Assume a Can Opener: Notes on the Making of an...

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1 Assume a Can Opener: Notes on the Making of an ‘Economic’ Robinson Crusoe Michael White Monash University I was born to be my own Destroyer. Robinson Crusoe In the wake of the global financial crisis, particular criticism was directed at macroeconomic DSGE models that assume behaviour can be represented by a representative agent with rational expectations, as in a ‘Robinson Crusoe economy’ set out in real business cycle models from the 1980s. 1 Thirty years ago, an analysis of how an ‘economic’ Crusoe came to be produced would draw its contemporary reference points from microeconomics. 2 Today, with the dominance of dogmatic claims about the necessity of a ‘microfoundations’ for macroeconomics [King 2012], the reference points are much broader. One reason why the formation of a Crusoe economy can be thought of as a production is that, as has often been noted, the illustrative device or metaphor has no discursive relationship, other than in the invocation of a name or two and a geographical location, with its ostensible source, Daniel Defoe’s Robinson Crusoe (1719). If Defoe’s Crusoe (and Friday) did not behave in the ways specified by the economic model, the latter could not have been the result of simply extracting elements from Defoe’s text. The initial formulation of the economic Crusoe has been traced to a series of changes during the nineteenth century that can be summarised as follows. 3 The figure of Crusoe had no place in Classical Political Economy as represented by Adam Smith and David Ricardo. While they were criticised by Karl Marx in the Grundrisse for using ‘Robinsonades’ in their discussion of deer-beaver exchanges to illustrate value theory [Smith 1976, Introduction; 1, vi; Ricardo 1951, ch. 1], Marx was 1 For the criticisms, Lux and Westerhoff 2009; Colander et al. 2009. For Crusoe real business cycle models, Long and Plosser 1983; Plosser 1989. 2 See, for example, Ruffin 1972, where Crusoe is awarded a “split personality” so as to be both a producer and a consumer. 3 See White 1982; idem. 1987; Kern 2011; Watson 2011; Winter 2013. Grapard and Hewitson 2011 also considers a broader range of issues than those discussed here.

Transcript of Assume a Can Opener: Notes on the Making of an...

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Assume a Can Opener: Notes on the

Making of an ‘Economic’ Robinson Crusoe

Michael White

Monash University

I was born to be my own Destroyer.

Robinson Crusoe

In the wake of the global financial crisis, particular criticism was directed at

macroeconomic DSGE models that assume behaviour can be represented by a

representative agent with rational expectations, as in a ‘Robinson Crusoe economy’

set out in real business cycle models from the 1980s.1 Thirty years ago, an analysis

of how an ‘economic’ Crusoe came to be produced would draw its contemporary

reference points from microeconomics.2 Today, with the dominance of dogmatic

claims about the necessity of a ‘microfoundations’ for macroeconomics [King 2012],

the reference points are much broader. One reason why the formation of a Crusoe

economy can be thought of as a production is that, as has often been noted, the

illustrative device or metaphor has no discursive relationship, other than in the

invocation of a name or two and a geographical location, with its ostensible source,

Daniel Defoe’s Robinson Crusoe (1719). If Defoe’s Crusoe (and Friday) did not

behave in the ways specified by the economic model, the latter could not have been

the result of simply extracting elements from Defoe’s text.

The initial formulation of the economic Crusoe has been traced to a series of

changes during the nineteenth century that can be summarised as follows.3 The

figure of Crusoe had no place in Classical Political Economy as represented by

Adam Smith and David Ricardo. While they were criticised by Karl Marx in the

Grundrisse for using ‘Robinsonades’ in their discussion of deer-beaver exchanges to

illustrate value theory [Smith 1976, Introduction; 1, vi; Ricardo 1951, ch. 1], Marx was

1 For the criticisms, Lux and Westerhoff 2009; Colander et al. 2009. For Crusoe real business

cycle models, Long and Plosser 1983; Plosser 1989. 2 See, for example, Ruffin 1972, where Crusoe is awarded a “split personality” so as to be

both a producer and a consumer. 3 See White 1982; idem. 1987; Kern 2011; Watson 2011; Winter 2013. Grapard and Hewitson

2011 also considers a broader range of issues than those discussed here.

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referring to a strand of an eighteenth–century literature that depicted the stadial

development of society. Smith’s and Ricardo’s analysis of exchange in ‘that early and

rude state of society’ could be read as a remnant of that literature, reworked, in

Smith’s case, as the four-stage theory of economy and society.4 Instead, the first

direct references to Crusoe by English-speaking political economists appeared in the

early nineteenth century, although these were rather brief. The more detailed

references to, or formulations of, Crusoe as an economic actor only appeared after

the mid-nineteenth century with Frederic Bastiat’s Economic Harmonies (1850),

followed by Henry Carey’s Principles of Social Science (1858) and, ironically, Marx’s

Capital (1867). The trope was then appropriated and reworked by the early

marginalists. This economic Crusoe was not constructed solely within the domain of

political economy as it depended, in part, on rewritings of Defoe’s text and was also

consistent with a particular reading of that text by British literati after the mid-

nineteenth century. Just as importantly, Crusoe provided a defence against criticisms

of the marginalists’ depiction of actors with autonomous preferences and hence,

more generally, their use of ‘methodological individualism’ which also marks the

Crusoe economies of today.

The purpose of this paper is to clarify three issues in the summary regarding the

formation of the Crusoe economy in the nineteenth century. The first is why

references to Crusoe had such a limited role early in the century. The discussion in

that period was dominated by a question that can be summarised as: given a

particular definition of value, can a figure such as Crusoe have any role in the

analysis? Posed in that way, the possibility of using Crusoe as an illustrative device

was limited. W. Stanley Jevons used that frame of reference in his Theory of Political

Economy (TPE), which can help explain why Crusoe played such a fleeting role in

that first detailed exposition of British marginalism (Section 1).

