Karl’s interest in the rationale of an empirical method in economics arose when he was employed by a financial services company in the early to late 1960s to prepare economic reports. He realized that, apart from an understanding of certain institutional arrangements such as banking, the economics acquired in a formal education seemed to be of little relevance to the statistical investigations that are done. That was the starting point for this dissertation; the totally different character of theoretical and empirical economic studies, and the fact that very little use seems to be made of economic theory in most empirical studies. There was a question to be investigated; what is the empirical content of economics?

This book is part of that dissertation written in the mid 1970s. Days and nights ran into each other. Karl grew a beard during this period and was never clean-shaven again. I typed, on a portable typewriter, what Karl wrote in pencil on a foolscap pad.

When it was finished Karl asked me to accompany him when he went to hand it to a professor of economics at his home in Johannesburg. This puzzled me but I did go with him and he did hand it to the professor. Periodically I would ask Karl what was happening about it, and he always replied that one person did not understand it at all and the other person only understood 10 per cent of it.

One morning, roughly ten years ago, I got up early and Karl, who had not gone to bed yet, was sitting on the staircase reading this dissertation and he said to me “This is brilliant.” Karl did not blow his own trumpet.

Later, when I asked the professor to whom Karl had handed the dissertation what he had done with it, he told me that it was not his field and that he had given it to another professor of economics.

I was never allowed into Karl’s study. When I had to sort it out I could not find the dissertation. I had sleepless nights thinking that I had failed Karl. Then I found the chapters. Michael Stettler, a former student and colleague of Karl’s, and one of Karl’s favourite young men, sorted out the chapters and Karl’s other favourite young man, Eugene le Roux, an accountant, spent his entire Christmas break putting it into digital format.

Karl’s face used to light up whenever Eugene or Michael came to visit him in his latter years.

Johannesburg

May 2023