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4.6 The seven sources for innovative opportunity 124
4.7 Innovating for the marketplace 128
4.8 Who is the customer? 130
4.9 Why will the customer buy from me? 132
4.10 Summary and activities 135
4.11 Notes, references and recommended further reading 143
5 Information and help 145
5.1 Testing the new venture – the ‘lean start-up’ 146
5.2 Entrepreneurial networking 147
5.3 Market research for small firms 148
5.4 Secondary data 152
5.5 Primary data 153
5.6 Help for small business 159
5.7 The effects of government policy 165
5.8 Summary and activities 167
5.9 Useful sources of information for entrepreneurs 173
5.10 Notes, references and recommended further reading 174
PART II
Creating the entrepreneurial small business 177
6 Business planning 178
6.1 The purpose of a business plan 179
6.2 When to plan? 181
6.3 Who can benefit? 183
6.4 Why produce a plan? 184
6.5 The format of a business plan 185
6.6 Summary and activities 193
6.7 Notes, references and recommended further reading 215
7 Successful small business strategies 217
7.1 Strategy and the small business 218
7.2 New venture strategy 222
7.3 The business model 224
7.4 Survival strategy 228
7.5 Growth strategy 232
7.6 A composite model of successful strategies 238
7.7 Summary and activities 240
7.8 Notes, references and recommended further reading 249
8 Start-ups and franchises 252
8.1 The alternative routes to market entry 252
8.2 The start-up 254
8.3 What is franchising? 257
8.4 The franchising market 259
8.5 The pros and cons of franchising 263
8.6 But is it a small business? 267
8.7 Summary 269
8.8 Case studies and activities 269
8.9 Notes, references and recommended further reading 272
9 Buying an existing business 275
9.1 The scope for buying an existing business 276
9.2 Small business buyers 279
9.3 Assets for sale 283
9.4 Liabilities to be avoided 290
9.5 Basis of valuation of an existing business 291
9.6 Taxation aspects of a small business purchase 294
9.7 For and against buying an existing business 295
9.8 Summary and activities 297
9.9 Notes, references and recommended further reading 305
10 Forming and protecting a business 307
10.1 Choice of business organization 308
10.2 Limited company 309
10.3 Sole trader 314
10.4 Partnership 315
10.5 Choosing the appropriate business form: sole trader vs partnership vs limited company 318
10.6 Cooperatives 320
10.7 Social enterprise 323
10.8 Intellectual property rights 324
10.9 Summary and activities 328
10.10 Notes, references and recommended further reading 338
PART III
Managing the entrepreneurial small business 343
11 Management of people and resources 344
11.1 Total management 345
11.2 Premises 348
11.3 Materials and equipment 350
11.4 Insurance 351
11.5 Business processes and ICT 352
11.6 Management of people 354
11.7 Summary and activities 364
11.8 Notes, references and recommended further reading 369
12 Marketing 373
12.1 Small business marketing issues 374
12.2 Marketing defined 375
12.3 Entrepreneurial marketing 377
12.4 Word-of-mouth marketing methods 386
12.5 From word of mouth to word of mouse 390
12.6 Personal marketing communications 394
12.7 Impersonal marketing communications 395
12.8 Marketing channels 397
12.9 Summary and activities 398
12.10 Notes, references and recommended further reading 406
13
Money matters for small business 409
13.1 The uses and sources of funds for SMEs 410
13.2 Debt finance 413
13.3 External equity finance 416
13.4 Access to finance – the issues 421
13.5 Managing finance 425
13.6 Case studies and activities: Part 1 433
13.7 Financial analysis 435
13.8 Summary and activities (Part 2) 448
13.9 Notes, references and recommended further reading 453
PART I
● This Part consists of five chapters which evaluate the role that small businesses and entrepreneurship play in our economy and society, the environment in which entrepreneurs operate and how they are supported and helped.
