Abstract
The purpose of this chapter is not to downgrade nor to extol the virtue of economic analysis, but rather to reflect on its limitations. In these times, given much professional talk of the expanding domain of economic science and an inclination on the part of some economists to claim that economic analysis has no boundaries, my purpose may seem unusual.1 My concern is not that we economists have said nothing, but that we have lost sight of the limitations of our methods and, thereby, the limited applicability of the conclusions that have been drawn. More specifically, in much modern discussion, economists seem to have made an unrecognized intellectual leap from assuming that the individual has a rational capacity to assuming that all individual behavior has a rational foundation and is therefore subject to logical discourse.
Chanting the square deific, out of the One advancing out of the sides Out of the old and new, out of the square entirely devine Solid, four sided, (all sides needed) from this side Jehovah am I
— Walt Whitman
“Chanting the Square Deific”
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Notes
Frank H. Knight, “Fact and Values in Social Science,” Freedom and Reform: Essays in Economics and Social Philosophy (Port Washington, N.Y.: Kennikat Press, 1969 [1947]), p. 25.
Gary S. Becker, The Economic Approach to Human Behavior ( Chicago: University of Chicago Press, 1976 ), p. 8.
See Gary S. Becker, Economic Theory ( New York: Alfred Knopf, 1971 ).
George J. Stigler and Gary S. Becker, “De Gustibus Non Est Disputandum,” American Economic Review, March 1977, pp. 76–90.
See James Buchanan, “Is Economics a Science of Choice?” Roads to Freedom: Essays in Honour of Friedrich A. Von Hayek (London: Routledge and Kegan Paul, n.d.).
B.F. Skinner, Beyond Freedom and Dignity ( New York: Bantam Books, 1971 ).
Stigler and Becker, “De Gustibus,” pp. 77–81.
Milton Friedman, “The Methodology of Positive Economics,” Essays in Positive Economics ( Chicago: University of Chicago Press, 1953 ), pp. 3–6.
Frank H. Knight, “The Limitations of Scientific Methods in Economics,” The Ethics of Competition and Other Essays ( New York: Harper and Row, 1936 ), p. 105.
Paul Tillich, The Courage to Be ( New Haven, Conn.: Yale University Press, 1952 ).
Ludwig von Mises, Human Action: A Treatise on Economics ( New Haven, Ct.: Yale University Press, 1949 ).
Israel M. Kirzner, Competion and Entrepreneurship ( Chigago: University of Chicago Press, 1943 ).
Frank H. Knight, Uncertainty, and Profit (New York: Augustus M. Kelly, 1951 ).
John Mckinney, “Frank H. Knight on Uncertainty and Rational Action,” (Southern Economic Journal, April 1977, pp. 1438–52).
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© 1983 Kluwer Nijhoff Publishing
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McKenzie, R.B. (1983). The Nonrational Domain and the Limits of Economic Analysis. In: The Limits of Economic Science. Kluwer Nijhoff Studies in Human Issues. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-7421-0_3
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