History of Economic Analysis part 51 doc

edged indebtedness to him and followed his lead, and it is safe to assume that his influence extended beyond the range of explicit recognition. Nevertheless, historians who to this day fail to give Bailey his due are only accepting the facts of the case as it presented itself at the time. Writing in 1845, McCulloch did not risk provoking laughter when he wrote in his Literature of Political Economy that Bailey had not properly appreciated the Ricardian theory and had not ‘succeeded in any degree in shaking its foundations,’ in the face of the fact that a poll of writers on value from 1826 to 1845 would produce a considerable majority for Bailey. These are the explanations I have to offer. First, in science as in art and especially in politics, there is such a thing as coming too soon; and failure, much more complete than was Bailey’s, is the usual result of premature action. Second, Bailey’s criticism was indeed constructive and did suggest by implication how the system he attacked could have been replaced by a more satisfactory one; but he did not try to do so, and those who followed in his wake and tried were no match for the shadow of Ricardo. They no doubt undermined his system and thus helped toward J.S.Mill’s transformation of it, but they did so by a slow process of attrition rather than by spectacular victory. In this process of attrition, Chalmers’ 18 influence counted for a good deal, at least in Scotland. As a theorist, he was thoroughly un-Ricardian and followed the line of what we have called Malthus’ recoinage of the Wealth of Nations. He also followed Malthus in matters of general gluts and oversupply of capital. If it were possible to speak of a Malthusian school in general theory (which I doubt), Chalmers would have to figure as its McCulloch—which is, after all, not so left-handed a compliment as it may seem to the reader. Lord Lauderdale 19 stands somewhat out of line and holds only a secondary position in the history of economics, but one that is fully deserved and independent of the additional recognition that should now be extended to him on account of his argument against debt redemption (Three Letters to the Duke 18 The Rev. Thomas Chalmers (1780–1847), whose activities included teaching of moral philosophy and political economy (at St. Andrews) and divinity (at Edinburgh), was a man of many merits. We cannot claim more than a fraction of him for analytic economics. Only two of his works need be mentioned: his Enquiry into the Extent and Stability of National Resources (1808), partly incorporated in his On Political Economy (1832). The latter is a book of considerable importance, but not easy to appraise. It presents a curious mixture of sound insights and technical shortcomings. And these shortcomings sometimes account for patently untenable results such as the proposition that a loss of foreign markets is almost a matter of indifference to a country—which overlooks the whole of the division-of-labor argument—though it may be interpreted as an overstatement of the true proposition that (after adaptation) the loss of foreign markets need not affect employment. We shall have to mention the book again. Chalmers seems to have coined the phrase, though of course not the concept, ‘margin of cultivation,’ and is the author of the argument, much appreciated by J.S.Mill, that explains why ravages of wars are in general quickly repaired. 19 James Maitland, eighth Earl of Lauderdale (1759–1839), Inquiry into the Nature and Origin of Public Wealth…(1804). This is the only publication of his that counts as an analytic performance. History of economic analysis 462 of Wellington…1829), which was based upon an argument against excess saving and for excess expenditure. 20 The topics of value, capital, and interest owe something to him, as we shall see, but more important than are these contributions in themselves is the invigorating impulse he gave: he was a man who thought for himself and was not prepared to accept fundamentals as handed to him by the Smithian tradition. Though a dilettante and, from the standpoint of the nascent profession, something of an outsider, he was a writer of force and, in most cases, of sense. 21 The only author who ever did justice to Ramsay is Marx, who dealt fully with him in the Theorien über den Mehrwert. 22 Even Professor Seligman, who revived his memory (op. cit.) emphasized his dependence upon French writers more than I think justified. It is true that, especially in his theory of enterprise and profits, he had been anticipated by Say. It is also true that he was not the first to introduce those ideas to English economics, and that he might even have ‘borrowed’ at second hand. But he synthesized better than did others and, more important, many suggestive details were his own. It is easy enough to see that he made no mark. But it should be added that he came near to doing so and that his lack of success has perhaps more to do with his unpopular opposition to the repeal of protection to agriculture than with his most serious shortcomings. There is thus no reason to think little of him. 23 Read 24 impaired his chances of success by certain oddities, especially by his doubtful speculations about the ‘Right to Wealth.’ His attacks upon the Ricardian socialists are of little interest to us. Nevertheless his work is of some importance for us, first, because it bears witness to the influence of Bailey, whom Read followed in his Ricardo criticism, and to the anti-Ricardian current that was running strong around 1830; second, it has some merit and in turn exerted some influence of its own, particularly in the analysis of profit 20 On this, see F.A.Fetter, ‘Lauderdale’s Oversaving Theory,’ American Economic Review, June 1945. 21 Of late, an attempt has been made to ‘explain’ both his analysis and his recommendations in terms of his interests as a landlord. We know what to think of the explanatory value of this. 22 Marx’s recognition of Ramsay must, of course, be appraised with reference to his habits of criticism. If these are taken into account, this recognition means a lot. Also it speaks highly of Marx’s scholarship, for when he wrote Ramsay was practically forgotten. Sir George Ramsay’s (1800–1871) only relevant work is his Essay on the Distribution of Wealth (1836). 23 Ramsay’s case is food for thought, particularly in one respect: when a writer has failed to make the right contact with his contemporaries—excepting those rare cases in which a valiant champion arises to laud him to the skies posthumously—historians assume a strange attitude of hostility toward him and set up standards that would dwarf A.Smith, whereas, in more fortunate cases, they quite commonly sponsor absurd claims to originality or other merits that are never revised. 24 Samuel Read (no personal data that I know of); the only work that needs to be mentioned here is his Political Economy. An Inquiry into the Natural Grounds of Right to Vendible Property or Wealth (1829). E.R.A.Seligman (op. cit. sec. 4) has noticed all the points about it that matter to us. Review of the troops 463 and interest. Among the writers it influenced directly, the most eminent one is Scrope, 25 the monetary reformer of index-number fame, who was not only the author of numerous pamphlets on money and banking, poor laws, agricultural labor, and other topics but also an economic theorist of some importance. His Principles of Political Economy (1833) was, however, written for popular consumption and did not develop his analysis at all satisfactorily. It is easy to notice his original ideas on population and the ‘tabular standard.’ But these are not what I mean just now. Much more important for us is the insight into the nature of economic equilibrium: he saw how the mechanism of demand and supply, turning on everybody’s tendency to maximize returns, solves both the problem of allocation of resources (production) and the problem of income formation (distribution), thus disposing, incidentally, of the whole West-Ricardian construction. In the analysis of interest and profits, too, he made headway: it is there that he seems to have owed something to Read. All the performances so far mentioned in this section—and our list is very incomplete—were un-Ricardian or anti-Ricardian; and it would be quite impossible to draw up a parallel list of Ricardian writings. Moreover, the antagonism to the West- Ricardian schema that all of them display was primarily scientific and not political: Read’s hostility to the Ricardian socialists may have set him against the Ricardian theory of value, but for the rest I cannot find motivating political antagonisms between these writers and the Ricardians. 26 The theory that resolves all differences between economists into differences of their politics and always looks to ‘what a man stands for’ fails in this case as it does in the case of the victory of the marginal utility theory in the next period. Finally, the writings of which we have noticed examples put later developments in a new light: a continuity of effort reveals itself to anyone who pays attention to these writings that is completely lost in the usual story of a prevalent Ricardianism—J.S.Mill figures as a Ricardian in this story—spectacularly shattered by ‘revolution’ around 1870. The last author I am going to mention, Torrens, 27 cannot be described as 25 George Poulett Scrope (1797–1876) was one of those delightful Englishmen of laborious leisure to whom our science, like others, owes so much. Among other things, he was an authority on volcanoes and a M.P. His reputation as an economist rests mainly on his work on central-bank policy and on stabilization of the price level. But there is also analytic merit—and striking independence and originality—in some of his pamphlets on other practical questions. Though accepting the fundamental slogans or principles about the ‘system of natural liberty’ current in his time, he bravely swam against the stream in such matters as his unemployment-insurance scheme and his advocacy of public works. When dates are considered, the insight—I repeat: the analytic insight—implied in this places him high above the common run of the economists of his time. 26 Ramsay’s qualified support of the corn laws, e.g., can be defended also on a Ricardian basis. This is why I italicized the word motivating. 