Owen

Maybe not that popular, but Robert Owen was a really a hero in his time. Could be described as one of the first utopian socialists (with Thomas More permission). The amazing thing about Robert Owen, is that he wasn’t only utopian, but practical. He transformed a little mill village (New Lanark) in something not far from utopian society. He changed the life of hundreds for good!. Owen’s main contribution to socialist thought was the view that human social behavior is not fixed or absolute, and that human beings have the free will to organize themselves into any kind of society they wished.

During Malthus and Ricardo days wasn’t that hard to understand why that gloomy vision of economy and life in general. From Heilbroner:

“In 1828, The Lion, a radical magazine of the times, published the incredible history of Robert Blincoe, one of eighty pauper-children sent off to a factory at Lowdham. The boys and girls (they were all about ten years old) where whipped day and night, not only for the slightest fault, but to stimulate their flagging industry. And compared with a factory at Litton where Blincoe was subsequently transferred, conditions at Lowdham were rather humane. At Litton the children scrambled with the pigs for the slops in a through; they were kicked and punched and sexually abused; and their employer, one Ellice Needha, had the chilling habit of pinching the children’s ears until his nails met through the flesh. The foreman of the plant was even worse. He hung Blincoe up by his wrists over a machine so that his knees were bent and then he piled heavy weights on his shoulders. The child and his coworkers were almost naked in the cold winter and (seemingly a purely gratuitous sadistic flourish) their teeth were filed down!”.

Probably this story was exaggerated, but surely inhuman practices were accepted and was none business. Even in these days news about slaves appears once in a while in my own country.

Not only bad practices at job were a problem. Technology was the rage, and machinery meant displacement of laboring hands by efficient machines. In 1779 a mob of 8.000 workers attacked a mill and burned it to the ground, because it was taking jobs.

Even Ricardo, who was very respected, admitted that maybe machinery did not always operate to the immediate benefit of the workman. To an observer, the working class were getting out of control, and something must be done. Repression is the first thought, but not the only one.

In those dark times, one small light shone. That light was New Lanark. And as a good light in the dark, New Lanark was visited by over 20.000 moths who wanted to see the miracle by their own eyes. Tsar Nicholas I of Russia was one of those moths. They all came to see that horrible industrial life was not the only and inevitable social arrangement, some good practices were possible too. Some of the good practices were:

  • Workers had two room houses, the garbage was neatly piled up awaiting disposal instead of being strewn in filthy disarray.
  • Factories: Over each employee hung a little cube of wood with a different color painted each side: black, blue, yellow and white. From lightest to darkest, the colors stood for different grades of performance: white was excellent, yellow good blue indifferent; black bad. At glance, the factory manager could judge the performance of his workforce.
  • There were no children under ten or eleven in factories. Those that did, work only for 10 \frac{3}{4} hours per day (the norm were 16). Most important, they were not punished; discipline seemed to be wielded by benignity rather than fear.
  • The factory manager was available for objections to any rule or regulation, or bad cube rating (just like a good school or university).
  • Little children, instead of being in the street by their own, they played in schoolhouses. The small ones were learning the names of plants, animals and trees. Older boys were learning grammar. Regularly, children gathered to sing and dance under young ladies sight. Young ladies were instructed that no child’s question was ever to go unanswered, not child was ever bad without reason, punishment was never to be inflicted, and that children would learn faster from the power of example an from admonition.

Beside all that marvels, New Lanark was profitable. So, this town was not run only by a saint, but by a business saint: Robert Owen, the “benevolent Mr. Owen of New Lanark”. A man that born poor and made a fortune as a capitalist. From a capitals to a opponent of private property. From advocated to benevolence (because it pays dividends) to urge the abolition of money. So take your time if you want to classify him, you will need it.

So first Mr Owen was an entrepreneur (a successful one), then as a capitalist, a philanthropist. When he ran of money, he became a social leader. Most important, he was able to build his dreamed society, and it did work. At least once.

