Thomas Sowell retired from writing his syndicated column a few weeks ago. And so the tributes have been coming in. As they should.
I note that Paul Jacob at ThisIsCommonSense.com, and Gene Epstein on the Tom Woods Show, both have praised Sowell for his astute and well-explained economics popularizing while expressing their chagrin that Sowell never seemed to apply the same “thinking beyond Stage One” approach to foreign policy.
This was a point I made in one of my earliest published reviews, of Thomas Sowell’s A Conflict of Visions, to be found in the premiere issue of Liberty, way back in 1987. (Which you can read on this site, now — O, lucky you!)
So, if we are all pretty much saying the same thing, what can I say differently?
Well, I could mention my favorite Sowell book, his first: Say’s Law: An Historical Analysis. This is probably his most difficult book, in no small part because Say’s Law is itself a surprisingly difficult concept. It has been years since my last reading — and I have read it at least three times, even now wishing to return to it, give it another go.
I first read the book in tandem with W. H. Hutt’s quirky A Rehabilitation of Say’s Law. Each book helped me understand the other.
One of the really tricky things about Says Law is that it is a macro theory; but many authors found its chief resonance on the micro level. Indeed, though Say’s Law was first marshaled to debunk one theory of economic depression, the general glut theory, W. F. Lloyd, in his classic essay on value, tied that macro problem very closely to what became the theory of marginal utility, the micro theory par excellence. And Say’s Law according to Say’s disciplines — the Third School, or Catallactic economists — turned into a theory of “harmonies,” not equilibrium. It was another macro approach based on a micro insight that in turn was used against not merely general glut theories, but also protectionism and socialism. Sowell, if I remember correctly, does not extend his analysis into the third school, except insofar as he deals with Walras’s Identity.
As an economic popularizer and as an economic historian, particular of race and cultures, Sowell was magnificent. Yes. But as a social philosopher he was perhaps even better. More necessary.
There is a caveat to this judgment, however. Jacob and Epstein and Woods all discussed their favorite Sowell contributions. I have done the same, with his recondite Say’s Law survey. But let me offer a balance: his worst book, something neither Epstein nor Jacob bother with.
I nominate Marxism: Philosophy and Economics (1985). This book is easier to read than Say’s Law, my favorite, and it probably packs more punch . . . at least in terms of surprise value. But one of the big surprises is a huge whopper of an error. It is an error, of all things, about value.
Sowell asserts, in Marxism, that Eugen von Böhm-Bawerk was wrong on Marx’s labor theory of value.
When I read this, I had not only read Böhm’s classic “Zum Abschluss des Marxschen Systems,” translated under the provocative-if-puzzling title Karl Marx and the Close of His System (first English language edition, Alice MacDonald, 1898), but also two other important books related to the subject: Destutt de Tracy’s A Treatise on Political Economy (Thomas Jefferson, 1817) and a crucial chapter in Karl Marx’s infamous Das Kapital (1867).
You might be wondering: what the heck — what’s with the Tracy? Well, Tracy makes much of the Condillac thesis of both parties to an exchange gaining value in the transaction. So when I read Marx’s obscurantist dismissal of that thesis, wherein the old socialist crank mocks Condillac and Tracy’s mutual gain thesis, I was prepared for Sowell’s disagreement with Böhm.
The key Marxian error, in my opinion, is that repudiation of mutual gain through trade. It was there that Marx necessarily went off track, not seeing how value is increased as goods flow through the market nexus. The marginalist view of value is intricately entangled with the mutual gain concept, and by rejecting mutual surplus of value in each trade, Marx took his most decisive turn the wrong way. Adam Smith and David Ricardo and the British economists had sent economics down the wrong path in 1776, and Marx took their labor theory of value to its absurdist conclusion. Sowell basically apologizes for Marx. He insists, without much evidence (and with the evidene right there in Das Kapital, on the pages citing Condillac and Tracy), that Marx’s formalistic definition of value as (somehow) incorporating socially necessary labor time was indeed compatible with marginalism. This thesis seems not in the tiniest degree defensible.
A few years later (if memory serves), David Ramsay Steele cleared all this up in his magnificent book on the socialist calculation problem, From Marx to Mises (1992), speculating that Sowell was merely regurgitating the views of his Marxist-apologist professors in the days before his conversion.
In any case, Sowell has, since his conversion from Marxism under the influence chiefly (I think) of Milton Friedman, remailed too closely tied to the British Classical School. He seems uninterested in, perhaps dismissive of the Third School tradition starting with Condillac and moving through Tracy, Comte and Dunoyer, Bastiat, Perry, Henry Dunning Macleod, and Gustave de Molinari. (Half of these economists are French or Belgian or Swiss, so the tradition is often called the French Liberal School. But that is too narrow a reading of this dissident, proto-marginalist tradition.) The later Third Schoolers ran off-track, too, in not accepting the important proof of the basic idea in the marginalist advances of W. S. Jevons, Carl Menger, and Leon Walras. While Menger did not go on at length about what he owed to the Third School economists, Jevons sure did, while heaping scorn upon the Ricardians. And Walras, it is worth noting, was himself the son of a Third School economist, Auguste.
This lack of interest in these economists seems especially strange to me, since Sowell has repeatedly dipped into the rhetorical well so ably primed by Third Schoolers Frédéric Bastiat and Yves Guyot. (See my forewords to Bastiat’s and Guyot’s classics, available on Amazon/Kindle and iBooks.)
But it has been a long time since I read Sowell’s Marxism. Perhaps my memory is fuzzy. And my view of the Marxian surplus value and exploitation theories needs refreshing. So, after just now re-reading my three decades’ old review of A Conflict of Visions, I won’t direct my attention to The Vision of the Anointed: Self-Congratulaton as a Basis for Social Policy (1995), which I had been planning to do. I will go back and re-read Böhm-Bawerk’s take-down of Marx, instead.
So perhaps I will follow up this post with a corrective, soon. I should not be this fuzzy on something so basic as “surplus value.”