The Classical Economists Revisited - Brossura

O'Brien, D. P.

Brossura

ISBN 10: 0691177988 ISBN 13: 9780691177984

Casa editrice: Princeton Univ Pr, 2017

Riassunto

The Classical Economists Revisited conveys the extent, diversity, and richness of the literature of economics produced in the period extending from David Hume's Essays of 1752 to the final contributions of Fawcett and Cairnes in the 1870s. D. P. O'Brien thoroughly updates, rewrites, and expands the vastly influential work he first published in 1975, The Classical Economists. In particular, he sets out to make clear the shaping of a comprehensive vision of the working of an open economy, building on the great work of Adam Smith in Wealth of Nations, a development that was substantially affected by the contributions of David Ricardo. He shows that the Classical literature was in fact the work of a host of thinkers from a wide range of backgrounds.


Covering the intellectual roots of the Classical literature and its methodological approaches, and the developed theories of value, distribution, money, trade, population, economic growth, and public finance, and examining the Classical attitudes toward a rich variety of policy issues, The Classical Economists Revisited considers not only the achievements of the Classical writers but also their legacy to the later development of economics.


A seminal contribution to the field, this book will be treasured for many years to come by economists, historians of economics, instructors and their students, and anyone interested in the sweeping breadth and enduring influence of the classical economists.

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Informazioni sull?autore

D. P. O'Brien, Professor Emeritus of Economics at the University of Durham, is the author or editor of many books, including J. R. McCulloch and Thomas Joplin and Classical Macroeconomics.

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The Classical Economists Revisited

By D. P. O'Brien

PRINCETON UNIVERSITY PRESS

Copyright © 2004 Princeton University Press
All rights reserved.

ISBN: 978-0-691-17798-4

Contents

Preface to the Second Edition, xi, 
Preface to the Original Edition, xiii, 
Introduction, xv, 
Chapter One The Classical Economic Stage, 1, 
Chapter Two The Roots of Classical Economics, 26, 
Chapter Three The Characteristics and Preconceptions of Classical Economics, 63, 
Chapter Four Classical Value Theory, 91, 
Chapter Five The Classical Theory of Distribution, 127, 
Chapter Six Classical Monetary Theory, 165, 
Chapter Seven International Trade, 205, 
Chapter Eight The Classical Theory of Growth and Development, 248, 
Chapter Nine Classical Public Finance, 288, 
Chapter Ten The Policy Prescriptions of Classical Economics, 327, 
Chapter Eleven Classical Economics: A Retrospect, 356, 
Notes, 363, 
Index, 405, 

CHAPTER 1

The Classical Economic Stage

I. The Period of Classical Economics

In any detailed discussion of a particular body of ideas, it is perhaps helpful to begin by indicating to the reader the period during which those ideas were of importance.

There can be little doubt that the heyday of Classical economics was during the years 1800–1850. Delineation of the period during which Classical economics developed as a body of thought, came to be the ruling approach to economics, ultimately experienced a measure of stagnation and decay, and was finally supplanted by the young and vigorous development of neo-Classical economics in the "Marginal Revolution," is however a good deal less easy.

At one end it is usual to date the era of Classical economics as beginning in 1776, with the publication of Adam Smith's mighty Wealth of Nations. Such an approach has a strong prima facie appeal, but closer examination raises doubts about it. On the one hand Classical economics owed a great deal to David Hume in certain critical areas, especially that of monetary theory. The relevant part of Hume's Essays was published in 1752; and it is therefore doubtful if too much weight can be placed on the year 1776. Indeed the influence of Hume upon Smith cannot be ignored; they were close friends, and Hume was appointed by Smith to be his literary executor. In addition the work of Adam Smith himself did not suddenly spring from nothing in 1776. He lectured in Edinburgh from 1748, moved to the University of Glasgow and was a professor there from 1751 to 1763. Of course he covered other subjects in addition to economics; but there is a set of notes on his lectures taken in 1762–63, and their editor, Edwin Cannan, pointed out many passages in them which are parallel to passages in the Wealth of Nations. Indeed it is apparent that quite a lot of the book was substantially in existence before Smith resigned his chair. Moreover there is evidence that his influence as a lecturer was considerable.