Napoleonic wars threatened with general gluts. To avoid the coming misery, the Dukes of York and Kent and other respectable people formed a committee to look forward for solutions for the arriving gluts. They called Owen to present his views. He didn’t came with just that, he came with the blueprints for a new society: Villages of Cooperation.

For Owen, the problem was that paupers became non productive in general gluts, so the solution was to make them productive. Paupers could become the producers of wealth if they were given a chance to work, and they deplorable social habits could easily be transformed into virtuous ones under the influence of a decent environment. Why would anyone believe that paupers were not able to produce wealth given the resources?. I mean, being pauper is not an illness. Owen knew they were people, just like everybody else.

Villages of Cooperation were an structure to make people productive. Owen proposed their way of living. From Heilbroner:

The families were to live in houses grouped in parallelograms, with each family in a private apartment but sharing common sitting rooms and reading rooms and kitchens. Children over the age of three were to be boarded separately so that they could be exposed to the kind of education that would best mold their characters for later life. Around the school were gardens to be tended by slightly older children, and around them in turn would stretch out the fields where crops would be grown. In the distance, away from the living areas, would be a factory unit; in effect this would be a planned garden city, a kibbutz, a commune.

The committee thanked Mr Owen’s plan, and his ideas were carefully ignored. Laissez faire was the beauty girl and planned economy, well, none seemed to care. But passiveness was not an option for Owen. He sold his interests in New Lanark, and set about building his own community of the future. He chose the place where dreams came true, where the grass is green and the girls are pretty: America (North America please), Indiana. It’s name: New Harmony.

New Harmony was a disaster (maybe it wasn’t so easy to have a community without the strong support of a stable business as New Lanark did with it’s own prosperous mill). After loosing four fifths of is fortune in New Harmony, Mr. Owen went back to England to participate actively in leading a new section of the country: the working classes. Indeed, he started the english working class movement by the name of The Grand National Moral Union of the Productive and Useful Classes. Some marketing genius changed the name to just Grand National. The Grand National gathered 500.000 members. It was huge!

The Gran National was a fiasco too. It appears that England was prepared for a national trade union just as US was prepared for a community paradise. Local union could not control their members and local strikes prospered. Grand National only lasted for two years.

So, who was Robert Owen? He was not only an economist, but a economic innovator who wanted to change the world (and he did it, a bit). While others wrote, he went ahead and tried to change it.

Mr. Owen, my greatest respect to you.

Malthus

We could consider the faith on the invisible hand as an optimistic view: If society act based on individuals choices everything will be OK. But, is there a pessimist view?. Of course! And it is handled by Thomas Robert Malthus. Most known as poor Malthus, the first professional economist.

Thomas Malthus was son of Daniel Malthus, an eccentric old gentleman who enjoyed to discuss the utopian and optimistic views of the future. Daniel Malthus found a mate to discuss, nonetheless than his son Thomas Robert Malthus, who was at the oposite side of the optimistic utopian views. Let’s call Thomas directly a party pooper.

According to the party pooper, the basic problem with society was that too many people lived on it and there was a lack of food for all of them. Even worst, there was going to get even been worst with time: people will grow a geometric ratio and food only in an arithmetic ratio.

Thomas wrote his ideas trying to convince his father of the not so bright future. Daniel was so impressed with the brightness and clarity of his son’s ideas, that he insisted to publish them in an anonymous treatise called An Essay on the Principle of Population as It affects the Future Improvement of Society. In that essay Thomas postulated that there was a tendency in nature for population to outstrip all possible means of subsistence. Instead of ascending in higher life standard, society was in caught in a trap in which the humans reproductive urge would inevitably shove humanity to a precipice of existence. Even though he wasn’t the first one to notice (B. Franklin and J.S Mill published previous essays pointing the problem of too many people), Malthus used strong phrases and images that made him well known.

