For many economists, including those who have made the most marked contribution to the development of the discipline, their work has to be understood in the context of the rhetorical strategy they were pursuing – what they wanted to persuade us of and how they wanted to do it. The paper identifies two fundamental rhetorical strategies of laissez-faire resting on entirely distinct ontological foundations. What distinguishes these two strategies is the way they articulate the individual with the general (...) interest, how they relate the micro to the macro. The two strategies discussed in the paper are characterised by the stance they take on a fundamental ontological issue, the way in which the things which appear to us in the world are related to the things or matters which compose them. A reductionist approach suggests that we can understand an entity at one level as a congeries. An entity in this view is just an aggregate of entities at a lower, substrate level – a purely external unity. The properties and behaviour of an entity can then be understood in terms of the properties and behaviour of the constituent lower-level components, taken in isolation. In this approach, phenomena at some level are regarded as having just the qualities enjoyed by its lower-level, substrate elements, writ large. The contrary, holistic, stance is to view the qualities of phenomena at one level as emergent at that level, and to assert that an entity can be understood as a product of the inter-relations between its component parts. We have, then, a pair of contrasted approaches: a polarity which is productive in the study of schools of thought, of competing methodologies, and of rhetorical strategies in economics. The paper applies this approach to the work of Smith, Keynes, Hayek, Lucas and Friedman. (shrink)

The eighteenth-century Physiocrats are widely considered to be precursors to classical economics, the French ninteenth-century Economistes, and contemporary free-market economics. They advocated free trade against mercantilism, and natural law against despotism. Although the Physiocrats also contributed to Walras and modern economic engineering, they fit squarely within the French (and world) liberal tradition.

The 2008 crisis has revived debates on the relevance of laissez-faire, and thus on the role of the State in a modern economy. This volume offers a new exploration of the writings of Keynes and Friedman on this topic, highlighting not only the clear points of opposition between them, but also the places in which their concerns where shared. This volume argues that the parallel currently made with the 1929 financial crisis and the way the latter turned into (...) the Great Depression sheds new light on the proper economic policy to be conducted in both the short- and the long-run in a monetary economy. In light of the recent revival in appreciation for Keynes’ ideas, Rivot investigates what both Keynes and Friedman had to say on key issues, including their respective interpretations of both the 1929 crisis and the Great Depression, their advocacy of the proper employment policy, and the theoretical underpinnings of the latter. The book asks which lessons should be learnt from the Thirties? And what is the relevance of Keynes’ and Friedman’s respective pleas for today? (shrink)

To understand the work of economic theorists it is often helpful to situate it in the context of the rhetorical strategy they were pursuing. Two ontologically distinct rhetorical strategies of laissez-faire may be distinguished by the way they articulate the individual interest with the general interest. A reductionist approach, exemplified by Friedman and Lucas, suggests that the properties and behaviour of an entity can be understood in terms of the properties and behaviour of the constituent lower-level components, taken (...) in isolation. The contrary – holistic – stance, viewing the qualities of phenomena as products of the inter-relations between their component parts, is characteristic of Smith and Hayek. While the reductionist approach naturally issues in a laissez- faire policy prescription, the holistic account is more problematic. Reconciling a holistic ontology with a reductionist policy prescription requires the intercalation of a black box, such as an evolutionary process or the invisible hand of a deity. (shrink)

For many economists, including those who have made the most marked contribution to the development of the discipline, their work has to be understood in the context of the rhetorical strategy they were pursuing – what they wanted to persuade us of and how they wanted to do it. The paper identifies two fundamental rhetorical strategies of laissez-faire resting on entirely distinct ontological foundations. What distinguishes these two strategies is the way they articulate the individual with the general (...) interest, how they relate the micro to the macro. The two strategies discussed in the paper are characterised by the stance they take on a fundamental ontological issue, the way in which the things which appear to us in the world are related to the things or matters which compose them. A reductionist approach suggests that we can understand an entity at one level as a congeries. An entity in this view is just an aggregate of entities at a lower, substrate level – a purely external unity. The properties and behaviour of an entity can then be understood in terms of the properties and behaviour of the constituent lower-level components, taken in isolation. In this approach, phenomena at some level are regarded as having just the qualities enjoyed by its lower-level, substrate elements, writ large. The contrary, holistic, stance is to view the qualities of phenomena at one level as emergent at that level, and to assert that an entity can be understood as a product of the inter-relations between its component parts. We have, then, a pair of contrasted approaches: a polarity which is productive in the study of schools of thought, of competing methodologies, and of rhetorical strategies in economics. The paper applies this approach to the work of Smith, Keynes, Hayek, Lucas and Friedman. (shrink)

