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On Being an Economist

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It is reported of the greatest economist whom I have personally known that he used to say that if he had seven sons they should all study economics. If this was meant to suggest the magnitude of the task economists have to solve, this heroic resolution cannot be highly enough commended. If it was meant to suggest that the study of economics is a sure path to personal happiness, I am afraid I have no such cheerful message for you. And it may be that Carl Menger himself later changed his views: when at last, at the age of sixty-two, he produced one son, this son did not become an economist, though the father lived to see him become a promising mathematician.

There is at least one kind of happiness which the pursuit of most sciences promises but which is almost wholly denied to the economist. The progress of the natural sciences often leads to unbounded confidence in the future prospects of the human race, and provides the natural scientist with the certainty that any important contribution to knowledge which he makes will be used to improve the lot of men. The economist’s lot, however, is to study a field in which, almost more than any other, human folly displays itself. The scientist has no doubt that the world is moving on to better and finer things, that the progress he makes today will tomorrow be recognized and used. There is a glamour about the natural sciences which expresses itself in the spirit and the atmosphere in which it is pursued and received, in the prizes that wait for the successful as in the satisfaction it can offer to most. What I want to say to you tonight is a warning that, if you want any of this, if to sustain you in the toil which the prolonged pursuit of any subject requires, you want these clear signs of success, you had better leave economics and turn to one of the more fortunate other sciences. Not only are there no glittering prizes, no Nobel prizes1 and – I should have said till recently – no fortunes and no peerages, for the economist. But even to look for them, to aim at praise or public recognition, is almost certain to spoil your intellec­tual honesty in this field. The dangers to the economist from any too strong desire to win public approval, and the reasons why I think it indeed fortunate that there are only few marks of distinction to corrupt him, I shall discuss later. But before that I want to consider the more serious cause for sorrow to the economist, the fact that he cannot trust that the progress of his knowledge will necessarily be followed by a more intelligent handling of social affairs, or even that we shall advance in this field at all and there will not be retrograde movements.

The economist knows that a single error in his field may do more harm than almost all the sciences taken together can do good – even more, that a mistake in the choice of a social order, quite apart from the immediate effect, may profoundly affect the prospects for generations. Even if he believes that he is himself in possession of full truth – which he believes less the older he grows – he cannot be sure that it will be used. And he cannot even be sure that his activities will not produce, because they are mishandled by others, the opposite of what he was aiming at.

I shall not argue that the economist has no influence. On the contrary, I agree with Lord Keynes that ‘the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else’. The only qualification I want to add, and with which Lord Keynes would probably agree, is that economists have this great influence only in the long run and only indirectly, and that when their ideas begin to have effect, they have usually changed their form to such an extent that their fathers can scarcely recognize them.

This is closely connected with the fact, inevitable I believe in a democracy, that those who have to apply economic theory are laymen, not really trained as econo­mists. In this economics differs from other disciplines. We do not,. as the other sciences do, train practitioners who are called in when an economic problem arises – or they can at most be called in as advisers while the actual deci­sions must be left to the statesman and the general public. However attractive the ideal of a government by experts may have appeared in the past – it even induced a radical liberal like John Stuart Mill to state that:

of all governments, ancient and modern, the one by which this excellence [i.e., that political questions are decided ‘by the deliberately formed opinion of a comparatively few, specially educated for the task’] is possessed in the most eminent degree is the government of Prussia – a most powerfully and skilfully organised aristocracy of all the most highly educated men in the kingdom.

We know now where this leads. And we prefer, I think rightly, an imperfect government by democratic methods to a real government by experts.

However, this has consequences of which economists more than others ought to be aware. We can never be sure what our suggestions will produce and whether our best meant efforts may not result in something very different from what we wish. It is, in fact, quite conceivable that advance in social knowledge may produce a retrogression in social policy, and this has indeed happened more than once. I will give you only one example. About seventy years ago economists began seriously to urge certain exceptions to the free-trade argument then almost univer­sally accepted. I am not concerned here whether they were right or wrong. The point I want to make is merely that when after the usual interval of a generation or so their ideas began to take effect they produced a state of affairs which, I believe, even the most extreme protectionists would agree to be greatly inferior to the conditions of near free trade they had attacked. It may be true that some little protection, or some little flexibility in exchange rates, judiciously administered, may be better than free trade or the gold standard. I don’t believe it, but it may be true. But this does not exclude that the advocacy of these modifica­tions may have most regrettable effects. The attack against the principle, or perhaps half-truth, of the free-trade doctrine has certainly had the effect that the public forgot even a great deal of the elementary econom­ics it had learnt, and became once more ready to assent to absurdities which seventy years ago it would have laughed out of court.