Although Jevons probably referred to, but made no substantive use of, the new

economic Crusoe produced by the mid-nineteenth century, Section 2 provides new

4 It was also common in the physiocratic literature to distinguish between production by an

‘isolated man’ as compared with a social division of labour [van den Berg and Salvat 2001,

pp.163-5]. In that context, Richard van den Berg has found a reference to Crusoe, used to

distinguish between use and exchange value, in a manuscript by the Abbe Andre Morellet,

which possibly dates from the 1760s. See his message on the SHOE email list, 28 September

2012: https://listserv.yorku.ca/cgi-bin/wa?A2=ind1209d&L=shoe&T=0&P=1192.

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information to show why that construction had no stable basis in Defoe’s text. Read

in terms of the categories of ‘race’ and ‘civilisation’, Robinson Crusoe was rejected as

a misleading, if not dangerous, narrative. Bastiat’s prevarications on that score

illustrate how the solution to the perceived defects in Defoe’s text was to construct a

new fictional Crusoe. It was the rewritten Crusoe, produced in part by drawing on the

example of previous rewritings of Defoe’s text, which was to dominate in economics.

By the end of the nineteenth century, for those deploying the now stabilised figure of

Crusoe, the previous questions of whether it was possible to use the device or

whether its verisimilitude was problematic had been erased. Finally, Jevons’

references to Crusoe have a broader significance in that they enable consideration of

the common characterisation of early marginalist economics utilising methodological

individualism as part of a shift in the analytical focus of political economy from

production and distribution to exchange and consumption (Section 3).

1. A `Science of Exchanges’?

In the opening paragraph of his chapter on the theory of capital in the first edition of

TPE, Jevons referred to a Crusoe figure, albeit in the form of Alexander Selkirk on

whose story Defoe had probably drawn when writing Robinson Crusoe:

In considering the nature and principles of Capital, we enter a distinct branch

of our subject. There is no close or necessary connexion between the

employment of capital and the processes of exchange. Both by the use of

capital and by exchange we are enabled vastly to increase the sum of utility

which we enjoy; but it is conceivable that we might have the advantages of

capital without those of exchange. An isolated man like Alexander Selkirk, or

an isolated family, might feel the benefit of a stock of provisions, tools and

other means of facilitating industry, although cut off from traffic with any

others of the race. Political Economy, then, is not solely the science of

Exchange or Value: it is also the science of Capital" [Jevons 1871, pp.212-3].5

5 For Selkirk, see Selcraig 2005. Jevons altered the paragraph in the second edition,

changing “science of Capital” to “science of capitalization”, substituting "other men" for “race”,

and omitting the "isolated family", which was presumably a reference to The Swiss Family

Robinson by J. D. Wyss (1812) [Jevons 1879, p.241]. In 1857, near the end of his

Antipodean interlude, Jevons wrote that he now took “quite a romantic view of wild primeval

forests and cannibal blacks. Robinson Crusoe, The Swiss Family Robinson, and Masterman

Ready I used to think amusing but childish fiction, yet the true incidents which happen in

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Here, the figures of Selkirk and the isolated family were used to illustrate the

argument that the analyses of exchange and capital were separate topics in that a

stock of produced goods could be used to maximise utility, independently of

exchange. Hence, political economy could not be characterised as ‘the science of

exchange or value’. Jevons clearly regarded that point as important because he had

previously twice referred to it in TPE. In the chapter on the theory of utility, when

analysing the “distribution of commodity in different uses”, he remarked that

Barley may be used either to make beer, spirits, bread, or to feed cattle …

Imagine, then, a community in the possession of a certain stock of barley;

what principles will regulate their mode of consuming it? Or, as we have not

yet reached the subject of exchange, imagine an isolated family, or even an

individual, possessing an adequate stock, and using some in one way and

some in another. The theory of utility gives, theoretically speaking, a complete

solution of the question.

The ‘complete solution’ of equalising the final degree of utility in different uses was

then discussed in some detail [Jevons 1871, pp.68-71]. The argument was reiterated

in the next chapter on exchange, where Jevons noted that "some economists have

regarded their science as treating of this operation alone". While agreeing that "high

importance" should be "attributed to exchange", Jevons added that trade "is not

indeed the only method of Economy: a single individual may gain in utility by a proper

consumption of the stock in his possession. The best employment of labour and

capital by a single person is also a question disconnected from that of exchange, and

which must yet be treated in the science" [Jevons 1871, pp.79-80].

Jevons’ statements indicate his broad agreement with John Stuart Mill in a long-

running debate as to whether the theoretical object of political economy should be

designated as `the science of exchanges’. In the opening paragraph of the analysis

of value in his Principles of Political Economy, Mill noted that some "thinkers" had

reduced political economy to an analysis of exchange and that one "eminent writer

has proposed as a name for Political Economy, `Catallactics,' or the science of

exchanges" [Mill 1871, p.535]. The eminent writer was clearly Archbishop Richard

Whately, who claimed in his Introductory Lectures on Political Economy that,

Australia or … Polynesia … are quite as singular and interesting, minus a little of the coleur

de rose” [Black 1973-81, 2, pp.332-33].

