Relations of History and Theory

Extract

Most economic theorists nowadays appreciate that particular theories are peculiarly relevant to particular historical situations, and gain their chief importance from this relevance. In place of one absolute set of propositions, economists are becoming accustomed to the idea that their theoretical arsenal needs to include, for example, weapons suited to conditions of approximately full employment, and different weapons suited to conditions of depression. The dependence of theory on conditions properly goes further than this. We need to ask whether our fundamental concepts are appropriate to the historical conditions of the time to which they are to be applied.