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Quotation of the Day…

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… is from page 61 of the second (2006) edition of Cento Veljanovski’s primer, The Economics of Law [2]:

At the core of economics is the assumption that individuals act purposively to select those alternatives in those quantities which maximise their welfare as perceived by them.  It is this assumption which gives economics its explanatory power – the ability to anticipate better than other approaches the consequences of changes in the conditions of choice.

Those who treat every instance of increasing or decreasing costs – for example, every instance of a hike in the minimum wage or a fall in the price of beef – as posing an empirical question of whether or not such changes in cost result in a reduction in the quantity of labor demanded or an increase in the quantity of beef demanded, understand neither the nature of science in general nor of economics in particular.  Such people would sacrifice genuine scientific inquiry and knowledge upon the altar of naive empiricism – an altar impressive only to people who haven’t thought deeply about the nature of knowledge and of how knowledge is increased and improved.

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