● The activities and cases studies throughout this book are designed to stimulate your thoughts and experiences of the topic under discussion. Understanding and retention of information is more likely if it is related to what you already know or have experience of, so it is important to undertake the activities either in the text, or at the end of each chapter.
● At the end of each chapter, it is important to consolidate the learning by tackling the relevant step in ‘Planning a new venture’ (see Figure 1 of the Preface). In this Part, the five chapters represent the process of taking an opportunity from a position of unknown risk to a reasonable prospect. By the end of Chapter 5, you will be able to complete an initial evaluation of the opportunity.
Activity 1 What is a small business?
CoolLED Ltd designs and manufactures LED illumination systems for microscopes. Since its incorporation in 2011, it has grown rapidly, selling over €3 million of its innovative products annually around the world, employing 25 people and achieving a net asset value of €1.5 million on its balance sheet.
Poqués International sells discounted clothes on the internet that it sources from other manufacturers. Sales exceeded €3 million last year although it employs only 7 people. Low margins keep profits tight so its balance-sheet value is under €0.5 million.
How would you categorize each of these businesses: Micro, Small or Medium-sized?
Once you have decided, check your assessment with the definitions adopted by the European Union below.
‘Management’ is generally understood to refer to a particular mode of activity in an organizational context; but it is helpful to remember that we all manage (our work, our families, our lives, etc.) on a daily basis. On one level, the ability to manage, in a small business or otherwise, is a universal human capacity, not a job description reserved for a privileged few.
‘Entrepreneurship’ is also an elusive term. It is commonly linked to small business management because it involves the processes of recognizing opportunities and the development of new ventures, but entrepreneurs operate in a range of contexts including larger corporations and the public sector, not just small businesses. Definitions of entrepreneurship and those involved in managing small businesses are explored in Chapter 2, where we consider the differences between an ‘owner-manager’ and an ‘entrepreneur’.
This chapter focuses on the role of small businesses in terms of their contribution to society in general, but we should not forget the crucial role of the people that create and manage these enterprises.
Small businesses do not conform to any neat parameters. Much depends on the industry in which they operate and the personalities and aspirations of those that run them. These factors vary from manufacturers to retailers, professional managers to husband and wife teams, high growth, high-tech start-ups funded by venture capitalists to self-financed tradesmen content just to make a living. It is this diversity that makes generalizations of any kind, including a definition of the sector, extremely difficult, and often unwise.
1.1.2 QUANTITATIVE DEFINITIONS
Some definitions focus on numerical parameters in order to differentiate between smaller and larger business types. The European Commission (EC) initiated an important set of definitions of the small and medium-sized enterprise (SME) that introduced a further category of the ‘micro’ enterprise to reflect the growing importance of very small businesses. These definitions are based on headcount, and turnover or balance-sheet value, as shown in Table 1.1.
CoolLED pE-1 unit
Source: Courtesy of Liz Stark, CoolLED Ltd.
Table 1.1 SME size thresholds adopted by the European Commission
Note: if a firm qualifies on two of the three measures it is in that category as turnover and balance-sheet are alternative measures. So, in the examples cited in Activity 1, CoolLED Ltd would qualify as a small business because it employs more than 10 people and its turnover is more than €2 million even though its balance-sheet total is less than €2 million. Poqués International is a micro business because it employs 7 people and has a balance sheet value less than €2 million, even though its turnover exceeds €2 million.
Source: The European Union (ec.europa.eu)
These quantitative thresholds are important because they are used throughout the European Union (EU) for policy purposes. For example, they might be used to determine the eligibility of a business for certain types of grant or other assistance. They are also widely used by national government institutions such as the Department for Business, Innovation and Skills (BIS)1 in the UK.
