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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 Science of the Lower Side of Human Nature

This chapter on the definitions of economics as a science of wealth cannot close without taking account of the stigma which has persistently clung to economics, and for which these definitions of the subject in terms of wealth must bear a major share of responsibility. Well over a century ago, Bailey discussed the popular view that economics is “a mean, degrading, sordid inquiry.”77 Economists have shrugged off somewhat uneasily Carlyle’s contemptuous description of their subject as a “pig–science.” But economists themselves, especially by conceiving of their subject as a science of wealth, have clearly laid themselves open to such criticisms. From the start an economics centered around wealth had to contend with a climate of opinion in which the so–called “economic virtues” had long been held in moral disrepute.78

By the close of the main period of classical economics, leading writers on the subject found it necessary again and again to defend the ethical standing of their discipline against its detractors.79 Economists of the 1830’s and 1840’s refuted the criticisms levelled against their moral status with indignation, with ridicule, or with disdain. The unworthiness of political economy in public opinion stemmed directly from its explicit preoccupation with so degrading a subject matter as wealth. All the depravities that moralists throughout the centuries have ascribed to wealth became naturally attached to the science of wealth.

The defenses raised by some of the economic apologists against those strictures are revealing. A popular argument that was used did not attempt to deny the possible immoral associations of wealth. But then, the argument ran, political economy must be studied all the more diligently in order to know how to avoid wealth!80

Nevertheless, despite rather extensive apologetics on the part of these writers, the observer may be excused if he gains the impression that many economists themselves were not altogether convinced by these discussions. If they did not consider their subject as actually a degraded one, they very certainly did consider it as concerned chiefly with the lower and seamier side of human nature. R. Jennings, one of the “precursors” of subjectivism in economics, painted a highly repulsive picture of the motives with which economics is concerned. Writing in 1855, he announced that “Political Economy treats only of those human susceptibilities and appetences which are similar or analogous to those...in the brute creation;...it never attempts to enter those higher paths of human conduct which are guided by morality, or by religion.”81

Among later writers, especially those who favored the hedonistic view of economics, a similar opinion prevailed. Economists displayed a sense of moral inferiority towards the votaries of the “higher,” less mundane branches of knowledge. Bagehot speaks of other studies “which are much higher, for they are concerned with things much nobler than wealth or money.”82 Jevons wrote: “My present purpose is accomplished in...assigning a proper place to the pleasures and pains with which the Economist deals. It is the lowest rank of feelings which we treat...” Edgeworth considered economics as “dealing with the lower elements of human nature.”83 It comes as no surprise to find Jevons hopefully writing that he does “not despair” of “tracing the action of the postulates of political economy” among dogs and other more intelligent animals.84

The whole literature on the “lower” side of human nature with which economics was held to be concerned provides a commentary on the wealth-bound conception of the subject.85 The foremost characteristic of this type of definition is that it associates economic activity with a specific type of ends. Of the many goals of human endeavor, one, that known as wealth, is singled out as the subject of economics. Grant that wealth ministers, or at least ministers chiefly, to physical wants, and the sordidness of economic phenomena is well established. It was only in the twentieth century that the need for the ethical insulation of economics became widely recognized, so that the identification of the subject with any one type of end has receded from fashion.

3

The Science of Avarice; Getting the Most for the Least

In the past economists have often been attacked on the grounds that their theories only applied to selfish people; such attacks were brushed aside as absurd. But they were not absurd...

I. M. D. Little

The bottle of medicine for a dying child, or of wine for himself; the tools for his trade; the supplies for a home for the aged, bought as a contribution to the home from a future inmate—all are bought with the same end of getting the most for the least, whatever the motive for the purchase may be.

J. Viner

In the present chapter a number of types of definitions are grouped together by virtue of their possession of either of two special characteristics. These definitions either see economic activity as being essentially motivated by pecuniary self-interest or they see it as conforming to a pattern of behavior prescribed by the so-called “economic principle.” These two points of view and the postulation of a common starting point for both require some elaboration.

[[77]]S. Bailey, “On the Science of Political Economy,” in his Discourses on Various Subjects Read Before Literary and Philosophical Societies (London, 1852), p. 125. This essay was written about 1835.

[[78]]On the disrepute in which the “economic virtues” had been held, see, e.g., R. H. Tawney, Religion and the Rise of Capitalism (London, 1926), ch. IV.

[[79]]In his Inquiry into the Various Systems of Political Economy (translated by D. Boileau, New York, 1812), Ganilh devoted some thirty pages to a survey of classical and modern civilizations, attempting to show that in the latter the desire for wealth bears no similarity to its objectionable counterpart in the former.

[[80]]See R. Whately, Introductory Lectures on Political Economy (4th ed.; London, 1855), p. 25; M. Longfield, Lectures on Political Economy (Dublin, 1834), p. 3.

[[81]]R. Jennings, Natural Elements of Political Economy (London, 1855), p. 41.

[[82]]W. Bagehot, Works (Hartford, 1889), V, 224.

[[83]]See W. S. Jevons, The Theory of Political Economy (1871); (4th ed.; London: Macmillan & Co., 1911), p. 26; F. Y. Edgeworth, Mathematical Psychics (London, 1881), pp. 52–53.

[[84]]See W. S. Jevons, “Future of Political Economy,” reprinted in Principles of Economics and Other Papers, pp. 197–199.

[[85]]See F. A. Hayek, The Road to Serfdom (Chicago, 1956), pp. 88–89, for an interesting commentary on the possible sinister consequences of the belief that economic affairs pertain to the more sordid sides of life.