Equilibrium and Wealth: A Word of Encouragement to Economists

In: Canadian journal of economics and political science: the journal of the Canadian Political Science Association = Revue canadienne d'économique et de science politique, Band 5, Heft 1, S. 1-18

Abstract

When the founder of the science which has become Economics came to write the title-page of his immortal work, he wrote boldly An Enquiry into the Nature and Causes of the Wealth of Nations. From this it might be thought that Economics was the science of wealth; that it would tell us what are the conditions which make one society wealthy and one poor, or which make for the growth and decline of wealth, in general or in particular. In fact, however, the science has not developed primarily along these lines, in spite of many interesting and important observations on this subject on the part of the standard writers. Especially in these days we seem to be interested not in Plutology—the science of wealth—but in Economy—the science of management, of budgeting, of the distribution of given resources. In other words, our interest has shifted from the study of the Nature and Causes of the Wealth of Nations to the study of equilibrium and disequilibrium.In many ways this shift of emphasis is regrettable, in spite of the undoubted achievements of equilibrium theory. Part of the loss of prestige from which Economics has suffered is undoubtedly due to this very point. To the general public, equilibrium seems to be a vague and irrelevant ideal. Most governments, and most individuals, would rather be in chronic disequilibrium, and be rich, than be in glorious equilibrium, and be poor. The assumption which frequently underlies economic homiletics—that equilibrium is synonymous with riches and disequilibrium with poverty—is not one which can be long maintained.