J. Bentham Economics (Benthamism)

Benthamism and Economics, Jeremy Bentham Economic

I regret that I cannot take up in this chapter any of Bentham's other contributions, in other writings, to economics. He made in all a good many substantial ones, and was in his own right an economist of no mean abilities and achievements. His main historic importance, how­ever, is based on his work and intellectual output in other fields already surveyed here; and for all its interest, his work in economics had and has far less importance than that of Ricardo, who became the great authority on economics in and for the circles or receptive public made up of both his own and Bentham's followers. The two men were not by any means in complete agreement on all questions in the field of economics; but they seem never to have discussed their points of dis­agreement, or even paid much attention to each other's writings or opinions in this field. Since Bentham was mainly absorbed in develop­ing his whole, broader system of thought, he left the expressions of his views in economics—a minor part of the total field of his interests —so scattered about in various parts of his writings, generally concerned more or as much with other subjects, that they may scarcely have come to the attention of Ricardo, whose interests were concentrated in eco­nomics only. Ricardo's prestige and influence in all economic discus­sions, throughout the overlapping circles that were his and Bentham's, became so great that on economic questions Bentham's views, when they differed from Ricardo's, got little attention; and apparently Ben­tham himself hardly ventured to argue with Ricardo. In any case, their differences on various special points or questions, though numerous and often significant, were minor as compared with their broad general agreement, as advocates and theorists of a liberal competitive economy and as at once admiring and critical students of Adam Smith's Wealth of Nations. There remains a problem, however, as to why Bentham did not develop the fundamentally different, un-Ricardian theory of value and of all economics, which was logically implied in his pleasure-pain psychology and "felicific calculus," and was to be developed at a later time by the economists who reconstructed their science on the basis of their "utility" concepts. I must say a few words about this problem, before ending this chapter with my final remarks about Benthamism as a whole.

If the view which has been expressed by various writers is accepted, that Bentham's conception of all human behavior as pleasure-maximiz­ing is the both logical and historical source of the conception (in all economic theories built around this) of economic behavior as gain-max­imizing, then it is very difficult to understand Ricardo's, and of course still more Bentham's own, failure to work out the fully and directly hedonistic theory of economic behavior in the same kind of thorough, detailed, and systematic way in which that was done later by the more modern "utility" economists. But in fact the assumption that economic, i.e., business, behavior is or tends to be gain-maximizing, which had been the familiar, accepted, matter-of-course assumption in most eco­nomic theory for centuries before Bentham's time, had its original roots, beyond question I think, not in the hedonistic or any formal psychology, but simply in the common experience of businessmen and observations of their doings by economists, to the effect that business activities are carried on "to make money," and to succeed in their aim must be guided by profit and loss calculations or estimates of comparative, prospective costs and returns. And the costs and returns were usually thought of, not only by businessmen but also by most economic theorists—until long after Ricardo's and Bentham's time—not in the psychological and subjective terms of pain-costs and rewards of pleasure or want-satis­faction, but in objective terms—either monetary, as in the conduct of business itself, or in "real" as opposed to monetary but still objective terms, i.e., as required inputs of labor-time and materials used up in production, and resulting outputs of products (in physical quantities).

Economists learned, fairly early, to go beyond the common way of thinking familiar to businessmen, to the extent of analyzing the pursuit of wealth as the effort to maximize not simply the ratios of money re­ceipts to money costs or outlays, but the ratios of the quantities of goods (desired ones of course) obtained, to the quantities of labor-time and material resources expended to produce them or exchanged for them. The quantities-of-labor-and-goods calculus went a step nearer to the "ultimates" involved than the pure and simple money-expenses-and-returns calculus, but still was concerned with physical or objective, not psychological or subjective quantities, and thus was not in the same realm of discourse with Bentham's "felicific calculus." And the latter as used by its author was not a new tool for economics, set up to super­sede the former in that field, but a way of generalizing and adapting the economic conception of rational or most useful behavior, for use in analyzing and reforming or improving the other departments of human life and affairs. The idea of all intelligent living as happiness-maximiz­ing, though itself very ancient in the literature of philosophy, psychol­ogy, and ethics, was never I think the source of the more or less equally ancient idea of business behavior as wealth-maximizing. But in this epoch and partly through Bentham's work, it acquired or borrowed from the latter's already more precise elaborations and their common currency, a new, apparent precision and very widespread appeal or

persuasiveness, within the culture of modern capitalism. Economic ife as the pursuit of wealth was already becoming rationally organized in efforts to maximize the economic outputs, incomes, and wealth of all men and society; let all the rest of life or the pursuit of happiness become more rationally organized also, in appropriate institutions and behavior in all fields, to maximize the happiness of all men individu­ally and collectively! But the full working out of the repercussion of the hedonistic theory of life in its entirety, upon economic theory as the special theory of one part of life, was a later development, and was not much more largely or nearly carried out or anticipated in Bentham's own work than in Ricardo's.

