Digressions&Impressions

On Information and the State: from Justin Smith to George Stigler

[Over time I plan to phase out D&I at typepad. This post was first published at  digressions.impressions.substack here. To receive new posts and support my work, consider becoming a free or paid subscriber at <digressionsimpressions.substack.com>]

A recent wide-ranging, erudite, and politically salient Substack post by Justin Smith defends the thesis that "we may identify a vast process currently underway whereby we are moving, in our efforts to understand reality and to harness it to our ends, from its to bits. It seems to me the real story of the past few decades, a story that easily explains the rise in popularity of the simulation argument...is of a fairly total regime change, from physics to informatics —here I am adapting the French informatique, which names the research domain in question far more appropriately than “computer science”— as the Prima Scientia or ultimate science of reality." (The post may be gated so you will have to trust me on its interest or take a subscription to Justin's excellent substack, Hinternet.) Presumably, by 'regime' Smith is suggesting that the wide world of learning is fundamentally ordered and (he makes an explicit nod to Hacking here) ordering and authoritative in some sense. 

In these digressions, I have been joking over the years that economics will soon be displaced by computer science. But as is usual while I have been focusing on a change in one tree, Justin is noticing the shifts in the wider forest.

Unfortunately, Smith never defines 'information' (and its non-trivial cognate,) 'units of information processing' despite it playing a key role in his overall argument. That's probably a feature and not a bug of his argument because part of his point is that in virtue of the significance and fluidity (within constraints) of symbolic representation information is not (ahh) ontically stable, eternally out there. 

Inform has Latinate roots (to give form to, to shape, educate, etc.), and, perhaps, there are echoes of the scholastic doctrine of hylomorphism lurking here. (Not so long ago, I was pleased to learn that computer scientists use 'hylomorphism' to refer to a certain recursive function which struck me as very funny and profound at once.) As I was barely conscious contemplating the possible significance of this, through the mystery of the associative process and the rapidity of modern networks (and Google), I looked up and downloaded George Stigler's (1961) "The Economics of Information." This paper has over 12000 citations, and alongside his work on economic regulation, crucial to his importance to the development of economics (for which he got a Nobel).

Somewhat amusingly, Stigler also fails to give a definition of information. He tends to use 'knowledge,' 'advertising,' subjective beliefs, and the comparison of prices by consumers as ways of understanding and describing information. Information can be 'pooled' and has a 'flow.' Most famously, information is costly (and can be bought and sold).

That information is costly is both part of the cause and part of the effect of the dispersion of prices. (In an older tradition of economics -- as David M. Levy taught me, one can think of Wicksteed -- prices were thought to be uniform in a market at a given time; although earlier, during the 18th century, Adam Smith and his contemporary, James Steuart, thought that prices dispersed, too although their analysis is not identical.) I don't mean to suggest that this exhausts the role of information in Stigler's analysis of economic life because it connects means and ends, but about that some other time more.

In Stigler's paper, I encountered a fascinating passage that is worth quoting and discussing (and this is the real point of this digression):

The maintenance of appreciable dispersion of prices arises chiefly out of the fact that knowledge becomes obsolete. The conditions of supply and demand, and therefore the distribution of asking prices, change over time. There is no method by which buyers or sellers can ascertain the new average price in the market appropriate to the new conditions except by search. Sellers cannot maintain perfect correlation of successive prices, even if they wish to do so, because of the costs of search. Buyers accordingly cannot make the amount of investment in search that perfect correlation of prices would justify. The greater the instability of supply and/or demand conditions, therefore, the greater the dispersion of prices will be.
In addition, there is a component of ignorance due to the changing identity of buyers and sellers. There is a flow of new buyers and sellers in every market, and they are at least initially uninformed on prices and by their presence make the information of experienced buyers and sellers somewhat obsolete.
The amount of dispersion will also vary with one other characteristic which is of special interest: the size (in terms of both dollars and number of traders) of the market. As the market grows in these dimensions, there will appear a set of firms which specialize in collecting and selling information. They may take the form of trade journals or specialized brokers. Since the cost of collection of information is (approximately) independent of its use (although the cost of dissemination is not), there is a strong tendency toward monopoly in the provision of information: in general, there will be a "standard" source for trade information. (Stigler 1961, 220)

Chicago economists are not exactly known for assuming that any market will tend toward a monopoly. As I noted last week, in the 1950s Stigler's work was, in fact, prominent for undermining empirically the Marxist (and Marx-inspired) thesis that markets tend naturally tend to monopoly. 

Now, later when (in part inspired by the work of the sociologist Morton and in part because of his interest in which economics Phds would be hired where) Stigler turned to the sociology of scientific knowledge, he tackled this tendency toward monopoly in knowledge production head on. And so I will return to it some other time. But in the 1961 paper he leaves the point in the quoted passage alone.

It would be tempting here to discuss the role of google or wikipedia or the stanford encyclopedia of philosophy as standard sources of information in our ecologies. (And to what degree ChatGPT can displace these or become one itself.) But I want to close with an important broader context in which i situate Stigler's passage.

In the liberal tradition — with which Stigler was very familiar — which understands, as a a core function of the state, it (the state) as a machinery of record, a collector and disseminator of accurate public data. A lot of our social practices, inside and outside the market, presuppose a social infrastructure in which the machinery of record is reliable, allowing public authorities and private actors to plan their activities. For that to happen, the public must be well-informed, and the only way citizens can possibly be well-informed on complex matters of policy is for state experts to organize and process information. Elsewhere, also in joint (forthcoming) work with Nick Cowen I have argued that Walter Lippmann's (1922) Public Opinion puts this vision forward.[1]

In fact, the germ of Lippmann’s idea is expressed in the closing paragraph of John Stuart Mill’s and Harriet Taylor’s On Liberty (1869, Ch. 5), where they claim that “the greatest dissemination of power consistent with efficiency” should be allied with “the greatest possible centralisation of information, and diffusion of it from the centre.” In context, it is clear (recall) that they are responding to Tocqueville’s fears that in order to prevent democratic despotism through local self-government, incompetent art of government is inevitable.

So, lurking in Stigler (1961) is a causal account that both explains the origin of the state and justifies the state's continued existence as a (perhaps even natural) authoritative monopoly provider of the machinery of record. (In fact, this is how Smith explains the epistemic origin of the state: as guarantor of measures and weights and the soundness of currency. ) And that even in a bit-rich world this will remain so.

Of course, Marxists and Libertarians may object that the account hinted at here effaces the violence of the state. This is undoubtedly so, but I consider this a feature not a bug of the argument.

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Polanyi (Karl), Adam Smith, The Great Transformation, and Credit.

