4 Turning from empirical to theoretical analysis, we find in the econometric field many different theoretical approaches. We find a mosaic of theories, some of which are complementary, while others are competing; we find rather fragments of a theory than one unified theory. Now in view of the many factors in economic life and their great variability, it is but natural that economic theory should be fragmentary. An all-embracing theory would no doubt be too complicated to be useful. But are the existing fragments all right? Are there not too often too many alternative approaches and suggested solutions to the same problem? J. M. Clark has touched upon this question in the note already referred to, and has also pointed out the weak point of many of these theories, the questionable realism of the underlying premises.

This lack of realism can to some extent be explained by the main handicap of economic analysis: economic theory cannot be tested by experiments. Now thus handicapped we should be all the more careful in selecting our premises and assiduous in testing them by non-experimental means. But I fear that the opposite is in fact more true: the less the theories can be tested experimentally, the more freely they seem to be put forward. I think, accordingly, that much remains to be done towards rejecting the less realistic approaches so that we can concentrate on the more realistic ones.