Skip to main content

John Locke and John R Commons Part 1

In Chapter 2 of Institutional Economics entitled "Methods", Commons spends a significant amount of time on the English philosopher and political thinker John Locke. It is important to spend with Commons thinking on Locke to understand his overall project.

Commons is keen to emphasize how Locke things about knowledge and the human brain.  As a side point, I still think for those who claim Commons had no real theory of human cognition and human behavior just aren't actually reading Commons in full but only bits and parts or reading summaries of Commons. 

Again for Commons context matters.  Locke was writing in response to an absolute monarch and church and so wanted to emphasize the role of the individuals and not talk so much about collective action.  Locke talks about reflections and sensations.  Reflections are the external stimulus we take in from the outside world through our senses.  Sensations are how our internal mind understands and thinks about these reflections.  Ideas, both simple and complex, come out of this sensation process and reflect a passive mind that is simply copying the outside world.  This is a critical point that Commons believes has had great influence on economics form the 17th to the 19th century.

According to Commons, Locke's ideas of the passive mind meant he had real trouble with ideas of choice and power. He fell back on the fact that choice was simply based on the sensation of pain and pleasure.  This passive mind is a crucial concept that continues to rear its head in modern neoclassical minds. About Lockes individuals, a long quote from Commons is useful here,"We can thus see the basis of Locke's individualism. Human beings were not the product of habit and the customs of their time and place, but were rational units, like himself, who, by exercise of reason, could be certain of the infinite beneficent reason of the universe and the laws of nature designed to attain it. There is but one infinite reason, an infinite cause, which all individuals can know for certain because they themselves are the effects of that cause. This infinite reason is therefore Locke's own reason made eternal and unchangeable. He begins with his own individual mind as the center of the universe, and not with that repetition of events, practices, and transactions to which his mind had been so accustomed that they seemed natural, rational, and divine. " (pg. 22, IE). Again, we see that there is one truth and that truth can be uncovered by reason via Locke.

Building on these ideas, Locke then moved to labor and abundance.  The only real source of economic wealth was labor power.  Labor in his view was due to the punishment of the divine based on original sin*.  Thus, for Commons, Locke was the originator of the labor theory of value.  A second point to this was that Locke based his economics and political economy on abundance.  This again means that one person could take something and not subtract from what others could take.  This assumption may have made sense for a white englishman of means in that timeframe as even Commons acknowledges.

More to come....





* Commons writes about Locke saying that poverty was due to a lack of labor power and therefore a designation of a state of sin on those who failed to work certainly an idea that still exists today

Comments

Popular posts from this blog

Commons Futurity pg.526-528

Commons Futurity VII. The Margin for Profit pg 526-528  In this section, Commons turns to thinking about a specific aspect of modern banker capitalism addressing the question of profit's role in the economy. He starts with some terminology regarding profit share - the share of national income that goes to profit earners and the profit margin - the dynamic aspect that drives a going concern forward. We then move into another set of terms that are rate of profit and profit yield.  The rate of profit is related to the par value of stock and yield is related to market value of stock or outstanding equity. The social question to Commons is what the role of profit in keeping the overall economy and does society or community pay too much or too little for this service. Economists have long thought about the role of profits in driving the economy up or down.  Commons believes there are profit share theories and profit margin theories as two diction categories in economic thinking...

Commons Futurity pg. 510-526 VI. The Transactional System of Money and Value

VI. The Transactional System of Money and Value  The overall objective of this section is to understand money and its role and relationship to economic value in the institutional economics of John R. Commons. Commons writes that, "It is because Value is a two-dimensional concept (omitting futurity)—with two different causations, the one being the scarcity-value, or price, determined by supply and demand, the other being the greater or smaller output of use-value which will be created in the labor process that follows the transaction. " (Commons, pg. 517, 1934). The point here is again Commons is fighting against what he observes are the limits of other definitions of economic value such as simply individual utility or the classical case of exchange value only.   In this section, Commons make an important move on pages 520 and 521. He states that for a thing to be objective it needs to be independent of any objective will as opposed to other competing definitions. He will ...

Commons commenting on Marx and Proudhoun

Commons provides a short discussion to contrast Karl Marx (communism) and Pierre Joseph Proudhon (anarchism) in Institutional Economics.  His point in writing about these two authors is to continue to flesh out the idea of theory of efficiency versus an economic theory of value. This is section eight in the chapter of efficiency and scarcity pages 366 to 378.  Commons wants us to understand that Ricardo and later Marx led us to a theory of efficiency and not a theory of value.  This is not in itself a negative as a theory of efficiency is important to Commons. However, Commons wants us to understand that a theory of efficiency as espoused by Ricardo and Marx is only half the story of a theory of value.  Marx is the real part of the story in this section with some attention paid to Proudhon. As usual, Commons points out both the advanced and faults in the various thinkers he is addressing. Marx, Commons writes, did improve on Ricardo and others by replacing a subjec...