by Bart Schultz
CY/Schultz
February ,
:
Henry Sidgwick: Eye of the Universe
are familiar and those of earlier ages, the more, primê facie, he tends to establish the corresponding independence of the economic science which, pursued with a
view to practice, is primarily concerned to understand the present. (PPE )
Thus, the more effectively the historian demonstrates the inapplicability of
economic analysis to medieval conditions, the more medieval conditions
may appear inapplicable to ours. Progressive history poses such dilemmas
for economics, just as it does for religious doctrine.
Just how successful Sidgwick was in this attempt to fashion a more
eclectic, diversified approach to economic analysis is hard to say. Although
he is sometimes designated one of the two founders of the Cambridge
school of economics – the other of course being Marshall – he is often
treated only glancingly, if at all, in histories of economic theory. Phyllis
Deane, in The New Palgrave, expresses the view of many: “The fact is
that the Principles owed more to the classical tradition of J. S. Mill than
to what contemporaries were then calling the ‘new political economy’
of Jevons and Marshall.” Similarly, Mark Blaug states that “Cairnes’
Leading Principles () and Sidgwick’s Principles () were entirely cast in the old mold,” though he goes on to say that the “dominant view
among English economists in the s and s was that of the Historical
School,” that such historicism “was an indigenous growth, whose roots
go back to Carlyle’s and Ruskin’s protests against the narrow scope of
classical political economy,” and that this “English Methodenstreit” was
finally “put to rest by John Neville Keynes’s Scope and Methods of Political
Economy () and by Marshall’s conciliatory attitude in the Principles
(), by which time the new movement had successfully vanquished
all vestiges of classical economics.” Howey, in the Rise of the Marginal
Utility School, also insists that economists “must add something to and
take something away from hedonism, as ordinarily construed, before it
becomes marginal utility economics. Jevons and Gossen could make the
transformation; Sidgwick never could.”
Scott Gordon, in at least partial contrast, has argued that the “ori-
entation of Marshall’s work to what is today called ‘welfare economics’
was due in part to Sidgwick’s contribution to economic theory and his
connection of it to the philosophy of utilitarianism,” and he also notes
how Edgeworth’s efforts at a science of “hedonometry” were consciously
indebted to Sidgwick. And Blaug actually cites sources that argue that
Sidgwick was the link between Marshall and Pigou’s welfare economics,
P: IJD
cA.xml
CY/Schultz
February ,
:
Colors
as well as noting that the Principles “seems to have been the first to question the traditional idea that technical change is necessarily capital-using.”
Sorting out Sidgwick’s various connections to Marshall, Keynes,
Edgeworth, H. S. Foxwell, P. Wicksteed, and all the other eminent figures
in the history of economics with whom he had close intellectual dealings
would be a very difficult task. This is in part because, as close as this
group may have been in its Oxbridge connections, there was a good deal
of division and conflict among them when it came to the nature and di-
rection of political economy. In fact, as previously noted, once Marshall
became professor of political economy at Cambridge, in , he lost no
time in seeking a hostile confrontation with Sidgwick over his views on
the teaching of economics as part of the Moral Sciences, and much else
besides. Sidgwick’s response, in addition to comparing himself to Clough,
allowed that “not knowing what road is best for humanity to walk in, I
want all roads that claim to be roads to be well made and hedged in”
(M ). Little wonder that Sidgwick thought of his teaching as an effort
at “concentrating fog,” or that the Moral Sciences Board would often
feature Sidgwick v. Marshall.
As far as the direction of teaching economics was concerned, Marshall
was clearly the one in the ascendant. It was Marshall, as much as anyone,
who fought to establish the new discipline of economics, rather than re-
habilitating the old one of political economy. The emphasis on marginal
utility theory, and on formal analysis generally, the increasing mathemati-
cization of the profession, would play no small role in making Sidgwick’s
Principles look antiquated. Thus, a reviewer in The Athenaeum charged that notwithstanding his expression of gratitude to Jevons, “it is doubtful whether Mr. Sidgwick has caught the full bearings of the former’s
fructifying idea of ‘final utility.’ He rejects with Cairnes the application
of mathematical conceptions to economics, ignoring the possibility of a
treatment akin to that of the calculus of variations and dealing with inde-
terminate quantity.”
