The Original "Third Way" Political Economist
(and how the extension of his thoughts leads to a modern, alternative economic paradigm*)
of Sismondi's main works on Political Economy
de l'agriculture Toscane; Geneva, 1801
|*) The term "Third Way" understandably has been regarded with aversion by a good many, ever since it was hijacked through the agency of the fake-left "progressives" at the end of the last century by such figures as Clinton in the U.S. and Blair in Britain, and especially once having merged with that vile rightist ideology called neoliberalism, earlier adopted by their predecessor policy-makers Reagan and Thatcher; with the original terminology referring to the idea of a happy medium between socialism and capitalism now totally perverted and lost by the privatization wayside. Does all this yet mean that the "Third Way" ship has sailed for good and is too far gone?||Perhaps but then again, unlike the present-day usurpers, an alternative economic paradigm equating its mission with promulgating economy-reformative ideas that are neither capitalist, socialist, nor anything else ideological, does as such hold a moral and legitimate inheritance to the term "Third Way". And when doing the necessary developmental work under a well-proven catchy and fair banner, its activities no doubt would be far more impelling in effecting real change than by just joining the barely surviving chorus of progressive thinkers. So why capitulate to the hijackers and relinguish the logical possibility of a successfull reclaimation?|
spite of going quite a bit beyond him further down on this page,
remains dedicated to a tragically almost ignored follower of Adam
Smith, named: Jean Charles Léonard Simonde de Sismondi (1773-1842),
Sismondi for short. For he is, and always will
be, the giant on whose shoulders I was
able to stand. While Ricardo and, later thanks to Keynes, Malthus
received all the credit for having advanced on the ideas of their
illustrious predecessor Smith, respectively founding the orthodox and
heterodox schools of thought; Sismondi, in spite of being the
originator of more valid economic ideas than both of them combined, has
never received the credit he deserves. To a large degree, I believe,
this remains a mystery; even though some telling reasons for this, no
doubt are detectable.
So why designating the ignoring of Sismondi's economic ideas as tragic? By far the greater part of historical suffering these past couple of centuries has been the result of a misinterpretation of economics. All dominant socio-economic "-isms": capitalism, communism, fascism, you name it, profess to hold the key to the cornucopia, with powerful forces within those movements forsaking large segments of the population perceived to stand in the way of that end. Sismondi was a "Third Way" (political) economist in spirit, long before Marx founded communism in response to unbridled capitalism, as a so-called second way. And it could even be said that instead of Marx being the original thinker, he simply appropriated crucial Sismondian terminology(1b), meant to help palliate the vicious conditions so common during the mid-industrial-revolution period, while subsequently putting his own stamp on it by radicalizing Sismondi's reasoning. Furthermore it could be argued, that most wars would never have started if a just, ideology-free economic solution had been within the grasp of policy-makers world-wide ever since Sismondi's time; i.e., post-Napoleonic.
But, blissfully unaware of a somewhat similar endeavour underway elsewhere(1b), on the principle of better late than never and in an effort to try to get rid of persistent old ideas inhabiting every nook and cranny not only of economists' but lay-persons' minds as well, I set out to translate the most relevant portions of Sismondi's magnum opus "Nouveaux Principes d'Économie Politique" (2e éd. Paris 1827) ; whose espoused principles, conceived about two centuries ago now, remain surprisingly new. Rather heavily annotated in places where this is deemed pertinent, it not only strives to stress the original indeterminacy slant of Sismondian thinking, but is also meant to lay the foundation for a totally different (non-deterministic) economics than is taught at present. Consequently thereby straightening out the notion, that after having advanced algebraic notations of lagged aggregate equilibrium income already in 1803(3d), that are fully in line with those of modern Post Keynesians; Sismondi's later theorizing is not inexplicably retrogressive(2c), but progressive and truly unique in its attempt to go beyond even the Keynesian disequilibrium economics of over a century later. This translation's ultimate purport therefore, is to show that the abrogation of classical economics by the marginalists of the late 19th century, was wholly unnecessary to put a close to classic political economic thinking, and a waste of time to say the least for now. As such, my translation not only differs from Richard Hyse's contemporary rendition(1b) as far as its annotations are concerned, but a liberal use of modern synonyms makes it in my opinion a far easier read.
1a.) Mao-Lan Tuan, Simonde de Sismondi as an Economist; Columbia University Press, New York, 1927.
