Individualism and Economic Theory

Abstract

ECONOMICS, ONE OF THE OLDEST of the social sciences, is in need of reconstruction. However, in spite of the dissatisfaction with economic thought, there are few attempts toward laying new foundations. The reason for this may be the lack of a basic insight into the meaning of economic thought; therapy is impossible without proper diagnosis. Rationalistic and positivistic thought interprets scientific truth as some kind of conformity between conceptual schemes and reality. Truth is considered as the sole aim of economic science. However desirable it may be to create such an economic science, the reality of economics shows a different picture. Our culture is distinguished by its emphasis, perhaps overemphasis, on economic activity. Production of goods and acquisition of wealth is not considered as an onerous necessity but as the main purpose of life. Economics moved into the center of thought. Functions which were fulfilled in other societies by mythology, religion and philosophy are, often unconsciously, performed by economic thought. Economics became a substitute for metaphysics and philosophy. One cannot understand the meaning of certain concepts of economic analysis without considering that thought in general performs a function beyond the mere scientific one of explanation and beyond the technological one of controlling reality. Man is subject to the conflicts created by his civilization. Systems of thought, philosophies and social ideologies perform the function of harmonizing tension-creating conflicts' and thereby enable man to bear the burden of existence. Because of the emphasis on economic activity in modern civilization, this function is largely fulfilled by economic thought. Economics has formulated the human ideal of industrial civilization.2 It has projected this ideal into nature and into the universe. Through its rationalistic and utilitarian assumptions and through its theoretical constructs it has molded human and social reality into the shape needed by an industrial society. Complete understanding of the meaning of economic thought is impossible if one neglects its covert, unconscious attempts to harmonize the conflicts created by industrial civilization.