John Womack asked: "Could this [careerism] be one explanation for economists   
believing only in "the history of success"? Not the production and diffusion   
of knowledge, but promotions, grants, appointments, contracts, awards?"  
  
Please pardon me for attempting an answer.  
  
It may be useful to distinguish between production and application of   
knowledge. John made a good observation on the sociology of science. Yes, by   
and large, most people in professions do have the primary focus on career   
advancement through application of existing knowledge. A core set of   
doctrines is shared, and the peers do expect one to show a basic *success*   
with learning (and applying) that knowledge-base. As such, nothing is wrong   
with this picture.  
  
Very few people are able to undertake production of (new) knowledge, while   
most are able to master what has been doctored by the very few others.   
Indeed, I have doubts even about mastering. My comments pertain to the   
*failure to master* existing knowledge. Let us consider Richard Whately and   
Lionel Robbins concerning the definition of economics to see what has   
happened.  
  
In 1832, Whately announced that economics is a science of exchange. A   
century later, Robbins announced that economics is a science of allocation.   
I call them masters rather than doctors because they did not produce very   
much in original knowledge, but they did well in mastering and systematizing   
existing knowledge produced by others. They did not produce new doctrines,   
but communicated what others proposed.  
  
Now, Whately had a more profound understanding of the character of   
economics, which he saw as a study of the economy pervaded by the phenomenon   
of exchange. A natural subsistence economy without exchange is indeed an   
ecology, and well within the grasp of the biologist whose application of the   
principle of conservation of energy transmutes into the principle of   
economizing. That is, one need know nothing about economics as such to study   
the optimization by the mouse nibbling at various alternative sources of   
nutrition. The study of the principle of economizing is not distinctly   
economics. Why, a biologist can do it very well without ever uttering the   
words market, profit, price, demand, supply, money and so on.  A mouse   
produces and consumes, but does not buy and sell. A mouse optimizes but   
never acts as an entrepreneur, whose job is to create new value out of   
nothing, by turning something of low value into something of high value.   
This last part is possible through and only through trade in a market, in   
which things of lower value are transferred from the current owner to   
somebody else who puts a higher value on it, when measured against some   
reference good as payment. Ludwig von Mises mastered the exchange issue   
well, far beyond the reaches of Robbins.  
  
So what success did we have? The science of exchange degenerated into a   
study of allocation. In this degeneration, people confused price with   
output, output with value, and value with income. This confusion led to a   
splitting of economics into incompatible parts known as microeconomics   
(which says that equality of demand and supply determines price) and   
macroeconomics (which says that equality of demand and supply determines   
output).  
  
How can one claim to have mastered the subject if one cannot see that a   
sentence such as "supply creates its own demand" makes no sense except when   
supply is to mean "the value of what is supplied" and demand is to mean "the   
value of what is demanded" whereas supply should simply mean "quantity   
supplied" and demand should mean "quantity demanded"?  
  
Dear John, we have a long way to go. The *production* of new knowledge is   
the job of exceptional people who make history, rather than the job of   
ordinary people who merely study history made by others and inherit the   
endowment created by the true doctors. We do not even seem to know how to   
apply the most basic ideas. For example, the idea that there is a choice   
between studying history of economics versus say econometrics seems to me to   
be entirely misplaced. It is like supposing that one has a choice between   
having legs and having shoes. Nobody can become an economist of any ability   
without studying at least the broad outlines of the history of ideas, to see   
how the same ideas may have many different connotations.  
  
So here is a historical question to econometricians. When you apply   
econometric procedures, how do you define demand, supply, and price, and   
then how do you interpret the statement "supply creates its own demand"?   
Here is the same question more elaborately.  
  
If demand for x is denoted by Xd, and stands for the quantity of x which the   
buyer is able and willing to buy at a given price Px, and when Xs denotes   
supply being the quantity of x the seller is able and willing to sell at a   
given price Px, what did econometricians of the past mean when Xd=Xs? Did it   
mean that the output was determined, or did it mean that the price of x,   
which is the quantity of y which pays for x (per unit of x), was determined?   
Who was the great econometrician who understood the difference between   
output and price? Please name one.  
  
And then what did the great econometricians do to interpret Say's Law?  It   
is clear that the when John supplies a certain quantity Xs, he hopes to get   
the value Px*Xs as revenue, which he intends to spend to buy some other good   
Yd from Paul at price Py. In this sense, the value of supply of x given by   
(Px*Xs) is equal to the value of demand for y given by (Py*Yd). It does not   
and could not mean that the supplier was himself the buyer, or that the   
supply of x created the demand for x? One could say that the supply of x of   
a given value created demand for y of the same value. Now, who was the   
econometrician who could apply this simple idea? Please name one.  
  
Mohammad Gani