There are obvious attractions in using such definitions. They seem objective and relatively simple to apply, facilitating statistical analysis of the sector. But such measures have important limitations. The number of people employed is very dependent on the industry involved and this makes generalized comparisons across sectors difficult. For instance, 49 employees may constitute a small manufacturer, but they probably count as a medium-sized consultancy or retailer, and would be considered large as compared to most businesses operating in the cultural and creative industries. According to Curran and Blackburn (2001), the use of numbers employed is even more problematic as full-time employment has become less common, with increasing numbers of part-time, project-based, casual and temporary workers.
Financial measures, such as the turnover and balance-sheet value of a business used by the EC, present similar sector problems. For example, wholesalers tend to have high levels of sales but operate with very low margins, and this would distort comparisons with higher-margin service companies with similar turnovers. Moreover, inflation and exchange rate changes make comparisons over time and between countries more difficult. The EC acknowledged this in 2005 by revising upwards the turnover and balance-sheet thresholds for each classification to the current levels from those originally set in 1999. It regularly monitors the implementation of the SME definition and a report recently concluded that no further change is needed at present (Centre for Strategy & Evaluation, 2012).
In the USA, some of these concerns are recognized in the way that the Small Business Administration (SBA)2 defines small businesses for the purpose of government funding. Size standards are set for each type of industry to reflect the differences between trades. Commonly, a small business is defined as having fewer than 500 employees in manufacturing industries and 100 employees in wholesale operations.
1.1.3 NON-QUANTITATIVE DEFINITIONS
To overcome some of these difficulties, non-quantitative definitions have been proposed that try to single out the essence or differentiating characteristics of a small business. Small firms may be difficult to define precisely on paper, but most are easy to recognize once they are seen in operation. There seem to be fundamental differences in practice that enable us to distinguish between small and large firms.
The Committee of Inquiry on Small Firms set up by the UK government recognized this in an influential report which became known as the Bolton Report (1971). The Report proposed that a small firm has three essential characteristics:
● A small firm is managed by its owner(s) in a personalized way.
● It has a relatively small share of the market in economic terms.
● It is independent in the sense that it does not form part of a larger enterprise and its ownership is relatively free from outside control in its principal decisions.
However, Bolton supplemented these general qualities by more specific, quantitative measurements depending on the industry type. For example:
Small firm type
Definition used
Manufacturing 200 employees or less
Construction 25 employees or less
Road transport 5 vehicles or less
Although these definitions formed the basis of much research in subsequent years, they are open to several criticisms, including:
● Low market share is not always a characteristic; small firms typically operate in highly specialized niches, or limited geographic markets, where they have a relatively high share.
● Independence is difficult to measure. For example, Bolton’s definition excluded franchises that are organized by a larger enterprise, but included subcontractors who were very dependent on one customer.
Wynarczyk et al. (1993) identified three key aspects in which small and large firms differ: uncertainty, innovation and evolution.
● Uncertainty is a persistent feature of small firms which tend to have small customer bases and limited resources.
● Innovation of either very new products, or marginal differences to well established ones, is a key factor in the success or failure of new business start-ups.
● Evolution refers to the state of constant structural and market changes which small firms are likely to experience as they struggle to survive and develop.
This definition has not been widely used because it lacks clarity and clear differentiation from larger companies. It could very well be argued that uncertainty, innovation and evolution are also a crucial part of the business environment of large corporates in today’s fast-changing world.
Curran et al. (1991) have argued against over-general notions of the ‘small firm sector’ because it consists of an exceptionally mixed bag of businesses, engaged in a wide range of activities, whose managers often have little in common with each other. Instead they used more detailed, pragmatic definitions derived from sources within a trade or activity type. Thus, a ‘small’ public house (free house) business is defined as having one outlet, an unspecified number of employees but not brewery owned, while a ‘small’ employment agency can have up to two outlets and ten employees.
1.1.4 DEFINITIONS USED IN THIS BOOK
Small business management is different in several respects to management in larger organizations, because of social structures and relationships, and because of the levels of resources available. While these differences may derive from the numbers of employees and size of turnover, it is their management implications that will be our
primary concern. For example, the manager who has no specialist departments to turn to for advice, who takes messages from creditors seeking payments because of a cash shortage and who has to choose between keeping an appointment with a client or attending to an important production issue, is facing situations typical of the management of small, rather than large, businesses.
