The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Optimism and Pessimism

  • F. C. Montague
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1523

Abstract

The term optimism is difficult to define. Strictly it should signify the belief that everything which exists is the best possible. But as there is scarcely any pessimist who denies absolutely the existence of good, so there is scarcely any optimist who denies absolutely the existence of evil. Optimism therefore can describe only the belief that good greatly preponderates in the world, or that evil admits of being resolved ultimately into good. Such a belief may be the result either of temperament or of a process of logical inference. In so far as it is the result of a happy temperament, it cannot be communicated to those whose disposition is less cheerful. In so far as it is the result of logical inference it may take various forms. All who regard the universe as the work of reason, in other words, all theists, must be optimists in one sense or another. But among theists even within the bounds of the Christian church there may be wide differences in the nature of their optimism. Some may concentrate their minds on the corruption of man and others upon the benevolence of his Creator. St Augustine or Calvin would hardly be termed optimists in the ordinary use of that word. Paley was an optimist in every sense. Now one of the characteristics of the period in which modern political economy took its rise, the period between the close of the Thirty Years’ war and the outbreak of the French Revolution, was a general optimism. Religious wars and persecutions had impressed the most active minds with indifference or disgust for the theological views which came down from the middle ages, and which were permeated with distrust of human nature and aversion to the pursuits of the world. In contrast to these views the antique conception of nature kept alive by the Roman law again attracted philosophers and became the germ of new moral and political theories. Natural religion took the place of revelation, and natural goodness of asceticism. Natural instincts were again regarded as innocent and deserving of gratification. Much stress was laid on those amiable and social instincts which find their fulfilment in promoting the happiness of others. Providence, it was held, had so ordered the world that each man in seeking to satisfy his own desires contributed to the general welfare. Virtue was identified with the rational pursuit of happiness, and thus was made to appear easy and natural. From these first principles the inference in favour of freedom was irresistible. Restraint or compulsion was in itself an evil because it was painful, and in most cases restraint or compulsion was unnecessary, since human instincts harmonized by divine wisdom tended of themselves to bring about the good of mankind.

The term optimism is difficult to define. Strictly it should signify the belief that everything which exists is the best possible. But as there is scarcely any pessimist who denies absolutely the existence of good, so there is scarcely any optimist who denies absolutely the existence of evil. Optimism therefore can describe only the belief that good greatly preponderates in the world, or that evil admits of being resolved ultimately into good. Such a belief may be the result either of temperament or of a process of logical inference. In so far as it is the result of a happy temperament, it cannot be communicated to those whose disposition is less cheerful. In so far as it is the result of logical inference it may take various forms. All who regard the universe as the work of reason, in other words, all theists, must be optimists in one sense or another. But among theists even within the bounds of the Christian church there may be wide differences in the nature of their optimism. Some may concentrate their minds on the corruption of man and others upon the benevolence of his Creator. St Augustine or Calvin would hardly be termed optimists in the ordinary use of that word. Paley was an optimist in every sense. Now one of the characteristics of the period in which modern political economy took its rise, the period between the close of the Thirty Years’ war and the outbreak of the French Revolution, was a general optimism. Religious wars and persecutions had impressed the most active minds with indifference or disgust for the theological views which came down from the middle ages, and which were permeated with distrust of human nature and aversion to the pursuits of the world. In contrast to these views the antique conception of nature kept alive by the Roman law again attracted philosophers and became the germ of new moral and political theories. Natural religion took the place of revelation, and natural goodness of asceticism. Natural instincts were again regarded as innocent and deserving of gratification. Much stress was laid on those amiable and social instincts which find their fulfilment in promoting the happiness of others. Providence, it was held, had so ordered the world that each man in seeking to satisfy his own desires contributed to the general welfare. Virtue was identified with the rational pursuit of happiness, and thus was made to appear easy and natural. From these first principles the inference in favour of freedom was irresistible. Restraint or compulsion was in itself an evil because it was painful, and in most cases restraint or compulsion was unnecessary, since human instincts harmonized by divine wisdom tended of themselves to bring about the good of mankind.

This form of optimism pervades the discussion of education, of legislation, and of economics by the most celebrated writers of the 18th century. It is very noticeable in the writings of the physiocrats and of Adam Smith. Adam Smith cannot indeed be charged with taking too exalted a view of human nature. He assumes that men are generally employed in promoting their own interests, and he objects to any regulation that can be dispensed with, because he thinks that it is likely to be inspired by selfishness. Adam Smith’s optimism lies rather in overrating the ability of the individual to perceive his interest, and in assuming a providential harmony between the self-interest of various individuals if placed in a state of legal freedom and equality. It is only after a prolonged discipline that the ordinary civilized man has attained even to his present imperfect knowledge of what is good for him, and even now the pursuit of his own welfare by each individual constantly brings him into conflict with others.

