inequality

The Life of John Stuart Mill: Transcript of the Documentary

JohnStuartMill

The video is here. There are, of course, minor discrepancies between the script and the video (e.g I chose to say one word instead of another based on how it sounded when read aloud).

John Stuart Mill was an English child prodigy who grew up to make seminal contributions to philosophy, economics, logic and political science. As an activist, public figure and member of parliament, he immersed himself in the practical aspects of domestic policy and diplomacy. He was a tireless and early champion of representative government, secularism, women’s rights, decentralization, economic freedom and personal liberty. Today many of his ideas are so widely accepted they seem commonplace, though they were radical at the time and, thanks to the breadth of his writings and the broadness of his thoughts, he has served as an inspiration to many disparate figures. John’s thought, which has entwined itself with the cultural fabric of the West, was shaped largely by his own quest for autonomy.

 

Born in London on May 20th, 1806. Son of James Mill, a Scottish intellectual and devout follower of Jeremy Bentham. The importance the elder Mill’s quest to turn his son into a genius at all costs cannot be underemphasized in an examination of John’s life. Nor can the influence of Jeremy Bentham.

 

Jeremy Bentham was a polymathic scholar and lifelong bachelor who dabbled in a sundry of unrelated ventures, among them a primitive telephone and a prison design he dubbed the Panopticon. Ironically the amount of debt he incurred pushing the Panopticon almost resulted in his own incarceration as a debtor. A child prodigy in his own right, he read a thick history of England as a toddler and began learning Latin at three. Though he studied to become a lawyer, he never practiced. Yet his legal training did not go to waste. He was an advocate for free speech, animal rights, the abolition of slavery, gender equality and, perhaps most offensive to his period’s sensibilities, the decriminalization of homosexuality. He and his followers were labeled radicals by mainstream English society because their ideas were not palatable to the Whigs or the Tories. Influenced by French philosophes like Voltaire, he exalted reason above custom and tradition. His empiricist psychology, dubbed associationism, attempted to explain consciousness by asserting that all mental phenomena is the result of the association of various perceptual elements. This view of the mind was elucidated upon further by James and later by John. Bentham views humans as little more than pleasure-maximizing robots and his ethical opinions reflect his outlook. According to his wishes, Bentham was mummified. His corpse now resides at University College in London.

 

Sadly, his soulless utilitarianism, which did not differentiate between types of pleasures, is often conflated with Mill’s more subtle views on ethics and morality.

 

As a boy James Mill was recognized for his precociousness. His gifts gained him the patronage of Sir John and Lady Jane Stuart. He was made the tutor of their daughter. James, like Sir Walter Scott and so many others, fell in love with her almost immediately. Yet it was not to be. She was the daughter of his aristocratic patrons. Here the seeds of his disdain for England’s social hierarchy were sown. Later James would name his daughter Wilhelmina after his forbidden love interest. He later became a Presbyterian minister, but his sermons were deemed too intellectual. He married Harriet Barrow in 1805. Together they had nine children. The family struggled financially before the publication of The History of India. As he so ardently hoped, his achievements would soon be eclipsed by his son’s. James is most famous now as the domineering father who molded his child into the perfect prodigy. Others have followed his example—with varying levels of success. It is possible James would not have tried to make John a morally and intellectually perfect man if he had not subscribed to such an epistemology which set nurture above nature. Although nominally an Epicurean and a radical, James never shook his Calvinist dedication to hard work or the traditional Christian conception of a woman’s place. As John would later recall, his father “professed the greatest contempt for passionate emotions.” Harriet was a housewife who rarely spoke and never dared challenge her husband. One of Mill’s sister called their marriage “an instance of two persons, a husband and wife, living as far apart, under the same roof, as the north pole from the south.” As a teacher James was stern and unrelenting, when his son found a text inscrutable James insisted he read it again. One contemporary said:

 

“The one really disagreeable trait in James Mill’s character, and the thing that has left the most painful memories, was the contemptuous way he allowed himself to speak and behave to his wife and children before visitors. When we read his letters to friends, we see him acting the family man with the utmost propriety, putting wife and children into their due place; but he seemed unable to observe this part in daily intercourse.”

