Thursday, August 14, 2008

Once More on Murray Rothbard and his Lack of Knowledge About Adam Smith

I have commented on Murray Rothbard’s writings on the division of labour in Wealth Of Nations before and return to it only because his introduction to "Freedom, Inequality, Primitivism, and the Division of Labor," which he wrote in 1970 and published in 1991, is republished by Lew Rockwell HERE:

Rothbard writes: “The Division of Labor”

I have come to realize, since writing this essay, that I overweighted the contributions and importance of Adam Smith on the division of labor. And to my surprise, I did not sufficiently appreciate the contributions of Ludwig von Mises.
Despite the enormous emphasis on specialization and the division of labor in the Wealth of Nations, much of Smith's discussion was misplaced and misleading. In the first place, he placed undue importance on the division of labor within a factory (the famous pin-factory example), and scarcely considered the far more important division of labor among various industries and occupations.”


Smith didn’t place ‘undue importance on the division of labor within a factory (the famous pin-factory example), and scarcely considered the far more important division of labor among various industries and occupations’. Some readers of Wealth Of Nations placed that ‘undue importance’ on the pin factory themselves; then they ignored the rest of the chapter.

Smith gives a single paragraph to the pin factory (WN I.i.3: pp 14-15). If Murray Rothbard gave ‘undue importance’ to the pin factory that could only be because he didn’t read the rest of the 11 chapters that make up the chapter (I suspected this was the case when I wrote about Rothbard’s misunderstandings of the chapter a couple of years ago on Lost Legacy – I think we have proof of that suggestion now).

Look at the next paragraph in Wealth Of Nations:

The separation of different trades and employments from one another, seems to have taken place, in consequence of this advantage…” (WN I.i.4: p 16)
‘..How many different trades are employed in each branch of the linen and woollen manufactures, from the growers of the flax and the wool, to the bleachers and smoothers of the linen, or to the dyers and dressers of the cloth! (Ibid)

Then go to paragraph 11 (p 22) and read Smith's account of the multiple trades engaged in the manufacture of the ‘common artificer or day labourer’s woolen coat:

Observe the accommodation of the most common artificer or day-labourer in a civilized and thriving country, and you will perceive that the number of people of whose industry a part, though but a small part, has been employed in procuring him this accommodation, exceeds all computation. The woollen coat, for example, which covers the day-labourer, as coarse and rough as it may appear, is the produce of the joint labour of a great multitude of workmen. The shepherd, the sorter of the wool, the wool-comber or carder, the dyer, the scribbler, the spinner, the weaver, the fuller, the dresser, with many others, must all join their different arts in order to complete even this homely production. How many merchants and carriers, besides, must have been employed in transporting the materials from some of those workmen to others who often live in a very distant part of the country! how much commerce and navigation in particular, how many ship-builders, sailors, sail-makers, rope-makers, must have been employed in order to bring together the different drugs made use of by the dyer, which often come from the remotest corners of the world! What a variety of labour too is necessary in order to produce the tools of the meanest of those workmen! To say nothing of such complicated machines as the ship of the sailor, the mill of the fuller, or even the loom of the weaver, let us consider only what a variety of labour is requisite in order to form that very simple machine, the shears with which the shepherd clips the wool. The miner, the builder of the furnace for smelting the ore, the feller of the timber, the burner of the charcoal to be made use of in the smelting-house, the brick-maker, the brick-layer, the workmen who attend the furnace, the mill-wright, the forger, the smith, must all of them join their different arts in order to produce them. Were we to examine, in the same manner, all the different parts of his dress and household furniture, the coarse linen shirt which he wears next his skin, the shoes which cover his feet, the bed which he lies on, and all the different parts which compose it, the kitchen-grate at which he prepares his victuals, the coals which he makes use of for that purpose, dug from the bowels of the earth, and brought to him perhaps by a long sea and a long land carriage, all the other utensils of his kitchen, all the furniture of his table, the knives and forks, the earthen or pewter plates upon which he serves up and divides his victuals, the different hands employed in preparing his bread and his beer, the glass window which lets in the heat and the light, and keeps out the wind and the rain, with all the knowledge and art requisite for preparing that beautiful and happy invention, without which these northern parts of the world could scarce have afforded a very comfortable habitation, together with the tools of all the different workmen employed in producing those different conveniencies; if we examine, I say, all these things, and consider what a variety of labour is employed about each of them, we shall be sensible that without the assistance and co-operation of many thousands, the very meanest person in a civilized country could not be provided, even according to what we very falsely imagine, the easy and simple manner in which he is commonly accommodated.’

Could it be expressed any clearer? The fact that Rothbard missed this example of the interconnection of numerous supply chains to produce so simple a product as a woolen coat, located in places miles away, even overseas, with the heavy implication that if you take more complex products, the inter-connectedness would be even greater, says much about Rothbard’s lack of thoroughness about Adam Smith, perhaps from distant loss of memory, or from an original ignorance of the contents of Wealth Of Nations.

