Margaret Schabas The Natural Origin of Economics

The Natural Origins of Economics

MARGARET SCHABAS is professor of philosophy at the University of British Columbia. She is the author of 1 World Ruled by Number: William Stanley Jevons and the Rise of Mathematical Economics and the coeditor of economies in the Age of Newton.

The University of Chicago Press, Chicago 60637
The University of Chicago Press, Ltd., London
© 2005 by The University of Chicago
All rights reserved. Published 2005
Printed in the United States of America
ISBN: 0-226-73569-9 (cloth)
Library of Congress Cataloging-in-Publication Data
Schabas, Margaret, 1954-
The natural origins of economics / Margaret Schabas.
ISBN 0-226-73569-9 (cloth : alk. paper)

  1. Economics. 2. Science. I. Title.


Preface ix
1 • Before "the Economy" 1
2 • Related Themes in the Natural Sciences 22
3 • French Economics in the Enlightenment 42
4 • Hume's Political Economy 58
5 • Smith's Debts to Nature 79
6 • Classical Political Economy in Its Heyday 102
7 • Mill and the Early Neoclassical Economists 125
8 • Denaturalizing the Economic Order 142
Notes 159
References 175
Index 207


A question that has motivated much of my writing and research over the past twenty or so years is, In what sense is economics a science? This has necessitated a detailed study of the overlap -- both methodological and conceptual -- of economic theory with the natural sciences. My first monograph, which studied the rise of mathematical economics in late-nineteenth-century Britain, focused primarily on the methodological overlap, although the role of new concepts in logic and the philosophy of science was examined along with the appropriation of quantitative tools. The present study focuses on the conceptual foundations of classical economics and argues that the phenomena themselves were grounded in physical nature. It thus makes a very strong case for the natural context of economic theory from the early eighteenth century through the mid-nineteenth. John Stuart Mill stands out as the pivotal figure in the process that I refer to as the denaturalization of the economic order.


Before "the Economy"

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. -John Maynard Keynes, The General Theory of Employment, Interest and Money

Daily references are made to the economy, whether in speech or in print. Most economists (and many politicians) maintain that virtually everything we do is governed by the economy. We are deemed to be producers or consumers at every moment of our lives. Every interaction can be defined as an act of exchange with an implicit price. Every object or service is potentially evaluated in terms of other goods and, thus, part of our so-called utility calculus. Even seemingly noneconomic activities such as marriage, suicide, or substance abuse have fallen under the lens of neoclassical economists, Gary Becker most famously. Paradoxically, just as we have come to see every human activity in economic terms, we have also come more and more to embrace the belief that we can control the economy, that it can be stabilized by monetary and fiscal measures. John Maynard Keynes's remark of economists and political philosophers -- that "the world is ruled by little else" (1936/1973, 383) -- has only grown in credibility and import.

If one goes back a few centuries, however, it is by no means clear that people, even the learned communities of Western Europe, perceived such an entity as the economy. Collectivities such as markets and nation-states were well recognized, and "intricately interconnected" (Rothschild 2001, 29). But the majority who wrote on political economy defined their subject as an investigation into money, trade, and wealth; they rarely spoke of economies per se. Commerce connoted civil transactions between individual merchants and consumers and was not, by and large, used in the aggregate sense. Moreover, it was not just that early modern thinkers rarely referred to an economy, either national or international. Rather, their emphasis was much more on specific phenomena -- the interest rate, for example than on an overarching system by which the pieces fit together. Moreover, wealth was essentially a property of the physical world; the principles that governed its growth and distribution were said to be natural and could be augmented much as a forest might extend its reach into a meadow. Wealth was readily equated with the fruits of the earth and sea, with minerals, fish, and exotic plants. For Carl Linnaeus, the epitome of wealth, and, hence, the primary objective of the science of economics, was the domestication of foreign plants such as tea and cinnamon (see Koerner 1999, 2, 80, 150). At the end of time, humankind would restore the abundance and complete leisure of the Garden of Eden. Early modern conceptions of wealth were strongly wedded to prelapsarian ideals, whether one reads John Locke, Jean-Jacques Rousseau, or Thomas Jefferson, and were a far cry from more recent conceptions of wealth in terms of maximizing utility.

Only gradually, over the course of the late eighteenth century and the mid-nineteenth, did economic theorists come to posit and identify an economy as a distinct entity and maintain that it was subject, not to natural processes, but to the operation of human laws and agency. The main thesis argued here is that, until the mid-nineteenth century, economic theorists regarded the phenomena of their discourse as part of the same natural world studied by natural philosophers. Not only were economic phenomena understood mostly by drawing analogies to natural phenomena, but they were also viewed as contiguous with physical nature. Economic discourse was, in short, considered to be part of natural philosophy and not, as we would now deem it, a social or human science. It did not then address an autonomous sphere as it does today.

How and why political economists came to see the economic domain as severed from the physical world, as the product of human action, human deliberation, and human institutions, is the story imparted here. This denaturalization of the economic order, as I would like to call it, took place gradually and, in certain fundamental respects, has never been completed. But, if one were to juxtapose the conception of the economic realm articulated by leading theorists in the 1770s to those articulated in the 1870s, the differences are, I think, patently obvious. There is in both cases a strong conviction that economic phenomena such as money and trade are orderly and, thus, subject to the operation of laws, only the mechanisms by which those laws operate, and the source of the phenomena in general, stem from two different worldviews.

For Adam Smith, nature was wise, just, and benevolent, whereas, for John Stuart Mill, it was imprudent, unjust, and cruel. For François Quesnay, wealth was a gift of nature, whereas, for Alfred Marshall, it could be defined only in terms of property claims and, thus, in terms of human institutions. For Quesnay, wealth was a physical entity, grain for our nourishment, whereas, for Marshall, it was a state of mental well-being or utility. For Smith, the best policy was to dismantle human designs and allow the "natural progress of opulence" (Smith 1776/1976, bk. 3). For Marshall, and even more for his student Keynes, the best policy was one of intervention, of fiscal management and economic planning.

