- Shopping Bag ( 0 items )
Here, Peart and Levy tackle the issues of racism, eugenics, hierarchy, and egalitarianism in classical economics and take a broad view of classical economics' doctrine of human equality. Responding to perennial accusations from the left and the right that the market economy has created either inequality or too much equality, the authors trace the role of the eugenics movement in pulling economics away from the classical economist's respect for the individual toward a more racist view at the turn of the century.
The "Vanity of the Philosopher" reveals the consequences of hierarchy in social science. It shows how the "vanity of the philosopher" has led to recommendations that range from the more benign but still objectionable "looking after" paternalism, to overriding preferences, and, in the extreme, to eliminating purportedly bad preferences. The authors suggest that an approach that abstracts from difference and presumes equal competence is morally compelling.
"People in the know on intellectual history and economics await the next book from Peart and Levy with much the same enthusiasm that greets a new Harry Potter book in the wider world. This book delivers the anticipated delights big time!"
-William Easterly, Professor of Economics and Africana Studies, NYU, and non-resident Senior Fellow, Center for Global Development
"In their customary idiosyncratic manner, Sandra Peart and David Levy reexamine the way in which the views of classical economists on equality and hierarchy were shifted by contact with scholars in other disciplines, and the impact this had on attitudes towards race, immigration, and eugenics. This is an imaginative and solid work of scholarship, with an important historical message and useful lessons for scholars today."
-Stanley Engerman, John Munro Professor of Economics and Professor of History, University of Rochester
Sandra J. Peart, Professor of Economics at Baldwin-Wallace College, has published articles on utilitarianism, the methodology of J. S. Mill, and the transition to neoclassicism. This is her fourth book. David M. Levy is Professor of Economics at George Mason University and Director of the Center for Study of Public Choice. This is his third book.
The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labour. The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education. When they came into the world, and for the first six or eight years of their existence, they were perhaps, very much alike, and neither their parents nor playfellows could perceive any remarkable difference. About that age, or soon after, they come to be employed in very different occupations. The difference of talents comes then to be taken notice of, and widens by degrees, till at last the vanity of the philosopher is willing to acknowledge scarce any resemblance. -Adam Smith, Wealth of Nations
That political economy in the classical tradition rightly presupposed humanhomogeneity and consequently rejected hierarchical presuppositions of any sort is an underlying theme of this work. Starting with Adam Smith, classical economics is characterized by an analytical egalitarianism that presumes humans are the same in their capacity for language and trade; observed differences are then explained by incentives, luck, and history, and it is the "vanity of the philosopher" incorrectly to conclude that ordinary people are somehow different from the expert (Smith, Wealth of Nations, I.2.4).
The questions at issue between analytical egalitarians and their critics are (1) whether everyone's preferences count equally and (2) whether everyone is equally capable of making economic decisions. In Smith's account, all people, philosophers and subjects alike, are motivated by fame and fortune, and we are all equally capable of making decisions. We call this doctrine, which makes no distinction between the street porter and the philosopher, analytical egalitarianism. The oppositional view holds that some among us are different from others. Since difference implies superiority in the period we study, we call this doctrine analytical hierarchicalism. Our argument in what follows is that economics moved from a doctrine of analytical egalitarianism in the classical period to one of analytical hierarchy in the postclassical period.
The notion of analytical hierarchy was expressed forcefully in economics by F. Y. Edgeworth, who argued that, post-Darwin, it was inappropriate to have a social norm in which everyone counted as one. Instead, Edgeworth held that economists needed to take evolutionary fitness-which mapped to the capacity for pleasure-into account. Since some preferences were "better" than others, these were to count more in the calculus of social happiness.
