Sunday, February 23, 2014

John Stuart Mill and the limits of his thinking

In his classic text on economics, Principles of Political Economy (1848) John Stuart Mill wrote what can be considered the definitive text on 19th Century economics. Mill is something of a hero to Libertarians, who mine his works for those specific ideas that support their views, even as they ignore, dismiss or re-interpret those parts that contradict their biases. Though Mill, the author of On Liberty (1855) was solidly in favor of maximizing individual freedoms,
“The only freedom which deserves the name is that of pursuing our own good, in our own way, so long as we do not attempt to deprive others of theirs, or impede their efforts to obtain it.” On Liberty
…he was also interested in protecting the rights of those without power through the coercive force of government.
“Since the state must necessarily provide subsistence for the criminal poor while undergoing punishment, not to do the same for the poor who have not offended is to give a premium on crime.” Principles of Political Economy
John Stuart Mill was a man of his time, with many ideas that are valuable and many that are not. He was obviously a very smart, very influential thinker, but since his time we have learned much more about the dangers of unregulated capitalism. Mill could not think of the economy in terms of a complex system, the mathematics for such thinking hadn’t been developed yet. Instead, Mill sought to simplify economics and create models that he understood to have extremely limited and specific uses. Mill recognized that the “moral sciences” such as economics did not easily reveal their secrets through experimentation as would chemistry and physics.
“There is a property common to almost all the moral sciences, and by which they are distinguished from many of the physical; that is, that it is seldom in our power to make experiments in them… We cannot try forms of government and systems of national policy on a diminutive scale in our laboratories, shaping our experiments as we think they may most conduce to the advancement of knowledge.” Principles of Political Economy
However, Mill did think that we can learn and reason from prior experience. Economics, in Mill’s view is an abstract science performed through a priori reasoning; reasoning from an assumed hypothesis. Economics is applied when we match our reasoning to reality and see how closely they match. If reality doesn’t match the model then it is time to adopt a new hypothesis, new reasoning and a new model.

What is clear from reading Mill is that if he thought politics and economics were conducive to the “crucible of experimentation” he would have preferred to use such tools. He preferred the more definitive results experimentation produced in chemistry and physics to the limits of a priori reasoning, but saw no alternative if we were to attempt understanding complex human interactions. If it were possible to erect supremely complex models of several different economic ideas and then compare the outcomes to judge maximum utility, Mill would have been all for that idea as well.

But Mill was hamstrung by the mathematics of his times. He didn’t have access to computers capable of running millions of calculations every second, grinding data in ways no human mind could possibly duplicate. Mill did not know about game theory, and the kind of experiments modern neuroscientists can run. Today, fascinating new sciences have appeared on the scene: experimental economics, neuroeconomics, complexity economics, feminist economics, ecological economics, econometrics and many more.

Classical economics is to these new and developing ideas as astrology is to astronomy, alchemy to chemistry or Freudian psychoanalysis to modern neuroscience. There is no one term for this new science that is developing out of economics, but eventually the practitioners in these new fields will want to distance themselves from their outmoded, embarrassing progenitor. I expect brave new paradigms in what we now think of as economic thought. One day we may very well consider arguments between socialists and capitalists to be as relevant to human wellbeing as discussions between alchemists John Dee and Edward Kelly on how to best turn lead into gold.

I am not qualified to say what this new science will look like, but the general shape, if I can be so bold as to try and predict the unpredictable, seems to be centered on ecological sustainability and economic equality, based in a system of abundance rather than scarcity. We won’t be talking about economic freedom any more but freedom from economics. Classical economics will be seen as a curiosity, like phrenology.

John Stuart Mill, infinitely curious and always thinking, would not be adverse to these new ways of thinking. He would laud attempts to break free from the drudgery of work so as to begin the contemplation of science, the creation of art and the realization of liberty for all people to pursue their dreams. Like all scientists, John Stuart Mill did not see himself as penning the last word on his chosen subjects, he was merely taking what was best from the past, adding his new insights, and passing it on the future.

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