Mill:Liberty/Socialism, Principles of Political Economy

Primary version of this post, with visual content, at Barry Stocker's Weblog.

Returning here to a topic I addressed on September 9th. The ways in which Mill seems to depart from On Liberty in Principles of Political Economy, though he was working on it at about the same time. The several editions the Principles went through somewhat confuses that interpretative issue.

More ways in which Mill departs from the On Liberty perspective, in Book II on Distribution (which does not appear in all versions currently in print).

Wages are at least to some degree determined by custom rather than markets. Mill here seems to be referring to those upper professions which tend to be linked with the upper classes and have social power, law, medicine and so on. One might expect Mill to suggest that that non-economic power had enabled members of these professions to increase their welfare through restricting entry, monopoly of practice of that profession through compulsory member of a professional body, and so on. Adam Smith had already made similar points. However, Mill seems to regard these examples as evidence that distribution of income can generally be separated from supply and demand in the market.

The previous point feeds into the consideration he gives to the possibility of communism, which I have already mentioned. In connection with what he says on custom determining income, he suggests that income distribution could be flattened and there would still be an efficient economy.

The last point itself connects, if indirectly, with the suggestion that there could be a static economy, with no further development. It might be easier to conceive of a state reallocation of income, of the economy has reached some kind of plateau, in which case rearranging who gets what income might not seem like to harm the economy. Mill thinks such a state could be reached if existing materials and technology have been exploited to the full. This ignores the tendency to innovate with regard to the use of materials, technological innovation and the possibilities of innovation in the organisation of labour.

There may be societies which have reached some stasis. I would guess irrigation based agricultural communities in Pharonic Egypt, or pre-Columbian Guatemala. In both cases, a despotic political system presided over, and was reinforced by control of irrigation. In both cases, the political and economic stasis killed innovation and I believe led to a lack of adaptation which led to catastrophic collapse in the face of climate change or over use of fixed resources. Mill’s hypothesis of a static economy would be the product of political despotism, and a connected killing off of incentives to innovate. If that is part of Mill’s argument for the possibility of socialism, then it’s a rather dark picture, counteracting Mill’s growing tendency to believe over time that personal liberty might co-exist with communism.