Dispersed knowledge and individual freedom : the forgotten popular political economy of Thomas Hodgskin

The importance of knowledge in a market economy is usually deemed to be an issue that only emerged in the 20th century. This paper argues that journalist and political essayist Thomas Hodgskin foreshadowed some of the basic tenets of the reflections by F. A. Hayek (among others) in the 20th century. The main focus of the paper is Hodgskin’s book Popular Political Economy . While often considered a “Ricardian socialist”, Hodgskin was instead a passionate follower of Adam Smith. However, he thought Smith did not fully appreciate the importance of human knowledge for the development of the economy. For Hodgskin, it is precisely because knowledge is dispersed in society, and legislators cannot come to master it, that the “system of natural liberty” should be upheld. The growth of knowledge is for Hodgskin a wholly “democratized” process, the whole of society is a great knowledge-creating enterprise: he emphasized the cognitive dimension of any human effort, maintaining that it was the free development of new ideas that empowered men. For this very reason, he thought that demographic growth was conducive to a more developed and innovative society. In Hodgskin’s perspective, government couldn’t but hinder the spontaneous “higgling of market”.