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because political economy was "concerned, universally, and exclusively, about

exchanges”, Alexander Selkirk or Robinson Crusoe "is in a situation of which Political

Economy takes no cognizance" [Whately 1831, pp.6-9].6 That rhetorical device was

not new in British political economy as Nassau Senior, Whately’s predecessor in the

Drummond chair at Oxford University, had produced a more erudite version in one of

his lectures:

To suppose an attempt by Robinson Crusoe to regulate the distribution of

commodities according to the laws of Political Economy would resemble the

celebrated soliloquy of an Amphisbaena, or the cabinet council held Julio et

Caesare consulibus … Political economy considers men in that more

advanced state … in which each individual relies on his companions for the

greater part, in many cases for the whole of what he consumes, and supplies

his own wants principally or wholly by the exchanges in which he contributes

to theirs [cited Levy 1918, pp.519-20].7

Mill was also not the first to reject Whately’s argument. In 1834, William Forster

Lloyd, Whately’s successor in the Drummond chair of Political Economy at Oxford

University, insisted that value should instead be defined “to mean the esteem in which

any object is held". To illustrate how value could be identified in a society “such as

exists in England” and in the behaviour of an “isolated individual”, Lloyd included two

pages of quotations from Robinson Crusoe, although he acknowledged that the text

did not contain “any thing so much to the point as I could have wished” [Lloyd 1834,

pp.11, 22-23, 21].8

Five years later, the American economist Henry Carey used the device of an

“individual of mature age, thrown upon and sole occupant of an island, or an

extensive body of land of average fertility”, to show that “labour is the sole source of

value”. The individual would gather food where the cost was the amount of labour

required, construct a dwelling (without “implements”) and then procure a further

6 All emphases in quotations appear in the original sources. 7 Thomas Hodgskin made the analogous point that, if there was “only one person in

existence, he would be obliged, like Robinson Crusoe, to provide for all his wants himself, and

there could be no division of labour” [Hodgskin 1827, p.117]. John Gray also argued that, in “a

state of society … [to] be able to exchange is … as important, as it was to Robinson Crusoe

to produce” [Gray 1831, pp.20-21]. 8 For the context of the disagreement between Whately and Lloyd over value theory, see

Moore and White 2010, pp.231-33.

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source of food for the winter. These were different types of property “to which he

attaches the idea of ‘value’”, which was “regulated by the cost of production – by the

quantity of labour he has been obliged to give in exchange for them”. The same rule

would govern any exchange with “another individual … a few miles from him” [Carey

1837, pp.7,8,19]. This relation between value and cost of production was

diametrically opposed to that of Whately and Carey’s citation of the latter’s Lectures

[ibid. viii] might suggest that, while it does not actually refer to Crusoe, his analysis

was designed to counter the Archbishop’s position. Nevertheless, the terms of

Carey’s argument indicate that he was reworking the deer-beaver illustrations used

by Adam Smith and Ricardo, albeit with the introduction of the allocation of labour

time by a single actor.

Whately, however, was not without supporters. In 1845 Charles Knight cited his

Lectures, referring to Crusoe and arguing that it was exchange “which makes man

the lord of the world” [Knight 1845, pp.16,18]. In 1862, Henry Dunning Macleod

delivered a paper to the British Association for the Advancement of Science meeting

at Cambridge (the same meeting at which Jevons' ‘Brief Account’ of his marginalist

analysis was read [Jevons 1866]), citing both Whately and Frederic Bastiat in support

of his declaration that political economy was the science of exchanges, the definition

“to which the majority of Modern Economists are now gravitating” [Macleod 1862,

p.3]. While other economists were often hostile to Macleod’s work, Jevons avoided

any direct public criticism although, as indicated above, he made clear in TPE that he

rejected the argument that the domain of political economy could be characterised as

the science of exchanges, a point that was reiterated in his unfinished Principles of

Economics [Jevons 1905, p.49]. More privately, he was exasperated by Whately’s

position, as he recorded in a manuscript note: “Whately … holds that taxation is an

exchange!”9 Jevons might have been reminded of that matter in early 1870, shortly

before he began writing up TPE for publication, when, in one of a series of public

lectures to which Jevons contributed, his former teacher, W.B. Hodgson, restated

Whately's general position [Hodgson 1870, p.59]. Jevons’ discussion in TPE with its

mention of Alexander Selkirk was thus a reference to the continuing debate within

British political economy, which had followed Whately’s glib statement that Crusoe or

9 Undated note in the Jevons Archive, John Rylands University Library, University of

Manchester, JA 6/22/43. If Jevons was referring here to Whately’s Lectures, he must have

been using the second edition because the relevant note on taxation did not appear in the

first [Whately 1832, pp.10n-11n; cf. idem. 1831, pp.10-11]. See also Whately 1853, pp.69–70.

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Selkirk ‘is in a situation of which Political Economy takes no cognizance’. At the same

time, the terms of Jevons’ discussion suggest that he was also referring to Bastiat.

In 1873, Jevons reviewed J.E. Cairnes' Essays on Political Economy which

contained a trenchant critique of the value theory in Bastiat’s Economic Harmonies

[Cairnes 1873, pp.312–44]. As Bastiat had based his theory on the claim that

“Exchange is Political Economy” [Bastiat 1860, p.70], it is perhaps not surprising that

Jevons acknowledged Cairnes had shown the “inadequacy” of Bastiat’s value

theory“.10 Nevertheless, he argued that the critique had paid only

partial justice to the talent with which Bastiat expounded and illustrated the

truths of political economy … Mr. Cairnes might have discovered more merit

in Bastiat and far less in Comte. He remarks that the most recent and

important works in political economy, those, for example, of M. Courcelle-

Seneuil, make little reference to Bastiat so that he has no following; but we

are much mistaken if the general disposition of the subject by Seneuil,

followed since by Professor Hearn, of Melbourne in his `Plutology', is not

derived from Bastiat ... Mr. Mill has most erroneously denied that

consumption of wealth is a branch of political economy ... It is probable that

when the true logical order of the treatment of the doctrines of the science

comes to be carefully reconsidered, the order adopted by Mr. Mill will be

rejected and that of Bastiat more clearly followed [Jevons 1873].11

Much the same point had been made in TPE, where Mill was criticised for arguing

that there were no known "laws of the consumption of wealth" [Mill 1844, p.132n], while Bastiat (among others) was praised for arguing that “human wants are the

ultimate object of Economy”. In that regard, Jevons approvingly cited Bastiat’s

aphorism from the Harmonies that “wants, efforts, satisfaction … is the circle of

Political Economy” [Bastiat 1860, p.65; Jevons 1871, p.48]. Bastiat referred to that

aphorism at the beginning of his chapter on capital in the Harmonies when he

claimed that the same "economic laws" prevailed whether the analysis was

10 Jevons was also critical of Bastiat's treatment of land and rent, as indicated in a July 1882

letter: “I do not think you need to trouble yourself much about Bastiat’s opinions in regard to

land. They are not, in my opinion, well founded” [Black 1973-81, V, pp.196-97]. 11 A decade before, Jevons had also been effusive in his praise for Jean Gustave Courcelle-

Seneuil’s Traité Théorique et Pratique d'Economie Politique (1858) and William Hearn’s

Plutology (1863) [Jevons 1864].

