This being the first meeting of the Club devoted to methodology, we are following a rather consistent tradition among economists of being mainly interested in economic problems, not in the problem of what economics is. Fifty years ago John Neville Keynes wrote the Scope and Method of Political Economy and since that time only one full book in English, that I know of, has been published on this topic—Lionel Robbins's The Nature and Significance of Economic Science.

If I seem to adopt a tone of finality upon matters concerning which we all speak with equal authority, excuse it as the necessary brevity to avoid a tedious repetition of “it seems to me” and “in my opinion.” The ideas presented are all simple, one-cylinder ideas, meant as an introduction to discussion and presented, not by an authority but by someone who, like you, is an economist and needs occasionally to pinch himself and say, “What manner of man am I?”

The first thing that should be stressed about economic method is that it should be economic method, not methods. It would be bad to think of method as deductive or inductive, for the interrelation is too close. For an economist, the division is fatal. Put them in different stalls and there is no offspring.

Deductive is the often criticized a priori reasoning. If demand is constant and elastic, what happens to total revenue when price is cut? Answer: total revenue increases.