For many economists, including those who have made the most marked contribution to the development of the discipline, their work has to be understood in the context of the rhetorical strategy they were pursuing – what they wanted to persuade us of and how they wanted to do it. The paper identifies two fundamental rhetorical strategies of laissez-faire resting on entirely distinct ontological foundations. What distinguishes these two strategies is the way they articulate the individual with the general (...) interest, how they relate the micro to the macro. The two strategies discussed in the paper are characterised by the stance they take on a fundamental ontological issue, the way in which the things which appear to us in the world are related to the things or matters which compose them. A reductionist approach suggests that we can understand an entity at one level as a congeries. An entity in this view is just an aggregate of entities at a lower, substrate level – a purely external unity. The properties and behaviour of an entity can then be understood in terms of the properties and behaviour of the constituent lower-level components, taken in isolation. In this approach, phenomena at some level are regarded as having just the qualities enjoyed by its lower-level, substrate elements, writ large. The contrary, holistic, stance is to view the qualities of phenomena at one level as emergent at that level, and to assert that an entity can be understood as a product of the inter-relations between its component parts. We have, then, a pair of contrasted approaches: a polarity which is productive in the study of schools of thought, of competing methodologies, and of rhetorical strategies in economics. The paper applies this approach to the work of Smith, Keynes, Hayek, Lucas and Friedman. (shrink)

ABSTRACT Both Constant and Spencer are moralists who want to encourage individual human perfection. But for Constant, politics has moral value even in a laissez-faire state, whereas for Spencer political participation has no moral value in itself. For Constant, from a moral perspective the historical change from an ancient to a modern conception of liberty is not absolute, and he wishes to retain, in a subordinate role, certain aspects of ancient liberty in modern societies. For Spencer, the historical (...) evolution from militant to industrial society involves the complete separation of politics from any positive moral good. In an industrial society, altruism has no connection with politics, and attempt to bring altruism into politics are not only doomed to failure but iare unjust and therefore immoral. Spencer is a leading figure in the separation of classical liberal thought from perfectionist morality that flourishes in the twentieth century. The separation between classical and modern liberalism that takes place in the fin de siècle is not just a matter of economics – as is shown by the fact that both Spencer and Constant are ardent apostles of laissez-faire – it is above all a question of different attitudes to morality. (shrink)

Liberal political theory is all too familiar with the divide between classical and welfare-state liberals. Classical liberals, as we all know, insist on the importance of small government, negative liberty, and private property. Welfare-state liberals, on the other hand, although they too stress civil rights, tend to be sympathetic to “positive liberty,” are for a much more expansive government, and are often ambivalent about private property. Although I do not go so far as to entirely deny the usefulness of this (...) familiar distinction, I think in many ways it is misleading. In an important sense, most free-market liberals are also “welfare-state” liberals. I say this because the overwhelming number of liberals, of both the pro-market and the pro-government variety, entertain a welfarist conception of political economy. On this dominant welfarist view, the ultimate justification of the politico-economic order is that it promotes human welfare. Traditional “welfare-state liberals” such as Robert E. Goodin manifestly adopt this welfarist conception. But it is certainly not only interventionists such as Goodin who insist that advancing welfare is the overriding goal of normative political economy. J. R. McCulloch, one of the great nineteenth-century laissez-faire political economists, was adamant that “freedom is not, as some appear to think, the end of government: the advancement of public prosperity and happiness is its end.” To be sure, McCulloch would have disagreed with Goodin about the optimal welfare-maximizing economic policy: the welfarist ideal, he and his fellow classical political economists believed, would best be advanced by provision of a legal and institutional framework — most importantly, the laws of property, contract, and the criminal code — that allows individuals to pursue their own interests in the market and, by so doing, promote public welfare. In general, what might be called the “classical-liberal welfare state” claims to advance welfare by providing the framework for individuals to seek wealth for themselves, while welfarists such as Goodin insist that a market order is seriously flawed as a mechanism for advancing human welfare and, in addition, that government has the competency to “correct market failures” in the provision of welfare. (shrink)

The view of Mandeville as a pioneer of laissez-faire is difficult to reconcile with his repeated insistence that private vices were turned into public benefits by the 'dexterous management of the skilful politician'. Even if references to the skilful politician are regarded as shorthand for a legal and institutional framework, there remains the question of whether such a framework is a spontaneous order or the product of purposeful experiment as Mandeville thought? Mandeville warned about the harmful effects of (...) meddling but his complaint was about the actions of fashionable do-gooders rather than government. He understood that the voluntariness of a transaction could be regarded as a defence against complaints of unfairness but he was quick to point out the limitations of voluntariness especially in the market for labour. Mandeville's objective was to teach people what they are not what they should be. He pointed to the strengths of the emerging market system but was not afraid to expose its faults. (shrink)

