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The Economic Point of View: An Essay in the History of Economic Thought; Kirzner, Israel M.
19 paragraphs found.

The American Economic Association (for permission to quote from their publications, including the Survey of Contemporary Economics, 1949); George Allen and Unwin Ltd. (for permission to quote from N. Senior, Outline of Political Economy, and J. Bentham, Economic Writings, edited by Stark); Jonathan Cape Limited (for permission to quote from L. Mises, Socialism, and L. Robbins, The Economic Causes of War); Columbia University Press (for permission to quote from E.R.A. Seligman, Economic Interpretation of History, 1902, and from Political Science Quarterly, 1901); the editorial Board of Economica (for permission to quote from Economics, 1933, 1941); the editor of the Economic Record and the Melbourne University Press (for permission to quote from the Economic Record, No. 61, November, 1955); The Free Press (for permission to quote from Max Weber on the Methodology of the Social Sciences); Harper and Brothers (for permission to quote from F. H. Knight, The Ethics of Competition); Harvard University Press (for permission to quote from the Quarterly Journal of Economics and from H. Myint, Theories of Welfare Economics, 1948); William Hodge and Co. Ltd. (for permission to quote from Max Weber, Theories of Social and Economic Organization); Howard Allen, Inc. (for permission to quote from K. Boulding, The Skills of the Economist); Richard D. Irwin, Inc. (for permission to quote from T. Scitovsky, Welfare and Competition); Kelley and Millman, Inc. (for permission to quote from W. Mitchell, The Backward Art of Spending Money); Alfred A. Knopf, Inc. (for permission to quote from S. Patten, Essays in Economic Theory, edited by R Tug well); Longmans, Green and Co., Ltd. (for permission to quote from R Hawtrey, The Economic Problem); The Macmillan Company, New York (for permission to quote from L. Haney, History of Economic Thought, 1949, F.S.C. Northrop, Logic of the Sciences andHumanities, 1949, A. Marshall, Principles of Economics, 1920); Macmillan and Co. Ltd., London (for permission to quote from Economic Journal, International Economic Papers, and works by Croce, Hutchinson, Jevons, Macfie, Marshall, Robbins, and Pigou; for the Pigou works acknowledgment is gratefully extended also to the St. Martin's Press, Inc., New York); Oxford University Press and the Clarendon Press, Oxford (for permission to quote from the Proceedings of the British Academy, and from 1. Little, Critique of Welfare Economics); Routledge and Kegan Paul Ltd. (for permission to quote from P. Wicksteed, The Common Sense of Political Economy, F. A. Hayek, Road to Serfdom, and G. Myrdal, Value in Social Theory); Staples Press (for permission to quote from E. Cannan, Wealth, E. Cannan, Theories of Production and Distribution, D. H. Robertson, Economic Commentaries); University of Chicago Press (for permission to quote from F. A. Hayek, Road to Serfdom, F. H. Knight, History and Method of Economics, and from the Journal of Political Economy); The Viking Press, Inc. (for permission to quote from T. Veblen, The Theory of the Leisure Class, The Place of Science in Modern Civilization, Essays in Our Changing Order, and W. Mitchell [editor], What Veblen Taught); Yale University Press (for permission to quote from L. Mises, Human Action).

Chapter 1
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.
Chapter 2

The period in which economic affairs were chiefly considered as being concerned with a class of objects known as wealth coincided roughly with the nineteenth century. Only since the turn of the century have economists been increasingly inclined to consider the scope of their subject in less objective terms. Yet most of the newer views on the question of definition had already found some expression in the writings of the more thoughtful students of economic methodology well before the present century. These murmurings of dissatisfaction with the traditional wealth-bound conception of economics may most illuminatingly be interpreted as the reflection of the more general revolt against the classical system that came to a head in the last quarter of the century.

Chapter 3

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

Chapter 4

Lawson, one of the Dublin professors, devoted his first lecture in 1844 to problems of the scope and methodology of his subject. The object of political economy is "to investigate and trace to general laws the different phenomena of the commercial or exchanging system..." This is clearly in the Whately tradition. But even more noteworthy is Lawson's declaration that political economy is a science that has man as its subject matter and "views him in connexion with his fellow-man, having reference solely to those relations which are the consequences of a particular act, to which his nature leads him, namely, the act of making exchange." *57 What Lawson has put before us is no less than a completely original "economic man," fully capable of bearing comparison with his more familiar cousin, the economic man created by J. S. Mill. Mill's creature was a being bereft of all passions other than avarice. Mill's economics was a body of principles governing the consequences of avaricious behavior. Lawson's economic man, on the other hand, is a far less repulsive caricature. His obsession is merely to engage in the act of exchange "to which his nature leads him," and the task of Lawson's political economy is to investigate the consequences of this human urge—an impulse that Adam Smith had long ago made famous as the "propensity to truck, barter, and exchange one thing for another." *58


Many of the ideas mentioned in the preceding sections of this chapter have a bearing on the relationships that have at various times been held to exist between economics and the social sciences generally. The structures of interpersonal patterns of contact that the economist studies in his analysis of the market may, of course, be of interest to the sociologist or the social psychologist from a totally different aspect. And writers who identified the specifically economic aspect of phenomena with the social quality inherent in exchange, the market, and the like, found themselves influenced more or less deeply by their ideas on the nature and methodology of the social sciences as a group.