An example of the strong idea: What could save us from geometric ratios of growing? preventive and positive checks. For preventive he meant to delay parent- hood (not that bad). For positive he meant: war, famine and plagues (not that good either. Not positive at all). In Malthus words, there is no more evil in the world than what is absolutely necessary.

But those solutions weren’t finals. They were just weeks forces against the giant power of reproduction. Of course moral restraints would be not enough for such a immense power.

If we consider his scientific interpretation of data was right, and his eloquence admirable. What happened with the doomed view of future? I mean, the essay appeared in 1798 and we are still alive and not dying from hunger (at least, in this part of the world). I hardly say precipice of existence. What Malthus missed in his rigorous calculations? Beside poor data information, he missed an important aspect (here is the key): technology improvement. I prefer, the nonlinearities of the human behavior.

Industrial revolution started, and with it, new ways to produce far more food at cheaper prices. At the beginning of the eighteenth century, European agricultural productivity was no higher than twenty centuries earlier. But from 1700 to 1800, output per worker doubled in England. In France, despite the effects of revolution and war, output grew by roughly 25% between Malthus’s birth and the first edition of An Essay. Several innovation accounted for the leap, including crop rotation, seed selection, better tools, and de use of the horse instead of oxen, reducing plowing time by nearly 50%.

With that quantity of food, why did we not explode having more and more children? Why higher standard of living did not lead to Malthusian birth spiral? I believe the answer is simple: we changed too. More education and job goals persuade us to have fewer children. So we changed, and we changed in a way that was not seeing from the past. The importance of this is that, it can happen again. It surely will be.

Once in a While, we remember the poor Malthus:

  • 1970 Donella Meadows presented The Limits to Growth. In this book (to read) the data and trends predicted disaster within hundred years unless pre- ventatives were taken. Those preventatives were: immediately stop economic growth, stop population expansion, and recycle resources. They even propose, with hard data, that we are already living in a non sustainable way of life. We are living this way since 1980.
  • 1973 Robert McNamara, president of the World Bank, compared the population explosion to the threat of nuclear war. (Malthus surely would have used the nuclear term as positive check.)
  • 1974 Robert Heilbroner published An Inquiry into the Human Prospect in which he concluded that resources could not keep up with industrial demand.
  • 1980 the State Department and the Council on Environmental Quality released Global 2000 Report proclaiming : If present trends continue, the world in 2000 will be more crowded, more polluted, less stable ecologically, and more vulnerable to disruption than the world we live now.

Were those guys just the ghost of poor Malthus trying to gain popularity? Or are those threats really going to happen? (if they are already not happening) Let’s pray for not to.

Maybe more important than his doom prophecy, is his scientific approach (even him missed). In Malthus words:

The principal cause of error, and differences which prevail at present among the scientific writers on political economy, appears to me to be, a precipitate attempt to simplify and generalize…[and not to] sufficiently try their theories by a reference to that enlarged and comprehensive experience, which, on so complicated a subject, can alone establish their truth and utility.

Malthus has been wrong, for a while, and that’s good for us, for a while.

Karl Marx

Whereas the utopians believed that people must be persuaded one person at a time to join the socialist movement, Marx believed that people would tend to act in accordance with their own economic interests. So no persuasion needed. This belief is known as historical materialism, an argument which support that the world is changed not by good wishes and ideas but by actual physical-material activity and practice. Thus, appealing to the working class best material interest would be the best way to mobilize them to make a revolution and change society. Sounds like a very good plan. The best thing of the plan is that it was, according to Marx, inevitable; capitalism should fall by its own weight. Moreover, is not just any kind of capitalism; Marx states that perfect capitalism (modeled capitalism) falls, and consequently, all others.

This is said by a man that dedicated almost 20 years of his life going to a library to study all there was to be known about economics. If you are not impressed by that, knowing that four children of him died because the poverty he was living because of that hard study, should impress you. And if passion is not enough for you, the almost 2.500 pages of cold analyzing of capitalism in in four volumes of  Das Kapital should make you respect him, at least.

