THE ROLE OF THE ECONOMIST IN A POLITICAL WORLD

Professor Kenneth E. Boulding

Address delivered at the Economics Club at the University College of the West Indies, November 18th, 1959.

1. Economics grew up in a world in which the economic functions of government were relatively small. The question arises therefore what is the role of the economist in the world like that of today in which the functions of government have become very large. As some wit has said, "Has the law of supply and demand been repealed and replaced by the law of deny and command."
2. The economist is not an engineer who deals with the relations of physical realities. Neither is he a general social scientist who deals with all the relations of society. He has a special skill and that is to deal with the relations of commodities. In so far as commodities have relations even in a politicized society, the economist still has a role to play.
3. One of the important roles of the economist is to be dismal. Economics is traditionally the dismal science and this is because it deals with the basic phenomenon of scarcity. It is the economist's dismal duty to tell the world that it cannot have its cake and eat it; that we cannot have guns and butter and that there are basic limitations even on the rate of growth. This is not to say that the message of the economist must be one of unrelieved gloom. Within limitations he says you can do as you please, but his main duty is to point out the limitations. It is the peculiar temptation of those who do not have power to believe that the only problem is how to get power. In fact the main problem is what to do with power when one has it. This it is the particular duty of the economist to point out.
4. The economist has a special professional interest in the role, function and use of the price system as an agency in economic planning. Both the engineer and the politician tend to dislike and to distrust the price system. The engineer because it seems to impose upon him limitations which nature does nut, and the politician because it also seems to impose on him limitations which his constituents do not enjoy. Nevertheless, if the price system is not used, or if it is abused, there are important and often unfortunate social consequences. In the first place if there is no differentiation between the pricing of high quality and low quality products, a universal Gresham's law comes into play in which the bad things drive out the good. If the same price is paid for good milk as for bad milk, there will be more bad milk and less good milk. In the second place if we try, to rely on manipulations of the price system in order to achieve a better distribution of income, we run grave risks - first of the waste of resources, diverting resources from uses where they are more to uses where they are less valuable, and second we run the risk of not accomplishing our aims of social justice. For when we raise prices in order to benefit the producers of a certain commodity, we usually benefit the rich producers more than the poor.
5. The price system has an important function to play in the direction of technical change. If we make something cheap it will not be economized. If we have a resource which is plentiful now, but which will be scarce later, then it may be disastrous to make it cheap.
6. Finally, it is the duty of the economist, as of all social scientists, to try to widen the area of knowledge and diminish the area of opinion. It is the great vice of a political world to believe that opinion is a substitute for knowledge. This is a belief which has been the ruin of many societies. Through debate, which is the political agent par excellence, one opinion may conquer another, but it is only through the painstaking processes of scientific research that knowledge increases. This is not to say that the role of the economist will never replace that of the politician. There are limits to knowledge as to everything else, and it is likely that there will always be a place for opinion. There is also a realm of social, aesthetic and moral values, where the peculiar skills of the economist are perhaps relevant, but are not conclusive. We must beware, however, of the politician who says: "I will tell you what to get and you economists simply tell us how to get it." The economist must point out that there are many things which we do not know how to get, and that it is no use crying for the moon. Again, however, it should be remembered that the economist has a certain conservative bias, and that his warnings against crying for the moon may prevent us landing on it.