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― Through His Unpublished Book, Right Policy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 critical approach to Keynes as the author of the Treatise.3 Leaving
these relatively well-known aspects of Hawtry the economist to other occasions,
We would like to focus here on his social philosophy now completely forgotten.4
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 as “the
only economist” there 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 we will, rather, focus
on his other and last (unpublished) book, Right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 need arises.
Right
Policy is a book
which critically examines the areas of economics, sociology and politics, being
based on Moorean ethics - including “Good as indefinable”. As will be explained
later, “value judgments” in the subtitle means judgments in view of “true ends”
by a leader rather than “intermediate ends” by the public.
Before we enter into the main
argument, it could be useful to introduce RP’s
table of contents. It runs as
follows. In Chapters I “Ends”, II “The Good” and III “The Philosophic Religion”
discussion ranges over the ethical sphere, passing on, in Chapters IV
“Government”, V “Freedom” and X “Class” to the political and sociological
spheres, and in Chapter VI “Economic Fundamentals”, VIII “Labour” and IX “Questions
of Distribution” to the world of economics. In Chapter VII “Capitalism and
Collectivism” comparative systems are argued while Chapter 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”.
The main purpose of this paper is to
explore and evaluate how Hawtrey’s social philosophy is constructed. The paper
runs as follows: In section 2 we will present the main theme of Right Policy, and in section 3 we will consider
“The Theory of Aspects” as Hawtrey’s own philosophy. In section 4 we will outline
Moorean ethics, and go on to analyse in section 5 how Hawtrey saw society, and
in section 6 how he saw the economy. In section 7 his theory of the world peace
will be dealt with, and in section 8 how philosophy evolved in Cambridge
after Moore
When examining RP, we cannot help
feeling that his way of developing his social philosophy is discursive and lacking
in logical integration. What the present paper aims to do is to clarify his
social philosophy, filling in the gaps. In this sense, it might be called an “exploration”.
The exploration is of a certain significance.
Firstly, it will comprise an important part of the project, “Studies of the
Social Philosophies” in the interwar Cambridge
2. The Main
Theme
2.1 Right
Policy, True Ends and Good
We need to clarify, first and
foremost, what the main theme of Right
Policy is. The title implies man’s behaviour not so much among individuals as
in relation to a community.6 “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 Good7 without settling for “intermediate ends”,
which are no more than means by which the people should make their living, and which
might decline into “false ends”8 “[w]hen these intermediate ends are
allowed to dominate action, without regard to qualifying circumstances or
consequences” (RP, p.528).
As he sees it, the only end (ultimate
aim) which Pure Reason should acknowledge is the Good.9 “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”.10 Hawtrey
here follows Moore’s “Good as indefinable”11, which implies that it
can be appreciated only intuitively by the mind. He lays the foundation 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”),12 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
used to reflecting about the Good, and about 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 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 Policy13 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”14, which man can appreciate
by way of intuition), we cannot help feeling that what “good” ends actually means
is left to the readers’ judgment from the outset.
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”.
2.2 Hawtrey’s
Conception of Society
With his conception of society composed of a
ruler and the public together with everyone’s assumed ability to identify the
Good and the distinction between “true and intermediate ends" (to be
examined later), Hawtrey seems to conceive society as follows:
Any society is composed of a ruler and the
public. Although all the individuals, by nature, have an ability of identifying
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 intermediate ends. 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 fall into false ends (The public are not in
a position to pursue the Good, even if they have the ability of identifying the
Good. That is why they would leave this task to a ruler).
Society thus conceived has its foundations in
the relation between ruler and public. It is worth noting that liberty is
regarded as one of intermediate ends. The ultimate value is set on the Good,
which should be pursued by the ruler. Here the Good has priority over liberty.
And this concept of Good is attributable to Moore
We should also note that Hawtrey does not put
forward any concrete policy in Right
Policy. What he sets out to expound there is his social philosophy.
We have already said more than enough for our
initial remarks. Let us now go on to focus on a more precise topic --- his
specific philosophy.
