ABSTRACT
Sir John Hicks has recently lamented that John Stuart Mill ‘as an economist, seems to have been de-throned’ (Hicks 1983:60). It is my contention that his under-evaluation has been at a great cost-intellectual and social. Professor Phelps-Brown, in his Presidential Address to the Royal Economic Society in 1971, charged that the profession had contributed little by its sophisticated theoretical and econometric techniques to the most pressing economic problems of our age, and explained this discrepancy by the argument that our models are ‘built upon assumptions about human behaviour that are plucked from the air’, rather than drawn from observation-‘that the behaviour posited is not known to be what obtains in the actual economy’ (Phelps-Brown 1972:34). The President of the American Economic Association in 1971 made precisely the same point, that the ‘consistently indifferent performance in practical applications is…a symptom of a fundamental imbalance in the present state of our discipline. The weak and all too slowly growing empirical foundation clearly cannot support the proliferating superstructure of pure, or…speculative economic theory.’ What is needed, considering that by the nature of social systems the structural relationships (both their form and the parameters) are subject to continuous change, is ‘a very difficult and seldom very neat assessment and verification of these assumptions in terms of observed facts’. In this context he characterised much econometric work ‘as an attempt to compensate for the glaring weakness of the data base available to us by the widest possible use of more and more sophisticated statistical techniques’ designed ‘to stretch to the limit the meager supply of facts’—techniques ‘which themselves are based on convenient assumptions of fact which can be seldom verified’ (Leontief 1971:1-3).
