Friday, December 23, 2005

Once More With Feeling

James K Galbraith contributes another article to Mother Jones, similar to the one he published in November (see archive on the right-hand column for November, which contains my initial reply to it and to comments on it by Galbraith), which he must have been pleased with because the recent article contains some of the very same paragraphs, word for word, identical to his November article. The December/January article is titled: "Smith v Darwin".

Presumably the editor didn’t notice the duplication or doesn’t mind paying twice for the same material; hopefully, for the editor and the author, readers of Mother Jones do no not mind paying twice to read nearly the same articles in successive issues, if there is enough new material to make it otherwise interesting.

In typical style, James Galbraith quotes from, "The Metaphysical Club", by Louis Menand, who asserted that “God and science really don't mix. Darwin didn't invent evolution. He invented Godless Evolution” and “the purpose of On the Origin of Species was not to introduce the concept of evolution; it was to debunk the concept of supernatural intelligence—the idea that the universe is the result of an idea."

Such sweeping summaries leave much to be desired. If Origin of Species had a purpose it was to explain natural selection as an idea and to register the claims of Darwin to have been the author of the idea based on his research in HMS Beagle. I recollect nothing in Darwins' Origin of Species about him 'debunking' God.

Darwin’s concerns were primarily about how the religious body of opinion (including his wife’s) would take to a scientific statement that appeared to call into question the Biblical teaching on the origins of humans, which is why he delayed publication of his theory until prompted, accidentally, to publish because of Wallace’s discovery of the same hypothesis and his intention to publish his ideas to the Royal Society, pre-empting what Darwin had concluded years before.

Economists” asserts Galbraith, “on the other hand, have been Intelligent Designers since the beginning. Adam Smith was a deist; he believed in a world governed by a benevolent system of natural law. Consider this familiar passage from Wealth of Nations, published in 1776, with its now mostly forgotten anti-globalization flavor:

"By preferring the support of domestic to that of foreign industry [every individual] 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

This conclusion is quite inappropriate, as I suggested last month in reply to the same paragraph by Galbraith. As then, I appeal to Galbraith to read the passages from which he takes his selective quotation. Smith is writing about what he considered was the ‘natural’ and appropriate evolutionary line of the development of a commercial society. From investment in agricultural improvement, he saw ‘merchants and manufacturing’ as the next destination of investment (commerce) and then in ‘distant sales’ domestically, and finally in the ‘carrying trade’ and overseas. This progression would increase domestic wealth creation first and world trade second.

All capital stocks diluted from investment in domestic output retarded domestic investment. The concept of absolute advantage, allied with the international division of labour, was at the heart of his ideas about the benefits of international trade. He was not what today is described fashionably an ‘anti-globalist’.

The reference to the invisible hand is a metaphor, not a theory of markets, nor an allusion to religion. Smith was not a deist. He borrowed the metaphor from Shakespeare (Macbeth: 3.2). It has been made a theory by 19th -, and particularly 20th -, century economists pursuing different agendas in support of the notion that any regulation of markets is not a good idea, a wholly non-Smithian policy.

That Veblen, “The greatest American economist”, turns a single metaphor into a theory, is more a comment on Veblen’s style than an authoritative judgement on intelligent design and Smith’s meaning. Apparently, Galbraith has a theory about Smith and his happy to keep repeating it. If Smith had never mentioned his single use of the invisible hand metaphor it would make not a jot of a difference to anything in “Wealth of Nations”. It was a comment on the unintentional consequences of human motivations and never a theory of how markets work (fully explained in Book I.vii).

By the time Veblen was writing (19th-20th centuries), Smithian political economy had been abandoned and the profession had moved in to economics en route to mathematics. Anything ‘sublime’ in economics had nothing to do with Adam Smith. All his works are parts of an evolutionary view of society, its growth and development. What the modern economists have made of the invisible hand is entirely their doing, not Smith’s.

He certainly centred on the individual working in concert (though not always in tune) with others to create, unintentionally, language, divisions of labour, differing means of procuring subsistence, different societal forms, the arts and knowledge, and what we call today markets. His consciousness that societies could grow and then decline; that ‘progress’ was never continuous or assured, and that they could ‘crumble into atoms’ were evidenced by hi understanding of history. For Smith, the fall of Rome was real; it showed the fragility of civilisation.

Smith taught and wrote about the fragility of human endeavours and the conditions conducive to their capacities for limited progress. He was not optimistic of the outcome; his appreciation of venality of the ‘rulers’ of mankind, the mendacity of men of influence and the ‘ignorance’ of the common majority were characteristic of his appreciation of the obstacles in the way of the achievement of his modest proposals for change.

James K. Galbraith claims to be familiar with Smith’s works. This is not yet supported by what he continues to assert about their contents.


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