Chapter 6 Chapter Four: The Order and Purpose of Economic Research

The general idea of ​​the second and third chapters of the first section. We have seen that economists must be greedy for facts, and facts do not speak for themselves.History is the narration of successive and concurrent events; but only reasoning can explain these events and draw lessons from them.The work we have to do is so varied that much of it must be studied with that special common sense which is the final arbiter of every practical question.Economics is nothing but the exercise of common sense, aided by the method of organized analysis and general reasoning which facilitates the collection and arrangement of particular facts and the drawing of conclusions therefrom.Economics, though always limited in scope, and though its work would be in vain without the aid of common sense, it enables common sense to be brought to light further on difficult problems which it could not otherwise do.

Economic laws are statements about the tendency of human activities under certain conditions. The laws of economics are hypothetical in the same sense as the laws of natural science are hypothetical: because the laws of natural science also include or imply various conditions.It is, however, more difficult to ascertain these conditions in economics than in physics, and, if they are not ascertained, the danger is greater.It is true that the laws of human activity are not so simple, definite, or clearly ascertainable as the law of gravitation; but many of them can stand alongside those of the natural sciences which deal with complex subjects.

The raison d'être of economics as an independent science is that it is chiefly the study of that part of human activity governed by the most measurable motives; this part of the activity is thus more open to systematic reasoning and analyze.It is true that we cannot measure motives of any kind, high or low, in themselves: all we can measure is their dynamics.Money is never a perfect measure of such dynamics, and is not even a reasonably good measure unless we carefully consider the general circumstances under which the dynamics operate, and especially the wealth and poverty of those whose activities are being studied. scale.But money, if done with care, can be a pretty good measure of the dynamics that form most of the motives of human life.

The study of theory must go hand in hand with the study of facts: for the study of most modern problems, modern facts are of most use.For the economic records of antiquity are in some respects insignificant and unreliable; the economic conditions of antiquity were quite different from the modern economy of free enterprise, general education, real democracy, steam, and cheap printing and telegraphy. Section 2. The research of science is not arranged according to the actual purpose it wants to achieve, but according to the nature of the subject it studies. Therefore, the purpose of economics is, first, to seek knowledge for its own sake, and second, to explain practical problems.While we must carefully consider the uses of any research before we undertake it, we should not plan our work directly in terms of these uses.For, if we do so, we interrupt thought whenever it has no direct relation to the particular purpose we have in mind at the time: the direct pursuit of practical ends leads us to gather the bits and pieces of knowledge in Together, these pieces of knowledge have no relationship to each other except for the purposes of the study at the time when they were brought together; nor do they account for their relationship to each other.Our mental energy is spent passing from one kind of knowledge to another, without coming up with anything thoroughly, and making no real progress.

The best classification, therefore, for the purposes of science, is that which collects together all qualitatively similar facts and inferences: so that the study of one thing will make clear what is related to it.By studying a certain class of problems in this way for a long time, we come to understand those basic uniformities which are called the laws of nature: We first explore the action of these laws alone, and then in combination; and thus we make progress, slowly but surely. The economist should never be indifferent to the practical uses of economic research, but his special business is to study and explain facts, and to find out what the different causes act individually and in combination.

The main topics of the third section of economic research. This can be illustrated by enumerating some of the main problems, as economists themselves say.he asked: What causes, especially in modern times, have affected the consumption and production, distribution and exchange of wealth; the organization of industry and trade, financial markets, wholesale and retail commerce, foreign trade, and the relationship between employer and employee?How do all these actions affect and react to each other?How do their eventual inclinations differ from their current inclinations? What are the constraints on the price of anything as a measure of the desire to have it?If there is a certain increase in the wealth owned by any category of people in society, how much will the welfare increase appear to be?To what extent is the efficiency of industry impaired by the inadequacy of any class of persons?To what extent will an increase in the income of any class of people, if achieved, be maintained as a result of increasing their efficiency and earning power?