While quantitative measures such as the EU definitions oversimplify matters, they do reflect the changing management environment of an enterprise as it reaches key stages in its growth. Businesses with fewer than ten employees rarely need a middle management structure, but over that size there is often pressure on the ownermanager to delegate more of the decision-making. In this sense small business management can be extended to small enterprise management to bring in the many types of small organizations which are not traditionally regarded as businesses, but which share many of the management issues of a small firm. Small non-profitmaking units (including charities, theatres, sports clubs, health centres, arts organizations, even schools) may be influenced by the ‘smallness’ of their operation in ways which are similar to small businesses. A doctor in a small medical practice, the head teacher of a primary school, or the manager of a small charity may work in a similar management environment, and face similar management decisions as the owner-manager of a small firm. While such organizations may not fit with accepted definitions of a small business, the management environment can still be typical of a small enterprise.
It is this peculiar management environment of the small enterprise which defines the parameters of this book, rather than any precise threshold level above which a small firm automatically becomes medium-sized or large. While those that operate in larger organizations can still act entrepreneurially and entrepreneurship is not limited to small business (see Chapter 2), entrepreneurs working in small enterprises have significant additional issues that are related to the size of the operation.
Activity 2 Why are small businesses important to the economy?
Which of the following factors help small businesses make a positive contribution to the health of the economy?
(a) Small firms provide a seedbed from which larger businesses grow
(b) They can be cheaper than rivals if you pay cash
(c) They improve the availability of different products and services
(d) They increase the size of the ‘black economy’
(e) They provide employment for enterprising individuals
(f) They don’t have to obey all the regulations
Which of these are positive economic factors and which negative? Try and think of other positive factors before checking your answers with the factors listed by the Bolton Report below.
1.2 Why bother with small businesses?
1.2.1 SHIFTING PERCEPTIONS OF SMALL BUSINESSES
Guided by politicians and management theorists, public perceptions of the small business have shifted over the last half century or so between the extremes of neglect and ignorance to hype and over-expectation. In the 1950s and 1960s, small firms were written off as out-of-date forms of economic activity. By the late 1970s and
moral status of a man's life. Thousands whose material wants are amply provided for revel in sin and corruption, and the dreadful orgy where vice holds carnival reels and swaggers in the palaces where amid gilded refinements and dazzling splendor the so-called better classes disport themselves. It is true that when a man is starving or naked, bread and clothing are the things which will satisfy his most immediate wants, and not prayers or sermons. To supply such wants is easy enough, but to so arouse or kindle into a flame of fortitude and manliness, the diseased conscience and the perverted judgment, to so operate upon the will as to make the man able to not only choose but do the right, is the great and radical difficulty which is not so easily overcome. Psychology and medicine seem to have no remedy to offer, while religion for these many years has simply touched the hem of the garment—while the abandoned classes have seemingly multiplied on our hands.
In concluding these remarks we cannot forbear to express our regret that the real author of the book has given it over to "General" Booth and allowed him not only the credit of authorship, but most likely also the privilege of mixing up a scheme of social reform with the politics of the Salvation Army. The book was "boomed" in this way, but we fear that it will at the same time be doomed in this way. The Salvation Army and its founder have reaped much undeserved praise. "General" Booth has received incredible sums from enthusiasts to support the scheme, and these sums have to a great extent been used to advertise it. It appears to us that "General" Booth has contracted a debt which he will be unable to pay. The better situated classes of society do not lack in sympathy for their wretched fellow-men, and it sets us thinking, how strong human sentimentality must be that the propagation of the mere idea of curing the evils of mankind proposed in this book as feasible with
the aid of one million pounds furnishes ample means to a religious enthusiast whose method of salvation is rather noisy than thorough, representing a kind of barbarous relapse and only adapted to the lowest and most uneducated classes. We should know that sentimentality cannot save. Sentiment and sympathy are good things, but unless they are backed by a cold consideration of fact and rational foresight, they are worse than useless.
