Investigations into the Method of the Social Sciences

The Special Nature of Theoretical Knowledge in the Field of Economy Does Not Invalidate the Character of Economics as a Theoretical Science

The theoretical sciences are not equally strict; this circumstance nevertheless has no influence on their general formal character.—Whatever the degree of strictness may be which the truths of theoretical economics display, the character of the latter as a theoretical science remains intact.—Thereby, it cannot become either a historical or a practical science.—The value of the theoretical sciences for the cognition and under-standing of phenomena is by no means invalidated by the fact that their truths are less strict.

The types and typical relationships (the laws) of the world of phenomena are not equally strict in all cases. A glance at the theoretical sciences teaches us rather that the regularities in the coexistence and in the succession of phenomena are in part without exception; indeed they are such that the possibility of an exception seems quite out of the question. However, some are such that they do indeed exhibit exceptions, or that in their case exceptions seem possible. The first are called laws of nature, the latter empirical laws.

Now among the methodologists no view is more widespread than the one that in certain realms of the world of phenomena, and predominantly in that of nature, strict types and typical relationships can be observed; in others on the contrary, and especially in that of social phenomena, only those of lesser strictness can. In other words, “laws of nature” can be observed only in the first realm; only “empirical laws,” on the contrary, can be observed in the latter. This opinion, frequently found in the general theory of knowledge, will prove erroneous in the sequel. At this point we want briefly in passing to characterize the error only to this extent: that which on close examination turns out to be the result of different orientations of theoretical research in the individual realms of the world of phenomena is construed as the result of the differing natures of the phenomena. But we intend to speak of this only in what follows. What we would like, however, to emphasize right here most emphatically is the circumstance that, whatever the degree of strictness of the laws characteristic of the realm of social phenomena may be and whatever the results are to which investigations into the special nature and the different types of these laws lead us, the character of economics as a theoretical science is by no means affected. The types and the typical relationships of economy may be of greater strictness or lesser, or in general of any nature—the nature of theoretical economics can under all circumstances consist in nothing else than in the exposition of just these types and typical relationships. In other words, it can consist only in the exposition of the general nature and the general connection of the laws of economic phenomena, but by no means, for instance, in the exposition of the nature and connection of individual phenomena of economy, i.e., in historical presentations, or else in practical rules for the economic activity of people. The theory of economy must in no case be confused with the historical sciences of economy, or with the practical ones. Only the person who is completely in the dark about the formal nature and the problems of theoretical economics could perceive in it a historical science because the general (theoretical) knowledge which it embraces ostensibly, or really, shows less strictness than in the natural sciences; or else perhaps for the further reason that the development of economic phenomena, as we will see, is not without influence on the way and manner in which economics is able to solve its theoretical problems. Only a person who cannot keep apart the natures of theoretical and practical sciences could perceive in economics a practical science—perhaps for the reason that it, like other theories, forms the basis of practical sciences.

Just as erroneous is the frequently met opinion that the value of economics as a theoretical science is invalidated, as a result of the above-stressed circumstances. Even if it were admitted a priori and without closer investigation that the theoretical knowledge in the realm of economic phenomena was not of a strictness admitting no exception, and in particular that the fact of the development of the phenomena under discussion here excluded laws of nature pertaining to these, even then, we say, the above conclusion could by no means be drawn. The number of natural sciences which absolutely comprise strict laws of nature is also small, and the value of those which show only empirical laws is nevertheless beyond question. It does not, for example, occur to a natural scientist to deny the character of theoretical sciences to a series of sciences which present the laws of organic life because they comprise empirical laws. It would be just as foolish if we were to disdain in the field of economy the powerful aid which even less rigorous theories offer for understanding, for predicting and controlling phenomena, and to limit ourselves to research in the history and the statistics of economy, or indeed to work in practical economic science, because a strict theory of economic phenomena were not attainable. Such a procedure would leave a gap in the system of the sciences of economy, a gap of just the same kind as if the historical or the practical sciences of economy remained uninvestigated.

Whether the laws of the coexistence and of the succession of phenomena are of greater or lesser strictness is, of course, not devoid of significance, either for understanding or for predicting and controlling the phenomena. The greater the strictness of the laws, the greater also the degree of certainty with which, on the basis of these laws, conclusions can be drawn beyond direct experience about the occurrence of future phenomena, or about the coexistence of simultaneous phenomena not directly observed. Without doubt the fact that laws of the succession and the coexistence of phenomena are not rigorous ones accordingly diminishes the certainty of the conclusions based on them and with this also that of predicting and controlling the phenomena. All these differences, however, are, in respect to the prediction and control of phenomena, differences in degree, not in principle. Theoretical sciences, too, which only exhibit empirical laws have accordingly a great practical significance for human life, even if a now greater, now lesser probability takes the place of complete certainty of the knowledge mediated by them. Historical knowledge and the historical understanding of phenomena per se, on the contrary, do not offer us this prediction (etc.) at all and they can therefore never replace theoretical knowledge. Historical knowledge, on the contrary, can never be anything but the material on the basis of which we can determine the laws of phenomena (e.g., the laws of development of economy). Even the practical politician must first gain more general knowledge (rules) from history before he can draw his conclusions in respect to shaping future events.

The circumstances that in the realm of economic phenomena results of theoretical research of an absolute strictness are viewed by individual schools as unattainable can indeed impart a separate character to theoretical research in the field of economic phenomena and establish certain characteristics of that field. But it can never bring it about that in the economic realm of the world of phenomena the historical or the practical orientation of research can take the place of the theoretical and substitute for it. The same is true of the circumstances that theoretical research in the economic realm does, indeed, encounter difficulties which are foreign to natural-science research in its individual branches. It is true, finally, of the circumstance that for theoretical economics there are not always present problems of exactly the same kind as for the theoretical natural sciences. Theoretical economics can never be viewed as a historical science nor, as many wish, as a practical one.

We must try to keep ourselves from making a double mistake in research in the field of political economy. It would be a serious error to misunderstand the characteristics of the realm of phenomena which we call economy, and thus also misunderstand the peculiarity of the problem which is offered to us by theoretical research in the economic realm. It would, however, be a still greater error if, in the endeavor to do justice to the indicated characteristics of research, we were to sacrifice theoretical work in the realm of economic phenomena, whether explicitly or tacitly, and if we were to lose sight of the theory of economy itself in order to comprehend this theory under a special aspect, for instance, the historical.