This article revisits the "harmony doctrine" school of economics (1835–1860) and its distinctive understanding of how ethics and economics intersect. Harmony doctrine thinkers staked out a “natural” understanding of economic phenomena that in many ways fused the classical political economy of Adam Smith with the earlier French Physiocratic School. Their metaphysically grounded interpretation was largely eclipsed by the developments of utilitarian and marginalist schools by the end of the nineteenth century. Yet harmony doctrine thinking adhered to a distinct understanding of how ethical processes and outcomes play out within the economic sphere that has to date gone under examined by business ethicists. This paper outlines three characteristics of harmony doctrine views: the belief in curative forces empowered to "heal" the economic order, a dichotomous interpretation of the economic realm that distinguishes the “natural” from the “artificial,” and an overarching belief in a harmonious social order actualized by cooperative interdependencies within economic enterprises. Despite falling into obscurity in the economic discipline, all these ideas found new life in intellectual currents of organizational and political thought at the turn of the twentieth century. After surveying these historical developments, this article concludes by demonstrating how harmony doctrine thinking helpfully illuminates persisting metaphysical dimensions of contemporary business ethics.
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To take as an example of the challenge in synthesizing Smith’s thought, the most extensive review of the notion of the “invisible hand” (Samuels, 2011) indexes over ninety different definitions of the concept in the history of economic thought, leading the author of the review to conclude that the concept has always been “laden with ambiguity” (ibid, p. 144) and now constitutes an “embarrassment” when used in the field (ibid, p. 293, cf. Hahn, 1982).
The similarities in themes and arguments in their respective thinking did not go unnoticed: Carey accused Bastiat of plagiarism in the years prior to Bastiat’s death. While this has been the subject of debate among economic historians, Ernest Teilhac (1936) made the case that the similarities between the two are the consequence of both thinkers relying so heavily on Say’s writings.
Marx recognized Bastiat’s influence on economic thought in the latter half of the nineteenth century: an updated afterword to the second German edition of Das Capital in 1873 recognizes Bastiat as one of the two major poles in contemporary political economy thinking, the other being John Stuart Mill. Bastiat’s “bourgeois political economy” represented the “most superficial and therefore the most adequate representative of the apologetic of vulgar economy.” Marx gave slightly more credit to Mill’s thought, which Marx labeled a “shallow syncretism” that attempted to “reconcile irreconcilables'' but, to its credit, recognized the “bankrupt” status of the economy itself.
Gide (1948) fittingly labels Malthus and Ricardo the “pessimist school” to emphasize the contrast with the optimists coming after them, a contrast echoed by Heilbroner (1986). These pessimistic scholars were in many ways responding to a prior cohort of “optimists”: William Godwin and Marquis de Condorcet (Screptani & Zamagni, 2005).
Smith’s most direct engagement with French Physiocratic thought appears in his consideration of Francois Quesnay’s (1694–1774) thought in Book 4, Chapter 9, para. 27 of Wealth of Nations. Smith sees Quesnay’s move of applying the same principles of health for the human body to political economy as placing too high a demand for “perfect liberty” on societies. Smith instead sees the “political body” as containing principles of “preservation and correcting” that may operate in the absence of Quesnay’s perfect liberty (cf. Harcourt, 2011, p. 81–85).
Their naturalism should also not be confused with moral naturalism (e.g. Foot, 1978) or the naturalism associated with positivist perspectives that perceive a basic continuity between the subject matter of the natural sciences and the social sciences that warrants the application of scientific methods onto study of social behavior (e.g. Nagel, 1963), a view that gained ground in twentieth century postwar American sociology and psychology. Though writing in an earlier time period, Bastiat and Carey would likely find some common ground with this latter form of naturalism while effectively landing on the exact opposite conclusion: the continuity between the social and natural world warranted the supremacy of philosophy (and natural theology) in political economy over and against any surrendering of the field to deductive and mechanistic methods of the natural sciences.
According to Somers and Block’s (2014) account–which in turn relies on Polanyi’s (1944) history of ideas–social naturalism made its first major inroads into political economy in the work of Joseph Townsend (1739–1816) before moving to Malthus and Ricardo. Yet the harmony doctrine thinkers in many ways represent an alternative and substantively different stream of naturalism, one which centers on a different unit (or level) of analysis. Whereas Townsend drew attention to biological instincts of human beings, the harmony doctrine thinkers inherited from the French Physiocrats the notion of a biology-like nature governing over the economic systems as a whole. This divide appears to have a lasting impact: Townsend’s instinct-based naturalism appears more influential on the microeconomic axioms that would eventually flow into utilitarianism and marginalism while the French Physiocrats and the French Liberal School that came after them would stake out more macro-grounded visions of equilibrating forces governing national wealth and trade.
Carey’s only qualifier for this perfect harmony is that “producer and consumer [must] take their places by each other’s side” in making face-to-face transactions. Carey saw “hostile interests” arising only when traders and merchants became intermediaries in transactions, as these actors incited competition and left no place for “harmony, sympathy, neutrality, partnership, or even equity of distribution” (1859, p. 422). The prevalence of intermediaries in the British system earned some of Carey’s sharpest criticisms.
The migration of harmony doctrine ideas into books and essays on law and politics rather than economic disciplinary journals also reflects changes in the economic discipline itself, which began to favor the formal modeling of neoclassical economics rather than the style of writing and argumentation best served the earlier harmony doctrine writers.
Similarities to earlier harmony doctrine may not be accidental, as the authors of Conscious Capitalism profess a profound admiration for several Austrian economists mentioned above (Hayek, Von Mises, Rothbard). Mackey and Sisodia credit these thinkers for inciting a massive shift in their thinking (Mackey & Sisodia, 2013, p. 4).
“Mutations” from a well-functioning organization are not limited to labor unions and overly-demanding workers: Conscious Capitalism also identifies shareholder value maximization and senior management teams receiving such high compensation that “unhappy stakeholders” begin exiting in a manner that ultimately harms the organization (Mackey & Sisodia, 2013, p. 172).
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Lynn, A. Ethics, Economics, and the Specter of Naturalism: The Enduring Relevance of the Harmony Doctrine School of Economics. J Bus Ethics 178, 661–673 (2022). https://doi.org/10.1007/s10551-021-04819-y