Friday, December 25, 2009

Review Commentary No. 1: Milgate and Stimson's "After Adam Smith": a promising good read

Murray Milgate and Shannon C. Stimson, 2009.
After Adam Smith: a century of transformation in politics and political economyPrinceton University Press, Princeton, ISBN 978-0-691-14037-7

Murray Milgate, a fellow and director of studies in economics at Queen’s College, University of Cambridge, and Shannon C. Stimson, professor of political science and the history of political thought at the University of California, Berkeley, have co-authored a promising exhibition of scholarship in the history of economic thought, which has significant meaning for economists and political theorists – perhaps also policy makers – in the 21st century.

They tackle the relatively unexplored territory of what happened to political economy after Adam Smith died in 1790 that made the subject, and what replaced it, quite different by the last quarter of the 19th century (and, therefore, beyond, to what it has become today).

The gap, if there is one, which I think there is, has traditionally been filled with studied accounts of the theoretical ‘corrective’ process, considered inevitable in a new discipline, once the early authorities have passed on and new authorities have arisen in public esteem, seemingly correcting the early errors and sloppy concepts that no longer held sway or even respect.

Indeed, I have read both scholars and ‘young Turks’, who comment with unveiled and disparaging astonishment that Adam Smith, for example, did not take, what is now obvious to them, because of their graduate training, a very small step from where he left some of his prominent concepts. If Smith had done so, apparently he would have ‘saved’ the discipline a hundred years of frightful errors in a dead-end, made worse by the political consequences of the delay to new ideas ‘discovered’ in the 1870s, but apparently discoverable in the 1770s, or at least in the 1790s (Smith, we note died, in 1790).

These critics have in mind the example of his alleged ‘labour theory of value’ – more a ‘labour theory of muddle’ in my view – which, apparently, led to Karl Marx and , in the rather silly assessment of the ever-irascible Murray Rothbard, this meant Smith was to blame for the 20th-century’s horrors of communism! (“Against stupidity even the gods battle in vain’, Schiller)

Milgate and Stimson are not of that ilk. They have written a well-argued, mature approach to what happened in the broad discipline of political economy after Smith died. The period, of what they call the transition, which took place between the eighteenth-century discourse on commercial society and liberty of trade (Smith’s focus) and what these ideas came to exemplify in what is broadly known today as classical political economy and the science of politics.

Adam Smith was not the only memorable political economist of the eighteenth-century. The field is almost crowded with justly-memorable figures and with several-thousand lesser known and unknown figures in the healthy pamphlet culture that flourished for a hundred years before Smith’s Wealth Of Nations (Yale University has over 4,000 such pamphlets on economics, finance, and politics in its archives).

Smith wrote a synthesis of economic thought relevant to his main theme – a critique of mercantile political economy, the ruling political dogma at the time – and brought to the attention of his readers large parts of what he had taught his students about jurisprudence, including ‘police’, civic society, rhetoric, and moral sentiments, from 1748-51 in Edinburgh and 1751-64 in Glasgow.

In the first half of the 19th-century, Malthus, Ricardo, and Mill dominated British political economy and shifted its focus into new territories, which Milgate and Stimson note was quite a break from the direction in which Smith took, so much so, that they note that modern ‘left-right’ political histories that treat as a continuity the writings of Smith with modern welfare and neo-liberal politics are ‘anachronistic and misleading’. Adam Smith, the radical, however valid for the 18th century, in modern terms is unconvincing. The agenda has changed, as has the way we see social problems.

There is wide disagreement among modern commentators on what Smith was saying – see the journal literature for an overview and a sense of the differences. Milgate and Stimson explore what Smith meant and show how his idea of ‘perfect liberty’ in its market and government manifestations was developed and altered after him.

Economists were no longer talking about the same things. Take self-interest; it became “constrained optimisation” and “not only a component part of economic life in civil society but rather its only component. Where once stood Smith’s rich description of morally regulated, prudent behaviour described self-interested interaction – derived from a model of a socially constructed self – now stood a rational calculator of exclusively private costs and benefits” P6).

Milgate and Stimson open with Dugald Stewart, the son of Smith’s student friend, Michael Stewart, Professor of Mathematics at Edinburgh University, the chair that Dugald occupied before transferring to the Edinburgh Chair of Moral Philosopy, which in the fashion of the time, included political economy.

Dugald, they report, “altered Smith’s views on the input that political economy might have in both legislative practice and constitutional reform” by re-creating Smith as someone for whom “political economy was exclusively a science of the legislator” and which “had nothing to contribute to debates over forms of constitutional order”, especially in “revolutionary ways”.

Dugald Stewart had previous form in these matters, which might explain his motives for the shift. In January and March 1793, Dugald Stewart gave the eulogy at the commemoration of Smith’s life to the Royal Society of Edinburgh, coinciding inadvertently with social unrest in Scotland among the “inferior orders”.

The consequent trials of those perceived to be the leaders of the bouts of unrest took place in the heightened social tensions where the “superior orders” took fright, so to speak at the events in revolutionary France. Hanging, prison and transportation followed for the guilty.

The legal establishment took a closer look at intellectuals, such as Smith, whose Wealth Of Nations may have been supposed among the legal minds of the day (let’s be clear they were not radically-minded men; reactionary would hardly exaggerate their inclinations) to have contributed to the social unrest.

Smith was dead but Dugald Stewart was alive, and was making controversial public speeches, albeit to the staid fellows of the RSE and not the ignorant and easily stirred up ‘mob’. Think of Smith on the combination acts, his hostility to “merchants and manufacturers”, and his intemperate remarks about landlords (though actually making clear they behaved “like all men”) who preferred to “reap where the never sowed”.

Dugald escaped judicial punishment, largely by assuring his legal interrogator that Smith had no ambitions to alter the existing constitutional order. He saved himself, but also moved Smith away from his legacy, just enough to start the long transformation of his original ideas into what they became 50 years later.

I shall say more about this episode in future review/commentaries on Milgate and Stimson’s fascinating account, as I go through chapter by chapter.

You can order it from Amazon and follow my account and comments. Your opinions are also welcome.

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Blogger Nicholas Gruen said...

I liked Emma Rothschild's chapter in Economic Sentiments on what happened to the ideas of Smith - the radical who had been quoted by French Revolutionaries - in the decade after his death when his doctrines were 'tamed' and made more palatable to a more 'conservative' mood in the UK.

2:55 p.m.  

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