ECONOMIC MAN. The term homo economicus has often been employed, with an ironical significance, by critics of political economy, and has been especially directed against the English economists who founded the Classic school, such as Ricardo and Senior. Critics reproach them with having based a science of eco nomics on the conception of an "abstract man," a creature moved solely by exclusively economic motives. The German economists, in particular, have opposed to this conception a rival method, the so-called "historical" or "realist" school, which studies men (not man) under the sundry aspects evolved in different ages and coun tries. They maintain that this method alone is fruitful and ca pable of indefinite renewal, while the conception of the homo eco nomicus can lead only to a few general formulae devoid of any practical application.
It must, however, be admitted that the science of economics could never have been developed, had it not seen men as something more than different individuals ; had it not first regarded the char acteristics common to all. Long ago Aristotle said, "there is no science except of the general"; individuals, objects, facts, being, so to speak, merely accidents, deviations from the true type. The existence of a science of economics implies that men generally, if not invariably, behave in the same fashion when placed in the same circumstances. If they are purchasers, they will always prefer the cheaper of two products of equal quantity, or, if price is equal, that of better quality. If they are workers, they will seek the kind of work which is least laborious and best remunerated. If they are owners of an object, they will not part with it or lend it without return.
The real failing of the early economists was their habit of too wide generalization. The French economists of the late 18th and early 19th centuries, such as the physiocrats and Jean Baptiste Say, declared that political economy is possible only if every dis tinction of time and nationality is suppressed. The historical school was right in protesting against this conception of a uni versal and eternal national order, and substituting for it that of economic systems differentiated by time and circumstance. It does not study the "typical man," but the man of the loth cen tury or of the first; the bourgeois or the workman; the man of the west or him of the east; the town-dweller and the country dweller, and restricts its concentric circles progressively to ap proach reality through successive approximations. Nevertheless, these remain generalizations, although increasingly narrow ones. The individual case, the conduct of John or William, so far as it is isolated, "excentric," as it has been well termed, is of no inter est for the economist, unless this individual case, by generalizing itself, becomes the starting-point for a new generalization, and inaugurates a new column to a statistical table.
The dispute between the economists of the liomo economicus school and those of the realist and historical school is a revival of the great conflict which divided the mediaeval scholastics for several centuries, between the "Universals" and the "Nominal ists," the former affirming, with Aristotle, the reality of abstract and general ideas, the latter seeing in them nothing but words, names, categories, corresponding to no reality.
The Nominalists were ultimately victorious, and founded mod ern science, the product of observation and experimentation. The latter is directed towards the particular, and, indeed, the most minute facts, which were considered negligible by the Universals, are most highly prized by the students of to-day. It has been said that the domain of discovery begins beyond the fourth decimal point ; which is to say that it is only at this point that a univer sal law can be shaped, unless a sagacious observer sees a new vista open before him. Only when observations, pressed to the last limit of precision, revealed certain discordances in the movement of luminous rays, could Einstein's theory be formulated.
Nevertheless, the role of deduction in physical science is far from played out ; for while students struggle to relate phenomena to unity, others work unceasingly to discover divergences in that unity. It is the same in the science of economics.
Here, too, we must grant science, even in the case of a social science, the right, even the necessity, of elimination. If a physicist studying mechanics must eliminate all phenomena capable of affecting the motion, such as friction, so much the more may the economist, to clear his way in the tangle of social facts, simplify them by eliminating from his field of vision everything not con cerned with the desire of gain.
In the introduction to his "Theory of Political Economy," Stanley Jevons said : "The theory which follows is entirely based on a calculus of pleasure and pain, and the object of Economics is to maximise happiness by purchasing pleasure, as it were, at the lowest cost of pain." This was the origin of the so-called "hedonist" school. Thus political economy becomes a sort of mechanical science, and can even be expressed in mathematical formulae.
