The Fable of the Bees

The Fable of The Bees: or, Private Vices, Public Benefits is a book by Bernard Mandeville, consisting of the poem, The Grumbling Hive: or, Knaves turn’d Honest, along with prose discussion of the poem. The poem was published in 1705, and the book first appeared in 1714. The poem suggests many key principles of economic thought, including division of labor and the "invisible hand", seventy years before these concepts were more thoroughly elucidated by Adam Smith. Two centuries later, the noted economist John Maynard Keynes cited Mandeville to show that it was "no new thing ... to ascribe the evils of unemployment to ... the insufficiency of the propensity to consume", a condition also known as the paradox of thrift, which was central to his own theory of effective demand.

At the time, however, it was considered scandalous. Keynes noted that it was "convicted as a nuisance by the grand jury of Middlesex in 1723, which stands out in the history of the moral sciences for its scandalous reputation. Only one man is recorded as having spoken a good word for it, namely Dr. Johnson, who declared that it did not puzzle him, but 'opened his eyes into real life very much'."

It was also reported that:

Mandeville gave great offense by this book, in which a cynical system of morality was made attractive by ingenious paradoxes. ... His doctrine that prosperity was increased by expenditure rather than by saving fell in with many current economic fallacies not yet extinct. Assuming with the ascetics that human desires were essentially evil and therefore produced "private vices" and assuming with the common view that wealth was a "public benefit", he easily showed that all civilization implied the development of vicious propensities....

The poem had appeared in 1705 and was intended as a commentary on England as Mandeville saw it. Keynes described the poem as setting forth "the appalling plight of a prosperous community in which all the citizens suddenly take it into their heads to abandon luxurious living, and the State to cut down armaments, in the interests of Saving".

The "hive" is corrupt but prosperous, yet it grumbles about lack of virtue. A higher power decides to give them what they ask for:

This results in a rapid loss of prosperity, though the newly virtuous hive does not mind:

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