William E. Hearn and classical political economy

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1977-05-01

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Virginia Tech

Abstract

This thesis is an evaluation of the work of the nineteenth century economist William Edward Hearn. Attention is given primarily to Hearn’s Plutology: Or the Theory of Efforts to Satisfy Human Wants, but this is related to Hearn's work as a jurist and as a political theorist. The Plutology is also discussed in relation to prior and to subsequent work of others in economics.

In Chapter I, Hearn is introduced as a classical political economist in the “Smithian,” as opposed to the "Ricardian," tradition. This distinction is explained, and the emergence of neoclassical or modern economics is discussed as a change in world-view. Modern economists, holding the neoclassical view, have had difficulty seeing merits of the "Smithian” approach

In Chapter II, an account is given of Hearn's work and reputation. In his own lifetime, Hearn enjoyed an international reputation as an author. In addition to the. work mentioned, he wrote The Government of England, The Aryan Household, and The Theory of Legal Duties and Rights. He was also chancellor of the University of Melbourne and served in the Victorian legislature.

The novel design of the Plutology is explained in Chapter III. Hearn's formula for economic activity, "Efforts to Satisfy Human Wants," supplied him with a conceptual scheme within which was found a logical place for the most notable doctrines of earlier economists. Also, Hearn's approach left him free of many doctrines now generally believed to be sterile or misleading.

A separate chapter is given to Hearn's views on specific topics which can be understood as contributions even: by those. whose sympathies lie with the modern orthodoxy. For example, though presented in a different language, Hearn's theory of the firm contains the substance of the theories on that topic advanced by modern writers such as Frank H. Knight and Ronald Coase.

In Chapter V, evidence is presented to support the contention that Hearn's Plutology influenced both Marshall's Principles and Jevons' Theory of Political Economy. Marshall was far more “Smithian” than is commonly believed. And although Jevons is known today as one of the fathers of the modern theory of value, his expressed admiration for Hearn, together with an examination of his theories of labor and of capital, suggests that an alternative interpretation of his work is in order.

Chapter VI is an expansion of the implications of Hearn's restatement of what might be called the "Smithian labor theory of value.” The single-factor hypothesis is reconciled with modern views of production and distribution.

Chapter VII draws from Hearn's work in both analytical and historical jurisprudence for a theory of economic institutions. The principal element in Hearn's legal theory was "duty" rather than "right"; this might be compared to the emphasis, in classical economics, given "labor" rather than "satisfactions." Hearn's legal theory ‘is useful to the modern economist with an interest in the questions raised by the “institutional economics."

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