Tyranny of words
Chapter excerpted from Stuart Chase's 1938
book, The Tyranny of Words.
TO THE RIGHT WITH THE ECONOMISTS
Classical philosophy does not yield a helpful method of obtaining
information about the world outside. Classical economics does
not yield a helpful method of explaining how men acquire food,
clothing and shelter. Initially, one expects better results
from economics, because it deals with homely things like wheat,
onions and parlour furniture. It wastes little effort in tracking
down the Good, the True and the Beautiful. But on closer examination
it appears that unwarranted identifications and high-order
abstractions run riot here, as in philosophy. Just because
it seems to be a more practical study, the results are perhaps
even more lamentable.
Says Hogben in this connexion:
Instead of inventing a scientific nomenclature
free from extraneous associations, economics, like theology,
borrows its terms from common speech, defines them in a sense
different from and often opposite to their accepted meaning,
erects a stone wall of logic on concealed verbal foundations,
and defies the plain man to scale it. The part of the real
world with which economics is concerned is bounded above and
below by the two covers of the dictionary.
Hogben finds a sample in the works of Professor Lionel Robbins
of the London School of Economics. Robbins states the 'law'
of supply and demand as a well-known generalization of price
theory. When some outside body fixes a price below the market-price,
demand will exceed supply. Robbins then asks upon what foundations
this statement rests. Not upon any appeal to history, he says.
Not upon the results of controlled experiment. 'In the last
analysis our proposition rests upon deductions which are implicit
in our initial definition of the subject matter of economic
Hogben, the biologist, is scandalized. Such stuff, he says,
is the astrology of the Power Age. The law of supply and demand
rests on a manipulation of words rather than on verified observation.
The process is like a game of chess which depends on knowing
the initial definition of the moves.
A subject which admits to the dignity of law, statements
solely based on logical manipulation of verbal assertions
forfeits any right to be regarded as a science. In science
the final arbiter is not the self-evidence of the initial
statement, nor the facade of flawless logic which conceals
Final validity in science rests on doing, on performing an
operation, not on talking.
A semantic analysis of economic theory would fill a book in
itself. It would be a volume both instructive and depressing.
Here we have space but for a few examples. The economists
are as far from agreement among themselves as are the philosophers.
This strongly suggests that extrapolation and shaky assumptions
dominate the field, with the scientific method undeveloped.
It is a safe rule that any study where students cannot agree
upon what they are talking about is outside the scientific
I employ a skilled mechanic to mow my meadow and cultivate
my garden. He used to be employed in a Connecticut mill, but
a new machine was installed and he and some others lost their
work. So he is keeping himself and his family alive as best
he can at a fraction of his former income. He was a victim
of what is termed 'technological unemployment.' A machine
took his work from him, and for a considerable period he could
find no other work to do. He might have left town, but he
had bought a house, his children were in school, his wife
liked the neighbourhood and to take to the road was a risky
venture with machinists out of work on every hand. Now what
do the classical economists do with my friend Roy Thompson?
They prove by irrefutable logic that technological unemployment
is impossible. I know what I am saying, for I have debated
the matter in public with classical economists and can tick
off the arguments with my eyes shut. The logic proceeds like
this: A new machine is put into a pin factory to take the
place of men. The cost of making pins is lowered. Presently
competition lowers the price of pins as the machine is generally
adopted. Therefore housewives spend less money for pins and
have more money to spend for silk stockings. Therefore the
factories making stockings employ more help and no unemployment
results. On the other hand, if the first factory has a monopoly
of the new machine and does not choose to lower the price
of pins, the owner of the factory takes in more money. This
money he either spends, let us say for a private aeroplane,
or invests in a new pin factory. Workers have to build the
aeroplane or the factory, giving more employment. On purely
logical grounds, you cannot get round it. Employment shifts,
but does not decline and the same amount of money continues
in circulation. Q.E.D.
