This time of year, as we find ourselves huddling together indoors, kept from death by frostbite and ennui by miracles of modern technology, I would like to take you for a moment to a very different place. Imagine a sunny, idyllic island on the South Seas, where there lives but one man, an adventurous gentleman, beloved of literary critics and economists alike, who enjoys splitting his time up between simple leisure and the harvesting of yams. This is Robinson Crusoe, and over the centuries, classical liberals have discovered that they could learn a great deal from him.
Daniel Defoe’s Crusoe is mired in the political philosophy of the British Enlightenment, and finding himself stranded on his desert island, rather than despairing or going feral like a resident of a neighboring isle, he diligently turns to the task of enacting in practice John Locke’s ideal of improvement and property acquisition. Locke formulated in his Second Treatise of Government that in a state of nature man acquires property by mixing his labor with it and “improving” it by making it useful for human purposes. However, this is often hard to demonstrate in a society where nature is already largely tamed and owned, as England had been for centuries. Locke pointed to the America of his time as a stage wherein the pageant of civilization was playing out. Defoe used an island and an individual without competition to illustrate this.
After Crusoe’s publication, the reading public demanded more, and rehashes of this plotline proliferated at the same time liberal political economy was developing. The two soon became inseparable, and remain so. In a nod to this tradition, many economists have used the example of Crusoe to illustrate tradeoffs in a simplified one-man economy. This is called “Crusoe Economics,” and while it is controversial and often attributed to the Austrian School, it is relatively mainstream. Most often, Crusoe serves as both producer and consumer, and decides how to divide his time between work and leisure.
When other individuals are added to the equation, Crusoe Economics get more complicated, and our grasp of microeconomics grows as it delves into the areas of trade, ethics, and coordination. The five individuals of Jules Verne’s Mysterious Island (1874) allow for the examination from the outset of certain issues of theory such as comparative advantage and the division of labor, social hierarchies, and social cohesion. Furthermore, the developments in classical political economy since Crusoe, specifically the contributions of Adam Smith, are on display. By dividing tasks among them according to their comparative advantages, the castaways can achieve the productive efficiency that allows them to build their technologically complex society. As Adam Smith predicted in The Wealth of Nations (1776), such division of labor creates a scheme of interdependence leading to a large degree of social cooperation, even in such a small economy. However, in a break with the liberating egalitarianism of Smith, Verne portrays this interdependence as markedly unequal, leading to a rudimentary social hierarchy among the castaways, a development which the more radical Enlightenment thinkers and particularly Smith would find troubling. Verne portrays this order as natural and spontaneous, perhaps giving us insight into the basis of complex structures of societal inequality. With a more optimistic outlook in The Ethics of Liberty (1982), Rothbard uses Crusoe and his interactions to examine the formation of ethics. In his view, shared societal values arise by a similar spontaneous order process as trade. While incomplete, the Crusoe model can at least assist us in understanding these topics.
Austrian economists like Murray Rothbard use the one-man economy for a variety of further illustrative purposes. In Man, Economy, and State (1962), Rothbard’s treatise, Crusoe not only exchanges work for leisure but consumption for investment. Rothbard goes into detail about the theoretical structure of production for berries with a simple stick as capital and with savings illustrated by the reduced consumption and rationing of berries during the period of producing this stick, an investment of time. Thus, with a bearded castaway and a stick, Rothbard explains some fundamentals of a capital theory beyond the grasp of many policy economists today.
This post would be incomplete if we did not take a moment to examine the other side of the model — namely, its significant limitations. Liberals in the nineteenth century sometimes failed in this area, in their enthusiasm over the cohesive system of classical political economy. Retellings of Crusoe’s story became their own genre so pervasive that Karl Marx, using the term “Robinsonade,” dedicated time in Das Kapital (1867) to critiquing them.
Crusoe, while talented, cannot teach us actual history. The temptation among liberals was to apply the ideal model of Locke as a descriptive model of civilization’s origins. The Enlightenment model of “Whig history,” a model which many present-day libertarians use, stresses the overall peaceful evolution of civilization toward a better and better quality of life. This optimism, however, glossed over violent injustices and, more importantly, the unjust structures that resulted from them. By contrasting the narrative of Lockean accumulation with one of conflict and materialism, Marx criticizes the very fiction upon which he believes political economy is built. What use is this theoretical story of property to the description of an economy built upon totally different and exploitative foundations? Furthermore, Marx believed that the proliferation of Robinsonade literature within liberal capitalist culture contributed to a popular misconception of economic reality and provided the framework for capitalist apologetics for the status quo, the “vulgar libertarianism” and “right-conflationism” for which Carson and Long, respectively, sometimes chastise us.
Avoiding the conflation of a prescriptive ideal with descriptive history is crucial, lest we fall into the trap of ignoring the past and apologizing for the unjust products of the very injustices we oppose. Libertarians can and should celebrate the things Crusoe can teach us, but we need to be on guard against our tendency to infer more from the model than we reliably can.