The Methodology of Political Economy
Tugan-Baranovsky identified two components of political economy: theoretical (subdivided into abstract and concrete) and practical (or economic policy). The task of abstract theoretical political economy, as he saw it, was to reveal general objective laws and regularities in economic life.
This task was to be achieved in two stages: (1) a description leading to the construction of a system of general concepts; (2) an explanation resulting in a set of causal regularities. The main method here is deduction. Induction is used in concrete political economy, which studies historically specific types of economies. For Tugan-Baranovsky there is no impenetrable wall between these two parts: empirical analysis often precedes theoretical analysis and is used to evaluate a theory. Theoretical political economy is contrasted with practical political economy, closely associated with some ethical principles. According to Tugan-Baranovsky, the only ethical principle that could provide an acceptable normative basis for practical political economy was the Kantian principle of the supreme value and equipollence of the human personality. Tugan-Baranovsky advocated a separation of the two parts of political economy, emphasizing that the penetration of ethics into scientific analysis calls into question the objectivity of science. However, he admitted that in view of the specific subject matter of political economy the ethical element is already present at the stage of the description and concept formation. That is why he saw the problem of the objectivity of economic knowledge as a very difficult one. He hoped that a scholar seeking objective knowledge would not mix the normative and positive approaches. His main complaint against Marxism was that Marxists based their theory on the class approach, so casting doubt on its objectivity. He believed that many of the mistakes of Marxism, including the thesis about the tendency of the rate of profit to fall and the resulting inevitable collapse of the capitalist economic system, were ultimately associated with this methodological bias.Vladimir Avtonomov and Natalia Makasheva
See also:
Albert Aftalion (I); Enrico Barone (I); Business cycles and growth (III); Corporatism (III); Economics and philosophy (III); Clement Juglar (I); Karl Heinrich Marx (I); Marxism(s) (II); Russian School of mathematical economics (II); Arthur Spiethoff (I).