3. 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.15). Let us see how this
theory is discussed in RP, pp.42-53,
taking Thought and Things, his only, and
unpublished philosophical book into consideration (Hawtrey Papers, 12/1,
Churchill College, Cambridge University. A 314-page typescript composed of
eight chapters. Hereafter TT).
The
theory of aspects lies in the “analysis of thought into the discernment of
aspects in conscious experience”. Using a method of “introspection”, it argues that
mind can discern aspects. 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.16 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.
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. Aspects thus obtained, according to him, are 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 empiricism, 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.17
How
is the theory of aspects, which represents Hawtrey’s epistemology, related to
the Good? Can the Good be said to exist as an aspect in things? Hawtrey seems
to relate the theory to the Good, but he does not succeed in persuading us.
In
order to be consistent with Moorean ethics, the Good must exist beyond all the
aspects existing in things. Aspects seem to be considered to be important in
relation to the appreciative ability of the mind. He believes that if one refines
one’s capacity for discernment and perceives more artistic, and more delicate
aspects through education, society will reach a higher level (for this will
contribute to more “plus products” [to be explained below]). Therefore, we
might reasonably conclude that the theory of aspects is argued in relation to
the appreciative ability of mind, while the Good is esteemed as the ultimate,
independent of aspects. And yet, be it noted, both are deemed to be intuitively
appreciated.18
Now we will turn to Moorean ethics as
the foundation of Hawtrey’s social philosophy.
4. Moorean
Ethics
It is well known that Moore attracted
the most excellent students of Cambridge in the early 20th century, who
gathered in the “Society”.19 Hawtrey was not only one of them but
also laid the foundations of Right Policy
on Moorean ethics.20 No such persistence is to be seen among his
contemporaries who were also influenced by Moore.
The Good cannot be defined, and can be
grasped only through intuition ― “Good as indefinable”. It is this Good to which
he 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).
It is worth noting, again, that in RP liberty is regarded not as the ultimate
but 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, according to him, a true end.21
Let us turn to intermediate ends.
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 instinct and the “system of rewards and
punishments”.23 He admits the indispensability of intermediate ends
in the actual world, and yet warns that, when going to extremes, they might decline
into “false ends”, mentioning as examples “the desire for material possessions”
(in contrast with the moral aspiration which shares satisfaction)24,
“the desire for money” (which injures other valuable feelings), “safety” (which
might prompt the feeling that punishment to criminals is in itself desirable)
and “egoism”.
Hawtrey argues that a leader should take
heed of intermediate ends as an object of criticism.
[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
Hawtrey regards liberty, justice, security,
democracy, and respect for property and personal rights as intermediate ends,
distinguishable from true ends. He sets them below the Good, pursuit of which
by a ruler should be regarded as the supreme priority. In this sense, he is not
a liberal who puts the highest priority on liberty and respect for property.
This type of ranking is peculiar to Hawtrey, there being no sign of it in the
writings of Keynes, Robertson or Pigou. Indeed, it constitutes the most
conspicuous feature of Hawtrey’s social philosophy, showing strong affinity
with Plato’s ideal of the nation, although based on Moorean ethics.
In The Economic
Problem he had already defined “welfare” in relation to (probably Moore
Welfare here is an ethical term25;
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
Right Policy where the “Good” is the ultimate. In EP he argued “power” in relation to authority and obedience, but
not in relation to the Good, whereas in RP
he did so. In this respect RP might
be seen as the book into which Hawtrey set out to incorporate Moore
5. Cognition
of Society
Let us now turn to how Hawtrey conceives
of society. The key concepts here are “leader (ruler)”, the “theory of
evolution” and “rationalisation".
5.1
Leader (Ruler)
Whenever he speaks of society, Hawtrey
argues that there exists power in any society which is composed of a leader26
who possesses and uses power, and the public, who follow him/her. Among other
things, he stresses the role of the leader (or the class of leaders27)
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).
This is true of any type of society. In
a democratic society, for example, the public, through elections, entrust power
to the parliament, which is to give orders which the public accept as long as it
does not deviate from the norms/conventions of society.