How do you get round it? You look steadily at Roy Thompson,
at scores of still less fortunate Roy Thompsons. You adopt
the operational approach, disregard the logic in your head
and observe what is happening outside. You are careful not
to generalize from one or two cases. In the world of fact,
you find that men and women frequently lose their jobs to
machines, to stop-watch efficiency methods, photo-electric
cells, to improvements in agricultural methods. You can count
them if you have the heart, leaving their benches and their
tools and going out upon the street.
You can examine the curves of output per man-hour for this
commodity and that and note how they have been rising for
fifty years. You can halt any working man and ask him to tell
you how he or his friends have lost their work from time to
time because of new inventions. It is not hard to check and
recheck the facts of technological unemployment. Referents
for the term are very plentiful. Very good or rather,
very bad. Millions of Roys have suffered for a greater or
lesser period. Do they find other work? Many of them do. Often
like Roy, they learn new trades at inferior pay. But the increasing
obstinacy of unemployment in the modern world indicates that
many do not. Whether they do or do not, certain relevant human
factors must be brought into the concept. Can Roy1,
after twenty years of working at a lathe shift his skill to
qualify as a linesman if men are wanted in that field? Can
Roy2, after living forty years in Middletown with
his roots driven deep pick up his family and move to Seattle
if men are wanted on the docks? Can Roy3 now unemployed
hibernate like a woodchuck and live without eating because
a year hence there is to be a demand for machinists in the
television industry? Can Roy4 change from man's
work in a machine shop to women's work in a rayon factory?
What kind of employment awaits him? Where does it await him?
When does it await him?
It is two very different things to talk about 'technological
unemployment' as a net statistical effect and to observe Roy
in his perplexity and discouragement. If new inventions speeds
up, it is obvious that more men and women per thousand are
in transit from a job lost to a job hopefully to be found.
And what happens if the owner of the factory does not care
to buy a private aeroplane or to invest in a new pin plant?
Suppose he just puts his money in the bank, and the bank just
lets it stay there? For the last eight years new investments
in private industry have been pitifully small compared with
earlier periods. What if we have as many pin factories as
prospects for profitable investment warrant?
These considerations by no means exhaust the question. But
perhaps I have given enough to show that knowledge about technological
unemployment, or indeed any kind of employment, is not advanced
by the syllogisms of classical economists. The classicists
treat the term as thing-in-itself without finding the referents
which give it meaning. Most characteristics are left out.
Observe the brutality of the result. If one can prove
by logic that there can be no such thing as technological
unemployment, then any apparent idleness must he due to human
cussedness Roy must have been a slack worker, improvident
and wrong-headed and one can lean comfortably back
in one's chair with no need to do anything about it. More,
one can violently object to anybody's doing anything about
it, for this would interfere with the functioning of 'economic
'Unemployment' is not a thing. You cannot prove its existence
or nonexistence except as a word. The validity of the concept
rests on the shoulders of millions of your fellow citizens.
Are they suffering because they have no work? Are their families
suffering? Are the children without shoes with which to go
to school? In March, 1937, I visited WPA kitchens in Savannah,
Georgia, where 4,500 schoolchildren certified as underweight
from malnutrition, were being fed. Savannah is neither a large
city nor a city of slums. If you cannot see through the word
'unemployrnent' to ragged children standing patiently in line
with bowl and spoon, you have no business hanging out your
shingle as an economist.
Let us inspect another favorite abstraction of the economic
faculty: 'The function of business is to supply the consumer
with what he wants.' Translating this to lower levels: The
function of the radio business is to supply Adam1
with a serviceable radio at a price consistent with the cost
of producing it. In the fall of 1936, a leading radio trade
journal made the following editorial comment:
The ear of the average consumer is notoriously
cauliflower when it comes to distinguishing between good radio
reception and bad. Since original boorn-boom dynamic speakers
superseded early high-pitched magnetics, few improvements
impinging upon the auditory organs have been sufficiently
obvious to nudge obsolete receivers into oblivion without
the aid of vocal mesmerisms by some retail salesman. The public
eye, on the other hand, appears to be readily impressed, and
we predict the best year since 1929. Design for selling.