Postwar economists, via manipulations of the interest rate and the money supply, have widely sought to stabilize the economy and dampen the oscillations of the business cycle. In short, there is now a sense that the economy can be engineered, if not entirely controlled. As a quick perusal of any macroeconomics textbook since the 1970s makes evident, economists are unequivocally committed to "stabilization policy." The only area for dispute is which "tools" to employ to achieve stabilization. Exogenous and often unpredictable shocks beset the economy, but, through fiscal and monetary measures, economic planners are able to steer us along a path of steady-state growth and stability. The rhetoric is very much like that of civil engineers. Wind shears or earthquakes or ordinary frost might threaten the stability of bridges, but engineers can overcome these shocks given the right plans. Macroeconomists convey a similar degree of confidence in our ability to achieve a national economy of low inflation and unemployment coupled with healthy economic growth.

For the eighteenth-century savants, there was no such separate domain. Facets of their world, manifest as trade, population, or wealth, received analysis, and specific measures such as taxation could be used to achieve specific ends, but there was no overarching concept of an economy as an integrated system of production, distribution, and consumption. There were goals, to be sure -- perhaps to increase the national treasury as a means to wage war -- but there was no collective thing to stabilize or engineer.

It is important to grasp just how recent is our configuration of an economy as an autonomous set of relations only two hundred years old. Economic phenomena, by contrast, have been discerned and analyzed in their own right since antiquity. Aristotle's Politics and Nicomachean Ethics, for example, contain some remarkable analyses of money, market exchange, and household production. Moreover, the terms oikonomike or economia, or the art of household management, and chrematistike, or the more dubious activity of commerce, were established before Aristotle: arguably by Homer and most certainly with Xenophon's economicus of ca. 400 B.C. (see Booth 1993, pt. 1).

The term economy became more prevalent in the early modern period, although more often in the context of natural history and physiology than in discussions of commerce and trade (see Schabas and De Marchi 2003). The oeconomy of nature became a commonplace term ca. 1700 and spawned many variants as well. Bryan Robinson, an Irish naturalist, published A Treatise of the Animal economy in 1734; François Quesnay issued his well-known Essai phisique sur l'oeconomie animale in 1736. Charles Bonnet appealed to an organic economy to explain growth and generation in terms of the interaction of the different parts of an organism (see Daston 2004, 120). There were dozens of texts with similar titles throughout the mid-eighteenth century, even one, by the physician John Armstrong, entitled The economy of Love (1736). economy was also used to denote frugality or the wise management of one's household, but only in rare instances did it refer to the national economy at large. Jean François Melon's Essai politique sur le commerce (1734) uses the term but once, in the sense of a set of riches: "A better economy produceth more Men, and a greater Plenty of all the Products of the Earth" (Melon 1734/ 1739, 54). Richard Cantillon had used the term once to refer to the arrangements of a slave plantation (see Cantillon 1755/1964, 33), and James Stuart's Principles of Political economy (1767), the title notwithstanding, makes only one reference to an economy as we understand it (see Stuart 1767/ 1966, 1:16).

David Hume and Adam Smith rarely made reference to the economy of a nation-state. In his History of England, Hume mostly used the term to mean individual frugality. In his Dialogues concerning Natural Religion, he used it in the sense of an orderly system, particularly in nature. Philo (Hume's spokesman) asks: "Is there a system, an order, an economy of things, by which matter can preserve that perpetual agitation, which seems essential to it, and yet maintain a constancy in the forms, which it produces? There certainly is such an economy" (Hume 1779/1947, 183). Philo extrapolates to "the whole economy of the universe" (191) but also sees economy in the structure of each animal (207) and even in the layout of a building (204). Only once, in his essay "Of Public Credit," did Hume remark on the whole interior economy of the state" (Hume 1777/1985, 354). Ironically, Smith used the term more in The Theory of Moral Sentiments than in The Wealth of Nations. There are again references to the economy of a person, meaning his frugality, but more often the word appears as the economy of nature (see Smith 1790/1976, 50, 77- 78, 183, 321).

These are all signs that, until the late Enlightenment, the natural and the economic realms were one and the same. Even in the 1790s, Goethe claimed that "nature was the perfect economy" (see Jackson 1994, 411). Concepts and methods from natural history and the physical sciences shaped and governed the analyses of wealth offered by eighteenth-century thinkers such as Hume, Quesnay, and Smith. And none had a concept of an economy as we denote it at present or even as Ricardo devised, namely, a self-contained and self-regulating system of the production and distribution of commodities that can be more or less efficient and that can grow or decline. Indeed, as we will see in the next chapter, the most detailed account of an economy during the mid-eighteenth century was the Linnaean economy of nature, which encompassed human production, the web that joins animals and plants, the earth's surface (including fossils), and what we would now call the hydrologic cycle (see Worster 1977, 34-35).

For Smith, moreover, political economy as a pursuit was defined as the "science of the legislator, " not a full-fledged study of economic phenomena (see Winch 1996, 409). Only in the first half of the nineteenth century did the concept of the economy emerge as an autonomous entity. John Stuart Mill was pivotal in rendering explicit the role of human agency as the framework for economic analysis, as the preliminary remarks to his Principles of Political Economy reveal: "In so far as the economical condition of nations turns upon the state of physical knowledge, it is a subject for the physical sciences, and the arts founded on them. But in so far as the causes are moral or psychological, dependent on institutions and social relations, or on the principles of human nature, their investigation belongs not to physical, but to moral and social science, and is the object of what is called Political Economy" (Mill 1871/1965, 1:20-21). Mill thus captures the very transition that took political economy from the physical to the social domain.

