Chapter 59 APPENDIX III SCOPE AND METHODS IN ECONOMICS

Section 1 A unified social science is within reach.The value of Comte's suggestion, the weakness of his reproach.Some, like Comte, believe that any useful study of human social behavior is as broad in scope as the social sciences as a whole.They believed that the various aspects of social life were so closely connected that the study of any one of them alone must be futile; they urged economists to abandon the study of economics and devote themselves to the common development of a unified all-encompassing social science.But the range of human social behavior is too vast and complex to be analyzed and explained by a single science.Comte himself and Spencer had engaged in this work with incomparable knowledge and genius.With their extensive research and constructive ideas they opened up a new era of thought; but they could hardly even be said to have taken the first step in the establishment of a unified social science.

While the brilliant and impetuous Greek geniuses insisted on seeking a single basis for explaining all natural phenomena, natural science progressed slowly; modern natural science has made great strides by breaking up broad problems into several constituent parts. part.Undoubtedly, there is a unity which underlies all the forces of nature; but any progress in the discovery of this unity depends as much on occasional observations of the whole sphere of nature as on persistent Knowledge acquired in Yu's specialized studies.Adding to the material which makes it possible for posterity to understand better than we do the factors which govern the development of social organization will require equally patient and careful research.

But on the other hand, Comte's view must also be fully recognized that even in the natural sciences, those who specialize in a certain field are also obliged to maintain constant contact with those who are engaged in similar fields.Those specialists who never look beyond their sphere tend to see affairs out of proportion to reality; much of the knowledge they gather is relatively insignificant; lose their meaning and are replaced by new questions posed by new points of view; they do not get the insights that various scientific advances offer by comparing phenomena around them.One of Comte's great merits, then, is his insistence that the unity of social phenomena necessarily renders the work of specialists in the social sciences even more futile than that of specialists in the natural sciences.While acknowledging this, Mill went on to say that "a person who knows nothing about other things is probably not a good economist. Various social phenomena interact with each other, and if they are isolated, they cannot be understood correctly; but It is by no means to say that the phenomenon of social material industry itself is incapable of useful generalizations, but only that these generalizations are bound to be related to a certain form of civilization and a certain stage of social development".

Section II Methods of Economics, Physics and Biology. Indeed, the factors discussed in economics have the advantage of using the deductive method, that is, their method of combination is, as Mill says, mechanical rather than chemical.That is to say, when we know the effects of two economic factors separately (for example, an increase in the wage rate and a decrease in the degree of difficulty of work in a certain industry will affect the labor supply of the industry respectively), we can roughly predict their combined effect , without waiting for it to appear. But even in mechanics, tedious deductive reasoning is directly applicable only to phenomena occurring in the laboratory.These reasonings alone are insufficient to deal with the jagged material and the intricate and capricious combination of factors in the real world.They must therefore be supplemented by concrete experience and employed (and often of a secondary importance) in conjunction with the constant study of new material and the constant search for new generalizations.The engineer, for example, can calculate with considerable accuracy the angle at which an armored ship will become destabilized in still water; but before he anticipates what will happen to the ship in a storm, he will use the observations of experienced Observed its motion; the factors which economics must take into account are more numerous, less definite, less perceptible, and more varied in nature than mechanical forces; and the material upon which they act is more variable, Uniformity is less.Moreover, there are occasions in which the combination of economic factors is more arbitrarily chemical than purely mechanical, and these are neither extremely rare nor insignificant.For example, a slight increase in someone's income will generally cause him to buy more things in various ways.But a lot more income, probably changing his habits, maybe boosting his self-esteem, making him dislike certain things altogether.The passing of a fashion from high society to low society can cause it to become extinct in high society.In the second place, our sympathy for the poor may lead us to give generously, or to do away with certain forms of charity altogether.

