Tuesday, January 22, 2008

Sam Fleischacker on Adam Smith on Inequality in Commerce

The 2nd annual Adam Smith Review contains a multitude of excellent scholarship and debate from well-kent names among leading Adam Smith authors.

In one of three symposia (in which several authorities write short comments on an author’s latest book and the author responds) Samuel Fleischacker’s On Adam Smith’s Wealth of Nations: a philosophical companion (2004) is discussed by Ryan Patrick Hanley, Jerry Z. Muller, Frederick Neuhouser and David Raynor.

It would be invidious to capture the essence of the debate. Instead I wish to quote from Samuel Fleischacker’s response to a topic that certainly interested me in my new book, Adam Smith: the moral philosopher and his political economy (in press Palgrave) and I think is of contemporary interest.

The theme since the 18th century, with Rousseau in particular and with much 21st century comment is inequality. Rousseau contrasted 18th century inequality with the freedom alleged enjoyed by the hunter in early human society and the equality that he imagined prevailed. Marx or Engels called this ‘primitive communism’. Adam Smith called it the equality of poverty (and added that these hunting tribes of North America/Africa were ruled by ‘princes’ with absolute power over their equal subjects).

Here is a short extract from Sam Fleischacker’s response (at 600 words I am close to trespassing on the copyright boundary)

When we turn to pastoral and agricultural societies, we find a vast increase in inequality over the hunter-gatherer stage. Smith say in his lectures on jurisprudence that in pastoral societies ‘the inequality of fortune makes a great odds in the power and influence of the rich over the poor than in any other’ (LJA IV.8), and he details and why this is so both there an in WN (III.iv.4-7). In WN, it is clear that much the same sort of inequality continues into agricultural societies, and this is a point of great importance for Smith’s critique of feudalism. The decline of feudalism is above all a decline in the political power of large landlords, and an increase in the number of people in society whi have some political say, as well as in those who are reasonably ‘independent’ of those for whom they work. So the rise of commercial society brings with it an increase in equality – an equality of exactly the kind that most interested Rousseau: social and political equality – over the types of society that preceded it. That doesn’t mean that commercial society is equal relative to hunter-gatherer society, but the latter, as we saw, was a condition of great unfreedom. There is therefore a very good case to be made, if Smith is right about the empirical facts, that commercial society provides the best distribution of freedom the world has ever seen.

This transforms the difference between Smith and Rousseau into a difference over the relevant benchmark against which to measure the inequalities of commercial society. Rousseau could still hold that we should compare commercial society, not with past actual societies, but with the condition of self-sufficiency he imagines in the Second Discourse. Smith would probably respond by noting that that condition never existed, and asking why, therefore, we should think it possible. But this is not a fully adequate response, since Rousseau could say in turn – and this is one reading of what he might mean by the facts not being relevant to his project – that anything we can imagine is possible for us, that we should not limit ourselves, in figuring out what sort of society we want, to what human beings have done in the past but seek rather to create something new, something in accord with our ideals rather than our history.

And it is here, at the level of methodology, that I think Smith has his deepest and most interesting answer to Rousseau. Smith is not opposed to social reform, to changing society when we see it as seriously wrong in some respect – and he has in fact some proposals for reducing inequality – but he rejects the idea that we can determine what those changes should be without doing history. He rejects the idea that our imaginations alone can be an adequate guide to social change. I take it that that is indeed the fundamental reason why he put all his efforts as a social theorist into a book like WN, rather than writing up a speculative constitution, as his friend Hume did, or responding directly to the Second Discourse. The imagination, left alone, is unreliable, and may lead us to fantasise away the basic limitations of human nature – as Smith, I am sure, thought Rousseau had done when he imagined a world of people who were both independent of one another and materially self-sufficient. So while the imagination is useful (both Smith’s moral theory and his political economy can rely on imagination in fundamental ways) it needs to be constrained by a close examination of actual history. History is a way of distancing ourselves from our own fantasies about human nature; it provides an external check on introspection.”

Sam Fleischacker, 2006. On Adam Smith’s Wealth Of Nations, Response’ in The Adam Smith Review, ed. Vivienne Brown, for the International Adam Smith Society, Routledge, Oxford

I consider this a brilliant exposition of the important theme of history running through all of Adam Smith’s works. My independent version in Adam Smith (2008) is bare-boned in contrast, though it states the main point. Samuel Fleischacker is a philosopher and writes beautifully; he also writes with a great command of Adam Smith’s oeuvre because he has grasped his philosophy of history. I certainly owe a great deal to him.


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