Exercises in economic analysis

(Here, in the summary part I refers to the author)

This is a text book of a somewhat unusual kind. Instead of presenting the student with some propositions which he is expected to master and to believe I have tried to show him how propositions in economic theory are arr ived at so that he can carry on for himself where the book leaves off. This cannot be done by trying to explain analytical method. Sermons on methodology are of no use to a beginner. The only way to learn it is to do it. I should, however, like to draw attention to a few methodological rules that I have tried to observe (if I have failed, the reader must catch me out).

(1) We must take time seriously. To make a com parison between two situations, each with its own future and its own past, is not the same thing as to trace a movement from one to the other.

(2) A quantity has no meaning unless we can specify the units in which it is measured.

(3) Technical and physical relations, between man and nature, must be distinguished from social relations, between man and man. (There is an intermediate class, concerning the incentives of behaviour, where human nature itself is part of the technical situation.)

Chewed in solitude, the exercises will prove very dry. The best way to use them is as a basis for group discussion. Each student should work over an exercise and then compare his results with others and discuss their meaning and application.