And yet for all that, one can make a strong case that Sidgwick’s care-
ful distinctions between the science and art of political economy, and his
measured introduction of the inductive, historical side of the methodol-
ogy, did end up shaping the course taken by Marshall and Keynes, both
of whom clearly owed him a great deal. If Marshall would go on to favor
what Sidgwick (like many since) regarded as ill-defined biological analo-
gies, as tools for thinking about the evolution of social systems, he would
P: IJD
cA.xml
CY/Schultz
February ,
:
Henry Sidgwick: Eye of the Universe
also insist on the historical side of his work. For all his differences with
Sidgwick, Marshall’s work, as Ronald Coase has observed, “always em-
phasizes induction, collection and assembly of facts, and plays down what
we would term ‘theory,’ a word which . . . he did not much like when ap-
plied to economics.” Furthermore, J. S. Nicholson, another prominent
economist of this era, would in a survey article in give a notably
generous assessment of Sidgwick’s contribution that linked him directly
to Marshall’s hand-picked Cambridge successor:
Sidgwick showed very clearly that the principle of utility needed serious qualifi-
cations, and in the end, in spite of his thorough-going support of utilitarianism,
he considers ‘only very mild and gentle steps towards the realisation of the social-
istic ideal as at all acceptable in the present state of our knowledge.’ Prof. Pigou’s economy of reference to Sidgwick is even more strange than his reticence regarding Adam Smith. For not
only does the younger writer apply the same general
principle of utility, but the main trend of the argument is the same. Yet Sidgwick’s
name is only mentioned in connexion with one or two points of minor detail.
If Prof. Pigou had really appreciated the work of Sidgwick, he would have been
saved from some unfortunate inconsistencies, and from some appalling lacunae
in his argument.
In the end, Marshall too expressed considerable admiration for
Sidgwick’s work, calling the section in the Principles on the art of po-
litical economy the best thing of its kind in any language.
Now, whatever its failings in formal analysis, Sidgwick’s treatment of the
issues of wealth and value and the “Art” of political economy is extremely
carefully thought out, and he took some pride in the “elaborateness” of his
discussion. He analyzes at great length the difficulties involved in giving
any very precise general content to the basic terms of political economy. As
he conceives it, the basic questions for the theory of production are: “What
are the causes that make the average annual produce per head of a given
community at a given time greater than that of another whose primary
wants are not materially different, or greater than its own produce at a
previous state of history?” and “What are the laws of their operation?”
(PPE ) As for exchange and distribution, the main question is:
‘According to what laws is the new increment of commodities, continually pro-
duced by the combination of the labour and unequally distributed capital (in-
cluding land) of different members of the community, shared among the different
classes of persons who have co-operated in producing it, either by their personal
P: IJD
cA.xml
CY/Schultz
February ,
:
Colors
exertion – bodily or mental – or by allowing others to use their wealth, knowledge,
or other resources?’ . . . Our object is to study the causes of the different extents of command over ‘necessaries and conveniences,’ obtained respectively by different
members of the community, through the complicated system of co-operation by
means of exchange on which the life of modern society depends; and since some
portion of each one’s money income is spent in purchasing not material wealth but
education, professional advice, &c., we must regard these utilities, no less than the material products of industry, as practically ‘distributed’ through the medium of
the money payments that determine the nominal incomes of individuals: and the
laws that govern the exchange values of these immaterial commodities concern us
as much as those regulating the values of material products.
These topic questions are very carefully put, reflecting the numerous
qualifications that Sidgwick introduces in his discussions of the basic
elements of value and wealth, and in his assessments of the various notions
of use value, real value, and exchange value. As he summed up the lengthy
account of just what it would mean to enhance the wealth of a nation:
[I]n studying the Wealth of Nations what we are concerned to know is, Under
what conditions different communities of men, or the same communities at dif-
ferent times, come to be ‘better or worse supplied with all the necessaries and
conveniences for which they have occasion.’ Hence our attention should be con-
centrated upon those directly useful commodities which I have called consumers’
wealth to distinguish them from the instruments and materials which are only
useful and valuable as means of producing other wealth. Again in comparing –
with any aim at precision – the supply of such commodities enjoyed by different
communities, or the same community at different times, we must limit ourselves
to cases in which the primary needs of the persons concerned are not materially
different. Further the durability of a portion of consumers’ wealth must not be
left out of sight in estimating the community’s command over the ‘conveniences’ –
and even the ‘necessaries’ – of life. A man’s house does not the less shelter him
from the elements because it was built in the reign of Elizabeth; and if we ask why
England now is richer than England years ago, a part of the answer must be
that each generation has added somewhat to the stock of such durable wealth as
is not, except accidentally, destroyed in the using.
