The Strange Ones

THE WORLDLY PHILOSOPHERS: THE LIVES, TIMES, AND IDEAS OF THE GREAT ECONOMIC THINKERS (342 pp.)--Roberf L. Heilbroner--Simon & Schuster ($5).

The fraternity of economists is recent and exclusive. For the first 6,000 years of recorded history, no candidate presented himself, because economics in the modern sense did not exist. The production of food, the making and selling of goods, was thought subject to the laws of God, King or custom; no one suspected that such lowly economic activities might have laws of their own. That thought did not dawn until the late Renaissance, when trade and transport burst medieval barriers and began to claim all the world for a market place. Not until the 18th century was that new market place seen in a single vision and a single theory.

The man who had the vision and wrote down the theory, in a scholarly tome called An Inquiry into the Nature and Causes of the Wealth of Nations, was an exceedingly odd Scotsman named Adam Smith. Most economists of note since then have been no less odd, and have influenced the affairs of men by reacting, in one way or another, to Adam Smith's vision. In The Worldly Philosophers, Robert L. Heilbroner, a successful magazine writer but no scholar, tells the stories and beliefs of these men, beginning with Smith himself. It is a sprightly popularization which makes the odd economists human, and humdrum economics fun.

A Wonderful World. Smith was a professor of philosophy whose absentmindedness was staggering. Once he left his home in a dressing gown and walked 15 miles before coming to. His speech was bumbling, his gait "vermicular," his appearance unfetching. "I am a beau," he once said, "in nothing but my books." When he first met Dr. Johnson in a heated argument, the lexicographer said: "You lie." Smith retorted crisply: "You are a son of a bitch!"

Confronted with the anarchic but enormously fruitful growth of early capitalism, Smith began by asking himself what caused that growth, and wound up by making a revolutionary statement about man: i.e., that the quest for gain is good. This had been said before by cynics, but never with the almost reverent seriousness of Smith. In his explanation of the economic life, the quest for gain provided needed goods and services as well as competition among their purveyors. Competition, and the changing pressures of supply & demand in the market place, forced each businessman to conform to the needs of the community. It would be a wonderful world, Smith thought, if the market mechanism were allowed to follow its unimpeded destiny in a soaring spiral of productivity; in that case, self-interest would result in riches even for the poor.

A Beautiful World. In their way, the Socialists, when they first appeared on the scene, were as optimistic as Smith. But, unlike Smith, they put their real faith not primarily in the free, but in the organized, good life--with varying degrees of forcible encouragement. Robert Owen, a rich Manchester factory owner, thought that men ought to form collectives and go back to working with the spade instead of the plow. Charles Fourier, who loved cats and flowers, was probably mildly insane, but in a pleasant, do-goodish way. His community centers, called phalanxes, were once a minor fad in the U.S. Count Claude Henri de Roudvroy de Saint-Simon, a democratically minded aristocrat, used to get up every morning as a boy to his valet's cry: "Arise, Monsieur le Comte, you have great things to do today!" In a vision, Charlemagne told him the great thing was to be a philosopher, and, trying to become one, Saint-Simon spent his fortune hiring all the savants he could find so that they might teach him "everything there was to know."

The world dismissed these early Socialists--perhaps hastily--as "Utopian"; yet the difference between them and later, more practical Socialists is perhaps not as deep as used to be thought. At any rate, as Author Heilbroner shows, they put Socialism on the intellectual map.

An Inexorable World. If Adam Smith was the first economist to know the importance of capitalism. Karl Marx was the first major economist to sense the importance of the modern machine. Before his eyes, the Industrial Revolution was creating more wealth and, by contrast, more poverty than ever before. Scribbling day after day in the library of the British Museum and dabbling in the petty politics of European refugees, Marx raised an apocalyptic vision against Smith's: the capitalists' quest for gain would destroy them; the machine must be shackled by the state; the men who work the machine must become the new rulers, to replace the old bourgeoisie.