It will be wise to consider the propositions made in "In Darkest England" without taking into consideration the rôle to be played in the scheme by the Salvation Army. But while the reader may be just enough to consider the plan of social reform on its own merits, "General" Booth is in possession of the funds and will be the general manager of the experiment.
Γκ.
PLANKTON-STUDIEN.
Vergleichende Untersuchungen ueber die Bedeutung und Zusammensetzung der pelagischen Fauna und Flora. By
ErnstHaeckel. Jena: Gustav Fischer.
The first systematic studies of the innumerable organisms which almost everywhere drift about in the ocean, were made by Professor Johannes Müller who some forty years ago made excursions in the North Sea. Haeckel, then a student twenty years old, accompanied him on one of these excursions to Heligoland. Since then these investigations have been conducted on a larger scale. The English vessel "Challenger" cruised in different oceans for no less than forty months, and the results of this great undertaking were published by John Murray in the "Voyage of H. M. S. Challenger"—a voluminous work consisting of eighty-two zo-ological reports, to which Professor
Haeckel also has contributed his "Report on the Deep-Sea Keratosa." The German government sent out the German cruiser "National" on the same errand. The scientists of the expedition were Hensen, Brandt, Dahl, Schütt, Fischer, Krümmel. They were at sea altogether ninety-three days making a circuitous trip on the Atlantic ocean, touching at the Bermudas, Brazil, and the Azores. The results of the expedition, published in reports by Hensen, Brandt, Du BoisReymond, and Krümmel, were considered as very satisfactory and received the unreserved applause of the German press. Professor Haeckel is of a different opinion. He considers the reports as standing in flat contradiction to former valuable observations, especially to those of the English "Challenger" and the Italian "Vettor Pisani" expeditions. Hensen's results rest upon a weak supposition and contain wrong generalisations; even his method is, according to Haeckel, entirely useless, giving a wrong presentation of the problems of pelagic biology.
The word "plancton" was introduced by Hensen. Haeckel adopts it because he considers the Greek term preferable to Johannes Müller's Auftrieb or pelagic Mulder (the latter has been adopted also by English, French, and Italian planctologists). By plancton (πλαγκτόν), derived from πλάζω, to roam about, is understood the drifting microorganisms of the sea.
Professor Haeckel in the present volume not only corrects Professor Hensen's errors, but also gives a report of his own observations. Not the least valuable part of the brochure is the exact terminology which Professor Haeckel proposes in order to escape the confusion necessarily resulting from a looseness of terms. Κ.
DIE ALLGEMEINE WELTANSCHAUUNG IN IHRER HISTORISCHEN
ENTWICKELUNG.
Charakterbilder aus der Geschichte der Naturwissenschaften. By CarusSterne. Mit zahlreichen Porträts und Textabbildungen.
Stuttgart: Otto Weisert.
Dr. Ernst Krause, better known by the nom de plume of "Carus Sterne," has here undertaken to present the modern worldconception as contrasted with the olden one. We have scarcely ever met with a book that contains in so popular a form all the noteworthy facts of the great progress that has been achieved in science since the time of Copernicus. The results of the evolutiontheory are generally known, but the road and the stations of the road on which science has reached its present position, now almost universally recognised among men, are almost forgotten. No one perhaps is better able to tell us of this great struggle for truth than the enthusiastic disciple of Darwin, Carus Sterne. Carus Sterne and his friend Prof. Ernst Haeckel, have done no small work in obtaining recognition for the theory of evolution in Germany. While Haeckel's work has been confined to the field of exact science, Carus Sterne has complemented the labors of his co-worker by pointing out the moral truths contained in Darwinism. We are aware of the fact that Carus Sterne has also written purely scientific works, "Werden und Vergehen," for instance; but what we wish to emphasise as his especial merit is that he was, so far as we know, the first to call attention to the moral workings of nature in her great cosmic empire. As an article characteristic of this trait in Carus Sterne's writings we refer the reader not familiar with German literature to his article "The Education of Parents by their Children," a translation of which appeared in Nos. 22 and 23 of TheOpenCourt.
