•*.«*:^'. *• '^''% V^^^^V V'--*%<^* v^^^v < ^: %>i^' \j ,^^^^ • l"« •^ ri^ • • • * ^% • ao y^t^-'V* ^'♦'^V ..\.*'^^'\**' • 4 o^ 5\ **..^« '^^^VaW ,<*"* /^l^*- *♦..** -ifJ^f/! THE STUDY OF POLITICAL ECONOMY. HINTS TO STUDENTS AND TEACHERS. BY J. LAURENCE LAUGHLIN, Ph.D., ASSISTANT PROFESSOR OF POLITICAL ECONOMY IN HARVARD UNIVERSITY. NEW YORK: D. APPLETON AND COMPANY, I, 3, AND 5 BOND STREET. 1885. H37i ■ L 3 Copyright, 1885, By D. APPLETON AND COMPANY. FILIUS MATRI BENIGNiE. PREFACE. The existence of this little book is due to an attempt to convey, by lectures to students, an understanding of the position which political economy holds in regard, not merely to its actual usefulness for every citizen, but to its disciplinary power, and to the qualities of mind which are necessary for success in the study. It was hoped, thereby, that young men might more intelligently decide whether they should begin the study, and, even when they had purr sued it for a time, whether they should continue it. Each man by his own judgment, after an analysis such as is given within of the powers required for the study of political economy, should be enabled to come to a decision for himself more wisely than any one else could reach it for him. I desired in this way to aid 6 PREFACE, in a judicious selection of courses by the stu- dent who had some freedom of choice in his CO lege course. The interest which the public now manifests in economic studies led me to put the material of my lectures into a general form, in order that they might assist inquirers in any part of the country. No special knowledge has, therefore, been demanded of the reader by way of prep- aration for the substance of what I have intro- duced into this volume. By avoiding, as far as possible, all technical language, I have sought to make the inquiry useful to any general read- er of intelligence who may be interested to know how to study political economy. But that which I have most at heart is the exten- sion of instruction in political economy in all schools and colleges, and the improvement in methods of teaching the subject I need hardly say that I shall be glad if these pages call out any suggestions by which these two objects may be furthered. J. Laurence Laughlin. Harvard University, Cambridge, Mass., May, 1885. CONTENTS. CHAPTER I. PAGB Our Civil War the Cause of a New Interest in Eco- nomics 13 CHAPTER II. The Character of Political Economy as a Study . 51 CHAPTER III. The Disciplinary Power of Political Economy . . 73 CHAPTER IV. The Relations of Political Economy to the Law, the Ministry, and Journalism 90 CHAPTER V. Methods of Teaching Political Economy , , .115 A TEACHER'S LIBRARY, SELECTED FROM ENGLISH, FRENCH, AND GERMAN AUTHORS. General Treatises. John Stuart Mill's "Principles of Political Economy." Abridged, with critical, bibliographical, and explanatory notes, and a sketch of the History of Political Economy, by J. Lau- rence Laughlin. A text-book for colleges (1884). Professor Fawcett's " Manual of Political Economy " (Lon- don, sixth edition, 1883) is a brief statement of Mill's book, with additional matter on the precious metals, slavery, trades- unions, co-operation, local taxation, etc. Antoine-Ehse Cherbuliez's "Precis de la science econo- mique" (Paris, 1862, 2 vols.) follows the same arrangement as Mill, and is considered the best treatise on economic science in the French language. He is methodical, profound, and clear, and separates pure from applied political economy. Other excellent books in French are : Courcelle-Seneuil's "Traite theorique et pratique d'economie politique" (1858), (Paris, second edition, 1867, 2 vols.), and a compendium by Henri Baudrillart, " Manuel d'economie politique " (third edi- tion, 1872). Roscher's "Principles of Political Economy" is a good example of the German historical method : its notes are crowded with facts ; but the English translation (New York, 1878) is badly done. There is an excellent translation of it into French by Wolowski. A desirable elementary work, " The Economics of Indus- lo ^ TEACHER'S LIBRARY, try" (London, 1879; second edition, 1881), was prepared by Mr. and Mrs. Marshall. Professor Jevons wrote a " Primer of Political Economy " (1878), which is a simple, bird's-eye view of the subject in a very narrow compass. Important General Works. Adam Smith's " Wealth of Nations " (1776). The edition of McCulloch is perhaps more serviceable than that of J. E. T. Rogers. Ricardo's "Principles of Political Economy and Taxa- tion" (1817). J. S. Mill's "Principles of Political Economy" (2 vols., 1848— sixth edition, 1865). Schonberg's " Handbuch der politischen Oekonomie " (1882). This is a large co-operative treatise by twenty-one writers from the historical school. Cairnes's " Leading Principles of Political Economy " (1874); "Logical Method" (1875), lectures first delivered in Dublin in 1857. Carey's " Social Science " (1877). This has been abridged in one volume by Kate McKean. F. A. Walker's "Political Economy" (1883). This au- thor differs from other economists, particularly on wages and questions of distribution. Treatises on Special Subjects. W. T. Thornton's "On Labor" (1869). H. George's "Progress and Poverty" (1879). In connec- tion with this, read F. A. Walker's " Land and Rent " (1884). J. Caird's "Landed Interest" (fourth edition, 1880), treat- ing of English land and the food-supply. McLeod's "Theory and Practice of Banking" (second edition, 187 5-1 876). A TEACHER'S LIBRARY. II Goschen's " Theory of Foreign Exchanges " (eighth edi- tion, 1875). W. G. Sumner's " History of American Currency " (1874). John Jay Knox's " United States Notes " (1884). Jevons's " Money and the Mechanism of Exchange " (1875). Tooke and Newmarch's " History of Prices " (i 837-1 856), in six volumes. M. Block's " Traite th^orique et pratique de statistique " (1878). Leroy-Beaulieu's " Trait6 de la science des finances " (1883). This is an extended work, in two volumes, on taxa- tion and finance ; " Essai sur la repartition des richesses " (second edition, 