ECONOMIC PHILOSOPHY (by JOAN ROBINSON)

ECONOMIC PHILOSOPHY

by JOAN ROBINSON

PENGUIN BOOKS 1964

1

METAPHYSICS, MORALS, AND SCIENCE

One reason why modern life is so uncomfortable is that we have grown self-conscious about things that used to be taken for granted. Formerly people believed what they believed because they thought it was true, or because it was what all right-thinking people thought. But since Freud exposed to us our propensity to rationalization and Marx showed how our ideas spring from ideologies we have begun to ask: Why do I believe what I believe? The fact that we ask such questions implies that we think that there is an answer to be found but, even if we could answer them at one layer, another remains behind: Why do I believe what I believe about what it is that makes me believe it? So we remain in an impenetrable fog. Truth is no longer true. Evil is no longer wicked. ‘It all depends on what you mean.’ But this makes life impossible – we must find a way through.

‘Backward or forward, it’s just as far. Out or in, the way’s as narrow.’ ‘Who are you?’ ‘Myself. Can you say as much?’ ‘What are you?’ ‘The Great Boyg…Go round about, go round about.’ (Ibsen, Peer Gynt, Act II, Scene 7.)

We must go round about to find the roots of our own beliefs. In the general mass of notions and sentiments that make up an ideology, those concerned with economic life play a large part, and economics itself (that is the subject as it is taught in universities and evening classes and pronounced upon in leading articles) has always been partly a vehicle for the ruling ideology of each period as well as partly a method of scientific investigation.

I

How can we distinguish ideology from science?

First of all we must define what we mean by definitions. It is important to avoid confusing logical definitions with natural history categories. A point is defined as that which has position but no magnitude. Clearly no one has ever observed a point. It is a logical abstraction. But how to define an elephant ? The man had the right idea who said: I cannot define an elephant but I know one when I see it.

An ideology is much more like an elephant than like a point. It is something which exists, that we can describe and discuss and dispute about. To settle disputes it is no good appealing to a logical definition; what we need are not definitions but criteria. An elephant is a pretty clear case, but take another example – those swans which logicians are so fond of. If the word ‘swan’ is to describe a bird that has the characteristic, among others, of appearing white, then those black birds in Australia must be called by another name, but if the criteria for being a swan are anatomical and do not mention colour, then the black and the white swans are in the same category. All the argument is about how to set up the categories, not about the creatures. They are what they are however we choose to label them.

What then are the criteria of an ideological proposition, as opposed to a scientific one? First, that if an ideological proposition is treated in a logical manner, it either dissolves into a completely meaningless noise or turns out to be a circular argument. Take the proposition: All men are equal. In a logical view what does it mean? The word ‘ equal’ applies to quantities. What – are all men the same weight? Or do they all get the same marks in intelligence tests? Or – to stretch the meaning of quantity a little – do I find them all equally agreeable? ‘Equal’ without saying in what respect of equality is just a noise. In this case, the equality is just in respect of equality. Every man is equally equal.

The hallmark of a metaphysical proposition is that it is not capable of being tested. We cannot say in what respect the world would be different if it were not true. The world would be just the same except that we would be making different noises about it. It can never be proved wrong, for it will roll out of every argument on its own circularity; it claims to be true by definition of its own terms. It purports to say something about real life, but we can learn nothing from it.

Adopting Professor Popper’s (See The Logic of Scientific Discovery.) criterion for propositions that belong to the empirical sciences, that they are capable of being falsified by evidence, it is not a scientific proposition.

Yet metaphysical statements are not without content. They express a point of view and formulate feelings which are a guide to conduct. The slogan ‘All men are equal’ expresses a protest against privilege by birth. In an egalitarian society no one would ever have thought of saying any such thing. It expresses a moral standard for private life – that it is wrong to be snobbish about class or colour; and a programme for political life – to create a society where all have the same rights; to refuse to accept a state in which some are more equal than others.

Metaphysical proposition also provide a quarry from which hypotheses can be drawn. They do not belong to the realm of science and yet they are necessary to it. Without them we would not know what it is that we want to know. Perhaps the position is different in the respectable sciences, but , so far as the investigations of psychological and social problems is concerned, metaphysics has played an important, perhaps an indispensable role.

Take our example – the slogan ‘All men are equal’ provides a programme for research. Let us find out whether class or colour is correlated with the statistical distribution of innate ability. It is not an easy task, for ideology has soaked right into material we are to deal with. What is ability? How can we devise measurements that separate what is innate from what is due to environment? We shall have a hard struggle to eliminate ideology from the answer, but the point is that without ideology we would never have thought of the question.

