Is there a universal Management
science and universal Economics in
the World?
Prof. Ivars Brīvers
2nd Annual International Conference of
Latvian Economic Association,
March 4, 2011, Riga, Latvia
“Economics is not for Latvian students”
Rene Descartes – deductive method
Conclusions, that are made in a deductive way are
always true, if the postulates, on which they are
based, are true.
Euclidian geometry – the best example.
Economics is a science, performing conclusions
about human behaviour.
Is it possible to anticipate human behaviour?
Is this behaviour equal for all nations and races?
Which are these postulates, that are on the basis of
economics?
David Ricardo
1772-1823
Human behaviour in
economics is
predictable, as this
behaviour is rational.
The principles of rational
behaviour are universal.
Wherewith the economic
science is universal in
the whole World.
Simonde de Sismondi
1773-1848
It (economics) is not founded on
dry calculations, nor on a
mathematical chain of
theorems, deduced from some
obscure axioms, given as
incontestable truth…Political
economy is founded on the
study of man and men; human
nature must be known, and
also the condition and life of
societies in different times and
in different places.
(De la richesse commerciale, 1803)
Wilhelm Roscher
1817-1894
That which is general in Political
Economy has, it must be
acknowledged, much that is
analogous to the mathematical
sciences. Like the latter, it
swarms with abstractions… (But)
the advantages of the
mathematical model of
expression diminish as the facts
to which it is applied become
more complicated. This is true
even in the ordinary psychology
of the individual. How much
more, therefore, in the portraying
of national life!
(System des Volkswirtschaft, 1854)
Gustav Schmoller
1838-1917
Economic theory, based
on deductive method is
not only useless, but
pernicious, owing to the
unrealism of
assumptions, as human
behaviour is not
subjected to any
universal principles.
Brilliant neoclassics Alfred Marshall (1842-1924) and Leon Walras (1834-1910) –
economic science is universal in the whole World
Thorsten Veblen
1857-1929
Human behaviour constantly is
not rational – it is determined
by human nature – instincts,
and the social environment –
institutions.
Instincts for different nations
and races differ fractionally.
Institutions may differ
substantially. (Example Islamic or Jewish banking.)
The weakest point of
economic science, based
on deductive method – it
takes in account only the
rational human behaviour.
Is there a universal Management science?
Management science is based on a human
behaviour in a larger degree than economics.
Management science:
• American,
• German,
• Italian,
• Japanese, (P.Drucker in his Effective Executive indicates the
substantial difference of Japanese management science)
• Russian
Which of these management sciences should be
taught to Latvian students?
From “Management Theory” by Vladimir Ukolov, Alexandr Mass and
Igor Bystryakov (in Russian)
The managerial system should be orientated towards the
rebirth of entrepreneur-…
(… hozjain in Russian, saimnieks in Latvian, Wirt in German.
Approximate English translation Master does not reflect the
exact meaning of the word.)
The modern economic doctrine is guided towards
entrepreneur, who tends to get maximum profit. A true
entrepreneur-… perceives the system of the employees and
processes as his … (hozjaistvo, saime (!) ). The increase of
profit he assumes as one of the factors among others,
which commonly are directed to the functioning and
development of the environment for which he is
responsible.
(Free translation from the Latvian edition of the book)
Effective Executive
The title of the present edition of this Peter
Drucker’s book in Latvian is translated as
“Efektīvs vadītājs” – “Efficient Manager”.
More approriate translation should be
“Lietpratīgs saimnieks” (Sachkundig Wirt),
which contains even deeper nuances than
the original title.
Mūsu augstākās izglītības sistēmai
ir jāsagatavo
nevis efektīvus vadītājus,
bet lietpratīgus saimniekus.