The aim of democracy is to supersede
that right of rebellion, which is the only remedy of discontent against an
autocratic or oligarchic government, by 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
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 6 below), on the world as a whole (see Section 7 below) 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 there,
the market mechanism cannot guarantee the intrinsic value of goods (to be
explained in Section 6).
In the early 20th
century Elite Theories28 became prevalent, as represented by V.
Pareto, G. Mosca and R. Michels. Although we cannot verify that Hawtrey was
influenced by them, it appears quite probable. 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.
5.2 The Theory
of Evolution and Rationalisation
Apart from Elite Theories, Hawtrey’s
cognition of society also shows the influence of the Theory of Natural/Social Evolution.
Although he was to accept Moore
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”.30 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.31
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 it has been
capable of developing systematic thinking, it has 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. Rationalisation32
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).
Accordingly 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).33
6. Cognition
of Economy
In this section we will look into Chapters
6-10 of RP, the main theme of which is
to “apply the ultimate criterion [of the Good] to economic problems”34.
The most conspicuous feature in Hawtrey’s cognition of economy lies in his close
attention to the “Good” as the ultimate end. In these chapters, among other
things, “economic ends” and “economic justice” matter.35 Another
point worth noting is “comparison between Capitalism and Collectivism”.
6.1
Economic Ends
The dominant feature of Hawtrey’s cognition
of economy is a classification of final products into “utility products” and
“plus products”.36 Utility products are indispensable for making
livings, maintaining lives, and protecting the people from injury, pain or
discomfort. Plus products are designed to afford some positive benefits or
enjoyment.
Hawtrey argues that if economic
activities were to make some positive contribution to the “true ends”, it
should be sought in plus products. 37 He cautions, however, that the
ends of the plus products should not be identified with the Good (for example,
human values do not depend on plus products).
Hawtrey always sees final products from these
points of view, so “value judgments” in his sense are incessantly 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 might have in mind the Theory
of Aspects, which stresses the “aesthetic pleasure” or “intellectual pleasure” that
the people can appreciate.
Plus products have market value because they
are transacted in the markets. The final products which exceed utility products,
the 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 the plus products, however, should be very large (although he offers
no answer to how the gap can be bridged).
The market value of a work which is
destined eventually 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).38
Hawtrey also argues that whether
economic activities can contribute to the attainment of the Good depends on how
plus products can grow.
He also approaches education from this
point of view.
…
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).
And yet Hawtrey’s treatment of plus
products seems somewhat ambiguous. On the one hand, the intrinsic values of
plus products are argued to lie in artistry, so they depend on the public who have
the ability of appreciation. On the other hand, plus products are transacted in
the markets, and are sold and bought with cash. There should, indeed, lie a
great divergence between their intrinsic values and their market values.
However, the gap would remain hard to
bridge even if the public’s capacity for appreciation were improved, for there are
plus products in which intrinsic (aethetic) values would have no relation to
the market (cash) values. Hawtrey seems to overlook the market transaction in
the actual economy by paying too much 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), Hawtrey argues that
plus products differ from one another according to differences in the method of
marketing. Here he points out that in industrial society the middle class has taken
over affluent patrons who were influential in aristocratic society. He seems to
perceive the demand for plus products in the industrial society in a
pessimistic way, and describe it rather ambiguously.
Hawtrey argues that in the market
economy the function and ability of dealers outweigh those of the other
economic agents. Among other things, the role of dealers in selling is
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.39 There is, therefore, a certain difference in ability
among economic agents.
This point is worth noting, and yet it
does not imply that the dealers can settle the above-mentioned divergence. Even
if consumers were able to level up their capacities for appreciating plus
products, the possibility of contributing to decreasing the divergence would
probably be slight in view of the definition of intrinsic value.
The development of the capitalistic
economy has brought about products far beyond the products necessary for
survival --- electrical goods, medicines, automobiles and so forth. However, they
are not plus products, for these durable goods are regarded as utility
products.40 Innovative industrial technology has gone into producing
these goods, vastly improving the degree of convenience in everyday life. It is
the profitability in the markets, however, that finally governed the growth of
these products, and profitability largely depends on the degree of increasing
returns to scale. Actually, it seems farfetched to evaluate the market economy
from a point of view of plus products, relating intrinsic value to right ends.
