THE FATAL CONCEIT The Errors of Socialism phần 9 docx

APPENDIX B

THE COMPLEXITY OF PROBLEMS OF

HUMAN INTERACTION

Although physical scientists sometimes appear unwilling to recognise

the greater complexity of the problems of human interaction, the fact

itself was seen more than a hundred years ago by no less a figure than

James Clerk Maxwell, who in 1877 wrote that the term `physical

science' is often applied `in a more or less restricted manner to those

branches of science in which the phenomena considered are of the

simplest and most abstract kind, excluding the consideration of the

more complex phenomena such as those observed in living things'. And

more recently a Nobel laureate in physics, Louis W. Alvarez, stressed

that `actually physics is the simplest of all the sciences.... But in the

case of an infinitely more complicated system, such as the population of

a developing country like India, no one can yet decide how best to

change the existing conditions' (Alvarez, 1968).

Mechanical methods and models of simple causal explanation are

increasingly inapplicable as we advance to such complex phenomena.

In particular, the crucial phenomena determining the formation of

many highly complex structures of human interaction, i.e., economic

values or prices, cannot be interpreted by simple causal or 'nomothetic'

theories, but require explanation in terms of the joint effects of a larger

number of distinct elements than we can ever hope individually to

observe or manipulate.

It was only the `marginal revolution' of the 1870s that produced a

satisfactory explanation of the market processes that Adam Smith had

long before described with his metaphor of the `invisible hand', an

account which, despite its still metaphorical and incomplete character,

was the first scientific description of such self-ordering processes. James

and John Stuart Mill, by contrast, were unable to conceive of the

determination of market values in any manner other than causal

determination by a few preceding events, and this inability barred

them, as it does many modern 'physicalists', from understanding self￾steering market processes. An understanding of the truths underlying

marginal utility theory was further delayed by James Mill's guiding

influence on David Ricardo, as well as by Karl Marx's own work.

Attempts to achieve mono-causal explanations in such areas (prolonged

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APPENDIX B

even longer in England through the decisive influence of Alfred

Marshall and his school) persist to the present.

John Stuart Mill perhaps played the most important role in this

connection. He had early put himself under socialist influence, and

through this bias acquired a great appeal to `progressive' intellectuals,

establishing a reputation as the leading liberal and the `Saint of

Rationalism'. Yet he probably led more intellectuals into socialism than

any other single person: fabianism was in its beginnings essentially

formed by a group of his followers.

Mill had barred his way to comprehending the guide function of

prices by his doctrinaire assurance that `there is nothing in the laws of

value which remains for the present or any future writer to clear up'

(1848/1965, Works: III, 456), an assurance that made him believe that

` considerations of value had to do with [the distribution of wealth]

alone' and not with its production (1848/1965, Works, III: 455). Mill

was blinded to the function of prices by his assumption that only a

process of mechanical causation by some few observable preceding

events constituted a legitimate explanation in terms of the standards of

natural science. Due to the influence that Mill's assumption had exerted

for so long, the `marginal revolution' of twenty-five years later, when it

did arrive, had an explosive effect.

It deserves mentioning here, however, that only six years after Mill's

textbook was published, H. H. Gossen, a thinker who is almost wholly

overlooked, had anticipated marginal utility theory in already clearly

recognising the dependence of extended production on guidance by prices

and emphasising that `only with the establishment of private property can

the yardstick be found for the determination of the optimal quantity of each

commodity to be produced under given circumstances.... The greatest

possible protection of private property is definitely the greatest necessity for

the continuation of human society' (1854/1983:254-5).

Despite the great harm done by his work, we must probably forgive

Mill much for his infatuation with the lady who later became his wife -

upon whose death, in his opinion, `this country lost the greatest mind it

contained' and who, according to his testimony, `in the nobleness of her

public object ... never stopped short of perfect distributive justice as

the final aim, implying therefore a state of society entirely communist in

practice and spirit' (1965, Works: XV, 601; and see Hayek, 1951).

Whatever the influence of Mill may be, Marxian economics is still

today attempting to explain highly complex orders of interaction in

terms of single causal effects like mechanical phenomena rather than as

prototypes of those self-ordering processes which give us access to the

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