Cover Page



Half Title Page

Title Page


Editors’ Note

General Introduction

Political Economy

Objective of the Book

The Logic of Modernity

The First Enlightenment Model: Locke’s Liberty Narrative

The Second Enlightenment Model: Rousseau’s Equality Narrative

The Liberty Narrative Expanded

The Equality Narrative Expanded

Reflections on the Two Narratives

Ten Defining Questions

Conclusion: Two Narratives of Political Economy

Part One: The Emergence of Political Economy:
Economic Activity Leaves the Household


The Three Pillars of Liberty and Equality

John Locke and the Liberty Narrative

J. J. Rousseau and the Equality Narrative

John Locke The Second Treatise

The Purpose of Politics

The State of Nature

“There Were Never Any Men In The State Of Nature”

The Right To Private Property

God’s Intention

The Labor Theory of Value

The American Situation

“Labor, In the Beginning, Gave a Right of Property”

The Introduction of Money

Origin of Political Society

The Purpose of Government

The Three Defects of the State of Nature

The Two Powers of Man in the State of Nature

The Rule of Law

The Right to Revolution: “A Long Train of Abuses”

“Who Shall be Judge?”


John Locke A Letter Concerning Toleration

Purpose of Letter

Separation of Civil Government and Religion

The Church as a Voluntary Society

The Power and Limitations of the Church

The Extent and Duty of Toleration by the Church

The Extent and Duty of Toleration by the Magistrate

The Concept of “Indifferent Things”

The Magistrate and “an Idolatrous Church”

The Magistrate and “Articles of Faith”

The Importance of the Temporal Life

Who Shall Be Judge?

Liberty of Conscience as a Natural Right

Freedom of Conscience and Separation of Church and State

John Locke Some Considerations of the Lowering of Interest and the Raising the Value of Money

Can “the Price of the Hire of Money … be regulated?”

“The Unavoidable Consequences of such a Law”

“What will be the Consequences of such a Law?”

“There are but Two Ways of Growing Rich”

The Farmer and the Kingdom Analogy

Money and Trade

“Industrious and Thriving Men”

“Should there be no Law at all to Regulate Interest?”

The Example of Holland

The Case of the Landholder

“Money is the Measure of Commerce”

Removing the “Great Mystery” of Money

Jean-Jacques Rousseau The Two Discourses

The First Discourse

A Discourse on the Moral Effects of the Arts and Sciences

The Second Discourse

Jean-Jacques Rousseau A Discourse on Political Economy

The Definition of Political Economy

The General Will and Political Economy

“The General Will [is] the First Principle of Public Economy”

The Second Rule of Political Economy

Political Economy and Public Education

Third Rule of Political Economy

“The Distinction between Necessaries and Superfluities”

Cui Bono? Rich or Poor?

“Heavy Taxes” on “Superfluous Expenses”

Jean-Jacques Rousseau The Social Contract

Book I: “What Can Make It Legitimate?”

Book II: Sovereignity

Book IV: Civil Religion

Part Two: The Arrival of Political Economy:
Liberty, Property, and Equality


Adam Smith and the System of Natural Liberty

The American Founding

Tocqueville and the Two Narratives

The French Revolution and the Equality Narrative

Robert Owen and the Application of Rousseau’s Project

Saint-Simon and the Birth of Socialism

Friedrich List and the Critique of Adam Smith

P. J. Proudhon and the Fulfillment of Rousseau

Adam Smith Wealth of Nations

Book I: Of The Causes Of Improvement In The Productive Powers of Labor, And of The Order According To Which Its Produce Is Naturally Distributed Among The Different Ranks of The People

