Adam Smith and Capitalism

‘Gagdad Bob’ writes in One Cosmos HERE:

‘The Stone Age Economics of the Left: Who Would Jesus Bail Out?’

‘But Gress believes that such critical developments as liberty, democracy, and the free market weren't so much ideas as behaviors that people lived out and only later reflected upon, in the manner, say, of Adam Smith, or America's founders. In other words, no one invented capitalism, or liberty or democracy, and that's the point. These things had to first be lived and experienced in order to be valued in an abstract manner.’

Comment
Extracted from Gagdad Bob’s long article (worth reading for a different but intelligent view of the ‘cosmos’).

‘Gress’ touches on a theme I have commented upon several times in Lost Legacy. Some contributors to Blog Land refer to principle authors associated with path- breaking themes, such as Adam Smith and Wealth Of Nations for instance, which assert, erroneously, that he ‘invented’, ‘created’, or was somehow responsible for the emergence of ‘capitalism’.

This, more than the usual misattribution of the word ‘capitalism’ to Adam Smith, when, of course, the word itself was first used in English in 1854 in a novel, The Newcomes, written by William M. Thackeray, and Smith died in 1790.

The assertion that Adam Smith ‘invented’ capitalism is the main error. Smith did not invent anything; nor its it likely that anybody could invent a social phenomenon of such a scale. Indeed, attempts to ‘invent’ new societies with new ‘plans’, crafted for their assumed perfections that their authors consider valuable, but which have not been tried out for their practicality (I am thinking of Karl Marx and such of his ilk) have a poor track record.

Even trying to bolt on a set of social arrangement onto an existing social arrangement has had unintentional consequences, mostly negative (think of those religious preferences imposed on their societies).

‘These things had to first be lived and experienced in order to be valued in an abstract manner.’

I think ‘Gress’ or ‘Gagdad Bob’ (it’s not clear which or both) has got it right. Social trends (for ‘good or ill’) emerge for them to be ‘lived’ and ‘experienced’ for them to be set into social norms and last beyond being a fad among a few and to become a definite trend among many.

This is a more likely scenario for, say, the emergence of such defining trends as the ‘propensity to truck, barter, and trade’ (of much wider social application than mere commerce (Polanyi’s error), the division of labour (initially associated with natural degrees of ‘fitness’, physical, emotional, and intelligence), the behaviours of gift exchanges, leading to reciprocity norms and sanctions, and the emergence of shepherding, farming and property.

The earliest manifestation of these social changes within early, larger societies than the gatherer/scavenger small extended family bands led, of course, and inevitably, to the emergence of inequality, without which the emerging, social changes, designed by nobody, would not have taken root.

Adam Smith, a moral philosopher, was an acute observer and knowledgeable reader, who wrote about what he understood of how society from the earliest times had evolved, not always positively, to, ‘at last’, the age of commerce well before classical times. He refrained from commenting about what would happen beyond his own lifetime – that was for future legislatures to determine. He recommended changes to existing arrangements, particularly in the political economy of the mercantile practices of current governments across Europe.

He was not too optimistic that the necessary changes would be introduced. He was realistic enough to recognize that such changes would come about, if at all, ‘slowly and gradually’, because that is how they had come about in the past, and contingent, unanticipated events could as easily change things for the worse as for the better.

His Book IV of Wealth Of Nations should be read for how he approached the existing state of affairs right across British society. It is a remarkable tour de force on how he applied his observations to existing problem trends and how he applied his realism about the limitations of conscious human interventions on manifest missed opportunities to overcome major, and minor, obstacles to the approach to opulence within the existing norms of British society, upon which the unhappy plight of the overwhelming majority of the population depended for amelioration of their circumstances.