Years ago in a graduate economics class, a concept we were discussing reminded me of something I had read the night before in Leo Tolstoy’s Resurrection. After highlighting the point – probably about the conflict between private and social interests in Orthodox Church affairs – I remarked that perhaps great novelists could teach economists a thing or two. After all, I said, novels are ultimately about the consequences of that fundamental human problem – choice – just like economics. The professor, and I suspect my classmates, were simply stunned that I was taking time away from my economics studies to read a novel. The prof clearly thought the consequences of my choice might not be in my best interest. I disagreed then as I do now.
I tell that anecdote to indicate my agreement with Sarah Skwire that we can learn a lot about economics generally, and public choice in particular, by reading great (and also no-so-great) literature. Her selections from Shakespeare should convince us that pre-Enlightenment writers were not all rosy-eyed romantics about the interests and actions of monarchs, their counselors, members of Parliament, and Church leaders. Indeed, they probably saw the connections among interests and actions more clearly because the line between the personal benefit to the ruler and the benefit to society were less clearly drawn in the political language of the day.
But the essay also led me to contemplate a historiographical, as well as a literary, problem for Skwire’s position. The first part of my response will focus on the historiographical problem; the second part will take up the literary problem. The starting point for my response is a set of lectures that Frank Knight (1960) delivered at the Thomas Jefferson Center for Studies in Political Economy during its first year of operation at the University of Virginia. Coincidentally, that was also Tullock’s first year of collaboration with James Buchanan in studies that led to the publication of Calculus of Consent (1962), the ur-text of public choice economics.
The Liberal Revolution and the Separation of the Political and the Economic
In his lecture series, Knight argued that the Enlightenment’s “liberal revolution” created a two-fold theory of social organization. The first division was between the individual and the social, and the second was a division of the social realm into the political and the economic. We capture the latter transformation, for example, when we speak of democratic capitalism, combining democratic political organization with “free enterprise” (Knight, 2013, 24-25). Prior theories of social organization unified the economic and the political, and also merged the individual and the social. Feudal society, for example, merged the economic and the political by building social relations on land ownership and use, governed ultimately by the merger of king and church. One’s duty to the church, the state, one’s lord, and one’s self were guided by a single moral code. Thus, as Tullock said, social discussion was moral discussion.
Knight argued that democratic capitalism – the product of the liberal revolution – was different. It was not the case that widespread, active markets didn’t exist before the liberal revolution (pace Karl Polanyi, such markets did exist, and let’s be aware that Knight was a much closer source for Tullock!). Rather, the liberal revolution brought the realization that, in both the political and economic spheres, the success of a form of social organization depended on the impersonal, unintentional, societal consequences of individual actions. Free enterprise and democracy were both impersonal systems that coordinated the consequences of individual decisions in ways that reinforced their intentions, but that also created unintended consequences that would have to be considered.
Note the use of “impersonal” and “unintended” in the previous two sentences. The Liberal Revolution was not just an economic and a political revolution – introducing free enterprise and democracy. It was also a social revolution – requiring a rejection of ethical systems built on individual choices and the analysis only of their first-order effects, in isolation from unintended consequence. Pre-liberal ethics was based on individual morality; the liberal revolution showed the bankruptcy of such ethical systems in matters of social analysis. In his final consideration of the topic – the lectures to the Jefferson Center that Tullock heard – Knight argued we were still searching for “rational norms” to guide modern political economic decisions. Public choice theory, and especially the constitutional political economy that came out of it, was perhaps a response to Knight’s challenge.
Romanticizing Politics in English Literature After the Liberal Revolution
One implication of Knight’s understanding of the Liberal Revolution is that it bifurcated the individual into two different “persons” – the economic person and the political person. Or, to put it differently, after the Liberal Revolution, the “person” operating in the economic realm was conceptualized differently from the “person” operating in the political realm. Morality remained important to political discourse after the Liberal Revolution, while rational calculation and profit-seeking were important to economic activity. What Knight made of this divide won’t detain us now, but one of the interesting consequences of his argument is the possibility that literary discourse in the post-Enlightenment period was romanticized because of the economic/political divide. If Shakespeare and others “were capable of viewing politics without even a shred of romance,” as Skwire argues, that doesn’t mean that literary writers continued to view politics without romance. In fact, one might want to make the case that the nineteenth century was the heyday for romance about politics, at least among the English literati. Let me conclude with some evidence to support that argument.
