ound in the work of the classical
economists--Adam Smith and his followers of half a century--who created
the modern science of political economy. Beginning as controversialists
anxious to overset a particular system of trade regulation, they ended
by becoming the exponents of a new social order. Modified and amended as
their system is in its practical application, it still largely
conditions our outlook to-day. It is to this system that we must turn.

The general outline of the classical theory of political economy is so
clear and so simple that it can be presented within the briefest
compass. It began with certain postulates, or assumptions, to a great
extent unconscious, of the conditions to which it applied. It assumed
the existence of the state and of contract. It took for granted the
existence of individual property, in consumption goods, in capital
goods, and, with a certain hesitation, in land. The last assumption was
not perhaps without misgivings: Adam Smith was disposed to look askance
at landlords as men who gathered where they had not sown. John Stuart
Mill, as is well known, was more and more inclined, with advancing
reflection, to question the sanctity of landed property as the basis of
social institutions. But for the most part property, contract and the
coercive state were fundamental assumptions with the classicists.

With this there went, on the psychological side, the further assumption
of a general selfishness or self-seeking as the principal motive of the
individual in the economic sphere. Oddly enough this assumption--the
most warrantable of the lot--was the earliest to fall under disrepute.
The plain assertion that every man looks out for himself (or at best for
himself and his immediate family) touches the tender conscience of
humanity. It is an unpalatable truth. None the less it is the most
nearly true of all the broad generalizations that can be attempted in
regard to mankind.

The essential problem then of the classicists was to ask what would
happen if an industrial community, possessed of the modern control over
machinery and power, were allowed to follow the promptings of
"enlightened selfishness" in an environment based upon free contract and
the right of property in land and goods. The answer was of the most
cheering description. The result would be a progressive amelioration of
society, increasing in proportion to the completeness with which the
fundamental principles involved were a