THE SCIENCE OF ECONOMICS: THE ECONOMIC TEACHING OF LEON MACLAREN

As a Londoner I have an impression going back decades of posters on the London Underground for meditation courses run by The School of Economic Science. If, like me, you saw them and were a little unsure of how meditation and economic science came together, or what 'practical philosophy' meant, then this new book answers at least some of those questions. I did in fact attend several classes on Plato at the School, while more recent contact with members revealed that the Advaita tradition of spiritual teaching is also important to it. The Science of Economics: The Economic Teachings of Leon MacLaren focusses mostly on economics however. It also pursues an issue close to my heart: that of economic justice. The book is essentially an update for the 21st century of Leon MacLaren's course on economics constructed in the 1960s. MacLaren founded the Henry George School of Economics in 1937, running courses on classical theories of economics and the challenge to them laid down by the American economist Henry George. In a break with George's ideas MacLaren developed his own teachings and renamed the school in 1942 as The School of Economic Science. Since then its name has reflected the conviction that economics as a discipline needs to be more scientific in its approach. As far as I can work out the spiritual side of the School came out of a conviction that economic activity should have an ethical basis, and that required the spiritual development of mankind. The editor of The Science of Economics, Raymond Makewell, has done a wonderful job of making MacLaren's thinking relevant to our times, pointing out at the beginning that the Credit Crunch has forced economists to look back to the early masters including John Maynard Keynes and Henry George. MacLaren has important ideas on economic justice that we also need to reflect on in the wake of banking scandals and growing economic inequality. The book has a good introduction to MacLaren's original inspiration and creation of the School, followed by chapters that cover the staple items of economic theory, including the division of wealth, value, price, banking, inflation, trade and taxation. The last part of the book focuses on ethical issues and develops a hierarchy from Production through Credit and Trade to Justice and finally Goodness. It is here that we see the ultimate link to spiritual values, and also to the ethics of Plato.

Although MacLaren made his thought independent of its original inspiration in the work of Henry George, there is no doubt that George's influence runs right through this book. George was an 19th century American political economist, a rival to Marx, and a vigorous proponent of land value tax (LVT). MacLaren, like George, insists that land is the basis of economic activity, and that economic injustice begins with the Enclosures and other developments by which ordinary people have been deprived of the means of livelihood. If we imagine a political economy of the Left which is at its most extreme in Marx and at its most moderate in Keynes, then perhaps George's vision sits in the middle. It is certainly the inspiration for the many groups today arguing for the LVT, and, in MacLaren's reworking of it, deeply thought-provoking. At some level we all wonder, I think, whether capitalism is intrinsically wrong, but may well feel that traditional socialism, with its call to the nationalisation of all production, is simply an unworkable response. MacLaren provokes more subtle thinking on the subject, though one has to buy his basic premise that 'enclosure' in its greater meaning is the source of all economic wrong. For example he says that 'Money-lending is not natural to the economic organism; it arises when land is enclosed.' This statement also hints at his view that there is a natural order and natural laws which govern human society, and our job is to prevent the drift away from that order. Hence his ultimate interest in drawing on such thinkers as Plato and such traditions as the Advaita. For those like myself trained in the hard sciences of physics and chemistry the approach to economics is not easy. We see a discipline with both a science-like basis and the ready application of mathematics to many of its theories, but also one with a political and moral basis. Countless economic writers have considered to what extent the methods of physics can be imported into what is really a social science, and indeed the entire legacy of the Enlightenment can be understood as that very impetus. MacLaren, early in the book, establishes what for him is a key law in economics: the law of rent. He expresses it in four paragraphs and tells us that it is a natural law. However the origin and statement of this law bears no resemblance to how laws in physics originate or are stated, and so, as with many other attempts, I wonder just how valid the analogy with physics might be. Putting it another way, if we really pursue a 'science of economics' then what exactly does the term 'science' mean here? It is a debate as old as that of economics itself, and MacLaren's perspective is a good a starting point as any for a survey of this issue. Whether one agrees that MacLaren's economics is more scientific than any other, or agree with the arguments for the LVT, is not the point here. What matters is to engage with any thinker who is serious about economic justice. It matters because, although it may seem like a deeply refractory problem, not thinking about it is collectively the most likely cause of the economic mess we are in today. This book will be of great interest to anyone concerned with this problem, and also to anyone interested in the history of the School of Economic Science.