Can John Stuart Mill’s radicalism achieve liberal egalitarian ends? Joseph Persky’s The Political Economy of Progress is a provocative and compelling discussion of Mill’s economic thought. It is also a defense of radical political economy. Providing valuable historical context, Persky traces Mill’s intellectual journey as an outspoken proponent of laissez-faire to a cautious supporter of co-operative socialism. I propose two problems with Persky’s optimistic take on radical social reform. First, demands for substantive equality have led past radicals to (...) endorse exclusionary nationalist and eugenics policies. It pushes some contemporary radicals towards illiberal interventions into intimate social life. Second, the radical critique of capitalism relies on an account of profit that neglects the epistemic function of private-property markets. Once this is acknowledged, capitalism retains some progressive credentials against radical alternatives. (shrink)

Federic Bastiat came on to the economic scene in 1844 and died in 1850. He filled the pages with his analyses of economic relations and the effects of government plunder, regulation and transfers. He fulfilled the first character of a scientist, he was unterrifed. Before his writings he had had a quarter century of study of economics. He immersed himself in the major economic writings of the discipline. The French economists, Cantillon, Quesnay, Turgot, Dupont, Condorcet, Condillac, Say, Destutt de (...) Tracy, some of them precursors of Adam Smith, had been the leaders in the science of economics. The two leading disciples of Say, Charles Dunoyer and Charles Comte, had edited the major Liberal periodical, le Censeur europeen, from which Bastiat drew his thinking. Bastiat, like Say and Destutt de Tracy, was translated and published in the United States. Bastiat has had his greatest impact during the second half of the twentieth century on American public opinion.Frédéric Bastiat apparut sur la scène économique en 1844 et mourut en 1850. Parmi ses écrits figurent ses analyses des relations économiques et les effets du pillage, des régulations et des transferts étatiques. Il avait le tempérament essentiel d’un scientifique, celui de ne pas avoir peur. Avant d’écrire, il avait étudié l’économie pendant un quart de siècle. Il s’immergea dans les écrits des principaux auteurs de la théorie économique. Les économistes français, Cantillon, Quesnay, Turgot, Dupont, Condorcet, Condillac, Say, Destutt de Tracy, dont certains furent des précurseurs d’Adam Smith, avaient été les chefs de file de la science économique. Les deux principaux disciples de Say, Charles Dunoyer et Charles Comte, avaient édité le principal périodique libéral, le Censeur Européen, qui inspira les écrits de Bastiat. Tout comme Say et Destutt de Tracy, Bastiat fut traduit en Americain. L’impact majeur de Bastiat se fit sentir sur l’opinion publique aux Etats-Unis durant la seconde moitié du vingtième siècle. (shrink)

The paper suggests that Bastiat’s theory of interests, harmony, and the State is rooted in a particular conception of Natural Right, in which the Lockeans and thomistic streams of thought meet. But it also suggests that Bastiat’s interpretation of the role that Providence plays in human events is not able to give a sustainable theory of liberal order. The paper also considers the criticisms to Bastiat’s economic and political theory coming from exponents of classical liberalism, from the Austrians, and from (...) Catholic thinkers of that time, such as L. Taparelli d’Azeglio and M. Liberatore.The conclusion is that although the economic theory of Bastiat is by now obsolete from the conceptual point of view, his political theory and his criticism of the state do remain extraordinarily topical.Cet article suggère que les théories des intérêts, de l’harmonie et de l’Etat de Bastiat sont ancrées dans une conception particulière du droit naturel au confluent des pensées lockéenne et thomiste. Cependant, il suggère aussi que l’interprétation que donne Bastiat du rôle de la Providence dans les affaires humaines ne débouche pas sur une théorie recevable de l’ordre libéral. L’article examine aussi les critiques qu’adressent les partisans du libéralisme classique-tels que les économistes autrichiens, les penseurs catholiques de l’époque comme L. Taparelli d’Azeglio et M. Liberatore-à l’égard des théories économiques et politiques de Bastiat. L’article conclut que le caractère obsolète des théories de Bastiat d’un point de vue conceptuel ne remet pas en cause la singulière actualité de sa théorie politique et de sa critique de l’Etat. (shrink)

This paper develops John Rawls’s famous objection to the system of natural liberty as against the contemporary system of international trade. Even as “dynamic” policies have proven successful in several recent development success stories, the current system enforces a “static,” laissez-faire system of comparative advantage that threatens to consign poorly-endowed countries to a low-productivity, low-income destiny in agriculture and raw materials. I discuss two very different fairness arguments in favor of allowing and encouraging “dynamic,” pro-development polices: an argument (...) from “structural equity” and an argument from “equity of fortune.” I suggest that the former is of more central importance, and that the difference between the two kinds of fairness argument shows why Rawls’s original objection to the system of natural liberty does not imply “luck egalitarianism.”. (shrink)

