"Laissez Faire in Nineteenth-Century Britain: Fact or Myth?"

Paul, Ellen Frankel
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Editor/Trans.
First Pub. Date
Winter 1980
Publisher/Edition
Literature of Liberty. Vol. iii, no. 4, pp. 5-38. Arlington, VA: Institute for Humane Studies
Pub. Date
1980
Comments

1. [1] Colin J. Holmes, "Laissez-Faire in Theory and Practice: Britain, 1800-1875," Journal of European Economic History 5(Winter 1970):680.

2. [2] Lionel Robbins, The Theory of Economic Policy in English Classical Political Economy, p. 37. For appraisals of the extent of adherence to laissez faire among the classical political economists see: G. J. Stigler, "The Economist and the State," The American Economic Review 55(March 1965):1-18; W. D. Grampp, Economic Liberalism, and "On the History of Thought and Policy," Papers and Proceedings of the American Economic Association 55(May 1965):128-142; Jacob Viner, "Adam Smith and Laissez-Faire," Journal of Political Economy 35(1927), reprinted in Viner, The Long View and the Short; Joseph A. Schumpeter, History of Economic Analysis; Warren A. Samuels, The Classical Theory of Economic Policy; Thomas Sowell, Classical Economics Reconsidered; T. W Hutchison, 'Positive' Economics and Policy Objectives.

3. [3] E.g., Arthur J. Taylor, Laissez-Faire and State Intervention in Nineteenth-Century Britain, takes a dynamic view focusing upon both the shift of position by such figures as Senior and McCulloch over a twenty year period and the general movement away from laissez faire among the economists who succeeded Ricardo. Others, Sowell for one, tend to view the Classicals in a more static view with their differences on individual issues displayed but without generating a definite trend.

4. [4] Viner, "The Intellectual History of Laissez-Faire," The Journal of Law and Economics 3(October 1960):60.

    It is clear, moreover, that for Adam Smith laissez-faire, beyond its material benefits, had ethical or moral value in that it left to the individual unimpaired that 'natural system of liberty' to which he had a natural right. It is quite probable, therefore, that Adam Smith would have rejected an extensive program of state regulation of economic enterprise even if he had believed that the wealth of nations would thereby be augmented.

See: R. Lindgren, The Social Philosophy of Adam Smith for an interpretation of Smith as outside the natural rights tradition.

5. [5] Lionel Robbins, Theory of Economic Policy, p. 177.

6. [6] Jeremy Bentham, Anarchical Fallacies, Works, II, p. 501.

7. [7] See Ellen Frankel Paul, Moral Revolution and Economic Science, Chapter I.

8. [8] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, IV, ix, p. 51.

9. [9] Others, now called Ricardian socialists, would employ Ricardo's theory of rent to argue for land nationalization. After all, if landowners enjoy windfall returns as a result of the scarcity of land and the premium paid for more advantageous plots, and not as a result of any merit on their part, why not nationalize the unjust returns. Such, of course, was not Ricardo's opinion; rather, he argued for repeal of the Corn Laws to forestall for a short period the time of reckoning.

10. [10] Thomas Robert Malthus, An Essay on the Principle of Population as it Affects the Future Improvement of Society, p. 16.

11. [11] Colin J. Holmes, "Laissez-Faire Theory and Practice," p. 677.

12. [12] Ellen Frankel Paul, Moral Revolution and Economic Science.

13. [13] For discussions on the extent of Bentham's adherence to Smithian economics and his place in the Classical School see: J. B. Brebner, "Laissez-Faire and State Intervention in Nineteenth-Century Britain," Journal of Economic History, Supplement 8(1948); J. W. Hutchison, "Bentham as an Economist," Economic Journal (June 1956), pp. 288-306; A. V. Dicey, Lectures on the Relationship Between Law and Public Opinion in England During the Nineteenth Century; Leslie Stephen, English Utilitarianism.

14. [14] Joseph Schumpeter, History of Economic Analysis, p. 531.

