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The Dependent Character of the Science of Finance


§ 1. A consensus will gradually be reached as to the purport of science generally : what its sphere may be, what is its sub ject matter, its content, its attainable goal. The doubts and misconceptions that arise in the course of a discussion of this kind, usually—apart from tenets that simply negative all approach to an understanding—have their ground in peculiarities of the field of view with which the scientists occupy themselves.

Not without difficulty, but still not without some ultimate result, may we seek to bring about a reconciliation between the ideas of the jurist and the physician, the historian and the natural ist, the investigator and the systematician. These are, when all has been said, nothing but the refracted rays of which the perfect light is made up ; and there is, after all, nothing needed beyond such an exercise of good will as shall enable each to view his own contribution to the whole from a more comprehensive standpoint.

This has been the purpose of certain remarks that have been inserted in their proper place in the Grundlegung that forms part of the present work. The very general character of the point of departure, as well as the elucidation of the subject matter by means of material from outside, is due to the presence of such a purpose ; this applies especially to the chapter on The Method ology of the Social Sciences and of Political Economy in par ticular [Die Methodologie der Staatswissenscluzften and der National iikonamie insbesondere], and to the succeeding chapters on The Place of Political Economy in the Circle of the Sciences [Die Stellung der Nationalokomie im Kreise der Wissenschaften].

More difficult is the question, What constitutes an indepen dent science ? We might with a good conscience evade this difficulty if the question were an idle one. But that is not the case. The question of the dependence or independence of a given field in the general domain of science has somewhat the same importance as the analogous difference in the relations of states to one another. As, according to Aristotle, it is a characteristic of the state that it should be self-sufficing, so it must also be taken that an independ ent science is such a portion of the aggregate of scientific knowl edge as is complete in itself, and which therefore does not in its essential nature depend on support from without. Just as those commonwealths are in a sad plight, in process of disintegration or of becoming, whose existence depends on the tutelage of a greater state, or on the dissensions of their neighbors ; so also is that science on a precarious footing that is obliged to depend largely on resources of knowledge that lie outside its own domain. Such a science simulates independent existence, while it is in reality dependent, and should therefore properly abandon its boundary lines. Or worse still, it feigns life while it is in reality cut off from the source of life.

§ 2. The difficulty of the question as to the independence of a science is due to the causes mentioned below.

I have already reviewed the course of historical development (vol. i. sec. 63) and shown how science only slowly and grad ually frees itself from the interested thinking of every-day life and becomes an end pursued for its own sake. Every-day expediency does not concern itself with underlying principles but only with the ready applicability of its maxims, and the most immediate and pressing cares of life are precisely the ones which, as regards the principles involved, call for,_ union of the most divergent points of view. It is therefore this independent, practical purpose or need that urges to the establishment of an independent science. And this sort of independence has, more over, the weight of a prior title in its favor ; inasmuch as it is the practical aim that first gives occasion for reflection. And so long as human inquiry remains under the jurisdiction of expediency, as in spite of all past progress it still does today, it will be exceedingly difficult to bring these venerable traditional sciences to a reckon ing. The result is that we find the sciences ranged in groups, departments and branches, in a fashion that is altogether unin telligible except in the light of this fact. The chief institutions devoted to the development and perpetuation of the sciences all bear the mark of this relation. And this bustling expediency stands ever ready to erect out of every fresh acquisition of knowledge new sciences, constructed after its own heart, whose lack of venerableness is made up for by the superabundance of popular applause awarded them.

A second ground of difficulty is the fact that no science is independent in the sense suggested by the analogy of national autonomy. Under the harsh exigencies of national life as we actually find it, the ideal of the solidarity of mankind may have to give way before the boundaries of such national units as are possible for the time being. In science, whose office it is to bring about a progressively wider and profounder knowledge of all being, and so to gain an ever deeper insight into the funda mental unity of all knowledge under a single comprehensive synthesis,—in science no such exclusiveness is practicable, and every considerable innovation in methods of research or of gen eralization rudely upsets the complacent self-sufficiency of a hard and fast classification.

