HOISTED FROM THE ARCHIVES: An Ur-Text by George Stigler for Dark Satanic Millian Liberalism, & Related Matters...
From 2021-05-23...
From 2021-05-23…
For the rather strange George Stigler of 1949, the rather strange young optimistic David Frum of 2004, and many others, the real point of the market economy is not to create prosperity but rather to build character—the distant faraway green light on the dock of prosperity is there to encourage industry, but woe to those who actually manage to get into their boat and motor to the light! And so, as, or rather more, key to the market economy’s true proper role as a builder of Protestant bourgeois virtue, is that the market economy must create uncertainty and constant risk of poverty in order to play its proper societal role.
An ur-text for the doctrines of Dark Satanic Millian Liberalism:
Here George Stigler, writing back in 1949, seeks to assimilate the classical economists Smith, Senior, and Mill to his claim that a good economic system does not produce prosperity but rather builds character:
George Stigler (1949): Five Lectures on Economic Problems: ‘Why encourage men to work and save ? The customary answer is to maximize output…. One might defend the goal of maximum output by arguing that the ultimate utilitarian goal was maximum satisfaction, and that greater output will lead to larger increases of satisfaction than will greater equality. This interpretation is plausible, but I believe it is mistaken. Most of the important classical economists explicitly rejected maximum satisfaction as a goal, and none except Bentham explicitly adopted it….
The [Adam] Smith of the Wealth of Nations… propos[ed]… labour disutility as the true measure of value over time…. Utility is independent of income…. Labour disutility appeared to have a more durable and stable significance: an hour’s toil was as irksome in 1400 as in 1776. This view of the utility of income as dependent only on the incomes of other times and other people accounts for much of the neglect of utility in the classical economics.
[Nassau] Senior reached and stated the law of diminishing marginal utility, only to dismiss it: “The desire for distinction… may be pronounced to be the most powerful of human passions. The most obvious source of distinction is the possession of superior wealth…. To seem more rich, or, to use a common expression, to keep up a better appearance, is, with almost all men who are placed beyond the fear of actual want, the ruling principle …. For this… they undergo toil which no pain or pleasure addressed to the senses would lead them to encounter; into which no slave could be lashed or bribed…”
Mill followed the tradition: “I know not why it should be a matter of congratulation that persons who are already richer than any one needs to be, should have doubled their means of consuming things which give little or no pleasure…. It is only in the backward countries of the world that increased production is still an important object…”
Why, then, did the classical economists display such great and persistent concern with policies that maximize output? Their concern was with the maximizing, not with the output. The struggle of men for larger incomes was good because in the process they learned independence, self-reliance, self-discipline—because, in short, they became better men… <https://archive.org/details/in.ernet.dli.2015.84261>
As history of economic thought, these observations by Stigler are… quite bad.
John Stuart Mill, unless you work very hard to cherry-pick isolated quotations, had a strong preference for leisure, bildung, and the philosophical life rather than extending the working day, and his attitudes were much complicated by his Malthusianism, but he did not think the marginal utility of consumption was at all close to zero. Smith’s observations about the vanity of acquisition are aimed at the upper classes: for him the marginal utility of consumption for the overwhelming bulk of the population—even in rich England—is very large indeed.
And as for Nassau Senior, well, for the Drummond Professor of Political Economy at Oxford to compare the disutility of his labors scratching out one more article to increase his distinction to those of the slaves in Jamaica under the lash who grew his sugar and had a life expectancy on the plantation of seven years, or to those of the adult males in South Carolina growing his cotton, enslaved, lashed, and fed 4000 calories a day lest they did of overwork otherwise—Nassau Senior was a great ass, and it is transitive: anyone who quotes Nassau Senior without observing that he was a great ass is a great ass.
In the Grand Architecture of Stigler thought, he misuses the classical economists here to gain support for the first of the three grand claims that make up his intellectual edifice:
The actual quantity and distribution of wealth is unimportant—needs to be dismissed from consideration.
It is very important that the rich not be taxed and regulated, because to do so would keep them from exerting their powers to the fullest to become excellent and demonstrate their excellence.
It is very important that the not-rich not be insured by society against want, for to do so would deprive them of the spur that they need to improve their characters and achieve what excellence they might be capable of.
For most people who make this three-part argument, it is, as John Holbo quotes Lionel Trilling as assessing it, not a thought but only an “irritable mental gesture”. At least as I read Stigler, however, he is dead serious.
