Perspective on the History of Economic Thought, volume 2,
chapter 3: “James Mill, Ricardo, and the Ricardian System.” An MP3
audio file of this chapter, narrated by Jeff Riggenbach, is available
of class conflict as a key to political history did not begin with
Karl Marx. It began, as we shall see further below, with two leading
French libertarians inspired by J.B. Say, Charles Comte (Say’s son-in-law),
and Charles Dunoyer, in the 1810s after the restoration of the Bourbon
monarchy. In contrast to the later Marxist degeneration of class
theory, the Comte-Dunoyer view held the inherent class struggle
to focus on which classes managed to gain control of the
state apparatus. The ruling class is whichever group has
managed to seize state power; the ruled are those groups
who are taxed and regulated by those in command. Class interest,
then, is defined as a group’s relation to the state. State rule,
with its taxation and exercise of power, controls, and conferring
of subsidies and privileges, is the instrument that creates conflicts
between the rulers and the ruled. What we have, then, is a "two-class"
theory of class conflict, based on whether a group rules or is ruled
by the state. On the free market, on the other hand, there is no
class conflict, but a harmony of interest between all individuals
in society cooperating in and through production and exchange.
developed a similar theory in the 1820s and 1830s. It is not known
whether he arrived at it independently or was influenced by the
French libertarians; it is clear, however, that Mill’s analysis
was devoid of the rich applications to the history of western Europe
that Comte, Dunoyer, and their young associate, the historian Augustin
Thierry, had worked out. All government, Mill pointed out, was run
by the ruling class, the few who dominated and exploited the ruled,
the many. Since all groups tend to act for their selfish interests,
he noted, it is absurd to expect the ruling clique to act altruistically
for the "public good." Like everyone else, they will use
their opportunities for their own gain, which means to loot the
many, and to favor their own or allied special interests as against
those of the public. Hence Mill’s habitual use of the term "sinister"
interests as against the good of the public. For Mill and the radicals,
we should note, the public good meant specifically laissez-faire
government confined to the minimal functions of police, defense
and the administration of justice.
the preeminent political theorist of the radicals, harked back to
the libertarian Commonwealthmen of the 18th century in stressing
the need always to treat government with suspicion and to provide
checks to suppress state power. Mill agreed with Bentham that "If
not deterred, a ruling elite would be predatory." The pursuit
of sinister interests leads to endemic "corruption" in
politics, to sinecures, bureaucratic "places" and subsidies.
the end [of government] as it really is, in its own nature. Think
next of the facility of the means — justice, police, and security
from foreign invaders. And then think of the oppression practised
upon the people of England under the pretext of providing them.
Never has libertarian
ruling-class theory been put more clearly or forcefully than in
the words of Mill: there are two classes, Mill declared, "the
first class, those who plunder, are the small number. They are the
ruling Few. The second class, those who are plundered, are the great
number. They are the subject Many." Or, as Professor Hamburger
summed up Mill’s position: "Politics was a struggle between
two classes — the avaricious rulers and their intended victims."
The great conundrum
of government, concluded Mill, was how to eliminate this plunder:
to take away the power "by which the class that plunder succeed
in carrying on their vocation, has ever been the great problem of
Many" Mill accurately termed "the people," and it
was probably Mill who inaugurated the type of analysis that pits
"the people" as a ruled class in opposition to the "special
interests." How, then, is the power of the ruling class to
be curbed? Mill thought he saw the answer:
must appoint watchmen. Who are to watch the watchmen? The people
themselves. There is no other resource; and without this ultimate
safeguard, the ruling Few will be forever the scourge and oppression
of the subject Many.
But how are
the people themselves to be the watchmen? To this ancient problem
Mill provided what is by now a standard answer in the Western world,
but still not very satisfactory: by all the people electing representatives
to do the watching.