Perhaps you recall Arnold Toynbee’s (1884, 1) remark that the century after Adam Smith’s Wealth of Nations was a “bitter argument between economists and human beings”? Toynbee (1884, 24) added that “Political Economy destroyed the moral and political relations of men, and dissolved the social union.” The “human beings” of which Toynbee spoke – the moralists, literary figures, church leaders, and the working poor (at least, so Toynbee thought!) – believed that human potentiality was being dashed by rapidly advancing industrialization and manic economic activity. In Toynbee’s work, we see a modern concept that the pre-Enlightenment writers did not share: politics in the service of democracy was to be a high calling to which all persons were called, motivated by the public interest and empathy for the people. Economics, on the other hand, while important in provisioning people well, became immoral when motivated by self-interest; profit-seeking, fueled by calculation, could not lift us morally to become a good society.
Thinking of more than just the vaulted ceiling of King’s College Chapel, William Wordsworth wrote in the 1820s,
TAX not the royal Saint with vain expense,
With ill-matched aims the Architect who planned –
Albeit labouring for a scanty band
Of white robed Scholars only – this immense
And glorious Work of fine intelligence!
Give all thou canst; high Heaven rejects the lore
Of nicely-calculated less or more;
So deemed the man who fashioned for the sense
These lofty pillars, spread that branching roof
Self-poised, and scooped into ten thousand cells,
Where light and shade repose, where music dwells
Lingering – and wandering on as loth to die;
Like thoughts whose very sweetness yieldeth proof
That they were born for immortality.
Forty years later, John Ruskin (1907, 171) wrote that true Wealth was “THE POSSESSION OF THE VALUABLE BY THE VALIANT” (caps in original), and argued that, unless society, and especially those devoted to high art, were vigilant to maintain artistic and human value standards, market activity would produce, not Wealth, but “Illth” – that which contributes to sickness, death and destruction. Producing that which contributes to health, life, and common good – i.e., true wealth, could only come by empathic transformation, placing the laborer at the center of economic attention, rather than the capital holder.
With his friend and fellow artist William Morris, Ruskin transformed his words into art – the Arts and Craft Movement, through which their standards for art – if not for economics! – continued to govern art criticism for at least another generation. Morris eventually became a socialist and, through his friend George Bernard Shaw, influenced the foundations of the Fabian Society, the group of writers – and eventually the think tank – that set the socialist agenda for the British Labour Party, which, at least in the Atlee government after World War II, might be identified as the supreme example of Romance in Politics. Of course, anticipation of Labour’s victory spurred F. A. Hayek – one of the pre-eminent anti-romantic economists, to write The Road to Serfdom (1944).
Buchanan, James M., and Gordon Tullock. The Calculus of Consent: Logical Foundations of a Constitutional Democracy. University of Michigan Press, Ann Arbor, 1962.
Hayek, F. A. The Road to Serfdom. London: Routledge, 1944.
Knight, Frank. The Economic Organization. Transaction Publishers, New Brunswick, 2013.
Knight, Frank. Intelligence and Democratic Action. Harvard University Press, Cambridge, 1960.
Ruskin, John. Unto This Last & Other Essays on Art and Political Economy. London, J. M. Dent, 1907.
Tolstoy, Leo. Resurrection. Penguin Classics, London, 1966.
Toynbee, Arnold. Lectures on the Industrial Revolution in England. London, Rivingtons, 1884.
Tullock, Gordon. “The Theory of Public Choice.” In Government Failure: A Primer in Public Choice, by Gordon Tullock, Arthur Seldon and Gordon L. Brady, Cato Institute, Washington DC, 2002, 3-79.
Wordsworth, William. The Complete Poetical Works. London, Macmillan and Co., 1988; Bartlby.com, 1999. http://www.bartleby.com/145/ww690.html. Accessed March 6, 2017.