 

Mill’s education is often depicted as incessant cramming, and while he was obliged to learn almost constantly through study or conversations with his father and the eminent visitors to the house, James knew rote memorization, though not without a place, was not conducive to cultivating deep and genuine understanding.

 

“A man who, in his own practice, so vigorously acted up to the principle of losing no time, was likely to adhere to the same rule in the instruction of his pupil. I have no remembrance of the time when I began to learn Greek; I have been told that it was when I was three years old. My earliest recollection on the subject, is that of committing to memory what my father termed vocables, being lists of common Greek words, with their signification in English, which he wrote out for me on cards. Of grammar, until some years later, I learnt no more than the inflections of the nouns and verbs, but, after a course of vocables, proceeded at once to translation…

Much of it consisted in the books I read by myself, and my father’s discourses to me, chiefly during our walks. From 1810 to the end of 1813 we were living in Newington Green, then an almost rustic neighbourhood. My father’s health required considerable and constant exercise, and he walked habitually before breakfast, generally in the green lanes towards Hornsey. In these walks I always accompanied him, and with my earliest recollections of green fields and wild flowers, is mingled that of the account I gave him daily of what I had read the day before. To the best of my remembrance, this was a voluntary rather than a prescribed exercise. I made notes on slips of paper while reading, and from these in the morning walks, I told the story to him; for the books were chiefly histories, of which I read in this manner a great number: Robertson’s histories, Hume, Gibbon; but my greatest delight, then and for long afterwards, was Watson’s Philip the Second and Third.

In these frequent talks about the books I read, he used, as opportunity offered, to give me explanations and ideas respecting civilization, government, morality, mental cultivation, which he required me afterwards to restate to him in my own words. He also made me read, and give him a verbal account of, many books which would not have interested me sufficiently to induce me to read them of myself.”

He was raised in a secular household, of his father John wrote, “finding, therefore, no halting place in Deism, he remained in a state of perplexity, until, doubtless after many struggles, he yielded to the conviction, that concerning the origin of things nothing whatever can be known. This is the only correct statement of his opinion; for dogmatic atheism he looked upon as absurd.”

 

From a tender age John helped his father edit ponderous tomes and official papers. In childhood he composed histories of England and of Roman government. By 14 he had read most of the classics of antiquity and by 16 was acquainted with economics, politics, history, higher mathematics, logic and all branches of philosophy. In this same year he began working for the East India Company. Though it was not an especially prestigious position, it gave him enough time to pursue his other interests while making a comfortable income. It was not an easy job; he produced two thick volumes on behalf of the company every year, and while the workload may have burdened a less industrious intellect, Mill continued to work and to write books until the company was disbanded following the Sepoy Revolt of 1857. These accomplishments did not puff him up. No one ever described him as arrogant. This is partially due to the strange and arguably abusive parenting methods of James Mill, who made sure his child never felt in any way special or unique. In his Autobiography he recalls this without bitterness.

 

“[my father] completely succeeded in preserving me from the sort of influences he so much dreaded. I was not at all aware that my attainments were anything unusual at my age. If I accidentally had my attention drawn to the fact that some other boy knew less than myself–which happened less often than might be imagined–I concluded, not that I knew much, but that he, for some reason or other, knew little, or that his knowledge was of a different kind from mine. My state of mind was not humility, but neither was it arrogance. I never thought of saying to myself, I am, or I can do, so and so. I neither estimated myself highly nor lowly: I did not estimate myself at all. If I thought anything about myself, it was that I was rather backward in my studies, since I always found myself so, in comparison with what my father expected from me. “

 

Although he always insisted he was below average in all natural endowments and his only advantage was his willingness to learn from anyone about anything, and had achieved what he had entirely thanks to his carefully managed childhood, it’s obvious his father chose him  among his 9 children because of the promise he displayed and, as we have seen, James himself did not lack innate talent. H.R Bourne and other friends of the adult John Stuart Mill were struck by his powers of memory which, though highly trained, were likely unusually powerful from the beginning.