I have just referred to the interval of a generation or so which usually elapses before a new opinion becomes a political force. This phenomenon will be familiar to the readers of Dicey’s Law and Opinion, and I could add many further instances to those given there. But it is perhaps specially necessary to remind you of it, because the unique rapidity with which, in our own time, the teach­ing of Lord Keynes has penetrated into public consciousness may a little mislead you about what is the more regular course of things. I shall presently have to suggest an explanation of this exceptional case.

Another point to which I have indirectly referred already, but on which I must dwell a little, is the fact that in our field no knowledge can be regarded as established once and for all, and that, in fact, knowledge once gained and spread is often not disproved, but simply lost and forgotten. The elements of the free-trade argument, at one time nearly understood by every educated man, are a case in point. The reason why in our field knowledge can be so lost is, of course, that it is never established by exper­iment, but can be acquired only by following a rather difficult process of reasoning. And people will believe a thing if you just tell them ‘it has been shown by experi­ment’ – although they may understand nothing about it ­they will not accept in the same manner an argument, even though that argument may have convinced everybody who has understood it. The result is that in economics you can never establish a truth once and for all but have always to convince every generation anew – and that you may find much more difficult when things appear to yourself no longer so simple as they once did.

I cannot attempt here more than to touch upon the inexhaustible subject of Economists and the Public, a subject on which Professor H. Hutt of Capetown has written a thoughtful book, which contains many wise things and some not so wise – and which I strongly recom­mend to your attention. There are very interesting points in this connexion, which have considerable bearing on our professional position as economists, such as the special difficulty, in our field, of distinguishing between the expert and the quack – and the equally important fact of the traditional unpopularity of the economists. You prob­ably all know the remark of Walter Bagehot that the public has never yet been sorry to hear of the death of an economist. In fact, the dislike for most of the teaching of the economists in the past has built up a picture of the economist as a sort of monster devouring children. There is little to justify it in the facts. One of the great liberal politicians of the early nineteenth century (Sir James Mackintosh) has said that ‘he had known Smith slightly, Ricardo well and Malthus intimately and found them about the best men he had known’. I can to some extent confirm this. As you perhaps know I have amused myself at times by digging into the history of economics, and during the past twenty-five years I have had the opportu­nity to know not only a good many economists of this and the past generation but also to compare them with schol­ars in other fields. And I must say I have found them on the whole a surprisingly nice, sensitive and sane lot of people, less crotchety and mad than other scientists. Yet they still enjoy a reputation worse than almost any other profession and are imagined to be particularly hard, prej­udiced, and devoid of feeling. And it was, and still is, the most eminent of economists in an academic sense, towards whom these reproaches were most frequently directed, while nothing is easier than for a crank to acquire the reputation of being a friend of the people. Things are in this respect still very much the same as they were in Adam Smith’s time, and what he said about the relation of an MP to monopolies applies very much to the relation of the economist to the practical ‘interests’ – and not only the capitalist interests: ‘The member of parlia­ment’, you will find it said in the Wealth of Nations.

Who supports every proposal for strengthening this monopoly (of house manufacturers), is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose number and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes real danger, arising from the insolent outrage of furious and disappointed monopolists.

Before I pursue this subject of the effect of public opinion and political bias on the work of the economist I must for a moment pause to consider the various reasons and purposes which make us study economics. It is proba­bly still true of most of us – and in this, too, economics differs from most other subjects – that we did not turn to economics for the fascination of the subject as such. Whatever may guide us later, few do – or at least did in my time – turn to economics for that reason simply because we usually don’t quite know what economics is. Indeed I remember that when I first borrowed during the last war from a fellow officer a textbook on economics I was strongly repelled by the dreariness of what I found, and my social enthusiasm was hardly sufficient to make me plod through the tome in which I hoped to find – and needless to say, did not find – the answer to the burning problem of how to build a juster society for which I really cared. But while the motives which have led most of us ­and I hope most of you – to the study of economics are highly commendable, they are not very conducive to real advance of insight. The fact which we must face is that nearly all of us come to the study of economics with very strong views on subjects which we do not understand. And even if we make a show of being detached and ready to learn, I am afraid it is almost always with a mental reser­vation, with an inward determination to prove that our instincts were right and that nothing we learn can change our basic convictions. Though I am verging dangerously on preaching, let me nevertheless implore you to make a determined effort to achieve that intellectual humility which alone helps one to learn. Nothing is more perni­cious to intellectual honesty than pride in not having changed one’s opinions – particularly if, as is usually the case in our field, these are opinions which in the circles in which we move are regarded as ‘progressive’ or ‘advanced’ or just modern. You will soon enough discover that what you regard as specially advanced opinions are just the opinions dominant in your particular generation and that it requires much greater strength and independence of mind to take a critical view of what you have been taught to be progressive than merely to accept them.