To what extent does economic liberty actually affect (or have at any one time) affect in any place, on any class of persons in society, or in any particular branch of industry?Also, what other influences are most powerful; how does it all work together?In particular, to what extent does economic liberty, by its own effects, tend towards the formation of associations and monopolies, and with what consequence?What happens to all kinds of people in society when they are affected by the effects of economic freedom?While the final results of economic freedom are being realized, what will be its intermediate results?What is the relative importance of the final and intermediate outcomes, given the time over which these outcomes will spread?Who will bear the taxation of various systems?What burden does the tax system place on society at large, and how much revenue will it provide the country?

Section IV encourages current British economists to undertake practical problems of study, although these problems are not entirely within the purview of economics. The above are the main problems that economics must directly study, and the main work of economics-collecting facts, analyzing facts and drawing inferences-should be arranged according to the above-mentioned main problems.Practical problems, though largely outside the purview of economics, implicitly provide a major impetus to the work of economists. Practical matters vary from time to place even more than the economic facts and conditions that are the material of the economist's research.The following issues seem to be of particular urgency in our country right now:

How should we act to increase the good effects of economic freedom on its final outcome and to reduce its bad effects as it proceeds?If the end result is good and the intermediate result is bad, but those who are harmed are not benefited, they should suffer for the benefit of others, and if it is true, how far is it true? Let us suppose that a more equal distribution of wealth is desirable. How far does this justify changing the regime of property, or restricting free enterprise, even if the total amount of wealth is thereby reduced? In other words, if our aim is to increase the incomes of the poor and reduce their jobs, even if this reduces the material wealth of the nation, how far should we achieve this end?How far can this go without being unfair and without compromising the efforts of progressive leaders?How should the burden of taxation be distributed among the different classes in society?

Should we be satisfied with the existing division of labor?Is it necessary that most people specialize in jobs where there is no opportunity for advancement?Is it possible to gradually develop new capacities of the majority of workers for higher jobs, and especially for co-operative management in the enterprises in which they themselves are employed? What is the proper relation between individual and common activities at a stage of civilization like ours?To what extent should groups of voluntary associations of all forms, old and new, be allowed to act together in order to have a special interest in doing so?What business affairs should be conducted by society itself—through its central or local governments?For example, has our plan of common ownership and common use of open spaces, works of art, means of education and recreation, and the material necessities of civilized life which must be provided by joint action, such as gas, running water, and railroads, reached us? To what extent should it be done?