Several caveats need to be issued. For one thing, the term social science was coined only in the 178os, by Condorcet, and did not enter the English language until the early nineteenth century (see Baker 1964; and Cohen 1994, xxvi). The factors that led to the emergent field of social science were part and parcel of the process by which economics detached itself from natural philosophy. For another, economic theorists have always embraced specific notions, either explicit or implicit, about human nature. I do not wish to imply for a minute that such notions were absent in the early modern period. Rather, they were refracted through the prism of physical nature, at least in the eighteenth century and the early nineteenth. While it would be imprudent to define nature -- clearly the term has multiple meanings even at a given point in time I will most often use the term to mean physical nature, the domain commonly studied by natural philosophers at the time under consideration. The phenomena under investigation might belong to the science of mechanics, or to experimental physics, or to natural history. For the sake of my argument, human nature, or the phenomena known as the will, the intellect, the sentiments, and the passions, is to be set apart from the rest of the natural world, even though there are some obvious points of overlap, human physiology most notably. I propose that, while human agency was not emphasized as the primary or proximate cause of economic phenomena in the mid-eighteenth century, that notion is, nonetheless, present in economic writings of the period.

Hume wisely remarked that no word "is more ambiguous and equivocal" than nature (Hume 1739-40/2000, 304). The passage of 250 years has done nothing to improve the situation. Raymond Williams commences his efforts at definition with the caveat: "Nature is perhaps the most complex word in the language" (Williams 1976, 184). It is not just the ambiguity and complexity of the word nature that make it one of the most elastic and evasive terms in our language but the wide array of definitions. Familiar distinctions -- such as those between natural philosophy and moral philosophy, physical nature and human nature, nature and artifice, the natural and the supernatural -- are, ultimately, drawn in sand, if only because no two philosophers have ever ascribed exactly the same meanings to those terms.* Williams rightly distinguishes one enduring set of meanings that maps nature onto the material world, but it is an open question where to place human beings. Even if one were to separate human agency from physical nature, in a manner embraced by modern science, there is, perhaps, no place, at least in the sublunar realm, that is untainted by human activity. The ozone layer, Bruno Latour has argued, is a political object; the distinction between nature and society, he argues, is completely devoid of meaning (Latour 1993). It is not just that everything that exists is part of nature but that everything is also part of the social realm. As Lisbet Rausing has recently observed: "In its full brittle complexity, nature exists only on our sufferance" (Rausing 2003, 173).

Although it is almost impossible to articulate precisely what is meant by the word nature in the period under consideration here, it is possible, look- ing to paintings or poetry, for example, to discern from tableaux or portraits of nature the range of credible meanings. Broadly speaking, for the Enlightenment philosophers, physical nature was rational, harmonious, and orderly. They frequently spoke metaphorically of nature as a watch, a clock, or, more generally, a machine. Some- for example, Bernard de Fontenelle and Adam Smith--viewed nature as a kind of theater, by which elaborate hidden machines produce delightful results (see Schaffer 1993, 493). As Lorraine Daston has observed of the eighteenth-century metaphysicians: "The natural no longer subsumed the artificial, as it had for Bacon and Descartes; rather, the artificial subsumed the natural" (Daston 1998, 166). For the Romantic philosophers of the early nineteenth century, nature had acquired a mysterious and turbulent appearance. Nature was shrouded in layers of manifest symbols that, rightly discerned, would reveal its underlying unity. For many mid- nineteenth-century philosophers, nature had become fierce and almost diabolical, something to be conquered and subdued. Think of Darwin's depiction of nature as a continual battlefield between weak and strong, "red in tooth and claw," to use Tennyson's apt phrase (see Ruse 1979).

Another avenue to conceptions of nature in this period is that of gardens, particularly aristocratic gardens. As Chandra Mukerji has argued, French formal gardens of the ancien régime were symbols of corporate property, of mercantile capitalism, rather than of paradise or unbridled fertility (Mukerji 1993, 456). Alternatively, the English landscapers "provided a model of natural perfectibility" to incite improvement (453). Paintings and gardens, among other objects, offer a broad spectrum of images of nature devised during the eighteenth and nineteenth centuries. Even metaphysicians such as Fontenelle or George Berkeley embedded their discourse in dialogues conducted in gardens, as a means of reminding the reader of the visual cues to the order of nature. To this day, nature, as Williams observes, has also meant the countryside or places unspoiled by humans (Williams 1976, 188).

The eighteenth century also abounds with treatises on the nature of nature. Two salient examples are Dénis Diderot's De linterprétation de la nature (1753) and Baron d'Holbach's Système de la nature (1770), but there are dozens more such tracts. As Carl Becker observed, the words nature and natural law were to the eighteenth century what evolution and progress were to the nineteenth." A century later, philosophers were more cautious about making lengthy pronouncements or did so under the guise of an overarching system such as Herbert Spencer's. By the mid-twentieth century and the onset of academic specializations, most accounts had become purely historical, making sense of past ideas: pace the sweeping and splendid accounts of Arthur Lovejoy (1936) and Robin George Collingwood (1945). Among postwar scholars, modesty has rightly set in, and one is hard-pressed to find more than a few general accounts on the nature of nature. The 198g Herbert Spencer lectures at Oxford elicited six general essays on the concept of nature by leading scholars such as Geoffrey Lloyd, Elliott Sober, and Roger Penrose, but each essay sticks fairly closely to the author's respective subdiscipline (see Torrance 1992). Kate Soper's What Is Nature? (1995), while more substantial, is leveled at environmentalists and their misguided appeals to nature. Lorraine Daston's two recent articles. "The Nature of Nature in Early Modern Europe" (1998) and " Attention and the Values of Nature in the Enlightenment" (2004), though replete with apt comparisons and contrasts between the early modern period and our own, are judiciously positioned in the past rather than the present.

