Exploring Hawtrey’s Social Philosophy*
― Through His Unpublished Book, Right Policy
Toshiaki Hirai (Sophia University)
1. Introduction
Ralph Hawtrey (1879-1975) is well-known as an economist who developed a monetary theory of business cycles.1 He is also famous for providing a theoretical basis for the so-called “Treasury View”2 ― and thus as an economist who took a stand against Keynes. Moreover, he developed a critique of Keynes as the author of the Treatise, which became one of the factors that moved Keynes in the direction of the General Theory.3 Leaving these well-known aspects of Hawtrey the economist aside, we would like to focus here on his social philosophy, now completely forgotten.4
Social philosophy is an investigation of human society. It is the capitalistic society, in which most of economic activities are made through markets, that we would focus on here. The following are studied there: how the capitalistic society should be evaluated (affirmatively or critically, or in between)?; what are the grounds for these evaluations?; how the capitalistic society should be reformed based on these evaluations? Social philosophy tries to inquire into the intrinsic nature of the capitalistic society, make value judgment of it, and ask how one should reform it, as
Keynes wrote the last chapter of the General Theory or Schumpeter wrote Capitalism, Socialism, and Democracy. Social philosophy is different from philosophy proper, which tries to inquire into the more fundamental problems as is seen in epistemology, ontology and so forth.
Hawtrey was brought up in the intellectual environment of Cambridge ― among other things, he was an apostle of the “Society”. After graduation he entered the Treasury and worked there as “the only economist” until retirement.
In the field of social philosophy Hawtrey published two books: The Economic Problem [1926. Hereafter EP]5 and Economic Destiny [1944. Hereafter ED]. In this paper, however, we will focus, rather, on his third and last (unpublished) book, Right Policy: the Place of Value Judgments in Politics (Hawtrey Papers, 12/2, Churchill College, Cambridge University. 528 pages type-written manuscript composed of eighteen chapters. Hereafter RP), although we will refer to the two books as the need arises (especially when we need to refer to differences or continuity).
As will be explained later, Right Policy is a book which examines the areas of economics, sociology and politics from a critical viewpoint, based on Moorean ethics - including “Good as indefinable”. “Value judgments” in the subtitle means judgments in view of “true ends” by a leader rather than “intermediate ends” by the public.6
The main purpose of this paper is to explore how Hawtrey set out to construct his social philosophy. We argue that he did it so with his broader philosophy underlying it. That is, Hawtrey’s system is composed of two elements: philosophy and social philosophy. Although Right Policy, in essence, deals with social philosophy, philosophy runs beneath it (Hawtrey left his only, unpublished philosophical book, Thought and Things, which might have been written around the same period as RP7 [Hawtrey Papers, 12/1, Churchill College, Cambridge University. A 314-page typescript composed of eight chapters. Hereafter TT]). This paper aims to reconstruct his system in the light of the above points and offers an evaluation of it.
When examining RP, we cannot help feeling that his way of developing social philosophy is discursive and lacking in logical integration. What the present paper has in mind is logically to reconstruct his system as composed of philosophy and social philosophy as far as we can, and to evaluate it as thus reconstructed. In this sense, it might be called an “exploration”.
The exploration is of certain significance. Firstly, it will comprise a part of importance for studies of Cambridge interwar social philosophy . Secondly, discursiveness does not necessarily mean that Hawtrey’s social philosophy is of scant significance. We would, rather, emphasize that Hawtrey made great efforts to construct his social philosophy more systematically than did his Cambridge contemporaries, including Keynes, Robertson and Pigou.8
This exploration can be said to be the first endeavour to reconstruct Hawtrey’s system based on his unpublished book, RP.
We noted above that Hawtrey’s social philosophy is “now completely forgotten”. This does not mean that it did not attract attention before and after the Second World War. In the mid-1920s his Economic Problem came under serious discussion. Hawtrey insisted on the necessity of integrating economics with ethics, which elicited criticism from Robbins and laudation from Knight, among others. Hawtrey continued to extend his social philosophy along this line, as can be seen in his Economic Destiny and Hawtrey [1946], in which he commented critically on “a dissociation of their [economists’] reasoning from any accepted ethical background” (p.351) and argued that “no limited purpose can supersede the foundation of right ends. It is the virtue of faith not to move mountains but to move mankind” (p.365). RP can be said to be the end (and unfinished) result of his long journey along this line (Hawtrey [1946] drew criticism from Robertson [1949], taking the Pigouvian point of view.9 Incidentally, it is the sort of thing that reminds us of Keynes’s letter to Harrod dated July 4, 1938 in which he said that “as against Robbins, economics is essentially a moral science” (Keynes [1973], p.297).
The present paper, however, does not deal with the controversy over the scope and method of economics or what welfare economics is10, but aims at clarifying Hawtrey’s system as expressed in RP.
The paper runs as follows: In Section 2 we will present the basic theme of Right Policy. We will then clarify Hawtrey’s philosophy in Section 3, and his social philosophy in Section 4. In section 5 we will evaluate Hawtrey’s system as a whole. In Section 6 we will trace a brief sketch of the movement in philosophy subsequent to Moorean ethics. Then in Section 7 we will compare Hawtrey with Moore and Keynes in philosophy and/or social philosophy. Section 8 sets out the conclusions.
2. The Basic Theme: Right Policy, True Ends and Good
Before examining RP in detail, we had better clarify, first and foremost, what the basic theme of Right Policy is.
The title implies man’s behaviour not so much among individuals as in relation to a community.11 “Man” here indicates a “leader or ruler” (not the general public), with the emphasis on the obligation assumed by a leader. It is argued that a leader who is responsible for implementing public policy should differ from the general public, and base his/her behaviour on an evaluation of the Good12 without settling for “intermediate ends”, which are no more than means by which the people should make their living, and which might fall into “false ends”13 “[w]hen these intermediate ends are allowed to dominate action, without regard to qualifying circumstances or consequences” (RP, p.528).
It should be noted that a leader is conceded authority on condition that he uses it to further the public’s ends, so the above argument is applicable to a democratic society; this will be explained in Section 4.1.1.
As he sees it, the only end (ultimate end) which Pure Reason should acknowledge is the Good.14 The “right” ends – an antonym of “intermediate ends” – which a leader should pursue must be good ones, so we need to understand what is meant by the “Good”.15 Hawtrey here follows Moore’s “Good as indefinable”16, which implies that it can be appreciated only intuitively by the mind. He lays the foundations of his social philosophy on it.
… in the last resort there is no substitute for the Good as the ultimate foundation of the moral code and of the principles of all human behaviour (RP, p.136).
Hawtrey then declares that one does not need to define “right ends” (therefore, “right policy”),17 for man is able to recognise right policy intuitively. The Good is argued to be “within the reach of the intelligence of all human beings” (RP, p.136), and to be objective. He states that, in order to identify the Good, man does not need to rely on philosophy but can appeal to everyday judgment.
We are not accustomed to reflecting on the Good, and the relation of means to ultimate ends, but our judgments involving it pervade all practical life, so that a moral code built on it has a firm foundation (RP, p.136).
… the Good is not merely Good for him. His experience is an experience for him,
but the attribute good is inherent in the experience, and is not just relative to him …. What is good is good, and the individual who experiences it is merely the channel through which it is realised (RP, p.69c).
When he states that the “goodness” of Right Policy18 is indefinable (and yet he insists that the attribute “Good” is extensible to other states of feeling such as aesthetic pleasures, intellectual pleasures and “human values”19, which man can appreciate by way of intuition), it indicates that what “good” ends actually means is entirely entrusted to the readers’ intuition.
In the Preface to Right Policy, Hawtrey declares that the purpose of the book is to assist clear thinking about [political and social] problems by appealing to “a sense of value inherent in human consciousness”.
We have specified the basic theme of RP. Based on it, Hawtrey put forward his system as being composed of two distinct but interrelated fields: philosophy and social philosophy.
RP is, in the main, a book on social philosophy. Hawtrey’s social philosophy is, in essence, composed of two elements. One is his conception of society in general, the other the view he takes of capitalistic economy. It should be noted that Hawtrey does not put forward any concrete policy in Right Policy. What he sets out to expound here is his social philosophy.
