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Saturday, August 31, 2013

In Mill's shadow: Cairnes and the inductivists

On Cairnes's methodology, see John Elliott Cairnes, The Character and Logical Method of Political Economy (2nd ed., London: Macmillan, 1875); and Murray N. Rothbard, Individualism and Philosophy of the Social Sciences (1973; San Francisco: Cato Institute, 1979), pp. 49–50, On Cairnes and the Australian gold controversy, see Crauford D. Goodwin, ‘British Economists and Australian Gold’, Journal of Economic History, 30 (June 1970), pp. 405–26; and Frank W. Fetter, Development of British Monetary Orthodoxy, 1797–1875 (Cambridge, Mass.: Harvard University Press, 1965), pp. 240–9.
On the rise of William Whewell and the Baconian inductivists, see N.B. de Marchi and R.P. Sturges, ‘Malthus and Ricardo's Inductivist Critics: Four Letters to William Whewell’, Economica, n.s. 40 (Nov. 1973), pp. 379–93; I. Bernard Cohen, Revolution in Science (Cambridge, Mass.: Belknap Press of Harvard University Press, 1985), p 528; and S.G. Checkland, ‘The Advent of Academic Economics in England’, The Manchester School of Economic and Social Studies, 19 (Jan. 1951), pp. 59–66.

Austrian Perspective on the History of Economic Thought (2 volume set)

Friday, August 30, 2013

The French laissez-faire school and its influence

On the French laissez-faire school and its influence in Europe and the United States in the nineteenth century, see the seminal article by Joseph T. Salerno, ‘The Neglect of the French Liberal School in Anglo-American Economics: A Critique of Received Explanations’, Review of Austrian Economics, 2 (1988), pp. 113–56. In this important and subtle essay, Salerno corrects the conventional historical deprecation of the theoretical acumen of Bastiat and the French liberals, and demonstrates their considerable influence on nineteenth century economic theory, including the marginalists.
The only satisfactory biography of Bastiat is Dean Russell, Frédéric Bastiat: Ideas and Influence (Irvington-on-Hudson: Foundation for Economic Education, 1965). Although Russell is an admirer of Bastiat, he undervalues Bastiat's economic theory, as grossly inferior from the point of view of the Austrian School. Russell fails to take into account that Bastiat's emphasis on immaterial services rather than material goods, as well as his emphasis on consumer wants, were great steps forward toward Austrian theory as compared to dominant British classicism. More material on Bastiat's career as legislator can be found in George Charles Roche III, Frédéric Bastiat: A Man Alone (New Rochelle, NY: Arlington House, 1971), pp. 82–122. See also the discussion of Bastiat in Israel M. Kirzner, The Economic Point of View (Princeton, NJ: D. Van Nostrand, 1960), pp. 82–4. Also see Robert F. Hébert, ‘Claude Frédéric Bastiat’, New Palgrave Dictionary, I, pp. 204–5. On the international congress of economists held in Brussels, see Joseph Garnier, ‘Économistes (Congrès des)’, in C. Coquelin and C. Guillaumin (eds.), Dictionnaire d'Économie Politique (Paris: Guillaumin, 1852), I, pp. 671–2. There is no substitute for reading the delightful work of Bastiat directly; see the translations of his volumes Economic Harmonies, Economic Sophisms, and Selected Essays of Political Economy, all published by Princeton, NJ.: D. Van Nostrand, 1964.
The best discussion of Molinari is the three-part article by David M. Hart, ‘Gustave de Molinari and the Anti-statist Liberal Tradition: Part I’, Journal of Libertarian Studies, V (Summer 1981), pp. 263–90; ‘Gustave de Molinari and the Anti-statist Liberal Tradition: Part II’, Journal of Libertarian Studies, V (Autumn, 1981), pp. 399–434; and ‘Gustave de Molinari and the Anti-statist Liberal Tradition: Part III’, Journal of Libertarian Studies, VI (Winter 1982) pp. 83–104.
There are English translations of Molinari's path-breaking anarcho-capitalist work: The Production of Security (New York: Center for Libertarian Studies, May 1977) (with preface by M. Rothbard); and his Eleventh Soirée in Hart, ‘Molinari, Part III’, pp. 88–104. The only book of Molinari's translated into English came when he had already retreated from anarcho-capitalism: The Society of Tomorrow (New York: G.P. Putnam's Sons, 1904).
For an appreciative discussion of Molinari and private protection by a modern economist, see Bruce L. Benson, ‘Guns for Protection and Other Private Sector Responses to the Fear of Rising Crime’, in D. Kates (ed.), Firearms and Violence: Issues of Public Policy (San Francisco: Pacific Institute for Public Policy Research, 1984), pp. 346–56.
On the influence of Bastiat and Francesco Ferrara in Italy, and on the spread of historicism and socialism in the 1870s, see Luigi Cossa, An Introduction to the Study of Political Economy (London: Macmillan, 1893).
For an overall discussion of French academic economics in the nineteenth century, see Alain Alcouffe, ‘The Institutionalization of Political Economy in French Universities, 1819–1896’, History of Political Economy, 21 (Summer 1989), pp. 313–44.
On Francesco Ferrara and the Italian laissez-faire school, also see Ugo Rabbeno, ‘The Present Condition of Political Economy in Italy’, Political Science Quarterly, 6 (Sept. 1891), pp. 439–73; and Piero Barucci, ‘The Spread of Marginalism in Italy, 1871–1890’, in R.D.C. Black, A.W. Coats, C.D.W. Goodwin (eds.), The Marginal Revolution in Economics: Interpretation and Evaluation (Durham, NC: Duke University Press, 1973), pp. 246–66.
The best discussion of Pareto, combined with English translations of many of his articles and excerpts from his works, is in Placido Bucolo (ed.), The Other Pareto (London: Scolar Press, 1980). Also important is S.E. Finer's introduction, as well as the compilation in, Vilfredo Pareto, Sociological Writings and S.E. Finer, ‘Pareto and Pluto-Democracy:

