146 SECTIONAL ADDRESSES 



variety of possibilities. Thus he has to employ it, even when a specific 

 end is furnished to him.^ 



He uses his criterion both to give advice simpliciter and to give it sub- 

 ject to an overriding end furnished to him. If it were true that there is a 

 latent ethical or political bias when he gives advice simpliciter, it would 

 be equally true when he advises on the means to achieve an end laid down 

 by moralists or politicians. Without his own criterion, he is entirely 

 stultified. With it, he can give advice of precisely equal validity and 

 freedom from ethical bias whether a specific end is furnished to him or not. 



We proceed to our second head within this field of thought : the 

 mechanism for testing whether the requirements of the criterion are ful- 

 filled. Here again our main debt is to Adam Smith. He perceived that 

 the complex phenomena of markets and prices might be regarded as the 

 result of the efforts of individuals to inform each other of their preferences. 

 This is the basis of the analytical map. He correctly maintained that 

 economic study arises from the fact of division of labour. Robinson 

 Crusoe directs his energies in relation to his own standard of preferences ; 

 he needs no outside advice. He may indeed misdirect his efforts from 

 ignorance of agriculture or engineering ; in this the technicians in these 

 subjects can alone correct him ; the economist has no place. The need 

 for the economist arises from the division in person between the producer 

 and the consumer. 



Economists have constructed a map or model in which individuals 

 are seen informing each other of their preferences. (It may help the 

 reader to regard this map as ' the theory of perfect competition,' provided 

 that all reference to the sequence of events is excluded from that ' theory.') 

 In order to construct the map in a way which corresponds with the 

 observed phenomena of the real world, certain important analytical work 

 was necessary. The relevant propositions may be stated in the form of 

 truisms or tautologies, such as that the price of an article is equal to the 

 sum of rewards to all persons contributing to its production, or again, if 

 services of the same type get equal rewards in different occupations, the 

 prices of commodities will be proportional to the quantity of services 

 required for their production.* The intellectual intuition behind these 

 formulations is primarily one of classification. Indeed, it may be said 

 that the major part of traditional economic theory consists of classification. 

 Classification is a highly respectable scientific activity of which economists 

 have no need to be ashamed. By referring more to it and less to so-called 

 ' laws ' their claim to scientific status, albeit more modest, would be less 

 suspected. 



2 The position may be more complex. The economist may be asked to pro- 

 vide not for absolute self-sufficiency but for a higher degree of it than obtained 

 before. He will then be able to lay down the conditions for the attainment of 

 the greatest amount of economic advantage in connection with any given degree 

 of self-sufficiency, and he may be able to give some idea of the successive rates 

 of economic sacrifice involved in the attainment of successively higher degrees 

 of self-sufficiency. 



* More strictly, the prices of commodities will be the sums of parts a, b, c . . . 

 charged in respect of services A, B, C . . ., the value of each of which parts will 

 be proportional to the quantity of the corresponding service used. 



