Adam Smith on Colonialism and Republicanism, Antique and Modern. Paris Talk III (Final Part)

We should think of Smith’s work on colonialism and empire as including relations between England, Scotland and Ireland, and relations between the Anglo parts of Ireland and Scotland, and the rest. This is largely an implicit issue,  though he does have a lot to say about the injustice of not allowing equal trade terms to Ireland with Great Britain. Smith is silent on what he thinks about the Jacobite Uprising and the means used to put it down. It seems reasonable to assume that Smith preferred the Hanoverian cause to the Jacobite cause, the latter at least symbolically linked to a return to the more absolutist model of monarchy preceding the 1688 Glorious Revolution. Did he approve of the harsh measures used to crush the social basis of Jacobitism after Culloden? That seems at odds with his general emphasis on justice in the state and sympathy in ethics, but maybe he did see some violence against savages/barbarians as necessary to the emergence and preservation of civil and commercial society. He was deeply aware of the fate of ancient states based on some measure of liberty and commercial life, and their defeat by more barbaric peoples, as in the domination of the Greece of free republics by the Macedonian monarchy or the defeat of the Roman Empire in the west by barbarians. He sometimes seems deeply pessimistic about the survival chances of liberty and commercial society in the modern world, for example having a rather exaggerated view of the triumphs of Louis XIV, the model of absolutist monarchy, over the republican and commercial Dutch Republic. He also shows great pessimism about the prospect of republics progressing in liberty for all, suggesting that it is a republic of the greatest liberty for its citizens that is most unlikely to extend rights to non-citizens. He fears that slavery will never be abolished, partly because the freest republics, like the American colonies will be unwilling to emancipate slaves. Their system of liberty is embedded in the political economy of slavery, so how is it possible to hope the citizens benefitting from that system will take it apart? He looks at the Roman Republic in the same light, though oddly does not refer to the amelioration in the conditions of slaves during the Empire. Sometimes Smith seems caught up in a pessimistic acceptance of a Ferguson or Vico style of cyclical history in which savagery or barbarism (the divine and heroic ages in Vico) will keep returning, which may also reflect a fear that ethical and civil progress means a loss of natural strength.

The American colonies appear to be a model for the future, as a repetition of the Greek colonial system, if Britain grants the colonies independence as Smith hopes. However, that proposed birth of perfected liberty in American republics incorporates both a the slavery which Smith fears persists the more republican liberty exists, and the liberty in the American wilderness which cannot be incorporated into republican or any ‘natural’ system of of liberty. Colonisation of the New World produces a model of pure political absolutism and economic robbery in the Spanish Americas, and a model of liberty so pure it collapses in the British Americas. That fear that American liberty could be torn between despotism over salves and extreme disaggregation of individuals in the wilderness might explain some of Smith’s silence about the dark side of monarchical-republican liberty in Britain, as if that was the best that could be hope for, rather than the experiment in pure liberty that Smith hopes for and fears in the Americas.

Smith hopes for an end to colonialism, though as with other hopes, in a manner tinged with pessimism. He argues that Britain would benefit from giving up the colonies, so saving itself the expense of providing external security and the broader economic costs of distorted trade. Despite the historical precedents he identifies in the Ancient Greek model of relationship, between parental republic and descendent republics, he seems to despair of the possibility of a voluntary termination of colonialism. The advantages of free trade and friendship based on voluntary association between states may never outweigh the narrow self-interests behind mercantilism. The unspoken issue, is should the crown and the real source of power in the semi-republican oligarchy, not only give up overseas colonies, but also Ireland  and Scotland, or maybe just the Scottish Highlands and Western Isles and the Gaelic parts of Ireland along with the Welsh speaking parts of Wales? Smith envisages a European ‘Empire’, by which he means a free trading confederacy, maybe with some shared form of representative government. The trade element would bring great economic benefits, and some kind of shared representative government is Smith’s ideal model for overseas colonies. The lack of the representative principle in antiquity made republican government impossible in the imperial stage of the Roman Republic and the fully Imperial stage of the Roman state. The political and moral decline of the Roman Republic, after the imperial expansion associated with victory over the Carthaginian republic, was an issue in the late republic, in Renaissance republicanism and in the European Enlightenment thought of Montesquieu and Rousseau. This is presumably in the background of Smith’s thoughts about modern empire. The two approaches to modern empire, dissolving it or establishing a confederation through representative government is never fully presented as an option, though it is mentioned as what the Romans lacked. The implications for the three core kingdoms of the British monarchy (England, Scotland and Ireland) are not fully explored, or at least the issue of coercion in the interests of crown and mercantilist oligarchy is not dealt with perhaps because in some respects Smith believed in the justice of a coercive civilising state, an impression confirmed by his doubts about pure republicanism.

