Classic Perspectives on
International Political Economy
John Locke
Adam Smith
Karl Marx
Class 2 – Thursday, 15 September 2011
J A Morrison
1
Lec 2: Classic Perspectives
I. Locke, Smith, & Marx
II. States and Markets
III. Materialism versus Idealism
2
Lec 2: Classic Perspectives
I. Locke, Smith, & Marx
II. States and Markets
III. Materialism versus Idealism
3
As we saw on Tuesday, there were
a number of different ways to
define “political economy.”
We also saw that the definitions
we use can privilege certain
understandings of the phenomena
involved.
4
Today, we’ll continue in the
same mode, exploring several
prominent theorists’
frameworks for understanding
political economy.
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I. Locke, Smith, & Marx
1. Who they were
2. Why we should bother with them
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“John Locke” ?
What gives?
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No--really...
?
=
What gives?
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John Locke
• 1632?-1704
• English philosopher;
developed political
connections
• Helped inspire & justify
Glorious Revolution 16881689
• Secured adoption of fixed
exchange rate in 1696
• On Board of Trade, reformed
commercial, fiscal, &
migration policy
9
Adam Smith
• 1723-1790
• Part of Scottish
Enlightenment
• Lectured at Univ of
Glasgow (1750s-1760s)
• Worked for Charles
Townshend (1760s)
• Wealth of Nations (1776)
• Inspired free trade
movement in 1780s
10
Karl Marx
• 1818-1883
• Prussian; father converted
from Judaism
• Student of Hegel
• Revolutionary; frequently
exiled
• Founder of Communism
(brand of Socialism)
• Coauthor of Communist
Manifesto (1848)
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I. Locke, Smith, & Marx
1. Who they were
2. Why we should bother with them
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John Locke, Adam Smith, and
Karl Marx have all been dead for
decades.
Why should we bother with
their opaque musings? What
relevance could they possibly
have?
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There are several good reasons
to “bother” with these very old,
very dead guys...
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(1) Historical Importance
• Locke, Smith, & Marx were among the most
influential intellectuals of all time
• Each shaped policy in their lifetimes and for
decades to come
• Impossible to understand the history of the
global economy without understanding their
roles and their ideas
15
(Of course, their precise ideas and the roles
they played are subject to ongoing debate!
But few deny their importance.)
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(2) Intellectual Importance
• These theorists also bore extraordinary
influence on subsequent economic thought
– Locke was a pivotal foil for Smith
– Marx borrowed from Smith and challenged Locke
– And JM Keynes returned to Locke in his attempt to
assault the “classical liberals” (including Smith)
• We lose much of the conversation today if we
neglect these persistent voices
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(3) Provide Relief
• Some of the writing is surprisingly unfamiliar
– Primeval terms and formulations for familiar
concepts (“vent”)
– Nonstandard spellings (“forraign”) and printing
– Shocking assumptions about racial, national, &
religious characteristics
• These differences can sharpen our perspective
on our own “discourse” of political economy
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(4) Offer Alternatives
• These “great” writers developed solutions to
transcendent (timeless) challenges
• These “great” writers were unusual in their
attempts to tackle a number of issues in a
single framework
• We might revisit these proposals in search of
additional alternatives
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Lec 2: Classic Perspectives
I. Locke, Smith, & Marx
II. States and Markets
III. Materialism versus Idealism
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II. States and Markets
1. What is the Priority: Politics or Economics?
2. Whose Property are we Protecting?
3. Distinguishing “Political” from “Economy”
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Clearly, states and markets
interact.
But does politics serve
economics? Or does economics
serve politics?
(Obviously, economists should and do serve political scientists!)
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Aristotle’s classic answer set the
tone for centuries to follow…
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“[T]he city…exist[s] by nature, and…
man is by nature a political animal.”
(Aristotle, Politics, 1253a2)
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“It is clear…that a city is not an
association for residence on a common
site, or for the sake of preventing
mutual injustice and easing exchange…
What constitutes a city is an
association of households and clans in
a good life, for the sake of attaining a
perfect and self-sufficing existence.”
(Aristotle, Politics, 1280b29)
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Aristotle’s Political Economy
• State exists naturally
• Political life is telos of man’s existence
• Market relations exist to facilitate
social/political endeavors
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“In [the state of nature], there is no place for Industry;
because the fruit thereof is uncertain: and
consequently no Culture of the Earth; no Navigation,
nor use of the commodities that may be imported by
Sea; no commodious Building; no Instruments of
moving, and removing such things as require much
force; no Knowledge of the face of the Earth; no
account of Time; no Arts; no Letters; no Society; and
which is worst of all, continuall feare, and danger of
violent death; And the life of man, solitary, poore,
nasty, brutish, and short.”
(Hobbes, Leviathan, Ch XIII)
27
 In Leviathan (1651), Hobbes
followed largely in Aristotle’s
mode: market relations were
inconceivable without political
society.
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Locke wrote the Two Treatises
just a few decades after Hobbes
published Leviathan.
