“Has economics gone to seed?” in Too Much College, by Stephen Leacock:
Economists end to end—Knowledge that falls asleep—Political Economy as world gospel—The bottom falls out of it—The Spendthrift saves society—Bad money saves national trade—The colleges meet the situation—A catalogue of dead opinion—Economists dig in behind a barrage of x and y—Economics joins the Chinese Classics
Some years ago when I was the dinner guest of a famous club in Boston, the chairman of the evening introduced me in the following words: “Our guest to-night is an economist. I need hardly remind you, gentlemen, of the large part played in our life of today by our economists. Indeed it has been calculated that if all the economists were laid out in a line, end to end, starting at the Mexican border, they would reach”—the orator paused impressively and added—”nowhere.”
That, I say, was a few years ago. What was a genial joke then is plain fact now. In my opinion that is exactly where college economics stands. At a time when the world is in danger of collapse from the dilemma of wealth and want, the college economists can shed no light—or rather only a multitude of cross lights that will not focus to a single beam—in place of a lighthouse, wreckers’ signals, or, at best, fireworks, elaborate and meaningless.
The time has come to ask, has economics run to seed? Consider what we mean by the phrase. There comes a time in the life of plants and flowers, when bloom and freshness have passed away. The blossoms are gone, the green of bud and leaf has withered to a faded brown; on the shrivelled stem once bright with bloom there remains nothing but the ragged seed-pods, sear and unsightly. In these, indeed, lies resurrection, the hope of future life, but, for the moment, use, purpose and beauty are gone. Let the wind scatter the seed for a new start on other ground.
So it is with the growth of human knowledge. It rises in new force, vigorous in life, brilliant in expression and beneficent in power. Time passes. New growth has stopped. Knowledge, like a withering stick, becomes rigid and formal. Adaptability has gone. Leaf has become wood; speculation has turned to authority. The doddering thought has run to seed. The hand that holds the pen is dead.
So it was vast centuries ago when the Chinese, a brilliant nation in the sunrise of intellectual growth, invented a system of symbols, of little pictures, that permitted the written communication of thought. It was a marvellous advance. But over these little pictures the Chinese fell asleep for five thousand years, mumbling and reciting the “sacred books,” sacred only in their primitive simplicity, like an idiot among savages.
The Babylonians measured out the sky and baked their knowledge on clay, in wedge-shaped characters. They moved, stopped—and then the Assyrian came down like a wolf on the fold and Babylon was buried in the sand.
In Alexandria the new Greek science and medicine ran its course for over five hundred years. There the Ptolemies built a great library of half a million books, a lighthouse four hundred feet high with beams focused far out at sea, a wonder of the world. Here were the triumphs of Euclid, of Aristarchus and of Galen. Then knowledge slowly crystallized; life and inquiry died out of it; the great weight of opinion of the dead suffocated the living. The conquering Arab overran it all, and the Caliph Omar burned its books in the name of a Mohammedan God.
When Greece and Rome declined, the Barbarians came, but among them grew up the schools of the Christian church, the schools of Alfred and Charlemagne, like beautiful little plants in the forest. These grew into the cloistered learning of the monastery, copying its parchment books in the quiet of a scriptorium, a sanctuary all still within, noise and battle without. Then the learning of the church, over-weighted and encrusted with age, turned to scholasticism, substituting words for things and grammar for thought, formal and worthless.
The Renaissance swept all this away, to put in its place the “humanities” and the classical scholarship which was the mainstay of our learning and our literature in England and America for three hundred years. The education of a “gentleman” was based on conjugations and declensions; young ladies’ minds were sweetened and enriched with Greek mythology, and America named its rising towns from the Rome and Syracuse of antiquity.
As the modern world of industry and machinery and democracy grew up, the world of classical education failed to notice that it was there and dozed quietly to rest, murmuring Latin quotations in its sleep.
As it slept, there rose up beside it, alert and eager with life, the new science of political economy. This, as fashioned by Adam Smith and Ricardo and their American disciples, seemed a wonderful dogma, fit to rank with Galileo’s telescope and Isaac Newton’s apple. It was so simple that it could all be written in a few pages. It told the poor exactly why they were so. Work, industry, liberty, free competition and a police force were all that was needed for social welfare. Every man got what he was worth and was worth what he got, and the world went of itself.
Not that this bright new dogma was taught in the colleges. Gentlemen didn’t need it and the poor couldn’t afford it. But the Cobdens and the Brights and the Manchester School put it round the world. It seemed like a gospel of light. Russian nihilists in the Siberian mines hid copies of John Stuart Mill under their shirts, like early Christians with a gospel.