Adam Smith on Colonialism and Republicanism, Antique and Modern. Paris Talk II

The completely anti-republican nature of the negative models of colonialism is matched by the purity of the republican forms of the positive forms of republicanism, which are Greek and British in north America. The British in North America model even presents a kind of liberty beyond republican liberty. Smith refers to the solitary freedom of the settler in the vast open spaces of North America. This is a liberty unconstrained by government and laws, republican or otherwise. Forms of liberty outside republicanism as understood by Greeks and Romans was understood by them and referred to with reference to barbarians, or even in philosophical limit situations like the god or animal Aristotle thinks of outside the republic (polis). Smith and other Scottish Enlightenment thinkers themselves had ways of thinking about this with reference to the savage and barbarian stages of human history, which contain a kind of liberty of natural force not found in civilisation and which threatens civilisation. We can find this discussion in Hume as well as in Smith, and most richly in Ferguson’s History of Civil Society.

We can see these analyses at the background of Tocqueville’s understanding of the United States in Democracy in America, where the liberty of the ‘Indians’ is an important counterpoint to the growth of commercial and political liberty amongst whites, particularly in the non-slave states. The bondage of African-Americans in the slave states providing another counterpoint round despotic social relations, and the possibility of unlimited force erupting between whites and blacks in a race war.

In Smith, in an area of tension he shares with other Enlightenment thinkers, the isolated liberty of an individual in the wilderness, has an intensity of natural liberty lacking in the natural liberty Smith discerns in civilised commercial states and which he wishes to improve. The idea of natural liberty itself leads Smith into concerns about what can go wrong with trying to make natural liberty too  systematic and perfect. The idea of the isolated settler in the wilderness of North America presents another extreme aspect of liberty, where it disappears in the sense that Smith and others generally use it, of the liberty obtaining in a community under law.

The way that Tocqueville used the Enlightenment historical stages to analyse the America of the 1830s, should itself remind us of the way that Smith, Hume and Ferguson were referring to distinctions within Britain and Ireland. The formation of their thought coincides with the Jacobite Rebellion of 1745, which largely ended with the victory of Hanoverian forces at the Battle of Culloden in 1746. Charles Edward Stuart drew on support from clans in the Gaelic speaking islands and mountains of Scotland, where different laws, customs and authority structures prevailed in comparison to the Scots speaking lowlands. The Hanoverian victory in defence of the settlement of 1688 did not end of all those differences, which traditional landowners in the Highlands using a feudal style of authority over peasants well into the 19th century, but a major state offensive took place against the self-governing Gaelic communities on the north and west of the Highland line. Crown authority became complete beyond the line, with suppression of distinctive language, dress and custom to create subjects of the crown rather than of Highland chiefs. Before and after the crushing of the 1745 Uprising, social conditions in the Scottish islands and mountains could be defined as barbaric or even savage in relation to the Enlightenment centres of Aberdeen, Glasgow and Edinburgh, or Smith’s home town, the commercial centre of Kirkcaldy. A similar way of thinking could be applied to the Gaelic speaking rural parts of Ireland in relation to Dublin, the English speaking aristocracy, and the Presbyterians of Ulster, who made their own contribution to Scottish Enlightenment through Frances Hutcheson. These are crude distinctions, and Edmund Burke for one would not fit clearly into the category of Protestant upper class cosmopolitan remote from Catholic peasant culture. Many other qualifications can and should be made to distinctions between civilised English speaking moderate Protestant Enlightenment Britain and Ireland, and the ‘barbarian’ or ‘savage’ opposites. Nevertheless, there is some reality to them, enough to push Smith and others in the direction of a savage-barbarian-civil and commercial society understanding of history, where the civil and commercial communities are perpetually at risk from being overwhelmed by the natural strength of the less civil and commercial communities.

(to be continued)

Adam Smith on Colonialism and Republicanism, Antique and Modern. Paris Talk I

First of several posts of the parts of a paper presented at the conference Scotland, Europe and Empire in the Age of Adam Smith and Beyond on 4th July 2013, in the Guizot Ampitheatre of the University of Paris IV: Paris-Sorbonne. The conference was hosted by the Centre Roland Mousnier. It was organised by the Eighteenth Century Scottish Studies Society and the International Adam Smith Society.