In short, do not build radios for the ear, because there
have been no recent improvements to warrant new models; build
them to sell an elegant Circassian walnut cabinet. Here are
some assorted vocal mesmerisms:
Vibracoustic Floating Sound Boards
Automatic Flash Tuner
What the radio industry does in the economic textbooks is
one thing; what it actually does is another. The observation
holds for most industries which can make more goods in a year
than people buy in a year, or in more learned language, where
capacity exceeds demand.
What a remarkable term is 'business', especially in America!
How is business? not your business, but business-in-general.
Statisticians toil over composite graphs and charts to answer
this mythological question. If there is no such entity as
'business' and by now we know there is not it
seems a little superfluous to be constantly taking its temperature.
Business says. Business speaks. Business recovers its voice.
Business views with alarm. Business is jubilant when the Supreme
Court votes down the NRA. Business is sick. Business is terrible.
Business runs through a cycle charming image. Business
has recovered: Look at the chart there it is, as plain
as the nose on your face. Back to 1929. The curve says we
are all right, therefore we must be all right. What, eight
million unemployed; farmers in the Dust Bowl down and out;
share-croppers reach new depths of misery? Forget it. Keep
your eye on the chart.
This is pure hocus-pocus. Not only are there no dependable
referents to which we can hitch the chart, but those to which
it has been hitched 'carloadings', 'bank loans', 'lumber
production', 'cotton-mill consumption' cannot he combined
into any composite curve which does not violate mathematical
sanity. A great mathematician, Ivar Fredholm, calls such omnibus
index numbers 'hermaphrodite arithmetic monsters devoid of
all sense'. At this point we note a curious perversion of
the scientific attitude. Opinions as to the health of 'business'
are based on figures, rather than on hearsay and hunches.
We are looking, we believe, at cold facts. We are scientific
as hell. But the 'facts and figures' we look at have been
mutilated beyond meaning. Some day we must give up prostrations
before a phantom 'business', though the charts reach from
Wall Street to the moon. The term 'business' and its faithful
follower 'service', often prevent us from observing what useful
or useless things businessmen are actually doing.
Many economists and statisticians believe it legitimate to
argue that industrial prosperity after a slump will inevitably
return, because their charts show ups and downs in the past.
They point to the scientific nature of the 'proof'. But the
graphs a real scientist draws describe the conditions of an
experiment arranged by him. They can be used safely for drawing
conclusions only if similar conditions can he arranged.
The humps and hollows on the economists' charts refer to changing
conditions. There is no similar arrangement and few valid
conclusions are possible. The context has changed and the
result must be guesswork. 'Introducing graphs of supply and
demand,' says Hogben, 'in a fictitious free-exchange economy
does not make economics an exact science.'
A business executive with whom I am associated asked me the
other day, 'What will be the reaction of the public
to the new laws for retail price maintenance?' This was an
important question, for as manufacturer, wholesaler and retailer
of a commodity he had to decide a policy covering costs, prices,
possible injunctions, court orders, notification to retailers
and so on. Yet my colleague was trying to settle this critical
matter with the aid of a ghost.
There is no 'public' which is a useful concept in the premises.
Calling it 'John Q. Public' does not help. Between us, we
had to break down 'public' into a series of interested groups
New York retailers, retailers in the West, jobbing
houses, customers of various kinds before we could
know what we were talking about and arrive at a valid decision.
Observe that in this case no theory was involved. As businessmen,
we had to determine, by the following Saturday morning, a
specific course of action involving the stability and the
jobs of a considerable business enterprise.
Formal economics wanders in a veritable jungle of abstract
terms. Here is a sample of the flora:
wages; the iron law of wages
interest; the long-term interest rate
profit the profit system
money: the gold standard
credit; debt; savings; securities
inflation; deflation; reflation
the law of diminishing returns
the economic man
free competition; the free market
the law of supply and demand
monopoly; the trusts
socialism; public ownership
the consumer; the producer
the standard of living
Some of these terms are useful short cuts provided one does
not objectify them. But if one employs them without being
conscious of abstracting, they acquire a fictitious existence.