1883). F. A. Walker's " The Wages Question " (1876) ; " Money " (1878). L. Reybaud's " Etudes sur les r^formateurs contemporains, ou socialistes modemes" (seventh edition, 1864). Rae's " Contemporary Socialism " (1884) gives a compen- dious statement of the tenets of modern socialists. See, also, R. T. Ely's "French and German Socialism" (1883). Dictionaries. McCulloch's " Commercial Dictionary " (new and enlarged edition, 1882). Lalor's " Cyclopaedia of Political Science" (i 881-1884) is devoted to articles on political science, political economy, and American history. Coquelin and Guillaumin's " Dictionnaire de I'^conomie politique" (1851-1853, third edition, 1864), in two large volumes. Reports and Statistics. The "Compendiums of the Census" for 1840, 1850, i860, and 1870, are desirable. The volumes of the tenth census 12 A TEACHER* S LIBRARY. (1880) are of great value for all questions ; as is also F. A. Walker's "Statistical Atlas" (1874); and Scribner's "Statis- tical Atlas of the United States," based on the census of 1880. The United States Bureau of Statistics issues quarterly statements ; and annually a report on " Commerce and Navi- gation," and another on the "Internal Commerce of the United States." The " Statistical Abstract " is an annual publication, by the same department, compact and useful. It dates only from 1 878- The Director of the Mint issues an annual report deaUng with the precious metals and the circulation. Its tables are important. The Comptroller of the Currency (especially during the administration of J. J. Knox) has given important annual re- ports upon the banking systems of the United States. The reports of the Secretary of the Treasury deal with the general finances of the United States. These, with the two last mentioned, are bound together in the volume of " Finance Reports," but often shorn of their tables. There are valuable special reports to Congress of com- missioners on the tariff, shipping, and other subjects, pub- lished by the Government. The report on the " International Monetary Conference of 1878 " contains a vast quantity of material on monetary ques- tions. The British parliamentary documents contain several an- nual " Statistical Abstracts " of the greatest value, of which the one relating to other European states is peculiarly convenient and useful. These can always be purchased at given prices. A. R. Spofford's " American Almanac " is an annual of great usefulness. J. H. Hickcox, Washington, publishes a very useful monthly catalogue of the Government publications, entitled " United States Publications." CHAPTER I. OUR CIVIL WAR THE CAUSE OF A NEW INTER- EST IN ECONOMICS. In some parts of our country there is a cur^ rent maxim among the old-fashioned gardeners, to the effect that " a wind-shaken tree will bear the more fruit." By widening its application, we shall find in it no little subtle force. In fact, it is a homely expression of an idea which un- doubtedly finds its parallel in individual and so- cial life. As individuals, we all know that there is no real growth of character except by a con- quest over opposing difficulties ; to do right when it is against our inclinations and preju- dices strengthens the moral fiber, so that the firm organism gives forth fairer and sweeter fruit. But carry the analogy one step farther — from the individual to society. In the social organism it is possible that we may find, as it were, a moral law of conservation of energy, by 14 THE STUDY OF POLITICAL ECONOMY. which there appears a relation between a loss and a gain ; so that a sacrifice becomes the par- ent of a subsequent good. Some great convul- sions in political life find their justification when viewed in the light of this truth, and by it his- tory often reveals to us some different lessons than those which lie on the surface of events ; but it is the most natural thing that this inter- pretation should escape the minds of the partici- pants in the sacrifice, because the future gain may lie at such a distance and be so impalpable as even to elude considerable foresight. We are, however, already reaching that interesting distance from the events of the civil war where we can begin to study them historically, and to consider some of their evident effects. A few years ago, we saw armies go out of our sight during the civil war, only to come back thinned, injured by disease, with half their number left dead on the field. Death meant bitter, inde- scribable sorrow in all our homes. The experi- ences of the war were felt to be pitiless, inex- plicable, and hard. And yet, perhaps, a subtle suggestion may have passed into some of our minds that it was not simply by dying, or in THE STUDY OF POLITICAL ECONOMY. 15 living, that the best law of our being was en- forced ; that there was, in truth, some Power be- hind it all ; that some purpose was being worked out through each one of us ; and that, although not comprehended by us all, each one was as necessary to the whole in the same way, for example, that each leaf is necessary to the com- pleted organism of the whole tree, and ceases to be when it is separated from the stem. But j-et it may be possible, without presuming too much, to begin to look for some of the results of that social and political upheaval which we must now admit has been the greatest and most con- siderable disturbance in our national life since the foundation of the government. It is worth while to examine whether the wind-shaken tree has borne the more fruit. The process by which citizens from secluded districts and remote towns were sent through new cities to opposite parts of the Union, ex- changing ideas with men of different habits of thought, was a marked feature of the war period, and leavened the mental life of the American people in a way hitherto little suspected. It was something like sending a country boy to 1 6 THE STUDY OF POLITICAL ECONOMY. college, where he changes the ideas of the farm for what is best in literature and science ; but, in the case of the war, it was a college of national politics and