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John Stuart Mill or the ethics of liberalism: Part I, private property

by Migeru Fri May 5th, 2006 at 06:01:53 AM EST

John Stuart Mill: Principles of Political Economy and Chapters on Socialism edited by Jonathan Riley, Oxford World Classics. ISBN: 0-19-283672-2. £7.99

Last summer I finally got around to reading John Stuart Mill's great work. The old masters were a verbose bunch and, as often happens, I could only get my hands on an abridged edition of this voluminous 5-volume work. My edition contains parts of volumes II and III, and the whole of volumes IV and V, of the 7th (1871) edition of the Principles, and the posthumously (1879) published Chapters on Socialism.

John Stuart Mills ranks as one of the giants of 19th century (pre-marginalist) economics, and one of the most important theorists of (laissez-faire) liberalism. Irritatingly, he is today classified as a philosopher rather than as an economist (chalk that one up to the ahistorical nature of the neoclassical consensus) so his work is shelved away from that of other economists, ensuring he gets less exposure than, say, Adam Smith. As I have harped on before in my comments, Mill's overriding concern was ethics, and so his approach to economic policy is refreshing to read. He is also concerned with expediency, and often rejects an "ideal" economic policy on the grounds that it is impractical or unfair.

More than a review of the whole (abridged) book, this diary is organize around scant commentary of a few selected quotations, as they really speak for themselves.

As this is getting too damn long I've decided to make it a series. Enjoy the first instalment.


Book II, Chapter I: Of Property, contains Mill's famous dictum the principle of private property has never yet had a fair trial in any country, but also much more. It begins with the following observation

The principles which have been set forth in the first part of this Treatise, are, in certain respects, strongly distinguished from those, on the consideration of which we are about to enter. The laws and conditions of the production of wealth partake of the character of physical truths. There is nothing optional or arbitrary in them. Whatever mankind produce, must be produced in the modes, and under the conditions, imposed by the constitution of external things, and by the inherent properties of their own bodily and mental structure.
...
We cannot, indeed, foresee to what extent the modes of production may be altered, or the productiveness of labour increased, by future extensions of our knowledge of the laws of nature, suggesting new processes of industry of which we have at present no conception. But howsoever we may succeed in making for ourselves more space within the limits set by the constitution of things, we know that there must be limits.
Oh, good, Mill understands the second law of thermodynamics better than modern economists do, to judge by Herman Daly's criticism of neoclassical economics:
What Second Law?

It was argued in Chapter 2 that growth economists were confused about ultimate means, or low-entropy matter-energy. It might be useful here to document a few examples of economists' disregard for the second law of thermodynamics.

In an article defending growth, Harvard economist Richard Zeckhauser tells us that "Recycling is not the solution for oil, because the alternate technology of nuclear power generation is cheaper" (1973, p. 117, n. 11). The clear meaning of the sentence is that recycling oil as an energy source is possible but just happens to be uneconomical, because nuclear energy is cheaper. The real reason that energy from oil, or any other source, is not recycled is of course the entropy law, not the relative price of nuclear power. This nonsensical statement is not just a minor slip-up that we can correct and forget; it indicates a fundamental lack of appreciation of the physical facts of life. No wonder Zeckhauser is unconvinced by limits to growth arguments; if he is unaware of the entropy law he could not possibly feel the weight of the arguments against which he is reacting in his article.

An article entitled "The Environment in Economics: A Survey" Begins with the words: "Man has probably always worried about his environment because he was once totally dependent on it" (Fisher and Peterson, 1976, p. 1). The implication is that man is no longer totally dependent on his environment, or at least that he has become less dependent. Presumably, technology has made man increasingly independent of his environment. But, in fact, technology has merely substituted nonrenewable resources for renewables, which is more an increase than a decrease in dependence. How could man possibly become more independent of his environment without shutting off exchanges with the environment or reducing depletion and pollution, rather than increasing them? For man to exist as a closed system, engaging in no exchanges with the environment, would require suspension of the second law. Man is an open system. What was man three months ago is now environment; what was environment yesterday is man today. Man and environment are so totally interdependent it is hard to say where one begins and the other ends. This total interdependence has not diminished and will not in the future, regardless of technology.

The statement, already cited, by Barnett and Morse that "Nature imposes particular scarcities, not an inescapable general scarcity," is about as clear a denial of the second law as could be imagined. To drive the point home they add:

Science by making the resource base more homogeneous, erases the restrictions once thought to reside in the lack of homogeneity. In a neo-Ricardian world, it seems, the particular resources with which one starts increasingly become a matter of indifference....Advances in fundamental science have made it possible to take advantage of the uniformity of energy/matter--a uniformity that makes it feasible without preassignable limit to escape the quantitative constraints imposed by the character of the earth's crust [Barrett and Morse, 1973, p. 11].

