Political Economy is not just an old label for 'Economics'

Political Economy is not just an old label for 'Economics'

Part 6 of 22, from Exiting the Wizard's Circle of Economics

Political Economy, like Classical Liberalism, is not a conceptually tidy term, and though I'm using it here to refer to that small slice of time leading into our Founders' era, and culminating with Jean Baptiste Say, deTocqueville, and Frederic Bastiat, you should understand that it is typically applied to those whose ideas were very much opposed to theirs, including J.S. Mill, who wrote a great deal about it. The origins of Political Economy lay in the somewhat seedy doings of the French royals & Physiocrats, as well as some devilry from the always vile Jean Jacques Rousseau, as Jean Baptiste Say said

"...the sect of "Economists" of the last century, throughout all their writings, and J. J. Rousseau, in the article "Political Economy" in the Encyclopedie, lie under the same imputation."

Rousseau used Political Economy as a means to develop and justify his idea of a 'General Will', which held that it was necessary for the state to have the power & authority to 'shape' and improve society for the 'greater good',

"...Heavy taxes should be laid on servants in livery, on equipages, rich furniture, fine clothes, on spacious courts and gardens, on public entertainments of all kinds, on useless professions, such as dancers, singers, players, and in a word, on all that multiplicity of objects of luxury, amusement and idleness, which strike the eyes of all, and can the less be hidden, as their whole purpose is to be seen, without which they would be useless. We need be under no apprehension of the produce of these taxes being arbitrary, because they are laid on things not absolutely necessary...."

, which is a sentiment that tyrants from Robespierre to Marx and beyond, have appreciated the utility of, ever since.

However, leading into the Founders' era, people like Richard Cantillon, and later Adam Smith, began seeing that history for what it was. Adam Smith regarded such matters derisively as a form of 'state craft', which was very much opposed to the 'Science of Wealth' or 'Natural Liberty', that he had begun to discover the need of:

"...the expression ‘political economy’ consistently refers to those systems of economic policy and analysis which are being opposed and criticized."

, and yet Smith was eventually able to describe political economy on his own terms, as:

"Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign. [WN IV. Intro. 1]"

From my POV, that's still a bit problematic in the powers it implicitly concedes to government, but then those pioneers who lead the way to a new discovery, should be forgiven, rather than canceled, for not discovering every danger that lurked behind the real benefits of what they had discovered.

Footnote from Say's 'Treatise on Political Economy':
"From οικος a house, and νομος a law; economy, the law which regulates the household. Household, according to the Greeks, comprehending all the goods in possession of the family; and political, from πόλις, civitas, extending its application to society or the nation at large.

Political economy is the best expression that can be used to designate the science discussed in the following treatise, which is not the investigation of natural wealth, or that which nature supplies us with gratuitously and without limitation, but of social wealth exclusively, which is founded on exchange and the recognition of the right of property both social regulations."

Others soon came along to improve on that pioneering vision, such as Jean Baptiste Say, who Thomas Jefferson praised as being clearer, and much briefer than Adam Smith, and was himself followed by one who succeeded better than most others in marking out the best paths & vistas upon the maps of what Smith & Say had blazed, which was Frederic Bastiat.

Bastiat later observed that the approach and understanding that was consistent with Smith's ideal of 'Natural Liberty', was as distinct from the Socialist and later 'Economic' views, as astronomy is from astrology, or chemistry is from alchemy, in that:

"...What separates, radically and profoundly, the two schools is their difference of methods. The one school, like the astrologer and the alchemist, proceeds on hypothesis; the other, like the astronomer and the chemist, proceeds on observation...."

Bastiat understood that just as two astronomers could observe the same fact and disagree for a time about its cause or meaning, yet because they were both aiming at understanding what is real and true, once the matter became better understood, their views would eventually come to an harmonious agreement as to what is valid and true. This was very much in line with what Thomas Reid had said earlier:

"...While the parties agree in the first principles on which their arguments are grounded, there is room for reasoning; but when one denies what to the other appears too evident to need or to admit of proof, reasoning seems to be at an end; an appeal is made to common sense, and each party is left to enjoy his own opinion...."

, but as Bastiat noted:

"... between the astronomer, who observes, and the astrologer, who imagines, the gulf is impassable...."