Finally, the pharmacist studies things that are always the same, while economics, like biology, studies things that are by their nature constantly changing both in internal structure and in appearance.The pharmacist's predictions are all based on the implicit assumption that the reagent used is the proper reagent, or at least that the impurities in it are negligible.But even for him, when dealing with people, it is difficult to make much progress without specific experience.He relies chiefly on being told how the new drug affects healthy people, and how it affects people with a certain disease; In terms of new combination with other medicines, unexpected results can also be found.

If we look at the history of such serious economic relations as commercial credit and banks, trade unions and cooperatives, we see that modes of working that were largely successful in one time and place were completely successful in another. Failed.This distinction can sometimes be attributed simply to differences in culture or morality and mutual trust; but such explanations are more difficult.At one time and one place men will rely too much on one another, and sacrifice themselves for the common good, but only in certain respects; and at another time and place there will be the same restrictions, but in a different direction; Limit the scope of economic reasoning.

For the moment, the variability of the race is more important than the variability of the individual.Indeed, the change of personal character is partly arbitrary and partly routine.It is also true, for example, that the average age of workers involved in a labor dispute is an important factor in predicting the way it is used.But generally speaking, since the young and the old, the hard-tempered and the depressed, are in about the same proportion at one time and one place as at another time and place, the characteristics of individual character and the differences of character Change, the general use of the deductive method, is less obstructive than it appears at first glance.Thus, through the patient study of nature and the advances in analysis, the action of laws invaded the two new fields of medicine and economics; Prediction, independent of concrete experience, has also become possible.

Section III Interpretation and prediction are the same process in opposite directions.Only an interpretation of past material based on a thorough analysis can serve as a reference for the future.It can be seen that the role of analysis and deduction in economics is not to forge a few long chains of reasoning, but to properly forge many short chains and basic links.But this is not an easy task either.If an economist engages in careless and hasty reasoning, he can easily make bad connections everywhere in his work.He needs to make careful use of analysis and reasoning, because only by means of them can he select the correct material, properly classify it, and make it informative in thought and instructive in practice; It is built on the basis of induction, so every induction process must include analysis and reasoning.In other words, explaining the past and predicting the future are not two different things, but two opposite sides of the same thing, one going from effect to cause and the other from cause to effect.Himüller is right, "To gain knowledge of the individual causes we need induction, whose final conclusion is nothing but the inversion of the syllogism employed by the deductive method...  

Both inductive and deductive methods are based on the same tendencies, the same beliefs, and the same demands on our reason. " Only by discovering all the events that can affect an event and the manner in which each of these events affects it alone can we fully account for the event.If our analysis of any of these events or relations is incomplete, if our interpretations have a tendency to be wrong, inner inferences have been developed towards building up generalizations which, though plausible, are in fact wrong. And if our knowledge and analysis were perfect, we could infer the future almost as accurately as we could explain the past from the same knowledge, simply by reversing our thought processes.Accuracy of prediction and accuracy of interpretation make a big difference only when we go beyond the first step; for any error made in the first step of prediction will accumulate and and in explaining the past, errors are not likely to accumulate easily; for observation or recorded history can be re-examined at every step.The same process of induction and deduction can be employed almost equally in explaining known events in history as in predicting unknown events.

It must never be forgotten, therefore, that observation or history, though they may tell us whether one event and another happened simultaneously or in succession, cannot tell us whether the first event was the cause of the second.The answer can be found only through reason acting on the material.When people say that an event in history teaches this or that, the totality of the circumstances that existed when the event occurred is never addressed.Some situations are implicitly (if not unconsciously) assumed to be irrelevant; this assumption may or may not be true in a given situation.Extensive experience and more careful investigation may prove that the causes which are supposed to have caused the event would not have probably produced it had it not been aided; Omitted for other reasons.