6.2
Economic Justice
“Economic justice” (as well as justice
in general) is an intermediate end (so that taking it to an extreme could make
it fall into “false ends”)41 and is a part of moral code. When
applied to the social system, however, economic justice becomes a moral
obligation for a leader.42
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.43 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
ideal in the communist society.44
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, if justice in a system of rewards should be taken into
consideration, then the expectations it prompts should not be betrayed. This,
too, is a moral obligation that a ruler must observe.45
Thus, when social services are to be provided
it is far from clear where the concept of justice should be situated between
the two systems of distribution. 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. Hawtrey discusses economic justice not in
terms of “commutative justice”/ “distributive justice” but in terms of a system
of rewards/ a system based on needs. Economic justice is needed as what is good
as a “rule”, not as an end itself. Hawtrey holds that only a compromise could
satisfy the public as a whole.
6.3
Capitalism and Collectivism
How did Hawtrey evaluate Capitalism
and Collectivism46, the latter prohibiting private firms and providing
for collective ownership? 47 The following sum up his judgement.
(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 of
maintaining balance as if on the razor. Contrastingly, Collectivism eschews
this difficulty.48
In passing, the objective of monetary policy
is identified 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 take place due to the
nature of the system which depends on bureaucratic machinery.49
Contrastingly, because in Capitalism what to produce is left to entrepreneurs, the
possibility of innovation is far higher.
In Collectivism accountability to the
authority 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, through progressive tax, correcting
inequality which this system has (inequality, which is derived from profit and
land ownership).
To
sum up, Collectivism excels in (1), while Capitalism in (2). As for (3),
Capitalism can come close to Collectivism.
So
which side will Hawtrey stand on? Although
he makes no final judgement in Right
Policy, we may point out that he shifts toward the right in terms of the political
spectrum as compared with his position in The
Economic Problem and Economic Destiny.
At
the same time we must point out just how critically Hawtrey saw Capitalistic
society. He was keenly aware how difficult it is for the market system to
bridge the gap between intrinsic value and market value: for (i) levelling up
the public’s capacity for appreciation has some limitations; (ii) the market
has some bias in power between dealers and consumers, and (iii) there are
certain malfunctions in the labour market. Moreover, Capitalistic society is
motivated by false ends (profit making), as a result of which it reveals inequality
in income distribution. In short, Capitalistic society is a Plutocracy. One
remedy for correcting plutocracy might be an intervention of the State (or a
Ruler). However, Hawtrey must have considered that any type of society faces
intractable difficulties in attaining “intrinsic value”.
7．Views
on World Peace
In Right
Policy no few pages are used for the political situation of the world.
Among other things, much reference is made to the Cold War, the Suez Crisis and
the Korean War. There 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) 50 is a key
concept. Again, for him power exists in every society: every nation possesses
power, being always a potential enemy to the rest of the nations.51 The
world is also regarded as a society in which there exist a ruler and the ruled.
A world consisting only of independent
nations is situated in a kind of “international anarchy”52 in the sense of
Dickinson53, in which it 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”.54
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”55 which has so far played an essential role in the adaptation
of society to changes, and is an act negating pursuit of the Good.56
His hopes was put on 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).
8. Philosophical Development in
Cambridge57
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
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 error, 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.
This does not mean, however, that
Moorrean ethics was not criticized. Far from it, it provoked criticism from the
outset. The so-called “Emotivism” of Ogden, Richards, Stevenson and others is a
representative example, which was to become dominant meta-ethics in the 1920s-1950s. It argued
that the Good is useful only as an emotional sign expressing one’s attitude
(see Davis, p.45) 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 of criticism of Moorean
ethics can be found in the later Wittgenstein, who developed the theory of language
game, 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 birth of the later Wittgenstein.58
The story does not stop here. We have, again, 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 this outpouring torrents: he was a member
of the “Society” and the Bloomsbury Group, took a keen interest in philosophy
and that wrote an unpublished philosophical book, Thought and Things. How did he react to these torrents, then?
