The purpose of this essay is twofold. In the first place, it seeks to arrive at precise notions concerning the subject-matter of Economic Science and the nature of the generalisations of which Economic Science consists. Secondly it attempts to explain the limitations and the significance of these generalisations, both as a guide to the interpretation of reality and as a basis for political practice.

THE SUBJECT-MATTER OF ECONOMICS

1. The object of this Essay is to exhibit the nature and significance of Economic Science. Its first task therefore is to delimit the subject-matter of Economics—to provide a working definition of what Economics is about.

ENDS AND MEANS

1. We have now established a working definition of the subject matter of Economics. The next step is to examine its implications. In this chapter we shall be concerned with the status of ends and means as they figure in Economic Theory and Economic History. In the next we shall be concerned with the interpretation of various economic “quantities”.

THE RELATIVITY OF ECONOMIC “QUANTITIES”

1. That aspect of behaviour which is the subject-matter of Economics is, as we have seen, conditioned by the scarcity of given means for the attainment of given ends. It is clear, therefore, that the quality of scarcity in goods is not an “absolute” quality. Scarcity does not mean mere infrequency of occurrence. It means limitation in relation to demand. Good eggs are scarce because, having regard to the demand for them, there are not enough to go round.

THE NATURE OF ECONOMIC GENERALISATIONS

1. We have now sufficiently discussed the subject-matter of Economics and the fundamental conceptions associated therewith. But we have not yet discussed the nature of the generalisations whereby these conceptions are related. We have not yet discussed the nature and derivation of economic laws. This, therefore, is the purpose of the present chapter.

ECONOMIC GENERALISATIONS AND REALITY

1. It is a characteristic of scientific generalisations that they refer to reality. Whether they are cast in hypothetical or categorical form, they are distinguished from the propositions of pure logic and mathematics by the fact that in some sense their reference is to that which exists, or that which may exist, rather than to purely formal relations.

THE SIGNIFICANCE OF ECONOMIC SCIENCE

1. We now approach the last stage of our investigations. We have surveyed the subject-matter of Economics. We have examined the nature of its generalisations and their bearing on the interpretation of reality. We have finally to ask: What is the significance of it all for social life, and conduct? What is the bearing of Economic Science on practice?

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Amonn, A., 17, 20, 21

Bailey, S., 56, 60–62

Benham, F., 141, 146

Beveridge, W., 2, 32, 73

Böhm-Bawerk, E. v., 84, 92

Bonn, M., 54

Bowley, A., 58

Braun, M. St., 141, 156

Bresciani-Turroni, C., 54

Brutzkus, B., 18

Cairnes, J., 82, 105

Cannan, E., 2, 4, 7–11, 22, 27, 48, 64, 65, 136

Cantillon, R., 96, 98, 115, 129, 151

Carlyle, T., 26, 27

Cassel, G., 20, 87, 88

Child, J., 114

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