Supply and Demand: The Start-up Guide to The Basis of Economics (Paperback) (ISBN-13: 9781805477877)

Theory and Fact. The controversy between the "Theorist" and the "Practical Man" is common to all branches of human affairs, but it is more than usually prevalent, and perhaps more than usually acrid in the economic sphere.

It is always a rather foolish controversy, and I have no intention of entering into it, but its prevalence makes it desirable to emphasize a platitude. Economic theory must be based upon actual fact: indeed, it must be essentially an attempt, like all theory, to describe the actual facts in proper sequence, and in true perspective; and if it does not do this it is an imposture.

Moreover, the facts which economic theory seeks to describe are primarily economic facts, facts, that is to say, which emerge in, and are concerned with, the ordinary business world; and it is, therefore, mainly upon such facts that the theory must be based.

People sometimes speak as though they supposed the economist to start from a few psychological assumptions (e. g. that a man is actuated mainly by his own self-interest) and to build up his theories upon such foundations by a process of pure reasoning.