Wednesday, April 6, 2011

James Mill: 'Lenin of the Radicals'

James Mill (1773 - 1836)
On this date in 1773, founding member of the Political Economy club, James Mill, was born. Recent research indicates that it is he that we should credit with the law of comparative advantage, a law that was credited to David Ricardo (not to be confused with Ricky Ricardo). George Reisman considers the best expression of Say's Law to be found in Mill's Commerce Defended.

Murray Rothbard in the second volume of his history of economic thought, Classical Economics, helps us understand how important Mill was behind the scenes, guiding, promoting, and encouraging the work of Jeremy Bentham and David Ricardo. As Rothbard describes Mill:
James Mill (1771-1836) was surely one of the most fascinating figures in the history of economic thought. And yet he is among the most neglected. Mill was perhaps one of the first persons in modern times who might be considered a true 'cadre man', someone who in the Leninist movement of the next century would have been hailed as a 'real Bolshevik'. Indeed, he was the Lenin of the radicals, creating and forging philosophical radical theory and the entire philosophical radical movement. A brilliant and creative but an insistently Number 2 man, Mill began as a Lenin seeking his Marx. In fact, he simultaneously found two 'Marxes', Jeremy Bentham and David Ricardo. He met both at about the same time, at the age of 35, Bentham in 1808 and Ricardo around the same date. Bentham became Mill's philosophic Marx, from whom Mill acquired his utilitarian philosophy and passed it on to Ricardo and to economics generally. But it has been largely overlooked that Mill functioned creatively in his relationship with Bentham, persuading the older man, formerly a Tory, that Benthamite utilitarianism implied a political system of radical democracy. David Ricardo (1772-1823) was an unsophisticated, young, but retired wealthy stockbroker (actually bond dealer) with a keen interest in monetary matters; but Mill perceived and developed Ricardo as his 'Marx' in economics.

Unfortunately his impact on the thinking of the radicals was not altogether positive. He did well to convince Ricardo of Say's Law and the Law of Comparative Advantage. However, he also led Ricardo to embrace a woefully artificial and abstract economic method, oversimplified use of aggregates, extreme Malthusianism, and confusing profit with interest, which resulted in the notion of conflict between labor, capital, and land.

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