At all events we cannot date the Classical era as starting any later than 1776, and there are strong arguments for taking 1750 as its starting point. At the same time, however, it must be emphasized that during these early years the Classical approach certainly did not dominate economics. The Physiocratic system of the French economists was still very much in its full strength. Indeed the beginning of the school is usually dated from the publication of the articles "Fermiers" and "Grains" by its leader Quesnay in 1756 and 1757. Mirabeau's L'Ami des Hommes appeared between 1756 and 60, and the famous Tableau Economique in 1758–59. The intellectual influence of the Physiocrats is, however, generally agreed to have been at its zenith in the 1760s, declining quite fast after 1770. Nevertheless the famous Réflexions sur la Formation et la Distribution des Richesses of Turgot did not appear until 1771, and this was far from being the last Physiocratic work.

But Classical economics did become the ruling system, and for half a century up to 1850 it completely dominated economic thought. Although there can be little doubt that its influence declined from that date, delineation of the end of the era is, again, far from easy. It is tempting to select the year 1870, and there are certainly persuasive arguments for this. Jevons, who has a strong claim to be regarded as the progenitor of the neo-Classical economics which succeeded the Classical system, published his Theory of Political Economy in 1871. In a sense this was a watershed in the development of economics. In the ten years up to its publication Jevons had, largely unsuccessfully, attempted to interest people in his theory of value, first published as a paper read to the British Association in 1862. At that time it had attracted no attention, and Jevons seems to have become discouraged. But by 1870 he was president of the Statistical Section of the British Association and, in the ten years which followed, the marginalist approach of neo-Classical economics was clearly making extremely rapid strides.

At the same time Classical economics, and all it involved, did not suddenly come to an end in 1870. What was probably the last significant work of Classical economics, J. E. Cairnes's Some Leading Principles of Political Economy Newly Expounded, did not appear until 1874, a year which also saw the fourth edition of Henry Fawcett's Manual of Political Economy (first published in 1863). Classical economics did not go without a fight. In the preface to the second edition of his Character and Logical Method of Political Economy, published in 1875, Cairnes attacked Jevons's whole employment of mathematics in economics; and as late as 1895, when the young Winston Churchill set out to teach himself some economics, it was to Fawcett's work that he turned. But if it did not go without a fight it still went; and 1870 will accordingly be treated as the end of the era, although not in any rigid sense — some significant works published after that date will be considered as falling within the subject matter of this book.

II. The Personnel of Classical Economics

Economists with no special interest in the history of economic thought tend, on hearing the word "Classical," to think rather vaguely (if they think of anything) of Smith and Ricardo — and to leave the matter at that. Yet, although these two writers were undoubtedly the twin pillars of Classical economics, they were but two out of a great number of writers; and it may be helpful to indicate the extent of the army of Classical economists.

Perhaps the best way to approach this exercise is to place the writers of the Classical school into three groups. Like all groups, these involve arbitrariness; and no doubt the inclusion of particular writers in one or another group will cause some readers to feel that less (or more) than justice is being done to the individual concerned. This may well be the case, but the device of grouping is intended as a purely clarificatory one, not as a system of ranking on merit.

Group I consists, conveniently, of just two men, Adam Smith (1723–90) and David Ricardo (1772–1823). In terms of the influence they exercised, these two writers were without doubt the two major figures of Classical economics. They were, however, not of the same kind. Smith, who as author of the Wealth of Nations has strong claims indeed to be regarded as the most influential economic author for 160 years after its publication, was a writer who covered virtually the whole field of economic inquiry. His great work, though at times straying into lengthy digressions, has a strong claim to be one of the most influential books ever written, extending its sway well beyond those who wrote on economics. It was often well argued and shrewd, yet it was capable of containing several different theories of the same economic phenomena without any real attempt to resolve the differences between them. But herein to some extent lay the secret of Smith's influence: the Wealth of Nations was thus able to suggest many extremely interesting lines of inquiry to different people.

