Notes from My Notebook 2

Adam Smith’s account of the first stages of the distribution of land among early humans in Moral Sentiments (1759) is not based on evidence.  In fact, he says very little about it by using a rhetorical device to avoid commenting on what most likely was a quite violent, or at least a disturbing, series of events, the avoidance of which helped to mystify its consequences for readers:

“When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition” (TMS IV.1.10: 185).

The reference to ‘Providence’ is one of the only 12 occasions in which Smith refers to providence, which was a theological idea about the final cause of all human events, without mentioning that providence was a Stoic belief which was first rejected as a pagan heresy by the then guardians of Christian doctrine and only later absorbed it into Christian theology (see Kennedy, Adam Smith On Religion, Journal of the History of Economic Thought, Volume 33, Number 3, September 2011).  His other mentions include references its Stoic authors.

However, the history of the division of land, without a fictitious ‘providence’ was clearly understood and expressed by Smith in Wealth Of Nations (1776; IV.vii.a.3: 456,n.5 and LRBL ii.157), as it was by clearly stated by Richard Cantillon ([1735] 1755) and Turgot (1767), both which Smith read.   

Cantillon’s “Essai” included a direct rebuttal of “providence” having a role in dividing the land among a minority of owners: “it does not appear that Providence has given the Right of the Possession of Land to one Man preferably to another; the most ancient Titles are founded on Violence and Conquest’ (Chapter XI, p 31).  He added: “in this oeconomy [the proprietor] must allow his Labouring Slaves their subsistence and wherewithal to bring up their children” (Essai, p 33).

I have long argued that modern interpretations of Adam Smith use of the invisible-hand metaphor show a disregard for Smith’s meaning. The claim that his use in TMS was to do with market economics, in which ‘an invisible hand’ is believed to work its ‘magical’ properties, is absurd.  The truth is much more straightforward, as the truth often is.

There are two parts to this question.

The first is that the invisible hand” for Smith was a metaphor, but for what?   Well, Smith taught that metaphors “describe their objects in a more striking and interesting manner” (Lectures on Rhetoric and Belles Lettres”, p 29 ([1763] 1983). But what is the ‘object’ of the IH metaphor in TMS?  It was the “proud and unfeeling landlord” who made “nearly the same distribution of the necessaries of life” to“ all the thousands whom they employ” for their “labours”, upon which labour, the landlord’s “gratification of their vain and insatiable desires’ depended. And “thus without intending it, or knowing it, [they] advance the interest of the society, and afford means to the multiplication of the species” (TMS IV.1.10: 184-5).

This leads us to the second part of the question. Without food labourers cannot labour; the owners of the land must feed even slaves.  And without labour, the poor cannot feed themselves or their families.  This absolute dependency is mutual and overriding for both parties and it was a dependency that long preceded the emergence of market economies.   It has been present in human societies since the land was divided unequally by men, every bit as afflicted by their need to ensure the “gratification of their vain and insatiable desires’.  From the very first men who claimed the land and all that was on it through to the power-driven Chiefs, Kings, Pharaohs, Emperors of the Oriental Despotisms, and the warlords and feudal Lords in Europe during the first millennium, they ruled by violence and by ideologies, both secular and theological.

The “invisible hand” was not, for Smith, something magical or the ‘hand of God”, that ensured that self-interested, even “selfish”, motivations brought about the “public good” though markets (these were not operating for much of the millennia that preceded them).  It describe “in a striking and more interesting manner” the realities of human societies ‘led’ by the absolute necessities involved in moving human endeavour from when some humans, followed by thousands, then most, left the hunter-gatherer lives of their ancestors.

Smith understood these changes.  It’s a pity that so many scholars have adopted wholly invented (and ever more fantastic) notions about the use of the metaphor of “an invisible hand”.