Of teaching, I say, there was little. The East India Company first taught political economy in their college at Haileybury. Their cadets were supposed to need it, to work it on the Hindu. The first lecturer was Malthus, the apostle of the empty cradle; but he had a hare-lip; the students couldn’t understand him; so no harm was done. In Scotland also political economy was taught in college before and after Adam Smith; not under that name but as a branch of philosophy and the theory of moral sentiments. As such it turned into a sort of dream, like philosophy itself, bankrupt since Plato but garrulous as an aged patient in a workhouse ward. When political economy joined it, that made two. But as far as political economy meant practical precept—work, save and take what you can get—the Scotch didn’t need it in school. They had it as home work.
With the modernization of our education which began about fifty years ago, economics came sweeping in as a college-subject. Students cried for it. Benefactors died for it. It reached and swelled till it filled a B.A. curriculum, turned into a graduate study and after that students could go to Germany and get more of it, and keep on with it until they died.
But even then, though no one realized it, the bottom was out of it. Political economy had taken too much for granted. Property, and above all property in land. Where did that come from? asked Henry George. And inheritance? Loosen the dead hand and let us see what it holds in its fingers. What? Is that fair? All that vast wealth! And labor, asked Karl Marx, does it get all it produces? If so, why hire it? And competition, asked a thousand complaining voices, as the complexity of our machine industry grew, why is competition fair, if the strong can crush the weak and vested interest take its toll of necessity?
Even the theory of the matter turned upside down like a capsized boat. Does cost of production really govern the value of a thing, or does the value of a thing dictate its cost? And with that the theorists were off to a new start, perplexed as Milton’s arguing devils, who “found no end in wondering mazes lost.” Thus did the experts wrangle and jangle in their own Paradise Lost. With the new century, economics, with the bottom knocked out of it, was carried forward floating on the mud, like Stephenson’s first railway.
As a result, economic science has got itself into the tangle in which it is tied today. Of all the “economic truths” of a hundred years ago, I do not know of one—literally, not of one—that would pass unchallenged. Lord Bacon tells us that Pontius Pilate asked in jest, “What is truth?” and “would not stay for an answer.” If he asked the question of the economists of today and waited for an answer, he would have to arrange his board for a long time in advance.
Nothing stands. John Stuart Mill was convinced that “productive labor” was the basis of social welfare—that and nothing else. Labor spent on producing mere luxuries was wasted. The spendthrift was an enemy to society. What he did was to call for velvet clothes and champagne. Mill was a simple man, and a velvet suit and a bottle of champagne seemed to him the last word for a wild time. We could show him something now. But the idea was that Mill’s spendthrift, by calling for workmen to make him his suit and fix his drink, diverted them from producing real things that do not pass away—such as bridges, machines and factories. “A demand for commodities,” said Mill, “is not a demand for labor.” This he made one of his “four fundamental propositions” that held up the whole structure like the pillars of the mediaeval firmament.
But where is the argument today? Smashed to fragments. The loudest of our complaints are the voices calling for more spending of money. Anything to start it going. Prime the pump. Pension the old men. Give everybody in Alberta $25 a month. Don’t produce, spend. Cut production down, limit it. Let the hog die unborn and pay the farmer for the corn he doesn’t raise, on the sole condition that he will spend the money and not save it.
There again, saving! That, with all the economists from Adam Smith to his latest imitator, was the prime force in progress. There the interest of the individual and of society focused to a single light. If everybody worked hard and saved money, then everybody would get rich, the future would be provided for, and rainy days be stalled off till every place would be as good as Nevada.
They never stopped to ask what happens if everyone sells and nobody buys—if we save enough to build so many machines that there’s nothing for them to do. What if we do provide for the future? It hasn’t come yet. How are we to get along till it does? Hence all the wrangle and jangle over “technology,” technological improvement and technological unemployment, the waste of abundance and the superfluity of productive power.
I am not proposing to unravel the tangle—only to indicate it, coiled all over the ground on which we try to advance. In fact, it begins to look as if a “rainy day” were one of the best things in nature, and the more sudden the shower the better. Come on, loosen up and spend something! Have a cigarette.
So it seems that the bottom is out of the saving theory. That particular pillar is undermined and falling over. You may for the moment help yourself by saving money, but you’re a poor pup in the social sense if you do. Go and buy a velvet suit and order a quart of extra dry.
Saving money! And there again the moment you say “money,” off goes another explosion and up into the air a whole new mass of charred fragments. Scarcely a sentence is left intact of the old monetary theory that seemed as solid as bedrock. There it lay, the basis of our economic life and international trade—the doctrine of sound money. It seemed as if half the economic evils of the past had come about for lack of the knowledge and practice of it. Every student read in his economic scriptures of the evil of the Continental Dollar, the madness of the French Assignat and of how the Greenback was fought, slain and redeemed, as the dragon was fought by St. George.
Where is all this theory now? Nothing left, after the war explosion that blew it up, nothing except fierce, hot blasts of contrary opinion rushing into the vacuum. Monetary theory, or at least monetary practice, denounces solid, sound money, and calls for money at least as bad as and if possible worse than that of other nations. “If you devalue your pound, remember we’ll devalue our dollar. You can’t work that stuff on us!” To cling to sound money would be to become a Christian all alone in the arena.
