Tuesday, July 22, 2008

Adam Smith on Justice at Doha

Selected quotatiosn from Adam Smith may be used to give a distorted version of what Adam Smith actually said and the mischievous misapplication of Smith's authority to curent events can become misleading.

Paul Rayment writes in guardian.co.uk (The Guardian, London 21 July) HERE:

Why a Doha breakdown wouldn't spell disaster. Ignore the urgent rhetoric surrounding the Doha round of trade talks. It's time for a rethink"

For those ministers gathering in Geneva, the voice to listen to is still Adam Smith's: "Society may subsist, though not in the most comfortable state, without beneficence; but the prevalence of injustice must utterly destroy it…. Justice is the main pillar that upholds the whole edifice". The current state of the negotiations shows little sign of coming anywhere near this standard.
Far from being a disaster, a failure of the Doha round will provide countries, at all levels of development, with a much-needed incentive and opportunity for reflection and debate on how to restore and strengthen the basic principles of the world trading system in such a way that will not only meet Smith's criterion but also recover the broader and longer-term multilateral vision of those who shaped the original structure of international institutions in the late 1940s

This is another case of a quotation from Adam Smith being stretched too far. Here is the fuller version of what Smith wrote:

Society, however, cannot subsist among those who are at all times ready to hurt and injure one another. The moment that injury begins, the moment that mutual resentment and animosity take place, all the bands of it are broke asunder, and the different members of which it consisted are, as it were, dissipated and scattered abroad by the violence and opposition of their discordant affections. If there is any society among robbers and murderers, they must at least, according to the trite observation, abstain from robbing and murdering one another. Beneficence, therefore, is less essential to the existence of society than justice. Society may subsist, though not in the most comfortable state, without beneficence; but the prevalence of injustice must utterly destroy it.

Though Nature, therefore, exhorts mankind to acts of beneficence, by the pleasing consciousness of deserved reward, she has not thought it necessary to guard and enforce the practice of it by the terrors of merited punishment in case it should be neglected. It is the ornament which embellishes, not the foundation which supports the building, and which it was, therefore, sufficient to recommend, but by no means necessary to impose. Justice, on the contrary, is the main pillar that upholds the whole edifice. If it is removed, the great, the immense fabric of human society, that fabric which to raise and support seems in this world, if I may say so, to have been the peculiar and darling care of Nature, must in a moment crumble into atoms.

In order to enforce the observation of justice, therefore, Nature has implanted in the human breast that consciousness of ill-desert, those terrors of merited punishment which attend upon its violation, as the great safe-guards of the association of mankind, to protect the weak, to curb the violent, and to chastise the guilty. Men, though naturally sympathetic, feel so little for another, with whom they have no particular connexion, in comparison of what they feel for themselves; the misery of one, who is merely their fellow-creature, is of so little importance to them in comparison even of a small conveniency of their own; they have it so much in their power to hurt him, and may have so many temptations to do so, that if this principle did not stand up within them in his defence, and overawe them into a respect for his innocence, they would, like wild beasts, be at all times ready to fly upon him; and a man would enter an assembly of men as he enters a den of lions

(Moral Sentiments, II.ii.3.3-4: p 86; The words selected by Paul Rayment are in bold. You should read the whole chapter to confirm what Smith meant by justice.)

Paul Rayment, former director of economic analysis at the UN Economic Commission for Europe. Co-author with Richard Kozul-Wright of: The Resistible Rise of Market Fundamentalism, Zed Books, 2008, stretches Adam Smith’s vital point that a society must have a tolerable system of justice in it for it to survive to misapply it to today's international negotiating process.

Justice is a negative virtue compared, say, to beneficence, a positive virtue. To behave according to positive virtues, you have to do something, in this case, to act beneficently, and in the absence of doing so you breach the virtue, again in this case, you are guilty of ‘the blackest ingratitude’, but cannot be forced to act beneficently. However, the negative virtue of justice must be conducted on pain of punishment (even, in 18th-century Britain, on pain of hanging).

Smith clearly is talking about justice under laws in a single society applying to a population within it. Paul Rayment is stretching ‘justice’ in Smith’s case to cover today’s international ‘society’, like, say the United Nations negotiations, which are not enforceable by laws in a system of justice in the same sense as applies within a national, or local, society.

Without specific laws – such as laws that state that certain countries must accept the demands of other countries regarding their trade relations, a wholly wooly idea and one given to serious irregularities – it follows that countries have rights to accept or reject the proposals of other countries and agreement can only be reached by each country volunteering to accept proposals, perhaps suitably amended, in a process otherwise known as negotiation.

Paul Rayment presumably believes that certain countries should, because they ‘ought’ to, accept certain demands from certain other countries, which is fine as a point of view, but it is not Smith’s moral philosophy of justice. Countries that block all progress in place of accepting what is acceptable to others (and this applies to all countries and not just one side only) may be guilty of short-sighted politics, which may be a pity for all of them, but it is not a breach of the negative virtues of justice according to Adam Smith.

In so far as they are contesting trade protection as in Doha, a favourite topic for Adam Smith, I am sure where he would make suggestions in matters of trade policy. He would favour a ‘gradual’ lifting of trade barriers (WN IV.ii.12-4: pp 457-72) to avoid severe disruptions and privations among the labourers’ families affected in all countries affected by such changes. He would also favour gradual changes in the injustices (breaches of domestic laws) in those countries where the gains from trade, and from domestic production, are stolen by their rulers for themselves from their own people.

It is a consequence of such behaviour that the labouring and unemployed poor remain so, and this alone is a situation of instability, military coups, political repression and, in too many case, civil war, from which their societies ‘crumble’, their state’s ‘fail’, and their common atrocities feature so regularly on the world’s television screens.

The above is the proper application of Paul Rayment’s truncated quotation from Adam Smith’s theory of justice in Moral Sentiments.


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