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concerned with "a numerous agglomeration of men or of only two individuals, or even

a single individual condemned by circumstances to live in isolation". Robinson

Crusoe thus represented the “whole economic evolution of … want, effort,

satisfaction ... [H]e would be enabled to form an idea of the entire mechanism, even

when thus reduced to its greatest simplicity”. Crusoe illustrated, for example, how

time could be allocated to produce capital instruments with tools, materials and

provisions. In making tools, Crusoe would calculate how much work was required to

produce "an equal satisfaction at a smaller expense of effort, or a greater amount of

satisfaction with the same effort" [Bastiat 1860, pp.166,167].

The use of Selkirk/Crusoe at the beginning of the chapters on capital in both the

Harmonies and TPE suggests that Jevons’ comments were, in part, a reference to

Bastiat. However, although the calculating Crusoe of Bastiat might well have

appealed to Jevons, the respective roles of that device were quite different in that

Jevons’ Selkirk did not construct productive capacity and hence was not used to

illustrate the principles of his capital theory. Instead, Selkirk was depicted as working

with a given stock of provisions and tools so as to refer to the allocation of that stock

between different uses. That was consistent with Jevons’ analytical focus on the

older question of whether the domain of political economy should be characterised as

the science of exchanges and hence whether value should be understood to mean

exchange value. Posed in that way, references to the relevance of Crusoe had a

limited role as they were largely restricted to agreeing with or countering Whately’s

statement. In the preceding literature, Carey’s more detailed discussion was the

exception that proves the rule, as it owed a good deal to the reworked

‘Robinsonades’ of Smith and Ricardo.

That analytical context was also consistent with a further reference to Crusoe added

in the second edition of TPE. In a new section discussing different “popular”

meanings of the word `value’, Jevons noted that it had been used to mean either an

exchange ratio or the “intensity of desire or esteem for a thing”. The latter was

“identical” with his concept of the final degree of utility of a commodity, which he

illustrated by remarking that “Robinson Crusoe must have looked upon each of his

possessions with varying esteem and desire for more, although he was incapable of

exchanging with any other person” [Jevons 1879, p.87]. Once again, the point was to

show that exchange should not be regarded as the defining characteristic of the

domain of political economy. While Jevons rejected that characterisation by Macleod

and Bastiat, however, he made no explicit mention of them in that regard. Indeed, he

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praised both in TPE for other aspects of their work. That was consistent with his

rhetorical strategy regarding a number of critics of the current orthodoxy, which was

to praise those aspects of their work with which he agreed, while either refusing to

criticise other aspects or not naming them when indicating his dissent from their

position.12 Jevons’ limited references to Selkirk/Crusoe can thus be understood as

both an intervention in the debate as to whether political economy should be

designated as the science of exchanges and as part of a rhetorical strategy to

support critics of the prevailing orthodoxy.

2. Crusoe, Race and Civilisation

The new mid-nineteenth century figure of Crusoe was produced in the context of

readings of Robinson Crusoe which problematised its verisimilitude and rewritings of

that text to address the perceived deficiencies in its narrative. Two of the categories

used to evaluate Robinson Crusoe in that regard were ‘race’ and ‘civilization’.

Whately, for example, did not simply dismiss the figure of Crusoe as irrelevant for

political economy because it was inconsistent with his definition of value. He also

made clear that he objected to the verisimilitude of Defoe’s text. The basis for that

criticism was outlined in a discussion of how the social division of labour ("the

distribution of employments") led to "the progress of society" in his Introductory

Lectures. This was designed to show that political economy was part of a "Natural

Theology", so that the division of labour and progress demonstrated providential

design [Whately 1831, pp.152, 111, 113]. To illustrate this, Whately criticised an

argument, “apparently” assumed “by several writers on Political-Economy”, who had

“described the case of a supposed race of savages, subsisting on the spontaneous

productions of the earth, and the precarious supplies of hunting and fishing; and have

then traced the steps by which the various arts of life would gradually have arisen,

and advanced more and more towards perfection”, via the division of labour [ibid.

p.119]. Although no references were given, Whately regarded the assumption as

nonsense because there was no evidence “of a tribe of savages, properly so styled,

rising into a civilized state, without instruction and assistance from people already

civilized”. Indeed, “civilized Man has not emerged from the savage state … [and] the

progress of any community in civilization, by its own internal means, must always

12 For the contemporary hostility towards Macleod and the ways in which Jevons attempted to

negotiate around both Macleod and his critics, see White 2004; 2010.

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have begun from a condition removed from that of complete barbarism” [ibid. pp.

122, 119]. That was consistent with the

Book of Genesis which describes Man as not having been, like the brutes,

created, and then left to provide for himself by his innate bodily and mental

faculties, but as having received, in the first instance, immediate divine

instructions and communications: and so early, according to this account, was

the division of labour, that of the first two men who were born of woman, the

one was a keeper of cattle, and the other a tiller of the ground [ibid. pp.122-

23].

