of monopoly as to one of competition. Yet our confidence in this instrument of analysis is far from inspiring us with the assurance which has done so much to discredit economics by provoking its professors to dogmatize upon

  1. Address by the President to the Economic Science and Statistics Section at the Dover meeting of the British Association for the Advancement of Science.