Secondly, there is the mischievous contradiction between the discussions in Book I and Book V in the Wealth of Nations. In Book I, the division of labor is hailed as responsible for civilization as well as economic growth, and is also praised as expanding the alertness and intelligence of the population. But in Book V the division of labor is condemned as leading to the intellectual and moral degeneration of the same population, and to the loss of their "intellectual, social, and martial virtues." These complaints about the division of labor as well as similar themes in Smith's close friend Adam Ferguson, strongly influenced the griping about "alienation" in Marx and later socialist writers.

Again it is evidence of Rothbard’s lack of knowledge about Wealth Of Nations.

The first chapter in Book I is about the prodigious productive powers of the division labour from ‘increased dexterity’, the ‘saving of time’ and ‘the great number of machines which facilitate and abridge labour’ (other people made the ‘machines’ in other trades!). (WN I.i.5: p 17)

The increase in the output of the ‘necessaries, conveniences, and amusements of life’ constitutes economic growth and the spread of opulence, especially to the labouring poor.

The paragraph in Book V (WN V.i.f.50: pp 781-2) is in the midst of Smith’s argument in favour of education for all through ‘little schools’ in each village, paid for local public funds (on the Scottish model). His book seeks to influence the literate readers from the income groups who would have to pay for universal education if it was legislated for in Parliament, which meant he had to persuade legislators and those who influence them to pass the necessary laws. This can be seen by reading the paragraphs:

‘Of the Expence of the Institutions for the Education of Youth’

'In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging, and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expence of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.’ (WN V.i.f: 50: pp 781-2)

‘The education of the common people requires, perhaps, in a civilized and commercial society the attention of the public more than that of people of some rank and fortune.'

It is otherwise with the common people. They have little time to spare for education. Their parents can scarce afford to maintain them even in infancy. As soon as they are able to work they must apply to some trade by which they can earn their subsistence. That trade, too, is generally so simple and uniform as to give little exercise to the understanding, while, at the same time, their labour is both so constant and so severe, that it leaves them little leisure and less inclination to apply to, or even to think of, anything else.’(53)

For a very small expence the public can facilitate, can encourage, and can even impose upon almost the whole body of the people the necessity of acquiring those most essential parts of education.’ (54)

The public can facilitate this acquisition by establishing in every parish or district a little school, where children may be taught for a reward so moderate that even a common labourer may afford it; the master being partly, but not wholly, paid by the public, because, if he was wholly, or even principally, paid by it, he would soon learn to neglect his business. In Scotland the establishment of such parish schools has taught almost the whole common people to read, and a very great proportion of them to write and account. In England the establishment of charity schools has had an effect of the same kind, though not so universally, because the establishment is not so universal. If in those little schools the books, by which the children are taught to read, were a little more instructive than they commonly are, and if, instead of a little smattering of Latin, which the children of the common people are sometimes taught there, and which can scarce ever be of any use to them, they were instructed in the elementary parts of geometry and mechanics, the literary education of this rank of people would perhaps be as complete as it can be. There is scarce a common trade which does not afford some opportunities of applying to it the principles of geometry and mechanics, and which would not therefore gradually exercise and improve the common people in those principles, the necessary introduction to the most sublime as well as to the most useful sciences.’
And then the clincher: if his readers were not convinced yet by the education argument alone, Smith appeals to their fear of the consequences of leaving the common people ignorant for want of a small expense to educate the children:

‘A man without the proper use of the intellectual faculties of a man, is, if possible, more contemptible than even a coward, and seems to be mutilated and deformed in a still more essential part of the character of human nature. Though the state was to derive no advantage from the instruction of the inferior ranks of people, it would still deserve its attention that they should not be altogether uninstructed. The state, however, derives no inconsiderable advantage from their instruction. The more they are instructed the less liable they are to the delusions of enthusiasm and superstition, which, among ignorant nations, frequently occasion the most dreadful disorders. An instructed and intelligent people, besides, are always more decent and orderly than an ignorant and stupid one. They feel themselves, each individually, more respectable and more likely to obtain the respect of their lawful superiors, and they are therefore more disposed to respect those superiors. They are more disposed to examine, and more capable of seeing through, the interested complaints of faction and sedition, and they are, upon that account, less apt to be misled into any wanton or unnecessary opposition to the measures of government. In free countries, where the safety of government depends very much upon the favourable judgment which the people may form of its conduct, it must surely be of the highest importance that they should not be disposed to judge rashly or capriciously concerning it

Rothbard never got the point. He was a selective quotation searcher and not a reader.

To paraphrase from Rothbard: I have come to realize, since writing these comments, that I overweighted the contributions and importance of Murray Rothbard on economics. And to my surprise, I did not sufficiently realize how weak he was on his knowledge of Adam Smith.



Post a Comment

<< Home