Friday, December 27, 2013

Adam Smith On Civil Government

The Dreamer” posts (8 December) this piece “Adam Smith: the most misquoted economist of our time.HERE on 
Note: I was discussing with a colleague how frustrated I was when socialists took Adam Smith quotes out of context. He replied that the right had equally used Smith to support its dogmas. To be clear, Smith was not a dogmatist, but a pragmatist. I wish to clarify the context in which he said all these things.”
“Civil government, in so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all. – Adam Smith, Wealth of Nations, Book V, Chapter I, Part II On the Expense of Justice.”
“Smith was talking about the origins of civil government here and how no effective institutions for the regulation of property were put in place without significant corruption. Further in the chapter, Smith elaborates on the necessity of a separation of powers to ensure fair judgment of the Rule of Law to promote egalitarian treatment. A fair justice system will ensure that both the rich and the poor have property rights.
I discussed this quotation from Smith on Lost Legacy 29 July way back in 2006:
Taking a quotation out of context can always cause misunderstandings. It does so in this case. Smith was not outlining the appropriate policies for civil governments for all time and in no sense did he suggest that the appropriate role of government in modern societies was to suppress the poor. Quite the reverse! His entire approach to modern government was for it to cease intervening on behalf of special interests to enrich themselves at the expense of consumers, the majority of whom were among the poor. He saw commercial society as a road to opulence that would spread its benefits to the family of common labourers.
His lectures on jurisprudence, delivered at the University of Glasgow between 1751-1764, show his historical approach to the evolution of modern societies through four stages, each comprising a different mode of production. He began with what his contemporaries called ‘Rude’ society, the closest analogy of which were commonly described as represented by the North American ‘Indians’, as reported by travellers in the 17th-18th centuries, and in Africa and the Pacific.
In contrast to the common labourer in Scotland, by modern standards a class of people living in poverty compared to the lives of the gentry, landlords and princes of Britain, they compared well with the ‘chiefs’ and ‘kings’ at the head of the ‘savage’ nations of America and Africa. Indeed, Smith pointed out that the difference in living standards between the rich and poor in Britain was not as great as the difference in living standards between the common poor in Britain and the ‘richest’ chief in America, who ruled the lives of thousands of his people.
It is important to realise that Smith did not ascribe these differences in relative living standards to any kind of racial cause; the differences arose solely because of the relatively advanced state of the division of labour between the two modes of production. The ‘Americans’ (and Africans) were hunters; the Scottish poor were farmers and day-labourers, living in shepherding, agricultural and commercial societies that had developed from when all Europeans had lived in the first age of man – hunting and gathering. It was John Locke (1690) who said that ‘in the beginning all the world was America’. And so it was. Every human society had started in the Hunting stage as ‘savages’, just as our distant ancestors all came from Africa.
With extremely low population densities, hominids migrated out of Africa from about a million years ago (and became extinct), followed by humans about 200,000 years ago. There was no need for ‘governments’ as we understand them. People were ‘free’ of coercion, except within the families and bands, but ‘enjoyed’ extremely low living standards, first as gatherers (in common with our cousins, the primates), then as gatherer-scavengers (stone tools, primitive co-operators) and then as gatherer-hunters, the remnants of which occupied North and South America (but not Central America), sub-Saharan Africa, South Asia, Pacific Islands, and Australia.
Meanwhile, and separately, human societies in India, China, north and central Asia, and Europe went from savagery (hunting), through shepherding, then agriculture and lastly, commerce, some societies ‘stopping’ at particular stages (shepherding in central Asia and Arabia, North Africa), others reaching the commercial stages, and then reverting under barbarian invasions (Persia, Greece, Egypt, Rome, western Europe) to agriculture with the destruction of commerce. Meanwhile, China and India's civilisations stagnated under institutional inertia.
Crucially, Smith highlighted the increasing role of laws as each society developed through the four stages. With hunting and gathering, laws were few, and were settled within families; with shepherding, law were enforced by those who possessed flocks and herds (poachers were killed); and with agriculture and settlements, laws were devised and enforced by the first governments, mainly in defence of property. People who grew crops protected them against theft by those who had none. No stable society can last for long if property in agriculture is insecure. That was the main role of civil government as it settled disputes and adjudicated between disputants. Shepherds defended their flocks and herds by rewarding individuals without them with subsistence; farmers defended their fields by rewarding landless labourers in the same manner.
Commerce grew slowly, from the continuing division of labour – surplus food exchanged for manufactured products in bargaining – with contracts enforced by civil government. The relapse from Roman ‘civilisation’ (a fairly barbaric world too) into warlords and feudalism, lasted a thousand years until commerce revived”
in the 15th-16th centuries. Smith’s Lectures in Jurisprudence (1763-4) trace this entire period from Classical Greece-Rome to 18th-century Britain, and also trace the growth of Liberty within ‘modern’ society as absolutist Feudal monarchy gave way to the rule of law, Habeas Corpus, trial by Juries, independence of the judiciary, emasculation of the powers of the monarch, parliamentary ‘elections’ and freedom of contracting.”
Smith was talking about the origins of civil government here and how no effective institutions for the regulation of property were put in place without significant corruption. Further in the chapter, Smith elaborates on the necessity of a separation of powers to ensure fair judgment of the Rule of Law to promote egalitarian treatment. A fair justice system will ensure that both the rich and the poor have property rights.
Today I would add further comments, particularly regarding the defence of property rights in history, from observation of the behaviour not just of the poor but also of the defence of property rights by the rich against the depredations and ambitions of other rich property owners. Any history of dynastic quarrels from the earliest times saw law cases galore brought by property owners against would-be suitors with claims against current owners often requiring the civil government to intervene on one side or another.   
War Lords, Kings, and Emperors were not above these quarrels.  They probably represent the largest single cause and expense of armed state interventions in much of Europe from pre-Roman times to the 18th century, and since.
Even in the earliest times, inter-tribal warfare was common and skirmishes over territorial rights were constant.  Hence that the Left often quote this passage from Smith in righteous indignation about the affects of civil-government on the poor is not surprising but they seem to prefer the naked quotation to Smith’s full argument both his Lectures on Jurisprudence and Wealth Of Nations. 
Early legal judgments that settled disputes about property rights could cover which tribal member in an egalitarian band had the “right” to the fruit of a tree – the one who picked it or the one who snatched it from the picker? – or the “right” to an animal in a hunt – the one who “started” the chase or the one who claimed the body during the hunt?  And so on in their everyday lives. 
Smith discusses these and many other cases in his Lectures on Jurisprudence. Only Left anarchists and Hard Libertarians dispute the absolute need for civil government to support justice in civil society and that means Civil Government and the Rule of Law.


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