_ Source: _Page Count 21 This paper develops John Rawls’s famous objection to the system of natural liberty as against the contemporary system of international trade. Even as “dynamic” policies have proven successful in several recent development success stories, the current system enforces a “static,” laissez-faire system of comparative advantage that threatens to consign poorly-endowed countries to a low-productivity, low-income destiny in agriculture and raw materials. I discuss two very different fairness arguments in favor of allowing and encouraging (...) “dynamic,” pro-development polices: an argument from “structural equity” and an argument from “equity of fortune.” I suggest that the former is of more central importance, and that the difference between the two kinds of fairness argument shows why Rawls’s original objection to the system of natural liberty does not imply “luck egalitarianism.”. (shrink)

In this essay I discuss a powerful challenge to high-liberalism: the challenge presented by neoclassical liberals that the high-liberal assumptions and values imply that the full range of economic liberties are basic rights. If the claim is true, then the high-liberal road from ideals of democracy and democratic citizenship to left-liberal institutions is blocked. Indeed, in that case the high-liberal is committed to an institutional scheme more along the lines of laissez-faire capitalism than property-owning democracy. To present and (...) discuss this challenge, I let John Rawls represent the high-liberal argument that only a narrow range of economic liberties are basic rights and John Tomasi represent the neoclassical liberal argument that the full range of economic liberties are basic rights. I show that Rawls’s argument is inadequate, but also that Tomasi’s argument fails. I thus conclude that high-liberalism is in a precarious situation, but is not yet undone by the neoclassical liberal challenge. (shrink)

In this essay I discuss a powerful challenge to high-liberalism: the challenge presented by neoclassical liberals that the high-liberal assumptions and values imply that the full range of economic liberties are basic rights. If the claim is true, then the high-liberal road from ideals of democracy and democratic citizenship to left-liberal institutions is blocked. Indeed, in that case the high-liberal is committed to an institutional scheme more along the lines of laissez-faire capitalism than property-owning democracy. To present and (...) discuss this challenge, I let John Rawls represent the high-liberal argument that only a narrow range of economic liberties are basic rights and John Tomasi represent the neoclassical liberal argument that the full range of economic liberties are basic rights. I show that Rawls’s argument is inadequate, but also that Tomasi’s argument fails. I thus conclude that high-liberalism is in a precarious situation, but is not yet undone by the neoclassical liberal challenge. (shrink)

A review of economic thought since the sixteenth century reveals two streams of economic discourse, dirigisme and laissez-faire. Starting with the mercantilists, dirigiste approaches to economics embrace the real-world complexity of commodities that often differ greatly in attributes that are growth- and rent- augmenting. Most importantly, this means that free trade is likely to be polarising: it concentrates growth- and rent-augmenting commodities in countries that already enjoy a head start in these commodities. Advanced countries, therefore, support (...) class='Hi'>laissez-faire, while lagging countries tend to support dirigisme. In order to rationalise their laissez-faire stance, advanced countries began developing a new economic discourse that strips commodities of their complexity. The foundations for this ideological reconstruction of economics were first laid by Adam Smith; this process eventually reached its climax with the neoclassical economists who stripped commodities down to one attribute: their capital intensity. In opposition to this laissez-faire economics, other writers, supportive of the interests of lagging countries, brought complexity back into their economic discourse; they argued that lagging countries had a fighting chance of catching up to advanced economies only by indigenising a growing array of growth- and rent-augmenting commodities. (shrink)

