An Essay on the Nature and Significance of Economic Science

Lionel Robbins' Essay (1932, 1935, 2nd ed., 158 pp.) sought to define more precisely economics as a science and to derive substantive implications. Analysis is relative to "accepted solutions of particular problems" based on best modern practice as referenced, especially including the works of Philip Wicksteed, Ludwig von Mises, and other Continental European economists. Robbins disclaims originality but expresses hope to have given expository force on a very few points to some principles "not always clearly stated" (1935, pp. xiv-xvi) Robbins develops and defends several propositions about the relation of scarcity to economics and of economic theory to science, including the following. "Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." (1935, p. 15) "Economics is not about certain kinds of behaviour," but "a certain aspect of behaviour, the form imposed by the influence of scarcity." (pp. 16–17) "Economics is entirely neutral between ends; ... in so far as any end is dependent on scarce means, it is germane to the preoccupations of the economist." (p. 24) "[W]ealth is not wealth because of its substantial properties. It is wealth because it is scarce." (p. 47) "The Law of Diminishing Marginal Utility ..., whether true or false, can never be verified by observation or introspection." ... [Nor does it] "justify the inference that transferences from rich to poor would increase total satisfaction... Interesting as a development of an ethical postulate, [such an effect] does not at all follow from the positive assumptions of pure theory." (pp. 137, 141) Economics as science is about "ascertainable facts" of the positive as distinct from normative (ethical) judgments on economic policy. (p. 148). The definition of economics above has been described as "central to the arguments presented" that followed in the Essay and as redefining economics in marginalist terms and thereby "destroy[ing] the view classical economists had of their science.