struggles, and, instead of one boy, there were a million men. The rural popula- tion came into a knowledge of our cities, while the urban classes were carried away into new climates, and into unvisited parts of our vast domain. New sights, new methods of cultiva- tion, different standards of living, stimulated the dull and fired the active and enterprising men in the ranks. The life of the farm and the vil- lage was widened to an interest in the nation. About the same time, moreover, the vast in- crease in easy means of communication by rail- ways, and a great extension of the use of the news- paper and telegraph, which were stimulated by the war exigencies, brought provincial towns into direct connection with the outside world. In the process of comparison with the more attract- ive habits of the dwellers in the great cities and towns, even oddities of customs and dress began to disappear. In various ways like this, the thinking horizon was extended. The presence of complicated problems dawned upon the con- THE STUDY OF POLITICAL ECONOMY. jy sciousness of dull intellects, and brighter minds found new spurs to ambition in the questions of larger interest. On all sides men felt them- selves coming into contact daily with new diffi- culties, under a dim comprehension of their big- ness, but with a strong belief that their knowl- edge of how to deal with them was inadequate. In short, the tremendous crisis through which we passed during our civil war, apart from its effect on the preservation of the Union, has had a wide, although subtle, influence on the moral and intellectual character of the American people. It can easily be imagined that the work- ing of these new forces should have had a se- rious effect on a quick and susceptible race. Under somewhat similar conditions, they have, in fact, had a distinct influence on a more phleg- matic people than our own. Old students at Gottingen, on returning to the university since the late wars in which Germany has been en- gaged, are amazed to find the old-fashioned spot — where the customs, habits, and naive simpHci- ty of one hundred years ago had prevailed until quite recently — now wholly changed. The com- 1 8 THE STUDY OF POLITICAL ECONOMY, mercial spirit has seized the formerly simple- minded peasants, and the quiet town now hears in its streets the heavy march of cosmopolitan- ism. The United States, as well as Germany, had new problems to solve. The conflict of arms ended the long slavery struggle, it is true, but the war brought with it intricate questions of a character very different from those which had gone before. Without warning, and conse- quently without the opportunity to make due preparation or acquire proper training, our pub- lic men were confronted, as the war progressed, with matters of vital importance not only in inter- national and constitutional law, but in taxation, and in every form of administration and finance. The demand for men who had devoted themselves earnestly to the study of governmental science was an imperative one ; but, generally speaking, it was met in a way which showed that there existed in the community a class from whom these necessary men could be recruited. That class was the legal profession of the country. The questions of reconstruction, the relation of the Federal Government to the States, the civil THE STUDY OF POLITICAL ECONOMY. 19 rights of the negro, our attitude toward foreign powers during the blockade of the Southern ports, were not abandoned to men who had never habituated themselves to discussions such as were involved in their settlement. There were differences of opinion, of course ; but, in- asmuch as these differences of opinion were the outcome of different political theories, this itself proved that attention had been previously given to such subjects to the extent that crystallized systems of thought, formulated in dogmas, had been created by the various parties. It may then be truly said that, in respect of political questions, we were not wholly unprepared for the emergencies of the war. But, as has been suggested, other considera- tions than those of a legal and constitutional character arose, and new burdens were laid upon the public men of that day. The mag- nitude of the military operations involved an expenditure of money by the State on so large a scale as to demand from our statesmen a financial skill of an almost unparalleled kind. To meet these newly-presented questions of tax- ation finance, and currency, upon what body of 20 THE STUDY OF POLITICAL ECONOMY. men could we call? To this, answer must be frankly made that the war overtook us without a supply of, or even a few, trained economists and financiers in public life. The economic part in the equipment of a public official had been hitherto almost wholly neglected. In fact, po- litical economy and finance had never been seri- ously studied in the schools ; but, if studied at all, they had been classed in the old-fashioned required curriculum with Butler's " Analogy " and the " Evidences of Christianity." They had been, moreover, compressed into the briefest possible time, which would naturally assure, if not a dislike of the study, at least a superficiality even worse than total ignorance. Although Adam Smith wrote his " Wealth of Nations " in 1776, it is a mortifying fact that political econo- my was practically an unknown science to the American people before i860. When this fact is considered, and when we realize how unfit we were to handle economic problems skillfully, it is an interesting study to look into the way in which our people took up the burdens and tasks of our great civil con- flict. There was the quick adaptability of THE STUDY OF POLITICAL ECONOMY. 