out capital be made most efficient? The clause is not consciously added, "regardless of its effects upon men;" but the extent to which this clause actually vitiates the temper and program of theoretical and applied economics really constitutes the central social problem of our epoch.

This opening paragraph also supports the belief that frank repetition of some of Smith's confident presumptions would today place men well along in the way toward extreme socialism. No modern trade-union leader, at any rate, is more sure than Adam Smith was that labor is the original source of wealth. The difference is that Smith took it for granted, while the modern laborer has to fight against jealous denial of this most rudimentary economic truth. Today capital is not always content even to share honors with labor. Capital often goes so far as to claim superior virtues in the productive process, and to imply priority of right to the output. This perversion has not merely crept into economic practice, but it is written large between the lines of much economic theory. We shall see that this is in a considerable degree a change that marks secession from the moral presumptions upon which Smith's economic theories were based.

Assuming, then, the homely fact that a nation is a collection of persons needing consumable

goods in order to proceed with the other things that are of subsequent and superior importance, and in view of the fact that the produce of the nation's labor is a dividend that has to be shared by all the population, Smith in effect asks the frankly technical question: How may the labor of the nation be so applied that the dividend will be as large as possible, and that the quotient for each sharer may thus amount to a sufficient supply of the fundamental material necessities?

In this question there is no suggestion nor implication of the attitude of aloofness toward the larger questions of social or moral science which later became characteristic of economic theory and practice. There is no hint that the question can be answered independently of the preliminary analysis of the moral world; nor that answering the question about the commissary department of life solves all the essential problems of life. On the contrary, the question which The Wealth of Nations proposes is as frankly special and technological as though it had been : How may the sewage of Great Britain, that now goes to waste, be saved and made valuable in fertilizing agricultural land?

While the two questions are far from coordinate, Adam Smith's philosophy no more thought of making the question dealt with in The

Wealth of Nations the central question of society, than it would have proposed to put the question of utilizing sewage in that position. On the contrary, the dependence of thought in his system was implicitly this: Human beings have a moral or social destiny to work out. Nations are units of effort in accomplishing that destiny. The people who compose a nation have the task of finding out appropriate ends of life, of learning what are the conditions which must be satisfied in reaching those ends, and of realizing the ends by getting control of the necessary means. As the life-problem of individuals and nations presented itself to Adam Smith's mind, it was, as we shall later see more in detail, first, a problem of religion; second, a problem of ethics; third, a problem of civil justice; fourth, a problem of economic technique.

Without stopping to take issue with this classification, it is enough for our purpose to insist upon the main fact that the classification, crude as it is, and prescribed indeed by the traditions of the chair of moral philosophy from which Smith taught it, puts the actual interests of life more nearly in their essential relations than they were afterward in economic theory until the sociologists began to move for a restoration of the balance. Adam Smith turned from study of social

life in its largest relations to intensive study of one of the techniques by which the processes of life are sustained. If economic theory remains in the position of logical subordination which it occupied in Adam Smith's system, it is an indispensable portion of social philosophy. In so far as it occupies a different position, unless it can justify itself as a larger moral philosophy, it does just so much to confuse and disturb the theory and practice of life.

We shall see, as we analyze the later economists from the standpoint of this essay, that two things are true: first, the so-called classical economists of England gave an emphasis and a "proportion to economic theory that wrenched it arbitrarily from the just position which it occupied in Adam Smith's philosophy; second, the German economists, during the greater part of the nineteenth century, followed traditions which in spirit, if not in form and detail, were much nearer to Adam Smith than to the later classical English economists. The latter succeeded overcasting the whole social sky with their science, and made it "dismal," by temporarily obscuring the more fundamental science in which the economic theory of Adam Smith had its setting.

To repeat, the most significant movement in thought during the present generation is a return

to a basis of moral philosophy, in perspective rather than in content like that upon which Adam Smith rested his economic reasonings. To detect the serious mistake, and to recover the essential value of nineteenth-century economics, it is necessary to make as clear as possible the contrast between the true perspective of economic theory as a portion of moral science, as it was recognized by Smith, and the fallacious aspect of economics, as both corner-stone and key-stone of moral science, in classical theory, culminating in John Stuart Mill. It should be added that, while Mill represents the extreme aberration of economic theory from its proper center in moral science, it would not be far from the facts to say that his chapter on the future of the laboring classes marks the beginning of the return to Adam Smith's basis.5

In order to locate more distinctly the point of departure from which Adam Smith started, it is well to make a careful note of what is involved in his own general outline of The Wealth of

"See J. S. Mill, Political Economy, Book IV, "Influence of the Progress of Society on Production and Distribution." These chapters, rather than the single one referred to, may be called the watershed between the abstract and the sociological tendencies in British political economy.

I shall elsewhere discuss the title of Cliffe Leslie to some of this credit.