Book III: Of The Different Progress of Opulence In Different Nations

Book IV: Systems of Political Economy

Book V

Adam Smith The Theory of Moral Sentiments

Part IV, Chapter I, Paragraph 10

The American Founding

The Declaration of Independence

The Virginia Declaration of Rights

James Madison’s Memorial and Remonstrance

The Constitution and Political Economy

Federalist 10

Federalist 51

The Amendments of 1791

Alexis de Tocqueville Democracy in America

Author’s Introduction

Volume Two: Part Two – Influence Of Democracy On The Feelings Of The Americans

Volume Two: Part Four – Influence of Democratic Opinions on Political Society

The French Revolution

Declaration of the Rights of Man and Citizen, 1789

The French Constitution, 1791

The French Constitution, 1793

The French Constitution, 1795

Robespierre: On the Principles of Political Morality

Robert Owen A New View of Society

First Essay

Comte de Saint-Simon Nouveau Christianisme

The Religions

Friedrich List The National System of Political Economy

Chapter 31: The System of Values of Exchange (Falsely Termed by the School, The “Industrial” System)—Adam Smith

P. J. Proudhon The Philosophy of Poverty

Chapter I: Of the Economic Science

P. J. Proudhon What is Property?

Chapter I: Method Pursued in this Work. The Idea of Revolution

Part Three: The Maturation of the Two Narratives:
The Challenge of Social Economy


John Stuart Mill, Karl Marx and the Maturation of Political Economy

Mill and the Liberty Narrative

Marx and Engels and the Equality Narrative

John Stuart Mill The Principles of Political Economy

BOOK II: Distribution

Book III: Exchange

Book IV: Influence of Progress

Book V: Of The Influence of Government

John Stuart Mill On Liberty

Chapter I: Introductory

Chapter II: Of The Liberty Of Thought And Discussion

Chapter III: On Individuality, as one of the Elements of Well Being

Chapter IV: Of The Limits To The Authority Of Society Over The Individual

Chapter V: Applications

John Stuart Mill The Subjection of Women

Chapter I: The Principle Of Perfect Equality

Chapter IV: The Benefits Of Equality

K. Marx and F. Engels The Communist Manifesto

Introduction: The Spectre Haunting Europe

Bourgeois and Proletarians

The Bourgeoisie as a Revolutionary Force

“Modern Bourgeois Society”

The Development of the Proletarians into a Class

The Bourgeoisie Produces its Own Grave-Diggers

The Relationship Between the Proletarians and the Communists

“The Distinguishing Feature of Communism: Abolition of Private Property”

Bourgeois Society and Communist Society

“Bourgeois Notions of Freedom”

“The Workers Have No Country”

Further Charges Against Communism

Ten Point Program to “Win the Battle of Democracy”

“The Free Development of All”

Reactionary Socialism

Conservative or Bourgeois Socialism

Critical—Utopian Socialism and Communism

The Communists in Relation to the Various Existing Opposition Parties

Karl Marx Das Kapital

Volume One, Part I: Commodities and Money

Part II: The Transformation of Money into Capital

Part III: The Production of Absolute Surplus-Value

Part IV: Production of Relative Surplus-Value

Part V: The Production of Absolute and of Relative Surplus-Value

Part VIII: The So-Called Primitive Accumulation

Das Kapital: Volume Three, Part VII

Fredrick Engels Socialism: Utopian and Scientific

The Origin of Utopian Socialism

The Contribution of Saint-Simon

The Contribution of Fourier

The Contribution of Robert Owen

The Limitations of the Utopian Socialists

The Decline of Metaphysics and the Emergence of Dialectics

“Nature is the Proof of Dialectics”

“The Hegelian System” and “German Idealism”

The Emergence of “Modern Materialism”

“A Decisive Change in the Conception of History”

“Socialism Became a Science”

“The Materialist Conception of History”

“What is, then, the position of Modern Socialism?”

“Anarchy Reigns in Socialized Production”

The Immanent laws of the “Capitalistic Mode of Production”

“The Perfecting of Machinery”

“The Socialized Organization of Production”

The Withering Away of the State


The Two Narratives of Political Economy

Title Page

Editors’ Note

A complete account of the intellectual origins and development of political economy would encompass the multiple works of many writers over several centuries. Instead, we have (1) edited the original material that captures the conversation over three centuries between what we have called the liberty narrative and the equality narrative and (2) made that conversation available in an accessible, and affordable, one volume reader. Since our objective is to let the original participants speak for themselves, we have kept editorial intrusions to a minimum.