15. [15] For a detailed examination of Mill's various metamorphoses on the question of socialism see: Lionel Robbins, The Theory of Economic Policy, Lecture V; and Ellen Frankel Paul, Moral Revolution and Economic Science, pp. 167-175.

16. [16] J. E. Cairnes, "Political Economy and Laissez-Faire," p. 244.

17. [17] Henry Sidgwick, The Principles of Political Economy, p. 417.

18. [18] For a study of the Manchester School of Economics; Bernard Semmel, The Rise of Free Trade Imperialism, Classical Political Economy and the Empire of Free Trade and Imperialism, 1750-1850; Norman McCord, The Anti-Corn Law League, 1838-1846.

19. [19] A more extensive discussion of such sources can be found in Colin Holmes, "Laissez-Faire in Theory and Practice," pp. 680-682; and Arthur Taylor, Laissez-Faire and State Intervention, pp. 27-30.

19a. [19a] I would like to thank Robert Hesson of the Hoover Institution for his valuable assistance in locating portions of the literature discussed in this section.

20. [20] J. Bartlet Brebner, "Laissez Faire and State Intervention in Nineteenth Century Britain," pp. 59-60, 61.

21. [21] Other early historians who share Dicey's view of the nineteenth century as embodying a protected period of laissez faire include: W. Cunningham, The Growth of English Industry and Commerce in Modern Times, Part II: Laissez Faire; C. R. Fay, Great Britain From Adam Smith to the Present Day and Life and Labour in the Nineteenth Century; L. C. A. Knowles, The Industrial and Commercial Revolution in Great Britain During the Nineteenth Century; E. Lipson, Planned Economy or Free Enterprise: The Lessons of History.

22. [22] A. V. Dicey, Law and Opinion, p. 144.

23. [23] A. V. Dicey, Law and Opinion, pp. 144, 146.

24. [24] A. V. Dicey, Law and Opinion, pp. 307, 146.

25. [25] A. V. Dicey, Law and Opinion, p. 309. For a more recent appraisal which supports Dicey's view of the Benthamites' contribution to collectivism as an unwitting one see: Arthur J. Taylor, "Laissez-Faire and State Intervention in Nineteenth-Century Britain," pp. 36-37. Taylor contends that there exists a fundamental dichotomy between the views of the Benthamites and the Fabians towards the state: that the Fabians saw the state as a positive tool to promote the greater good, while the Benthamites took it to be a negative institution reluctantly required on occasion to secure the greatest happiness. "To this extent the Utilitarians' contribution to the emergence of the Welfare State, however real, was essentially an unwitting one... it may be claimed with no less plausibility that had there been no Bentham the nineteenth century would have had to create one."

26. [26] J. B. Brebner, "Laissez Faire and State Intervention," p. 65.

27. [27] J. B. Brebner, "Laissez Faire and State Intervention," p. 65.

28. [28] Oliver MacDonagh, "The Nineteenth-Century Revolution in Government: A Reappraisal," The Historical Journal 2(1958):52-67; David Roberts, Victorian Origins of the British Welfare State; H. Scott Gordon, "The Ideology of Laissez-Faire," in A. W. Coats, The Classical Economists and Economic Policy; William D. Anydelotte, "The Conservative and Radical Interpretations of Early Victorian Social Legislation," Victorian Studies, No. 2(1967-68):225-236; W. L. Burn, The Age of Equipoise: A Study of the Mid-Victorian Generation; Colin J. Holmes, "Laissez-Faire in Theory and Practice: Britain, 1800-1875," pp 671-688.

29. [29] Oliver MacDonagh, "The Nineteenth Century Revolution in Government," p. 58.

30. [30] David Roberts, Victorian Origins of the British Welfare State, pp. 93-96.

31. [31] H. Gordon, "The Ideology of Laissez-Faire," p. 202.

