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Economics 301
nomics, or to any other science, is unquestionable; here it wil suffice to recall its
value in helping to deal with the problem that had been the subject of violent
controversy for nearly two centuries, viz., the law of diminishing returns. From
an analysis of economic activity, the statistician may easily conclude that each
successive outlay is less effective that its predecessor. But economists (entre-
preneurs) themselves range the outlays required in such a way that those that
secure the greatest increment in production come first, and follow with those
which are increasingly less efficient, and they obviously start by implementing
thekost efficient proposals. The praxiological principle of efficient doing is thus
applied by entrepreneurs and afterwards given a technological interpretation. 29
A number of similar problems could be mentioned, which are of more im-
portance to the economist and to political economy than to the economic his-
torian. The latter wil be less interested, for example, in the analysis of types of
technical progress which is crucial to studies of economic growth, or in relations
resulting from the technical characteristics of the production process. It may,
obviously, be useful to him to know these technical coefficients - in the same way
as praxiology is useful to the economist in the example given above.
Rational action implies endeavouring to minimize the outlay necessary in
order to attain a given result, or to maximize the effect of what has to be expend-
ed. But this takes place in specific material and social conditions which are not
always propitious to rational solutions by society as a whole, although the action
of each individual may be subjectively rational in accordance with the above
principle.
The distinction proposed by Polanyi, for example, between two economies,
one logical, the other substantive, is valid only if it is remembered that political
economy analyses the behaviour, in the process of producing material goods, of
people who are historically and socially conditioned; and that it is thus studying
the operation of the general principle of rational action in specific and global
socio-historical contexts. Its subject-matter is not the general principle of ra-
tional action as such nor the norms of human conduct which result from it, but
its specific and varying applications during the course of economic activities;
hence the relative and historical character of patterns of economic behaviour,
and even of the types and instruments of economic calculation in the strict sense.
Apart from the examples already mentioned, praxiology serves political
economy in many ways. The rules of efficient action and in particular the prin-
ciple of economic rationality may one day provide an instrument for estimating
the economic efficiency of a given social polity. In the history of economic
thought, it was Max Weber and Werner Sombart who for the first time, and with
full awareness, used the principle of rationality as a criterion to show the su-
periority of the capitalist mode of production over previous social systems.
Weber argued that, in earlier systems, economic activity was predominantly
traditional. It was tradition and not rational analysis that determined the choice
of ends and means. Tradition was defended by the social groups whose interests
it served, particularly through magico-religious sanctions ; the principle of eco-
nomic rationality had no application in this kind of s0ciety.3~ The aims and
means are too diverse to allow measurement or comparison by means of a com-