Monday, September 10, 2007

Rich Landlords Could Do No Other

Steve J’ posts this on Radamisto here (9 September):

It's obviously unrealistic, but Smith did believe in a more equitable distribution of wealth and thought it would occur naturally.

From his The Theory of Moral Sentiments, ed. by Knud Haakonssen, pp. 215-16:

"The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces."

That Smith thought there should be a more ‘equitable distribution of wealth’ (defined as the ‘necessaries, convenience, and amusements of life’) is correct.

I am less sure it had anything to do with ‘an invisible hand’, the metaphor used by Adam Smith to describe what happened naturally and of necessity. The landowners did not till their fields; the labourers’ did that and had to receive at least their subsistence to continue to survive and to breed and for enough children to survive to replenish the labour force each generation.

If the landlords did not do at least that, they would themselves be at risk of diminishing their wealth, and at risk from neighbouring landlords who did do enough to replenish the labour force and who would covet their weaker neighbours and take their land by force.

In short, as explained in my paper, ‘Adam Smith’s Invisible Hand: from metaphor to myth’ (2007: for the History of Economics Society, 34th Annual Conference, GMU, June), landlords could do no other.

Adam Smith laid great store by society’s progress to opulence, which would benefit all of society’s Great Orders. Growing employment would raise the money wages of the labouring poor, the division of labour would extended and deepen, reducing costs per unit and thereby raise the real wage, and the propensity to truck, barter, and exchange, would promote social harmony.

Reading Moral Sentiments, Wealth Of Nations and Lectures On Jurisprudence shows Adam Smith’s unity of his ideas, and will make him less unknown.


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