It is, however, not the uniformity of matter-energy that makes for usefulness, but precisely the opposite. It is nonuniformity, differences in concentration and temperature, that makes for usefulness. If all materials and energy were uniformly distributed in thermodynamic equilibrium, the resulting "homogeneous resource base" would be no resource at all. There would be a complete absence of potential for any process, including life! The economist's notion of infinite substitutability bears some resemblance to the old alchemists' dream of converting base metals into precious metals. All you have to do is rearrange atoms! But the potential for rearranging atoms is itself scarce, so the mere fact that everything is made up of the same homogeneous building blocks does not abolish scarcity. Only Maxwell's Sorting Demon could turn a pile of atoms into a resource, and the entropy law tells us that Maxwell's Demon does not exist.

Back to Mill:
It is not so with the Distribution of Wealth. That is matter of human institution solely. The things once there, mankind, individually or collectively, can do with them as they like. They can place them at the disposal of whomsoever they please, and on whatever terms. Further, in the social state, in every state except total solitude, any disposal whatever of them can only take place by the consent of society, or rather of those who dispose of its active force. Even what a person has produced by his individual toil unaided by any one, he cannot keep, unless by the permission of society. Not only can society take it from him, but individuals could and would take it from him, if society only remained passive; if it did not either interfere en masse, or employ and pay people for the purpose of preventing him from being disturbed in the possession. The distribution of wealth, therefore, depends on the laws and customs of society. The rules by which it is determined, are what the opinions and feelings of the ruling portion of the community make them, and are very different in different ages and countries, and might be still more different, if mankind so chose.
I tell you, this man (like Adam Smith before him) is a dangerous socialist. Be it as it may, he then embarks of an exploration of the objections to private property, the various alternative (socialist) systems known to him, and criticisms of those.
The assailants of the principle of individual property may be divided into two classes: those whose scheme implies absolute equality in the distribution of the physical means of life and enjoyment, and those who admit inequality, but grounded on some principle, or supposed principle, of justice or general expediency, and not, like so many of the existing social inequalities, dependent on accident alone.
Mill mentions Owen, Louis Blanc, M. Cabet, as well as St. Simonism and Fourierism, the latter of which Mill reports as "still flourishing in the number, talent and zeal of its adherents". Mill is not entirely opposed to these socialist schemes
Whatever maybe the merits or defects of these various schemes, they cannot be truly said to be impracticable.
He then proceeds to disarm the main argument of the opponents of socialism
The objection ordinarily made to a system of community of property and equal distribution of the produce, that each person would be incessantly occupied in evading his fair share of the work, points undoubtedly, to a real difficulty. But those who urge this objection, forget to how great an extent the same difficulty exists under the system on which nine-tenths of the business of society is now conducted. The objection supposes, that honest and efficient labour is only to be had from who are themselves individually to reap the benefits of their own exertions. But how small a part of the labour performed in England, from the lowest to the highest, is done by persons working for their own benefit.
He then considers two other objections to Communism, and concludes with the following explanation for the appeal of Utopian Socialism:
If, therefore, the choice were to be made between Communism with all its chances, and the present state of society with all its sufferings and injustices; if the institution of private property necessarily carried with it as a consequence that the produce of labour should be apportioned as we now see it, almost in an inverse ratio to the labour [...] is this or Communism were the alternative, all the difficulties, great or small, of Communism would be but as dust in the balance.
Like Keynes and the Social Democrats would during the 20th century, Mills now sets out to reform capitalism in order to save it from revolution. First, with an appeal to intellectual honesty.
But to make the comparison applicable, we must compare Communism at its best, with the régime of individual property, not as it is, but as it might be made. The principle of private property has never yet had a fair trial in any country; and less so, perhaps, in this country than in some others. The social arrangements of modern Europe commenced from a distribution of property which was the result, not of just partition, or acquisition by industry, but of conquest and violence: and notwithstanding what industry has been doing for many centuries to modify the work of force, the system still retains many and large traces of its origin. The laws of property have never yet conformed to the principles on which the justification of private property rests. They have made property of things which never ought to be property, and absolute property where only a qualified property ought to exist. They have not held the balance fairly between human beings, but have heaped impediments upon some, to give advantage to others; they have purposely fostered inequalities, and prevented all from starting fair in the race. That all should indeed start on perfectly equal terms, is inconsistent with any law of private property: but if as much pains as has been taken to aggravate the inequality of chances arising from the natural working of the principle, had been taken to temper that inequality be every means not subversive to the principle itself; if the tendency of legislation had been to favour the diffusion, instead of the concentration, of wealth—to encourage the subdivision of the large masses, instead of striving to keep them together; the principle of individual property would have been found to have no necessary connexion with the physical and social evils almost all Socialist writers assume to be inseparable from it.
Mill may not think that property is theft, but he comes dangerously close to it as property as he knew it definitely was. Mill now defines private property and the additional necessary conditions for a desirable social order, chief among which is liberty:
Private property, in every defence made of it, is supposed to mean, the guarantee to individuals of the fruits of their own labour and abstinence.
...
To judge the final destination of the institution of property, we must suppose everything rectified, which causes the institution to work in a manner opposed to that equitable principle, of proportion between remuneration and exertion, on which in every vindication of it that will bear the light, it is assumed to be grounded. We must also suppose two conditions realized, without which neither Communism nor any other any other laws or institutions could make the condition of the mass of mankind other than degraded and miserable. One of these conditions is, universal education; the other, a due limitation of the number of the community. With these, there could be no poverty, even under the present social institutions: and these being supposed, the question of Socialism is not, as generally stated by Socialists, a question of flying to the sole refuge against the evils which now bear down humanity; but a mere question of comparative advantages, which futurity must determine. We are too ignorant either of what individual agency in its best form, or Socialism in its best form, can accomplish, to be qualified to decide which of the two will be the ultimate form of human society.