21 Americans to start with ; there was plenty of patriotism and good-will, and no lack of those high qualities of self-sacrifice and heroism which are still fragrant to us; but lawyers, such as Chase and Fessenden, were -practically our only financiers. Operations which required patience, experience, knowledge, and leadership had to be carried on by men who had no such quali- ties. Early in the war they were required to consider a scheme of raising loans, and to adjust a plan of taxation corresponding to the extraor- dinary war expenses ; but the banks became loaded with unsalable United States bonds, and, unguided, the country drifted at once into a position where specie payments were sus- pended at the end of 1861. Without consider- ing alternatives, they created a national debt in a few years as great as that incurred by old des- potisms of Europe in centuries ; without fore- sight, or financial leadership, they fell into a ruinous issue of irredeemable paper money, which even yet, although somewhat contracted, still remains a source of anxiety and danger; without intending it as the aim of a definite policy, but simply through a desire to gain a 22 THE STUDY OF POLITICAL ECONOMY, war revenue, they imposed heavy customs duties on imports, which have brought into existence business interests largely dependent on the con- tinuance of these temporary war - measures. When it is realized that principles of taxation are probably less understood to-day, even by intelligent men, than any other branch of eco- nomics, it is not surprising to find that in 1864 Congress was occupied only five days in pass- ing through both its branches the most gigantic taxation measure of the war. The National Bank Act, moreover, which has fortunately given us the best system of banking ever en- joyed by the country, was in reality recom- mended to Congress with the hope that it would facilitate the sale of United States bonds and aid our tottering credit. We blundered egregious- ly; but our vast resources made it possible to blunder without much suffering. Then, since all our national questions come before the vot- ers, the country was obliged to listen to discus- sions in Congress, in the newspapers, and on the "stump," to very difficult problems of foreign trade, currency, and finance. Out of our very blunders, and from this revelation to the people THE STUDY OF POLITICAL ECONOMY. 23 of its ignorance, its inability to know how to meet the demands of a great emergency period, rose a desire, slowly growing throughout the community, as the recognition of the want was felt, to learn something of economics, and to study the principles which underlie the material prosperity of the nation. Out of the conscious- ness of weakness developed in the struggle came a natural longing for strength. The political leader who spoke, the journalist who discussed, the citizen who listened and read, all began to lament their want of training, and to admit the need of wholesome and sound instruction. The wish to speak intelligently on every subject which is uppermost in men's minds is a work- ing factor in the nature of all Americans ; and the constant reference to economic questions in the journal which lay on the breakfast-table was at once a constant reminder to the reader of his ignorance and a laudable stimulus toward bet- ter knowledge of such subjects. The parent became anxious that the son should have the training which he had never got ; and the new generation is now responding to this feeling. In fact,*it is now unquestionable that a new 24 THE STUDY OF POLITICAL ECONOMY, interest in economics and finance has already arisen, and the cause of it seems to be very clear. The Civil War was, so to speak, the convulsion which brought into existence a desire for the study of political economy in the United States. The country was stirred to its depths by eco- nomic questions ; for they entered into the po- litical issues of exciting campaigns. The war issues thus did for the United States — in a dif- ferent way, of course — even more than the corn- law agitation did for England. They actually gave birth to new motives for study. There never has been a time in our history when there was so evident a desire to get light on the eco- nomic problems of the day as now. There is a new stir among the ranks of the young men at college ; and the printing-press sends forth an increasing flood of new books upon subjects which are constantly discussed in the daily newspapers. There is, without doubt, a new- born but slowly growing attention by the younger men of our land to the necessity — as well as the duty — of fitting themselves properly for the responsibilities of citizenship. In every social class, and in every department of busi- THE STUDY OF POLITICAL ECONOMY, 25 ness, men are eagerly asking for information on economic topics. If the war has given us this — the absence of which used to be so often la- mented by thoughtful men a few years ago — then may some of our sacrifices not have been in vain. In that case the wind-shaking has surely resulted in abundant fruit. To the minds of some persons the tangible evidences of this movement may not have been shown ; but it will not be difficult to give visible proof to such people. In the pres- ent awakening in educational discussion, one phase of which has been called the " Greek Question," it is worth while to notice the influ- ence of the war period on the college curricu- lum. In most of our schools and colleges, on the breaking out of the war — and even to the present day — the pecuniary resources and en- dowments had been tied down by the provis- ions of donors, under the binding force of old traditions, to supply instruction in the custom- ary Greek, Latin, mathematics, and philosophy, which were then considered the only essentials of a liberal education. But when, after tasting of the forbidden fruit of civil strife, our naked 26 THE STUDY OF POLITICAL ECONOMY, ignorance was revealed to us, and when we looked about to see wherewithal our ignorance should be clothed, and in what schools the new studies could best be followed, it was discov- ered that the college curriculum (with a few ex- ceptions) made practically no provision for such instruction. In the old days, when only sailing- vessels entered Boston harbor, but one chan- nel was practicable, and all the fortifications were placed in such a way as to command this single means of approach ; yet, when steam took the place of sails, another channel proved the best, but it is now wholly undefended. The old ship-channel must be defended, but so must the new one. Likewise, in the case of collegiate studies, the old subjects are desirable, of course, but they are not the only desirable ones. The new demands, due to the progress of the age, must also be met. We shall, therefore, look with interest to see if the college curriculum shows any evidence of changes made to satisfy the new wants. As we look into the work of various institutions, these changes will be found to be very considerable. In fact, the response of the schools to the new demands is at once THE STUDY OF POLITICAL ECONOMY. 