Saturday, July 29, 2006

Adam Smith on the Origins of Government

A contributor to News Blaze (‘Support our troops, Read their stories’) discusses ideas about Maoist socialism and western capitalism, in a clear example of American free speech, somewhat at odds with the usual image of writers in military magazines. I comment on a couple of extracts (Google News Blaze for the URL, as mine came via an agency without the details).

Maoism or Capitalism From Economic Perspectives’ by Kamala Sarup (in News Blaze’, Folsom, California, USA).

‘What I also understand is that "capitalism" is not an economic system so much as recognition of a fundamental reality: it is the accumulation of "capital" which allows investment, which allows creation.

That such efforts normally fail is simple. That is, it proves very difficult to tell people to "be free" in certain areas but not in others. Sooner or later, they start crossing the regime's red lines!

On the other side I want to argue like here's an Adam Smith quote in it I used. Smith said "civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor." Smith would have railed against giant corporations if he were alive today. They plunder the world and we fight wars for them like in Iraq.’

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.

Now, in this context, only sketched in the thinnest of outlines above, Smith’s statement about government protecting the possessors of property against those without any (except in the property of their labour) is a different message than the one bluntly quoted by Kamal Sarup.

[A Nepali Journalist and Story Writer, Kamala Sarup is specialising in in-depth reporting and writing on Peace Resolutions, Anti war, Women, Anti Terrorism, Anti Fascism, Democracy, and Development.’]


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