So what could be so power to dedicate your life to? I don’t know, but Marx gives you a hint: “philosophers have only interpreted the world in various ways, the point is to change it”. But why to change society? Maybe Marx didn’t even question that; there were a lot people unhappy with social arrangement in those times (See more in Owen). John Stuart Mill (See more in Mill) characterized the French government as “wholly without the spirit of improvement and… wrought almost exclusively through the meaner and more selfish impulses of mankind“. Nicholas I (despite the Tsar’s one-time visit to Robert Owen’s New Lanark) was characterized by the historian Tocqueville as “the cornerstone of despotism in Europe“. Industrial workers realized that for all their work, they weren’t receiving enough compensation. First, they were frustrated, then they become angry. Revolution was in the air. Changing wasn’t longer an option; it was the only way. 1848 was the terror year for the old order in Europe.

Had the despair been channeled and directed, it might have changed into a truly revolutionary one. But it was spontaneous, undisciplined and aimless; they won initial victories, and then, while they were wondering what next to do, the old order slapped them back into place. The revolutionary fervor was abated and crushed. In Paris, 10.000 people died in the mobs by the National Guard. In Belgium, the country decided that it is better to keep the king, and the king acknowledged it by abolishing the right of assembly.

The revolution was over, but not for a few: The Communist League, a group of communists which counted with the presence of Karl Marx and Friederich Engels. For them, 1848 was only the beginning for a massive change scheduled for the future with a undoubtedly success. The Communist League commissioned their ideas to Engels and Marx to produce The Communist Manifesto (See more here).
Deeper into the Manifesto you find a philosophy. It even has a name: dialectical materialism.

  • Dialectical because it incorporates Hegel ideas of inherent change. Change, according to Hegel, was the rule of life. Every idea, every force, irrepressible bred its opposite, and the two merged into “unity” that in turn produced its own contradiction. So there is nothing wrong or right, but always struggle.
  • Materialism because it grounds itself to the real world, not ideas. As Engels put it in his work “Anti-Duhring” “..starts from the principle that production, and with production the exchange of its products, is the basis of every social order; that in every society that has appeared in history the distribution of the products, and with it the division of society into classes or estates, is determined by what is produced and how it is produced, and how the product is exchanged. According to his conception, the ultimate causes of all social changes and political revolutions are to be sought, not in the minds of men, in their increasing insight into eternal truth and justice, but changes in the mode of production and exchange; they are to be sough not in the philosophy but in economics of the epoch concerned“.

So, whatever the solution to the the basic economic problem, society require a “superstructure” of noneconomic activity of thought. This is not an independent superstructure but deeply in connection with real economic activity. Moreover, this relation means that thought and ideas are product of environment, even when they aim to change the environment. Here is the constant struggle, the dialectical part: material life shape ideas, and ideas shapes material life in the next period. As Marx put it:

Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly found, given, and transmitted from the past“.

The Manifesto wasn’t just a cry for revolution, but a philosophy of history in which a communist revolution was not only desirable but inevitable. Unlike the utopians, who wanted to reorganize society closer to their desires, communist did not appeal to men sympathies and desires. Marx criticized utopian socialists, arguing that their favored small-scale socialistic communities would be bound to marginalization and poverty, and that only a large-scale change in the economic system can bring about real change.
Communists, on the other side, appeal to a cold analysis of what social system inevitable will be; a social system ruled by proletariat. They have only to wait, they could not lose. They did wait; seventy years.

Marx contemplated the possibility of Russia’s bypassing the capitalist stage of development and building communism on the basis of the common ownership of land characteristic of the village mir. Was Russia what Marx had in mind?. Was U.R.S.S a government ruled by proletariat? Was it even a left government? (understanding left wing parties those who opposition social hierarchy). Maybe is not a good idea to bypass development.

