FOOTNOTES:
[175] Vide Ross, Foundations of Sociology, chapter on the "Sociological Frontier of Economics," and Tarde, Psychologie Économique, passim.
[176] It may be objected that instead of "breaking the circle," we have simply widened it—that economic values, working through other forms of value, affect other economic values still. In a sense, of course, this is true. In any truly organic situation, we have the phenomenon of reciprocal causation. An organic situation must be circular in this sense. The parts are interdependent. And our objection to the theories criticized is based on the fact that they are essentially efforts to describe a process in rectilinear causation—in the case of the Austrians, e.g., the process is from subjective utility, to objective value of consumption goods, then to the values of the production goods of the nearest rank, and then on and on to goods of remoter ranks, etc. Böhm-Bawerk recognizes very well that the charge of circular reasoning, if it could be brought home to the Austrians, would vitiate their system. Vide "Grundzüge," Conrad's Jahrbücher, 1886, p. 516. And Professor Clark likewise recognizes that value theory of the sort he is treating is spoiled by circular reasoning, as indicated by his criticism of a certain form of the labor theory in his Distribution of Wealth, p. 397. Whenever a small set of abstractions is picked out, as the source and cause of the rest of a movement, such a process of rectilinear causation is implied. And a rectilinear process has no right to get into a circle!
[177] Pareto, in the introductory chapter of his Cours d'Économie Politique, defines economics in terms of the narrow abstraction which he has chosen for the explanation phenomenon, as the "science of ophelimity" (p. 6), and ophelimity is "an entirely subjective quality" (p. 4). There are two objections to this procedure: you neither completely explain your problem phenomena, nor do you exhaust the possibilities of your explanation phenomena—for the same sort of mental facts have bearing on ethical and other social problems as well as on economic problems.
[178] I am indebted to Professor E. C. Hayes, of the Department of Sociology of the University of Illinois, for this distinction.