On Appraising the Performance of an Economic System: What an Economic System is, and the Norms Implied in Observers' Adverse Reactions to the Outcome of its Working

207 Pages·1984·3.47 MB·English

by  Rutledge Vining

On appraising the performance of
an economic system

On appraising the
performance of
economic system
an
What an economic system is,
and the norms implied in
observers' adverse reactions
to
the outcome of its working
RUTLEDGE VINING
University of Virginia
Thtr ighotft he
UniverosfiC toymb ridte
top rinatn ds t/I
almla nneorfb ooks
wasg rantbeyd
HtnryVI II in1 534.
ThtU niverhsaistp yr inted
andp ublischoendt inuously
sinc15t84 .
Cambridge University Press
Cambridge
London New York New Rochelle
Melbourne Sydney
CAMBRIDGE UNIVERSITY PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, Sao Paulo
Cambridge University Press
The Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521256568
©Cambridge University Press 1984
This publication is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without the written
permission of Cambridge University Press.
First published 1984
This digitally printed version 2008
A catalorgeuceo rfdor t hipsu blicaitsia ovna ilafrbolme t heB ritiLsihb rary
The author gratefully acknowledges permission to reprint material from the
following: "Vilfredo Pareto (1848-1923)" by J. A. Schumpeter, Quarterly
Journaolf E conomi6c3s (,M ay 1949), pp. 155--6, ©1 949 John Wiley & Sons,
Inc.; "The Statistical Law ofNature" by Erwin Schri:idinger, Natur1e5,3 (June
10, 1944), pp. 704-5, ©1 944 Macmillan Journals Limited; Freedoamn dR eform:
Essaysi nE conomiacnsdS ociPahli losobpy hFy. H . Knight (New York: Harper
and Bros., 1947), pp. 10-11, 12-15, 182-3, 198-9, 212, 216, 217, 383, 390-3,
© 1947 Harper and Bros.; "On Two Foundation Concepts of the Theory of
Political Economy" by Rutledge Vining, Journaolf P olitiEccaoln om(My arch­
April 1969), pp. 207-10, © 1969 The University of Chicago Press; "Science,
Society, and the Modes of Law" by F. H. Knight, in TheS tatoeft heS ocial
Scienceed.s L,. D . White (Chicago: University of Chicago Press, 1956), pp. 21,
25, © 1956 The University of Chicago Press; "Virtue and Knowledge: The
View of Professor Polanyi" by F. H. Knight, Ethic5s9 ,(1 948-9), pp. 280-2,
© The University of Chicago Press; On theH istoarnyd M ethoodf E conomics
by F. H. Knight (Chicago: University of Chicago Press, 1956), pp. 152-5, 174,
©1 956 The University of Chicago Press.
Libraoryf C ongreCsast aloguiinPn ugb licatdiaotna
Vining, Daniel Rutledge, 1908-
0n appraising the performance of an economic system.
Includes bibliographical references.
1. Economic policy. 2. Economic history.
3. Economics. I. Title.
HD75.V56 1984 338.9 83-25236
ISBN 978-0-521-25656-8 hardback
ISBN 978-0-521-07176-5 paperback
The word "system" is nowhere defined I would like a
. . . .
discussion of the concept of "system." . . . T hat is one of my
stumbling blocks.
Jacob Viner
We have involved ourselves in a colossal muddle, having
blundered in the control of a delicate machine, the working
of which we do not understand.
]. M. Keynes

Contents
Preface XI
Part I. The circumstances in which the
conceptual problems are posed: legislators
deliberating upon how well an economic
system is working.
1 Three main concepts that inhere in the
circumstances cited 3
1.1 The three concepts introduced 3
1.2 Rudimentary illustrations 7
1.3 Further illustrations marking the
distinctions to be drawn 11
1.4 The physical reality in which
performance is manifested 13
1.5 The notion of a norm against which the
actuality is compared 17
1.6 The probabilistic character of the
concepts introduced 18
1.7 A juxtaposition: corresponding concepts
in the theory of probability 23
1.8 The person whose descriptive problems
are the subject of our inquiry 26
2 On the peculiarities of economics as a
descriptive science 34
2.1 What free means, as in free society, and
the descriptive problems entailed 34
2.2 A preliminary exhibit of the
circumstances in which the descriptive
tasks are posed 40
2.3 A fundamental distinction illustrated:
what the physical reality is of which price
stability is a statistical property 46
Vll
viii Contents
2.4 What that working mechanism is for
which economic system is the name 49
2.5 The meaning of statistical, as in statistical
economics: illustrations from a peripheral
literature 54
An Appendix to Section 2.5 59
3 On norms that are implied in observers'
adverse reactions to an economic system's
performance 66
3.1 The sense in which a norm is said to
exist 66
3.2 Two categories of norm as reality 67
3.3 Avoiding the fallacy of "scientism" 69
3.4 The reality of health contrasted with that
of fairness-or of fullness of employment 74
3.5 Fair game theory as simple prototype of
a theory of political economy 77
3.6 A case of a distinguished practitioner in
the act of practicing Smith's science of
the legislator 81
3.7 A second case of the practice of this
advisory science 86
3.8 Two exhibits of the practice of the
profession 90
Part II A nation's economy in geographic space
and time: on the task of specifying norms
of various aspects of it
4 On constructing a small-scale model of a
nation's population of people 111
4.1 An introductory statement of the
descriptive task undertaken 111
4.2 Steps in the first stage of a doing of this
task 115
4.3 A city viewed as a detail in a population
density configuration 115
4.4 The density configuration of which a
city is a detail 119
4.5 The development over time of this
density configuration 122
An Appendix to Section 4.5 126
Contents IX
5 A provisional description of a nation's
population developing over time while in a
state of full employment 136
5.1 The unemployment rate as a measure of
a physical property of a spatially
dispersed population 136
5.2 The variation of this physical property
over geographic space 138
5.3 The variation of this property over
geographic space and time 144
5.4 A description of this variation over a
time of full employment 148
5.5 Toward a theory of the outcome of an
economic system's working 161
6 Concluding remarks upon what an economic
system is, and the problem of specifying
norms of the outcome of its working 170
6.1 What an economic system is 170
6.2 Knightian principles of empirical
inquiry in the social studies 175
References 182
Index 188