The present book (over 400 pages) discusses the following subjects: Pagan and Christian Cosmology; Copernicus, Tycho Brahe, and Kepler; The Controversy Concerning the Geo-centric View; The Infinitude of Habitable Worlds; From Bacon to Newton; The Beginnings of an Animal- and Plant-Geography; The Doctrine of Spontaneous Generation; The Discussion Concerning the Origin of Birds; The Terrestrial Globe and Its Fossils; Diluvianism; The Mongrel Theory; The Doctrines of Preformation and Metamorphosis; The Doctrine of Catastrophes; Persistence or Mutability; The Controversy on the Anthropocentric View; The Origin of Language; On the History of Evolution.
UEBER DIE AUFGABEN EINER ALLGEMEINEN RECHTSWISSENSCHAFT.
By Dr. Alb. Herm.Post. Oldenburg and Leipsic: A. Schwartz.
The author of this little book, Dr. Albert Hermann Post, a Judge of the courts of the free city of Bremen, Germany, has made the study of ethnological jurisprudence the scientific work of his life. His idea and purpose are to establish a positive science of jurisprudence in the widest and most comprehensive sense of the word, on the basis of an investigation of all the forms of law, available to research, that have ever appeared. A universal science of jurisprudence, according to this conception, would have for its subject-matter the contents of the jural sense or consciousness of the entire human race,—the jural facts of the totality of human society. In other words, this science must be, not only historical, but ethnological. It must include the jural life not only of the civilised, but also of the uncivilised races of mankind: it must comprehend all. It thus constitutes a step beyond
that great movement of the beginning of this century which gave us the science of the history of law. It extends the latter, supplements it, and aims to find in the juro-social existence of undeveloped and uncivilised races the germs of legal practices and institutions that the literary history and traditions of civilised peoples would never supply.
The matter of the present work of Dr. Post takes up some 215 pages. It treats of the available sources of such a universal science of law, of the elaboration of these sources; it gives a concise and illustrative epitome of the most important parallel phenomena met with in the jural life of the human race,—e. g. in the departments of the Law of Inheritance, of Property, of Marriage, etc., etc.,—and a survey of the separate ethnic divisions of law over the whole earth.
It is a grand task—the realisation of this conception. And its execution in its enormous magnitude is only possible through the speedy and intelligent co-operation of scientists and travellers as well as jurists. It will make of jurisprudence a natural science, as distinguished from the a priori character this study has up till now assumed; and its prosecution will impart into the science a light and freshness which it sadly needs. Next to theology, the science of law is least pervaded with the spirit of modern research. And this is eminently so in our country, where hardly the history, let alone the ethnology of law, is studied.
We are tempted to give a much more thorough and detailed exposition of Dr. Post's ideas. But an original article will appear from his pen in a future number of The Monist, and therefore we are brief.
μκρκ.
"L'Evolutionnisme des Idées-Forces"; Koenig's "Die Entwicklung des Causalproblems."