Collingwood's Idea of Nature maintained: "Greek natural science was based on the principle that the world of nature is saturated or permeated by mind. . .. The world of nature is not only alive but intelligent; not only a vast animal with a 'soul' or life of its own, but a rational animal with a 'mind' of its own" (Collingwood 1945, 3). This was especially true for the Stoics. To achieve greater virtue was part and parcel of being in harmony with physical nature, to understand that the pneuma or spirit pervades all bodies. While Collingwood is overblown and dated, there is still a large grain of truth to his central thesis. As numerous scholars have since argued, the ancient theories of natural philosophy, atomism, essentialism, and the like were directly linked to theories of virtue and justice. In that respect, the sphere of human activity, such as the polis, was enmeshed with that of physical nature (see Lloyd 1992, 15). Scholars have also placed much emphasis on the strong intellectual debts of the leading Enlightenment economists- Hume, Smith, and Quesnay-to Greek philosophy. Both Hume and Smith were enthusiasts of Stoic thought, while Quesnay attempted to revive Aristotelian and Galenic ideas. In this respect, although also under the sway of the mechanical philosophy that swept over European thought, they were still deeply wedded to the supposition of a unified world, the issue of a single author or deity. The separation of mind and matter, in short, did not fully seep into political economy until the nineteenth century.

These are grandiose claims, claims that surely demand extensive support from the historical record. In addition to a close reading of the primary sources in print, I have perused some of the manuscript collections at Harvard University, the University of Toronto, Cambridge University, the University of Edinburgh, and the National Library of Scotland. My efforts have been facilitated by considerable scholarly spadework already extant; my debts to those who have edited and compiled the papers and correspondence of the leading past thinkers are incalculable. I also rely extensively on the secondary literature in the history of science, which has gained considerable sophistication in the postwar period and grown at a dramatic pace.

Twenty-five years ago it was a truism among historians that eighteenth- century science was enigmatic. There were brilliant studies of Enlightenment physics by Charles Gillispie (1960), Robert E. Schofield (1970), and Thomas Hankins (1970). But they were much overshadowed by scholarship of seventeenth- and mid-nineteenth-century science, partly because scholars were drawn to such luminaries as Galileo and Newton, Darwin and Maxwell. The eighteenth century does not have a single contributor to science with such cachet. Indeed, the period rightly belongs to the moral sciences, or the science of man, as it was known. The relative political stability of the eighteenth century oddly enough engendered brilliance in political philosophy -Rousseau, Hume, and Smith, to name just a few. And, while it was possible to study some of the prominent mathematicians such as Leonard Euler- in isolation from social thought, it was not so feasible in the case of D'Alembert, Lavoisier, Priestley, or Condorcet. Arguably more than historians of seven- teenth- or nineteenth-century science, those of eighteenth-century science are compelled to be versed in political philosophy. Some of the pathbreaking studis that take an integrated approach to Enlightenment science are those by Baker (1975), Gillispie (1980), and Daston (1988). More recently, the number of detailed studies of the culture of science in the eighteenth century, both narrowly focused and more wide-ranging, has grown considerably (see, e.g., Golinski 1992; Koerner 1999; Riskin 1998; Schiebinger 1993; Schaffer 1983, 1989, 1990, 1993, 1999; and Spary 2000). It is now possible to make some reliable generalizations and, thus, begin to position economic thought within this context. There is far less literature, however, that treats economic ideas within the context of the history of science. This book is meant to provide a contribution to that end, and the result, I trust, will be to impress the reader with the great number and wide variety of links between classical economics and the natural sciences, both conceptual and methodological.

Historians of economics have traditionally adopted an internalist stance and emphasized what Emma Rothschild aptly calls processionalism, by which she means viewing the past as a set of unadulterated seeds for present truths (Rothschild 2001, 40-41). Such tendencies stem partly from the strongly ahistorical nature of advanced training in economics; the science is studied and practiced in a way that rarely cultivates a historical sensibility." But even more significant is the tenor of Joseph Schumpeter's monumental History of Economic Analysis (1954), which looked to every past thinker as either aiding or delaying the onset of neoclassical economics. Schumpeter, however, was not strongly internalist. His book makes a concerted effort to document the broader historical context notwithstanding the primary emphasis on analytic progress. Fortunately, in the past fifteen or twenty years, a number of prominent historians of economics have broken with this tradition and challenged the received view of a unilateral and purportedly triumphant march toward greater analytic clarity. Even more exciting has been the significant number of works that join the history of economics to the history of the natural sciences, by specialists in both fields. I°

My intentions are not to rework the internal economic analyses that one finds in the leading texts of Smith or Mill, let alone translate past theories into contemporary mathematical language, as has been done by many other scholars. Rather, I wish to appraise the claims of the leading classical economists in relation to the scientific ideas and practices of their time. I seek zeitgeists, not systems of simultaneous equations.

Classical economics is about as disputed a historical term as any other. Some would stretch its purview from Petty and Locke right up to Marx, while others would limit it to the one hundred years that run from Smith to John Elliott Cairnes." Not much is at stake with either set of boundaries. I use the term classical economics simply as a shorthand for a body of ideas that spans the period from the mid-eighteenth century to the mid-nineteenth. I begin my study of economic ideas with the French économistes of the eighteenth century because they, more than any other group, so readily joined their conception of wealth with the operations of nature. The story might have begun at an earlier point, but there are no stronger instantiations of economic thought harnessed to nature than the Physiocrats.!? Chronologically, Hume's economic essays of 1752 preceded the formation of Physiocracy by five years, and the heyday for the latter was truly in the 176os. Moreover, if one grants that some ideas central to Hume's political economy are in his Treatise of Human Nature (1739-40), then Hume ought rightly to be treated before the Physiocrats. The reason for my reverse ordering has to do with Hume's close ties, personal and intellectual, with Adam Smith and the fact that Hume segues well into Smith. Moreover, the Physiocrats are commonly placed apart from the school of classical political economy (Hume's status is also ambiguous), and, thus, for that rea- son too, it seemed best to commence with a study of their ideas.

To develop my reading of this period as one of denaturalization, I might well have started even earlier. Hobbes, Boisguilbert, Petty, and Locke all stand out as relevant figures in this account. But an additional reason for starting in the mid-eighteenth century, at least in a concentrated fashion, stems from my belief that political economy was not viewed as a separate and coherent discipline until that point in time. The seventeenth century abounds with books, pamphlets, and broadsides on money, interest, and trade, to take the title of Locke's 1696 volume as representative. A discourse can easily be located ca. 16go, but the subject of political economy did not form a domain in its own right until the mid-1750s. The mid-eighteenth century witnessed the founding of chairs and societies in political economy (notably in Sweden and Italy), the establishment of periodicals on economics (especially in France), and the publication of general treatises such as Richard Cantillon's Essai sur la nature du commerce en général (1755). Hume's economic essays of 1752 circulated widely. Within two years, there were two new English editions and two French translations. By 1770, these essays had been reissued at least seventeen times and translated into five European languages (see Charles, in press).

