Hence the Church must have perfect freedom to carry out its task of instructing the people.

Through the teaching of the Church, men will learn to lift their gaze to a higher life and to realize that their whole life purpose should not be limited to the acquisition of wealth, that there are loftier aims of a spiritual nature more befitting the activity of their spiritual faculties.

Men will conceive the right idea of this present life as a time of trial, where happiness here and hereafter can be attained by serving God and obeying His law.

The rich and the poor will be brought to realize that they are not opponents, but are united by a common bond, having the same Creator and the same end, with mutual rights and duties.

The laborers should put aside all envy of the rich and should fulfill their contracts with the rich and bear with patience and resignation the hardships of their life. Poverty and manual labor are not degrading, since the Son of God became poor and earned His livelihood through the work of His hands.

On the other hand, the rich should look upon the laborer not as a mere tool whose labor they may bargain for, but as a fellow being endowed with a personality and possessed of inalienable rights. They should pay the laborer a just wage, should not overburden him with work, nor expose him to danger of life and limb, but should treat him with respect and kindness, since he too is a child of God and an heir to Heaven.

The Church teaches not only the duties of justice, but insists on the practice of charity. All men are members of the same God's family. The rich are the custodians, the stewards of the wealth they possess. It should in some way be shared with the poor. They can give of their superabundance. The greater the need of the poor, the greater the duty of the rich.

The Church is not merely a teacher. It is moreover the dispenser of God's grace through the sacraments. Herein it offers to men a powerful means of strength to aid the weakness of human nature in tending towards the lofty ideals which it lays before them in its teaching.

The Historical School; Explanation. The Historical School of Political Economy is a reaction against the Classical School, and began with the publication of Wm. Roscher's work on Political Economy in 1843 (Grundriss zu Vorlesungen über die Staatswirtschaft nach geschichtlicher Methode). With Roscher should be associated Lorenz von Stein, Bruno Hildebrand, Karl Knies, Kauts, Cliffe-Leslie, De Laveleye.

The Historical School rejects the deductive, aprioristic method of the Liberal School, and turns to history for the study of social and economic facts.

Instead of assuming principles arrived at through the deductive method and insisting that facts must necessarily conform to such principles, the school studies economic facts in their relation to their surroundings and as influenced by the conditions of governments, laws, external and internal forces, as manifested in the past history of peoples.

The Historical School holds that there are no universal and absolute principles, no general body of laws, which determine the mode of action of the various economic events. Each particular circumstance of time must be studied, they say, and the trend of events will indicate a certain conclusion which, however, is not a law in the strict sense, but an historical declaration of how things happen. Things do not happen by any logical sequence, but because of circumstances peculiar to each case, changeable as the circumstances may change.

The

According to the Historical School, there is a continual evolution going on in economic matters as there is in all society. direction which the evolutionary process will take depends on environment, internal and external, which imperceptibly exerts its influence on men and things.

The Historical School follows the general tendency of scientific investigation in the preceding century, in decrying the metaphysical methods of argumentation and turning more to the observation of concrete facts. Its method is purely descriptive and tends to destroy Political Economy as a science.

Principles of the Historical School. - Its principles, more

particularly relating to Political Economy, may be thus formulated:

I. Greater insistence should be put on the study of historical facts relative to wealth, its production, consumption, and distribution, than upon the abstractions, hypotheses, and a priori deductions so much used by the Liberal School.

2. These historical facts present merely passing phases of an ever advancing and ever changing development.

3. The so-called laws of Political Economy are but the generalizations of facts as noticed in the past, and furnish no certainty of what will take place in the present or the future.

4. Property ownership and wages are not the outgrowth of any general or necessary causes, but "historical categories," as they are called.

5. The principle of "laissez faire " should be rejected.

6. The state must aid in bringing about economic prosperity by wise laws.

QUESTIONS

1. What forms the basis of the definition of Political Economy? Why is the activity of man brought into the definition?

2. What is a science? Show that Political Economy comes within the definition of a science.

3. Illustrate by concrete examples how Political Economy makes use of observation. What does Political Economy observe?

4. What is the nature of the experimenting made use of by Political Economy?

5. What is a law? What kinds of laws does Political Economy formulate? Does Political Economy accept any laws from any other source? Give concrete examples of the several kinds of laws that are found in Political Economy.

6. What is a practical science? a speculative science? Give examples of each kind. Why is Political Economy a practical science?

7. What is Ethics? Show how Political Economy is distinct from Ethics but subject to it. Give examples to illustrate. Does popular opinion to-day admit a connection between Ethics and Political Economy?

8. What is Political Science? Give examples to show that Political Economy is subordinate to Political Science.

9. What is induction? deduction? Explain the method of Political Economy. Give examples. Show how the sources of ethical principles are made use of in the discussion of some economic subject.

10. Explain the Mercantile System.

11. What are the fundamental principles of the Liberal School? Does the Liberal School favor the deductive or the inductive method in arriving

at its conclusions? Explain the meaning of these terms by examples. 12. Mention the different branches of the Liberal School. Read up the historical account of the adoption of free trade in England in 1846. 13. Give a general view of the Socialist School. What fundamental principle of the Natural Law does Socialism reject?

14. Give a brief account of the Catholic School - its defenders, its view of social evils, its main principles, the activity of Church and state. Why did the Catholic School spring up in Europe?

15. How does the Historical School differ from the Liberal School?

of studying Political Economy, the science is divided into three parts: the Historical, the Theoretical, and the Practical.

The Historical part of Political Economy is the narrative of the progress of a nation and of the causes affecting Political Economy, as commercial geography, the establishment of the consular service in the various cities and towns of foreign countries, the origin of protection or free trade in a country, the reports of the government on various subjects, the development of banking, the trend of immigration, export and import duties, cost of living in the past and the present.

Theoretical Political Economy studies the principles affecting the science; tells what is wealth, value, price; the factors affecting exchange, distribution, consumption, production.

The Practical part of Political Economy takes up the different problems of Economics, the actual applications of the theories seen in the second part, and studies such questions as taxation, free trade and protection, banking, insurance, corporations, the labor problem.

These three parts are not usually divided and studied separately except in some of the larger universities. They are ordinarily combined as here in the general course. Recent writers

on Political Economy give much space to the Historical part. In our study of Political Economy, we shall consider Production, Exchange, Consumption, and Distribution.