Chapter IV: The Nature of Ecnomic Generalisations

CHAPTER IV THE NATURE OP ECONOMIC GENERALISATIONS 1. WE have now sufficiently discussed the subjectmatter of Economics and the fundamental conceptions associated therewith. But we have not yet discussed the nature of the generalisations whereby these conceptions are related. We have not yet discussed the nature and derivation of economic laws. This, therefore, is the purpose of the present chapter. When it is completed we shall be in a position to proceed to our second main task—investigation of the limitations and significance of this system of generalisations. 2. It is the object of this essay to arrive at conclusions which are based on the inspection of Economic Science as it actually exists. Its aim is not to discover how Economics should be pursued—that controversy, although we shall have occasion to refer to it en passant,1 may be regarded as settled as between reasonable people—but rather what significance is to be attached to the results which it has already achieved. It will be convenient, therefore, at the outset of our investigations, if, instead of attempting to derive the nature of economic generalisations from the pure categories of our subject1 See below, Seotion 4, and Chapter V., Section 3.

72 iv NATURE OF ECONOMIC GENERALISATIONS 73 matter,1 we proceed rather by examining specimens drawn from the existing body of analysis. The most fundamental propositions of economic analysis are the propositions of the general theory of value. No matter what particular "school" is in question, no matter what arrangement of subjectmatter is adopted, the body of propositions explaining the nature and the determination of the relation between given goods of the first order will be found to have a pivotal position in the whole system. It would be premature to say that the theory of this part of the subject is complete. But it is clear that enough has been done to warrant our taking the central propositions as established. We may proceed, therefore, to inquire on what their validity depends. It should not be necessary to spend much time showing that it cannot rest upon a mere appeal to "History". The frequent concomitance of certain phenomena in time may suggest a problem to be solved.