3 Laveleye: a critic ripe for conversion - Part II: nineteenth-century British and continental critics

American Journal of Economics and Sociology, The,  Nov, 2003  by Roy Douglas

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Emile de Laveleye (1822-1892), professor of political economy at the University of Liege, and later Baron de Laveleye, was a Belgian scholar and publicist, whose observations on Henry George first appeared in a brief article published in January 1880 in the Revue scientifique de la France et de l'etranger. (1) Later he wrote a much longer commentary that appeared in the London Contemporary Review of 1882. (2)

Laveleye's first article adopts a somewhat ambivalent position in relation to George. The beginning and the end are highly laudatory: "il m'a instruit et m'a fait reflechir," he writes of Progress and Poverty near the beginning, while toward the end he waxes enthusiastic for the "single tax" doctrine: "Elie est si simple et d'une si grande portee pour l'avenir, qu'elle aurait chance d'etre accueillie." Indeed, in his very last sentence Laveleye claims to have justified and developed the idea himself in an earlier work, to which I shall have need to refer later.

Yet there is a passage in the middle that appears more critical. George is taken to task for not considering the burden of military expenditure and of other government exactions upon labour: this ignores such sections as book 9, chapter 4. There is a part of the article, moreover, which is distinctly socialistic in its tendency, and to this too I shall later return.

Laveleye's second article is also by no means hostile, although it contains certain undeniably critical passages. As C. A. Barker noted in his biography of George, "Except for a private communication which this reviewer presently sent the author, it would be hard to say to which side his judgment leaned. But he assured George that in his net opinion Progress and Poverty was a book to be admired, and he offered compliments on the huge success of the English editions." (3)

Laveleye's arguments fall under several heads. He commences by making some interesting comments on the nature of economics as a science, and its connexion with morality. He then raises criticisms of George that relate to the Malthusian and "wage fund" theories. These criticisms are largely similar to those raised more fully by later writers, but introduce a few points of Laveleye's own. George, he argues, "is wrong in stating that this increase [i.e., the increase in rent] is the sole cause of the inequality of conditions," contending that the "constant increase of capital [is] no less important." (4) Finally, Laveleye moves from the posture of a negative critic to advocate a position of his own, for he was the author of important works on historical analysis and social theory, whose conclusions he contrasts with those of George. It is convenient to examine the "wage fund" arguments in the chapter that is mainly concerned with the views of W. H. Mallock, while the other points will be discussed here.

Laveleye's discussion of the nature of economics as a study is perhaps least vital to the argument, since it is quite possible to agree with his views in toto without dissenting from any important conclusions drawn by Henry George. Nevertheless, the topic has some fascination. George is taken to task for the proposition that economics is "as much a science as geometry." (5) The parallel may be closer than either George or Laveleye realised. Euclidian geometry and most of George's economics turn on a priori reasoning. The geometer discusses the properties of (say) lines and triangles, although there is no such thing in the whole order of nature as a line or a triangle as he defines those terms. George's a priori approach to economics contrasts sharply with the a posteriori approach that is now so common in the social sciences.

The Nature of Economics

The a priori approach common to George and the geometer has much to commend it. Suppose, for example, that the modern economist with his a posteriori reasoning wishes to study the relationship between inflation rates and economic growth. He may examine societies with different inflation rates, and compare their economic growth. Yet the relationship that he claims to have established will almost certainly be criticised by another economist who argues that the effect was really due in part or whole to something else: different technological inputs; the discovery of fuel reserves; the fiscal policy of another country. In contrast with the condition in most natural sciences, controlled experiments cannot be applied to determine the matter. Such difficulties by no means destroy the value of a posteriori investigations in economics, but they render the method a good deal less convincing than in a science like chemistry.

The a priori approach--whether of George or of the geometer--does not operate in a vacuum. The proposition that the angles of a triangle always add up to 180 degrees is accepted not merely because it is based on an elegant and intellectually satisfying theorem, but because it helps engineers to design bridges. The attraction of George's economics is not just the lucidity of his reasoning, but the fact that observed economic effects are consistent with his arguments.