Back to my main topic. The great majority of you neces­sarily study the social sciences not with the intention of going on to study them for the rest of your lives, but with a view to a job in which in the near future you can use your knowledge. You will then be entirely concerned with what is practical and will have to take the dominant ideals and ideas of your time for granted. Though in the long run it may be the economist who creates these ruling ideas, what he can do in practice is determined by the ideas created by his fathers or grandfathers. Does that mean that in academic study, too, we ought to be concerned with the immediately practical, take the current of ideas for granted, and prepare ourselves for the particular job we shall probably be called upon to perform? Now I do not believe that the universities can do this or that they would perform their proper function if they attempted to do it. I do not think that in the social sciences the univer­sities could give an effective ‘professional training’ or that persons so trained would be of much use except for subor­dinate jobs. The practical aspects of a particular job are much better learnt on the job – and that is even true of many of the more general concrete aspects of the society in which we live. What you need, if through that inevitable apprenticeship you hope ultimately to rise to more responsible positions, is a capacity to interpret the detail with which you will be concerned and to see through the catchwords and phrases which govern everyday life. Does the study of the social sciences as it is now pursued provide this education, or how can it be made to do so?

This raises immediately the vexed problem of special­ization versus a general and all-round education, much more acute and difficult in the social sciences than anywhere else. Let me meet a common misunderstanding: it is often argued that in social life everything hangs so closely together that society can only be studied ‘as a whole’. If that were really the case it would mean that it could not be studied at all. Nobody is capable of really understanding all aspects of society, and so far as advance­ment of knowledge is concerned specialization is in the social sciences as necessary as anywhere, and becomes daily more necessary. But in another sense the contention that exclusive knowledge of a single sector of the social sciences is of little use is perfectly true. While you may be a very useful member of society if you are a competent chemist or biologist but know nothing else, you will not be a useful member of society if you know only economics or political science and nothing else. You cannot successfully use your technical knowledge unless you are a fairly educated person, and, in particular, have some knowledge of the whole field of the social sciences as well as some knowledge of history and philosophy. Of course real competence in some particular field comes first. Unless you really know your economics or whatever your special field is, you will be simply a fraud. But if you know only economics and nothing else, you will be a bane to mankind, good, perhaps, for writing articles for other economists to read, but for nothing else. If you have only three years this double task of acquiring technical compe­tence in a narrow field plus a general education is a formidable task. But you will find it will for long be the only opportunity you have to collect a great deal of varied knowledge whose meaning and significance you will recognize only later. And if you mean to make the acade­mic study of one of the subjects your life-work, it is even more important that during your undergraduate years you let your interests range rather widely. Any successful orig­inal work on one of the social sciences requires now many years of exacting and exclusive attention to a narrow field, and it will be only after ten or fifteen years in which by such work you have become entitled to regard yourself as a creative economist that you once again emerge as a man who can look at things in a wider perspective and can broaden out beyond your narrow specialism. It is in the years before you have become specialists, before you have tied yourself to a particular field or a particular purpose, that you must acquire what general education you will have to guide you in the most active and productive part of your life.

What I want to plead for here is that in this you should let yourself be guided not by any fixed purpose but mainly by intellectual curiosity and a spirit of exploration. Apart from what you need for examination purposes there is no definite field of knowledge which you can hope to have ‘covered’ by the time you complete your course. And you will derive infinitely more profit if you allow yourself to follow up problems which at the moment interest you, or interest yourself in questions which you feel are definitely interesting, than if you make it a set purpose to master a definite subject. That you do enough of that the impend­ing examinations see to. But no man or woman deserves to be at a university whose intellectual energy is completely absorbed by that except in the last months before the exams, in work for the exam. Unless you use the opportunities you now have in this respect you will never make the gain which I still regard as the greatest of all that the university can give: the discovery that to learn, to come to understand things, can be the greatest of human pleasures, and the only one that will never be exhausted.

