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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 “Economic Impulse”

These discussions of the significance, for the understanding of economic phenomena, of such concepts as the pursuit of wealth or the maximization of want-satisfaction invite a brief digression on the idea of a specifically economic motive or impulse. It is clear that the meaning, if any, that is to be attached to such an expression depends on the view taken of economic activity generally. For example, if the view mentioned in the previous chapter is accepted, according to which economic activity is concerned with the sustenance of human life, then the urge for self-preservation may fairly be understood as the economic impulse.24

What makes the question of the meaning of the economic motive especially relevant to the present chapter is that the developments that have been discussed in the conception of economic activity point for the first time to the possibility that no such economic drive may in fact exist. So long as an objective entity—viz., wealth or economic welfare—is singled out as the phenomenon of interest to the economist, as it was in the definitions considered in the previous chapter, then, of course, the concept of an economic motive is meaningful in terms of a drive towards this objective entity. And when economics is understood, as it has been in definitions considered in the present chapter, as examining the phenomena that are attendant upon the activities of man in so far as he is in pursuit of a definite end, viz., wealth, then the economic impulse emerges as the very focus of the economists’ interest. But when the pattern of human activity aimed at maximizing want-satisfaction is made central to economics and the idea of wealth is quietly discarded, then the nature of any economic motive becomes highly problematical.25

The specificity of any one human drive depends on the uniqueness of the end that stimulates and activates it. The most conspicuous feature of the earlier definitions of economics was their identification of the subject with an allegedly unique category of ends, viz., wealth. And it was this association that gave plausibility to the concept of an economic motive. With the recognition that the ends embodied in wealth are as heterogeneous as human wants themselves, the significance of the concept of wealth as a criterion for defining the nature of economic activity declined. Thus, with the progress seen in the present chapter from an economics analyzing human avarice towards an economics analyzing the maximization pattern of human behavior, the notion of a specifically economic impulse fell under a shadow.

In a later chapter it will be seen that a large group of economists who, with Robbins, see the essence of economic activity in the economizing of scarce means consider a major contribution of this conception of economics to be its explosion of the notion of specifically “economic” ends and motives. The idea of an economic motive still has, to be sure, considerable popularity. One recent writer has seen in “acquisitive drives” one of the really significant aspects of behavior in modern economy.26 But the difficulties surrounding the singling out of wealth as a distinct end of human activity were exposed already in the middle of the last century. We have noticed in the previous chapter that Cliffe Leslie, in an influential essay, vigorously attacked the idea of wealth as a unique end. Leslie’s criticisms were aimed at the classical conception of the character of economic activity, especially as embodied in the construction of an economic man. Leslie’s recognition of the multiplicity of motives actuating the quest for wealth impelled him to urge upon economists a more historically oriented and less abstract and deductive methodology. A similar impulse lies behind a remark of Roscher, one of the leaders of the “older” German Historical School in economics. Roscher describes the change in economics since the era of the classical economists as consisting in the investigation of man in the economic sphere of life, instead of the earlier analysis of economic man.27

Thus, the attack on the isolation of any specifically economic motive came from both directions. On the one hand, the theorists were finding it unnecessary to invest wealth with any special role; it was sufficient for analysis to introduce a specific type of human behavior aiming at maximization. On the other hand, the historically-minded economists, interested in the “full reality” of economic phenomena, were finding that it was a misleading over-simplification to see the motive of economic activity in the desire for wealth and were probing into the many and diverse impulses that together constitute the pursuit of wealth.

The most decisive rejection of the notion of any economic motive was contained in Wicksteed’s writings. He terms the concept “a false category” and “one of the most dangerous and indeed disastrous confusions that obstruct the progress of Economics.” The desire for wealth reflects “all the motives and passions that actuate the human breast”; and if, by way of precaution, altruistic motives are excluded by the economist in his study, only self-regarding activity being recognized, then clearly the desire to possess wealth is no longer being treated as the “motive” at all.28

There is one possibility of salvaging the economic motive that remains to be considered. Even when the essence of economic activity is seen in the special maximization pattern of behavior, i.e., in the activity of securing “the most for the least,” it remains a question whether such behavior may not still be regarded as an end in itself in spite of the multiplicity of ends that this type of activity may promote. The rejection of the idea of a specifically economic motive, once the paramount position is given to a “most-for-the-least” pattern of behavior, stems primarily from the fact that this pattern of behavior occurs in areas in which radically different types of motives are at work. It is for this reason that, as we have seen, many writers have sought some other criterion for the delimitation of the economic domain.29 The very fact that the distinctive feature of behavior characterized by maximization consists in its neutrality in regard to motives prevented its wide acceptance as a criterion for economics. The possibility now to be considered is that, despite its neutrality in regard to the motives actuating it, the very activity of maximization carves out a separate niche for itself in human affairs because it satisfies a self-sufficient human urge.