Smith’s account of colonialism is in some dimensions an account of republicanism, differentiating between Greek, Roman, and modern models. The Greek model is one of overseas colonies that are independent of the original republic though tied to it by family type relations. The Roman model is one of the extension of the territory of the original republic, so that it is a case of that republic expanding in size rather than founding new republics in a loose family. In both cases, colonialism is a way of dealing with population that appears excessive in relation to the resources of the home republic. The modern model, or that aspect which Smith draws attention to, is the overseas commercial empire where colonies are largely founded to further mercantilist schemes which aim, if misguidedly, for the economic benefits of the home state. Modern colonialism is often undertaken by states of a monarchical character rather than a republican character, but the issues of a republic, and associated concerns with liberty and government by consent of the people arise, even in the most monarchical colonising powers. Smith does not present a clear commitment to republicanism as a principle of government, and certainly does not deny the legitimacy of monarchical governments, or deny the possibility of progress in liberty and prosperity under a monarchy. Nevertheless, there is a preference for republicanism, if more as an underlying assumption than an explicitly argued claim. The preference for republicanism emerges most clearly in his account of modern colonialism, since  it is here that the destructive effects of monarchy and of the political power of economic elites (what was classically known as oligarchy) are most clear to the people so governed.

The account of colonialism in An Inquiry into the Nature and Causes of the Wealth of Nations is itself part of an account of mercantilism, which is the product of monarchical and oligarchic distortions of government, which try to reserve economic benefits for the politically privileged parts of the community. Mercantilism in international commerce and colonialism itself has levels of injustice combined with economically self-destructive action. The worst is the Spanish (and Portuguese) colonisation of South and Central America, a form of direct grasping of economic resources by the crown in the colonising country, with economically destructive effects all round except for the crown and those closest to it. The monarchical colonisation of what is now known as Latin America.

The best is the British colonisation of north America, which has allowed the formation of self-governing republics with no hereditary aristocracy, as Smith emphasises with considerable republican enthusiasm (though as we shall see there is a critical aspect in his attitude), and a relatively good deal with regard to trade rights, compared with the inhabitants of India under the domination of the East India Company. Smith certainly deplores the restrictions on trade that Britain imposed on its American colonies, but notes that the terms were more favourable to the colonies exempting them from tariffs imposed on goods imported into Britain from outside the Empire. Danish colonial activities in the Americas are held up as a counter example of the bad that results from restricting the imports and exports of colonies. Smith does not say so, but was presumably aware that Denmark was an absolutist monarchy at that time, and so has a point to make in comparing a republican leaning monarchy as in Britain with a more pure example of monarchy. .

Somewhere the absolutist and republican models of colonialism, there are the regulated companies and the joint stock companies. Regulated companies, like one for trade with ‘Turkey’ (the Ottoman lands) are recognised by the state, have monopolistic power and are dominated by the self-interest of individual traders in the company who are rarely concerned with the good of the company as a whole, which is essentially an aggregate of individual interests licensed by the state. Joint stock companies (not really understood as what we largely think of as joint stock companies now) pool the risks and benefits for individual traders and so are dominated by the common economic good of the enterprise. These work more like states than the regulated companies, and in Smith’s time the East India Company was administering a large part of India, as a kind of junior partner state, or sub-state, of the British state, a situation which prevailed until the mid 19th century. The joint stock company is a more effective economic unit than the regulated company, but is in that case all the more complicit with the injustices and economic disadvantages of mercantilist colonialism. The joint stock companies subject colonised peoples to an alien government which is not concerned with their interests, but with the interests of investors in the home country.

Distributive Justice and Adam Smith (Istanbul Talk) IV (final)

A model for understanding Smith might be provided by Foucault’s discussion of ‘art of government’ and governmentality in the 18th century, not because Foucault was a a great Smith scholar, or that he was correct in every respect in his understanding of 18th century thought, but because his schema is so good at illustrating the general contours of thought. Foucault thinks of a model of ‘nature’ related to an emphasis on government becoming effective through learning to restrain itself. That self-limitation allows the natural growth of commerce and the emergence of natural man.

The 18th century understanding of the ‘savage’ promotes a natural man who can be the individual of political economy and of contractual relations (as in the political contract which Smith did not advocate, and the importance of voluntary contracts between free individuals, which Smith does advocate). There is an idea of ‘natural liberty’ in Smith which is what allows commercial society, and the benefits that commercial society brings to all classes free of too much design and political schemes.

The influence on Smith of the model of ‘nature’ can also be seen in his tendency to see agriculture as more natural and therefore more important to wealth than manufacture, and to understand financial and banking sectors as less important than either, even if necessary. Similar evaluations can be found in his attitude to countryside and city, particularly the capital city of a monarchy where luxury is concentrated. Smith does have a critical attitude to the maldistribution of economic goods through politically centred concentrations of wealth, but it is the weakening of such impositions on the natural development of trade which is important to Smith, not schemes of redistribution.

