I am being amazed by the ingenuity of John Stuart Mill since I’ve been reading his works, i.e., ‘On Liberty’. Also mentioned before, John Mill, in his Principles of Political Economy, argued that economics was not the “dismal science” that its radical and literary critics had supposed. He has put quite an effort on explaining his view on the Definition and Method of Political Economy.
At his time, Mill argued that the term “Political Economy” was commonly understood as not a science of speculative politics, but a branch of that science.
“Political Economy does not treat of the whole of man’s nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end. It predicts only such of the phenomena of the social state as take place in consequence of the pursuit of wealth. It makes entire abstraction of every other human passion or motive; except those which may be regarded as perpetually antagonizing principles to the desire of wealth, namely, aversion to labor, and desire of the present enjoyment of costly indulgences.”
Political Economy (hereby called Economics) regards mankind as solely occupied in acquiring and consuming wealth. Under the impact of this desire, it displays mankind accumulating wealth and using that wealth to accumulate even more wealth.
The science investigates the laws which govern the actions and operations, under the assumption that man is a being who is determined, by the fundamental of his nature, to prefer a greater wealth to a smaller one. In order to judge how he will act under the variety of preferences and constraints which operate upon him, we need to analyze each scenario with exclusive variables separately. Economics takes into considerations only the cases where the primary objective of a man is to accumulate and consume wealth.
After having the assumption of wealth accumulation, economist may analyze the actions which would be produced by this desire of solely accumulating and consuming wealth. What we can find is the nearest approximation to the truth. Then, this approximation is being corrected by making proper allowance for the impacts of any impulses of a different descriptions.
“So far, as it is known, or may be presumed, that the conduct of mankind in the pursuit of wealth is under the collateral influence of any other of the properties of our nature than the desire of obtaining the greatest quantity of wealth with the least labor and self-denial, the conclusion of political economy will so far fail of being applicable to the explanation or prediction of real events, until they are modified by a correct allowance for the degree of influence exercised by the other causes”.
So, Economics may be defined as:
“The Science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, in so far as those phenomena are not modified by the pursuit of any other object.”
“There are, on social and political questions, two kinds of reasoners: there is one portion who term themselves practical men, and call the other theorists; a title which the latter do not reject, though they by no means recognize it as peculiar to them. The distinction between the two is a very broad one, though it is one of which the language employed is a most incorrect exponent. It has been again and again demonstrated, that those who are accused of despising facts and disregarding experience build and profess to build wholly upon facts and theorizing. But, although both classes of inquirers do nothing but theorize, and both of them consult no other guide than experience, there is this difference between them, and a most important difference it is: that those who are called practical men require specific experience, and argue wholly upwards from particular facts to a general conclusion; while those who are called theorists aim at embracing a wider field of experience, and, having argued upwards from particular facts to a general principle including a much wider range than that of the question under discussion, then argue downwards from that general principle to a variety of specific conclusions.”
Mostly, the systematic differences of opinion in any science mostly is caused by the different views concerning the nature of the evidence appropriate to the subject, or the difference in their conceptions of the philosophic method of the science.
The first of the two different methods used is a method of induction, à posteriori. The second one is a mixed method of induction and ratiocination, à priori. “By the method à posteriori we mean that which requires, as the basis of its conclusions, not experience merely, but specific experience. By the method à priori we mean (what has commonly been meant) reasoning from an assumed hypothesis; which is not a practice confined to mathematics, but is of the essence of all science which admits of general reasoning at all. To verify the hypothesis itself à posteriori, that is, to examine whether the facts of any actual case are in accordance with it, is no part of the business of science at all, but of the application of science.”
By defining the Economics, Mill has characterized it as essentially an abstract science, and its method an à priori. “It reasons, and, as we contend, must necessarily reason, from assumptions, not from facts. It is built upon hypotheses, strictly analogous to those which, under the name of definitions, are the foundation of the other abstract sciences.” He argues that it reasons and must necessarily reason from assumed premises- from premises that might lack any fact at all, and which are not pretended to be universally in accordance with it.
As it is in geometry, the conclusions of Economics is only true in the abstract; namely, under certain suppositions, in which none but general causes are considered.
According to Mill, the à priori method is the only method by which truth can possibly be attained in any department of the social science, and the reason, he argues, is that which can be proven to be true in the abstract, is always true in the reality with proper allowances. “This will be mere trifling if the assumed circumstances bear no sort of resemblance to any real ones; but if the assumption is correct as far as it goes, and differs from the truth no otherwise than as a part differs from the whole, then the conclusions which are correctly deduced from the assumption constitute abstract truth; and when completed by adding or subtracting the effect of the non-calculated circumstances, they are true in the concrete, and may be applied to practice.”
So is the Economics of this character. To render it flawless as an abstract science, the consolidation of scenarios which it presumes should include all the events that are common to all circumstances whatever. The results correctly deduced from these presumptions would be as true in the abstract as those of mathematics or physics or any natural science. Moreover, it would be the nearest approximation, as abstract truth, to the concrete reality.
Mill, J. S. (n.d.). On the Definition and Method of Political Economy. The Philosophy of Economics, 41-58. doi:10.1017/cbo9780511819025.003
Hausman, D. (1981). John Stuart Mill’s Philosophy of Economics. Philosophy of Science, 48(3), 363-385. Retrieved from http://www.jstor.org/stable/186985
Hausman, D. (2007). The Philosophy of Economics: An Anthology. Cambridge: Cambridge University Press. doi:10.1017/CBO9780511819025