The presence or absence of markets or money does not necessarily affect the economic system of a primitive society-this refutes the nineteenth-century myth that money was an invention the appearance of which inevitably transformed a society by creating markets, forcing the pace of the division of labor, and releasing man's natural propensity to barter, truck, and exchange. Orthodox economic history, in effect, was based on an immensely exaggerated view of the significance of markets as such. A "certain isolation;' or, perhaps, a "tendency to seclusion" is the only economic trait that can be correctly inferred from their absence; in respect to the internal organization of an economy, their presence or absence need make no difference.
   The reasons are simple. Markets are not institutions functioning mainly within an economy, but without. They are meeting place of long-distance trade. Local markets proper are of little consequence. Moreover, neither long-distance nor local markets are essentially competitive, and consequently there is, in either case, but little pressure to create territorial trade, a so-called internal or national market. Every one of these assertions strikes at some axiomatically held assumption of the classical economists, yet they follow closely from the facts as they appear in the light of modern research.
   The logic of the case is, indeed, almost the opposite of that underlying the classical doctrine. The orthodox teaching started from the individual's propensity to barter; deduced from it the necessity of local markets, as well as of division of labor; and inferred, finally, the necessity of trade, eventually of foreign trade, including even long distance trade. In the light of our present knowledge we should almost reverse the sequence of the argument: the true starting point is long distance trade, a result of the geographical location of goods, and of the "division of labor" given by location. Long-distance trade often engenders markets, an institution which involves acts of barter, and, if money is used, of buying and selling, thus, eventually, but by no means necessarily, offering to some individuals an occasion to indulge in their propensity for bargaining and haggling.--Karl Polanyi (1944) The Great Transformation, p. 61-62

Polanyi's official target here is the "nineteenth century myth," treated as "orthodox economic history," of the "classical economists" in which money causes the creation of markets and so facilitates the division of labor. This nineteenth century myth, in turn, adopts a theory of human nature theory, which includes the "propensity to barter, truck, and exchange," a reference to Smith's account of the origin of the division of labor.  And this propensity can (finally) express itself in the developing markets (and division of labor). 

The chapter I am quoting has been enormously influential in economic sociology, generating, somewhat ironically as Jens Beckert argues, a huge scholarly literature on embeddedness, and a certain kind of soft-marxist and republican political economy now fashionable again. I cannot tell you how often I read purported refutations of Adam Smith, classical economics, or liberalism more generally that echo Polanyi. I find this amusing because the story Polanyi tells after the "true starting point" is pretty much David Hume's account of the rise of commercial society in "Of Commerce" (except that Hume is more focused on the causes of productivity and adopts a kind of labor theory of value) and (recall) Smith's own account of Europe in Book III of Wealth of Nations (which, admittedly, Smith calls "retrograde" and does not rely on a labor theory of value.) But my interest today is not in defending the Enlightened Scots.

Polanyi's theory of the great transformation treats the development of markets as an imposition of the mercantile national and nationalizing state on towns and country that resisted this.* And this imposition inverted a kind of natural or at least better order of things: "Instead of economy being embedded in social relations, social relations are embedded in the economic system." (60)

And where markets did originally (before the great transformation) arise, they are hemmed in by local  restrictions, such that "Local markets are, essentially, neighborhood markets, and, though important to the life of the community, they nowhere show any sign of reducing the prevailing economic system to their pattern." (66) In other words, prior to the great transformation, markets are tamed by political life and serve community needs. And this story has an enormous pull on communitarians, social democrats, christian democrats and others partially nostalgic for a lost world. (Marxists tend to play a double game here: promoting the disaffection of the nostalgics, but accepting capitalism's destruction as needed for a better future.)

Now, when liberals confront the Polanyi style story, in response they sometimes note that the taming of markets also involves repeated acts of violence, but generally they tend to trot out the sudden upward curve of growing prosperity (wealth and consumption) since the industrial revolution. And the more insidious liberals may even justify colonialism and imperialism because those born late (including the descendents of surviving natives) benefit greatest from the creative destruction that follows from the spread of markets embedded in this curve.+ So, rather than addressing the roots of nostalgia generated by the present status quote, these liberals offer a consequentialist account about the status quo in terms of the good-making features of submitting to forces beyond most community's control (a great financial power, perhaps, excepted). Despite my (skeptical) liberal sympathies, it is obvious that the liberal response won't persuade. (That point is compatible with the further fact that most nostalgic folk are unwilling, in practice, to give up the comforts of modern life.)  

Polanyi had kind of anticipated the response. For, Polanyi pre-market societies are characterized by a different fundamental motive than market societies: the "transformation implies a change in the motive of action on the part of the members of society; for the motive of subsistence that of gain must be substituted." (43-44) And while Polanyi does not say this explicitly, a society based on  gain is in no sense properly reciprocal. (Here Polanyi cheats a bit because he relies on the reader to view gain as zero-sum not mutual.)

In the few words remaining in the Digression, I can't settle the debate. But in returning to Polanyi, I noticed a curious absence in Polanyi's argument. He completely misses that the primitive economies of medieval europe were suffused with debt; as a leading authority puts it, "it was an important part of medieval life."** People had to make "many deals on credit to allow consumption." (Christine Desan Making Money, 214) Now, Graeber has much of interest to say, also to philosophers, about the role of virtual money in such credit/debt patterns (and perhaps being the original form of money). But here I just want to note an important effect, that a society characterized by mutual credit/debt relations was enmeshed in open ended mutual acrimony and litigation (Desan 218ff.).

So, the social relations that embed pre-market society, if there is such a thing, is one of open ended mutual score-keeping (of mutual loans) and mutual promises of repayment that themselves are potentially precarious, and potential open-ended conflict about trying to call in outstanding debts. And while, if Desan is to believed, it is true that matters were worse in medieval England - because of the English policy of making low denomination coinage scarce --, medieval England is the source of the beginning of the great transformation (recall this post on Adam Smith's account on the origin of capitalism) and so highly relevant to evaluating Polanyi's argument (Desan also names him as one of her targets early in her book). 

That is to say, one way to understand the great transformation is that it liberated ordinary people from being routinely in each other's debt, that is, a suffocating embrace of unsteady and stifling mutual obligations that could be called in at the worst possible moments. And in particular, because these credit obligations predictably generated lots of mutual conflicts, they created an opportunity for authorities to settle conflict. This may have helped develop the rule of law in the very long run, but it is pretty obvious in the interest of the powerful to have the not so powerful be in regular conflict with each other and need their mediating/legal services to settle conflict among ordinary people. This form of social embeddedness undoubtedly helped ensure the long-term stability of this mode of governance.   

 

 

 

14 February 1979: Foucault's Polemics with 'the Left' (XVII)

When you talk about contemporary neoliberalism, whether German or any other kind, you generally get three types of response.

The first is that from the economic point of view neo-liberalism is no more than the reactivation of old, secondhand economic theories.
The second is that from the sociological point of view it is just a way of establishing strictly market relations in society.
And finally, the third response is that from a political point of view neo-liberalism is no more than a cover for a generalized administrative intervention by the state which is all the more profound for being insidious and hidden beneath the appearances of a neo-liberalism.
You can see that these three types of response ultimately make neoliberalism out to be nothing at all, or anyway, nothing but always the same thing, and always the same thing but worse. That is to say: it is just Adam Smith revived; second, it is the market society that was decoded and denounced in Book I of Capital; and third, it is the generalization of state power, that is to say, it is Solzhenitsyn on a world scale.

Adam Smith, Marx, Solzhenitsyn, laissez-faire; society of the market and spectacle, the world of the concentration camp and the Gulag: broadly speaking these are the three analytical and critical frameworks with which this problem of neo-liberalism is usually approached, and which therefore enable it to be turned into practically nothing at all, repeating the same type of critique for two hundred, one hundred, or ten years. Now what I would like to show you is precisely that neo-liberalism is really something else.--Michel Foucault, 14 February 1979,  translated by Graham Burchell, Lecture 6, The Birth of Biopolitics. 129-130.

