Wednesday, March 17, 2010

Review Commentary No. 6: Milgate and Stimson's "After Adam Smith"

Murray Milgate and Shannon C. Stimson's "After Adam Smith; a century of transformation in politics and political economy”, Princeton, Princeton University Press 2009

[My series of review commentaries has been delayed unavoidably due to domestic upheavals mentioned in recent announcements. I am now almost back to normal, though my library appears to be missing several volumes.]

Chapter 7 is on Thomas Malthus (1766-1834), whose name is immortalized. He intervened with a polemic in the 1790s on the revolutionary fervour of the likes of Britain’s William Godwin (1756-1836) and France’s Condorcet (1743–1794). The latter admired Adam Smith, whose Enlightenment association with the radical Frenchman, however, caused judicial enquires to be made in 1793 about Smith’s possible role in spreading unrest among British labourers in the shadow of the French Terror.

Malthus raised the issue of population exceeding the capacity of an economy to sustain living standards and Milgate and Stimson take us through the issues clearly for the most part. However, I sensed an orthodox treatment of the so-called ‘Malthusian’ vision as representative of economics as the ‘dismal science’, crowned with the ‘classic statement that this came from Carlyle’ (122), without their explanatory comment, as if it referred to Malthus.

The origins of the ‘dismal science’ accolade, regularly awarded to economics, classical and modern, had little to do with Malthus, and Milgate and Stimson should have taken the opportunity to say so. I refer readers to a paper by David M. Levy and Sandra J. Peart: “The Secret History of the Dismal Science. Part I. Economics, Religion and Race in the 19th Century” HERE which sets out the real story of economics becoming known as the ‘dismal science', wich they show had nothing to do with a description of Thomas Malthus:

While this story is well-known, it is also wrong, so wrong that it is hard to imagine a story that is farther from the truth. At the most trivial level, Carlyle's target was not Malthus, but economists such as John Stuart Mill, who argued that it was institutions, not race, that explained why some nations were rich and others poor. Carlyle attacked Mill, not for supporting Malthus's predictions about the dire consequences of population growth, but for supporting the emancipation of slaves. It was this fact—that economics assumed that people were basically all the same, and thus all entitled to liberty—that led Carlyle to label economics "the dismal science." ‘

Given the status of Carlyle, I think no opportunity should be taken to refrain from repeating the canard of the ‘dismal science’ in relation to Malthus, or, if it cannot be resisted, then at least economists should mention from whom – and WHY - the label originated. Carlyle’s ‘dismal science’ article was called ‘The N-----‘ Question, in one edition and in others, the less offensive title of ‘The Negro Question’ (though the contents are equally offensive).

Milgate and Stimson make a clear presentation of the evolution of the population ideas of Malthus in the various editions, without getting bogged down in the intricacies of Malthus’s argument.

I noted one interesting gem among these pages, namely that Malthus in the Quarterly Review for 1824 ‘maintained, like Smith, that in the presence of positive profits, exchangeable value was no longer determined by the quantity of labour employed to obtain them’ (132). This is a view I have expressed for some years. Smith did not have a labour theory of value except in ‘rude’ society, before the emergence of property and capital – but I have been unable to convince many others, so far.

What I also found fascinating was the Milgate and Shannon’s discussion of Malthus on ‘unintended consequences’ (133-35) and the distinction between ‘unintended’ and ‘unforeseen’.

They write that people are not relieved “of moral authority for their actions for “ignorance and inattention” and add that “Smith has also placed accountability ‘to God and his fellow creatures’ at the centre of an individual’s character as a moral being’ (giving the reference as ‘(1976 -85, 6:52) (134), which I could not find. However, I am familiar with an alternative reference, from which paragraphs were moved and some dropped for the 6th edition (1790), including the following:

[3] A moral being in an accountable being but an accountable being, as the word expressed, is a being who must give an account of his actions to some other, and that consequently must regulate them according to the good liking of this other. Man is accountable to God and his fellow creatures. But tho’ he is, no doubt, principally accountable to God, in the order of time, he must necessarily conceive of himself as accountable to his fellow creatures before he can form any idea pf the Deity, or of the rules by which the Divine Being will judge of his conduct.”) (TMS III.3: page 135, footnote 1).

This was withdrawn for the 6th edition, as part of extensive revisions Smith undertook to Moral Sentiments that had the effect of diluting many of the religious passages to make TMS more secular and less religious. Malthus was quoting from earlier editions of TMS [See my “The Hidden Adam Smith in his Alleged Theology”, January 2010). HERE:

Milgate and Shannon fail to discuss, what ought to be perhaps, a mystery of the absence in Malthus of mentions of Adam Smith’s use of the “invisible hand”, if modern economists are correct in their assertion that this was Smith’s great idea, concept, or paradigm. The absence of discussion of the metaphor in Malthus, who had read Wealth of Nations closely, is worthy of discussion. They refer instead to references to the metaphor appearing in the works of evangelical Christian economists, such as Thomas Chalmers (136).

To date, I have not looked closely at these references (they cite Chalmers, 1832, On Political Economy, in connexion with the moral state and moral prospects of Society, Glasgow: Collins). In this context, Milgate and Stimson introduced me A. M. C. Waterman (1991) Revolution, Economics, and Religion, Christian political economy, Cambridge University Press). A sign of a great book is when it prompts readers follow lines of enquiry on issues of interest; I am sure that historians of economic thought will also find many prompts in this book of a similar kind.

They give some explanation for Malthus not mentioning the invisible hand: ‘Malthus could not longer make use of the invisible hand (nor indeed any other classical economist) as Smith had done – a felicitous metaphor for informing ordinary people’s perceptions of market society’ (137). They suggest it was because Malthus, ‘writing nearly a quarter of a century after Smith, and from within a more fractious political and economic context, Malthus could not make use of the invisible hand’ (137). Extraordinary is one word for the validity of this proposition. Waterman is quoted as saying that “Malthus “formulated an ‘invisible hand theorem’ in regard of ‘moral restraint’ as a form of an ‘unintended consequence’. Highly imaginative springs to mind! And nothing to do with Adam Smith’s use of the metaphor in my considered view.

I liked the reference to Malthus (1803) wishing to amend Smith’s syllabi for the parish schools to include ‘the simplest principles of political economy’ to ‘reading, writing and account’ (138).

In summary, Milgate and Stimson will enlighten readers who are currently confined to the mechanics of the population problem and, perhaps, will draw them into wider reading – it has me!

If I may recommend to those interested in the deeper significance of the population debate, I would suggest reading Greg Clarke’s, A Farewell to Alms: A Brief Economic History of the World (Princeton Economic History of the Western World) (Princeton University Press, 2007).

[I shall next report on Chapter 8 Utility, Property, and Political Participation next.]

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