27 Another strong, interesting, and sympathetic type! Colonel Robert Torrens (1780–1864), a professional soldier who had seen service, finding himself on half-pay after the Napoleonic Wars, proceeded forthwith to make for himself a fresh career in politics and finance and a name as an economist as well. He is chiefly known for his advocacy of Peel’s Act: excepting Lord Overstone, he was the only economist of standing who History of economic analysis 464 anti-Ricardian. But neither can he be described as a Ricardian. Professor Seligman has argued the case for Torrens’ independent discovery of the ‘Ricardian’ theory of rent, with priority over Malthus and West, and of the principle of comparative cost, with priority over Ricardo. On the one hand, this is enough to secure him a place in the history of analysis; on the other hand, this seems to include him in the Ricardian group. His exploits in general theory, however, are distinctly un-, if not anti-, Ricardian. But they are difficult to appraise because Torrens was careless in formulation and not a good technician and offers his wheat much mixed with chaff. He did not accept the central Ricardian doctrine that issues in the proposition that profits depend exclusively on wages. But his argument against it strongly suggests that he failed to grasp the sense in which Ricardo held it. What he put into its place may have been substantially valid as he meant it. But as it stands, it is not particularly enlightening. He needs an interpreter to do for him what the Ricardo admirers of around 1890 did for Ricardo. Until such an interpreter appears and succeeds it is premature, to say the least, to rank him, as has been done in one instance— presumably in reaction to the contemptuous treatment he received on other occasions— with Ricardo and Malthus as one of the ‘founders of the classic school.’ 4. FRANCE If French economics of that period is to be seen in its true proportions, two facts must be borne in mind. First, as we know, the Parisian scene was colored until 1848 by the activities, literary and other, of socialist groups to an extent for which there is no contemporaneous parallel anywhere else. Not so spectacular but equally important in the long run were the activities, also literary and other, of Catholic critics of economic and political liberalism (‘the principle of 1789’), which went, however, beyond criticism toward the goals of Catholic social reform. 1 Laicist bourgeois of ultraliberal persuasion formed a third group. All this makes fascinating material for the sociology of political and social ideas. But it makes poor material for the history of scientific eco- identified himself with it. Like Scrope, he wrote a great many pamphlets and ‘letters’ on topics of the day. The marvel is that he also ascended into the rarified air of pure theory. The writings that are important in this respect are: An Essay on the External Corn Trade (1815); An Essay on the Production of Wealth (1821); On Wages and Combinations (1834). See Seligman and Hollander, ‘Ricardo and Torrens,’ Economic Journal, September 1911. 1 I am going to use this opportunity to mention Alban de Villeneuve-Bargemont (1784–1850; especially: Économie politique chrétienne, 1834), a central figure in a broad movement. It is extremely difficult to do justice to his work. Those—laicist liberals in particular—who look at his social philosophy and his politics, decide whether they like it or not, and appraise him accordingly have indeed an easy task. But ours is not so easy. We have to realize, first, the depth and social significance of his convictions; the wisdom of many of his practical recommendations; the scientific value of much of his sociology; and, at the same time, the defects of his technical economics, which was in fact rudimentary. These defects should not decrease in the least our respect for the man or his thought; only, they happen to be relevant from the standpoint of this book. Review of the troops 465 nomics. Second, excellent factual work was done during the period, the great performance of Le Play topping a highly creditable record. For the rest, however, there are only two first-rank men to mention (besides Cournot of course), namely, J.B.Say and Sismondi. Jean-Baptiste Say (1767–1832) was one of those men who illustrate two important though slightly paradoxical truths: first, that, in order to appraise a man properly and to put him into the right place, it is sometimes necessary to defend him not only against his enemies but also against his friends and even against himself; second that there is a fundamental difference between superficiality of exposition and superficiality of thought. 