Summary of "The Worldly Philosophers" by Robert L. Heilbroner

The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers was first published in 1953 and written by Robert L. Heilbroner. The Worldly Philosophers discusses the ideas and lives of influential economists—Adam Smith, Parson Malthus, David Ricardo, Karl Marx, Thorstein Veblen, John Maynard Keynes, and Joseph Schumpeter—and takes great care to show how each was important, making it a great book to read for those with an interest in the field of economics.

Heilbroner begins his book by giving a description of the influence and nature of the people he’ll be discussing: “This is a book about a handful of men with a curious claim to fame. By all the rules of schoolboy history books, they were nonentities: they commanded no armies, sent no men to their deaths, ruled no empires, took little part in history-making decisions … Yet what they did was more decisive for history than many acts of statesmen who basked in brighter glory, often more profoundly disturbing than the shuttling of armies back and forth across frontiers, more powerful for good and bad than the edicts of kings and legislatures. It was this: they shaped and swayed men’s minds … Few of them ever lifted a finger in action; they worked, in the main, as scholars—quietly, inconspicuously, and without much regard for what the world had to say about them. But they left in their train shattered empires and exploded continents; they buttressed and undermined political regimes; they set class against class and even nation against nation—not because they plotted mischief, but because of the extraordinary power of their ideas” (13). Heilbroner states that these people should be known as the Great Economists, and he defines economics as a field far from boring, as it affects the lives of all of humanity, thereby making it a very practical subject of study. The economists discussed by Heilbroner range greatly from not only time periods but their stations in life and opinions regarding certain issues (ex. the accumulation of wealth and women’s rights). Thus, these economists are worldly philosophers, as they focus heavily on how people try to accumulate wealth, not abstract ideas. Heilbroner states that he will be focusing on the last three centuries of economics, and will not begin with Adam Smith, as he was active during the Revolutionary War while the history of economics goes far back in time. He writes the following of humanity: “Since he came down from the trees, man has faced the problem of survival, not as an individual but as a member of a social group. His continued existence is testimony to the fact that he has succeeded in solving the problem; but the continued existence of want and misery, even in the richest of nations, is evidence that his solution has been, at best, a partial one. Yet man is not to be too severely censured for his failure to achieve a paradise on earth. It is hard to wring a livelihood from the surface of this planet … It is only because man is a socially cooperative creature that he has succeeded in perpetuating himself at all.” (18). However, this is in itself a contradiction: although humans can cooperate in large numbers, they are still self-centered at the end, which can lead to conflicts in interests and questions involving the distribution of income and resources. To deal with such issues, civilization encouraged following tradition (a person did the same job their parents did). This is well seen in the societies of Egypt, China, and India for most of their history. Other times, to ensure that obligations are fulfilled, states resort to violence and forced labor. Thousands of years ago the pharaohs used their authority to force people to build pyramids at a great human cost, and relatively recently the Soviet Union involved many Five Year Plans that involved an inconceivable amount of work and fatalities (from things like famine). Heilbroner writes that as long as societies utilized tradition and coercion to keep itself going, it wasn’t actually following economics: “Although the societies of history have shown the most astonishing economic diversity … so long as they ran by custom or command, they needed no economists to make them comprehensible … the economists waited upon the invention of a third solution to the problem of survival. They waited upon the development of an astonishing arrangement in which society assured its own continuance by allowing each individual to do exactly as he saw fit—provided he followed a central guiding rule. The arrangement was called the ‘market system,’ and the rule was deceptively simple: each should do what was to his best monetary advantage … And yet, although each was free to go wherever his acquisitive nose directed him, the interplay of one person against another resulted in the necessary tasks of society getting done.” (20-1). When the world moved towards that of a free market, economists found their jobs, as a free market is frequently subjected to fluctuations that impact its state. Thus, this movement towards a true (that is, capitalist) economic system “was the most important revolution, from the point of view of shaping modern society, that ever took place—fundamentally more disturbing by far than the French, the American, or even the Russian Revolution.” (21).

Heilbroner then reveals that centuries ago, charging interest and trying to make a profit was viewed by many societies as going against the natural order and as being a grave sin (of avarice). Furthermore, in Europe, merchants who are viewed as being greedy can be fined huge sums of money and can even be pilloried, a clear contrast to the attitude of today. Heilbroner states that the idea of personal profit is only a recent invention. Heilbroner excuses the people of the past (especially the Middle Ages) for not seeing the huge potential of a market economy, as technology was unadvanced then, making travel and thus trade difficult to manage: “Lacking land, labor, and capital, the Middle Ages lacked the market: and lacking the market … society ran by local command and tradition. The lords gave orders, and production waxed and waned accordingly. Where no orders were given, life went on in its established groove … Who would look for abstract laws of supply and demand, or cost, or value, when the explanation of the world lay like an open book in the laws of the manor and the Church and the city, along with the customs of a lifetime? Adam Smith might have been a great moral philosopher in that earlier age, but he could never have been a great economist; there would have been nothing for him to do.” (29). The transition from a stagnant, socially conservative economy into an innovative, profit-driven one took centuries, but the process was far from simple or even peaceful, as large numbers of people were forced to work unsavory, dangerous, and low-paying jobs to make exorbitant sums of money (the proletariat) for the owners of capital. For many years the working class had few opportunities and their lives were full of physical exhaustion and drudgery (although today worker burnout is still a huge problem, it’s nowhere near as bad as how severe it was in the past). Furthermore, sometimes people would severely punish those that desired innovation. For instance, in France in 1666, when the concept of innovation was introduced, “the Privy Council ordered the dangerous contraption [a stocking frame] abolished. In France the importation of printed calicoes now threatens to undermine the clothing industry. It is met with measures that cost the lives of 16,000 people! In Valence alone on one occasion 77 persons are sentenced to be hanged, 58 broken on the wheel, 631 sent to the galleys, and one lone and lucky individual is set free, for the crime of dealing in forbidden calico wares.” (31). Furthermore, the move towards an open market caused a sizable number of people to lose their jobs, as machinery and other innovations made the labor of many obsolete (a concept present today in the future development of artificial intelligence). Thus, those who found themselves stripped of their former jobs became either paupers or factory workers. “The market system with its essential components of land, labor, and capital was thus born in agony—an agony that began in the thirteenth century and had not run its course until well into the nineteenth … they ripped apart the mold of custom; insolently they tore away the usages of tradition” (33). Some influences that led to this distinct movement include (1) the formation of distinct national entities in Europe (in the Middle Ages feudalism required small, separate systems of manors to survive), (2) an increase in skepticism and decrease in religious bigotry and fanaticism after the Italian Renaissance, (3) an expansion of towns, roads, trading routes, and food production, and (4) the rise of science and the realization of the wonders that technology can bring to society. To reiterate, the process of moving towards a market economy was a long one in regards to a human lifespan, as rulers needed to be convinced of the benefits of adopting such a system over being stuck in the rut of tradition. Heilbroner also includes the following: “The new philosophy brought with it a new social problem: how to keep the poor poor. It was generally admitted that unless the poor were poor, they could not be counted upon to do an honest day’s toil without asking for exorbitant wages. ‘To make the Society Happy …, it is requisite that great numbers should be Ignorant as well as Poor,’ wrote Bernard Mandeville, the shrewdest and wickedest social commentator of the early eighteenth century.” (40).

