Adam Smith, the City, Natural Order, Republicanism

Primary version if this post, with visual content, at Barry Stocker’s Weblog

At the end of Book III, Chapter 1, ‘Of the Natural Progress of Opulence’, of An Inquiry into the Nature and Causes of the Wealth of Nations, Smith refers to a unnatural and retrograde order. What he means is the inversion of a natural progress from agriculture, to manufacture to international commerce. That natural progress is the progress from improvements in agriculture which allow the formation of towns and investments in manufacture, and a similar progress to international trade.

The unnatural event takes place in European cities where international trade has introduced new luxuries to cities. These luxuries influence domestic manufacturers who compete in that new market, and that further influences agriculture.

I’ve mentioned dialectic in Smith a few times, and Smith as bringer of dialectic into his definitive work on political economy. The idea of an unnatural order is either a break down of dialectic, or a suggestion that dialectic leads to rigid unifying forms. Writing about Pascal and Smith as dialecticians yesterday, I suggested that Pascal’s form of dialectic is more contradictory, more concerned with paradox than Smith’s. Kierkegaard also provides a model of a more paradoxical kind of dialectic, he had a good phrase for it, dialectic of the absurd.

Smith is shocked by something that is clearly inevitable, I would have thought. That is the feedback consequences of a long historical process, so that ‘older’ forms of wealth are influenced by the older forms. There is a moralism here about the influence of ‘luxuries’, not that Smith ever thinks it would be a good idea to try to restrict them. At an earlier point in The Wealth of Nations, Smith even recognises the positive impact of the wealth of towns on the surrounding countryside. He also suggests that an alliance between monarchs and cities in the Middle Ages was a good thing in hastening the end of feudalism, and the increase in free trade.

The moralism about cities appears in a slightly different form with regard to cities which are centres of political power. Smith refers to the huge waste of a royal court and its hangers on which outweighs even the wealth produced by Paris. At another point, Smith mentions the expense of royal courts and back tracks to refer to the honourable role of high royal servants. I’m disposed to believe that Smith was a covert critic of royalty. From that point of view, it;s interesting that in the discussion of the Navigation acts he repeatedly refers to what he normally calls Holland, also known then as the Dutch Republic, as the ‘maritime republic’. Smith strongly hints that royal courts continue the tradition of wasteful expenditure on hangers on, which is wealth diverted from investment, in nomad princes and the like.

The implied criticism of royal expenditure, and of the institution itself, is rather mingled with moralising about the sort of people to be found round royal courts. That lurking republicanism is maybe associated with the less rational dislike of the inversion of nature, since royal expenditure might be regarded as the diversion of economic capacity, occasioned by a premature entry of luxury goods from another country,

This odd outrage at countries which don’t follow economic stages in the right order, is in tensions with the feedback processes Smith otherwise values; and his general feeling that trade should be left alone, except where really very strong moral and national interests are at stake. It also suggests a limitation in the understanding of ‘nature’ at the time, which has natural theology somewhere within it, that is the view that everything in nature moves forward in orderly stages to an end ordained by God. I don’t think that notion is really abandoned, in general, until Nietzsche, and then later in the 19th Century when Darwinism became neo-Darwinism, and when the laws of thermodynamics led to a cultural interest in entropy in nature.

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