Adam Smith, the City, Natural Order, Republicanism

Primary version if this post, with visual content, at Barry Stocker's Weblog

At the end of Book III, Chapter 1, ‘Of the Natural Progress of Opulence’, of An Inquiry into the Nature and Causes of the Wealth of Nations, Smith refers to a unnatural and retrograde order. What he means is the inversion of a natural progress from agriculture, to manufacture to international commerce. That natural progress is the progress from improvements in agriculture which allow the formation of towns and investments in manufacture, and a similar progress to international trade.

The unnatural event takes place in European cities where international trade has introduced new luxuries to cities. These luxuries influence domestic manufacturers who compete in that new market, and that further influences agriculture.

I’ve mentioned dialectic in Smith a few times, and Smith as bringer of dialectic into his definitive work on political economy. The idea of an unnatural order is either a break down of dialectic, or a suggestion that dialectic leads to rigid unifying forms. Writing about Pascal and Smith as dialecticians yesterday, I suggested that Pascal’s form of dialectic is more contradictory, more concerned with paradox than Smith’s. Kierkegaard also provides a model of a more paradoxical kind of dialectic, he had a good phrase for it, dialectic of the absurd.

Smith is shocked by something that is clearly inevitable, I would have thought. That is the feedback consequences of a long historical process, so that ‘older’ forms of wealth are influenced by the older forms. There is a moralism here about the influence of ‘luxuries’, not that Smith ever thinks it would be a good idea to try to restrict them. At an earlier point in The Wealth of Nations, Smith even recognises the positive impact of the wealth of towns on the surrounding countryside. He also suggests that an alliance between monarchs and cities in the Middle Ages was a good thing in hastening the end of feudalism, and the increase in free trade.

The moralism about cities appears in a slightly different form with regard to cities which are centres of political power. Smith refers to the huge waste of a royal court and its hangers on which outweighs even the wealth produced by Paris. At another point, Smith mentions the expense of royal courts and back tracks to refer to the honourable role of high royal servants. I’m disposed to believe that Smith was a covert critic of royalty. From that point of view, it;s interesting that in the discussion of the Navigation acts he repeatedly refers to what he normally calls Holland, also known then as the Dutch Republic, as the ‘maritime republic’. Smith strongly hints that royal courts continue the tradition of wasteful expenditure on hangers on, which is wealth diverted from investment, in nomad princes and the like.

The implied criticism of royal expenditure, and of the institution itself, is rather mingled with moralising about the sort of people to be found round royal courts. That lurking republicanism is maybe associated with the less rational dislike of the inversion of nature, since royal expenditure might be regarded as the diversion of economic capacity, occasioned by a premature entry of luxury goods from another country,

This odd outrage at countries which don’t follow economic stages in the right order, is in tensions with the feedback processes Smith otherwise values; and his general feeling that trade should be left alone, except where really very strong moral and national interests are at stake. It also suggests a limitation in the understanding of ‘nature’ at the time, which has natural theology somewhere within it, that is the view that everything in nature moves forward in orderly stages to an end ordained by God. I don’t think that notion is really abandoned, in general, until Nietzsche, and then later in the 19th Century when Darwinism became neo-Darwinism, and when the laws of thermodynamics led to a cultural interest in entropy in nature.

Blaise Pascal, Adam Smith and Dialectic

Primary version of this post, with visual content, at Barry Stocker's Weblog.

I’ve already mentioned the idea that Adam Smith belongs with Clausewitz as a ‘dialectical’ thinker, that is a thinker concerned with the relation between opposite, and differing , ideas and material forces, and how they are transformed when combined. That is dialectic in a rather general sense. The idea if dialectic was for sometime clouded by a few issues: association with Hegel and the belief that Hegel was an incomprehensible charlatan who was somehow responsible for Fascism and Marxism-Leninism (though if he was incomprehensible it’s difficult to see how he could have been responsible for anything; association with the dismal official ideology of Marxism-Leninism in the communist countries, and distinctly philosophical sub-prime manuals of dialectical materialism; Kant’s attacks on dialectic, by which he meant doctrines of concepts taken beyond the limits of experience, this is sometimes regarded as a refutation of Hegel before he got going, but that most Hegel scholars regard his ‘dialectic’ as a reconstruction of experience.

The situation for dialectic has improved. The inadequacies of state sponsored Marxism-Leninism is not a living issue; Hegel’s reputation as a constitutional thinker has been rehabilitated; Hegel’s method has been understood as something different from what Kant was attacking (a rather big subject I can’t begin to tackle here).

It’s widely recognised that Smith was a dialectical thinker. It’s widely recognised that Pascal was a dialectical thinker. However, the relationship between Pascal and Smith has only be looked at with regard to ideas of self-interest (self-love in Smith and amour-propre in Pascal) and notions of virtue. I haven’t even seen a detailed comparison on that issue, but there is some understanding of the connection. What I have not seen is an account of the connection between Smith and Pascal, with regard to dialectic. There may be some work out there, but it’s not easy to find.

Pascal’s sense of the dialectic is more contradictory than Smith, but they have the following in common.

The difficulty of combining a global and particularistic point of view, which would be necessary to real knowledge.

The sense that self-interest serves collective interests, at least under an effective sovereign authority

A sense of the limitlessness of human desire combined with the finite possibilities than can be grasped.

Pascal’s thought contains a sense of interaction of parts and wholes, which Smith finds in the world and which must be present in the structure of his thought. Smith does not reflection on his own thought, but he does reflect on the way that individuals find it difficult to grasp the consequences parts coming together. He quotes the community in Britain which tried to reject a road because it thought that would allow competition to drive local producers out of business. The real effect is that some producers lose out, but the community gains overall from lower prices and greater competition, and the chance to invest a bigger surplus in new businesses. This seems removed from Pascal’s concerns, but Pascal was aware of the rise of commercial society, though in less articulate terms than Smith, This informs Pascal consciousness of self-love and limitless desire in humanity.

Smith seems more optimistic and social, Pascal seems more pessimistic and inward looking. Both are concerned with a restlessness in human spirit where extremes of moral elevation and depravity become very close. Both look at how the human individual reacts to a world of infinite divisibility: atoms for Pascal, division of labour for Smith. Both look at a world of infinite scope: ever growing markets with ever more intense production in Smith, infinite spaces in the universe, and the infinity of God, for Pascal. Both are concerned with how those must interact in a way which never produces a final comprehensible moment of unity and stasis.

I don’t suggest a direct link, both knew about the history of philosophy, modern science, and were sensitive to the the development of the social world towards the paradoxocal looking combination of greater complexity and integration. Pascal talks of gambling, and uses it as a way of thinking about how we have faith in God, in ‘Pascal’ Wager’; Smith talk about a world of calculation of economic factors and risk taking by economic agents.