To what extent should government allow individuals and groups to conduct their own affairs as they please, when the government itself is not directly involved?How far should the government restrict the operation of railroads and other somewhat monopoly enterprises?And to what extent should the management of land and other things which man cannot increase in quantity be restricted?Is it necessary to fully preserve all existing property rights: or is the original need for such rights now somewhat non-existent? Are the current fashioned ways of using wealth entirely justified?In some economic relations, if the government interferes with individual activities severely and violently, it will do more harm than good, so the moral pressure of public opinion will restrict and guide individual activities, but what is the scope of this pressure? ?In what respect does the responsibility of one nation to other nations in economic affairs differ from the responsibility of the peoples within a nation to each other? Thus, economics refers to the study of the economic aspects and conditions of human political, social, and private life; but particular emphasis is placed on the study of social life.The purpose of this kind of research is to seek knowledge for knowledge's sake, and to obtain guidance for practical behavior in life, especially in social life.The need for such guidance has never been greater than it is now, and the next generation may have more leisure than we do now to devote ourselves to the work of illustrating obscure points in abstract thinking or in past histories, but For the current difficulties, it can't help immediately. But although economics is thus greatly influenced by practical needs, it avoids as far as possible the discussion of urgent problems of party organization and of political tactics, both internal and external, which statesmen must consider. Then it can be decided what means to propose which will most easily attain for him what he intends to achieve for his country.It is true that the purpose of economics is to help him decide, not only what end should be pursued, but the best means of general policy to pursue that end.Economics, however, avoids discussing many political issues that the experienced man cannot ignore: it is, therefore, a pure and practical science, not a science and a method.It is therefore better to use the broad term "economics" to describe it than the narrower term "political economy". Section 5. An economist must train his faculties of perception, imagination, reasoning, sympathy, and prudence. The economist needs to have three great intelligences: namely, perception, imagination, and reasoning: the most important of these is the imagination, which enables him to explore the inconspicuousness of visible events, that is, those causes that lie below the surface, and the differences between visible events Significant are those results that lie below the surface. The natural sciences, and especially their physics, have this great advantage over all studies of human activity as a discipline: in the natural sciences the researcher has to draw correct conclusions, which can be determined later on. observations or experiments to confirm.If he is content with the apparent causes and effects, or if he neglects the interplay of the elements of nature in which every movement modifies and is affected by all the elements around it, Change, then his fault will soon be discovered.Nor is the scrupulous scholar of physics content with a mere general analysis; he is constantly striving to make this analysis quantitative; and to give due weight to each factor in his problems. In the sciences concerned with man, precision is not as attainable as in the natural sciences.The path of least resistance is sometimes the only open path, which is always tempting, though always unreliable, to be taken when a more thorough path can be wrought by resolute work The allure is still great.The scientific historian is handicapped by his inability to conduct experiments, and even more hampered by the absence of objective criteria by which to estimate the relative importance of historical events.This estimation exists at almost every stage of his arguments: he cannot conclude that one cause or class of causes has been outweighed by another cause or class of causes if he The relative importance of words without making some sort of implied estimate.But it is only by great effort that he can understand how he depends on his own subjective impressions.Economists are also hampered by this difficulty, though to a lesser extent than other scholars of human activity; for the same advantages which give accuracy and objectivity to the work of the physicist are indeed enjoyed by economists. part.At least, so long as he is dealing with current and recent events, many of his facts can be grouped into different kinds, about which definite statements can be made, which have often been numerically nearly true: thus, He seeks causes and effects that lie beneath the surface and are not easily seen, and it is more convenient for him to analyze complex situations into individual factors, and to reconstruct many factors into a whole. In smaller cases, simple experience does suggest causal relations which are not obvious.Experience, for instance, will teach that thoughtless aid to wasteful souls, even though it may appear almost entirely beneficial, is injurious to strength of character and family life.But it would require greater effort, farther vision, and a more vigorous use of the imagination to explore, for example, the real results of many specious schemes to increase the stability of employment.For this purpose we must understand how closely related are various changes in credit, domestic trade, foreign trade competition, crop harvests, and prices; and how all these changes have good and bad effects on the stability of employment.We have to look at how almost every major economic event in any part of the Western world affects employment in at least some industries almost everywhere else.If we study only the present causes of unemployment, we may not be able to cure the harm we see, but to cause harm we cannot see.If we seek out those insignificant causes and weigh their importance, the current work is really a good exercise for our mental strength. Second, when wages in any industry are kept exceptionally high by "standard rules" or other means, the imagination at work is to seek the jobs which are not possible to do because of such standard rules, and to obtain the jobs which people are willing to pay for the work. The living conditions of those who work for wages.Has their life improved?Or is it lowered?If some people's lives are raised and some people's lives are lowered, as usually happens, are the