My
provisional answer is that he did not change his philosophical stance. This is
demonstrable from Right Policy, which this paper has so far examined, as
well as Thought and Things. Hawtrey held
on to Moorean ethics based on “Good as indefinable” and his own “Theory of
Aspects” throughout his life. In this respect he differs from Keynes, who was
once enthusiastic about Moorean ethics, but came to take a critical view of it
later on.59
9.
Comparison with Moore and Keynes
Now that we have examined Right Policy, let us compare Hawtrey
with Moore and Keynes. Moore
9.1 Comparison
with Moore
Hawtrey’s philosophy has four essentials:
(i) the theory of evolution; (ii) the theory of aspects; (iii) Moorean ethics;
(iv) the distinction between true ends and intermediate ends.
(i) and (ii) are peculiar to Hawtrey. 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 rationalisation. Then Hawtrey’s epistemology (ii) comes in (different
from Moorean theory of “sense data”). Hawtrey cherished (i) and (ii) since his
youth.
(iii) and (iv) are, by contrast, elements
which Hawtrey succeeded from Moore and regarded as essential in philosophy.
To sum up, we can say that Hawtrey was not completely
imbued with Moore’s philosophical influences, but rather maintained/developed
his own philosophical stance.
9.2 Comparison
with Keynes in Philosophy
We have now seen, albeit partially,
what Hawtrey’s philosophy was like. What of Keynes’s philosophy?
It can
be divided into two phases. The first is represented by A Treatise on Probability.
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 (this is Moorean). 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
trusted the rationality of the human nature.
With regard to Moore ,
Keynes accepted “Good as indefinable”, intuitionism, while he rejected Moore
As the years went by, however, Keynes came to
lose his trust on the rationality of the 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 Club.
9.3 Comparison
with Keynes in Social Philosophy
Keynes is also known as an advocate of
“New Liberalism” in the mid-1920s. He severely criticised both the capitalistic
system (on the ground that it was driven by motives of “pseudo-morality”) and laissez-faire
economics and philosophy.
Hawtrey stands on the same side with Keynes
on these points (see note 46). He is also critical of the capitalistic system
in terms of the divergence between intrinsic value and market value. It should be
noted that Hawtrey regards 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 socialisation of large joint-stock
companies within the then capitalistic system, playing down the role of
entrepreneurs. Albeit he also supported Commons’s evolutionary theory of society,
he seldom referred to it.
Hawtrey endorses 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 Right Policy is not so clear. Although he is very critical of
Capitalism and is seldom critical of Collectivism, he does not explicitly show
which system is better (in The Economic
Problem and Economic Destiny he
supported Collectivism. See note 46).
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, and
integrating other components such as a theory of aspects, the theory of
evolution and an elite theory. 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
10. Conclusion
Hawtrey is the only scholar in
interwar Cambridge to set out to systematically develop a social philosophy.
His well-known monetary theory of business cycles occupies only a part of it.
What he aimed at was to construct a systematic
theory to grasp human society. To this end, Moore Moore
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 check “intermediate ends” lest they should fall
into “false ends”. In this respect, Right Policy is, par excellence, a philosophical/
ethical problem entailing value judgments from a point of view of “true ends”.
Notes
* An English version of Hirai
[2009]. It is greatly revised, thanks to invaluable comments, among others, by
Profs. T. Hashimoto (Hokkaido Univ. ) and N. Yamawaki (Univ.
of Tokyo) at the JSHET Conference (Keio Univ. May 2009), N. Aslanbeigui
(Monmouth Univ., US) and J. Davis (University of Amsterdam [Netherlands] and
Marquette University [US]) at the HES Conference (Univ. of Colorado Denver.
June 2009), and R. Backhouse (Birmingham
Univ. ) and R. Sandilands (Univ. of Strathclyde , UK )
at the UK-HET Conference (Univ.
of Manchester
1)
Hawtery [1913] is his major work.
2) He developed it in Hawtrey [1925].
3) He developed it in Hawtrey [1932]. The
criticism developed here is based on Hawtery [1928] and anticipated the
argument to be found in the General
Theory (this point is virtually neglected even now). See Hirai [2003],
pp.334-336.