There is a theory (largely implicit) of distributive justice in Smith but not a justification of redistribution, and it is important to maintain that distinction. There is a Smithian desire to remove distortions of ‘natural’ distributive justice, with the welfare of the poor in mind and conditioned by disdain for the luxuries of the rich, but no desire to re-arrange property and income distribution through state power, and in general no desire for measures which limit the ‘natural’ growth of wealth except at margins which will not have a major impeding effect, as in the proposal for free education for the poorest or direct taxes on the luxury goods of the rich. Other interpretations of Smith tend to make false equivalences between concern for the welfare of the poor, or criticism of measures which harm the poor, and enthusiasm for state re-arrangement of the distribution of income and wealth.


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.

Distributive Justice and Adam Smith (Istanbul Talk) II

There is a welfare, or ethical, aspect to Smith’s political economy, which includes a bias towards the interests of the poor, and against wealth that arises from the less productive parts of the economy. However, these aspects of his thought do not lead him to state designed schemes for distributive justice. Rather he demands an end to those state activities which harm the poor, and the most productive parts of the economy. The assumption is that state action is to very limited, and beyond education, which Smith still  believes should be largely private, he does not suggest expanded state activity on behalf of the poor, as distinct from the re-ordering of taxes and the regulation of the economy which itself tends towards deregulation. Herzog refers to negative externalities and asymmetries of power in the economy which are not addressed by Smith and which might have led him to expand the field of state action if he had lived long enough to see those issues become of more concern in political life and in political thought.

Answers to this kind of question are necessarily speculative, but we can get some idea by looking at where Smith can be located in relation to other thinkers of his time. Wilhelm von Humbolt who was writing a bit later in The Limits of State Action puts forward an eloquent case for minarchism, minimal state liberalism, which he refers to as proper polity or a state based on negative welfare. This includes a rejection of the kind of modest proposals Smith has for state activity with regard to public goods and the condition of the poor. There is not precise equivalent for Humboldt on the side of a very active state. Rousseau had a strong belief in the justice of income and wealth equality, but he thought it was only relevant circumstances where not much state action would be necessary to maintain that situation. There is some attention at some points to measures the state might take to restrain inequality, as in the proposed constitution for Corsica, though the concern is just as much with the moral corruption of leaving a locality and immediate community. The major arguments for an active and expanding state of Smith’s time come from the actions and brief texts of political actors, most famously the French minister Jean-Baptiste Colbert, and from a conservative position of maintaining an existing aristocratic-monarchical state.

The difficulty in comparing Smith with current thinkers is that ‘progressive’ thinkers of the 18th century favoured limited government, and now support expansive government. Those elements of 18th century thought which anticipate statist-active government progressive positions now are only accepted by Smith in their most moderate form and more than balanced by state limiting proposals. This suggests a libertarian-egalitarian liberal cross over, but more leaning to the libertarian side. The likelihood therefore is that Smith would have favoured very limited moderate steps on the issues raised by Herzog, and would have wished to cut back on big schemes to restructure the distributive effects of the market.

Smith’s view of distributive justice early on in Lectures on Jurisprudence, where he invokes Aristotle and Grotius to discuss the distinction between commutative justice and distributive justice. Commutative justice refers to what cannot be taken from us or attacked, because it rightly belongs to us, or is part of us. It is a very strong form of justice relative to distributive justice. Commutative justice is enforced through the state legal system, distributive justice is a matter or morally preferably outcomes in which we prefer to see wealth going to those in need rather than those who already have many luxuries. Smith never directly says that all distributive  justice should become a voluntary matter never enforced by the state, though that might seem to follow. He also refers, as we have seen, to the relation between politics and issues of ideals of distribution, the inevitability of the ways that the state tries to maintain itself though distributive strategies. Smith may think that distributive justice is in a middle position between the institutions of criminal justice which enforce commutative justice (strictly speaking) and the purely individual voluntary nature of charitable giving. Distributive justice is something pursued by the state for the sake of social peace, and the maintaining of itself, as a precondition for social existence, but not a matter of absolute justice.

Distributive Justice and Adam Smith (Istanbul Talk) I

Based on a presentation for a panel I convened on Adam Smith at the conference Pluralism and Conflict: Distributive Justice Beyond Rawls and Conflict, Fatih University, Istanbul, 6-8th June 2013.

