Owen’s Economics
Over the course of his long and committed career, Owen probably won more hearts than minds. Few took him seriously as a political economist, since his arguments on behalf of higher wages and cooperative self-management were drawn from the writings of others who had more directly studied Ricardo’s Principles.
Many of his ideas were inconsistent and far-fetched. Yet Owen effectively challenged Adam Smith’s assumption that benevolent selfinterest was a fact of Nature. He argued instead that self-interest was essentially shaped by social and family life. He initiated a furious debate over human malleability and the limits of socialization. He encouraged experimentation with egalitarian collectives whose failures, however painful, yielded important lessons for the future.Owen’s emphasis on the economic significance of developing children’s capabilities was both practical and prophetic. None of his predecessors had paid much attention to the development of what we now term human capital. While Adam Smith had pointed to the advantages of public education he offered little by way of detail regarding regulations or provisions. Owen waxed eloquent on the subject of living machinery, applying the time-honored metaphor of mainspring to the clock.32 He addressed factory managers directly when he insisted that the productivity of their vital machines—their workers—was as essential to their profits as their capital equipment.33
Society itself resembled a machine whose efficiency could be improved. The subsistence wages that most political economists accepted as a natural law led to the waste of children’s capabilities. Prodded by democratic
reforms, British employers began to recognize the economic logic behind the cooperative provision of at least some public goods. They accepted greater regulation of working hours and spending on common schools, along with public investments in transportation and utilities.34
Malthus had officially recognized his new challenger in 1817, when the revised fifth edition of his Essay on Population substituted criticisms of Owen's New View of Society for his original assault on Godwin. Malthus reiterated his view that movements toward equality would be undermined by population growth. Owen remained, as ever, optimistic. Reminiscing in extreme old age, he claimed that in his discussions with her husband, Mrs. Malthus always took his side.35