Adam Smith, said to be the father of modern economics, published his Inquiry into the Nature and Causes of the Wealth of Nations in 1776 (during the American Revolution), a book that stated that market forces are inherently self-correcting (this is known as the invisible hand theory), as supply and demand will ensure equilibrium. Heilbroner notes that Smith’s observations are quite interesting, seeing how he was able to derive order out of chaos in the eighteenth-century, seeing how labor then involved much cruelty, deprivation, overwork, and danger: “Suppose, for example, our visitor had gone to see the tin mines of Cornwall. There he would have watched miners lower themselves down the black shafts, and on reaching bottom draw a candle from their belts and stretch out for a sleep until the candle guttered. Then for two or three hours they would work the ore until the next traditional break, this time for as long as it took to smoke a pipe. A full half-day was spent in lounging, half in picking at the seams. But had our visitor traveled up north and nerved himself against a descent into the pits of Durham or Northumberland, he would have seen something quite different. Here men and women worked together, stripped to the waist, and sometimes reduced from pure fatigue to a whimpering half-human state. The wildest and most brutish customs were practiced; sexual appetites aroused at a glance were gratified down some deserted shaftway; children of seven or ten who never saw daylight during the winter months were used and abused and paid a pittance by the miners to help drag away their tubs of coal; pregnant women drew coal cars like horses and even gave birth in the dark black caverns.” (43-4). It shouldn’t come as a surprise that Smith was an academic person who had no experience observing the working conditions of the average person. Smith was a friendly though absent-minded individual who was an intellectual ally of David Hume (he got into trouble repeatedly at a teaching position at the University of Glasgow due to his reading Hume’s A Treatise of Human Nature and for criticizing the intermingling of education and religion). Smith became the dean of the University of Glasgow in 1758 and had his initial taste of fame in 1759 when he published The Theory of Moral Sentiments, in which he discusses the nature of moral judgment. Smith later became the tutor and steward of a child from a rich family (his widowed mother had remarried Townshend, the official responsible for the Townshend Acts, one of the major contributors to the American Revolution). Smith, while traveling, frequently thought of Economics, and he had his first ideas of The Wealth of Nations during this time. He adopted the concept of laissez-faire or “let-alone” policy that states that governments shouldn’t get involved with a market economy, as they’re interacting with something that will naturally fix itself, given enough time. Two years after publishing The Wealth of Nations, “Smith was appointed Commissioner of Customs for Edinburgh, a sinecure worth six hundred pounds a year. With his mother, who lived until she was ninety, Smith lived out his bachelor’s life in peace and quiet; serene, content, and in his likelihood absent-minded to the end.” (50). His book remains to this day one of the cornerstones of modern economics, and it remains a hugely important classic. It is powerful due to its sheer scope, as it seeks to talk about the world as a whole. As Heilbroner put it, “The book … ducks nothing, minimizes nothing, fears nothing … Again and again it refuses to wrap up in a concise sentence a conclusion it has laboriously arrived at over fifty pages. The argument is so full of detail and observation that one constantly has to chip away the ornamentation to find the steel structure that holds it together underneath. Coming to silver, Smith detours for seventy-five pages to write a ‘digression’ on it; coming to religion, he wanders off in a chapter on the sociology of morality. But for all its weightiness, the text is shot through with insights, observations, and well-turned phrases that imbue this great lecture with life.” (52). The book was revolutionary in the sense that it was quite democratic in its views, as it discredited many of the aristocratic, might-makes-right attitudes of the day (ex. mercantilism, which states that countries have the right to pillage their colonies for resources and the justification of poverty by aristocrats who allege that the poor need to remain so to keep the system functioning). As Heilbroner put it, “Gone is the notion of gold, treasures, kingly hoards; gone the prerogatives of merchants or farmers or working guilds. We are in the modern world, where the flow of goods and services consumed by everyone constitutes the ultimate aim and end of economic life.” (53). Smith writes in his book of how economies work, and he makes it clear that societies are inconstant, as they constantly evolve. Smith states that although people are quite greedy, in a free market they will be unable to satisfy their excessive greed due to competitors who would charge a lower price to their customers. As stated before, Smith discusses the concepts of supply and demand, and he interprets them as the economy obeying the will of the public, as goods that are greatly desired are generally created in large quantities and thereby each unit becomes cheaper. When it comes to profit and wages, there are limits to everything, not just greed: if a job is in high demand due to how much it pays, competition will ensure that few people get it. Heilbroner acknowledges, “All this may seem somewhat elementary. But consider what Adam Smith has done, with his impetus of self-interest and his regulator of competition. First, he has explained how prices are kept from ranging arbitrarily away from the actual cost of producing a good. Second, he has explained how society can induce its producers of commodities to provide it with what it wants. Third, he has pointed out why high prices are a self-curing disease, for they cause production in those lines to increase. And finally, he has accounted for a basic similarity of incomes at each level of the great producing strata of the nation. In a word, he has found in the mechanism of the market a self-regulating system for society’s orderly provisioning.” (57).

The overall tone of The Wealth of Nations is generally carefully optimistic, since at its premise it implies that society is constantly improving itself, even if at a slow pace, so that the quality of life for the average citizen will only improve over time. To repeat, the situation for most people in his era was quite grim, as child labor was frequent and many children were seriously injured by the jobs they took. Heilbroner adds, “For if any problem absorbed the public mind, besides its mixed admiration of and horror at the factory, it was this omnipresent problem of the unprofitable poor. In 1720, England was crowded with a million and a half of them—a staggering figure when we realize that her total population was only twelve or thirteen million ... the common complaint was the ineradicable sloth of the pauper … Where would all this lead to, asked the thinkers of the day; were not the wants of the poor (‘which it would be prudence to relieve, but folly to cure,’ as the scandalous Mandeville put it in 1723) essential for the welfare of the state? What would happen to Society if the indispensable gradations of society were allowed to disappear?” (60). Adam Smith addressed these concerns in writing that “‘No society can surely be flourishing and happy, of which by far the greater part of the numbers are poor and miserable’” (60-1). Smith praised the concept of specialization and the division of labor, as when people are highly skilled in one task, they can work efficiently to produce a complicated product in conjunction with other workers. Of course, this concept is still very relevant today, seen in assembly lines that have workers becoming experts at one specific task. Smith states that although it was true that many were miserable in his time (and still today, unfortunately), their lives did see a notable improvement in regards to those who lived in the past, seen in the products they were able to buy thanks to the market system. Smith believed in the Law of Accumulation, which states that the more wealth one owns, the easier it will be to make money (think of interest rates). “But Adam Smith did not approve of accumulation for accumulation’s sake … in the accumulation of capital Smith saw a vast benefit to society. For capital—if put to use in machinery—provided just that wonderful division of labor which multiples man’s productive energy. Hence accumulation becomes another of Smith’s two-edged swords: the avarice of private greed again redounding to the welfare of the community. Smith is not worried over the problem that will face twentieth-century economists: will private accumulations actually find their way back into more employment? For him the world is capable of indefinite improvement and the size of the market is limited only by its geographical extent. Accumulate and the world will benefit, says Smith.” (64). Smith also came up with the Law of Population, which mandates that people will have different numbers of children at different times. It should be noted that infant mortality was very common at the time, especially among the poor, due to things like malnutrition, disease, and the natural elements. Following this logic, when times are good, more children will survive, which will keep the Law of Accumulation profitable, as a sufficient number of people would keep the wages at a sufficient amount that ensures both the career of the worker and the profitability of the business. As Heilbroner excellently put it, “The rise in wages which it caused and which threatened to make further accumulation unprofitable is tempered by the rise in population. Accumulation leads to its own undoing, and then is rescued in the nick of time. The obstacle of higher wages is undone by the growth in population which those very higher wages made feasible.” (65-6). Although Smith does enjoy a positive outlook, he was realistic in the sense that he knew that accumulation and population growth has its limits, seeing how certain resources and opportunities could run out. However, he didn't foresee how influential technology could be, as he viewed benefits to an economy as something to be enjoyed once (ex. fossil fuels), not continually (how artificial intelligence can perhaps create many jobs and provide people with universal basic income if and when it becomes sufficiently advanced): “As had been recently pointed out, he did not see the organization and technological core of the division of labor as a self-generating process of change, but as a discrete advance that would impart its stimulus and then disappear. Thus in the very long run the growth momentum of society would come to a halt—Smith once mentions two hundred years as the longest period over which a society could hope to flourish. Thereafter the laborer would return to his subsistence wages, the capitalist to the modest profits of a stable market, and the landlord alone might enjoy a somewhat higher income as food production remained at the levels required by a larger, although no longer growing, population. For all its optimistic boldness, Smith’s vision is bounded, careful, sober—for the long run, even sobering.” (67).

Smith’s opinions when it comes to government are the following: “far from being opposed to all government undertakings, Smith specifically stresses three things that government should do in a society of natural liberty. First, not surprisingly, it should protect that society against ‘the violence and invasion’ of other societies. Second, it should provide an ‘exact administration of justice’ for all citizens. And third, government has the duty of ‘erecting and maintaining those public institutions and those public works which may be in the highest degree advantageous to a great society,’ but which ‘are of such a nature that the profit could never repay the expense to any individual or small number of individuals.’” (68-9). That is, Smith believed in a government that pursued peace and spent money on public work projects like infrastructure. To reiterate, although Smith believed the government should be very involved in many areas, he was against it getting directly involved in the market economy, as he thought that it would mess up all its affairs—this caused The Wealth of Nations to be viewed as against public welfare and humanitarianism, as anything that can slow down the market (ex. social security, decent working conditions, and minimum age requirements) are viewed as inefficient from a purely economic lens. However, Smith probably didn't mean this, seeing what he spoke about what a government should do (“justice” can be interpreted as extending to the jobs of the citizens). Ultimately, “In a sense the vision of Adam Smith is a testimony to the eighteenth-century belief in the inevitable triumph of rationality and order over arbitrariness and chaos. Don’t try to do good, says Smith. Let good emerge as the by-product of selfishness. How like the philosopher to place such faith in a vast social machinery and to rationalize selfish instincts into social virtues! There is nothing halfhearted about Smith’s abiding trust in the consequence of his philosophical beliefs … He sees little future for the newly emerging business organizations called joint-stock companies (corporations), since it seems highly improbable that such impersonal bodies could muster the necessary self-interest to pursue complex and arduous undertakings. Even the greatest humanitarian movements, such as the abolition of slavery, are defended in his own terms; best abolish slavery, says Adam Smith, since to do so will probably be cheaper in the end.” (70-1). From today’s standpoint, Smith’s belief in a relatively unchanging world (though with a greatly increased population) is demonstrated to be inaccurate, but this doesn’t take any value away from his works. As Heilbroner excellently wrote, “For Smith’s encyclopedic scope and knowledge there can be only admiration. It was only in the eighteenth century that so huge, all-embracing, secure, caustic, and profound a book could have been written. Indeed, The Wealth of Nations and The Theory of Moral Sentiments, together with his few other essays, reveal that Smith was much more than just an economist. He was a philosopher-psychologist-historian-sociologist … The Wealth of Nations … is part of a huge conception of the human adventure itself … Perhaps no economist will ever again so utterly encompass his age as Adam Smith. Certainly none was ever so serene, so devoid of contumacy, so penetratingly critical without rancor, and so optimistic without being utopian. To be sure, he shared the beliefs of his day; in fact, he helped to forge them. It was an age of humanism and reason; but while both could be perverted for the cruelest and most violent purposes, Smith was never chauvinist, apologist, or compromiser …. All the grubby scrabbling for wealth and glory has its ultimate justification in the welfare of the common man.” (72-3). Smith died in 1790 at the age of sixty-seven.

