Monday, October 8, 2012

Hayek: History and Politics

History and Politics

Political opinion and views about historical events ever have been and always must be closely connected. Past experience is the foundation an which our beliefs about the desirability of different policies and institutions are mainly based, and our present political views inevitably affect and color our interpretation of the past. Yet, if it is too pessimistic a view that man learns nothing from history, it may well be questioned whether he always learns the truth. While the events of the past are the source of the experience of the human race, their opinions are determined not by the objective facts but by the records and interpretations to which they have access. Few men will deny that our views about the goodness or badness of different institutions are largely determined by what we believe to have been their efects in the past. There is scarcely a political ideal or concept which does not involve opinions about a whole series of past events, and there are few historical memories which do not serve as a symbol of some political aim. Yet the historical beliefs which guide us in the present are not always in accord with the facts; some times they are even the effects rather than the cause of political beliefs. Historical myths have perhaps played nearly as great a role in shaping opinion as historical facts. Yet we can hardly hope to profit from past experience unless the facts from which we draw our conclusions are correct.

The influence which the writers of history thus exercise on public opinion is probably more immediate and extensive than that of the political theorists who launch new ideas. It seems as though even such new ideas reach wider circles usually not in their abstract form but as the interpretations of particular events. The historian is in this respect at least one step nearer to direct power over public opinion than is the theorist. And long before the professional historian takes up his pen, current controversy about recent events will have created a definite picture, or perhaps several different pictures, of these events which will affect contemporary discussion as much as any division on the merits of new issues.

This profound influence which current views about history have on political opinion is today perhaps less understood than it was in the past. One reason for this probably is the pretension of many modern historians to be purely scientific and completely free from all political prejudice. There can be no question, of course, that this is an imperative duty of the scholar in so far as historical research, that is, the ascertainment of the facts, is concerned. There is indeed no legitimate reason why, in answering questions of fact, historians of different political opinions should not be able to agree. But at the very beginning, in deciding which questions are worth asking, individual value judgments are bound to come in. And it is more than doubtful whether a connected history of a period or of a set of events could be written without interpreting these in the light, not only of theories about the interconnection of social processes, but also of definite values-or at least whether such a history would be worth reading. Historiography, as distinguished from historical research, is not only at least as much an art as a science; the writer who attempts it without being aware that his task is one of interpretation in the light of definite values also will succeed merely in deceiving himself and will become the victim of his unconscious prejudices.

There is perhaps no better illustration of the manner in which for more than a century the whole political ethos of a nation, and for a shorter time of most of the Western world, was shaped by the writings of a group of historians than the influence exercised by the English �Whig interpretation of history.� It is probably no exaggeration to say that, for every person who had firsthand acquaintance with the writings of the political philosophers who founded the liberal tradition, there were fifty or a hundred who had absorbed it from the writings of men like Hallam and Macaulay or Grote and Lord Acton. It is significant that the modern English historian who more than any other has endeavored to discreditthis Whig tradition later came to write that �those who, perhaps in the misguided austerity of youth, wish to drive outthat Whig interpretation... are sweeping a room which humanly speaking cannot long remain empty. They areopening the doors for seven devils which, precisely because they are newcomers, are bound to be worse than thisfirst.� (1) And, although he still suggests that �Whig history� was �wrong� history, he emphasizes that it �was one of ourassets� and that �it had a wonderful effect on English politics.� (2)

Whether in any relevant sense �Whig history� really was wrong history is a matter on which the last word hasprobably not yet been said but which we cannot discuss here. Its beneficial effect in creating the essentially liberalatmosphere of the nineteenth century is beyond doubt and was certainly not due to any misrepresentation of facts. Itwas mainly political history, and the chief facts on which it was based were known beyond question. It may not standup in all respects to modern standards of historical research, but it certainly gave the generations brought up on it atrue sense of the value of the political liberty which their ancestors had achieved for them, and it served them as a guide in preserving that achievement.

