not, that is, deduce the physiological
principles from the mechanical principles, although they are throughout
implied. But those principles are not the less true and useful in the
detection of fallacies. They may enable us to show that an argument
supposes facts which do not exist; or, perhaps, that it is, at any
rate, inconsistent because it assumes one structure in its premisses,
and another in its conclusions.

I state this by way of illustration: but the value of the remark may be
best tested by applying it to some economical doctrines. Let us take,
for example, the famous argument of Adam Smith against what he called
the mercantile theory. That theory, according to him, supposed that the
wealth of nations, like the wealth of an individual, was in proportion
to the amount of money in their possession. He insisted upon the theory
that money, as it is useful solely for exchange, cannot be, in itself,
wealth; that its absolute amount is a matter of indifference, because
if every coin in existence were halved or doubled, it would discharge
precisely the same function; and he inferred that the doctrine which
tested the advantages of foreign commerce by the balance of trade or
the net return of money, was altogether illusory. His theory is
expounded in every elementary treatise on the subject. It may be urged
that it was a mere truism, and therefore useless; or, again, that it
does not enable us to deduce a complete theory of the functions of
money. In regard to the first statement, I should reply that, although
Smith probably misrepresented some of his antagonists, the fallacy
which he exposed was not only current at the time, but is still
constantly cropping up in modern controversies. So long as arguments
are put forward which implicitly involve an erroneous, because
self-contradictory, conception of the true functions of money, it is
essential to keep in mind these first principles, however obvious they
may be in an abstract statement. Euclid's axioms are useful because
they are self-evident; and so long as people make mistakes in geometry,
it will be necessary to expose their blundering by bringing out the
contradictions involved. As Hobbes observed, people would dispute even
geometrical axioms if they had an interest in doing so; and, certainly,
they are ready to dispute the plainest doctrines about money. The other
remark, that we cannot deduce a complete theory from the axiom is, of
course, true. Thus, for exampl