Knowledge that Transforms

The very words of this topic are provocative. We are invited to consider the place of economic theory in graduate work. Here at the outset is the implication that in a general scheme of advanced economic study theory is to occupy a place somewhat apart. A distinction is, in effect, drawn for us between economic theory and ordinary economics. If this suggested distinction were merely the mishap of a phrase it would be trivial to notice it. But in fact it accords closely with a good deal of our academic practice, and finds colloquial expression in our departmental discussions. We organize and announce separate courses in "theory." We require a specialist in "theory" as one member of a well-balanced economic staff. We are asked to recommend "a man in theory" to fill a vacant chair. We intrust "practical" courses to teachers who lack both inclination and capacity for "theoretical" instruction. We remark a bent toward theory in certain of our graduate students and an inaptitude for theory in others-thus ourselves raising, more or less superficially, the question that is here raised for us: What, after all, is the proper place of theory in the general plan of graduate instruction ? Now, of course, this prevalent view of the subject has its reasons and in some degree its justification. Undeniably, there are recognizable and proper differences in the stage of abstraction to which our several economic inquiries are pursued. But we have allowed these differences of degree and extent to grow into supposedly important differences of kind, with results which are unfortunate alike for economic theory and for the impliedly non-theoretical economics. In consequence we habitually set off economic theory as a distinct branch of our subject; we identify it to a regrettable extent with the more or less conventionalized theory of value and distribution; and, attributing to economic theory, thus conceived, a

Statisticians have long been aware that for some purposes of analysis and graphic representation the logarithmic scale has special advantages which the ordinary natural scale does not offer. But with that awareness they have mostly rested content. Com? paratively few have worked with the logarithmic method and really come to know it in its applications. The logarithmic scale, it has been assumed, would be unintelligible save to experts. Because of its unfamiliarity it has been neglected; through neglect it remains unfamiliar, and thus a serviceable statistical tool lies virtually idle. It is the thesis of this article that the logarithmic scale is too useful as a statistical auxiliary to be disregarded simply because it is not yet generally understood; and, further, that the best way to secure for it a more general understanding and appreciation is to use it intelligently at every appropriate opportunity. This is not by any means to say that the logarithmic scale should prevail? ingly replace the natural scale in ordinary graphic work. Often, however, where only one method is to be followed, the logarithmic construction is clearly superior. Even if such occasions are as yet comparatively infrequent, it is still true that figures drawn to the logarithmic scale will usually afford an informing contrast and supplement to diagrams in the more conventional form. For demonstrating the characteristics of logarithmic diagrams such a contrast is quite the most promising plan. Mr. Bowley, in his brief but excellent discussion of logarithmic diagrams,1 has recommended this procedure. "It would be useful," he remarks, "to offer several diagrams on both scales; for in many series of figures the differences exhibited by the two methods are very instructive." Mr. Bowley felt himself constrained by the limits of space to forego acting upon his own proposal, but the suggestion was good. In the following pages space is deliberately devoted to 1 Elements of Statistics, pp. 188 ff.

What is the value to an engineering student, a future engineer, of economics effectively taught? It will tend to broaden his views by showing engineering in its proper relation to other activities. It will help to develop the very valuable habit of thinking in terms of groups rather than of individuals, especially in matters of service. It will help the engineering student to see the real ultimate purposes of engineering. It will, for the best of engineering students, help to bring in the future years of engineering experience that wider vision which is the inspiration, the spiritual motive power of the great engineer. Economics and engineering are closely related. Economics has been defined as the social science of earning a living. With the same appropriateness engineering may be defined to be physical science applied to helping groups of men to make a better living. That is but paraphrasing Tredgold's classic definition, " Engineering is the art of directing the great sources of power in nature for the use and convenience of man." Two lines of thought so closely related as are economics and engineering necessarily react upon, and supplement, each other. Each line of thought aids in securing a complete understanding of the other. Four illustrations of the close relations between economics and engineering follow. The four illustrations deal with the effect of the development of the steam engine on economic conditions: the economic waste produced by poorly designed terminals and by the unnecessary use of terminals in large centers of population, the economic waste produced by sending freight over that one of two railways between two cities on which the actual cost of hauling the freight is the higher, and the advisability of neglecting some waterways. It is immaterial for the present purpose whether you agree with my conclusions in these four illustrations. The important point is that in each of these illustrations, as in many other matters, true