Sunday, March 23, 2008

Brad Delong on Karl Marx and Adam Smith

Sic Semper Tyrannis (‘just another weblog)
Nathanjmorton reports: on ‘Brad Delong on Karl Marx’ here:

First, Marx the economist was among the very first to get the industrial revolution right: to understand what it meant for human possibilities and the human destiny in a sense that people like Adam Smith did not.

Second, Marx the economist got a lot about the economic history of the development of modern capitalism in England right–not everything, but he is still very much worth grappling with as an economic historian of 1500-1850.’

[Original was written by Brad Delong: “Karl Marx as Moralist-Prophet: Morning Coffee for Good Friday”

I don’t disagree often with Brad Delong but I have some concerns with his comparison of Karl Marx to Adam Smith.

There is much debate about the origins of the so-called ‘industrial revolution’ and even the dates when its first appeared and reached its full effects. That Karl Marx was able to make a full account of its effects on the economy, and later, on the world, is not difficult to explain. By the time that Marx was writing about it (from 1848), the effects of its substantial impacts were almost self-evident. By the time that Adam Smith was researching the history of the British economy (1748-76) there were precious few signs that indicated what was beginning to happen.

Smart modern economists, with the full panoply of research tools available to them on their desktops, blame Smith for not being aware, or worse, deliberately ignoring, the ‘many signs’ of what became known as the ‘industrial revolution’. They ignore the evident facts that a single local large manufacturer (Carron Iron, near Falkirk), mainly casting iron products using known technology, did not a ‘revolution’ make.

Adam Smith knew its owner, Dr John Roebuck, and exchanged correspondence with him as well as meeting him over the years, and it seems Roebuck didn’t know he was riding point for the coming revolution, or if he did (unlikely), Smith did not pick up his proclamation. Adam Smith looked backwards to what caused Britain to be in the shape it was in, and seldom looked forwards to what was likely to happen.

One exception to this lifetime record, was his ‘prediction’ that the American former colonies would be the world’s largest economy, and, if Britain and the colonies had joined together in 1776 into a representative parliament, then located in London, the government would move its location to New York by the late 1880s.

There is an interesting debate about these issues in C. P. Kindleberger, ‘The Historical Background: Adam Smith and the Industrial Revolution’, in Thomas Wilson and Andrew S. Skinner, The Market and the State: essays in Honour of Adam Smith’, Clarendon Press, 1976. Kindleberger debates with R. M. Hartwell on whether Adam Smith knew or should have known about the ‘industrial revolution’. I discuss these issues in my earlier book, Adam Smith’s Lost Legacy, Palgrave Macmillan, 2005.

On the evidence I find that Adam Smith was not aware, nor could be (nobody else was!), about what ‘the industrial revolution’ meant ‘for human possibilities and the human destiny’ in 1776. Karl Marx in the mid-19th century was able to examine and report his view of what ‘the industrial revolution’ meant ‘for human possibilities and the human destiny’in detail from, among other sources, Parliamentary papers, articles, and official reports by the box load.

If Marx is worth reading ‘as an economic historian’ of the events in Western Economies in the critical period of ‘1500-1850’, I would have to say that Marx also had the advantage of reading what many writers in the Scottish Enlightenment, including Adam Smith, had written about this period. Adam Smith centred his entire analysis of the rebirth of the commercial societies of the classical centuries of Greece, Rome, and others that preceded them, on the period after the interregnum centuries from the 5th to the 15th, when commerce (‘at last’) revived (Smith’s 4th Age of Man), and in Britain in particular, became the most advanced historically.

You can read Adam Smith’s rich analysis in his Lectures On Jurisprudence [1762-3] in the Oxford University edition of 1978 (also reproduced in the 1982 Liberty Fund edition, available at an economical price; check Amazon). Much of this is also expressed in Wealth Of Nations too.

Unless you are familiar with Smith’s social-evolutionary approach to the economy, much of his powerful analysis in Wealth Of Nations is diluted.

To this end, I am reading the final proofs (shameless plug) of my new book, Adam Smith: a moral philosopher and his political economy, (July 2008, Palgrave Macmillan) in which I focus upon the re-emergence of the commercial economy. I think you will find that Adam Smith's work in this area is every bit as good (shameless preference) as Karl Marx who wrapped his analysis in his skewed version of Adam Smith’s ‘Ages of Man’ trajectory.

Apart from this, there is a strong case for you book-marking Brad Delong’s weblog here.


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