[발췌: Mitra-Kahn's Redefining the Economy] 5. Political fragmentation breaks empirical economics, 1740-1780

출처: Benjamin H. Mitra-Kahn, “Redefining the Economy: how the ‘economy’ was invented in 1620, and has been redefined ever since,” Unpublished Doctoral thesis, City University London. September 2011.

자료: http://openaccess.city.ac.uk/1276/


Chapter 5_ Political fragmentation breaks empirical economics, 1740-1780

5.1 Political fragmentation changes the economic debate
    5.1.1 Matthew Decker's apparent conversion
    5.1.2 Decker and Political impact

5.2 The contribution of professionals
    5.2.1 The anonymous professional of 1746
    5.2.2 Andrew Hooke and Newton's ratios
    5.2.3 Hooke's economy
    5.2.4 Arthur Young, the last of the practical economists

5.3 Scholars vs. industrial policy advisors
    5.3.1 What sort of an economy could emerge from this?

5.4 The end of an 18th century of empirical advice

* * *

OF WHICH

※ 발췌 (excerpts):

The second half of the 18th century is portrayed by Schabas (2005) and others as a time when economics and the economy as a concept emerge on a wave of secularism following the dark ages of mercantilism. Just as I have argued that there was no dark age but a deep and exciting empirical literature from 1700 to 1750, I illustrate how there was no sudden emergence of the concept of an economy in the late 18th century. Indeed I show that there was an economic debate from 1740 to 1780 and its focus was on the definition and measurement of the economy. I argue that the economics Schabas (2005) and Hoppit (2006) see as emerging toward the 1770s is actually the emergence of a more familiar authorship on economics. They note the familiar scholary authors who discuss economics, but mis the forgotten traditional policy advisors, who were writing and calculating throughout the century. These merchants, industrialists and other non-scholars were trying to maintain their policy influence, and this is why the industrialist Andrew Hooke was so keen to point out that merchants addressed the "common life" while academic Doctors of Divinity offered nothing but "airy speculations."

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5.2 The contribution of professionals

( ... ) As I continue to argue in this section, there was no shortage of economic and empirical writing during this period. Numerous empirical submissions were made to parliament and the public from 1740 to 1780, and the authors were industrialists and professionals who did not want to be left alone: they wanted to affect policy. I present the national accounts of three authors in order to give a picture of the economic discourse during this period. I believe that these accounts, in addition to the work of Massie and Decker, giver a clear indication that the period was empirically interesting and rigorous by the standards of the time. I dwell on the work of the industrialist Andrew Hooke[n.7] (1750) who adopted part of Newton's physics to make his empirical argument. This episode leaves a question mark by Schabas's (2005) notion that there was an adoption of better methods and secularisation of economics only after 1776, because Hooke takes the latest maths and applies it free of any religious consideration. ( ... ) these authors were not full time scholars but professionals and businessmen who wanted to analyse the nation and provide policy advice, just as they had for the last century.


5.2.1 The anonymous professional of 1746

( ... ) Published anonymously, the author argued that the current tax system was "a Custom begun in bad times, supported by bad Men, and founded upon bad Principles" (Anon. 1747: 87).

This was not just a letter but a tract submitted by a professional author, perhaps a lawyer or an MP. I refer to the author as a 'professional' as there are numerous references to parliamentary debate and documents in the submission (Anon. 1746: 10). ( ... ) His focus was on the "Trade and interest of his country" (Anonymous 1746: 3) and the national income was defined quite specifically:

What I mean by National Incomes is, all the whole body of our people get or receive from Land, Trade, Arts, Manufactures, Labour, or any other way whatsoever; and by Annual Expence I mean, the whole that they spend or consume; and I lay it down as a Rule certain, that if our Annual Income is equal to our Annual Expence, we need never borrow. (Anon. 1746: 28-29)

The national income is the total income received by the "whole body of our People" from land, trade, and any type of labour. The difference between the national income and expenditure makes up both the taxes and the investments made by people and the government, or superlucration (Anon. 1746: 23). From that initial definition, the author provides a very detailed national income account, with a proposal for a new tax system, where income is taxed at 10% with lower rates for low income families.

The national income account imputed a rent for owner-occupied housing and set out the economy in terms of wages from all professions including "Painters, Poets, Virtuoso's, Mathematicians" and so forth (Anon. 1746: 34). The national income of England adds up to ￡65.6m, and Scotland added ￡8m. The author argued that the current tax system was unfair and inefficient because the land tax reached a third of the nation's income (similar to Davenant's 1698 claim) and was levied on less than a third of the population. The annual income column was calculated to address the more pressing concern: "I hope it is not yet too late to examine our Strength, and see how much an equal Taxation may fairly raise within the Year" (Anon. 1746: 8). The author proposes an income tax of 10% on all incomes, with lower taxes for low income manufacturers and labourers (￡20-￡40 p.a.) and exceptions for the poor and middle-income workers with more than three children (Anon. 1746: 39). This system would raise ￡8.7m if imposed nationally, and would be more efficient than current system. To re-assure the reader that this is affordable, he also provides a national expenditure account, divided by nations, including all taxes in the expenditure. 

The economy was one where tax revenues competed with superlucration for the difference between national income and expenditure. It appears to include the foreign trade, though the incomes of 'Owners, Officers, and Traders at Sea', as well as the service industries, and is reminiscent in its logic of British Merchant (1713-21) or Davenant (1695, 1698), who had also opposed a land tax on exactly the reason that it only reached a third of the population (1695: 122). While the impact of this submission seems to have been minimal in terms of legislative change, it should be considered on its own merit as a piece of economic analysis. It is empirically clear, and sets out a definition of the economy reminiscent of past attempts, although with a modification on how national stocks could be accumulated. ( ... )

Table 5.1 

Table 5.2


5.2.2 Andrew Hooke and Newton's ratios

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