1 CHffe Leslie enumerates a number of problems which he asserts
are left entirely unsolved by the deductive metliod ; but most of these
problems will be found to be of a purely historical character. On the
other hand, when he comes to deal with theoretical questions, he
himself constantly implies or presupposes the use of a deductive and
a priori method of reasoning on fundamental points. For instance,
"Only high profit can permanently support high interest, and low
profit can afford only a low recompense to the lender of capital. The
rate of profit determines in general both the maximum and the
minimum of interest; the maxiurum must be below it, or the borrower
would make nothing, and the minimum must not be so low as to
drive the owners of capital to employ it themselves, instead of lending
it, or to spend it" {Essays, p, 255). Again, "A falling-off in the
foreign demand for British produce, such as is sometimes argued from
the small proportion of exports, would have the opposite eiieot of
diminishing the proportion of imports, by altering the equation of
international demand to the disadvantage of Great Britain. A
diminution of exports might result from hostile tariffs, but imports
would fall off more. A good market abroad for our exports raises
their value measured in foreign commodities, and swells the amount
of goods given for them ; while a declining demand in foreign countries
would compel us to give more for our imports; the ratio of exports
would increase, exporters would sell at ever-increasing disadvantage
and diminishing profits" (p. 257). The doctrine here laid down
appears to be based on Mill's theory of international values, which
represents the deductive method in a somewhat high stage of develop-
ment. Other typical instances, in which Cliffe Leslie employs the
deductive method after the fashion of ordinary deductive economists,
are cited by Professor Sidgwick in an article on Economic Method in
the Fortnightly Meview for February, 1879, pp. 304, 5. Compare also



NOTE B.] HISTORICAL CONCEPTION OF ECONOMICS. 319

According to Knies, the historical conception of political
economy is based on the ideas of economic evolution and
the relativity of economic doctrines. Economic institutions
and economic theories are products of historical develop-
ment. No given economic system can be final. 