See especially G. Tarde, Psychologie économique (Paris, 1902), pp. 151 f., for the use of this aspect of exchange to distinguish between economics and politics. On Weber's position, see above, n. 16; see also shils and Finch, eds., Max Weber on the Methodology of the Social Sciences (Glencoe, 1949), p. 63; M. Weber, Gesammelte Aufsätze zur Wissenschaftslehre (Tübingen, 1922), pp. 365-366.
Chapter 5
L. Robbins, "Live and Dead Issues in the Methodology of Economics," Economica, August, 1938, p. 344.

Chapter 6

Chapter 6

Something of a turning point in discussions on the nature of economic science and of economic affairs came in 1930 with the appearance of Robbins' Nature and Significance of Economic Science. Professor Robbins brought to the problem a method of attack that clearly revealed the logical inadequacies of earlier conceptions of the economic sector of affairs. At the same time he set forth his own positive definition of economics with effective simplicity and persuasive literary charm. The problem of definition was treated by Robbins as an integral part of the exposition of his general views on the appropriate tasks and methodology of economics. As such, the book as a whole and Robbins' definition of economics attracted widespread attention. Although Robbins claimed no originality for his definition, he effectively presented to the English-speaking world a group of earlier views with a clarity and a vigor that made them the focus of a newly awakened interest and unmistakably left his own stamp on the formulation he espoused. Since the publication of his book, discussions of the problem of definition have invariably tended to revolve around Robbins' definition, or at least to take it as a starting point.


These limitations on the scope of the economist's area of competence have, of course, been condemned again and again by historically-minded and institutionally-conscious critics of economic theory. The fact that the validity of these limitations follows rigorously from Robbins' definition of economics reveals the close faithfulness with which this definition of the subject mirrors the procedures that economic theorists have, in fact, been following all the time. What the explicit recognition of the fact that the phenomena with which the economist deals are data does achieve is the appreciation that self-restraint by economic theorists does not spring from blindness to the facts of economic life. The "abstractions" of the economists, against which realistically-minded critics have so vigorously rebelled, are inherent in the nature of the problems to which they address themselves. Their subject matter forms a distinct field precisely because there exists an element in action that is distinct from the nature of the ends of action and at least conceptually independent of the processes whereby ends are selected and ordered. It must surely be regarded as a merit of Robbins' definition that it isolates this element with clarity. A grasp of the character of this element in action makes it immediately evident that the severely circumscribed applicability of the propositions enunciated by the economic theorist, far from being the necessary result of a crudely unrealistic methodology, is but the properly incomplete contribution of the specialist whose skills have been developed by a judicious and fruitful division of labor. Specific policy recommendations on economic affairs may require long and careful study of the actual attitudes of human beings, their wants, valuations, and expectations. Crucially important though such information may well be, the research and scholarship involved in its compilation is different from the application of economic reasoning. Robbins' definition brings this distinction into sharp focus.

For these references to precursors of Robbins' definition, see Nature and Significance, pp. 15, 16; L. Robbins, "Live and Dead Issues in the Methodology of Economics," Economica, August, 1938, p. 344; A. Lowe, Economics and Sociology (London, 1935), p. 42; A. Emery, "The Totalitarian Economics of Othmar Spann," Journal of Social Philosophy, April, 1936, pp. 270-271; F. Oppenheimer, "Alfred Amonn's 'Objekt und Grundbegriffe,'" Weltwirtschaftliches Archiv, Bd. 27 (1928), I, 174-175. A. Voigt, "Die Unterscheidung von Wirtschaft und Technik, Erwiderung," Zeitschrift fur Sozialwissenschaft, 1915, p. 395; Shils and Finch, eds., Max Weber on the Methodology of the Social Sciences (Glencoe: Free Press, 1949), pp. 63 f.; Gesammelte Aufsatze zur Wissenschaftslehre von Max Weber (Tübingen, 1922), p. 365. See, however, Weber's comment on Voigt's position, in Verhandlung des ersten Deutschen Soziologentages (Schriften der Deutschen Gesellschaft für Soziologie, 1911), pp. 265 f.
Max Weber, The Theory of Social and Economic Organization (translated by A. M. Henderson and T. Parsons, New York, 1947), pp. 162, 209. For passages in which Weber discusses the distinction between economics and technology, see Shils and Finch, eds., Max Weber on the Methodology of the Social Sciences (Glencoe: Free Press, 1949). pp. 34-35; and "R. Stammler's 'Ueberwindung' der materialistischen Geschichtsauffassung," Archiv fur Sozialwissenschaft und Sozialpolitik, 1907, reprinted in Gesammelte Aufsatze zur Wissenschaftslehre von Max Weber, p. 328.
Chapter 7

