Saturday, February 11, 2006

Smith was not Deist

James K. Galbraith has graced the pages of this Blog on several occasions (mainly critically). He has a distinguished cv as an economist and writes regularly on the ‘issues’ from a ‘progressive’ perspective. None of this prevents him being wrong on Adam Smith. A typical example is from one of his regular articles in Mother Jones (December-January):

“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."

Smith's Creator did not interfere. He simply wrote the laws and left them for events to demonstrate and man to discover. The greatest American economist, Thorstein Veblen, observed that "the guidance of…the invisible hand takes place…through a comprehensive scheme of contrivances established from the beginning." What is this if not Intelligent Design?”

Taking the above at face-value it contains ideas that I find problematical.

“Adam Smith was a deist”

a careful reading of Adam Smith’s works in their context of 18th century Scotland, with its religious climate and the evident doctrinaire approach of Christian zealots who could, and did, make life miserable for those they considered apostates or atheists, or worse, if they merely suspected them of these ‘crimes’, suggests that the face-value of a charge of deism based on an intellectual’s writings two centuries later is not worth as much as it seems.

Smith’s close friend, James Hutton, (1726-1797) who became his co-executor with Joseph Black, was a major influence in the world of scientific geology in the 18th century. His writings are replete with religious terminology of the kind used by Smith in his writings.

They had similar ideas about the evolution of Nature and how human minds impose ‘order, regularity, purpose, and wisdom’ as a ‘heuristic aid’ to understand phenomenon. Hutton cautioned against limiting ‘nature with the uniformity of an equable progression’ and ‘intention may be found in nature, but this intention is not to be supposed, or vainly imagined, from what we may conceive to be’ (Hutton, J. “The Theory of the Earth; or an investigation of the laws observable in the composition, dissolution, and restoration of land upon the globe”, Royal Society of Edinburgh, Transactions, v. 1, 1788, pp. 209-304, quoted in Sengor, A. M.Is the Present the key to the Past or the Past the Key to the Present?,’ Geological Society of America, Special paper 355, 2001, p. 20).

Reading Hutton or Smith and concluding they were deists or, as Galbraith states of Smith, ‘believers in Intelligent Design’, when in fact they both took great pains to hide their scepticism, if not their outright atheism, is in error. I discuss this theme in greater detail in my forthcoming study of Adam Smith for Palgrave’s Great Thinkers in Economics series (2007).

Hutton wrote at the time of the Scottish sedition trials of 1793-4 (Smith died in 1790) and both lived through an era when to ‘go against the Church was to go against the State and the penalties were severe’ (Sengor, above, p. 20). David Hume was denied employment in the Universities of Edinburgh and Glasgow and attempts were made to prosecute him for apostasy. The zealots even prosecuted Francis Hutcheson (Smith’s mentor at the University of Glasgow) on weak and silly charges, despite him being a most celebrated professor of moral philosophy and an ordained Minister in the Church.

Sengor quotes a colleague who ‘compared Hutton’s Edinburgh with the United States of the McCarthy era.’ Whilst making no excuses for McCarthy, I think modern Iran under the ex-Mayor of Tehran is a more relevant comparison of the religious climate in Smith’s Edinburgh. How would James K. Galbraith adjust his prose style if modern America suffered anything like the regime under which the Scottish Enlightenment flourished by avoiding overt attacks on religious notions? Much better to write with great circumspection and use the cliché phrases learned in the relatively harsh education system was religious divines, as did, to an extent, Charles Darwin who wrote cautiously sixty-nine years later.

Smith was not a deist; he wrote in code to avoid attracting the reactionary reprisals of some fairly awful and largely ignorant people who did not live up to the admonition in the New Testament to ‘turn the other cheek’ – there is no fury like the fury of a fanatic carrying a big stick and a hanging rope (or today, a belt of explosives).

The second of Galbraith’s errors is in the partial quotation from Smith’s “Wealth of Nations”, prefaced with the woeful nonsense of ‘its now mostly forgotten anti-globalization flavor”. Smith discusses the preference of individuals for applying their capital stock in the neighbourhood in which they can watch over it, rather than sending it away or abroad and out of sight. Only the very rich and powerful, and those with powerful superintendents, could risk that. Keeping in within sight had the consequence that a neighbourhood’s or a nation’s capital stock grew quicker than it would if it left the country (because, in value-added terms, the products of the labour of the neighbourhood remained local – sending it abroad meats only that the profits returned to the owners of capital stock, which were a smaller proportion of the value-added).

This had nothing to do with ‘globalisation’ in Smith’s time because Britain was going through that phase in the accumulation of commercial capital known sometimes as ‘primitive accumulation’ (about where Africa on the ground is now; ignore the thieves in government). Capital stock was scarce and usually existed in small, individual amounts commensurate with tradesmen, artisans, merchants and shopkeepers. The era of vast capitals was still over the horizon; therefore, it was not part of the “Wealth of Nations”. There were some capital outflows to the colonies and mercantile policies kept their added-value within the British Empire. No view was expressed by Smith of whether this was an appropriate policy for a different level of capital accumulation, as exhibited in the mid-19th and 20th centuries. He was not a visionary predicting the future.

