TUE INDUCTIVE The ultimate aim of the inductive method is by systematic analysis and comparison of concrete economic. phenomena, "to observe the effects of a cause coming singly into action while all other forces remain un altered." The attempt to do this gives rise to two inductive processes: the method of differ ence and the method of agreement. In the method of difference we compare circumstances exactly similar with the exception of one factor, in order to disenver the effect of that factor. Thus. in 1893. Messrs. Mather and Platt. of the Salford Iron Works, attempted to discover the effect of the eight-hour day on their profits and the general welfare of their workmen. Strictly speaking, their experiment required that, with the exception of the hours of labor, every causal condition in 1593 should be identical with those in preceding years. as their object was to dis cover I he exact effect of the reduction in hours upon profits and conditions of employment. The chief instrument of the method of difference is thus the experiment, to which may be added in economies the observation of extraordinary in stances in which the conditions of an experiment are clo.ely approximated by some fortuitous or extraordinary event. Thus the Black Death in England furnishes a striking exemplification of the effect upon wages of a sudden diminution in the supply of labor. In theory the method of difference requires that the collateral or sur rounding circumstances shall be absolutely alike. This condition is seldom fulfilled even approxi mately. and hundreds of instances might be cited in which the method has been abused. To refer to the experiment at the :Salford Iron Works, which on the whole constitutes an ideal economic experiment. it is evident that grave doubt is thrown on the results of this experi ment by the fact that the workmen themselves were interested in the success of the experiment, and probably worked with extraorditwry care and diligence. to make it a success. Finally, it is to be noted that the method of difference, while entirely satisfactory where the conditions are per fect. is always narrow and restricted. It shows with certainty that a given cause in a certain set of circumstances can produce a certain result, but tells us nothing of what will happen in another set of circumstances.
To generalize, to establish uniformities. use is made of the method of agreement. Her we compare circumstances wholly different, with the exception of two phenomena between which we expect to establish a eausal connection. The causal (-ounce-thin is indicated by the repealed conjunction of the two phenomena. If we ex amine the movement of exports awl the move ment of the marriage rate, and find that a rise in the exports per capita is always accompanied by a rise in the marriage rate, we are safe in accepting this connection as an economic uni formity or law, provided that we have examined a very large number of instances in which the collateral circumstances have been infinitely di verse and varied. Theoretically this method re
quires that we should exhaust every possible combination of circumstances before concluding that a rise in the exports per capita will always (-apse an increase of marriages.
With respect to the general utility of the inductive method, it is plain that, though little can he done without it, it seldom, if ever, suffices to convince. Take the ease of the exports and the marriage rates cited above. of instances might be adduced from English statis tics in which a rise in the per capita exports has been followed by a rise in the marriage rate. Yet no one believes that a mere increase in exports would cause an increase in marriage. Both are evidently the results of a single cause— active business. etc. Brisk trade, high wages, constant employment, etc., stimulate marriage and show themselves usually in an increased volume of exports, yet if commercial prosperity at any time increased without stimulating ex ports, we have every reason to believe that the marriage rate would rise irrespective of exports. And in less developed countries where trade and commerce are relatively unimportant no COD neetion is observed between exports and alarriage. The great difficulty of induction in economics is INC to the complexity of economic phenomena: we are seldom able either to bring about a satisfactory experiment or to secure a sufficiently diverse number of instances of agreement. Cur rent literature is full of sweeping generalizations based upon far less agreement than that observed between marriages and exports. The twenty-live years preceding the repeal of the corn laws in England were, on the whole, far less prosperous than the twenty-five years which succeeded the repeal; concluded many writers, free trade would be advantageous to every country of the world. On the other hand, the method of agree ment has been equally abused. 1'A-cause the crea tion of the great modern European monarchies was in most instances accompanied by protective tariffs, colonization schemes, and a harsh ness and brutality toward strangers, therefore, concluded the extremists of the German His torical School, it is not only expedient, but ethically right, that the German Empire in the last half of the nineteenth century should start in with protective tariffs, colonization schemes, and the policy of the mailed fist. To-day it is universally conceded that both methods must and should be used wherever possible.