The next worldly philosophers to be discussed are Parson Malthus and David Ricardo. Thomas Malthus was a clergyman who was a friend of Hume and a friend of Rousseau. Malthus wrote of the dangers of overpopulation and resource consumption in his 1798 essay An Essay on the Principle of Population as It Affects the Future Improvement of Society. In this essay he states that population growth is currently explosive, which will lead to terrible living conditions that will subsequently force the population to decrease with much suffering and death. As Heilbroner elegantly put it, “For what the essay on population said was that there was a tendency in nature for the population to outstrip all possible means of subsistence. Far from ascending to an ever higher level, society was caught in a hopeless trap in which the human reproductive urge would inevitably shove humanity to the very brink of the precipice of existence. Instead of being headed for Utopia, the human lot was forever condemned to a losing struggle between ravenous and multiplying mouths and the eternally insufficient stock of Nature’s cupboard, however diligently that cupboard might be searched.” (78). Alongside Malthus’s beliefs was Ricardo Malthus, who stated that as the population increased, the quality of life will be continuously kept down due to how many people are competing for jobs. That is, if there are a lot of people searching for employment, employers have the leverage to significantly decrease the value of the wages offered, worsening the living situations of many people—this is known as the Iron Law of Wages. Ricardo came up with this idea when food prices were soaring due to the Napoleonic wars and landowners were continuing to charge rent from the poor. Malthus, staying true to his beliefs that the vast majority of the population would breed uncontrollably, argued against social security and welfare, as he believed that helping them was only prolonging the inevitable, not-mentioning how they will produce many offspring who will further strain the system. Expectedly, this caused him to be greatly hated, and Heilbroner notes that Malthus, contrary to his reputation, wasn’t a nasty or cruel individual: “Malthus was neither a prude … nor … an ogre. It is true that he urged the abolition of poor relief and even opposed housing projects for the working classes. But all this was done with the sincerest interest of the poorer classes at heart—and indeed may be contrasted with the view of some contemporary social theorists who suggested blandly that the poor be allowed to die peacefully in the streets. Hence Malthus’s position was not so much a hard-hearted as a supremely logical one. Since according to his theory the basic trouble with the world was that there were too many people in it, anything that tended to promote ‘early attachments’ only aggravated the sum of mankind’s misery” (83). Malthus was a poor man while Ricardo came from a rich family and was much-respected. Ricardo was also a reformer, as he desired freedom of speech and assembly, religious tolerance, and the end of government corruption. Malthus and Ricardo in fact knew each other, and were close friends, though they challenged each other intellectually by critiquing each other’s works. Heilbroner further characterizes Malthus and Ricardo by stating that while “pamphleteers compared him with Satan … Malthus was a tall and handsome man and a gentle soul; his students called him ‘Pop’ behind his back. He had one odd defect: from his great-great-grandfather he had inherited a cleft palate and his speech was difficult to understand; l was his worst letter” (86). As for Ricardo, he was a fantastic businessman who succeeded financially vastly with seemingly little effort from the vantage point of outside observers. When it comes to his success, “Sir John Bowring later declared that Ricardo’s success was based upon his observation that people in general exaggerated the importance of events.” (87). Ricardo suddenly died in 1823 at the age of fifty-one, and his last letter to Malthus thanked him for being both honest and intelligent in their discussions. Malthus lived on until 1834, and he wrote of Ricardo: “‘I never loved anybody out of my own family so much.’” (88).

When it comes to Malthus’s theory, Malthusian population growth, while indeed possible, has not (so far, at least) devastated human society, seeing how the Green Revolution of the 20th century and the ever-increasing power of technology has allowed food to be produced in massive quantities (though even greater amounts of food would be produced if the world moved to a plant-based diet, seeing how factory farming wastes much land and is the leading cause of greenhouse emissions and climate change). Malthus believed that a human population would double itself in twenty-five years, but the reality proved to be much different, as people had many children at that time period due to the risk of infant mortality. A key component of Malthusian economics is how land, unlike people, doesn’t grow with time: as more and more people are brought into existence, the greater the struggle for necessities will become. “Hence, while the number of mouths grows geometrically, the amount of cultivable land grows only arithmetically.” (89). Malthus writes that if the human population will continue to double (that is the trend of the modern era: just look at a population chart), most people will be subjected to deprivation and turmoil, especially due to famine: “‘Famine seems to be the last, the most dreadful resource of nature. The power of population is so superior to the power of the earth to provide subsistence … that premature death must in some shape or other visit the human race. The vices of mankind are active and able ministers of depopulation … But should they fail in this war of extermination, sickly seasons, epidemics, pestilence, and plague advance in terrific array and sweep off their thousands and tens of thousands. Should success still be incomplete, gigantic inevitable famine stalks in the rear, and with one might blow, levels the population with the food of the world.’” (90). Heilbroner tellingly notes of the human condition, “Nothing, nothing can rescue mankind from the constant threat of drowning under its own weight but the frail reed of ‘moral restraint.’ And how dependable is moral restraint against the great passion of sex?” (90). As stated before, Malthus’s predictions were inaccurate. In the 1970s many scientists worried that his prediction would come true (they believed that the world’s population could be 20 billion in 2020), but the Green Revolution saved humanity from what could’ve been a catastrophic famine. Although Malthus was inaccurate in one regard, his description of the dangers of explosive population growth is to be respected and observed, seeing how nothing is guaranteed, not even in today’s society. Thus, things like contraception, sex education, and the accessibility of abortions are made even more important, as they will prevent unwanted births and raise the quality of life of those already experiencing life. Heilbroner includes some hopeful information: “In the years 1970-75, despite the prevailing gloom, the rate of growth of population slowed down for the first time in history. The growth of population has not yet stopped by any means—U.N. experts predict that today’s world population of some 5 billion [now 7 billion] may grow to between 9 to 10 billion before it levels off. But at least and at last, the growth rate is slowing down, and the leveling may come sooner than was imaginable only a decade ago” (92). Unfortunately, while developed countries like Europe and America have successfully decreased their birth rates to a great degree, countries struggling with poverty, though seeing a decline in the birth rate, still have much work to do. Ricardo designated three groups in his Principles of Political Economy that was published in 1817: the workers (who bring about their own undoing with their reckless reproduction due to their enjoying “the delights of domestic society”), the capitalists (who have trouble making profits due to their lowering their prices to simply compete with each other), and the landlord (who utilize overpopulation to make large sums of money while not producing any valuable product). To reiterate Ricardo’s beliefs, he thought that an explosion in the population will allow landlords to profit while harming capitalists and commoners, enforcing much misery. Heilbroner writes that Ricardo’s contribution was his precise and mechanical portrayal of how the world worked while that of Malthus involved the severe danger of uncontrollable growth of the human population. “Yet, in retrospect, perhaps the main contribution of the two lay outside their technical accomplishments. For quite without intending it, Malthus and Ricardo did one astonishing thing. They changed the viewpoint of their age from optimism to pessimism. No longer was it possible to view the universe of mankind as an arena in which the natural forces of society would inevitably bring about a better life for everyone. On the contrary, those natural forces … now seemed malevolent and menacing.” (104).

