"[A] system of generalizations that can be used to make correct predictions about the consequences of any change in circumstances." [p. 4]
And, he notes this system has two components.
"In part, it is a 'language' designed to promote systematic and organized methods of reasoning. In part, it is a body of substantive hypotheses designed to abstract essential features of complex reality." [p. 7]
He goes on to say:
"Viewed as a language, theory has no substantive content; it is a set of tautologies." [p. 7]
In one sense the economic language, like any other language and modern logic for that matter, is a set of tautologies. Concepts such as supply and demand, perfect monopolies and perfect competition are defined relative to one another within the diagram. The relationships between them are true, by definition, in all instances.
However, consider the accounting assumption, at least it was an assumption when I took accounting, that businesses are "on-going concerns." Much of accounting, but especially the valuing of assets at cost, was based on this assumption. It was part of defining what a "business" was, part of the accounting language, but it was not a tautology. The corporate raiders of, what was it, the 1980s, made a great deal of money, even went to jail, questioning that assumption. There was a large and profitable difference between assets valued at cost in an ongoing concern and those same assets if the "business" was not to be an ongoing concern.
A language or logic does not sever its connection with experience by being tautologically consistent. X = X is always true, but there remains the question of just what can and cannot be an X. That tautology, and the diagrammatic inferences made employing it, will not work for something like Philip, who can be drunk or sober.
However, consider the accounting assumption, at least it was an assumption when I took accounting, that businesses are "on-going concerns." Much of accounting, but especially the valuing of assets at cost, was based on this assumption. It was part of defining what a "business" was, part of the accounting language, but it was not a tautology. The corporate raiders of, what was it, the 1980s, made a great deal of money, even went to jail, questioning that assumption. There was a large and profitable difference between assets valued at cost in an ongoing concern and those same assets if the "business" was not to be an ongoing concern.
A language or logic does not sever its connection with experience by being tautologically consistent. X = X is always true, but there remains the question of just what can and cannot be an X. That tautology, and the diagrammatic inferences made employing it, will not work for something like Philip, who can be drunk or sober.
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