John Neville Keynes on Theory in Relation to Concrete Economic Problems

Inspired by the controversy about the true nature of economics from the last decades of the nineteenth century in England, John Neville Keynes published The Scope and Method of Political Economy in 1891. The book does not touch on substantive issues in economic welfare as such, but it does address the subject rather indirectly, from a conceptual perspective as it relates to the broader question of the scope of economic thought relative to other social sciences. Neville Keynes’s main concern was to establish a sort of compromise among the competing visions of economics at the time by asserting that much of the ongoing disputes had grown out of misunderstandings about the dual role of the deductive and historical methods in economic inquiry. He considered that the appropriateness of each particular approach depended on the material available, the stage of the investigation, and the objective in view. With this in mind, Neville Keynes split the scope of political economy into three major methodological categories, namely: (1) a positive body of deductive knowledge about the general laws of economic action or what is; (2) a normative or regulative science, dealing with the criteria of ideal conditions or what ought to be; and (3) economics as an art, or the assessment of specific means to achieve pre-established ends.

Although insisting on the idea that each one of these fields of study within political economy could be pursued in isolation, Neville Keynes agreed that a strict separation among abstract, ethical, and moral considerations would not be practicable in many situations. Besides, the acceptance of positive economics would not invalidate the contention that it should be often accompanied by normative qualifications. Or, in his own words:

It may be pointed out how enormous is the influence exerted upon the wellbeing of mankind by the modes in which wealth is produced and distributed; and stress may be laid upon the fact that those human activities, which constitute the subject-matter of the economist’s investigations, have an ethical significance, which is at least as worthy of consideration as their economic significance (Neville Keynes 1891 [1897]: 46).

On matters such as these, Neville Keynes reveals a strong intellectual link with Sidgwick (Backhouse 2006: 35). As regards the art of economics, which may concern the welfare implications of public policy, Neville Keynes justifies its validity by drawing on Francis Bacon’s dichotomy between fruit and light by noting that economists have a characteristic disposition to pursue not just light-bearing science but fruit-bearing science as well by directing their studies to useful channels (Neville Keynes 1891 [1897]: 51). A generation later, Pigou followed Neville Keynes by also adopting the distinction between fruit- and light-bearing sciences (Pigou 1932: 3-5). Once the discussion enters this particular terrain, though, where explicit initiatives are to be evaluated according to their effectiveness in achieving a desired state of the world, economic forces are no longer supreme and ethical, social, and political concerns come also to the forefront of the argument. No solution to concrete economic problems, therefore, could be taken as complete without incorporating ethical and other reflections. If this exclusion had been common in the past, warned Neville Keynes, it was no longer held as good practice by contemporary economists (Neville Keynes 1891 [1897]: 55-63).