Two essential constituents in that older theory, as will be recalled, were the notions that each individual is of himself equipped with the intelligence needed, under the operation of self-interest, to engage in political affairs; and that general suffrage, frequent elections of officials and majority rule are sufficient to ensure the responsibility of elected rulers to the desires and interests of the public. As we shall see, the second conception is logically bound up with the first and stands or falls with it. At the basis of the scheme lies what Lippmann has well called the idea of the “omni-competent” individual: competent to frame policies, to judge their results; competent to know in all situations demanding political action what is for his own good, and competent to enforce his idea of good and the will to effect it against contrary forces. Subsequent history has proved that the assumption involved illusion. Had it not been for the misleading influence of a false psychology, the illusion might have been detected in advance. But current philosophy held that ideas and knowledge were functions of a mind or consciousness which originated in individuals by means of isolated contact with objects. But in fact, knowledge is a function of association and communication; it depends upon tradition, upon tools and methods socially transmitted, developed and sanctioned. Faculties of effectual observation, reflection and desire are habits acquired under the influence of the culture and institutions of society, not ready-made inherent powers. The fact that man acts from crudely intelligized emotion and from habit rather than from rational consideration, is now so familiar that it is not easy to appreciate that the other idea was taken seriously as the basis of economic and political philosophy. The measure of truth which it contains was derived from observation of a relatively small group of shrewd business men who regulated their enterprises by calculation and accounting, and of citizens of small and stable local communities who were so intimately acquainted with the persons and affairs of their locality that they could pass competent judgment upon the bearing of proposed measures upon their own concerns.