In lecture five, Foucault had identified Marcuse's criticism of capitalism with Sombart's. Foucault is disparaging about the line of argument ("confused"), and, more striking yet, had claimed that the Nazis had appropriated it; and "indeed in opposition to this destruction of society by the [capitalist]* economy and state that the Nazis proposed to do what they wished to do." (114) The claim is rather damning toward Marcuse because in his own voice, Foucault describes Sombart's voyage (not unfairly) from "quasi-Marxism to quasi-Nazism." (113) So, one way to understand Foucault's criticism of Marcuse, is not just that his criticism is old-fashioned, but the criticism is of a dangerous sort: in its diagnosis it contributes to the very problem it wishes to analyze.

So, lurking here (recall this post drawing on ideas by Niko Kolodny) are ideas about responsible speech and a polemic -- calling somebody a fellow traveler of Nazism counts as polemic -- about how to criticize and engage with liberalism and neoliberalism. That is to say, in addition to the complex positive argument of Birth of Biopolitics, which I have argued is itself a contribution to the liberal art of government, there is lurking a polemic against a bad style of criticizing liberalism in virtue of this criticism contributing to a species of totalitarian thought. And so, the lectures ask us to consider it as an exemplary form of responsible speech.

At the start of lecture six, in the passage quoted above, he addresses what we might call the general culture of anti-liberalism in certain circles. I actually think Foucault reveals some of his irritation because while his sense is clear he literally contradicts himself (e.g, X is nothing and simultaneously X is bad). The three kinds of criticism he rejects all end up flattening liberalism,  and turn 'neoliberalism' merely into a word of disapproval. 

As an aside, it is a bit sad that these lectures were only published in 2004 (in French) and in translation in 2008. For, the problem he identifies is extremely visible, as I documented, in David Harvey's very influential (2005) A brief History of Neoliberalism. I am not suggesting Harvey would have felt obliged to take on board Foucault's reservations, but given the celebrity of Foucault he or his reviewers might have responded to them.  Having said that, and this returns me to the fifth and sixth lectures, the enduringness of the anti-liberal tropes in a certain part of the 'Left' suggests it would have made little difference. Because we don't get Foucault's thoughts on why the tropes endure I leave it at that here.

With the critique of Marcuse in the background, we can discern that Foucault is making four critical claims about the three kinds purported critical analyses of liberalism. First, they are false. Liberalism "is really something else."* They fail to grasp liberalism in its historical specificity and its evolution. The whole Birth of Biopolitics is meant to support this claim. Second, the criticisms are intellectually lazy because merely repetition. And again, the lectures show what would be required to begin to engage with the details of liberalism. (As regular readers know, I am trying to keep track critically of this feature of the lectures in these digressions.) Third, the standard criticisms of liberalisms contribute to a culture that makes Nazism if not possible, at least appear more legitimate. Here, Foucault comes extremely close to accepting (recall this post on the road to serfdom thesis as an ideal type) the ORDO interpretation of history. And it is, I think, among the best evidence for recent interpretations of Foucault as a kind of fellow-traveler of neoliberalism. Fourth, the standard criticisms are analytically useless (because they flatten what needs to be explored in detail).

It is pretty clear that in addition to Marcuse, Foucault has his sights on the style of criticism of liberalism made popular (recall) by Karl Polanyi (recall also this post, in particular, on the Mises-Polanyi debate). Strikingly, Karl Polanyi is never mentioned in the lectures, while his brother is. This Foucault-ian criticism of Polanyi has recently been articulated in impressive fashion by Melinda Cooper in (2017) Family Values, itself an impressive contribution to the critical study of neoliberalism. She is a lot more critical than Foucault is (recall here; and with modest criticism here). The not naming, other than Marcuse, of targets -- undoubtedly lots of bien-pensant French intellectuals are included -- makes this feature of the lectures a bit frustrating to the later historian.+

One final point on the third criticism. In the fourth lecture, Foucault had (recall) already offered a searing criticism of Marxism as lacking an art of government. What he adds here, is that in its modern guise, it inspires an insipid and dangerous criticism of liberalism in which neoliberalism is just a cover, a masquerade, for a kind of totalitarian form of oppression (cf. Harvey). Rather than being informative this makes it impossible to make important distinctions.** And, if I understand Foucault correctly, the failure to make such distinctions contributes to making a Nazi culture possible. We might say that Ernst Thälmann's tendency to treat the Social Democrats as the real enemy is illustrative of the dangers of such a failure in thought. I am pretty sure -- and this is speculative -- that this is why Foucault doesn't even mention Pinochet (then fresh in memory). And treats the dangers of liberalism's flirtation with benevolent despots (recall for example lecture 3) in terms of the (more distant) physiocrats. 

The question is whether Foucault's point generalizes. As noted above, and as he rightly notes ORDO-liberal thought embraces, as an ideal type, a road to serfdom thesis in which lots of social phenomena are symptoms of, and simultaneously with "internal necessity" (111) contribute to, the rise of Nazism. If Foucault thinks the criticism generalizes, then this, too, is one of his targets. (I think this only gets addressed in the final lecture(s)--stay tuned!) And what is at stake here, is the general utility of the manner in which Weberian ideal types are deployed in (German) social science of the twentieth century.++

On the Origin of Capitalism; On Ellen Meiksins Wood, and Adam Smith

it was unfixed, variable rents responsive to market imperatives that in England stimulated the development of commodity production, the improvement of productivity, and self-sustaining economic development. In France, precisely because peasants typically enjoyed possession of land at fixed and nominal rents, no such stimulus existed. It was, in other words, not the opportunities afforded by the market but rather its imperatives that drove petty commodity producers to accumulate....The same process created a highly productive agriculture capable of sustaining a large population not engaged in agricultural production, but also an increasing propertyless mass that would constitute both a large wage-labour force and a domestic market for cheap consumer goods - a type of market with no historical precedent. This is the background to the formation of English industrial capitalism.--Ellen Meiksins Wood (1999 [2017] The Origin of Capitalism: A Longer view, 102-103

Meiksins Wood  (whose book I warmly recommend) relies on a distinction between commerce and capitalism. Commerce is historically ubiquitous; whereas capitalism originated once,  relatively recently in human history (in the English countryside). The former is characterized by voluntary exchanges in which people buy low and sell dear and occurs primarily in (what we may call) arbitrage opportunities. While societies in which commerce exists are durable, their growth potential is limited. The latter occurs from necessity, that is survival, in which in order to survive people engage in ever cheaper and more efficient production of their factor. Growth in capitalism is, in principle, open-ended bounded at some limit by Earth's resources (and internal instability). Crucially, in a capitalist system everybody, or all factors, experiences structural domination by the market: "compulsion lies at the heart of the new economic dynamic." (138)

Meiksins Wood explores the question of the origin of capitalism in order to (use her terminology) denaturalize it (cf. p. 74). In particular, she attacks the idea, which she repeatedly associates with Adam Smith and the phrase associated with him, 'truck, barter, and exchange' (11, 21, 28 75, 193), that there is an "economic man" whose shackles (e.g., feudalism, slavery, trade-protection, etc.) simply need to be undone in order for capitalism to emerge naturally. The idea behind this thought can be found in a famous passage in the Wealth of Nations (hereafter WN): "all systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord."

