Economics - "Economics is the youngest of all sciences..."

Posted by ProjectC 
'Economics is about using our available means to achieve the best possible ends. Achieving an end is called consumption and applying a means towards an end is called production.'

- Daniel Krawisz, How the Free Market Works, October 27, 2009

"Economics opened to human science a domain previously inaccessible and never thought of."

'...The age between the 8th and 16th centuries was a time of amazing advance in every area of knowledge, such as architecture, music, biology, mathematics, astronomy, industry, and — yes — economics.

One might think it would be enough to look at the Burgos Cathedral of St. Mary, begun in 1221 and completed nine years later, to know there is something gravely wrong with the popular wisdom.

The popular wisdom comes through in the convention among nonspecialists to trace the origins of promarket thinking to Adam Smith (1723–1790). The tendency to see Smith as the fountainhead of economics is reinforced among Americans, because his famed book An Inquiry into the Nature and the Causes of the Wealth of Nations was published in the year America seceded from Britain.

There is much this view of intellectual history overlooks. The real founders of economic science actually wrote hundreds of years before Smith. They were not economists as such, but moral theologians, trained in the tradition of St. Thomas Aquinas, and they came to be known as the Late Scholastics. These men, most of whom taught in Spain, were at least as pro–free market as the much-later Scottish tradition. Plus, their theoretical foundation was even more solid: they anticipated the theories of value and price of the "marginalists" of late 19th-century Austria.


Joseph Schumpeter gave the Late Scholastics a huge boost with his posthumously published 1954 book, History of Economic Analysis (New York: Oxford University Press). "It is they," he wrote, "who come nearer than does any other group to having been the 'founders' of scientific economics."


One must recall the opening words of Mises's own Human Action here. "Economics is the youngest of all sciences," he announces. "Economics opened to human science a domain previously inaccessible and never thought of."

And what did economics contribute? Mises explains that economics discovered "a regularity in the sequence and interdependence of market phenomena." In so doing, "it conveyed knowledge which could be regarded neither as logic, mathematics, psychology, physics, nor biology."

Let me pause here with some comments on those who reject outright economics as a science. This tendency is not limited to the Left who embrace the fantasy called socialism, nor the environmentalists who think that society should revert to the status of a hunting and gathering tribe. I'm thinking in particular of a group that we might call conservatives. People who believe that all they need to know about reality and truth is contained in the writings of the ancient philosophers, the Church fathers, or some other time-tested source, whereas anything modern — defined as anything written in the latter half of the 2nd millennium of Christianity — is generally seen as suspect.

This tendency is widespread on the American Right, and extends to the Straussians, the communitarians, the paleoconservatives, and the religious conservatives. There are examples among them all. To seek economic wisdom, they brush aside everything of the last 500 years, and return again and again to the writings of early saints, of Plato and Aristotle, and to words of wisdom from many other revered nonmoderns.


Now let us understand a bit more about the Scholastic mind as shaped in the tradition of St. Thomas. At the root of the Thomist worldview was a conviction that all truth was unified into a single body of thought, and that this truth ultimately pointed to the Author of all truth. Insofar as science was seeking truth, the truth that they found was necessarily reconcilable with other existing truth.

In this way, they saw the idea of truth as operating very much like mathematics. It was integrated from the lowest and most fundamental form to the highest and more elaborate form. If there was a contradiction or a failure to link a higher truth to a lower truth, one could know with certainty that there was something going wrong.

So knowledge was not parceled out and segmented the way it is today. Today, students go to classes on math, literature, economics, and building design, and don't expect to find any links among the disciplines. I'm quite certain that it would never occur to them to try. It is just an accepted aspect of the positivist program that knowledge need not be integrated.

We must all exist in a state of suspended skepticism about everything, and be buffeted about randomly by the latest ideological fad that seems to have some scientific support. The conviction that small truth is related to large truth has been eviscerated.

It is sometimes said that the Scholastic's attitude toward truth made them skeptical toward scientific inquiry. Indeed, the very opposite is true. Their convictions concerning integral truth made them utterly fearless. There was no aspect of life that should escape serious scholarship investigation and exploration.

- Llewellyn H. Rockwell Jr., The World of Salamanca, October 27, 2009