measure from the infinite variety of actions and to construct a
series of types or concepts of classes and of empirical laws, thus
rendering uniform the formless, within certain limits. Thus is
obtained the concept of bread and of the consumption of bread, and
of the various portions of bread and of other objects, for which a
portion of bread can be exchanged, and so on. In this way are full
philosophico-historical reality and the method of logical necessity
and of realistic observation of facts abandoned for a feigned reality
and for a method of arbitrary choice, which, as we know, has its good
reasons for existing in the human spirit, and does great service by
the swift recall and easy control of the requisite knowledge. And
if Economy consisted in the establishment of a series of laws and
examples in the above sense (or when understood in this way), it would
join the number of the descriptive disciplines; and in that case there
would be no necessity for us to speak of it further, for it would
suffice to refer back to what has already been said of the relations of
the Philosophy of the practical with practical Description, classes,
rules, and casuistic. But economic Science is not descriptive, and is
not developed according to the following formula: goods are divided
into the classes _a, b, c, d, e,_ etc., and the class _a_ is exchanged
with the class _b_ in the proportion of I to 3, the class _b_ with the
class _c_ in the proportion of I to 5, etc. In such a formula is always
understood the _up and down,_ the _for the most part,_ and _the very
nearly:_ the classes _with their ups and downs_ are as stated; the
exchanges take place _for the most part_ in the proportions stated; if
things are to-day _very nearly_ thus, to-morrow they will be so _very
nearly,_ in a different way.
On the contrary, the propositions of the Science of Economy are
rigorous and necessary. "Granted that soils of different degrees of
fertility are cultivated, their possessors will all obtain, besides
the absolute rent, a differential rent, with the exception of the
possessor of the least fertile soil" (Ricardo's law). "Bad money drives
out good" (Gresham's law). Now, it is not conceivable in any case that
soils of different fertility, all of them cultivated, should not give
a differential rent. It will be said that the State can confiscate the
differential rent, or that the possessor, owing to his bad cultivation
or to his bad administration, may lose it; but the proposition does
not remain less sound on this account. Nor is it possible that, when
an unchangeable paper money is in circulation, gold coins should also
circulate indifferently and on a par with it, when the total of the
money in circulation lowers the value of the monetary unit beneath
the metallic value of the better money. A madman who might be in
possession of a hoard of gold pieces at the time of the circulation of
the declining paper money (which causes poverty) would perhaps give it
in exchange for the inferior money; but the wise man will keep it in
his safe. The economic proposition expresses the rational necessity,
not the madness, which is irrational. Those propositions, like all the
others of economic science, are therefore certainly not descriptions,
but _theorems._
[Sidenote: _Their mathematical nature._]
The denomination "theorems" makes us think at once of the mathematical
disciplines, among which alone can economic Science find a place.
The propositions of that science being excluded from philosophical,
historical, or naturalistic science, there remains nothing that they
can be, save _mathematical._ Yes, they are mathematical, but not pure
mathematics, for in that case they would be nothing but arithmetic,
algebra, or the calculus, that is, they would belong to the kind of
mathematical disciplines called _applied,_ because they introduce into
the paradigms of the calculus certain data taken from reality, that is
to say, taken from without the purely numerical conception. Economic
Science, then, is a mathematic applied to the concept of human action
and to its sub-species. It does not inquire what human action is; but
having posited certain concepts of action, it creates formulæ for the
prompt recognition of the necessary connections.