The Whig interpretation of history has gone out of fashion with the decline of liberalism. But it is more than doubtfulwhether, because history now claims to be more scientific, it has become a more reliable or trustworthy guide inthose fields where it has exercised most influence on political views. Political history indeed has lost much of thepower and fascination it had in the nineteenth century; and it is doubtful whether any historical work of our time hashad a circulation or direct influence comparable with, say, Macaulay�s History o f England. Yet the extent to whichour present political views are colored by historical beliefs has certainly not diminished. As interest has shifted fromthe constitutional to the social and economic field, so the historical beliefs which act as driving forces are now mainlybeliefs about economic history. It is probably justifiable to speak of a socialist interpretation of history which hasgoverned political thinking for the last two or three generations and which consists mainly of a particular view ofeconomic history. The remarkable thing about this view is that most of the assertions to which it has given the statusof �facts which everybody knows� have long been proved not to have been facts at all; yet they still continue, outsidethe circle of professional economic historians, to be almost universally accepted as the basis for the estimate of theexisting economic order.

Most people, when being told that their political convictions have been affected by particular views on economic history, will answer that they never have been interested in it and never have read a book on the subject. This,however, does not mean that they do not, with the rest, regard as established facts many of the legends which at onetime or another have been given currency by writers on economic history. Although in the indirect and circuitousprocess by which new political ideas reach the general public the historian holds a key Position, even he operateschiefly through many further relays. It is only at several removes that the picture which he provides becomes generalproperty; it is via the novel and the newspaper, the cinema and political speeches, and ultimately the school andcommon talk that the ordinary person acquires his conceptions of history. But in the end even those who never read abook and probably have never heard the names of the historians whose views have influenced them come to see thepast through their spectacles. Certain beliefs, for instance, about the evolution and effects of trade-unions, the allegedprogressive growth of monopoly, the deliberate destruction of commodity stock as the result of competition (an eventwhich, in fact, whenever it happened, was always the result of monopoly and usually of governmentorganizedmonopoly), about the suppression of beneficial inventions, the causes and effects of �imperialism,� and the role of thearmament industries or of �capitalists�in general in causing war, have become part of the folklore of our time. Most people would be greatly surprised tolearn that most of what they believe about these subjects are not safely established facts but myths, launched frompolitical motifs and then spread by people of good will into whose general beliefs they fitted. It would require severalbooks like the present one to show how most of what is commonly believed on these questions, not merely byradicals but also by many conservatives, is not history but political legend. All we can do here with regard to thesetopics is to refer the reader to a few works from which he can inform himself about the present state of knowledge anthe more important of them. (3)

There is, however, one supreme myth which more than any other has served to discredit the economic system to which we owe our present-day civilization and to the examination of which the present volume is devoted. It isthe legend of the deterioration of the position of the working classes in consequence of the rise of �capitalism� (or ofthe �manufacturing� or the �industrial System�). Who has not heard of the �horrors of early capitalism� and gainedthe impression that the advent of this system brought untold new suffering to large classes who before were tolerablycontent and comfortable? We might justly hold in disrepute a system to which the blame attached that even for atime it worsened the Position of the poorest and most numerous class of the population. The widespread emotionalaversion to �capitalism� is closely connected with this belief that the undeniable growth of wealth which thecompetitive order has produced was purchased at the price of depressing the standard of life of the weakest elementsof society.

That this was the case was at one time indeed widely taught by economic historians. A more careful examination ofthe facts has, however, led to a thorough refutation of this belief. Yet, a generation after the controversy has beendecided, popular opinion still continues as though the older belief had been true. How this belief should ever havearisen and why it should continue to determine the general view long after it has been disproved are both problemswhich deserve serious examination.

This kind of opinion can be frequently found not only in the political literature hostile to capitalism but even in works which on the whole are sympathetic to the political tradition of the nineteenth century. It is well represented by thefollowing pasage from Ruggiero�s justly esteemed History o f European Liberalism:

[i]Thus it was precisely at the period of intensest industrial growth that the condition of the labourer changed for theworse. Hours of labour multiplied out of all measure; the employment of women and children in factories loweredwages: the keen competition between the workers themselves, no longer tied to their parishes but free to travel andcongregate where they were most in demand, further cheapened the labour they placed on the market: numerous andfrequent industrial crises, inevitable at a period of growth, when population and consumption are not yet stabilized,swelled from time to time the ranks of the unemployed, the reserves in the army of starvation.(4)

There was little excuse for such a Statement even when it appeared a quarter-century ago. A year after it was ferstpublished, the most eminent student of modern economic history, Sir John Clapham, rightly complained:

The legend that everything was getting worse for the working man, down to some unspecified date between thedrafting of the People�s Charter and the Great Exhibition, dies hard. The fact that, after the price fall of 1820-1, thepurchasing power of wages in general-not, of course, of everyone�s wages-was definitely greater than it had been just before therevolutionary and Napoleonic wars, fits so ill with the tradition that it is very seldom mentioned, the works ofstatisticians of wages and prices being constantly disregarded by social historians.(5)