The Retreat to Galapogos’, American Political Science Review, 62 (1968), pp. 440–50. For a current discussion see Salerno, ‘Neglect’.
On Bastiat and laissez-faire views in Sweden, see Eli F. Heckscher, ‘A Summary of Economic Thought in Sweden, 1875–1950’, The Scandinavian Economic History Review, 1 (1953), pp. 105–25. On the libertarian, laissez-faire economist John Prince Smith in Germany, see the illuminating article by Ralph Raico, ‘John Prince Smith and the German Free Trade Movement’, in W. Block and L. Rockwell (eds.), Man, Economy, and Liberty: Essays in Honor of Murray N. Rothbard (Auburn University, Ala.: The Ludwig von Mises Institute, 1988), pp. 341–51. Also see W.O. Henderson, ‘Prince Smith and Free Trade in Germany’, Economic History Review, 2nd ser., 2 (1950), rprt. in Henderson, Britain and Industrial Europe, 1750–1870 (Liverpool, 1954). On Prince Smith's associate Julius Faucher, see Andrew R. Carlson, Anarchism in Germany, Vol. I: The Early Movement (Metuchen, NJ: The Scarecrow Press, 1972), pp. 65–6. On Karl Heinrich Rau, see Keith Tribe, Governing Economy: The Reformation of German Economic Discourse 1750—1840 (Cambridge: Cambridge University Press, 1988), pp. 183–201. On Rau, also see H.C. Recktenwald, ‘Rau, Karl Heinrich’, The New Palgrave, IV, p. 96.
On German liberalism generally, see Donald G. Rohr, The Origins of Social Liberalism in Germany (Chicago: University of Chicago Press, 1963); and James J. Sheehan, German Liberalism in the Nineteenth Century (Chicago: University of Chicago Press, 1978).
On British laissez-faire theorists heavily influenced by Bastiat, Henry Dunning Macleod's work is of interest. In particular, see his The Elements of Political Economy (London: Longman, Brown, 1857); The History of Economics (New York: Putnam, 1896); and his Dictionary of Political Economy, Vol. I (London: 1863). His view of laissez-faire and of the history of economic thought is nicely summed up in his ‘On the Science of Economics and Its Relation to Free Exchange and Socialism’, in Thomas Mackay (ed.), A Policy of Free Exchange (London: John Murray, 1894), pp. 3–46. For appreciative discussions of Macleod, see Salerno, ‘Neglect’, pp. 130–32; Charles Rist, History of Monetary and Credit Theory (1940, NY: A.M. Kelley, 1966); Israel M. Kirzner, The Economic Point of View (New York: Van Nostrand, 1960), pp. 73, 202–3; and Murray N. Rothbard, ‘Catallactics’, The New Palgrave, II, p. 377.
The unjustly neglected Wordsworth Donisthorpe's work in laissez-faire economics consists of Individualism, A System of Politics (London: Macmillan, 1889), and his Law in a Free State (London: Macmillan, 1895); his waffling chapter on ‘The Limits of Liberty’ in the latter work was reprinted from his article of the same name in Thomas Mackay (ed.), A Plea for Liberty (NY: D. Appleton & Co., 1891), pp. 63–106. For a history of Donisthorpe and the British laissez-faire movement, see W.H. Greenleaf, The British Political Tradition (London: Methuen, 1983), II, pp. 263–87. Also see Edward Bristow, ‘The Liberty and Property Defence League and Individualism’, The Historical Journal, 18 (Dec. 1975), pp. 761–89; and John W Mason, ‘Thomas Mackay: The Anti-Socialist Philosophy of the Charity Organization Society’, in K.D. Brown (ed.), Essays in Anti-Labour History (London: Macmillan, 1974), pp. 307–9. For Donisthorpe's plutology, see his Principles of Plutology (London: Williams & Norgate, 1876). Also on Donisthorpe, see Peter Newman, ‘Donisthorpe, Wordsworth’, New Palgrave, I, pp. 916–7.
On William E. Hearn and economics in Australia, see Hearn, Plutology, or the Theory of the Efforts to Satisfy Human Wants (London: Macmillan, 1864); Salerno, ‘Neglect’, pp. 125–9; J.A. LaNauze, Political Economy in Australia (Melbourne: Melbourne University Press, 1949); and D.B. Copland, William E. Hearn, First Australian Economist (Melbourne: Melbourne University Press, 1935).
Joseph Dorfman's magisterial multi-volume Economic Mind in American Civilization is indispensable for any coverage of American economic thought; relevant to laissez-faire thought influenced by Bastiat are Volume II: 1606–1865 (New York: Viking, 1946), and Volume HI: 1865–1918 (New York: Viking, 1949). Also important for the nineteenth century after the Civil War is Sidney Fine, Laissez Faire and the General-Welfare State (Ann Arbor, Michigan: University of Michigan Press, 1956). Also see Salerno, ‘Neglect’, pp. 133–8; Kirzner, Economic Point of View, pp. 75–77. Amasa Walker's most important work was his The Science of Wealth (3rd ed., Boston: Little Brown, 1867); and Arthur Latham Perry's was his Political Economy (21st ed., New York: Scribner, 1892). Also see the illuminating collection of essays by Perry, Miscellanies (Williamstown, Mass.: published by author, 1902), published for the semi-centennial celebration of the Williams College class of 1852.
Charles Holt Carroll's collected essays are published in Edward C. Simmons (ed.), Organization of Debt into Currency, and Other Essays (Princeton NJ: Van Nostrand, 1964). Simmons's Introduction, ibid., pp. v-xxiv, is outstanding. Also see the reprint of Carroll's essays Congress and the Currency (James Turk, ed., Greenwich, CT: Committee for Monetary Research and Education, Sept. 1977), from Hunt's Merchant's Magazine of July 1864. For Carroll and other 100 per cent gold writers, see Skousen, Economics of a Pure Gold Standard. As Simmons points out, even Dorfman omits Carroll, while the standard histories of monetary thought in America: Mints, History of Banking Theory; and Harry E. Miller, Banking Theories Before 1860 (Cambridge Mass.: Harvard University Press, 1932), make no reference to any of Carroll's writings after the start of the Civil War.

Austrian Perspective on the History of Economic Thought (2 volume set)