As the twentieth century draws to a close and the rush to globalization gathers momentum, political and economic considerations are crowding out vital ethical questions about the shape of our future. Now, Hans Kung, one of the world's preeminent Christian theologians, explores these issues in a visionary and cautionary look at the coming global society. How can the new world order of the twenty first century avoid the horrors of the twentieth? Will nations form a real community or continue to (...) aggressively pursue their own interests? Will the Machiavellian approaches of the past prevail over idealism and a more humanitarian politics? What role can religion play in a world increasingly dominated by transnational corporations? Kung tackles these and many other questions with the insight and moral authority that comes from a lifetime's devotion to the search for justice and human dignity. Arguing against both an amoral realpolitik and an immoral resurgence of laissez faire economics, Kung defines a comprehensive ethicfounded on the bedrock of mutual respect and humane treatment of all beingsthat would encompass the ecological, legal, technological, and social patterns that are reshaping civilization. If we are going to have a global economy, a global technology, a global media, Kung argues, we must also have a global ethic to which all nations, and peoples of the most varied backgrounds and beliefs, can commit themselves. "The world," he says, "is not going to be held together by the Internet." For anyone concerned about the world we are creating, A Global Ethic for Global Politics and Economics offers equal measures of informed analysis, compassionate foresight, and wise counsel. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:184 THE ECONOMIC THOUGHT OF DAVID HUME David Hume's views on economics are expressed in his Essays, Moral, Political and Literary, Part II (1752). He was a contemporary of Adam Smith and read Smith's The Wealth of Nations shortly before his death. Some commentators have suggested that Hume exercised some influence over Smith's views on economics; others are not so sure. Hume's commentators over the last 200 (...) years have emphasized his theory of knowledge, doctrine of causality and belief, theory of morals and historical writing. His views on economics have been relatively neglected. The purpose of this essay is to summarize and clarify Hume's views on economics. Commerce and Trade Hume's essay "Of Commerce" is an extension of his view of property rights. Just as government should not impair property rights, it should not impair commerce, which is the freedom to contract between consenting parties. But Hume was not a 'pure' advocate of laissez-faire. He supported the infant industry argument: A tax on German linen encourages home manufacturers, and thereby multiplies our people and industry. A tax on brandy encreases the sale of rum, and supports our southern colonies. The bulk of workers are employed either in argiculture or manufacturing. In the more primitive societies, almost everyone is employed in agriculture (husbandry), and as agricultural techniques are improved, the land becomes able to support more nonagricultural workers, including artisans and providers of luxuries as well as manufacturers. Some of these 185 surplus (i.e., nonagricultural or manufacturing) workers are sometimes appropriated by the sovereign for use in the army or navy (OC 256), which prevents them from producing luxury goods and services, and leads to a different kind of state than would exist if their labor were not so appropriated. Increases in industry, the arts and trade generally increase both the power of the sovereign and the happiness of the people (OC 260). Trade is something that is mutually beneficial -- both parties gain. Hume spends a great deal of time refuting the idea that one nation's gain is another's trade loss. Thus, trade is a win-win rather than a win-lose situation, as some modern-day mercantilists (such as Thurow fThe Zero Sum Gamel and Batra G The Great Crash of 1989l)would have us believe. Hume views everything in the world as purchased by labor, and sees labor as being caused by people's passions (OC 261). In modern language, one could say that wealth is produced either from physical or mental labor, and that it is individual incentive that causes the human action to begin in the first place. Of course, this view overlooks the fact that labor does not exist in a vacuum, but is mixed with land and perhaps capital (which can be seen as the result of accumulated labor). Exchange occurs when producers of a commodity produce more than they can consume. At that point, they trade their surplus for other goods and services (OC 261). In peacetime, the farmers' surplus goes toward the acquisition of manufactures or the cultivation of the liberal arts. In war, the surplus can go toward the support of an army or navy. The state becomes more powerful as it can produce increasingly beyond subsistence, what Hume refers to as employment beyond mere necessities (OC 186 262). But rather than encouraging the increase in state power by force, such increase is best accomplished by allowing individuals to produce as much as they want, which they will do automatically in the absence of coercion, and then appropriate part of the surplus: It is a violent method, and in most cases impracticable, to oblige the labourer to toil, in order to raise from the land more than what subsists himself and family. Furnish him with manufactures and commodities, and he will do it himself. Afterwards you will find it easy to seize some part of his superfluous labour, and employ it in the public service, without giving him his wonted return. Being accustomed to industry, he will think this less grievous, than if, at once, you obliged him to an argumentation of labour without any reward. (OC 262) Countries that engage in... (shrink)

I discuss how the scientificity characterizing Adam Smith’s political economy has to exteriorize social conflict in order to sustain its objectivation of social interaction in terms of regulative laws. I claim that this exteriorization constitutes an internal point of subversion, not only because it resists economic objectivation, but first and foremost because it forces Smith to employ political strategies that both contradict and guarantee the scientificity of his theory. I show how the place of conflict in modern economy, according to (...) Smith, can actually be determined in three different ways: as a concrete place when it comes to the confrontations between workers and capitalists; as a theoretical place in the sense of being an arbitrary disturbance of the spontaneous organization of the market; and as a place that, as being the intersection between economic naturalization and social contingency, problematizes the scientificity of Smith’s political economy. In this sense, I develop three cases where Smith invokes an argumentative circularity that reveals the paradoxical politics of his economic scientificity, beyond its official laissez-faire politics: State coercion, monetary power and capitalist competition. (shrink)

