Economic Theory as Social Policy

Abstract

The Meaning and Validity of Economic Theoryl is not a conventional text on the history of economic thought. It is rather an attempt to prove the hypothesis significant new orientations in economic theory first emerge in the concealed or unconcealed guise of argument in the realm of social reform. According to this hypothesis, economic theories have meaning and validity as guides to action and can be understood only within the external context of controversy over social issues. Meaning is here defined operationally, that is, it is to be judged by the consequences produced in action. In Professor Rogin's words, this contingency of economic theory on some policy or plan of action is described as follows: For the purpose of this study, the meaning of a new departure in theory is not to be discovered through an investigation of the natural history of the theorist in question leading up to the emergence of the theoretical innovation as the product of a unique personality. Our interest is in the strategic factor, some institutional aspect of human enterprise which has become a central public issue, dramatized by politics, as expressed in projects either of reform or of revaluation. It is to be discovered in the area of the intersection of the theorist with the social scene. We are concerned in short, with the objective and hence relatively demonstrable correspondence between theory and policy. This hypothesis of the manner in which economic theory originates is the basis of Professor Rogin's contention that social theory is essentially purposive and practical. He holds that the notion of a 'value-free' social science is inspired by the successful career of the natural sciences, that the theoretical articulation of human affairs is susceptible to the uniquely correct determination by means of an appeal to fact, freed from subordination to social ideals and social goals. Professor Rogin's research into the history of economic thought led him to quite a contrary position; namely that economic theory is never an objective representation of the actual situation with which it deals. Every theoretical construction bears the impress of a selective appeal to facts. It is Professor Rogin's contention that the economist's own sense of values and social perspective enter into the selection of any given problem, the interpretation of facts, and the proposed solution. There can be no ques1 The Meaning and Validity of Economic Theory-An Historical Approach. By Leo Rogin. New York: Harper, 1956, $6.50.