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Kirzner defines economics as the reconciliation of conflicting ends given the existence of inescapable scarcity (1960)

The Austrian economist Israel Kirzner (b. 1930) argues that to understand economics as the investigation of a particular aspect of society, such as wealth or welfare, is mistaken. Rather it is the study of much more general and abstract matters such as conflicting ends and the inescapable scarcity of means:

Fraser has classified definitions of economics into Type A definitions and Type B definitions. Type A definitions consider economics as investigating a particular department of affairs, while Type B definitions see it as concerned with a particular aspect of affairs in general. The specific department singled out by Type A definitions has usually been wealth or material welfare. The aspect referred to in Type B definitions is the constraint that social phenomena uniformly reveal in the necessity to reconcile numerous conflicting ends under the shadow of an inescapable scarcity of means….

[In recent decades there has been a] trend away from the association of economics with specific “ends” or a specific department of human affairs. In this development the work of [Lionel] Robbins has been consistently pursued to what appears to the writer to be the most adequate solution of the problem…. [T]he contributions of several eminent economists, including Mises and Knight… [called the praxeological outlook]… has a significance that, in the writer’s opinion, has not been sufficiently recognized because it has not yet been brought into historical perspective.

Fraser has classified definitions of economics into Type A definitions and Type B definitions. Type A definitions consider economics as investigating a particular department of affairs, while Type B definitions see it as concerned with a particular aspect of affairs in general. The specific department singled out by Type A definitions has usually been wealth or material welfare. The aspect referred to in Type B definitions is the constraint that social phenomena uniformly reveal in the necessity to reconcile numerous conflicting ends under the shadow of an inescapable scarcity of means.

During the twentieth century two distinct trends are visible in the definitions of the economic point of view. On the one hand, a transition from Type A to Type B definitions has been vigorously carried forward. On the other hand, there has been a pronounced movement toward the denial of any distinctly economic point of view whatsoever, and the consequent conviction that all attempts to present such a point of view with clarity must be a waste of time.

It will be seen in subsequent chapters that the classification of definitions of the economic point of view into Types A and B is far from an exhaustive one. The voluminous literature since the turn of the century dealing with the problem of definition reveals, indeed, the entire range of formulations that are discussed in this essay. Nevertheless, it remains true that the most outstanding development in the history of the problem is the switch from the search for a department of human affairs to which the adjective “economic” applies, to the search for the appropriate aspect of affairs in which economic concepts are of relevance. (It should be noticed that almost all the numerous formulations of the specific point of view of economic science are considered by their authors, not as describing a new science, but as offering a more consistent characterization of the existing discipline.) The emergence of the Type B definitions is reflected in a considerable body of literature on the continent as well as in the English–speaking countries. Type A definitions are treated in the second chapter of this essay, and the transition to Type B definitions is traced in the sixth chapter. Type B definitions are associated especially with the name of Professor Robbins, whose work of 1930 has had an outstandingly stimulating effect on all subsequent discussions.

The final chapter of this essay traces the further development, in recent decades, of this trend away from the association of economics with specific “ends” or a specific department of human affairs. In this development the work of Robbins has been consistently pursued to what appears to the writer to be the most adequate solution of the problem. The developments described in this final chapter are made up of the contributions of several eminent economists, including Mises and Knight. These writers in no way constitute a “school,” and although in this essay the developments of the final chapter are described as “praxeological” (following Mises’ terminology), it is not to be understood that all the writers cited in that chapter fully subscribe to what is here called the praxeological outlook. It is maintained, however, that the consistent and refined development of the ideas first brought to a focus in the Type B definition constitutes a distinct contribution to the history of the problem. The path–breaking work of Mises in this regard has a significance that, in the writer’s opinion, has not been sufficiently recognized because it has not yet been brought into historical perspective.

About this Quotation:

2010 is the 50th anniversary of the publication of this path-breaking book by Israel Kirzner on The Economic point of View (1960). Kirzner was a student of the great Austrian economist Ludwig von Mises and he brings to the study of what economics actually is a much needed historical perspective. By examining the evolution of what economists thought they were studying he is able to show what was far too often a certain narrowness of perspective, focusing on a single issue such as wealth, trade, or welfare. The great insight of the Lionel Robbins in England and Ludwig von Mises in Austria and then America was the need to make the discipline of economics much more abstract and general by focusing on the nature of human action itself in order to understand the deeper reasons for exchange in a world of inevitable scarcity.

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