II

Whether or not ideology can be eliminated from the world of thought in the social sciences, it is certainly indispensable in the world of action in social life. A society cannot exist unless its members have common feelings about what is the proper way of conducting its affairs, and these common feeling are expressed in ideology.

From the standpoint of evolution, it seems plausible to say that ideology is a substitute for instinct. The animals seem to know what to do; we have to be taught. Because the standard of proper behaviour is not passed on in genes, it is highly malleable and comes up in all sorts of different forms in different societies, but some standard of morality is necessary for every social animal.

The biological necessity for morality arises because, for the species to survive, any animal must have , on the one hand, some egoism – a strong urge to get food for himself and to defend his means of livelihood; also – extending egoism from the individual to the family – to fight for the interests of his mate and his young. On the other hand, social life is impossible unless the pursuit of self-interest is mitigated by respect and compassion for others. A society of unmitigated egoists would knock itself to pieces; a perfectly altruistic individual would soon starve. There is a conflict between contrary tendencies, each of which is necessary to existence, there must be some mechanism to make an individual keep the rules when they conflict with his immediate advantage.

Adam Smith derives morality from feelings of sympathy:

How selfish soever may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it or are made to conceive it in a very lively manner. That we often derive sorrow from the sorrow of others, is a matter of fact too obvious to req2uiere any instances to prove it; for his sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.

This is true as far as it goes but it does not cover the whole ground. When it comes to a conflict, I will save myself at your expense – sympathy will not be enough to stop me. Altruistic emotion is strong enough to evoke self-sacrifice from a mother defending her young; it is very unreliable in any other context.

Since the egoistic impulses are stronger than the altruistic, the claims of others have to be imposed upon us. The mechanism by which they are imposed is the moral sense or conscience of the individual. To take an example form the economic sphere, consider respect for the property of others. Stealing as such is not very deep in the category of wickedness. We do not feel the natural repugnance to it that we do to cruelty or meanness – except when it amounts to cruelty and meanness – the rich robbing the poor. When it is the other way round, we rather like it. When we read that a dacoit or a bandit who has been playing Robin Hood has at last been captured, our sympathy is not wholeheartedly with the police. Yet a lack of honesty is a very great nuisance in society. It is a source of expense and it is thoroughly tiresome – just as tiresome for thieves as for everyone else; without honour among thieves even thieving would be impracticable.

In the absence of respect for property it would have been quite impossible to achieve a reasonable standard of life. Even the simplest investment – ploughing for next season’s harvest – would not be worth while on a scale beyond what a man could guard at harvest time. To impose fear of punishment by force goes some way, but it is expensive, ineffective, and vulnerable to counterattack. Honesty is much cheaper. But observe, it is the honesty of other people that is necessary for my comfort. If all were honest except me, I should be in a very fortunate position. The necessity for each to be subject to the good of all gives rise to the need for morality. As Dr Johnson put it:

The happiness of society depends on virtue. In Sparta theft was allowed by general consent; theft, therefore, was there not a crime, but then there was no security; and what a life must they have had when there was no security. Without truth there must be a dissolution of society. As it is, there is so little truth that we are almost afraid to trust our ears; but how should we be, if falsehood were multiplied ten times?

(Boswell, The Life of Dr. Johnson [Allen and Unwin edition] Vol. II, p. 298)

Just because thieving does not arouse any strong natural repugnance, respect for the property of others has to be taught. This is a technical necessity, to make social life possible. Take an example from the rooks. They nest together sociably. Every spring the nests have to be refurbished or new built. Instinct, or whatever it is that governs behaviour, leads the rooks to go out and break twigs for building materials. They evidently have some natural propensity to work efficiently – to get the easiest and best twigs – or the job would never be done. But obviously the easiest and best twigs are those already in a nest. What prevents them from robbing each other? If each relied on the others to fetch twigs, the society would break down. It is not that they have an inborn dislike of second-hand twigs, for they freely use deserted nests for building material. Some observers maintain that thieving does occur occasionally and that when a thief is observed the other rooks mob him and drive him away. (Mr. G. K. Yeats doubts this, but he attributes the mobbing to a still more striking phenomenon, the neighbours turning against an adulterer. The Life fo the Rook, pp. 31 and 38.) It is not to the purpose to ask whether the thief feels a sense of guilt and the others a sense of righteous indignation (though it may well be so, for the emotional life of birds seems to be very like our own). The point is not concerned with the subjective feelings of the rooks. The point is that the same technical situation – social life and individual property – leads to the same result: a moral code backed up by sanctions.