To repeat, we are interested in a conversation about the origin and development—including its anticipated fall and rise again—of political economy. We collect under one roof, the seventeenth, eighteenth, and nineteenth century essential contributions of leading writers on behalf of the liberty narrative and the equality narrative which we identify as the two paths of political economy. Even though the liberty narrative has its roots in the Anglo-American tradition, we have excluded writers such as David Ricardo who turned political economy in a more technical direction. Similarly, we have selected authors who focus on the issue of the inter relationship between the questions of property, fairness, and religion over three centuries in our coverage of the equality tradition. And while this tradition is mainly Continental European, we have included Robert Owen as an important part of the conversation. We also assume that the reader will have ready and affordable access to the twentieth century and twenty-first century versions of the two narratives.

In short, the readings included here are intended to be instructive with respect to the origin and development of the two narratives rather than an exhaustive account of how thinkers and writers on economics advance the project of economics as a social science.

We divide the conversation into three parts roughly coinciding with the three centuries. And in each part, we focus on one or more critical thinkers and use one or more decisive events as bookends. Prior to modernity, economic activity was confined to the household and/or regulated by the religious sphere. Thus we call Part One, The Emergence of Political Economy: Economic Activity Leaves the Household. With the works of Locke and Rousseau, on the one hand, and the Glorious Revolution and suspicion of the Enlightenment on the other hand, the economic question enters the public sphere and we have the birth of the two narratives. We entitle Part Two, The Arrival of Political Economy: Liberty, Property, and Equality. The central thinkers are Adam Smith on behalf of the liberty narrative and Robert Owen and P.J. Proudhon for the equality narrative. The pivotal question is the status of property and its relationship to liberty and equality. The vital events are (a) the two revolutions that take place on opposite sides of the Atlantic in the late eighteenth century and (b) the unsettling, yet reflective, times of the 1840s. The final section of the book, Part Three, we refer to as The Maturation of the Two Narratives: The Challenge of Social Economy. The two critical thinkers are John Stuart Mill and Karl Marx, who “correct” the intellectual foundations of the two narratives inherited from the previous centuries. The defining opening event is the specter of yet further revolutionary activity and thought haunting Europe in 1848. We have deliberately not put a bookend to Part Three for it leads naturally into the next century.

All of the selected material is edited from original sources available at The Huntington Library or one or more of the University of California Libraries. The material is in the public domain and we have used editions that stay as close to the version approved by the author as possible. We have retained the original style, grammar, and punctuation wherever possible and sensible. We have, however, made an effort to modernize, even Americanize, the spelling. An important editorial intrusion is the addition of subheadings to the original texts where appropriate to help the reader breakdown material which at times is dense. For example, we, not Locke, divide his Second Treatise into 17 sections, Toleration into 13 sections, and Money into 12 sections. We have taken particular liberties with John Stuart Mill’s paragraphs: often Mill will include a page or more within one paragraph and, thus, we have chopped several of them into shorter and more manageable ones. But we have also given other writers a helping hand.

The standard The Works of John Locke (1823) is our point of departure for the three Locke entries. The Second Treatise, Toleration, and Money written by Locke (1632–1704), and each published for the first time in 1689, are also available in affordable paperback versions and on a number of electronic sites; see for example Liberty Fund’s Online Library of Liberty. G.D.H. Cole’s 1913 translations of the four J.J. Rousseau (1712–1778) entries are the basis for our own versions of Rousseau’s works. The First Discourse, The Second Discourse, Political Economy, and The Social Contract were published in 1750, 1754, 1755, and 1762 respectively. See also the Constitution Society website for helpful links to commentaries on Rousseau.