 

“Nothing escaped his notice at the time of its occurrence: nothing was forgotten by him afterwards. His friends often found, to their astonishment, that he knew far more about any passages in their lives that he had been made aware of than they could themselves remember; and, whenever that disclosure was made to them, they must have been rejoiced to think, that this memory of his, instead of being, as it might well have been, a dangerous garner of severe judgments and fairly-grounded prejudices, was a magic mirror, in which their follies and foibles were hardly at all reflected, and only kindly reminiscences and generous sympathies found full expression.”

 

Oxford would have been a welcome reprieve, yet he had no reason to attend. It was still customary then to swear allegiance to the Anglican Church before admission, something John, who had been raised as a skeptic, objected to on principle. He was already employed, financially stable and had completed the equivalent of an undergraduate education by the age of nine. His teen years were spent paying lip service to the Benthamic radicals, but increasingly he was finding fault with their beliefs. More and more he longed to declare independence from them, to gain autonomy, a concept which would later play a central role in his life and thought. At age 20 he suffered a nervous breakdown. He later used an excerpt from Coleridge’s poetry to describe his torpor.

 

“A grief without a pang, void, dark and drear,
A drowsy, stifled, unimpassioned grief,
Which finds no natural outlet or relief
In word, or sigh, or tear.”

 

Then, more prosaically in his Autobiography, chronicled his depression and its unexpected resolution.

 

“It was in the autumn of 1826. I was in a dull state of nerves, such as everybody is occasionally liable to; unsusceptible to enjoyment or pleasurable excitement; one of those moods when what  is pleasure at other times, becomes insipid or indifferent; the state, I should think, in which converts to Methodism usually are, when smitten by their first ‘conviction of sin.’ In this frame of mind it occurred to me to put the question directly to myself: ‘Suppose that all your objects in life were realized; that all the changes in institutions and opinions which you are looking forward to, could be completely effected at this very instant: would this be a great joy and happiness to you?’ And an irrepressible self-consciousness distinctly answered, ‘No!’ At this my heart sank within me: the whole foundation on which my life was constructed fell down. All my happiness was to have been found in the continual pursuit of this end. The end had ceased to charm, and how could there ever again be any interest in the means? I seemed to have nothing left to live for.

I was reading, accidentally, Marmontel’s Mémoires, and came to the passage which relates his father’s death, the distressed position of the family, and the sudden inspiration by which he, then a mere boy, felt and made them feel that he would be everything to them–would supply the place of all that they had lost. A vivid conception of the scene and its feelings came over me, and I was moved to tears. From this moment my burden grew lighter.”

 

Dr. A.W Levi believes Mill’s crisis was brought on by a sublimated desire to rebel against his father’s authority.

 

“In reading Marmontel’s account John could in the process of identification and without guilt bring to full consciousness the idea that his father in the natural course of things would some day die, and that he himself would assume the dominating role…in experiencing his father’s death and the freedom which this would mean to his own ego, but under the literary and imaginative circumstances which would absolve him of the guilty wishes themselves,

Mill brought to the surface of his consciousness what had hitherto been laboriously repressed, and by his cathartic act spontaneously found the real solution for his mental crisis”

Dr. Peter Glassman claims Mill’s crisis forced him to “think and live in a healthier way. Specifically it forced him to acknowledge and repudiate the loneliness and the suffering that always before he had felt himself obliged to conceal and accept.” The following decade was quiet but fecund. His twenties were spent absorbing and assimilating, partially out of insecurity and uncertainty, and partially to avoid the censure of the older utilitarians if he published something which strayed from far from the orthodoxy. He continued to read widely and befriended many of the most eminent men of the age, including Thomas Carlyle, to whom he wrote:

 

“I am often in a state almost of scepticism, and have no theory of Human Life at all, or seem to have conflicting theories, or a theory which does not amount to a Belief. This is only a recent state, and as I well know, a passing one, and my convictions will be firmer and the result of a larger experience when I emerge from this state, than before.”

