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a great deal has been made of the industrial development of Germany, and although her imports exceed her exports, those who weigh the balance of commerce are never tired of admiring the increase at each end of the scale; they even go as far as to compare the trade of Germany in 1870 with that of 1904, although since the German Empire only came into existence in 1871 any calculations up to 1880 are quite worthless.

That idea—”the wrong-doer deserves punishment because he might have acted otherwise,” in spite of the fact that it is nowadays so cheap, obvious, natural, and inevitable, and that it has had to serve as an illustration of the way in which the sentiment of justice appeared on earth, is in point of fact an exceedingly late, and even refined form of human judgment and inference; the placing of this idea back at the beginning of the world is simply a clumsy violation of the principles of primitive psychology.

The most civilized nations of modern Europe issued from the woods of Germany; and in the rude institutions of those barbarians we may still distinguish the original principles of our present laws and manners. In their primitive state of simplicity and independence, the Germans were surveyed by the discerning eye, and delineated by the masterly pencil, of Tacitus, the first of historians who applied the science of philosophy to the study of facts.

The common proverbial maxims of prudence, being founded in universal experience, are perhaps the best general rules which can be given about it. To affect, however, a very strict and literal adherence to them, would evidently be the most absurd and ridiculous pedantry. Of all the virtues I have just now mentioned, gratitude is that, perhaps, of which the rules are the most precise, and admit of the fewest exceptions.

Historically law in the second sense precedes these juristic concepts which we reach by analysis and postulate as the logical bases of legal precepts. The logical sequence is interest, right, duty, action, remedy. In order to secure the interest recognized and delimited by the law, it confers a legal right, secured by imposing a corresponding duty.

Failure to produce “public bad” is equivalent to the creation of “public good.” And the failure to provide “public good” is equivalent to the production of “public bad.” The choice between constructions here depends largely on the purpose to be served by analysis and on the relevance to real-world problems. If, as in traditional public-goods theory, the purpose is to explain why market institutions fail and why governmental action may be necessary, attention should be paid to the “public good” that collective action might generate.

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