My turn for the seminar this week, so I am writing up the lecture and reading a bit earlier than usual.
First up, Jonathan Swift (1667-1745) and his extremely amusing 'A Modest Proposal', which is his tongue in cheek proposal of ridding Ireland of its surplus of beggar children by fattening them up and then selling them for slaughter as a foodstuff. Swift expounds his theory at great length and seemingly in earnest, citing its benefits as ridding the country of papists, making husbands fond of their pregnant wives (and not beating or kicking them for fear of causing miscarriage) as well as introducing a new and delicious national dish.
His frustration with the current rule of Ireland is expressed when he lists the commonly discussed political solutions to Ireland's problems, and then says '...let no man speak to me of these and the like expedients, 'till he hath at least some glympse of hope, that there will ever be some some hearty and sincere attempt to put them into practice.'
Swift also rails against the import of foreign fineries that Ireland cannot afford (this has suddenly become topical again) and asks of critics of his proposal:
'I desire the author or authors will be pleased maturely to consider two points.
First, as things now stand, how will they be able to find food and rainment for a hundred thousand useless mouths and backs.
And secondly, there being a round million of creatures in humane figure throughout this kingdom, whose whole subsistence put into a common stock, would leave them in debt two million of pounds sterling, adding those who are beggars by profession, to the bulk of farmers, cottagers and labourers, with their wives and children, who are beggars in effect; I desire those politicians who dislike my overture, and may perhaps be so bold to attempt an answer, that they will first ask the parents of these mortals, whether they would not at this day think it a great happiness to have been sold for food at a year old, in the manner I prescribe, and thereby have avoided such a perpetual scene of misfortunes as they have since gone through...'
This is a savage and direct attack on Ireland's ruling class, couched in humour, but with serious intent.
From my own experience in life, the closest I can find to a modern equivalent to this essay is the (un)popular magazine Private Eye, which is currently edited by Ian Hislop (previously edited by Peter Cook) and can often offer a similarly savage satirical outlook on real world problems.
From Jonathan Swift, we move on to the slightly less humorous topic of Adam Smith.
Adam Smith is widely considered to be the father of economics in Britain, opposing the prevailing economic theory of the day, which was mercantilism. Mercantilism was effectively the idea that wealth was generated in order to be attributed to your king or state and existed to enrich the state.
Smith argued that wealth created by an individual should be attributed to that individual, and that although such self-interest would appear to be completely self-serving, in fact the natural greed of people so enriched would cause money to flow away from them and toward the larger community as a matter of course.
Smith argues that government intervention, however well meaning, usually ends in a skewed market and effectively works against the general population. As such, Smith is very much a believer in true free market economics. It should be noted that although there is a popular misconception that we have free market economics at present, this is not in fact the case. America, Europe and others are all guilty of offering significant subsidies to what they consider key industries, therefore preventing fair competition between nations.
Smith divides the wealth of a nation into several different categories. Firstly (and most importantly) Smith argues, are the raw materials created by farming (and implicitly mining although this is not specifically mentioned) Smith argues that the surplus that is not required for feeding the farmers and their workers will go to the nearest town in order to be traded for manufactured goods that are produced in the town. The second stage as far as Smith is concerned, is the trade of manufactured goods, whether that be back to the country that provided the raw materials, or to people within the town. Lastly, is the export of surplus goods to other nations. Smith argues that this is the least attractive of the three options, due to the requirement to entrust the goods to people at the other side who they do not personally know, and therefore whose character they cannot gauge. This is less the case in modern times, due to the convenience of air travel and technologies such as email and web-conferencing. However, it is still considered easier to determine the trustworthiness of your neighbour, than it is to determine the trustworthiness of somebody on the other side of the world.
Smith was also influential in pointing out that slavery was an inefficient form of labour, as it caused the slaves tending the land to do the absolute minimum necessary to ensure that they remained fed and housed. Smith argued that unless those who tend the land have a vested interest in maximising its output (e.g. they profit from an increase in the lands productivity) then there is no incentive to develop the land to maximise its productivity.
As such, Smith was very much in favour of the idea of farmers being 'free men', as he believed that only by allowing the farmer to retain a proportion of the profit of his labour, could they be induced to work harder than the minimum, and take an active interest in how the land was cultivated and developed. It should be noted that Smith made no moral argument for the abolition of slavery, his reasoning was purely pragmatic.
Smith's arguments are by and large practical, and from the point of view of pure economy, one can see their persuasiveness. However, they completely fail to take into consideration any subjective notions of quality, or allow for circumstances in which one or a few individuals have been able to amass enough wealth or influence to effectively control entire markets.
For example, if Smith's ideas were followed to their logical conclusion, the only eggs on sale in the UK would be battery-farmed eggs, as these would provide the maximum profit to landowners. All farming would be intensive, with the land 'developed' to the maximum of its potential.
Smith also makes no differentiation between the farmer and those who work for him. There is no intimation in Smith's works that wealth generated for the farmer would (or should) flow down to the labourers who enable the farmer to manage the farm and bring in the harvest.
Lastly, while it is pedantic to criticise an author for not having prescience, Smith did not foresee an era during which merchants were able to hold entire nations to ransom, based on their ability to move manufacturing from one country to another, based on whomsoever had the laxest labour protection laws or weakest unions.
It would be interesting to know how Smith would view our modern world of subsidised farming and multinational corporations.
For those who have never read it, I would recommend reading Robert Tressell's 'The Ragged Trousered Philanthropists', which gives the view from an individual without influence from the lower or middle classes. It is clear from Smith's writings that he has had a privileged upbringing, and Tressell (in the form of a fictional novel) gives a view that helps to balance Smith's optimism in the free market model.
In the modern age there are many economists and journalists who specialise in economics and business. However, it is likely that for those who do not take an active interest in such things, that Robert Peston may be the only journalist of this ilk that you have come across. Robert Peston is the Business Editor for the BBC, and his coverage of the 'Credit Crunch' was some of the most viewed, read and analysed within the UK. While there are specialist publications such as the Financial Times or CityWire available to those who keep an eye on the markets, Peston is the closest that the UK has to an 'economist for the rest of us'.