For Meiksins Wood, capitalism emerges, as it happens (but this is less important) under a certain version of feudalism, in which, and this is important, term-limit leases are introduced in agriculture and the price of these leases are determined by an estimation by surveyors of the value of that land after improvement (a key word) in light of prevailing, or at the least the abstract perception of prevailing, market conditions. I quote two representative passages: "As for the tenants, they were increasingly subject not only to direct pressures from landlords but also to market imperatives that compelled them to enhance their productivity." (100) And "We can watch the development of a new mentality by observing the landlord's surveyor as he computes the rental value of land on the basis of some more or less abstract principle of market value, and measures it explicitly against the actual rents being paid by customary tenants."  (101) These new kind of leases create the "rupture" (8) that generates the "laws of motion" associated with capitalism "that uniquely compel people to enter the market, to reinvest surpluses and to produce 'efficiently' by improving labour productivity - the laws of competition, profit maximization, and capital accumulation." (16) 

Some other time, perhaps, I'd like to discuss her fascinating treatment of Thomas More and, especially, Locke. And the role of the state in facilitating the growth of capitalism. For now I want to note that one need not be Marxist to appreciate her effort. Determining the historical origin and naire of capitalism is fascinating  and undoubtedly sheds some light on the possibilities, if any, of articulating alternatives or changes to it. This is so, even if one were to reject the commerce vs capitalism distinction. So, for example, if one has a liberal mindset, the relevant distinction is within capitalism: one between mercantilism and commerce (or liberalism). And the liberal is willing to grant that mercantilism is historically prior (albeit not, perhaps, conceptually). 

Above, I suggested that it is not unfair (to Meiksins Wood and Smith) to see Adam Smith as the proper target of Meiksins Wood's analysis. Even so, while reading her book I had the recurring thought that Smith had anticipated her in a key respect. This is not strange because as many authors have noted that despite the pin factory example, Smith seems almost ignorant of the industrial revolution (if he notices it at all), and focuses quite a bit of attention on land rents. For, in fact, Smith calls attention to the very leases singled out by Meiksins Wood, and he concludes his discussion of them: "Those laws and customs so favourable to the yeomanry, have perhaps contributed more to the present grandeur of England than all their boasted regulations of commerce taken together." (Wealth of Nations, 3.2.14, p. 392)

The three features Smith singles out are [i] "When such farmers have a lease for a term of years, they may sometimes find it for their interest to  lay out part of their capital in the further improvement of the farm; because they may sometimes expect to recover it, with a large profit, before the expiration of the lease." & [ii] since the time of Henry VII, the protection of the tenants'  value in improved land by "the action of ejectment" which allowed legal remedy of recovery against premature. (WN 392; in the next paragraph, Smith  notes that some such law was introduced in Scotland already in 1449) 

Before I get to the third feature, I want to stress this is not a side comment, in Smith's analysis. I offer two kinds of evidence. First, when Smith formally analyzes 'rents of land' in (WN 1.11) he describes variable, fixed-term leases of agricultural capitalism described by Meiksins Woods as the exemplary kind: landlords "In adjusting the terms of the lease, the landlord endeavours to leave him [the tennant] no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labour, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighbourhood. This is evidently the smallest share with which the tenant can content himself without being a loser, and the landlord seldom means to leave him any more." (WN 1.11.1, 160). Throughout the chapter, Smith makes clear that these leases drive productivity and that they represent a conflictual model (and, but I explore this some other time, in some ways even violate our sense of fairness and justice).

Second, Smith praises the Physiocrats (or "Oecenemists"), when in their plans to eliminate French famine and to have French agriculture catch up with English standards, they emulate British practices:  "it has been in consequence of their representations, accordingly, that the agriculture of France has been delivered from several of the oppressions which it  before laboured under. The term during which such a lease can be granted, as will be valid against every future purchaser or proprietor of the land, has been prolonged from nine to twenty-seven years. The antient provincial restraints upon the transportation of corn from one province of the kingdom to another, have been entirely taken away, and the liberty of exporting it to all foreign countries, has been established as the common law of the kingdom in all ordinary cases. (WN 4.9.38, 678);

So, Smith both knows that the paradigmatic cases of rent, which are crucial to the analytic core of his system, are themselves historically conditioned by institutional factors and not eternal pre-existing forms of exchange.* And it is this paradigmatic case that drives commercial development as he sees it. So, why has this not been emphasized (even missed by friends and critics of Smith). This gets me to the third point.

In explaining the downfall of feudalism and monastic estates, Smith emphasizes [iii] that foreign commerce developed vain, new tastes in landlords, who, in order, to increase revenue from their holdings set in motion the kinds of leases which form the backbone of what Meiksins Wood calls agricultural capitalism.  In fact, scholars love to quote the passage, which emphasizes the political effects, of the rise of agricultural capitalism:

The expensive vanity of the landlord made him willing to accept of this condition; and hence the origin of long leases...The tenants having in this manner become independent, and the retainers being dismissed, the great proprietors were no longer capable of interrupting the regular execution of justice, or of disturbing the peace of the country. Having sold their birth-right, not like Esau for a mess of pottage in time of hunger and necessity, but in the wantonness of plenty, for trinkets and baubles, fitter to be the play-things of children than the serious pursuits of men, they became as insignificant as any substantial burgher or tradesman in a city. A regular government was established in the country as well as in the city, nobody having sufficient power to disturb its operations in the one, any more than in the other. (WN 3.4.13-15, p. 421; elsewhere Smith makes the same claim about the demise of feudal, monastic landholding: "But this increase of rent could be got only by granting leases to their tenants, who thereby became in a great measure independent of them.")

Scholars and critics have loved to focus on the moral psychology and providential morality tale, even theodicy, immanent in [iii], which Smith himself attributes to Hume. But there is no doubt that Smith has the very same explanation [i-iii] of the origin of commerce as a social stage in the four stages of development as Meiksins Wood. (Well not entirely the same because she downplays the significance of the existence of foreign trade.) It is in what she calls the slow development of agricultural capitalism made possible by a certain kind of variable but secure lease that Smith sees the great source of England's wealth. These leases represent  the (improving) reproductive potential of the tenant and the discipline of the market-place. 

So, while I think it is correct to say that Smith also propagated the rhetorical seeds of the naturalized version of the origin of capitalism, he is crystal clear about the origin and significance of agricultural capitalism. None of the above is meant to deny that Meiksins Wood and Smith offer different interpretations of the wider moral significance of agricultural capitalism (Smith thinks it generates a new kind of interdependent independence; Meiksins Wood a new kind of structural domination), but about these matters some other time more.

 