As Genesis was “an historical record of acknowledged antiquity”, it followed from the

“impossibility of men's emerging unaided from a completely savage state” that “all

savages must originally have degenerated from a more civilized state of existence”

[ibid. pp.123, 129].13 Moreover, there was “no good reason for calling the condition of

the rudest savages ‘a state of nature’”:

the natural state of man must … be reckoned not that in which his intellectual

and moral growth are as it were stunted, and permanently repressed, but one

in which his original endowments are … enabled to exercise themselves, and

to expand … and, especially, in which that characteristic of our species, the

tendency towards progressive improvement, is permitted to come into play

[ibid. pp. 137,138].

It was on the basis of these claims about degeneracy and misuse of the term ‘natural

state’ that, in his Elements of Rhetoric, Whately remarked that Robinson Crusoe

would have appeared

less apparently natural if Friday and the other savages had been represented

with the indocility and other qualities which really belong to such beings as

the Brazilian cannibals; and if the hero himself had been represented with that

half-brutish apathetic despondency, and carelessness about all comforts

13 Having read Whately’s Introductory Lectures in 1857 while in Australia, Jevons approved of

much of the analysis but he objected to this attempt to establish "the truth of Genesis … The

gift of reason was necessary in the first place to make man, but unassisted reason is I believe

always capable of raising itself and has produced all the various conditions of the human race

from the Australian aboriginal to the most refined & energetic Anglo Saxon, the ultimate limit

of the advancement of the latter being as yet completely out of sight” [Black and Konekamp

1972, p.159].

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demanding steady exertion, which are the really natural results of a life of

utter solitude [Whately 1846, p.50].

The reference to the ‘indocility’ of ‘savages’ was clarified in a posthumously

published essay where Whately insisted that Robinson Crusoe was implausible

because, while “savages … are represented as ferocious … and ignorant” (a point

with which he agreed), they also appeared as “intelligent, and docile, and easily

susceptible of civilisation”. That was grossly misleading. A “missionary” might be able

to make some “progress … in civilizing … the second or third generation of savages”,

but Defoe’s text failed to give the unwary reader a “full … estimate [of] the brutish

stupidity, the childish silliness, and the perverse indocility, of the savage character”.

Indeed, by careful examination of “all the accounts that are given of savages, by

those who have had actual intercourse with them, we shall inevitably come to the

conclusion that the representation of savages, as given by Defoe, involves a

complete moral impossibility” [Whately 1865, p.340-42].14

Bastiat would have none of this so far as ‘savages’ were concerned. In “Something

Else”, an essay first published in 1847, he presented a dialogue between Crusoe and

Friday on the benefits of trade. Here, it was Friday who understood a (crude) version

of comparative advantage based on labour time, while Crusoe was both ignorant and

illogical, basing his discussion on the premise that “labour is wealth”. There was one

element in the story that reflected an aspect of Robinson Crusoe. Although Friday

was presented as having the better of the argument, with “Robinson possessing a

greater ascendant over Friday, his opinion prevailed”. Bastiat did not explain what ‘a

greater ascendant’ meant or entailed [Bastiat 1873, pp.210-11, 212-15], and it was

Stephen Hymer who subsequently examined the power relationship between Crusoe

and Friday [Hymer 1971]. For the rest, however, the dialogue was clearly Bastiat’s

invention, as it has no parallel in Defoe’s text.15 That was consistent with the figure of

14 It has been suggested that the holders of the Trinity College Dublin chair in political

economy, which had been endowed by Whately, were engaged in a “struggle against racism”

[Peart and Levy 2010]. If so, the struggle could have started close to home. 15 It might also be noted that, in The Past, the Present, and the Future (1848), Henry Carey

altered his 1837 argument (see above) with a potted account of cultivation and the

development of an economy over time, which begins “The first cultivator, the Robinson

Crusoe of his day, provided however with a wife” [Carey 1848, p.1]. Passages from this text

were repeated and expanded in the first volume of his Principles of Social Science with

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Crusoe in the capital chapter in the Harmonies, as Bastiat indicated when he referred

to his “supposed Robinson Crusoe”. Indeed, he undermined the verisimilitude of the

illustrative device by prefacing his discussion with the qualification, “if … [Crusoe]

could exist for some time in an isolated state” [Bastiat 1860, pp.166, 167]. The basis

for the proviso had been discussed previously in the Harmonies when Bastiat

provided a general rationale for his claim that ‘exchange is political economy’. He

defended this, in part, by criticising J.J. Rousseau who, Bastiat argued, had claimed

that “isolation was man’s natural state, and, consequently, that society was a human

invention”, which depended on “convention” and hence the importance of the

“legislator”. For Bastiat, however, the “state of nature” or “absolute isolation, the

absence of all relations among men, is only an idle fancy coined in the brain of

Rousseau”. Instead, “society is our state of nature” and “man in an isolated state of

nature cannot exist” [Bastiat 1860, pp.28, 67, 71]. To illustrate the point, he referred

to Robinson Crusoe which

has shown us man surmounting by his energy, his activity, his intelligence,

the difficulties of absolute solitude … [having been] accidentally cut off from

civilisation. It was part of Defoe’s plan to throw Robinson Crusoe into the

island of Juan Fernandez alone, naked, deprived of all that the union of

efforts, the division of employments, exchange, society, add to the human

powers.

And yet … Defoe would have taken away from his tale even the shadow of

probability if … he had not made forced concessions to the social state, by

admitting that his hero had saved from the shipwreck some indispensable

things, such as provisions, gunpowder, a gun, hatchet, a knife, cords, planks,

iron, &c; a decisive proof that society is the necessary medium in which man

lives … And, observe that Robinson Crusoe carried with him into solitude

another social treasure, a thousand times more precious than all these … his

ideas, his recollections, his experience, above all, his language without which

he would not have been able to hold converse with himself, that is to say, to

think [Bastiat 1860, pp.74-75].16

extensive references to Crusoe and Friday (see, for example, Carey 1858, pp.96-99, 147-51,

181-2, 198). 16 As indicated by Stephen Hymer (1971), the items taken from the shipwreck were more

extensive than Bastiat suggested.

