Friday, August 9, 2013

The Science of Demand (1) - Unofficial Translation of Steven Cheung's 经济解释 - 科学说需求

More than ten years ago, while wandering in a bookshop, I incidentally came across a book of Steven N S Cheung. Once started reading, there was no way to stop. A whole decade of collecting and studying almost every publication of Cheung followed. Some are not easily comprehensible, while most are amazing and fun. About three years ago, after learning Cheung was drastically revising his classic Chinese book “Economic Explanation”, I volunteered to help translate that into English. The offer was unfortunately turned down. Rules, however, cannot deter follies – I spent several months translating the then newly published Volume I into simple English, then e-mailed the script to Cheung for review. Two years have gone by with no response. Understandably, Cheung is still focusing on rewriting the remainder of his classic, yet follies are nothing less than follies – in the sheer hope of spreading sooner Cheung’s lifelong economics thinking into the English world, the translation will be published in this blog. Treasured knowledge should be shared in the public domain, instead of being barred by language barrier!

Economic Explanation     Volume I     The Science of Demand
Written by: Steven N S Cheung     Translated by: Daley Mok


Sitting by my desk, with a pen in hand, I am thinking about mankind’s achievements in science. Science is an interesting knowledge in systematically explaining phenomena. Definitely, mankind is the crown of creation. So developed is our brain that when compared with other creatures, the difference is immense. Expression of feeling is an art, whereas rational analysis is a science. Human feelings are often confused with reasoning. As such, scientific inference may be influenced by feelings and thus made sloppy, or it can be so fantastically made that words could not express. Indeed, science may have the beauty of art.

In search of beauty is only human nature, science therefore may have its artistic quality and beauty, too. However, science itself is no art, its main objective being to explain phenomena. On the other hand, human, being only human, cannot be so cold-hearted as to be emotionless. Consequently, declaring a scientific article as a piece of art is a compliment. The problem is, merely beautiful but incapable of explaining phenomena means that science loses its function. Since scientists are also only human, we cannot expect they are any exceptions with no emotions. However, emotions can never be abused in science. The principle is simple: scientific work can combine objective analysis and subjective judgment, yet the two have to be clearly differentiated. As long as this is done, affectionate terms can be inserted as ornaments in scientific writings to make them less monotonous but more readable.

In economics, subjective sentiment and objective analysis are more difficult to delineate. Though not impossible, it is more difficult when compared to natural sciences such as physics or chemistry. Economics is a science for explaining human behavior. The problem is, economists are only human, thus inevitably add their own values, and may even apply their own likes and dislikes to scientific conclusion. First-rate economists, however, are capable of setting aside their own value judgment when analyzing. This is the ability to simultaneously use one’s mind on two separate matters. People who are not born with this have to work extra hard.


My desk sits next to the window. It is late autumn. Bamboos outside are swaying under the breeze. In a densely populated city like Hong Kong, it is not easy to have a tree-lined window view. Du Fu, our great poet, wrote: “Carpeting the ground are leaves cascading down from boundless trees.” Hong Kong people could envisage such a scene despite not experiencing that before. Why? It is already late autumn, yet the greenness of the bamboos here are still lovely. Why so? This year’s temperature has dropped earlier than usual. Though only early November, it feels chilly. The butterflies I saw outside the window two months ago are nowhere to be found. Nonetheless, I know they will come again next June. Why am I so sure?

My window faces east. Since I do my writing in the evening, I have not seen the sun rise for several years. But I dare bet with anyone that if I sit by my desk in the morning and look outside, I can see the sun. When I see the ocean, I know seawater is salty, and that high tides and low tides are somewhat related to the waxing and waning of the moon. I was a fishing expert when I was a kid. When watching the sea, I could remember the happy moments of fishing. Anglers owe fish, but they understand the character of fish. A cloudy night with a full moon is the best time to catch sea bream. This is regularity.