If a conjecture may be hazarded, the decision will probably depend mainly on one consideration, viz. which of the two systems is consistent with the greatest amount of human liberty and spontaneity. [...] The perfection both of social arrangements and of practical morality would be, to secure to all persons complete independence and freedom of action, subject to no restriction but that of not doing injury to others: and the education which taught or the social institutions which required them to exchange the control of their own actions for any amount of comfort or affluence, or to renounce liberty for the sake of equality, would deprive them of one of the most elevated characteristics of human nature. It remains to be discovered how far the preservation of this characteristic would be found compatible with the Communistic organization of society. No doubt, this, like all the other objections to the Socialist schemes, is vastly exaggerated. [...] The restraints of Communism would be freedom in comparison with the present condition of the majority of the human race. [...] But it is not by comparison with the present bad state of society that the claims of Communism can be estimated; nor is it sufficient that it should promise greater personal and mental freedom than is now enjoyed by those who have not enough of either to deserve the name. The question is, whether there would be any asylum left for individuality of character; whether public opinion would not be a tyrannical yoke; whether the absolute dependence of each on all, and surveillance of each by all, would not grind all down into a tame uniformity of thoughts, feelings, and actions.

After giving this bleak view of what is to be expected of communism, he goes on to discuss forms of "non-communistic Socialism" such as St. Simonism or Fourierism, of which he concludes
Even from so brief an outline, it must be evident that this system does no violence to any of the general laws by which human actions, even in the present imperfect state of moral and intellectual cultivation, is influenced; and that it would be extremely rash to pronounce it incapable of success, or unfitted to realize a great part of the hopes founded on it by its partisans. With regard to this, as to all other varieties of Socialism, the thing to be desired, and to which they have just claim, is opportunity of trial.

Poll
How was it?
. What was the point of this, again? 7%
. Ok, but one instalment is enough 0%
. Let's have more 92%

Votes: 14
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As this was getting too damn long I've decided to make it a series. Enjoy the first instalment.

It really is too bad I did not have time to get into the ethics of private property. Oh, well.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Sun Apr 30th, 2006 at 07:53:56 PM EST
Monday morning...got to get some work done...will return later to read. But thanks for writing this...eager to learn more about Mills.

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Mon May 1st, 2006 at 03:12:57 AM EST
Of course, what this highlights is that as the threat of revolution recedes, so the impetus for a fair and just society does too.

Arguably, then, parties of the left need to maintain not only the appearance of electability, but possibly more importantly the appearance of extremism, because when they become reasonable, all momentum for reform is lost.

by Metatone (metatone [a|t] gmail (dot) com) on Mon May 1st, 2006 at 03:46:25 AM EST
Conversely, with a new gilded age looming, radicalization of the left is inevitable. It's quite amazing that, after the fall of the soviet block, it's taken barely 15 years for things to get as bad as this.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 1st, 2006 at 03:59:26 AM EST
[ Parent ]
Perhaps the surprise you feel is because our generation was brought up believing that Democracy was not only a necessity for social justice, but also a driver of it.

It becomes clear that the social justice developed in the West since World War Two needed Democracy to occur, but it was actually driven (if you'll forgive the market-speak) by competition between two ideologies. Once the ideological competition was replaced with an effective monopoly, there was no longer any reason to provide "good service to consumers."

On a side note, I don't know why, I think it is my pessimistic nature, but I felt this happening very soon after the fall of the Berlin wall.

In a strange way, the worst thing that ever happened to the world was the re-unification of Germany and the creation of the euro.  These events created the psychological meme of a "sclerotic Europe" unable to match the dynamism of the US. Couple this "failure of the semi-alternative model" with the removal of any ideological pressure on US elites to promote overall progress in US society (after the fall of the Sovite Union) and we have where we are now.

On reflection, I am perhaps not surprised because it was amazing how quickly the "zeitgeist" of British policy making (if not quite, public opinion) was turned around by Thatcher. We went from a partially community based society to an atomised one in only about ten years. And I was growing up in that time, so my own barometer for political change is miscalibrated to almost expect radical shifts.

by Metatone (metatone [a|t] gmail (dot) com) on Mon May 1st, 2006 at 04:17:40 AM EST
[ Parent ]
My surprise is that we have esentially been betrayed by the social democrats. It's not like they were already pursuing a third way between communism and capitalism (call it 'market socialism'), but after 1991 they've decided to sell us a 'third way' beteen social democracy and neoliberalism. The entire political spectrum has moved one notch to the economic right.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 1st, 2006 at 04:22:50 AM EST
[ Parent ]
True. But it seems less so in Spain?