There are two aspects to distributive justice in Smith, referring more to the underlying themes of his work rather than his explicit claims. One aspect is the manner in which states maintain themselves by bringing advantages to enough people for it not to encounter too much resistance to enjoy and orderly existence. The second aspect is more morally guided with regard to protecting the poorest from complete destitution and preserving the sense that justice is being applied to all. The first aspect might not seem like justice at all, because it is what people in power do in order to keep their status, and associated economic goods, rather than what anyone does for the sake of justice itself.

Smith himself was not, however, an advocate of a form of moral theory detached from other interests. Theory of Moral Sentiments gives psychological and social bases for moral rules and judgements, and though Smith strongly resisted the idea of an egotistical reduction of ethics, the criterion of satisfying the invisible spectator does not establish a sharp distinction between self-regarding acts and altruistic acts. Ethics on  a collective level grows and and improves over time. The idea of social and political justice emerging from state craft is in this case not a big jump from Smith’s explicit thoughts about justice. The second aspect flows from Smith‘s explicit thoughts about ethics and justice, though it does not give us a fully explicit theory.


The second aspect is developed in An Inquiry into the Nature and Causes of the Wealth of Nations, mostly with regard to distributive injustice. This itself has two aspects: injustice towards the poor and injustice between sectors of society. The first brings us closer to the more pure form of distributive justice questions, and the second closer to the state craft issues. In these threads in Wealth of Nations, the cause is largely the activity of the state rather than the results of markets being left free of state legislation and government schemes. Smith sees injustice as resulting from collaboration between merchants in the same sector, but sees this as more the consequence of state intervention than of free commerce. The state enabling, encouraging and even requiring enterprises to form corporate bodies (such as local chambers of commerce in Britain) in the same sector is the biggest reason for merchants conspiring against the public. That is the source of the famous quotation about merchants conspiring against the public, though that quotation is often used to support demands for increased state regulation. The great injustices that Smith mentions to the poor come in part from the way the Poor Law tends to tie the poor to their locality of birth, under suspicion that they might apply for public funds in a parish (minimal unit of local government in Britain) where they lack previous connections. There is a concern here with the suffering of the poor, but also with the negative consequences for the economy of restricting labour mobility (concern which can and should be applied now to migration between countries).

A related concern is that lingering requirements from the Middle Ages for seven years of apprenticeship, before practising a craft, limits the chances to the poor to improve their economic situation. The poor are less able to offer skills to make a good living if faced with an artificial seven year delay before putting their skills out on the market.  Again there is an interlacing of concern for the condition and rights of the poor, with the negative consequence for consumers in general and what we might now call the public good.

Another source of injustice to the poor is the application of taxes on the necessities of life, in which case the concern is more purely one for the condition of the poor. Smith’s favours taxing luxuries rather than necessities, but he nowhere calls for graduated (progressive) taxes, and only a tortuous interpretation of his work can support such an idea. Public debt results in a distributive injustice for Smith, the understanding of which includes the assumption that ‘natural liberty’ is a better basis for political economy than state interventions. Public debt leads to a forced transfer of income from the productive sectors of the economy to creditors, that is the financial sector of the economy. That includes a transfer (also noted by Hume) from tax payers of low income to rich holders of government bonds (a very relevant issue at present, though it tends to be egalitarians now who are less concerned with debt than conservatives and libertarians).The solution that Smith advocates is reducing debt, which includes reducing public expenditure, particularly on war, so again an approach different from most egalitarians at present, though on the specific issue of military spending there could be some agreement.

Adam Smith and Historical Pessimism

The second of two posts of  thoughts about Adam Smith’s lectures, as I work on two conference papers on the man from Kirkcaldy.

There is an element of pessimism in Adam Smith, despite the general expectation that Enlightenment thinkers are humanist optimists. While arguing against slavery, Smith suggests that it might never be eliminated from the world. It still has not been absolutely eliminated from the world, not that there is anywhere it is still legal, but a mixture of abuse of power by traditional elites in more isolated parts of the world, and the vulnerability of migrants in a world of immigration controls means there are certainly persistent pockets of effective slavery. Smith’s reasons for such pessimism seem to include an element of geographical determinism. I have come across no discussion of the element of geographical determinism in Smith, which he shares with Montesquieu and Rousseau. It is not something that he has a lot to say about, and of course though I have read quite a lot of Smith scholarship, on and off in recent years, and intensively in the last couple of years, my knowledge is not exhaustive. It may have become subsumed under discussion of the element of the primacy of agriculture within Smith. There is a tendency to think of wealth as coming from the land because that use of the land is the first form of economic activity, and that it must always have primacy within any national economy. That is maybe more of a tendency, than an explicit theory, but it has been quite widely noticed with regard to An Inquiry into the Nature and Causes of the Wealth of Nations. Getting back to slavery, the element of reduction of wealth to agriculture fits with a view of the determination of societies, and their possible development, by physical geographical conditions.