Author Heilbroner gives an adequate summary of Marx's theories, and a lively account of his fairly familiar life--how the rabbi's grandson married a beautiful German aristocrat, how he was forced to leave first Germany and then France because of his radical ideas, how he lived in abject poverty in London, dreaming of power without suspecting even in his dreams the staggering consequences his unreadable tomes and hate-filled fulminations would have for hundreds of millions of men. Carbuncles added to his other miseries. "I hope," he said one night prophetically, "the bourgeoisie as long as they live will have cause to remember my carbuncles."

A Savage World. Thorstein Veblen also cast a jaundiced eye on the bourgeoisie. A nonconformist who might have been one of Sinclair Lewis' village atheists, he was born on the American frontier of Norwegian parents. Among other peculiarities, he locked his watch to his vest with a large safety pin and he'd up his socks with two pins moored to his pants. His idea of a joke was to return a borrowed sack to a farmer with a hornet's nest inside. Acidly sardonic, he called religion "the fabrication of vendible imponderables in the nth dimension," religious organizations "chain stores," and individual churches "retail outlets." Women apparently could not resist him. nor he, them. "What are you to do if the woman moves in on you?" he once asked a friend.

In his books he savagely dissected early American capitalism--in a predatory era when Cornelius Vanderbilt could write to his associates: "Gentlemen, you have undertaken to ruin me. I will not sue you, for law takes too long. I will ruin you." Veblen took a closer look at the people Marx called the ruling class, and produced a new label: the leisure class. The businessman, to Veblen, was a saboteur of the economy, because instead of just sticking to making goods, he tried to regulate output in order to make more money. Eventually, thought Veblen, the engineers would inherit the world and run it properly. He died on the eve of the Great Depression. Perhaps his greatest merit, as Author Heilbroner makes clear, was that he saw one great truth Marx never saw: the "working class" had no real desire to rebel against the bourgeoisie, but wanted to become more like it.

A Sick World. John Maynard Keynes was a brilliant intellectual and financial operator who made a couple of million dollars dealing in international currencies and commodities half an hour each morning while still in bed. He wrote a mathematical masterpiece on probability, was the darling of the avant-garde Bloomsbury set, chairman of a life-insurance company, husband of a beautiful ballerina, a governor of the Bank of England, a spectacular bridge player. "The Architect of Capitalism Viable." as Author Heilbroner calls him. Keynes also wrote an intricate book, The General Theory of Employment, Interest, and Money, drastically revising Adam Smith's view of capitalism. His conclusion: the market place is not a safe place; every boom is constantly threatened with collapse, any depression might last indefinitely. No moral question is involved. The system has a mechanical defect, and its price is high: unemployment. The solution. stated in its simplest form: government investment. The less radical of the British Socialists, e.g., the late Sir Stafford Cripps, followed Keynes (who died in 1946). Whatever may be said for or against him, Keynes was, essentially, the prophet of economic patchwork.

An Unknown World. Since Adam Smith, economists (and politicians) have gone a full circle. In his time, capitalism was revolutionary and liberal; today, in the minds of many, it is reactionary. In his time, the idea that the state must control economic affairs Was reactionary; today, for millions, it is the only true liberalism. All but extreme partisans agree, nevertheless, that modern American capitalism is a different brand, never envisaged by Marx, not yet seen by Veblen, probably not fully understood by Keynes. Contemporary economists of all shadings worry about it--fearing that it may collapse under its own weight and bigness, or be destroyed by meddling government, or by Communism.

Author Heilbroner sides with the optimists in his collection (though he leans to the cautious hope of Keynes far more than to the bolder hopes of Adam Smith, as adapted to modern times by Economist Friedrich Hayek). Heilbroner predicts that economics will diminish somewhat as an influence on human affairs, and that morals and politics will reassert themselves more strongly. Capitalism's big problem, he feels, is not really economic, but political--the "problem of establishing itself as the arsenal, not only of production, but also of hope and meaningful freedom to the anonymous hundreds of millions who may otherwise distrust us [and] take arms against us."

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