2 Superficiality is in fact what strikes Say’s reader first. His argument flows along with such easy limpidity that the reader hardly ever stops to think and hardly ever experiences a suspicion that there might be deeper things below this smooth surface. This brought him sweeping success with the many; it cost him the good will of the few. He sometimes did see important and deep-seated truths; but when he had seen them, he pointed them out in sentences that read like trivialities. He never bent—as even Ricardo did—to the task of hammering them out so that they might be recognized by everyone for what they were and stand criticism and wear and tear. Also he invariably mismanaged his case in controversy by replying to criticism in a desultory manner, without bestowing the requisite amount of work on it. Hence, the historian must restate his argument for him and, in doing so, must often neglect infelicitous wording or even discard downright silly bits of reasoning that only carelessness will account for. Everyone realizes that this must also be done for Ricardo and Marx because, in their cases, the roughness of the surface invites digging. But the economists were few indeed who were able and willing to render this service to Say. Thus he never got his due. The huge textbook success of his Traité— nowhere greater than in the United States—only confirmed contemporaneous and later critics in their diagnosis that he was just a popularizer of A.Smith. In fact, the book got so popular precisely because it seemed to save hasty or ill-prepared readers the trouble of wading through the Wealth of Nations. This was substantially the opinion of the Ricardians, who treated him with some respect because of the Law of Markets, which they accepted from him, 3 but for the rest put him down as 2 Let me illustrate this: nobody will call Hegel’s exposition superficial, but some (misguided) individuals may think that his elaborate show of profundity covers many shallows. J.B.Say, as will be argued in the text, presents an instance of the opposite kind. 3 Even as regards this law, they displayed some inclination to assert claims of their own (on behalf of James Mill), although Say’s priority is beyond the possibility of doubt. a writer—see McCulloch’s comments upon him in the Literature of Political Economy—who had been just able to rise to Smithian, but had History of economic analysis 466 failed to rise to Ricardian, wisdom. For Marx he is simply the ‘insipid’ Say (der fade Say). For later critics he was merely one of the exponents of economic liberalism to be disregarded on this count alone. Where he did live on, in the theory of cycles, his law was voted either wrong or else a valueless tautology. In our own time he experienced a curious kind of renaissance. His Law of Markets was declared—mistakenly as we shall see—to be the basis of the whole structure of classic economics in the Keynesian sense of this term (see above, ch. 1, sec. 1). This gave him sinister importance—but at least it gave him importance. But even his friends were taken in by that deceptive semblance of superficiality. Even for those French historians who were ready enough to protect his memory, he was primarily the exponent—one of them said ‘vulgarizer’—of A.Smith’s teaching. To this merit, it is true, they added various others, of which we may take notice by anticipation: Say cast the subject matter of economics into the schema—production, distribution, and consumption; its methodology owes something to him; he pointed toward a utility theory of value; he helped to establish the triad of factors—land, labor, and capital; he emphasized the figure of the entrepreneur, using the term (which occurs in Cantillon); and, of course, he was Say of Say’s Law of Markets. All of this, as usually put, makes only a modest case since some of these merits are per se of minor importance or even of doubtful value. We shall comment on all of them in due course. At present, we are concerned with the fundamental error that vitiates appraisal of Say’s position in the history of economics, namely, with the usual interpretation of his relation to A.Smith. Say’s work grew from purely French sources, if we consider Cantillon a French economist. It is the Cantillon-Turgot tradition, which he carried on and from which he could have developed—whatever it was he actually did—all the main features of his analysis including, by the way, his systematic schema and his entrepreneur. 