The Historical School represents a reaction. against the dogmatic attitude of the followers of deductive method. The reaction was specially marked in Germany and was represented by economists like Rochester, Hildebrand and Frederick List. The Historical School had also its supporters in England, e.g., Cliff Leslie. These economists advocated a method which has come to be known as Historical, inductive or Realistic. This method insists on the examination of facts and thin laying down general principles. Here we go up particulars to generals, whereas in the Deductive Method well come down from generals to particulars.
Merits of the Inductive Method The following merits arc claimed fur the inductive method.
(i) The inductive method can be applied for the verification of conclusions based on ducting reasoning. In this way, deficiencies in their treatment can be brought out and their conclusions amplified or restated. Hence the inductive method proves a useful compliment to the deductive method.
(ii) The exponents of the inductive method have drawn pointed attention to the fact that economic phenomena are too complex to lend themselves to deductive reasoning. It is thus impossible to draw conclusions which may have universal validity. thee, they are relative to time and place and have, reform, limited applicability. Hence, inductive is more suit ab since it is based on facts than on abstract reasoning. Inductive method is more suitable and he formulation of economic policies for countries and for the same country . This is due to the fact that. in e method we proceed by examining in a situation. That is how we may trade policy may be more useful try.
It should be recognized that many assumptions made in economic analysis arc really analytically tools. They may even help us purposefully to misrepresent real world conditions. Economic theory provides us with a basis for better under standing of economic behavior. It is primarily procedural rather than substantive. We are more concerned with how and why man behaves and chooses than with what he actually does.
Economics is a composite discipline. It contains quantitative and very precise statements as well as statements touching on ethical and moral issues. Because of intrusion of ethical issues in so many economic problems, it is necessary to bear in mind the distinction between positive economics and normative economics. Positive economics is a scientific discipline, whereas normative economics is largely a branch of ethics. The resolution of nonnative problems is usually brought about through the political process and the ballot box. It is said that the economists’ opinion on a nonnative question is of nor mere value than guessing the result of a football match.
In economics a great deal of attention is focused on the study of the underlying axioms of the economic systems. their relevance and consistency. In the final analysis. It is the verification of the theory through observation that determines the usefulness or otherwise of the axioms employed in the theory. The axioms call turn out to he highly controversial statements and may have \0 he revised or rejected from time to time in keeping with the progress of ideas. “The history of science is strewn with the discarded bodies of defunct but once thrilling statements that alone time or another were taken to be true by definition. An economic model is like a geographical map. It docs 110th show every aspect lit the terrain, but only those features that arc of interest for any task at hand, The map is 1I0t the territory nor is the model the real world. But neither can be understood without a map or a model. Economic models, like maps, increase the degree of certainty about what is likely to turn up over the hill, in the economic landscape.