In brief remarks intended to give non-economists a sense of the major methodological schools of economics at a 1937 conference at the New School for Social Research, Columbia professor Wesley Clair Mitchell distinguishes (i) orthodox economics dedicated to the understanding of the “pecuniary logic” of an agent within a capitalist market environment, (ii) institutional economics dedicated to the understanding of the evolution of economic organization, and (iii) a new, yet unnamed, type of economic theory that is clearly recognizable as being “behavioral economics”.
____________________
Conference Program
CONFERENCE ON METHODS IN PHILOSOPHY AND THE SCIENCES
New School for Social Research
66 West 12th Street
New York City, N.Y.
Saturday, May 22 and Sunday, May 23, 1937
PROGRAM
Saturday, May 22
* * * * * * * * * * * * * * * *
9:30 A.M. – 11:00 A.M – Registration, Room 24, Fee – $1.00
11:00 A.M. – 1:00 P.M. – First Session – Room 25
Chairman: H. M. Kallen
Sidney Hook: The Current Philosophical Scene
John Dewey: A Possible Program for Libertarians and Experimentalists
* * * * * * * * * * * * * * * *
2:30 – 4:00 P:M: – Second Session – Room 25
Brief statements on various departments of philosophy and the sciences: Their assumptions, methods, histories of the different schools, etc.
Ernest Nagel: The Position in LOGIC and METHODOLOGY
W.M. Malisoff: The Position in the PHYSICAL SCIENCES
DISCUSSION
4:00 – 5:30 P.M. – Second Session Continued – Room 25
S. E. Asch: The Position in PSYCHOLOGY
Wesley C. Mitchell: The Position in ECONOMICS
DISCUSSION
* * * * * * * * * * * * * * * *
7:00 P.M. – DINNER, Gene’s 71 West 11th Street
Speakers: Bacchus, Dionysus, the Holy and other Spirits.
Appointment of Committees
* * * * * * * * * * * * * * * *
Sunday, May 23
10:00 A.M. – 12 M. – Third Session, Room 25
Julius Lips: The Position in ANTHROPOLOGY
Meyer Schapiro: The Position in AESTHETICS
R. M. MacIver: The Position in SOCIOLOGY
DISCUSSION
12M. – 1:00 P.M. – Business Meeting
Election of Officers
Appointment of Permanent Committees
Unfinished Business
Adjournment
____________________
Handwritten Remark by Wesley Clair Mitchell
Economics
Conference on Methods in Philosophy and the Social Sciences
New School
May 22, 1937
Economics like Philosophy and the other Social Sciences is still in the stage of development marked by the existence of fairly distinct schools of thought, or as I like better to say Types of Theory.
These schools differ in method. But these differences in method arise from differences in the problems which are taken as the central concern of economics.
Orthodox economics concerns itself primarily with what I like to call pecuniary logic — what it is to the economic advantage of men to do under a capitalistic organization — and the ‘purer’ this theory becomes the more exclusive concentration on that problem becomes.
In dealing with pecuniary logic, the investigator employs the method of imaginary experimentation. That is, he sets up certain assumptions and seeks to think out what it is to the interest of men to do under the conditions supposed.
The theory is developed by varying these assumptions with reference to such matters as the factors in theory set which are allowed to change the length of the period considered in the problem, the degree of competition supposed, elasticities of demand, relations between unit costs and volume of output.
How far the conclusions apply to the actual world depends upon the character of the assumptions made. The correspondence between these assumptions and actual conditions is seldom investigated.
Hence the doubts about this type of theory are usually doubts, not about the correctness of the reasoning, but about how far they apply to the facts we wish to understand. May have uncertain ‘operational significance’. Defence.—tool makers. Question about applicability not relevant.
This description applies less strictly to Marshall than to many of his pupils, to the later Austrians, and to mathematical economists.
Institutional economics concerns itself primarily with the evolution of economic organization.
To Veblen this meant study of the widely prevalent habits of thought.
To Commons it means study of social controls over induced action—primarily through the courts.
Methods employed combine ethnology or historical research with reasoning about how men with a certain set of habits ingrained in them by the social environment in which they have grown up and by the work they do will behave or how the social controls over induced behavior may be expected to work out.
Again there may be doubts about how far the reasoning concerning economic behavior applies to actual conditions.
A third type of economics seems to be developing though not represented as yet by systematic theoretical treatises.
It endeavors to learn by analytic studies of actual behavior how men conduct themselves. Its methods are closer kin to those of animal psychologists than to those of introspective psychologists.
Though these men show no reluctance to account for their observations by supposing that their subjects know the rules of the money-making and money-spending games. Here they go beyond outlook[?] of physical science— Supposes men have purposes: that they plan for future .
Large use of the mass observations afforded by statistics
Considerable emphasis upon method[?] analysis of these records.
Not confined to statistics.
Doubts here concern representative value [or volume?] of the data
Trustworthiness of the mathematical analysis.
Extent to which factors that are not recorded statistically may modify conclusions drawn. Work of this sort is primarily monographic. Since social phenomena are interdependent, the question concerning what is left out is highly important
Can’t be applied well except when mass observations are available.
Promises to develop in future because statistical observation is covering a wider range.
Danger of ‘mere fact finding’ Dewey. Yes, but the facts may have deep ‘operational’ significance. Relation to questions of policy.
Source: Columbia University Archives. W. C. Mitchell Collection. Box 3, Folder “5/22/37 A”.
Image Source: Wesley Clair Mitchell from Albert Arnold Sprague’s and Claudia C. Milstead’s Genealogical Website.