As for the end point of the period of classical economics, I take Mill and Cairnes rather than Marx. As Dennis O'Brien points out, Marx's economics are borrowed wholesale from the classical economists, but he is an offshoot, like Henry George (see O'Brien 1975, xi). To make sense of Marxian economies requires attention to Hegel and the French socialists as much as to Ricardo and Mill. Moreover, Marx's major work, Das Capital (vol. 1 appeared in 1867) did not begin to make its mark until the 188os, when my account tapers off. Nevertheless, there are many linkages between nature and economic phenomena in Marx's works, not to mention an essentialism regarding our species-being that drives much of his analysis (see, e.g., Hearn 1991; and Meikle 1991). And, while I am partial to the view that Mill and Cairnes were the last of the classical economists, I will also underscore here the extent to which Mill stands as an important pivotal figure for the neoclassical era.'" Indeed, if there is any writer who serves to mark the denaturalization of the economic order, it is Mill -and the Mill of the 1836 Essays as much as of the 1848 Principles. In that respect, my overview is confined to about a hundred years, from approx- imately 1750 to 1850.

What makes the Enlightenment conception of nature so different from our own is its strong allegiance to the deity. The moral and natural worlds were unified insofar as they were the book of a single "Author," as philosophers then were wont to say. Only a small minority of philosophers, such as Hume, queried the view that a deity had made the world according to a given plan. More significant was the belief in the continuous presence and providential action of the Christian God. Despite secularizing forces in the late Middle Ages, many seventeenth-century savants intensified and extended the identity of God with physical nature. This is best exemplified by Nicolas Malebranche and his doctrine of occasionalism, whereby God was the proximate cause of all events. Insofar as all matter was passive and without soul, it could not be active. God was the only source of motion and change, and, hence, every mechanical event bespoke his agency. Over the next century, God's efficacy begin to wane, although never to the point of robbing nature of its order. The secularization of concepts of nature transpired at a slow pace and was by no means a simple or monotonic development. Voltaire, Hume, Buffon, and Hutton were some of the prominent figures at the vanguard of secularization. The nineteenth century brought even more and profounder uncouplings of science and religion, thanks in part to the maturation of evolutionary biology in the hands of Cuvier, Lamarck, Lyell, and Darwin. But there were also many others -- Whewell and Pasteur come to mind - who were bent on reinforcing the Christian component of their scientific research. The secularization of science will be examined in more detail in the next chapter. The main point to grasp here is the extent to which Enlightenment philosophers, like their Greek predecessors, saw the world as a single unified whole.

Contemporary natural and social scientists, by contrast, have implicitly agreed to divide the world into two parts. When physicists today think of the world they investigate, it is one with all the social institutions stripped away. Matter, force, and energy are studied independently of the principles that gov- ern interest rates or property laws, let alone the accumulation of wealth. Economists, in parallel fashion, have come to adopt a domain of discourse that is similarly segregated. The Schroedinger equation can tell us nothing about the interest rate, to put it bluntly. To be sure, some of the analytic tools resemble one another; there are many formats common to the models used in micro-economics and ecology, for example." But there is no ontological conviction that economic phenomena are themselves part of the natural order that serves as the domain for natural scientists. The phrase laissez-faire has lost all its original import. It pertains now to liberal trade policies, not the operations of nature itself.

Economists today study a world that is essentially detached from the processes of physical nature. The annual harvest that figured so prominently in the classical theory of political economy has all but disappeared. True, some calendar events, such as the Christmas retail market, have economic consequences, but those consequences stem from human convention rather than from "natural processes." The cycle of the seasons that was at the forefront of economic theory ca. 18o0 has now almost disappeared from the discourse. Indeed, economists tend to mock the idea once put forward by Stanley Jevons that the sunspot cycle might influence the business cycle via the climate. If anything, fluctuations in the climate are rarely present in economic models and can, arguably, be eliminated from the model, given the right technology. 15 My thesis of the denaturalization of the economic order is not intended to undercut the extent to which economists have persistently sought to emulate physicists and, thereby, embraced mechanical analogies and mathematical tools. Beyond doubt, contemporary economics bears a strong formal resemblance to physics, as Philip Mirowski has ably demonstrated in his More Heat Than Light. There is remarkably little effort made, however, to link the uniformities of the physicist's world to those of the economist's. Indeed, even the physical description of economic processes such as production is very meager. As Mirowski has noted: "The symmetry of consumption and production has severely limited and crippled any pretense of cogent description and discussion of actual physical production processes. . .. The problem of production has been reduced to a matter of semantics" (Mirowski 1989, 319). Despite all the analogical and methodological similarities in their respective discourses, contemporary economists and physicists inhabit separate worlds.

Jevons was the first to explore the question of the dimensions of economic variables, and he found that, in many cases, the physical component dropped out of the analysis. Demand and supply, for example, were measured in terms of utility, which in turn was measured in terms of intensity and time. The upshot of this is that more contemporary neoclassical notions, such as commod- ity space, are entirely ethereal. They have no grounding in physical nature as it is commonly understood. Indeed, the material attributes of goods are of no consequence to the analysis; all that matters is that commodities map onto utility functions under the requisite constraints. In fact, were such goods to become corporeal, it would rob the indifference curves and, hence, the demand functions of their continuity and completeness and, thus, make the use of the differential calculus all the more unwarranted (see Hausman 1992, chap. 1). Other attributes have also lost their physical dimensions. Money, for example, is now seen as the locus of information about present and future prices (see Brunner and Meltzer 1971). Capital is essentially a claim on the future and is, thus, defined in terms of the discounting of time. Perhaps the only variable in neoclassical economics that might still be ascribed a physical dimension is population growth. But, even there, economists have stripped it of its natural dimensions. For Malthus, offspring were the result of a natural and enduring passion between the sexes. For Gary Becker, they are the result, not of a reproductive urge, let alone of sexual passion, but of an explicit component of our deliberations or utility calculus. Now all children are planned like the purchase of consumer durables such as refrigerators; they offer a stream of benefits after an initial hefty investment (see Becker 1976, 171-94). Even more un- orthodox is the assumption, widely used for mathematical closure, that we live infinite lives -insofar as our accumulated wealth is bequeathed to our offspring. Thomas Mann had it right in his masterful Buddenbrooks when he observed that children are the only claim that rich burghers have to immortality.