1b.) J.C.L. Simonde de Sismondi, NEW PRINCIPLES OF POLITICAL ECONOMY, of Wealth in its Relation to Population. Translated and annotated by Richard Hyse. Transaction Publishers; New Brunswick, (N.J.) 1991.
2a.) A. Amonn, Simonde de Sismondi, Als National Oekonom. Francke Verlag, Bern; 2-Vol's 1945-9.
2b.) J. A. Schumpeter, History of Economic Analysis. London: George Allen and Unwin, 1954. pp. 493-6.
2c.) Thomas Sowell, Sismondi: A Neglected Pioneer; History of Political Economy. Spring 1972.
3a.) J. Weiller, Préface des Nouveaux Principes d'Économie Politique, J. C. L. Simonde de Sismondi. éd. Calmann-Lévy, 1971.
3b.) A. Parguez, "Sismondi et la théorie du déséquilibre macro-économique" Revue économique, 05, 1973.
3c.) Jean Weiller, Société des amis de Sismondi, "Histoire, socialisme et critique de l'économie politique"; ISMEA Paris, 1976.
3d.) R. Arena, "Réflexions sur l'analyse sismondienne de la formation des prix"; Revue économique, 01, 1982. pp.132-149
3d2.) R. Arena, "Note sur les apports de Sismondi à la théorie classique"; L'Actualité économique, vol. 57, n° 4, 1981, pp. 565-588.
4.) Reprinted in the "Revue Encyclopédique", Sept. 1826; and translated by F. Mignet, 1847.
5.) Sismondi giving us a first hint of disequilibrium political economy: "Let us be wary of this dangerous theory of equilibrium, as supposedly reestablishing itself automatically...An inevitable equilibrium, it is true, is reestablished in the long run, but it is only by way of a frightful amount of suffering.” (transl. mine) pg. 220 of: Nouveaux Principes d'Économie Politique; 2e éd. Vol.2, Paris, 1827,
Once this work is read and the mind opened up, if not cleared of the countless misconceptions regarding commonly held economic notions, at least be made aware of a potentially valid alternative point of view; a follow up is meant to continue from where Sismondi left off(5), in a quest to make the workings of the economy an open book. By that I mean that its principles, as developed in a logically constructed thesis, could then be used to furnish answers to any real-world economic problem that might arise, rather than inherently containing all those possible answers already. For the real-world economy, being man-made and as such very much subject to human foibles at all times, requires a synthesis of its thesis and collective antinomies in order to understand it, and promulgate an equitable progression in a non-utopian setting.
fair bit of work in that regard has already been done, but its task is
huge. Aside from writing a 35+
ago now, that throws the validity of the orthodox economic
population-endogeneity axiom into doubt; and in addition to the
writings as listed on the right, I have also started on
Tentatively it is called: EPICONOMICS:
ALTERNATIVE ECONOMICS' THEORY FOR NON-ECONOMISTS.
The term "epiconomics" was coined to signify a
field of study that transcends the level whereon the the study
of conventional economics takes place. Its
preface and introduction, downloadable
on the right,
pretty well identifies what will be involved. Over the years however,
I've found my forte to lie in a succinct bringing to the fore
of facts, as derived from an alternative set of
apparently valid first
principles; with which to successfully challenge both current orthodox
and heterodox economic reasoning.
But I'm not a
storyteller, hence not a very good writer and could use some help in
that regard. In other words, I'm looking for a collaborator and likely
more than one. Thus if
you have some background, preferably though not necessarily in
heterodox economics, and have the knack to spin yarn from bare threads
as it were,
please consider getting in touch
with me, your expertise is
sorely needed. I also would be willing to start a Google or WordPress discussion
group if the interest warrants it, and so develop a wider purview
from prospective entries. For there is no doubt in my mind that a whole
lot of thinking will be required to cover all the possible
ramifications that will be affected by this new perspective.
give you a starting
idea what this alternative approach to uncovering the true nature of
our economy is all about, below are some of its tenets. These are all
deductively determined in terms of three high level axioms; but unlike
all the other approaches from the earliest pamphleteers till modern
theoreticians (with the possible exception of Sismondi), it doesn't
take an existing economy as point of departure. Instead, its axioms
derive from the pre-analytical position, of how an economy would be
organized if it did not yet exist at all. In other words, how a
hypothetical society with the knowledge of modern human beings, but
simply living of the land and obtaining its standard of living from
Nature, would organize an economy to add
to its existing living standard
with a minimum of waste (in supra-economic terms; i.e. not only a waste
of endogenous outputs, but of exogenously located inputs as well).