This difficulty has come to the fore in recent debates about contemporary events in our country.Whenever dissenting conclusions were drawn from these events, it was put to a referendum; different interpretations were proposed; new material was discovered; The opposite conclusions they draw. The analytical difficulties and need for analysis are compounded by the fact that no two economic events are identical in all respects.It is true, however, that two simple events may be very similar, that the terms of the tenancy of two farms may be determined by almost the same causes; Exact repetitions don't exist either.However similar two instances may be, we must decide whether the difference between them is negligible as practically insignificant; and this may not be easy, even though the instances refer to the same time and the same a place. If we are dealing with ancient materials, we must take into account those changes which at the same time touch the whole nature of economic life; however similar the present problem may be in appearance to another one contained in history, it is probable that further study will find them There is a fundamental difference in nature.Unless this is the case, no valid argument can be made from the former to the latter. Section 4 is often capable of extensive analysis with the aid of common sense, but it rarely finds unknown causes, especially causes of causes.Functions of a scientific machine.This brings us to consideration of the relationship between economics and ancient materials. The study of economic history has various purposes and correspondingly various methods.As a branch of general history, its purpose may be to help us understand "the social organization that has existed in various periods, the structure of various social classes and their interrelationships"; it may ask "what is the material basis of social life; The necessities and conveniences of life, such as how to produce them; what organization provides and directs labor; the goods thus produced, such as how to distribute; what is the system and distribution based on them” and so on. Interesting and important as it is in itself, this kind of work does not require a great deal of analysis; a studious person can provide for himself most of what is needed.An economic historian who is well versed in religious ethics, cultural arts, and socio-political conditions can expand the range of our knowledge and offer valuable new insights, even if he is content to observe near-surface approximations and causal relationships. But, unconsciously, his purpose must go beyond these limits, and seek to discover the bottom of economic history, to reveal the secrets of the rise and fall of customs, and to explain other inexplicable phenomena that are no longer considered to be endowed by nature.He probably doesn't shy away from drawing on the past to guide the present.Indeed, human reason does not like to leave gaps in its conception of the causality of events it encounters.Simply by arranging the material in a certain order and guarding against causality, consciously or unconsciously, the economic historian assumes the role of guide. For example, the introduction of long-term tenancies at fixed money rents in the north of England, followed by a great improvement in the agriculture and in the general condition of the native population; Study what other changes occurred at the same time.And to what extent this improvement is due to the various changes in it.For example, we must consider the impact of changes in the prices of agricultural products and the establishment of social order in the periphery.This requires caution and scientific method; unless this is the case, it is impossible to draw reliable conclusions about the general tendency of long-term tenancy.Even so, we cannot hold from this experience that long-term tenancies are now practiced in, say, Ireland, regardless of the qualitative difference between the domestic and foreign markets for various agricultural products, and possible changes in the production and sale of gold and silver, etc. Wait.The history of the use of land is full of archaic interest; and unless it is carefully analyzed and explained with the aid of economic theory, it cannot give a good account of what is the best form of land use which nations should now adopt.Some, for example, hold that private property in land is clearly an artificial transitional institution, since primitive societies generally possess the land in common; range, so, it is necessary for future progress.But to draw a real lesson on this subject from history, it is necessary to analyze the effects of past common land tenure, in order to discover to what extent each of them has always played the same role, and to what extent it has been influenced by human habit, knowledge, Changes in wealth and social organization. Even more interesting and instructive is the history of those claims of guilds and other trade associations and bodies in industry, domestic and foreign trade, that they used all their privileges for the public good.But to arrive at a complete judgment on this question, and above all to use it as our present reference, requires not only the rich knowledge and astute intuition of the experienced historian, but also a mastery of the aspects of monopoly, foreign trade, and taxation. many extremely difficult analyzes and theories. And if the purpose of the economic historian is to discover the dynamics of the world economic order, to learn from the past to guide the present, he should use methods that help him to separate the essential from the false and preserve the true from the false; he should find out the real causes of events. , and make it occupy a