To me the UK situation always feels a bit anomalous, it will take 30 years or more to work off the psychological effects of the Thatcher time (and of course that will only happen if the neo-libs can be prevented from completely implementing the Washington consensuses generally.)

We can (and I frequently find myself in this argument) discuss about whether the Labour party needed to shift to the right the way they did to win in 1997. However, it is certainly the case that they thought they did, in part due to the weight FPTP gives to certain marginal constituencies and a certain kind of floating voter.

The other probnlem is that since our economists are all economically illiterate, it shouldn't surprise that our politicians are more so and have been sold various kinds of neo-lib moonshine along the way. Economic stability (and indeed a bit of growth) are the currency of political survival/power. If you can get them then it's a lot easier to win elections.

Academic economists told the world and the politicians that the old nostrums were dead. Neo-libia had won and the only way to make society richer was to follow the neo-lib way.

Good politicians want to make a better life for people. If you tell them that the only way to avoid total economic decline is the neo-lib way, there is a strong pressure for them to accept it as the lesser of two evils, no?

by Metatone (metatone [a|t] gmail (dot) com) on Mon May 1st, 2006 at 05:07:55 AM EST
[ Parent ]
we have esentially bw the social democrats
True. But it seems less so in Spain?
By chance, I managed to buy the print edition of El Pais today, and found this pearl of an op-ed:
Enrique Gil Calvo: Self-government? (2006 May 1)
The continuation of an unbalanced economic policy, dependent on the increasing value of real-estate, besides being ostensibly rightist is more than doutful, as it has sunk productivity, has bloated inflation and has lost the reins of the trade deficit. So that, lacking the promised labour reform to unblock youth employment, and in the absence of a housing policy protecting the right to form a family, to accomplish a left agenda one has only the Dependency Law.
...
What is progressive is not the distribution of power (and income) among the autonomous territories, but the redistribution of income (and power) among the social classes. But unfortunately, the Spanish left (like the whole of the Western European Left) has lost its own political agenda for the past 25 years. And, not having an agenda of its own, the Spanish left has chosen to adopt as its own the political agenda of the nationalists (with whom it is in a coalition since the Transition [to democracy] against Francoism and today against the PP), which makes of territorial self-government its only goal.
Sigh...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 1st, 2006 at 05:18:36 PM EST
[ Parent ]
Ironically, the same could be said of Blair in a way. Scottish and Welsh devolution, some flexibility around NI and then... nothing...
by Metatone (metatone [a|t] gmail (dot) com) on Tue May 2nd, 2006 at 02:04:58 AM EST
[ Parent ]
It's not like they were not already pursuing
typos, typos, who's got the typos...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 1st, 2006 at 05:16:50 AM EST
[ Parent ]
My surprise is that we have esentially been betrayed by the social democrats.

But the left lost their confidence ages ago. Look at the US where the democrats in the 50s guise were the promoters of the Common Good and the enrichment of the middle and working classes, making the "American Dream" seem possible for everyone. By the time of Reagan they had degenerated into fighting a rearguard action defending the New Deal.

Their higly visible lack of intellectual rigour in policy making and their timidity in promoting just about any liberal principle has been echoed by left/liberal parties all around the world. It just became obvious in the last 10 years or so.

I suspect it's largely because the left in power were as careless with citizen's rights as the right, but at least the right offered you hope of economic empowerment. Something the left were incapable of as their mindset was invariably telling you to be grateful for what you got.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Mon May 1st, 2006 at 01:30:26 PM EST
[ Parent ]
Mas, mas, quiero mas.

more more....so Mill saying let's have a try and understanding perfectly the second law... amazing... this is the good thing abbut reading the classic directly.. you would be amazed about the things Darwin or Kant or Hume were supposed to have said but they never actually said....or even state exactly the opposite.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon May 1st, 2006 at 05:25:51 AM EST
My all-time best experience reading the classics was when I had to write a term paper for History of Mathematics, and I chose to do the history of probability theory. I based my paper of a 19th-century English classic, and read DeMoivre (1731) and Laplace (1812) in the original, as well as Bernoulli (ca. 1710) in translation (my Latin is not that good ;-).

It's a great experience to see it argued forcefully that the law of large numbers is evidence of the existence of God.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon May 1st, 2006 at 06:21:48 AM EST
[ Parent ]
Amazing.. I am sometimes scared that Anthropology can be so right...It is frightening.. I just imagine one day all the GOP in the US having thousands of antrhopologists working for them....and I get scared.....

oh.. wait.. I am already scared with the Iran stuff...

Jesus...and large numbers...important to remember.. Jesus, God and Trinity one in all for the large number (all for one and one for all? well.. all for three and three for all?)....

