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Margaret Schabas on the Concept of Nature in Economic Thought June 6, 2011

Posted by Will Thomas in EWP Book Club, History of the Human Sciences.
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In my first post on the need for historical studies of the relationship between scientific and economic thought, I was greatly remiss in not discussing a scholar who has done a great deal to develop and organize work in exactly this area: Margaret Schabas of the UBC philosophy department.  Thankfully, a quick reference by Tiago Mata over at History of Economics Playground set me aright.  For a first pass through the existing literature, I’d like to take a look at her book, The Natural Origins of Economics (2005).

The book is a critical-intellectual history.  As an intellectual history, it sticks to an analysis of the published works of (mainly) canonical authors.  Where a straight intellectual history might recount the arguments that historical authors explicitly made, critical-intellectual histories draw out continuities and breaks over time in authors’ lines and methods of argumentation.  Like many intellectual historians, Schabas is mindful of detailed arguments in the secondary literature, and does a good job of acknowledging, consolidating, communicating, and building on the gains of that literature.

Schabas argues that where 18th-century philosophers of political economy understood their subject to connect deeply to nature and natural philosophy, economics began to explicitly frame itself as a science of peculiarly social phenomena following John Stuart Mill’s Principles of Political Economy (1848), the rise of the idea of “the economy” as an object of study, and the rise of neoclassical economics in the late-19th century.

Ultimately, I am not convinced of the importance of Schabas’ overarching argument about “nature”, since as near as I can tell nature played a series of disconnected and largely (though not totally) tangential roles in classical economic thought, rather than a clearly important central one.  Nevertheless, I believe she does make her case successfully by cataloging the various ways in which work in political economy attached to nature, and then showing how all of these connections were indeed broken in the transition to modern economics.

Economic and Political Phenomena as Natural Phenomena.  The core idea in Schabas’ argument is that economic and political phenomena were natural products of innate human tendencies.  In accord with the Enlightenment-era idea of “economy” which emphasized the idea of systems comprising parts that play specific functions (manifested, for example, in the idea of physiology as an “animal economy”), in works of political economy people appeared as members of classes who perform some social function [edit. Schabas notes this point was flagged by Marxist economist Maurice Dobb in Theory of Value and Distribution since Adam Smith: Ideology and Economic Theory (1973)]. This view persisted with Ricardo who saw wealth as accruing to landlords, capitalists, and laborers according to certain principles, and contrasts strongly with neoclassical economic models, which cast individuals as economizing decision-makers.

Physiology, the Passions, and Social Behavior.  The idea that people performed social functions was connected to the idea that they did so because they followed their passions, which were in turn grounded in their physical constitution.  Schabas, I think, overstates her case in arguing that David Hume (1711-1776) denied free will in his arguments that human thought was a product of circumstances, and that humans were like animals in being subject to natural laws.  I think she is correct, though, to call attention to the connections between the passions, physiology, and physical (especially electrical) theory, pointing to Christopher Lawrence’s 1979 work* on the links between Adam Smith (1723-1790) and the medical Enlightenment. I think she is also secure in suggesting a more general move from the Oeconomia naturae (1750) of Carl Linnaeus (1707-1778), with its interlinked animal physiology, animal behavior, and the “economy of nature”, to connections drawn between physiology, the passions, and political economy (90-92).  Beyond that, the connection she draws between the physiology of nervous fluid and Smith’s idea that labor can be stored in goods (like a vital fluid) is intriguing, albeit not totally convincingSchabas has surprisingly little to say about the legacy of the links that Montesquieu (1689-1755) drew between climate and the passions in the history of political economy.

The Natural Origins of Wealth in Agriculture.  The idea of the French physiocrats — a group including François Quesnay (1694-1774), Victor Mirabeau (1715-1789), and Pierre-Samuel Du Pont de Nemours (1739-1817)that only the earth can create wealth ex nihilo in the form of growing plants is well known, as is the associated idea that a nation’s wealth descended from its agricultural production.  However, Schabas shows the power of the idea of wealth deriving from nature in that later proponents of industry, such as David Ricardo (1772-1823), preferred to extend the idea rather than dismiss it.  As Ricardo wrote in his Principles of Political Economy and Taxation (1817): “Does nature nothing for man in manufactures?  Are the powers of wind and water, which move our machinery, and assist navigation, nothing?   The pressure of the atmosphere and the elasticity of steam, which enable us to work the most stupendous engines — are they not the gifts of nature?” (114).  Ricardo also made use of the idea of the gift of nature in assigning comparative advantage to regions based upon their respective climates.

The Appropriation of Metaphors from the Natural Sciences.  Schabas points to a number of instances where thinkers in political economy may have drawn on metaphors from the natural sciences, particularly concerning the flow of fluids.  Despite a general lack of references in works to electrical fluid, she suggests it may have provided a richer metaphorical resource than water flow.  She also suggests the discovery of “fixed” air may have had some influence on Smith’s description of goods as actually carrying the value of the labor applied to them, rather than as simply transformed by labor as in the physiocratic view.  Schabas argues that the later appropriation of physical models (such as the thermodynamic appropriations documented by Philip Mirowski) are “superficial” compared to earlier links between economics and the physical sciences.  I am not fully convinced that those earlier links were especially deep themselves.

Overall, I think there are powerful elements to Schabas’ argument.  For example, her contrast between classical and neoclassical thought on the concept of price works quite well.  In classical political economy (p. 155):

A natural price was determined by natural costs, which were determined by the cycles of the harvest and population, which were determined by the climate and sexual passions and natural resources.  Price theory today steers a different course, emphasizing the role of demand and utility and the deliberations of a firm toward the end of maximizing profits.

If anything, though, I think Schabas over-makes her point.  Where I would simply emphasize continuities between the natural and political in the rules of Enlightenment-era philosophizing, as well as the points of intersect between physiological, moral, and political-economic philosophy, she insists on making the appearance of “nature” in older economic thought the center of her story.  This leads to what I think are stretched metaphorical connections, and unusually labored arguments for authors’ awareness of natural philosophical thought (which I think can be safely assumed).  I’d like to discuss why “nature” is so important to her argument at a later date.

—-

*Christopher Lawrence, “The Nervous System and Society in the Scottish Enlightenment” in Natural Order: Historical Studies of Scientific Culture, ed. B. Barnes and S. Shapin (Beverly Hills: Sage, 1979).

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