An Economist Looks at Economics

Extract

Last year you heard my distinguished predecessor, Dr. Coats, set forth a by-no-means modest claim for statistics in his brilliant address “Statistics Comes of Age”. Sweeping as his claim was, Dr. Coats, by his great organizing and administrative abilities, has established it in this country. That he has through the shifting experiences of more than thirty years of public administration retained his vision and resourcefulness, is evidence of a high courage.

It is now more than a hundred and sixty years since Adam Smith's Wealth of Nations, popularly conceived to be the beginning of specialized study of economics, was launched into the world of letters and affairs, and it is about fifty since Economics became a subject of specialized study in Canadian universities. One has only to scan university examination papers of the late eighties, based mainly on John Stuart Mill and Fawcett's little manual, to realize that in form at least the subject has changed profoundly. But what has been accomplished? Is it an instrument or a game that has been fashioned? If an instrument, what are its limitations?

These and related questions have often been asked and answered, and the answers are not always to the economist's liking. Three years ago the then president of this Association asked, “What is left of Adam Smith?” and answered in substance, nothing except the economic man. Avoiding discussion of his exception, and adding one or two of our own, we can accept his answer as broadly not untrue. The implication, however, that modern economics even in rudimentary form is set forth in the Wealth of Nations, needs emphatic denial. As Professor Schumpeter has justly said: “Classical theory has no other claim to its epithet than pristine simplicity.” And yet, the economics of the Wealth of Nations is of a type which the economist's critics would have him adopt—the espousal of a doctrine, the initiation of a movement, propagandizing a policy. Any body of doctrine limited and attached to a policy is necessarily tied to a particular era; most of the Wealth of Nations is now of historical interest only.