Thursday, August 29, 2013

Socialist and Marxist thought

On socialism in general, and on Marx and Marxism in particular, literally millions of words have been written, and out of this vast pot pourri and kitchen-midden I can only select those readings and sources which have proved most helpful. For an overall analysis and critique of socialism, the premier work is Ludwig von Mises, Socialism (3rd English ed. Indianapolis: Liberty Classics, 1981).
By far the most useful history of socialist thought is the brilliant, witty, perceptive, and properly mordant work by Alexander Gray, The Socialist Tradition (London: Longmans, Green, 1947). Also indispensable is the massive, enormously researched, and exciting work by James H. Billington, Fire in the Minds of Men: Origins of the Revolutionary Faith (New York: Basic Books, 1980). While not as strong in analysis of theories as Gray, Billington in unique in tracing all the interrelations of a large number of revolutionary and socialist figures, as well as revealing and stressing the numerous irrationalities of their positions. So deep is Billington's contempt for his subjects, however, that once in a while he mistakenly lumps all radical advocates of social change in with socialists, such as his big mistake of treating the laissez-faire radical J.B. Say as a socialist. These are minor flaws, however, in a monumental book. Also helpful is Igor Shafarevich, The Socialist Phenomenon (New York: Harper & Row, 1980).
On the other hand, the highly touted, multi-volume history of socialist thought by G.D.H. Cole, in particular Vol. I, Socialist Thought: The Forerunners 1789–1850 (London: Macmillan, 1959), and Vol. II, Socialist Thought: Marxism and Anarchism 1850–1890 (London: Macmillan, 1957), is woefully inadequate, both as history and as analysis.
Unfortunately, Alexander Gray's work omits the vital theme of apocalyptic millennialism in socialist and Marxist thought. On this theme see the amillennial Christian critique in Thomas Molnar, Utopia: The Perennial Heresy (New York: Sheed & Ward, 1967), and in the brief but profound article by Molnar, ‘Marxism and the Utopian Theme’, Marxist Perspectives (Winter 1978), pp. 144–58. Also see Molnar's mentor Eric Voegelin, ‘The Formation of the Marxian Revolutionary Idea’, Review of Politics, 12 (July 1950), pp. 275–302; and J.L. Talmon, Political Messianism: The Romantic Phase (New York: Praeger, 1960). See also the brief treatment of ‘Socialistic Chiliasm’, in von Mises, Socialism, pp. 249–55.
On the various radical groups during the English Civil War, see the good, up-to-date survey by F.D. Dow, Radicalism in the English Revolution, 1640–1660 (Oxford: Basil Blackwell, 1985). The Dow book is marred by his taking the egalitarian communist Winstanley as the touchstone for evaluation of the other radical groups.
Theocratic millennialists such as the Rosicrucians are treated in Paul Gottfried, ‘Utopianism of the Right: Maistre and Schlegel’, Modern Age, 24 (Spring 1980), pp. 150–60. See also Gottfried, Conservative Millenarians; the Romantic Experience in Bavaria (New York: Fordham University Press, 1979).
The fascinating work by C. Patrides and J. Wittreich (eds.), The Apocalypse: in English Renaissance Thought and Literature (Ithaca: Cornell University Press, 1984), far broader than its subtitle, includes two important articles directly relevant to Marxism: Ernest L. Tuveson, ‘The Millenarian Structure of The Communist Manifesto’, pp. 323^41; and M.H. Abrams, ‘Apocalypse: Theme and Variations’, pp. 342–68.
M.H. Abrams's brilliant book, Natural Supernaturalism: Tradition and Revolution in Romantic Literature (New York: WW Norton, 1971), demonstrates that Marx's thought is an atheist variant of a pantheistic determinist view of human history. In this view, the collective organism, man, separated and alienated from God-nature-himself by the dialectical act of creation of the universe, is destined some day to return in a mighty cosmic merger into unity with God-nature-himself, thereby putting an end to history. Abrams demonstrates that this bizarre world-view permeated the entire Romantic period, not only in the poetic-philosophic system of Marx's spiritual mentor, Hegel, but also in Hegel's fellow German Romantics, such as Schlegel, Schiller, Schelling, Schleiermacher, Novalis, and in such English Romantics as Wordsworth and Coleridge. Abrams shows that this determined pantheistic-organicist ‘upward spiral home’ world-outlook continues down into such twentieth century Romantic figures as D.H. Lawrence.
Robert C. Tucker, Philosophy and Myth in Karl Marx (New York: Cambridge University Press, 1961) is the crucial, indispensable work in clarifying and illuminating the vital importance of millennial, apocalyptic communism in the Marxian system, as well as explicating Marx's path through Hegelianism to Marxian communism. Tucker's Philosophy and Myth is the most important single work on Marx's philosophy of communism, and therefore on Marxism as a whole. Tucker's second edition (Cambridge University Press, 1972), unfortunately adds nothing, even references. All it does is weaken a few of Tucker's anti-Marxian insights in a few passages. The monumental work of Leszek Kolakowski, Main Currents of Marxism: Its Origins, Growth and Dissolution, I: The Founders (New York: Oxford University Press, 1981), is particularly significant for its analysis of alienation and the Hegelian-and-Marxian dialectic in Plotinus and the heretical Christian mystics of the Middle Ages. Kolakowski brilliantly traces these concepts to the creatological heresy that God created man and the universe not out of an abundance of love but out of a felt need to remedy God's own imperfections.
The most complete collection of Marx and Engels's work in English is Marx and Engels, Collected Works (New York: International Publishers, 1975-), destined to be completed in 51 volumes.
There is also now available a three-volume labour of love by Hal Draper, The Marx-Engels Cyclopedia (New York: Schocken Books, 1985), giving every aspect of Marx's and Engels's lives in worshipful and even stupefying detail. Vol. I is the Marx-Engels Chronicle, an account of every day in the lives of the two heroes, Vol. II, the Marx-Engels Register, and Vol. Ill, the Marx-Engels Glossary (and Index). Unfortunately, Draper's hagiographical approach leads him to deny the recent but accepted revelation that Marx fathered an illegitimate son, Freddie Demuth, by his housemaid, and then pressured his friend, patron, and patsy Engels into acknowledging the child as his own.
Of the numerous anthologies of Marx-Engels's writing, the best and most penetrating is Robert C. Tucker (ed.), The Marx-Engels Reader (2nd ed., New York: W.W. Norton, 1972).
Particularly valuable is Dr David Gordon's splendid annotated bibliographical essay, Critics of Marxism (New Brunswick, NJ: Transaction Books, 1986).
The best and most penetrating book on Marxism and Marxian economics is David Conway, A Farewell to Marx: An Outline and Appraisal of His Theories (Harmondsworth, England: Penguin Books, 1987). On the other hand, the most spectacularly overrated work on Marxism is Thomas Sowell, Marxism: Philosophy and Economics (London: Unwin Paperbacks, 1986), which for most of its length is more a work of Marxian apologetics than of critical analysis. For a devastating review of Sowell, see David Ramsay Steele, ‘Review of Thomas Sowell, Marxism: Philosophy and Economics’, International Philosophical Quarterly, 26 (June 1986), pp. 201–3.
There is no completely satisfactory biography of Marx. One of the great merits of the rather stodgy David McLellan, Karl Marx: His Life and Thought (New York: Harper & Row, 1973) is that it has at last displaced as the standard life of Marx the outdated and hagiographical Franz Mehring, Karl Marx: The Story of His Life (Ann Arbor, Michigan: University of Michigan Press, 1962). Robert Payne's excellent but underrated Marx (New York: Simon & Schuster, 1968), uncovered the sordid story of Marx's foisting of his illegitimate son upon the hapless Engels. Payne's work was the first time this important disclosure appeared in English. The original revelation was in the German work by Werner Blumenberg, Karl Marx...(Hamburg, 1962), but Payne added considerable new evidence, even tracking down the illegitimate son's birth certificate. Leopold Schwarzchild, The Red Prussian: The Life and Legend of Karl Marx (New York: Scribner's, 1947), is refreshingly critical of someone who certainly deserves it, but the work is not only out of date, it is short on scholarship and long on fictional ‘thoughts’ and ‘statements’ allegedly and without evidence emitted by Marx.
Fortunately, there is now, at long last, an excellent biography available of Engels, the thorough and vivid W.O. Henderson, The Life of Friedrich Engels (2 vols, London: Frank Cass, 1976).
In addition to Tucker, extremely valuable on Marx as a philosophico-religious communist, as well as on Marx's youthful path to communism, is Bruce Mazlish, The Meaning of Karl Marx (New York: Oxford University Press, 1984). In this work, Mazlish keeps his propensity toward psychoanalytical history under restraint. On Marx as communist, also see Murray N. Rothbard, ‘Karl Marx: Communist as Religious Eschatologist’, in Yuri Maltsev (ed.), Requiem for Marx (Auburn, Ala.: Ludwig von Mises Institute of Auburn University, 1993), pp. 221–94. Also indispensable on the young Marx, including the translated text of his revealing poetic drama, Oulanem, is Robert Payne, The Unknown Karl Marx (New York: New York University Press, 1971). For other translations of the poems, also see Pastor Richard Wurmbrand, Marx and Satan (Westchester, 111.: Crossway Press, 1986), although Wurmbrand goes beyond the evidence in claiming that Marx was actually a member of a Satanic cult. On Marx, also see Fritz J. Raddatz, Karl Marx: A Political Biography (Boston: Little, Brown, 1978). An excellent but grievously neglected work on Marx and on the Marxian system is Gary North, Marx's Religion of Revolution: Regeneration Through Chaos (1968, 2nd ed., Tyler, Texas: Institute for Christian Economics, 1989). North properly stresses the essence of Marxism as a ‘religion’, and he was also the first to puncture the myth of Marx as ‘poverty-stricken’ during his years in London. Instead, North demonstrates that Marx lived high off the hog supplied by Engels and other devoted followers, all the while whining about his money problems, demanding new subventions and constantly in debt. And all the time denouncing ‘money fetishism’ under capitalism! North also helps correct the common underestimation of Engels and overvaluation of Marx, which he shrewdly attributes to Engels's ‘traditional Germanic awe of the academic drudge, [which] colored his own self-evaluation right up until his death’. North, ‘Preface’, Religion of Revolution, p. xliii. For an excellent summation of North's findings about Marx's sponging and other unlovely aspects of his character, see Gary North, ‘The Marx Nobody Knows’, in Maltsev (ed.), Requiem for Marx, pp. 75–124.