Of all these doctrines I am not attacking one. Of all these problems I am not solving any. I am only drawing attention to the hopeless muddle in which economic thought and practice has involved itself. It has become a mass of contradiction. Every nation is calling in one breath for freer trade and economic nationalism, for a sound currency as debased as possible, for rigid economy with plenty of spending—in other words, calling out, “High!” “Low!” “Up!” “Down!” “Begin!” “Stop!”—till all is a mere babel of voices.
Perhaps the best index of what has happened to the science of economics is what has happened to the teaching of it in our colleges. The colleges have a system for meeting such difficulties.
When opinion gets confused—living opinion—the colleges can always fall back on the opinion of the dead. If living men can’t think, let’s have a catalogue of all that dead men ever thought, and the students can learn that. In fact, economics can be all dosed up with history, as doctors dose a patient with iron. And statistics. If we don’t understand the industrial world, at least let us have statistics. The continental area of the United States is 3,026,789 square miles and the number of spindles in Lowell, Mass., is 201,608 (or is it?) That’s the stuff. Make a four-year course and give a degree in it—a D.F.
And with that, of course, goes the familiar therapeutics of putting in “qualifications,” what is called the “relative” view—that a thing is partly so and partly isn’t so. Any book of what is called “general economics,” after indicating the continental area of the United States and the number of spindles in Lowell, Mass., proceeds to a series of propositions as to why wages partly rise and partly don’t, why prices may fall, or perhaps leap up, proving that black is in a sense white, except that where it is white it is partly black. This course is called Economics 1. From it you get to first base.
And, most of all, if we can’t understand it, let’s at least see that outsiders don’t. Let us dress economics up in esoteric language, give it a jargon of its own, and break away from plain terms like labour and profit and money and poverty. Let’s talk of “categories” and “increments” and “margins” and “series.” Let’s call our appetite for breakfast our consumer’s marginal demand. That will fool them. And if I buy one cigar but won’t buy two, call that my submarginal saturation point for nicotine.
Above all, let us call in the help of the psychologist. He’s the fellow with the technique. Turn him onto the theory of value, and grandfather Adam Smith won’t know his own offspring.
Accordingly, the theorist of today, following in the tracks of the dead scholasticism, the lost Babylonian and the Egyptian dozing in the dust of the pyramids, runs his economics to finer and finer distinctions that have lost all meaning for everyday life. He can no longer talk of our wants; he must have marginal wants, degrees of wants, increments of satisfaction, curves of desire meeting in an equilibrium. The difference as between plain language and this jargon is as between digestion and a stomach-ache. To the college economist a boy standing in front of a pastry shop represents a submarginal increment of satisfaction. Give him ten cents and he comes out with a consumer’s surplus in him. You can see it sticking out.
If anyone thinks this argument overdone, this language strained, let him open with me the latest of the books on pure economic theory, the books that have such titles as the Theory of Value, of Capital, of Investment, anything like that. It would be invidious to name them singly since this is an attack not on a man but on a method.
Here before me on my desk is one of the latest, a book that will be pronounced by the reviewers as one of the really “big” things—an “outstanding contribution,” that’s the phrase. The ordinary person can no more read it than he can read Chinese. Here is a sample of how this outstanding contribution stands out:
The slope of the curve passing through any point p has indeed a very definite and important meaning. It is the amount of y which is needed by the individual in order to compensate him for the loss of a small unit of x. Now the gain in utility got by gaining such an amount of y equals amount of y gained multiplied by marginal utility of y; the loss in utility got from losing the corresponding amount of x equals amount of x lost multiplied by marginal utility of y (so long as the quantities are small). Therefore, since the gain equals the loss, the slope of the curve
_am't of _y_ gained marg'l utility of _x
== ------------------- == --------------------
_am't of _x_ lost marg'l utility of _y
The author naïvely adds:
“Have we any further information about the shapes of the curves?”
No, I hope not.
I was once the guest of that merry institution, the Savage Club of London. Among the mock stunts of the evening was a speech supposedly in Chinese with an interpreter to explain it. After the bogus Chinese guest had spoken about half a dozen sentences, the chairman politely interrupted, and asked of the interpreter, “Now, what has Mr. Woo-hoo said?” “Nothing, so far,” said the interpreter.
The same is true of the quotation. It only means that when you have enough, you don’t want any more.
A thousand chapters have been written similar to that sample. Take enough of that mystification and muddle, combine it with the continental area of the United States, buttress it up on the side with the history of dead opinion and dress it, as the chefs say, with sliced history and green geography, and out of it you can make a doctor’s degree in economics. I have one myself.
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י”ב תשרי ה’תשע”ח 02/10/17