Eugen Peter Schwiedland · 1888
Eugen Peter Schwiedland’s review examines Henry Sidgwick’s address on economic science, organizing its exposition into three sections on economic policy, self-interest and abstraction, and economics’ relation to sociology. Its central concern is an empirical economics that avoids both orthodox dogmatism and the historical school’s rejection of established analytical assumptions. Schwiedland makes this intermediate position explicit in a footnote correcting Sidgwick’s classification as an adherent of the historical school:
Es gibt eben auch eine mittlere, zwischen orthodoxer und historischer liegende Richtung.
English translation: There is indeed also a middle tendency, lying between the orthodox and the historical one.
The first section presents Sidgwick’s attack on deriving practical policy from abstract principles. Adam Smith appears as a cautious observer, distinct from Ricardo’s precipitate generalizations, while Mill marks a turn toward a more balanced empirical approach. The historical account of laissez-faire acknowledges its effectiveness against oppressive privileges without treating its emancipatory origins as proof of universal validity.
Der abstracten Theorie allein ist es überhaupt nicht gegeben, einen praktischen staatsmännischen Entschluss unmittelbar herbeizuführen, einen solchen wird man vernünftiger Weise erst nach sorgfältiger Prüfung der besonderen Voraussetzungen des praktischen Problems, der Zeit und dem Orte nach, fassen.
English translation: It is not given to abstract theory alone to bring about directly a practical statesmanlike decision; such a decision one will reasonably take only after careful examination of the particular presuppositions of the practical problem, according to time and place.
Trade policy supplies the test case. Sidgwick exposes national advantage beneath English free-trade advocacy’s cosmopolitan language. Conversely, temporary protection cannot be dismissed as necessarily harmful under every conceivable government. Yet actual governments lack the impartiality needed to make that hypothetical possibility a reliable policy prescription: protection emerges from competing political interests and remains an expensive, uncertain instrument.
The second section distinguishes self-interest as an explanatory assumption from its endorsement as a moral ideal. Sidgwick defends its predominance in ordinary exchange without claiming either that it ought to govern all conduct or that it necessarily produces the best economic order. His criticism of German historical and ethical economists is that their analyses continue to employ familiar motives and methods beneath their professed departures.
Jede wirtschaftstheoretische Forschung müsse ein hypothetisches Element enthalten, denn sie beobachtet die Thatsachen nicht in der gegebenen complexen Form ihrer Erscheinung, sondern in künstlicher Vereinfachung.
English translation: Every investigation in economic theory must contain a hypothetical element, for it observes the facts not in the given complex form of their appearance, but in artificial simplification.
Abstraction is therefore indispensable, but its practical value depends on continuous restraint by factual inquiry. The historical school deserves credit for enforcing this empirical discipline, even if it understates advances within economic theory. Sidgwick’s constructive priority is the gradual, systematic development of statistics, rather than replacing analysis with ethical declarations or historical illustration.
The third section resists making economics dependent on a comprehensive sociology whose conclusions remain unsettled. The divergent forecasts of Comte, Spencer, and Schäffle concerning religion and industry expose the weakness of purported knowledge of society’s general development. Neither vague sociological claims nor indiscriminate excursions into specialized fields remedy economics’ limitations. The appropriate response is bounded empirical research capable of producing positive results.
Schwiedland closes by observing that the address, despite its title, does not tackle methodological questions in the strict sense. He then adds an independent objection to historical, social, and economic laws of development:
Es ist nämlich der Einfluss des Bewusstseins auf die menschlichen Handlungen nicht zu unterschätzen.
English translation: For the influence of consciousness upon human actions is not to be underestimated.
His argument goes beyond the absence of evidence for such laws. Awareness can strengthen or suppress an impulse; likewise, announcing that a social tendency necessarily leads to a given outcome can create resignation, resistance, or fanaticism. The prediction may thus alter the very process it claims to describe. The review’s distinctive contribution is this reflexive challenge to developmental necessity, extending its defence of empirically controlled economics into a critique of predictions that disregard their effects on human action.
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