Posted by: N.S. Palmer | June 30, 2018

Unorthodox Wisdom from John Stuart Mill

For my website, I need a document file of Globalization and Culture, which was my 2001 Ph.D. dissertation in economics. I couldn’t find the original file, so I’m laboriously re-entering the text from my printed copy.

A quote from John Stuart Mill was inadequately footnoted, so I went looking for the source in his Principles of Political Economy, published in 1848. I had better luck that time. The book was right where I expected on my bookshelf.

Mill (1806-1873) is best known as the author of On Liberty (1859). He was also one of the great “classical” economists, along with Adam Smith, David Ricardo, and — yes, reallyKarl Marx. Some of Marx’s political and philosophical ideas were nuts, but his economic analysis was credible for its era. Brilliant, in fact. Whether or not it was true is a different question.

One of the central tenets of classical economics was the labor theory of value. It held that the prices of goods were determined mainly by how much labor it took to produce them. Supply and demand also affected prices, but mainly in the short run. A thing’s long-run “natural price” was determined by the quantity of labor required to make it.

Interestingly, contemporary (“neoclassical”) economics has a mirror image of the classical view. Instead of price being determined mainly by labor requirements but also affected by supply and demand, neoclassical economics argues that price is determined mainly by supply and demand, but can be affected by labor requirements. Instead of calling it the natural price like classical economists, they call it the equilibrium price. It’s kind of a “you say to-may-to, I say to-mah-to” dispute.

The last of the 19th-century classical economists wasn’t Mill, however. It was John E. Cairnes (1823-1875), whose book Some Leading Principles of Political Economy (1874) is still worth reading.

But I digress.

While paging through Mill’s Principles of Political Economy to correct my footnote, I found a passage that’s strikingly relevant to the present day.

Our social orthodoxy seems to change every few months. Viewpoints considered mainstream last year can suddenly become hateful, bigoted, and forbidden this year. Orthodoxy changed more slowly before the Internet era, but as described by Mill, it changed in pretty much the same ways:

“It often happens that the universal belief of one age of mankind — a belief from which no one was, nor without an extraordinary effort of genius and courage, could at that time be free — becomes to a subsequent age so palpable an absurdity, that the only difficulty is to imagine how such a thing can ever have appeared credible.”

I won’t mention any current absurdities (:: cough :: gender :: cough ::), lest I be consigned to the outer darkness with Milo Yiannopoulos. But there are plenty of them. John Stuart Mill would probably find them amusing.

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