Political Economy versus Individualistic Economics

In numerous instances economists have recognized that policies which seem appropriate for private individuals and certain branches of the private economy are unsuited for the economy as a whole, and they have sharply criticized conclusions arrived at through reasoning by analogy from the case of the private individual to that of the nation in general. Yet, during the depression, many economists have committed similar errors, particularly in reasoning about the proper price level, the proper wage level, and the proper expenditure program for both the private and public economy to pursue. Especially has the reasoning of some economists favoring a reduction in the general level of wages been subject to such error. Techniques that are appropriate for analyzing problems of individualistic economics may be well-nigh useless in solving the broader problems of political economy. For such broader issues an understanding of social psychology may be of more value than skill in higher mathematics or in refined reasoning say of the ceteris paribus type. "It is very false Reasoning to make general Conclusions from particular Cases." Francis Rawle, said to have been the first writer on political economy in America (1726).