Since Adam Smith wrote upon morals and economics, optimism has been discouraged by several causes. In the first place, the French Revolution showed that the glorification of natural impulses might end in crimes and disorders as great as had ever been produced by fanaticism. In the next place, the struggle of nation with nation, and of class with class, for the last hundred years, has compelled us to see that there is no pre-established harmony between the appetites of different human beings. In the third place, the rise in the standard of comfort has produced an all but universal discontent. Mankind are probably more comfortable than in any former age, yet the difference between that which they enjoy and that to which they think themselves entitled is more noticeable than ever. Lastly, the progress of science has disturbed the cheery, old-fashioned view of nature. Malthus showed that nature has not provided an abundant subsistence for an indefinite number of persons. Darwin showed the evolution of life to have been a process of almost infinite length involving wholesale waste and destruction. Those who have adopted a formal and philosophical pessimism are few, but those who maintain the easy optimism of the 18th century are fewer. There are many who propose to make mankind happy by political or economical changes, but as a rule they propose to do this by subjecting the individual to the community. For with the old optimism the old belief in liberty has also declined in strength.

Like the term Optimism, the term pessimism is used in a variety of senses. Properly it denotes the doctrine that, in the world as a whole, evil necessarily predominates over good. But it is often used loosely to describe the mood of those who are more alive to the evil than to the good of existence. Quite apart from any philosophic theory, differences of temperament and of circumstances will cause men to differ very widely in their estimate of life. Individual feeling admits of infinite gradations which defy classification. Pessimism and optimism in this popular use are terms of merely relative import. Pessimism as a principle has manifested itself in religious forms, notably in Buddhism, and in philosophical forms, the most modern of which are associated with the names of Schopenhauer and Hartmann. A critical examination of pessimist theories would altogether transcend the limits of this article. They have their origin in the undeniable and awful contrast between human aspiration and human attainment. No form of philosophic pessimism has at present exerted much influence on political economy. The classical economists lived in an age of optimism and were in full sympathy with their age. They had a hearty faith in the unfettered energies of mankind. It is true that the theories of certain eminent economists, as Malthus and Ricardo, have been used to demonstrate that under existing conditions the state of the mass of mankind must steadily grow worse. The inference commonly drawn, however, was not that mankind were doomed by fate to suffer, but that the actual economic system must be modified. Those who do not expect well-being to result from individual effort are confident that it can be produced by the action of the community.

The rising generation of economists may probably be less optimistic in tone. The very diffusion and intensity of the desire for comfort tend to produce a formidable discontent which may at first discharge itself upon obnoxious institutions or classes, but must finally break against the unalterable facts of nature. Certain characteristics of modern civilization, notably the resulting prolongation of the lives of the weak, both in mind and body, and the heavy burthens imposed on the capable members of society, seem likely to retard progress as hitherto understood. The limits to the physical resources of our globe are becoming more apparent. Nearly the whole of its surface has been explored; the area which civilized man can occupy has been pretty well ascertained; the great forests are disappearing, the virgin soils are losing their spontaneous fertility, and mines are worked upon a scale which in many cases threatens exhaustion in no distant future. The assumption that mankind are destined to a practically infinite economic development is thus shaken. The economists of a past age were chiefly concerned with the advantages which would follow the destruction of artificial barriers; but the stringency of natural limitations which cannot be removed will probably attract more attention from the economists of the approaching time.

The change in the tone of economic literature can be realized by comparing Smith’s Wealth of Nations with J.S. Mill’s Principles of Political Economy. Leslie Stephen, English Thought in the Eighteenth Century; Bonar, Philosophy and Political Economy; Ritchie, Natural Law, may be consulted for information respecting the philosophical optimism of the 18th century.

Bibliography

  1. Bonar, J. 1893. Philosophy and political economy. London: S. Sonnenschein & Co.Google Scholar
  2. Mill, J.S. 1848. Principles of political economy. London: J.W. Parker.Google Scholar
  3. Ritchie, D.G. 1890. Natural law. London.Google Scholar
  4. Smith, A. 1776. An inquiry into the nature and causes of the wealth of nations. London: W. Strahan & T. Cadell.CrossRefGoogle Scholar
  5. Stephen, L. 1876. History of English thought in the eighteenth century. London: Smith, Elder.CrossRefGoogle Scholar

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • F. C. Montague
    • 1
  1. 1.