That said, his philosophy firmly underlies his social philosophy. It can readily be understood from the above that ultimate value is placed in the Good, which should be pursued by the ruler, and this concept of Good is attributable to Moorean ethics.
Our next task, therefore, is to examine these two fields.
3. Hawtrey’s Philosophy
Hawtrey’s philosophy expounded in RP has, as we take it, three components: (i) Moorean ethics; (ii) the theory of aspects; and (iii) the theory of evolution and rationalization.
(i) can be said to be the philosophical foundations for RP as greatly influenced by Moore, while (ii) is epistemology peculiar to Hawtrey. (iii) is an evolutionary theory of the human mind and is profoundly influenced by Social Darwinism.
What essentially matters in RP should be (i), although (ii) is very important in understanding Hawtrey as philosopher, while (iii) is indispensable in understanding Hawtrey as an evolutionist.
3.1 Moorean Ethics
It is a well-known fact of Cambridge history that Moore attracted many of the most brilliant students of that university in the early 20th century, and they came together in the “Society”.20 Hawtrey was not only one of them but also laid the foundations of Right Policy on Moorean ethics.21 It is worth noting that no such persistence is to be seen among his contemporaries who were also influenced by Moore.
Hawtrey argues that the human mind, once it has sufficiently developed over the evolutionary process, comes to be equipped with the ability to distinguish true ends from intermediate ends through intuition. But usually it is left to a leader to pursue the true ends, while it is left to the public at large to follow the intermediate ends.
The Good, which is a true end, cannot be defined, and can be grasped only through intuition ― “Good as indefinable”. It is this Good to which Hawtrey attaches the highest importance.
I think the world has most reason to be grateful for his emancipation of the attribute Good from the obscurities and dubieties of philosophy (RP, p.4).
Let us turn to intermediate ends. Hawtrey argues that a leader should pay critical attention to intermediate ends.
[An existing moral code] can itself be only a code of intermediate ends. The existing code itself must be open to criticism, … No political principle is exempt from this criticism, not Justice, Liberty or Security (RP, p.72a).
Hawtrey states that “code of conduct or moral code” offers various intermediate ends as practical guidance, mentioning “honesty, good faith, kindness, respect for property, for the family, for authority, and for personal rights and feelings”22 as well as the “system of rewards and punishments”.23
Hawtrey, moreover, regards liberty, (economic) justice, security and democracy as intermediate ends. He sets them below the Good, pursuit of which should be regarded as the supreme priority for a ruler.
It is worth noting that liberty, among other things, is regarded as one of intermediate ends. Although liberty is deemed a high ideal open to the human mind, which craves multiplicity and a vast range of opportunities, it is not, as Hawtrey sees it, a true end.24 In this sense, he is not a liberal who places the highest priority on liberty.
This type of criterion is peculiar to Hawtrey, there being no sign of it in the writings of Keynes, Robertson and Pigou. Indeed, it constitutes the most conspicuous feature of Hawtrey’s social philosophy, showing some affinity with Plato’s ideal of the nation, although based on Moorean ethics.
He admits the indispensability of intermediate ends in the actual world, and yet warns that, when going to extremes, they might fall into “false ends”, mentioning as examples “the desire for material possessions” (in contrast with the moral aspiration which shares satisfaction)25, “the desire for money” (which corrodes other valuable feelings), “safety” (which might prompt the feeling that punishment to criminals is in itself desirable) and “egoism”.
The leader should take care lest the public should fall to false ends through extreme pursuit of intermediate ends.
In The Economic Problem Hawtrey had already defined “welfare” in relation to (probably Moore’s) Good, arguing that:
Welfare here is an ethical term26; it comprises … those experiences, which are good in themselves …. It is co-extensive with the simple concept “good” as applied not to means, but to ends. We are speaking here of experiences which are good as ends or in themselves … The distinction [between “good as ends” and “good as means”] is familiar to philosophers, and is fundamental in ethics (EP, p.185).
In The Economic Problem “welfare” was used as a key concept, while it is not adopted in RP where the “Good” is the ultimate. In EP he argued “power” in terms of authority and obedience, but not in terms of the Good, whereas in RP he did so. In these respects RP might be seen as the work in which Hawtrey set out to incorporate Moore’s ethics as the foundations, and here the ruler appears as the (supremely) important figure whose task is to implement right policy.
3.2 The Theory of Aspects
Hawtrey’s own philosophy might be called the “Theory of Aspects” (since his youth he had cherished “aspect” as a fundamental concept.27). Let us see how this theory is discussed in RP, pp.42-53, while taking Thought and Things into consideration.
The theory of aspects is an “analysis of thought into the discernment of aspects in conscious experience” (TT, Preface). Applying a method of “introspection”, it argues that mind can discern aspects.
Sense experience is an object to the mind, and the aspects are inherent in the experiences; the mind in discerning them does not create them, but discovers them (RT, p.47. My underlining).
… the aspects which appreciation discerns in an experience are inherent in it (RP, p.49).
According to Hawtrey, aspects do in fact exist in things, but only as potentiality. They do not become reality until they are discerned, through conscious experience, by the mind.28 Suppose people see a certain picture. Some might discern “delicate beauty”, while others might see “delicate shadow”. Delicate beauty and delicate shadow are aspects which intrinsically exist in that picture, and are realized through each individual’s discernment.
This epistemology is closely connected with Hawtrey’s view of human value.
A person is that which feels. His/her identity resides in his feeling. His/her character or disposition consists essentially of sentiments, or potentialities of feeling and emotion. A sentiment remains latent except when the object to which it is directed enters his consciousness. The occurrence of the object awakens the feeling (RP, p.58)
Aspects are inseparable from a thing as a whole. Although “delicate beauty” exists in the picture, and is realized through discernment by mind, it cannot be isolated from the picture.
… the … face may bear a resemblance to the man’s mother. There can be discerned in the same set of features two distinct characteristics each of which belongs to the face in its entirety, and is not detachable, [but] as a part is detachable from a whole. Such characteristics I call aspects (RP, p.45. My underlining).
Aspects thus obtained are, he goes on to observe, accumulated within the mind. Whenever it makes a judgment, the mind is to make reference to them.
In this theory, man’s mind is considered to have a certain, if not complete, ability to discern various aspects in a thing such as an aspect of sense experience, an aspect of feeling and sentiment, an aspect of thought and so forth.
Hawtrey’s own philosophy thus belongs to the stream of empiricism29, standing between objectivism and subjectivism, laying its foundations on the individual’s ability to appreciate aspects, and is in sharp contrast with Behaviourism and Materialism, which attempt to explain things and phenomena as independent of mind. He is also critical of Scientism, which sets out to explain phenomena in terms of things.30
3.3 The Theory of Evolution and Rationalisation
Hawtrey’s cognition of society shows the influence of the Theory of Natural/Social Evolution. Although he was to accept Moore’s intuitive ethics, Hawtrey had adhered to the theory of evolution since his youth.31
The human mind was not a perfect instrument for thought and knowledge from the outset, but evolved under the pressure of natural selection, adapting to the circumstances. The human mind’s principal function here was to memorize impressions of physical circumstances, and to take appropriate action by way of an “instinctive propensity”.32 He then argues;
Mind, once fully developed, has opened the way to a far more rapid process of social evolution, in which instinctive reactions have been supplemented by conscious planning (RP, p.4).
The human being is, in fact, an entity in which rationality is added to the animal instincts.33
Human evolution is above all an evolution of consciousness. Consciousness itself has a high survival value. … When the progress of physiological evolution has equipped man with a brain capable of systematic thought, conscious planning becomes possible (RP, p.11).
The human mind has thus been developed through the process of natural and social evolution. Accordingly as the human mind has been capable of developing systematic thinking, it has been enabled to introduce “conscious planning” into society.
“Rationalisation” is the term used to explain the development of the human mind at this stage. It is a process which renders religious disciplines explainable by Reason.
In this process mystical elements which the people had blindly worshipped are gradually to disappear while the area which the human mind can understand by way of Reason is to increase. Rationalisation34 is, in a word, a development of rational philosophy.
Mind, once evolved, is free to think of all things, including its own states of feeling. When these are judged desirable, and the mind discerns right means to right ends, the way is open to rational action (RP, p.69a).