27 the evidence and the result of the quickening and stimulating conditions already described. A comparison of the amount of instruction in pohtical economy given by the principal insti- tutions of the land in i860 and 1870 with that given in 1884 will furnish us new proof that the wind-shaken tree is yielding good fruit. (See pages 28 and 29.) When it is considered that the resources of institutions have been generally hampered by restrictions as to their use, this change in the course of studies could have taken place only by virtue of a very urgent pressure arising from the public for such instruction. Nor can any- thing show more distinctly than the foregoing tables how young is any real systematic study of political economy in this country. It was not likely that there could be any number of trained economists among us in the days when no serious attention was given to economic study at the chief seats of learning. If it is thought strange that we have had no " Ameri- can school " of economists (except the followers of Carey), there is a good reason for it in the absence of any attempt to stimulate the best of >-, w nt o ^ X! a (1> m c; (U •*-> !? Tl 3 ri fl 0) rt § ^ b5 CA G O J3 a O trl {«^ ^ 3 J« ^ O (1) >^ s 0) 1) rt t: rn ;3 ii 1 U 28 TIfJS STUDY OF POLITICAL ECONOMY. •5 9 oh oo^oM-, c! H ^ Z, aS o ^ coo ^H |i ^:|"| g ^ « I |5 s I «^ •a . °-S lo£| .sis Sisune'S si^si^U 1^ -s^lSa^-^ it^% 8^ l-^. :2.-S fib's 5S "55 ^5 C! w fi-2, C S o o o o{3 g-S ^o *^ .rt ■<-' o ay "0 a ° . ell !> 'i^ >2 U 1^ THE STUDY OF POLITICAL ECONOMY. ^ "* ^^ ^ .52 ti'2 it ^Si ^ S^ 3 -Ob S ^ I u I % 5-a .p -la I I - I- ^ « b 5 :a 3 i? Si t^-^ • ^ -^ -^ -'♦^ rt gg£ 3| § -S B*- ^"J >;^. ^ -2 vJ 8^ ^ §^•2 l« . 1 -^^ -^Si •?:;- 2 2 ^^ o| ^ ««HC3-3 "oJ *-■ *-■ •S'U -St^ l3o px 'O >-> *j S ^ O O i! 3C/) U >> E^ rt U cS UiTj o 29 .Son o (tj :». S: «3 ^ " sj 3 » »- ITi in t X o U S 5 bJ) - * z ^ * C z J f "Q J859 = =0" Z 1864 . ..../ ;> > : = n 1869 ^ > 1874 N < ^--s X 1679 f \ < <: V, "'*"u 1884 J •• -^ > ..--- > 1 PI r THE STUDY OF POLITICAL ECONOMY. 137 other exactly changed their relative positions to the line representing the total tonnage. The graphic method lays bare the naked facts for the scalpel of the investigator. The student is then in a position to apply principles and dis- cover explanations. No table of figures, I am convinced, would disclose vital relations in the statistics in the searching way by which it is done with the aid of a few lines on a chart. In short, the more extended collection of economic data is now rendered possible through the better methods employed in census and statistical bureaus, and the resort to the work of verification of economic principles in the examination of these data is one of the best means by which political economy can be re- deemed from the baseless and common charge of being made up of formulae which have no practical use. Into this work one can carry no instrument so effective and helpful as graphic representations. In fact, the investigator, after having collected his tables and columns of fig- ures, will find his gain in first putting them in some graphic form, before he can intelli- gently see exactly with what he has to grapple ; 138 THE STUDY OF POLITICAL ECONOMY, then he can turn his energies directly upon the problems which are disclosed by the chart to every other eye as well as his own. There are, however, other important gains to be derived from the use of charts by the teacher. Above all, they are interesting. They will attract the idler by something new which he can easily understand, although he can not explain the causes ; they stimulate the quick by putting them at once in possession of the facts to be explained. When lecturing upon practi- cal questions, one great difficulty presents itself to the teacher in trying to find the means of laying before his class the actual condition of the subject which is to be investigated. If it were proposed to place the statistics on the blackboard before him, the time of the lect- urer would all be lost while the student was copying figures. The references to the books can be given where these figures dealt with by the lecturer are collected, but by a chart long columns of statistics are easily imported into the class-room, become the basis of discus- sion, and are photographed on the listener's mind once for all in an attractive and interest- THE STUDY OF POLITICAL ECONOMY. 