I see I let myself again and again be drawn away from what I wanted to talk more about than anything, and as time is now getting short I must concentrate entirely on that one point. It is a point connected with the one I have just discussed – the way in which, not as beginners, but in our original work as economists, we guide and direct our interests. Should we aim at immediate usefulness, should we concern ourselves mainly with what is immediately practicable? Or should we pursue whatever intellectual difficulty we feel we might be able to solve, follow up problems where we see accepted views are defective or muddled and where, therefore, we can hope to effect some theoretical improvement, irrespective of whether we can now see what its practical significance will be or not? The question is, of course, closely connected with whether the economist should strive for immediate influence or whether the economist should be content to work in effect for a distant future in which he has little personal interest. This is, of course, a choice which only the academic econ­omist, the ‘don’, has to make; but it is nevertheless of some importance.

When I stress the unpopular and unfashionable answer to these questions I do not, of course, mean to imply that these are really exclusive alternatives and that a sensible person will not aim at some judicious balance between the two. What I want to suggest is merely that the ‘academic’ attitude which I shall favor is being unduly disparaged at the moment and the dangers to full intellectual integrity and independence which the more ‘practical’ attitude involves are perhaps not fully enough recognized.

The reason why I think that too deliberate striving for immediate usefulness is so likely to corrupt the intellec­tual integrity of the economist is that immediate usefulness depends almost entirely on influence, and influence is gained most easily by concessions to popular prejudice and adherence to existing political groups. I seriously believe that any such striving for popularity (at least till you have very definitely settled your own convic­tions) is fatal to the economist and that above anything he must have the courage to be unpopular. Whatever his theoretical beliefs may be, when he has to deal with the proposals of laymen the chance is that in nine out of ten cases his answer will have to be that their various ends are incompatible and that they will have to choose between them and to sacrifice some ambitions which they cherish. This is an inevitable consequence of the type of problems with which he has to deal: problems which are well described by the lines of Schiller that

With ease by one another dwell the thoughts But hard in space together clash the things.

The economist’s task is precisely to detect such incompat­ibilities of thoughts before the clash of the things occurs, and the result is that he will always have the ungrateful task of pointing out the costs. That’s what he is there for and it is a task from which he must never shirk, however unpopular and disliked it may make him. Whatever else you may think of the classical economists you must admit that they never feared being unpopular.

It is fashionable now to sneer at their ‘non-conformist conscience’ or ‘self-castigating spirit’ which found plea­sure in recommending all sorts of self-denial. And perhaps at a time when to adhere to their doctrines was essential to respectability there really was not as much merit in their stern attitude as some of them might claim. But the pendu­lum has now so much swung in the opposite direction, the fashion is now so much to give the public what it wants rather than to warn it that it cannot have all, that it is worth remembering how much easier this is than to take the unpopular course. I think as economists we should at least always suspect ourselves if we find that we are on the popular side. It is so much easier to believe pleasant conclusions, or to trace doctrines which others like to believe, to concur in the views which are held by most people of good will, and not to disillusion enthusiasts, that the temptation to accept views which would not stand cold examination is sometimes almost irresistible.

It is the desire to gain influence in order to be able to do good which is one of the main sources of intellectual concessions by economist. I do not mean, and do not wish to argue, that the economist should entirely refrain from making value judgements or from speaking frankly on political questions. I do not believe that the former is possible or the latter desirable. But I think he ought to avoid committing himself to a party – or even devoting himself predominantly to some one good cause. That not only warps judgement – but the influence it gives him is almost certainly bought at the price of intellectual inde­pendence. Too much anxiety to get a particular thing done, or to keep one’s influence over a particular group, is almost certain to be an obstacle to his saying many unpopular things he ought to say – and leads to his com­promising with ‘dominant views’ which have to be accepted, and even accepting views which would not stand serious examination.

I trust you will forgive me if I seriously suggest that the danger of such intellectual corruption, of concession made to the desire of gaining influence, is today greater from what are known as the left or progressive parties than from those of the right. The forces of the right are usually neither intelligent enough to value the support of intellec­tual activities, nor have they the sort of prizes to offer which are likely to influence honest people. But the fact that, whatever may be true of the country as a whole, the ‘intelligentsia’ is predominantly left means that you are certain to have much greater influence, and therefore apparently chances to be useful, if you accept the sort of views which are generally regarded as ‘progressive’. There are now, and probably always will be, any number of attractive jobs, such as various sorts of research or adult education, in which you will be welcomed if you hold the right kind of ‘progressive’ views, and will have a better chance of getting on various committees or commissions if you represent any known political programme than if you are known to go your own way. Never forget that the repu­tation of being ‘progressive’ adheres almost always to people or movements which have already half succeeded in converting people.

