Smith and Judeo-Christian Religions
The notion that the road to ‘maximising’ a nation’s wealth is to combine the ‘invisible hand’ with the Judeo-Christian Bible cannot be taken seriously, though Thomas E. Brewton advocates it in his posting of 20 April 2005, “Adam Smith vs. Robert Reich”, on www.IntellectualConservative.com (‘the only site on the web devoted exclusively to intellectual conservatism’) from Phoenix, Arizona. IC is produced by Rachel, Andrew and Sandra Alexander (Rachel is a lawyer) and their names suggest Scottish roots in the family.
As usual the ‘invisible hand’ is promoted from a single mention in Adam Smith’s Wealth of Nations into an all embracing maxim, even into a fundamental law of economics, to be let loose everywhere and without restraint.
Smith did not conclude this from his use of the metaphor on a single occasion to explain why the normal tendency of ‘merchants and manufacturers’ to prefer to keep their capital invested locally, where they could watch over it, rather than invest abroad or in the carrying trade, where they could not watch over it so closely, had the effect of promoting the national wealth, which they did not intend.
So individual inclinations produce “the greatest value [where] he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” [Wealth of Nations, IV.ii.9: 456]
To generalise from a single observation, aimed at making a different point, into the general ‘law’ of economic policy is absurd, especially when the law is interpreted to mean that all actions of modern business should be without constraint on the grounds that the invisible hand is something real, universal and constant.
In many other cases, it may not be the case at all, and Smith spent whole chapters of Wealth of Nations discussing the cases where merchants and manufacturers should be constrained because of their tendency to create monopolies under the impetus of their real, universal and constant’ intention of promoting their own gain.
Tomas Brewton goes further in his sweeping generalisations about how economies function:
“Our Judeo-Christian heritage admonishes us both to love the Lord God with all our heart, soul, mind, and strength, and, vitally important, to love others as we want to be loved. It calls on everyone individually to do his best to deal decently, pleasantly, and honestly with his fellows.”
He concludes:
“An ‘invisible hand’ maximizes a nation’s economic and social welfare, when individuals are permitted the maximum possible economic liberty and when they are self-restrained by the moral dictates of our Judeo-Christian heritage. One cannot function effectively without the other.” (For the full text of the article visit: www.intellectualconservative.com)
The existence of several capitalist non-Judeo-Christian countries (Japan, Taiwan, Singapore, Malaysia, China, India) could be taken as evidence that Brewton’s generalisation is suspect. As could the existence of several nominally Judeo-Christian countries in Latin America that are not performing as well as they might could be taken as counter-evidence. Past contributions to economic and social evolution from parts of the globe before Judeo-Christian beliefs were dominant in the West could also be called upon as evidence (Greece, Persia, India, China, Egypt). The historical map is not so clear-cut and, as ever, choosing your base line can affect the outcome.
Given also that Brewton, and indeed, IntellectualConservative.com, features David Hume (Smith non-religious friend) as a major contributor to his false story of the necessary inextricable intertwining of capitalism and Judeo-Christian religious beliefs conveniently mentions not a word at Hume’s persecution by the same Christian zealots during his lifetime.
Smith avoided persecution because he ensured he never gave offence deliberately to the zealots
Brewton also intertwines Adam Smith’s economics of his version of the ‘invisible hand’ with the usual false attribution to Smith of so-called laissez faire economics. But that is an old song already questioned here many times, so on this occasion I will let it pass. (It is covered in greater detail in “Adam Smith’s Lost Legacy”, as well as other posts below.)
As usual the ‘invisible hand’ is promoted from a single mention in Adam Smith’s Wealth of Nations into an all embracing maxim, even into a fundamental law of economics, to be let loose everywhere and without restraint.
Smith did not conclude this from his use of the metaphor on a single occasion to explain why the normal tendency of ‘merchants and manufacturers’ to prefer to keep their capital invested locally, where they could watch over it, rather than invest abroad or in the carrying trade, where they could not watch over it so closely, had the effect of promoting the national wealth, which they did not intend.
So individual inclinations produce “the greatest value [where] he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.” [Wealth of Nations, IV.ii.9: 456]
To generalise from a single observation, aimed at making a different point, into the general ‘law’ of economic policy is absurd, especially when the law is interpreted to mean that all actions of modern business should be without constraint on the grounds that the invisible hand is something real, universal and constant.
In many other cases, it may not be the case at all, and Smith spent whole chapters of Wealth of Nations discussing the cases where merchants and manufacturers should be constrained because of their tendency to create monopolies under the impetus of their real, universal and constant’ intention of promoting their own gain.
Tomas Brewton goes further in his sweeping generalisations about how economies function:
“Our Judeo-Christian heritage admonishes us both to love the Lord God with all our heart, soul, mind, and strength, and, vitally important, to love others as we want to be loved. It calls on everyone individually to do his best to deal decently, pleasantly, and honestly with his fellows.”
He concludes:
“An ‘invisible hand’ maximizes a nation’s economic and social welfare, when individuals are permitted the maximum possible economic liberty and when they are self-restrained by the moral dictates of our Judeo-Christian heritage. One cannot function effectively without the other.” (For the full text of the article visit: www.intellectualconservative.com)
The existence of several capitalist non-Judeo-Christian countries (Japan, Taiwan, Singapore, Malaysia, China, India) could be taken as evidence that Brewton’s generalisation is suspect. As could the existence of several nominally Judeo-Christian countries in Latin America that are not performing as well as they might could be taken as counter-evidence. Past contributions to economic and social evolution from parts of the globe before Judeo-Christian beliefs were dominant in the West could also be called upon as evidence (Greece, Persia, India, China, Egypt). The historical map is not so clear-cut and, as ever, choosing your base line can affect the outcome.
Given also that Brewton, and indeed, IntellectualConservative.com, features David Hume (Smith non-religious friend) as a major contributor to his false story of the necessary inextricable intertwining of capitalism and Judeo-Christian religious beliefs conveniently mentions not a word at Hume’s persecution by the same Christian zealots during his lifetime.
Smith avoided persecution because he ensured he never gave offence deliberately to the zealots
Brewton also intertwines Adam Smith’s economics of his version of the ‘invisible hand’ with the usual false attribution to Smith of so-called laissez faire economics. But that is an old song already questioned here many times, so on this occasion I will let it pass. (It is covered in greater detail in “Adam Smith’s Lost Legacy”, as well as other posts below.)
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