Some have no discoverable referents. 'Value', for instance,
is as elusive as 'the Omnipotent'. Some have referents very
difficult to1ocate: 'capitalism', 'individualism', 'inflation',
'credit', 'money', 'business'. Some have referents easier
to locate, provided one makes the rare effort to find them.
Following Bridgman, we might prepare a list of meaningless
questions in economics:
1. Does capital produce wealth?
2. Is the consumer more important than the producer?
3. What is a reasonable profit?
4. Is man by nature co-operative or competitive?
5. Is fascism a kind of capitalism?
6. What is a classless society?
7. What is the American standard of living?
8. Are capital and labour partners?
9. Are we headed for inflation?
10. Is decentralization better than centralization?
These questions are either completely meaningless, or meaningless
as they stand. Given a position in time and space with further
description of the terms employed, qualified answers might
be found for some. For instance, Margaret Mead studied a tribe
in New Guinea where habits of co-operation were very strong.
A hundred miles over the mountains she studied another tribe
where competition was so ferocious that it threatened survival.
On the basis of these observations we might venture a qualified
answer to question 4. For question 8, one can say that capital
and labour are partners in the same sense that Castor and
Pollux are brothers mythological matters both.
Korzybski observes that any study to become a science must
begin with the lowest abstractions available, which means
descriptions of happenings on the level of sense impressions.
Economic literature usually reverses this procedure, starting
with high-order terms and working down. Thus you will find
in Chapter I of Dr. Blank's Principles of Economics
elaborate definitions of 'land', 'labour', 'capital', 'wealth',
'profit', 'money', 'credit', 'property', 'marginal utility'.
As any two economists have great difficulty in agreeing upon
the precise meaning of these terms, the treatise begins with
shaky assumptions. Worse follows when the shaky assumptions
are woven into elaborate systems by deductive logic. The best
fun which a professor of economics apparently gets out of
his academic life is to demolish the theories of his confrères.
The single time to my knowledge that American economists were
in general agreement was when they objected to the Smoot-Hawley
tariff bill in 1930, by a joint memorandum of more than a
thousand signers. That was a red-letter day in the history
of economic thought.
To extend agreement and make the study of economics conform
to the scientific method, it is necessary to lay aside abstract
definitions and apply the operational approach, What is Rufus1
doing on his farm? What is Roy1 doing at his factory
bench? What is Junius1 doing in his bank? (A bank
studied on the basis of what is going on inside without recourse
to abstractions like 'credit', 'liquidity', 'soundness', is
a pretty whimsical thing.) What is Sylvia1 doing
at her desk? Observe and record what a great number of men
and women are actually doing in furnishing themselves and
the community with food, clothing, and shelter. Then proceed
to inferences. Then proceed to general rules governing economic
behaviour if any can be found. Then check the rules
with more first-hand observation. Never forget Adam1
acting, the date at which he acts, the place where he acts.
Fortunately some economists and sociologists are beginning
to follow this programme. We find it in the studies of Middletown
by the Lynds, in Ogburn's Social Change, in Economic
Behaviour and Recent Social Trends, in the studies
of the National Resources Committee.
Inferences drawn by Adam Smith about the England of 1770,
or by Karl Marx about the England, France and Germany of the
1850's, are obviously worthless for the America of today.
Some deductions may still he sound, but all are suspect pending
operational check in modern America. To criticize American
economic behaviour today, or to prescribe for its improvement
because Adam Smith said thus and Marx said so, is as foolish
as believing that a fly has eight legs because Aristotle said
so. Both Smith and Marx used their eyes and ears more than
their fellow theorists. Ricardo, for instance, might have
been born blind, so pure a theorist was he.
Economic laws became in the hands of
the classical school just laws in themselves. Often they were
merely logical exercises. So it was that classical theory
stood triumphantly symmetrical, an absolute! And so it is
still too much taught. By a series of assumptions and with
the use of certain chosen illustrations it can be worked up
to climactically. And when the thing is complete there
you are! But the student goes away from the demonstration
unsatisfied, frustrated, angry, feeling as though a logical
trick had been played upon him. And why? Well, because for
one thing, in the twentieth century the truth must be useful
and this is not.