Whether rooks have a conscience or not, we know that humans have. Instead of instinct that creates a set pattern men and women have a conscience that can take various imprints and so permit very varied patterns of society to flourish. A propensity to develop a conscience is in the structure of a healthy human brain. It is very similar to the propensity to learn to talk. The power to attach meanings to sounds and to utter them in appropriate contexts is latent at birth; it develops very rapidly in the first few years of life and continues, with less facility, thereafter. It varies from one individual to another and is sometimes lacking altogether. It has a peculiar location in the brain and may be lost through injury. Sometimes after an injury it is possible to re-train the brain (which contains some spare parts) and recapture a power to recognize words that had been lost. The propensity to learn a language is evidently pretty much the same in all races. But what language is learned depends upon the particular society in which a child grows up.

All this is true of the moral sense, or propensity to develop a conscience. It comes on gradually (a year or two late than speech); some subnormal individuals lack it; some lose it through brain injuries, which, however, can sometimes be made good by retraining. The content of a conscience, like the particular language that is learned, depends upon the society in which the individual grows up.

Some people resent the idea that morality has a physical basis and arises out of biological necessity, as though this degraded the noblest aspect of human nature to the level of the beasts. This seems unreasonable. We all agree that mother-love is fine and admirable. (Even Freud, who was so much shocked by his discoveries about human nature, says that the love of a woman for her son is the purest of all emotions. [New Introductory Lectures, translated by W.S.H. Sprott, pp 171-2]) Yet no one can deny that mother-love has a biological function or that we share it with the beasts. (Here the exception proves the rule – among the sticklebacks, it seems, the father takes charge of the young and displays the most besotted devotion, while the mother, having performed her purely physical part in procreation, dances off, like the male in other species, to enjoy a carefree life. Nature, like human societies, finds a great variety of solutions for the same technical problem.)

The biological mechanism for growing a conscience seems to operate through our emotional equipment.

Nature, when she formed man for society, endowed him with an original desire to please, and an original aversion to offend his brethren. She taught him to feel pleasure in their favourable, and pain in their unfavourable regard. She rendered their approbation most flattering and most agreeable to him for its own sake; and their disapprobation most mortifying and most offensive. (Adam Smith, Moral Sentiments, Vol. I, p. 276.)

Conscience is moulded in a child by his learning what is approved and disapproved by the rest of the family, but it works inwards and becomes a desire to be approved of by what Adam Smith calls the ‘man within the breast’. (Adam Smith, Moral Sentiments, Vol. I, p. 304.) A secret shame is no doubt less painful than being found out, but it is still painful.

The sense of shame is natural and universal, but just what it is that causes shame depends upon convention. It is like the rule of the road. There has to be one, but in some countries it is ‘Keep to the left’ and in others ‘Keep to the right’.

In most societies, until recent times, morality has been purveyed through the medium of religion. It is by no means an easy matter to mould the individuals in a society to a harmonious pattern; religion is a useful way both of strengthening the desire of the individual to do whatever he thinks right, and of imposing a particular view of what is right. It works partly by cutting out morality and appealing to prudence or enlightened self-interest – the wicked will be punished; partly by teaching the individual to project the fear of disapproval on to an unseen being so that private shame is exposed to an ever-watchful eye; and partly by giving strength and purpose to the feeling of benevolence that ‘even the greatest ruffian…is not altogether without’.

Many people to whom morality was taught through the medium of religion really believe that there is no other motive for wanting to do what is right than to avoid the wrath of God: Si dieu n’existe pas, tout est permis. If there is no God, nothing is forbidden. This is one of the silliest things that has ever been said. If I do not believe in God it does not mean that can safely drive on the right of the road in London or the left in Paris. It does not mean that thieves are any less nuisance to honest men or that a society infected with thieves is not involved in great expense to keep the pest under control. If a man’s conscience disintegrates when he loses his faith in God, it cannot have set properly when he was young. It is still in the infantile stage of a desire to be approved of by others and has not yet grown up into a sense of right and wrong.

A favourite argument nowadays, of the supporters of organized religion, is that it is necessary to good conduct and social harmony. The decay of religion is blamed for the crime waves, the broken homes, the strife and ill-will that torment the modern world. A return to the churches would bring a return to good order. Those who argue in this way are unwittingly supporting the above argument. Morality is desired and respected for its own sake; religion is being recommended to us because it supports morality, not morality because it derives from religion.

Those who have no religious beliefs, on the other hand, are often inclined to try to derive moral feeling from reason. The commonest argument is that each individual ought to do right because, if he does not, others will not either. This is based on a confusion. It is the confusion of the war-time posters: ‘It all depends on you.’ Of course the authorities wanted us each to act as if we believed it. But it just was not true. Any one individual, as an individual, does not carry any appreciable weight. Of course, if his example is influential, he carries the weight that his influence brings, but the poster was not pointing at influential people. It was meant to apply one by one to the men in the street.

