Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Static economics and business forecasting / Benjamin M. Anderson, Jr.

Collection:: Economics Books

8 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK have found little in it that bears upon the laws of economic change or that enables them to tell which factors move first and which come after. Pure economic theory has largely abstracted from the element of time and the sequence of events in time, while it is precisely this sequence of events with which the business forecaster is most immediately concerned. The business fore- caster has thus been driven to the study of business history rather than theory, and has tried to deduce a certain theory (or a mul- tiplicity of theories) of his own from the study of history, ignorant of or contemptuous of the static theory. He is interested in “dynamics,” not in “statics.” Moreover, the business forecaster is increasingly concerning himself only with that part of business history which can be measured in statistical terms. At the extreme he ignores not only economic theory but also the rich body of historical facts which cannot be quantitatively stated. His ideal seems to be to develop mathematical laws which will tell him not merely which factors change first, but also what percentage changes in other factors will follow from a given magnitude of change in a particular factor, and which ones will come three months later, which ones four and a half months later, and which ones four and three- fourths months later. | In extreme cases he does not know enough of economic theory or of economic history to realize that such an undertaking is foredoomed from the beginning, and that if laws of this kind could be worked out for a given period in the past, there is no guaranty at all that such laws would apply at any time in the future! I hasten to add that the extreme case I have just been describing is a caricature which does not justly describe any living business forecaster. I claim the privilege which the static theorist has always claimed of studying tendencies in their pure form, even though concrete human nature always involves complexities! It must be apparent, however, that in ignoring the static con- ceptions and the beautifully worked out static doctrines the statistical business forecaster is throwing away a most valuable aid. Static theory does describe underlying economic forces. If it tells nothing about the rate at which they are moving, it does at least indicate the directions in which they move, it indicates their relative power, and it indicates their relations inter sese. The student of change who knows the goal toward which his

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