In assessing how well the laws of economics describe actual behavior, the student will notice immediately the limitations of time. Economists like Adam Smith were unable to foresee how factory systems would change following revolutionary discoveries, such as the steel-making process, which replaced the lowly pin factory. Likewise, David Ricardo did not envision improvements in nineteenth-century agricultural productivity; nor did John Stuart Mill or Karl Marx clearly predict innovative changes in the political control of economics. In more recent times, even Keynes' and Schumpeter's theories have already suffered major setbacks as events have moved in directions neither man could foresee.
Most significant to the trouncing of economic prediction is the fact that economists as a group have not been able to predict three trends:
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The growth of technology. Adam Smith was unable to guess that mass production would vastly alter the factory system. Moreover, David Ricardo had no inkling how drastically steam power would alter production. In general, these market seers failed to understand how machines could displace labor. Only Karl Marx surmised that machines might replace workers and even he would be astounded at modern computer-driven machinery, particularly the sophisticated robotics that bolsters the automotive industry.
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Changes in society's attitudes and behavior. Adam Smith assumed that workers would remain complacent when, in fact, they became more militant. Karl Marx, assuming that human outlook would remain static, failed to see that workers could resolve their differences with capitalists within the confines of a democratic society
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More profound than the other two trends is the fact that regularities of economics are no longer regular. Adolph Lowe, who questions how the random behaviors of individuals in the marketplace manage to provide for the entire community, reveals that people establish economic order because of their singleminded acquisitiveness. However, the will to maximize personal finances is waning as capitalism develops. Human lives are so well furnished that modern capitalism resorts to advertising to convince the public that it needs the new products which factories are turning out. Thus, one of the dependable "givens" of the economic equation is no longer a sure thing.
