ABSTRACT
The specific functions of economic history in connection with the theoretical problems of political economy may be roughly classified into three. Firstly, to illustrate and test conclusions not themselves resting on historical evidence; secondly, to teach the limits of the actual applicability of economic doctrines; thirdly, to afford a basis for the direct attainment of economic truths of a theoretical character. Economic history teaches the limits of the actual applicability of economic doctrines. The propositions of economic history are accordingly statements of particular concrete facts; economic theory, on the other hand, is concerned with the establishment of general laws. Economic history and economic theory in various ways assist and control one another; and their mutual relations become specially important as the history approaches the period with which the theory is more particularly concerned.