Heilbroner noted that both Malthus and Ricardo believed that the average person would be too foolish, lazy, or weak to make any revolutionary change to the system and the environment, a clear contrast to utopian socialists who believed that communal living with an emphasis on cooperation could solve the issues of greed and scarcity. The socialists had good reason to despise capitalism, as at that time period working conditions were hard, brutal, and unprofitable for workers, not-mentioning how some employers were sadistic and cruel. The following is an instance reported in 1828: the story involves Robert Blincoe, “one of eighty pauper-children sent off to a factory at Lowdham. The boys and girls—they were all about ten years old—were whipped day and night, not only for the slightest fault, but to stimulate their flagging industry. And compared with a factory at Litton where Blincoe was subsequently transferred, conditions at Lowdham were rather humane. At Litton the children scrambled with the pigs for slops in a trough; they were kicked and punched and sexually abused; and their employer, one Ellice Needham, had the chilling habit of pinching the children’s ears until his nails met through the flesh. The foreman of the plant was even worse. He hung Blincoe up by his wrists over a machine so that his knees were bent and then he piled heavy weights on his shoulders. The child and his co-workers were almost naked in the cold of winter and … their teeth were filed down” (105-6). Overall, the story illustrated above effectively demonstrated that capitalism had indeed gone too far, as workers had basically no legal protections and were seen as expendable by their employers (as I’m writing this summary on 7/24/20 in light of the Covid-19 epidemic, I’m disappointed to say that this sentiment, though not explicitly stated by the rich, is put into practice whenever possible, as workers are still viewed as disposable for the sake of profit). In this time period was Robert Owen, a utopian socialist who founded New Lanark (a small society that tried to make people work hard by respect and decency rather than the ever-present threat of punishment). Robert Owen was born in 1771 to poor parents in Wales and pursued making profits in the world of textiles. He became enormously successful and focused on philanthropy, as he ardently believed that the behavior of humans is only a reaction to the environment they’re in. Following this logic, if a favorable manner of living is provided to people, a paradise can be generated. During the Napoleonic Wars, Owen “advocated the formation of Villages of Cooperation in which eight hundred to twelve hundred souls would work together on farm and in factory to form a self-sustaining unit. The families were to live in houses grouped in parallelograms—the word immediately caught the public eye—with each family in a private apartment but sharing common sitting rooms and reading rooms and kitchens. Children over the age of three were to be boarded separately so that they could be exposed to the kind of education that would best mold their characters for later life. Around the school were gardens to be tended by the slightly older children, and around them in turn would stretch out the fields where crops would be grown—needless to say with the aid of spades and without the use of plows. In the distance, away from the living areas, would be a factory unit; in effect this would be a planned garden city, a kibbutz, a commune … In 1819 a special committee (including David Ricardo) was put together for the purpose of trying to raise the necessary £96,000 to establish one full-fledged experimental Village of Cooperation.” (111-2). Owen’s Village of Cooperation was scorned by everyone, as people found the idea either unrealistic or a mockery of tradition. Furthermore, his implementation of his plan was quite poor, seeing how eight hundred settlers arrived without basic organization. The colony later fell apart as the settlers competed against each other and Ford lost four-fifths of his wealth in this venture. However, while disappointed, he was far from being entirely dissuaded: he started the Grand National Moral Union of the Productive and Useful Classes (later changed to “Grand National Consolidated Trades Union” and even later to the “Grand National”), a truly influential and powerful union that had more than half a million members. The Grand National was shut down just two years after its formation, as the wealthy, after hearing of how it urged the abolition of wealth and financial inequality, forced it to shut down. Ford lived the rest of his life continuing to promote cooperation and the abolition of wealth and died in 1858 at the age of eighty-seven. Heilbroner details that Owen’s story is amazing to recount, and that he was an idealistic, theoretical individual who genuinely and unfailingly believed in the utopian and humanistic books that he came across. “He was not, by any stretch of the imagination, an economist. But he was more than that; he was an economic innovator who reshaped the raw data with which economists have to deal. Like all the Utopian Socialists, Owen wanted the world changed; but while others wrote, powerfully or otherwise, he went ahead and tried to change it.” (115). When it comes to thoughts, the one which Owen left behind for humankind was one of hope and the betterment of society, seeing how he believed that “‘Man is the creature of circumstances.’” (116). To put it in another way, “The world is not inevitably good or bad but to the extent that we make it so. In that thought Owen left behind him a philosophy of hope more powerful than all his fanciful notions about spades and plows or money or Villages of Cooperation.” (116).

Saint-Simon was an aristocrat who tried to go on a search for knowledge. Unfortunately, doing so was very expensive, causing him to fall into severe poverty. “In 1823, although his family now accorded him a small pension, he shot himself in despair. But he could never quite do anything as he wished. He succeeded only in losing an eye. He lived two more years, ill, impoverished, dedicated, and proud.” (119). Although Saint-Simon’s life was a financial disaster, he was somewhat influential when it came to ideas, as he defended the notion that the most valuable parts of a society are those that work, not those who idle, seeing how it would be much worse if many skilled professionals were to suddenly die than if some nobles were to perish. Thus, Saint-Simon believes that society should operate like a factory, and people should be rewarded in proportion to one’s contributions and effort. However, when it comes to how to set this into mention, he left no clear plan. Saint-Simon influenced Fourier, an eccentric who was partially insane, as he believed in utterly ludicrous things (I’m not going to include them in this summary due to their absurdity, but rest assured that they’re very interesting to read). While his life was quite boring from an outside angle (he worked a tedious job and seemed to be interested in only a few things like cats, flowers, and thinking), know that his plan of making the world a better place, in clear contrast to Saint-Simon, was extremely specific: “Society should be organized into phalanxes—the French word is phalanstèresè—which would consist of a kind of Grand Hotel arrangement, not too dissimilar from Owen’s Villages of Cooperation. The hotel was carefully described: there would be a large central building … and around it would be fields and industrial establishments. You could live in the hotel at the scale best suited to your purse; first, second, or third class, with just as much privacy as you desired (including meals in your rooms) and with just enough mingling to spread a leaven of culture. Efficiency would be achieved through centralization … Everyone would have to work, of course, for a few hours each day. But no one would shirk work, for each would do what he best liked … Among the workers there would be amicable competition to see who did best … And the whole affair would be profitable in the extreme; gains would run to 30 percent. But it would be communal profit: the surplus would be divided five twelfths to labor, four twelfths to capital, and three twelfths to ‘ability,’ and everybody would be urged to become a part owner as well as a fellow worker.” (122-3). His idea, quite expectedly, wasn’t put into action, as it seemed too unrealistic to most people. Heilbroner tellingly writes, “Fourier pointed with devastating truth to the miserable unhappiness of the world in which he lived, but his prescription was too much compounded of heavenly ingredients for the moral ills he wished to cure.” (124). While it’s true that the utopian socialists were imaginative and unrealistic, their courage to express their ideas in a world full of cruelty and deprivation is to be appreciated. The utopian socialists, unlike the communists, tried to persuade the upper class to adopt change instead of resorting to mass violence. They also loathed capitalism due to not believing that it itself could be reformed in key ways, seeing how it was a very young concept at the time that seemed to bring nothing but misery to many people. “They were men of very good will. And yet, for all their good intentions and their earnest theories, the Utopians … needed the imprimatur of someone with them in heart but whose head would be somewhat more firmly attached to his shoulders. And they found such a person in the most unlikely place in the ultimate conversion to socialism of the person who was by common consent the greatest economist of the age: John Stuart Mill.” (126).

John Stuart Mill was born to James Mill, and was given an extremely preparatory and detailed education that was specifically designed to make him a genius. He was by all accounts one, as shown in the following: “John Stuart Mill was born in 1806. In 1809 (not 1819) he began to learn Greek. At age seven he had read most of the dialogues of Plato. The next year he began Latin, having meanwhile digested Herodotus, Xenophon, Diogenes Laërtius, and part of Lucian. Between eight and twelve he finished Virgil, Horace, Livy, Sallust, Ovid, Terence, Lucretius, Aristotle, Sophocles, and Aristophanes; had mastered geometry, algebra, and the differential calculus; written a Roman History, an Abridgment of the Ancient Universal History, a History of Holland, and a few verses … At the ripe age of twelve, Mill took up logic and the work of Hobbes. At thirteen he made a complete survey of all there was to be known in the field of political economy.” (126-7). Mill acquired all this in how he worked consistently and with great vigor for years; he received no holidays or weekends. He also didn't have any friends, as he virtually wasn’t allowed to leave his house. Surprisingly, when Mill left his home for the first time, he didn't suffer from an existential crisis or any severe mental issue, though when he was twenty he did suffer from melancholy upon realizing that the world’s flaws cannot be corrected by him, even if he is to spend his entire life trying to do so. Mill met Harriet Taylor, who was married. They fell in love, but he didn't copulate with her while she was married (for twenty years) and married her only when her first husband passed. Mill and Taylor got along splendidly, so much so that Mill credited her as his main inspiration. They later had a daughter, Helen. Mill wrote at the age of forty-three Principles of Political Economy, which discussed basically everything in the field. This book also stated that economics focuses more on production rather than distribution, as he wrote that once things are produced, people should utilize the resources in a manner they deem fit and refrain from hoarding wealth, as society has given individuals the privilege to do so and should be compensated in turn. Mill writes himself, “‘The distribution of wealth … depends on the laws and customs of society. The rules by which it is determined are what the opinions and feelings of the ruling portion of the community make them, and are very different in different ages and countries, and might be still more different, if mankind so chose’” (129). Following this logic, Mill stated that Communism made much sense, seeing how it held much promise. However, he rectified his statement by stating that capitalism should be given some more time to get its act together, as it’s still a young and rather undeveloped concept. Mill aptly summarizes his opinion of capitalism in the following words: “If … the choice were to be made between Communism with all its chances, and the present state of society with all its sufferings and injustices; if the institution of private property necessarily carried with it as a consequence, that the produce of labour should be apportioned as we now see it, almost in an inverse ratio to the labour—the largest portions to those who have never worked at all, the next largest to those whose work is almost nominal, and so in a descending scale, the remuneration dwindling as the work grows harder and more disagreeable, until the most fatiguing and exhausting bodily labour cannot count with certainty on being able to earn even the necessaries of life; if this or Communism were the alternatives, all the difficulties, great or small, of Communism would be as dust in the balance.” (130-1). Mill states that capitalism, aside from the potential of reform, should be allowed to exist (at least for a while longer) due to how it provides an outlet for people to utilize their aggression rather than to expend it by warring, as well as the fact that capitalism encourages eccentricity and originality, two traits of an ideal society in the opinion of Mill (he greatly valued tolerance and diversity of opinion). Mill also viewed capitalism as a starting point for socialism, as people will eventually band together to demand better treatment, for a meritocracy to be put in place, and for the destruction of unearned wealth and idleness. Mill as a Victorian had a restrained tone in his writing, and it is to be noted that his idea of socialism being inevitable wasn’t actually true. Regardless, he was a truly gifted and impactful thinker who helped define an age. Mill as a person was a moral entity, as he was willing to challenge his opinions (he once quipped that the person who only knows their side of the argument knows little of the topic being discussed) and help others. For the latter point, he had his Principles of Political Economy published in a single volume at a cheap price to make it accessible to the average person by paying for its expenses himself. He also funded the work of Herbert Spencer, his archrival in philosophy, when he suffered from poverty, as he told him that he didn't want to deprive the public of what he wished to say. Overall, “Mill cared only for two things: his wife, for whom he conceived a devotion that his friends thought verged on blindness, and the pursuit of knowledge, from which nothing could deflect him. When he was elected to Parliament his defense of human rights exceeded the temper of the day; he was thereupon defeated, but he cared not a whit any way … After she [Harriet] died, there was her daughter, Helen, now equally indispensable … He retired to spend his last days with Helen in Avignon, near Harriet’s grave, a wonderfully wise and thoroughly great man.” (134).

