Monday, October 06, 2008

Adam Smith on 'the vile maxim of the masters of mankind'

Susan George, Chair of the Board of the Transnational Institute, and author, inter alia, of ‘Hijacking America: How the religious and secular right changed what Americans think’ and 'We the peoples of Europe’, gave the Schumacher Lecture this week (4 October) 'Transforming the Global Economy: Solutions for a Sustainable World’.

A passage in it contains these ideas:

At this point in the discussion, especially when one is speaking to concerned, engaged, decent people like those likely to be found at a Schumacher lecture, someone will raise two highly pertinent questions. The first is this: “ Isn’t there a point where people with huge fortunes say ‘enough is enough’ and start sharing?” Some do—Bill Gates and Warren Buffet are oft- cited examples. But as a class, I’m sorry to say that the answer is no. We know a lot about poverty lines but there is no such thing as a wealth line and the word “enough” is not part of the vocabulary of this class. You needn’t believe me. Listen to the expert who said “All for ourselves and nothing for other people seems in every age of the world to have been the vile maxim of the masters of mankind.” That was not Karl Marx but Adam Smith, in his classic 1776 treatise on capitalism, the Wealth of Nations. Little has changed since then.”

Susan George’s first sentence above sounds innocent, but when you think of all the people not at her lecture who have claims to being ‘concerned, engaged, decent’ and who may not share her views, it is somewhat ‘offensive’, or if that is too strong, ‘arrogant’, if not ‘pretentious’ to identify the 'good among' her listeners.

Self-praise ‘is no recommendation’ was taught at the schools I attended and haughty self claims to possessing the virtues are the vice of some fairly unpleasant people down the ages and Susan George would not wish to be associated with that ilk (the parable of ‘the widow’s mite’springs to mind, just behind ‘Holy Willie’s prayer’).

However that is not my main qualm about her paragraph. I refer to Adam Smith’s statement: “All for ourselves and nothing for other people seems in every age of the world to have been the vile maxim of the masters of mankind.”

The quotation is interesting as it comes from Book III of Wealth Of Nations, chapter IV, and here it is in the paragraph it is quoted from:

But what all the violence of the feudal institutions could never have effected, the silent and insensible operation of foreign commerce and manufactures gradually brought about. These gradually furnished the great proprietors with something for which they could exchange the whole surplus produce of their lands, and which they could consume themselves without sharing it either with tenants or retainers. All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with any other persons. For a pair of diamond buckles, perhaps, or for something as frivolous and useless, they exchanged the maintenance, or what is the same thing, the price of the maintenance of a thousand men for a year, and with it the whole weight and authority which it could give them. The buckles, however, were to be all their own, and no other human creature was to have any share of them; whereas in the more ancient method of expence they must have shared with at least a thousand people. With the judges that were to determine the preference this difference was perfectly decisive; and thus, for the gratification of the most childish, the meanest, and the most sordid of all vanities, they gradually bartered their whole power and authority.” [WN III.iv.10. p 418]

Susan George sources he quotation in Adam Smith’s “in his classic 1776 treatise on capitalism, the Wealth of Nations.” Regular readers of Lost Legacy will know that Wealth Of Nations was not a 'treatise on capitalism' - it was a critique of the mercanile policies of UK Governments in the 17th and 18th centuries. Also Smith never used the word 'capitalism' - it wasn't invented until used by Thackeray in 'The Newcomes' in 1954.

She notes that “Little has changed since then”, which is an underwhelming assertion, given that Smith says that the ‘vile maxim’ seems to have operated continuously ‘in every age of the world’. If it has operated in ‘every previous age’ there is no surprise that it continues to operate within every known society that exists, has existed, or is likely to exist.

In the case that Smith discusses in Book III he describes “How the Commerce of the Towns Contributed to the Improvement of the Country”, doing so, it must be remembered, by the new traders of the towns undermining the feudal rulers of the countryside, who traded their power (their armed retainers and serving tenants called to arms to inflict their Lords’ miseries on neighbours, rivals, and enemies or friends of the king) merely for “a pair of diamond buckles, perhaps, or for something as frivolous and useless”. Since the 18th century, liberty has been strengthened by secular democracy, a not insignifcant difference.

Once again context matters.



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