Take the example of voting. On a small committee it may often happen that one vote is decisive; then it is only reasonable for me to be sure to turn up to a meeting at which a decision will be taken that I happen to care about. But suppose that I live in a safe constituency, why should I vote at a general election? One vote more or less will not affect anything at all. ‘Ah, if everyone thought that, democracy would collapse.’ Yes, but I am not everyone – I am only me. The others will carry on without me. ‘What a shocking way to talk!’ Yes, that is just the point. It is certainly right that everyone should feel that it is his duty to vote, but he cannot be persuaded by reason. He must think it is right because it is right.

Or take the rooks again. If one sneaked a twig from another’s nest, just once, the system would not collapse. If he were seen and not attacked, standards would decline; but if he was unobserved? What harm would it do? There cannot be any reason no to do it except that it is not done.

More sophisticated systems seek to derive morality from the tendency of the direction of evolution. But this is not convincing. If I say: ‘Let evolution look after itself; I will do as I please,’ how can you answer me except by an appeal to my sense of duty? Evolution, certainly, accounts for my having one, but if evolution had endowed me, not only with a sense of duty, but with a knowledge of what my duty is, there would be no need to have a theory about it.

The upshot of the argument is that moral feelings are not derived from theology or from reason. They are a separate part of our equipment, like our ability to learn to talk.

If this is granted, it leaves open the question of what is the content of our ethical feelings. All the philosophical systems of ethics are attempts to give a rational account of ethical feeling; not of the fact that we have such feelings, but of what code of behaviour is based upon them.

Keynes took up the study of the theory of probability under the influence of Moore’s ethical system, which taught ‘the obligation so to act as to produce by causal connexion the most probable maximum of eventual good through the whole procession of future ages’ (Keynes, Two Memoirs, p. 97.) It was a matter of the highest concern to be able to calculate probabilities. But even if Keynes had got the theory of probability right, it would not have provided a very handy manual for conduction daily life.

Other rational systems of ethics may be less fanciful, but they are no better. Professor Braithwaite points out the difference between a system of scientific laws and a system of ethical principles:

Alas, there is a logical difference between the two hierarchies: in ascending the scientific hierarchy the propositions become stronger and stronger so that we are saying more and more; in ascending the hierarchy of ends the propositions become weaker and weaker so that we are saying less and less…This arises from the fact that, whereas a lower-level scientific law is a logical consequence of its higher-level explanation, conversely pursuit of a wider end B is a logical consequence of pursuit of a narrower end A (together with the fact that A is as subsumed under B, i.e. that all pursuits of A are also pursuits of B). So as we ascend the hierarchy the ends increase in content and lose all definite outline.… This accounts for the peculiar elusiveness that many of us find in concepts which the great moral philosophers have proposed as ultimate ends – Aristotle’s eudaimonia or Mill’s ‘happiness’, for example. It is easy to give positive or negative instances of these; but the concepts themselves seem inscrutable – almost as inscrutable as the indefinable ‘goodness’ of Principia Ethica. The reason would seem to be that, in order to justify lesser goods, they have to be so comprehensive as to lose all cognitive content. (R.B.Braithwaite, ‘Moral Principles and Inductive Policies’, Proceedings of the British Academy, 1950, last page.)

Reason will not help. The ethical system implanted in each of us by our upbringing (even a rebel is influenced by what he rebels against) was not derived from any reasonable principles; those who conveyed it to us were rarely able to give any rational account of it, or indeed to formulate it explicitly at all. They handed on to us what society had taught to them, in the same way as they handed on to us the language that they had learned to speak.

The contents of ethical codes, comparing one society with another, are not perhaps quite as various as their languages, but they certainly vary a great deal.

The contents of ethical codes, comparing one society with another, are not perhaps quite as various as their languages, but they certainly vary a great deal.

The morality of Hamlet is usually taken to be a confusion between Christian and pagan notions; it can also be seen as Shakespeare’s imaginative insight grasping the point of view of a recently converted people who take all the business of Heaven and Hell quite literally, but retain their own ethics of the honourable duty of revenge. A proper revenge requires that an adversary should be slain in such a way as to ensure his going to Hell. The theology, perhaps, is rather naïve, but the ethical system is quite straightforward, as yet untainted by Christian feeling.

Or, to take an example more closely connected to economic behaviour, consider the Thugs. They were a sect, recruited both from Moslems and Hidus, whose religious devotions, dedicated to the Goddess Kali, consisted in strangling wayfarers in a particular ritual manner, and dividing their goods among the party according to a particular formula. Their code forbade them to murder women, and when once a party, for fear of leaving a witness, defied the rule, Kali deserted them and the British-Indian police found them out.