On Hegel and on Marx's derivation of his world-outlook from Hegel, Tucker's Philosophy and Myth is excellent. Kolakowski's Main Currents is indispensable on the origins of the dialectic, and Raymond Plant's Hegel (Bloomington, Indiana: University of Indiana Press, 1973) has been particularly helpful and lucid in ploughing through the Hegelian morass, especially on his political philosophy. On Hegel's influence from Sir James Steuart see also Paul Chamley, ‘Les origines de la pensee economique de Hegel’, Hegel-Studien, Band 3 (1965), pp. 225–62. On Hegel's political philosophy, also see the anthology in Walter Kaufmann (ed.), Hegel's Political Philosophy (New York: Atherton Press, 1970), especially E.F. Carritt, ‘Reply’, (1940). For a blistering critique of Hegel, see Karl R. Popper, The Open Society and Its Enemies (New York: Harper Torchbooks, 1963), Volume II. On Left revolutionary Hegelianism, see Billington, Fire in the Minds, and David McLellan, The Young Hegelians and Karl Marx (London: Macmillan, 1969).
On historical materialism and the dialectic in Marx, see the lucid and powerful critique by Ludwig von Mises in Theory and History (1957, Auburn, Ala.: von Mises Institute, 1985), pp. 102–58; the detailed rebuttal to Marx by John Plamenatz, in German Marxism and Russian Communism (New York: Longmans, Green & Co., 1954), pp. 9–54, supplemented by Plamenatz, Man and Society, II (London: Longmans, 1963); and the classic work by M.M. Bober, Karl Marx's Interpretation of History (2nd rev. ed., Cambridge, Mass.: Harvard University Press, 1948).
On the Marxian concept of class and class struggle, see the profound critique by Ludwig von Mises, in Socialism: An Economic and Sociological Analysis (3rd ed., Indianapolis: Liberty Classics, 1981), pp. 292–313. Von Mises's brilliant juxtaposition of the concepts of ‘class’ vs ‘caste’ was introduced here, with the term ‘estate’ being used for the latter concept. ‘Caste’ was used, instead, in von Mises, Theory and History, pp. 112–47, which also critically analyses the Marxian doctrine of ‘ideology’. For an excellent discussion of class and caste, also see Walter Sulzbach, ‘“Class” and Class Struggle’, Journal of Social Philosophy and Jurisprudence, 6 (1940–41), pp. 22–34.
On Marx and Engels's occasional confused lapse into the libertarian caste notion of class, particularly in their analyses of contemporary French events, see the little gem of an article by Ralph Raico, ‘Classical Liberal Exploitation Theory: A Comment on Professor Liggio's Paper’, The Journal of Libertarian Studies, 1 (Summer 1977), pp. 179–83. And see in particular the expansion of Raico's analysis in his ‘Classical Liberal Roots of the Marxist Doctrine of Classes’, in Maltsev (ed.), Requiem for Marx, pp. 189–220. On the confusions in the concept of ‘bourgeois’ which aggravated this muddle, see Raico, ‘Classical Liberal Exploitation’, p. 179; and the illuminating discussion in Raymond Ruyer, ‘The New Bourgeois’ (unpublished MS, 8 pp., translated by R. Raico from Ruyer, Eloge de la societe de la consommation, Paris: Calmann-Levy, 1969).
On the Saint-Simonians as the carrier of the confused version of the class doctrine, and the relation between Saint-Simon and the libertarians Charles Comte and Charles Dunoyer, see the locus classicus of this history in Élie Halévy, ‘Saint-Simonian Economic Doctrine’, (1907), in his The Era of Tyrannies (1938, Garden City, NY: Doubleday Anchor Books, 1965), pp. 21–104. Also see Leonard P. Liggio, ‘Charles Dunoyer and French Classical Liberalism’, Journal of Libertarian Studies, 1 (Summer 1977), pp. 153–78. Mark Weinburg, ‘The Social Analysis of Three Early 19th Century French Liberals: Say, Comte, and Dunoyer’, 2 (Winter 1978), pp. 45–63; and James Bland Briscoe, ‘Saint-Simonianism and the Origins of Socialism in France’ (doctoral dissertation in history, Columbia University, 1980). For a modern translation of a work of a leading member of the Comte-Dunoyer school, see Augustin Thierry, Theory of Classical Liberal ‘Industrielisme’ (trans. Mark Weinburg, New York: Center for Libertarian Studies, Feb. 1978).
On the relationship, and contrast, between the laissez-faire liberal ideologues, and the scientistic and technocratic Saint-Simonians, see the important work of F.A. von Hayek, The Counter-Revolution of Science (Glencoe, 111.: The Free Press, 1952). A major work of the Saint-Simonians is translated as The Doctrine of Saint-Simon: An Exposition (trans. G.G. Iggers, Boston: Beacon Press, 1958). The totalitarianism of the Saint-Simonians is denounced in Georg G. Iggers, The Cult of Authority (2nd ed., The Hague: Martinus Nijhoff, 1970); and their follies wittily revealed by Alexander Gray, The Socialist Tradition, pp. 136–68; and sometimes hilariously portrayed in J.L. Talmon, Political Messianism: The Romantic Phase (New York: Praeger, 1960), pp. 35–124. The movements of the Saint-Simonians, and their influence on Marx, are traced in Billington, Fire in the Minds; and for the Kovalevsky revelation of his childhood mentor Baron Ludwig von Westphalen's Saint-Simonian influence on Marx, see Georges Gurvitch, ‘Saint-Simon et Karl Marx’, Revue Internationale de Philosophic, 14 (1960), p. 400.
The best discussion of the Ricardian socialists: William Thompson, John Gray, and John Francis Bray, is in the always scintillating Alexander Gray, The Socialist Tradition (London: Longmans, Green, 1947), pp. 269–96. On these three, and especially on Bray, also see G.D.H. Cole, Socialist Thought: The Forerunners, 1789–1850 (London: Macmillan, 1959), pp. 112–9, 132–9. Also on Bray, see Joseph Dorfman, The Economic Mind in American Civilization, 1606–1865 (New York: Viking Press, 1946), II, pp. 686–9, 961–2.
On Thomas Hodgskin, we are fortunate enough to have a superbly written biography, by the great Élie Halévy, Thomas Hodgskin (1903, London: Ernest Benn Ltd, 1956). It is now all the more true what Alexander Gray first wrote in 1948: ‘It is rather extraordinary, and not wholly creditable to us, that we should be indebted to a Frenchman for the only biography of Hodgskin; it is even more extraordinary that we should have to rely for our knowledge of a large part of Hodgskin on such extracts from his unpublished papers as M. Halevy has elected to translate into French.’ Gray, Socialist Tradition, p. 278n. The great improvement, however, is that the Halevy book is now translated into English.
Also on Hodgskin, see Gray, Socialist Tradition, pp. 277–83; Gray, a hard taskmaster, is appreciative of Hodgskin's talents, praising his ‘intellectual eminence and distinction’, and adding that Hodgskin ‘leaves most acutely a feeling that here was one designed for greatness which, owing to the misfits of time and of life, was never attained’ (p. 277).
For a valuable article on Hodgskin and the Economist, which, however, overrates the influence of Hodgskin on Herbert Spencer, see Scott Gordon, ‘The London Economist and the High Tide of Laissez Faire’, The Journal of Political Economy, 63 (Dec. 1955), pp. 461–88.
On Marx and the economics of capitalism, see Conway, A Farewell to Marx; and the classic refutation of Marx's theory of value by Eugen von Böhm-Bawerk, Karl Marx and the Close of His System (Sweezy ed., New York: Kelley, 1949). On Marx and the iron law of wages, see Ludwig von Mises, ‘The Marxian Theory of Wage Rates’, in Eugen von Böhm-Bawerk, The Exploitation Theory of Socialism-Communism (3rd ed., South Holland, 111.: Libertarian Press, 1975), pp. 147–51. On Marx's concept of alienation as grounded in the division of labour, and not simply in the wage system, see Paul Craig Roberts, Alienation and the Soviet Economy (1971, 2nd ed., New York: Holmes & Meier, 1990); and Paul Craig Roberts and Matthew A. Stephenson, Marx's Theory of Exchange, Alienation and Crisis (2nd ed., New York: Praeger, 1983). On Marx and impoverishment, see Gary North, Marx's Religion of Revolution (Nutley, NJ: The Craig Press, 1968), pp. 140–41; Bober, Karl Marx's Interpretation of History, pp. 213–21; Mises, Socialism, pp. 381–4; and Schumpeter, History, p. 686n. On Marx's cycle theory, see Bober, Marx's Interpretation. On Tugan-Baranowsky's non-monetary overinvestment, or disproportionality, variant of Marxian cycle theory, see Sergio Amato, ‘Tugan-Baranowsky...’, in I.S. Koropeckyj (ed.), Selected Contributions of Ukrainian Scholars to Economics (Cambridge, Mass.: Harvard University Press, 1984), pp. 1–59; and Gottfried Haberler, Prosperity and Depression (4th ed., Cambridge, Mass.: Harvard University Press, 1958), pp. 72–85.
The latest group of ‘analytical Marxists’ in England, headed by John Roemer and Jon Elster, are highly fashionable, possibly because they have virtually abandoned Marxism altogether, having embraced methodological individualism. The analytical Marxists have abandoned the labour theory of value, redefining ‘exploitation’ as consisting only in income and wealth inequality – a leftist but most un-Marxian doctrine. For a critique of this school by an orthodox Marxist, see Michael A. Lebowitz, ‘Is “Analytical Marxism” Marxism?’, Science and Society, 52 (Summer 1988), pp. 191–214. For a definitive demolition of analytical Marxism, see David Gordon, Resurrecting Marx: The Analytical Marxists on Freedom, Exploitation, and Justice (New Brunswick, NJ: Transaction Books, 1990)

