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Books - Ralph Raico, New Individualist Review [1961]

Edition used:

New Individualist Review, editor-in-chief Ralph Raico, introduction by Milton Friedman (Indianapolis: Liberty Fund, 1981).

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Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Books

Friedrich Engels: His Contributions to Political Theory, by Fritz Nova. New York, Philosophical Library, 1967. 115p. $4.50.

The German Revolutions; The Peasant War, and Revolution and Counter Revolution, by Friedrich Engels. Edited and with an Introduction by Leonard Krieger. Chicago, University of Chicago Press, 1967. 246p. $2.45.

ENGELS HAS NEVER emerged from Marx’s shadow. He was generally self-effacing and, as the man who systematized dialectical materialism, is generally shunned by those who study Marx as a philosopher of alienation and emphasize the humanist aspects of Marxism. Neither of the recent biographies is much good. Yelena Stepanova paints Engels as a revolutionary saint, and her solid research has been translated into muddled English; Grace Carlton shows him as a good-natured man somehow led astray by Marx, without whose maleficent influence Engels would have lived happily and dully ever after; the Carlton book is interrupted by tirades against Marx and Engels for their failure to appreciate the perfection of English institutions and empiricism, and it ends up even more dogmatic than the Stepanova work, which at least has some reading behind it.

Both biographies are essentially personal in emphasis, presenting Engels as hero or victim, and Gustav Mayer’s impressive work, which assessed Engels and his ideas, is out of print both in the original and in the one-volume English abridgment. Therefore, Fritz Nova’s book, which purports to discuss some of Engels’ ideas, ought to be a good thing.

Unfortunately, it turns out to be not so much written as simply sorted into chapters, presenting quotations and paraphrases without any comment. The first chapter, “Social Theory: To Condemn or Condone?” is characteristic. The gist of the assembled statements (which Nova does not sum up) is that Engels thought political theory was well enough so long as it did not insulate the theorist from all contact with the real world, and so long as the theory was not wrong.

The ten-page chapter on Reformism and Revolution provides no hint of what Engels meant by revolution; there is no differentiation between statements made in 1844 and those made thirty-odd years later, as if Engels’ opinions necessarily formed an unchanging whole; and there is no mention, much less analysis, of those references to the possibility of a peaceful transfer of power that give Marxist revisionism some claim to canonical authority. Not only is there no analysis, but the selection of quotations is erratic.

Nova’s conclusion is that he has “not found any justification for reducing Engels to not much more than an accessory of Marx,” but he makes no effort to prove that Engels was significant in himself. Engels was surely no appendage of Marx, but neither did he work in a vacuum. Nor should he be written about in a vacuum. Anyone who sets out to discuss Engels’ ideas, even if he restricts himself to one of those fields such as natural or military science on which Marx rarely trespassed, ought to make some attempt to define the relation of his topic to Marxism in general. To list Engels’ statements on politics or any other subject, without putting them into any context, can prove nothing more than what Nova has proven: that Engels wrote some things himself. And this could be ascertained by glancing at the index to the Marx-Engels Werke. Why is Engels important? Nova invokes Karl Kautsky, who is “generally regarded the most important successor to Marx and Engels,” who said that Engels was an influence on him.

Certainly more than this can be said about Engels. In 1844 when Marx was still largely immersed in the study of Hegel, Engels had decided that the advance of industrialism in England was the most important thing going on in the world and that the accompanying ideology of classical liberalism was correspondingly important; and he had begun the Marxist critique of liberalism as fundamentally a species of hypocrisy. After that he watched, advised, and criticized the world revolutionary movement for fifty years. In the course of this involvement, he wrote a great many books and articles, most of which are significant in one context or another, and which must be analyzed, discussed, and thought about.

Engels is not likely to be ignored altogether. International Publishers keeps some of his works available in paperback (including the “Outline of a Critique of Political Economy,” in Marx’s Economic and Philosophical Manuscripts of 1844), the University of Manchester Press has a recent translation of The Condition of the English Working Class in 1844, and now we have a new edition of Revolution and Counter-Revolution. The Peasant War was already available but fits in well here, and Revolution and Counter-Revolution, a series of articles that Engels wrote for the New York Tribune in 1851-52, shows him as an effective English stylist. He has plenty of opportunity to be scathing as he discusses the ineptitude and half-heartedness of the German middle-class revolutionaries of 1848-49. The book is a useful treatment of that particular revolution, and considered as a Marxist document it, like the Peasant War, illuminates some fundamental propositions of the Marxist attitude toward revolution: that bourgeois progressives are exceedingly unreliable allies, and that revolutions are matters of classes and epochs, not of conspiratorial or military expertise.