Foucault on the Idea of Europe (and Adam Smith, Hume & Kant), Part 1

So we find this idea, which will be at the center of the economic game as defined by the liberals, that actually the enrichment of one country, like the enrichment of one individual, can only really be established and maintained in the long term by a mutual enrichment...Consequently there is a correlative, enrichment, an enrichment en bloc; a regional enrichment: either the whole of Europe will be rich, or the whole of Europe will be poor. There is no longer any cake to be divided up. We enter an age of an economic historicity governed by, if not unlimited enrichment, then at least reciprocal enrichment through the game of competition.
I think something very important begins to take shape here, the consequences of which are, as you know, far from being exhausted. What is taking shape is a new idea of Europe that is not at all the imperial and Carolingian Europe more or less inherited from the Roman Empire and referring to quite specific political structures...It is a Europe of collective enrichment; Europe as a collective subject that, whatever the competition between states, or rather through the competition between states, has to advance in the form of unlimited economic progress.
This idea of progress, of a European progress, is a fundamental theme in liberalism and completely overturns the themes of European equilibrium, even though these themes do not disappear completely. With this conception of the physiocrats and Adam Smith we leave behind a conception of the economic game as a zero sum game. But if it is no longer to be a zero sum game, then permanent and continuous inputs are still necessary. In other words, if freedom of the market must ensure the reciprocal, correlative, and more or less simultaneous enrichment of all the countries of Europe, for this to function, and for freedom of the market to thus unfold according to a game that is not a zero sum game, then it is necessary to summon around Europe, and for Europe, an increasingly extended market and even, if it comes to it, everything in the world that can be put on the market. In other words, we are invited to a globalization of the market when it is laid down as a principle, and an objective, that the enrichment of Europe must be brought about as a collective and unlimited enrichment, and not through the enrichment of some and the impoverishment of others. The unlimited character of the economic development of Europe, and the consequent existence of a non-zero sum game, entails, of course, that the whole world is summoned around Europe to exchange its own and Europe's products in the European market.
Of course, I do not mean that this is the first time that Europe thinks about the world, or thinks the world. I mean simply that this may be the first time that Europe appears as an economic unit, as an economic subject in the world, or considers the world as able to be and having to be its economic domain. It seems to me that it is the first time that Europe appears in its own eyes as having to have the world for its unlimited market. Europe is no longer merely covetous of all the world's riches that sparkle in its dreams or perceptions. Europe is now in a state of permanent and collective enrichment through its own competition, on condition that the entire world becomes its market. In short, in the time of mercantilism, raison d'Etat, and the police state, etcetera, the calculation of a European balance enabled one to block the consequences of an economic game conceived as being over. Now the opening up of a world market allows one to continue the economic game and consequently to avoid the conflicts which derive from a finite market. But this opening of the economic game onto the world dearly implies a difference of both kind and status between Europe and the rest of the world. That is to say, there will be Europe on one side, with Europeans as the players, and then the world on the other, which will he the stake. The game is in Europe, but the stake is the world.
It seems to me that we have in this one of the fundamental features of this new art of government that is indexed to the problem of the market and market veridiction. Obviously, this organization, or at any rate this reflection on the reciprocal positions of Europe and the world, is not the start of colonization. Colonization had long been underway. Nor do I think this is the start of imperialism in the modem or contemporary sense of the term, for we probably see the formation of this new imperialism later in the nineteenth century. But let's say that we have the start of a new type of global calculation in European governmental practice. I think there are many signs of this appearance of a new form of global rationality, of a new calculation on the scale of the world.--Michel Foucault, 24 January 1979, The Birth of Biopolitics. 54-6

Foucault correctly discern the significance of Kant's Perpetual Peace to Ordoliberal thought (recall here; here; here). (He mentions Kant's essay on the following page, and he begins to develops his idea about the Ordos in the subsequent lecture on 31 January.) While it is not surprising Addison is ignored, it is a bit surprising that Hume goes unmentioned because his essays on "The Balance of Trade" and "The Jealousy of Trade" are key steps in the positions described by Foucault. In particular, "The Balance of Trade" explicitly adopts a European stance (and contrasts Europe with China, in particular [recall this post]).*

One way to put Foucault's point in Schmittian terms he does not use is that once the non-zero-sum logic of mutual gains of trade is accepted as state policy, enemies can be transformed into possible mere rivals. Rivals can be genuine competitors in one sense, but since they are playing the same game also partners of a certain sort. And this transformation entails the possibility of permanent self-limitation in foreign affairs, even a route toward confederation (or "ever closer union"). I use the language of possibility because subsequent history suggests the temptation of continental-wide conquest does not disappear altogether. 

The significance of all of this is that foreign affairs is transformed from the Hobbesian state of nature to something distinctive. Foucault emphasizes the development of a species of "global rationality" (there are shades of Hegel here) and the significance of global markets for European exports and imports. I return to this point below. But before i get to that, when regional enemies are turned into regional rivals, one is incentivized to develop and sustain regional institutions and norms that manage various features (trade, communication, international law, etc.) of the rivalry. This is the possible mechanism that underwrites (recall) Smith's idea of a transatlantic empire and Kant's idea of regional con-federation.

One effect is that the world is divided between peoples (rivals) with which one has shared interests and peoples who remain possible enemies. This way of putting it makes sense of Foucault's idea that the development of liberalism generated a European subject, who viewed part of the world as ripe for, if not, colonialism and  imperialism, then at least continued mercantilism. That is, on this view, intra-European liberalism strengthened the system of global mercantilism. Foucault can grant, and even argues this, that liberalism understood itself as a limitation and correction of mercantilism (and the mercantile police state in particular). But this self-understanding, while partially correct, occludes the fact that the embrace of domestic and regional liberalism sustains a system of global mercantilism.

The benefit of this analysis is that it can explain why mercantile forces made such a powerful comeback after 1870 (as neoliberals lament and their critics acknowledge). For rather than being defeated by the victory of 19th century liberalism, its position had de facto been improved. 

Now, against Kant and Smith, Foucault comes close to implying that the non-zero sum intra-European relationships presuppose a zero-sum extra-European relationship that extracts wealth from would be enemies (in what we may call the Global South). On this view a zone of open-ended progress requires the domination of the backward, even if the shape of this domination is product of contingent features. 

It is important to register that while this is certainly not implausible (given subsequent history) this is not the necessary liberal self-understanding. Smith is quite explicit that non-zero-sum relations are possible with peoples everywhere and, as is well known, he is very critical of the mercantile spirit of war that has occasioned the "savage injustice" of non-Europeans. For both Smith and Kant, progress toward a global organization that creates non-zero-sum logic can accompany open-ended economic progress. Whether the self-conception is correct or is ideological delusion or sensible regulative ideal is, in part, an empirical question. 

I am about to wrap up. But note that there is a further implication of the division of states into European rivals and non-European possible enemies. The possible enemies are all, in principle, geographically distant. And so the grounds of enmity much fewer than among the formerly local enemies. This fact was obscured by the existence of European imperialism/colonialism itself the consequence of (a) capacity to project power globally; (b) the relative military weakness of most non-Europeans; (c) and the development or ethnic/racialist/cultural ideologies of European superiority. With global shifts of balance of power against Europe, (a-c) are de facto being undermined. So, this makes possible a form of European subject that does not thereby indirectly support global mercantilism. So, Europe's current relative weakening may, in fact, be good news for European liberalism understood as a global aspiration. If that's right, this may be the first grounds for optimism about a possible third wave of liberalism, if we can generate it.

Okay, that's it for today. Somewhat surprisingly, when later in the lecture series, Foucault turns to the Ordos and the Chicago school, Foucault does not really return to theme of European subjectivity, nor global rationality. But in a follow up post, I will try to rationally reconstruct it and address the question whether neo-liberalism generates imperial mechanisms.

 

On Being On To Something

Professor Kenneth Arrow died on February 21, 2017, at the age of 95. He was widely regarded (along with Paul Samuelson, John Hicks and possibly --- depending on tastes --- John Maynard Keynes, Milton Friedman and Gary Becker) as one of the greatest economists of the 20th century. He also happened to be my favorite economist of all time.    

Professor Dipak Banerjee, my teacher, introduced me to Kenneth Arrow in 1974, who appeared (much in the manner of Hindu god[esses]s for whom my mother had special reverence) in the form of a small yellow paperback. I acquired Social Choice and Individual Values from Dasgupta and Co. of College Street, and still have it. I was a first year undergraduate. That little book was a repository of the most profound logical thought. I had never seen anyone distill what appeared to be an abstract question in political economy into a theoretical device that cut sharply, and cut deep.

