Review Author(s): Review by: Henry Higgs Source: , Vol. 6, No. 23 (Sep., 1896), pp. 452-454 Published by: Wiley on behalf of the Royal Economic Society Stable URL: http://www.jstor.org/stable/2957395 Accessed: 21-06-2016 17:56 UTC

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The Science of Finance. By GUSTAV COHN. Tranislated by T. B. Veblen. (Chicago: the University of Chicago Press, 1895.) 800 pp. 8vo. No. I of the Economic Studies of the Un-iversity of Chicago.

PROF. COHN bids- fair to become well known to a wider circle of English readers than any German economist has hitherto been. Articles from his pen are familiar to readers of the ECONOMIC JOURNAL and of the leading American reviews, and his History of Political Econaomy, translated by the American Academy of Political Science, is now followed by a translation of his Science of Finance, under the auspices of Chicago University. Prof. Cohn is an interesting writer, independent, vigorous, decisive and well-informed. These qualities are to be found in other German Professors of ; but Prof. Cohn secures, we imagine, the preference of the translator by the merit, rare among his scientific compatriots, of compressing what he has to say within manageable compass. It is true that the present volume of 800 pages omits one of the four Books of the original System der Finanzwissenschaft; but even this book, dealing with the German Tax Legislation of the present time (and deemed to be out of date after a lapse of six years), would not have made the volume more than a small fraction of the size of Prof. Wagner's monumental and still unfinished Finanzwissenschaft. The omission of Book III. is, in some respects, to be regretted; and the cross references to the author's Political Economy tend still further to impair the ' unity within itself' which is desirable in such a volume. But we have no hesitation in welcoming the translation and in recommending it to the English student who has already a moderate acquaintance with the subject. It is not so well adapted to general use as Prof. Bastable's Public Finance. It does not cover the same ground. It does not deal in the same way with topics handled by both writers. But its point of view is ingenious and suggestive, and it stimulates reflection even where it fails to carry conviction. Comparison of theories is hardly less necessary or fruitful than comparison of facts in the science of Finance. The central idea of the book is patriotism. ' The word Fatherland probably is the one word that symbolises to the modern citizen all those higher interests which, apart from economic goods, aire what the national organisation conserves' (p. 152). The citizen must, if need be, shed his blood cheerfully in defence of his country. He must, at whatever inconvenience, render in kind to the State his services as a conscript in the army, and equally, within the limits of his ability, must contribute of his means to meet other requirements of the State. The same honourable alacrity should be shown, and the same stirring pride felt,.in the second case as in the first. Those who grudge their t.-xes or expect some material ieturn for them are lacking in the moral sense of duty to the community. Indeed, that the State's work should be ' done simply out of inclination for the work, from motives of

This content downloaded from 128.223.86.31 on Tue, 21 Jun 2016 17:56:49 UTC All use subject to http://about.jstor.org/terms COHN: THE SCIENCE OF FINANCE 453 honour and patriotism, without regard to any economic return . .is the- ideal of a free commonwealth; it is the ancient ideal of a life spent in the service of the State and for the State's sake; it is the grand and undying conception handed down from antiquity of a freeman's work whose spirit instinctively recoils from the thought of a pecuniary motive ' (p. 256). Unfortunately there is now a ' wide divergence between this ideal and the reality,' for the modern bureaucratic State must needs pay its officers. Resistance to proposed taxation is too much pandered to. Statesmen 'proceed on the principle that the least possible offence must be given to the modern citizen's irritable spirit of resistance to all public demands' (p. 104). But if we are ever to reach a satisfactory basis of finance ' it will have. to come to this, that every public purpose must be pursued. only on the condition that the sacrifices necessarily involved are accepted as a matter of course by the body of citizens.. Every public activity that may require sacrifice should be enabled to pursue its end in all serenity, without being disturbed by any questions as to the raising of the necessary funds' (ib.). To which we would object that, however convenient this might prove to govern- ments, and however desirable it may be that the citizen should have an enlightened sense of his duty to the State and of the inmaterial benefits which he derives from its existence, principles like these are of little assistance in modern democracies. Indeed, the more public- spirited a man is, the more earnestly will he inquire precisely what, expenses it is desirable or necessary for the State to incur, in what, way they can be defrayed with the minimum of injury to the com- munity, and whether the resulting benefits are found to warrant the attendant expense. Upon these radical considerations Prof. Cohn is less explicit. Many interesting observations upon them are scattered throughout the book; but he would, we think, have been better advised to group them together in more orderly sequence and to dispense altogether with the very lengthy disquisition on the nature,. origin, and evolution of the State, whose existence, in its present form, it would, for his purpose, have been quite legitimate to take for granted. English and American readers will be surprised to learn that (apart from military reasons) the most cogent reason for the building of rail- ways by the State is the fact that ' there is a necessary period of transition, during which the receipts of the business cannot be ex- pected to cover the expenses' (p. 147), that University endowment is, part of the regular business of the organisation of the State (p. 170), that all nations have been 'constrained to follow' the example of conscription (p. 251), that the author condemns ' conversion' of debts. (p. 239), and that the French octroi is ' bound to seek and to find a foothold in other countries' (p. 422). Nationalism has its narrowness as well as its grandeur. After Prof. Cohn's bold claim that Germany is supreme in financial as in economic science (p. 32), we are not No. 23.-VOL. VI H H

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surprised at his mean opinion of the French writers since, and except, the Physiocrats, nor at his denunciation of ' 's pusillanimous theory of the income tax' (p. 419); but it must be our consolation to note that he is impartial enough to accuse Rau of being ignorant, superficial, and inconsistent, and compares some of Stein's views to fireworks, which dazzle for a moment 'only to leave us in a still profounder darkness' (p. 25). In' short, the volume is valuable because, the product of a Teutonic 'Mind of undoubted ability, it presents an old subject in a new way to English' readers; and it will be their own fault if they do not some- times by agreement, sometimes by reaction, derive much benefit from a careful study of its pages. HENRY HIGGS

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