On Physiological Expression in Psychology. In opposition to the "subjective purism" in psychology advocated by Mr. Stout and Mr. Bradley. The mixture of the psychical with the physical is such as to prove that mental processes, however distinct from bodily processes, have never owned even a vocabulary of their own. Pleasure and pain are psychical states, but we cannot theorise fully upon them without adverting to their physical causes or conditions. The action of drugs proves that the physical constitution of the nerve-substance is a paramount condition of our sensibility, pleasurable or painful. By taking the organs of special sense in separation we can exhaust the modes of sensibility under each, and when we look minutely into the anatomy of the several organs, we obtain further helps to the subdivision and distinction of the individual sensations. Connected with the physics of the brain, apart from the nervous substance and its conditions, is the important state known as excitement, with its opposites quiescence, languor, repose, drowsiness, sleep, and insensibility. The theory of the Will must rely, in the first instance, upon subjective sequences, but the physical consequences of pleasure and pain are a two-fold activity—Expression and Volition, and for verification of any hypothesis as to priority between these two forms of the physical outcome of feeling, the sequence must be taken on the physical side alone. As regards the emotions, taken in themselves, the tracing of physical concomitance is unavoidable. In Psycho-physics the experiments are made upon the physical side, though not to the exclusion of subjective reference. A law relating to the seat of ideas obtained in the first instance through the senses, declares the nervous tracts to be the same in both, thus connecting Sense with Intellect. It has always been impossible to avoid
determining the strength of apperceptive systems may be either extrinsic or intrinsic. The extrinsic consist in passing circumstances which from time to time favor its activity. The intrinsic conditions are inherent in the constitution of the system itself. Among the former are the co-operation of another system; the recovery or the intensity of its own previous action; the influence of organic sensation; its own freshness arising from previous repose. Of these the organic sensation is of fundamental importance. The influence of the cœnæsthesis pervades the whole mental life. Every specific kind of emotion is accompanied by a characteristic mode of organic reaction. The intrinsic conditions are the comprehensiveness of the system; its internal organisation, of which the philosophy of Hegel is cited as an example; the strength of the cohesion between its parts; the nature of the sensory material which enters predominantly into its composition, that is, the comparative excitability of ideas derived from different senses. The normal working of competition, cooperation, and conflict, may be illustrated by contrasting it with the pathological state called suggestibility, in which those processes are more or less completely in abeyance. The conditions which determine the train of ideas arise from the fact that attention, being a motor process, depends on feeling, which dependence cannot be separated from that on apperception. Feeling gives unity to mental process, and is a simple mode of consciousness resulting from the excitement of a multiplicity of elements, and it causes attention to be concentrated on the central presentation from which the wave of excitement is radiated. The essential characteristic of a train of thought, as distinguished from a mere train of ideas, is that the relation linking each idea to its predecessor forms also a source of the interest through which it attracts attention. The ground of the distinction is that thinking involves the activity of a proportional
system as such, that is "a system adapted to apperceive objects in other respects most diverse from each other, merely because they agree in being capable of entering into certain relations." The modified working of the principle of association through the apperceptive activity of a proportional system, is proportional or analogicalproduction, which may possibly operate in every instance of the suggestion of one idea by another. A reversion of attention to a previous link in a chain of ideas, giving rise to a modified repetition of it, is a distinctive feature of thinking. In a separate article will be dealt with the special part played by language, which from a psychological point of view is "a peculiar movement of attention having a peculiar influence on apperceptive process."