In so far as general public opinion is concerned, the position is scarcely better today, although the facts have had tobe conceded even by most of those who had been mainly responsible for spreading the contrary opinion. Few authorshave done more to create the belief that the early nineteenth century had been a time in which the position of theworking class had become particularly bad than Mr. and Mrs. J. L. Hammond; their books are frequently quoted toillustrate this. But toward the end of their lives they admitted candidly that

statisticians teil us that when they haue put in Order such data as they can find, they are satisfied that earningsincreased and that most men and women were less poor when this discontent was loud and active than they werewhen the eighteenth century was beginneng to grow old in a silence like that of autumn. The evidente, of course, isscanty, and its Interpretation not too simple, but this general view is probably more or less correct. (6)

This did little to change the general effect their writing had had on public opinion. In one of the latest competentstudies of the history of the Western political tradition, for instance, we can still read that, �like all the great social experiments, however, the invention of the labour marketwas expensive. It involved, in the ferst instance, a swift and drastic decline in the material standard of living of theworking classes.� (7)

I was going to continue here that this is still the view which is almost exclusively represented in the popular literaturewhen the Tatest book by Bertrand Russell came to my hands in which, as if to tonfirm this, he blandly asserts:

The industrial revolution caused unspeakable misery both in England and in America. I do not think any Student ofeconomic history can doubt that the average happiness in England in the early nineteenth century was lower than ithad been a hundred years earlier; and this was due almost entirely to scientific technique. (8)

The intelligent layman can hardly be blamed if he believes that such a categorical statement from a writer of this rankmust be true. If a Bertrand Russell believesthis, we must not be surprised that the versions of economic history which today are spread in hundreds of thousandsof volumes of pocket editions are mostly ofthe kind which spread this old myth. It is also still a rare exception when we meet a work of historical fiction whichdispenses with the dramatic, touch which the story of the sudden worsening of the position of large groups of workers provides.

The true fact of the slow and irregular progress of the working class which we now know to have taken place is ofcourse rather unsensational and uninteresting to the layman. It is no more than he has learned to expect as thenormal state of affairs; and it hardly occurs to him that this is by no means an inevitable progress, that it waspreceded by centuries of virtual stagnation of the position of the poorest, and that we have come to expect continuousimprovement only as a result of the experience of several generations with the system which he still thinks to be thecause of the misery of the poor.

Discussions of the effects of the rise of modern industry on the working classes refer almost always to the conditionsin England in the first half of the nineteenth century; yet the great change to which they refer had commenced muchearlier and by then had quite a long history and had spread far beyond England. The freedom of economic activity which in England had proved so favorable to the rapid growth of wealth was probably in the first instance an almost accidental byproduct of the limitations which the revolution of the seventeenth century had placed on the powers of government; and only after its beneficial effects had come to be widely noticed did the economists later undertake toexplain the connection and to argue for the removal of the remaining barriers to commercial freedom. Inmany ways it is misleading to speak of �capitalism� as though this had been a new and altogether different systemwhich suddenly came into being toward the end of the eighteenth century; we use this term here because it is themost familiar name, but only with great reluctance, since with its modern connotations it is itself largely a creation ofthat socialist interpretation of economic history with which we are concerned. The term is especially misleadingwhen, as is often the case, it is connected with the idea of the rise of the propertyless proletariat, which by somedevious process have been deprived of their rightful ownership of the tools for their work.