With the advent of neoclassical economics, we find a pronounced shift toward a conception of the economy that stems from the deliberation of economic agents. As Jevons declared in 1871: "The theory presumes to investigate the condition of a mind, and bases upon this investigation the whole of Economics" (Jevons 1871/1957, 14-15). Insofar as prices were construed as the direct product of a Benthamite calculus of pleasure and pain, and insofar as prices were conceived as the simultaneous clearing of production and distribution, the entire economy emanated from individual deliberation. As Philip Henry Wicksteed observed in an entry for Palgrave's Dictionary of Political Economy (1896): "The economist must from first to last realise that he is dealing with psychological phenomena, and must be guided throughout by psychological considerations" (Wicksteed 1910/1933, 767). There was, to be sure, much human agency in the classical theory, but it did not stem from what we would now call rational choice. Human nature was infused with certain passions and propensities -to better our condition or to truck, barter, and trade, for example but the rest of the social fabric unfolded with unwitting regularity against a backdrop of an orderly world. It is not by accident that Smith wrote on the history of astronomy or compared the activities of the market to gravitational attraction.

As Maurice Dobb recognized several decades ago, the classical theory also took classes, not individuals, as its unit of analysis (Dobb 1973, chap. 7). There were different types of persons (frugal merchants, prodigal sons, etc.), not to mention the standard classes of farmers, landowners, and artisans, but, within these groups, there was little to distinguish one person from another. Smith's Wealth of Nations is full of remarks that confirm this preoccupation with groups:

Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate.

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices. (Smith 1776/1976, 1:84, 145; see also Denis 1999)

There was such regularity in human action, at least among types of per- sons, that the role of individual deliberation paled in comparison to the role of the group, at least for eighteenth-century economics. As David Carrithers has observed for thinkers such as Adam Ferguson: "Individuals qua individuals . . . are not the building blocks of society. Rather, families, clans, and socioeconomic groupings of various sorts deriving from the earliest division of labor began to take center stage as the focal point of the 'sociological' analysis emerging in the Enlightenment" (Carrithers 1995, 235). 16 Similarly, Bernard Mandeville served to show that "the individual's point of view, while instinc- tive in naturally self-regarding creatures, in fact tends often to conceal the so- cial significance of his actions" (Hundert 1994, 179). People are deceived into thinking that they act only as individuals when, in fact, they are entirely the products of their social milieu.

So deeply entrenched is our commitment to individuals as the unit of analysis in economics that it is hard to accept that such a commitment played a much lesser role in the early modern period. There were, certainly, efforts to probe the mind of a single person, as Smith does with his image of the impartial spectator. But, again, that spectator makes us more than one; it joins us to a group, a collective mind of moral beings.!? Hume has already shown that the individual's boundaries dissolved under scrutiny, that there was no receptacle holding together the stream of mental impressions that seemed to constitute and individuate the mind of a single person (see Baier 1991). Other prominent Enlightenment philosophers- think of Rousseau's general will or Kant's categorical imperative - shared this propensity toward the collectivity rather than the individual.

In neoclassical economics, by contrast, economic laws emerge precisely because of the distinct calculations of different minds, different preference sets for goods and services, and different attitudes toward risk and toward time. Given the number of variables and the range of preferences, no two persons are the same, and, hence, groups of individuals rarely figure in theoretical analysis. It is the very diversity of persons, particularly our mental stock of beliefs, desires, and intentions, that accounts for the existence and pattern of economic activities.I$ Indeed, we are so unique that no two of us use the same means to define or measure our utility. The inscrutability of each mind precludes interpersonal comparisons of utility.

Our current conception of the economy is not just closely wedded to methodological individualism but mind driven through and through (see, e.g., Davis 2003). We all seek to maximize our utility, however that may be construed or measured. This in turn raises significant and possibly intractable problems at the explanatory level, particularly insofar as the source of such diversity is located in the realm of the unobservable. The traditional move since Paul Samuelson has been to slay that metaphysical beast by retreating to the stance of revealed preferences. Our consumption bundles reflect or "reveal" our preferences, period. But, as several critics have shown, neoclassical theory incorporates an account of mental deliberation even if it chooses not to address it in a substantive manner (see Hausman 1992, 19-22). Economics is still com- pletely beholden to the operations of the mind.

Fortunately, the early neoclassical economists were not so bashful about the concept of utility. For Francis Ysidro Edgeworth, economics was virtually synonymous with the utility calculus (Edgeworth 1881/1967, 15-16). For Alfred Marshall, all that man can produce or alter are utilities: "Man cannot create material things. In the mental and moral world indeed he may produce new ideas; but when he is said to produce material things, he really only produces utilities; or in other words, his efforts and sacrifices result in changing the form or arrangement of matter to adapt it better for the satisfaction of wants" (Marshall 1890/1920, 53). Matter no longer constrains or determines, as it did for the Physiocrats and the classical economists. No longer does land scarcity or the stationary state loom on the horizon. We find a conception of the economic order that is more or less severed from physical constraints. Wealth, or utility, is granted an unprecedented ability to expand.

What brought about this transformation that I am calling the denaturalization of the economic order? Clearly, many factors were at work. In addition to the internal reworking of economic concepts, I will also explore related developments in natural philosophy itself, experimental physics, natural history, and evolutionary biology as well as in the emerging science of the mind. The ongoing secularization of science also played a significant role in the shifting convictions of eighteenth- and nineteenth-century economists. This will be a more difficult set of links to establish but relevant nonetheless.