 

As it so often happened, he was right.

 

“I have what for a considerable time was quite suspended in me, the feeling of growth. I feel myself much more knowing, more seeing, having a far greater experience of realities, not abstractions, than ever before, nor do I doubt that this superior knowledge will make itself available in the form of greater power, for accomplishing whatever work I may be called to, shall I say also for choosing the work which I most worthily perform.”

 

In 1836 James Mill passed away from a series of “pulmonary attacks” likely brought on by tuberculosis. John, now 30, was grief stricken. He suffered several sympathetic pulmonary episodes of his own. He had lost the person who had overseen, and to large extent controlled, the development of his mind and manners. He had lost and parent and a part of himself, a very large part of himself. Yet he pulled himself out of his depression and, ultimately, the passing of the old despot who had given, and taken, so much from him, would finally allow John Stuart Mill to become his own man.

 

In 1838 his Essay on Bentham was published, the man who blithely proclaimed: “prejudice apart, the game of push-pin is of equal value with the arts and sciences of music and poetry.” Mill had struggled for most of his life to repress and then later, come to terms with, his objections to this cold and narrow view of existence. Although he always admired Betham’s willingness to question authority, he fully admitted to his old idol’s shortcomings:

 

“Bentham’s knowledge of human nature is bounded. It is wholly empirical; and the empiricism of one who has had little experience. He had neither internal experience nor external; the quiet, even tenor of his life, and his healthiness of mind, conspired to exclude him from both. He never knew prosperity and adversity, passion nor satiety. He never had even the experiences which sickness gives; he lived from childhood to the age of eighty-five in boyish health. He knew no dejection, no heaviness of heart. He never felt life a sore and a weary burthen. He was a boy to the last.”

 

His essay on Coleridge, published two years later, was part of the reconciliation of his heart and mind. Wordsworth’s and Coleridge’s poetry, for Mill, was the antidote to his predominantly austere childhood and his analytical education. The art and philosophies of the Romantics gave him a deeper appreciation for the beauty of the natural world and his own emotions. More than once he lamented the English tendency to conceal strong feelings. His salvation would not come in the form of poetry or prose. In 1830 he met a bright, striking, articulate and married woman named Harriet Taylor. He was smitten with her from the beginning. The feeling soon became mutual, but to avoid scandal they did not indulge in any physical contact. Her husband was aware of their affections for one another. This put some strain on their marriage, but less than one would expect. Harriet resided in a separate residence with her daughter from 1833 onward. There was a quiet understanding between the three parties until Mr. Taylor’s death in 49. John and Harriet wed two years later.

 

During their lengthy and allegedly sexless ffair Mill composed some of his best known works. His Principles of Political Economy, not surprisingly, touched upon matters of political and social significance. He is remembered as a transitional figure and as the last great classical economist. Though Principles of Political Economy was the standard textbook on the subject for nearly half a century, today he is glossed over in introductory courses. This is primarily because he did not specialize in one area. He contributed to comparative advantage in international trade, opportunity cost, and to theories of innovation. Unlike his predecessors he paid attention not merely to the creation of wealth, but to its distribution. Moreover, he was among the first to see the difficulties involved with predicting economic phenomenon, and thus situated himself midway between Malthus’s gloomy predictions of population growth outpacing production and Adam Smith’s sunny world of laissez faire, thus, in a sense, setting a precedent for more sophisticated analysis of complex systems. He wisely proposed multiple outcomes depending on the rate at which technology developed and other unforeseen variables. As well as pointing on inequities, he went so far as to attack the dogma of growth for growth’s sake:

 

“I confess I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that the trampling, crushing, elbowing, and treading on each other’s heels, which form the existing type of social life, are the most desirable lot of humankind, or anything but the disagreeable symptoms of one of the phases of industrial progress.”

