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Saturday, October 15, 2011

pascalian peasant economics

Paul Warde makes useful distinction (in Subsistence and Sales: the peasant economy of Württemberg in the early seventeenth century, Economic History Review, 2006) between a school of the economic historiography of peasant economies that emphasized Ricardian decreasing returns and Malthusian limits to resources, and a school that emphasized a Smithian growth approach, in which the peasant’s natural inclination to barter and trade and maximize profit is merely hindered by rent seeking and anachronistic guild like institutions. One of the star representatives of the latter approach, Sheilagh Ogilvie, attacks any theory that holds that the peasant economy is somehow special, because, according to her, such a theory is founded on the idea that peasants are irrational. Her reading, then, of Polanyi style analysis is that it is deeply patronizing to peasants and blind to the way peasants were struggling to become capitalists against the dead weight of feudal institutions:

“But whether 'irrational' or 'differently rational', peasants lack the conventional economic concepts of wages, capital, interest, rent, and profit. [Ogilvie here is criticizing non-Smithian approaches] Consequently they can neither minimize costs nor maximize profits; instead, they minimize risks and seek to 'satisfice' culturally defined consumption targets.9 These theories regard peasant minimization of risk as excluding 'capitalist' maximization of profit, a distinction puz-zling to mainstream economics, which regards all economic agents as seeking to obtain the lowest possible risk for the highest possible return.”

If this were an accurate criticism of what is the dominant anthropological paradigm of peasant economies, Ogilvie has chosen the right method to smash it – finding records of peasants minimizing costs, making profits, trading, using money, etc.

But as Ward points out, this pushes the non-Smithian approach into absurdities it never articulates. Far from thinking that peasants have no conception of opportunity costs, as Ogilvie puts it, the school she attacks most harshly bases its whole analysis on the peasant’s awareness of opportunity costs.

Ward is, I think, correct here:

“Historians have not recently argued, at least for central and western Europe, that peasants did not understand profit generally. They have argued that they were not profit maximizers , or primarily motivated by profitability, a rather different position, although it is in truth rather difficult to establish if, or indeed how, peasants might have conceptualized profit or loss across a range of activities over any given period of time.”

Ogilvie, in other words, is using the evidence from the record, which amply demonstrates trading, quantifying, and wage labor, as something that demonstrates a collective social tendency on the part of the peasants to conform their economic activity to these kinds of proto-capitalist features. But she actually shows nothing of the kind, since she thinks it is sufficient to show trading in order to show all the institutionally driven activities that result from the circulation of commodities. In fact, the peasants in her example often show exactly the kind of limited good mentality that would make investment and profit maximization not only institutionally difficult, but culturally suspect.

How capitalism arrives is a question that is wrapped up with how the capitalist character is formed. It seems, in a sense, that capitalism, with its double aspect – of a certain form of production and a certain form of circulation – is boobytrapped. One must understand the mentality of the agents of circulation in order to understand the condition of the agents of production, and one must understand the limits imposed on the agents of production in order to understand the possibility of circulation. One must, then, understand not only technology, but ideology.

Mainstream economics is proud of its methodological individualism, but it doesn’t believe it. The individual, as the economists understand, does not spontaneously produce his acts. The man in an office, or behind a plow, or behind a gun, did not find his places by inventing his scene. The idea that the individual invents society is, evidently, an act that has never attributed to any individual. So the mainstream economist has come up with a wonderful concept saver: the individual, in their terms, is essentially a chooser. Goethe’s Faust cried out that in the beginning was the act – but the economist’s homo economicus counters that in the beginning was the choice. The cosmology of the preference wraps the societal world in a mystery – for one never seems to come to acts, only to choices. Every blade of wheat, every board of wood, every drop of ink, is not what it seems to be, but is instead an agglomeration of atomic choices. By some inexplicable accident, these choices also seem to be matter, and have weight and chemistry. The only thing that isn’t chosen is choice itself.

This is a rich cosmology, but not necessarily a believable one. So it is reinforced by the time honored method of scolding. If we don’t hold to individualism, all responsibility is lost, and anarchy and concentration camps are loosed upon the world.

The origin of this cosmology is surely to be found in the period between around 1650 and 1789. And it did not arise among the peasant masses, yearning to profit maximize, but among a varied assortment of clerks and policymakers. Intellectuals in Edinburgh universities and ministers at Louis XVI’s court, as well as slave traders and sugar merchants were all starting to put it together.

By the late twentieth century, the capitalist operation had become so dominant – at least among intellectuals – that historians could not believe the cosmos had ever been different. Thus, in the spirit of conquest, the historians went back to pre-capitalist societies and attempted to rescue them for capitalism. Thus, theorems of market equilibrium, or of public choice, are imposed as the real language of rationality that the peasants were, as it were, articulating in mime.

My own sense is that the peasant economies were not irrational, nor are the rational capitalist economies non-peasant – the rational economic institutions are colonized by non-equilibrium, non-growth, non-maximizing kinds of behavior, and peasant economies surely involved calculations to some end. However, instead of the models that Ward and Ogilvie use to understand rationality of peasant economics, I think one should turn to contemporaries, like Blaise Pascal, for the vocabulary of what was afoot. Pascal’s three forms of the spirit – l’esprit geometrique, l’esprit de finesse, and l’esprit juste give us a much deeper sense of what was in question, in the maintenance of the household, the community, and the person in peasant economies, than we are going to get from Ogilivie’s grid. yet historians in the 21st century, who don't yet face a powerful alternative to capitalism, are unlikely to give up the project of conquering the past with the models of the present, even if the rules they are using predict a much different past than the one that we have. Actually, they also predict a much different present, which must be adjusted, nudged, and jammed to fit into the mainstream economist's rational formats. But the present is malleable, while the past, ah, the past - the problem is that the past can't be fired.
More's the pity.

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