The next economist discussed is Karl Marx. Marx lived in a time in which despotism and the aristocracy still tyrannized over the lives of most workers, making The Communist Manifesto very understandable in its call to overthrow the capitalists and the idle rich. Marx and his friend Friedrich Engels, while widely abhorred in many areas, weren’t in fact malevolent individuals, as they were quite relatable though exceptional in their own regards. Marx had dark skin and a powerful body, and he was very athletic in his youth (he was able to swim the Weser River four times consecutively). Engels, on the other hand, was intelligent and possessed an amicable mood. When it comes to their ideas, “Marx was much more ponderous. He is the German scholar par excellence, slow, meticulous, and painstakingly, even morbidly, perfectionist. Engels could dash off a treatise in no time at all; Marx was always worrying one to death. Engels was fazed only by Arabic with its four thousand verb roots; Marx, after twenty years of practice, still spoke hideously Teutonic English … But for all his heaviness, Marx is the greater mind of the two; where Engels supplied breadth and dash, Marx provided the depth.” (140). Engels published The Condition of the Working Class in England in 1844 that described the horrific living conditions of many working class people. Marx in college was influenced by Hegel’s belief that change is integral to existence (which is true), causing him to join a group known as the Young Hegelians that debated issues like atheism and communism in Hegelian dialectic. Marx wrote articles supporting Communism and the rights of workers in a variety of newspapers, thereby making Communism dialectic materialism, “dialectical because it incorporates Hegel’s idea of inherent change, and materialism because it grounds itself not in the world of ideas, but on the terrain of social and physical environment.” (144). In Marx’s and Engel’s opinions, capitalism was destined to collapse due to the fact that workers have nothing to lose and outnumber the capitalists. As Heilbroner put it, “the base of industrial production—the actual making of goods—was an ever more organized, integrated, interdependent process, whereas the superstructure of private property was the most individualistic of social systems. Hence the superstructure and the base clashed: factories necessitated social planning, and private property abhorred it; capitalism had become so complex that it needed direction, but capitalists insisted on a ruinous freedom. The result was twofold. First, capitalism would sooner or later destroy itself. The planless nature of production would lead to a constant disorganization of economic activity—to crises and slumps and the social chaos of depression. The system was simply too complex; it was constantly getting out of joint, losing step, and overproducing one good while underproducing another. Secondly, capitalism must unknowingly breed its own successor … the embittered proletariat.” (147). In his personal life Marx married a woman named Jenny von Westphalen, the daughter of an aristocrat who believed in class unity and humanism. Before marrying Marx, she was in a very good living position and could’ve married someone else, but she chose him, to his delight. Her life would soon become very hard, as Marx didn't have a stable source of income, and none of his jobs paid well. “And yet it was a deeply devoted union. In his dealings with outsiders, Marx was unkind, jealous, suspicious, and wrathful; but he was a joyous father and a loving husband. At one period, when his wife was ill, Marx turned to Lenchen, the Westphalian family maid who stayed with them, unpaid … but even that infidelity—from which an unacknowledged child was born—could not undo a relationship of great passion. Later, much later, when Jenny was dying and Marx was ill, this lovely scene was witnessed by her daughter. ‘Our dear mother lay in the big front room and the Moor lay in the little room next to it…. Never shall I forget the morning he felt himself strong enough to go into Mother’s room. When they were together they were young again—she a young girl and he a loving youth, both on life’s threshold, not an old disease-ridden man and an old dying woman parting from each other for life.’” (148-9). Going back to Marx’s jobs, the government would regularly censor the articles he wrote and would force him to leave to avoid imprisonment. Due to how much he struggled financially, Engels (who came from a wealthy family) helped him by giving him some money. Jenny died in 1881, and by that time she had buried two of her five children (including her only son). Marx survived for two more years before meeting his own end.

Marx’s and Engel’s impact consisted of popularizing the idea of Communism and creating a working-class movement. While Marx had a tremendous global impact, he in his personal characteristics echoed one of the main weaknesses of Communism, that of intolerance. He regularly denounced his enemies in derogatory words and believed that those who didn't agree with him had to be wrong. “Early in his career, when he was still in Brussels, Marx had been visited by a German tailor named Weitling. Weitling was a tried son of the labor movement; he had scars on his legs from the irons of Prussian prisons and a long history of selfless and valiant efforts on behalf of the German workingman. He came to speak to Marx on such things as justice and brotherhood and solidarity; instead he found himself exposed to a merciless cross-examination on the ‘scientific principles’ of socialism … Marx, who had been sitting as the chief examiner, began to stride angrily about the room. ‘Ignorance has never helped anybody yet,’ he shouted. The audience was over.” (152). Marx’s intolerance for other opinions can be seen in his correspondence with Pierre Proudhon, who was an intelligent, self-educated Socialist who published What Is Property? In which he stated that accumulated fortunes is public theft, though not all private property is to be abolished to better the world, seeing that people do need some resources to fall back on. When Marx asked Proudhon to join him in the Communist movement, Proudhon movingly responded with the following clauses that demonstrate his humanity and skepticism (seen in how he didn't want the founders of Communism and Socialism to be viewed with the same dogmatic fervor as how people observe religious prophets): “Let us together seek, if you wish, the laws of society, the manner in which these laws are reached, the process by which we shall succeed in discovering them; but, for God’s sake, after having demolished all the a priori dogmatisms, do not let us in our turn dream of indoctrinating the people…. I applaud with all my heart your thought of inviting all shades of opinion; let us carry on a good and loyal polemic, let us give the world the example of an informed and farsighted tolerance, but let us not—simply because we are at the head of a movement—make ourselves into the leaders of a new intolerance, let us not pose as the apostles of a new religion, even if it be the religion of logic, the religion of reason. Let us gather together and encourage all dissent, let us outlaw all exclusiveness, all mysticism, let us never regard a question as exhausted, and when we have used one last argument, let us if necessary begin again—with eloquence and irony. On these conditions, I will gladly enter into your association. Otherwise, no!’” (153). In response to Proudhon’s fantastic words, Marx published a book mocking him. This attitude would later be seen in how Communist authorities would frequently conduct massive purges and executions that would claim the lives of tens of millions during the twentieth century. Ultimately, Marx’s most notable contribution was his statement that capitalism is a doomed venture and would inevitably destroy itself. Marx also published Das Kapital (“Capital”), which is twenty-five hundred pages long that is extremely precise and exact with the circumstances. The book discusses the effects of technology: as capitalists compete with each other, they will turn to ever-increasingly efficient machines to save money and to stay afloat, which will lead to them firing their workers, who will eventually rebel. Once capitalism is overthrown, Marx states that society will be classless and there would be no private property. Furthermore, “During a transitional period of ‘socialism’ there would be a ‘dictatorship of the proletariat’; after that, ‘pure’ communism itself.” (162). From today’s vantage point, Marx’s diagnoses of the problems of capitalism remain relevant, seeing financial inequity and torturous conditions and working hours for those dealing with poverty and low-paying jobs. Overall, “Marxist analysis cannot be disregarded. It remains the gravest, most penetrating examination the capitalist system has ever undergone … For all its passion, it is a dispassionate appraisal, and it is for this reason that its somber findings remain pertinent … Marx is certainly not infallible … He is better thought of as unavoidable—a great explorer whose footprints have been indelibly imprinted on the continent of social thought that he discovered. All who wish to explore that continent further, whether or not they agree with Marx’s findings, must pay their respects to the person who first claimed it for mankind.” (168-9).