I discuss how the scientificity characterizing Adam Smith’s political economy has to exteriorize social conflict in order to sustain its objectivation of social interaction in terms of regulative laws. I claim that this exteriorization constitutes an internal point of subversion, not only because it resists economic objectivation, but first and foremost because it forces Smith to employ political strategies that both contradict and guarantee the scientificity of his theory. I show how the place of conflict in modern economy, according to (...) Smith, can actually be determined in three different ways: as a concrete place when it comes to the confrontations between workers and capitalists; as a theoretical place in the sense of being an arbitrary disturbance of the spontaneous organization of the market; and as a place that, as being the intersection between economic naturalization and social contingency, problematizes the scientificity of Smith’s political economy. In this sense, I develop three cases where Smith invokes an argumentative circularity that reveals the paradoxical politics of his economic scientificity, beyond its official laissez-faire politics: State coercion, monetary power and capitalist competition. (shrink)

This paper considers the maturation of the American Catholic tradition of social and economic thought in the seminal period between 1920 and 1940, particularly as encapsulated in the work of John A. Ryan. While different social ethical models emerged in the American Church during this time, the dominant school of thought was the liberal tradition associated with Ryan. This tradition, which Ryan described as "true economic liberalism," forged American political liberalism and papal critiques of secular modernity into a new social (...) ethical theory which became the capstone of prewar Catholic progressivism. True economic liberalism first manifested itself in critiques of the Supreme Court's description of "freedom" in Adkins v. Children's Hospital (1923). It took positive form during the 1920s in the widespread Catholic embrace of industrial democracy as a moral alternative to laissez-faire capitalism It was during the 1930s, however, when the Church confronted the economic crisis of the Great Depression, that true economic liberalism became a more totalizing system of social thought. It was also during the 1930s that this theory revealed the difficulties Catholic liberals have had in defining their relationship to a market economy and the state. On one hand, true economic liberalism provoked the creative maturation of Catholic thought and established the Church as a leading progressive critic of capitalism. At the same time, true economic liberalism circumscribed the possible depths of the Catholic moral critique. American Catholics liberals were so committed to constructing a social ethic that upheld "the priceless goods of liberty, opportunity, and democracy," that they accepted a reformed capitalism, guarded and chastened by religion, as the most desirable outcome for a modern economy. As John P. Carroll revealingly wrote, "The remedy, then, for the social evils. . . does not lie in the destruction of the present social system. The way to clean a house is not to dynamite it." By accommodating the Church's social ethic to the ideals of American democracy, liberal Catholics rejected radical reforms in favor of moderate legislative schemes which one writer described in Commonweal as "sniping at capitalism." It was for this reason that so many Catholics fawningly embraced the New Deal and, indeed, found in Franklin Roosevelt the supreme advocate for the principles set forth in Pius XI’s 1931 Quadragesimo Anno. (shrink)

This target article is concerned with the implications of the surprisingly different experimental practices in economics and in areas of psychology relevant to both economists and psychologists, such as behavioral decision making. We consider four features of experimentation in economics, namely, script enactment, repeated trials, performance-based monetary payments, and the proscription against deception, and compare them to experimental practices in psychology, primarily in the area of behavioral decision making. Whereas economists bring a precisely defined “script” to experiments for (...) participants to enact, psychologists often do not provide such a script, leaving participants to infer what choices the situation affords. By often using repeated experimental trials, economists allow participants to learn about the task and the environment; psychologists typically do not. Economists generally pay participants on the basis of clearly defined performance criteria; psychologists usually pay a flat fee or grant a fixed amount of course credit. Economists virtually never deceive participants; psychologists, especially in some areas of inquiry, often do. We argue that experimental standards in economics are regulatory in that they allow for little variation between the experimental practices of individual researchers. The experimental standards in psychology, by contrast, are comparatively laissez-faire. We believe that the wider range of experimental practices in psychology reflects a lack of procedural regularity that may contribute to the variability of empirical findings in the research fields under consideration. We conclude with a call for more research on the consequences of methodological preferences, such as the use on monetary payments, and propose a “do-it-both-ways” rule regarding the enactment of scripts, repetition of trials, and performance-based monetary payments. We also argue, on pragmatic grounds, that the default practice should be not to deceive participants. Key Words: behavioral decision making; cognitive illusions; deception; experimental design; experimental economics; experimental practices; financial incentives; learning; role playing. (shrink)

This paper evaluates the economic assumptions of economic theory via an examination of the capitalist transformation of creditor–debtor relations in the 18th century. This transformation enabled masses of people to obtain credit without moral opprobrium or social subordination. Classical 18th century economics had the ethical concepts to appreciate these facts. Ironically, contemporary economic theory cannot. I trace this fault to its abstract representations of freedom, efficiency, and markets. The virtues of capitalism lie in the concrete social relations and social (...) meanings through which capital and commodities are exchanged. Contrary to laissez faire capitalism, the conditions for sustaining these concrete capitalist formations require limits on freedom of contract and the scope of private property rights. (shrink)

