as we recognize that business is primarily a matter of human relations, that it has to do with groups and organizations of human beings, we see that scientific analysis of it cannot proceed in exactly the same way as with units of inanimate matter. The reaction of human relations to changed influences, frequently cannot be predicted until the changes occur. Business, in other words, is a social science and, like all social sciences, must deal primarily with contingent rather than exact data; likewise conclusions drawn from scientific analysis must in large measure be contingent rather than exact.

Although we cannot always isolate our factors, control our processes, and otherwise apply scientific method, with results as conclusive as those obtained in laboratories of chemistry, physics, or biology, we need not therefore reject scientific method in favor of a rule-of-thumb. We should, however, be suspicious of too sweeping claims based on any but the most careful and painstaking analysis of facts by persons who are thoroughly trained in the kind of analysis they undertake.

While a scientific approach will help in solving many problems of business detail, the substitution of scientific method for a rule-of-thumb approach will realize its object most completely in the influences exerted upon fundamental long-time policy, influences which cannot bear fruit in a day or a year. The circumstances of our history have retarded the acceptance of a long-time scientific viewpoint in business, but forces now at work are making powerfully for a scientific approach to business management. First among these is a realization that our resources are measured in finite terms. We have begun to take account of what we have, and we are able in a rough way to figure the loss from what we have squandered. The situation is not desperate, but we can see that it may become so. To insure against possible disaster in the future we need to exercise effective economy in turning resources into finished goods, and we need to eliminate waste in the distribution and the consumption of these goods. In private business the need for such economy is reflected in rising prices for raw materials. In its public aspect we have labeled the problem, conservation.

A second force making for a scientific approach to business is found in the beginnings of a social policy to which I have referred. This policy is showing itself in limitations upon the way in which materials and men may be utilized and in a sharper definition of the business man's obligations to employees, to competitors and consumers. As long as resources are to be had for the asking, while cheap labor can be imported and utilized without restraint, and where no questions are asked in marketing the product, there is not the right incentive to do things in a scientific way. As business becomes more and more the subject of legal definition, as the tendency grows of regarding it as a definite service, performed under definite limitations, and for definite social ends, margins will be narrowed and it will become increasingly necessary to do things in the right way.

The scientific approach to business has made great progress during the past decade. Out of the hostile criticism to which so-called big business has been subjected have come several government investigations and court records, in which policies of different concerns have been explained, criticized, and compared. Besides, business men themselves have become less jealous of trade secrets and have shown an increasing inclination to compare results. A good illustration of this tendency is seen in the growth of "open price associations" and in the spirit in which credit men, sales managers' associations, and other business groups exchange information. In the same spirit, business and trade journals have given a large exposition of individual experience and increasing attention to questions of fundamental importance.

More significant still has been the scientific management propaganda. Mr. Brandeis's dramatic exposition of this movement in the railway rate cases in 1911 at once made it a matter of public interest. Later discussion may not have extended acceptance of scientific management, but it has not caused interest in it to flag. The movement has become essentially a cult. Its prophet, the late Frederick Taylor, by ignoring trade-unionism and labor psychology in the exposition of his doctrines, at once drew down upon them the hostility of organized labor; the movement was branded as another speeding-up device. More serious than the antagonism has been the spirit in which some of the scientific management enthusiasts—not all—have met it. They seem to assume that their science is absolute and inexorable, that it eliminates disturbing factors and hence needs no adjustment to adapt it to the difficulties met in its application. This air of omniscient dogmatism, together with the disasters of false prophets, has somewhat compromised the movement and has diminished its direct influence. However, business men have been stirred up. They have become accustomed to using the words "science" and "business" in the same sentence. They are in a receptive attitude for ideas. The indirect influence has been great.

A final, and probably in the long-run the most permanent, influence making for the extension of scientific method in business has been the new viewpoint from which universities have been approaching the task of educating men for business. Prior to 1900, university education for business in the few universities that attempted anything of the sort was confined to such branches of applied economics as money and banking, transportation, corporation finance, commercial geography, with accounting and business law to give it a professional flavor. There were also general courses labeled commercial organization and industrial organization, but these were almost entirely descriptive of the general business fabric of the country, and had but the most remote bearing on the internal problems of organization and management which an individual business man has to face. The assumption was that a man who was looking forward to business would probably do well to secure some information about business, but there was little attempt at definite professional training of the kind given to prospective lawyers, physicians, or engineers.

Within the past few years universities have begun to undertake seriously the development of professional training for business. The result has been that through organized research and through investigations by individual teachers and students, the universities are gathering up the threads of different tendencies toward scientific business and are themselves contributing important scientific results. Out of all this there is emerging a body of principles and of tested practice which constitutes an appropriate subject-matter for a professional course of study, and points the way to still further research.

One of the earliest results of an approach to business in an attitude of scientific research, is the discovery that there are certain fundamental principles which are alike for all lines of business, however diverse the subject-matter to which analysis is applied. Substituting the principle of likeness for diversity as the starting-point of business analysis, has far-reaching consequences not only for education and research but for management as well. First among these consequences is the fact that search for elements of likeness leads at once to replacing the trade or industry with the function as the significant unit both of research and organization.

If we start our study of business by separating manufacturing, railroading, merchandising, banking, and the rest, with a large number of more or less logical subdivisions in each field, and then try to work out a body of principles applicable to each subdivision, we soon run into endless combinations and lose all sense of unity in business as a whole. As soon, however, as we approach business from the standpoint of accounting, sales management,