How,he asked,could there be a 'proportion'between two disparate things,a 'quantity'(supply)and a 'desire'(demand)?(4)He proceeds to remove the ambiguity by an account of the 'equation'between demand and supply,explaining the process by which values adjust themselves so that the quantity supplied at the current price will be equal to the quantity demanded at that price.I take it that his account of the facts is substantially correct,and that,by removing certain inconsistencies of language,he had purified the theory from one at of fallacies.But he himself seems to regard the improvement as merely one of terminology.He thinks that his predecessors meant to state the same facts,and,indeed,that they must have seen the truth,though he could not find in them an express statement.We may ask whether later improvements of Mill himself amount to a substantial change in the theory,or merely to a better mode of expression.I do not doubt that modern economists have much improved the language in which the theory is expressed.

Nor,again,can it be doubted that the logic is rectified by rectifying the language.The only question can be as to the importance of the improvement.What strikes the sceptic is that,after all,when we approach any practical application of the theory,the old and the new theorists seem to be guided by pretty much the same reasoning.The improvement in elegance and consistency of the language does not bring with it a corresponding improvement in the treatment of actual problems.

The obvious reason is that political economy has not reached,if it ever will reach,the stage at which the application of a refined logical method is possible or fruitful.The power of using delicate scientific instruments presupposes a preliminary process.We must have settled distinctly what are the data to be observed and measured;and the use of mathematical formulae is premature and illusory till we know precisely what we have to count and how to count it.The data and the psychological assumptions of economists are still far too vague and disputable to admit of such methods,except by way of illustration.

Meanwhile rough and even inaccurate statements may be adequate to convey the knowledge which we can really apply.We are really making use of facts admitted on all hands,and known with sufficient accuracy,though the principles upon which they depend have not been clearly defined.

II.CONTEMPORARY MOVEMENTS