i6o SECTIONAL ADDRESSES 



current elasticity of demand. Yet even that magnitude of central import- 

 ance, which theorists are apt so glibly to take as given, is one about which 

 many entrepreneurs are quite in the dark. 



Having regard to the fog of uncertainty, by which the entrepreneur 

 is thus shrouded, it has seemed to some of us in Oxford that valuable 

 information about how he does in fact steer his course might be gained 

 by the method of direct question. It is desirable to obtain a wide sample 

 and to conduct the questionnaire in such a way as to make it probable that 

 the victim will speak his true mind. I select two lines of thought for 

 mention. 



1. Theory may assume that the change in a certain magnitude, e.g. 

 the rate of interest, will cause a defined change in the entrepreneur's 

 behaviour. But in fact if his margins of possible error owing to uncertainty 

 about various factors are very wide, such a specific change, even although 

 definitely known, may be treated by him as of too small account to affect 

 his reckoning. The method of direct question does not seem an 

 unreasonable one for obtaining reliable information about this. 



2. The entrepreneur lives by action ; even if ignorant of the relevant 

 data, he must decide one way or another. Nor can each and every de- 

 cision be reached by an independent act of judgment ; some rules of 

 thumb are necessary to the efficient conduct of a business. In the 

 absence of data, the rules must be supplementary to those envisaged in 

 static theory. What are they ? Again this seems a suitable subject for 

 direct question. Generalisations may be possible and valuable, even if 

 confined to certain types of industry. For instance, an irrational but 

 systematic and consistent treatment of overhead costs might give rise to a 

 pattern of behaviour of significance in the trade cycle. 



I believe that we may be on the eve of a great advance in economic 

 theory, taking us right outside the ambit of the static system of equations. 

 The wealth of statistical data, together with the indications resident in 

 the trade cycle that the succession of events is governed by laws still 

 undiscovered, should be a spur to the inventiveness and enthusiasm of 

 every student to whom the ways of science make appeal. He may 

 reasonably feel that any day he may light upon some general relation of 

 wide validity, satisfying to the intellect and capable of yielding vast benefit 

 to humanity. The prospect is an inspiring one. 



Kindled by it, the worker who is an economist at heart will reject with 

 contempt proposals for relegating him to the banausic work of the mere 

 cataloguer. Nor will he be likely to wish to take up a position of polite 

 subordination to the sociologist or anthropologist, as Mrs. Wootton has 

 recently suggested. All honour be to those allied branches of investiga- 

 tion into human behaviour. I hope that I have indicated that the 

 economist should take a broad view ; he should be very much awake to 

 the possibility of obtaining hints from and using the results of workers 

 on the periphery of his subject. But if the status of a subject may be 

 judged by the number and width of its general laws established on a 

 firm foundation, then, even adopting my very modest assessment, the 

 economist may still claim without insolence that his subject is more mature 

 than other sociological studies. And it may be added that the wealth and 