Austrian Perspective on the History of Economic Thought (2 volume set)

Wednesday, August 28, 2013

John Stuart Mill

It is difficult to think of anyone in the history of thought who has been more egregiously and systematically overestimated, as an economist, as a political philosopher, as an overall thinker, or as a man, than John Stuart Mill. Unfortunately, historians have tended to follow the example of opinion in Mill's own lifetime. Current historians have continued this tradition, even in economics, where his reputation has unfortunately been making a comeback. As a corollary, the over-investment of ‘scholarly resources’ in Mill, in trying to track, interpret and render coherent his every word and thought, is enormous. It is hardly possible, still less worthwhile, to ponder it all, and all the more difficult to find the proper assessment of him as a devious and muddled filio-pietist. I can only recommend what I have found the most useful in uncovering the essential Mill.
First, of course, for Mill himself: most important for our purposes is his Principles of Political Economy, either in the classic Ashley edition (1909, rprt., Penguin, 1970), or in the edition in his Collected Works (2 vols, Toronto: University of Toronto Press, 1965). Also important is Mill's Essays on Some Unsettled Questions on Political Economy (1844, rprt., London: London School of Economics, 1948).
The standard biography is Michael St John Packe, The Life of John Stuart Mill (London: Seeker & Warburg, 1954). Iris Wessel Mueller, John Stuart Mill and French Thought (Urbana, 111: University of Illinois Press, 1956) is interesting on the influence of French socialist theorists on Mill. The quarrel (cherchez lafemme\) over the extent to which Harriet Taylor influenced Mill in a socialist direction is reflected at length in F.A. von Hayek, John Stuart Mill and Harriet Taylor (Chicago: University of Chicago Press, 1951) (yes), and H.O. Pappe, John Stuart Mill and the Harriet Taylor Myth (Melbourne: Melbourne University Press, 1960) (no). In any case, there is no doubt that Mill suffered, as Gertrude Himmelfarb amusingly put it, from ‘excessive uxoriousness’. The best portrayal of the young Mill as leader of the philosophical radicals is in Joseph Hamburger, Intellectuals in Politics: John Stuart Mill and the Philosophical Radicals (New Haven: Yale University Press, 1965).
Probably the best of the breed of recent apologia for Mill's economic policy views is Pedro Schwartz, The New Political Economy of J.S., Mill (Durham, NC: Duke University Press, 1972). For a sardonic corrective, see Ellen Frankel Paul, ‘John Stuart Mill: 1806–1873’, in Moral Revolution and Economic Science (Westport, Conn.: Greenwood Press, 1979), pp. 146–99.
The most recent, and by far the most grandiose, of the current glorifications of Mill is Samuel Hollander, The Economics of John Stuart Mill (2 vols; Toronto: University of Toronto Press, 1986). This work is Part III of Hollander's massive and bizarre project to transform all the classical economists into perfect little propounders of neoclassical, general equilibrium doctrine. A devastating and most welcome demolition of this entire enterprise is the review of the Mill volumes by Terence W. Hutchison, ‘Review of The Economics of John Stuart Mill, by Samuel Hollander’, Journal of Economic Literature, 25 (March 1987), pp. 120–22. Calling ‘the whole gigantic operation’ a ‘reunification wrapped in anachronism’, Hutchison asks:

why should 1,037 pages be written – or read – on the economics of J.S. Mill? Why not compile a 1,037-page anthology of Mill's own economic writings with some useful notes and an informative introduction? Mill is not a newly discovered writer, and in any case, Hollander has no new biographical information to offer. Nor did Mill write so obscurely and abstrusely that a lot of space might be required to make his meaning clear. In fact, to this reviewer, Mill seems a rather more lucid and orderly writer than Hollander.

Hutchison points out that, since father James Mill cannot be fitted into the proto-Walrasian mould, his influence on his son is seriously underrated. In fact, Hutchison concludes that Hollander's volumes ‘display an extraordinary capacity... for dismissing, disregarding, or devaluing evidence, however plain and unambiguous, that conflicts with the Hollander interpretations’. (Hutchison, pp. 120–21.) Alexander Gray, The Development of Economic Doctrine (London: Longmans, Green, 1931), has an incisive discussion of Mill and Cairnes, pp. 277–92. There is a keen technical critique of Mill amidst the other classical economists, in Edwin Cannan's A History of the Theories of Production & Distribution (3rd ed., London: Staples Press, 1917).
One of the most valuable, and also one of the most neglected economists and historians of thought, of our time, is William H. Hutt. Hutt's The Theory of Collective Bargaining 1930–1985 (San Francisco: Cato Institute, 1980), pp. 1–6, straightens out the century-old confusion about the wages fund theory and economists' attitude towards labour unions. And Hutt's A Rehabilitation of Say's Law (Athens, Ohio: Ohio University Press, 1974), should be consulted for Mill's ambivalent role in the advancement of that law.
The neo-conservative historian Gertrude Himmelfarb is almost always worth reading, even if we must dissent from her depiction of two Mills, the conservative compulsory moralist (good) and the libertarian (bad). Gertrude Himmelfarb, On Liberty and Liberalism: The Case of J.S. Mill (New York: Knopf, 1974). Mill is scarcely that clear-cut; in a sense, there is only one Mill – multi-faceted, self-contradictory, kaleidic, devious, muddled and filio-pietistic.
By far the most useful essay on the strategy, reception, and importance of Mill's Principles is N.B. de Marchi, ‘The Success of Mill's Principles’, History of Political Economy, 6 (Summer 1974), pp. 119–57. Also on Mill as rehabilitating Ricardo, see Frank W. Fetter, ‘The Rise and Decline of Ricardian Economics’, History of Political Economy, 1 (Spring 1969), pp. 80–81. For the indirect impact of Mill's triumph, see J.G. Smith, ‘Some Nineteenth Century Irish Economists’, Economica, n.s. 2 (Feb. 1935), pp. 25–32; and R.D.C. Black, ‘Trinity College, Dublin, and the Theory of Value, 1832–1863’, Economica, n.s. 12 (August 1945), pp. 146–8.
For an excellent article on John Stuart Mill and the shift of classical liberals towards imperialism, see Eileen P. Sullivan, ‘Liberalism and Imperialism : J.S. Mill's Defense of the British Empire’, Journal of the History of Ideas, 44 (Oct. – Dec. 1983), pp. 599–617. On Wakefield, also see Leonard P. Liggio, ‘The Transportation of Criminals: A Brief Political-Economical History’, In R. Barnett and J. Hagel III (eds), Assessing the Criminal: Restitution, Retribution, and the Legal Process (Cambridge, Mass.: Ballinger Publication Co., 1977), pp. 285–91.

