Monday, April 22, 2013

Adam Smith: Left or Right?

In Paul Walker’s excellent Blog, Anti-Dismal, (New Zealand) HERE 
He posts an informative article on a very modern issue, basically on whether Adam Smith leaned either to the “Left” or the “Right” (a somewhat anachronistic distinction, given these distinguishing terms refer to the accidental location of whether French revolutionaries who sat on the left or the right sides of the French assembly meeting hall, a event after Smith died in 1790).
Paul writes:
In a forthcoming article (“Adam Smith: Left or Right?”) in the journal Political Studies well-known Adam Smith scholar Craig Smith writes:
Amartya Sen (2009) has drawn inspiration from Smith in developing his own theory of social justice and Samuel Fleischacker (2004) has made the case for reading Smith as a precursor of modern notions of social justice. Iain McLean (2006), on the other hand, makes the stronger claim that Smith’s true legacy lies, not with the libertarian economists of the Adam Smith Institute, but rather with the social democrats of the John Smith Institute. In all three cases the broad claim is that there are grounds for associating Smith with the modern egalitarian idea of social justice understood as the state-backed redistribution of wealth to ameliorate the effects of poverty.” …
…. That he is wary of any automatic reliance on the political process and the state to pursue our social objectives is admitted even by those such as Fleischacker who want to reclaim Smith for the left. As Fleischacker (2004, p. 241) also admits, this points us toward a presumption against the state and a presumption in favour of private action by voluntary associations of individuals. But if this is the locus for the exercise of beneficence and the provision of public works then we are dealing with something very different from the modern debates about intra-national transfers or even international transfers and distributive patterns.
Craig Smith goes on to say that what this implies for a ‘Smith-based’ notion of distributive or social justice is clear,
we should take more seriously Smith’s silence on modern distributive justice, his desire to place conceptual distance between beneficence and justice, his distrust of the political process and his temperamental distaste for utopianism. And we should pay more attention to his localist, prudential category of police and his desire to press a normative distinction between strict principles of justice and political or beneficent decisions guided by expediency. These are not accidental aspects of Smith’s thinking, however imperfectly they are carried over into his own policy prescriptions. They suggest a very different understanding of the normative ideal of justice and one that might actually give us good reasons to doubt the efficacy of thinking about our moral obligations to the poor and welfare provision in terms of social justice. …
… When thinking of our moral obligations a related question about Adam Smith’s thinking is raised by Maria Pia Paganelli in a chapter forthcoming in the Oxford Handbook on Adam Smith. Paganelli asks why Smith promotes free markets and argues that he promotes them for at least two reasons: efficiency and morality. In terms of morality Paganelli argues that Smith thought that markets can foster morality just as much as morality can foster markets. Paganelli concludes her chapter by noting:
“Adam Smith favours commerce on grounds of both morality and efficiency. Commerce is intertwined with morals, it supports moral development and at the same time it is supported by it. Commerce requires morals for its functioning and gives the conditions under which people can live, can live freely, and can live morally…
Returning to the question of whether Adam Smith was “left or right” James Otteson writes in the epilogue to his 2011 book Adam Smith:
‘He [Smith] was instead an old-fashioned liberal: favoring individual liberty, endorsing state institutions to protect this liberty, and, where they conflicted, favoring the individual over the state as a default. But he was also a sceptical empiricist. He favored free trade, free markets, and a government robust but limited to the enforcement of a few central tasks not because they comported with a priori principles but because they seemed to work.
It is worth noting that this sceptical empiricist approach to markets, trade and government rather than an a priori principle approach would most likely disqualify Smith as a libertarian, at least of the Radian or Nozickean kind.
Otteson goes on to say, “Smith’s concern with the poor leads some commentators to suggest that he must have been a proto-“progressive” liberal, since, as some believe, only progressive liberals care about the poor. Samuel Fleischacker, for example, argues that Smith’s concern for the poor is one reason to see him as “left-leaning” rather than “right-leaning”. Concern for the poor is, however, hardly the exclusive provenance of the political left. And Smith’s strong arguments in favor of decentralization of power, competition, and free markets would seem to put him rather on the right of today’s political spectrum than on the left.”
[You must follow the link to the “Anti-Dismal” Blog and read the entire post for an erudite discussion of recent contributions by Smithian scholars at the highest levels of scholarship.]
I have met and discussed Adam Smith with all of the distinguished authors mentioned in the post and have followed the issues they debate in recent years, including the specific issues raised in the post.  
Currently, I am working on aspects of these issues particularly in relation to the Left”- “Right” distinctions made in these debates and how they relate to the invisible-hand metaphor and its modern connotations.
I am often asked why I make such a fuss over a metaphor used by Adam Smith in the 18th-century.  However, Smith’s use of the IH metaphor is of underlying importance today given its prominence in modern debates on the market-state’s roles and share in the GDP of all countries.  
Moreover, the protagonists in and around governments base much of their different perceptions of how much is enough on the supposed roles in the success and failures of whichever mix of proportions of State/market roles are permitted in their GDP on supposed recommendations for or against by Adam Smith.    Do we rely on the “invisible-hand’ of markets for most of our GDP or the “visible hand” of the state?  Or do we raise questions about what is meant by these categories?
Why do markets need an “invisible hand” to operate  when markets work perfectly well only by very visible prices and could not work without their visibility?  Why do states that work under conditions of invisible power deals, personal ambitions, private invisible lobbying – and not a little invisible corruption - become somehow categorised as “visible”, apart from it being a term popular with politicians?
This is a rich field well beyond interest in the search for Adam Smith’s politics.  Even if he had been alive, I doubt if he would have chosen to sit on the left or the right side of any Assembly.  He did not have a vote in 18th-century Scotland and would have been disinclined to exercise it even if had a vote.  He believed that as a philosopher that his role was to “do nothing but observe everything”.