Helmholtz's Theory of Space-Perception. The doctrine of "unconscious inference" is explicitly founded upon the general theory of knowledge formed by Helmholtz, which is identical with that of Kant, and Helmholtz's investigation into the genesis of spaceperception applied to the problem which Kant did not consider, namely, the perception of particular or concrete spaces. The distinction made by the former between the inference from the data of sense and that in which the data are consciously known to be signs, by calling the inductive inferences of the sciences conscious, and those involved in external perception of world unconscious, is open to the charge of involving a contradiction. On the one hand, the theory of "unconscious inference" supports the empirical doctrine of perception only in consequence of calling the process an inference. On the other hand, to call the process "unconscious" is to restore the conception of immediacy which the idea of inference is supposed to exclude. This contradiction may not be insisted on, but, as the phenomena of binocular adjustment discussed in a previous article showed in the visual consciousness a quale which, with or
without its relation to tactual and muscular extension, was other than plane dimension, Helmholtz must, unless this quale can be proved to be result of inference, limit the application of his theory to the synthetic connection between touch and sight. Parallax of motion, which consists of the different afferent movements or velocities of bodies in horizontal meridians, and situated at different distances from the observer, seems to do the same for monocular vision that adjustment and fusion do for binocular vision. The phenomena attending certain experiments in which the parallax of motion was observed "correspond exactly to the conception of those who hold that the representative of plane dimension in the retinal image decides the nature of all perceptions whose character is not presented in the image except as a visual sign, and hence that aught beyond magnitude must be the result of influence." An examination of Helmholtz's fundamental principle, "the denial of all preestablished harmony between the nature of impressions and the nature of the external world," confirms the view that the conception of space may be properly a visual one, requiring the superior constancy of touch to correct illusions growing out of the complexities of vision. If we limit visual phenomena as data to mere variations of kind and distinctness in color, we cannot account for such cases as the appearance and inversion of mathematical perspective, binocular localisation and translocation, and the distinct effect of the monocular parallax of motion, qualities which are dimensional in their nature. "While the complexities of spaceperception make the co-operation of inferential agencies very probable, yet the spacial quality must be originally given somewhere in consciousness either as an object of perception or as a mental construction, in order to furnish a basis for inferences to its existence or its relations where they are not immediately cognised.
relation "is implied in the rudimentary inference which states only the particular fact observed and the particular fact now expected. It is explicit in the reason that is conscious of its own grounds and methods, and takes there the form of the universal judgment, or major premiss."
The Undying Germ-Plasm and the Immortal Soul. All unicellular beings such as the Protozoa and the simpler Algæ, Fungi, etc., reproduce themselves by means of simple fission, and consequently they are immortal. All the single individuals of a family of unicellular beings belong to each other, although they be isolated. Amongst certain infusoria they do, in fact, remain together and build up branching colonies. Later on, division of labor made its appearance and increased the dependence of the individuals upon one another, so that their individuality was to a great extent lost. By the development of this process, multicellular Metazoa arose from colonies of similar Protozoa, and at length culminated in the higher animals and man. All the cell-series are immortal, but they all must die because the structure which is built up by them collectively is mortal. The reproductive cells are the only kind adapted for existence outside the body, and from time to time some of the human reproductive cells succeed in conjugating, and from them a new individual arises. The whole structure of man is acquired with the one object in view of maintaining the series of reproductive cells, of which he is, so to speak, the slave. They are the most important and essential and also the undying parts of the organism. The series of reproductive cells thus possess the essential attributes of the human soul. If we compare the conception of the soul as held by various related religions, and take the characteristics invariably ascribed to the soul, we find that they hold also for the series of reproductive cells continually developing within the body. The
ordinary conception of the fate of the soul after death agrees fundamentally with the result of observation on the prosperity of the series of germ-cells. That fate depends on conduct in the body, and the only possible definition of a good deed, that is approved by conscience, is one which will benefit the series of germ-cells arising from one individual, that is ourselves and our family, and further which will be of use to others with their own series of germ-cells, and that in proportion to the degree of connection or relationship. Thus, "the apparently enigmatical conception of the eternal soul is founded on the actual immortality and continuity of the germplasma." (London: Williams & Norgate.)
INTERNATIONAL JOURNAL OF ETHICS. January, 1891. Vol. I. No. 2.
CONTENTS:
THE RIGHTS OF MINORITIES. By D.G.Ritchie.
A NEW STUDY OF PSYCHOLOGY. By Prof.JosiahRoyce.
THE INNER LIFE IN RELATION TO MORALITY. By J.H.Muirhead.
MORAL THEORY AND PRACTICE. By Prof.JohnDewey.
MORALS IN HISTORY. By Prof.Fr.Jodl.
THE ETHICS OF DOUBT—CARDINAL NEWMAN. By W.L.Sheldon.
THE ETHICS OF SOCIALISM. Steinthal—The Social Utopia; Paulsen—Socialism and Social Reform. By Prof.FranklinH.