32. [32] H. Gordon discovers further ammunition for his case in the work of Anydelotte, "The Conservative and Radical Interpretations of Early Victorian Social Legislation," who examined the division lists in Parliament during 1841 to 1871 on radical proposals regarding political reform, the Corn Laws, and the Ten Hours Bill. He found almost no statistical relationship between how men voted on reform and the Corn Laws, and how they voted on economic regulation in the Ten Hours Bill. The conclusion reached was that there was no underlying ideological consistency that prompted men in their voting behavior. "Radical reform... and the regulation of working hours in factories constituted two different attitude dimensions largely unrelated to each other," p. 233.

33. [33] W. L. Burn, The Age of Equipoise, p. 217.

34. [34] W. L. Burn, The Age of Equipoise, p. 150.

35. [35] Arthur Taylor, "Laissez-Faire and State Intervention," p. 48.

36. [36] Taylor, "Laissez-Faire," p. 64.

37. [37] Colin Holmes, "Laissez-Faire and Interventionism: A Potential Source of Historical Error," Journal of Political Economy 57(October 1949):438-441.

38. [38] [Econlib Editor: This footnote is missing in the original text. In the Bibligraphy the following work by Spengler is listed: Spengler, Joseph A. "Laissez-Faire and Interventionism: A Potential Source of Historical Error," Journal of Political Economy 57,5 (October 1949):438-441.]

39. [39] J. Brebner, "Laissez-Faire and State Intervention," p. 69.

40. [40] For a competent survey article on this topic see: Valerie Cromwell, "Interpretations of Nineteenth-Century Administration: An Analysis," Victorian Studies 9, No. 3(March 1966):245-254.

41. [41] Oliver MacDonagh, "The Nineteenth Century Revolution in Government," pp. 65, 66-67.

42. [42] L. J. Hume, "Jeremy Bentham and the Nineteenth-Century Revolution in Government," The Historical Journal 10, No. 4(1967):361-375.

43. [43] David Roberts, "Jeremy Bentham and the Victorian Administrative State," Victorian Studies (March 1959):207.

44. [44] For other authorities who concur with MacDonagh and Roberts in disparaging the influence of Benthamism upon British collectivism see: Kitson Clark, The Making of Victorian England; R. L. Lambert, "A Victorian National Health Service—State Vaccination, 1855-71," Hist. Fl. V(1962), pp. 1-18; Robert M. Gutchen, "Local Improvements and Centralization in Nineteenth-Century England," Hist. Fl. 4(1961):85-96; W. L. Burn, Age of Equipoise.

45. [45] Jennifer Hart, "Nineteenth-Century Social Reform: A Tory Interpretation of History," Past and Present, No. 31(July 1965):39.

46. [46] Henry Parris, "The Nineteenth-Century Revolution in Government: A Reappraisal Reappraised," Historical Journal 11(1960):17-37.

47. [47] Henry Parris, "The Nineteenth-Century Revolution," p. 35.

48. [48] Henry Parris, "The Nineteenth-Century Revolution," p. 36. For other authorities who view the influence of the Benthamites upon the creation of the Victorian administrative state as profoundly significant see: Sidney and Beatrice Webb, English Poor Law History, Part II; B. L. Hutchins, The Public Health Agitation; Elie Halevy, The History of the English People in the Nineteenth Century; Samuel Finer, The Life and Times of Edwin Chadwick, pp. 12-37,74-75.

49. [49] R. A. Lewis, Edwin Chadwick and the Public Health Movement, p. 188.

50. [50] W. I. Churchill, Lord Randolph Churchill, pp. 268-69, as quoted in Viner, "The Intellectual History of Laissez-Faire," p. 68.

51. [51] Herbert Spencer, The Man Versus the State, see particularly "The New Toryism," "The Coming Slavery," and "From Freedom to Bondage."

52. [52] W. Hutchison, A Review of Economic Doctrine 1870-1929.

53. [53] Dicey discounts this factor, remarking on the tendency of the rich to either feebly resist or explicitly favor collectivist legislation. Dicey, Law and Opinion, p. 218.

54. [54] Schumpeter, History of Economic Analysis, p. 763.

55. [55] Hutchison, A Review of Economic Doctrine, Ch. I.

End of Notes.

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