At the same time . . . this stock of wealth requires continual expenditure of labour upon it in various ways; and it is often convenient to neglect the small
element of inherited consumable commodities and consider society as continually
supplying what it continually consumes, in respect of the comparatively durable
part of its consumers’ wealth no less than of that which is rapidly destroyed
and reproduced. But we must not forget the amount of error involved in this
P: IJD
cA.xml
CY/Schultz
February ,
:
Henry Sidgwick: Eye of the Universe
limitation of view; and we must also bear in mind that carelessness in preserving
what has been produced, and the instability of taste and fashion which impairs
the satisfaction derived from it, tend practically to reduce the available supply of
commodities.
Further; I argued that, in a complete view of the conveniences of life, we ought
to consider along with consumers’ wealth what I have called, for analogy’s sake,
‘consumable service’: and I accordingly propose to extend the terms ‘produce’ and
‘commodities,’ so as to include such services as well as material products. I also
pointed out that, since a portion of wealth consists of books, pictures, microscopes, and other material means of literary, artistic, and scientific culture, and since the utilities embodied in these objects cannot be realised except by persons who have
been more or less elaborately trained, it would be a mistake for us to leave out of
sight the culture that results from this training, and the skill that is acquired and used as a source of immediate enjoyment, as a private person’s skill in painting or
piano-playing. Though we do not call permanent skill and culture, any more than
transient services, by the name of wealth; still, since they resemble wealth in the
two important characteristics of being results of labour and sources of satisfaction, the economist no less than the statesman or the philanthropist must keep them
in view, in contemplating the growth of the resources of refinement and elevation
of life which the progress of civilisation tends to furnish in continually increasing abundance. (PPE )
These last points are essential for appreciating just how qualified
Sidgwick’s account of the importance of political economy really is. For he
admits that it would be hard to extend the usual forms of economic analysis
to cultural life; the “most important changes that have taken place as re-
gards the possession and enjoyment of culture” are quite
different in their
nature and cause from those involved in increasing material wealth. Trying
to squeeze into political economy an explanation of “the varying quality
and abundance of the services of painters, poets, educators, even priests,
would . . . take us into regions very remote from that of political economy
as ordinarily understood.” (PPE ) On the other hand, confining the dis-
cipline to a focus on material commodities seems arbitrary in any number
of ways, and it is important to bear in mind that lots of commodities –
such as railways and telegraphs – do not comport with the image of
durable goods being exchanged from producer to consumer, but instead
create a different infrastructure in which economic life more narrowly
construed takes place. Indeed, Sidgwick is fairly emphatic that questions
of wealth are completely entangled with more basic questions of value.
P: IJD
cA.xml
CY/Schultz
February ,
:
Colors
Thus, Sidgwick is certainly not going to jump to any hasty conclusions
about just when a society is really better off, given all the difficulties
involved in measuring intangible advances in such areas as culture and
science, art and professional services, not to mention all of the difficulties
involved in trying to compare the wealth of a country such as England
with that of countries in very different historical and cultural settings –
say, ancient Greece – in which people had different needs and wants.
In political economy, as in politics, he would often deploy the historical
method in order to demonstrate precisely how difficult it is to make – much
less to draw any lessons from – global comparisons of past and present.
Nor does he think that the notions of value – even Ricardo’s notion of
real value in terms of labor expended – are going to eliminate the vagaries
of political economy. Certainly, he at least appreciated the logic of Jevons’s
contribution in qualitative terms: “as Jevons had admirably explained, the
variations in the relative market values of different articles express and
correspond to variations in the comparative estimates formed by people