What was the question? Briefly, it was well known from the so-called Condorcet paradox that majority voting could produce nasty cycles in choices, even when the individual preferences involved in that voting process were perfectly reasonable.  That led to the question: was there any political system that could “reasonably” aggregate individual preferences? Now think about the question for a second: we know what majority voting is, but there is in principle an infinity of other systems. How could one ever formulate such a problem, let alone attempt to answer it? The very formulation — as axioms placed on an abstract mapping that connected individual preferences to their social counterpart — was sheer genius. But the apparatus was not only beautiful: it could also speak. It argued that under the minimal desiderata placed on the aggregator, there was no way of putting together individual preferences into a satisfactory social ordering; one that was cycle-free.

Arrow had received the Nobel Prize just two years before this encounter with him. He was just 51 years old, by far the youngest Laureate then (or since) in Economics. I ran off to the National Library in Calcutta to dig out the Nobel citation, excitedly anticipating a homage to my beloved Impossibility Theorem. Yet oddly, the The Nobel citation mentions Arrow’s monumental theorem only at the very end, and almost in passing. It focused instead on Arrow’s (and Hicks’s) contributions to general equilibrium theory:

“[Arrow] provided the basis for a radical reformulation of the traditional equilibrium theory. Through this reformulation, which was based on the mathematical theory of convex sets, the general equilibrium theory gained both in generality and in simplicity… The model presented in this paper became the starting point for the major part of further research in this field. Among Arrow's many important contributions should also be mentioned his development of the theory of uncertainty and its incorporation within the frame of general equilibrium theory and, furthermore, his analysis of the possibilities for decentralized decisions in a society where the price system is fixed by the central authority… As perhaps the most important of Arrow's many contributions to welfare theory appears his ‘possibility theorem,’ according to which it is impossible to construct a social welfare function out of individual preference functions.”

This was disappointing as far as my current passion was concerned. But it was also exhilarating: because there was more! (Later, I realized just how much more.) Back I went to Professor Banerjee. I wanted to know why general equilibrium was not just a question of several equations in the same number of unknowns, and what all this was about “the mathematical theory of convex sets.” In response, Dipak-babu helpfully produced another small tome by Gerard Debreu. This was based on the work with Arrow. Though certainly more mainstream this time in its questions, the techniques went way over my 17-year old head....

As a graduate student, reading all this in late 70s and early 80s, I viewed Arrow as a thinker who could both ask the deepest questions in economic and political philosophy, and at the same  time use mathematical arguments with ease and utility to answer them to a substantive degree. This was someone who could put past accomplishments into perspective, leave them behind, and seek to look beyond to newer and more difficult concerns. Such were the nature of his forays into questions of incomplete information, pervasive externalities, increasing returns and interpersonal equity. There was just one word for it: inspirational. The inevitable reaction was not long in coming: I wanted to be like Ken Arrow. Surprise surprise, that was not destined to happen. But something else did: I had the immense good fortune to become his colleague at Stanford.

I was at Stanford on a job flyout, at the very beginning of 1982. I had been warned about the meeting with Arrow. Apparently, all I had to do was tell him the assumptions of my model and then, before I could get any further, he would proceed to tell me all the results that could conceivably be proved from those assumptions. This was unnerving news. But nothing of the sort happened.

I walked into his office. It was small and cluttered, full of books that went up high. It had a vertical rather than horizontal feel. Arrow himself gave the opposite impression. He was shorter than I had expected, strong, rooted to the ground. The man seemed to be in constant motion. He was both brisk and welcoming. He was wearing brightly colored suspenders, and there was an immense bicycle helmet on his desk. (I did not then realize that these, along with the perennially flipped pencil at seminars, would be an intrinsic part of my later memory of him.) I began talking about my work. It was a bit of an out-of-body experience; I could see myself talking to him. Arrow listened very closely. There was an intensity of gaze that never wavered, except when he would start speculating, during which he would look up at the ceiling and back to me. He asked questions non-stop. He talked very fast, the words tripping over one another, the tone uneven, the sentences clearly struggling to keep up with the flow of thoughts. He didn’t exactly anticipate my results. But after 15 minutes, I had a second eerie sensation: that I was talking to someone who  had thought about my problem for a very long time. This was a weird feeling that I came to associate with Arrow over the next few years.

....

Less enthusiasm was shown [by Arrow] towards the neo-Ricardians. Once I had mustered up enough courage, I would talk with Arrow with complete freedom, and before long I had told him that I had once spent an entire day with Piero Sraffa at Cambridge, and that he had given  me a signed copy of his book ...I told [Arrow] that I admired the book for its apparent demonstration that the distribution of income across labor income and profit could not be fully pinned down by economics — that some reference to the political system was needed. Arrow looked at me with a mix of irritation and pity: “I’ll get you out of that soon enough.” And of course he did convince me that Production of Commodities By Means of Commodities had an extra degree of freedom in it that generated a fake indeterminacy, though I still harbor a sneaking suspicion that Sraffa was on to something.--Debraj Ray "Kenneth Arrow, 1921-2017"

Of the quick, first round of obituaries of Arrow, the one by Ray, himself a leading economist (recall that I have remarked on his criticism of Piketty), stands out for its excellence mixing intellectual, psychological, and sociological observations on the significance and nature of Arrow's scholarly life as seen by professional economists today. It's worth reading in full (including the stuff on the scale and content of some of Arrow's many contributions to economics as well as Arrow's relationship to socialism) not the least for acquiring a flavor of the anecdotes that circulate around Arrow's life. One other reason why I quote so much of it -- despite some names and issues being obscure to philosophers -- is that Ray's manner of evaluation is so familiar to us professional philosophers (genius; deepest questions; out-of-body experience; intensity of gaze; talking to someone who  had thought about my problem for a very long time, etc.) They reminded me of the tenor of the recent remarks about Derek Parfit (who, to be sure, published much less than Arrow and was probably slightly less central to the disciplinary formation in philosophy than Arrow was in economics).

In the final sentence of the quoted paragraph (which is not the end of the obituary), Ray allows himself one very modest reservation: "I still harbor a sneaking suspicion that Sraffa was on to something." Now, in context, Ray is remarking on the fact that Arrow (then already very famous) "was teaching History of Economic Thought" and that among the history covered Arrow favored Cournot.* Ray is reporting on a series of exchanges with Arrow some time in the early 1980s (so more than thirty years ago). Even then Sraffa's work was not setting the agenda and conceptual framework for professional economics (in the way that Samuelson and Arrow did and to some extent still do). Even if we allow historical distortion, Arrow's irritation at the interest of his younger, talented colleague in a by then discarded project is notable.+

As an aside, as it happens in 1991,** Arrow published (inter alia) about Sraffa's role in the (Marxist leaning) reception of Ricardo, which influenced the way Keynes was assimilated, especially at Cambridge (and especially by Joan Robinson). In the paper, "Ricardo's Work as Viewed by Later Economists," Arrow self-describes himself as "a practicing theorist, not a scholar in the history of economic thought." Yet, Arrow shows great command over the historical material and the history of Ricardo reception.** One criticism of Sraffa by Arrow is that Sraffa is "indifferent to [Ricardo's] the full employment hypothesis, though one would have thought a position on this question to be basic to the formulation of a coherent model." Another (more implicit) criticism of Sraffa is that "the possibility of diminishing returns was dropped by Marx and equally by Sraffa and Joan Robinson."

