Quantitative economics

It is of course true that quality is much more difficult to “handle” than quantity, just as the exercise of judgement is a higher function than the ability to count and calculate. Quantitative differences can be more easily grasped and certainly more easily defined than qualitative differences; their concreteness is beguiling and gives them the appearance of scientific precision, even when this precision has been purchased by the suppression of vital differences of quality. The great majority of economists are still pursuing the absurd ideal of making their “science” as scientific and precise as physics, as if there were no qualitative difference between mindless atoms and men made in the image of God.

small-is-beautifulp. 33

It is a fact, however, that there are fundamental and vital differences between various categories of “goods” which cannot be disregarded without losing touch with reality. The following might be called a minimum scheme of categorisation:

Non-renewable Renewable Manufactures Services
The market knows nothing of these distinctions. It provides a price tag for all goods and thereby enables us to pretend that they are all of equal significance. £5 worth of oil (category 1) equals £5 worth of wheat (category 2), which equals £5 worth of shoes (category 3) or £5 worth of hotel accommodation (category 4). [...]

I am not here concerned with discussing the reliability or rationality of the market mechanism, of what economists call the "invisible hand.” This has endlessly been discussed, but invariably without attention to the basic incommensurability of the four categories detailed above. [...]

small-is-beautifulp. 34–5

cf Philosophical Errors (sp. "hierarchy")


small-is-beautiful Schumacher, Ernst Friedrich. 2001. Small Is Beautiful: A Study of Economics as If People Mattered. Random House. ↩︎ 1 2