These additions to output would thereby necessarily have to be valued
identical to the values of the natural provisions currently being
enjoyed, for otherwise they could not be added as such; which means
that any notionally expressed values of the contemplated system, would
have to annihilate one another at the point of its fruits becoming
additional to a currently enjoyed standard of living.
1. The economy functions non-linearly, contains no paradoxes, yet is sequentially causative (non of this "simultaneous determination" sophistry of Mainstream economics); with all supply-side activity keeping it in disequilibrium as its normal state of affairs, and the demand-side only potentially and non-contemporaneously pulling it back towards, though without ever reaching, a true equilibrium in time.
2. The optimal distribution of income has a pure economic meaning, and is not pushed away into some irrelevant ethical realm; as the consequence of a rising inequality in remuneration, while merely asset-inflationary for some, diminishes living standard achievability in real terms for the rest of the population. Money is no longer neutral.
3. Monetary phenomena as well as the nature of capital are derived from axioms rather than inductively determined; this imparts a quantum leap advancement over the Keynesian critique of money-neutral (neo-)classical economics, through allowing comprehensive theories of inflation, growth, and profit.
4. As a "true" economic system, it is able to unify all its micro with its macro principles, whereby it refutes "the whole is simply the sum of its parts" of conventional economic theory; the "parts" having been identified here as an agglomeration of abstractions yet in search of determinants, and so are in no position to be added up at any time.
5. It is stimulated through direct spending and expertise underwritten "new" income, and not necessarily by the saving/investing of "old" income; as the latter may lead to a situation where claims to output have grown to far exceed that output, without such potential inflation being at all detectable by claim-holders in any economic fashion whatsoever.
6. It allows a level of aggregate profit realization that is totally independent of the remuneration rate of wage earners, but could result instead from the combination of (more or less ostentatious) lifestyles of profit earners and a concomitant decrease in unemployment.
7. It is vertically integrated, with the direct spending of profit income at the retail level, ex post "closing" all economic pursuits, which happens through ever diminishing numerically interlocking feedback loops; thus not only ruling out neat (ex ante fixed) econometric coefficients but a static determinacy as well, and whereby a multiplier of sorts enables the distribution of achieved growth in final output.
8. It not only disregards any determinacy in its capital values and/or equity, but, by being designated as valid claims to an eventual share in economy-produced transcendent standard of living, its economic-claim receivers are in debt to the economy; whose systemic rebirth and continuation requires a timely, mutual resolution. This puts the validation of all economic activity into the realm of distribution, and not into the one of production; and makes the satiation for produced output, and not its unbounded wants, the ultimate determinant of economic well-being.
8b. Therefore capitalism, or its alter ego finance, as thought to be an own-value creating entity, is unable to produce an appropriatable surplus in its conventional meaning of accumulated yet idle balances, (all financing being in fact deficit financing!) and becomes invalid; even though its component free-enterprise, having humanistic-judicial criteria determining the rightful development of its free natural resources, remains very much valid indeed.
9. It is unable to lower its already achieved standard of living, unless this either: actively, however unwittingly, is induced by an in essence inept but under current institutional directives unduly powerful, "economic man", or the population outruns the availability of natural resources.
10. Not only is it ideologically neutral, but by enlarge it is also readily understandable to anyone of average intelligence; for, in spite of being non-deterministic, it is far easier to understand than conventional economics.
