Is Economics a Science?
From the initial doubts expressed about the progress of political economy in his Inaugural Lecture, Price became increasingly sceptical of a scientific approach to economics through the 1870s.
Most notable was his Presidential Address to the Department of Economy and Trade of the National Association for the Promotion of Social Science in Cheltenham in October 1878. He warned of a current crisis in economic thought and teaching. Despite the previous gains of free trade, Price warned that ‘The mercantile theory still survives with great vitality in the language of the city and of commercial exchanges’ (Price 1878a: 638). Traders failed to understand the nature of money, favourable exchanges were still seen as the best indicator of a prosperous trade, and protectionist calls grew in the face of depression. Where in all this, he asked, were the political economists? One factor was a failure to explain the problems in terms that the people of the market and workshop could understand: political economy was inherently polemical. The other was ‘the grave mistake made by economists in attempting to give a scientific form to [their] teaching’ (ibid.: 641), and ‘The language in which this scientific teaching was couched was as remote from common life as that of the mathematician’ (ibid.: 642).Price’s 1878 collection of lectures used the term “Practical Political Economy”, which was ‘intended to indicate a mode of treatment which not only does not claim to be scientific, but which supposes the strictly scientific method to be a mistake’ (Price 1878b: 1). Political economy, therefore, was something of everyday life, open to common sense, simply a means of explaining complexities and exposing error. Attempting to do this in mathematical terms such as proposed by Ricardo, Mill and others was to move away from the essence of what Adam Smith had started.
Price pointed out that it was a self-evident truth that if more goods are made than wanted, their price must fall or not be sold at all: ‘There is little else in the economical discussions of supply and demand but expansions and applications of these very obvious and instinctively observed facts. To call them scientific principles is nothing but inflated language’ (ibid.: 15) and:The truths proclaimed by Political Economy are ultimately truisms—processes which have always been known to all the world; and when Political Economy has explained them, the hearer is rightly apt to exclaim, that everyone knew that before. It is an excellent test of real economical teaching that it should land the pupil in the perception that it is made up of familiar truisms. A right understanding of them is worth all that scientific treatises have ever constructed (ibid.: 16).
Not scientific laws, then, but simply rules in an art that seeks to explain what is wealth, in terms that anyone would understand, which did not therefore need the precision of a science. Political economy, for Price, is an ‘Inquiry into some general processes in the production and distribution of wealth' (ibid.: 19). As such, Ricardo's false path should be abandoned to return to the Smithian method of The Wealth of Nations. Price uses very much the same set of arguments in his 1879 article for a US audience, stating: ‘Whatever else Political Economy may be, most assuredly it is not the science of value' (Price 1879a: 573).
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