[Sidenote: _Its principles; their character of arbitrary postulates and
definitions. Their utility._]
It is not surprising that such propositions examined in their truth
appear in one respect arbitrary and in another tautological. But it is
not thus that they are examined, and it is not thus that propositions
of mathematics are ever examined, for their value lies solely in the
service that they render. Certainly Ricardo's law relating to land of
varying fertility is nothing but the definition of lands of various
fertility, in the same way that Gresham's law relating to bad money is
nothing but the definition of bad money. The same may be said of any
other economic law, as, for example, that every protective tariff is
destruction of riches, or that a demand for commodities is not a demand
for labour, since these, like the preceding, are simply definitions
of the protective tariff, of the demand for commodities, and of the
demand for labour. And it could be proved of all of them that they are
arbitrary, because the concepts of land, tariffs, commodities, money,
and so on, are arbitrary, and because they become necessary only when
that arbitrariness has been admitted as a postulate. But the same
demonstration can be given of any theorem in Geometry; since it is not
less arbitrary and tautological, that the measure of a quadrilateral
should be equal to the base multiplied by the height, or that the
sum of the squares of a cathetic should be equal to the square of
the hypotenuse. This does not prevent Geometry from being Geometry,
or negate the fact that without it we should not have been able to
build the house in which we dwell, nor to measure this star upon which
we live, nor the others that revolve around it or around which we
revolve. Thus, it would be impossible to find one's way in empirical
reality without these economic formulæ, and that would happen which
happened when economic science was still in its infancy; namely, that
by its means measures of government were adopted, which were admirably
suited to produce in the highest degree those evils which it was
thought could be avoided by its help, a misfortune of which the Spanish
government in Lombardy or in the Province of Naples in the seventeenth
century, with its _cries_ and its _pragmatics_ in economic and
financial matters, has left most excellent examples. Or what happens
now, when ignorance, or deceitful interest, which profits by ignorance,
proposes or causes to be adopted ruinous measures under the appearance
of _publica salus,_ arguing that they are good, or that they are good
for different reasons than those for which they could be maintained.
Such, for instance, would be the proposal for fresh expenditure on
public works that are useless or of little use during a period of
economic depression in a country, and instead of relieving, increase
the general depression; or the increase of protective tariffs, when
industrial progress is slow, which ought to encourage industry, but on
the contrary produce an industry that is unstable and artificial, in
place of one that is spontaneous and durable.
[Sidenote: _Comparison of Economic with Mechanics, and reason for its
exclusion from ethical, æsthetic and logical facts._]
The special form of application of mathematics, which we find in
economic Science, has been compared on several occasions with that
which takes place in Mechanics. "The economic man" of the first has
seemed to be altogether like the "material point" of the second, and
Economy has been called "a sort of Mechanics," or simply "Mechanics."
All this is very natural, for Mechanics are nothing but the complex
of formulæ of calculation constructed on reality, which is Spirit and
Becoming in Metaphysic, and may be abstracted and falsified in Science,
so as to assume the aspect of Force or a system of forces, for the
convenience of calculation. Economy does the same thing, when it cuts
off from the volitional acts certain groups, which it simplifies and
makes rigid with the definition of the "economic man," the laws of
"least means," and the like. And owing precisely to this mechanicizing
process of economic Science, it is ingenuous to ask oneself why
ethical, logical, or æsthetic facts are not included in Economy, and
in what way they can be included. Economic science is the sum of
abstractive operations effected upon the concept of Will or Action,
which is thus _quantified._ Now since moral facts are also will and
action, and since economic Science is not occupied with qualitative
distinctions, not even with the quality itself of that economic fact
which it employs as its material, it is clear that Science cannot
lay any stress upon moral distinguished from economic facts, nor can
it receive them in a special class, because its assumption is the
indistinction of the two orders of facts, and they are included in that
indistinction. As to æsthetic or scientific facts, these, taken by
themselves, are not facts, but representations and thoughts of facts,
and as such escape economic calculation: considered in the unity of the
spirit, they are certainly facts, that is to say, volitional products,
but as such are already found included with these in the indistinction
of economic Science.
[Sidenote: _Errors of philosophism and historicism in Economy._]
As a mathematical discipline, economic Science is ultimately
_quantitative,_ and it remains so, even when it makes use of the
smallest possible number of numerical and algebraical signs (even when
it is not _mathematical Economy_ in the strict sense of the word). The
attempts, both of philosophism and historicism, which claim to deny
Economy, by criticizing its abstractness and its arbitrariness, and to
make it philosophical (or as they say _psychological_) and historical
are therefore to be reproved. If Economy do not give the universal
truth of Philosophy, nor the particular truth of History, Philosophy
and History are in their turn incapable of making the smallest
calculation: if Economy have not eyes for the true, Philosophy and
History have not arms to break and to dominate the waves of fact, which
would oppress man with their importunity and finally prevent him from
seeing. Hence the absurdity of _philosophism_ and _historicism_; hence
too, the sound tendency of Economy to constitute itself _pure_ Economy,
free of _practical_ questions, which are also, it is clear, historical,
not abstract and scientific questions.
