What is theory except the methodical presentation of universal practice?
Before reviewing the errors of his predecessors, Frédéric Bastiat warns us against two mistakes that are widely shared concerning money, namely to think:
- that it has an intrinsic value (his idea being that intrinsic value does not exist since value comes from the service, including for gold)
- that it is an immutable measure “alongside the metre, the litre, the are, the stere, the gramme, etc.”
What is of interest to me in today’s quote is that, before revisiting the theoretical concepts he believes are mistakes, he reminds us:
- on one hand that exposing universal practice in order to understand and discover misunderstandings with the aim of avoiding repeating them is one of the reason I enjoy economic science,
- on the other hand that I find in it a fundamental error of the constructivists, namely that this proposition is bijective.
Indeed, if theory is issued from the practice, the opposite is not necessarily true. And yet, the horrors seen in the 20th century in countries that were more or less following marxist theory often came from the will of the constructivists to adapt practice to theory, which is fateful when the theory is wrong.
Other quotes from On Value:
Introduction – Part 1 of 10 – Part 2 of 10 – Part 3 of 10 – Part 4 of 10 – Part 5 of 10 – Part 6 of 10 – Part 7 of 10 – Part 8 of 10 – Part 9 of 10 – Part 10 of 10 – Conclusion – Epilogue