Two Cases of Mistaken Identity

A book review (3 April) in The Dartmouth Review (HERE):

“Dartmouth College Professor Creating Homo Economicus”

“In the past few years, it has become ever more apparent that the Homo economicus that Adam Smith postulated does not exist. For those of our readers who are not acolytes in the dismal science, Homo economicus is the "economic man" or a consumer who makes the perfectly rational decision and thus maximizes his self-interest. A great deal of ancient economic theory depended upon this conceptual man, but more and more research has proven that small details can entirely change people's behavior.”

Comment
When I first saw the Dartmouth Review, I thought, with horror, that I was about to criticise a publication from The Royal Naval College, Dartmouth in England, which I visited long ago to deliver a paper on some aspect of defence economics (my specialist subject at the time) to a class of its young officers in the company of a visiting panel of admirals and senior captains. Then I looked closer at the post and realized it was an American college, so I relaxed a little.

Adam Smith never had a theory of Homo economicus, a wholly late 19th -century notion assembled over a hundred years after Smith died in 1790. The author of the piece, a ‘Dartmouth professor’ no less, is absolutely wrong in his (perhaps her) wrongful attribution.

Smith did not have a notion of "economic man" or a consumer who makes the perfectly rational decision and thus maximizes his self-interest.” Wrong person and also wrongly dated too. “Perfectly rational economic man” is a modern notion (not Smith's) among mathematicians and theorists – it makes their equations work, mathematically perhaps, though not in the real world.

I trust the officers at Dartmouth are better equipped in their navigation classes than in economics.

Incidentally, sneers of the ‘dismal science’ variety are actually a wholly racial diatribe from Carlyle in his rabid pamphlet “On the Negro Question” and had nothing to do with either Malthus or Ricardo from the 1800s, but was a disgusting attack on the views of John S. Mill for his perfectly sound views in support of the equality of black slaves and their shared humanity with whites, an idea that his racist critics abhorred.

On Getting Adam Smith Absolutely Wrong

Michael Happy writes (17 July) on The Educated Imagination (a website dedicated to Northrop Frye) HERE: http://fryeblog.blog.lib.mcmaster.ca/2010/07/17/adam-smith/:

"Adam Smith

Frye in “Varieties of Eighteenth Century Sensibility”:

“We saw that Locke, like Descartes before him, based his philosophy on a philosophical man abstracted from his social context, in short, a theoretical primitive. Also that Robinson Crusoe was an allegory of another abstract primitive, the economic man of capitalist theory, whose outlines are already fairly complete in Adam Smith. These are the individual primitives at the core of Augustan culture. But such primitives have voluntarily entered a social contract and a historical tradition. For this attitude nothing in the area of culture can develop except on the other side of the social contract: literature and the other arts are rooted in a historical context in both time and space. (CW 17, 33)”

Comment
While it is risky to pick up on writings of literary specialists as a moral philosopher or political economist, this seems to me that Northrop Frye is way outside the boundaries of the ideas of Adam Smith; indeed it gives an entirely misleading appreciation of Smith’s ideas.

For Smith, there was no ‘theoretical primitive’ nor an ‘economic man of capitalist theory’.

Indeed, I should expect a literary theorist to know that the very word ‘capitalism’ emerged in English long after Smith had died in 1790. The word first appeared in English in Thackeray’s novel The Newcomes in 1854 and, therefore, it follows that Smith never had a theory – or even mentioned – capitalism or capitalist – in his writings. It also follows that the statement that the ‘outlines are already fairly complete in Adam Smith’ is, er, nonsense (apologies for being blunt but no offence is intended).

Adam Smith saw individuals as social and moral agents in his Moral Sentiments. Society was the ‘mirror’ by which individuals in society learned to distinguish those behaviours that were acceptable to others and arranged their compliance accordingly.

In Wealth of Nations he explicitly opens with social mankind in their exchange relations with each other, a relationship that went well beyond that of ‘truck, barter, and exchange’ in is writings on the formation of compound languages from the first ages of mankind, which arose from the ‘necessary consequence of the faculties of reason and speech’ (WN I.ii.2: 25). These faculties were present hundreds of millennia ago and certainly long before 19th century ‘capitalism’!

Similarly, in his Lectures on Jurisprudence (1762-3) and Astronomy (1744-50). Exchange requires at least two people in a relationship (Robinson Crusoe did not exchange anything with anybody – until Man Friday arrived) and is common to all societies from a handful to millions). And what an incredibly narrow view of mankind is in the 19th-century Homo economicus and its modern variants. Neither Robinson Crusoe nor Homo economicus have anything to do with Adam Smith’s philosophy nor his political economy.

I suggest a quick refresher course in Adam Smith's work is in order, as is a re-think about the thinking of Northrop Frye.