The actual history of the connection between capitalism and the rise of the proletariat is almost the opposite of thatwhich these theories of the expropriation of the masses suggest. The truth is that, for the greater part of history, formost men the possession of the tools for their work was an essential condition for survival or at least for being able torear a family. The number of those who could maintain themselves by working for others, although they did notthemselves possess the necessary equipment, was limited to a small proportion of the population. The amount ofarable land and of tools handed down from one generation to the next limited the total number who could survive. Tobe left without them meant in most instances death by starvation or at least the impossibility of procreation. Therewas little incentive and little possibility for one generation to accumulate the additional tools which would have madepossible the survival of a larger number of the next, so long as the advantage of employing additional hands waslimited mainly to the instances where the division of the tasks increased the efficiency of the work of the owner of thetools. It was only when the larger gains from the employment of machinery provided both the means and theopportunity for their investment that what in the past had been a recurring Surplus of population doomed to earlydeath was in an increasing measure given the possibility of survival. Numbers which had been practically stationaryfor many centuries began to increase rapidly. The proletariat which capitalism can be said to have �created� was thusnot a proportion of the population which would have existed without it and which it had degraded to a lower level; itwas an additional population which was enabled to grow up by the new opportunities for employment which capitalismprovided. In so far as it is true that the growth of capital made the appearance of the proletariat possible, it was in thesense that it raised the productivity of labor so that much larger numbers of those who had not been equipped by theirparents with the necessary tools were enabled to maintain themselves by their labor alone; but the capital had to besupplied first before those were enabled to survive who afterward claimed as a right a share in its ownership. Althoughit was certainly not from charitable motives, it still was the first time in history that one group of people found it in theirinterest to use their earnings on a large scale to provide new instruments of production to be operated by those whowithout them could not have produced their own sustenance.

Of the effect of the rise of modern industry on the growth of population, statistics tell a vivid tale. That this in itselflargely contradicts the common belief about the harmful effect of the rise of the factory system on the large masses isnot the point with which we are at present concerned. Nor need we more than mention the fact that, so long as thisincrease of the numbers of those whose output reached a certain level brought for. ward a fully correspondingincrease in population, the level of the poorest fringe could not be substantially improved, however much the averagemight rise. The point of immediate relevance is that this increase of population and particularly of the manufacturingpopulation had proceeded in England at least for two or three generations before the period of which it is alleged thatthe position of the workers seriously deteriorated.

The period to which this refers is also the period when the problem of the position of the working class became for thefirst time one of general concern. And the opinions of some of the contemporaries are indeed the main sources of thepresent beliefs. Our first question must therefore be how it came about that such an impressioncontrary to the facts should have become widely held among the people then living.

One of the chief reasons was evidently an increasing awareness of facts which before had passed unnoticed. The veryincrease of wealth and well-being which had been achieved raised standards and aspirations. What for ages hadseemed a natural and inevitable situation, or even as an improvement upon the past, came to be regarded asincongruous with the opportunities which the new age appeared to offer. Economic suffering both became moreconspicuous and seemed less justified, because general wealth was increasing faster than ever before. But this, ofcourse, does not prove that the people whose fate was beginning to cause indignation and alarm were worse off thantheir parents or grandparents had been. While there is every evidence that great misery. existed, _ there is none thatit was greater than or even as great as it had been before. The aggregations of large numbers of cheap houses ofindustrial workers were probably more ugly than the picturesque cottages in which some of the agricultural laborers ordomestic workers had lived; and they were certainly more alarming to the landowner or to the city patrician than thepoor dispersed over the country had been. But for those who had moved from country to town. it meant animprovement; and even though the rapid growth of the industrial centers created sanitary problems with which peoplehad yet slowly and painfully to learn to cope,statistics leave little doubt that even general health was on the whole benefited rather than harmed. (9)

More important, however, for the explanation of the change from an optimistic to a pessimistic view of the effects ofindustrialization than this awakening of social conscience was probably the fact that this change of opinion appearsto have commenced, not in the manu. facturing districts which had firsthand knowledge of what was happening, but inthe political discussion of the English metropolis which was somewhat remote from, and had little part in, the newdevelopment. It is evident that the belief about the �horrible� conditions prevailing among the manufacturingpopulations of the Midlands and the north of England was in the 1830�s and 1840�s widely held among the upperclasses of London and the south. It was one of the main arguments with which the landowning class hit back at themanufacturers to counter the agitation of the latter against the Corn Laws and for free trade. And it was from thesearguments of the conservative press that the radical intelligentsia of the time, with little firsthand knowledge of theindustrial districts, derived their views which were to become the standard weapons of political propaganda.