4 The most important of these features, and his really great contribution to analytic economics, is his conception of economic equilibrium, hazy and imperfectly formulated though it was: 5 Say’s work is the most important of the links in the chain that leads from Cantillon and Turgot to Walras. Only two facts about his life are relevant to our purpose. Barring some unimportant cases during the French Revolution, he was the first French academic teacher of economics, first at the Conservatoire National des Arts et Métiers (1819), later at the Collège de France (1830). And, for a considerable part of his life, he was a practical businessman and thus enjoyed the advantage of having first-hand knowledge of what he was writing about. Intellectuals who know business only from newspapers are in the habit of congratulating themselves on their detachment. But obviously there is 4 Although I am pleading for justice to him, I must emphasize that, to some extent, this reduces his claims to originality. The Cantillon tradition had never died out in France. 5 In part, the imperfections alluded to are due to the fact that the task is an essentially mathematical one, which he was not equipped to handle. This adds to the difficulties of doing justice to him also Review of the troops 467 in other respects: his Law of Markets is expressed in loose words that may be made to carry different exact meanings. also another side to the matter. The principal items in his list of publications for us are his Traité d’économie politique (1803; Prinsep’s trans., 1821, is from the 4th edition which, however, it is dangerous to use without also referring to the 1st, for Say had a way of forgetting what he really meant) and his letters. The Cours complet d’économie politique pratique (1828–9) does not add a great deal. His works (Oeuvres) form vols. IX–XII of the Guillaumin Collection des principaux économistes (1840–48). The Traité needs no reader’s guide. But I wish to reiterate the warning that profitable perusal is much more of a job than it looks. J.C.L.Simonde, who called himself ‘de Sismondi’ (1773–1842), was something of a practical farmer and an amateur politician—excellent exercises in realism—but primarily a laicist intellectual, who enjoyed living on the fringe end of le monde, and a historian. His main achievement is, I think, his Histoire des républiques italiennes du moyen âge (1807–18). Of these 16 volumes, I have a skipping knowledge, which is, however, more than I can say with reference to the 31 volumes of his Histoire des Français (1821–44). Of the rest of his historical work, which also covers literary history, I know only his Histoire de la chute de l’empire romain…(1835), the scholarly shortcomings of which are partly compensated for, to an economist, by interesting sociological vistas and analyses. His economics are much more English than French. His Richesse commerciale (1803), is indeed not quite the Smithian brew it has been made out to be, even if we disregard the un-Smithian recommendations in the second volume. The real Sismondi, the Sismondi of later years, shows occasionally. On the whole, however, the traditional opinion is sufficiently near the truth. Sismondi’s reputation as an economist rests on his Nouveaux Principes d’économie politique… which appeared in 1819. 6 But we know that the essentials of this work had actually been written by 1815 for an article that Sismondi contributed to Brewster’s Edinburgh Encyclopaedia, though this article was not published until after the Nouveaux Principes. By then—at the latest—he was in possession of all the elements of doctrine that are associated with his name. His later works, such as his Études sur l’économie politique (1837–8), emphasized and developed the main points—and his claims—but do not add anything essentially new. 7 Sismondi’s work received critical notice immediately, especially from the Ricardians. As the tide went against the latter, Sismondi’s fame increased steadily until, with social reformers and opponents of laissez-faire in general, he was eventually raised to one of those positions to which it becomes etiquette to pay respect. In part, this was owing to attitudes that have little to do with analytic achievement; he preached the gospel that the true object of economics is man and not wealth. He attacked Ricardianism as mere ‘chrematistics’ and as unrealistic chrematistics to boot. 8 He advocated once more the intervention of the state in eco- 6 The 2nd edition of the Nouveaux Principes came out in 1827 with not insignificant changes. 7 Selections of Sismondi’s works have been published in German with an introduction and comments by Professor Amonn (1945–9). See also A.Aftalion, History of economic analysis 468 L’Oeuvre économique de Simonde de Sismondi (1899); and H.Grossman, Simonde de Sismondi et ses théories économiques (1924). 