Victorian economics was overall optimistic and hopeful, and one of its chief proponents was Francis Ysidro Edgeworth, a brilliant scholar who was disinterested in economics due to its inclusion of mathematics. He was innovative in how he stated that humans are pleasure machines and he believed that economics should focus on maximizing happiness. He came up with many extensive and detailed equations and formulas to describe economics, a key change in its nature. Frédéric Bastiat was a French economist who spoke in favor of free trade. He also had a wicked sense of humor, as he defended an open market by showing the ridiculousness of trying to prevent foreign competition: in one satire, he wrote a document that petitioned the government to prevent the sun from entering the area due to how it decreased the demand for candles and artificial light. Bastiat, aside from his humor, was also realistic, as he tellingly stated that although everyone wants the government to provide for them, the reality is that the government relies on everyone to provide for it, not vice-versa. His major pet peeve was “the rationalization of private greed under the pretentious cover of a protective tariff erected for the ‘national good.’ … When the French ministry proposed to raise the duty on imported cloth to ‘protect’ the French workingman, Bastiat replied with this delicious paradox: ‘Pass a law to this effect,’ wrote Bastiat to the Minister of Commerce. ‘No one shall henceforth be permitted to employ any beams or rafters but such as are produced and fashioned by blunt hatchets…. Whereas at present we give a hundred blows of the axe, we shall then give three hundred. The work which we now do in an hour will then require three hours. What a powerful encouragement will thus be given to labor!’” (181). In 1848 Bastiat became a member of the National Assembly and published Economic Harmonies, a book that defended capitalism. However, he barely finished his book, as he was a severe sufferer of tuberculosis: he died in 1850. Henry George was an American who did a variety of jobs before focusing on economics. He was an impassioned defender of the common person and published Progress and Poverty, a book that wasn’t too technical and became famous due to its emotion, a clear and utter contrast to the dogmatic, dry textbooks of the day. In this book “Henry George is outraged at the spectacle of men whose incomes—sometimes fabulous incomes—derive not from the services they have rendered the community, but merely from the fact that they have had the good fortune to hold advantageously situated soil.” (186). Thus, he proposed a large tax on land to decrease the rent the average person would have to pay. He believed that society only needed this kind of tax and could do away with the rest. That is, by abolishing the concept of rent it would “‘raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, purify government, and carry civilization to yet nobler heights.’” (187). George’s message in his book and his powerful emotion made him extremely famous. Expectedly, conservatives loathed his book due to how it stated that equity should be pursued and people shouldn’t be allowed to profit off of the labor of others due to sheer luck. In fact, the book sold so well that it sold more copies than every other economic text combined. George became a much-beloved person in the eyes of the masses seeing his friendliness and humanism, and when he died in 1897, thousands attended his funeral. The age of imperialism soon came into existence, as nations, desperate for power and influence, acquired Africa and other areas: “Between 1870 and 1898 Britain added 4 million square miles and 88 million people to its empire; France gained nearly the same area of territory, with 40 million souls attached; Germany won a million miles and 16 million colonials; Belgium took 900,000 miles and 30 million people; even Portugal joined the race, with 800,000 miles of new lands and 9 million inhabitants.” (190-1). John A. Hobson was a relatively regular person (he had ill health and had a speaking impediment) who became a provocative thinker after reading Ruskin, a British social critic who mocked Victorian traditions. Hobson later met A. F. Mummery, a freethinker who utterly changed how he thought. He worked with him to write The Physiology of Industry that states that saving money could, in fact, harm the economy, as money that could’ve been spent on investments and buying products (thereby raising demand and allowing for people to continue to be employed) is frequently kept in relatively static accounts, making it virtually useless for society. This had a massive impact on the world of economics, causing Heilbroner to state that Hobson was viewed as a secular heretic. After visiting Africa and witnessing the scramble for valuable minerals and the ensuing conflict, he published Imperialism. “For here was the most important and searing criticism that had ever been levied against the profit system. The worst that Marx had claimed was that the system would destroy itself; what Hobson suggested was that it might destroy the world. He saw the process of imperialism as a relentless and restless tendency of capitalism to rescue itself from a self-imposed dilemma, a tendency that necessarily involved foreign commercial conquest and that thereby inescapably involved a constant risk of war. No more profound moral indictment of capitalism had ever been posed.” (195).

Hobson stated that in a highly hierarchical society, the poor struggle to survive while the rich bask in comfort. But that isn’t everything: although the rich consume a massively disproportionate amount of resources, they cannot possibly consume them all, as they are limited in number. Thus, they save their money, which worsens the state of affairs by withholding employment and economic benefits from the average citizen. Hobson states that the answer to this dilemma isn’t in investing in factors of production (seeing how many resources are not being sold at all), but in investing overseas. The latter answer is, however, very flawed, as most industrial nations have the same idea, leading to armed conflict and much avoidable suffering. As Heilbroner put it, “there ensues a race to partition the world, with each nation trying to fence off for its investors the richest and most lucrative markets it can seize. Thus Africa becomes a huge market (and a source of cheap raw materials) to be split among the capitalists of England and Germany and Italy and Belgium; Asia becomes a rich pie to be carved up among the Japanese and the Russians and the Dutch. India becomes a dumping ground for British industry, and China becomes an India for Japan. Imperialism thus paves the way to war … through a sordid process in which capitalist nations compete for outlets for their unemployed wealth.” (197). While most economists avoided looking deeply into Hobson’s conclusions, Marxists embraced it with much enthusiasm. A reason why it was popular for many individuals was that it did have hope for a better future: Hobson believed “that rival imperialism might arrange a kind of final settlement of the world and exist peaceably side by side on a live-and-let-live basis.” (198). The Marxists viewed Hobson’s theory as the ultimate indictment of capitalism, as they saw it as an attempt to make the rich even richer by adding victims to the systems of capitalism by expansion and by subsequently exploiting them by using them for cheap (or forced, in many cases) labor. As the Soviet intellectual Bukharin (who was executed by Stalin later on after a show trial) wrote in the Third International in 1928, “imperialism is decaying, dying capitalism. It is the last state of capitalist development as a whole; it is the onset of the socialist world revolution.” (199). When it comes to imperialism, it decreased in prevalence and people’s opinions worsened regarding it following WWII. While foreign intervention and even domination still exists today, it’s usually done not for the sake of profit, but for political control. Hobson died in 1940. A chief economist of the age was Alfred Marshall, who focused on how (if) the market self-corrects itself. He taught John Maynard Keynes and was an esteemed teacher. He published Principles of Economics that involves logic, mathematics, and clear examples, making it detailed yet largely accessible. Marshall said that time changes everything and that economics constantly changes due to fluctuations in supply and demand. It should be noted that Marshall was very compassionate in his writing: “A genuine concern for the laboring poor, for the ‘cringing wretches’ he noted on his trips to the London slums, for economics as a tool for social betterment—all this was inextricably woven into his book. So, too, it should be noted, was an appraisal of the future that cautioned against succumbing to the ‘beautiful pictures of life, as it might be under institutions which [the imagination] constructs easily,’ coupled with hopes that the attitudes of the rich were capable of turning toward ‘chivalry,’ to ‘help the tax-gatherer … remove the worst evils of poverty from the land.’” (208-9). Marshall stated that the utility of money differs for different individuals (a $20 bill makes a larger difference in the life of someone struggling with poverty than a millionaire) and that economics involves every expenditure, including the social life of people. The latter represents a turning away from political economy, as Marshall is mostly interested in mathematics, not social relations. In the big picture, “while … Marshall and his colleagues were refining their delicate mechanism of equilibrium, a few unorthodox dissenters were insisting that it was not equilibrium but change—violent change—that characterized the real world and properly formed the subject for economic inquiry. War and revolution and depression and social tension were to their minds the basic problems for economic scrutiny—not equilibrium and the nice processes of adjustment of a stable textbook society … The complacency of the official world was not merely a rueful commentary on the times; it was an intellectual tragedy of the first order. For had the academicians paid attention to the underworld, had Alfred Marshall possessed the disturbing vision of a Hobson or Edgeworth, the sense of social wrong of a Henry George, the great catastrophe of the twentieth century might not have burst upon a world utterly unprepared for radical social change. It teaches us, in retrospect, that ideas, however heretical, cannot safely be ignored—least of all by those whose interests are, in the best sense of that misused word, conservative.” (211-2).

