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.
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.
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.
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.
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.