Austrian Perspective on the History of Economic Thought (2 volume set)

Tuesday, August 27, 2013

Currency and banking schools

The best overall summary of the currency and banking school controversy is Marion R. Daugherty, ‘The Currency-Banking Controversy, Part I’, Southern Economic Journal, 9 (Oct. 1942), pp. 140–55; and ‘The Currency-Banking Controversy: II’, Southern Economic Journal, 9 (Jan. 1943), pp. 241–50. The fullest and indispensable account is Frank W. Fetter, Development of British Monetary Orthodoxy, 1797–1875 (Cambridge, Mass.: Harvard University Press, 1965). Also see Jacob Viner, Studies in the Theory of International Trade (New York: Harper & Bros, 1937), Chap. V, and, on the United States as well as Britain, Lloyd Mints, A History of Banking Theory in Great Britain and the United States (Chicago: University of Chicago Press, 1945). Elmer Wood, English Theories of Central Banking Control, 1819–1858 (Cambridge, Mass.: Harvard University Press, 1939), is particularly good on the theoretical controversies in the aftermath of Peel's Act.
On the background of Peel's Act, see J.K. Horsefield, ‘The Origins of the Bank Charter Act, 1844’, in T.S. Ashton and R.S. Sayers (eds.), Papers in English Monetary History (Oxford: The Clarendon Press, 1953), pp. 109–25. Peel himself is re-evaluated in an important article by Boyd Hilton, ‘Peel: A Reappraisal’, Historical Journal, 22 (Sept. 1979), pp. 585–614. Hilton is responsible for reinterpreting Peel as a statesman with increasingly fixed classical liberal principles, within which he used superb tactics to put his principles into effect. But Hilton, on the other hand, who does not understand economic theory, misconstrues who beats whom in economic argument, and sneers at Peel as being an inflexible dogmatist in contrast to the previous historical interpretation of Peel as unprincipled opportunist.
James Pennington is collected, brought to the fore, and analysed by R.S. Sayers in his edition of the Economic Writings of James Pennington (London: London School of Economics, 1963). Robert Torrens, his theories, and his controversies, are annotated and treated in a superb work by Lionel Robbins, Robert Torrens and the Evolution of Classical Economics (London: Macmillan, 1958). The best discussion of Thomas Tooke is still T.E. Gregory, ‘Introduction’, to Thomas Tooke and William Newmarch, A History of Prices and of the State of the Circulation from 1792 to 1856 (New York: Adelphi Printing Co., 1928). Arie Arnon absurdly tries to make a key to Tooke's thought the latter's non-existent conversion to free banking. Arie Arnon, ‘The Transformation in Thomas Tooke's Monetary Theory Reconsidered’, History of Political Economy, 16 (Summer 1984), pp. 311–26. James Wilson's business cycle theory is illuminated in Robert G. Link, English Theories of Economic Fluctuations, 1815–1848 (New York: Columbia University Press, 1959), which also has a good discussion of John Stuart Mill's cycle theory. For an elaboration of Wilson's thesis, see H.M. Boot, ‘James Wilson and the Commercial Crisis of 1847’, History of Political Economy, 15 (Winter 1983), pp. 567–83.
Vera C. Smith, The Rationale of Central Banking (1936, Indianapolis: Liberty Press, 1990) is a pioneering and excellent work on free and central banking school controversies in Britain, the United States, France and Germany, and is still by far the best work on the subject.
On Johann Louis Tellkampf, see, in addition to Smith, Joseph Dorfman, The Economic Mind in American Civilization (New York, 1946), II, pp. 833–5. Smith not only highlights important but otherwise obscure writers such as Cernuschi and Modeste, but also presents a good summary of the history of banking in the four countries in the nineteenth century. Particularly important is Smith's classifying her theorists on a two-dimensional, and therefore four-term, grid, i.e. where they stand on currency principle vs banking principle, and free vs central banking. Lawrence H. White, Free Banking in Britain: Theory, Experience, and Debate, 1800–1845 (Cambridge: Cambridge University Press, 1984), performs the service of reviving emphasis on free banking thought, pro and con, after a 50-year hiatus. But while he adds more names to Smith's account for Great Britain, he is seriously misleading in shifting to a three-term classification and category mistake: free banking, banking school, and currency school. This new taxonomy ignores the fact that his free bankers are scarcely a united school, being seriously split into currency and banking men. Furthermore, the free bankers in Britain scarcely deserve being elevated to the dignity of a school of thought, since almost all of them were commercial bankers swaying to their economic interests of the moment, and not interested in consistent free banking. Moreover, White misleads by hailing Scotland in the first half of the nineteenth century as a land of free banking, when Scottish banks merely pyramided on top of the Bank of England, and were often bailed out by the bank. Neither can the Scottish banks be really said to rest on gold convertibility. They kept very little gold reserve, and greatly resisted any attempts by their customers to demand specie. White's attempt to show that the Scottish banks were superior to the English system makes not even a token effort to demonstrate that they were less inflationary; his sole evidence is a lower failure rate, which by no means shows that the banking system was working better for the economy. Sometimes, a truly competitive industry will have a higher failure rate than a privileged one, and so much the better.
For the fascinating debate among the French laissez-faire thinkers on how to apply libertarian principles to the vexed questions of banking, see, among others, Henri Cernuschi, Contre le Billet de Banque (Against Bank Notes) (Paris, 1866); Victor Modeste, ‘Le Billet Des Banques D'Emmission et la Fausse Monnaie’, (Bank Notes and False Money), Journal des Économistes, 3 (August 1866), pp. 188–212; Gustave Du Puynode, ‘Le Billet de Banque N'est Ni Monnaie Ni Fausse Monnaie’, (A Bank Note is Neither Money Nor False Money); ibid., 3 (Sept. 1866), pp. 392–5; Leon Wolowski, ibid., pp. 438–41; J.G. Courcelle-Seneuil, ‘Le Billet De Banque N'est Pas Fausse Monnie’, (‘Bank Notes Are Not False Money’), ibid., 342–9; Victor Modeste, ‘Le Billet Des Banques D'Emmission Est-Il Fausse Monnaie?’ (‘Are Bank Notes False Money?’), ibid., 4 (Oct., 1866), pp. 73–86; Gustave Du Puynode, ‘Le Billet De Banque N'est Ni Monnaie Ni Fausse Monnaie’, (‘Bank Notes Are Neither Money Nor False Money’), ibid., 4 (Nov. 1866), pp. 261–7; Th. Mannequin, ‘L'Emmission Des Billets de Banque’ (‘Bank Notes’), ibid., 4 (Dec. 1866), pp. 396–410.

Austrian Perspective on the History of Economic Thought (2 volume set)

Monday, August 26, 2013

The bullionist controversy

Despite the importance and renown of the bullionist controversy for the emergence of monetary and banking thought in the early nineteenth century, there is no fully satisfactory account and analysis. A good chronological account can be found in Frank Whitson Fetter, Development of British Monetary Orthodoxy, 1797–1875 (Cambridge: Mass.: Harvard University Press, 1965), which should be supplemented by the classic analytical discussion in Jacob Viner, Studies in the Theory of International Trade (New York: Harper & Bros, 1937), Chapters III-IV Also see the brief but valuable treatment in Chi-Yuen Wu, An Outline of International Price Theories (London: George Routledge & Sons, 1939), still the best published history of theories of international money and prices. Edwin Cannan's ‘Introduction’ to the Bullion Report, both contained in The Paper Pound of 1797–1821 (2nd ed., London, PS. King & Son, 1925), is a classic discussion of the events of the restriction era.
Also useful is Lloyd W. Mints, A History of Banking Theory in Great Britain and the United States (Chicago: University of Chicago Press, 1945), which is however marred by his exclusive concentration on the evils of the real bills doctrine; and Charles Rist, History of Monetary and Credit Theory From John Law to the Present Day (1940, A.M. Kelley, 1966), which on the contrary, suffers from devotion to the real bills doctrine, at least under a gold standard.
By far the best treatment of the bullionist writers is by Joseph Salerno, ‘The Doctrinal Antecedents of the Monetary Approach to the Balance of Payments’ (doctoral dissertation, Rutgers University, 1980). Salerno's paradigm of classifying the variants of bullionists is a path-breaking one, from which all future discussion must start. His emphasis is on the international monetary aspect of the controversy.
Jacob H. Hollander's path-breaking article, ‘The Development of the Theory of Money from Adam Smith to David Ricardo’, Quarterly Journal of Economics, 25 (May 1911), pp. 429–70, is still indispensable. The Dictionary of National Biography's articles on the various writers and statements involved in the controversy often provide excellent background information.
Henry Thornton's contribution has been well served, perhaps too much so, by later historians. In particular, see F.A. von Hayek's extremely favorable ‘Introduction’ to the reprint of Thornton's Inquiry (New York: Farrar & Rienhart, 1939). Also see David A. Reisman, ‘Henry Thornton and Classical Monetary Economics’, Oxford Economic Papers, n.s. 23 (March 1971), pp. 70– 89. For a biography, see Standish Meacham, Henry Thornton of Clapham, 1760–1815 (Cambridge, Mass.: Harvard University Press, 1964); and on his banking activities, see E.J.T. Acaster, ‘Henry Thornton – the Banker, Part I’, The Three Banks Review, no. 104 (December 1974), pp. 46–57. For an opposing position, see Salerno, ‘Doctrinal Antecedents’. On Francis Horner, see Frank W. Fetter, ‘Introduction’ to Fetter (ed.), The Economic Writings of Francis Horner (London: London School of Economics, 1957). And on John Wheatley, see Frank W. Fetter, ‘The Life and Writings of John Wheatley’, Journal of Political Economy, 50 (June 1942), pp. 357–76. Salerno, ‘Doctrinal Antecedents’, has single