Thorstein Veblen was an economist in America who lived when capitalism was taken too far (it still is) in America, as America’s belief in the rugged individualist encouraged people to display their potentially obscene amounts of wealth. At that point in time capitalists resorted to violence and kidnapping to acquire advantages, seeing how being a capitalist is like fighting in a war. Veblen as a person enjoyed his own company, seeing how he held himself apart from the society he found himself in, causing him to have basically no friends. His views regarding the world was flexible but unradical. He was also an eccentric: “He refused to have a telephone, kept his books stacked along the wall in their original packing cases, and saw no sense in daily making up the beds; the covers were thrown back in the morning and pulled up again at night. Lazy, he allowed the dishes to accumulate until the cupboard was bare and then washed the whole messy heap by turning the hose on them. Taciturn, he would sit for hours in silence when all his visitors were eager to hear his pronouncements. A flouter of convention, he gave all his students the same grade, regardless of their work, but when one student needed a higher mark to qualify for a scholarship, Veblen gladly changed a C to an A.” (219). Veblen’s writing style was descriptive, precise, and exact. He focused heavily on why things were the way they were, and tried to dissect society for what he felt it really was. When he went to Carleton College Academy he fell in love with the niece of the president of the college, Ellen Rolfe. Their marriage was tumultuous and they didn't really get along, though they were both intellectually gifted: “Veblen was hardly faithful to Ellen and she was to leave him again and again, sometimes for his indiscretions, sometimes for the cruelty with which he treated her, sometimes out of the sheer frustration of trying to read an inscrutable and walled-off mind. For many years, however, Veblen himself would seek a rapprochement, coming to her house in the woods unannounced, with a black stocking dangling from his hand and inquiring, ‘Does this garment belong to you, Madam?’” (223). Veblen throughout his life was a voracious reader and studied everything he could get his hands on. After getting his Ph.D. from Yale, he returned home due to being sick with malaria and having repeatedly bad luck. In fact, his luck was so bad that he spent years doing nothing but reading, and only at the age of thirty-four became a faculty member of the University of Chicago. Veblen was famous for his learning and was quite sassy, seeing that he was unflinchingly honest in his teaching, though his eccentricity also appeared there, as he had a tendency to be so boring and dry that most students would leave. He eventually left the University of Chicago after fourteen years due to his promiscuity and he published his classic The Theory of the Leisure Class when he was forty-two. The book stated that while most people are struggling to survive, the rich (the leisure class) show off their position by displaying their wealth in whatever way possible. Heilbroner adds that it was a bestseller, and that “No wonder it excited attention, for never was a book of sober analysis written with such pungency. One picked it up at random to chuckle over its wicked insights, its barbed phrases, and its corrosive view of society in which elements of ridiculousness, cruelty, and barbarousness nestled in close juxtaposition with things taken for granted and worn smooth with custom and careless handling.” (228). Veblen viewed the current state of humankind in a dismal way, as he believed that modern humans are still savages at heart, seeing how they are eager to compete and attack each other and how the rich express their aggression by seizing resources from the poor. “The leisure class … [desired] the predatory seizure of goods without work. It did not, of course, any longer seek for booty or women; that barbaric it was no more. But it sought for money, and the accumulation of money and its lavish or subtle display became the modern-day counterpart of scalps hanging on one’s tepee. Not only was the leisure class still following the old predatory pattern, but it was upheld by the old attitudes of admiration for personal strength. In the eyes of society, the members of the leisure class were still the more warlike and more fearsome members of society … Everyone … sought through the conspicuous expenditure of money—indeed through its conspicuous waste—to demonstrate his predatory prowess.” (232). Indeed, Veblen’s fantastic observation can still be seen today, as hard labor is somehow seen as undesirable while office work is generally viewed in a better light. Veblen’s belief that humans are still very barbaric elegantly answers Marx’s question on when the proletariat will rebel: they won’t because they have the same attitude towards competition, domination, and wealth as the capitalists. “If Marx’s view was right … and the proletariat was irreconcilably and diametrically opposed to the capitalist, what prevented the revolution from breaking out at once? Veblen provides an answer. The lower classes are not at swords’ points with the upper; they are bound up with them by … common attitudes. The workers do not seek to displace their managers; they seek to emulate them. They themselves acquiesce in the general judgment that the work they do is somehow less ‘dignified’ than the work of their masters, and their goal is not to rid themselves of a superior class but to climb up to it. In the theory of the leisure class lies the kernel of a theory of social stability.” (233).

Veblen, as demonstrated above, viewed the economy as akin to a machine. Thus, he viewed businesspeople as components of society that tried to disrupt the economy, seeing how they produce nothing of value while attacking each other, an opinion espoused in Business Enterprise. This is further supported by how he lived in the time where Robber Barons dominated companies. Needless to say, Veblen had a very low view of businesspeople. When it comes to his personal life, his wife left him in 1911, and Heilbroner interestingly notes, “once when Ellen thought that she was pregnant, Veblen sent her home in a panic. He considered himself totally unfit to be a father and rationalized his fears with anthropological arguments on the unimportance of the male in the household.” (241). Veblen moved in with Davenport, an economist whom he enjoyed a somewhat good relationship with. While he stayed with Davenport he published The Higher Learning in America, a book that viciously yet realistically criticized American universities and how those who went there frequently didn't learn but focused on acquiring power through varying means. In fact, the book was so provocative that he wanted to name it “A Study in Total Depravity,” though he eventually decided against it. He married his second wife in 1914, though it ended in disaster like his first marriage: she suffered from delusions of persecution and had to be committed to an institution. He lived in even greater solitude for the rest of his life and perished a few months before the Great Depression struck the world. His will asked for his body to be cremated and unceremoniously disposed of, which did happen once he died. One of Veblen’s main impacts was his interest in industrial machines and the rise of technology and science, as he believed they would correct much of the irrationality and useless expenditure of human society. This belief of his is very relevant today, seeing the potential of AI (right now, only narrow AI—later, general AI, and, if possible, superintelligent AI, which will effectively make all humans obsolete, regardless of their education and profession). The economist Wesley Clair Mitchell, a student of Veblen, wrote the following of him: “‘There was the disturbing influence of Thorstein Veblen—that visitor from another world who dissected the current commonplaces which the student had unconsciously acquired, as if the most familiar of his daily thoughts were the curious products wrought in him by outside forces. No other such emancipator of the mind from the subtle tyranny of circumstance has been known in social science, and no other such enlarger of the realm of inquiry.’” (246-7). Of course, this is seen in how Veblen was an extremely rationalistic, explanation-driven, and logical individual. The next economist discussed is John Maynard Keynes, who is famous for Keynesian economics and of his explanation of why the Great Depression occurred. Before the Great Depression struck, there was the Roaring Twenties, an age where prosperity seemed to be within everyone’s reach. Times seemed to be so good and the economy seemed to be so prosperous that most people believed in a stable and great future: they ignored the fact that much of the wealth was built on nothing but speculation. When the Great Depression finally occurred, the bubble’s burst couldn’t have been more violent: on Black Tuesday “brokers wept and tore their collars; they watched stupefied as immense fortunes melted like spun sugar; they shouted themselves hoarse trying to attract the attention of a buyer. The grim jokes of the period speak for themselves: it was said that with every share of Goldman Sachs you got a complimentary revolver, and that when you booked a hotel room the clerk inquired, ‘For sleeping or jumping?’ … In two insane months the market lost all the ground it had gained in two manic years; $40 billion of values simply disappeared … In retrospect it was inevitable. The stock market had been built on a honeycomb of loans that could bear just so much strain and no more. And more than that, there were shaky timbers and rotten wood in the foundation which propped up the magnificent show of prosperity.” (250). The Great Depression caused millions of people to become unemployed, and it is possible that at its peak almost a quarter of Americans were jobless. Instead of taking any kind of large action, the government for years did nothing, which only exacerbated the seriousness of the situation and made people lose faith in it. As Heilbroner wrote, “In the nation as a whole, residential construction fell by 95 percent. Nine million savings accounts were lost. Eighty-five thousand businesses failed. The national volume of salaries dwindled 40 percent; dividends 56 percent; wages 60 percent. And the worst of it, the most depressing aspect of the Great Depression, was that there seemed to be no end to it, no turning point, no relief. In 1930, the nation manfully whistled ‘Happy Days Are Here Again,’ but the national income precipitously fell from $87 billion to $75 billion. In 1931 the country sang ‘I’ve Got Five Dollars’; meanwhile its income plummeted to $59 million. In 1932 the song was grimmer: ‘Brother, Can You Spare a Dime?’—national income had dwindled to a miserable $42 billion. By 1933 the nation was virtually prostrate. The income of the country was down to $39 billion. Over half the prosperity of only four years back had vanished without a trace; the average standard of living was back where it had been twenty years before … 14 million unemployed” (251-2).