There can be no question that in resisting the inclina­tion to join in with some popular movement one deliberately excludes oneself from much that is pleasant, profitable and flattering. Yet I believe that in our field more than in any other this is really essential: if anyone, the economist must keep free not to believe things which it would be useful and pleasant to believe, must not allow himself to encourage wish-dreams in himself or others. I don’t think the work of the politician and the true student of society are compatible. Indeed it seems to me that in order to be successful as a politician, to become a political leader, it is almost essential that you have no original ideas on social matters but just express what the majority feel. But I have perhaps said already more than enough about the external temptations and I want to say only a few more words about the internal ones, the seductive attraction exercised by the pleasantness of certain views. Here, too, there has recently been a great change of attitude. While the classical economists were perhaps a little too apt to feel ‘that is too good to be true’, I believe this attitude is still a safer one than the feeling that the conclusions of an argument are so desirable that they must be true.

I can illustrate this position only from my own experi­ence and that will probably be different from yours. From all considerations other than the purely scientific one I have every reason to wish that I were able to believe that a planned socialist society can achieve what its advocates promise. If I could convince myself that they are right this would suddenly remove all the clouds which to me blacken all the prospects of the future. I should be free to share in the happy confidence of so many of my fellow men and to join with them in the work for a common end. As an econ­omist such a situation would indeed have a double attraction. As I am again and again reminded by some socialist colleagues, our special knowledge would secure us a much more important position and I might rise to be a trusted leader instead of a hated obstructionist. You will probably say that of course it is only pride which, once I have staked my professional reputation on a certain view, now prevents me from seeing the truth. But it was not always so. And I have indeed been mainly thinking of the extremely painful process of disillusionment which led me to my present views.

You will probably not have the experience in the same connexion, but I am sure that, if you do not regard your economics just as a given instrument to achieve given ends, but as a continuous adventure in the search for truth, you will sooner or later have a similar experience in one connexion or another. It will be for you as well a choice between cherished and pleasant illusions on the one side and the ruthless pursuit of an argument which will lead you almost certainly into isolation and unpopu­larity and which you do not know where else it will lead. I believe this duty to face and think through unpleasant facts is the hardest task of the economist and the reason why, if he fulfils it, he must not look for public approval or sympathy for his efforts. If he does he will soon cease to be an economist and become a politician – a very honourable and useful calling, but a different one, and not one which gives the kind of satisfaction we expect when we embark on an intellectual pursuit. It is this choice about which I wanted to talk and of the necessity of which I mainly wanted to warn you. There are, as you will realize more and more, many self-denying ordinances which the economist must pass on himself if he wants to remain true to his vocation. But the most important of them seems to me that he must never directly aim at immediate success and public influence. I do not go as far as Professor Hutt in the book mentioned who wants the economists to submit to an almost monastic discipline in order to protect them from corruption. But I believe there is more truth in what he says than is commonly admitted. And I don’t know that any economist will be happy in his profes­sion till he has made the choice and, if he chooses the pursuit of light rather than of fruits, reconciles himself with these limitations.

If he is able to do so I believe he has a better chance in the long run to contribute to the improvement of our social problems than if he more directly strove for it. I am also convinced that if he has made the renunciation there is a great deal of real pleasure in his work, just as there would be if he had equally wholeheartedly devoted himself to any more tangible and definite goal. So far as I myself am concerned, at any rate, and in spite of what I have said, I have never really regretted that I became an economist, or really wished to change with anybody else.

But I have been long enough. It was not my intention when I started to preach a sermon, and if I have sometimes more than verged on it, you must forgive me. It was the first and I trust will be the last sermon I shall ever preach. And it has taken this form not because I am anxious to convert you to my point of view, but rather because I had to talk about questions which have deeply concerned me and where it has cost me considerable efforts to clear my own mind, and on which in consequence I feel strongly.”

Originally delivered as an address at the London School of Economics, February 1944. 
  • 1. Editors Note: The Nobel Prize in Economics was established in ​1968, 24 years after.

F. A. Hayek (1899–1992) is undoubtedly the most eminent of the modern Austrian economists, and a founding board member of the Mises Institute. Student of Friedrich von Wieser, protégé and colleague of Ludwig von Mises, and foremost representative of an outstanding generation of Austrian School theorists, Hayek was more successful than anyone else in spreading Austrian ideas throughout the English-speaking world. He shared the 1974 Nobel Prize in Economics with ideological rival Gunnar Myrdal "for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena."  Among mainstream economists, he is mainly known for his popular The Road to Serfdom  (1944).

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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