The tone of pessimism comes partly from a way of looking at the past, shared with two other Scottish Enlightenment thinkers, David Hume and Adam Ferguson, and with many precedents, in which commerce and culture accompanies declining military capacities, leading to the conquest of cultured commercial peoples by savage peoples. Tough that is compensated in the world Smith knows with the hope that commerce and culture is generally winning, he does have a pessimism still poking through. Towards the end of the  Lectures on Jurisprudence, Smith reverts to a version of the savages defeating commercial cultured peoples when he refers to French invasion of the Netherlands in the early 18th century. This presumably refers to an invasion of the Spanish Netherlands (roughly what is now Belgium) in 1701, in which France undermined conditions the Dutch had imposed on trade by the Spanish Netherlands and removed Dutch fortresses within the Spanish Netherlands near the French border. Smith refers to a plan to evacuate the Netherlands and move the population to the Dutch East Indies (now Indonesia). This is all rather bizarre and I can only think that Smith is confusing the 1701 events with the 1672 invasion of the Netherlands (as in the independent Dutch state) by France, as part of a four party coalition which also included Britain, Spain, and the Holy Roman Empire of the German Nation (in practice the lands controlled by the Austrian Habsburgs). This event was a terrible threat to the Netherlands, which lead to the murder of the Grand Pensionary of Holland (roughly speaking the de facto prime minister of the Netherland, based on control of the largest province) Jan de Witt, an event witnessed with great horror by the philosopher Spinoza. The Dutch did not attempt to move to colonies of the East Indies. The newly empowered Stadtholder (military chief of Holland and other provinces, a position always held by the Princes of Orange) organised the breach of dams flooding large parts of the country. So far from the cultured commercial Dutch giving in softly to an invasion by French brutes, desperate measures were undertaken to maintain independent national life, following brutal measures so that those who thought they could organise such resistance could assume complete power. In addition, as Smith often mentioned, France was a cultured, wealthy and complex nation at that time, if less free of onerous government than Britain.

So, at least some of the time, Smith was more melancholic in his view of history, and associated view of the possible futures of humanity, than some might assumes. I’m inclined to associate this with his view of antiquity and of the history of republics. While discussing the undoubted horror of antique slavery, he seems at times to overstate things  bit. Though he mentions an anecdote about the horror of the Emperor Augustus at the cruelty of one of the nobility with regard to his slaves, and a subsequent decision to emancipate them, Smith has nothing to say about the general improvement in the condition of slaves during the Empire, compared with the Republic. Smith does mention the miserable condition of slaves under the republic, but more to suggest that  a republic of free people may be less willing to emancipate slaves than an absolute monarch, than to create an optimistic narrative about the history of slavery. Smith is  very conscious of how republics may fail to give rights to slaves, or to free poor citizens, or the lower orders in general, though not so much it seems to me to advocate monarchy, which he does not, but to suggest that even the antique, medieval and early modern republics were limited and even counter productive in pursuit of liberty, while monarchy inclines to distortions of the nation economy through luxury, palaces, and an over burdensome state.

Adam Smith: Statism and Distributive Injustice in the Wealth of Nations

I’ll be giving a paper at a panel on Adam Smith I convened for the conference Pluralism and Conflict: Distributive Justice Beyond Rawls and Consensus, Fatih University, Istanbul, June 6th-8th 2013. Below is the abstract, which will appear in the conference booklet, as the final paragraph. Preceding paragraphs give the context of debate.

Discussion  of Adam Smith as a political and social thinker tends to be polarised between a minarchist view and a left-liberal/social democratic view. The minarchist view as in the minimal  state position according to which the only public goods the state provides are those of the defence of external frontiers and the maintenance of a criminal justice system to protect individuals against violence, theft and fraud, and in which the state leaves the private economy to distribute income and wealth.. The left-liberal/social democratic view as in the belief that the state can provide public goods of a kind which lead to around half  of national wealth going through state hands, and  the belief that the state should redistribute income and wealth from the richer to the poorer, to reach some predetermined ideal level. That could also be summed up as the difference between the political philosophy of Robert Nozick and that of John Rawls. No one could seriously claim that Smith was a strict minarchist, nevertheless there is a definite tendency for free market libertarians to talk as if Smith did have that view, and remarkably little contribution to the recent growth of interest in Smith as a social, ethical and legal philosopher (Craig Smith is a rare exception,and he is not the most influential Smith scholar around), with many other interests of a cultural, philosophical and scientific kind. Even in the field of institutional economics, the well known book by Daron Acemoglu and James Robinson, Why Nations Fail, which is a tribute to Smith’s most famous book, An Inquiry into the Nature and Causes of the Wealth of Nations, in its title and its approach, is centrist in approach rather than libertarian or classical liberal. At a more absurd level we have Ha-Joon Chang in a recent item in The Guardian associating Smith with Karl Marx or Noam Chomsky equally trying to make Smith out to be a very left socialist.

