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• Foreword
• Introduction to the Second Edition
• Author’s Preface
• Acknowledgments
• 1: On Defining the Economic Point of View
• The Economic Point of View and the Scope of Economics
• The Multitude of Economic Points of View
• The Controversy Over the Utility of Definition
• An Interpretation of the Controversy
• The Economists and Their Definitions: the Classical Economists
• The Economic Point of View: the Background of the “methodenstreit”
• Twentieth–century Economic Points of View
• 2: The Science of Wealth and Welfare
• The Emergence of Political Economy As the Science of Wealth
• The Science of Material Wealth
• The Science of Subsistence
• The Science of Wealth Retained
• Man Against Nature
• From Wealth to Welfare
• The Science of the Lower Side of Human Nature
• 3: The Science of Avarice; Getting the Most For the Least
• The Science of Avarice
• The Economic Principle
• The “economic Impulse”
• Selfishness and “non-tuism”
• Economics and Mechanics
• 4: Economics, the Market, and Society
• Economics and Catallactics
• Exchange and the Propensity to Truck
• Exchange and the Division of Labor
• The “purely Formal” Concept of Exchange
• Exchange and the Economic System
• Economics, the Economy, and the “volkswirtschaft”
• Economy and Society
• 5: Economic Affairs, Money, and Measurement
• Money, Wealth, and Exchanges
• Money As the Measuring Rod
• Money As a Universal Measuring Rod
• Measurement and Economics
• Money and Price-economics
• Money As an Economic Institution
• 6: Economics and Economizing
• The Economics of Professor Robbins
• Scarcity and Economics
• Economizing and Maximization
• The Character of Robbins' Definition
• A. the “breadth” of Robbins' Definition
• B. the “formalism” of Robbins' Definition
• The Nature of Ends and Means
• “given” Ends and Means
• Single End and Multiple Ends
• Economics and Ethics: the Positive and the Normative
• The Nature of Economic Science and the Significance of Macroeconomics
• 7: Economics As a Science of Human Action
• I
• The Sciences of Human Action
• The Emergence of the Praxeological View of Economics
• Max Weber and Human Action
• Acting Man and Economizing Man: Mises and Robbins
• Ii
• Praxeology and Purpose
• Praxeology and Rationality
• The Assumption of Constant Wants—the Praxeological Context
• Praxeology, Apriorism, and Operationalism
• The Economic Point of View and Praxeology

The Controversy Over the Utility of Definition

As we shall discover, a number of sharply contradictory opinions have been expressed on the usefulness of undertaking the careful definition of the economic point of view or of the nature of the subject matter of economic theory. To those who have considered such a task as significant, its fulfilment represents in itself a distinct scientific achievement. On the other hand, many writers have been at pains to disassociate themselves from an undertaking whose accomplishment seems, in their opinion, to possess no scientific value in itself nor to promise any fruitful results for further work. This book will deal in some detail with many more or less careful attempts at such a definition; and it is only proper to pause to consider the question whether these attempts were potentially fruitful or were by their very character necessarily doomed to be wordy disquisitions, fertile in nothing but the stimulation of sterile controversies.

Among those considering any search for a precise definition of the economic point of view to be a barren enterprise, we find Pareto, Myrdal, and Hutchison.9 Pareto denied that there is objectively an economic phenomenon and considered it therefore “a waste of time to investigate what it may be,” since only a manmade distinction is in question. Myrdal, writing some thirty years later, voiced a closely similar view. A definition of economics can only be a search for arbitrarily drawn boundary lines. “Economics,” in Myrdal’s view, is the only term regarding the precise definition of which the economist need not be concerned; nothing in economic science depends upon it. Hutchison has flatly declared that “the actual assignment of a definition to the word ‘Economics’ does not appear to solve, or even help in the solution of, any useful scientific problem whatsoever.” These pronouncements seem typical of what one writer has noticed as a widespread impression that the discussions concerning the nature and scope of economics “are merely an endless and useless logomachy.”10