Any economic system requires a set of rules, an ideology to justify them, and a conscience in the individual which makes him strive to carry them out.

These examples recall what a variety of moulds the human conscience is capable of taking. They also demonstrate another point – that we make moral judgments of moral systems. Hamlet is perhaps an arguable case, but we agree about the Thugs. We may admire the discipline, the resolution, and the piety of an individual Thug, but we do not approve of Thuggee as an economic system. Perhaps, dear reader, you will say that you do not disapprove, that your attitude to society is morally neutral and that any system of ethics is just another system of ethics. But would it really be true; Are you sure that you really approve the ethical system of the Thugs?

A simple-minded person believes that he knows the difference between right and wrong – that the particular mould his own conscience has taken is the only possible one (all the more so if his ideology came to him in the form of religious belief). Sophisticated people recognize the great variety of ethical systems and take a relativistic view of moral questions. But all the same, under the relativism we believe in certain absolutes. There are certain basic ethical feeling that we all share. We prefer kindness to cruelty and harmony to strife; we admire courage and respect justice. Those born without these feelings we treat as psychopaths; a society trains its members to crush them we regard as a morbid growth. It is no good trying to pretend that we can think or speak about human questions without ethical values coming in.

Perhaps Gunnar Myrdal is too sweeping when he says (speaking as an economist) that ‘our very concepts are value-loaded’ and ‘cannot be defined except in terms of political valuation’ (An international Economy, p. 337.) It is true that economic terminology is coloured. Bigger is close to better; equal to equitable; goods sound good; disequilibrium sounds uncomfortable; exploitation, wicked; and sub-normal profits, rather sad. All the same, taking a particular economic system as given, we can describe the technical features of its operation in an objective way. But it is not possible to describe a system without moral judgements creeping in. For to look at a system from the outside implies that it is not the only possible system; in describing it we compare it (openly or tacitly) with other actual or imagined systems. Differences imply choices, and choices imply judgement. We cannot escape from making judgements and the judgements that we make arise from the ethical preconceptions that have soaked into our view of life and are somehow printed in our brains. We cannot escape from our own habits of thought. The Boyg bars the way. But we can go round about. We can see what we value, and try to see why.

It does not seem that religion has ever had much to do with our own economic ideology. The story of an eighteenth-century parson reading the Gospel – ‘How hardly shall they that have riches enter the kingdom of God’ – who was heard muttering under his breath ‘Of course that’s all nonsense,’ may not be true, but it is certainly life-like.

The conflict between piety and economics was satirized in the Fable of the Bees, which Dr. Johnson said that every young man had on his shelves in the mistaken belief that it was a wicked book. (Adam Smith classed it with the Licentious Systems.) The bees one day were smitten with virtue, and began to lead a sober life, eschewing pomp and pride, and adopting frugal, modest ways. The result was a dreadful slump.

In their flourishing state,

The Root of Evil, Avarice,

That damn’d ill-natur’d baneful Vice,

Was Slave to Prodigality,

That noble Sin; whilst Luxury

Employ’d a Million of the Poor,

And odious Pride a a Million more:

Envy itself, and Vanity,

Were Minister of Industry;

Their darling Folly, Fickleness,

In Diet, Furniture, and Dress

That strange ridic’lous Vice, was made

The very Wheel that turned the Trade.

(Mandeville, The Fable of the Bees [Kay’s edition], Vol. I, p.25.)

After they turn’d virtuous,

As pride and Luxury decrease,

So by degrees they leave the Seas.

Not Merchants now, but Companies

Remove whole Manufactories.

All Arts and Crafts neglected lie;

Content, the Bane of Industry,

Makes’em admire their homely Store,

And neither seek nor covet more.

(ibid., p.34)

Keynes’s interpretation of Mandeville in terms of the theory of effective demand was somewhat forced. (General Theory, Chap. 23, VII.) That the luxury of the rich gives employment to the poor was something pretty obvious. In an under-developed country, as Mandeville’s England was, thee is a plentiful reserve of labour in agriculture to supply lackeys and handicraftsmen who can draw sustenance from luxury expenditure. It was a favourite theme of Dr Johnson (who entirely agreed with Mandeville’s economics though he did not accept his ‘monastick morality’).