8 Sismondi never lost an opportunity to extol A.Smith at the expense of the ‘new school’ (the Ricardians). In matters of method, he diagnosed A.Smith’s as truly scientific and ‘experimental’ (meaning empirical), whereas he condemned Ricardo’s as abstract nomic affairs. And he was thoroughly pro-labor. Whoever did any or all of these things was as sure of applause from some quarters as he was of adverse criticism from others. But it must be added that he was in fact one of the most important forerunners of later Sozialpolitik and that some of his recommendations—for example, the recommendation that employers should be made to guarantee their workmen security against unemployment, sickness, and destitution in old age—are among his most genuinely original contributions. 9 As regards analytic economics, his reputation rests primarily upon his argument against Say’s law and his under-consumption theory of crises (if indeed his theory should be thus labeled; see below, ch. 7, sec. 6). But even if the uncritical recognition that was extended to him on this score—mainly by economists whose strength was not in economic theory—were more justified than it is, these points would not express his true importance in the history of analysis. The distinctive feature of Sismondi’s analysis is that it is geared to an explicit dynamic model in the modern sense of this phrase. The terms, Static and Dynamic, we have met already. We shall use this opportunity to take a first step toward a closer acquaintance with their meaning. For this purpose, let us start with a famous statement of Ricardo’s, made in a letter to Malthus: 10 ‘You always have in mind the immediate and temporary effects…[I] fix my whole attention on the permanent state of things which will result from them.’ This is not quite true, but if it were, it would mean this: suppose we have before us an economic process that is perfectly balanced and ideally adapted to its data; then let us impose arbitrarily some change in some element or elements of it, say, in some prices or quantities; this disturbance will produce immediate adaptations, some of which will in turn produce further disturbances; but in the end, when everything has had time to straighten itself out, a new perfectly balanced state of the economic organism will result that is again ideally adapted to its data. 11 Ricardo was evidently of the opinion that the speculation that had lost contact with reality. It should be observed, however, that his arguments, so far as they are valid against Ricardo, are just as valid against Smith. 9 The more limited modern idea of the ‘guaranteed wage’ may with justice be said to have been visualized by him. The originality of his suggestions stands out in one point especially: his idea was to turn the social costs of labor-saving improvements into business costs of employers. 10 Professor Hollander quoted this letter in his Introduction to Ricardo’s Notes on Malthus’ Principles (ed. 1928, p. lxxxviii). Review of the troops 469 11 This is by no means always so and, even if it is, requires proof that raises a number of delicate questions. Just now we neglect this, just as Ricardo himself neglected it. important thing is to investigate the properties of this new ‘normal’ state in comparison with the properties of that ‘normal’ state from which we started: the new ‘permanent’ incomes, prices, and quantities are compared with the old incomes, prices, and quantities. For this procedure, the term Comparative Statics came into use later on (see below, Part IV, ch. 7, sec. 3). It implies, of course, both that the sequence of intermediate or ‘transitional’ states through which the system has to pass on its way to the new ‘normal’ state does not affect the latter—that is to say, that the new ‘normal’ state depends only on the old ‘normal’ state and on the nature of the disturbance but not on that sequence of transitional states— and also that the transitional states are relatively unimportant, at least in the sense that they do not present any very interesting problems to the analyst. Sismondi admitted, just as uncritically as had A.Smith and Ricardo, that such a new equilibrium state—he used the term equilibrium—will eventually emerge. But he urged that the road toward it may be so long and lead through such severe upheavals—he said: ‘terrible sufferings’—as to make it practically impossible for the analyst to deal cavalierly with the incidental phenomena. So far, so good. Malthus did (independently) the same thing. But Sismondi took a further step, credit for which he does not have to share with Malthus or anyone else except, possibly, with Quesnay. He realized that the most important of the reasons why transitional phenomena