Sismondi on Theory and Method

Sismondi on Theory and Method

Sismondi's disagreement with classical economics was based less on theoretical principles than on its method, aims, and conclusions. While Nassau Senior strove to remove all normative elements from economics so as to render it scientific, Sismondi viewed economics as a subset of the science of government. Thus while Saint-Simon was willing to replace government with industrial administration, Sismondi viewed government and economics as inseparable. To Sismondi, economics was a moral science: "The physical well-being of man, insofar as it can be the work of his government, is the object of political economy" (Nouveaux principes, I, p. 8). A science that concerns itself solely with the means of increasing wealth without studying the purpose of such wealth was, in Sismondi's view, a "false science."

In a subtle attack on the theory of self-interest, Sismondi pointed out that in the struggle to achieve personal gain, not every individual force is equal. Hence, "Injustice can often triumph... being backed by public force which is believed to be impartial, but which, in fact, without examining the cause, al­ways places itself on the side of the stronger" (Nouveaux principes, I, p. 408). Furthermore, Sismondi argued that in the social arena, exercise of individual self-interest does not always coincide with the general interest. His poignant example illustrating this point seems especially relevant today:

It is to the interest of one to rob his neighbor, and it is to the interest of the latter to let him do it, if he has a weapon in his hand, in order not to be killed; but it is not to the interest of society that one should use force and the other should give in. The entire social organization presents to us at every step a similar compulsion, not al­ways with the same sort of violence, but always with the same danger of resistance (Nouveaux principes, I, p. 200).

Sismondi especially attacked the abstract, deductive method of the Ricardian school, preferring instead the comparative, historical method. His telling description of economics is both an indictment of classical economics and a clarification of his own method:

It is not founded on dry calculations, nor on a mathematical chain of theorems, de­duced from some obscure axioms, given as incontestable truth__Political economy is founded on the study of man and men; human nature must be known, and also the condition and life of societies in different times and in different places. One must consult the historian, and the travellers; one must look into one's self; not only study the laws, but also know how they are executed; not only examine the tables of exportation and importation, but also know the aspect of the country, enter the bo­som of families, judge the comfort or suffering of the mass of the people, verify great principles by observation of details, and compare ceaselessly science with daily practical life (De la richesse commerciale, I, p. xv).

In other words, Sismondi clearly perceived the complexity of the industrial era, and he felt that the few abstract theories of the classical economists were inadequate for the modern age. He held the classical theorists culpable for drawing too many loose observations in England alone, without regard to other countries. The conclusions of classical economic theory, which were fre­quently held as absolute principles, were therefore considered spurious by Sismondi. Moreover, he strongly protested the tendency of the abstract theo­rists to reduce habits and customs to calculations. Finally, Sismondi criticized "those who wished to see man isolated from the world, or rather who con­sidered abstractly the modifications of his existence, and always arrived at conclusions that are belied by experience" (Etudes sur I'economie politique, I, p. 4).

In sum, Sismondi the historian was interested in those periods of transition that encompass the exit from one regime and the entrance to another. In prac­tice, he was concerned with ameliorating the condition of the proletariat (a term he coined) during this transition. He may be said to have originated the line of inquiry that the French call economie sociale ("social economy"). Sismondi influenced a number of writers who were not outright socialists but who recognized the evils of unrestrained laissez faire. These writers, along with Sismondi, sought some happy halfway house that would retain the prin­ciple of individual liberty as much as possible.

In retrospect, Sismondi's criticism of the classical school was somewhat justified, but his reason was marred by a logical flaw. In his theory of over­production, Sismondi reasoned that if increased production is to be useful, it must always be preceded by increased demand. He did not admit the possibil­ity that increased production could itself create additional demand. Sismondi's interest in political economy was nevertheless summed up in his theory of eco­nomic crises and his concern for their effects on the working class.