Monday, March 26, 2007

Two Funerals and Das Problem

Chaim Steinmetz – Happiness Warrior (a Blog billed as ‘Articles by a Fortyish Orthodox Rabbi in Montreal’) writes (elegantly):

“Yes, I have a problem with capitalism. And so did Adam Smith.

Adam Smith, the 18th century Scottish philosopher, is considered to be the founding father of capitalism. In his book The Wealth of Nations, he notes that society is most productive when structured around the self interest of every individual. Smith says that:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest."

So free enterprise is the best way to structure society. Let the market decide what’s good or bad, and whether Yankee logos belong on coffins.

But at the same time, Smith wrote another book, The Theory of Moral Sentiments. In it, he sees society as based on mutual love and sympathy:

It is thus that man, who can subsist only in society, was fitted by nature to that situation for which he was made. All the members of human society stand in need of each others assistance, and are likewise exposed to mutual injuries. Where the necessary assistance is reciprocally afforded from love, from gratitude, from friendship, and esteem, the society flourishes and is happy.

So in one book, Smith says society is best structured around self interest. In another he says it is best structured around love and gratitude. So which is it?

This question, known as the “Adam Smith Problem”, is one that has baffled scholars. Clearly, Smith may have embraced laissez faire capitalism, but also realized a society structured around pure self interest would lose its soul. Or, to apply it (rather crudely) to my case, capitalism might produce a New York Yankee coffin, but capitalism should not have the final word. Our spiritual values should make the ultimate decisions.”

I wouldn’t presume to comment on the Talmud or Torah (though I remember some interesting questions in them that I often used to illustrate early ideas in statistical probability for students) without finding out a great deal more about them than Chaim Steinmetz has found out about Adam Smith before pronouncing on what he is alleged to have written.

That he considers that Adam Smith had a problem with ‘capitalism’ is acutely wrong – he never knew anything about capitalism, a phenomenon from the mid-19th century, back projected onto him by 20th century neoclassical economists and graduates who passed through Economics 101 as taught by graduates from Chicago. Smith wrote about commercial markets, not about capitalism, an economic form driven by finance capital, either accumulated or financed by banks, and not the result of savings out of personal income.

Taking Smith’s model of society, through the ‘four ages of man’ from hunting, through shepherding, farming and (‘at last’) commerce, accommodates the notion that “society is most productive when structured around the self interest of every individual” throughout each age, and not just that of commerce.

He asserted (Lectures in Jurisprudence, 1763-4 and Wealth of Nations, 1776) that the behavioural traits of ‘seeking to better oneself’ (‘from cradle to the grave’), of the ‘propensity to truck, barter, and exchange’ (from the beginnings of humans), and the ‘division of labour’ (requiring the first formations of capital stock – subsistence) were always present in societies of humans. As were (Theory of Moral Sentiments, 1759) the moral sentiments (sympathy, concerns for the judgements of others, via the impartial spectator) which society held up to all as through a mirror.

Hence, he didn’t say that ‘let the market decide what’s good or bad’ nor his Chaim’s allusion correct in: “Clearly, Smith may have embraced laissez faire capitalism, but also realized a society structured around pure self interest would lose its soul.” For a start he did not ‘embrace laissez-faire capitalism’; he never used the words ‘laissez-faire’ (nor ‘capitalism’). For the culprits, please refer to the gentlemen and ladies from Chicago.

In both Moral Sentiments and Wealth of Nations he stated the need for justice, curbs on the self-interested proclivity for monopolists for protectionism, for conspiracies against consumers, and called for the stiff application of the laws of justice against self-interested criminals, fraudsters, assaulters against the person, thieves, and such like. He wasn’t too fond of self-interested princes fighting wars for trivial vain-glory ends, nor for chartered trading companies, and mercantile colonies.

Chaim Steinmetz is not in possession of the full facts (i.e., a politer way of saying he is wrong) when he concludes that “the “Adam Smith Problem”, is one that has baffled scholars”. It hasn’t. It baffled some readers who didn’t know of the existence of the student notes of Smith’s Lectures, found respectively in 1895 and 1958, or who haven’t read them since they were widely published in 1982, and it may baffle those who have picked up ‘the problem’ second-hand. It was never a problem to Smith and it isn’t to those familiar with his books.

On the issue of whether persons should leave instructions to have their coffins carry the logo of a sports team, in this case ‘the Yankees’, if it is not illegal, causes no offence to his immediate family, and reflects their passions during life, I am prejudiced in favour of Liberty.

Recently, I have attended several funerals with ‘unorthodox’ ceremonies. I would never presume to tell others how they should make that journey, or who should be present, or not, as the case may be. Smith criticised David Hume’s choice of grave stone, considering it too ornate for his own taste and his sense of frugality in matters of using funds for unproductive labour.

[Read Rabbi Chaim Steinmetz at:


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