The most important impact of Marx and Engels were not their revolutionary activities; none brought too much fruit during their own lifetimes. The most important impact of Marx and Engels were their vision and philosophy. For Engels, it was clear that private property was not a mean for organizing society, but for Marx it was even more: capitalism must finally collapse. As he saw it, pure capitalism must collapse, not by boycott but just itself. Marx didn’t just believe it, he modeled and he prove it (at least, his model of capitalism).

Marx did a complete study of the monster of capitalism and he foresaw his dead. The good thing was that the giant monster won’t need to be killed by armored knight, but just by himself: a monster will eventually fall by his own weight. The thing is that history tell us something different: that the monster did not fall but became stronger; capitalism evolve to neoliberalism. Improves made by Milton Friedman gave our most precious aspects of life to feed the monster: health, education and pensions.

So, the monster did not fall by his own weight, but it became stronger. What happened? Why he didn’t die and became stronger? How is that we are making him even stronger? What are we doing to kill him? Do we really want him to die?

Karl Marx wasn’t communism inventor, just like Adam Smith wasn’t capitalism’s, but they gave a deep and great structured description of the most well known kinds of economy and social order; market economy and planned economy. Is there something else?.

Dedicated to “Sepu, el Sepulveda”.

Adam Smith

Adam Smith never taught a course in economics. In fact, Smith never took a course in economics and is considered as the father of actual economics. His great contribution was proposing that nations wealth could be reached based on individuals choices. There is an invisible hand that is acting to get everything OK (by the way, the invisible hand is mentioned no more than three times in the whole Wealth of Nations). Even more, he tell us what increases the wealth of nations: division of labor and free trade.

What I find really majestic of Smith is that everything he proposes comes with limits or advices. He is not mandatory but an advisor. For example, regard division of labor:

The man whose whole life is spent in performing a few simple operations, of which the effect too are perhaps, always the same… has no occasion to exert his understanding, or to exercises his invention in finding out expedientes to removing difficulties….He, naturally, therefore loses the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become”.He even tell us how to deal with this: public education.

He advises us about abnormal high profits too. Those could persist when small groups of merchants join in pacts to keep prices high. Moreover, proposes exceptions to free trade; Infant industries should have temporary benefits to the early years of development. So yes, government could play a role in markets. Not a fatal heresy.

Nevertheless Smith was very clear about government role:

  1. Provide national defense.
  2. Manage justice through a court system.
  3. Maintain public institutions and resources such roads, canals, bridges, educational systems, and the dignity of the sovereign.

Smith argued that government interference in economy is general harmful and the public interest is best served by competition among private buyers. He recognized that businessmen love to use politics in order to help themselves.

Adam Smith did not invent the market; nor did he invent economics, but taught economics and market to the world for around 75 years, and even more.

Understanding morals as the way how people should act to keep society working, Smith started being a moralist. He searched for the origin of moral approval or disapproval in his first big book: The Theory of Moral Sentiments.

The Presbytery prosecuted him for spreading the following ”false and dangerous” doctrines:

  1. The standard of moral good is promotion of happiness to others.
  2. It is impossible to know good and evil without knowing God.

Against the question How can man who is interested chiefly in himself make moral judgements that satisfy other people? He answered: When people confront moral choices, they imagine an ”impartial spectator” who carefully considers and advises them. Instead of simply following their self-interest, they take the imaginary observer’s advice. So, people decide on the basis of sympathy, not selfishness. It seams that is not just selfishness that rule human life, but maybe a noble side. We are assuming that noble side does not come from selfishness.

Instead of measure wealth on the basis of coin and precious metals, Smith believed that real wealth should be gauged by the standard of living of households. So wealth must be measured from the viewpoint of a nation’s consumers. This surely comes from his french friends, the Physiocrats that argued:

  1. Wealth arose from production, not from gold and silver as mercantilist thought.
  2. Only the agricultural enterprise produced wealth.

In his An Inquiry into the Nature and Causes of the Wealth of Nations Smith focuses in one goal: to uncover causal laws that explain how to achieve wealth. Why? because he was bothered and started to write a book to pass the time in Europe, mainly France. So, he was very good describing his life in those days.