Chomsky and Chang are certainly not stupid, far from it, so more shame on them for talking in a such a misleading way on this issue. Smith like many free market libertarians now, just about everyone who sails under that banner as opposed to the conservative, or sometimes centrist, establishment types, who use market economics since Smith as a defence of the establishment. Smith was not completely an outside with regard to the British establishment (certainly not in the way he would have been if he had been a Chomsky-Chang type leftist, though as they are faculty at very famous universities they are a bit establishment themselves), but he had a very critical view of the way that the state, and the conservative forces allied with it, use it to protect economic privileges. The examples of economic privilege in Smith are very largely to do with state interference in the economy, with anti-competitive behaviour by colluding groups of merchants firmly linked with state power. Smith’s solution is very largely to withdraw state intervention, not expand it. He was not a strict minarchist, advocating for example state involvement in promoting education, though within what he thought should be largely a private education economy (as noted below). The influential economist and social philosopher Amartya Sen interprets this as justification for a ‘public option’ in United States heath care (which despite popular misunderstanding has long been heavily subsidised and regulated by the federal government) within the insurance options provided by ‘Obama Care’, or more properly the Affordable Care Act. Jumping from Smith’s position on education, which is to recommend far less state involvement in education than is now the case in any country, to a growing state role  in health care in the USA is a perverse argument.

There are perhaps some genuine difficulties in understanding how to apply the thought of an 18th century writer to the present day, but it is not a good procedure to insist that someone who preferred less state should be interpreted as demanding more state now. If we look at a very admirable Smith commentator like Samuel Fleischacker (A Third Concept of Liberty: Judgement and Freedom in Kant and Adam SmithOn Adam Smith’s Wealth of Nations: A Philosophical Companion), we see a tendency to say that Smith must have meant that in the societies of our time which have expanded various areas of state activity enormously since Smith’s time, the state should do more than it is in reducing inequality and other supposed ‘market failures’. Smith was concerned that some forms of inequality flow from manipulation of the political process by the privileged, and had related concerns about balance between geographical  and economic sectors. He was also rather scornful about the luxuries consumed by the rich. However, he never declares economic equality to be an end in itself, and argues for ‘natural liberty’ (liberty as it exists without the state, or maybe through the unplanned growth of institutions) as a basis for the growth of wealth. I can agree with some of the left Smithians that a concept of natural liberty is open to criticism, as if liberty as we know it, and desire it, could exist without any element of state design and sovereign political institutions. However, that is still no reason to say that Smith favoured state designed distributive justice beyond whatever is necessary to support the basics of life (as in the Poor Law of the time which Smith accepted though he did not argue for them), in a civilised society (such as public schemes to promote transport networks, preferably with tolls, as was happening in his time).

There is now a richer and growing ecology of political and social theory between Nozick and Rawls, of which left leaning commentary on Smith is an honourable part. However, for a away of thinking which is as close to Smith as is now possible, it is best to look at what has been labelled variously as Rawlsekiansim, liberaltarianism, Bleeding Heart libertarianism and Arizona libertarianism (various previous posts have explored these, please use search window to find them). That is the growing stream of thought which regards state provided public goods, beyond minarchism, and state action to maintain the living conditions of the poorest, as allowable and desirable, within an overall pattern of economic distribution which comes from the market rather than the state, and where civil society is clearly bigger than the state, and which is suspicious of attempts to always look to the state as the first solution to economic and social problems. Relevant figures here include Jerry Gaus, David Schmidtz, John Tomasi, and  Jacob Levy.