But this factor of comprehensive generalization is constantly traversed by the other equally inevitable need of all advancement of knowledge, viz., increasing intensity of culture—to borrow a phrase from the vocabulary of industry. As in agricultural industry the magnitude of an estate is not to be measured by a geographical, but by an economic standard, it being quite pos sible to conduct a large industry within a relatively narrow space, if only a high development of human industry has been attained,—so also in science. A narrowing of the field of its labors, such as will correspond with the limitations of its intel lectual gifts, is a condition prerequisite to profitable application on part of the average talent employed in the scholar's trade today. The absence of perspective in this bustling activity gives rise to independent sciences that contain but scant suggestion of the profounder unity of all knowledge. But so potent is the tendency that finds widespread and conscious expression in these phenomena, that any effort in behalf of more comprehensive synthesis of the particular under the general finds it exceedingly difficult to effect even a reconciliation of the part with the whole.

3. Under these circumstances it follows that the concept of a science as an independent department of the aggregate of sciences will always be subject to variation. It varies with the point of view to which we may be accustomed, and it varies even within the same group of thinkers and in the same period of time. It is in a state of absolute flux if account is taken of the passage of time and the changing circumstances indicated by the divergent points of view above referred to.

It is therefore bootless to attempt to draw hard and fast boundary lines between the sciences ; such lines cannot be maintained.

But one thing is always possible, and is at the same time necessary. It is that every particular fragment of knowledge which puts forth a claim to rank as a distinct science, whether on grounds of the practical purpose it serves, or of usage, or of specialization, should not only be considered as belonging to the general domain of science, but its fundamental elements should be brought into vital connection with the greater whole. Only in this way can the roots of a special science be kept from drying up. Only in this way can we insure to the special science that substantial vitality which is the essential object sought in this straining after an " independent" standing.

Hence we see what we see during these latest times ;— that the advance of research and the profounder insight gained by employment of the latest methods are upsetting the fancied inde pendence of whole groups of these special sciences and replacing it with a comprehensive relation of dependence. This is what modern Natural Science teaches, when the traditional boundary lines of Medicine, Botany, Zoology, etc., have to be readjusted after every new step in advance, when Chemistry and Physics draw closer together as the potent force of sweeping generalizations based on the great mass of material furnished by research comes to the front.

Something similar, though hampered by the difficulties inher ent in a complex subject matter, is to be remarked in the case of our own science. There is no contradiction in the fact —it is rather the fruit of an improved method of research —that the latest developments of our science have been characterized on the one hand by an affectionate attention to the historical material bearing on economic life, and on the other hand —and at the same time—by a broader and more comprehensive view of the nature of all economy. An attempt has been made in the first vol ume of the present work to form an estimate of the value of this evolution, and, so far as in me lies, to contribute some thing towards its furtherance. We shall simply be contin uing the work on the same line in doing the like for the Science of Finance and placing to its credit what has been accomplished for the science. Just as Political Economy has been traced back to its deeper-lying sources, and has therewith been advanced beyond its narrow traditional limits, so also the science of finance may claim the like within its field after its achievements have likewise been assimilated into the body of the profounder con ceptions of all social life.

§ 4. That the Science of Finance is a part of Political Econ omy is a long-accepted fact.

There is an objection of a trivial character that may be raised at this point, an objection based on the varying meaning attached to the term " Political Economy." Since the term has been applied now to economic science as a whole, now to the funda mental (general) part of the science only, it has not rarely hap pened that the Science of Finance and Political Economy have been contrasted with one another as parts of a greater whole. The like was done more intentionally and consciously by K. H. Rau and his contemporaries and followers when they contrasted the Science of Finance with Economic Science [Volkswirthschafts lehre]. Indeed, the contrasting of the two was in this case the result of a well-defined purpose, and was consistently adhered to ; Economic Science as a whole being designated " Political Econ omy " [Politische Oekonomie] (similarly of late in the Handbuch der politischen Oekonomie of Gustav Schonberg, 1882 ; 3. ed., 1890-91). The ain't was to call attention to the difference between an ostensible ' pure theory " and its application in the practical working of political affairs.