Such a discussion is all the more in order since it has been long overdue in the methodological literature on economics. The concept of a science of human action, or, to use the term applied by Professor Mises, the praxeological view of economics, *74 has been singularly unsuccessful in gaining the degree of attention that, in its significance for economic methodology, it unquestionably deserves. Although isolated aspects of the praxeological point of view have been perfunctorily treated in the literature, little attempt has been made to understand them as integral parts of a complete epistemological system of the social sciences. The result has been a tendency to replace the system as a whole, in the public view, with specific controversial propositions concerning such concepts as apriorism, rationality, and the like. Taken out of context and discussed against the background of radically different epistemological ideas, these propositions could rarely command the serious consideration to which they were entitled. Especially unfortunate has been the consequence that the praxeological view has come to be even more profoundly neglected.


Croce's ideas will have been perhaps more fully set forth when we shall have considered his contributions to several points of detail in the praxeological conception of economics. Although his stature as a thinker drew more academic attention to these ideas than had been given to those of Sherwood, Croce's impact on the development of economic methodology has to this day not reached its full potential. Writings during the last half century on the proper conception of economic science could in many instances have greatly benefited from familiarity with Croce's work in this field. One author whose writings do deserve a place in any discussion of the evolution of praxeological ideas, although his contribution in this respect scarcely approaches that of Croce, is Max Weber.


Although praxeological ideas already appear in germinal form in Mises' first book, The Theory of Money and Credit (1912), it was not until the twenties that they became explicitly formulated. By the early thirties Mises' ideas on the nature and scope of economics had reached their full development, *87 and some of these ideas attracted the attention of writers on the methodology of economics in a number of countries. *88 The works in which Professor Mises has most fully presented the case for praxeology are his Grundprobleme der Nationalökonomie. (1933), Nationalökonomie (1940), and its English counterpart Human Action (1949). A vigorous restatement of the position of the sciences of human action and a spirited defense of their epistemological assumptions are to be found in Mises' recently published Theory and History (1957).


The concept of rationality in human behavior has long been a topic for discussion in the literature on the methodology of economics. Attacks on the undue reliance which economic theory has been accused of placing upon human reason are as old as attacks on the very notion of an economic theory. Historically-minded critics of theory long ago discovered that man is possessed of "instincts," that he is a creature of "habit," that he is capable of being carried away by mass hysteria and other psychological aberrations. Economic theory, it was found, had blindly ignored the realities of life. Where it had not explicitly endowed economic man with an exclusive thirst for "wealth" or with an utterly selfish character, economics had apparently proceeded on the quite gratuitous assumption that men behave sensibly from the point of view of their own interests. It was easy to demonstrate how far from the truth economics must be; it was easy to point out the true character of men with their full array of impulses, instincts, and stupidities. On the other hand, it was not difficult for economists to defend their theorems as hypothetical constructions with a definite, if limited, applicability to the real world, or, alternatively, as providing norms for the appraisal of actual performance. And debates on these lines abound in the economic journals of the decades around the turn of the century and later.

M. Weber, "Die Objektivitat sozialwissenschaftlicher und sozialpolitischer Erkenntnis," Archiv fur Sozialwissenschaft und Sozialpolitik, 1904; translated in Shils and Finch, eds., Max Weber on the Methodology of the Social Sciences (Glencoe: Free Press, 1949), p. 83.
See, e.g., L. Robbins, Nature and Significance (1930); also his "Live and Dead Issues in the Methodology of Economics," Economica, August, 1938; F. Kaufmann, Methodology of the Social Sciences (English ed.; New York, 1944), ch. XVI; M. Bowley, Nassau Senior and Classical Political Economy (1937), p. 64; T. W. Hutchison, The Significance and Basic Postulates of Economic Theory (1938); O. Morgenstern, The Limits of Economics (English ed.; 1937), p. 154.
L. Robbins, "Live and Dead Issues in the Methodology of Economics," Economica, August, 1938, p. 348.