A rational act is directed to a purpose or end. Rationality requires the selection
of the right means to attain given ends, but it involves something more. The
ends themselves must be right ends (RP, p.3).
According as society evolves, the conscious mind evolves and human beings come to be aware of the problem of the “Good”. This is the situation in which Moorean ethics hold good: the human mind has acquired the ability to appreciate the Good through intuition.
The search for an ethical criterion in evolution bears fruit because human society in this phase of evolution is awake to the good (RP, p.9).35
4. Hawtrey’s Social Philosophy
Hawtrey’s social philosophy developed in RP can, in my estimation, be divided into two parts. One is his cognition of society in general while the other is that of capitalistic economy as one type of society.
We need to point out, in advance, how one component of his philosophy - Moorean ethics - explained in Section 3, is related to his social philosophy to be explained here.
4.1 Cognition of Society in General
For Hawtrey the key concept here is the relation between a “leader (ruler)” and the public, which has something to do with the relation between true ends and intermediate ends. And a leader’s behaviour should be based on “Good” in terms of Moore.
4.1.1 Leader (Ruler)
Whenever he speaks of society, Hawtrey argues that there exists power in any society which is composed of a leader36 who possesses and uses power, and the public, who follow him/her. Among other things, he stresses the role of the leader37 as indispensable for maintaining society. Terms such as “authority” and “power” appear in connection with him/her.
authority is conceded to the leader as ruler conditionally. The community becomes an instrument in his hands. The members of the community accord him loyalty and obedience on condition that he so uses this instrument as to further their individual ends (RP, p.21. Original underlining).
Any society is composed of a ruler and the public. Although all the individuals, by nature, have the ability to identify the Good through intuition, only a ruler could pursue right policy based on the true ends, while the public, who will entrust authority to the ruler, are in a position to pursue the Good. A ruler should, in turn, pursue right policy in such a way that it could satisfy the needs of the public, and take care lest intermediate ends should decline into false ends.
The concept of “leader” (or “ruler”) might suggest to readers that Hawtrey’s idea is anachronistic. This is not, in fact, the case, for it is true of any type of society including democratic society, in which the public, through elections, entrust power to parliament, which is designated to issue laws and regulations which the public accept as long as they do not deviate from the norms/conventions of society. We should not forget, moreover, that Hawtrey uses the word “condition” in the above quotation.
The aim of democracy is to supersede that right of rebellion which is the only remedy discontent has against an autocratic or oligarchic government, with a system of control residing in the whole mass of people (RP, p.108).
The following passage expresses the essential of Hawtrey’s cognition of society.
If association is to progress beyond an elementary stage, the members must have cognizance of the community itself. The community is a powerful instrument, which requires conscious direction in its handling (RP, p.20).
“Conscious direction” by the leader and the loyalty and obedience of the public, according to Hawtrey, open the way toward the rationalization of the society. He considers that a society lacking in such a leader will tend to fall into confusion. A (good) leader, who should implement Right Policy based on the Good, is considered to be indispensable for rationalising any society.
This cognition underlies his argument on collectivism (see Section 4.2.3), on the world as a whole (see Section 4.1.2) and on the market economy. Hawtrey holds that the market economy without any conscious direction could fall into chaos and needs some kind of planning by the State. He is acutely aware, moreover, that because power is unevenly distributed in the market economy, the market mechanism cannot guarantee the intrinsic value of goods (see Section 4.2.1).
He emphasizes that there exists a moral code which the people conventionally observe, and without which the maintenance of order would be impossible. And a leader is also required to observe it to retain his/her position.
4.1.2 View on World Peace
In RP a considerable number of pages are dedicated to the political situation of the world. Among other things, much reference is made to the Cold War, the Korean War and the Suez Crisis – cases in which Hawtrey was acutely aware of the weak and awkward position of the United Nations.
Whenever Hawtrey looks out to the world, the “balance of power” (among independent nations)38 is a key concept. Again, for him power exists in every society: every nation possesses power, remaining always a potential enemy to the rest of the nations.39 The world is also regarded as a society in which there exist a ruler and the ruled.
A world consisting solely of independent nations is mired in a kind of “international anarchy”,40 in the sense that Dickinson attributes to the expression41, and cannot keep peace. Hawtrey suggests, as a way of escaping from this situation, peaceful co-existence by means of “the genuine co-operation of the great powers”.42
Co-operation by the great powers means co-operation in the application of principles which will take the place of war in adapting the international system to changing conditions. It is these principles that they must agree upon if war is no longer to be an institution (RP, p.467).
“War” is, according to Hawtrey, an “institution”43 which has so far played an essential role in the adaptation of society to changes, and is an act negating pursuit of the Good.44 His hopes were placed in revitalizing and resuscitating the United Nations as a means of attaining world peace.
Once the requisite agreement and co-operation [among the Great Powers] have been assured, the United Nations Organisation will be at hand to provide the instrument of action, and the world will not want to incur delay in using it by waiting for the elaboration of a constitution (RP, p.466).
4.2 Cognition of Capitalistic Economy
This topic is dealt with mainly in Chapters 6-10 of RP, the main theme of which is to “apply the ultimate criterion [of the Good] to economic problems”45. The most conspicuous feature in Hawtrey’s cognition of economy lies in his close attention to the “Plus Products” and the Market. Other points worth noting are “Economic justice”46 and “comparison between Capitalism and Collectivism”.
4.2.1 Plus Products and the Market
The dominant feature of Hawtrey’s cognition of economy is the distinction of final products between “utility products” and “plus products”.47 Utility products are indispensable for maintaining “life, health and physical fitness, and …[guarding] against injury, pain, or discomfort, or …[saving] effort and fatigue” (RP, p.154). Plus products “are designed to confer some positive benefit or enjoyment” (RP, p.154).
Hawtrey argues that if economic activities were to make some positive contribution to the “true ends”, it should be sought in plus products and depend on how plus products can grow. He cautions, however, that the aims of plus products should not be identified with the Good (for example, human values do not depend on plus products).48
Hawtrey always sees final products from these points of view, so “value judgments” in his sense are always involved. He seeks to evaluate economic activities in relation to the Good as true ends, criticising Marshall-Pigou’s methodology in which the object of economic analysis should be confined to economic welfare. When he states that plus products could be useful for the “right ends”, he may well have in mind the Theory of Aspects, which stresses the “aesthetic pleasure” or “intellectual pleasure” that the people can enjoy.
Plus products have market value because they are transacted in the markets. The final products which are in excess of utility products, namely plus products, are related to the economic activities serving to attain the Good. Hawtrey points out that the divergence between the intrinsic and market values of plus products, however, is very wide (although he offers no answer as to how the gap can be bridged).
The market value of a work which is eventually destined to be recognised as of transcendent merit, may thus be very low. And, even when recognition attributes a high cash value to such work, the cash value cannot be taken as a measure of its intrinsic merit. Cash value has very little bearing on the aesthetic or intellectual value of plus products (RP, p.159).49
He also approaches education from this point of view, conceived in terms of the possibility for ever more people to enhance their capacity for appreciation.
… the aim of education should be to extend to all people the sense of values, the power of appreciation, appropriate to a governing class .… a sense of values, that is to say, of right ends (RP, p.303).
… much of education may be treated, like care of health, as a utility product.… As soon as education proceeds beyond these limits, the plus aspect begins to predominate. When education inculcates good manners and sound morals, it prepares the way for human values, and, when it develops literary, artistic and scientific tastes, it opens up the appreciation of the higher levels of plus products (RP, pp.290-291).
4.2.2 Economic Justice
“Economic justice” (as well as justice in general) is an intermediate end (so that taking it to an extreme could bring it down to the level of “false ends”)50 and is a part of the moral code. When applied to the social system, however, it becomes a moral obligation for a leader.51
Economic justice requires that there be no arbitrary discrimination among persons in the distribution of resources, but it also requires that the rules governing distribution be good rules (RP, p.172).
Hawtrey describes two types of distribution system － a system of rewards and a system according to needs.52 The former is a system adopted in the capitalistic society in which the equivalent to what an individual produces belongs to him/her, while the latter is a system taken as the ideal in the communist society.53
Economic justice, according to Hawtrey, is required as a compromise between the two systems. On the one hand, justice is a concept which prohibits arbitrary inequality in treating individuals.
