Distributive Justice and Adam Smith (Istanbul Talk) III

In Smith distributive justice has a rather accidental aspect then, as we can see it emerging when other considerations are taken into account rather than having  structure of arguments of its own. This could be taken as simply the consequence of Smith not writing a book on justice, or the principles of politics. However, we do have his Lectures on Jurisprudence for the law and theory of justice, The Theory of Moral Sentiments for his moral principles, and An Inquiry into the Nature and Causes of the Wealth of Nations for his political economy, and much associated thought about the state, taxes, poverty, public works, luxury and so on. There is a theory of distributive justice which can be constructed from these texts, and others, but that is not to say a theory of redistributive justice.

One of the problems with Smith commentary is that admirable scholars and political theory thinkers, like Rasmussen and Fleischacker, who are disposed favourably to a theory of redistributive justice see it in those elements of Smith which express a wish for distributive justice. There is distributive justice in Smith in the sense that he favours the distribution that emerges from freedom in economic activities, and in the state measures he favours to benefit the poor rather than the rich. However, that is not the same as the kind of belief in a predetermined pattern of distribution of justice which Rawlsians, or egalitarian liberal favour, at the extreme a completely flat distribution as argued for by G.A. Cohen and which is in the basic assumptions of Habermas‘ thought on norms, ethics, and discourse.

It is important to note in this context that there are people who favour a flat income distribution who do not favour a state designed plan of redistribution. That includes individualist anarchists like Roderick Long and Gary Chartier, who believe that markets and property exist best through voluntary protection and law enforcement agencies, as without the power of a central state which monopolises violence, there is no strong force favouring large scale concentrations of property. In that case the state acts that favour financial services and large companies cannot exist and such economic entities would not exist. Without such large entities there can only be a diverse and broadly equal range of small companies and the self-employed. That kind of analysis draws on Smith and David Hume, referring to the way that government bonds ground a financial market by transferring money to bondholders from the tax payers in general, the monopolies granted to companies, the layer of senior state bureaucrats who have an impact on general income distribution  and naturally favour the existence of a private bourgeoise, interact with and find ways of getting family members into it. Smith does  not favour the anarchist solution, but the existence of that option in the terms I have just described, clarifies something about Smith’s attitude to distributive justice. That it is possible to favour increasing economic benefits for the poor and to attach more importance to that than increasing economic benefits for the rich, without favouring state imposed schemes of redistributive justice, but favouring that distributive pattern that emerges from state enforcement of the rules of a market economy. There is some modest state action to promote public goods and relieve the conditions of the poorest, but beyond that Smith is arguing for withdrawal of the state, not expansion of the state.

Admirable though the work of Rasmussen and Fleischacker on Smith is, they are too inclined to see an underlying drive towards redistribution though they acknowledge that there is no explicit argument along those lines. One compensating argument is that  no one else was arguing for redistribution at that time, or previously, so Smith could not make that argument. Though it is true that recent ideas of comprehensive redistribution through the tax and benefits system, maybe combined with strong trade unions and collective bargaining legislation, lack precedents from before the emergence of the modern welfare state in the 1870s, there are some precedents. Plato and Aristotle favoured some restraint on accumulation of  wealth, and Rousseau evidently preferred a flat income distribution, though not regarding it as plausible in a large modern commercial society.

Various ancient, medieval and early modern states have had a confiscatory attitude towards large accumulations of private wealth, particularly where it threatens political power, and bought consent from the lower classes on the model of the ‘bread and circuses‘ provided for the poor of Rome during the Empire. Smith himself notes the way that land was transferred to army veterans through colonies in conquered territories.  Thomas More’s Utopia provided a Renaissance example of a literary thought experiment about an egalitarian communist society. Radical Protestant movements of the Reformation, such as the Anabaptists at Münster provided examples of egalitarian communism. None of this seems to have been attractive to Smith. It could be argued that he would have been attracted to a Thomas Paine type program of taxation, but despite living into the time of Paine’s notorious (to mainstream British opinion) major writings there is no evidence that Smith was impressed.


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