handedly brought back into focus the notable achievements of Peter Lord King, in elaborating the complete bullionist position.
Thornton's crucial role in provoking David Ricardo into a mechanistic bullionism in opposition to the former's muddled approach, is brought out in the excellent and important article by Charles F. Peake, ‘Henry Thornton and the Development of Ricardo's Economic Thought’, History of Political Economy, 10 (Summer 1978), pp. 193–212. Also see Salerno, ‘Doctrinal Antecedents’. On Ricardo, see also R.S. Sayers, ‘Ricardo's Views on Monetary Questions’, Quarterly Journal of Economics (1953), in T.S. Ashton and R.S. Sayers (eds.), Papers in English Monetary History (Oxford: The Clarendon Press, 1953), pp. 76–95. David Weatherall, David Ricardo, has a considerable discussion of Ricardo's monetary views. On the bullion committee report itself, see Fetter, Development; Frank W. Fetter, ‘The Bullion Report Reexamined’ (1942), in Ashton and Sayers, Papers, pp. 66–75, and especially the definitive Frank W. Fetter, ‘The Politics of the Bullion Report’, Economica, n.s. 26 (May 1959), pp. 99–120.
On the resumption of specie payment, see, in addition to many of the above sources, Cecil C. Carpenter, ‘The English Specie Resumption of 1821’, Southern Economic Journal, 5 (July 1938), pp. 45–54. Salim Rashid makes a notable contribution in uncovering the important influence of Edward Copleston on the return to gold, in Salim Rashid, ‘Edward Copleston, Robert Peel, and Cash Payments’, History of Political Economy, 15 (Summer 1983), pp. 249–59.
On the response to banking and the panic of 1819 in the United States, see Rothbard, The Panic of 1819. Also see Mark Skousen, Economics of a Pure Gold Standard (1977, 2nd ed„ Auburn, Ala.: Ludwig von Mises Institute of Auburn University, 1988). On Jefferson, also see Luttrell, ‘Thomas Jefferson’, and on Busch and Storch, see the interesting discovery of Peter Bernholz, ‘Inflation and Monetary Constitutions in Historical Perspective’, Kyklos, 36, no. 3 (1983), pp. 406–9.
We are fortunate to have the Swedish controversy of the mid-eighteenth century era of fiat money brought recently to our notice. For an illuminating survey, see Robert V. Eagly (ed.), The Swedish Bullionist Controversy (Philadelphia: American Philosophic Society, 1971), in his ‘Introductory Essay’. The remainder of the book translates Pehr Niclas Christiernin's 1761 tract for the first time, Summary of Lectures on the High Price of Foreign Exchange in Sweden. Also see the lengthy and fascinating article by Carl G. Uhr, ‘Anders Chydenius, 1729–1803, A Finnish Predecessor to Adam Smith’, Western Economic Journal, 2 (Spring 1964), pp. 85–116

Austrian Perspective on the History of Economic Thought (2 volume set)

Sunday, August 25, 2013

The anti-Ricardians

Perhaps the best place to begin a study of the host of important non- or anti-Ricardian economists in nineteenth century Britain is with the pioneering article that resurrected them from the oblivion in which they had been cast by the triumph of John Stuart Mill: Edwin R.A. Seligman's ‘On Some Neglected British Economists, I’, and ‘On Some Neglected British Economists, IF, in the Economic Journal, 13 (Sept. 1903), especially pp. 347–63, and in Economic Journal, 13 (Dec. 1903), pp. 511–35, reprinted in his Essays on Economics (New York: Macmillan, 1925). Seligman is particularly good on Craig, Longfield, Ramsay and Lloyd. R.C.D. Black's brief but highly important article on the Irish economists is his ‘Trinity College, Dublin, and the Theory of Value, 1832–1863’, Economica, n.s. 12 (August 1945), pp. 140–48. Also see J.G. Smith, ‘Some Nineteenth Century Irish Economists’, Economica, n.s. 2 (Feb. 1935), pp. 20–32. On Richard Whately, see Salim Rashid, ‘Richard Whately and Christian Political Economy at Oxford and Dublin’, Journal of the History of Ideas, 38 (Jan. – March 1977), pp. 147–55. On Whately, Lawson and catallactics, see Israel M. Kirzner, The Economic Point of View (Princeton, NJ: Van Nostrand, 1960), pp. 72–5; and Murray N. Rothbard, ‘Catallactics’, The New Palgrave: Dictionary of Economics (London: Macmillan, 1987), I, p. 377.
We are fortunate enough to have some comprehensive works on individual economists of this era. Particularly outstanding is Marian Bowley's Nassau Senior and Classical Economics (1937, New York: A.M. Kelley, 1949; Octagon Books, 1967). Miss Bowley deals not only with Senior but also with many of his confrères. S. Leon Levy's chatty and uncomprehending Nassau W. Senior, 1790–1864 (New York: A.M. Kelley, 1970) provides useful information on Senior's life and genealogical background. Unfortunately, Miss Bowley's later collection of essays accomplishes little, reflecting a falling away from the previously perceptive Austrian position of herself and of her mentor Lord Robbins, and a wish to rejoin the Ricardians in the historiographical mainstream of economic thought. Marian Bowley, Studies in the History of Economic Theory Before 1870 (London: Macmillan, 1973). Also excellent is Robert M. Rauner, Samuel Bailey and the Classical Theory of Value (Cambridge, Mass.: Harvard University Press, 1961). Rauner's book, however, unfortunately omits the Austrian orientation of Bailey's philosophy and methodology as expounded in Rauner's preceding doctoral dissertation at the University of London, ‘Samuel Bailey and Classical Economics’ (1956). See Denis P. O'Brien, ‘Critical Reassessments’, in Thweatt (ed.), Classical Political Economy, pp. 199–200. Again, Laurence S. Moss, Mountifort Longfield: Ireland's First Professor of Political Economy (Ottawa, 111: Green Hill Publishers, 1976), has the merit of dealing with other economists of the day in addition to Longfield, and contains an up-to-date bibliography. The definitive work on Colonel Torrens is Lionel Robbins, Robert Torrens and the Evolution of Classical Economics (London: Macmillan, 1958). The important work demonstrating that even the allegedly arch-Ricardian J.R. McCulloch was not really a Ricardian for very long, is Denis P. O'Brien, J.R. McCulloch: A Study in Classical Economics (New York: Barnes & Noble, 1970).
On Nassau Senior's notable exchange on population theory with T. Robert Malthus, see Bowley, Nassau Senior, pp. 117–22; Cannan, History, pp. 133— 4; and Schumpeter, History, pp. 580–81.
Primary sources particularly rich in rewards for the reader are: Samuel Bailey's excellent A Critical Dissertation on the Nature, Measure, and Causes of Value (1825, New York: A.M. Kelley, 1967); Nassau W. Senior's Outline of the Science of Political Economy (1836, New York: A.M. Kelley, 1965); and The Economic Writings of Mountifort Longfield (R.D.C. Black, ed., Clifton, NJ: A.M. Kelley, 1972).
Useful journal articles are Thor W. Bruce, ‘The Economic Theories of John Craig, a Forgotten English Economist’, Quarterly Journal of Economics, 52 (August 1938), pp. 697–707; Laurence S. Moss, ‘Isaac Butt and the Early Development of the Marginal Utility Theory of Imputation’, History of Political Economy, 6 (Winter 1974), pp. 405–34; and Richard M. Romano, ‘William Forster Lloyd – a Non-Ricardian?’ History of Political Economy, 9 (Autumn 1977), pp. 412–41. Also on Lloyd, see Emil Kauder, A History of Marginal Utility Theory (Princeton, NJ: Princeton University Press, 1965), pp. 38–41.
On the life of Thomas Perronet Thompson, see the account by Norma H. McMullen, ‘Thomas Perronet Thompson’, in J. Baylen and N. Gossman (eds.), Biographical Dictionary of Modern British Radicals, Vol I: 1770–1830 (Atlantic Highlands, NJ: Humanities Press, 1979), pp. 475–9. For Thompson on rent, see Robbins, Robert Torrens, pp. 43–4; on Thompson's critique of the cost theory of value, see Gordon, ‘Criticism’, p. 374. Also see Schumpeter, History, pp. 672–3, 713–4. On Thompson and the calculus, see Spiegel, Growth, pp. 293–4, 507–08.
The definitive study, biography, and collected works of John Rae (all that are still extant except the bulk of his geological papers), are to be found in R. Warren James's two-volume John Rae: Political Economist (Toronto: University of Toronto Press, 1965). Also see the discussion of Rae in Joseph Dorfman, The Economic Mind in American Civilization, 1606–1865 (New York: Viking Press, 1946), II, pp. 779–89; and Joseph J. Spengler, ‘John Rae on Economic Development: A Note’, Quarterly Journal of Economics, 73 (August 1979), pp. 393–406. The best critique of Rae's New Principles is in Eugen von Böhm-Bawerk, Capital and Interest, Vol. I History and Critique of Interest Theories (South Holland, 111.: Libertarian Press, 1959), pp. 208–40.
For the isolated and remarkable case of the American subjective utility theorist Amos Kendall, developing his views in his Kentucky newspaper, see the full text of his articles in the Autobiography of Amos Kendall, ed„ W. Stickney (1872, New York: Peter Smith, 1949), pp. 227–36. Also see Murray N. Rothbard, The Panic of 1819: Reactions and Policies (New York: Columbia University Press, 1962), p. 55.
For Nassau Senior, John Stuart Mill, and the early praxeology vs positivism debate, see Marian Bowley, Nassau Senior, pp. 27–65. Also see Rothbard, Individualism, pp. 49–51. For a contrasting view of the debate, see Fritz Machlup, ‘The Universal Bogey’, in M. Peston and B. Corry (eds.), Essays in Honour of Lord Robbins (White Plains, NY: International Arts & Sciences Press, 1973), pp. 99–117. On Dickens's Hard Times and its caricature of economics and utilitarianism, see Ludwig von Mises, Socialism (1922, Indianapolis: Liberty Classics, 1981), p. 422.