To return to my main point. Ray reports his own "sneaking suspicion that Sraffa was on to something" despite being exposed to (presumably conclusive) proof that Sraffa's attempted formal "demonstration that the distribution of income across labor income and profit could not be fully pinned down by economics" was incoherent or unsupported. Lurking in the background is not just the question of the role of politics in determining economic outcomes, but also the question of disciplinary autonomy and closure. One would have liked to hear more about Ray's suspicions here -- Ray is the editor of the American Economic Review so he plays a non-trivial role (among many others) as gate-keeper and standard setter in the profession.++ 

But leaving aside the question of Arrow's criticism of Sraffa, I think the phenomena that Ray puts his finger on is more widespread (and also prevalent in philosophy): often the technically superior person will refute a theory Y -- and let's stipulate these are not straw-man versions of Y --, and [this matters] will do so in ways such that new recruits will not drift toward Y or variants of Y, and yet the insight (u) that gave rise to Y may not have been adequately handled.*** This is due to the fact that the relationship between (u) and Y is not a tight mapping. Much formalization in economics (recall my piece on the criticism of Harberger by MA. Khan) and all explication (recall my post on Leitgeb, Carnap, and Tarski) have some degrees of freedom and judgment about the way in which a would be Y captures (u), especially if (u) is interesting. After the refutation of Y, the partisan of (u) is often told to keep quiet until she can offer a successor to Y  that is not prone to the fatal flaws exposed of Y (by technically superior person). [This is even so in circumstances where Y could handle stuff in ways that no other present theory does, as in cases of Kuhn loss (recall).]

If (u) is something non-trivial, even important, it can be problematic that a discipline avoids working on developing successors or replacements of Y. And so, ideally, one would wish that the refutation of Y would be accompanied by some theoretical articulation that does justice to the significance of (u). [Notice that this is true of formal and non-formal theories of Y.] But currently the incentives and norms of many disciplines work against this and we are not encouraged to reflect on how this might be improved.

 

Debating Kant & Spinoza with Boehm (II): on the First Antinomy, Spinoza & Newton

A central part of Omri Boehm's book, Kant's Critique of Spinoza (especially Chapters 2&3) is a re-reading of Kant's antinomies in order to show that these address Spinoza and Spinozism in order to help explain the Critical Kant's claim that  the two viable metaphysical options are either Kant's Transendental Idealism, which in Boehm's hands is itself a regulative Spinozism, or a Transcendental Realism, which can be best understood as a species of metaphysical Spinozism (recall this post; and also this post on the debate over the PSR between Garber and Della Rocca  as well Alex Douglas's post). I am fully persuaded by Boehm that Spinoza is, indeed, a central interlocutor (for the bad reason that it fits my views of the pre-Critical Kant).

Boehm notes correctly that Descartes and Leibniz, who distinguished between space as indeterminately large and as infinitely large in order to claim that space was indeterminately large (not infinite), reserved "true infinity to God." (75) By contrast, "Spinozism is committed to the world's infinity." (79) This suggests to Boehm (and I agree) that Kant is concerned with Spinozism in the first antinomy's anthithesis. But does it follow that Spinoza is the only such Spinozist known to Kant? I think not. For, Newton, too, is such a Spinozist not just in texts unknown to eighteenth century readers, but also in the General Scholium (and the Principia more generally). This is not obvious if one identifies, as too many Kant scholars stilll do, Clarke's correspondence with Leibniz as the Newtonian position. Even if there weren't Newtonian texts (known to Kant) that suggest otherwise, it would be a mistake to treat Clarke's presentation as echt-Newton because the whole exchange between Leibniz and Clarke is framed from the start by Leibniz's insinuation at the start of the exchange that Newton is a crypto-Spinozist (an explosive charge by the time Leibniz makes it).

For, Newton embraced the true infinity of space right at the start of the Principia: ‘‘Now no other places are immovable but those that, from infinity to infinity [ab infinito in infinitum], do all retain the same given position one to another, and upon this account must ever remain unmoved and do thereby constitute immovable space,’’ (Principia, scholium to the definitions). This is is a core Newtonian commitment unchanged through all the editions (see here for more details). In the General Scholium, added to the Principia's second edition, Newton explains the relationship between God and infinite space. I quote two passages: 

[A] [God] endures always and is present everywhere, and by existing always and everywhere he constitutes duration and space. Since each and every particle of space is always, and each and every indivisible moment of duration is everywhere, certainly the maker and lord of all things will not be never and nowhere (quoted from the Cohen/Whitman translation, p. 941).

[B] “the supreme God necessarily exists, and by the same necessity he is always and everywhere” (941; emphases added)

On [A] God and time (and space) co-exist eternally – so there is no first creation of a moment of time. While Newton denies that God should be identified with space (and time), "He is not eternity and infinity, but eternal and infinite; he is not duration and space, but he endures and is present," God is, thus, always and everywhere immanent within the order of nature (understood as existing in space and time). Newton does not shrink back from claiming that space and time are truly infinite. Moreover, space's existence is a (non-causal) consequence of God's existence ("by existing always and everywhere he constitutes duration and space"). In the General Scholium, Newton does not explain the nature of this consequence. (There is a rich scholarly literature on Newton's (ms) De Grav, where Newton both recognizes the infinite/indefinite distinction which he associates with Descartes's fears about being acccused of atheism, and offers an emanative account of the relationship between God and space; see here for my treatment and survey of literature.)

In the fourth letter to Bentley (which became public in the middle of the eighteenth century), Newton allows “there might be other systems of worlds before the present ones, and others before those, and so on to all past eternity, and by consequence that gravity may be coeternal to matter, and have the same effect from all eternity as at present” (in the Janiak translation, 102). The pre-Critical Kant also embraced the position that ‘‘infinite space teems with cosmic systems’’ [der unendliche Weltraum von Weltgebäuden wimmele] (UNH, Part 1, chapter 1 257 (247)). In context, Kant refers to Huygens (who is, in part, responding to Newton) as his source.

On [B] the modal status of God’s existence and God’s infinite spatiality is said to be identical. So if God is, infinite space (and time) is. Newton does not explain his views on necessity in the General Scholium (or elsewhere, I think), but I pointed out last week that now-less-familiar works by Clarke do so in terms of the final halting point of the PSR. Either way, Newton's views on God, space, and time are Spinozist. (Obviously in this post I have not said anything to motivate the thought that Newton is a monist about substance; but see here.) 

Of course, Newton's views are not identical to Spinoza because Newton treats space and time relatively symmetrically whereas in Spinoza space is and time is not an attribute of substance. In fact, it is worth noting that Kant (in a passage frequently quoted by Boehm) treats Spinozism as the view, "in which space and time are essential determinations of the original being itself." (Critique of Practical Reason) As such this characterization is closer to the historical Newton than to the historical Spinoza. (Boehm recognizes, of course, that Kant treats space and time more symmetrically than Spinoza does.)

So, returning to Boehm, he is simply wrong when he identifies Newton with the view "that the world is not infinite and has a beginning" (80) and that there is "only one relevant rationalist thinker who has a good reason to insist, as does the Antithesis [of the first Antinomy], that world is positively infinite," that is Spinoza. (80) (To avoid confusion, Boehm treats Newton as a rationalist dogmatist.)

Intriguingly, while Boehm has to explain why, given his identification of the position in the Antithesis with Spinoza's, Kant would attribute the position to "a principle of pure empiricism," my suggestion that it could just as well be Newton's faces no such quandary. (That is everything that Boehm claims about what Kant might mean with 'pure empiricism' here could also be attributed to Newton.) Moreover, when Kant [A471] identifies the Antithesis's empiricism (that goes too far) with Epicureanism (as Boehm notes on p. 105 in footnote 28), this fits, as I have argued elsewhere, Kant's pre-Critical interpretation of Newton as a kind of Epicurean. (Why he would do so I have explained here.) 