[Justice] must be so understood that what is just is right. The rules to be conformed to must be good rules (RP, p.169).
Therefore, a leader must render social services through distribution “according to needs” to those who cannot meet their needs on their own.
On the other hand, in the case of justice as a system of rewards, the expectations it will prompt should not be betrayed. This, too, is a moral obligation observed by a ruler.54
Thus, when social services are to be provided it is far from clear where the concept of justice should be situated between the two distribution systems. Hawtrey then concludes:
Distribution according to needs provides a certain standard for those who for any good reason cannot secure it by their own earning power, and the rest of the available output is distributed in the forms of the equivalent of each person’s contribution to it, subject to the appropriate deduction of taxation (RP, pp.172-173).
Economic justice is, again, an intermediate end, not a true end. It should be noted that Hawtrey discusses it not in terms of a “commutative justice”/ “distributive justice” criterion but in terms of a system of rewards/a system according to needs. Economic justice is needed as what is good as a “rule”, not as an end itself. He argues that only a compromise could satisfy the public as a whole.
4.2.3 Capitalism and Collectivism
How did Hawtrey evaluate Capitalism and Collectivism55, the latter excluding private firms and providing for collective ownership?56 The following points sum up his evaluation.
(1) Economic adjustment by means of monetary policy is easier in Collectivism than in Capitalism. Because in the latter the government can make only indirect adjustment to the movement of the credit economy, it has some difficulty in maintaining balance as if on a razor edge. On the other hand, Collectivism avoids this difficulty.57
In passing, the objective of monetary policy is set as price stability. Hawtrey’s description here reminds us of something like the quantity theory of money.
(2) In Collectivism a wave of innovative firms are difficult to turn out due to the nature of the system, which depends on bureaucratic machinery.58 Contrastingly, because in Capitalism what to produce is left to entrepreneurs, the possibility of innovation is far higher.
In Collectivism accountability to the authorities tends to be a formidable bottleneck. Even if high officials sought the advice of specialists, they would still see innovation as a potentially dangerous deviation from the familiar routine.
(3) Capitalism could come close to Collectivism by applying progressive tax to correct the inequality of the system - inequality deriving from profit and land ownership.
To sum up, Collectivism excels in (1), Capitalism in (2). As for (3), Capitalism can come close to Collectivism.
So which side was Hawtrey to stand on? Although he makes no final judgement in RP, we see him here shifting towards the right of the political spectrum as compared with his position in The Economic Problem and Economic Destiny, both of which were in favour of Collectivism.59
At the same time we must point out just how critically Hawtrey viewed Capitalistic society. He was keenly aware of how difficult it is for the market system to bridge the gap between intrinsic value and market value: for (i) enhancing the public’s capacity of appreciation comes up against limitations; (ii) the market has a certain bias in power between dealers and consumers.
Moreover, Capitalistic society is motivated by false ends (profit making), as a result of which it shows inequality in income distribution. In short, Capitalistic society is a Plutocracy. One remedy for correcting Plutocracy might be intervention by the State (or a Ruler). However, Hawtrey must have considered that any type of society will face intractable difficulties in attaining “intrinsic value”.
5. Hawtrey’s System Evaluated
Now that we have seen Hawtrey’s philosophy and social philosophy, we are in a position to comprehend his system as a whole and evaluate it.
5.1 Hawtrey’s System as a Whole
Hawtrey’s system as a whole is composed of the two distinct and still interrelated sub-systems: philosophy and social philosophy.
Hawtrey’s Philosophy – It has three components: (i) the theory of evolution and rationalisation (ii) the theory of aspects; and (iii) Moorean ethics.
He argues that the human mind has made progress in terms of theory (i). “Rationalisation” is a key word there. Suppose that the human mind has reached the stage of completion through rationalization (this is greatly influenced by Social Darwinism). Then Hawtrey’s peculiar epistemology (ii) comes in (which is different from Moorean theory of “sense data”). Hawtrey continued to cherish (i) and (ii) since his youth.
(iii) is, by contrast, an element which Hawtrey inherited from Moore and regarded as essential in philosophy. Hawtrey laid the foundations for his social philosophy on Moorean ethics characterized by the ideal of the Good as indefinable and the distinction between true ends and intermediate ends.
Hawtrey’s Social Philosophy – It has two components. One is his cognition of society in general, the other his perception of capitalistic economy as one type of society.
With regard to Hawtrey’s conception of society, the key concept is the relation between a “leader (ruler)” and the public, which has to do with the relation between true ends and intermediate ends. And a leader’s behaviour should be based on ‘Good’ as conceived by Moore.
The most conspicuous feature in Hawtrey’s cognition of economy lies in his close attention to “plus products” and the market. In particular, he points out the divergence between the intrinsic and market values of plus products, which the market has a certain intractable difficulty in bridging. Another point worth noting is “economic justice” as belonging to intermediate ends.
5.2 Evaluation
5.2.1 Positive Side
We said above that his way of developing his social philosophy is discursive and lacking in logical integration. In this paper we have attempted to reconstruct his system in a logical way as far as we can. From this it emerges that Hawtrey’s system as a whole is constructed in such a way that his philosophy deeply underlies his social philosophy. This is quite unique among economists, not to be seen in the social philosophy of his contemporaries such as Keynes, Robertson and Pigou.
5.2.2 Problems
That said, we would like to point out three problematic elements detected in Hawtrey’s system.
Epistemology in Hawtrey and Moore - One concerns the relation between Hawtrey’s epistemology (the theory of aspects) and Moore’s epistemology. Can they coexist without any inconsistency?
How is the theory of aspects related to the Good? Can the Good be said to exist as an aspect? Hawtrey seems to relate his theory to the Good, but he does not seem to succeed in persuading us.
In order to be consistent with Moorean ethics, the Good must exist beyond all the aspects existing in things. Aspects are considered to matter in relation to the appreciative ability of the mind. He believes that if one could enhance one’s capacity of discernment and perceive more artistic, and more delicate aspects due to education, society would reach a higher level because this would contribute to more “plus products”. Therefore, we might reasonably conclude that the theory of aspects is argued in relation to the appreciative ability of the mind. In order to appreciate aspects which lie in things one needs to distinguish various aspects. In order to do so, it is necessary to enhance the ability of appreciation through, e.g., education. Intuition is not enough to acquire knowledge of them. The theory of aspects is related to the capacity for appreciation, although it does not necessarily exclude intuition.
But the Good as defined by Moore is indefinable and is esteemed as the ultimate end, thus having nothing to do with aspects. The Good exists, as it were, beyond all the aspects. The Good is known through intuition while aspects are attainable by means of the mind’s capacity for appreciation, and more aspects are discernable with an enhanced level of appreciation acquired through education.
The theory of aspects seems alien to Moore’s ethics.60
Plus Products and the Market - The other element concerns his treatment of plus products. On the one hand, the intrinsic values of plus products are argued to lie in artistry, so they depend on the public’s ability of appreciation. On the other hand, plus products are transacted in the markets, and are sold and bought with cash. Inevitably, there is a marked divergence between their intrinsic values and their market values.
However, the gap would still be hard to bridge even if the public’s capacity for appreciation were improved, for there are plus products in which intrinsic (aesthetic) values would have no relation to the market (cash) values. Hawtrey seems to overlook the market transaction in the actual economy by paying excessive attention to viewing the aesthetic aspects of plus products in relation to the “right ends”.
In “The Demand for Plus Products” (RP, pp.274-278a), he argues that plus products differ from one another according to differences in the method of marketing. He points out here that in the industrial society the middle class has taken over from the affluent patrons who were influential in aristocratic society. He seems to take a pessimistic view of the demand for plus products in industrial society, describing it somewhat ambiguously.
Hawtrey argues that in the market economy the function and ability of dealers outweigh those of the other economic agents, the role of dealers in selling being particularly emphasized. The market organization is “composed of … dealers in commodities who specialize in buying and selling and are ready to deal with all comers”(RP, p.180), and “[t]he making of a price which equates supply and demand is an important part of the services rendered by the dealers in a market, but by no means the whole” (RP, p.181). In contrast, the consumers are lacking in ability and information.61 There is, therefore, a certain difference in ability among economic agents.