We argue in what follows that the "science" of eugenics is a consequence of analytical hierarchicalism. In eugenic science, "experts" presupposed its subjects to be inferior and proposed to remake the human herd more to the experts' liking, to obtain racial perfection or for the "general good," as Charles Darwin put it. It is no coincidence that in the period when eugenics acquired both its name and the analytical machinery purporting to locate "the unfit," its first and persistent target was classical economics and the early utilitarian presumption that all should count equally in the calculus of social good. The early eugenicists (W. R. Greg and Francis Galton) knew they were contending with the egalitarian doctrine of classical economics. The key point of contention was whether individuals could be trusted to regulate their numbers sufficiently, or whether individual preferences needed to be overridden in such decisions. One important instance of this contention occurred in the public debate concerning unregulated access to birth control. The contemporary report on this debate viewed the matter as a dispute between J. S. Mill's focus on human happiness, on the one hand, and Charles Darwin's pursuit of racial perfection, on the other (Times 20 June 1877, 11; chap. 10, this vol.).
Plato's Republic asked the eugenic question for the first time: why do we breed cattle but not people? Again it is no coincidence that when Galton's eugenic work was first reviewed, it was hailed as the first step beyond Plato (chap. 6, this vol.). The question supposes that we-the experts-are different from them-the human cattle, the subjects. In classical economics, by contrast, there is no Other because the philosopher, as Smith put it, is part of the analysis. The distinction (or lack thereof) is foundational and has enormous consequences: the classical view implies that, as a group, the subjects of a theory have the same moral standing and innate abilities as the experts who propose the theories. The hierarchical view places the subjects and experts on different moral and intellectual grounds.
For classical economists, the subject and the expert share moral standing, ability, and motivational structure. Following in the tradition of analytical egalitarianism, J. S. Mill developed his famous stance on homogeneity in his 1836 essay "On the Definition of Political Economy." Here, and in his Principles of Political Economy and Logic, Mill maintained that nonsystematical differences might be abstracted out when we use the device of "Abstract Economic Man." For the political economist, the common behavioral assumptions that matter are the hypotheses of competence as well as nonsatiation in the context of a social state.
[Political economy] does not treat of the whole of man's nature as modified by the social state, nor of the whole conduct of man in society. It is concerned with him solely as a being who desires to possess wealth, and who is capable of judging of the comparative efficacy of means for obtaining that end.... It makes entire abstraction of every other human passion or motive; except those which may be regarded as perpetually antagonizing principles to the desire of wealth, namely, aversion to labour, and desire of the present enjoyment of costly indulgences. (Mill, Essays, 321)
The wealth maximization axiom is selected because it is "the main and acknowledged end" in "certain departments of human affairs" (323). Wealth maximizing and labor avoidance are common attributes of all humanity: those for whom institutions such as slavery or marriage prevent competent, self-directed decision making might nonetheless develop this competence if the barriers to doing so were removed.
We pause to note that Mill's "hypothesis" of economic man does not imply that people are motivated only by material interests. Just as people are willing to trade material income for leisure so, too, if people are willing to trade material income for praise or praiseworthiness (or to avoid blame), then the economic calculus must take this desire for approbation into account. Smith explained the point in detail in his Moral Sentiments and Wealth of Nations. Individuals might willingly give up material income in return for the improved reciprocal standing of another group (such as slaves or women). In Smith's account, this depends upon the ability to imagine yourself in someone else's position. For Mill, human development is characterized by improved sympathetic judgments which provide the source of moral obligation. So understood, Mill's greatest-happiness utilitarianism is equivalent to the Golden Rule of Christianity (chaps. 7, 8, this vol.). We shall return later to the notion of sympathy and the consequences of its removal from economics on many occasions.
The foundational assumption that the street porter and the philosopher are essentially the same prompts us to ask whether we all have the same motivations when it comes to uncovering scientific "truth." In particular, are scholars motivated by the same self-interested desires for fame and fortune as the rest of the population? Since Smith supposes the philosopher is in all respects the same as the street porter, his answer must be yes. Since his time, however, many in the academy have come to presume that scholars are more public-spirited than the rest of the population; scholars are said to seek only (or at least mainly) the truth. We allow that prejudice infects the academy in the area of personal relationships, acknowledging, for instance, that a scholar might oppose hiring a talented colleague because of racial or religious prejudice. Yet we often cling to the belief that the same scholar would be unbiased in the evaluation of ideas or intellectual output-that he or she would never ignore or disparage ideas for racial or religious reasons. Such a presumption may be the final and most persistent form of hierarchical thinking. In chapters 5 and 6, we shall examine a case in which the presumption that experts seek only the truth was terribly wrong.