Developments in the economy itself no doubt made their mark as well. Industrialization is the salient feature of the period under consideration here, particularly in Britain and France. Maxine Berg has argued that the "age of machinery" was reflected in the economic texts of Ricardo and his immediate successors (Berg 198). Likewise, with increasing urbanization, it might seem that appeals to nature, at least in the form of agriculture, would fade into the background. This has a very plausible ring to it, but there are problems with such claims. For one, economists often help themselves to phenomena from across the globe and as far back as historical records permit. It might seem ob- vious that, prior to the onset of industrialization, the Physiocrats would put so much stock in the agrarian sector or that, given the Great Depression, John Maynard Keynes would highlight the problem of unemployment, but these phenomena were neither new nor outside economists' sphere of observation at prior historical moments. To explain why one economist or a group in a given time and place embraces a select set of ideas requires much more than an appeal to extant economic conditions. In my view, even for someone as worldly as Keynes, his theoretical insights were less a product of the economic slump than one might suppose. 19 An economist is much more inclined to work out his or her ideas in the confines of the study, absorbing the books and pa- pers of others. The more we know about Keynes's conceptual genesis, for ex- ample, the more we see that it was the product of philosophical ideas and the effort to sort out inconsistencies in the work of his immediate predecessors (see Davis 1994; Bateman 1996; and Runde and Mizuhara 2003). Arguably, a better case could be made for the claim that the successful reception of eco- nomic theories is more likely when the theoretical claims coincide with similar economic conditions. In sum, historical inquiries often disclose a fair degree of autonomy between economic theorizing and the economic conditions ex- perienced by the theorist.

My central claim -- that the concept of an economy is effectively a post- Enlightenment one -- may be found in Michel Foucault's The Order of Things. He there argued that, ca. 1800, three branches of knowledge -- political economy, philology, and biology -- all emerged in the gaps created by three previous epistemes, the studies of wealth, grammar, and natural history (Foucault 1970, 207). His thesis thus implicitly commits him to deeper forces at work in intellectual history, such that three different "human sciences" emerged simultaneously because "representations" no longer offered satisfactory explanations. However appealing, the account remains descriptive, without much guidance as to why these sciences moved in step with one another.

In my work here, I am not directly concerned with whether political economy evolved in tandem with other human sciences. It seems to me highly unlikely that it did, if only because the discipline of economics has a much older lineage than sociology, linguistics, or even psychology. As Joel Kaye (1998) has recently shown, there is a rich body of literature on money and trade in the fourteenth and fifteenth centuries that closely parallels investigations in natural science. Aquinas, Jean Buridan, and Nicole Oresme all took stock of new developments in European commerce in conjunction with Aristotle's teachings. But, to return to Foucault's specific treatment of economics, it seems too that he misleads with his claim that political economy came into being only with Ricardo. In my view, it was already a coherent discourse by the late seventeenth century, particularly given the texts of Pierre Boisguilbert, John Locke, and William Petty.20 To be fair, Foucault displays considerable erudition about the history of economics. He acknowledges the importance of Petty, Boisguilbert, and Ferdinando Galiani, for example. But I do not agree with his claim that the concept of wealth was a representation in the seventeenth and eighteenth centuries. Rather, it was conceived of in hard physical terms. Only later, in the mid- to late nineteenth century, did it become a nonmaterial entity and, thus, if I understand Foucault correctly, a representation. So, while I agree with him that Ricardo provides a critical watershed, I stand Foucault on his head. Wealth went, not from being a representation to an object, but the other way round.

Foucault also claims that "wealth is a system of signs that are created, multiplied, and modified by men; the theory of wealth is linked throughout to politics" (Foucault 1970, 205). This too is misleading. For many seventeenth- and eighteenth-century writers, say Locke, Quesnay, or even Smith, wealth was created prior to anything political, or so they believed. The strongest case is Locke's state of nature, which has property and money prior to the formation of government. Wealth was an inextricable part of physical nature and, thus, subject to physical laws. Human institutions, including the political system, were to be considered separately and post facto, at least until the mid- nineteenth century.21

A leading scholar who commits to a pre-nineteenth-century concept of the economy is Catherine Larrère. Her L'invention de l'économie au XVIlle siècle (1992) contains a very compelling interpretation of the Physiocrats and of Turgot. She emphasizes the deep rift with the mercantilist thinking of Vincent de Gournay and Josiah Child and the strong appeals to physical nature and natural law that motivated Quesnay and his followers, including their aspirations to scientific thinking. But I take issue with her claim that the Physiocrats invented the concept of an economy. For one thing, there is no such referent in the Physiocratic literature, and, for another, the Physiocrats very efforts to understand the circulation and reproduction of wealth are explicitly articulated in terms of a natural order. In short, there is no autonomous economic order to be found, let alone a distinct economy in the sense denoted, by the early nineteenth century.

Keith Tribe's Genealogies of Capitalism comes closest to my position. Tribe poses the central question: "In precisely what form does 'the economy irrupt into economic discourse?" (1981, 125). If I read him correctly, he sees Ricardo as the critical figure in that story, thus casting doubt on the long-standing assumption that the Enlightenment political economists had in mind the same image of the world as subsequent economists. In another work, Land, Labour and Economic Discourse, Tribe argues that, for eighteenth-century political economists, especially the Physiocrats, nature was the prime mover of economic processes. Man was simply the "midwife" (Tribe 1978, 91, 95). I concur with the main arguments in both books but believe that they demand qualification and require bolstering with more evidential support. For one thing, they need to be joined with scholarship in the history of the natural sciences, something that Tribe does not enlist, and, for another, these theses would benefit from an understanding of the broader context of the secularization of science.

