Political economy and the ‘modern view’ as reflected in the history of economic thought

Abstract

This paper focuses on the transition from classical political economy to ‘modern’ economics, a central aspect of which is the ascent of the conception of ‘theory’ as a mere instrument of research. We analyse how this transitional phase was perceived and interpreted in representative, more or less contemporaneous histories of economic thought: those by Luigi Cossa in 1880, by John Kells Ingram in 1915 (originally published in 1888), and by Charles Gide and Charles Rist in 1915. Despite their differences, all authors share the same conception of the structure of scientific laws, as well as the view that economics must be separated from liberalism.

Keywords:

• History of economic thought
• methodology
• classical economics

JEL Codes:

• B1
• B4

Acknowledgements

Previous versions of this paper were presented at a CES conference on ‘The Revival of Political Economy’, 21–23 October 2010, Faculty of Economics, University of Coimbra; at the 30th APHES conference, 19–20 November 2010, ISEG – UTL, Lisboa; and at the Joint AHE–IIPPE–FAPE conference, 5–7 July 2012, Paris 1 Panthéon-Sorbonne. We are grateful to the participants in these conferences, especially to Nuno Martins for his written comments, as well as to the anonymous referees. This research was financially supported by CEF.UP, which is funded by the Portuguese Fundação para a Ciência e a Tecnologia (FCT).

Notes

1 This exogenous dissent sometimes constitutes what William Coleman (2002: 7) calls ‘anti-economics’: an heterogeneous and evolving set of radical objections, based on the belief that ‘there is no value to be salvaged from economics in its present state’.

2 ‘Happily, there is nothing in the laws of value which remains for the present or any future writer to clear up; the theory of the subject is complete: the only difficulty to be overcome is that of so stating it as to solve by anticipation the chief perplexities which occur in applying it.’ (Mill 1909: 313–4)

3 Senior (1854: 7) writes: ‘The practical applications of [Political Economy], like the practical applications of every other Science, without doubt, require the collection and examination of facts to an almost indefinite extent … but the facts on which the general principles of the Science rest may be stated in a very few sentences, and indeed in a very few words.’ Say (1855: 18) takes much the same stance.

4 See e.g. Sidgwick (1887: 6–7); or Bagehot (1885: 5), who notes that English political economy is so unpopular out of England because ‘[i]t is known everywhere as the theory of ‘Free-trade,’ and out of England free-trade is almost everywhere unpopular … The Protectionist creed rises like a weed in every soil’.

5 In so doing, we shall focus on the authors’ views of the history (and prospects) of economics rather than on their methodology for writing this history. It is true, as a referee has observed, that each author's historiographic approach has some bearing on their results. In the present paper, however, we do not have the space to discuss this dimension of the histories in questions.

6 Mosca (2005) and Collison Black (1992) note the strategic exchange of translations between Jevons and Cossa, who translated Jevons’ Theory of Political Economy into Italian. The success of the Guida led Cossa to rewrite and expand it. In 1892 he published Introduzione allo studio dell’economia politica which, being more than twice the length of the Guida, cannot really be regarded as the same book, and which was (see Howey 1982) translated into Spanish, English and French. We have privileged the Guida's translation, both because the argument in the Introduzione, though vastly expanded, is similar and because its English translation seems unreliable (see footnote 12 in this paper).

7 Bonar (1911: 309) pleads for a translation of Gide and Rist's Histoire by arguing that: ‘Ingram's was partisan and is already obsolete; Mr. L. L. Price, Professor Ashley and Dr Cannan do not profess to cover the whole ground. Besides, much of the scientific achievement has been English and American, and a foreign historian may well be thought to see the whole more easily in perspective than one of our own people.’ See also the prefatory note, by R. Richards, to Gide and Rist (1915: v).

8 Apparently, no translation of a German history was commissioned in Britain. In the USA, however, Gustav Cohn's 1885 essay – part of his System der Nationalökonomie – was translated in 1894. In the foreword to this translation, Edmund J. James writes that ‘the field [is] still fairly open to the scholar who will undertake to give us a comprehensive treatise on the subject, and English literature is still far behind the German, for example, in this respect’ (Cohn 1894: 5).

9 Of course, the selected histories are important beyond the British context. According to Howey (1982), Cossa's Guida was also translated into Spanish and German; Gide and Rist's Histoire was translated into 11 languages (and there are three translations into German); and Ingram's history into 12 languages (there are two translations into German and into Russian).

10 On solidarism, a political doctrine which rejects both liberalism and state socialism, and is closely connected to the French Radical (or Radical Socialist) Party, see e.g. Gide and Rist (1915: 592).