You cannot spend money in luxury without doing good to the poor. Nay, you do more good to them by spending it in luxury than by giving it; for by spending it in luxury you make them exert industry, whereas by giving it immediately in charity than in spending it in luxury; though there may be pride in that too. (Boswell, The Life of Dr. Johnson [Allen & Unwin edition], Vol. II, p298)

and

Many things which are false are transmitted from book to book, and may again credit in the world. One of these is the cry against the evil of luxury. Now the truth is, that luxury produces much good. Take the luxury of building in London. Does it not produce real advantage in the conveniency and elegance of accommodation, and this all from the exertion of industry? People will tell you, with a melancholy face, how many builders are in gaol. It is plain they are in gaol, not for building; for rents are not fallen. A man gives half a guinea for a dish of green peas. How much gardening does this occasion? How many labourers must the competition to have such things early in the market keep in employment? You will hear it said, very gravely ‘Why was not the half-guinea, thus spent in luxury, given to the poor? To how many might it have afforded a good meal?’ Alas! Has it not gone to the industrious poor, whom it is better to support than the idle poor? You are much surer that you are doing good when you pay money to those who work, as the recompense of their labour, than when you give money merely in charity. Suppose the ancient luxury of a dish of peacock’s brains were to be revived; how many carcases would be left to the poor at a cheap rate? And as to the rout that is made about the people who are ruined by extravagance, it is no matter to the nation that some individuals suffer. When so much general productive exertion is the consequence of luxury, the nation does not care though there are debtors in gaol; nay, they would not care though their creditors were there too. (Boswell, The Life of Dr. Johnson [Allen & Unwin edition], Vol. II, pp. 133-4)

Mandeville’s point was not to establish this view of economics but rather, taking it for granted, to use it to show up the double standard of a people, purporting to be Christian, who value wealth and national glory above all.

In the prose composition that he appended to the Fable he explains:

When I say that societies cannot be raised to wealth and power, and the top of earthly glory without vices, I do not think that by so saying, I bid men be vicious, any more than I bid them be quarrelsome or covetous, when I affirm that the profession of the law could not be maintained in such numbers and splendour, if there was not abundance of too selfish and litigious people. (Boswell, The Life of Dr. Johnson [Allen & Unwin edition], Vol. II, p231 [spelling mordinized].)

And he sets up an Epicure to raise objections.

He will quote my Lord Shaftesbury against me, and tell me that people may be virtuous and sociable without self-denial; that it is an affront to virtue to make inaccessible, that I make a bugbear of it to frighten men from it as a thing impracticable; but that for this part he can praise God, and at the same time enjoy his creatures with a good conscience.

He will ask me at last, whether the legislature, the wisdom of the nation itself, while they endeavour as much as possible to discourage profaneness and immorality, and promote the glory of God, do not openly profess, at the same time, to have nothing more at heart, than the ease and welfare of the subject, the wealth, strength, honour, and what else is called the true interest of the country; and, moreover, whether the most devout and most learned of our prelates in their greatest concern for our conversion, when they beseech the Deity to turn their own as well as our hearts, from the world and all carnal desires, do not in the same prayer s loudly solicit him to pour all earthly blessings and temporal felicity, on the kingdom they belong to…

As to the last question, I own they are very puzzling: To what the Epicure asks, I am obliged to answer in the affirmative; and unless I would (which God forbid!) arraign the sincerity of kings, bishops, and the whole legislative power, the objection stands good against me: all I can say for myself is, that in the connexion of the facts, there is a mystery past human understanding. (Boswell, The Life of Dr. Johnson [Allen & Unwin edition], Vol. II, op. cit., pp.234-5.)

Adam Smith did not like it. His reply is rather flat and feeble after Mandeville’s sharp satire.(Moral Sentiment, Vol. II, pp. 302-3.)

It is the great fallacy of Dr Mandeville’s book to represent every passion as wholly vicious, which is so in any degree and in any direction. It is thus that he treats everything as vanity which has any reference, either to what are, or to what ought to be, the sentiments of others; and it is by means of this sophistry, that he establishes his favourite conclusion, that private vices are public benefits. If the love of magnificence, a taste for the elegant arts and improvements of human life, for whatever is agreeable in dress, furniture, or equipage, for architecture, statuary, painting and music, is to be regarded as luxury, sensuality, and ostentation, even in those whose situation allows, without any inconveniency, the indulgence of those passions, it is certain that luxury, sensuality, and ostentation are public benefits: since without the qualities upon which he thinks proper to bestow such opprobrious names, the arts of refinement could never find encouragement, and must languish for want of employment. Some popular ascetic doctrines, which had been current before his time, and which placed virtue in the entire extirpation and annihilation of all our passions, were the real foundation of this licentious system. It was easy for Dr Mandeville to prove, first, that this entire conquest never took place among men; and secondly, that, if it was to take place universally, it would be pernicious to society, by putting an end to all industry and commerce, and in a manner to the whole business of human life. By the first of these propositions he seemed to prove that there was no ral virtue and that what pretended to be such, was a mere cheat and imposition upon mankind; and by the second, that private vices were public benefits, since without them no society could prosper or flourish.