And some people say that science is objective and does not depend on social norms and promotes the "truthiness" and bla bla bla...:)

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon May 1st, 2006 at 10:55:05 AM EST
[ Parent ]
Abraam De Moivre: The Doctrine of Chances (1731)
What we have said is also applicable to a Ratio of Inequality, as appears from our 9th corollary. And thus in all cases it will be found that altho' Chance produces Irregularities, still the Odds will be infinitely great, that in the process of Time, those Irregularities will bear no proportion to the recurrency of that Order which naturally results from ORIGINAL DESIGN.
...Again, as it is thus demonstrable that there are, in the constitution of things, certain laws according to which Events happen, it is no less evident from Observation, that those Laws serve to wise, useful and beneficent purposes: to preserve the stedfast Order of the Universe, to propagate the several Species of beings, and furnish to the sentient Kind such degrees of happiness as are suited to their State.
But such Laws, as well as the original Design and Purpose of their Establishment, must all be from without; the Inertia of matter, and the nature of all created Beings, rendering it impossible that any thing should modify its own essence, or give to itself, or to anything else, an original determination or propensity. And hence, if we blind not ourselves with metaphysical dust, we shall be led, by a short and obvious way, to the acknowledgement of the great MAKER and GOVERNOR of all; Himself all-wise, all-powerful and good.
As you can see, my paraphrase does not do it justice. Make sure this excerpt doesn't fall in the hands of any Intelligent Design nuts.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon May 1st, 2006 at 06:16:36 PM EST
[ Parent ]
I already pass it.... je jej ejjejeje

You are a puto crack.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Tue May 2nd, 2006 at 09:57:06 AM EST
[ Parent ]
Sorry, 1718, 1738 and 1756 are the dates of the editions. That paragraph is probably from the 1738 edition.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 10:20:07 AM EST
[ Parent ]
I needed to read the whole instalment twice, and after the second time I got convinced that in my first political science class I have been deprived of getting closely acquainted with Mill's works. I remember we had some reading on him, about utilitariansim, but obviously, quite insifficient. Or maybe it is my mistake I seldom sit down and read more than the required material for classes. And sometimes the lack of time is no excuse.

And thanks for this, Migeru, I am starting to fill some gaps in my education!

I can resist anything but temptation.- Oscar Wilde

by Little L (ljolito (at) gmail (dot) com) on Mon May 1st, 2006 at 06:43:12 AM EST
Actually, I think Mill was writing prior to the time when the title of economist was in heavy use.  He was a Professor of Moral Philosophy, as was everyone from Smith to John Neville Keynes (Keynes's father).  So that's probably why he is referred to as a philosopher.

Anyway, I really enjoyed this and look forward to the next installment.  Thanks.  You and I are going to have to start a book club of some sort when I arrive in Britain.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon May 1st, 2006 at 10:59:46 AM EST
Well, the problem is when you pigeonhole a thinker of the stature and versatility of Mill and then put all his books in the same section of the bookstore.

For instance, his works on logic and ethics belong in philosophy, but he also wrote on representative government, wrote the most important economics treatise for half a century, and then other things like The subjection of women.

I guess what I'm trying to say is that he could have books in three or four different secions, but they get all shelved together under 'philosophy' and then economists, political scientists and feminists don't read him.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon May 1st, 2006 at 04:58:10 PM EST
[ Parent ]
I completely agree.  He was a brilliant writer and thinker, and a store could easily have his works in forty different sections, unlike 99.9% of writers.  It is a lot more simple to stuff his work in the philosophy section, though.  I have a bad knee.  It would be a pain to go running all over the store looking for a writer's work.  One of Keynes's first books was A Treatise on Probability, which was, of course, placed in the economics section, despite having very little, if anything, to do with economics.  But he's known for economic theory, so the store threw it in there.

Look on the bright side: At least the stores sell Mills books there.  I was furious, back when I read The General Theory and Friedman's Monetary History, because not one bookstore in the city had either book.  Easily the two most famous economics book on the 20th Century, but no one had them.  They certainly had plenty of copies of The (friggin') Da Vinci Code, though.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon May 1st, 2006 at 08:59:05 PM EST
[ Parent ]
Drew, just out of curiosity, how many original works (and which) is a modern Economics graduate supposed to have read as part of their degree?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 04:49:23 AM EST
[ Parent ]
It depends on which classes the student takes.  If the student avoids the classes on economic history and thought, he won't have to read any.  (Sad, I know.)  When my father was an econ. student at Florida State, they had to read many, but usually not in full.  Economic history is not required, so students don't actually need to read any original works, but I took the class, and we read a fair amount.  It's difficult to cover everything in one semester, obviously, and I wasn't able to fit the other history class into my schedule.  (I'm thinking about sitting in on the class this Summer, just for the hell of it, but I have no idea if it's being taught.)

Usually, the students who are interested in academic economics as a career path will read many -- Smith, Marx, Keynes, Friedman, Marshall, Hayek, Mises, etc., although Mises was really only covered for his critique of central planning because of my professor being an Austrian follower.  (And, God Almighty, could he rant about how great the Austrians were.  This was the class in which I learned that Keynes was Satan.)  I've read most of these, but didn't complete Das Capital or Marshall's Principles, and couldn't make it through even the first few pages of Mises's hideously-boring work.  Mill was, unfortunately, covered only briefly and without any reading.