Austrian Perspective on the History of Economic Thought (2 volume set)

Saturday, August 24, 2013

David Ricardo and the Ricardian system

The literature on Ricardo and Ricardianism is almost as enormous as on Smith, and so it must be winnowed judiciously here. All of Ricardo's works and correspondence are collected in the definitive eleven-volume labour-of-love edition edited by the left-Ricardian neo-Marxist Piero Sraffa, The Works and Correspondence of David Ricardo (Cambridge: Cambridge University Press, 1951–55). There are no satisfactory biographies of Ricardo; the only one available is the chatty family history by David Weatherall, David Ricardo (The Hague: Martinus Nijhoff, 1976). The best explanation and critique of the Ricardian system is Oswald St Clair, A Key to Ricardo (1957, New York: A.M. Kelley, 1965). There are brilliant insights into Ricardo and Ricardianism scattered, in disorganized fashion, throughout  Schumpeter's History of Economic Analysis; indeed, much of his History may be interpreted as a devastating assault on Ricardianism. For a properly acidulous view of Ricardianism, see also Frank H. Knight, ‘The Ricardian Theory of Production and Distribution’, in On the History and Method of Economics (Chicago: University of Chicago Press, 1956), pp. 37–8. Not surprisingly, some of the critiques of Adam Smith's theory apply also to Ricardo; see, in particular, Cannan's subtle A History of the Theories of Production & Distribution (3rd ed., London: Staples Press, 1917); Gray's sardonic and delightful The Development of Economic Doctrine (London: Longmans, Green, 1931); Douglas's lucid and trenchant ‘Smith's Theory of Value and Distribution’; Ellen Paul's forceful and perceptive Moral Revolution and Economic Science (Westport: Conn.: Greenwood Press, 1979); and Richard H. Timberlake Jr's ‘The Classical Search for an Invariable Measure of Value’, Quarterly Review of Economics and Business, 6 (Spring 1966), pp. 37–44. For a demonstration of the crucial importance to the Ricardian system – in contrast to Smith – of the quantity-of-labour theory of value, see L.E. Johnson, ‘Ricardo's Labor Theory of the Determinant of Value’, Atlantic Economic Journal, 12, (March 1984), pp. 50–59.
Unlike Adam Smith, David Ricardo has fortunately not been the recent recipient of a centennial-type boost to his reputation. But the indefatigable Samuel Hollander was of course there, as in the case of Smith, torturing Ricardo into the mould of a modern general-equilibrium theorist. Samuel Hollander, The Economics of David Ricardo (Toronto: The University of Toronto Press, 1979).
In recent articles Terry Peach has set forth a masterful defence of the ‘traditionalist’ view of Ricardo presented in this work, as well as a critique of the ‘corn model’ interpretation of Ricardo offered by Sraffa, and of the opposing Hollander proto-general equilibrium approach. In particular, Peach shows that Ricardo was marked by an increasingly intensified labour theory of value, an overriding concentration on the long-run equilibrium ‘natural price’, on very rapid increases of population returning the economy to long-run equilibrium, and by a total neglect of the role of demand in price as well as of the role of scarcity in determining the supply of reproducible goods. See in particular, Terry Peach, ‘David Ricardo: A Review of Some Interpretative Issues’, in William O. Thweatt, (ed.), Classical Political Economy: A Survey of Recent Literature (Boston: Kluwer, 1988) pp. 103–31. Also see Peach, ‘David Ricardo's Treatment of Wages’, in R.D.C. Black (ed.), Ideas in Economics (London: Macmillan, 1986).
The last effusion of the orthodox Keynesian view of the alleged triumph of Ricardianism in Britain is Sydney G. Checkland, ‘The Propagation of Ricardian Economics in England’, Economica, n.s., 16 (Feb. 1949), pp. 40–52. Revisionism of this view began with Ronald L. Meek, ‘The Decline of Ricardian Economics in England’, Economica, n.s. 17 (Feb., 1950), pp. 43–62, continued through Schumpeter's History and culminated in two excellent articles: Frank W. Fetter, ‘The Rise and Decline of Ricardian Economics’, History of Political Economy, 1 (Spring 1969), pp. 67–84; and Barry Gordon, ‘Criticism of Ricardian Views on Value and Distribution in the British Periodicals, 1820–1850’, History of Political Economy, 1 (Autumn 1969), pp. 370–87. The anti-Say's law underworld in Britain is explored in Barry J. Gordon, Non-Ricardian Political Economy: Five Neglected Contributions (Boston: Harvard Graduate School Baker Library, 1967).
Whenever any hint appears deprecating either the wisdom or the majesty of David Ricardo we can depend upon Samuel Hollander to enter the fray in combat; and, sure enough, Hollander weighs in with the maverick view that simply everyone was a Ricardian. Samuel Hollander, ‘The Reception of Ricardian Economics’, Oxford Economic Papers, 29 (July 1977), pp. 221–57.

Austrian Perspective on the History of Economic Thought (2 volume set)