In An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith has much to say about distributive injustice. This has two aspects: injustice towards the poor and injustice between sectors of society. In both cases, the cause is largely the activity of the state rather than the results of markets being left free of state legislation and public schemes. Smith sees injustice as resulting from collaboration between merchants in the same sector, but sees this as more the consequence of state intervention than of free commerce. The state enabling, encouraging and even requiring enterprises to form  corporate bodies in the same sector is the biggest reason for merchants conspiring against the public. The great injustices that Smith mentions to the poor come from the way the Poor Law tends to tie those under suspicion that they might apply for public funds to the Parish of birth only, and the way that requirements for seven years of apprenticeship, before practising a craft, limits the chances to the poor to improve their economic situation. Another source of injustice to the poor is the application of taxes on the necessities of life. Smith’s favours taxing luxuries rather than necessities, but he nowhere calls for progressive (graduated) taxes, and only a tortuous interpretation of his work can support such an idea. Public debt results in a distributive injustice for Smith, which rests on the assumption that ‘natural liberty’ is a better basis for political economy than state interventions. Public debt leads to a forced transfer of income from the productive sectors of the economy to creditors, that is the financial sector of the economy. The solution that Smith advocates is reducing debt, which includes reducing public expenditure, particularly on war. There is a welfare, or ethical, aspect to Smith’s political economy which includes a bias towards the interests of the poor, and against wealth that arises from the less productive parts of the economy. However, these aspects of his thought do not lead him to state designed schemes for distributive justice. Rather he demands an end to those state activities which harm the poor, and the most productive parts of the economy. The assumption is that state action is to very limited, and beyond education, which Smith still  believes should be largely private, he does not suggest expanded state activity.

Virtue, Economy and the Self: 5 Links

My thoughts for this post came about in the most immediate sense from Will Wilkinson: a post at his blog Will Wilkinson, entitled Now Let us Praise Results-Facilitating Virtue, dated 20th November 2009. Wilkinson is an economics and public policy commentator, with a background in philosophy.  He is responding to an blog post where the George Mason economist Tyler Cowen praises one of his colleagues, Robin Hanson, who responds in his own blog by arguing for the importance of praising consequences of individual actions, rather than the individual concerned.  Links to all of that in Wilkinson’s post.  What Wilkinson gives in reaction to all that is a beautiful little essay on character, virtue, and advantages to the economy.  As he explains, ‘virtue’ as an idea in ethical though refers to the character traits which the good individual forms and which benefit society.  What Wilkinson emphasises is the collective economic benefits of individuals in the society with virtue.


Since for non-philosophers ‘virtue’ amy seem like something to do with abstract moralising, it is worth explaining that ‘virtue ethics’ refer mores to a cultivation of individual excellence which serves the ‘virtuous’ individuals and society as a whole.  Virtue on this account is really more to do with strength and constancy of character, rather than giving priority to the demands of external moral obligations.  The Antique tradition of virtue was taken up in Medieval Christian philosophy, most notably in the thought of Thomas Aquinas; and at that point it maybe acquires a sense of moral imposition, though that is something of a brutal generalisation.   That antique sense of virtue has been increasingly discussed in philosophy since the 1950s, along with an increasing recognition that it was still very present in  18th and 19th Century philosophy.


For a very handy summary of Aristotle’s ethics by a leading commentator, Roger Crisp, go this podcast posted at the Faculty of Philosophy, Oxford University.  For an equally admirable summary of some later developments in Antique ethics, around Seneca and Stoicism, click here for a link to a recent podcast of am interview of Rick Benitez conducted by Alan Saunders for his PhilosophyZone radio show.


The virtue ethics tradition, as mediated by the Antique Stoics, was a major influence on Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations, as well as in his ethical treatise, The Theory of the Moral Sentiments.  For a great discussion of this click here for a pdf of Deirdre McCloskey’s paper ‘Adam Smith, the Last of the Former Virtue Ethicists’.  McCloskey is a professor of economics, history, English and communications at the University of Illinois, Chicago, which gives an idea of the way that she integrates different areas of the humanities and social sciences.  McCloskey points out that Smith’s philosophy and economic thought are shaped by Stoicism and theories of the virtues, and not just the virtue of prudence.  She also has a very good sketch of how economists, and the culture in general, lost sight of this kind of integration until philosophers revived Antique virtue theory.


One possible fault with McCloskey’s analysis is in the title, in its suggestion that Smith was the last of the virtue theorists.  This has some justification if we think of how Smith’s thought is distinguished from what was then the emergent moral school of Utilitarianism which very definitely looks at ethics from the point of view of the consequences of actions, and not quality of character.  However, there is at least one major candidate amongst late 19th Century philosophers for the label of virtue ethicist, Friedrich Nietzsche.  We can see his philosophy as a return from theories of external moral excellence to a theories of individual excellence.  That’s a rather large question I can’t deal with here, but an excellent brief summary of why Nietzsche might be considered a virtue theorist can be found in Lester Hunt’s paper ‘The Eternal Recurrence and Nietzsche’s Theory of Virtue’, click for the pdf.

I expect to return to these issues very soon in relation to Benedict de Spinoza and Michel Foucault.