The economy as a circular flow

It is astonishing that in spite of all other disagreements, theorists of different persuasions seem to agree on one issue: that the separation between technology and the economy is an essential precondition for economic theorizing. [. . .] For us, on the contrary, both ‘technical’ and ‘economic’ facts are established data which are used as a point of departure for further analysis. [. . .] If one were to investigate the characteristics of the various individual elements in the circular flow of an economy, one would be forced to enlist the aid of a large number of the social and natural sciences. The interconnections which shape all these elements into a unified whole-an economy-are not specifically economic in nature; indeed, they are as varied as the elements themselves, drawn from the realms of physics, biology, psychology, sociology and so on. And if the economic theorist, as opposed to the practitioner, needs no particular knowledge of physics or biology or any other specialist field, this is because he takes the existence of the above mentioned interconnections for granted, seeking no further elucidation. It is also quite possible that within the domain occupied by these other disciplines the necessary specialist research has not yet been carried out: for example, psychology has only in a very limited fashion explained its idea of the laws governing the satisfaction of needs. The economist can set about filling this gap, and in doing so he is acting as a psychologist. [. . .] In methodological terms, all these areas of research [. . .] go well beyond the boundaries of the actual problem under investigation.