Courtesy of Sandeep Jaitly @ Fekete Research:
“Thank goodness my task is to teach economics to a bunch of physicists and engineers. The other way around would take an infinite amount of time,” was the comment made by my economics lecturer on a supplemental course to my maths degree at Imperial College.
Economics is an often maligned subject, especially to the scientifically inclined. To the physicist, mechanical engineer or chemist, economics is a mystery. They cannot see why graduates in the subject could be honoured with a bachelor of science. Is this disdain justified? With the current state of classical economics, it most certainly is. Scientific enterprise has achieved many things that have improved the living standard of humanity, for example: the pyramidal teabag; the jet-propelled aircraft and the suspension bridge. Classical economics has no such claim.
The sciences are based on ‘axiomatic systems.’ An axiom is a proposition that cannot directly be proved but is rather self-evident. For example, in Euclid’s geometry one axiom is ‘all right angles are equal to one another.’ From a system of axioms, a science such as planar geometry can be described. Axioms might seem too obvious to individually contemplate – but are the sine qua non of all scientific endeavour. But what is the axiom or set of axioms that defines the subject of economics? Is it even possible to have a set of axioms that defines the essential character of economics? The German word for economics ‘volkswirtschaft’ is a better starting point for this question than the word ‘economics’ itself. The former describing activity with relationship to people and the latter implying a set of ethereal household rules that don’t really exist (‘economics’ is derived from the Greek work όικος and υομος meaning ‘house’ and ‘law’ respectively.)
There have been many attempts to define the characteristic principles of economics in a similar vein to Euclidean geometry and all were utterly lacking until the mid 19th century. For it was then that the father of what was to become the ‘Austrian’ school, Carl Menger, espoused the true and simple nature of economics with just one axiom…
Value does not exist outside of the consciousness of mankind.