By 1662 William Petty was introducing ceteris paribus into economic discourse...Petty in his Treatise of Taxes and Contributions (p. 50) presents a famous argument:
If a man can bring to London an ounce of Silver out of the Earth in Peru, in the same time that he can produce a bushel of Corn, then one is the natural price of the other; now if by reason of new and more easie Mines a man can get two ounces of Silver as easily as formerly he did one, then Corn will be as cheap at ten shillings the bushel, as it was before at five shillings caeteris paribus.
This passage was widely quoted in the 19th Century. Both John McCulloch and Karl Marx pointed out its importance as a forerunner of Ricardo's labor theory of value. But neither McCulloch or Marx seems to have appreciated its historic significance as the first use of ceteris paribus by an economist.
As best I can tell, it wasn't until 1767 that ceteris paribus again made its way into a work devoted to economics. In that year, Sir James Steuart used the expression several times in his Inquiry into the Principles of Political Economy. Joseph Persky (1990) "Retrospectives: Ceteribus Paribus," Journal of Economic Perspective, p. 188.
Philosophers today are not very familiar with James Steuart, so it is no surprise that the Stanford Encyclopedia of Philosophy entry on ceteribus paribus conditions, omits him from its historical survey. While it cites Persky's lovely piece (quoted above), it quickly skips from the equally obscure, William Petty -- despite his world historical significance in connecting the then fairly new, scientific enterprise to the project of colonial and imperial domination --, to John Stuart Mill and Alfred Marshall. Steuart was Adam Smith's great eighteenth century Scottish rival in political economy (albeit exiled for his Jacobite sympathies). Some other time, I return to the significance of the ongoing effacement of Petty and Steuart from the history of philosophy.
Here I note that Smith and Steuart had a common source, David Hume, who, in turn, was a careful reader of Petty. As it happens, Hume also deploys ceteribus paribus reasoning in his political economy. He does so in his lengthy and sophisticated esssay on demographics. For much of the nineteenth century, in the aftermath of Mathus, the economic significance of population was straightforwardly understood. With rising interest in preventing ecological disaster, demographics is returning to political economy (broadly understood).
In his long, ambitious essay on the population of ancient nations, Hume points out that, when facts are uncertain, it is appropriate to “intermingle the enquiry concerning the causes with that concerning facts.” In this essay, Hume postulates a natural rate of propagation: slightly more than a doubling in every generation of the human species. (Strictly speaking Hume does not call it a “natural rate” although a page later he says, the rate “seems natural to expect.”) Hume stipulates that “everything else being equal” (vegetation, climate, etc.) this rate can only be achieved under “wise, just, and mild government” with the “wisest institutions.” The natural rate is, thus, for Hume an optimal rate.
From a political perspective, Hume's point is important because population growth becomes a proxy for measuring good government. As Hume's editor notes, this was widely shared position in Hume's age. Hume did not rely exclusively on population growth to have epistemic access to good government. As I have noted before, he treats social unrest criminality as evidence of defective institutions or bad leadership (recall and here). So, in a good good government population grows without civil unrest or worse. (For Hume the lack of economic growth would produce famine and, thus, undermine population growth.) Hume applies this normative claim in his empirical research.
From a methodological perspective, what's striking here is that Hume infers what would be the case based on empirical observations of what is the case in, say, the American colonies [Hume was not too bothered by the treatment of the natives] and the quick rebound in population after plagues as well on facts about human nature (presumably he is drawing on his Treatise, which had been based on “experiment and observation”). Hume uses this natural rate to reason from facts to causes as well as from causes to facts. So, for example, if there is reliable information that population is or was increasing in some locale, this is evidence for a mild government with sound economic policy, while he will infer the converse, too. Positing the natural rate, then, allows Hume inferences about the past and present.
If one accepts of the relationship between the nature of government and population, as Hume does, then one also has an important constraint on accepting the facts provided by various literary and political texts (which Hume mines for population data in the past and present). Hume is, thus, self-consciously offering a principled evidential strategy to deal with a situation in which only limited data are available. (Alas, Hume does not allow historical facts to help him improve or refute the rule that he employs to interpret history with.) In my dissertation (and in my forthcoming book, Adam Smith: Public Thinker and Systematic Philosopher), I argue that this influenced Smith's evidential practices.
Because Hume has little invested in laws as explanatory principles (I have argued that most of Hume's explanations are not nomological, but rather what I call 'normological'--robust generalizations that allow exceptions-), his introduction of a ceteribus paribus clause does not call for special comment from him. Hume is positing a (counterfactual) natural rate that rarely obtains in the real world. But even in the rare occasions when “wise, just, and mild government” with the “wisest institutions” obtain, it is possible for the (implied) local natural rate of population to vary. That's because Hume thinks the local natural rate is, in part, dependent on conditions of geography, climate, etc.
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