This point is worth noting, and yet it does not imply that dealers can settle the divergence issue discussed above. Even if consumers were able to enhance their capacities for appreciating plus products, the possibility of its contributing to narrowing the divergence would probably be slight in view of the definition of intrinsic value.
The development of the capitalistic economy has brought about the production of goods far beyond the products necessary for survival --- electrical goods, medicines, automobiles and so forth. However, they are regarded not so much as plus products as, rather, utility products.62 Innovative technologies have gone into producing these goods, vastly improving comfort and convenience in everyday life. It is market profitability, however, that ultimately governs the growth of these products, and profitability largely depends on the degree of increasing returns to scale. It seems farfetched, therefore, to evaluate the market economy from a point of view of plus products, relating intrinsic value to right ends.
The Ruler and the Public – In his cognition of society the ruler, who is to pursue the Good as true ends, is distinct from the public, who is to pursue intermediate ends. This cognition corresponds to Plato’s one, in which the philosopher king, who is to perceive “ideas”, is distinct from the public, who are to live in a division-of-labour system – “Ideal State”. Hawtrey might have tried to fix the “Ideal State” through Moore’s “impossibility of the definition of the Good”.
However, Hawtrey makes no examination of, and no reference, to the following points: how a ruler is to appear or to be chosen; the risk of the appearance of a wicked ruler, who does not pursue the Good at all – at present as well as in previous times the world has been filled with dictators or tyrants who try to oppress the public for the sake of their own interests; how this risk is to be avoided, and so forth.
Too deeply influenced by Plato and Moore, Hawtrey’s cognition of society lacks in the power and tools of analyzing and evaluating the actual society as we live.
6. Philosophical Development in Cambridge63
We have so far examined Hawtreys’s social philosophy through Right Policy. However, we must not forget that interwar Cambridge saw philosophical torrents that were to revolutionise not only Cambridge but also the world. How did Hawtrey respond to these torrents? This is the question we will address in this section. It takes us a long way towards understanding Hawtrey to see him in the wider perspective, and to compare him with his contemporaries.
The starting point can be found in Moorean ethics, the most conspicuous feature of which lies, again, in “the Good as indefinable”. Arguing that the Good cannot be defined, and that attempts to define it in terms of other concepts would fall into naturalistic fallacy, Moore delivered a heavy blow against the established ethics: The Good is the Good; one can neither replace it with other words nor decompose it. How can one discern the Good, then? Moore’s answer was through “intuition”. All men/women are equipped with it, Moore insisted.
Moore’s view was to have a profound impact. As we have seen, Hawtrey cherished this view throughout his life. Keynes was also greatly influenced by it on his way to A Treatise on Probability [1921], which can be traced back to criticism of Moore’s “Ethics in relation to Conduct” in Principia Ethica. Moreover, “probability” in the Treatise defined as “the degree of rational belief among propositions” is itself Moorean, for this “degree” is argued to be obtainable only through intuition. Here the epistemology of “the Good as indefinable” is applied to “probability”. It is also a well-known fact that Moorean ethics had profound impact on the members of the “Society” and the “Bloomsbury Group” (Lytton Strachey, Leonard Woolf and so forth). Moorean ethics involves intuitionism, objectivism, and cognitivism in regarding the Good as a fact.
This does not mean, however, that Moorean ethics was not criticized. Far from it, it provoked criticism from the outset. The so-called “Emotivism” of Ogden, Richards, Stevenson and others represented the opposed view, which was to become dominant meta-ethics in the 1920s-1950s. It argued that the Good is useful only as an emotional sign expressing an attitude64 and should be understood as individualistic. It also criticised the objectivism of Moorean ethics on the ground that it failed to take into account the fact that intuitive understanding of the Good was prone to error. Emotivism was to go hand in hand with Logical Positivism which has Verificationism as its motto.
Another strand in the criticism of Moorean ethics can be found in the later Wittgenstein, where the theory of language game is developed, and the later Keynes, who is considered to succeed the later Wittgenstein. It should be noted here that Ramsey, together with Sraffa, made some contribution to the emergence of the later Wittgenstein.65
The story does not end here. Again, we have Ramsey. Harshly criticising A Treatise on Probability in “Truth and Probability” (Ramsey [1926]), he put forward an alternative theory now known as the theory of subjective probability, which was to lead to the decision-making theory (Ramsey was here influenced by Pierce’s pragmatism and J.S. Mill’s utilitarian psychology).
Hawtrey found himself amidst these outpouring torrents: he was a member of the “Society” and the Bloomsbury Group, and took a keen interest in philosophy to such an extent that he came to write Thought and Things. How did he react to these torrents, then?
Our provisional answer is that he did not change his philosophical stance. This is demonstrable from Right Policy as well as Thought and Things. Hawtrey held on to Moorean ethics based on “the Good as indefinable” and his own “Theory of Aspects” throughout his life.66 In this respect he differs from Keynes, who had once been enthusiastic about Moorean ethics, but came to take a critical view of it later on.
7. Comparison with Moore and Keynes
Let us compare, albeit very briefly due to lack of space, Hawtrey with Moore and Keynes in philosophy and/or social philosophy. Here Moore takes his place as a key figure who influenced both Keynes’s and Hawtrey’s way of thinking.
The present evaluation of the three scholars seems to go more or less as follows:
(i) Keynes: leading economist, leading social philosopher, leading philosopher
(ii) Hawtrey: leading economist
(iii) Moore: leading philosopher.
This means that Hawtrey has been completely forgotten as a social philosopher. As far as philosophy is concerned, we agree with the above evaluation, for Hawtrey has left no significant mark there. With regard to social philosophy, however, we argue that he should be seriously and fairly treated, although, unlike Keynes, he exercised no influence in this field as a leading figure of the New Liberalism in the interwar period.
7.1 Comparison with Moore in Philosophy
We can say that Hawtrey was greatly influenced by Moore in the sense that his social philosophy was based on Moore’s philosophy. That is to say, laying the foundations on Moore’s philosophy he was able to construct his own social philosophy.
It should be noted, moreover, that Hawtrey was not completely imbued with Moore’s philosophical influences, for he developed and maintained his own “theory of aspects” and the theory of evolution at the same time.
As for the difference in epistemology between Moore and Hawtrey, we dealt with it in Section 5.2.2, while with regard to the theory of evolution, it is sufficient to say that Moore criticized it as being subject to “naturalistic fallacy”.67
7.2 Comparison with Keynes in Philosophy
So far we have been looking into Hawtrey’s philosophy. What, then, is to be said of Keynes’s philosophy?68
It can be divided into two phases. The first is represented by A Treatise on Probability (which was originally written in 1907). This should be regarded as “ethics of rational mind”. Probability, defined there as a degree of rational belief between propositions, is treated as objective and attainable through intuition (a Moorean concept). Based on it, Keynes set out to explore the area between impossibility and certainty and construct an epistemological world by applying Russellian formal logic to it. He also endeavoured to explain induction in terms of formal logic. All in all, Keynes in this phase placed his trust in the rationality of human nature.
With regard to Moore, Keynes accepted “Good as indefinable” and intuitionism, while he rejected Moore’s “moral” code (but it should not be forgotten that this rejection was to lead to his Probability).
As the years went by, however, Keynes came to lose his trust in the rationality of human nature. This is the second phase, starting around 1914. In 1938 he completely lost this trust, and came to emphasize custom and convention, believing that rationalism and individualism were flawed. We can ascertain his change in philosophy through “My Early Beliefs” read at the Memoir Club69.
It should be noted, however, that Keynes left no paper, except for fragmentary ones, showing how he thought out his philosophy in the second phase: since the 1980s this has given rise to controversy over continuity or discontinuity among scholars70.
As far as the Keynes of the first phase is concerned, we can say that he shares Moorean ethics as foundations in common with Hawtrey. But Keynes did not adopt the theory of aspects and the distinction between true ends and intermediate ends, both of which Hawtrey cherished. As far as the Keynes of the second phase is concerned, all we can say at the moment is that, unlike Hawtrey, he eventually came to criticize Moorean ethics.
