Tuesday, April 22, 2014

The English Language, Pedantry and Libertarianism

Actually this subject bores me to tears, but here goes.

Daniel Kuehn links here to a group of libertarians who seem to want to reclaim the word “liberalism” from “progressive” or “left” liberals and demand that it be restricted to “classical liberalism.” Why? Because the modern sense betrays the original meaning, or so the argument goes (though whether the broad range of opinions within Classical liberalism is even representative of modern libertarianism seems highly dubious, to begin with).

This is rather like Austrians having a fit because the word “inflation” has evolved to mean “price inflation” rather than the earlier meaning of “monetary inflation” (for a debunking of that tired argument, see here).

But, taken seriously, this argument would require that libertarians must abandon the word “libertarian” for their own political movement.

Why is that?

We need only consult that wonderful resource, the Oxford English Dictionary (3rd. edn. 2010).

In its earliest sense, the word “libertarian” seemed to have neither a political nor economic sense, but meant simply “a person who supports the view that human beings have free will” – as opposed to “necessarians” who denied free will (Oxford English Dictionary [3rd. edn. 2010], s.v. “libertarian,” sense A.1).

The first cited use of the word in the Oxford English Dictionary is from 1789 (but of course that may not be the first instance of the word’s use in English).

Therefore if one wants to take seriously the pedantic modern attempts to reclaim “liberalism,” one might just as well complain that modern “libertarians” have misappropriated the word “libertarian.” Therefore let us leave the word “libertarian” to the philosophers!

Of course, this is an absurd argument.

And it is not that we can’t abuse words, or that words cannot corrupt moral discourse, but that words change and develop over time, and anyone who demands that some word in our political or economic vocabulary must be restricted to its original or archaic meaning – as if they have some moral right to ban others’ use of language – is engaged in legerdemain.

Sunday, April 20, 2014

Adam Smith on the Labour Theory of Value

There has been a lot of discussion of the labour theory of value in the comments section lately, a view which, I think, most Post Keynesians reject, and rightly so.

But Marx took the idea that labour is a measure of value and that labour is the cause of value from Ricardo (Robinson 1964: 36), and this idea in turn seems to stem from Adam Smith.

Adam Smith postulated that labour time was the criterion used in primitive societies to determine exchange value:
“In that early and rude state of society which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another. If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days’ or two hours’ labour, should be worth double of what is usually the produce of one day’s or one hour’s labour.

If the one species of labour should be more severe than the other, some allowance will naturally be made for this superior hardship; and the produce of one hour’s labour in the one way may frequently exchange for that of two hours’ labour in the other.

Or if the one species of labour requires an uncommon degree of dexterity and ingenuity, the esteem which men have for such talents will naturally give a value to their produce, superior to what would be due to the time employed about it. Such talents can seldom be acquired but in consequence of long application, and the superior value of their produce may frequently be no more than a reasonable compensation for the time and labour which must be spent in acquiring them. In the advanced state of society, allowances of this kind, for superior hardship and superior skill, are commonly made in the wages of labour; and something of the same kind must probably have taken place in its earliest and rudest period.

In this state of things, the whole produce of labour belongs to the labourer; and the quantity of labour commonly employed in acquiring or producing any commodity is the only circumstance which can regulate the quantity exchange for which it ought commonly to purchase, command, or exchange for.” (Smith 1845: 20).
But is there any hard empirical evidence from anthropology and history that this is true?

For example, since hunters usually have different levels of skill and experience, and often success in hunting depends on luck, the hunting time for any particular animal caught could vary considerably. It is simply unclear to me why hunter-gatherers or hunter-horticulturists would have to determine exchange value in such a way, when labour time could vary to a significant degree on each occasion an animal is hunted, and it looks like Adam Smith is engaged in some speculation here that would need to be backed up with a great deal of evidence from anthropology to be taken seriously.

Perhaps that evidence exists, but perhaps not too, like many hoary old myths in economics. I have not yet had a chance to look at the anthropological literature, and so will leave the question open.

BIBLIOGRAPHY
Robinson, Joan. 1964. Economic Philosophy. Penguin, Harmondsworth.

Smith, Adam. 1845. An Inquiry Into the Nature and Causes of the Wealth of Nations, Thomas Nelson, Edinburgh.