[Sidenote: _The two degenerations: extreme abstracticism and
empiristical disaggregation._]
But economy has in itself other enemies besides these that are
external, in so far as it is certainly a mathematical discipline, but
an applied mathematic, that is to say, one that assumes empirical
data. These empirical data can be infinitely multiplied, and hence
result infinite economic propositions, each distinct from the other;
and on the other hand, they can be regrouped, simplified and unified,
so as finally to return to the indistinct _x._ If the first tendency
prevail, we have what is called economic empiricism, a cumbrous
mass of disaggregated propositions; if the second, a very general
formula, which sometimes does not even preserve the smallest vestige
of that concept of human action from which it started, and becomes
altogether confounded with the formulæ of arithmetic, of algebra and
of the calculus. Sound economic Science must be at once abstract and
empirical, in accordance with its nature, connecting and unifying
disaggregate propositions; but it must not allow distinction to be
lost in unity, for the one is as necessary as the other. Those who
are unacquainted with the generalities of Economic Science, and those
acquainted only with its details, are alike incapable, though for
different reasons, of calculating the economic consequences of a
fact. The first see all the facts as one single fact, the second, all
the facts as different, without any arrangement by similarities and
hierarchies. The question as to the relative proportion of generalities
and particulars to be given in treatises, is one that has been
much discussed, but since this has only a didascalic and pedagogic
importance, it is only possible to answer it, case for case, according
to the nature of the various scholastic institutions that are held in
view. To maintain that Economy must stop short at this or that degree
of abstraction, and for example be limited to what are called external
goods or riches, excluding services; or to capital, as a concept
distinct from land and human labour, without striving to unify these
three concepts, is altogether capricious. Every unification, like every
specification, can be useful, and haters of abstracticism are also
abstracticists, but only half so.
[Sidenote: _dance at the History of the various tendencies of Economy._]
All those acquainted with economic studies will have recognized in
the concepts that we have explained, the _logical motives_ of the
history of Economy, the divisions, the polemics, the defeats and the
victories of this or that school and the progress of that branch of
studies. The quantitative character of economic science already appears
in its classics; in the inquiries of Aristotle as to prices and value
(_Politic_ and _Nichomachean Ethic_); and this is apparent also in
the rare mentions by Mediæval and Renaissance writers. Economists
have always been mathematicians, even when they have not spoken of
mathematical Economy. Our writers of the nineteenth century, Galiani,
Genovesi and Verri, were mathematicians in their methods; Francesco
Ferrara, the greatest Italian economist of the nineteenth century, was
a mathematician. The economic principle, which is all one with the
excogitation of the economic man, was formulated by the head of the
physiocratic school, Quesnay; and if the title of _political Economy,_
first given to the discipline by Montchrétien in 1615, prevailed,
that of _social Arithmetic_ also sometimes made its appearance. Its
progress has consisted, not only in the discovery of new economic
theorems, but also in the connection and unification of those that had
previously been posited in isolation, of material and immaterial goods,
of the cost of production and of rarity, of gross and net produce, of
agricultural rents and of all the others that are not agricultural, of
the production, distribution and circulation of riches, of economic and
financial laws, of social and isolated economy, of the value of utility
and of the value of exchange. It has even been possible to unite with
the body of admitted economic doctrines those of Marx, which seemed
revolutionary, for these are only definitions of a particular casuistry
founded upon the comparison of different types of economic constitution.
But to conquer empiricism was not enough; economic Science was menaced
in its existence by the so-called _historical School,_ which refused
to recognize abstract definitions and set up against them the infinite
variety of historical facts; hence the strife with historicism
conducted by Menger and the Austrian school. A consequence of the
struggle against the political degeneration of economic science was
the constitution of Economy as a _pure_ science (Cairnes). This was
all the more necessary, inasmuch as by confounding the abstract with
the concrete, and in the concrete itself, Economy with Ethic, there
was a desire manifested upon several occasions among German economists
(ethical school), and among Catholics of all countries, for an economic
Science that should have as its base Ethic. The conception of Economy
as a science deduced from the _egoistic_ hypothesis, has been the
extreme form of the reaction against ethicism (for example in the
treatise of Pantaleoni). The dangers arising from philosophism have
been less, because recent times, in which that discipline has most
flourished, have not sinned through excessive philosophy.
Of late, owing to the works of Jevons and of other Englishmen, of
Gossen, of the Italians of the school of Ferrara, and of the Austrians,
Economy has become at once more and more complicated and more simple,
owing to the applications, extensions, and reductions that it has
effected. But if with its progress it be able to become ever more exact
and perspicuous, yet it will never for that reason become _organic;_
its character of a quantitative discipline, of an applied mathematic,
in which the atomism of the postulates and of the definitions is
insuperable, does not allow of such metamorphoses.