No doubt another part of the explanation of that fact is that neither Ricardo's nor Bentham's "calculus," or anything of the kind then widely known or available within either economics or the other social, moral, or human "sciences," had any benefit of or connection with the branch of higher mathematics which is now called "calculus," and which came to play an essential role in the development of the modern economic "utility analysis" and all modern economic theory. Ricardo and Bentham came very close to the way or ways of thinking about their subject matters which needed the mathematical tool of "calculus" in the technical sense for easy, full, and clear expression and develop­ment of the ideas and reasonings involved. Ricardo's "law of diminish­ing returns" of additional produce from use of additional labor and capital on given land pointed toward modern "mathematical econom­ics," and so did Bentham's anticipation, already noticed above, of the "law of diminishing utility" of the modern "utility economists"—yet neither man had any of the mathematical equipment which would have enabled him to work out fully all the latent implications of his lines of thought. It was their colleague Malthus, to be taken up in the next chapter, who predicted that "fluxions," as calculus was then called, would some day come into use in economic science and help to solve its problems, as it long had been solving those in the physical sciences. Bentham's lack of this set of conceptual tools no doubt helps to explain why he did not transform economic theory, or reject Ricardo's labor-and-goods approach and replace it with a wants-and-satisfactions or "util­ity" approach, as the later utility economists were to do. His crude or rudimentary "felicific calculus"—a mere "table" of most common (as he thought) kinds or sources of human "pleasures" and "pains," and the features and relationships likely to make them relatively great or small in magnitude—was hardly a tool that he could have used to do the work of reconstructing economic theory. Yet it is hard to be confi­dent of the validity or great importance of this explanation, in view of the fact that among the founders of the modern utility economics, while Jevons, Walras, and Marshall (in different degrees) all had and used the mathematical equipment which Bentham lacked, the no less original and effective and important "Austrian School" of Menger and his followers did a full and thorough job of the same kind without any such equipment. Hence I am the more inclined to stress mainly the Other point which I first made above—that in Bentham's time and world economic theory was still firmly on its own mainly objective, not subjective, basis, and seemed to be doing all right on that basis. Besides, Bentham's main interests lay in other directions and did not lead him to think of analyzing economic life as such in terms of pain-costs and returns of want-satisfaction instead of in the Ricardian terms of physically required and measured man-hours of work, and physical amounts of products produced and exchanged for each other in the markets.

Nor was it, to my mind, wholly regrettable or a defect of his work that he did not do this; nor (later on) wholly a gain or an unalloyed gain for economics when others did do what he failed to do. Economics was already, in Bentham's time, a bit more advanced toward the status of an "exact science" than were the other "moral sciences" equally within the wide field of his interests; and was so partly because it (economics) had available to it and was working with a more nearly sufficient body of manageable, objective, and thus empirically measura­ble data. Psychology, ethics, education, jurisprudence, and politics perforce had, and have, to work largely with their tenuous, elusive, unmeasurable, subjective data, and Bentham's efforts to reduce them to exact sciences with the aid of his "felicific calculus" were in an essential part illusory and productive of much nonsense.

I think the later "intellectual revolution" in economic theory, which brought the subjective elements of its subject matter into the exclusive foreground of attention and pushed the objective elements, focused on in Ricardo's thought, into a neglected background, went too far and did harm as well as good to economic theory. But of course the early belief in the full sufficiency of the objective elements and data alone, or the virtually physical-science character of economic science, had its large component of illusion also. Not even economics can be wholly an exact science, precisely because as a human science it too has in its subject matter an essential part which is subjective and beyond the reach of truly scientific observation, measurement, description, and analysis. The early tendency to pay little attention to this part was a mistake, but so was the later belief that it—this subjective terrain— could be conquered by and for exact science, and made the basic part of strictly scientific economics. To these questions, however, we shall return in future chapters.

There is perhaps no great need to say much more, in concluding this chapter about Benthamism, than I have said already. In spite of all the great intellectual weaknesses in it, which I have pointed out, it was on the whole in its time and world a very "useful," comprehensive, at least superficially clear and cogent, and constructive vision of the possibilities of, and the lines of effort needed to achieve, a rationally organized and functioning liberal society of free, enlightened seekers of more wealth and happiness, cooperating to attain them by building and operating a democratic state, a rational legal order, and a free market economy. The tinge of Utopian optimism in the creed was not much more pronounced than was needed to make it, as it was, widely and highly effective or influential in spurring men to confident, hopeful, and zestful efforts along the lines it pointed out. At the same time it contained a good measure of down-to-earth "realism." Its recognition and acceptance of (most) men's simple, selfish, worldly aims or pro­pensities as facts which education and statecraft or public life must take as data and try to cope with, and its stress on the need for a social order designed and fitted to utilize these psychological and social forces and make them as far as possible conducive to the common welfare, allevi­ated the Utopian optimism and directed the efforts inspired by that, on largely sound and truly useful lines.

Yet the entire structure of thought or doctrine was superficial and glaringly deficient at important points, and one can sympathize to no small extent with the contempt expressed for it a few decades later by Carlyle, Ruskin, and others. The common association or linkage at the time, in the public mind, of all of Benthamism with the "classical"—mainly Ricardian—"political economy" has or had some paradoxical aspects not yet noticed here, but to be taken up hereafter. One may be mentioned now: the Benthamite vision as a whole was optimistic, not to say Utopian, but the Malthusian-and-Ricardian economics as we shall see in the next three chapters had in it a strong strain or strand of pessimism about England's, and every country's, long-range economic and general future or potentialities. But this as we shall see was not quite as grim or unalleviated, really, as it often has been thought to be; and in many minds at the time the two bodies of thought or doctrine seem to have blended well and in some ways mitigated each other's defects. The "classical" economics was on the whole I think a more solid "science," more nearly deserving that designation, than the very much broader and (despite its pretended precision) vaguer system of thought about everything of Bentham and his followers. But the latter in its way expressed the wider context of ideals and assumptions within which the "classical" theory of the "laws" of the economy In fact conceived and can best be understood; and I go on now to ask of describing the growth and elements of that special economic and helping the reader to understand it.