139 ing way. The slow and painful work of months is in this way presented to a class in a few min- utes, and the practical lessons caught at a glance. For this purpose, charts are the labor- saving machines of statistics. A word or two as to the details of preparing charts may not be impertinent. They can be made on common glazed white cotton cloth (called sarcenet cambric), which receives ink or water-colors ; but the labor of ruling the cloth in squares before the construction of the chart is very considerable. Use can be made, however, of heavy manila paper, made large enough by sticking two large sheets together. Some printers can now rule this paper in squares to suit the convenience of the w^orker ; but these guiding-lines ought to be faint, and not so heavy as to overpower the lines of the chart. The instructor can also have a black- board ruled with faint white lines, after the manner of co-ordinate paper, in his room, on which he can in half an hour put a simple chart, ready for the coming lecture. Different colored crayons serve the purpose admirably. Students can then use co-ordinate paper, in their notes, 140 THE STUDY OF POLITICAL ECONOMY. and draw ofiF an accurate copy of the chart in a few moments, before or after the lecture. This is a necessary course, unless some more feasible method than now exists should be found by the instructor for multiplying copies from his single chart in such numbers as to supply all members of his class. So far I have been speaking of charts for the class-room. Perhaps, in their own good time, such economic charts can be bought of educational agencies. But ordinary co-ordinate paper, on a small scale, is the best form in which first to construct the chart. It can be purchased in sheets at a small price, and is invaluable for both student and instructor. In fact, no lesson is more stimulating to a class than to give them the data of a subject and ask them to put it into graphic form with the use of such paper. For the first time they begin to realize that statistics are not dry ; indeed, any one who has turned over the pages of Walker's " Statistical Atlas " will find out for himself how the columns of census tables* can * Another successful attempt, on an elaborate scale, has been made with the materials of the census of 1880 by Messrs. Gannett THE STUDY OF POLITICAL ECONOMY. 141 talk to him in forms and colors not only with- out weariness, but with a sense of surprise at the interest they excite. 8. When the instructor comes to examina- tions he will find some difficulties in combining an ideal plan with actual conditions. In mak- ing out a paper he ought, of course, to keep in view that the questions should be selected so as to test not the memory, but the power of the pupil to apply principles. For this reason the ideal paper should contain nothing which the student has seen in that form before. The facts he is called upon to explain ought to be fresh ones, and the fallacies he is to examine should be such as he had not previously con- sidered. This, however, is not wholly neces- sary. The explanation of parts of the subject is certain to be difficult enough to warrant questions upon them even if they have been referred to in the class-room many times be- fore. For practical purposes, however, it seems best to remember that a class is composed of all kinds of persons, and, while the majority of and Hewes in Scribner's " Statistical Atlas of the United States " (1885). 142 THE STUDY OF POLITICAL ECONOMY. the questions should be of the character which I have described, yet at least a few easier and more encouraging questions should be set. In the examination-room the student, moreover, should be instructed to study each question with care, and avoid haste in answering, before he is sure that he has really caught the pivotal point of the question. Fairly good students often write about the question but do not an- swer it. It should be definitely understood that . no credit is to be given for irrelevant answers. Then, also, the examination can be used as a teaching process ; since, by inserting an impor- tant subject, the attention given to it at these times will be such as to keep it from speedy oblivion. Moreover, it will be well, as soon after the examination as possible, to read a good and a poor answer to each question before the class. They will know better what is expected of them in the future — hke troops after their first fight. After such an examination the in- structor will find his class much more discip- lined and more ready to exert themselves in the intellectual wrestling. The vigorous prep- aration for the examination has really given THE STUDY OF POLITICAL ECONOMY. 143 them a better grasp of the subject, and the teacher can easily bring on a warm discussion now, because they really know something and feel that they know it. In all this it is under- stood, of course, that I have had in mind writ- ten examinations. 9. When first approaching the study, it has been found to be of service to some minds to suggest that on the first reading of the text- book they note in the margins in a few penciled words the gist of each paragraph as it is read ; then, at the close of the chapter, that the reader review it by means of his marginal notes, and, finally, make a general but brief synopsis of the chapter. This will both save time and teach that essential thing — how to study rapidly but thoroughly. It will destroy aimless reading, which is so common in these days of many books. ID. Inasmuch as a vigorous contact of mind with mind on a subject which students are ap- proaching for the first time is necessary to pro- duce something more than a cartilaginous or veal-like quality in their knowledge, it is desira- ble to stimulate discussion among members of 144 THE STUDY OF POLITICAL ECONOMY, the class outside of the class-room. To accom- plish this purpose, I know of no better plan than to recommend students to form temporary- clubs of three or four persons to meet two or three times a week for an hour's discussion of the questions and topics which have been sug- gested by the text-book, by newspapers, or by facts of every-day observation. Such discus- sions, if the evil of irrelevancy can be frowned upon, will toughen the intellectual fiber, and give the means also of getting more from the instructor through questions upon difficulties and disagreements which have arisen in the clubs.* Congenial persons might group them- selves together in this way with profit to their economic progress, and gain something also in social pleasure of a healthy kind. II. In advanced courses, much of what has been said in regard to details in the conduct of * When about twenty, John Stuart Mill met twice a week in Threadneedle Street, from 8.30 to 10 A. M., with a political econ- omy club, composed of Grote, Roebuck, Ellis, Graham, and Pres- cott, in which they discussed James Mill's and Ricardo's books. It was understood that a topic should not be passed by until each member had had full chance for a discussion of his difficulties and objections. In these meetings Mill elaborated whatever he has added to the knowledge of political economy. THE STUDY OF POLITICAL ECONOMY. 