This possibility does not seem to have occurred to any of the nineteenth-century writers who discussed the maximization principle. But several more recent writers have laid stress on this newly isolated “end,” especially in connection with the means-ends conception of economics that, as will be seen in a later chapter, was developed from the “most-for-the-least” approach. Viner seems to have this idea in view when he declares the ends of economic man to be simple enough for inductive investigation:

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.30

More recently a passage from Boulding typifies the use of this idea as a means of contrasting “the cold, calculating type of behavior” of economic man with the warmth and impulsiveness of romantic, heroic, and visionary natures.31 Clearly this type of contrast tends to run counter to the opinion, previously cited, that the calculation-conscious behavior characteristic of maximization is relevant to all departments of human affairs. This, however, involves the entire problem of the place of the assumption of rationality in economic theory, which belongs in a different chapter. At this point the relevant concept is not the plausibility of that assumption, but rather the recognition, in the activity of getting the most for the least, of an element that makes activity tend to be worthwhile for its own sake, regardless of the further ends that it may serve.

This recognition has been most vigorously accorded in the writings of Macfie. In a book devoted to the isolation and scrutiny of this element in economic activity, Macfie has elevated “economy” into a value with intrinsic appeal to the human capacity for reverence.32 Such a position, if accepted, would clear the way for the retention of the maximization principle in the definition of economic activity. As Macfie himself stresses, any such recognition of the value-laden qualities of economy would, by attaching a specific end to economic activity, convert economics once again into an “ethical” discipline, which it had escaped being when previously defined in terms of the maximization principle. In any survey of what has been understood by the term “economic impulse,” Macfie’s contribution has earned a distinguished place.

[[24]]See, however, K. Kautsky, Die materialistische Geschichtsauffassung (Berlin, 1927), I, 3–6, for the denial of this.

[[25]]Of course, where maximization is itself expressed in terms of wealth, it leads back to the old notion of a specifically economic impulse (see, e.g., B. M. Anderson, Social Value [Cambridge, 1911], pp. 144–145).

[[26]]James S. Early, “The Growth and Breadth of Theoretical Economics,” in Economic Theory in Review, ed. C. L. Christenson (Indiana University, 1949) p. 13.

[[27]]W. Roscher, Geschichte der National-Oekonomik in Deutschland (Munich, 1874), p. 1033.

[[28]]P. Wicksteed, Common Sense of Political Economy, ed. Robbins, I, 163–165. For some later views on the subject see Z. Clark Dickinson, “The Relations of Recent Psychological Developments to Economic Theory,” Quarterly Journal of Economics, May, 1919, p. 388; see also his book Economic Motives (Harvard, 1922); T. Parsons, “The Motivation of Economic Activities,” Canadian Journal of Economics and Political Science (1940).

[[29]]Among the writers who rejected the economic principle as a means of definition of the economic point of view, see especially the discussion by Oswalt of a paper by Voigt in Verhandlungen des ersten Deutschen Soziologentages, published in Schriften der Deutschen Gesellschaft fur Soziologie, 1911, p. 270; H. Halberstaedter, Die Problematik des wirtschaftlichen Prinzips (1925), p. 76; F. Zweig, Economics and Technology (London, 1936), p. 19. Compare also P. Wicksteed, The Common Sense of Political Economy, ed. Robbins, I, 159 f.

[[30]]J. Viner, “Some Problems of Logical Method in Political Economy,” Journal of Political Economy, March, 1917, (Copyright 1917 by the University of Chicago), p. 248.

[[31]]K. E. Boulding, The Skills of the Economist (Cleveland: Howard Allen, 1958), p. 179.

[[32]]A. L. Macfie, An Essay on Economy and Value (London, 1936). For further discussion of Macfie's position, see chapter VI of this essay.