It is a completely change from moral. He saw men as they were, not as they should be. Is that a real difference? or is just that behavior as become too complicated to connect with basic rules?

Some of the remarkable hypothesis were:

  • ”desire of bettering our condition, a desire which though generally calm and dispassionate, comes with us from the womb, and never leaves us till we go to the grave”.
  • ”there is scarce perhaps a single instant in which his situation, as to be without any which of alteration or improvement of any kind”.
  • ”a certain propensity in human nature… to truck, barge, and exchange one thing for another… it is common to all men” .

Smith suggested that society should exploit these natural drivers: Government should not repress self-interested people, for self-interest is a rich natural resource. People would be fools and nations would be impoverished if they depended on charity and altruism.

Man almost constantly need help from others, but it is hoping in vain to expect their benevolence only. He will be more likely to prevail if he can shew them that it is for their own advantage. So here it comes the famous phrase ”It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest”.

Smith never suggest that people motivated only by-self interest; he simply states that self-interest motivates more powerfully and consistently than kindness, altruism, or martyrdom. Put succinctly: Society cannot rest its future on the noblest motives, but must use the stronger motives in the best possible way.

Can a community survive without a central planning authority do decide who produces and what produced?. Yes he argued. Not only will it survive, but the community will thrive more than any community with central planning. 

In The Wealth of Nations, Smith saw labor as the chief engine of economic growth, accelerating when:

1. Labor supply increased
2. labor subdivided
3. labor quality rose through new machines.

As long as new ideas for profitable investment and inventions continued to spring from imaginations and free exchange was permitted, economic growth would go forward. That means, the general public could enjoy a higher standard of living. Which is very similar to findings by Nobel Prize-winning economist, Paul Samuelson: “inventions keep recurring…profit rates and real wage rates average out above their subsistence level” .

So that was Smith: Wealth as function of land, labor, and capital. Free will and trade.

As weird as it may sound, I feel close to Adam Smith. That is because he started to write The Wealth of Nations just because he found himself getting bored in Europe, just as I did when I started to read about economics. In words of the old Smith, ”I Have begun to write a book in order to pass away the time”.

Moreover he started being a moralist, ended being an economist. Is there a real difference?.

John Stuart Mill

You will have a hard time classifying Mill in political or economic dimension, but surely not in brilliance: he was a genius. But that’s not that special, almost all of the greatest economist were extremely brilliant, but few started to learn greek at the age of three. At seven he read most of Plato dialogues. At thirteen he made a complete survey of all there was to be known in political economy. So, undoubtedly, such a nerd! A nerd that went deep enough to discuss the philosophical conflicts underlying classical economics. The ethical foundations of economics and capitalism were discussed.

Usually considered as a genius, probably owns that to his father, James Mill, close friend of Ricardo and Jeremy Bentham (father of utilitarianism). James was the one that pushed John to a seven days a week study plan (so yes, no friends for the little Mill). The miracle was not that John Stuart Mill wrote masterpieces; the miracle was that he survived childhood!

Utopian socialists are usually dismissed by considering them dreamers, but the thoroughness of Mill thoughts are not questioned.

“A person choose to do x, just if he believes that doing it, he will gain profit “. That was I learned in my first class of economy. That is the base of utilitarianism immortalized by Jeremy Bentham. You could see Bentham as the Newton of the moral universe, a moral scientist. Bentham’s model is based on seeing the “mankind under the governance of two masters, pain and pleasure….Since all human beings like pleasure and hate pain (masochists notwithstanding, although they prefer pain only because it gives them pleasure), they choose to do that which gives them pleasure”. So profit in this case, is pleasure minus pain. So when is time to choose, choose the alternative that maximizes profit (given the restrictions).