are of the essence of the economic process—and hence not only relevant to its practical problems but also to its fundamental theory— is that the economic process is chained to certain sequences that will exclude certain forms of adaptation and enforce others. An example will help. If the money income generated by a given process of production were always to be spent on the output of this same process of production, we should have a reason to believe 12 that the public’s ‘purchasing power’ and the output of goods and services would, barring individual errors, always correspond to one another so that, at least as a possibility, the latter could always be sold at cost-covering prices. But suppose that the economic process is chopped up into periods in the following way: the money income of any period t is generated by processes of production, the output of which becomes available in period t+1; and this same income is spent in period t on the output of the period t−1. In this case, we lose one 12 This condition would not be sufficient. However, in order to make my point as simple as possible, I neglect this fact here. History of economic analysis 470 of the reasons we have for believing that income and output will correspond to each other in the sense mentioned above: the money income of period t is the result of decisions taken in period t, whereas the output offered in period t is the result of decisions taken in period t−1, hence taken in possibly different circumstances—a fact that evidently may be a source of difficulties in adaptation and of new phenomena incident thereto. The example is oversimplified and otherwise unrealistic. But it suffices to show that the economic process is a system of periodicities and lags and, by virtue of this alone, harbors a world of problems that simply do not exist for Ricardian economics or any other economics of the same type. Analysis that takes account of this fact and attempts to deal with these problems is called dynamic analysis. We shall have to attend to it later on (Part IV, ch. 7 and Part V). Now we shall break off an argument that has, for the moment, no other purpose but to define the distinctive feature of Sismondi’s analysis. Nobody can ever have been unaware of the facts at which we have just glanced. A long list of pieces of analysis could be compiled, from mercantilist times on, that contain, unsystematically and rudimentarily, some dynamic elements. Even Ricardo would be represented in this list. But Sismondi’s great merit is that he used, systematically and explicitly, a schema of periods, that is, that he was the first to practice the particular method of dynamics that is called period analysis. Moreover, he saw clearly the difference this makes and in particular the disturbances, discrepancies, and hitches that result from the fact that economic life is bound to sequences of which every unit is determined by the past and in turn determines the future. At the same time, this great analytic merit is his only one. He handled his own tool—like other ideas of his—so clumsily as seriously to impair its usefulness. And all the other arguments he adduced against the Ricardian system, and for the propositions that he tried to put in place of it, were technically so faulty as to make it easy for the Ricardians to dispose of them and even to take him not quite seriously. Thus, we have before us, once more, one of those situations where a man was rightly defeated and, on another level of discourse, was nevertheless right. The Ricardian judgment about him prevailed also with the non- Ricardians of the second half of the nineteenth century. And the applause of those who appreciated his fervent social sympathies or the mere fact that he found hitches in the capitalist process was, so far as scientific economics is concerned, no compensation for this—for the competent theorist this applause was rather in the nature of a verification of his own adverse opinion. 13 13 As an illustration of Sismondi’s technical incompetence, I refer the reader to his numerical argument on pp. 374–84 of the first volume of the Nouveaux Principes. Sismondi correctly perceived that his period analysis greatly weakened the ‘classic’ argument about free competition. Review of the troops 471 . into the Nature and Origin of Public Wealth…(1804). This is the only publication of his that counts as an analytic performance. History of economic analysis 462 of Wellington…1829), which. exerted some influence of its own, particularly in the analysis of profit 20 On this, see F.A.Fetter, ‘Lauderdale’s Oversaving Theory,’ American Economic Review, June 1945. 21 Of late, an attempt. advocacy of Peel’s Act: excepting Lord Overstone, he was the only economist of standing who History of economic analysis 464 anti-Ricardian. But neither can he be described as a Ricardian. Professor