 

Needless to say, he did not care for social Darwinism. Hlthough he disagreed with Herbert Spencer, its leading prophet, he assisted financially in the publication of his Principles of Philosophy. Spencer would, years later, recall this event a tribute to Mill.

 

Though deeply influenced by David Ricardo, a regular visitor to his childhood home, he did see potential problems with free markets, although he also recognized the pitfalls of collectivist economies and various taxation schemes. Throughout his life he argued in favor of entrepreneurship and capitalism insofar as they were the best way to insure personal autonomy, the cornerstone of his ethics. It has been contended his wife softened his view of socialism. It was because of her a chapter on labor was added to his Principles of Political Economy. Yet a mind as broad as his, which made a habit out of studying the opinions of its opponents in more depth than its own, would likely have given it a fair hearing with or without her influence. He sees its virtues and its flaws:

 

“It is the common error of Socialists to overlook the natural indolence of mankind; their tendency to be passive, to be the slaves of habit, to persist indefinitely in a course once chosen…Competition may not be the best conceivable stimulus, but it is at present a necessary one, and no one can foresee the time when it will not be indispensable to progress.”

 

Earlier in his career he asserted:

 

“All who are on a level with their age now readily admit that government ought not to interdict men from publishing their opinions, pursuing their employments, or buying and selling their goods, in whatever place or manner they deem the most advantageous. Beyond suppressing force and fraud, governments can seldom, without doing more harm than good, attempt to chain up the free agency of individuals”

In his Principles of Political Economy he propounds his views on women’s suffrage. However, even his opus on logic contained passages dedicated to moral and political philosophy, in A System of Logic he argues in favor of individual freedoms and public education. Logic in Western thought was still concerned primarily with syllogisms and deduction from first principles. Although Bacon, Hume and others served as forerunners, A System of Logic stands as a powerful and formal exposition of induction, and Mill’s methods stand the test of time as a means of establishing causality. The first of the five states “if two or more instances of the phenomenon under investigation have only one circumstance in common, the circumstance in which alone all the instances agree, is the cause (or effect) of the given phenomenon.”

Unlike his own mother, who remained always in the background while James instructed the children and discussed matters of importance with the other radicals, Harriet actively and eloquently participated in conversation with him and his guests. In her he found a lover, a friend, a confidante. Most of all, unlike she was an equal who he trusted to help him write and edit a number of his best known works.

 

Harriet passed away in 1858. It is difficult to fathom what a blow this was for him. He loved her passionately until the end. Minor quibbles aside, there is no evidence to suggest their marriage was anything but loving or they anything but devout to each other. She was the saving grace of his life. Her daughter, Helen, who would become an actress, kept in contact with Mill until his death at the age of sixty six. He did not remarry or, as far as anyone can tell, develop a romantic relationship with another woman during his twenty years as a widower.

 

“Were I but capable of interpreting to the world,” he wrote of Harriet, “one half the great thoughts and noble feelings which are buried in her grave, I should be the medium of a greater benefit to it, than is ever likely to arise from anything that I can write, unprompted and unassisted by her all but unrivalled wisdom.”

 

During this period he dedicated himself to postulating his views on representative government, liberty and the individual’s relationship to society. In On Liberty Mill argued ferociously for personal freedoms, but towards the end of the piece advocated for compulsory public education and tests for voting rights:

“Once in every year the examination should be renewed, with a gradually extending range of subjects, so as to make the universal acquisition, and what is more, retention, of a certain minimum of general knowledge, virtually compulsory. Beyond that minimum, there should be voluntary examinations on all subjects, at which all who come up to a certain standard of proficiency might claim a certificate.”

 

Moreover, he was not without a certain elitism, as evinced in some of his private letters to Harriet. He recognized the pivotal point gifted people play in moving civilization forward. To what end in particular he did not say, as he disagreed sharply all teleologies, including Auguste Comte’s.