13

Putting the fiction about ‘Defoe’s plan’ to one side,17 Bastiat’s references to Crusoe in

the Harmonies are analytically incoherent. On the one hand, a person like Crusoe “in

a state of isolation would infallibly perish in a few hours” [Bastiat 1860, p.75], where

that state precluded the use of commodities from the shipwreck. On the other hand,

the Crusoe of the capital chapter has no shipwreck items to use while constructing

capital goods. Bastiat signalled the contradiction with the proviso in the capital

chapter that it was doubtful whether such a person could survive.

If the argument is peculiar, the discussion does suggest one resource on which

Bastiat might have drawn in constructing the ‘supposed’ Crusoe of the capital chapter

and the ‘Something Else’ essay. Although the Harmonies only cited Rousseau’s

Social Contract, the juxtaposition of Crusoe and Rousseau suggests that Bastiat was

also referring to Emile (1762), where Rousseau argued that Robinson Crusoe was

the only book to be read by Emile as it was “the best treatise on an education

according to nature”. That, however, required a particular reading of the text so that

it was “stripped of irrelevant matter” by focussing on the shipwreck and the island

sojurn. The story could then be clearly understood as Crusoe

on his island, deprived of the help of his fellow-men, without the means of

carrying on the various arts, yet finding food, preserving his life, and procuring

a certain amount of comfort … The condition … is not that of a social being …

[but Emile] should use it as a standard of comparison for all other conditions.

The surest way to raise him above prejudice and to base his judgements on

the true relations of things, is to put him in the place of a solitary man, and to

judge all things as they would be judged by such a man in relation to their

own utility [Rousseau 1974, p.147].

A further point of reference for Bastiat could have been Robinson der Jungere

(1779), a rewriting of Defoe’s text by Johann Heinrich Campe. That link was

suggested by Ian Watt, who noted that Campe, “the headmaster of the

Philanthropium at Dessau … acted on Rousseau’s suggestion that only the island

episode was improving, and produced a Nouveau Robinson for the young which

superseded Defoe’s original version both in France and Germany. In it, the stock of

17 Bastiat was not a particularly close reader of Robinson Crusoe. Crusoe was shipwrecked

off the mouth of the Orinoco river, which drains into the Atlantic ocean. It was Alexander

Selkirk who was marooned on one of the islands in the Juan Fernandez archipelago in the

South Pacific.

14

tools [from the shipwreck] was omitted” [Watt 1951, p.108].18 Two other features of

that text suggest Bastiat could have followed Campe’s lead in his comments about

Crusoe and political economy. The first was Campe’s stress on the role of language.

His Crusoe speaks to animals, particularly a parrot which can mimic some sounds.

The point was that the “mere sound of a supposedly human voice reinstates

Robinson as a civilized human being; the power of language (re)affirms his identity

as a member of the cultured European community” [von Merveldt 2013, p.3]. The

second feature, which is notable in the context of Bastiat’s ‘Something Else’ essay

where Friday understood the ‘correct’ argument on trade, is that Campe had Friday

learning German from Crusoe. This not only facilitated communication with Crusoe

but, more generally, “linguistic progress … allows the former savage and cannibal to

eventually become Robinson’s civilized equal and finally to lead a new and fulfilling

life as a cultured and fully integrated member of the German middle class” [von

Merveldt 2013, p.3].

It need not be surprising if Bastiat drew, in part, on the example of Robinson der

Jungere as, in his Entwickelung of 1854, Hermann Gossen directly referred to that

text to illustrate his discussion of work in terms of pleasure and pain [Gossen 1983

[1854], p. 54].19 The economic Crusoe produced after the mid-nineteenth century

was thus not simply a fiction, in that it bore no relation to Defoe’s text other than in

the invocation of a name or two and a geographical location, but also drew on a

rewriting of Defoe’s text. What is striking about Bastiat’s Harmonies in that regard is

the way it presented the isolated actor on the island and ‘deconstructed’ the

verisimilitude of that device. It might be thought that the two different Crusoes in the

Harmonies could be reconciled via Bastiat’s comment, made in the same text but

without reference to Crusoe, that “Economical science labours under a disadvantage

in being obliged to have recourse to hypothetical cases” [Bastiat 1860, p.204]. That

is, any doubts about the verisimilitude of the illustrative device could be dismissed on

the basis that it was simply a ‘hypothetical’ case which was an ‘abstraction’ from

‘actual’ behaviour. It might not fully represent all the components of that behaviour

but was sufficiently accurate to represent some of its basic features in a particular

18 First translated into English in 1788, Campe’s text was also popular in North America

[Brigham 1957, pp.141– 43]. 19 The English translation of Gossen is unhelpful on this point in claiming that Campe

translated Defoe’s text into German [Gossen 1983 (1854), pp. 302, 307]. Cf. White 1982, p.

135.

15

domain. This would, however, miss the point of the different stories in the Harmonies.

On the one hand, there was the construction of a Crusoe figure whose behaviour had

no textual referent in Defoe but could, at the same time, claim, in effect, a

hypothetical feasibility from that text by invoking the name of Crusoe and an island

location. (If feasibility was irrelevant why not refer to, say, Green Man and Blue Man,

rather than Crusoe and Friday?). On the other hand, the critique of Rosseau entailed

that Crusoe in a ‘natural’ state on the island, a state which precluded items taken

from the shipwreck, was not a hypothetical case that was merely an abstraction from

the complexity of events and was feasible in that sense. Rather the natural state was

not feasible as the actor could not exist for more than a few hours. For the

economists who followed Bastiat,20 however, any question of the verisimilitude of the

device was erased so that an economic Robinson Crusoe was now free of any

potentially troublesome contact with the text from which it obtained its ostensible

veracity.

