RELATION TO OTHER SCIENCES. Political econ omy is probably more dependent upon history than upon any other science, and indeed an extreme wing of the Historical School, of which Sehmoller is the most prominent example, holds that until a larger store of historical results is accumulated it is of little use to attempt broad theoretical generalizations; thus confining economics for the present to the phi losophy of economic history. This position seems untenable because of the evident logical defi ciencies of the historical method when used alone, and because new problems are constantly arising upon which history throws little light. (See Deductive Method, below.) While the great majority of economists refuse to admit that political economy is merely history, the im portance and necessity of economic history are now universally conceded. Dr. Keynes classifies the functions of economic history in connection with economic theory as follows: "First, to illustrate and test conclusions not themselves resting on historical evidence; secondly, to teach the limits of the actual applicability of economic doctrines; thirdly, to afford a basis for the direct attainment of economic truths of a theoretical nature."
The connection with psychology is particularly intimate. As a study beginning with human effort and ending with the satisfaction of human wants, economics really has its beginning and end in psychology. The theory of value, par ticularly, takes its fundamental axioms from psychology (e.g. that. the satisfaction afforded by commodities decreases per unit as the amount consumed increases). The difference between economics and psychology is, however, clear: the one deals with man in society, the other with man as an individual.