possesses many more surprising attributes as most of them, just like
the above, are bearing virtually no resemblance at all to the way the
economy is thought to function, according to present deterministic
(equilibrium) theories. A further example of this, and perhaps
to relate at this point as well, involves the notion of debt. But
unlike debt in its
normal meaning, here it concerns a kind of debt that nobody knows or
about; i.e. the debt we owe to the economy by drawing an
from it... In order to achieve a modicum of understanding how the
economy of ours functions in general and with regard to the notion of
in particular, it has to become recognized that for economic continuity
reasons and in terms of evolutionarily to be resolved sunk costs,
income represents a systemic debt already and as such is no different
than debt as it is commonly understood. Hence, earning some income and
with that money pay off one's debt is a false dichotomy. It is no more
than a robbing of Peter to pay Paul. Not necessarily an overriding
problem, unless, under conditions ever-present in the real world, Paul
not only misses the proclivity but isn't even in a position to
compensate Peter from having been robbed. Instead, acting on the advice
of a clueless economics profession, Paul "solves" the problem either by
pulling plugs or letting it fester and have it develop into the
situation of irresolvable debt that we're finding ourselves in right
If this all sounds interesting enough but you are still not sure it's not the work of a crank, why not download my translation of Sismondi's N.P.; that should be sufficiently informative to make up your mind one way or the other. If once having read Sismondi and thirsting for more, but you're unable to read beyond a smidgen of French, I was able to scan, OCR, and machine-translate his what now has become , so this too is available for download; with a proper translation perhaps to come later. Furthermore, a most favourable review of Sismondi's thoughts from a Marxian economics' perspective can be downloaded here. It is a Monograph of a Conference held December 1923, organized by the Society of Warsaw Economists in memory of the 150th anniversary of the birth of Sismondi by HENRYK GROSSMAN: SIMONDE DE SISMONDI ET SES THÉORIES ÉCONOMIQUES. (UNE NOUVELLE INTERPRÉTATION DE SA PENSÉE.) Translated and with a Preface added by me.
So to all you disgruntled economists out there, fed up with orthodox policy and crisis management agendas, but having been told ad nauseam that it takes a system to beat a system; this may just be it!
PAPERS/ARTICLES and other bits of WRITINGS:
My excuses in advance for a few occurring instances of self-plagiarization in the following articles, especially coming to the fore in ontology.pdf and the Introduction of an upcoming book. Since a very different perspective on economic theory is introduced herewith and all individual manuscripts are supposed to be intelligible independently toward that end, it almost comes with the territory.
1. QUESTIONING THE ONTOLOGY OF CONVENTIONAL ECONOMICS
This paper introduces an alternative ontological paradigm, from a given set of (sustainable) natural resources, that allows the principal workings of the real-world economy to become falsifiable. The neutrality of the unit of account, axiomatic according to the orthodox paradigm and axiomatically diametrical to most heterodox approaches, is herewith deduced logically in favour of heterodoxy; as well as providing economists working in that inductivist tradition with a firm underpinning of many of their other positions. The paper also provides a crucial starting point to the discussion, as to whether the regulatory policies of a democratic society's free-market, should be pre-designed to allow for a steadily progressing standard of living for all, but whose economic values are consequently understood to be no more than notionally booked (indeterminate) representations; or, whether it rather has to defer to capitalist rulings, thus allowing "determinate" gains in equity value to occur, that when empirically proven to have been unrealistic is followed by more or less rampageous periodical corrections, while all along detrimentally having affected the standard of living of society at large. The argument is inherent to having shown that the latter rests on the unfettered liberty of its agents to act; which is the antithesis of justice having a version of the golden rule as its underlying axiom, that also meta-underlies the former.
2. PREFACE and INTRODUCTION of upcoming book.
3. IN SEARCH OF ECONOMIC REALITY
This paper introduces a wholly different deductive methodology from all other conventional approaches to economics; and although underpinning a few (inductive) Keynesian propositions, it rejects others as being false. The model it uses is dynamic at its very core, which as such is thus impossible to be reduced to a static equilibrium condition, regardless if deemed to be an idealized version of reality or not. This would mean that when the economy as modeled is viewed at statically, all its endogenous values have now become indeterminate; and, while still remaining approachable for practical purposes, not only are these values inapplicable to be used as valid points of departure for an extended theoretical analysis, but also as empirically addable to provide a valid macro picture of our economy. A consequent conclusion is that all conventional economics, dealing with situations that are taken for granted to be, rather than as dynamic processes in a state of becoming, is fraudulent; innocent perhaps as in the case of the progressive factions of heterodoxy, but far less so where orthodox or Mainstream economics is concerned.
4. TOWARD NEUTRALIZING MONEY Upcoming (needs more work)Marx_Debunked.pdf
5. ETHICAL ECONOMICS: An Alternative Perspective. (edited version of a paper written for a WEA online conference in 2008)
|John S. Vertegaal email@example.com|
|I'm getting a lot of spam on this address, that is deleted without opening. Thus if you decide to contact me, please put "Sismondi follow-up" in the subject line, so I don't inadvertently delete your mail.|