Neither a purpose of this kind nor the varying usage of the terminology must, in view of the conclusions reached in the first volume of the present work, be allowed to mar the simplicity of the relation in virtue of which we have here to do with a general and a particular, a whole and its parts; — with parts, of which the Science of Finance is one ; with a whole, which is Political Econ omy. For everything contained in the discussions that follow is but a more detailed elaboration of the general outlines that have already been laid down in the first volume.

This view corresponds in the main with the views held at the time when an independent science of economic life first made its appearance. Even the creators of the new science, the Physio crats,' made the theory of taxation the corner-stone of their theory of economy, and so incorporated the Science of Finance indis solubly into the structure of the system. Adam Smith devotes the fifth book of his Inquiry into the Wealth of Nations to The Revenue of the Sovereign or Commonwealth, and English manuals 'See vol. i. secs. 71-73.

have to this day followed the tradition initiated by him. So John Stuart Mill, in his Principles of Political Economy, likewise devotes his fifth and last book to the same subject, and he even unmis takably follows Adam Smith in his arrangement of details, only he introduces discussions of a general character on the influ ence of the government upon industry. A separation of the part from the whole has not hitherto been attempted in England, for the reason that the slightness of the subsidiary structure has offered no temptation to a claim of independence. There has also been no work, worth mentioning, which treats separately of this subject.' § 5. The place of Financial Science in the general science of Political Economy has also been questioned on other grounds.

A treatment of the subject that makes the distinction between " Social Sciences " and the " Political Sciences " its point of departure relegates Political Economy to the former head, the Science of Finance to the latter. My opinion regarding the con trasting of these two great groups of sciences has been expressed in the proper place (vol. i. sec. 54). Among the consequences of making this distinction would be that the treatment of private law would come under the general head of the social sciences, and that of administrative and public law generally under the head of the political sciences,— a separation of things that belong together such as is manifestly untenable when we consider that precisely the latest advance in jurisprudence goes to show the impossibility of drawing any line between so-called private law and so-called administrative law. In like manner the latest progress of Economic Science places the state in such intimate relation to the factors of the social economy that any classifica tion of the subject matter to be dealt with which places the State in contrast with Society becomes no less false in theory than it is in actual life. Such a distinction would be tenable only in case we had a science of the instinctive movements and activities 'C. F. Bastable's Public Finance (1892) has been published since this was written. [TR.] of society (such as Sociology actually claims is possible), which could then be contrasted with the ethical " ought " as applied to the state. This question, however, has been so fully discussed in the general portion of the present work as to leave nothing more to be said about it at this point.

A much nearer approach to the real facts of the case is made in the observation that when the matter is viewed from the standpoint of the national administration we find ourselves con fronted with a special phase of social life and a special problem, which require that the science should be treated as a political science in the narrower sense, and that hence arises a group of political sciences, in the narrower sense, which treat of the various phases of the political range of activities. But even if this be granted, a useful purpose will be served by this Classifica tion only in so far as the special science takes up a special subject matter for scientific treatment ; so that the political sciences, in this narrower sense, will accordingly have to take up the particular institutions that go to constitute the state and through which the state acts. It then becomes a question between these " political " sciences and the other special sciences, how far the latter are to be deprived of their substance for the benefit of the former. It results that a theory of the State, of the Constitution, of Administration, may be developed up to a given point out of the principles special to the State as such ; while beyond this point we pass to ground where these principles alone will no longer serve our purpose, and where recourse must be had to knowledge drawn from elsewhere. It is at this point that Jurisprudence, Economic Science, and Natural Science come in and demand recognition, the one or the other of them, accord ing to the particular sphere of political activity under consider ation.

The like is true of the Science of Finance. We may approach the public economy from the summit of the political structure as well as from the lower-lying fields of the economic life of the people. But the knowledge required in order to a scientific treatment of the public economy remains the same, and it depends, in a greatly preponderating degree, on an understanding of what goes to make up the economic life of the people.

If, now, both these avenues of approach arc open to us, the logic of our method decides us in favor of the one which affords the more vital connection between the fundamental elements of the problem.

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