That political economists like Frederick List (1841) were hostile to the export of capital out of what he envisioned would be the German Empire (Reich) within the expanded borders of the separate states of Germany is quite clear in his writings, and we know now where such anti-foreign ‘globalisation’ ravings ended up in the 20th century.

Thorstein Veblen’s assertion about the invisible hand – a lonely metaphor in “Wealth of Nations” (a metaphor that is not even in the index in editions edited by Smith) – has been blown-up out of all proportion by 20th century campus economists. Today’s exaggerated imagery is linked to Smith’s name as if he conceived of his (or rather Shakespeare’s) metaphor in the same manner as Veblen and others were to see it a century later. Galbraith writes "the guidance of…the invisible hand takes place…through a comprehensive scheme of contrivances established from the beginning."

So that when Galbraith asks the rhetorical question: “What is this if not Intelligent Design?” I am bound to answer that Galbraith should ask himself the question and then ask Veblen, but not ask Smith. Veblen and Galbraith’s assertions are incorrect, unhistorical and have no basis in anything Smith wrote. They are no part of Smith’s legacy, nor were his alleged beliefs about the deity or religious meanings attributed to the invisible hand.


Blogger Gavin Kennedy said...

I have expressed already my policy is not to make unwarranted criticism of anybody’s assessments of Adam Smith’s writings. Lost Legacy usually criticizes ideas and tries to avoid criticizing individuals, especially where their records show them to be of some standing in the profession.

That I returned to James K. Galbraith (November, December, February) is not because things are ‘quiet’ on Adam Smith (they are in fact fairly busy each week, as this Blog’s contents show) but because James publishes in Mother Jones and shows little sign of responding to my points, except to repeat the views which I consider to be in error. These are not major failing or reasons to fall out on a personal level.

That a ‘great many authorities think’ Smith was a Deist does not justify mere repetition that he was. When scholars are shown contrary evidence they should consider it, and if it seems reliable, when checking the sources, they should at least qualify their assertions. How much Thornstein Veblen knew about the conditions in Scotland during the Enlightenment is not clear, except his ignoring the religious climate suggests if he did know anything he ignored it.

I make no claims for my forthcoming book (I would be surprised indeed if anybody was to call it ‘great’) and this was not the purpose of my mentioning it here. I recognize that I have not marshalled and presented here all of the evidence for Smith not being a Deist, except a few tell-tale pointers that suggest he was not, and which readers may follow up for themselves.

I added material about his friend James Hutton, just to indicate I was not making my claims up – they have been made by others, including ‘authorities’. The point about my book, due in 2007, was more to excuse my not going into detail to back up my case (in the usual scholarly manner) because this is contained in something I am writing for another purpose. No suggestion is implied that I expect James, or anybody else, to have read a book not yet published; my concern is that he may not have read widely enough on what is already in the public domain – Smith’s works, journal articles about them – but relies entirely on those authorities, admittedly the majority, who assert ‘Smith was Deist’ to add his own substantial credibility among economists to what is, in my humble view, an error.

I recently quoted the admirable work of Jerry Evensky, who makes a firm scholarly case for Smith being a deist (Evensky, J. 2005. Adam Smith’s Moral Philosophy, Cambridge University Press). I don’t agree with Evensky on Smith’s Deism but admire his work; I don’t agree with James Galbraith on Deism but acknowledge his work. Ideas are not to be taken personally in the republic of letters.

Smith’s mention of a preference for security (or any other reason or emotion) of one’s own capital stock, which is perfectly understandable and what was practised in 18th century Britaion, especially among the small to middling merchants and manufacturers, and, of course, smaller farmers, having the unintended consequence that it benefited society was certainly based on the fact that overseas opportunities existed, and were mainly exercised by richer merchants, the Royal Charter Trading companies (e.g., the East India Company) and not local merchants and journeymen. Of the great joint-stock chartered monopolies, Smith was most critical, not just of their corruption and vileness as ‘governments’, but also of their negative effects on local and national growth in Britain. They also cost expensive wars to maintain them.

Wealth of Nations is precisely about the conditions that ‘cause’ local/national wealth to grow faster and others that cause it to grow slower. Among the other causes that inhibit local/national wealth creation, he included monopolies, apprenticeship and settlement acts, tariffs and bounties of all kinds, and events like wars over frivolous issues. He accepted for reasons of state that some negatively-helpful growth deterrents, like the Navigation Acts, were necessary, even at some cost in growth terms, though he did not favour a policy of Empire merely to provide a market for monopolised distant sale (more worthy of ‘a government influenced by shopkeepers’ was how he expressed it).

I thank James for drawing my attention to a misattribution of a quotation to him instead of Veblen, for which I unreservedly withdraw and, of course, apologise. It is, however, still incorrect, whoever said it.
Smith did not believe in the inevitability of progress; retrogression was possible within his evolutionary model. Nothing was pre-ordained to happen. It was also central to his assessment of human society, shown in his treatment of European society as barbaric for 1,000 years after the fall of Roman civilisation, until the commercial age began to revive gradually from the 16th and 17th centuries.

3:53 pm  

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