So, what follows from this? Kant did, I think, distinguish Newton and Spinoza when it suited him. But in Kant's hands, Spinozism mixes elements from Newton's and Spinoza's writings. (This is not to deny that Spinoza is the more consistent Spinozist than Newton, of course.) This observation does not undermine Boehm's larger claims about the philosophical dialectic, but it does undermine his interpretation of Kant.

On Ethics & Economics and the Pre-History of Friedman’s ‘as if’

But this, measured by the standard of natural science, is not very far. There are no data for a science of conduct in a sense analogous to natural science. The data of conduct are provisional, shifting, and special to individual, unique situations in so high a degree that generalization is relatively fruitless. For the time being, an individual acts (more or less) as if his conduct were directed to the realization of some end more or less ascertainable, but at best provisional and vague. The person himself is usually aware that it is not really final, not really an "end"; it is only the end of the particular act, and not the ultimate end of that. F.H. Knight (1922) "Ethics and the Economic Interpretation," The Quarterly Journal of Economics, 475.(Emphases in original--ES.)

"[E]conomic hypothesis that under a wide range of circumstances individual firms behave as if they were seeking rationally to maximize their expected returns (generally if misleadingly called "profits")16 and had full knowledge of the data needed to succeed in this attempt; as if, that is, they knew the relevant cost and demand functions, calculated marginal cost and marginal revenue from all actions open to them, and pushed each line of action to the point at which the relevant marginal cost and marginal revenue were equal." Milton Friedman (1953) "The Methodology of Positive Economics" (Emphases in original--ES.)

The distinguished historian of economics, Ross Emmett, called my attention to the 1922 piece by Frank Knight. For, as Emmett notes, in the passage quoted above Knight partially anticipates the central methodological stance made famous by Milton Friedman in his 1953 piece (hereafter F1953). There is a known biographical connection between the two—Knight is what I call 'the Godfather' of Chicago economics because he taught so many future 'Chicago-economists' (and non-Chicago Nobel laureates), including Friedman.

In the quoted passages Knight and Friedman both recognize that the mathematical structure of economics should not be taken as a literal description of what goes on inside the minds of individuals or the decision procedures of economic agents (Friedman talks as much about "firms" as about "businessmen"); they also agree that in real life there is no "full knowledge" of the relevant data. Knight had just published a famous book, Risk, Uncertainty, Profit, in which he had defended the idea that because such relevant data were absent – that is we really live in a world of (unmeasurable) uncertainty -- entrepreneurs could make a profit. Friedman takes a different approach: according to him the as-if strategy is vindicated by the predictions that follow from assuming as-if maximization (etc.); these, Friedman expects, will be good enough (in part because, following a hint of Alchian, he assumes that in markets economic agents that deviate too much from the assumption will not survive).

Knight and Friedman both distinguishing economics from ethics; economics is independent and capable of generating agreement--a realm free from "controversies" (Knight 455; recall this post on Friedman). Before I go into the details of the distinction between ethics and economics (in both), it is worth stressing that Knight's defense of the independence and scientific nature of economics is also extremely deflationary; "it is substantially correct for practical purposes." (462) But Knight goes on to claim that,

"A science of conduct is…possible only if its subject-matter is made abstract to the point of telling us little or nothing about actual behavior. Economics deals with the form of conduct rather than its substance or content. We can say that a man will in general prefer a larger quantity to a smaller (the principal trait of the economic man) because in the statement the term "wealth" has no definite concrete meaning; it is merely an abstract term." (Knight 475; the position is echoed partially by Friedman: "Viewed as a language, [economic] theory has no substantive content; it is a set of tautologies." (F1953, 11; see also 7))

Stigler's Scientific Revolution

Economists generally share the ruling values of their societies, but their professional competence does not consist in translating popular wishes into an awe-inspiring professional language. Their competence consists in understanding how an economic system works under alternative institutional frameworks. If they have anything of their own to contribute to the popular discussion of economic policy, it is some special understanding of the relationship between policies and the results of policies. The basic role of the scientist, therefore, is that of establishing the costs and benefits of alternative institutional arrangements. (Stigler, Presidential Address at the AEA, The American Economic Review, 1-2)

George J. Stigler was a Chicago-economist who won the Nobel prize (1982) "for his seminal studies of industrial structures, functioning of markets and causes and effects of public regulation." But this citation does not quite capture what he become known for in the economics profession. In addition to an acerbic wit and a very robust defense of markets, he "deserves a great deal of the credit for getting economists to look at data and evidence." (The Concise Encyclopedia of Economics) Moreover, the entry on Stigler continues,"one could examine the actual effects of regulation, and not just theorize about them. Stigler devoted his entire 1964 presidential address to the American Economic Association to making this point. He argued that economists should study the effects of regulation and not just assume them."*

Yesterday, I noted the significant afterlife for the idea that "economists generally share the ruling values of their societies," which is a core assumption for the technocratic political ideal. Here I focus on the fact that that Stigler really is one of the economists that turned economics from relying on "the telling anecdote," (Stigler, 12) into a data-driven discipline (although his presidential address notes non-trivial predecessors on this score).** While Stigler may not have been able to foresee the extent to which economics would become data-mining, Stigler himself declared that "it is a scientific revolution of the very first magnitude-indeed I consider the so-called theoretical revolutions of a Ricardo, a Jevons, or a Keynes to have been minor revisions compared to the vast implications of the growing insistence upon quantification." (Stigler 17; the Kuhnian language is no accident--in fact, Stigler had theorized about scientific revolutions before Kuhn, and warmly welcomed Kuhn's Structure.) This declaration, he claims, "is prophecy, not preaching." (Stigler 17)

W.E.B. Du Bois, economist, philosopher, true lover of humanity

I have told you of those seventy-five landholders in Lowndes County--owning $25,000 worth of land, building new and better houses and working steadily and saving. And yet, gentlemen, not a single one of those men under the new constitution of Alabama has the right to vote: they cannot say a word as to the condition of the roads that pass their farmers, the situation of the schools, the choice of teachers, the kind of county officers or the rate of taxation. They are just as absolutely disfranchised as the worst criminal in the penitentiary and as I am in Georgia. You can twist this matter up and down and apologize for it and reason it out--its wrong, and unjust, and economically unsound, and you know it. (Du bois, 1906 "The Economic Future of the Negro," 242)

During the nineteenth century, philosophy, political economy, and moral sciences were overlapping disciplines that remained in fruitful, albeit increasingly fractured, conversation through the first half of the twentieth century. As philosophy became professionalized (as a species of scientific philosophy), it lost all memory of this; John Rawls educated himself into these matters and was the last to have a deep and wide knowledge of the issues. The oldest generation of active economists (who were still required to take history of economics in their graduate education) are the last disappearing store of knowledge about any of this.

One myth about the shared history of philosophy and economics is the idea that the historical overlap between the two is essentially constituted by utilitarianism.* W.E.B. Du Bois was no utilitarian, yet at the start of his career he was a distinguished economist trained in Berlin in the German historical school, then led by Schmoller and Wagner.** The passage above is, as Prasch suggests (320), directed at the economist John Bates Clark -- whose name is still remembered in professional economics because of the very influential medal named after him --, who had argued that economic development had to be prior to expansion of the franchise. Du Bois points to the enduring moral and economic truth: economic activity is embedded in (developing) political frameworks, which play a non-trivial role in generating patterns of economic outcomes.