French libertarian analysts, James Mill was not interested in the
history and development of state power; he was interested only in
the here and now. And in the here and now of the England of his
day, the ruling Few were the aristocracy, who ruled by means of
a highly limited suffrage and controlled "rotten boroughs"
picking representatives to Parliament. The English aristocracy was
the ruling class; the government of England, Mill charged, was "an
aristocratical engine, wielded by the aristocracy for their own
benefit." Mill’s son and ardent disciple (at that time), John
Stuart, argued in a Millian manner in debating societies in London
that England did not enjoy a "mixed government,"
since a great majority of the House of Lords was chosen by "200
families." These few aristocratic families "therefore
possess absolute control over the government … and if a government
controlled by 200 families is not an aristocracy, then such a thing
as an aristocracy cannot be said to exist." And since such
a government is controlled and run by a few, it is therefore "conducted
wholly for the benefit of a few."
is this analysis that led James Mill to place at the centre of his
formidable political activity the attainment of radical democracy,
the universal suffrage of the people in frequent elections by secret
ballot. This was Mill’s long-run goal, although he was willing to
settle temporarily — in what the Marxists would later call a "transition
demand" — for the Reform Bill of 1832, which greatly widened
the suffrage to the middle class. To Mill, the extension of democracy
was more important than laissez-faire, for to Mill the process
of dethroning the aristocratic class was more fundamental, since
laissez-faire was one of the happy consequences expected to flow
from the replacement of aristocracy by the rule of all the people.
(In the modern American context, Mill’s position would aptly be
called "right-wing populism.") Placing democracy as their
central demand led the Millian radicals in the 1840s to stumble
and lose political significance by refusing to ally themselves with
the Anti-Corn Law League, despite their agreement with its free
trade and laissez-faire. For the Millians felt that free trade was
too much of a middle-class movement and detracted from an overriding
concentration on democratic reform.
the people would displace aristocratic rule, did Mill have any reason
for thinking that the people would then exert their will on behalf
of laissez-faire? Yes, and here his reasoning was ingenious: while
the ruling class had the fruits of their exploitative rule in common,
the people were a different kind of class: their only interest in
common was getting rid of the rule of special privilege. Apart from
that, the mass of the people have no common class interest that
they could ever actively pursue by means of the state. Furthermore,
this interest in eliminating special privilege is the common interest
of all, and is therefore the "public interest" as opposed
to the special or sinister interests of the few. The interest of
the people coincides with universal interest and with laissez-faire
and liberty for all.
But how then
explain that no one can claim that the masses have always championed
laissez-faire? — and that the masses have all too often loyally
supported the exploitative rule of the few? Clearly, because the
people, in this complex field of government and public policy, have
suffered from what the Marxists would later call "false consciousness,"
an ignorance of where their interests truly lie. It was then up
to the intellectual vanguard, to Mill and his philosophic radicals,
to educate and organize the masses so that their consciousness would
become correct and they would then exert their irresistible strength
to bring about their own democratic rule and install laissez-faire.
Even if we can accept this general argument, the Millian radicals
were unfortunately highly overoptimistic about the time span for
such consciousness-raising, and political setbacks in the early
1840s led to their disillusionment in radical politics and to the
rapid disintegration of the radical movement. Curiously enough,
their leaders, such as John Stuart Mill and George and Harriet Grote,
while proclaiming their weary abandonment of political action or
political enthusiasm, in reality gravitated with astonishing rapidity
toward the cozy Whig centre that they had formerly scorned. Their
proclaimed loss of interest in politics was in reality a mask for
loss of interest in radical politics.
Joseph Hamburger, Intellectuals
in Politics: John Stuart Mill and the Philosophic Radicals
(New Haven: Yale University Press, 1965), p. 44.
N. Rothbard (1926–1995) was dean of the Austrian School,
founder of modern libertarianism, and chief academic officer of
the Mises Institute. He was
also editor — with Lew Rockwell — of The
Rothbard-Rockwell Report, and appointed Lew as his literary