3. Some Questions of Domain

Although Jevons’ references to Selkirk/Crusoe were brief, they enable consideration

of a common argument that, when compared with the Classical political economists,

the work of the early marginalists such as Jevons can be characterised as a shift in

‘attention’ or ‘focus’ of the analytical domain away from production and distribution to

exchange and consumption, coupled with the use of ‘methodological individualism’ to

designate behaviour.

While the shift to exchange reading can be presented in different ways, so far as TPE

is concerned, it usually depends on privileging chapter IV (“Theory of Exchange”) as

compared with chapter V (“Theory of Labour”) and the following chapters on land rent

and interest on capital as well as the comments on the distribution of income in the

final chapter (“Concluding Remarks”). A clear line is thus drawn between the analysis

of consumption and exchange in chapter IV and that of production and distribution in

the following chapters. It is assumed that the purpose of Jevons’ project is consistent

with and hence can be read off the ordering of chapters in TPE. Quite apart from the

20 For example, Carl Menger who cited Bastiat’s Harmonies and Carey’s Principles of Social

Science [Menger (1871) 1950, pp.134-5,156n,166n]. For the limitations that Vilfredo Pareto

and Eugen Böhm von Bawerk identified with the Crusoe economy, see Boianovsky 2013.

16

problem that this was not how Jevons first organised his analysis,21 this reading

erases the links in TPE between the analysis of market-period trading and prices in

chapter IV and of long-period equilibrium outcomes in terms of prices and cost of

production in the following chapter, where labour was the only variable input. This

obscures how Jevons followed his predecessors in distinguishing between market-

period and long-period prices and how that analysis was reflected in the organisation

of TPE.

One result of privileging chapter IV which is relevant for this paper was indicated by

John Hicks when he rejected the use of ‘marginalism’ as “a bad term”, preferring

catallactics as “an appropriate designation for neoclassical theory” because it was

based “primarily” on exchange, rather than production and distribution [Hicks 1983,

pp.9-10]. Amplifying that point, Klaus Hennings argued that chapter IV constituted the

“analytical core” of TPE so that "[t]rading is conceived as the archetypal economic

activity, and economics as a science of markets, or (to use Whately's term)

`catallactics'". To support the argument that "exchange was … transformed … into a

cornerstone of the economic system … to be discussed before production and

distribution" [Hennings 1986, pp.220,222,224], Hennings cited the following passage

from TPE: "Both by the use of capital and by exchange we are enabled to vastly

increase the sum of utility which we enjoy" [Jevons 1871, p.212]. For Hennings, "note

the juxtaposition: Jevons clearly considered exchange and production as alternative

means to increase the satisfaction of wants" [Hennings 1986, p.224]. The quotation

is taken from the opening paragraph of the chapter on capital in TPE cited in Section

1 above. However, as was also explained above, in that paragraph Jevons was

making precisely the opposite point to that claimed by Hicks and Hennings: political

economy could not be reduced to catallactics (see also Steedman 1997, p.57). Far

from privileging exchange over production, the opening paragraph in the capital

chapter reiterated a quite different point that Jevons had analysed prior to his

treatment of exchange. This is not to suggest that TPE did not make a series of

substantive analytical and epistemological breaks with preceding work in British

political economy. Indeed, I think it is possible to argue that a principal objective of

Jevons’ marginalist project was to demonstrate that market transactions were, in

general but not exclusively, exchanges of equivalents at the margin. This

21 In the 1862 summary of his marginalist project, Jevons discussed the analysis of labour and

rent before he discussed exchange [Jevons 1866]. If the ordering of the analysis explains

intentions, what was Jevons doing in 1862?

17

characterisation would, however, apply throughout TPE, including the analysis of the

distribution of output between labour and capital. It would not depend on privileging

Chapter IV, a procedure that obscures Jevons’ arguments.

Turning to Jevons’ depiction of behaviour with regard to the figure of Crusoe, the key

lies in his reference to an “isolated man like Alexander Selkirk, or an isolated family...

cut off from traffic with any others of the race” [Jevons 1871, pp.212-3], where ‘race’

needs to considered in terms of his marginal utilty theory. In 1876 Jevons argued that

the theory depicted laws of behaviour that were "universally true as regards human

nature” and “would apply, more or less completely, to all human beings of whom we

have any knowledge" [Jevons 1905, pp.196,197]. However, his analysis was not

principally concerned with individuals per se because, as he explained in TPE, the

laws of behaviour were only “capable of exact investigation and solution in regard to

great masses and wide averages" [Jevons 1871, pp.21-23,90]. In part, those averages

identified behaviour in terms of race and class, where different behaviours would

correspond to different shapes of utility and disutility functions, which were

characterized and evaluated by the yardstick of `civilised' actions [White 1994a]. Even

the fundamental exchange equations assumed "the facility of exchange prevailing in

a civilized country” [Jevons 1871, p.132]. The principal component of civilised

behaviour turned on the ability to ‘anticipate the future’, the clearest manifestation of

which concerned the foresight necessary for the accumulation of wealth through work

and saving. Behaviour would therefore differ

according to the circumstances, according to the intellectual standing of

the race, or the character of the individual ... That class or race of men

who have the most foresight will work most for the future. The

untutored savage is wholly occupied with the troubles of the moment;

the morrow is dimly felt; the limit of his horizon is but a few days off.

The wants of a future year, or of a lifetime, are wholly unforseen. But,

in a state of civilisation, a vague though powerful feeling of the future is

the main incentive to industry and saving [ibid. pp.41-42].

It was the same ‘feeling of the future’ that explained differences in working hours:

It is evident that questions of this kind will depend greatly upon the character of

the race. Persons of an energetic disposition feel labour less painful than they

otherwise would, and, if they happen to be endowed with various and acute

18

sensibilities, their desire of further acquisition never ceases. A man of lower

race, a negro for instance, enjoys possession less, and loathes labour more;

his exertions, therefore, soon stop. A poor savage would be content to gather

the almost gratuitous fruits of nature, if they were sufficient to give sustenance;

it is only physical want that drives him to exertion [ibid. pp.177-78].