 

“Persons of genius, it is true, are, and are always likely to be, a small minority; but in order to have them, it is necessary to preserve the soil in which they grow. Genius can only breathe freely in an atmosphere of freedom. Persons of genius are, ex vi termini, more individual than any other people—less capable, consequently, of fitting themselves, without hurtful compression, into any of the small number of moulds which society provides in order to save its members the trouble of forming their own character. If from timidity they consent to be forced into one of these moulds, and to let all that part of themselves which cannot expand under the pressure remain unexpanded, society will be little the better for their genius. “

 

“As it is useful that while mankind are imperfect there should be different opinions, so is it that there should be different experiments of living; that free scope should be given to varieties of character, short of injury to others; and that the worth of different modes of life should be proved practically, when anyone thinks fit to try them.”

 

For his dedication to women’s rights Mill was cruelly mocked by newspapers and viciously criticized by his fellow intellectuals.  In The Subjection of Women, he argued  “the legal subordination of one sex to another – is wrong in itself, and now one of the chief hindrances to human improvement; and that it ought to be replaced by a system of perfect equality, admitting no power and privilege on the one side, nor disability on the other…

I consider it presumption in anyone to pretend to decide what women are or are not, can or cannot be, by natural constitution. They have always hitherto been kept, as far as regards spontaneous development, in so unnatural a state, that their nature cannot but have been greatly distorted and disguised; and no one can safely pronounce that if women’s nature were left to choose its direction as freely as men’s, and if no artificial bent were attempted to be given to it except that required by the conditions of human society, and given to both sexes alike, there would be any material difference, or perhaps any difference at all, in the character and capacities which would unfold themselves.”

 

Mill spent the remainder of his life in Avignon, close to his wife’s grave.  He passed away in 1873 and was buried beside her. The grave would serve as a tourist spot throughout the Victorian era. For, in spite of his association with Bentham and the radicals, he was, in the words of one biographer, “the last great Romantic.” His death was met with many tributes from those he had inspired:

 

“He may have blundered and stumbled in his pursuit of truth; but it was part of his belief that stumbling and blundering are necessary means towards the finding of truth, and that honesty of purpose is the only indispensable requisite for the nearest approach towards truth of which each individual is capable. That belief rendered him as charitable towards others as he was modest concerning his own attainments. He never boasted; and he despised no one. The only things really hateful to him were arrogance and injustice, and for these he was, to say the least, as willing and eager to find excuse as could be the most devout utterer of the prayer, ‘Father, forgive them, for they know not what they do.’ We had noted many instances, coming within our own very limited observation, of his remarkable, almost unparalleled magnanimity and generosity; but such details would here be almost out of place, and they who need such will doubtless before long receive much more convincing proof of his moral excellence.”

He should not be remembered merely as a man who thought deeply, but one who felt deeply as well.

 

Works Cited:

Capaldi, Nicholas. John Stuart Mill: A Biography. Cambridge: Cambridge UP, 2004. Print.

Glassman, Peter J. J.S. Mill: The Evolution of a Genius. Gainesville: U of Florida, 1985. Print.

Mill, John Stuart, and David Spitz. On Liberty. New York: Norton, 1975. Print.

Mill, John Stuart, and Jack Stillinger. John Stuart Mill: Autobiography. Cambridge: Cambridge UP, 2004. Print.

Mill, John Stuart, and Oskar Piest. Utilitarianism. Indianapolis: Bobbs-Merrill, 1957. Print.

Mill, John Stuart, and W. J. Ashley. Principles of Political Economy, with Some of Their Applications to Social Philosophy. New York: A.M. Kelley, eller, 1965. Print.

Mill, John Stuart. On the Subjection of Women. Greenwich, CT: Fawcett Publications, 1971. Print.

Mill, John Stuart. A System of Logic: Ratiocinative and Inductive. London: Longmans, Green, 1949. Print.

Strathern, Paul. J.S. Mill in 90 Minutes. Chicago: Ivan R. Dee, 2002. Print.

Henry George Revisited

henrygeorge

“What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power.”