7.3 Comparison with Keynes in Social Philosophy
Keynes as an advocate of “New Liberalism” in the mid-1920s severely criticised both the capitalistic system, on the ground that it was driven by motives of “pseudo-morality”, and laissez-faire economics/ philosophy.
Hawtrey stood on the same side with Keynes on these points71. He was also critical of the capitalistic system in terms of the divergence between intrinsic value and market value. Hawtrey, moreover, regarded liberty as an “intermediate end”, placing top priority on the Good.
Keynes welcomed the growth of semi-autonomous bodies lying between firms and the state, and the socialization of large joint-stock companies within the then capitalistic system, playing down the role of entrepreneurs. Although he also supported J. R. Commons’s evolutionary theory of society, he seldom referred to it.
Hawtrey endorsed conscious planning as coming about due to evolution in rationalization, and the role played by the state, for example, in relation to economic justice.
Keynes sought to correct Capitalism rather than abolish it. In contrast, Hawtrey’s position in RP was not so clear. Although he was very critical of Capitalism and was seldom critical of Collectivism, he did not explicitly show which system he favoured in RP (in EP and ED he supported Collectivism.72).
With regard to the international scene, Keynes took imperialism for granted, while Hawtrey was very critical of it as a false end.
As for social philosophy, Hawtrey made great efforts to construct his own, laying the foundations on Moorean Good. He also insisted on the inseparability of economics from ethics. In the case of Keynes, we are left with the impression that he did not develop his own social philosophy in full.73
To sum up, Hawtrey and Keynes were decidedly critical of Capitalism. What differs Hawtrey from Keynes is that, unlike Keynes, Hawtrey set out to construct his social philosophy systematically.
8. Conclusions
Hawtrey might be regarded as the only scholar in interwar Cambridge74 who set out systematically to develop a social philosophy, which the present paper has attempted to reconstruct from RP, the end result of which is put forward in Section 5-1.
What he aimed at was, after all, to construct a systematic theory to comprehend human society. To this end, Moore’s Good was set as its foundation (on this point, Hawtrey occupies a unique position). The “true ends” are related to Moore’s Good. A leader should pursue them exclusively, while the public should live their everyday life, pursuing “intermediate ends”.
Although it is impossible to define Right Policy, we can appreciate what is good as ends through intuition. What matters for the implementation of Right Policy based on the Good is the human mind’s ability to discern Rightness (Goodness) intuitively. Hawtrey explains, in terms of rationalisation, that human beings have come to possess this ability. A leader should also pay close critical attention to “intermediate ends” lest they should decline into “false ends”. In this respect, Right Policy is, par excellence, a philosophical/ ethical problem entailing value judgments from the point of view of “true ends”.
Notes
* The present paper can be traced back to Hirai [2009]. It is greatly revised, thanks to invaluable comments, among others, by Prof. T. Hashimoto (Hokkaido Univ., Japan) at the JSHET Conference (Keio Univ., Japan, May 2009), Prof. N. Aslanbeigui (Monmouth Univ., US) and Prof. J. Davis (University of Amsterdam [Netherlands] and Marquette University [US]) at the HES Conference (Univ. of Colorado Denver, US, June 2009), and Prof. R. Backhouse (Birmingham Univ., UK) and Prof. R. Sandilands (Univ. of Strathclyde, UK) at the UK-HET Conference (Univ. of Manchester, UK, September 2009).
The largest improvement occurred in response to the two anonymous referees’ comments, for which I would like to express much gratitude. Any possible errors are mine.
1) Hawtery [1913] is his major work.
2) He developed it in Hawtrey [1925].
3) He developed it in Hawtrey [1932]. The criticism developed there is based on Hawtery [1928] and anticipated the argument to be found in the General Theory. For the relation between Hawtrey and Keynes, see Hirai [2003], pp.334-336; [2008b], pp.71-73.
4) The only book so far published on Hawtrey is Deutscher [1990]. It deals with his contribution to macroeconomics, not examining his social philosophy but. I retrieved EBSCO at Sophia Univ. without any result in terms of articles on Hawtrey as a social philosopher until the very recent publication of Andrews [2010] which studies the background to Hawtrey’s ethics rather than his social philosophy, contributing to shedding light on Hawtrey’s absolutely forgotten sphere.
Concerning Right Policy Andrews [2010, pp.306-307] refers to “Aspects” only. He uses Hawtrey’s theory of Aspects as implicating that the difference among people in opinion lies in the fact that each person sees different aspects of things, so that people’s views cannot be said to be in contradiction. He grasps the theory of Aspects from that point of view, arguing that it leads to Coleridge and Wittgenstein.
The present paper rather examines Right Policy in its entirety, taking Thought and Things, which embodies Aspects as well as Moorean ethics, evolution and rationalization, into consideration.
5) Hirai [2007], Ch.5, “Welfare and Value: Hawtrey” focuses on EP.
6) It is unknown when writing began on RP. All we can say at the moment is that it might have started after ED [1944], judging by the following evidence: (i) “creative products” are renamed “plus products” (see note 47); (ii) stance in favour of Collectivism is unclear in contrast with EP and ED.
Hawtrey refers to the Korean War and the Suez Crisis (1956), and, on p. 260, we read “now in 1964”. Judging from them, he must have gone on writing RP over a long period.
It could be useful to introduce RP’s table of contents here. In Chapters I, “Ends”, II, “The Good” and III, “The Philosophic Religion”, discussion ranges over the ethical sphere, moving on, in Chapters IV, “Government”, V, “Freedom”, and X, “Class”, to the political and sociological spheres, and in Chapters VI, “Economic Fundamentals”, VIII, “Labour”, and IX, “Questions of Distribution”, to the sphere of economics. In Chapter VII, “Capitalism and Collectivism”, comparative systems are argued while the Chapters from XI, “The Balance of Power”, to XVII, “A Concert of Great Powers”, address international politics (Chapter XII “Colonies”, XIII “The War Problem”, XIV “Communism and Nationality”, XV “Power Politics and Ideology” and XVI “Conditions of Peaceful Coexistence”). The book closes with Chapter XVIII, “Conclusion”.
7) It is unknown when writing began on TT. All we can say at the moment is that Hawtrey must have gone one writing it over a long period, judging by the following evidence: “1968” (p.253); “1968” (p.287); “Professor Ayer on Analytic” (pp.176-182b. Here A.J. Ayer’s “The Problem of Knowledge” (Macmillan, 1956) is examined).
8) While economic theory in the interwar Cambridge produced heated controversy and division, we see a considerable degree of similarities in social philosophy among Keynes, Robertson, Pigou and Hawtrey. Keynes called his social philosophy “New Liberalism” (while Robertson spoke of “Liberal Interventionism”). Rejecting both Liberalism and Socialism, they aimed, broadly speaking, to find a middle path between the two. For details, see Hirai [2008a].
9) On which see, e.g., Boianovsky [2005]. Also see note 26.
10) This is dealt with in the latest issue of this Journal, featuring Robbins. In this connection the present paper might be said to rehabilitate and reconstruct Hawtrey’s system through his last and unpublished RP.
11) See RP, p.1.
12) See RP, p.72. This view of the nation reminds us of Plato’s “Ideal Nation” in which a philosopher-king, who can appreciate the true world, rules over the people, who are specialized in their jobs.
13) Similar views are argued in detail as “Welfare and the False Ends” in EP, pp.185, 314, and ED, Ch.12. The term “welfare” is used there in Hawtrey’s sense and might be interpreted as “true ends” in RP.
14) See RP, p.69d.
15) See RP, p.3.
16) See RP, p.4.
17) See RP, p.4.
18) The same is true of “welfare” in EP. It is an ethical term which itself includes good experience, and is considered to be co-existent with the Good. See note 13.
19) See RP, pp.54-55.
20) For example, see Russell [1956], pp.79-80 and Russell, Woolf et. al. [1959].
21) See RP, p.4; TT, pp.100-105.
22) See RP, p.37.
23) See RP, p.69d.
24) See RP, p.71.
25) See RP, p.70.
