Wednesday, March 18, 2009

Adam Smith, Neither Left Nor Right

James R. Otteson, author of Adam Smith’s Market Place of Life, 2002, Cambridge University Press, (in my view a seminal approach to Adam Smith’s work) write on his Blog, HERE (17 March):

This Just In: Poverty and the Right

"I was asked (challenged?) by a reader to provide examples of right-of-center political or economic theorists who are genuinely interested in the poor. There are many, but let me mention one classical source and one contemporary source.

The classical source: Adam Smith in his 1776 An Inquiry into the Nature and Causes of the Wealth of Nations. Smith's concern for the poor there is palpable and undeniable. Now some scholars argue that, partly because of that, Smith would not quite qualify as a right-of-center thinker (Samuel Fleischacker, for example, but there are many others), but I think Smith's defense of free trade, markets, and limited government do qualify him. He is not an anarchist or even a libertarian, and he does not subscribe to a theory of natural rights that, as in Locke or Nozick, give principled restrictions on state activity: Smith is too practical and pragmatic for that. But that makes him what is usually called a "classical liberal," not a progressive liberal.

The contemporary source: Deirdre N. McCloskey's The Bourgeois Virtues: Ethics for an Age of Commerce. McCloskey's argument is that capitalist institutions are not amoral but are, instead, positively encouraging of virtue. But a large part of her argument in that book is that capitalism has brought substantial and often unappreciated benefits to millions of people, including especially the poor. McCloskey draws explicitly on Smith in making her case.


The classical source: Adam Smith in his 1776 An Inquiry into the Nature and Causes of the Wealth of Nations. Smith's concern for the poor there is palpable and undeniable. Now some scholars argue that, partly because of that, Smith would not quite qualify as a right-of-center thinker (Samuel Fleischacker, for example, but there are many others), but I think Smith's defense of free trade, markets, and limited government do qualify him. He is not an anarchist or even a libertarian, and he does not subscribe to a theory of natural rights that, as in Locke or Nozick, give principled restrictions on state activity: Smith is too practical and pragmatic for that. But that makes him what is usually called a "classical liberal," not a progressive liberal.

The contemporary source: Deirdre N. McCloskey's The Bourgeois Virtues: Ethics for an Age of Commerce. McCloskey's argument is that capitalist institutions are not amoral but are, instead, positively encouraging of virtue. But a large part of her argument in that book is that capitalism has brought substantial and often unappreciated benefits to millions of people, including especially the poor. McCloskey draws explicitly on Smith in making her case
.

Comment
I fully appreciate Jim’s the line of argument. I have often posted on Lost Legacy about Smith’s ‘neutral’ approach to the labour-capital divide, when chastising writers from both left of centre and right of centre, and others at either of their extremes, who try to hijack Smith into being in favour of one side of the other.

Smith is a much more complex advocate for his approach to political economy than his critics appreciate.

He favoured reforms of the policies of mercantile political economy because they inhibited the full power of commercial society to grow, and in doing so, to put the unemployed to gainful and productive employment and, for those taking the initiative, to save towards an amount of capital stock and put it into productive activity, thus widening opportunities for increasing opulence, the beneficiaries of which would largely be the labouring poor.

Right-of-centre-minded people are, or should be comfortable with Smith’s policies for labour, and for commercial enterprise, and for government interventions at the macro-level. The same should appeal to left-of-centre-minded people too.

Extreme libertarians, of right and left (yes, they do exist) and traditional anarchists or Marxists may not be comfortable with anything less than their ideal utopias (or nightmares).

Smith was not an ideologue, of left or right (the concepts of left or right were unknown in his lifetime).

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2 Comments:

Blogger Andres said...

In my view, a good example of his practical, non-ideological approach to poverty is the link he traces between the mechanism of economic cooperation, and the standard of living that prevails in those societies where economic cooperation is developed to a greater extent. His remarks on how the standard of living of the "meanest person of a civilized country" is much better than that of "many an African king", is, in my view, a statement as void of value elements as any statement of social science could be. And nonetheless, it contains key elements for the analysis of poverty and how to fight it.

7:17 p.m.  
Blogger Gavin Kennedy said...

In my Adam Smith:a moral philosopher and his political economy (2008; pp 104-07)) I quote Brad Delong who contrasted the difference between two tribes, one the Yanomamo by the Amazon and the other, the New Yorker, by the Hudson. With a nominal income gap of $90 and $36,000, and using Stock Keeping Units, the equivalent ratio is a few hundred for the Yanomamo to tens of billions.

Poverty is the absence of wealth, and relative poverty is a factor of the division of labour and the complexity of the suppply chains available to each tribe. Co-operation as you point out is not something you legislate for.

Redistribution is an answer to inequality, but equality lowers the division of labour and thins the supply chains. Wealth creation also takes a longer time than the legislative cycle.

Resolving the Smithian dilemma is not an easy option.

10:22 p.m.  

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