145 the class will be less important, because the teaching is necessarily different in kind. Such courses naturally fall either (i) into those which continue to study principles, as in the systems of various writers or schools of political econ- omy in the past and present, or (2) into those which treat historical or practical questions. In the former, the lecture system is unsatisfac- tory for reasons already given ; for the mem- bers of the class should themselves be constant- ly wrestling with the fuller discussion of sub- jects in which they can hitherto have had only a general knowledge. Experience seems to show that a topic, furnished with references to writers, affords the best method of procedure. This, of course, implies a good working library and a list of reserved books. In the practical courses a large part of the training consists in teaching the student how to use books, how to familiarize himself with the principal storehouses of statistics, such as the English " Parliamentary Documents," or our own Government publications ; how to collect his materials in a useful form ; how to apply graphic representations wherever possible ; in 7 146 THE STUDY OF POLITICAL ECONOMY, brief, to learn how to carry on an investigation in the economic field. Of course, the familiar- ity with the facts of several of the leading ques- tions of the day will form no small part of the advantage of such work. But the greatest good comes, of course, from putting the student on his own resources at once and forcing him to find his own materials, look up his own books and authorities, and come to a conclusion on the subject assigned to him independently of all aid or suggestion. The instructor can then at the conferences take up a paper for criticism and discussion, or first assign it to another mem- ber for that purpose. This is a feasible plan; but, if carried on throughout a whole course, it requires of the student in a regular college course so much time that his other work must suffer, and, in addition, but few subjects can be taken up in this thorough and leisurely way. This plan can be properly carried out only when there are a few persons able to devote their whole time to some economic investiga- tions. In practice it has been found best to use the lecture system partially. One subject can be taken up by the instructor at regular exer- THE STUDY OF POLITICAL ECONOMY, j^y cises, for which he furnishes beforehand the ref- erences, and partly lectures and partly discuss- es the subject with his class, thus guiding them steadily over the field and directing the disposi- tion of the time to be devoted to each subject. In this way many more subjects can be reached during the year. But the advantages of the in- vestigating method can be partly retained by requiring a monograph from each member of the class on a practical subject of his own selec- tion from a list prepared by the instructor, and this thesis can count for attendance on part of the lecture-work. In this thesis the student is pushed to do his best to give a really serious study to some particular topic, and he is ex- pected to do it independently of any aid be- yond general oversight and direction ; and he is warned that the paper will be of greater value, provided it contains the bibliography of the subject and constant reference by page and volume to his authorities. 12. The preparation of bibliographies is part of a teacher's duty. Moreover, he who has ac- cess to a rich and well-appointed library can do a service to the rest of his guild by leaving be- 148 THE STUDY OF POLITICAL ECONOMY, hind him notes of his bookish experiences. He can in a few words say whether a book is good or bad for a particular use, or indicate what part of it contains a valuable discussion or use- ful facts in a subject within his study. For this purpose it has been a great convenience to have little blank-books of ordinary stiff manila paper, six inches by three, with each sheet per- forated like postage-stamps near the butt of the book, so that it can be torn off smoothly. On each page a book can be entered under a suit- able heading, with its exact title and author, and room still be left for a very generous amount of criticism or commendation, or for noting the contents of the book. The cards can be laid away alphabetically by subjects in a drawer, and will prove of invaluable aid at many times. Books of which one has heard but never seen, can also be entered with a star, to be erased when a book has been examined. This systematic habit is peculiarly desirable when one is hunting for the facts of a certain subject. By this means one will be saved the loss of time caused by failure to remember where a statement has once been seen. THE STUDY OF POLITICAL ECONOMY. 149 13. In the foregoing remarks on methods of teaching political economy, I have kept in mind persons of the age and maturity possessed by usual college students. As a rule, these are the only persons who are given instruction in this subject. Still, knowing as we do the need of simple elementary instruction in political economy in the secondary and high schools, so that younger pupils of less maturity than the college student ought to have good effec- tive teaching, something ought to be said as to the methods which may be serviceable for such classes. A difficulty with which we are met at the outset is the lack of training among high-school teachers for original and suggestive object- teaching in economics. Any scheme, based on such a system, implies the possession of a very considerable economic training by the teachers. What is meant may be seen by the following excellent suggestions for certain parts of the study made by Dr. Ely : "^ " The writer has indeed found it possible to * In " Methods of Teaching and Studying History," edited by G. Stanley Hall, p. 63. 