proper place; especially to find out the remote cause of the change. From a maritime point of view, battles with ancient weapons may have been of great interest to the general historian of the time; but they are of little importance to the command of a navy to-day, who has to deal with a war of an entirely different nature. .Therefore, as Captain Mahan said, today's naval command will pay more attention to the strategy of the past than to the tactics. He is not very concerned with the details of each specific campaign, but concerned with the practical application of those basic operational principles that make him It can command the whole army without losing the initiative it should have; maintain a wide range of flexibility, but still be able to quickly concentrate and break through a point with superior forces. In the same way, a person well acquainted with the general history of a certain time may give a vivid picture of the tactics employed in a certain battle, and this picture is true in its main outlines, if it is sometimes wrong, but generally; for the weapons are out of date, Most people don't copy tactics.But to understand the strategy of a campaign, to distinguish the real motives from the apparent motives of a general in the past, he must be a strategist himself.And if he is charged with giving (however humble) some of the lessons that strategists of today must learn from the campaigns he records; The help of the problematic man's writings must not be overlooked.As with naval history, so with economic history. Only recently, and largely due to the salutary influence of the criticism of the historical school, a distinction in economics has come to be noticed, which corresponds to the distinction between strategy and tactics in war.What amounts to tactics are the external configurations and accidents of economic organization, which depend on temporary or local tendencies, customs, and class relations; on individual influences; or on the means of production.What is equivalent to strategy is the more fundamental nature of economic organization, which depends mainly on the desires and activities, preferences and dislikes that everyone has.They are, it is true, neither uniform in form, nor even quite identical in substance; but they have an element of eternity and universality which suffices to render them general in some degree, by means of which certain The experience of one generation can illustrate the difficulties of another generation. This distinction is analogous to that used in economics using mechanical and biological analogies.Economists in the early nineteenth century did not fully appreciate it.Ricardo's writings also clearly lack this distinction.When attention is paid not to the principles underlying his method, but to the concrete conclusions he draws; when these conclusions are made into dogma and applied rigidly to a time and place different from his, no doubt they do great harm. Big.His thoughts were like sharp chisels, which could easily cut one's hand if one were not careful, because their handles were so clumsy. However, when modern economists reject the dross, extract the essence, oppose dogma, and develop the principles of analysis and reasoning, they discover that one has many and many has one.They knew, for example, that his principles for the analysis of ground-rent were inapplicable to much of what is commonly called ground-rent today, and to a large part of what medieval historians are often incorrectly describing as ground-rent.But the scope of application of the principle of ground rent is expanding, not shrinking.For economists also know that, with caution, it can be applied to many things at various stages of civilization which at first glance seem quite unlike rent. Of course, strategists cannot ignore tactics.Although man's limited lifespan precludes a detailed study of his tactics in each of his various struggles against economic difficulties, the knowledge of man's tactics and strategies for combating his difficulties in a particular age and in a particular country cannot be studied in detail. The combination of knowledge and research is probably not of great value to the research of various broad problems in economic strategy.In addition, each strategist should carefully study the details of certain specific issues based on personal observations, not necessarily for publication, but for training himself.And it helped him a great deal in interpreting and weighing what he got from books and newspapers, whether about present or past deeds.Of course, a thinking and observant person can always gain knowledge about his time and especially the economic material around him from conversation and contemporary literature.The material he has thus accumulated unconsciously is sometimes in some respects more vivid and complete than any other material on distant times and places which he has obtained from all the literature.Leaving this aside, a direct and serious study of the material, perhaps principally of his own time, would require far more time than a purely analytical and theoretical study of any serious economist; Is a person who values ​​ideas more than materials, even if he believes that, rather than collecting new materials, it is better to study ready-made materials, which is what we urgently need now, or to improve the tactics of people in fighting against difficulties. And strategy will help us a lot. The fifth section continues. Admittedly, much of this work requires less careful scientific method than tact, a sense of propriety, and a wealth of life experience.But on the other hand, many jobs would not be easily done without such machines.Natural instinct will rightly select and properly