26) See notes 13 and 18. Hawtrey criticized Pigou’s Economics of Welfare, arguing that it confines welfare to economic welfare (see Hawtrey[1926], pp.184-185. Pigou’s rejoinder to this is to be seen in Pigou [1950], p.17, fn.3). The stance taken by Hawtrey and Hobson was welcomed by Tokuzo Fukuda, a leading economist in pre-war Japan. His approval comes from his classification of economics between “economics of price” and “economics of welfare” (see Fukuda [1922], p.169).
27) See, for example, Hawtrey [1912], read at the “Friday Club”. TT originates from it (The title of Ch. 1 is “Aspects”). Hawtrey states that his “aspect” comes close to Langer [1942]’s “form”. See RP, p.52.
28) This might be related to Putnam’s “immanent realism”. “In Putnam [1987], Putnam self-criticized scientific realism and functionalism of the mind as his own stance, and came to defend pragmatism which interprets the reality of various objects in the outer world as closely linked with the cognitive subject’s interest and meaning, vehemently criticizing Scientism as holding that the truth is no more than a scientific truth” (Ito [1997], p.330. Translation is mine).
29) Interestingly enough, Hawtrey remarks that “Plato’s theory of ideas is conceived as an aspect of the universe” (TT, p.269). For details, see TT, “The Platonic Ideas” (pp.269-273).
30) See TT, pp.241-243, where Hawtrey discusses the fundamental difference between “the area of consciousness” (Hawtrey’s stance) and “the area of mechanical causality” (the stance of Behaviourism and Materialism).
31) Hawtrey recollects that at his youth, in Moore’s class, he argued aesthetic and literary values from the point of view of the survival of the fittest theory (see TT, p.96). 32) See RP, p.4.
33) See RP, p.9.
34) Interestingly, Hawtrey defines civilisation in terms of rationalization. “Civilisation is by no means to be understood as something wholly good. It can be nearly identified with the process of rationalisation of codes of behaviour. A nation is civilised in so far as it has the capacity of modelling and adapting its institutions and practices in accordance with deliberately planned means directed to conscious ends. Civilisation so defined is not an unmixed good, for the ends may be good or bad” (RP, p.314).
35) Hayek [1976] discusses the formation of Spontaneous Order (or “Rule”) from his theory of “competitive selection of cultural institutions”, which is a version of the theory of evolution. However, “rule” is here deemed to be accomplished as the consequence of the people’s unintentional behaviours rather than the consequence of either an increase in rational cognizance or evolution in consciousness. Thus the two scholars make different use of the concept of evolution. Cf. RP, p.180. For my considerations on Hayek’s theory of Spontaneous Order, see Hirai [2000], pp.299-301.
36) Hawtrey compares a ruler to a gardener. See RP, p.62.
37) Throughout RP, Hawtrey refers to “a leader” and “leaders” to an equal degree, while he is inclined to use the expression “a ruler” rather than “rulers”.
38) In EP, Hawtrey dedicated attention to “power” as well as money making. Among other things, this is taken as a key concept for an understanding of the international scene. Competition among nations for “interposts”, competition for colonies, and conquest activities, through fixation on “national powers”, paved the way to war. Such activities have been involved, linking “pursuit of power” with “Plutocracy”. Hawtrey remarked that through fixation on “pursuit for power” and “Plutocracy”, these activities came to be regarded as true ends although they are, in fact, “false ends”. In RP, Hawtrey argues that we must change our way of thinking about adhering to “pursuit for power” and “Plutocracy”, transforming the present peace, which is a potential state of war, into “the genuine peace”.
39) See RP, p.495.
40) In ED, Ch.10 (“International Anarchy and the United Nations”), “international anarchy” is mentioned as the largest factor for the economic confusion in the interwar period.
41) R. Fry, apostle and member of the Bloomsbury Group, was Dickinson’s closest friend, and “his sympathy was all directed toward Lowes Dickinson who fought to set up the League of Nations” (Woolf, V. [1940], p.272).
42) See RP, p.522.
43) See RP, p.357.
44) See RP, p.351.
45) It is explicitly described in the Preface of RP.
46) See RP, p.153b.
47) In EP, products were classified as “defence products” and “creative products”, while in ED the disjunction is between “utility products” and “creative products”. In RP “creative products” are renamed “plus products”.
48) See RP, p.157.
49) In EP Hawtrey criticized the individualistic system (capitalistic system) from the point of view of ethical values (welfare in Hawtrey’ sense). Here he expressed the view that due to the weak powers of appreciation of the human mind, the market value as determined in the goods market deviates from its ethical value.
50) See RP, p.172.
51) See RP, p.172.
52) See RP, p.168.
53) See RP, p.211.
54) See RP, p.170.
55) See EP, pp.337, 379, 390 and ED, p.358. In EP Hawtrey points out that in an individualistic system (Capitalism) the activities of firms are motivated by making profits, as a result of which capital is accumulated and excessive inequality of income distribution emerges. The root cause there ultimately lies in profit making, so that it is indispensable, through the attainment of true ends, to abolish it. Thus Hawtrey aims at achieving a system which is not founded on profit making, abolishing money making (Plutocracy) as “false ends” and establishing welfare as true ends through the state ― in a word, Collectivism. In passing, the paper which Hawtrey read prior to 1914 at Morley College, an institute for adult education in London (Hawtrey Papers, 6/5/2) starts with the sentence: “In theory at any rate Socialism is the natural sequel of democracy…”.
56) See RP, p.197.
57) See RP, p.250. It should be noted that Hawtrey achieved distinction as an economist thanks largely to his work on a monetary theory of business cycles.
58) See RP, p.219.
59) See note 55.
60) The following is another difference in epistemology between Hawtrey and Moore. In the case of Moore, there exist the so-called “sense data” between things and the mind. The mind appreciates things, through sense, in the form of sense data. For the relation between sense-data and aspect, see TT, p.233.
Russell [1912] owes the core of his epistemology to Moore (see “Sense-Data” [1910. In Baldwin ed. [1993]]). It is worth noting that Hawtrey’s “aspect” pertains to the same period.
In passing, in later years Russell expressed the view that both mind and material should be treated as a series of events (see Russell [1956], p. 170).
61) See RP, p.216. His view on the topic is well-known.
62) See RP, p.277.
63) The following is owed to Davis [1994].
64) See Davis[1994], p.45.
65) This does not mean that their views converged. They rather seem to have generated harsh tension and antinomy. For the philosophical tension with Sraffa, see Kurz [2009].
66) This kind of persistence is also true of his stance in economics.
67) See Moore [1903], p.50.
68) Hirai [2007], Ch.11, “A Treatise on Probability and ‘My Early Beliefs’” examined Keynes’s philosophy.
69) It should be noted that what I argued there is that Keynes changed his stance toward rationality rather than its meaning.
70) In the latter half of the 1920s Keynes recognized the error of fundamental ideas in his Treatise on Probability, substantially accepting Ramsey’s criticism. In the same period Cambridge saw Wittgenstein make a great transformation from the early Tractus to the latter Philosophical Investigations. Keynes himself was there and was greatly involved in this great change in philosophy through interactive discussion.
From these situations there appeared a view that Keynes as a philosopher can be also divided into the earlier and the latter. This stance is stated by Jeffreys [1939], Good [1950], Davis [1995], Bateman [1996], Ito [1999] and so forth.
According to it, Keynes came to entertain “Community Pragmatism” as a philosophy alternative to A Treatise on Probability, accepting Ramsey’s criticism. Davis [1995] and Ito [1999] maintains that this is a philosophy underlying the General Theory.
In contrast with the above, there exists a view that the fundamental philosophical ideas run through up to the General Theory. Carabelli [1988], O’Donnell [1989] are representative there. O’Donnell states that once we would take Keynes’s works from 1931 on into consideration, it should be superficial to interpret Keynes [1931] word by word [cf. p.140], insisting that the essential points of A Treatise on Probability are maintained (even) in the General Theory (cf. p.154). Similarly, Carabelli [1988] remarks that although in his essay on Ramsey Keynes paid a lip service to Ramsey’s criticism, he did not change, in substance, his view on probability [cf. p.97].