As Bastiat saw it, like the Astronomer, the job of Political Economy was less to advise actions for governments to take, than to make observations that enabled facts and principles to guide people and governments away from acting upon those ideas and practices that lead to confusion and waste, and to provide them instead with the knowledge that would lead their society towards prosperity and harmony. But like the astrologers & alchemists, those who promote Socialism/'Economics' (and yes, they belong together) see their job as being to use their influence to urge policies that imposed upon people's lives which they justified on the basis of their dire or wonderous predictions for the future, no matter what facts or principles need to be ignored or denied in doing so (or concern for what the future actually holds).

Our task here & now, is to select between those interested in understanding reality and pursuing happiness, and those interested in pushing economic narratives in pursuit of power, by examining the systems they support, starting with those of the Pre-Classical Economists (Ooh! so close to finding a usable label!) which 'economics' supplanted.

Here's a few basic questions that should be actively considered before affixing any labels:

• What is an economy?
• How do you measure the state of an economy?
• What's involved in making adjustments to an economy, and at what cost?
• Are such actions justifiable?

A) What an economy actually is, is at least the material effects of every aspiration, concern, effort, expectation, and goal, of every person living within the geographical expanse it references, as well as everyone and everything outside of it which interacts with it.

Seems rather large, doesn't it?

B) And how does one go about measuring the state of such an... everything? While Political Economy would say an economy's health is best measured by what obstacles its members face in acting and trading within it, economics would have you believe that there are a number of widely agreed upon economic indicators that more than suffice to measure & direct this & that indicator and the ratios of them, to divine which actions and directions are necessary to take in order to improve 'the common good' of ... all of that.

Unfortunately if that gives you the impression that such key 'economic indicators' as the Federal Reserve's Interest Rate, GDP (Gross Domestic Product), CPI (Consumer Price Index), Unemployment Rate, etc., were actually objective indicators of the state of those 'economic realities', which enable 'those who know best' to divine our economic course into the future, instead of the arbitrary listings of politically motivated 'indicators', I'm sorry to say that you've been misled.

Yet they'll tell you very authoritatively that the advice of 'those who know best' is sufficient to guide society in making those adjustments (adjustments which 'those who know best' are in wild disagreement over) based upon 'recognized indicators', which they insist are necessary and sufficient to best 'manage' the course of our lives, in their society.

C) Even more misleading than indicating that those indicators are objective measurements for objective purposes, is the scope of what's involved in making such 'adjustments to the economy' that those indicators are used to legitimize. The willingness of the 'economically minded' to imagine that they can adequately comprehend an 'economy'(let alone 'correct' it) is what, IMHO, true arrogance looks like - much like what Adam Smith described way back when:

"...I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

What is the species of domestic industry which his capital can employ, He can judge of this much better than the statesman. and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him. The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would no-where be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it....."

The innumerable decisions, motivations, and judgements that go into making up an 'economy' (AKA: what you and everyone you know does, and why), is something that no one could ever even adequately identify, let alone 'manage'. I'd say that 'Folly and presumption' is an apt characterization for how 'Economists' gin up their formulations for the various measures and 'distribution curves' they claim to guide the actions that must be taken to 'guide' our economy, to say nothing of the truly dangerous nature which he noted was inherent in even attempting such a project, as even that necessitates infringing upon, and outright violating the individual/property rights of *some* (all) members of the community, in order to separate them by means of percentages, from everyone else in the community, by some such label as 'the wealthy'.

That my friends, which is what it is that 'economics' seeks to do, is a key 'tell' of the 'Economic' mindset, in that it's naturally inclined towards using power to divide people on inherently collectivist lines of favored and unfavored groupings, for purposes of its own.

A possibly apocryphal quip from Harry Truman “Give me a one-handed economist. All my economists say ‘on the one hand...’, then ‘but on the other...’”, expresses the frustration of seeking economic advice of more objective value than an opinion.

D) Perhaps worst of all, is the fact that even economists don't claim to objectively know what will result from their efforts, and yet the advice they give to those in positions of power, is derived from the various probabilities that follow from their disputed theories, which will result in concrete actions being taken, and the only thing that can be said for certain is that whatever actions are taken, will - for better or for worse - directly impact each and every one of us.

