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The empire strikes back: Adam Smith, John Stuart Mill, and the Robust Political Economy of empire

The Review of Austrian Economics volume 27, pages 359–385 (2014)Cite this article

Abstract

Recent scholarship regarding the idea of a U.S. Empire has raised serious questions as to the feasibility and desirability of imperial ambitions. This paper traces the debate over the net-benefit of empire back to the Classical economists. Adam Smith argued that the British Empire was a net cost while John Stuart Mill concluded the same empire was a net benefit. Contemporary arguments about a U.S. Empire map neatly to the divergent views of Smith and Mill. In addition to engaging in an exercise in history of thought, we use Smith’s political economy as a means of adjudicating between the different claims regarding the feasibility of empire. In doing so, we subject the claims of proponents of American Empire against the standard of robust political economy, which holds that intervention must generate desirable outcomes where less than ideal incentive and epistemic conditions hold. In doing so, we conclude that many of the claims made by proponents are fragile under less than ideal conditions.

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Notes

  1. Interestingly, in the first volume of his work, Das Kapital, Karl Marx (Marx 1867: 537–543) drew from this idea and expanded on Wakefield’s broader theory of systematic colonization. Marx noted that Wakefield’s scheme of colonization required the separation of people from the land in order for capitalistic markets to properly develop. It followed directly for Marx that workers were systematically expropriated by the capitalist colonial system. This exploitation prevented the working class from demanding wage increases and better conditions from the landed classes. Marx further proposed these observations as proof of the “chimera of free contracts” between independent actors in the labor market and concluded that the capitalist system of private property rights rests on the exploitation of the working class.

  2. However, see Easterly, Levine, and Roodman (2004) for a refutation of Burnside and Dollar (2000). Brumm (2003) corrects for measurement error in Burnside and Dollar and finds that aid negatively affects growth even where countries have good policies.

  3. For a complete literature review of the various historical trends in the peacekeeping literature, see Fortna and Howard 2008. See also, Johnstone 2005.

  4. Pickering and Peceny (2006) find mixed results with UN military interventions having more success than U.S.-led interventions.

  5. For further discussion of why interventions generate negative unintended consequences occur see Jervis (1997) and Coyne (2013).

  6. In addition to the studies discussed in the text, other relevant empirical studies include: Goldsmith 2001, Alesina and Weder 2002, Tavares 2003, Brautigam and Knack 2004, Knack 2004.

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  1. Department of Economics, George Mason University, MS 3G4, Fairfax, VA, 22030, USA

    Christopher J. Coyne & Abigail R. Hall

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Coyne, C.J., Hall, A.R. The empire strikes back: Adam Smith, John Stuart Mill, and the Robust Political Economy of empire. Rev Austrian Econ 27, 359–385 (2014). https://doi.org/10.1007/s11138-013-0212-1

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