The Ultimate Foundation of Economic Science

Economics can predict the effects to be expected from resorting to definite measures of economic policies. It can answer the question whether a definite policy is able to attain the ends aimed at and, if the answer is in the negative, what its real effects will be. But, of course, this prediction can be only “qualitative.” It cannot be “quantitative” as there are no constant relations between the factors and effects concerned. The practical value of economics is to be seen in this neatly circumscribed power of predicting the outcome of definite measures.

Those rejecting the aprioristic science of economics on account of its apriorism, the adepts of the various schools of Historicism and Institutionalism, ought from the point of view of their own epistemological principles to be prevented from expressing any judgment about the future effects to be expected from any definite policy. They cannot even know what a definite measure, whenever resorted to, brought about in the past. For what happened was always the result of the joint operation of a multitude of factors. The measure in question was only one of many factors contributing to the emergence of the final outcome. But even if these scholars are bold enough to assert that a definite measure in the past resulted in a definite effect, they would not—from the point of view of their own principles—be justified in assuming that therefore the same effect will be attained in the future too. Consistent Historicism and Institutionalism would have to refrain from issuing any opinion about the—necessarily future—effects of any measure or policy. They would have to restrict their teachings to the treatment of economic history. (We may pass over the question how economic history could be dealt with without economic theory.)

However, the public’s interest in the studies labeled as economic is entirely due to the expectation that one can learn something about the methods to be resorted to for the attainment of definite ends. The students attending the courses of the professors of “economics” as well as the governments appointing “economic” advisers are anxious to get information about the future, not about the past. But all that these experts can tell them, if they remain faithful to their own epistemological principles, refers to the past.

To comfort their customers—statesmen, businessmen, and students—these scholars have developed the trend doctrine. They assume that trends that prevailed in the recent past—inappropriately often dubbed the present—will also continue in the future. If they consider the trend as undesirable, they recommend measures to change it. If they consider it as desirable, they are inclined to declare it as inevitable and irresistible and do not take into account the fact that trends manifested in history can change, often or rather always did change, and may change even in the immediate future.