The Clash of Economic Ideas interweaves the economic history of the last hundred years with the history of economic doctrines to understand how contrasting economic ideas have originated and developed over time to take their present forms. It traces the connections running from historical events to debates among economists, and from the ideas of academic writers to major experiments in economic policy. The treatment offers fresh perspectives on laissez faire, socialism and fascism; the Roaring Twenties, business cycle theories (...) and the Great Depression; Institutionalism and the New Deal; the Keynesian Revolution; and war, nationalization and central planning. After 1945, the work explores the postwar revival of invisible-hand ideas; economic development and growth, with special attention to contrasting policies and thought in Germany and India; the gold standard, the interwar gold-exchange standard, the postwar Bretton Woods system and the Great Inflation; public goods and public choice; free trade versus protectionism; and finally fiscal policy and public debt. (shrink)

In launching modern economics, Adam Smith paved the way for laissez-faire capitalism, Marxism, and contemporary social science. This book scrutinizes Smith's disparagement of politics and religion to illuminate the subtlety of his rhetoric, the depth of his thought, and the ultimate shortcomings of his project. The author analyzes Smith's ideas on government, justice, human psychology, and international relations, stressing Smith's efforts to elevate wealth at the expense of citizenship and to replace normative political philosophy with historical theorizing (...) and empirical modeling that emphasize economic causes. The book also provides the most comprehensive interpretation available of Smith's views on religion, examining the discrepancies between The Wealth of Nations and The Theory of Moral Sentiments. The concluding chapter appraises the demise of communism in light of the Marxian emancipation of economics from politics and religion. (shrink)

It has often been argued that John Stuart Mill's normative economics is independent both of his positive economics of production and his liberal normative political philosophy of liberty. In this chapter I seek to show why we should reject this interpretation, by calling into question both the sharp distinctions between production and distribution, and economic and civil liberty. Following Lionel Robbins I argue that Mill is firmly rooted in the classical tradition of political economy and, indeed, that throughout (...) his social thought his primary value is liberty. (shrink)

In the first comprehensive and full-length study of the English historical economists, Gerard Koot traces their revolt against the theory, policy recommendations and academic dominance of classical and neoclassical economics in Britain between 1870 and 1926. English Historical Economics, 1870–1926 shows how these historical critics challenged the deductive method and mechanistic assumptions of the economic orthodoxy, developing an historical and inductive method for economic studies and laying the foundation for the professional study of economic history. The author examines (...) the effect of this new methodology upon English politics, discussing the intellectual framework that the historical economists provided for the conservative attack on laissez-faire philosophy in links between such larger social, economic, political and intellectual controversies and the origin and growth of English historical economics. (shrink)

(1998). Laissez‐faire Social Darwinism and individualist competition in Darwin and Huxley. The European Legacy: Vol. 3, On Social Darwinism, pp. 17-30.

This thesis argues for the fundamental importance of the opposition between holistic and reductionistic world-views in economics. Both reductionism and holism may nevertheless underpin laissez-faire policy prescriptions. Scrutiny of the nature of the articulation between micro and macro levels in the writings of economists suggests that invisible hand theories play a key role in reconciling reductionist policy prescriptions with a holistic world. An examination of the prisoners' dilemma in game theory and Arrow's impossibility theorem in social choice (...) theory sets the scene. The prisoners' dilemma epitomises the collective irrationality coordination problems lead to. The source of the dilemma is identified as the combination of interdependence in content and independence in form of the decision making process. Arrovian impossibility has been perceived as challenging traditional views of the relationship between micro and macro levels in economics. Conservative arguments against the possibility in principle of a social welfare function are criticised here as depending on an illicit dualism. The thesis then reviews the standpoints of Smith, Hayek and Keynes. For Smith, the social desirability of individual self-seeking activity is ensured by the 'invisible hand' of a god who has moulded us so to behave, that the quantity of happiness in the world is always maximised. Hayek seeks to re-establish the invisible hand in a secular age, replacing the agency of a deity with an evolutionary mechanism. Hayek's evolutionary theory, criticised here as being based on the exploded notion of group selection, cannot underpin the desirability of spontaneous outcomes. I conclude by arguing that Keynes shares the holistic approach of Smith and Hayek, but without their reliance on invisible hand mechanisms. If spontaneous processes cannot be relied upon to generate desirable social outcomes then we have to take responsibility for achieving this ourselves by establishing the appropriate institutional framework to eliminate macroeconomic prisoners' dilemmas. (shrink)