One of these people was David Ricardo. He started reading Smith's great work while bored when visiting Bath for his wife's health; the outcome of his reading was to be highly significant. For Ricardo was of a very different cast of mind from Smith. He was the pure theorist par excellence. To the raw material of Smith's book he applied his analytical technique, and the result was the development of a method of reasoning, and an approach to economic problems, which are with us today. He seems to have followed his own instinctive method of procedure, although he had some limited study of natural science. It consisted of making a number of extremely restrictive assumptions, and proceeding to reason closely to a conclusion on the basis of these assumptions, often with no more than token reference to the real world. A perfectly legitimate device in itself, it has become known as "model building"; it is, however, a procedure much open to abuse when, from the results of the exercise, startling policy conclusions are drawn. Ricardo was to be guilty of this, and Schumpeter in his great History of Economic Analysis named this "the Ricardian Vice." But for a while — though for nothing like as long as was the case with Smith — Ricardo's influence, both with respect to his theories and to the conclusions for policy drawn from them, was enormously strong. This was at least true of his influence with economic writers; the general public was less impressed, and at one stage it was suggested in the House of Commons, by Henry Brougham, that Ricardo must have "descended from some other planet," so oversimplified did his view of the working of the economic system appear.

Nevertheless his influence with economic writers was, for a while, very considerable. It must be stressed here that it is on the score of influence that Smith and Ricardo are included in Group I. No arbitrary judgment about the quality of what they wrote, as compared with the writers in other groups, is implied. Indeed many of the writers in these other groups had extremely important contributions to make, and offered insights which were later to prove very significant. But it is difficult to contest the view that the influence of Smith and Ricardo (though that of the latter was by far the less of the two) stands out clearly when Classical-economic literature is viewed as a whole.

Nevertheless many of the writers in Group II were extremely important. They include T. R. Malthus (1766–1834) who, building on Smith's foundations, managed to disagree with Ricardo on practically everything and who was, without a doubt, a major figure in Classical economics, even if attempts to make him into a forerunner of Keynes have been unsuccessful. It was Malthus who supplied the population theory which for long exercised great influence amongst the Classical economists, and which was incorporated by Ricardo into his basic model of economic progress.

Another significant figure included in Group II was a correspondent of both Malthus and Ricardo, the French economist J. B. Say (1767–1832). His own work, like that of Malthus, was much influenced by Smith; but it included the important (though subsequently much abused and misrepresented) Say's Law, and a subjective theory of value. Included in Group II also is James Mill (1773–1836), a disciple of the Utilitarian Jeremy Bentham, and a man who found the Ricardian style of reasoning congenial. He was undoubtedly Ricardo's closest follower. His son, also in Group II, was the famous John Stuart Mill (1806–73), the leading intellectual of his day but much less closely Ricardian than his father, and in many ways closer to Smith both in general approach and conclusions.