lives of the majority raised and the lives of the few lowered, or is it the opposite?If we pay attention to superficial results, we may think that life is improved for the majority.But if we exercise our imagination scientifically, and devise all the forbidden methods, whether sanctioned by trade unions or otherwise, which keep people from doing their best and earning the most, we shall often come to the conclusion that The conclusion is that life has been lowered for the many, while it has been raised for the few.Owing in part to British influence, some of the Australian colonies were pursuing daring ventures which offered the workmen specious hopes of greater immediate comfort and security.Australia does indeed possess enormous borrowing power in its vast estates: if the short-cut proposed is to cause a decline of industry, the decline may be slight and temporary.But it is now being argued that Great Britain should do the same as the Australian colonies: a decline of this kind would be more severe for Great Britain.What we need in the near future, and what we expect to be, is a more extensive study of plans of this kind, with the same care we use to judge whether a new design of a ship of war is strong in severe weather. . Purely intellectual and sometimes even critical faculties are most required in the study of problems like these.But economic research requires and develops the capacity for empathy, especially empathy that enables people to put themselves in the shoes of other classes of people as well as their fellow human beings.For example, this class sympathy is strongly developed by the study-which is becoming more and more urgent-by the study of how character and income, methods of employment and habits of spending money interact with each other; How the efficiency of the state is strengthened by the trust and affection of the members of each economic group--family members, employers and employees in the same trade, citizens of a country--and at the same time it strengthens this trust and affection; The study of how individual and class self-interest have both advantages and disadvantages in the rules of occupation and the practice of trade unions; and how actions to improve the welfare of present and future generations by making the best use of our increasing wealth and opportunities . The sixth section continues. The economist especially needs imagination in order to be able to develop his ideals. But what he needs above all is caution and restraint, in order that his advocacy of ideals will not outstrip his understanding of the future. Generations later, our present ideals and methods may seem to belong to human infancy rather than to manhood.A definite advance has now been made.We already know that, except for those who have been proven to be extremely cowardly or mean, every human being deserves full economic liberty: but we cannot say what this progress which has begun will ultimately reach. In the late Middle Ages, the study of industrial organization, which was regarded as including all human beings, had begun to begin.Subsequent generations have seen further developments of this organization; but never on such a wide scale as ours.The enthusiasm for studying this organization has increased with its development; never has the effort of previous generations reached its present breadth and depth.But the main result of recent research is to make us realize more fully than previous generations that there are few causes of progress that we know of, and few that we can predict the ultimate fate of industrial organization. At the beginning of the previous century some ruthless employers and politicians who justified exclusive class privileges found it easy to get the authority of political economy on their side; and they often called themselves "economists."Even in our own time those who oppose the large expenditure on the education of the majority claim this title, although contemporary economists agree that such expenditure is a real economy, viewed from the point of view of the nation. , not doing so is a wrong and bad thing to do.But Carlyle and Ruskin, and many other writers less brilliant and noble poetic than either of them, have assumed without study that eminent economists were responsible for what they really objected to, and hence the A widespread misunderstanding of their minds and characters. In fact, the founders of modern economics were almost all gentlemen, sympathetic men, and moved by human fervor.They are little concerned with acquiring wealth for themselves; they are much concerned with how widely distributed it is among the majority of the people.Antisocial monopolies, while powerful, are also against them. For several generations they supported the movement against class legislation which denied trade unions the privileges enjoyed by employers' bodies; or they supported the Factory Act despite the strenuous opposition of some politicians and employers who pretended to be in their name.Without exception, they are committed to the belief that the welfare of the people as a whole should be the ultimate aim of all private endeavors and public policies. But they were strong in courage and prudence, and they appeared cool because they did not want to take the responsibility of advocating haste down the untrodden road, the only guarantee of safety of which is the human race. With the hope of faith, their imagination is fertile, but neither limited by knowledge nor disciplined by hard thought. Their caution may have been a little too much: for even the great prescient were in some respects narrower in scope than many learned men are now; is generally considered to be an important fact in the social sciences.Economists, therefore, are now known to take a farther and more hopeful view of the possibilities of human progress.They have come to believe that the human will, if directed by careful thought, can alter circumstances so much as to alter character; living conditions.It is their duty now, as it was then, to oppose all plausible shortcuts to this great end which destroy the wellsprings of human energy and creativity. Property rights, as they are now, are not respected by those who founded economics; but those who assert acquired rights as extreme and anti-social use mistakenly refer to the authority of economics as Self-proclaimed.We should note, therefore, that the tendency of careful economic research is not to ground the rights of private property on any abstract principle, but on the observation that: Private property rights have in the past been inseparable from real progress; therefore, it is the business of responsible men to proceed cautiously and tentatively to abolish or change even those rights which seem inappropriate to the ideal conditions of social life.