He admits all the same that there is something in it:

But how destructive soever this system may appear, it could never have imposed upon so great a number of persons, nor have occasioned so general an alarm among those who are the friends of better principles, had it not in some respects bordered upon the truth. (loc. cit.)

Indeed Mandeville has never been answered. After more than two hundred years, Keynes is brooding over our squinting morality:

In Europe, or at least in some parts of Europe – but not, I think, in the United States of America – there is a latent reaction, somewhat widespread, against basing society to the extent that we do upon fostering, encouraging, and protecting the money-motives of individuals. A preference fro arranging our affairs in such a way as to appeal to the money-motive as little as possible, rather than as much as possible, need not be entirely a priori, but may be based on the comparison of experiences. Different persons, according to their choice of profession, find the money-motive playing a large or a small part in their daily lives, and historians can tell us about other phases of social organization in which this motive has played a much smaller part than it does now. Most religions and most philosophies deprecate, to say the least of it, a way of life mainly influenced by considerations of personal money profit. On the other hand, most men today reject ascetic notions and do not doubt the real advantages of wealth. Moreover it seems obvious to them that one cannot do without money-motive, and that, apart from certain admitted abuses, it does its job well. In the result the average man averts his attention from the problem, and has no clear idea what he really thinks and feels about the whole confounded matter. (Essays in Persuasion, p. 320.)

Schumpeter makes somewhat the same point in a different context when he argues that businessmen cannot command the loyalty of a people:

With the utmost ease and grace the lords and knights metamorphosed themselves into courtiers, administrators, diplomats, politicians and into military officers of a type that had nothing whatever to do with that of the medieval knight. And – most astonishing phenomenon when we come to think of it – a remnant of that old prestige survives even to this day, and not only with our ladies.

Of the industrialist and merchant the opposite is true. There is surely no trace of any mystic glamour about him which is what counts in the ruling of men. The stock exchange is a poor substitute for the Holy Grail. We have seen that the industrialist and the merchant, as far as they are entrepreneurs, also fill a function of leadership. But economic leadership of this type does not readily expand, like the medieval lord’s military leadership, into the leadership of nations. On the contrary, the ledger and the cost calculation absorb and confine.

I have called the bourgeois rationalist and unheroic. He can only use rationalist and unheroic means to defend his position or to bend a nation to his will. He can impress by what people may expect from his economic performance, he can argue his case, he can promise to pay out money or threaten to withhold it, he can hire the treacherous services of a condottiere or politician or journalist. But that is all and all ofit is greatly overrated as to its political value. Nor are his experiences and habits of life of the kind that develop personal fascination. Agenius in the business office may be, and often is, utterly unable outside ofit to say boo to a goose – both in the drawing-room and on the platform. (Capitalism, socialism and Democracy, pp. 137-8.)

It is precisely the pursuit of profit which destroys the prestige of the business man. While wealth can buy all forms of respect, it never finds freely given.

It was the task of the economist to overcome these sentiments and justify the ways of Mammon to man. No one likes to have a bad conscience. Pure cynicism is rather rare. Even the Thugs robbed and murdered for the honour of their goddess. It is the business of the economists, not to tell us what to do, but show why what we are doing anyway is accord with proper principles.

In what follows this theme is illustrated by reference to one or two of the leading ideas of the economists from Adam Smith onwards, not in a learned manner, tracing the development of thought, nor historically, to show how ideas arose out of the problems of each age, but rather in an attempt to puzzle out the mysterious way that metaphysical propositions, without any logical content, can yet be a powerful influence on thought and action.

III

Economics is not only a branch of theology. All along it has been striving escape from sentiment and to win for itself the status of a science. We saw above how metaphysical propositions not only express moral feelings, but also provide hypotheses. Before going on with the argument we must pause to consider how this comes about.

Scientific method is another kind of elephant – something which exists and can be described, not defined. A common view about the origin of scientific generalization is that they are based on induction from observed from observed instances. We used to be told that people in the Northern hemisphere arrive at the generalization: All swans are white, until Australia was discovered and black swans upset the generalization. This does not seem to accord with experience. The first time you see a swan, in England, you observe that it is white, has a long neck and so forth, and you learn that it is called a swan. There is no induction about it. You generalize that swans are like that from the very first instance. Now it happens that we classify species by anatomy, not colour. To say that all swans have long necks is a circular statement, for if this creature did not have a long neck it would not be classified as a swan. If they happened to have been named Whitebirds it would have sound silly to say black Whitebirds and those in Australia would have been called by a different name.