4)
The only book so far published on Hawtrey is Deutscher [1990]. It does not deal
with his social philosophy but his
contribution to macroeconomics. I retrieved
EBSCO at Sophia Univ. without any result in
terms of articles on Hawtrey as a
social philosopher.
5)
Hirai [2007] examines this.
6)
See RP, p.1.
7)
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.
8)
Similar views are argued in details 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”.
9) See RP, p.69d.
10) See RP, p.3.
11) See RP, p.4.
12) See RP, p.4.
13)
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 8 above.
14) See RP, pp.54-55.
15)
See, for example, Hawtrey [1912], read at the “Friday Club”. TT originates from it (The title of Ch.
16)
This might be related to Putnam’s “immanent realism”. “In Putnam [1987], Putnam
self-criticised 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).
17)
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).
18)
It should be noted that Hawtrey’s epistemology differs from Moore Moore Moore Baldwin ed. [1993]]).
It is worth noting that the above-mentioned 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 in “Mind and Material”
(see Russell [1956], p. 170).
19)
For example, see Russell [1956], pp.79-80 and Russell, Woolf et. al. [1959].
20)
See RP, p.4; TT, pp.100-105.
21)
See RP, p.71.
22)
See RP, p.37.
23)
See RP, p.69d.
24)
See RP, p.70.
25) Hawtrey criticised 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 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
26)
Hawtrey compares a ruler to a gardener. See RP,
p.62.
27)
See RP, p.100.
28)
For example, see Iyasu [2002] and Shionoya [1995], pp.208-211.
29)
Hawtrey recollects that in his youth he argued, in Moore’s class, aesthetic and
literary values from a point of view of the survival of the fittest theory (see
TT, p.96).
30)
See RP, p.4.
31)
See RP, p.9.
32)
Interestingly, Hawtrey defines civilisation in terms of rationalisation.
“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. Civilization so defined is not an unmixed
good, for the ends may be good or bad” (RP,
p.314).
33)
Hayek also discusses the formation of Spontaneous Order (or “Rule”) in
connection with 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. Therefore, both scholars differently use the concept of
evolution. Cf. RP, p.180. On my view
on Hayek’s theory of Spontaneous Order, see Hirai [2000], pp.299-301.
34) It is explicitly described in the
Preface of RP.
35) See RP, p.153b.
36)
In EP, the products were classified
into “defence products” and “creative products”, while in ED into “utility products” and “creative products”. In RP “creative products” are renamed “plus
products”.
37) See RP, p.157.
38)
In EP Hawtrey criticised an
individualistic system (= capitalistic system) from a point of view of ethical
value (=welfare in Hawtrey’ sense). He there expressed the view that due to the
weak power of appreciation of human mind, the market value as determined in the
goods market deviates from its ethical value.
39) See RP, p.216. His view referred to in the paragraph concerned is well-known.
40) See RP, p.277.
41) See RP, p.172.
42) See RP, p.172.
43) See RP, p.168.
44) See RP, p.211.
45) See RP, p.170.
46)
See EP, pp.337, 390, 379 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 route cause ultimately lies in profit making, so that
it is indispensable, through the attainment of true ends, to abolish it. Thus
Hawtrey aims at having a system which is not founded on profit making, abolishing
money making (Plutocracy) as “false ends” and establishing welfare as the true
ends by means of the state as its centre ― 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…”.
47) See RP,
p.197.
48)
See RP, p.250. It should be noted
that Hawtrey earned a good reputation as an economist who developed a monetary
theory of business cycles.
49) See RP, p.219.
50)
In EP, Hawtrey paid attention to “power”
besides money making. Among other things, this concept is used as a key concept
for understanding the international scenes. 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 made a remark 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”, turning the present peace, which is a potential
state of war, into “the genuine peace”.
51) See RP, p.495.
52) 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.
53)
R. Fry 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).
54) See RP, p.522.
55) See RP, p.357.
56) See RP, p.351.
57) The following owes to Davis
58) This does not mean that their
views converged. Their standpoints rather seem to have generated harsh tension
and antinomy. For the philosophical tension with Sraffa, see Kurz [2009].
59) This kind of persistence is also
true of his stance in economics.
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