Examples

Abstract

Examples in economics, as elsewhere, are simply cases, real or fictitious, or partly both, supposed to embody a general principle. They may be classified as follows: (1) Real but general, as Ricardo’s hunters (Principles), and Adam Smith’s bricklayers, carpenters, and men of letters (Wealth of Nations). The examples are taken from a known genus but not from known individuals. Where the genus is perfectly well known, no cavil is possible. Adam Smith’s illustration of division of labour could hardly have been improved by a reference to a particular pin-making establishment in a specified place. But, in exposition, the more concrete the genus the more telling the example; e.g. ‘blacksmith’ seems nearer life than ‘workman’. (2) Real and particular, as in Cairnes’s illustration of the theory of international trade from the Australian gold discoveries. Adam Smith, where he does not use the real and general, uses the real and particular, and falls back on fiction only for his similes (as ‘the highway’, ‘the waggonway through the air’, the ‘wings’, and ‘the pond and the buckets’, Wealth of Nations, II, ii), or his metaphors (‘wheel of circulation’, ‘channel of circulation’). Ricardo and his immediate followers have preferred, as a rule, (3) Fictitious examples. These may be illustrations of which the component elements are generically well known, even the favourite ‘man on the desert island’, but the combining of the elements is the work of the writer, and is more or less arbitrary, as de Quincey’s ‘man with the musical box on Lake Superior’, and Bastiat’s ‘plank and plane’. There is also a risk that the construction of the example may involve a begging of the question to be proved. ‘Suppose that there are but two nations in the world living side by side, with a population of one million souls in each’ (Barbour, Bimetallism). ‘My object was to elucidate principles, and to do this I imagined strong cases that I might show the operation of those principles’ (Ricardo, Letters). There is no necessary fallacy in this method of exposition any more than in illustrating the law of gravitation by the action of bodies in vacuo. Concrete cases must necessarily exemplify much more than one principle, and, even if they suggested a particular generalization, they may perhaps not clearly illustrate it without a fictitious simplification. The lawfulness of such a method of exposition or, it may be, of proof is discussed elsewhere.

This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman