Friday, October 20, 2006

Mandeville was a Predecessor Not a Precursor of Adam Smith

Mark Thoma over on Economist’s View provides a helpful service to economists generally with his publishing of ‘The Grumbling Hive: or Knaves Turn’d Honest’, a poem by Bernard Mandeville (1705).

Visit his interesting Blog at: and scroll down. You’ll find the poem in full. It is worth reading if you have not got any editions of Mandeville’s (1670-1733) famous book, The Fable of the Bees, or: Private Vices, Publick Benefits (1714). You can get a low priced 2-volume edition of it from Liberty Fund.

Why is it important? Well, read the following from Mark Thoma:

In 1714, Bernanrd Mandeville published The Fable of the Bees: or Private Vices, Publick Benefits in which he suggested that private vices that were at odds with the moral code at the time would, if practiced by all, result in the greatest public good. Behaviors such as selfishness, greed, lavish consumption, and acquisitive behavior are necessary for a thriving and industrious economy. Thus, The Fable is often seen as a precursor to the idea that allowing individuals to pursue their self-interest without interference will result in the greatest common good.”

Sound familiar? Yes, Mark has found the source of the nonsense normally attributed to Adam Smith in the Chicago version of what Smith was allegedly about. (In what follows I do not criticise Mark Thoma for other people's interpretation of his comments.)

Readers of Moral Sentiments (TMS VII.ii.4.114: p 306-14) will know the extent to which Smith criticised Mandeville’s view of human behaviour and its alleged consequences. His mentor, Professor Francis Hutcheson lectured strongly against Mandeville’s theory of private vices, as was to be expected from a moderate protestant Church minister, but Smith went deeper and criticised the idea that people being selfish would necessarily achieve social benefits – a wholly erroneous ideas nurtured by the epigones of Chicago in their infusion of self-interest in neo-classical economics.

That there is an association in the minds of some, who read too fast, between Smith and Mandeville is hinted at by Thoma in his statement that Mandeville is 'often' een as a ‘precursor’ of the idea that ‘allowing individuals to pursue their self-interest without interference will result in the greatest common good.’

As a view of a possible interpretation of Mandeville, I have no quarrel, but in so far that readers (moving too quickly again) interpret this statement as a view in common with Smith’s actual position, I admit to a most strenuous objection.

Self interest (undefined) can and often does drive individuals to act against the ‘common good’. When merchants and manufacturers strive for monopolies they act in their self interest; so do criminals, and so do spoilers of the ‘commons’, and so. By no means is it the case that self-interest is always necessarily benign (remember there is no invisible hand beyond the metaphor that applies on certain cases but not in all).

The problem lies in the definitive ‘will result in the common good’, not even ‘may result’ or ‘might result’, but ‘will result’, no doubts about it!

For a scholarly refutation of the notion that Mandeville was a ‘precursor’ of Smith’s views on self-interest and any suggestion that in Smith there is any notion that self-interest or Mandeville’s ‘selfishness’ ‘will result’ automatically for the common good, see Pierre Force, Self-Interest before Adam Smith: a genealogy of economic science, Cambridge University Press.

So, when people assert that self-interest leads individuals to act for the common good – the central theorem of neo-classical economics – it may produce impressive results mathematically and Mandeville’s poem may provide amusing literary comfort too, but neither describes the reality as outlined by Adam Smith. Of course, it could be Adam Smith was wrong (I think he was right) but what is not right is to associate Adam Smith with the central theorem of neo-classical economics.

Chicago Adam Smith is Bernard Mandeville in drag, dressed up in clothes that do not belong to him, nor do they fit him.


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