The class I attended involved a twenty-page term paper on a chosen economist's influence in modern life.  Most students in my class chose either Marx or Smith, because we were apparently suffering from an originality shortage.  I, of course, chose Keynes, since I was reading (and loving) The Economic Consequences of the Peace at the time, anyway, and it provided a great excuse to buy his other books and harass my professor for lying about him.

So that's about the full extent of it.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Tue May 2nd, 2006 at 11:25:25 AM EST
[ Parent ]
I think Metatone and I had already talked about sharing books. I should research how much it costs to mail a paperback. Can't be that expensive.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 06:41:47 AM EST
[ Parent ]
On a completely separate topic, I've almost got your global alliance preferences data.

Teaser: In the event no major upheaval in the world power structure occurs, the Caucasus and the 'Stans' continue to be a five-way toss-up between Russia, China, India, America and Europe.

In the event a Turkish-Iranian alliance arises, the area falls wholly into an emergent Islamic axis -- somewhat religious and modernist, while the more reactionary regions (see: Saudi Arabia, Sudan) are argued over by outside powers (China v United States).

Africa winds up being the grand prize of the 21st century. Where great power politics as-is prevail, Europe, the Islamic bloc, China, the United States, India, and even Russia get involved. It's a real mess, but armies go where the treasures are, and poor Africa, ever the victim, is lined up to be fought for once again.

Or is it?

You were interested, very much so, in the rise (renaissance, rather) of at least one South American power -- Argentina. There is at least one more -- Brazil.

Latin America comes to be divided between Argentina in alliance with Colombia, China gets a toehold via Peru and Mexico, Russia forges an alliance with Brazil and Venezuela.

All three blocs go to town in Africa, forging a trio of ostensibly 'Third World' alliances both there and farther afield, even planting flags in Europe and Asia; it's quite the scene.

Short Form

There are about twenty different alliance groupings possible if but one roll of the dice goes their way, and about six that are robust in most every scenario.

The one consistency is that the world is already multipolar whether Washington admits it or not, and it's only going to get even more diversified a portfolio of power, to the point that radical restructuring of wealth, trade and influence is going to occur, unless somebody puts a foot down on a lot of other people's necks.

Which, I suppose, is what the Bushies have been attempting, albeit quite clumsily, to do all along.

Why pick on the Iranians? Why plant a flag in Iraq? Simple: tolerating the peaceful and uncontested formation of a modernist Islamist bloc is a virtual death sentence for American influence in the Eastern Hemisphere. Al Qaida rehearsing plane hijackings is not what keeps the Americans up at night. Nor is Saddam Hussein wondering which village to gas next week. Not even the dispute over the Occupied Territories in Palestine gets much mileage.

What gives the Pentagon and Foggy Bottom ulcers is the nightmare scenario of Turkey, Iran and one other major player -- Egypt, perhaps, or Pakistan -- and that alliance either being chums with the new Sino-Indo-Russian entente, or going solo and becoming a new nuclear power (which, since the Paks already have the bomb, it would be instantly).

Suddenly, giving the Turks the cold shoulder for two decades doesn't seem like such a good move.

Oh, little detail: No one ever second-guesses the fact that the Turks have a nuclear energy program of their own.

Good thing the Turks are always on the right side of human rights. Good thing the Turks always have stable democratic institutions. Good thing the Turks have never had an aggressive foreign policy.

Else I might be a bit worried about their new friends, the Iranians, and their new tag-team strategy vis a vis the Kurds on northern Iraq.

Have Keyboard. Will Travel. :)

by cskendrick (cs ke nd ri c k @h ot m ail dot c om) on Mon May 1st, 2006 at 12:47:48 PM EST

Science by making the resource base more homogeneous, erases the restrictions once thought to reside in the lack of homogeneity.

Jesus H/F Christ.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon May 1st, 2006 at 02:13:23 PM EST
These economists think the market will survive the heat death of the universe ;-)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 02:52:04 AM EST
[ Parent ]
I always though that calling market deregulation 'The Big Bang' suggested just the tiniest hint of grandiosity.

Or possibly suspect sexual tendencies.

(Or both.)

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue May 2nd, 2006 at 09:20:51 AM EST
[ Parent ]
Thanks, Migeru, great stuff. The Herman Daly parenthesis was pure pleasure. And Mill's thoughts on private property and various forms of socialism seem to me to be as relevant today as they were in the 1870s.

the decision will probably depend mainly on one consideration, viz. which of the two systems is consistent with the greatest amount of human liberty and spontaneity.