Traditional corporate finance endorses the principle of stockholder wealth maximization as the purpose of business. In light of recent scandals and legislation, businesses are increasingly expected to use financial resources in a manner which benefits society and not just the owners of the firm. This imputation of a corporate soul will necessarily reduce investor returns, which has at least two major financial implications for the firm and the economy. The first is that it may cause investors to change their required (...) rates of return and thereby change the amount of capital available to firms, and the economy. The second is that it may implicitly replace equity with debt in the capital structure of firms, with all that implies for financing and corporate governance. The purpose of this article is to examine these implications and evaluate their sometimes counterintuitive consequences. (shrink)

In Animal Ethics in Context, Clare Palmer tries to harmonise two competing approaches to animal ethics. One focuses on the morally relevant capacities that animals possess. The other is the Laissez-Faire Intuition (LFI): the claim that we have duties to assist domesticated animals but should (at least generally) leave wild animals alone. In this paper, I critique the arguments that Palmer offers in favour of the No-Contact LFI - the view that we have (prima facie) duties not to (...) harm wild animals but no duties to assist them. I argue that Palmer's endorsement of the No-Contact LFI is unwarranted. Her arguments actually provide strong reasons to endorse what I call the Gradient View - a position that posits weak presumptive duties to assist wild animals that become stronger as our relations with the animals grow stronger. (shrink)

This response to Edgar Dahl’s paper in this issue of Health Care Analysis clarifies my argument concerning sex selection and shows that our disagreement is less than he believes it is.

In a recent comment on the HFEA’s public consultation on sex selection, Soren Holm claimed that proponents of family balancing are committed to embrace a laissez faire approach. Given that arguments in support of sex selection for family balancing also support sex selection for other social reasons, advocates of family balancing, he asserts, are simply inconsistent when calling for a limit on access to sex selection. In this paper, I argue that proponents of family balancing are in no (...) way inconsistent. Provided their advocacy of family balancing is aimed at preventing a severe distortion of the natural sex ratio, they are entirely justified in insisting on restrictions to sex selection. The real question is whether a concern for the sex ratio does indeed call for a limit on sex selection. Based on a recent survey on gender preferences and data from several Gender Clinics, I argue that a restriction on sex selection to family balancing is unwarranted. In the absence of any evidence for a pending sex ratio distortion, we are actually required to adopt a laissez faire approach to sex selection. (shrink)

Bunge (2000) distinguishes two main methodological approaches of holism and individualism, and associates with them policy prescriptions of centralism and laissez-faire. He identifies systemism as a superior approach to both the study and management of society. The present paper, seeking to correct and develop this line of thought, suggests a more complex relation between policy and methodology. There are two possible methodological underpinnings for laissez-faire: while writers such as Friedman and Lucas fit Bunge’s pattern, more sophisticated (...) advocates of laissez-faire, such as Smith and Hayek, base their policy prescription in a methodology quite divergent from the individualism Bunge describes. (shrink)

Disenchantment with liberalism and Marxism figures strongly in recent social commentaries like Habits of the Heart. This collection of seven contest entries, ably edited and introduced by William Maker, engages Hegel in these current debates. Hegel's regard for and uneasiness with the free-wheeling marketplace are timely. Raymond Plant notes that reading political economists like Steuart aged Hegel's early captivation with Greek culture to a respect for the principle of particularity, embodied in Christianity, Enlightenment, and modern commerce. Freedom lacks content without (...) the billowing of subjectivity in civil society. But does civil society possess the resources to mitigate the split between private and public, profit and patriotism? Can Hegel's deeply contextual approach--situating commodity exchange within ethical life between family and state--provide an alternative to laissez-faire, Marxism, and the welfare state? (shrink)

"Blau not only charts how the American government's embrace of laissez-faire ideology has wreaked havoc...he tells us what can be done to undo the damage. Must reading for anyon who cares about what's happening to the average American."--Charles Noble, Professor of Political Science, CSU Long Beach.

In his book The Economic Laws of Scientific Research, Terence Kealey deconstructs major misconceptions about scientific research and its relation to the state. He shows, through revisionist history and economic data, that the premises behind common defenses of government funding of science are fallacious. Even though science is related to economic growth, the state cannot boost the economy by injecting funds into scientific research. Also, the state cannot discover which scientific projects are most important because it cannot rely on market (...) signals from the price system. Finally, the state cannot determine the right level of funding for scientific research, because it has no way of knowing which projects will have positive economic impact. Not surprisingly, after showing how the market produces science in a rational way, Kealey recommends a laissez-faire approach to scientific research. (shrink)