Understanding the economic phenomena and procedures based on „common sense” is insufficient in the age of knowledge society, when the NEED FOR ACCURACY is not only a must, but also indispensable. Still, the need for accuracy involves THE HYPOTHESIS NEED IN BUILDING SCIENTIFIC THEORIES. There are certain conditions of constructivism and functioning of hypotheses, and considering them gives them a “status” in science. Coherence is the fundamental criteria of plausibility and credibility of hypotheses. A hypothetic construction should not contain internal dysfunctions, i.e. incompatible postulates or difficult to set up with one another.

Gheorghe BAILESTEANU

English

Research Papers in Economics

   
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  Editorial Board 
 
  Robert W. ACKRILL  Nottingham Trent University, United Kingdom 
  Vasile COCRIŞ  “Alexandru Ioan Cuza” University, Iaşi, Romania 
  Maurice CHENEVOY  Université d’Auvergne Clermont-1, France 
  François FULCONIS  Université d’Avignon et des Pays de Vaucluse, France 
  Orio GIARINI  L’Istituto del Rischio, Trieste – Milano – Ginevra 
  Aurel IANCU  National Institute of Economic Research, Bucharest, Romania 
  Vasile IŞAN  “Alexandru Ioan Cuza” University, Iaşi, Romania 
  Nigel HEALEY  University of Canterbury, Christchurch, New Zealand 
  Dinu MARIN  Academy of Economic Studies, Bucharest, Romania 
  Dumitru MATIŞ “Babeş-Bolyai” University, Cluj-Napoca, Romania 
  Kozo MAYUMI  University of Tokushima, Japan 
  Philippe ROLLET  Université des Sciences et Technologies de Lille, France 
  Mihai ROMAN  Academy of Economic Studies, Bucharest, Romania 
  Guy SOLLE  Institut d’Administration Economique de Metz, France 
  Ion STANCU  Academy of Economic Studies, Bucharest, Romania 
  Nadine TOURNOIS  Université de Nice Sophia Antipolis, France  
 
 
 
 
 
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* Professor, PhD., West University of Timişoara, Faculty of Economics and Business Administration,
Management Department 
 
 
Understanding the economic phenomena 
and procedures based on „common sense” is 
insufficient in the age of knowledge society, when 
the NEED FOR ACCURACY is not only a must, but 
also indispensable. Still, the need for accuracy 
involves THE HYPOTHESIS NEED IN BUILDING 
SCIENTIFIC THEORIES. There are certain conditions 
of constructivism and functioning of hypotheses, 
and considering them gives them a “status” in 
science. Coherence condition is the fundamental 
criteria of plausibility and credibility of hypotheses. 
A hypothetic construction should not contain 
internal dysfunctions, i.e. incompatible postulates 
or difficult to set up with one another. For example, 
the hypothesis of turnover increase, as a sign of a 
business development, is credible if it doesn’t 
generate economic and financial unbalance. 
Otherwise the conclusions are false and the 
hypothesis unintegrable in the analysis system. Regrettably, much economic 
research has as a starting point, improper hypotheses, on purpose or out of 
ignorance selected, which explains the incoherence of some development or 
restructuring programmes. The need for hypothesis assumes, in its turn, THE 
NEED FOR MATHEMATICS, which is becoming more and more legitimacy for 
the modern scientific economic constructions. For a layman, mathematics can 
harder justify itself, its problems and results, even if the layman is an engineer 
or an economist. The bonds of mathematics with economic reality are rather 
indirect, more difficult to consider than in the case of physics, chemistry or 
biology. Yet, mathematics has got, to a greater extent than any other subject-
matter the capacity of surprising, contradicting by its results, the simple 
intuitions. The interdisciplinary potential of mathematics resides in the fact 
that it is everywhere, that it is becoming indispensable in any subject-matter 
which has reached enough maturity to allow itself to separate its structural 
formal and substantial aspects. Economics cannot ignore mathematics. 
Accuracy and rationality mean ORDER in judgment. Order means STRUCTURE, 
which in its turn implies FORMALIZATION. On a first level, structure means 
organization, inner arrangement, and construction. This is revealed as a 
system of elements making up the anatomy or the hard of the phenomenon, 
ignoring its physiology. This is the level where the studies of element analysis 
making up the structure from the point of view of its composition, adapt 
themselves. In a subsequent stage follows the total-structure in which rational 
and physiology prevails, the structuralism being a relations – based system. 
On this analysis level, the whole and not the part prevails. On a last level is 
invariant-structure, in other words, what is preserved by contrast with what is 
modified. The easiest example of invariance is offered by algebra. Variable 
permutation of a polynomial does not alter the polynomial value.  
   