Other scholars have written on the connection between political economy and nature, notably Charles Clark in his Economic Theory and Natural Philosophy (1992). This book, while insightful, makes an argument very different from mine. It insists that "the aspiration [to explain economic events as natural phenomena] is uniform" from the seventeenth century up to the present (Clark 1992, 31). Clark mostly focuses on Smith and Mill, but he argues that, even for late-nineteenth-century economists such as Marshall, one finds the "Natural Law Outlook." The term outlook is Clark's own, and he defines it as an appeal by economists to the role of laws of nature both in the orderliness of the world and in moral amelioration. While I emphasize other facets of the intrusion of the natural into economic thinking, and while I agree with Clark that these concepts are present in the eighteenth century, I disagree with his interpretation of post-Ricardian economics. Mill, as we will see, did not believe in a world designed by God or in a morality grounded in the laws of nature. His thought constitutes a profound departure from the way in which economic phenomena were previously conceived and was of central importance in laying the conceptual foundations for the ascendant neoclassical theory.

Another related work to which I am much indebted is Vernard Foley's Social Physics of Adam Smith (1976). Foley delves into Quesnay's use of Cartesian vortices and Smith's infatuation with Epicurean atomism as well as the links between Smith and Newton. Deborah Redman's Rise of Political Economy as a Science (1997) covers a longer period, from the seventeenth century through the nineteenth, but the leitmotiv there is methodology. Again, there are many solid insights, but they pertain more to the adoption of hypothetico-deductive reasoning and other "scientific" methods than to the theoretical content itself. However, insofar as one cannot separate method from content, Redman's study is a valuable asset.

While Aristotle remains one of the earliest known writers on economic topics, the most fundamental economic assertion that he bequeathed to the scholarly world is to be found in his treatise On the Heavens, where he maintains that nature does nothing in vain.?? In a sense, this is the most essentially economic claim that one can make: nature is fully efficient. There are no superfluous entities or processes. Aristotle sees this borne out in the wondrous symmetries of animals and plants and in the direct paths that physical bodies describe when in motion. Chapter 2 will trace the evolution of this concept among natural philosophers, noting that one of the first to develop it in some detail was Carl Linnaeus, the great Swedish naturalist of the mid-eighteenth century. Linnaeus, interestingly, also cultivated an account of economic development that was rooted in the German cameralist tradition. But, in many respects, he provides us with the first full-fledged description of an economy, only it is a description of an economy that encompasses everything, including plants, animals, and the deity. This helps underscore all the more the close links between economic thought and natural philosophy that prevailed in the eighteenth century.

Chapter 2 also examines the secularization of science. This is important if we are to come to terms with the equally difficult question of the source of conviction in the existence of the economic order. In the Middle Ages, and even in the early modern period, most prices were fixed by a local authority. The tradition of the just price linked it to the system of divine rule, but there was no obvious reason to suppose that prices were governed by natural laws. Eighteenth-century savants, by contrast, shared the belief that economic phenomena such as prices were grounded in a natural order. To make sense of this development, it is important to look also at appeals to God or a deity as the creator of the economic order. As Daston has observed: "Because God was 'the Author of nature,' the natural order was ipso facto a moral order" (Daston 1998, 157). The gradual denaturalization of the economic order is, thus, intimately linked to the ongoing secularization of science. A shift toward treating economic phenomena in terms of human agency also diminished the efficacy of the deity.

Chapter 3 examines the contributions of the French thinkers, notably Quesnay and Turgot, both of whom drew direct linkages between natural and economic phenomena. Indeed, the point has been made so often that it hardly needs further elaboration. I also survey, albeit briefly, some of the subsequent developments in French economics. But there is really no one figure in nineteenth-century France who had the same impact as Ricardo, Mill, or Marshall. Jean-Baptiste Say's works were widely read but perceived, incorrectly, as distillations of Adam Smith. The two best candidates for original and influential contributions are A. A. Cournot and Léon Walras, but both failed to gain an audience among economists until the end of their careers and were fully appreciated only in the early to mid-twentieth century.

In chapters 4 and 5, I examine the two most prominent Scottish political economists, Hume and Smith. My primary emphasis is on their efforts to join economics to nature. Numerous scholars have emphasized the fundamental importance of natural science in the development of moral philosophy among the Scottish Enlightenment writers. Roger Emerson, for example, takes the emphasis on natural science in the first edition of the Encyclopedia Britannica (an Edinburgh publication) as highly indicative of "how thoroughly the great generation of Scottish thinkers had made science and its methods part of the intellectual culture of their time" (Emerson 1990, 25). He points out that most of the leading professors at the Scottish universities who taught moral philosophy were also versed in natural science. Inspiration from Newton, Boyle, and the early-eighteenth-century mathematicians was garnered, not just in the form of method, but in terms of metaphysical content as well. Scottish Enlightenment figures who were "thinking about substances, causality, purpose, life, power, or agency were also thinking about the metaphysical bases of morals" (Emerson 1990, 34). *

With chapter 6, I travel south, as the clock ticks, to the work of the great English economists, Malthus, Ricardo, Senior, and McCulloch. I argue that there was a gradual shift toward the role of human institutions as the point of origin for economic phenomena and that commitment to providing a detailed account of human nature and of wealth as a natural phenomena had waned considerably. This was also the era in which the concept of an economy became explicit in terms of what we would now call macroeconomic relationships.

Chapter 7 takes up Mill's conception of nature and its implications for his political economy. I argue that a radical reconfiguration transpired, one that in many respects laid the groundwork for what came to pass in the 1870s with the efforts of the early marginalists. I also examine the importance of new move- ments in psychology, or the science of the mind as it was then known, and the Darwinian revolution. Finally, chapter 8 offers some evaluations of the early neoclassical period, particularly in the case of the English economists, Jevons, Edgeworth, Wicksteed, and Marshall, and argues that they brought about a significant rupture with the past. Despite numerous changes and develop- ments in economic theory -game theory or the new institutionalism, not to mention considerable mathematical refinement -we have lived with their vision ever since.


Physics and economics ... are both disciplines with imperialist tendencies: they reportedly aspire to account for almost everything, the first in the natural world, the second in the social. -- Nancy Cartwright, The Dappled World

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