Applied Economics - Other 19th and Early 20th Century Economists Use of The Term

Other 19th and Early 20th Century Economists Use of The Term

Léon Walras, for example, planned to organize his main work into volumes on "pure," "applied," and "social" economics. Jaffé (1983) describes Walras's plan as involving making a distinction between that which is true, is useful, and is just. In using the term true, Walras referred to propositions that necessarily followed from the nature of things. Pure economics then involves pure logic. Applied economics involves examining ways to achieve practical goals and requires the making judgments about whether or not the logic of pure economics was relevant to the real world. Social economics also presumed pure economics, but dealt with a different range of questions than did applied economics.

Vilfredo Pareto ( 1971, 104) follows as similar usage suggesting economics might begin by eliminating that which is inessential to examine problems as reduced to their principal and essentials. He distinguishes between "pure economics" from "applied economics" with pure economics containing only the principal lines of argument and applied economics involving supplying the details.

Joseph Schumpeter (1954, 23) referred to some applied fields in economics the repetition of which might help highlight some of the issues involved in what defining applied economics involves. He discussed the following fields:

1. those that are typically thought of as part of economics but which also looked at individually to allow greater attention to detail – e.g. money and banking, trade, cycles, and location
2. those that are independent of economics but study of them is needed for economics. These include subjects such as accounting, actuarial science, and insurance
3. those that are areas of public policy: agriculture, labour, transportation, utility industries, control of industry, and public finance
4. comparative economic systems
5. demography
6. area studies