Cue John Holbo:
John Holbo (2003): Dead Right: ‘[From David Frum]: “The great, overwhelming fact of a capitalist economy is risk…. Risk makes people circumspect. It disciplines them and teaches them self-control. Without a safety net, people won’t try to vault across the big top. Social security, student loans, and other government programs make it far less catastrophic than it used to be for middle-class people to dissolve their families. Without welfare and food stamps, poor people would cling harder to working-class respectability than they do not…”
The thing that makes capitalism good, apparently, is not that it generates wealth more efficiently than other known economic engines. No, the thing that makes capitalism good is that, by forcing people to live precarious lives, it causes them to live in fear of losing everything and therefore to… behave ‘conservatively’…. Let’s call this position (what would be an evocative name?) ‘dark satanic millian liberalism’: the ethico-political theory that says laissez faire capitalism is good if and only if under capitalism the masses are forced to work in environments that break their will to want to ‘jump across the big top’, i.e. behave in a self-assertive, celebratorily individualist manner. Ergo, a dark satanic millian liberal will tend to oppose capitalism to the degree that, say, Virginia Postrel turns out to be right about capitalism ushering in a bright new age of individual liberty, in which people try new things for the sheer joy of realizing themselves, etc., etc….
Would [David Frum] really be willing to go so far…. Why, yes—yes, he would. Because he believes…. “Shrinking government has always been a political means rather than an end in itself. The end was the preservation of the American heritage, and beyond that, the heritage of the classical and Judeo-Christian (or Christian toute court) West. If that heritage could be preserved without fighting an ugly and probably doomed battle to shrink government, most conservatives would drop the size-of-government issue with hardly a pang…”
But is Frum really serious when he says this?… Surely Frum is at most guilty of insufficiently vigorous advocacy of prosperity. He can’t be expressly advocating the lack thereof.
Oddly, there are various strong hints that he is. Example: “Contemporary conservatives still value that old American character. William Bennett in his lectures reads admiringly from an account of the Donner party written by a survivor that tells the story in spare, stoic style. He puts the letter down and asks incredulously, “Where did those people go?”… If you believe that early Americans possessed a fortitude that present-day Americans lack, and if you think the loss is an important one, then you have to think hard about why that fortitude disappeared…. Reorganizing the method by which they select and finance their schools won’t do it… neither will the line-item veto, or discharge petitions, or entrusting Congress with the power to deny individual NEA grants, or court decisions strinking down any and all acts of politically correct tyranny…. worthwhile though each and every one of those things may be…. We must identify in what way our social conditions have changed in order to understand why…. There have been hundreds of such changes—never mind since the Donner party’s day, just since 1945.… But the expansion of government is the only one we can do anything about. All of these changes have had the same effect: the emancipation of the individual appetite from restrictions imposed on it by limited resources, or religious dread, or community disapproval, or the risk of disease or personal catastrophe…”
Words fail me; links not much better. The Donner Party? Where did all these people go?
Into each other, to a dismaying extent.
A passage from one of those moving, stoical diary entries: “Mrs. Murphy said here yesterday that [she] thought she would commence on Milt and eat him. I don’t think she has done so yet, [but] it is distresing. The Donno[r]s told the California folks that they [would] commence to eat the dead people 4 days ago, if they did not succeed in finding their cattle then under ten or twelve feet of snow & did not know the spot or near it, I suppose they have [cannibalized]… ere this time…”
I think we are beginning to see why Frum feels that his philosophy may be a loser come election time….
At this point let me step back and make quite clear:
I don’t actually think Frum is… actually advocating the intentional infliction of dire economic hardship and suffering—let alone cannibalism—on the American people for the sake of hardening them up, stiffening the national spine. I think if there were some Americans caught in the snowy mountains these days, he’d advocating sending in the helicopters and so forth–and he wouldn’t order them to stand off, just filming the poor schmucks eating each other for Frum’s subsequent viewing pleasure and moral edification.
Which is to say: Frum is not thinking about what he’s saying. Because what he is saying more or less instantaneously implies an indefinitely large cloud of things he really–really, really–doesn’t think….
Orwell talks about this in chapter 12 of The Road to Wigan Pier, incidentally: the naturalness of hostility to the softening that results from modern machine civilization. That’s the feeling, he explains. But, of course, next comes the thought: “So long as the machine is there, one is under an obligation to use it…. to use archaic tools, to put silly difficulties in your own way, would be… pretty-pretty arty and craftiness…. Revert to handwork in a machine age, and you are back in Ye Old Tea Shoppe or the Tudor villa with the sham beams tacked to the wall…”
That’s Frum in a nutshell. Had the feeling. Stalled out before he got the thought. What Frum has got, to repeat, is just a feeling that the kids these days are getting a bit soft. Everyone feels this way sometimes, of course–since it’s true. But some people have thoughts as well as feelings about this attendant effect of civilization…. Lionel Trilling… in 1953: anti-liberals do not, by and large, “express themselves in ideas but only in action or in irritable mental gestures which seek to resemble ideas.” Irritable mental gestures… <https://examinedlife.typepad.com/johnbelle/2003/11/dead_right.html>
In short, Frum (the young 2004 Frum) does not really mean it. But, I think, Stigler really does: the lower classes really should not be able to afford meat at every meal.
