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ECONOMIC PRINCIPLES

effected determine the distribution of the joint product of
many producers among these producers. In passing from
producer to consumer, therefore, goods are exchanged, and
the distribution of the value of the goods among the cooperating
 producers is a result of the terms on which the
exchanges take place. Thus, in arranging the lines of
division which it is convenient to draw in a systematic study
of economics, the threefold division of production, distribution
and exchange, consumption, satisfactorily meets the needs of
the case. Each section must deal with conditions which
concern other sections, for the efficiency of production is
vitally affected by the degree of satisfaction realised in the
processes of distribution, and the ends which will be sought
in production are determined by the conditions of consumption,

In prosecuting our enquiries into the nature of the connections
 between different phases of economic activity, we
may adopt either or both of two methods. The one, known
as the historical or a posterior: method, sets out to discover
economic principles as exemplified in the records of the life
of peoples in the past, or as shown by a comparison of
the present-day facts of different communities. The other
method, known as the a prior; method, endeavours to arrive
at economic principles by logical deduction from wellascertained
 facts of human nature, considered in relation
to the environment within which the principles are to be
operative. The great complexity of the conditions contemplated
 in any record of history renders it extremely
difficult to proceed with certainty by the mere examination
of facts. Facts teach nothing until they are arranged so as
to show some prevailing tendency. The mode of arrangement
 must be determined on some principle or other, and
the best principles of arrangement which can be adopted are
indicated by careful study along a@ prior: lines. Vet these
lines of study must be inadequate unless the basis of argument
is both judiciously and accurately selected. Reflection on
the most universal characteristics of humanity may supply
principles which can be utilised in a closer enquiry, as to the
extent of the validity of these principles and the operation