Thursday, August 18, 2011

Context is Needed to Properly Understand Adam Smith's Views

Jerry Bowyer, a columnist on Forbes (HERE):
writes (17 August):

‘God and the Economists”

"Some time ago I was asked by my friend Larry Kudlow to appear as a guest on his show to debate libertarian economist Don Luskin on the subject of Ayn Rand’s atheism. Luskin made the mistake of opening the debate by quoting Adam Smith’s famous statement about “the invisible hand.”

The problem there is that although Smith was indeed an advocate of the idea (which Rand also embraced) that self-interest can promote public good, Smith believed that this unexpected relationship is the result of divine design, not of random occurrence. Smith also rejected the idea that selfishness is a virtue and strongly endorsed the idea of altruistic empathy, in fact writing an entire book, The Theory of Moral Sentiments, to defend virtues such as altruism.

About 4 minutes into the exchange, Luskin went off the wheels. “That is not what [Adam Smith] said, Jerry. Jerry, you are a religious man and you will try to make this case. But that is not what he was talking about. The Invisible Hand Adam Smith was talking about was a metaphor. It was that entrepreneurs and capitalists and laborers produce goods ‘as if’ an invisible hand were guiding them to do so. ’As if,’ quote unquote–go back and read it. That invisible hand in Adam Smith was not God’s hand. You may be a religious man, you may not, but let’s not distort the record.”

I agree, let’s not distort the record, but unfortunately Luskin was so flummoxed by that argument that he falsified a quote from Smith, adding the words ‘as if’ to Smith’s quote to imply that Smith did not believe in Divine Providence and was using the idea as a mere metaphor. That quote is false. Here’s what Smith actually said:

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention… By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.

… So whose invisible hand was Adam Smith talking about? Smith mentioned God frequently in The Wealth of Nations and in the book for which he was already justly famous, The Theory of Moral Sentiments. In good 18th century style, Smith refers to God as “the Deity” or as “Providence,” but make no mistake about it: God was an extremely important idea in the origins of classical economics, and Mr. Luskin’s ignorance of history need not be our own.


[I wrote this first part as a potential comment in Forbes, but despite my repeated efforts, I could not get in to register.]

Jerry, you are right – Adam Smith never used “as if by an invisible hand” – however, I think you are wrong to deny that Adam Smith used “an invisible hand” as a metaphor.

Smith was very clear as to the role of metaphors: they are a figure of speech that, in Smith’s own words: “describe in a striking and more interesting manner” their “object”; see his Lectures On Rhetoric and Belles Letters”, [1763] 1983, p 29, and see the definition of metaphors in the Oxford English Dictionary.

The “object” in this case in Wealth Of Nations was the behaviour of some, but not all, merchants, concerned with the “security” of their capital, to prefer to invest in the home trade (“domestic industry”), and not risk it in the “foreign trade”. It was their “insecurity” that “led them” to invest locally, and this added to the “revenue and employment” of “domestick industry” (a public benefit), for which the metaphor Smith used was “led by an invisible hand”, describing “in a striking and more interesting manner” that which could not be seen by others, because their “insecurity” was in their operating heads.

You should read the whole of the first nine paragraphs of Chapter 2, Book IV, pages 452-456, which sets out Smith’s argument, and not just jump on a few lines from them.

I could make out a similar case for your misreading of Smith’s use of the metaphor in Moral Sentiments, including the mention of ‘Providence”, but space precludes my trespassing on the editor’s patience.

[This second part is a very brief quote also from Jerry's article.]

… It’s well neigh impossible for a serious student to deny the existence of God in the writings of Adam Smith. Serious thinkers who want to deny Smith’s theism assert that Smith just didn’t mean it. Perhaps, but that leaves us wondering why he mentioned God so often. There were plenty of anti-Christian thinkers writing at the time: this was, after all, the eve of the French Revolution.