To a significant extent, though to a lesser degree, it was a similar behavioural

characteristic of English labourers, artisans, and white-collar employees which

explained the "general tendency to reduce the hours of labour at the present day", as

compared with the "learned professions" or the "rich man in modern society [who] is

supplied apparently with all he can desire, and yet he labours unceasingly for more"

[ibid. pp.176-78]. Elsewhere, Jevons claimed that the excessive mortality rates of large

British cities could be explained in large part by their high proportion of Irish inhabitants

in an analysis that neatly combined the categories of class and race [White 1994b].

Jevons’ reference to ‘race’ in the discussion of Selkirk or the isolated family was thus

consistent with his depiction of behaviour in TPE. While the marginal utility theory

explained the general principles of economic behaviour, it could not explain precisely

how that behaviour became manifest in that it differed on average between identifiable

groups. The geographically isolated Selkirk or family were thus representative of the

race that exhibited the type of civilised behaviour referred to elsewhere in TPE.

References to race and class were an integral part of Jevons’ domain of a scientific

analysis.

In his critique of the notion of methodological individualism, Geoff Hodgson has argued

that the term has not been defined with sufficient precision, that it has not been

possible to produce an account of social behaviour which rests on individuals alone

and that the term has often been used to refer to individuals and the interactions of

individuals which entails references to institutions, including language understood as a

set of rules [Hodgson 2007; see also King 2012, pp.52-62]. While I concur that these

points indicate the impossibility of a coherent methodological individualism

framework,22 Hodgson also remarks that

Some economists have been enamoured by the example of Robinson Crusoe

(before the arrival of Friday) allocating his scarce resources between

competing ends, but the social characteristics of such a situation are limited.

22 See also Ian Steedman’s (1989) analysis of the impossibility of autonomous preferences.

19

We are concerned with social phenomena, which necessarily involve more

than one individual [Hodgson 2007, p.217].

Allowing for the focus on explaining social behaviour, this would seem to leave open

the possibility that Jevons’ references to Crusoe constitute one, albeit limited, type of

explanation which could be understood in terms of a methodological individualism. This

would, however, be an unnecessary concession. For as Hodgson also notes,

proponents of methodological individualism regard fundamental explanations of

behaviour couched in terms of ‘collectives’ such as races (and, presumably, classes)

as invalid [Hodgson 2007, p.216]. For Jevons, however, Selkirk/Crusoe was the

representative of behaviour explained by reference to race and civilisation so that it

would be inaccurate to characterise his approach as one of methodological

individualism.

***** In 1948, during the final drafting of the Universal Declaration of Human Rights that

was to be adopted by the United Nations in December of that year, the Australian

delegate Alan Watt suggesting amending the proposed opening clause of article 29,

which dealt with human duties.23 The original phrasing read: "Everyone has duties to

the community which enables him freely to develop his personality". Watt proposed

that it be changed to read: "Everyone has duties to the community in which alone the

free and full development of his personality is possible". There was vigorous dissent

to the amendment, with a Belgian delegate objecting that it could be taken to assert

that “that the individual could only develop his personality within the framework of

society; it was, however, only necessary to recall the famous book by Daniel Defoe,

Robinson Crusoe, to find proof of the contrary." After Watt withdrew his amendment,

it was taken up by the delegation from the USSR, for whom it "rightly stressed the

fact that the individual could not fully develop his personality outside society. The

example of Robinson Crusoe, far from being convincing, had, on the contrary, shown

that man could not live and develop his personality without the aid of society.

Robinson had … at his disposal the products of human industry and culture, namely,

the tools and books he had found on the wreck of his ship." It was this reading of

Robinson Crusoe that was accepted, if only by default, in that Watt‘s wording

ultimately became part of Article 29.

23 This paragraph, including all quotations, draws on the account in Slaughter 2007, pp.45-8.

20

The claim that a gesture toward Robinson Crusoe was sufficient to resolve the

question of the relations between ‘the development of human personality and society’,

appears bizarre, even given its Cold War context. Nevertheless, it is noteworthy how

those references to Defoe’s text replicated some of the terms in which political

economists had discussed its veracity by the mid-nineteenth century. Although it was

Bastiat as a representative of the French ‘exchange’ school who was to produce the

first economic Crusoe, the Crusoe of Defoe was a problematic figure even for those

who might have agreed with that specification of the discourse. While Whately was

particularly exercised by the ‘moral impossibility’ of Defoe’s depiction of ‘savages’, both

he and Bastiat also rejected the feasibility of Crusoe on the basis that his personality

(or, better perhaps, ‘character’) could not be developed or maintained ‘outside’ the

framework of a society. For Whately, Robinson Crusoe was a logical impossibility

because a Crusoe in a state of ‘utter solitude’ would lapse into a ‘half-brutish apathetic

despondency and carelessness about all comforts demanding steady exertion’. For

Bastiat, death would follow isolation from ‘the division of employments, exchange,

society’. Defoe had only avoided that outcome by making ‘forced concessions to the

social state’ in that Crusoe had been endowed and imbued with the instruments and

institutions of a society. If Bastiat’s economic Crusoe contradicted his reading of Defoe,

it was still the case that his geographically isolated illustrative device was understood

as a socially constituted figure. Nor was that social constitution erased by Jevons in his

marginalist reference to Crusoe which turned on the categories of race and civilisation.

If the economic Crusoe was produced because of the perceived deficiencies in Defoe’s

text, the story had to be subsequently rewritten again with the depiction of that

economic metaphor in terms of autonomous preferences under the more general label

of methodological individualism.24

24 In that regard, it has been noted that there is a marked difference between the representative

agent metaphor of today’s DSGE models and TPE in that Jevons’ use of averages entails

heterogeneity rather than homogeneity in behaviour [Boianovsky 2013].

21

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