...There are no such things as historical method of economics or a discipline of institutional economics. There is economics and there is economic history. The two must never be confused. All theorems of economics are necessarily valid in every instance in which all the assumptions presupposed are given. Of course, they have no practical significance in situations where these conditions are not present. There theorems referring to indirect exchange are not applicable to conditions where there is no indirect exchange. But this does not impair their validity.
The issue has been obfuscated by the endeavors of governments and powerful pressure groups to disparage economics and to defame the economists. Despots and democratic majorities are drunk with power. They must reluctantly admit that they are subject to the laws of Nature. But they reject the very notion of economic law. Are they not the supreme legislators? Don't they have the power to crush every opponent? No war lord is prone to acknowledge any limits other than those imposed on him by the superior armed force. Servile scribblers are always ready to foster such complacency by expounding the the appropriate doctrines. They call their garbled presumptions " historical economics". In fact, economic history is a long record of government policies that failed because they were designed with a bold disregard to the laws of economics.
It is impossible to understand the history of economic thought if one does not pay attention to the fact that economics as such is a challenge to the conceit of those in power.
Ludwig Von Mises: Human Action, Vol 1, Chapter 2: The epistemological problems of the sciences of Human action:Procedure of economics.
No comments:
Post a Comment