[Sidenote: _Signification of the judgment of Hegel upon the Science of
Economy._]
In this connection and as the seal upon what we have just been saying,
it is fitting to observe that the phrase of Hegel referred to above
can only have been interpreted as expressing admiration for the degree
of truth attained by Economy, owing to the ignorance of Hegelian
philosophy that has become usual; as though Hegel meant that Economic
science did much honour to the _thought,_ that is, to the speculative
reason. Hegel wished to say, on the contrary, that Economy does much
honour to the intellect, that is, to the intellect alone, to that
_abstractive_ and arbitrary _intellect_ which he hunted down in all
his philosophy: that it is not indeed true and philosophical science,
but a simple descriptive or quantitative discipline treated with much
elegance. This praise also contained the demand for a delimitation,
which, however, he did not expressly enunciate, develop and execute.
[1] _Philos, d. Rechtes,_ § 189. _Zus._
VI
CRITIQUE OF THE CONFUSIONS BETWEEN ECONOMIC SCIENCE AND PHILOSOPHY OF
ECONOMY
[Sidenote: _Adoption of the method and of definition of Economy by
Philosophy._]
There is no disagreement, then, between the Philosophy of Economy
described by us and economic Science or Calculus, of which we have just
defined the nature, since there cannot be any between two altogether
heterogeneous forms, the one moving within the categories of truth, the
other outside them, with objects of a practical order. This reciprocal
tolerance can be disturbed only by Philosophy, when it compels itself,
either to invade the field of economic Science, or to receive within
itself, to a greater or less extent, the method and the formulæ
proper to the latter. We have already referred to the first, when we
noted the inadmissibility of the economic attempts of philosophism
and historicism, and we will say no more on the subject. But it is
opportune to draw attention to the fact that we must distinguish
among these attempts those that we are accustomed to meet with in
many treatises on economy, pure or political, and in the Science of
finance (especially in the prologues), which labour to discover what
economic action may be, and in what way it differs from morality, what
are pleasure and pain, utility and value; whether the State be rational
will that levies a portion of the riches of the citizens for the ends
of civilization, or a simple fact resulting from general economic laws
and the like. In all these efforts of the writers of treatises, we have
an example of the gradual passage from empiria to philosophy, which is
to be observed in all the other fields of knowledge, and if it be only
possible to say in general that the Philosophy of Economy is derived
from economic Science, it is certain, on the other hand, that it finds
no small incentive in the philosophical doubts and discussions which
economic Science supports. On the other hand, the claim to resolve
philosophically and historically the economic Science or Calculus
is, as we have seen, altogether sterile, or contradicts itself in
development.
[Sidenote: _Errors that derive from it._]
From the second of the cases stated above, that is to say, from the
mixture of economic with philosophic methods, arises a series of errors
that are very common and very grave, and of which it is opportune to
take some notice here.
These errors can be divided into three groups, according as they
consist of _(a)_ considering economic Science or Calculus as a method
exclusive of every other, and alone capable of bestowing upon man all
the truth that can ever be attained in the field of human actions;
_(b)_ in attributing the value of universal thought to the empirical
thoughts upon which economic calculation is based; _(c)_ in changing
into reality the fictions excogitated for the establishment of the
Calculus.
[Sidenote: _1st. Negation of philosophy for economy._]
Of the three groups, the first, which represents the most extended
and radical form of the error, is, as usual, the least harmful, for
the reason previously given, that the precise and loyal positions are
those that are the most completely surpassed. Several cultivators
of economic Science, among the most strict and mathematical, enter
upon this desperate struggle against philosophy, which they ridicule
as empty chatter and do not merely wish to subdue but altogether to
destroy, substituting for it the methods of empirical observation and
of mathematical construction, thus favouring a particular empirical and
mathematical philosophy of their own, however much they may protest
to the contrary. That the pretension is unsustainable, is to be seen,
both from the contradictions in which they become entangled and from
the very fury that animates them, which is, at bottom, vexation at not
being able to free themselves from the contradictions in which they
have become involved. For our part, we should like to say to those
excellent economists, alike pure and mathematical, did this not appear
to be pouring oil upon the flames:--Spare yourselves the trouble of
philosophizing. Calculate, and do not think!
[Sidenote: _2nd. Universal value attributed to empirical concepts.
Example: protection and free trade._]