Economists Are Not Entrepreneurs
| Peter Klein |
Edwin Cannan, writing in 1902:
I do not mean to argue that a knowledge of economic theory will enable a man to conduct his private business with success. Doubtless many of the particular subjects of study which come under the head of economics are useful in the conduct of business, but I doubt if economic theory itself is. It does not indeed in any way disable a man from successful conduct of business; I have never met a decent economist who was in a position of pecuniary embarrassment, and many good economists have died wealthy. But economic theory does not tell a man the exact moment to leave off the production of one thing and begin that of another; it does not tell him the precise moment when prices have reached the bottom or the top.
This is from Cannan’s Presidental Address to the Royal Economic Society, reprinted in the January 2007 issue of EconJournalWatch. I have spent most of my career teaching economics to business students, and I am always careful to emphasize that knowledge of economic theory, while valuable, is neither necessary nor sufficient for commercial success.