In the period we study, those who opposed the classical economists' presumption of homogeneity focused on two purported heterogeneities between the expert and his subject. First, the expert is presumed to be untainted by considerations of self-interest, while his subject is motivated by self-interest. Second, perhaps because of superior self-control or some other inherent difference, the expert is supposed to be "superior" to or smarter than the subject he studies. And it is important to note that this intellectual superiority is not merely a matter of better information: the expert with whom we are concerned is someone who simply doesn't trust all subjects, who holds that some will always be hopelessly prone to making persistent mistakes no matter how much we educate, train, and inculcate. F. Y. Edgeworth clearly captured the difference between the classical egalitarian framework in J. S. Mill and post-Darwinian ideas that implied that education and other institutional changes would fail to produce the desired social good. In 1881, he wrote that "the authority of Mill, conveying an impression of what other Benthamites have taught openly, that all men, if not equal, are at least equipotential, in virtue of equal educatability" would "probably result in the ruin of the race" because it failed to take into account "difference of quality" among men (132). Ours is largely a story about how the category "inferior subjects" changes over time: from the Irish, to blacks, to Jews, and so on.
It is precisely this supposition of superiority that Smith opposed, as the "vanity of the philosopher": such vanity implies the subject is in need of guidance from the expert. It also implies that the expert will be predisposed to disapprove of (and even disallow) the subject making unfettered choices in a marketplace or in the direction of her affections in the household and elsewhere. As long as the expert maintains that he possesses insight into the sorts of preferences people "should" possess-if they only knew better-he must also accept, and may perhaps even demand, responsibility for directing those preferences until the subjects gain the sort of sophistication that he enjoys. The argument is as old as Plato's doctrine that the world will not be set right until the experts take charge. We shall argue that the "science" of eugenics operationalizes this doctrine. By contrast, the classical economists' egalitarian notion of homogeneity-motivational and otherwise-and choices unfettered by the direction of one's "betters" go hand in hand.
If we bring the expert and the subject of the theory, the ordinary person, to the same plane of existence in terms of motivation, we also need to consider how the ordinary person makes decisions. The attack on classical economics that we study here is a long-neglected example of the self-conscious expert's attack on the capacity of ordinary people to make decisions.
WHAT DOES EQUALITY LOOK LIKE?
It is straightforward to visualize difference-especially, perhaps, inferiority-among people: we all know of images of a beastlike being that are supposed to represent lower orders of humans. Since beasts participate in only a limited way in human rationality, images of human bestiality are powerful assertions of human difference. Images of bestiality can then be juxtaposed with choice to convey the claim of differential competence (see chaps. 2, 3, this vol.). How might we represent the economists' assumption of equal competence visually? How can the economists' egalitarian postulate of abstract economic man be represented in caricature? These questions initially startled us when they were put to us some time ago as we presented our work on images of hierarchy and transformation (the subject of chap. 3, this vol.). The immediate response of supply and demand curves seemed only partly right, and also somewhat less interesting than some of the visual renderings of hierarchy, racial or otherwise, that we shall see in the chapters that follow.
Visualizing equality is difficult. But late in the nineteenth century, the engineer and political economist Fleeming Jenkin took great pains to confront the critics of economics visually (1887, 2:150). He drew a picture of exchange in which the participants are faceless: there is no difference in competence to be inferred from physiognomical differences (fig. 1.1). Instead, in this delicate, dancelike drawing, the order is circular, each actor in the drama of markets has his or her own goals, and these private goals are revealed in the market order, the spontaneous order. Everyone dances and no one leads: Jenkin's drawing represents the economists' analytical tool of abstract economic man in the context of exchange characterized by reciprocity and sympathy. Because exchange is voluntary, it is mutually beneficial. There is no hierarchy because no one is in charge and individuals are self-directed.
