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Wednesday, October 20, 2010

Berkeley's floating world

Berkeley was a pre-classical economist – not that he knew it. Our captions exist outside of our frames, scribbled in by who knows who, the hand that writes and having writ - continues mindlessly to write endlessly more. But of those of his commentors who have taken the trouble to reflect on Berkeley’s political economy, especially as it is presented – or undermined – in that oddest of Irish bulls, The Querist – it is certain that, as Patrick Kelly puts it in his essay for the Cambridge companion to Berkeley, “Given the absence of any conception of the achievement of equilibrium through hidden harmony or the design of nature, a pivotal responsibility was accorded to the state in bringing about the necessary conditions to promote what Berkeley asserted to be the public objective of full employment.” One might think that ‘equilibrium’ – that frame upon which economics has woven its mythology since it got its science pants on – was, alas, not articulated in Berkeley’s time – but this is not exactly true, as B. Tieben, in his exhaustive study of the history of equilibrium as an economic concept has shown: Sir Dudley North and Pierre de Boisguilbert had already employed the concept, ‘treating the economy as a relatively self-regulating system…”

Berkeley, in the Querist, violates several principles of that self-regulating model. He expresses the horrifying idea in a work published four years before the great famine of 1741 wiped out about 200-400 thousand Irishmen that perhaps Ireland’s unstinting export of foodstuffs like beef and mutton to England, in return for which a certain class of landowner received the means to by English luxury goods, was not such a good deal for Ireland. This kind of thinking pops up around famine time, and is always soundly trounced by economists, who deal with aggregates and have well and truly summed up, in their accounting books, the pleasures of these luxury goods against the piddling souls of the barely employed and are extremely satisfied that the self-regulating system is the best of all worlds.

“142. Whether it be not certain that from the single town of Cork were exported, in one year, no less than one hundred and seven thousand one hundred and sixty-one barrels of beef; seven
thousand three hundred and seventy-nine barrels of pork; thirteen thousand four hundred and sixty-one casks, and eighty-five thousand seven hundred and twenty-seven firkins of butter? And what hands were employed in this manufacture?
143 Whether a foreigner could imagine that one half of the people were starving, in a country which sent out such plenty of provisions?
144 Whether an Irish lady, set out with French silks and Flanders lace, may not be said to consume more beef and butter than a hundred of our labouring peasants?
145 Whether nine-tenths of our foreign trade be not carried on singly to support the article of vanity?”

And in fact, taking and transforming an image from Locke, Berkeley imagines the following:

“134. Whether, if there was a wall of brass a thousand cubits high round this kingdom, our natives might not nevertheless live cleanly and comfortably, till the land, and reap the fruits of
it?
135 What should hinder us from exerting ourselves, using our hands and brains, doing something or other, man, woman, and child, like the other inhabitants of God's earth?
136 Be the restraining our trade well or ill advised in our neighbours, with respect to their own interest, yet whether it be not plainly ours to accommodate ourselves to it?
137 Whether it be not vain to think of persuading other people to see their interest, while we continue blind to our own? “

Yet, for all this, Berkeley was not a mere throwback to a hard money autochthonous economics. Oddly, he mixed a doubt about the unmitigated benefits of foreign trade with another doubt that put him on the very lines of the avant garde for his time: his doubt that gold or silver has any intrinsic value. Indeed, the Querist quietly pursues a purpose quite different from that of Swift, in the Drapier Letters, who propounded a theory of money that was classically metallic. Berkeley views money quite as he views vision – as a great system of signs. Under the signs, one finds the tangible value – industry, or labor.

“5. Whether money be not only so far useful, as it stirreth up industry, enabling men mutually to participate the fruits of each other's labour?”

and: “23 Whether money is to be considered as having an intrinsic value, or as being a commodity, a standard, a measure, or a pledge, as is variously suggested by writers? And whether the true idea of money, as such, be not altogether that of a ticket or counter?”

In this sense, Berkeley’s proposals aren’t that far from John Law’s, especially as he suggests a national, government run bank to issue these ‘tickets’. It is the stirring up of industry that Berkeley has in mind – and his mind darts immediately to what one might call the paradox of disequilibrium – that the system of industry requires the production of want: “20 Whether the creating of wants be not the likeliest way to produce industry in a people? And whether, if our peasants were accustomed to eat beef and wear shoes, they would not be more industrious?
21 Whether other things being given, as climate, soil, etc., the wealth be not proportioned to the industry, and this to the circulation of credit, be the credit circulated or transferred by what marks or tokens soever?”

This part of Berkeley’s work has served as a point of controversy between those who, like T.W. Hutchinson, glommed onto such statements as evidence that Berkeley had a pre-Keynesian sense that the state should be in the business of managing aggregate demand, and those who, like Ian Ward, emphasized Berkeley’s concern with the categories of voluntary and involuntary employment – which led Berkeley, in some of his Queries, to endorse slavery or servitude for the voluntary beggar. Hutchinson, in responding to Ward, makes the invaluable point that the voluntary vs. involuntary employment categories make no sense in the early modern economy, where the continuity of employment was not the recognized and legally hedged around social process that it is in the twentieth century.

Constantine George Caffentzis has noted that Berkeley’s solution to economic problems is very much aligned with the surface skepticism of a philosophy that has its deepest roots in the tangible, the real wisdom and common sense of all mankind. In other words, Berkeley does not view the economy as a puzzle to be solved, but as a puzzle that continually generates puzzles – and this is reflected in the very form of his suggestions, which press upon us with the utmost passivity of the question form. Just as a thing is really the to be perceived, in the heart of the proposition is the to be asked.

“The Querist’s Bank was not a machine, it was not a self-regulatiing homeostatic device, nor was it a storehouse of values, consequently when the Querist came to the solution of his problematic – a new definition of money and the project of a National Bank – there was no declarative sentence. The Bank was a questionable as its money. In fact, it was the very recognition of its questionability that made it a reasonable institution.”

Man lives in a floating world, and his institutions must either notice this fact or be crushed.

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