-Henry George

Progress and Poverty has been praised by Tolstoy, Einstein and Milton Friedman. Friedman, predictably, was the least effusive of three.  He said the “least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.” George disagreed with Thomas Malthus’s gloomy forecasts of widespread of famine; geometric population growth did not seem likely to him. While it is beyond the scope of this blog, in a future post I will explain why neither man was right.

Whereas the contemporaneous textbooks authored by Walras and Menger were strictly academic tomes about the theory of political economy, Progress and Poverty is succinct and accessible. The clarity of its arguments  made it such a success with the men listed above, but its rallying cry for equality is what endeared its author to people from all walks of life.  His thesis is simple: a land tax would encourage people to make use of their property while allowing those without land to keep all of their income. Also, and this should not even need to be said, his thoughts on real estate speculation are more pertinent now than when the book was published.

Henry George, like C.S Peirce, was an autodidact who had no ties to the ivory tower. Unlike Peirce, George became famous in his lifetime. Milton Friedman, though he is despised by the left for defending the unrestrained market and defamed by the likes of Mises for his “socialist” views on monetary policy, was an outstanding economist. He sits on the opposite end of the fence of the types commonly associate with modern Georgism, which is unfairly pegged as a populist movement composed of agrarian class warriors.  Nothing could be farther from the truth about the man or his followers.  An observer of the industrial revolution, George understood there are a myriad of benefits to capitalism, innovation and urbanization.  What troubled him was not private ownership or competition, but the level of inequality he observed in terms of material wealth and opportunities to advance one’s self. Unlike Piketty, what George saw was deplorable by the standards of any era. What he decried was reality, not his own dire predictions.

Slavery in antiquity was not a humane institution, but before the advent of labor laws (preceded and largely made possible by rises in the marginal productivity of capital) one can say it was abolished in name alone. One would have to be incredibly dense to think the formal renunciation of human chattel did anything to improve the lot of the freed or the already free. One only need to read The Condition of the Working Class in England or other period pieces to understand that a slave by any other name is still a slave. Even today English and Americans happily import mountains of consumer goods made by the “free” citizens of India, Cambodia, Vietnam and Malaysia without the slightest twinge of guilt. Nothing makes a sweater feel better than knowing the 8 year old who made it is not legally anyone’s property. He or she has chosen to forego childhood and education to work sixteen hour days without anything remotely resembling fair compensation, but they have the right to starve to death. In civilization’s brief history dreadful working conditions are the rule, not the exception. Urbanization, positions demanding specialized knowledge and the concentration of wealth into smaller geographic areas, along with political activism, are what changed this situation.

To me George’s genius does not necessarily lie with his advocacy of the land tax but with his realization that capitalism, in spite of all its triumphs, has flaws. I do not entirely agree with his thesis, but I believe Progress and Poverty is worth reading for the clarity of its exposition and its historical value. I wonder what he would have thought of Keynes, robots and all the other wonders and oddities that came after his death in 1897. One can only guess.

Perspectives on Piketty

                                                   pikka

Thomas Piketty is today’s most discussed economist. Not just a pedantic treatise on economic theory, Capital in the Twentieth Century is a political manifesto in the tradition of Henry George and Karl Marx. His literary references and indulgences in simple algebra, however, conjure Keynes’s stylistic spectre. Paul Krugman defends him by noting the responses to his thesis have come primarily in the form of “name-calling.” Hardly a valid point as this is the most common response to anything. One example of a commentator repeating vague neoclassical platitudes is The Cato Institute’s James Dorn. There is truth in his article, even though it amounts to little more than redundant rhetoric for an audience that never tires of  the touting virtues of the unfettered market.

“Capital in Mr Piketty’s book includes forms of wealth, such as land, that would not figure in economists’ models of production; his rate of return is the pace at which such wealth grows rather than the benefit to firms of investing it. Mr Piketty’s data appear to justify this approach: in the past, at least, the rich have been able to shift resources into higher-yielding forms of wealth when over-investment slashes the return.”

