Monday, July 30, 2007

No Role for an Invisible Hand in the European Conquest of the Americas

I was checking over a pile of notes as I round off my manuscript on ‘Adam Smith: the moral philosopher and his thinking’ (comments on the proposed title would be welcome, too), and I came across this reference which I looked up to check that my scribble was correct:

A project of commerce in the East Indies therefore gave occasion to the discovery of the West. A project of conquest gave occasion to all the establishments of the Spaniards in those newly discovered countries. The motive which excited them to this conquest was a project of gold and silver mines; and a course of accidents, which no human wisdom could foresee, rendered this project much more successful than the undertakers had any reasonable grounds for expecting.’ (Wealth Of Nations IV.vii.b.21: p 564)

This is most interesting in view of my discourses on the myths of the invisible hand that have appeared of late and which still clutter public claims about Adam Smith. What would a believer in Adam Smith’s ‘theory of the invisible hand’ make of this paragraph?

Would you claim that this is an example of an invisible hand working? If so, it would stretch the invisible hand leading a group of Europeans to sail west for 3,000 miles in search of a route to India and China to break the Venetian monopoly of the eastern spice trade via Egypt; finding a large continent in the way, putting up settlements; behaving as soldiers everywhere at that time behaved, with wanton cruelty, rapine and looting; turning defenceless local inhabitants into slaves to work in the mines; and finally a century or so later, plundering gold and silver and shipping it Spain and then the rest of Europe. If it was a 'blessing in disguise', it was, as Winston Churchill once said, 'well disguised'. Does it sound plausible?

No, I don’t think so.

Is it therefore a ‘linked chain of intermediary events’ that have no end-purpose in sight, which happened as recorded, the consequences of which were not the result of anybody being ‘led’ in any direction. Greed for gold and silver, which are not part of the wealth of a society, a role reserved for the products of land and labour manifested in the ‘necessities, conveniences, and amusements of human life’, caused substantial and shameful human distress and disorder.

Fortunately, in the Northern part of the American continents, no gold or silver was found in the British, Dutch, French and Danish colonies (until the 19th century on the Pacific side of it) and they were built instead on farming, which produced real wealth.

There was also a fair amount over the three centuries following of ‘substantial and shameful human distress and disorder’. But again, there is no role for ‘an invisible hand’ leading humans to found a thriving economy. Smith didn’t claim that there was and he didn’t use the metaphor to describe the ‘intermediate chain of events’.


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