Smith’s friend and colleague, David Hume, published openly atheistic books. There was obviously not some overwhelming social pressure to add theistic language to one’s works, and even if there were, Smith’s stance for economic freedom against the contemporary policies of the Crown showed him to be a man willing to say what he really thought. And if somehow he became suddenly cowardly and felt the need to mention a God in whom he did not believe, he could have put a nice little piece of pious gush into the front matter of the book and been done with it. Instead he laces his works throughout with theistic references. It seems clear that Smith really believed what he wrote”

Jerry is forgetting Adam Smith's circumstances over most of his life. Unlike David Hume, who had a private income from the capital he accumulated from his literary work and therefore, immune from loss of preferments, Smith had no independent income after university, but that which he generated from official appointments that his friendly sponsors helped him to obtain in his appointments: his professorship at Glasgow University (£100 a year, 1751-64), to his tutorship of the young Duke of Buccleuch (£300 a year, 1764-67) and life-pension of £300 a year, 1768-90), and to his post as a Commissioner of Scottish Customs and the Salt Duty (£600 a year, 1778-90). His sponsors were active members of the Church of Scotland or the Church of England, and his professorship required him to sign the Calvinist Confession of Faith (1752). He was baptised, by his mother's wishes (June 1723), and later confirmed, aged around 12 (1735).

However, at Oxford (1740-46), it appears, from written evidence in his posthumously published 'History of Astronomy' ([1744-50] 1795), that had he lost his faith in revealed religion, and students at Glasgow, reported years later, that his Lectures on Natural Religion tended to be irreligious, by his praising human intelligence at the expense of Christianity, and he sought to be excused from opening his lectures with a (Calvinist) prayer.

He was always strongly attached to his very religious mother, Margaret Douglas Smith, and protected her from any gossip or scandal from his private views (shared with close friends only) on religious beliefs. After his mother died in 1784 (aged 90), Smith edited the 6th and last edition of Moral Sentiments (1790 - just before a died a few weeks later), diluting to a very obvious degree its religious sentiments, including the removal of the Christian atonement passage, and much else.

Age and infirmity probably prevented a full excision of everything religious. What he did dilute and remove were hardly the acts of a Christian person, who knowing he was dying, was about to face "his maker". I discuss these events in my article "The Hidden Adam Smith in His Theology" (Journal of the History of Economic Thought, September, 2011). His essay on Astronomy was written in 1744-50 and he kept in hidden in his Bureau in his bedroom, not even showing it to David Hume until 1773 - 21 years after they first met and formed their close friendship!

It is also significant that while he ordered the burning of all of his notebooks, unpublished manuscripts, correspondence and other papers, a few days before he died, he singled out the Astronomy essay for posthumous publication by his friends, and executors, Joseph Black (Chemistry) and James Huttonm (Geology), which they arranged in 1795.

I consider Jerry's attempt to portray Adam Smith as a believer in Christianity neglects the biographical evidence. As for Providence - of the 13 mentions of providence in Moral Sentiments, almost all of them are references to Stoic theories of providence (a heathen, not a Christian source, and a necessary part of his lectures on Moral Philosophy to his students, and two are purely literary usage, common to 18th-century writing. They were not signs of his personal beliefs. In his Lectures on Jurisprudence ([1762-3] 1978), he explicitly states that the land was divided by violence by warlords and feudal lords, and noted that Roman attempts to divide the land equally all failed by the effects of inheritance, marriage alliances, and family rivalries through the generations.

Deism, originally a hostile schism in Christianity (for which professed adherents were cruelly killed), until Rome and Calvinists saw the benefits of absorbing it into the mainstream, became the only safe means by which science about the origins of the earth (James Hutton, the geologist, etc.,) and the intricacies of life could be portrayed safely in public. As the power of the institutions of Christianity declined in the 19th century, Deists tended to water down the 'intelligent design elements' of their findings.

I think Jerry, is less well informed about the history of philosophy, natural science, and Adam Smith's life and work.

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