Blogger airth10 said...

"He believed that as a philosopher that his role was to “do nothing but observe everything”.

I wonder what Adam Smith's observation might be today about the debated going on about his IH metaphor.

I think he would certainly be amused. I don't think he would be so upset, as some, at the teachings of Paul Samuelson about it. Smith would think Samuelson's meaning of it was merely a sign of the times. After all, the metaphor was not cast in stone. And really, is Samuelson's that distorted?

Would the world be a better or different place if it took Smith's literal meaning of the invisible hand? Anyway, I don't think his meaning of it is applicable to the world of today.

2:14 pm  
Blogger airth10 said...

Darwin was also an observer, like Smith. Through his observing he came up with his theory of 'natural selection'.

Somebody pointed out that natural selection is also 'invisible'. And this is what Smith saw in his invisible hand, a natural selection in economic activity. In Smith's mind this natural selection, in the social context, in the form of an invisible hand, would amount to something mutually beneficial.

Today we have capitalism as our chief economic engine, which came up through the ranks via the process of natural selection and the invisible.

5:45 pm  
Blogger Gavin Kennedy said...

Comment 1:
The quotation is from Smith's Works. It mans what it says about philosopher's duties (Smith: History of Astronomy).
Metaphors do have changed uses, as the invisible hand was used by Smith. They also conform to the grammatical rules of metaphoric statements - they describe "in a more striking and interesting manner" their "objects" (Smith "Lectures in Rhetoric"). However, they relate in all uses to a specific object; if the object changes, so does the meaning of the metaphor.
Samuelson changed the "object" - Smith's metaphoric use did not apply; Samuelson's metaphoric meaning therefore was different from Smith's.
Comment 2: You don't say who "pointed out that natural selection was invisible". Darwin explained "natural selection"; he observed the outcome of successive changes over long periods, mostly unobserved. The outcomes were very visible, that is how Darwin developed his theory of natural selection and from observation described the process. Some instances were actually visible in a human lifetime - the changes in butterflies during the industrial revolution, etc.
Smith explained the cause of certain changes in society - those causes were identified in each f his three uses, but motives of individual cases were invisible - the outcomes were very visible, but the IH metaphor was about the causes not the visible outcomes,
You have mixed up causes with outcomes and wrongly identified one with the other.

7:41 pm  
Blogger airth10 said...

I like the connection between an invisible hand and natural selection. There is kind of a 'spontaneous order' that arises from both of them.

8:06 pm  

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