1. TENDENCIES IN ECONOMIC THEORY--DISCUSSION.
- Author
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Davenport, H. J., Hamilton, W. H., Ely, Richard T., Fisher, Irving, Anderson, B. M., and Jr.
- Subjects
ECONOMICS ,ECONOMISTS ,LABOR market ,CAPITAL ,SPECULATION ,MONEY ,CREDIT ,SOCIAL sciences - Abstract
The article presents a discussion on the tendencies in economic theory. One argues that little or nothing worth has been accomplished in theory during the last thirty years and there is little really left to do. Another says that it is just an evaluation of results and of possible tasks which textbooks in economics have furnished. For example, the subject of trade unionism is badly in need of a general, even if tentative, statement of results. The clear vision and the sense of relative values which such a text would impart should suggest to the workers in the field the tasks which are really most worth doing. Another has put forward his view that much of the economic theory has been static theory, concerned with "normal equilibria" and delicate marginal adjustments, resting on the assumptions of a fluid market where labor, capital, and goods are perfectly mobile. If these assumptions were true, money would, indeed, be a meaningless "cloak," obscuring the real forces at work. It is, moreover, quite grotesque for static theory to offer itself as a support for its own foundation. A static or "normal" theory of money and credit, resting on the notion of accomplished equilibrium, after transitional changes have been effected, misses the main point as to the function of money and credit. Static theory which assumes frictionless fluidity, misses the whole point concerning money and credit. A functional theory of money and credit must be a dynamic theory, basing itself on an analysis of friction, of transitions and the like.
- Published
- 1916