The following six points highlight the features of economic laws.
Feature # 1. Economic Laws are not Commands:
Economic laws are not orders of the state (government) and are not commands. They are formulated on the basis of people’s behaviour in the real world.
Feature # 2. Economic Laws are not Exact:
Since economic laws deal with actions of human beings having free will, they are not as exact as the laws of the natural sciences. They are statements which are true only in general. For example, the statement that men will buy goods at the cheapest available market is true generally but not universally.
A man intentionally pays a higher price to help a relative or a friend; but such cases form a small fraction of the total transactions of human beings. Economists tacitly ignore these exceptional cases and frame their laws on the expectation that men’s action will, in the great majority of cases, follow a uniform pattern. This makes economic laws generally true, but less exact than physical laws. “Economic laws are probability laws, not exact relationships.”
“Abnormal as well as normal patterns of probabilities occur in economics”, as Samuelson has commented.
Feature # 3. Economic Laws are Statements of Cause and Effect:
Economic laws, like scientific laws, are statements of cause and effect. They attempt to state the effects that will follow from particular causes. Unfortunately in economic affairs many factors operate simultaneously and it is impossible to isolate each factor to find out its effects separately.
The qualifying clause “other things remaining the same” (ceteris paribus), is used to get over this difficulty. But in economic life other things generally do not remain the same. Hence, economic laws are never exact enough to enable accurate predictions or prophecies being made.
Feature # 4. Economic Laws are Hypothetical :
Economic laws are hypothetical Economic laws are also hypothetical, i.e., they are conclusions drawn from certain assumptions or hypotheses. But in this, economic laws do not differ from other scientific laws. The laws of science also start from certain hypotheses and deduce certain consequences.
Feature # 5. Predictions are Difficult:
As regards making predictions the following example may be noted. The simple and exact laws of gravitation enable astronomers to make accurate forecasts. But in the case of tides, the level of water depends on so many factors (e.g., strength of the attracting force, geographical features of the country etc.) that it is impossible to forecast the level accurately. Marshall therefore says, “The laws of economics are to be compared with the laws of tides rather than with the simple and exact laws of gravitation”.
Feature # 6. There are Same Physical Laws:
Some laws dealt with in books of economics deal with inanimate nature, e.g., the Law of Diminishing Returns. These laws are borrowed from other sciences.