But the contrary opinion has been repeatedly expounded. The very voluminous literature on defining economic theory, including the works of the most illustrious masters of the science, constitutes in itself a formidable monument to this position.11 Robbins especially has several times vigorously denied that it is a waste of time to attempt a precise delimitation of the field. It is, on the contrary, a “waste of time not to do so.”12 The science has developed to the point where further progress can take place only if the objective is clearly indicated; where problems are suggested only by “gaps in the unity of theory.” Knight has referred to the delimitation of the nature and content of value theory as “perhaps the ultimate conceptual problem in economics.”13 Macfie, among others, has pointed out the harm that can be done by a lack of a clear–cut definition; more especially he has stressed the distortion that a faulty definition could introduce into the character of the science.14

For the appreciation of the historical trend to the investigation of which this essay is devoted, it is important to understand the nature of this sharp divergence of views concerning the usefulness of a precise definition of the economic point of view. It is possible to interpret the disagreement as merely the expression of different attitudes towards the utility of expending energy in discussing the nature of economics, as compared with that of the effort devoted to the actual increase of our stock of economic knowledge. Numerous justifications for merely perfunctory attempts to provide a definition of the economic point of view do, in fact, stress the great difficulty of the undertaking, in conjunction with its alleged lack of importance for the work of the economist.15 The disagreement might thus be understood as simply reflecting differing estimates of the worthwhileness of the alternatives costs involved in achieving intellectual tidiness in the systematic exposition of the science. But such an interpretation would be a superficial one and would ignore the most significant aspect of the controversy.

[[9]]For Pareto's views on the usefulness of defining economic affairs, see the translation of his paper “On the Economic Phenomenon” (first published in Giornale degli economisti, 1900, II, 139–162) in International Economic Papers, No. 3, p. 194. See also V. Pareto, “L'économie et la sociologie au point de vue scientifique,” Rivista di scienza, 1907, p. 294. Myrdal's views are expressed in his The Political Element in the Development of Economic Theory (Harvard, 1954), pp. 154–155; for those of Hutchison see his The Significance and Basic Postulates of Economic Theory (London: Macmillan & Co., 1938), p. 53.

[[10]]G. Tagliacozzo, “Croce and the Nature of Economic Science,” Quarterly Journal of Economics, Vol. LIX, No. 3 (May, 1945), p. 308.

[[11]]For examples of earlier views recognizing the importance of an adequate definition of economic affairs, see E. de Laveleye, “Les lois naturelles et l'objet de l'économie politique,” Journal des économistes, April, 1883, p. 92; S. Patten, “The Scope of Political Economy,” The Yale Review, November, 1893, reprinted in S. Patten, Essays in Economic Theory (New York, 1924), p. 178.

[[12]]L. Robbins, An Essay on the Nature and Significance of Economic Science (2nd ed.; London: Macmillan & Co., 1935), p. 3. Robbins put forward the same view, as well as the suggestion for a history of the stream of thought leading up to modern definitions, in his Introduction to Wicksteed's The Common Sense of Political Economy (London, 1933), I, xxii. See also L. Robbins, “Live and Dead Issues in the Methodology of Economics,” Economica, August, 1938, p. 344, for an acknowledgment of the minor importance of the precise wording in the expression of the (correct) definition.

[[13]]F. H. Knight, review of L. Mises, Nationalökonomie, in Economica, 1941, p. 410 n.

[[14]]A. L. Macfie, An Essay on Economy and Value (London, 1936), pp. 2–3.

[[15]]For examples of economists convinced of the insuperable difficulty of achieving a determinate definition of economic affairs, see P. T. Homan, “Issues in Economic Theory, an Attempt to Clarify,” Quarterly Journal of Economics, May, 1928, pp. 349, 364; F. St. Leger Daly, “The Scope and Method of Economics,” The Canadian Journal of Economics and Political Science, May, 1945, p. 169.