 “Greatest happiness for the greatest number” is the cry of the utilitarian movement. Under that, relies the assumption that all people count equally when determining happiness, which sounds fair enough. Bentham even devised a method of quantifying pleasure and pain; it’s called felicific calculus (that really sounds like a lot of free time). Does anything from here gives us something useful? Of course!

  • In politics, Bentam’s Radicals (Bentham groupies) argued for democracy and free speech. From free speech comes truth, they declared.
  • They fought for reducing taxes on periodicals and assembly restrictions.
  • They attacked the Corn Laws (entrance barrier to foreign seeds to U.K).
  • They argued against punishment in prisons. After all, “a criminal is a person who believes that crime pays”. The problem is that they missed the long term pain (costs).

 To utilitarians, god was utility. The invisible hand wasn’t, even if their god usually worked through the invisible hand.

Mill was a Jeremy’s fan. He found the scientific precision that he was looking for, and gave him a sight of society. Not for too long. Around twenty, Mill realized that rational thoughts were just not enough. He missed the ultimate goal; happiness. He arrived at a critical point in his life. In his words:

“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 inters in the means? I seemed to have nothing left to live for”

 Hopeless, he found something that kept him alive: poetry. But flesh could not live just reading poetry. After a while he found what he was looking for: love. The nerd fell in love. Harriet Taylor was the girl. As usual, things were not that easy. There was a Mr. Taylor too, but as Disney taught us, love prevails. After twenty years of “non-sex relationship”} (he was such a nerd so, it was very plausible), they got married. Mill always noted the influence of his wife and daughter in his masterpieces. In the age of reason, Mill longed for passion (Amazingly, that is not that crazy. Hume insisted that reason always be the “slave of the passions”. Even Bentham introduced reason only as a method of comparing passions, not replace them).

“Whoever, either now or hereafter, may think of me and of the work I have done, must never forget that is the product not of one intellect and conscience, but of three”

After that spring break of feelings Mill would return to Benthamism, not to destroy it, but to improve it. Mill insisted that the greatest happiness depends more than mere pleasure. For example, art is more than pleasure; it lifts the spirit. Mill enhances utilitarianism by invoking Platonic virtues of honor, dignity and self-development. By the way, that’s the reason that Mill became an advocate of public education; to allow people to enjoy more than wordily pleasures, but spirit lifters.

 His first masterpiece were two long volumes titled “Principles of Political Economy”. Beside of being a survey of the field, he gave a new perspective that Mill believed of monumental importance:  economy was all about production, not distribution. For distribution, something else was needed (morals?). Scarcity and toughness of nature are real things, and the economic rules of behavior which tell us how to maximize the fruits of our labor are as impersonal and absolute as hard sciences. So economics have nothing to do with distribution.

“Once we have produced wealth as the best we can, we can do with it as we like… The distributions of wealth depends on the laws and customs of society. The rules by which it is determined are what the opinions and feelings of the ruling portion of the community make them, and are very different in different ages and countries, and might be still more different, if mankind so chose…  }“.

So as Robert Owen, Mill thinks that society has the power of make itself in different forms. There is not only one natural solution then.

  If society did not like the so-called “natural” results of its activities, it had only to change them. Society could tax and subsidize, it could expropriate and redistribute. It could give all its wealth to a king, or it could run gigantic charity ward; it could give due heed to incentives, or it could, at its own risk, ignore them. But whatever it did, there was no “correct” distribution, at least none that economics had any to reclaim. There was no “laws” to justify how society shared its fruits: there were only men sharing their wealth as they saw fit.

But the thing is that societies arrange their modes of payment as integral parts of their modes of production: for example, feudal societies do not have “wages”, anymore than capitalists societies have feudal dues. So production and distribution cannot be neatly separated.

Maybe, what John was trying to say is that societies would try to remedy its “natural” workings by imposing its moral values. Fixing economy with morals. Indeed, the New Deal (hand of John Maynard Keynes), or Germany welfare are kind of Mill’s vision of a society. So the moral nerd really extended his thoughts.