Another favourite conundrum that is supposed to illustrate induction, is: Why do you believe that the sun will rise tomorrow? For purpose of daily life we take it for granted; we do not believe anything about it, one way or the other. When we seriously ask: Do we believe it? and if so, why? the answer is certainly not because of induction from its past behaviour. We have a theory of the motion of the planets, which causes the apparent movement of the sun, and there is no reason to expect the process to be interrupted before tomorrow (though of course it might be – you never know). Before that there was a theory that God had created the sun to light the world and instructed it to move round, so that we could get some sleep at night. And before that there was a theory that Apollo drove his chariot daily over the sky. Before science began, there were already plenty of theories. The process of science, as Professor Popper maintains, consists in trying to disprove theories. The corpus of sciences at any moment consists of the theories that have not been disproved.

The great difficulty in social sciences (if we may presume to call them so) of applying scientific method, is that we have not yet established an agreed standard for the disproof of an hypothesis. Without the possibility of controlled experiment, we have to rely on interpretation of evidence, and interpretation involves judgement; we can never get a knock-down answer. But because the subject is necessary soaked in moral feelings, judgement is coloured by prejudice.

He who’s convinced against his will

Is of the same opinion still.

The way out of this impasse is not to shed prejudice and approach the problem to be discussed with a purely objective mind. Anyone who says to you: ‘Believe me, I have no prejudices,’ is either succeeding in deceiving himself or trying to deceive you. Professor criticizes the method of argument which pretends to be based upon the impartiality of the social scientists. The objectivity of science arises, not because the individual is impartial, but because many individuals are continually testing each other’s theories. ‘In order to avoid speaking at cross-purposes, scientists try to express their theories in such a form that they can be tested, i.e. refuted (or otherwise confirmed) by experience.’ (The Open Society and its Enemies, Vol. II, p. 205)

I think Professor Popper is wrong in saying the natural sciences are no better than the social sciences. They have in common the human weakness to develop patriotism for one’s own work: ‘My theory, right or wrong!’ But on top of that, in the social sciences, first, the subject-matter has much greater political and ideological content, so that other loyalties are also involved; and secondly, because the appeal to ‘public experience’ can never be decisive, as it is for the laboratory scientists who can repeat each other’s experiments under controlled conditions; the social scientists are always left with a loophole to escape through – ‘the consequences that have followed from the causes that I analysed are, I agree, the opposite of what I predicated, but they would have been still greater if those causes had not operated’.

This need to rely on judgement has another consequence. It has sometimes been remarked that economists are more queasy and ill-natured than other scientists. The reason is that, when a writer’s personal judgement is involved in an argument, disagreement is insulting.

Adam Smith remarks upon the different temperaments of poets and mathematicians:

The beauty of poetry is a matter of such nicety, that a young beginner can scarce ever be certain that he has attain it. Nothing delight him so much, therefore, as the favourable judgements of his friends and of the public; and nothing mortifies him so severely as the contrary. The one establishes, the other shakes, the good opinion which he is anxious to entertain concerning his own performances.

Mathematicians, on the contrary, who may have the most perfect assurance, both of the truth and of the importance of their discoveries, are frequently very indifferent about the reception which they may meet with from the public.

…[They] from their independency upon the public opinion, have little temptation to form themselves into factions and cabals, either for the support of their own reputation, or for the depression of that of their rivals. They are almost always men of the most amiable simplicity of manners, who live in good harmony with one another, are the friends of one another’s reputation, enter into no intrigue in order to secure the public applause, but are pleased when their works are approved of, without being either much vexed or very angry when they are neglected.

It is not always the same case with poets, or with those who value themselves upon what is called fine writing. They are very apt to divide themselves into a sort of literary factions; each cabal being oftenavowedly and almost always secretly, the mortal enemy of the reputation of every other, and employing all the mean arts of intrigue and solicitation to preoccupy the public opinion in favour of the works of its own members, and against those of its emenies and rivals. (Moral Sentiments, Vol. I, 293-7)

Perhaps Adam Smith had rather too exalted a view of mathematicians, and perhaps economists are not quite as bad as poets; but his main point applies. The lack of an agreed and accepted method for eliminating errors introduces a personal element into economic controversies which is another hazard on top of all the rest. There is a notable exception to prove the rule. Keynes was singularly free and generous because he valued no one’s opinion above his own. If someone disagreed with him, it was they who will being silly; he had no cause to get peevish about it.

The personal problem is a by-product of the main difficulty, that, lacking the experimental method, economists are not strictly enough compelled to reduce metaphysical concepts to falsifiable terms and cannot compel each other to agree as to what has been falsified. So economics limps along with one foot in untested hypotheses and the other in untestable slogans. Here our task is to sort out as best we may this mixture of ideology and science. We shall find no neat answers to the questions that it raises. The leading characteristic of the ideology that dominates our society today is its extreme confusion. To understand it means only to reveal its contradictions.