11 The 1892 Introduzione also covers Austria, Scandinavia, the Slavic countries, the Magyar countries and the United States. In this book, Marx is discussed.

12 The distinction of two parts in political economy – pure (or reasoned, or theoretical) economics and applied (or practical) economics, the former a science in the strictest sense and the latter an art – remains in Cossa's Introduzione (1892). However, he also uses the term ‘social economics’ to designate the reasoned part [‘L’Economia Sociale (o come altri dicono civile, nazionale, o l’economia senz’altro), cioè l’economia pura nel senso da noi adottato’ (Cossa 1892: 20)]. The English translation unfortunately misrepresents Cossa's terminology, as a comparison with the Italian original, or the French edition (Cossa 1899), shows. Consider the following two passages, which are obviously contradictory but only because of mistranslations in the second: ‘Social economics is … a science most strictly so called, because it exists to explain certain phenomena without in the least undertaking, as a science, to find the best means for producing useful modifications of them’ (Cossa 1893: 48); and ‘By this time it must be plain that social economics no less than political economy absolutely cries out for a sharp line of distinction, which absolutely must be drawn to separate them [in the original this reads: “Dal sin qui detto deriva essere sommamente desiderabile, tanto nell’interesse dell’economia sociale quanto in quello della politica economica, che se ne faccia una trattazione allato distinta …” (Cossa 1892: 66), – i.e. “economic policy” is mistranslated as “political economy”]. They are formally opposed to each other, and have their respective and well-marked criteria. Political economy [should be “social economics” (see Cossa 1892: 66)], being a science, must defend its universal character and maintain strictly its independence of any and every practical purpose, while its truths must once and for ever renounce all claims to immediate and universal application. Social economics [should be “economic policy” (see Cossa 1892: 66)] being an art must preserve its connection with the various sciences that supply it with rules to work by; from these it must formulate precepts which shall be adapted to circumstances, and sufficiently elastic to suit varying cases.’ (Cossa 1893: 57)

13 Cossa (1893: 75) writes: ‘We rightly conclude that social economics is just as positive as many a physical science whose premises are models of laborious induction, and just as exact as pure Mathematics with all its axioms and hypothetical definitions.’

14 This is one of the points on which Cossa changed his mind: in Cossa (1893: 90–1) he writes that the mathematical method can lead, and has led, to discovery.

15 Marx is not discussed, and neither is socialism in general. The 1915 edition of Ingram's book, as remarked, contains a new chapter, by William A. Scott, covering the early Austrians as well as other developments in Germany, Britain, the United States, France, and Italy.

16 Discussing Cournot, Ingram (ibid.: 177) adds: ‘[T]he great objection to the use of mathematics in economic reasoning is that it is necessarily sterile. If we examine the attempts which have been made to employ it, we shall find that the fundamental conceptions on which the deductions are made to rest are vague, indeed metaphysical, in their character. Units of animal or moral satisfaction, of utility, and the like, are as foreign to positive science as a unit of dormitive faculty would be; and a unit of value, unless we understand by value the quantity of one commodity exchangeable under given conditions for another, is an equally indefinite idea.’

17 ‘But just when Liberalism seemed most triumphant and the principles of the science appeared definitely settled there sprang up a feeling of general dissatisfaction … [The Historical school] demanded new contact with life – with the life of the past no less than that of the present. It was weary of the empty framework of general terms. It was athirst for facts and the exercise of the powers of observation … But there was one thing which was thought more objectionable than even the Classical doctrine itself, and that was the Liberal policy with which the science had foolishly become implicated … . In addition to such critics as the above there are also the writers who drew their inspiration from Christianity … . Intervention again, so tentatively proposed by Sismondi, makes a bold demand for wider scope in view of the pressure of social problems, and under the name of State Socialism becomes a definitely formulated doctrine.’ (ibid.: 377)

18 For a comprehensive discussion of why the deductivist conception is unconvincing, see Lawson (1997). If the laws of natural science were (descriptions of) regularities of the ‘whenever event x, then event y’ type, given that such regularities are typically restricted to experimental conditions, one would have to conclude that the ‘laws of nature’ depend on human intervention.

19 Ingram is perhaps too hasty in approximating the views of Comte to those of the German historical school. However, his conception of economic laws coincides, for instance, with Gustav von Schmoller's, whose empiricist conception of laws as regularities is formally equivalent to the ‘Ricardian’ conception that he rejects (see e.g. Dopfer 1993).