And, of course, there is the classic statement about how success in the modern market economy does not get you to but rather away from where you really want to be—that it is only fear of poverty that builds character, while the accomplishment of financial success brings disaster and corruption and an early death:
F. Scott Fitzgerald: The Great Gatsby: ‘Gatsby’s house was still empty when I left—the grass on his lawn had grown as long as mine…. I spent my Saturday nights in New York because those gleaming, dazzling parties of his were with me so vividly that I could still hear the music and the laughter, faint and incessant, from his garden, and the cars going up and down his drive…
And as I sat there brooding on the old, unknown world, I thought of Gatsby’s wonder when he first picked out the green light at the end of Daisy’s dock. He had come a long way to this blue lawn, and his dream must have seemed so close that he could hardly fail to grasp it. He did not know that it was already behind him, somewhere back in that vast obscurity beyond the city, where the dark fields of the republic rolled on under the night.
Gatsby believed in the green light, the orgastic future that year by year recedes before us. It eluded us then, but that’s no matter—to-morrow we will run faster, stretch out our arms farther.... And one fine morning——
So we beat on, boats against the current, borne back ceaselessly into the past… <https://archive.org/details/the-great-gatsby-1st-ed-1925>
References:
DeLong, J. Bradford. 2021. "An Ur-Text by Geoge Stigler for Dark Satanic Millian Liberalism." Grasping Reality, May 23. <https://braddelong.substack.com/p/briefly-noted-for-2021-05-23-su>.
Fitzgerald, F. Scott. 1925. The Great Gatsby. New York: Charles Scribner's Sons. <https://archive.org/details/the-great-gatsby-1st-ed-1925>.
Holbo, John. 2003. "Dead Right." John & Belle Have a Blog, November 17. <https://examinedlife.typepad.com/johnbelle/2003/11/dead_right.html>.
Lewis, Daniel. n.d. "Forensics of the Donner Party." The Donner Party. Accessed December 15, 2024. <https://raiboy.tripod.com/Donner/id14.html>.
Marshall, Joshua Micah. 2003. "Talking Points Memo: by Joshua Micah Marshall." Talking Points Memo, October 19. <https://web.archive.org/web/20031019000000/http://www.talkingpointsmemo.com/archives/week_2003_10_19.html#002103>.
Orwell, George. 1937. The Road to Wigan Pier. London: Victor Gollancz.
Stigler, George J. 1949. Five Lectures on Economic Problems: Five Lectures Delivered at the London School of Economics & Political Science on the Invitation of the Senate of the University of London. London: London School of Economics & Political Science; New York: Longmans, Green. <https://archive.org/details/in.ernet.dli.2015.84261>.
Trilling, Lionel. 1950. The Liberal Imagination: Essays on Literature and Society. New York: Viking Press. <https://archive.org/details/liberalimaginat00tril>.
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Stigler's reading is almost a complete inversion of what Mill is saying in the text from which Stigler quotes, and Stigler must surely have known that. Mill's point is that once population increase slows, then there is no point in struggling for wealth for its own sake. Rather what is needed is better distribution of wealth.
"I cannot, therefore, regard the stationary state of capital and wealth [low or zero economic growth] with the unaffected aversion so generally manifested towards it by political economists of the old school. I am inclined to believe that it would be, on the whole, a very considerable improvement on our present condition. I confess I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that the trampling, crushing, elbowing, and treading on each other's heels, which form the existing type of social life, are the most desirable lot of human kind, or anything but the disagreeable symptoms of one of the phases of industrial progress...…. it is not a kind of social perfection which philanthropists to come will feel any very eager desire to assist in realizing... the best state for human nature is that in which, while no one is poor, no one desires to be richer, nor has any reason to fear being thrust back by the efforts of others to push themselves forward."
Mill is here foreshadowing Keynes in Prospects for our Grandchildren and Weber also. Once we have escaped the Malthusian trap -- around 1880's when productivity grows faster than fertility, while fertility begins its long decline (hitting the replacement level when Keynes is writing) -- then growth is not so important. The protestant work ethic ceases to be a necessity, and simply becomes a iron cage that prevents us from leading happy, fulfilled lives. Stigler seems to arguing the very opposite: that Mill thinks we should pretend as if we are still living in the Malthusian era because, because it is good for our character.
Thanks for the imvisible university.
Reading this, it struck me that a bunch of people are left out of consideration: Women, Children, The Sick, The mentally incompetent and the old. I hear a subtle voice saying Fuck Them All.