Wednesday, July 15, 2009

Another Inaccurate Claim About Adam Smith and Charles Darwin

W.C. Hayward, Editor of the Blog, Undismalization (‘towards a rational, constructive, non-ideological dialogue on economics and pubic policy') HERE
writes (14 July):

The Flaws of Quasi-Darwinist Arguments for a Pure Laissez-Faire System”

“Adam Smith, having published The Theory of Moral Sentiments, in which the theory of “the invisible hand” first appears, precisely a century before Darwin’s Origin of the Species, created a model involving a “selection process” in the realm of commerce that could be said, from an analogous perspective, to anticipate Darwin’s theory of natural selection in the realm of biology.”

“Since Darwin, however, links between laissez-faire and Darwinist thinking have appeared frequently, at least in popular parlance, with the survival-of-the-fittest concept supporting the premise that a pure laissez-faire system is more efficient because it is more natural

Adam Smith did not have a ‘theory of an invisible hand’ in his Moral Sentiments (nor anywhere else). Whether such a non-existent theory by analogy ‘anticipated’ Charles Darwin’s theory of ‘natural selection in the realm of biology’ is also suspect.

As is ‘at least in popular parlance, with the survival-of-the-fittest concept supporting the premise that a pure laissez-faire system is more efficient because it is more natural.”

Natural selection is by definition ‘natural’, but ‘laissez-faire’ is certainly not, at least in the common understanding of being ‘natural’. Laissez-faire is anything but ‘natural’. Like Hobbes’s ‘state of war’ of ‘all against all’, laissez faire has never existed, anywhere on the planet throughout the history of the human race, at least as far as we can judge, even deep into pre-history; it certainly left no traces found by anthropology, so far.

Adam Smith was quite critical of Dr Quesnay , the French economiste, whom he admired so much, on the subject of what is often taken to be about laissez-faire (though Smith, familiar with the term laissez-faire never used the term at all):

Some speculative physicians seem to have imagined that the health of the human body could be preserved only by a certain precise regimen of diet and exercise, of which every, the smallest, violation necessarily occasioned some degree of disease or disorder proportioned to the degree of the violation. Experience, however, would seem to show that the human body frequently preserves, to all appearances at least, the most perfect state of health under a vast variety of different regimens; even under some which are generally believed to be very far from being perfectly wholesome. But the healthful state of the human body, it would seem, contains in itself some unknown principle of preservation, capable either of preventing or of correcting, in many respects, the bad effects even of a very faulty regimen. Mr. Quesnai, who was himself a physician, and a very speculative physician, seems to have entertained a notion of the same kind concerning the political body, and to have imagined that it would thrive and prosper only under a certain precise regimen, the exact regimen of perfect liberty and perfect justice. He seems not to have considered that, in the political body, the natural effort which every man is continually making to better his own condition is a principle of preservation capable of preventing and correcting, in many respects, the bad effects of a political œconomy, in some degree, both partial and oppressive. Such a political œconomy, though it no doubt retards more or less, is not always capable of stopping altogether the natural progress of a nation towards wealth and prosperity, and still less of making it go backwards. If a nation could not prosper without the enjoyment of perfect liberty and perfect justice, there is not in the world a nation which could ever have prospered. In the political body, however, the wisdom of nature has fortunately made ample provision for remedying many of the bad effects of the folly and injustice of man, in the same manner as it has done in the natural body for remedying those of his sloth and intemperance.”
(WN IV.ix.28: 674-5)

What Smith is saying is that an economy can tolerate quite severe distortions in its purity of function without collapsing into disaster and that if a society, as most were and are, was supposed not to prosper unless if enjoyed ‘perfect liberty and perfect justice’ the evidence of the history human societies contradicts the assertion because ‘there is not a nation in the world which could ever have prospered’.

In short, perfect liberty and perfect justice – about as close as we can get to what now passes for laissez-faire – does not support “the premise that a pure laissez-faire system is more efficient because it is more natural”. It isn’t natural; indeed it would be most unusual, even unnatural, should laissez faire be established anywhere and anytime.

Attempts to link laissez-faire to Darwin’s natural selection, of which there has been a spate of them recently, falls at the first essential hurdle of empirical evidence.

The rest of W.C. Hayward’s piece makes an interesting case about the current condition in the USA (follow the link to see how much of it you agree with), but that is separate from his assertions about Darwin’s and Smith’s ideas.

Darwin’s books and notes form a formidable body of evidence for natural selection (he didn’t get everything quite right, but he took major steps forward before the world knew anything about inheritance, genetics and the genome).

Attempts to forge a link with Darwin and Adam Smith on the grounds quoted above ultimately fail because they create so-called analogies with their ideas, mostly fanciful.

There is a connection however; both took an evolutionary approach to change and in a future post I shall discuss the forms that they took.

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