Leonard Krieger’s introduction discusses sensibly the relationship between Marx and Engels (though “Engels’ addiction to Germany in contrast to Marx’s propensity for France” greatly overstates this point of difference) and analyzes the importance of Engels’ two histories both in relation to their subjects and in relation to Marxism. They are made to illuminate major problems of Marxist thought, such as the relationship of history and philosophy and the relationship of free-will and determinism, and they gain in intelligibility and interest by being put in context. The analysis is on a very high level, but it is perhaps even more important that—in contrast to Nova—Krieger recognizes the necessity to ask questions.

—MARTIN BERGER1

James Mill: Selected Economic Writings, edited by Donald Winch. Chicago, University of Chicago Press, 1966. 452p. $12.50.

IT SHOULD COME AS no surprise to libertarians accustomed to meeting their ideas presented by others in surrealistic form that an inordinate number of efforts in the field of economic intellectual history are grotesquely inadequate. Prof. G. J. Stigler has gone to great lengths to show the casualness of scholarship in even such simple tasks as quoting accurately and naming theorems in such a way that they bear some non-random relation to the names of the theorems’ initial propounders.1 Still no amount of secondary cynicism can quite cushion the shock of, say, reading Max Lerner’s “Introduction” to the Wealth of Nations.

Perhaps naively, we can hope that more readily available works can help reduce some of the heinous crimes committed in the name of intellectual history—if their presence will not necessarily inspire more careful scholarship, at least reviewers will have to search less for the material to point out inadequacies. The great new editions of Ricardo, Bentham (economic writings), J. S. Mill (about one third has been published) and the forthcoming volumes of the bicentennial edition of Adam Smith may generate a more precise reading. Thus we should welcome the University of Chicago’s present and promised publication of the Scottish Economic Society’s Scottish Economic Classics. Concentrating on those whose theories are comparatively unknown even inside academic economic circles: McCulloch, Steuart, Lauderdale, and Anderson, these new and forthcoming editions should make economic intellectual history less a game for antiquarians and entice more research in primary sources.

In the first volume of Scottish Economic Classics, Dr. Winch has compiled three of James Mill’s most important economic pieces: An Essay on the Impolicy of a Bounty on the Exportation of Grain (which is so rare that J. A. Schumpter did not know it),2Commerce Defended, and Elements of Political Economy, along with “Smith on Money and Exchange,” “Whether Political Economy is Useful,” selections from History of British India, and “Extracts from Oral Evidence on the affairs of the East India Company.” In addition Winch provides a biographical sketch, commentary on Mill’s early economics, and an informal bibliography, not to mention an index.

I will not commend the editor for all his obvious hard work: virtue and book sales, after all, are their own reward; but I would examine one rather interesting point Dr. Winch raises which enters into serious interpretative problems with implications outside economics.

Winch asserts that Mill draws from Ricardo’s economics the thesis that rent, being a residual, is the optimal subject for taxation because there are no effects on resource allocation:

Mill went a good deal further than either Ricardo or McCulloch were willing to go. . . . Mill attempted to implement the radical conclusions which he drew from Ricardo’s interpretation of the rent doctrine. Though this is seldom realised, Mill’s influence on the Indian land revenue system represents perhaps the single most important application of Ricardian economics in practice.3

Ricardo himself did not support such a program:

It would be difficult to separate pure rent from profit on capital invested by the land-owner, and therefore a tax on contractual rents might inhibit the improving landlord. But, as always, Ricardo was willing to face the logical consequences of his doctrines, and does not seem to have been afraid of considering the possibility of complete land nationalisation.4

But Mill’s conclusions are readily deducible from Ricardo’s theories:

In upholding the principle of taxing rent Mill was merely taking to its logical political conclusion, Ricardo’s argument that there was an inherent conflict between the interests of land-owners and rest of the community.5

This is a profoundly misleading reading of Ricardo. Winch correctly describes the allocation aspects of Ricardo’s theory but ignores the political constraint of equal treatment under law which Ricardo always imposed on his policy proposals.

