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The Evening Star MONDAY, FEBRUARY 13, 1928. TREND OF ECONOMIC THOUGHT.

An important chapter in Dr Copland’s ‘ Studies in Economics and Social Science,’ to which we referred in a recent leader, is devoted to an attempt to sum up the present trend of economic thought. Needless to say, in a science such as economics, that deals with actual social life being lived in the business world, there arise easily distinct and opposing schools of thought iu several directions. As it approaches more and more to the nature of an exact science, however, these tend to disappear; so that general lines of agreement among economists become possible. On the other band, there seems to be a distinct growth iu what may be called “ applied economics,” as economic theory and economists themselves come more and more into touch with the problems of everyday liie and with public policy. Hence results controversy among the economists themselves, which contributes somewhat to the tendency of public authorities to neglect the economist. Nevertheless, the adoption that has taken place of more exact methods of research through the refinement of statistical analysis and the broadening of the field of operation is enabling the economist to speak with an authority that must be listened to, even as the pure scientist. The theory of the trade cycle is a case in point.

One very important factor is that effecting a change in modern thought is the substitution of “ group enterprise ” for private enterprise, in the narrow individualist sense of the term. It is true that we have private enterprise in the sense that the mainspring to action is still the prospect of private gain from investment and enterprise, But this type of enterprise is not in the hands of individuals so much as of commercial and social groups. It might bo called “corporate enterprise.” “In every field of economic and social life it is the group that predominates, whether it be the company organisation of industry, the trade union or employers’ association, the political party in government, or the friendly society or other group in social life. We are therefore witnessing a development of social control through these agencies quite apart from the actions of the State.” Often this means that special interests of groups are powerfully exerted in opposition to the general interest, so that Dr Copland considers “in the circumstances it is not difficult to see the importance of further control by the authority of the State in many spheres. . . . It cannot ignore the need for some conscious effort at directing economic forces towards the public interest when they are being diverted by special groups in their own interests.” To-day oven such a high advocate of individualism as Mr J. M. Keynes sees three fields in which some form of control is necessary. Ho would adopt a positive policy with regard to currency, the growth of population, and the amount and nature of savings in the community—this under the cegis of the State, but without direct State action. The trend to-day in Governmental action is apparently to lie not so much in detailed regulation as in the promotion of wide schemes—e.g., the regulation of currency or the amount of money in circulation—in such a way that catastrophic price changes are averted, which Dr Copland considers is to-day

quite possible, as the laws of such changes are now known. Looking a* some wider aspects of economic thought, tho chief contribution of modern research has been to show how the teachings of pure science may be applied to improve tho working of the economic system. Many universities are giving students in economics a preliminary study in economic history to trace the gradual growth of economic organisation. Such a study both exposes tho limitations of pure economic forces as causes of social phenomena, and also demonstrates the futility of political action based upon unsound economic premises. Equally important is tho study of the development and influence of institutions—o.g., property and contract—and their possible trend in the future. Particularly is this valuable in the case of financial institutions. Closely connected with this, of course, are the problems of behaviour, hitherto a neglected field. The common assumption by the nineteenth century economists that self-interest and the money motive are the mainsprings to human action has been undermined by the advances in psychology'. So the economist has to make a wide estimate of tho complex of influences operating upon individuals and groups in their social and economic activities. It is in statistical analysis that the greatest advance has been made. A huge volume of high-class material is being published now, which even in 1907 Alfred Marshall had asked for in vain. This serves as a most valuable check in the stating of economic laws. One result is that wc know very much more to-day than wc did of the working of the economic system. This shows up both its strength and its weakness, and throws important light on the directions in which improvement is urgent. “ The ’economist,” says Dr Copland, “ may fairly say that he has got beyond the position where he is concerned with pure science alone. It is quite an important feature of modern economic thought to make responsible criticisms of the working of the economic order, as well as to expound the operation of those features which are recognised as efficient.” And to-day the political scientist is influenced by the growing tendency to consider tho economic causes and results of political action. So that more and more must the economist face the problems of everyday life. It is good to sec that our Now Zealand professors of economics are rising to this challenge, and constantly in our telegrams their views are recorded on various questions of tho day. It is to be hoped that these will at least be weighed by those responsible for the conduct of public affairs; lor their habits of study and thought incline them not to speak without due consideration, but only after a serious study of tho question concerned.

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Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/ESD19280213.2.60

Bibliographic details
Ngā taipitopito pukapuka

Evening Star, Issue 19789, 13 February 1928, Page 6

Word count
Tapeke kupu
1,004

The Evening Star MONDAY, FEBRUARY 13, 1928. TREND OF ECONOMIC THOUGHT. Evening Star, Issue 19789, 13 February 1928, Page 6

The Evening Star MONDAY, FEBRUARY 13, 1928. TREND OF ECONOMIC THOUGHT. Evening Star, Issue 19789, 13 February 1928, Page 6

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