The millions of unemployed people, though not working, needed to be fed, causing massive bread lines to be created. John Maynard Keynes became very important. As a person, he had a fantastically excellent life and performed a huge variety of achievements: “He had … written a most recondite book on mathematical probability, a book that Bertrand Russell had declared ‘impossible to praise too highly’; then he had gone on to match his skill in abstruse logic with a flair for making money—he accumulated £500,000 by … dealing in international currencies and commodities. More impressive yet, he had written much of his mathematics treatise … while engaged in government service, and he piled up his private wealth by applying himself for only half an hour a day while still abed … He managed to be simultaneously the darling of the Bloomsbury set, the cluster of Britain’s most avant-garde intellectual brilliants, and also the chairman of a life insurance company … He collected modern art … he was a classicist with the finest private collection of Newton’s writings in the world. He ran a theater, and he came to be a Director of the Bank of England. He knew Roosevelt and Churchill and also Bernard Shaw and Pablo Picasso … And he once claimed that he had but one regret in life—he wished he had drunk more champagne.” (252-3). After doing fantastically and winning many awards in school, he became an official of the India Office and loathed the job, as he found it to be boring, but published a book by turning to his experience titled Indian Currency and Finance. When WWI ended, he called the peace that was bought by the Treaty of Versaille nothing more than victor’s justice, which was correct, seeing how Germany had to accept all the blame and pay exorbitant amounts of war reparations. Keynes published The Economic Consequences of the Peace vehemently criticizing the treaty, and he became famous because of it. In his book he warned that Europe was already in shambles and that many are going to remain unemployed and would subsequently starve to death if the treaty is adopted, potentially causing European civilization to degenerate if not fall into anarchy (which was chillingly true in some regards: Germany turned to Fascism and Hitler primarily due to financial difficulties during the Great Depression). Keynes later married Lytton Strachey, an accomplished ballerina. He later published Treatise on Probability, the Tract on Monetary Reform, and the Treatise on Money. Keynes brought into the popular vision the concept of the business cycle with its recessions, peaks, recessions, and troughs, making him an extremely important figure in economic history. Keynes believed that a constant flow of income is absolutely essential to the health of the economy, as wealth stagnates (sounds familiar?) when not invested. This explained why the Great Depression seemingly saw no end: the government didn't implement any large measure to cause income to frequently change hands. This is best seen in the utter absence of certain kinds of welfare and stimuli, which only caused the poor to struggle more and the rich to continue saving whatever wealth survived the initial fallout. Keynes soon published The General Theory of Employment, Interest and Money, a book that relied heavily on obscure terms like the Aggregate Supply Function and their correspondingly outlandish (to most people, at least) variables. This book stated that the economy is never self-correcting, and that situations only change when the behavior of people and their relationship to the economy changes (this concept is known as that of “animal spirits,” seeing how people’s investments and hopes in the future are frequently founded largely on emotion, not reason and deliberation). Thus, this book had a terrifying implication: the economy could remain in a depression or recession indefinitely if nothing changes and the government takes no action. Keynes stated that the solution lay in government expenditures, as people needed to be given economic aid in order to invest, not merely to survive. He met President Roosevelt and the Hundred Days of the New Deal, a period of many welfare reforms, was soon enacted, largely inspired by Keynes, subsequently giving rise to the term “Keynesian economics,” or economic policies that try to rectify an inopportune situation by focusing on the government’s policies. Keynes believed that the government should get involved in a crisis when it’s obvious that work needs to be done: otherwise, it should stay out of the affairs of the economy. Following the logic of Keynesian economics, “if investment could not be directly stimulated, why then, at least consumption could. While investment was the capricious element in the system, consumption provided the great floor of economic activity; hence public works projects were thought to attack the problem with a two-edged sword: by directly helping to sustain the buying power of the otherwise unemployed and by leading the way for a resumption of private business expansion.” (275). When the government listened to Keynes, they increased their total spending, causing private investment to flourish. However, unemployment still lasted, seeing how at least 9 million people were still jobless.

Heilbroner states that the reason unemployment wasn’t largely eradicated was due to the policies not being radical enough, seeing that when the government spent a massive amount of money ($103 billion) during WWII, unemployment was brought down from a high level to its usual degree. Another reason why Keynesian economics didn't work too well was that business saw government intervention in a negative light, causing them to shrink away from receiving much-needed aid. Regardless, Keynes’s policies had a massive effect on the American economy, as certain symptoms of the Great Depression decreased in their severity, though they still unfortunately remained. Keynes was an economic conservative, seeing how he criticized Communism and genuinely believed that when capitalism is perfected unemployment can be rendered largely extinct. In 1937 Keynes suffered a heart attack that prevented him from living a lifestyle of the same intensity as before, though he still did a large variety and number of tasks. When WWII struck, he wrote How to Pay for the War, in which he encouraged the concept of deferred savings: “The plan was simple—a portion of every wage earner’s pay would automatically be invested in government bonds that would not be available for redemption until after the war. Then, just when consumer buying would again be needed, the savings certificates could be cashed.” (281). Another reason Keynes advocated for savings was that if a large amount of wages would be given to many workers, there could see a rise in inflation, as money will have to be printed out in huge quantities to ensure that there exists a fair amount that moves around fluidly in the system. And since inflation decreases the average value of a currency, this would hurt the preciousness of the American dollar, which is yet another reason why Keynes desired compulsory saving during WWII. His proposal for such saving wasn’t undertaken by the government due to it being too innovative. Keynes was involved in the economy of Britain during WWII, and he attended and heavily influenced the Bretton Woods Conference. In 1946 Keynes died, and was paid honors by many countries. He wrote the following regarding the ideal economist: “The study of economics does not seem to require any specialized gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy or pure science? An easy subject, at which very few excel! The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought … He must be purposeful and disinterested … as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.” (285). Keynesian economics was practiced by the United States from the 1940s and 1950s and began losing credit in the 1960s. By the 1980s it wasn’t very popular anymore. The next economist discussed is Joseph Schumpeter, who, like Keynes, liked capitalism, though he believed that capitalism is self-regulating and is capable of growing over long periods of time. Joseph Alois Schumpeter was an aristocrat who published The Theory of Economic Development at the age of twenty-seven in 1942. This book stated that if capitalism was to remain unmoving and unchanging, capitalists would receive no profits. He maintained that entrepreneurs were the ones keeping capitalism dynamic and that they make profits due to how they cause the economy to grow. Schumpeter debated many Marxist scholars and was against Communism, like many others. He stated that capitalism was a financial though not a social success, as things like profits matter much more than virtues like kindness and compassion, which causes capitalism to bring about its own downfall. To repeat, Schumpeter’s version of this narrative is not that the proletariat rebel, but that capitalism causes the members of society to use their rationality to honestly examine their situation, making them adopt socialism, though this one is “benign, bureaucratic, planned” (303).

Heilbroner writes of the end of worldly philosophy. To clarify, he states that societies are continuing to change which makes the future impossible to predict. He maintains that modern society is unique in how the accumulation of wealth is a phenomenon encouraged for everyone, whereas in the past only the wealthy participated in it. Furthermore, capitalism is made up of competition and caters to consumers so much so that it sets itself apart. Third, capitalism is controlled by both public and private entities, as it answers to both the masses in their choices of consumption as well as private corporations and the government. When it comes to economics as a field, it should be noted that it, unlike science, doesn’t have absolute rules, making it difficult to be seen as a scientific subject. Adding to this is that the players in economics are people who are very irrational, which is further compounded by class divisions that are political in nature, as humans are highly competitive and hierarchic animals. Heilbroner then poses future problems that countries may face due to economics: “it is all too likely that any prospective socialism, especially in the less developed areas where its advent is most likely, will again develop tendencies for political megalomania, bureaucratic inertia, and ideological intolerance. To be sure, these strains and stresses will exert their destructive force on capitalist societies as well. Ecological dangers, foremost among them global warming, will bring not only the need to contain the damage of climatic change in the poor nations, but the even more difficult challenge of reducing climate-warming emissions in the richer nations that are their source. Add to this the alarming spread of nuclear weaponry on the one hand, and ethnic, racial, and religious hatreds on the other, and the stage is surely set for problems and tensions from which the capitalist powers cannot be insulated. Finally, there is the fast-growing problem of a globalized economy … In sum, here is a prospect as threatening if not as desperate, for the rich capitalist world as that which confronts the poor precapitalist or presocialist one.” (319). The importance of economics is to be noted, as it allows people to come up with ideas regarding the future which can lead to wise and prudent decisions. Heilbroner writes of the situation in which he wrote the book (which remains mostly true today): “we have a considerable variety of capitalist societies despite the general similarity of their economies—witness the gulf between the socially, if not always economically, successful capitalisms of Scandinavia and Europe, and the economically successful but socially disastrous capitalism of the United States: consider, for example, that executive compensation in the top corporations in the United States is twice that of France or Germany, whereas the upward mobility of the American poor is half that of those countries and but a third that of Sweden. The first comparison points to a culture of greed; the second to one of social indifference. The combination hardly suggests the institutional adaptability that will be needed by any nation seeking to minimize the strains of the decades ahead, much less serve as a model for world leadership” (320). Heilbroner states that more than just introspection and careful analysis is needed to better the world: actions that have been deliberated must be acted upon. In his own words, “Economic analysis, by itself, cannot provide a torch that lights our way into the future, but economic vision could become the source of an awareness of ways by which a capitalist structure can broaden its motivations, increase its flexibility, and develop its social responsibility. In a word, in this time of foreseeable stress, the purposeful end of the worldly philosophy should be to develop a new awareness of the need for, and the possibilities of, socially as well as economically successful capitalism … Economics alone will not guide a country that has no vital leadership, but leadership will lack for clear directions without the inspiration of an enlightened as well as an enlarged self-definition of economics. Assuredly such a new economics will incorporate knowledge from the domains of other branches of social inquiry, but if the usefulness of the worldly philosophy of the twenty-first century is to match that of the nineteenth and early twentieth, it will need to be both deepened and enlarged, above all compared to the desiccated residue with which we are left today” (320-1). The book ends with a list of books and readings that Heilbroner provides for the audience.

Personal thoughts:

The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers by Robert L. Heilbroner is a detailed, concise, descriptive, powerful, and entertaining book that provides an excellent overview of modern economic thought. Heilbroner takes great care to illustrate the thinkers who influenced economics as a field, and I greatly appreciate how he tries to portray them as individuals by explaining their lives, relationships, and personal characteristics. Heilbroner’s language is easy to understand and his list of readings at the end of the book is to be taken advantage of if one desires a maximum understanding of the subject. Economics is, at the end of the day, an extremely important field, seeing how it affects the lives of the vast majority of people and even a large number of sentient beings on the planet (seen in environmental degradation and the atrocious continuation of factory farming and the dairy and egg industries). Heilbroner’s remarks on economic subjects and of the future of economics is very helpful, seeing how he ties the past with the present and future. I highly recommend The Worldly Philosophers to anyone interested in historical figures, economics, social trends, human nature, the concept of interconnectedness, and the present and potential future.

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