It is true that Ricardo believed that neutrality in taxation is an important goal:

The duty which I have here proposed, is the only legitimate countervailing duty, which neither offers inducements to capital to quit a trade, in which for us it is the most beneficially employed, nor holds out any temptations to employ an undue proportion of capital in a trade to which it would not otherwise have been destined. The course of trade would be left precisely on the same footing as if we were wholly an untaxed country, and every person was at liberty to employ his capital and skill in the way he should think most beneficial to himself. . . . we should offer no temptations to capitalists, to employ their funds and their skill in any other way than they would have employed them, if we had had the good fortune to be untaxed, and had been permitted to give the greatest development to our talents and industry.6

Further there is no doubt taxes on rent would be neutral,7 but Ricardo refuses to recommend such taxation, on grounds of isonomy:

It must be admitted that the effects of these taxes would be such as Adam Smith has described [neutral]; but it would surely be very unjust, to tax exclusively the revenue of any particular class. . . .8

This concern with equal treatment is not an isolated instance in Ricardo. He opposes inflation, in spite of the fact that it might benefit the more productive classes, because it implies unequal treatment by government action;9 he opposes repudiation of the national debt in spite of distributional advantages on the same ground;10 he even supports tariffs to equalize the tax burden between landowners and the rest of society.11

THUS RICARDO’S opposition to taxes on rent and Mill’s support are indications of a rather deep split in political philosophy, not as Winch implies, a difference on the feasibility of measuring rent. The harmony/disharmony of interest interpretation of Ricardo and classical economics has blighted the profession since at least Halevy’s monumental Growth of Philosophical Radicalism but is useless as a rationalization for Ricardo’s policy proposals.12 As a student of Jacob Viner, Winch of course does not subscribe to the silly harmony theory: but it is a shame he still finds the disharmony part of Halevy’s theory at all useful to explain Ricardo’s policy. Ricardo did not favor class legislation against anyone, regardless of whether their interests were harmonious with the rest of society; and indeed as mentioned above is willing to put tariffs on corn to reduce the inequality of the tax burden on landlords. Nor does a harmony reading help understand any other part of Ricardo’s theory of policy: what is at question is whether a competitive price system produces some sort of an optimum, which Ricardo usually argues that it does, and importantly how do we go about getting out of the messes the government got us into. Ricardo develops and widely applies a theory of compensation to solve the problem that even the best reforms will hurt someone. This cannot be explained by a harmony/disharmony approach.

But enough carping. This new edition of James Mill gives complete (or nearly so) versions of important economic works and selections of minor pieces, in addition to interesting commentary. It is most valuable, but, unfortunately if quotations must be critical, one must compare them to the original. This writer found seven minor errors in the first eighteen pages (including table of contents and introduction) of the Elements.

—DAVID LEVY

[1 ] Martin Berger is currently doing graduate work in history at the University of Pittsburgh.

[1 ] George J. Stigler, Intellectual and the Market Place (New York: Free Press of Glencoe, 1963), pp. 57-62.

[2 ] Joseph A. Schumpter, History of Economic Analysis (New York: Oxford University Press, 1954), p. 476.

[3 ] Donald Winch, “James Mill and David Ricardo,” in the book reviewed, p. 197.

[4 ]Ibid., p. 198.

[5 ]Ibid.

[6 ]Works and Correspondence of David Ricardo, ed. Piero Sraffa (Cambridge: Cambridge University Press, 1962), Vol. IV, p. 244. All further references will be by volume and page.

[7 ] I, 204.

[8 ]Ibid.

[9 ] VI, 233.

[10 ] I, 245-46.

[11 ] IV, 264.

[12 ] Elie Halevy’s harmony/disharmony interpretation is that Ricardo’s static theory is a harmony view of the world. The labor theory of value states that all are paid according to their labor, hence the competitive price system produces a constrained version of the best of all possible worlds. His dynamic theory implies an inherent conflict between landlords and the rest of society: population increases by Malthusian principles forcing up the price of corn, increasing money wages, decreasing profits, and increasing rent. The decrease in the rate of profit will slow down economic progress, thus the landlord benefits at the expense of society. Elie Halevy, The Growth of Philosophical Radicalism, trans. Mary Morris (Boston: Beacon, 1966), p. 319ff.