Spontaneity. I like that word in this context.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon May 1st, 2006 at 04:18:39 PM EST
Excellent diary, and excellent comments.
by Colman (colman at eurotrib.com) on Mon May 1st, 2006 at 05:36:59 PM EST
The old masters were a verbose bunch

No TV, no internet, no recorded music, no movies, no phones... and some source of income that provided one with plenty of free time.  So... letter writing, socializing - including a highly developed art of conversation, gambling, flirtation... and for the less socially minded - reading and writing. Lots and lots of reading and writing.  Plus a lot less stuff to be learned about any subject before one could be considered qualified to write about it by oneself and others.

Great piece btw. More please.

by MarekNYC on Mon May 1st, 2006 at 05:52:05 PM EST
As someone interested in what applied physics can tell us about the capabilities of a more fully developed technology base, I would take issue with Mill here:

We cannot, indeed, foresee to what extent the modes of production may be altered, or the productiveness of labour increased, by future extensions of our knowledge of the laws of nature, suggesting new processes of industry of which we have at present no conception.

This statement falls into a pattern still familiar today -- the confusion of science (which advances by learning new things) with technology (which advances by making new things). One cannot predict what one will learn, simply because to do so would require that it already be known. Predicting (more accurately, inferring) that something can be made, in contrast, is routine in technology development. No new laws of nature are involved in developing a next-generation aircraft, merely the working out of the intricate consequences of intricate systems based on materials and principles that are already known. Well, give or take some fix-up and debugging.

In practice, of course, many of the most interesting advances in technology result when science discovers new materials and phenomena, and many of the most interesting advances in science rely on technology to make new instruments and tools. The conceptual distinction remains important, however, even when the activities are intimately intermixed within a single research group.

Because technology need not rely on new knowledge of nature, applied physics can be used to determine some facts about as-yet-unimplemented revolutionary technologies. These facts typically tell us more about the lower bounds on future achievements because, although careful inference can establish possibilities, it cannot so easily establish impossibilities (unless some natural law would obviously be violated -- perpetual motion, and all that). Describing upper limits on what can be done is naturally more difficult because it would require a proof of the unworkability of an unbounded set of possible designs, and because science may turn up new, exploitable materials and phenomena. Describing lower limits on what can be done is possible because this requires only that particular, high-margin-of-safety designs will work as physics says they will.

This knowledge regarding feasible developments is of first-rank importance to policy development, yet is commonly ignored.

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Mon May 1st, 2006 at 11:50:00 PM EST
This knowledge regarding feasible developments is of first-rank importance to policy development, yet is commonly ignored.

The problem, of course, is that "this knowledge" may be real, but it has not proven to be particularly practical. There have been many attempts at the process you outline and some have even produced reasonably accurate predictions in terms of particular designs.

Where they failed miserably was in accurate predictions of the timing (the difficulty of producing said design). This is the area that needs most work to improve it's status as a policy tool.

by Metatone (metatone [a|t] gmail (dot) com) on Tue May 2nd, 2006 at 02:11:38 AM EST
[ Parent ]
Timing is indeed unpredictable. Calculations only show (approximately) how a device would behave if made, but cannot tell anything about when some device along the same lines might actually exist -- or whether it will even be worth making, since better technologies often surpass good ones before the latter can be developed.

One application of this kind of knowledge is to suggest what might be worth developing. As Alan Kay said, "The best way to predict the future is to invent it."

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Tue May 2nd, 2006 at 02:49:13 AM EST
[ Parent ]
The best example of this is nuclear fusion reactors, which have been "within 20 years" for the last 60 years.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 02:51:19 AM EST
[ Parent ]
Is practical fusion power an example of "unpredictability" (certainly yes) or of "clearly understood to be worth developing" (I'd say no). Fusion reactors have typically been proposed as a way to reduce the fuel-cost of boiling water, relative to fission reactors, while multiplying the capital cost by an unknown and probably huge factor. Why all the excitement?

By contrast, technologies that are, in some sense, about reducing their own costs are in a different and unusual category. (Someone should look into this, and not just the usual specially-interested experts.)


Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Tue May 2nd, 2006 at 11:20:01 PM EST
[ Parent ]
Note, however, that the second law of thermodynamics was discovered by seeking an upper limit to the efficiency of ideal machines. So fundamental scientific discoveries can be driven by applied physics or even engineering design, and theoretical upper limits can be discovered.

The progress mode you describe is much more common, though.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Wed May 3rd, 2006 at 05:02:55 AM EST
[ Parent ]
Herman Daly seems quite confused here:

The economist's notion of infinite substitutability bears some resemblance to the old alchemists' dream of converting base metals into precious metals. All you have to do is rearrange atoms! But the potential for rearranging atoms is itself scarce, so the mere fact that everything is made up of the same homogeneous building blocks does not abolish scarcity. Only Maxwell's Sorting Demon could turn a pile of atoms into a resource, and the entropy law tells us that Maxwell's Demon does not exist.

Converting base metals into precious metals requires, of course, something far more difficult than rearranging atoms. The process must transmute atomic nuclei, which requires roughly a million times more energy.

Daly then states that the potential for rearranging atoms is scarce, which is true, but only because the required energy (that is, in the technical sense, "free energy") is scarce. It doesn't require Maxwell's Demon to do the job -- the impossible demon would decrease entropy by sorting atoms according to their thermal energies, which is quite different from moving them around and sorting them by their kinds.

