e, although the doctrine may be
unimpeachable, there is a difficulty in applying it to the facts. As
gold has other uses besides its use as money, its value is not
regulated exclusively by the principle assigned; as other things,
again, such as bank-notes and cheques, discharge some of the functions
of money, we have all manner of difficult problems as to what money
precisely is, and how the most elementary principles will apply to the
concrete facts. A very shrewd economist once remarked, listening to a
metaphysical argument, "If there had been any money to be made out of
it, we should have solved that question in the city long ago". Yet,
there is surely money to be made out of a correct theory of the
currency; and people in the city do not seem to have arrived at a
complete agreement. In fact, such controversies illustrate the extreme
difficulty which arises out of the complexity of the phenomena, even
where the economic assumption of the action of purely money-loving
activity is most nearly verified. The moral is, I fancy, that while
inaccurate conclusions are extremely difficult, we can only hope to
approach them by a firm grasp of the first principles revealed in the
simplest cases.

Even in such a case, we have also to notice how we have to make
allowance for the intrusion of other than purely economic cases. The
doctrine just noticed is, of course, closely connected with the theory
of free trade. The free trade argument is, I should mention, perfectly
conclusive in a negative sense. It demonstrates, that is, the fallacy
which lurks in the popular argument for protection. That argument
belongs to the commonest class of economic fallacies, which consists in
looking at one particular result without considering the necessary
implications. The great advantage of any rational theory is, that it
forces us to look upon the industrial mechanism as a whole, and to
trace out the correlative changes involved in any particular operation.
It disposes of the theories which virtually propose to improve our
supply of water by pouring a cup out of one vessel into another; and
such theories have had considerable success in economy. So far, in
short, as a protectionist really maintains that the advantage consists
in accumulating money, without asking what will be the effect upon the
value of money, or that it consists in telling people to make for
themselves what they could get on better terms by producing something
to exchange for