This position, to which so much even of the presentday beliefs about the effects of the rise of industrialism on the working classes can be traced, is well illustrated by a letter written about 1843 by a �London lady, Mrs. Cooke Taylor, after she had for the first time visited someindustrial districts of Lancashire. Her account of the conditions she found is prefaced by some remarks about thegeneral state of opinion in London:

I need not remind you of the statements put forward in the newspapers, relative to the miserable conditions of theoperatives, and the tyranny of their masters, for they made such an impression on me that it was with reluctance thatI consented to go to Lancashire; indeed these misrepresentations are quite general, and people believe them withoutknowing why or wherefore. As an instance: just before starting I was at a large dinner party, at the west end of thetown, and seated next a gentleman who is considered a very clever and intelligent man. In the course of theconversation I mentioned that I was going to Lancashire. He stared and asked,� �What an earth could take me there?That he would as soon think of going to St. Giles�s; that fit was a horrid place-factories all over; that the people, fromstarvation, oppression, and over-work, had almost lost the form of humanity ; and that the mill-owners were a bloated,pampered race, feeding on the very vitals of the people.� I answered that this was a dreadful state of things; andasked �In what part he had seen such misery?� He replied, that �he had neuer seen fit, but had been told that fitexisted; and that for his part he never had been in the manufacturing districts, and that he never would.� Thisgentleman was one of the very numerous body of people who spread reports without ever taking the trouble ofinquiring if they be true or false. (10)

Mrs. Cooke Taylor�s detailed description of the satisfactory state of affairs which to her surprise she found ends withthe remark: �Now that I haue seen the factory people at their work, in their cottages and in their schools, I am totallyat a loss to account for the outcry that has been made against them. They are better clothed, better fed, and betterconducted than mang other classes of working people.� (11)

But even if at the time itself the opinion which was later taken over by the historians was loudly voiced by one Party, itremains to explain why the view of one Party among the contemporaries, and that not of the radicals or liberals but of the Tories, should have become the almost uncontradicted view of the economic historians of the second half of thecentury. The reason for this seems to haue been that the new interest in economic history was itself closelyassociated with the interest in socialism and that at first a large Proportion of those who devoted themselves to thestudy of economic history were inclined toward socialism. It was not merely the great stimulus which Karl Marx�s�materialist Interpretation of history� undoubtedly gave to the study of economic history; practically all the socialistschools held a philosophy of history intended to Show the relative character of the different economic institutions andthe necessity of different economic systems succeeding each other in time. They all tried to prove that the system which they attacked, the System of private property in the means of production, was a perversion of an earlier and more natural system of communal property; and, because the theoretical preconceptions which guided thempostulated that the rise of capitalism must have been detrimental to the working classes, it is not surprising that theyfound what they were looking for.

But not only those by whom the study of economic history was consciously made a tool of political agitation - as istrue in many instances from Marx and Engels to Werner Sombart and Sidney and Beatrice Webb - but also many of the scholars who sincerely believed that they were approaching the facts without prejudice produced results whichwere scarcely less biased. This was in part due to the fact that the �historical apprbach� which they adopted haditself been proclaimed as a counterblast to the theoretical analysis of classical economics, because the latter�s verdict on the popular remedies for current complaints had so frequently been unfavorable. 12 It is no accident that thelargest and most influential group of students of economic history in the sixty years preceding the first World War, the German Historical School, prided themselves also in the narre of the �socialist of the chair� (Kathedersozialisten ) ; or that their spiritual successors, the American �institutionalists,� were mostly socialists intheir inclination. The whole atmosphere of these schools was such that it would haue required an exceptional independence of mind for a young Scholar not to succumb to the pressure of academic opinion. No reproachwas more feared or more fatal to academic prospects than that of being an �apologist� of the capitalist System; and,even if a Scholar dared to contradictdominant opinion on a particular point, he would be careful to safeguard himself against such accusation by joining inthe general condemnation of the capitalist system.� To treat the existing economic Order as merely a �historicalPhase� and to be able to predict from the �laws of historical deveIopment� the emergence of abetter Future system became the hallmark of what was then regarded as the truly scientific spirit.

Much of the misrepresentation of the facts by the earlier economic historians was, in reality, directly traceable to agenuine endeavor to Look at these facts without any theoretical preconceptions. The idea that one can trace thecausal connections of any events without employing a theory, or that such a theory will emerge automatically from the accumulation of a sufficient amount offacts, is of course sheer illusion. The complexity of social events in particular is such that, without the tools ofanalysis which a systematic theory provides, one is almost bound to misinterpret them; and those who eschew theconscious use of an explicit and tested logical argument usually merely become the victims of the popular beliefs oftheir time. Common sense is a treacherous guide in this field, and what seem �obvious� explanations frequently areno more than commonly accepted superstitions. It may seem obvious that the introduction of machinery will producea general reduction of the demand for labor. But persistent effort to think the problem through shows that this belief isthe result of a logical fallacy, of stressing one effect of the assumed change and leaving out others. Nor do the factsgive any support to the belief. Yet anyone who thinks it to be true is very likely to find what seems to him confirmingevidence. It is easy enough to find in the early nineteenth century instances of extreme poverty and to draw theconclusion that this must have been the effect of the introduction of machinery, without asking whether conditions hadbeen any better or perhaps even worse before. Or one may believe that an increase of production must lead to theimpossibility of selling all the product and, when one then finds a stagnation of sales, regard this as a confirmation ofthe expectations,although there are several more plausible explanations than general �overproduction� or �underconsumption.�

There can be no doubt that many of these misrepresentations were put forward in good faith; and there is no reasonwhy we should not respect the motives of some of those who, to arouse public conscience, painted the misery of thepoor in the blackest colors. We owe to agitation of this kind, which forced unwilling eyes to face unpleasant facts,some of the finest and most generous acts of public policy-from the abolition of slavery to the removal of taxes animported food and the destruction of many intrenched monopolies and abuses. And there is every reason toremember how miserable the majority of the people still were as recently as a hundred or a hundred and fifty yearsago. But we must not, long after the event, allow a distortion of the facts, even if committed out of humanitarian zeal,to affect our view of what we owe to a system which for the first time in history made people feel that this miserymight be avoidable. The very claims and ambitions of the working classes were and are the result of the enormousimprovement of their position which capitalism brought about. There were, no doubt, many people whose privilegedposition, whose power to secure a comfortable income by preventing others from doing better what they were beingpaid for, was destroyed by the advance of freedom of enterprise. There may be various other grounds on which thedevelopment of modern industrialismmight be deplored by some; certain aesthetic and moral values to which the privileged upper classes attached greatimportance were no doubt endangered by it. Some people might even question whether the rapid increase ofpopulation, or, in other words, the decrease in infant mortality, was a blessing. But if, and in so far as, one takes as one�s test the effect on the standard of life of the large number of the toiling classes, there can be little doubt that thiseffect was to produce a general upward trend.

The recognition of this fact by the students had to wait for the rise of a generation of economic historians who nolonger regarded themselves as the opponents of economics, intent upon proving that the _ economists had beenwrong, but who were themselves trained economists who devoted themselves to the study of economic evolution. Yetthe results which this modern economic history had largely established a generation ago have still gained littlerecognition outside professional circles. The process by which the results of research ultimately become generalproperty has in this instance proved to be even slower than usual.� (14) The new results in this case have not been ofthe kind which is avidly picked up by the intellectuals because it readily fits into their general prejudices but, on the contrary, are of a kind which is in conflict with their general beliefs. Yet, if we have been right in our estimate of the importance which erroneous views have had in shaping political opinion, it ishigh time that the truth at last displace the legend which has so long governed popular belief. It was the convictionthat this revision was long overdue which led to this topic being put on the program of the meeting at which the firstthree of the following papers were originally presented and then to the decision that they should be made available toa wider public.

The recognition that the working class as a whole benefited from the rise of modern industry is of course entirelycompatible with the fact that some individuals or groups in this as well as other classes may for a time have sufferedfrom its results. The new order meant an increased rapidity of change, and the quick increase of wealth was largelythe result of the increased speed of adaptation to change which made it possible. In those spheres where the mobilityof a highly competitive market became effective, the increased range of opportunities more than compensated for thegreater instability of particular jobs. But the spreading of the new order was gradual and uneven. There remained-andthere remains to the present day-pockets which, while fully exposed to the vicissitudes of the markets for theirproducts, are too isolated to benefit much from the opportunities which the market opened elsewhere. The variousinstances of the decline of old crafts which were displaced by a mechanical process have been widely publicized (the fate of the hand-loom weavers is the classical example always quoted). But even there it is more than doubtfulwhether the amount of suffering caused is comparable to that which a series of bad harvests in any region would havecaused before capitalism had greatly increased the mobility of goods and of capital. The incidence on a small group among a prospering community is probably felt more of an injustice and a challenge than was the general suffering ofearlier times which was considered as unalterable fate.

The understanding of the true sources of the grievances, and still more the manner in which they might be remediedso far as possible, presupposes a better comprehension of the working of the market system than most of the earlierhistorians possessed. Much that has been blamed on the capitalist system is in fact due to remnants or revivals ofprecapitalistic features: to monopolistic elements which were either the direct result of ill-conceived state action or theconsequence of a failure to understand that a smooth working competitive order required an appropriate legalframework. We have already referred to some of the features and tendencies for which capitalism is usually blamedand which are in fact due to its basic mechanism not being allowed to work; and the question, in particular, why andto what extent monopoly has interfered with its beneficial operation is too big a problem to attempt to say more aboutit here.

