ABSTRACT
The “correct” propositions regarding economic behavior are strictly analytical in character, and it is to the authority of such propositions that economic analysis must ultimately return. The formulation of the Chicago paradigm rests upon unverifiable propositions, except in the sense that together they constitute an internally consistent system of analysis. The resort to authority always has been one means by which economists have attempted to verify their own views, either by showing some connecting link with previous writers believed to be in the same camp, or by writers pointing up their own break with tradition, so as to differentiate their product. The Knight position has any number of implications for what might he considered correct theorizing and the identification of error. In the neoclassical formulation, the utility theory of value is rescued from its original limited role of determining relative values for David Ricardo’s rare goods case because of the universality of the law of diminishing returns.
