Home > Uncategorized > Would Adam Smith Occupy Wall Street?

Would Adam Smith Occupy Wall Street?

I’m studying for my comprehensive exams right now, which means I have to read a ton of books and then try to remember all of them. One of the books I’m trying to remember is Emma Rothschild’s Economic Sentiments: Adam Smith, Condorcet, and the Enlightenment. It’s a mouthful of a title, but it’s an excellent revisionist, or recovery, reading of early political economists, like Smith. Her driving purpose is to read these philosophers before there was such a thing as economics (which, as a discipline, still didn’t exist yet) and trace some of the other “sentiments”–moral, political, (anti-)religious, philosophical–that fed into, say, Smith’s Wealth of Nations. Rothschild is also unabashed that her argument has implications for 21st century debates about economics in general and how we interpret Smith. She feels–and I would agree–that Smith’s work has been read too glibly as a laissez-faire polemic, the first cry of free market fundamentalism.

As Rothschild shows, our modern depiction of Smith shouldn’t surprise us, because his successors–not even a couple decades after his birth–already began reducing Smith’s nuanced and complex arguments into a straightforward message of “market-laws-are-God’s-laws.” As economics as a discipline, as a type of science, emerged, popularizers and advocates of free market principles latched onto Smith and positioned him as a leading figure.

And in many ways, it’s not an entirely inaccurate picture. Smith was highly suspicious of government-run economies, of tariffs and colonies and all sorts of political capitalism. But if we begin to equate Smith with modern free market policies, we can forget his strong distrust of all systems and institutional powers and the way they are manipulated against the helpless and poor, and the role he believed governments had in protecting against those abuses. Smith is often very veiled about his politics, and can speak tactfully and carefully without revealing his true opinions, but his most vehement arguments are launched against conniving merchants that would manipulate wages through monopolies and all other back-scratchers that would leverage influence and power for their own gain, which–as Smith brilliantly argues–almost always comes at the cost of other people. According to Rothschild,

Smith’s real sentiments about poverty, too, were disregarded by 1800. He is indignant in the passages about wages which inspired Whitbread, and far more so in his unpublished works: as when he says, in the lectures on jurisprudence, that the poor laborer “supports me whole frame of society,” yet is “himself possessed of a very small share and is buried in obscurity”; that “it may very justly be said that the people who clothe the whole world are in rags themselves”; or that “laws and government may be considered . . . in every case as a combination of the rich to oppress the poor.” He is tolerant in his view of government interference, especially when the object is to reduce poverty…Yet these passages, too, were virtually ignored in the interpretation of the Wealth of Nations as a book with a single principle, “that all trade should be free.”

There are many other similar points Smith makes in Wealth of Nations (e.g., when he argues for progressive taxation: “the rich should contribute to the public expence, not only in proportion to their revenue, but sometlling more than in that proportion”). While many point to his passages praising the productive power of the division of labor in Book I, it is easy to forget that in Book V, Smith is worried about the deadening effect that comes from performing the same operations over and over again which can not only make life a bore, but undermine the moral fabric of society. He writes:

The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life. Of the great and extensive interests of his country he is altogether incapable of judging, and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war. The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expence of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless government takes some pains to prevent it.

Smith believed the government should prevent such mental torpor through universal, public education, even for adults, so that their minds can stay sharp despite their monotonous labor. Smith’s drew a distinction–an important one, for advocates of Smithian economics–between government intervention into the market economy and other government services, and supporting the former does not have to come at the expense of the latter.

Part of the difficulty of teasing out this more nuanced picture of Adam Smith is that, frankly, Wealth of Nations is just way too long for our tastes. And yet it is its very length, it’s intellectual (and physical) heft that also makes it that much more convincing. We might be deterred at trying to comprehend all its minutia, but we are also humbled by its venerated and daunting reputation. Therein lies the irony–the feature that in part awes us so much is the same that deters us from engaging it ourselves. Except for the Bible, perhaps no book in Western culture is venerated so highly and yet so deeply ignored or misunderstood as Adam Smith’s Wealth of Nations.

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