Every learned man concurs to the laws of nature. Human behavior is no different. Overlooking from my window, Chi Fu Fa Yuen, a private housing estate built by Hongkong Land, sits right next to Wah Fu Estate, a public housing estate built by the Hong Kong government. No need for survey, everyone would agree that the latter is more densely populated than the former. Baguio Villa, a residential estate closer to where I live, has an even lower population density than Chi Fu Fa Yuen. The higher class the residential area, the lower the population density. This is regularity. On a nearby hillside, a few wooden huts scatter here and there. Illegally built, these huts are simple and plain. Illegally-built properties, having no land rights, are a lot simpler and plainer than properties with land rights. This is regularity, too.

Certainly, regularity can be traced irrespective of whether it is a natural or human phenomenon. In fact, it is impossible to find any phenomenon that exhibits no regularity – though certain phenomena require in-depth study to find their pattern. It has always been like this since ancient times that every phenomenon has regularity. We know it is like this, but do not necessarily know why. Since we know it is so, it is only natural that we would like to know why it is so. Curiosity is human nature. Since we would like to find explanation, science is thus derived.

Science is based on three key principles by which everyone interested in science must abide. First, the existence of any phenomenon or behavior is based on subjective judgment, and no deviation from this subjective judgment is allowed. When I say the sun is rising (my subjective judgment), if you do not agree and believe the sun is declining, then the two of us cannot get together to scientifically explain the sun’s phenomena. When I see flower, you see flower, too; when I say it is raining, you agree it is raining, too – This is the first prerequisite of scientific generalization. Of course, some people never agree to anything. These people will always be cut off from science.

Surprisingly, the agreement to subjective phenomenon is often easily achieved. Even if subjective judgments toward a certain phenomenon are different, it is still not difficult to agree on its existence. For instance, people with color-blindness would agree the colors that they cannot see exist; deaf people would agree that sound exists though they cannot hear.

It is one foundation of science that subjective phenomenon bears objective consent and common belief. However, certain subjective matter does not have the consent or common belief of the public, hence falling outside the scope of science. For instance, China in the old days boasted a lot about extra-sensory power. Believers believed firmly, yet there were lots of non-believers as well. I saw in Beijing the performance of the most-renowned extra-sensory power. It was so spurious that I never believed in it. Extra-sensory power lies outside the scope of science, not only because I do not believe, and not only because many people do not believe, but because it has never been rigorously tested to make non-believers believe. Just like some people believe in God while some others do not, yet no one has ever successfully confirmed the existence of God. This is not to say Christianity or other religion makes no sense, only that religion is no science.

The second principle of science, as aforementioned, is: every widely identified phenomenon is traceable and exhibits regularity. The regularities of certain phenomena may require massive effort to identify or confirm. Experience tells us that the regularities of phenomena have always been unchanged. Even though it is no easy matter to identify the regularity of a new phenomenon, scientific researchers, firmly believing in its existence, will never be daunted by repeated setbacks in its hunting.

Why is the regularity of a phenomenon so essential? The answer is: if a phenomenon only happens casually or at random without any regularity, there is no way to find out the relationship between this and other phenomena, rendering this phenomenon unable to be systematically explained. Non-traceable phenomenon shows neither signs in advance nor basis afterwards, similar to the Ascension of Jesus which cannot be inferred by logic. Science being science is because there are no phenomena in the world that exhibit no regularities.

This leads to the third necessary principle. Scientific researchers must firmly believe that nothing happens with no reason. To predict (not forecast) and to explain are the same thing. If we predict that under certain circumstances, for certain reason, certain phenomenon will happen, then the emergence of that phenomenon is counted as being explained. For instance, the speed of a fly is not as fast as that of an airplane, but due to Newton’s law of gravitation, a fly can nevertheless fly forward inside a cabin. The same theory is applied in explaining that a fly can fly forward inside a cabin, as well as in inferring that outside a cabin a fly cannot fly faster than an airplane. If the speeds of a fly and an airplane exhibit no regularities, or under different circumstances their speeds cannot be compared, then we have no way to explain the flying phenomena inside or outside a cabin. How then can we start exploring science?

To win the consent of the public, subjective phenomenon has to have regularity, and there must be a reason for it to occur or emerge. These are the necessary conditions of science.

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