According to Locke, what was
the end (purpose) of political
society?
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30
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“The great and chief end therefore, of
Mens uniting into Commonwealths,
and putting themselves under
Government, is the Preservation of
their Property.”
(Second Treatise, § 124.)
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What does this imply about the
capacity of market relations to
exist beyond the realm of
political society? (see §108)
For Locke, did the market serve
the state? Or did the state serve
the market?
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John Locke was among the first
to challenge Aristotle’s
prioritization of the state over
the market.
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II. States and Markets
1. What is the Priority: Politics or Economics?
2. Whose Property are we Protecting?
3. Distinguishing “Political” from “Economy”
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But this raises a question:
whose economic interests are to
be served by the state?
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Meaning of “Preservation of their
Property”
• Narrow Interpretation: Protect specific
possessions, our (negative) liberties, and our
bodies
– Protect propertied from unpropertied
• Broad Interpretation: Protect the health and
welfare of our economy from foreign
competition and invasion
– Protect public/common interest
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So, which view did Locke hold?
“And all this to be directed to no
other end, but the peace, safety,
and public good of the people.”
(§131; See also §§ 97, 120)
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What did Smith suggest was the
original end of political society?
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“Laws and government may be considered
in…every case as a combination of the rich to
oppress the poor, and preserve to themselves
the inequality of the goods which would
otherwise be soon destroyed by the attacks of
the poor, who if not hindered by the
government would soon reduce the others to an
equality with themselves by open violence.”
(Smith, Lectures on Jurisprudence, 208)
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Locke versus Smith
Locke
Smith
Nature of Agreement Compact; consent
Coercion
Govt Invention
Created in single
moment
evolved historically
Whose property?
community; public
good
Rich vis-à-vis poor
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II. States and Markets
1. What is the Priority: Politics or Economics?
2. Whose Property are we Protecting?
3. Distinguishing “Political” from “Economy”
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Let’s back up.
We’ve been talking about “states”
and “markets” as if it were obvious
what the differences between the
two are.
What are the differences?
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Distinguishing States & Markets
A) Nature of decision-making: centralized versus
decentralized
B) Breadth of interests considered: public good
versus private good
C) Locus of Accountability: owners/shareholders
versus electors
D) Amount of competition: monopoly versus
competitive
E) Power: market power versus political power
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Lec 2: Classic Perspectives
I. Locke, Smith, & Marx
II. States and Markets
III. Materialism versus Idealism
44
III. Materialism versus Idealism
1. Smith’s Historical Materialism
2. Marx’s Historical Materialism
3. The Question of Revolution & Policy
Change
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In his historical analyses, Smith
generally held that the evolution of
material factors—interests &
institutions—powered social,
political, and economic
development.
46
Smith’s (Infamous) Four Stages
•
•
•
•
1st – Age of Hunting & Gathering
2nd – Age of Shepherds
3rd – Age of Agriculture
4th – Age of Trade and Commerce
(LJ(A)i.27)
47
“Base” and “Superstructure”
(Marx’s Terms)
• Each stage brings with it a different set of
values and allegiances
• Politics are organized in each “age” according
to the interests of the ruling class
– Agriculture  Feudalism (rule of landed elites)
– Commerce  Mercantilism (rule of “merchants &
manufacturers”)
• As the economy develops, the burgeoning
class overthrows the old guard
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So, where did Smith think history
would end?
(See the end of the Wealth of Nations.)
 It’s not clear. He certainly
doesn’t seem to have been as
optimistic as Marx.
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III. Materialism versus Idealism
1. Smith’s Historical Materialism
2. Marx’s Historical Materialism
3. The Question of Revolution & Policy
Change
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“The Premises of the Materialist
Method”
“Life is not determined by consciousness, but
consciousness by life. In the first method of
approach the starting-point is consciousness
taken as the living individual; in the second
method, which conforms to real life, it is the real
living individuals themselves, and consciousness
is considered solely as their consciousness.”
(GI, 181; Preface 425)
51
Marx’s “Stages of Development”
•
•
•
•
1st – Tribal Ownership
2nd – Ancient Communal & State Ownership
3rd – Feudal or estate Property
4th – [Market/industrial age]
52
The Communist Revolution
• Communism is the telos (endpoint) of
historical evolution (GI, 196)
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III. Materialism versus Idealism
1. Smith’s Historical Materialism
2. Marx’s Historical Materialism
3. The Question of Revolution & Policy
Change
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In this treatment, Marx’s
“Communism” is a subset of
Smith’s view of political economy.
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Of course, there was much
disagreement about specifics.
But several of the major
components are there…
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Marx and Smith Commonalities
• State is instrument of dominant class
• Materialism: ideas are generally product of
interests and material factors
• Historical materialism: political-economic
development progresses as different groups
become empowered by changes in the means
and modes of production
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But there was a major difference:
what would the end of history
bring?
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Marx was optimistic: Communist
Revolution.
Smith was less obviously so.
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What do you think determines
foreign economic policy?
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