My view on this issue runs as follows. On the one hand, Keynes abandoned the basic philosophical stance underlying A Treatise on Probability (esp. Books I-III). In this regard, Ramsey’s criticism might have had some influence. On the other hand, we cannot find any trace to show that Keynes tried to work out positively a theory alternative to A Treatise on Probability. Judging from his character, he must have left something if he would have tried to work out a new theory. Rather he was to concentrate his intellectual energies on social philosophy and economics. Probably this change seems to have been brought about by the First World War.
71) See note 55.
72) See note 55.
73) As far as philosophy and social philosophy are concerned, there seems to be no scope for comparison between Hawtrey and Keynes as macroeconomists. It should be noted, moreover, that Hawtrey’s well-known monetary theory of business cycles occupies only a part of his system as a whole.
74) See note 8.
References
Andrews, D. [2010], “The Background to Hawtrey's Ethics”, History of Political Economy, Vol.42, No.2.
Baldwin, T. ed. [1993], G. E. Moore: Selected Writings, Routledge.
Bateman, B., Keynes’s Uncertain Revolution, University of Michigan Press, 1996.
Carabelli, A., On Keynes’s Method, Macmillan, 1988.
Bateman, B. and Davis, J. eds.[1992], Keynes and Philosophy, E. Elgar, 1992.
Bateman, B., Hirai, T. and Marcuzzo, M.C. eds. [2010], The Return to Keynes, Harvard University Press.
Boianovsky, M.[2005], “Dennis Robertson on Utility and Welfare in the 1950s”
(http://www.anpec.org.br/encontro2005/artigos/A05A010.pdf)
Carabelli, A. [1988], On Keynes’s Method, Macmillan.
Coates, J. [1996], The Claims of Common Sense: Moore, Wittgenstein, Keynes and the Social Sciences, Cambridge University Press.
Davis, J. [1995], Keynes’s Philosophical Development, Cambridge University Press.
Deutscher, P. [1990], R. G. Hawtrey and the Development of Macroeconomics, Macmillan.
Dokic, J. and Engel, P. [2002], Frank Ramsey, Routledge．
Fukuda, T. [1922], Social Policy and Class Struggle, Kaizousha (in Japanese).
Hawtrey, R. [1912], “Aspects” (Hawtrey Papers, 12/1, Churchill College, Cambridge University).
Hawtrey, R. [1913], Good and Bad Trade, Constable & Company.
Hawtrey, R. [1925], “Public Expenditure and the Demand for Labour”, Economica, March.
Hawtrey, R. [1926], The Economic Problem, Longmans, Green and Co.
Hawtrey, R. [1928], Trade and Credit, Longmans, Green and Co.
Hawtrey, R. [1932], The Art of Central Banking, Longmans, Green and Co.
Hawtrey, R. [1944], Economic Destiny, Longmans, Green and Co.
Hawtrey, R. [1946], “The Need for Faith”, Economic Journal, 56, pp.351-365.
Hawtrey, R., Right Policy: The Place of Value Judgements in Politics (Hawtrey Papers, 12/2, Churchill College, Cambridge University).
Hawtrey, R., Thought and Things (Hawtrey Papers, 12/1, Churchill College, Cambridge University).
Friedrich A. von Hayek [1976], “The Atavism of Social Justice” in New Studies in Philosophy, Politics, Economics and the History of Ideas, The University of Chicago Press, 1978).
Good, I.J.[1950], Probability and the Weighing of Evidence, Charles Grifin.
Hirai, T. [2000], Keynes, Schumpeter and Hayek, Minerva (in Japanese).
Hirai, T. [2003], Keynes’s Theory, University of Tokyo Press (in Japanese).
Hirai, T. [2004], “Social Philosophies of Cambridge in the Interwar Period – Pigou, Robertson and Hawtrey”, Sophia Economic Review, 49-1/2: pp.45-89 (in Japanese).
Hirai, T. [2007], Keynes and the World of Cambridge, Minerva (in Japanese).
Hirai, T. [2008a], “Seeking the Cure for the Malaise of the Market Economy ―Social Philosophy in Interwar Cambridge”, ESHET, May (at Prague).
(http://www.eshet.net/conference/sarea.php?p=27&sa=41&key=toshiaki&Submit=Search)
Hirai, T. [2008b], Keynes’s Theoretical Development, Routledge.
Hirai, T., [2009], Ch.5, “Hawtrey – His Unpublished Book, Right Policy, in Hirai, T., ed., The Development of the Theory of the Market Society in Cambridge, Nihon Keizai Hyouronsha (in Japanese).
Hutchison, T. [1938], Significance and Basic Postulates of Economic Theory, Macmillan.
Ito, K. [1997], Philosophy of Human Rationality, Chikuma Shobou (in Japanese).
Jeffreys, H. [1939], Theory of Probability, The Clarendon Press.
Keynes, J.M. [1921], A Treatise on Probability, Macmillan.
Keynes, J.M. [1926], The End of Laissez-Faire, Hogarth Press.
Keynes, J.M. [1931], “Ramsey as a Philosopher”, The New Statesman and Nation, 3 October.
Keynes, J.M. [1938], “My Early Beliefs” in Two Memoirs, Rupert Hart-Davis, 1949.
Keynes, J.M. [1973] The Collected Writings of John Maynard Keynes, Vol.14, Macmillan.
Kurz, H. [2009], “If Some People Looked Like Elephants and Others Like Cats, or
Fish …: The Case of Wittgenstein and Sraffa”, European Journal of the History of
Economic Thought, June.
Langer, S. [1942], Philosophy in a New Key: A Study in the Symbolism of Reason, Rite, and Art, Harvard University Press.
Langer, S. [1953], Feeling and Form: A Theory of Art, Scribner, 1953.
Long, D. and Wilson, P. eds. [1995], Thinkers of the Twenty Years’ Crisis, Clarendon Press, Oxford.
Moore, G. E. [1903], Principia Ethica, Cambridge University Press.
O'Donnel, R. [1989], Keynes:Philosophy, Economics and Politics, Macmillan.
Pigou, A.C. [1950], The Economics of Welfare, 4th edition, Macmillan (The First edition, 1920).
Plato (trans. by Fujisawa, R. [1979]), Nation, Iwanami Shoten (in Japanese).
Putnam, H. [1987], The Many Faces of Realism, La Salle: Open Court.
Ramsey, F. [1922], “Mr Keynes on Probability”, The Cambridge Magazine, January.
Ramsey, F. [1926], “Truth and Probability” (in Ramsey [1990]).
Ramsey, F. (ed. by Mellor, D.H.) [1990], Philosophical Papers, Cambridge University Press, 1990.
Robertson, D. [1949], “On Sticking to One’s Last”, Economic Journal, Dec.
Russell, B. [1912], The Problems of Philosophy, Home University Library.
Russell, B. [1956], Portrait from Memory and Other Essays, George Allen and Unwin Ltd.
Russell, B. (trans. by Takamura, N. [2005]), Introduction to Philosophy, Chikuma Shobou (in Japanese).
Russell, B., Woolf, L., White, M. and Wisdom, J. [1959], “The Influence and Thought of G. E. Moore: A Symposium”, Listener, 30 April.
Schumpeter, J. [1943], Capitalism, Socialism and Democracy, George Allen & Unwin Ltd.
Shionoya, Y., “Sidgwick, Moore and Keynes: a Philosophical Analysis of Keynes’s ‘My Early Beliefs’ ”, in Bateman, W. and Davis, J. eds., Keynes and Philosophy, E. Elgar, 1992. pp.6-29).
Waddington, C.N. [1960], The Ethical Animal, Athenaeum.
Warnock, G. [1958], English Philosophy since 1900, Oxford University Press.
Wilson, D. [1978], Leonard Woolf : A Political Biography, St. Martin’s Press.
Wilson, P. [2003], The International Theory of Leonard Woolf, Palgrave.
Wittgenstein, L. [1958], Philosophical Investigations, Basil Blackwell (trans. by Anscombe, G.E. M.).
Wittgenstein, L. (trans. by Noya, S. [2003]), Logico-Tractus, Iwanami Shoten (in Japanese).
Woolf, L. [1916], International Governments, George Allen and Unwin.
Woolf, L. [1928], Imperialism and Civilization, Hogarth Press.
Woolf, V. [1940], Roger Fry: A Biography, Hogarth Press.