As a great person which we remember (and not a military), Mill didn’t feel good by his surroundings, and thought about that. In his words:

“I am not charmed with an 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 human kind, or anything but the disagreeable symptoms of one of the phases of industrial progress”

 So, based on his bad feelings regard surroundings, seeing it as a problem, he proposed a solution (a moral one):

“That the energies of mankind should be kept in employment by the struggle for riches as they were formerly by the struggle for war, until the better minds succeed in educating the others into better things, in undoubtedly better than they should rust and stagnate. While minds are coarse they require stimuli and let them have them”

Note, that as Adam Smith, John Stuart Mill saw capitalism as just a phase of human development, not a steady state nor a final solution.

If you are fast, and want to draw Mill as a communist, Mill tell you about communism (Not Karl Marx communism. Mill wasn’t aware of his existence then):

The question is wether would be any asylum left for individuality of character; wether public opinion would not be a tyrannical yoke; whether the absolute dependence of each on all, and the surveillance of each by all, would not grind all down into a tame uniformity of thoughts, feelings, and actions… No society in which eccentricity is a matter of reproach can be in a wholesome state.”

Rather than “equality of results”, Mill urged for “equal opportunity”. If some children inherit huge sums from their parents, they possess an unfair advantage over others. This with silver spoons may rely on their parent’s wealth rather than create more; an inefficiency.

Mill also wondered how society could give relief to the poor without dissuading them from getting jobs. He proposed recipients exchange labors for welfare payments (for the physically fit, handicapped should always receive aid from society). Ignored for decades, in 1988 federal governments in the U.S adopted “workfare” programs in which healthy welfare recipients must accept employment or job training. Mill feared that if welfare was too easily doled out, generations of poor people would be born into families weaned of a work’s ethic. He rejected socialist and romantic proposals for raising relief benefits or wages per se.

Where was Mill in a line ended by laissez-faire and government intervention?. In a good place around the middle. The goal of government supporters is to show that greater society happiness requieres intervention: “every departure from [laissez-faire], unless required by some great good, is a certain evil”.

Different from Malthus, a hopeful Mill thought that the working classes could be educated to understand their Malthusian peril, and that they would regulate their number voluntarily. With that pressure removed, Mill’s model took a different turn from Malthus and Ricardo: as before, the tendencies of the accumulation would bid up wages, but as now people is aware of the poverty of having too much children, they wouldn’t have too much. Profits would rise and the accumulation of capital would come to an end, reaching a steady state. Now, rather than seeing the study state as the end for capitalism and economic progress, Mill sees it as the first stage of a benign socialism (that what Smith said too), where mankind would turn its energies to serious matters as justice and liberty, and not economic growth per se.

Within this impending steady state, great changes could me made:

  • The state would prevent landlord from reaping unearned benefits.
  • The state would tax away inheritances.
  • Associations of workmen would displace the organization of enterprises in which men were subordinate to masters.
  • By their sheer competitive advantages, the workers cooperatives would win the day.

Capitalism would gradually disappear as former masters sold out to their workingmen and retired on annuities. More than a hundred years have passed, and the steady state is no in the horizon (not here at least). Patience then.

More than being at english at the core (gradualist, optimistic, realistic, and devoid of radical overtones), he was a moralist. When Herbert Spencer, his great rival in the area of philosophy run out of money to complete his project, Mill offered to finance it: “I beg that you will not consider this proposal in the light of a personal favor…But it is nothing of the kind, it is a simple proposal of cooperation for an important public purpose, for which you give your labor and (I) have given your health”.

That was John Stuart Mill, the last “political economist” and “utopian socialist”. For me, a super nerd that fell in love and happily apply his geniuses to think in how to enhance the human condition. For that he proposed greater wealth, equality, women rights and education. Only good things can come out of that. Thanks Harriet Taylor and daughter for encourage Mill’s geniuses.

Dedicated to Sebastian P., a nerd that is discovering something else beside reason.