So says R. G. Tugwell. Meanwhile Dr. Wesley C. Mitchell observes
that it is impossible to prove or disprove the classical laws.
The laws and principles were developed with the industrial
revolution. The Wealth of Nations was published in
the same year that Watt made a steam engine which would really
work the same year, incidentally, that the American
Declaration of Independence was drafted and signed. The classicists
were much influenced by notions about science, but they did
not adopt the scientific method. They tried to erect economic
laws like Newton's laws of gravitation, but they did not copy
Newton's operational technique. It was like a little boy making
himself a choo-choo after seeing a locomotive.
Editorial writers today are still infatuated with these 'laws'
of a make-believe science. They pull them out of their heads
with pontifical finality whenever reformers or Congressmen
propose a measure which editors do not like. 'Economic law
cannot so cavalierly be set aside,' they say. 'We cannot circumvent
the law of supply and demand any more than we can circumvent
the law of gravitation.' 'Only crackpots would seek to outwit
the immutable principles of economics.'
Classical economics not only was largely innocent of the
scientific method; it also became a kind of theology selling
indulgences to businessmen. As factories expanded after Watt's
steam engine, a philosophy was needed to give respectability
and prestige to the rising class of manufacturers. The philosophy
was first identified with the 'natural laws' of Newton. Then
it twined itself like a boa constrictor (yes, I am conscious
of abstracting) around Darwin's hypothesis of the 'survival
of the fittest'. What a handout! The greatest good for the
greatest number, so ran the dogma, arises from the unimpeded
competitive activities of enlightened self-interest. The faster
the stragglers are bankrupted and undone, the stronger the
economic frame. What appears as competitive anarchy is not
really anarchy at all, but a beneficent system of control
by natural forces. The big fish eats the little fish, the
strong businessman eats the weak. It is all very gratifying
and lovely, and as remote from reality as the labours of Hercules.
In 1798, Malthus published his famous essay on population,
one of the grandest examples of extrapolation on record. The
essay was in part designed to answer William Godwin's argument
to the effect that mankind could achieve happiness through
the use of reason. Malthus wanted to scotch the dangerous
idea that happiness was in prospect for the mass of the people.
(The principle of 'original sin' again). So by study of the
exceedingly unreliable statistics of the time, he laid down
two postulates: first, that population tends to grow at a
geometrical rate; second that the food supply tends to grow
at an arithmetical rate. The population of England was then
7,000,000; in a hundred years if the curve was followed it
would be, he said, 112,000,000. If food was sufficient for
the 7,000,000 in 1800, by 1900 the supply would expand to
feed only 35,000,000 'which would leave a population
of 77,000,000 totally unprovided for.'
This fantastic hypothesis was then solemnly applied to the
problem of poverty. As population was destined to leap ahead
of food supply, restrained only by pestilence, war, and famine,
it followed that measures to improve the living-standards
of the mass of the people were futile. 'It is, undoubtedly,
a most disheartening reflection, that the great obstacle in
the way of any extraordinary improvement in society, is of
a nature that we can never hope to overcome.' That stopped
the fellow Godwin in his tracks. The essay was also used for
decades as conclusive proof that reform laws were pernicious.
In the second edition of his essay, in 1803, Malthus relented
to the point where a new element was introduced into his equations.
It the poor would employ 'moral restraint' in their procreational
activities, they might possibly gain a notch or two on the
food supply. It was very cheering news to the well-to-do.
The poor had themselves to blame for their poverty and even
if moral restraint was widely practised, poverty was largely
Malthus's iron law of population was paralleled by Ricardo's
iron law of wages. This great principle put poor people in
another vice. Since labour is a commodity, said Ricardo, its
price goes up and down with demand. When demand for labour
is slack, wages will remain at the bare-subsistence level.
If demand becomes brisk, wages will rise, workers will have
more money. They will then produce more children and presently
the addition to the population will bring the price of labour
back to bare-subsistence level again. So what is the use of
trying to improve the condition of the workers?