In addition to the two Mills there was John Ramsay McCulloch (1789–1864), Nassau Senior (1790–1864), Robert Torrens (1780–1864), Thomas Tooke (1774–1858), and, perhaps the last true representatives of Classical economics, J. E. Cairnes (1823–75) and Henry Fawcett (1833–84). McCulloch was considerably, if transitorily, influenced by Ricardo, although he had begun his career very much under the influence of Smith and Malthus. He was the author of a highly successful textbook, but this was only part of an enormous output because he for long lived by his pen. He wrote extensively on economic policy, and was a pioneer in the collection and publication of economic data. Senior was the first to lead the revolt against Malthus's population theory. He was the architect of the New Poor Law of 1834, and a value theorist in a different mould from either Smith or Ricardo. Robert Torrens, a one-time Royal Marine commander with a stormy tenure in the military, pursued a career which was to prove almost equally stormy as economist and controversialist on such matters as money and banking and international trade theory and policy. In many ways his life was one continuous conflict, and his battles with successive governments for financial compensation for what he considered wrongs are a story in themselves. But Torrens, apart from Ricardo, was possibly the best pure theorist amongst the Classical economists: indeed in some respects he was arguably superior. Tooke is chiefly remembered for his monumental History of Prices. This, and an earlier work on High and Low Prices, must establish Tooke as the greatest collector of monetary data in the nineteenth century and as a formidable monetary controversialist. His insights in the latter respect were particularly important; but he made significant contributions in other fields, notably his clarification of the concept of profit in his Considerations on the State of the Currency. Cairnes and Fawcett are perhaps the least important figures in Group II, not so much because they contributed little that was new — although this was arguably the case — but because, judged by the criteria of influence, their importance, coming as they did at the end of an era, was necessarily limited. In many ways it was upon them that the marginal revolution fell. Fawcett has long been regarded as a regurgitator of J. S. Mill. This is perhaps a little unfair, in that he was alive to some of the differences between experience and the expected theoretical conclusions; and in any case there can be little doubt that, by virtue of his position as professor at Cambridge, he was in a position to exercise influence. Cairnes, as a professor at University College, London, was also in such a position, and his work had perhaps more to offer than that of Fawcett. In his work on method, and subsequently in his Leading Principles, he raised a number of questions about the central doctrines of Classical economics which, if he had pushed on to find answers to them, might have prolonged the vitality of the system.

Yet it is difficult to escape the feeling that Fawcett and Cairnes, included in Group II here because of an influence stemming partly from their academic positions, were analytically inferior to many, if not most, of the writers in Group III. The common characteristic of the latter is that they were men of considerable intellectual ability, sometimes highly influential over a narrow field of thought and policy, but men who did not attempt to exercise a broad general influence over large areas of economics and did not, with one or two exceptions, attempt comprehensive treatises, unlike virtually every writer in Group II except Tooke.

The common characteristic of the writers in Group III is that their contributions were highly specialized. They were confined to a considerable extent (though not entirely) to monetary economics (including foreign exchanges) and to value theory. Very many writers contributed to the public debates on these subjects, as well as to such popular matters of controversy as the Corn Laws, protection in general, colonies, and the Poor Laws. Any selection of the specialist writers becomes, then, highly arbitrary, and no doubt the selection included here will displease some readers. But it must be recognized that, on the one hand, no picture of Classical economics can be complete which omits entirely the specialist writers; and, on the other, no complete coverage of such writers is possible in anything less than encyclopedic dimensions. In defense of the particular selection offered here it should be said, firstly, that most of them contributed several publications of interest on a particular subject — they were not "one-shot" economists; and, secondly, that what they did have to say was, almost without exception, of considerable analytical interest.

The monetary writers form the largest group. They include Henry Drummond (1786–1860), Thomas Joplin (c. 1790–1847), George Warde Norman (1793–1882), Samuel Jones Loyd, later Lord Overstone (1796–1883), Henry Thornton (1760–1815), William Blake (c. 1774–1852), Francis Horner (1778–1817), John Wheatley (1772–1830), William Newmarch (1820–82), and Richard Page (1773–1841). Drummond and Joplin, together with Page and McCulloch and James Pennington (1777–1862), can claim to be the originators of the principle of "metallic fluctuation," which was to prove so important in nineteenth-century monetary controversy. G. W. Norman and Overstone (Loyd), particularly the latter, provided the basic theoretical framework for the Bank Act of 1844 (though drawing on Ricardo's exposition), both before its introduction and during its operation, when attacks against it required frequently to be repulsed. Norman, in addition, wrote on taxation and on international trade theory.

(Continues...)

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Dettagli dell'edizione

• Editore: Princeton Univ Pr
• Data di pubblicazione: 2017
• Lingua: Inglese
• ISBN 10: 0691177988
• ISBN 13: 9780691177984
• Rilegatura: Copertina flessibile
• Numero di pagine: 423
• Contatto del produttore: non disponibile
• Persona responsabile: non disponibile