We rely on Edwin Cannon’s 1904 edition of Adam Smith’s Wealth of Nations as our text for the Smith entry. Also see Liberty Fund’s publication and their Library of Economics and Liberty website at for the complete works of Smith (1723–1790). The Federalist is available in numerous forms; we use the 1788 “McLean Edition.” These essays are also available in many print and electronic versions. See, for example the “Rossiter edition,” updated by Charles Kesler, or George Carey’s edition for Liberty Fund. See also There are many efforts to produce the authentic version of the two volumes of Democracy in America by Alexis de Tocqueville (1805–1859). Nevertheless, we rely on the original English translation for our selections from the second volume (1840) by Henry Reeve (1813–1895) because 1) it is in the public domain and 2) we are more interested in Tocqueville’s contribution to the conversation of the two narratives than reproducing the definitive version of Tocqueville’s Democracy.

For our coverage of The French Revolution, we rely on Francis Lieber’s On Civil Liberty, edited by Theodore D. Woolsey and published by J. B. Lippincott in 1883. We rely on, but adapt, the 1794 Philadelphia publication of an English translation of Robespierre’s On the Principles of Morality. The full title of the original was Sur les principes de morale politique qui doivent guider la Convention nationale dans l’administration intérieure de la République Prononcé à la Convention le 5 février 1794–17 pluviôse An II. See for online coverage of Maximilien Robespierre (1758–1794). There are a number of reliable editions of Robert Owen’s work. See, for example, Complete Works of Owen (1771–1790) published in 1931 by Dent. We rely on the original 1816 second edition version of A New View of Society also published by Dent with an introduction by John Butt. Unfortunately, there is not a full set of English translations of Comte de Saint-Simon (1760–1825) in the public domain. So we have provided our own translation of the essential paragraphs of his Nouveau Christianisme (1825). A complete collection of Saint-Simon’s works is available in forty-three volumes; they were first published in Paris between 1865–1872. We include an excerpt from Sampson S. Lloyd’s English translation in 1881 of Friedrich List’s National System originally published in 1841. List (1789–1846) is not a direct advocate of the equality narrative but he is recognized as the father of the “German Historical School,” and perhaps even the great grandfather of the European Economic Union within which the ups and downs of the equality narrative are in full display in the twenty-first century. Moreover his critique of Smith’s individualism is central to the equality narrative and anticipates the growing importance of intellectuals in the conversation. We rely on the late nineteenth century English translations of P.J. Proudhon’s works by Benjamin R. Tucker (1854–1939). Here we include extracts from The Philosophy of Poverty (1840) and What is Property? (1846) by Proudhon (1809–1865). See also

For the entries from J.S. Mill’s Principles of Political Economy (1848) we rely on the 7th edition by William J. Ashley in 1909. And for On Liberty and The Subjection of Women, we rely, respectively, on the Longman, Roberts and Green version of 1869 and the Henry Holt edition of 1879. They originally appeared in 1859 and 1869. Thirty-three volumes of The Collected Works of John Stuart Mill (1806–1843) are available from The Online Library of Liberty. The edited versions of the three major writings of Karl Marx (1818–1883) and Frederick Engels (1820–1895)—The Communist Manifesto, Das Kapital, and Socialism: Utopian and Scientific—were translated into English by Samuel Moore and Edward Aveling in 1888, 1886, and 1892 respectively. They made their first appearance in 1848, 1867, and 1880 respectively. We rely on the English translations approved by Engels. Near the end of the Introduction to the 1888 English edition of The Communist Manifesto, Engels reveals his reliance on Moore: “The present translation is by Mr. Samuel Moore, the translator of the greater portion of Marx’s Capital. We have revised it in common, and I have added a few notes explanatory of historical allusions.”

We thank the following people for their insight and encouragement: Steve Ealy, Bobbi Herzberg, Kevin Honeycutt, and Martin Scrivener. We also thank Marie Ann Thaler and Christynn Vierra for their editorial assistance. Finally, we wish to thank Liberty Fund for bringing us together in the first place and for providing the opportunity to introduce earlier versions of The Two Narratives at a variety of conferences.

August 2010