synthesize those matters pertaining to the problem in question; but it selects chiefly from familiar things; it seldom gives a man insight into the depths of his personal experience, or far beyond it. outside the range. It is also true in economics that those effects of known causes and those extremely obvious causes of known effects are generally not the most important. "Things that cannot be seen" are often more worthy of study than "things that can be seen".If we are not dealing with a question of merely partial or transitory interest, but seek guidance in formulating long-term policies for the general good; or if we consider for some other reason less the immediate cause and more the This is especially the case for many reasons.For experience shows that common sense and tact, as might be expected, are not sufficient for such work; Do, that too often does not make him successful.In order to do this, each has recourse to the powerful machine of ideas and knowledge gradually accumulated through the ages.For systematic scientific reasoning does indeed play in the production of knowledge what machinery does in the production of goods. When the same operation must be repeated in the same way, it is generally advantageous to construct a machine to do the work.Let the variation in the details of the work be so variable that the use of machinery is disadvantageous, and the goods must be produced by hand.In knowledge, too, if there is any process of inquiry or reasoning in which the same kind of work must be repeated in the same way, the process is reduced to a system, the methods of reasoning are organized, and general propositions are formulated for use as machines and machines for the processing of materials. A pair of pliers to hold them firmly in the working position is worth it.Even if economic and other causes are so intertwined that exact scientific reasoning is seldom of great help to the conclusions we seek, yet, so far as it can go, without its help, is stupid.This is as stupid as the extreme opposite assumption that science is omnipotent and that practical talents and common sense will be useless.No matter how rich an architect's knowledge of mechanics is, if his common sense is not rich and his aesthetic concept is not developed, he can only build a very unsightly house; If it is not stable, it means that something is wasted in the construction process.An uneducated Brindley may be better at some kind of engineering than a less witty but well-trained person; Certain aspects suggest a better diagnosis; but the engineer should not neglect the study of theoretical mechanics, nor should the physician neglect the study of physiology. For talent, like craft, lives and dies with its owner.But each generation's improvements to industrial machinery or scientific tools are passed on to subsequent generations.Now perhaps there is no engraver more capable than the one who built the Parthenon, no thinker more rational than Aristotle.But the development of the tools of thought, like the development of the tools of material production, is progressive. Regardless of the ideas embodied in scientific and artistic ideas or practical tools, they are the most "true" heritage passed down from generation to generation.If the material wealth of the world is destroyed, it will quickly be compensated if the ideas from which this wealth was produced are preserved.But if it is ideas rather than material wealth that are lost, this wealth will gradually disappear and the world will return to a state of poverty.If we lose most of our knowledge of purely factual material, but retain constructive ideas, we will quickly regain this knowledge; and if ideas disappear, the world will inevitably return to the dark ages.Thus, the pursuit of ideas is not strictly speaking less "real" work than the collection of materials; That kind of research at school (realSchulen).The study of any branch of the broad field of economics in which the collection of material and the analysis and conception of its connection are fitted in such proportions as are believed to be most conducive to the advancement of knowledge and the development of that particular branch, such Research, in the strict sense of the word, is the most "real."As for what such a ratio is, it cannot be decided arbitrarily, but can only be resolved by painstaking research and specific experience. The sixth section continues. Economics has made more progress than any other social science because it has been more precise than the other social sciences.But every enlargement of the scope of economics always entails a loss of this scientific precision.And the question of whether this loss is greater or less than the benefit resulting from the expansion of the scope cannot be rigidly determined. There is a wide range of controversy in which economic questions are of great but not exclusive importance; and every economist is entitled to decide for himself, reasonably, how far within this range he will explore.The farther he moves from his stronghold, and the more he considers conditions of life and motives of action which cannot at least to some extent be brought into the scientific method, the less confidence he can argue.Whenever he is engaged in the study of living conditions and motives, and their manifestations cannot be reduced to definite standards, he must not rely on the observations and thoughts of other scholars, ancient and modern, at home and abroad; he must rely mainly on his own intuition and speculation. ; he must speak with that humility of personal judgment.But if he proceeds carefully and fully realizes the limitations of his work in the outlying areas of social research, he will make a great contribution.