Does anyone know whether Daly has been influenced by Rifkin? Referring to "the entropy law" and declaring that it prohibits unmixing atoms is an error that Rifkin first popularized.

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Mon May 1st, 2006 at 11:59:48 PM EST
All true, but do you have an estimate as to the free energies involved in unmixing two species of atoms?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 02:50:25 AM EST
[ Parent ]
Starting with a mixture containing equal amounts of two species, the theoretical minium energy for separating them is ln(2)kT per molecule, the reduction in entropy. This is, of course, quite small -- the same as the free-energy cost of compressing the volume of a gas by a factor of two.

Words and ideas I offer here may be used freely and without attribution.
by technopolitical on Tue May 2nd, 2006 at 11:24:49 PM EST
[ Parent ]
Mixing entropy and particle (in)distinguishibility is a fascinating topic. Maybe I should write a diary about it...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed May 3rd, 2006 at 05:05:03 AM EST
[ Parent ]
Mill:

One of these conditions is, universal education; the other, a due limitation of the number of the community.

Please note point #2, which follows Malthus.


Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Tue May 2nd, 2006 at 12:01:06 AM EST
Well, barring space settlement, it is still true. And space colonies on that scale may or may not be energy efficient.
by Metatone (metatone [a|t] gmail (dot) com) on Tue May 2nd, 2006 at 02:13:39 AM EST
[ Parent ]
Even with space settlement, his point is still valid, though the time scale changes.

Words and ideas I offer here may be used freely and without attribution.
by technopolitical on Tue May 2nd, 2006 at 02:51:16 AM EST
[ Parent ]
I wasn't sure whether "note he is following Malthus here" was supposed to be a criticism, a statement of fact or an endorsement. Malthus has such a bad reputation...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed May 3rd, 2006 at 04:57:35 AM EST
[ Parent ]
Oh, yes, Adam Smith, Malthus, Ricardo and Mill all were concerned about the fact that in their analysis the natural evolution of capitalism is, in the long run, declining profits and wages and increasing rent, with misery for all, unless population growth is curtailed. We discussed this in Colman's diary about the iron law of wages.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 02:48:46 AM EST
[ Parent ]
We discussed this in Colman's diary...

Where you of course concluded that the misery for all part is true, though not in the timeframe they imagined?

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Tue May 2nd, 2006 at 02:53:09 AM EST
[ Parent ]
I used the argument that the impressive economic growth of the 20th century is due to the avilability of cheap energy (oil). Some people call that "the oil slaves of modern man".

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 02:57:45 AM EST
[ Parent ]
You may want to revisit the diary and discussion: can we resist the iron law? and continue it here, since the original is in the archive?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 2nd, 2006 at 03:00:21 AM EST
[ Parent ]
I've just read Colman's "Iron Law" diary and the following thread, as you suggested.

[[[
I note in passing that there is again some dispute of the near-tautological principle of comparative advantage, but also some far more interesting discussion (in part by one Migeru) of whether its consequences are still as had been expected.

In the pernicious-idea category (and more peripheral to the diary) is the expensive-energy => near-autarky idea. Shipping, however, is now at the few-cents per ton-mile level, and a moderate multiplier on that cost would be far from being a barrier to international trade, though it would of course reduce it at a significant margin.
]]]

As a Wikipedia addict and occasional contributor, I find that:

According to Lassalle, wages cannot fall below subsistence level because without subsistence laborers will be unable to work for long. However, competition between laborers for employment will drive wages down to this minimal level.
Iron law of wages

Later, Ricardo said:

"Notwithstanding the tendency of wages to conform to their natural rate, their market rate may, in an improving society, for an indefinite period, be constantly above it; for no sooner may the impulse, which an increased capital gives to a new demand for labour, be obeyed, than another increase of capital may produce the same effect; and thus, if the increase of capital be gradual and constant, the demand for labour may give a continued stimulus to an increase of people...." (On the Pinciples of Political Economy, Chapter 5, On Wages).
Iron law of wages

This sounds more like a Plastic Law of Wages.

I would like to propose a Silicate Law of Capital, which states that as the human ability to transform matter increases, the cost of capital goods will fall to a level not significantly above that of the free energy consumed in its fabrication and the matter tied up in its physical structure. (Iron will not be a preferred structural material, as silicates are both more abundant and can be made stronger, owing to their directional covalent bonds.)

Malthus, however, still bites. Exponential growth of population (and no, the demographic transition isn't enough to show that this won't happen) would eventually reduce free energy flows per capita to a minimal level. Potential checks against this will include the traditional death option, or the more avant-garde option of part-time living (technology pending).

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Tue May 2nd, 2006 at 02:46:49 PM EST
[ Parent ]
Here we have "money on a free-energy standard" again. I think we need a couple of diaries where we seriously hash out the thermodynamics of economics.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed May 3rd, 2006 at 04:59:41 AM EST
[ Parent ]


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