This introduction is not intended to do more than to indicate the general setting in which the more specific discussionof the following papers must be seen. For its inevitable tendency to run in generalities I trust these special studies willmake up by the very concrete treatment of their particular problems. They cover merely part of the wider issue, sincethey were intended to provide the factual basis for the discussion which they opened. Of the three related questions -What were the facts? How did the historians present. them? and Why?-they deal primarily with the first and chiefly byimplication with the second. Only the paper by M. de Jouvenel, which therefore possesses a somewhat differentcharacter, addresses itself mainly to the third question; and, in so doing, it raises problems which reach even beyondthe complex of questions which have been sketched here.

1. Herbert Butterfield, The Englishman and His History (Cambridge: Cambridge University Press, 1944), p. 3.
z. Ibid., p. 7.
3. Cf. M. Dorothy George, �The Combination Laws Reconsidered,� Economic History (supplement to the Economic Journal), I (May, 1927), 214-28; W. H. Hutt, The Theory of Collective Bargaining (London: P. S. King & Son, 1930) and The Economists and the Public (London: J. Cape, 1936) ; L. C. Robbins, The Economic Basis of Class Conflict(London: Macmillan & Co., 1939) and The Eco. nomic Causes:s of War (London: J. Cape, 1939) ; Walter Sulzbach,�Capitalistic Warmongers�: A Modern Superstition (�Public Policy Pamphlets,� No. 35 [Chicago: University ofChicago Press, 1942]) ; G. J. Stigler, �Competition in the United States,� in Five Lectures an Economic Problems(London and New York: Longmans, Green & Co., 1949) ; G. Warren Nutter, The Extent of Enterprise Monopoly in theUnited States, 1899-1939 (Chicago: University of Chicago Press, 1951) ; and, on most of these problems, the writingsof Ludwig von Mises, especially his Socialism (London: J. Cape, 1936).
4. Guido de Ruggiero, Storia del liberalismo europeo (Bare, 1925), trans.,R. G. Collingwood (London: OxfordUniversity Press, 1927), p. 47, esp. p. 85. It is interesting that Ruggiero seems to derive his facts mainly from anothersupposedly liberal historian, �lie Halévy, although Halévy neuer expressed them so crudely.
5. J. H. Clapham, An Economic History of Modern Britain (Cambridge, 1926), I, 7.
6. J. L. and Barbara Hammond, The Bleak Age (1934) (reu. ed., London: Pelican Books, 194?), p. 15.
7. Frederick Watkins, The Political Tradition of the West (Cambridge, Mass.: Harvard University Press, 1948), p. 213.
8. Bertrand Russell, The Impact of Science on Society (New York: Columbia University Press, 1951), pp. 19-20.
9. Cf. M. C. Buer, Health, Wealth and Population in the Early Days o/ the Industrial Revolution (London: G. Routledge& Sons, 1926).
10. This letter is quoted in �Reuben,� A Brief History of the Rise and Progress o/ the Anti-Corn-Law League (London,[1895]). Mrs. Cooke Taylor, who appears to have been the wife of the radical Dr. Cooke Taylor, had visited the factoryof Henry Ashworth at Turton, near Bolton, then still a rural district and therefore probably more attractive than some ofthe urban industrial districts.
11. Ibid.
12. Merely as an illustration of the general attitude of that school a characteristic statement of one of its best-knownrepresentatives, Adolf Held, may be quoted. According to him, it was David Ricardo �in whose hand orthodoxeconomics became the docile servant of the exclusive interests of mobile capital,� and his theory of rent �was simplydictated by the hatred of the moneyed capitalist against the landowners� (Zwei Bücher zur sozialen GeschichteEnglands [Leipzig: Duncker & Humblot, 18811, p. 178).
13. A good account of the general political atmosphere prevailing among the German Historical School of economistswill be found in Ludwig Pohle Die gegenwärtige Krise in der deutschen Volkswirtschaftslehre (Leipzig, 1911).
14. On this cf. my essay, �The Intellectuals and Socialism,� University of Chicago Law Review, Vol. XVI (1949).


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