Pure economy cannot, however, claim to exhaust all political economy. These social mechanics can but give a schematic representation of political economy which is a science as living and as complex as man himself. As in the vision of the Prophet Ezekiel, who saw dry bones live, these skeletons must have re stored to them the flesh and blood removed by elimination. Man is not a creature governed solely by his interests, but also by his feelings, his convictions, his passions. Besides, it must be re marked that his so-called "interests" include very various mo tives ; for there is not only pecuniary interest, the desire of profit ; there is also the desire of leisure, that factor which has proved so potent in the struggle for the limitation of the working day ; there is the desire for independence, which revolts the working class against the wage-system ; there is the desire for security, which creates in every country the immense apparatus of social in surance. Personal interest expands progressively, and becomes family interest, corporative interest, class interest, national inter est, and even, reaching its last limit, the interest of humanity.
It is impossible to explain economic evolution if no factors out side egoism are considered, and the action of altruism is not also regarded. The so-called institutions of social service, solidarity, and mutual assistance—communal conditions inspired by collec tive interest—grow more numerous every day. Family allowances, for example, supplementary to the wage, occupy a growing place in modern economy. Consumers' co-operatives transform com merce by eliminating all purposes of profit.
If demography is admitted as part of political economy, then the sexual interest must be placed beside and above the personal interest. It is not "economic man" that begets children, for his individual and class interests often conflict with his sexual interest.
Most economists, however, consider that this progressive ex tension should not pass beyond the limit which should divide political economy from ethics. Their provinces should remain separate ; in the one case interest, in the other duty ; in the one utility, in the other justice. We think, however, that it is neither possible nor desirable to respect this dividing-line, which we con sider to be arbitrary. No doubt, from the point of view of classi fication, it may be well to distinguish the two provinces, just as in a library it is proper to separate the books dealing with the two sciences. Yet neither can be ignored in explaining social facts. Study of modern economic questions—social questions, as they are called—shows that one almost always arrives at an impasse where political economy fails, and only ethics can afford a solu tion. The ethics of political economy are justice.
According to pure economy, any price, any wage is just if it has been determined by the interplay of supply and demand under conditions of unrestricted competition. This is the tenet of the hedonist school, and they are right, if the word "just" be taken as meaning "exact," as when one says that a weight "just balances" when the two scales are in exact equilibrium. But what sort of political economy is that which in determining prices and wages eliminates "justice" in its true, ethical sense, and how can it give any solutions to the problems of the present generation, the prob lem of high prices, or of the remuneration of labour? When the authors of the Treaty of Versailles solemnly proclaimed in art. 42 7 : "labour should not be regarded merely as a commodity or article of commerce" (one of the principles of which the Interna tional Labour Office is the embodiment), they meant that labour conditions cannot be treated solely by the principles of pure economy. When the governments of every country endeavour to limit the rise of prices and lower the cost of living, this is because they believe that there is a conception of a just price which stands above that evolved from the blind caprice of the law of supply and demand, and that this higher law ought to prevail.
If we consider the history of labour, we see that it has passed through many stages. Formerly it was impelled by constraint, when slavery was current ; later in the stage of wage-labour, this constraint still exists, on account of the necessity imposed on the proletariat of earning its bread ; but by degrees, as the working class becomes stronger and better organized, forced 'labour is re placed by interested labour—already a great progress, not only from the moral point of view, but also from that of the return. Yet another stage may be foreseen—a stage already reached in the liberal professions—where interested labour becomes a social service, a public function, in the noble sense of this term; that is to say, its motive will be duty.
Similarly, as regards consumption, how can the economist set aside every moral consideration regarding the use of wealth ; re fuse to distinguish between that whose only aim is pleasure, such as the consumption of alcohol, and that which meets the public interest, such as the education of children? In conclusion, then, it must be said that homo economicus has a justification in existing, and may form the object of the abstract science of pure economics, but that the object of political economy is social man—a fact which is, indeed, sufficiently indicated by the very adjective "political." (C.G.)