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How I see the world: politics and political economy

Brad DeLong tries to make sense of Hayek.   At the risk of making an @$$ of myself, I have to respectfully disagree.  The way I see it, libertarian-ish types have been trying to “claim” descendance from Adam Smith for generations.  The problem is that, if Smith is “classical liberalism” incarnate, then libertarians have no more claim to him then the socialists do.

To try and illustrate why, I’m including a cladogram of the major currents of thought in the philosophy of political economy.

My view of the evolution of economic political philosophy

My view of the evolution of economic political philosophy

Maybe this is right, maybe it’s wrong.  But let’s just assume it’s right for the moment.  I want to discuss the branches I’ve labeled 1-4.

  1. The classical liberalism of Adam Smith.  It is “classical” because Smith more-or-less invents the subject as it is now understood.  Smith has some libertarian-ish views, or libertarians would not try to claim him, which include things like opposition to monopoly (in the day, entirely government created) and a belief in the effectiveness of market solutions (“invisible hand”).  He also had some non-libertarian views such as the dangers of private collusion (“[capitalists] seldom meet… but the conversation ends in a conspiracy against the public”) or the benefits of social well-being (“… some principles in [man’s] nature… interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it”).
  2. Marx.   It’s hard for me to look at Marx and not see Adam Smith: look how close they are!   The truth is that Marx is best thought of as one branch of the first major split in classical liberalism.  I want to get back to that split for (4), but for now just think of socialism as classical liberalism with a heavy emphasis on the well-being of the worker-class.   This strain of liberalism has a complicated relationship with government (Marx himself is probably closest to the Left Anarchists).
  3. Same thing as with Marx, the Laissez-Faire branch of liberalism is one of two major branches which lead away from classical liberal thought.  In this case, though, there is a heavy emphasis on the well-being of capitalists and a complicated view of monopoly.   Unlike libertarians out there, I tend to view this strain as all but dead as an intellectual force, but there are lines of influence from these ideas to more modern theories.
  4. Ricardo and the direct intellectual descendants of Smith.  Ricardo himself may have leaned right-ish a bit, but I think it’s fair to characterize his view as opposed to landed aristocracy.   As such he imbodies both socialist (pro-labor) and laissez-faire (pro-capital) views.  Ricardo may have leaned more towards capital politically, but his theory of comparative advantage was built assuming that labor is the only important input.

My takeaway from this is that the most important cleavage in liberal thought has to do with the factor of production that each strain identifies with.

Laissez-Faire thought identifies with the capitalists and quickly incorporates Nietzeschian notions of “supermen” to justify the super-wages which the capitalists earn within this otherwise liberal tradition.  The incorporation of Nietzesche makes the Laissez-Faire  strain the least classical, since Adam Smith himself is (I think, but I could be wrong) borrowing from Kant as his moral philosophy guide.

Socialist thought identifies with labor, but quickly recognizes that labor needs to band together in some way (recognizing a power disparity between owner and worker).  Thus, along this strain there is a mighty back and forth over the role of government where the importance of the debate is often obscured by the fact that all these strains agree on the goal of an empowered workforce.

Then, there’s the neoliberal tradition.  Direct descendants of Smith, this is basically the mainstream of the economics profession.   What separates this tradition is precisely the indifference between labor and capital which are handled interchangeably.   I don’t include every branch here, but I’d place Polyani along with the instutionalists.

Hayek is not here, obviously, along the neoliberal branch.  Instead it’s hard for me to view the Austrian school as anything other than the last surviving branch of the laissez-faire strain.

Now maybe all this is wrong.   Although, all I’m really doing here is classifying schools of thought using a standard clade-like (i.e. evolutionary) approach–strains of thought are related which are most alike.   But if I’m am wrong, I’d like to know why.  Rearrange the family tree and show me.

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