Economic Generalization or Laws1.It is the business of economics, as of almost every other science, to collect facts, to arrange and interpret them, and to draw inferences from them."Observation and description, definition and classification are the preparatory activities.But what we desire to reach thereby is a knowledge of the interdependence of economic phenomena....Induction and deduction are both needed for scientific thought as the right and left foot are both needed for walking."(1*) The methods required for this twofold work are not peculiar to economics; they are the common property of all sciences.All the devices for the discovery of the relations between cause and effect, which are described in treatises on scientific method, have to be used in their turn by the economist: there is not any one method of investigation which can properly be called the method of economics; but every method must be made serviceable in its proper place, either singly or in combination with others.And as the number of combinations that can be made on the chess-board, is so great that probably no two games exactly alike were ever played; so no two games which the student plays with nature to wrest from her her hidden truths, which were worth playing at all, ever made use of quite the same methods in quite the same way.
But in some branches of economic inquiry and for some purposes, it is more urgent to ascertain new facts, than to trouble ourselves with the mutual relations and explanations of those which we already have.While in other branches there is still so much uncertainty as to whether those causes of any event which lie on the surface and suggest themselves at first are both true causes of it and the only causes of it, that it is even more urgently needed to scrutinize our reasoning about facts which we already know, than to seek for more facts.
For this and other reasons, there always has been and there probably always will be a need for the existence side by side of workers with different aptitudes and different aims, some of whom give their chief attention to the ascertainment of facts, while others give their chief attention to scientific analysis; that is taking to pieces complex facts, and studying the relations of the several parts to one another and to cognate facts.It is to be hoped that these two schools will always exist; each doing its own work thoroughly, and each making use of the work of the other.Thus best may we obtain sound generalizations as to the past and trustworthy guidance from it for the future.
2.Those physical sciences, which have progressed most beyond the points to which they were brought by the brilliant genius of the Greeks, are not all of them strictly speaking "exact sciences." But they all aim at exactness.That is they all aim at precipitating the result of a multitude of observations into provisional statements, which are sufficiently definite to be brought under test by other observations of nature.These statements, when first put forth, seldom claim a high authority.
But after they have been tested by many independent observations, and especially after they have been applied successfully in the prediction of coming events, or of the results of new experiments, they graduate as laws.A science progresses by increasing the number and exactness of its laws; by submitting them to tests of ever increasing severity; and by enlarging their scope till a single broad law contains and supersedes a number of narrower laws, which have been shown to be special instances of it.
In so far as this is done by any science, a student of it can in certain cases say with authority greater than his own (greater perhaps than that of any thinker, however able, who relies on his own resources and neglects the results obtained by previous workers), what results are to be expected from certain conditions, or what are the true causes of a certain known event.
Although the subject-matter of some progressive physical sciences is not, at present at least, capable of perfectly exact measurement; yet their progress depends on the multitudinous co-operation of armies of workers.They measure their facts and define their statements as closely as they can: so that each investigator may start as nearly as possible where those before him left off.Economics aspires to a place in this group of sciences: because though its measurements are seldom exact, and are never final; yet it is ever working to make them more exact, and thus to enlarge the range of matters on which the individual student may speak with the authority of his science.
3.Let us then consider more closely the nature of economic laws, and their limitations.Every cause has a tendency to produce some definite result if nothing occurs to hinder it.Thus gravitation tends to make things fall to the ground: but when a balloon is full of gas lighter than air, the pressure of the air will make it rise in spite of the tendency of gravitation to make it fall.The law of gravitation states how any two things attract one another.how they tend to move towards one another, and will 'move towards one another if nothing interferes to prevent them.
The law of gravitation is therefore a statement of tendencies.
It is a very exact statement - so exact that mathematicians can calculate a Nautical Almanac, which will show the moments at which each satellite of Jupiter will hide itself behind Jupiter.
They make this calculation for many years beforehand; and navigators take it to sea, and use it in finding out where they are.Now there are no economic tendencies which act as steadily and can be measured as exactly as gravitation can: and consequently there are no laws of economics which can be compared for precision with the law of gravitation.