150 THE STUDY OF POLITICAL ECONOMY, entertain a school-room full of boys, varying in age from five to sixteen, with a discourse on two definitions of capital — one taken from a celebrated writer, and the other from an ob- scure pamphlet on socialism by a radical re- former. As the school was in the country, illustrations were taken from farm-life, such as corn-planting and harvesting, and from the out- door sports of the boys, such as trapping for rabbits." In teaching the functions of money, the fol- lowing approach to the subject, suggested by the same writer as a means of awakening an interest, is a good one : " Take into the class- room the different kinds of money in use in the United States, both paper and coin, and ask questions about them, and talk about them. Show the class a greenback and a national bank- note, and ask them to tell you the difference. After they have all failed, as they probably will, ask some one to read what is engraved on the notes, after which the difference may be further elucidated." If the teacher is sufficiently master of the subject to proceed by such ways to acquire a THE STUDY OF POLITICAL ECONOMY, 15 j hold on the young pupil he will probably not — as things now go — be found in a high school. It is to be hoped that he may in the future ; but, until that is the fact, some more practicable method of teaching must be adopted. Much must, therefore, depend on the text-book. But no fully satisfactory one is available for such purposes. Of existing books the following may be suggested : W. S. Jevons's "■ Primer of Politi- cal Economy" (1878). This little treatise is marred by the treatment of utility and value ; but yet it is a really good sketch of the subject in 134 pages. The teacher can further illus- trate the principles to his class by familiar facts, as already explained. The instructor should set forth distinctly in his mind, as a general object to be kept before him, the attempt to leave in the understanding of his pupils some simple principle in each case. If he is talking of capi- tal, the several illustrations should all lead the pupil back to the essential truth which is finally to be stated in general terms. Then, the pupil, when reviewing, should be required to reverse the process, and then called on for principles and asked to illustrate them. The aim of the 1^2 THE STUDY OF POLITICAL ECONOMY. teacher should be, after awakening interest, not simply to teach some few facts to which eco- nomic principles apply, but to try to drive home a few fundamental truths, and exercise the pupil, as far as time and skill allow, in tracing their operation in facts. For economic facts are constantly shifting, while principles do not. A boy taught how properly to view one set of facts about paper money will go all right as long as the conditions remain exactly the same, but when they change he is very badly off for guidance. In elementary teaching, therefore, the teacher should aim at giving a clear com- prehension of simple principles, and at offering materials for practice in applying these princi- ples. Much, consequently, which has been said in regard to more mature students will be equally applicable to the teaching of young boys. In this brief and inadequate way I have at- tempted to suggest from my own experience what may enable others to avoid difficulties, and possibly to aid in a more rational method of teaching political economy. It is scarcely more THE STUDY OF POLITICAL ECONOMY. 153 probable that what I have said is all new than that others should agree with me throughout in what I have advanced ; nor is it unlikely that other teachers may have many other suggestions to make in addition to mine. If my efforts may call them out and aid in better methods of teaching, I shall be amply repaid. THE END. k NEW AND CAREFULLY REVISED EDITION OF JOHN STUART MILL'S Principles of Political Economy. By JAMES LAURENCE LAUGHLIN, Ph.D., Assistant Professor of Political Economy in Harvard University. No writer on Political Economy, since Adam Smith, the acknowledged father of political science, can be compared in originality, exact and for- cible expression, and apt illustration, to John Stuart Mill. His writings on this great subject, while practical and popular in their adaptation, are also characterized by the true philosophic method. In his knowledge of facts and conditions, his clearness of understanding, and the soundness of his reasoning, he excels all other writers on the subject, and his " Prin- ciples OF Political Economy " has been an unfailing source of informa- tion and authority to all subsequent writers and students of political science. To present this work in form, size, and method, somewhat better adapted to class-room use, and present modes of study, and at the same time to preserve it so far as possible in the form and language of its great author, has been the aim in the present revision. The editor has made this work essentially a revision, and not a systematic mntilation. The publishers therefore feel confident that the new edition will be found thoroughly adapted to class use, and as such will prove a valuable and satisfactory text-book, and at the same time will be found to retain and present all the essential and valuable features of the original work. The new edition retains, in its own clear exposition, the connected system of the original, and at the same time its size is lessened by omit- ting what is Sociology rather than Political Economy. The difficulties of the more abstract portions of the original work are much lightened, and the new edition presents, in connection with the general tenor of the work, some important additions of later writers. The publishers respectfully invite Teachers of Political Econ- omy to examine the new edition of Mill's Principles of Political Economy before selecting a manual for their classes. Betail price, $3.50. I^iberal terms for introduction. Address D. APPLETON d CO., Publishers, NEW YORK. 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