THE NEED  
FOR  
ACCURACY 
 
 
Gheorghe BĂILEŞTEANU * 
365 Gheorghe BĂILEŞTEANU 
 
Assuming that: 
4x13 + 2x2 + 4x34 + 2x4 
and intersubstituting x1 variable by x2 variable or x2 by x4, the polynomial value 
is not altered. With formal sciences, structuralism is currently used with very 
good results. But, with cement sciences such as economy, there are numerous 
obstacles (at least for the present). It is rightly said that the distance between 
their epistemic levels is so great, that it can hardly be covered. In order to 
become structured, a subject-matter should go beyond the formal stage and 
become a formal science. But the more a science is more cement, richer in 
relations, the more it lets itself shaped and adjusted to patterns. Under the 
circumstances, the passage from abstract to cement sciences is accompanied 
by a process of degradation of the structure concept. Very often the structural 
method is satisfied by the purely qualitative assertion that an object makes up 
a whole, a system. Yet, the systemic effects of structuralism are obvious:1 
  the leap from apparent incoherence of the facts to their basic 
coherence; 
  the leap from description to deduction; 
  the leap from the atomic perspective to a total perspective; 
  the leap from division to the ever more comprising space integra-
tion; 
  the leap from phenomenon to essence. 
These advantages are to be found, all of them, within the formal 
sciences. But even relativized they are a target for the cement sciences too. 
Therefore, the endeavor of formalizing the science of economy is a necessary 
one for its progress. 
However, formalization assumes SIMBOLIZATION as a premise of pass-
ing from the natural to the symbolic language. Formal language is a kind of 
idealization of natural language, it possesses its features, but with a higher de-
gree of preciseness. The setting up of an ECONOMIC SEMIOTICS is more and 
more required a general theory of sign systems and their operating regulations. 
The economists are accustomed to o using various symbols, to analyze facts 
and signs characterizing some economic phenomenon and processes, but 
most of them do it intuitively, often in a contradicting and mechanical manner. 
The informational boom in economics, using computers on a large scale in 
economics, the assimilation by the economic theory by some notions, methods 
and techniques from mathematics, physics, chemistry, psychology etc., have 
led to the use on a large scale in the economic theory and practice of various 
symbols. As the number of these symbols is exponentially boosting, as well as 
the probability of some confusions among symbols, between their form and 
their meaning, a theory of economic semiotics should be built, a general 
economic system which should include: s i g n  f u n c t i o n  ( s y m b o l s  u s e d  i n  
economy) symbolizing – codification rules, sign usage and meaning rules. By 
symbolization, the economic sciences increase their information capacity of 
know-how and consequently fulfilling in a higher degree their prospective 
function. It is general knowledge that the systems in general, as well as the 
                                                 
1 Botezatu, Petre : Semiotică şi negaţie ; Editura Humanitas, Iaşi, 1973 
366THE NEED FOR ACCURACY 
 
economic ones, comprise: input, the transformation unit (production process), 
output and system regulation unit. The company can be diagnosed in a simple, 
classical way, correlatively observing the input and output by comparing them 
with certain control yardsticks, the standards of system evolution and drawing 
the right conclusions. 
Other conclusions, another manner of working and a different logical in-
terpretation of the company development are obtained if the information is 
formalized and symbolized according to an axiomatic system.  
Accordingly: 
(I)  Definitions: 
(a)  A cement  producing industrial company, cannot operate without 
using electricity (Eel) 
(b)  Economy needs cement (q) 
(c)  Used electricity costs money (pre) 
(d)  The cement produced is sold for money (prp) 
(e)  The work day has 24 hours 
(II)  Axioms: 
(a)  Each tone of cement needs a certain amount of electricity (cse) 
(b)  Within an hour it is being produced a quantity of cement (nq) 
(c)  Each tone of cement includes physical work (wm) 
(d)  Necessity for cement will be completely satisfied if existing electricity, 
money and raw materials (Nq) 
(e)  Standard costs for 1000 RON – level of production (cn) 
(III) Regulations: 
(a)  Eel = q ·cse  (shows the total required level of energy) 
(b)  Qn = q ·Wm (shows the level of production) 
(c)  Cel = q · cse · pre (total cost of electricity) 
(d)  Qm = q · prp (value of the production of goods) 
(e)  24 · nq · nz · l <>Nq (the connection between cement production and 
the need for cement) 
                       - nz – number of  working days per month; 
                       - l – number of working months per year 
(f)  q = 24 · nq · nz · l (parity between production and its defining factors) 
(g)  P = Qm ( 1- cn / 1000 ) (financial results)    
(IV) Theorems: 
(a)  wel = Qm /Cel   (productivity of electricity consumption) 
(b)  yel = P/Cel  (yield of electricity consumption) 
(c)  csel= Cel /Qm; P (specific consumption and energy consumption 
(V)  Explanation: 
  (e) rule is analyzed and should always be ≥ , otherwise the social 
need for cement it is not properly satisfied: 
       - due to nq 
       - due to nz 
367 Gheorghe BĂILEŞTEANU 
 
       - due to l 
       - due to disuse of the whole 24 hours of the day 
  a comparative analysis is being made, wel it is calculated using the 
standard value (wn) and the following situations might occur: 
        - wn > wel (inadequate situation) 
        - wn = wel (critical situation and alarm signal) 
        - wn < wel (good situation, desirable) 
  a comparative analysis of yel it is calculated using the standard value 
rn  and the following situations might occur:  
        - rn > yel (bad) 
        - rn = yel (good, but with doubts) 
        - rn <yel (very good) 
  same analysis for csel and cn, with the result: 
        - cn > csel (good) 
        - cn = csel (equilibrium, with doubts) 
        - cn < csel (bad) 
  efficiency indicators are compared in dynamic (wel, yel and csel) and 
their generating measures, with the result: 
        - wel~ > Qm~ where ~ is the future of recognition (fixed basis or 
chain basis) of the composing elements. 
        - wel ~ > Qm~ 
        - wyel~ > Rf~ 
        - csel ~> Cel~ 
Consequently, on a limited space, with an economy of resources, a 
logical calculus can be made of the efficient usage of electricity and a fast, cor-
rect and systemic interpretation, thus assuring the proper conditions for a 
good analysis of the state of the system, taking the adequate measures to im-
prove its functionality. 
 
 
 
 
 
 
 
 
 
 
 
 
 
368

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