Nassau Senior 'proved' that hours of labour could not be
reduced, because the employer's profit came out of the last
hour of operation. A 68-hour week was common at the time.
Eliminate that last hour, he said, and industrial profits
would be eliminated and the business of the nation ruined.
Thus if children in factories worked 67 hours rather than
68, panic would replace prosperity. Senior's analysis was
derived from theoretical examples where the arithmetic was
correct but the assumptions untenable.
Senior's contribution to economic theory proved that hours
could not be reduced. John Stuart Mill and other classicists
proved that wages could not be raised, by the famous 'wage-fund
doctrine'. Workers joined unions and struck for a raise. Pure
madness, said the economists. Why? Because there was a certain
fund set aside out of capital for the payment of wages. There
was a certain number of wage-earners. Divide the first by
the second. It was all arranged by Heaven and arithmetic and
trade unions could do nothing about it. The wage-fund theory
was the stock answer of the manufacturer and editor to the
claims of organized workmen. It had been blessed by economists
and must be true.
Observe how these 'laws' were put to tangible use, holding
back improvements in working-conditions for scores of years.
The philosophers produced nonsense which was at least disinterested.
Many of these classical economists had an axe to grind and
cruelly sharp they ground it. Not until 1876 was the wage-fund
theory exploded by an American economist, Francis Walker.
He argued that wages were paid not out of a fund of stored
capital, but out of current earnings a theory which
came closer to the facts. It is a pleasure to note that John
Stuart Mill who first popularized the wage-fund hypothesis
in his Principles of Political Economy in 1848, published
the following statement years later: 'The doctrine hitherto
taught by most economists (including myself) which denied
it to be possible that trade combinations can raise wages...
is deprived of its scientific foundation, and must be thrown
aside.' A brave, fine statement. But working people in England
and elsewhere for fifty years had paid a bitter price for
a 'law' that had no scientific foundation.
Orthodox economists have had a particularly bad time of it
since 1929. Governments all over the world have been indulging
in financial operations of a shockingly unorthodox character.
As Chester T. Crowell points out in the New Republic,
the learned faculty stands on the sidelines shouting: 'No!
You can't do that!' And while they shout, it is done. The
economically impossible is performed again and again. For
1. Mussolini simply could not carry on his vast operations
in Ethiopia with a gold reserve of only $3,000,000,000. It
was unthinkable. The reserve was a mere drop in the bucket;
it would be gone in a month. But Mussolini did it. Ethiopia
was brought to heel, and Italy is still afloat financially.
2. If a nation has a gold coverage of less than 2 per cent,
obviously it has no currency worthy of the name. Panic and
chaos are inevitable. It cannot hope to carry on foreign trade;
its citizens will fly from their native money standard. In
terms of respectable economic theory, the German financial
system today is a corpse. But the corpse does not fall down.
It goes right on acting as if it were alive.
3. We were all brought up on the fundamental idea that if
the British Treasury ever repudiated a government debt, it
would be the end of the pound sterling and of world trade.
The financial backbone of the planet would be broken. Well,
the British Treasury owes the American Treasury some billions
of dollars, and the latter can whistle for its money. The
pound remains firm, and ships still sail the seas. Because
of the repudiation, Congress passed the Johnson Act, forbidding
loans to warring nations, and so giving the American people
one of the sturdiest defences against being dragged into war
that it was ever our good fortune to secure. England's perfidy
has been our blessing.
4. A nation, we were taught, could not go off the gold standard
in fact, no matter how many proclamations its statesmen made.
If it devalued, prices would shoot up, and gold would still
be master. The United States went off the gold standard by
proclamation and most domestic prices hardly fluttered. France,
which clung nobly to gold, suffered a much more severe depression
than the reprobates who abandoned it.
Yes, the orthodox economists are having difficulties on the
sidelines. Is the trouble with the wicked world which pays
little attention to their 'laws', or is the trouble with the
laws themselves? How valid are 'natural laws' which can be
violated right and left?