IOW: Economics presumes that it's appropriate to use political power to experiment with the lives and livelihoods of those living in 'their economy', for the good of the economy, rather than for those it is made up of.

Bringing those issues up, however, is likely to get you and me labeled as being either overly individualistic (which you're intended to associate with the heads & tails 'lone wolf' imagery that J.S. Mill & Dewey both peddled) and with being too concerned with property, and Individual Rights, or in some other way at odds with the common good, such as my xTwitter friends admonished me.

xTwitter'rs tell me:
"...competing rights claims require Law that has the Common Good as an end..."
"..."Just laws" depend upon consideration of the public welfare and not simply of individual rights in discerning ..."
"...Imo rentiers have to be eliminated through policy so that productive investment, circulation and stability is promoted..."

Note the term that one of my xTwitterers' used, 'Rentiers'. That is a favorite label of the economically minded, which this reference provides a few different common dictionary definitions of:

• "A person who lives on income from property or investments.
• One who has a fixed income, as from lands, stocks, or the like.
• An individual who receives an income, usually interest, rent, dividends, or capital gains, from his or her assets and investments.
• someone whose income is from property rents or bond interest and other investments

, meaning that the term encompasses everyone from those who bought a property to fix up and rent out, or is retired and living on investment income from their 401k, all the way on up to the wealthy, all of whom depend upon the same individual right in property, which the economically minded believe should [should?] be 'eliminated'.

Have you noticed that 'Economic Thinkers' often use the word 'Common', and then in the next breath single out demographics such as 'rentiers' from the common populace, for uncommon treatment?

To speak of a 'Common Good' that isn't common to all, or of a 'Public Welfare' that counts upon damaging the welfare of some members of the public, is as ideologically-snowed blind, as deliberately destroying the individual bricks within a wall in order to save the wall which has been built from them. As the Inigo Montoya meme would say 'You keep using that word, I do not think it means what you think it means'.

And sorry, but if you think that 'they only mean millionaires!', the fact remains that utilizing the law to violate the rights of one person, means abandoning the principle of respecting everyone's rights under the law. Sure, you might not feel the effects of such efforts immediately, but what's common to all with their enactment, is that everyone has been immediately deprived of the full support of the Law in regards to that right (and others), and as happened with the income tax, your tax bracket too will eventually feel the particular effects of its impositions.

"But Van, we don't mean targeting either rich or poor individuals, but only corporations and Big Businesses!"

See 'Wickard v Filburn' for one famous instance out of thousands that confirm this, where SCOTUS decided that a single family farmer raising a small crop for his family's use only, was 'Akshually' an interstate-commerce violation of the FDR administration's 'New Deal' laws.

, and again, no, although that's how such actions are usually sold, they're implementation says otherwise, no matter what words are said or conveniently left unsaid. Our own history says otherwise as well, loudly, over and over and over again - almost as if an important lesson of history has been deliberately left untaught, so that we'll continue repeating the same mistake over and over again, which we will continue doing, so long as we evade paying attention to the lessons that history is trying to teach us.

And yet 'economic thinkers' persist in justifying their 'Economic actions' as being *objective* measures for improving the 'common good' - so what is this notion of a 'Common Good' that they they speak of? One of those xTweeting with me answered gamely:

xTwitter'rs tell me:
"The common good represents the conditions that allow individuals within a society to flourish"
, and then muddying the waters,
"The Common Good with respect to political economy is simply the necessary conditions of liberty."

Ah. Ok then. Human Flourishing and *Liberty* (using which definition?). Right. Well then. Somehow their use of those words makes me wonder about what they think is meant by them.

• Do they mean that understanding of 'Liberty' which Western history and literature led America and its laws to be established upon during our Founders' era, in order for America to flourish?
• Do they mean something similar to the flourishing that people like Adam Smith understood would follow from refounding Political Economy upon natural liberty (The Wealth of Nations was published in 1776)?

, or do they mean to use familiar terms like flourishing, *Liberty*, and the *Common Good* as understood by the Founders' sense of those terms, to entice popular support for the very different meanings that became associated with those words a half century and more after our Founders' era, by 'Classical Liberals' and the 'social science' of 'Economics'? The sense of 'common' which most comes to mind from that, is that of common thieves.