-The Economist

“But how do you make that defense if the rich derive much of their income not from the work they do but from the assets they own? And what if great wealth comes increasingly not from enterprise but from inheritance?”

-Paul Krugman

“Gary Becker, the late Nobel laureate economist, showed the importance of human capital (i.e., the skills individuals acquire through education and training) for a person’s future income and economic growth. High marginal income tax rates and wealth taxes dampen incentives to invest in human and non-human capital—and when investment slows so will economic growth. ”

-James Dorn

The United States has anxiously awaited a scholarly treatment of the acutely felt and easily exploited socioeconomic divide between the very rich and the rest of the nation. Appealing to envy is a time honoured tradition among politicians of the far left, but we should not dismiss the book’s thesis because of its political overtones or its ludicrous taxation scheme.  Francois Hollande’s presidency has attempted to put Piketty’s policy recommendations into action. They didn’t work. Piketty himself admits to the problems posed by creative banking, which is why he envisions a global tax. A bit ridiculous, no? While other factors could  be taken into account, Monsieur Hollande now knows his appropriation schemes are not without consequences. The catastrophe in 2008 had a marked influence on the entire world, but not surprisingly, an 80% income tax is a powerful disincentive in both good times and bad. A person who makes 10 million dollars a year may want to keep more than 2 million. This sounds like a huge sum of money, especially to someone who subsists in 20 or 30 thousand a year, but human wants are unlimited.

“For instance, we have this talk about tax havens. Five years ago, people were saying that nothing would ever happen; Swiss banks would keep their accounts secret and would never accept having automatic transmission of information. And then suddenly there were U.S. sanctions against Swiss banks and things began to change. I think these general moves will continue.”

-Thomas Piketty

Piketty views the uneven distribution of income and capital as the by-products of an unregulated economy.  This is incontestable; the point of contention here is when this becomes harmful and whether the government should intervene. In his analysis he ignores the various programs in place in nearly all developed nations: social security, Medicare, welfare, unemployment benefits and foodstamps. He also forgets about insurance packages many employers offer. This does not mean the underclass in America is living in a worker’s paradise, but to base a damning prediction based on one’s own “laws of capitalism” seems short-sighted, particularly when innovation in many fields is growing at an exponential rate. Who in 1850 could have imagined crude oil, nasty stuff with few uses, would become one of the most sought out commodities in the world?  Who could have foreseen the environmental and geopolitical ramifications of fossil fuels or the engines that created a tragically inelastic demand for them?

Like Steve Keen Piketty is critical of those who have tried to divorce economics from the other social sciences and use only simple mathematical models to “prove” their assertions. Yet his “laws of capitalism” seem to suffer from the same shortcomings as the neoclassical conceptions of employment, supply and demand Keen so deftly eviscerates in Debunking Economics. The entire palace this formerly obscure French economist is constructing relies strongly upon one equation: r > g. The rate of return on capital exceeds economic growth (and wages).  As any good Austrian can tell you this is not a bad thing. When investment is too high (artificially high in many cases) it results in the overvaluation of assets, a bubble. This would be fine and dandy if bubbles didn’t pop.

“But the fact that r exceeds g is simply a necessary condition for an efficient allocation of an economy’s investment over time, whether in a capitalist or a centrally planned economy (the former Soviet Union and, arguably, China are examples of countries that over-invested, so damaging their own consumption opportunities), and is consistent with any pattern of inequality, high or low, rising or falling. “

-Mervyn King

“In particular, the leap from r>g to the conclusion of a growing role of inheritance in society seems too large to me. Many capital owners consume much of the return on their capital, so wealth does not grow at rate r. This consumption ranges from fancy cars and luxurious vacations to generous charitable giving. In addition, unless mating is perfectly assortative, or we return to an era of primogeniture, wealth per family shrinks as it is split among children. “

-Greg Mankiw

Let us give the man himself the last word, one can all agree upon:

“Private property and the market system are good not only to promote innovation and to promote growth; private property and the market system are good for our personal freedom.”

-Thomas Piketty