Economics,, as we have now seen
again and again, is a science of recognizing *secondary*
consequences. It is also a science of seeing *general
*consequences. It is the science of tracing the effects of
some proposed or existing policy not only on some *special
*interest *in the short run, *but on the *general
*interest *in the long run.*

This is the lesson that has been the special concern of this book. We stated it first in skeleton form, and then put flesh and skin on it through more than a score of practical applications.

But in the course of specific illustration we have found hints of other general lessons; and we should do well to state these lessons to ourselves more clearly.

In seeing that economics is a science of tracing consequences, we must have become aware that, like logic and mathematics, it is a science of recognizing inevitable implications.

We may illustrate this by an elementary equation in
algebra. Suppose we say that if x = then x + y = 12. The
“solution” to this equation is that y equals 7; but this
is so precisely because the calculation *tells *us in
effect that)? equals 7. It does not make that assertion
directly, but it inevitably implies it.

What is true of this elementary equation is true of the
most complicated and abstruse equations encountered in
mathematics. *The answer already lies in the statement of
the problem. *It must, it is true, be “worked out.” The
result, it is true, may sometimes come to the man who works
out the equation as a stunning surprise. He may even have a
sense of discovering something entirely new—a thrill like
that of “some watcher of the skies, when a new planet swims
into his ken.” His sense of discovery may be justified by
the theoretical or practical consequences of his answer. Yet
the answer was already contained in the formulation of the
problem. It was merely not recognized at once. For mathematics
reminds us that inevitable implications are not necessarily
obvious implications.

All this is equally true of economics. In this respect economics might be compared also to engineering. When an engineer has a problem, he must first determine all the facts bearing on that problem. If he designs a bridge to span two points, he must first know the exact distance between these two points, their precise topographical nature, the maximum load his bridge will be designed to carry, the tensile and compressive strength of the steel or other material of which the bridge is to be built, and the stresses and strains to which it may be subjected. Much of this factual research has already been done for him by others. His predecessors, also, have already evolved elaborate mathematical equations by which, knowing the strength of his materials and the stresses to which they will be subjected, he can determine the necessary diameter, shape, number and structure of his towers, cables and girders.

In the same way the economist, assigned a practical
problem, must know both the essential facts of that problem
and the valid deductions to be drawn from those facts. The
deductive side of economics is no less important than the
factual. One can say of it what Santayana says of logic (and
what could be equally well said of mathematics), that it
“traces the radiation of truth,” so that “when one term
of a logical system is known to describe a fact, the whole
system attaching to that term becomes, as it were,
incandescent.”^{[*]}

Now few people recognize the necessary implications of the economic statements they are constantly making. When they say that the way to economic salvation is to increase credit, it is just as if they said that the way to economic salvation is to increase debt: these are different names for the same thing seen from opposite sides. When they say that the way to prosperity is to increase farm prices, it is like saying that the way to prosperity is to make food dearer for the city worker. When they say that the way to national wealth is to pay out governmental subsidies, they are in effect saying that the way to national wealth is to increase taxes. When they make it a main objective to increase exports, most of them do not realize that they necessarily make it a main objective ultimately to increase imports. When they say, under nearly all conditions, that the way to recovery is to increase wage rates, they have found only another way of saying that the way to recovery is to increase costs of production.

It does not necessarily follow, because each of these propositions, like a coin, has its reverse side, or because the equivalent proposition, or the other name for the remedy, sounds much less attractive, that the original proposal is under all conditions unsound. There may be times when an increase in debt is a minor consideration as against the gains achieved with the borrowed funds; when a government subsidy is unavoidable to achieve a certain military purpose; when a given industry can afford an increase in production costs, and so on. But we ought to make sure in each case that both sides of the coin have been considered, that all the implications of a proposal have been studied. And this is seldom done.

* George Santayana, *The
Realm of Truth *(1938), p. 16.