Hostname: page-component-cd9895bd7-8ctnn Total loading time: 0 Render date: 2024-12-28T03:05:04.701Z Has data issue: false hasContentIssue false
  • English
  • Français

Economic Growth, Coercion, and Freedom*

Published online by Cambridge University Press:  18 July 2011

Karl de Schweinitz Jr
Karl de Schweinitz Jr
Affiliation:
Northwestern University
Get access

Extract

The flood of attention that underdeveloped economies have received in recent years has revived interest in the normative questions of political economy. For the society that stands on the threshold of development apparently can choose among economic systems with different normative properties, each one of which claims enthusiastic followers. One such question concerns the impact of economic organization on freedom. Does a centrally administered economy restrict freedom by achieving its objectives through coercive means? Is the market economy fundamental to free institutions?.

Type
Research Article
Information
World Politics , Volume 9 , Issue 2 , January 1957 , pp. 166 - 192
Copyright
Copyright © Trustees of Princeton University 1957

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 There are, however, difficulties with the concept of growth. As an indicator of “welfare,” it is by no means unambiguous. Insofar as growth has repercussions on the distribution of income, the well-known problems raised by the impossibility of making interpersonal comparisons of utility plague the analyst. Moreover, even if one is only concerned with the measurement of aggregate income, irrespective of its influence on “welfare,” it is not always possible to tell when an “aggregate” increases, given a change in the composition of output and a change in price ratios. Here, however, we are concerned with economic growth as a process rather than as a measure of “economic welfare” or material wealth.

2 Hidden unemployment refers to a situation in which resources are organized so inefficiently that the marginal product of labor in some occupations is zero, or less than zero. Thus it is possible to withdraw labor from these occupations without diminishing total output. Employing this reserve of labor in new occupations will be cost less in the same sense that the employment of unemployed workers is costless. This situation is alleged to be not uncommon in underdeveloped agricultural economies.

3 See, for example, Ashton, T. S., The Industrial Revolution, 1760–1830, London, 1948, pp. 58–93Google Scholar; Barbara, and Hammond, J. L., The Rise of Modern Industry, London, 1926, pp. 66–189Google Scholar; Mantoux, Paul, The Industrial Revolution in the Eighteenth Century, 2nd ed., trans. by Vernon, Marjorie, London, 1926, pp. 193–346Google Scholar; Bowden, Witt, Industrial Society in England Towards the End of the Eighteenth Century, New York, 1925, pp. 70–135Google Scholar; Toynbee, Arnold, Lectures on the Industrial Revolution of the 18th Century in England, London, 1908, pp. 7–34, 64–73.Google Scholar

4 Professor Earl Hamilton, for example, believes “that a considerable lag of wages behind prices, hitherto an unnoticed factor, facilitated the Industrial Revolution, during the critical period” (“Prices, Wages, and the Industrial Revolution,” Studies in Economics and Industrial Relations, Philadelphia, 1941, p. 100). Although Professor Kuznets is reluctant to commit himself because of the inadequacy of the empirical evidence, he says, “I would place the early phase in which income inequality might have been widening from about 1780 to 1850 in England” (“Economic Growth and Income Inequality,” American Economic Review, XLV, March 1955, p. 19). As one might expect, John Maynard Keynes felt no compunctions about asserting his position: “The capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of ‘saving’ became nine-tendis of virtue and the growth of the cake the object of true religion” (The Economic Consequences of the Peace, New York, 1920, p. 20). On the other hand, Mantoux was quite unwilling to generalize on the basis of the available evidence. “But, in our opinion, it would be rash to attempt to draw a general price curve on the basis of such approximate figures, as it could only be done at the expense of scientific honesty; and a fortiori an attempt to make any mathematical comparison between the movement of prices and wages could only result in mystification” (toux, Man, op. cit., p. 439).Google Scholar

5 Cf. Ashton, T., Iron and Steel in the Industrial Revolution, London, 1924, pp. 226–31Google Scholar; Unwin, George, Introduction to Daniels, G. W., The Early English Cotton Industry, London, 1920, pp. xxix–xxxi.Google Scholar

6 Engels, Frederick, The Condition of the Working-Class in England in 1844, trans. by Wischnewetzky, Florence K., London, 1892, pp. 3–4.Google Scholar

7 Cf. Ashton, , The Industrial Revolution, pp. 25–26Google Scholar; Barbara, and Hammond, J. L., The Vittage Labourer, 1760–1832, London, 1911, pp. 43–96Google Scholar; Hasbach, W., A History of the English Agricultural Labourer, trans. by Kenyon, Ruth, London, 1920, pp. 103–47Google Scholar; Johnson, Ardmr H., The Disappearance of the Small Landowner, Oxford, 1909, pp. 83–106Google Scholar; Slater, Gilbert, The English Peasantry and the Enclosure of Common Fields, London, 1907, pp. 91–116.Google Scholar

8 This point of view is presented most persuasively by Ashton, T. S. in “The Standard of Life of the Workers in England, 1790–1830,” Capitalism and the Historians, ed. by Hayek, F. A., Chicago, 1954, pp. 127–59.Google Scholar

9 Cf. Rostow, W. W., British Economy of the Nineteenth Century, London, 1948, pp. 17–19.Google Scholar

10 See Ure, Andrew, The Philosophy of Manufactures, London, 1835.Google Scholar

11 Baykov, A., “The Economic Development of Russia,” Economic History Review, 2nd series, IV (December 1954), pp. 137–49.CrossRefGoogle Scholar

12 The experience of the Soviet Union with capital development has prompted Maurice Dobb to make some critical remarks about neo-classical notions of economic welfare. “The notion that successful development from one economic situation, with its given combination of resources and configuration of demand, to another might be a more crucial test of the contribution made by an economic system to human welfare than the attainment of perfect equilibrium in any given situation seldom commanded attention. It was as though one were to concentrate on the perfection of instruments whereby the summit of any mountain could be precisely located rather than ascertaining which was the highest mountain in the neighbourhood and which was the quickest way to the top” (Soviet Economic Development Since igiy, New York, 1948, p. 3). More recently, Kenneth Boulding has made the same criticism of welfare economics with a strikingly similar figure of speech. “The preoccupation of welfare economics with the definition of a single optimum may well have done a disservice insofar as it has diverted attention from the critical problems of a developmental dynamics. The problem may well be not how to get close to the top of a molehill, but how to climb down the molehill in order to start up the mountain” (“Welfare Economics,” in A Survey of Contemporary Economics, Vol. II, ed. by Bernard F. Haley, Homewood, 111., 1952, p. 27).

13 Deutscher, Isaac, Soviet Trade Unions, London, 1950, pp. 75–120.Google Scholar