But the notions of equal competence, Abstract Economic Man, and self-directed trade have always been contested. Early in our period, the attack on homogeneity occurs in terms of racial difference and presupposes unequal economic and political competence. The attack on unregulated sympathy concerned a woman's self-directed expenditure of household resources. As theories of racial heterogeneity were much discussed in British anthropological circles in the mid-nineteenth century, attacks on analytical egalitarianism also entered into economics itself and championed the anthropologists' claim that institutional reform would be a colossal failure because of inherent racial differences in the capacity to optimize. Without a "better" to specify what preferences the subject "should" have, reform would fail.
The failure is said to go beyond a simple disconnect between ends and means, something economists have always studied. If it were simply a matter of mistakes, competent people would learn and make corrections better to obtain their ends. But the failure at issue here is one of transformation. Left to their own devices, humans purportedly deteriorate, become lesser beings.
HOW THE DEBATES PLAY OUT
Those who held out for differences in competence relied on what we call transformation theories, the claim that incompetent economic man required remaking, directions for improvement, along with the claim that, left alone to make his own economic choices, economic man would devolve into something less-than-competent, so that remaking in line with the expert's recommendations was urgently required. Until such a transformation occurred, any appeal to changing conditions, incentives, or institutions was said to be infeasible. And to the extent that such groups as the Irish, women, or former slaves dared to place their own preferences on the same plane as those of the experts and to step outside the established institutional hierarchy, they were said to be incapable of economic or political self-rule. We examine this transformation argument in its literary and visual forms in chapter 3.
At the start of our period, economists vehemently opposed the worldview of Plato and Thomas Carlyle entailing hierarchy and transformation by one's betters, and presupposed homogeneity instead. By the early twentieth century, many (though not all) economists embraced a view of economic actors entailing (1) differential competence linked to race, gender, religion, or ethnicity; (2) calls for paternalistic intervention to look after systematically poor optimizers whose preferences could not be trusted; and (3) eugenical remaking. In chapter 4, we examine the significance of the attacks on homogeneity in anthropological circles and trace the influence of anthropologists such as James Hunt on the cofounders of eugenics, Galton and Greg. Eugenic thinking explicitly attacked the classical postulate of homogeneity that characterized the Malthusian recommendation of delayed marriage. Early eugenicists argued, by contrast, that delay of marriage would be dysgenic because the "foresightful" "improving element" will be outbred by the "more reckless" lower orders (Greg 1875, 129). As experiments in eugenics finally confronted the horror of the Holocaust, the classical tradition of equal competence (homogeneity) was revived, at London, Chicago, and scattered throughout the Austrian school. Not surprisingly, given the hierarchical characterization focused on intertemporal decision making, time preference was central in the Chicago revival (Knight 1931; Stigler and Becker 1977). And the antihierarchy argument was made even more emphatically, perhaps, by another admirer of classical economics, Ludwig von Mises (1949). As the Chicago school revived the classical doctrine of homogeneity, it also (and by no coincidence) revived the presumption of competence even in political activity.
Excerpted from THE "VANITY OF THE PHILOSOPHER" by Sandra J. Peart David M. Levy Copyright © 2005 by University of Michigan . Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
|Pt. I||Equality versus hierarchy|
|1||Analytical egalitarianism and its opposition||3|
|2||Perceiving race and hierarchy||15|
|Pt. II||Classical economics and the cattle herders|
|3||Hierarchy and transformation : "chemical political economy"||31|
|4||Denying human homogeneity : eugenics and the making of postclassical economics||58|
|5||Statistical prejudice : from eugenics to immigration||87|
|6||Picking losers for sterilization : eugenics as demographic central planning||104|
|Pt. III||Debating sympathy|
|7||Sympathy and its discontents : "greatest happiness" versus the "general good"||129|
|8||"Who are the canters?" : the coalition of evangelical-economic egalitarians||154|
|9||A discipline without sympathy : the happiness of the majority and its demise||180|
|10||Darwin and the differential capacity for happiness : from cardinal to ordinal utility theory||208|
|Pt. IV||The theorist in the model|
|11||Analytical egalitarianism, anecdotal evidence, and information aggregation via proverbial wisdom||237|
|12||Sympathy and the past : our "stock in dead people" reconsidered||265|
|Postscript : a letter from M. Ali Khan||270|
|App||Galton's two papers on voting as robust estimation||273|