Debating The Other Adam Smith: A Response to Christian Thorne’s Review

31st May, 2019

Adam Smith

by Mike Hill and Warren Montag

 

In ‘The Old Adam, After All: A Review of The Other Adam Smith by Mike Hill and Warren Montaghttps://brill.com/abstract/journals/hima/26/3/article-p243_12.xml, Christian Thorne is perplexed, even offended, that we would call our book The Other Adam Smith. For him, the other Adam Smith already exists: it is the humanist reaction to the ‘old’ Adam Smith of Greenspan, Friedman, Hayek and Von Mises, the heartless exponent of ‘laissez-faire.’ The new reading inverts the old: Smith becomes a thinker of sympathy and sensibility who values moral sentiments over self-interest (which presumes that self-interest, once known as greed, is not a moral sentiment) and who, even in the Wealth of Nations, refuses to reduce society to the sum of the interactions between rational actors. More importantly, he advocates not simply high but ever-increasing wages for labourers and regards their poverty as a sign of economic weakness (as illustrated by his portraits of China and India). In sum, the scholarship of the past forty years shown that Smith, unlike his undeserving and, more importantly, illegitimate, heirs, was a man of sympathy and understanding who was acutely aware of the human costs of the free market. While Thorne identifies with the new, good, Smith, his insistence that Smith does not, and does not have to, depart from his commitment to market rationality to address problems such as famine caused by market failure, suggests that he shares more with the old view of Smith than he realises. In general, it is far easier to discern the many philosophical and theoretical orientations that Thorne rejects than those – within the last century, at least – to which he grants some validity.

Thorne, who describes The Other Adam Smith as ‘aswarm with detail’ that he has trouble following, nevertheless claims that we have constructed our Smith through a series of mutually exclusive and simplistic interpretations: good Smith, bad Smith, Enlightenment and Counter-Enlightenment, and perhaps most bizarrely, the Scottish Enlightenment against ‘Spinozism.’ There is very little direct quotation from our book in his review – we hardly discuss Spinoza except in the shortest of the book’s five chapters – and he supplies even less textual evidence to support the existence of the modern liberal Adam Smith he wishes we had endorsed. For us, the term ‘other’ means (a) a Smith based on his total corpus, much of which has yet to be integrated into the prevailing picture of his philosophy; and (b) a Smith whose complexity cannot be reduced to the opposition between the old and the new. An indispensable part of our approach is precisely the identification of what previous readings must exclude to say what they want to say. If Thorne wishes to promote a social-democratic, or perhaps ordo-liberal Adam Smith, he must do by accounting for what Smith does and does not say, not by attributing to him ideas that are missing from his actual texts.

The lengthy introduction to our book outlines the plurality of Enlightenments (and the many Adam Smiths) that existed in his time and ours (see, for example, our account of the famous ‘Adam Smith Problem.’) It is for this reason that we included many other Enlightenment figures who cannot be reduced to an ally of either the good Smith Thorne likes, or the bad one he says we offer. Our book may be ‘aswarm with detail,’ but the swarm is where we find the most enigmatic and interesting aspects of the Enlightenment. This is not because we were engaged in a covert operation to apply some sort of French swarm-theory that we refused to name – those damned French, as Smith's cohort might say – but because Smith and the wide range of figures we discuss have a peculiar relationship to collectivity that is neither a mirror of economic individualism nor an organic whole. To say, as Thorne bizarrely does at the end of his review, that we rule out resistance of any kind, is at odds with both the historical reality of the eighteenth century and what we actually say in the book. How many partisans of the new Smith discuss the phenomenon of hunger riots in the eighteenth century or workers’ struggles against wage reductions?

For us, if we are permitted to cite French philosophy, the problem with what Foucault called the ‘simplistic and authoritarian alternative’ of being for or against the Enlightenment is that it requires a normative reading of the relevant texts. Such a reading tells us not what they actually say, but only whether they adhere to a set of prescribed values, just as official Communism once demanded that literary and philosophical texts be determined to be either reactionary or progressive. Thorne repeatedly expresses a particular animus toward Spinoza and, in a moment perhaps of over-exuberance, refers to the concept, taken by Spinoza from Roman historians and used widely in Eighteenth-century texts in English and French, of the multitude, as ‘a neo-vitalist philosopheme’ we have projected back into the late eighteenth century. Is it then an anachronism to speak about Spinoza even though he was a central point of contention in European thought throughout the eighteenth century and the prime mover of what Jonathan Israel has called the radical Enlightenment?

Thorne evokes contemporary French and Italian philosophy (for which Spinoza perhaps serves as a stand-in) in the way that other critics have evoked Marx in their critiques of The Other Adam Smith: as our hidden agenda. The mere mention of Marx for right-wing Smith scholars, and for many liberal readers of Smith, is sufficient to relieve them of the burden of reading our book and having to confront a level of historical detail that simply tries their patience. Thorne’s assertion of the influence of Foucault, let alone Agamben, on the book signals to readers why we have been so ‘unfair’ to Smith. He prefers to ferret out a few traces of contemporary continental thought rather than discuss the Enlightenment figures we analyse at great length. Spencer Pack, one of the proponents of the New Smith, complained that we were ‘uncharitable’ to Smith, as if it were necessary for Smith, like the beggar he describes in the Theory of Moral Sentiments, to ‘extort’ a theoretical alms from the reader. But Thorne’s review clarifies Pack’s complaint: our sin is to have taken Smith at his word, to refuse in as systematic a way as possible to bend or twist the actual words, sentences and texts into a false coherence or into the shape of something they are not and make them say more and other than what they do say. In this, we have followed not simply Spinoza’s protocol of reading as articulated in chapter seven of the TTP, but EP Thompson’s as well. It was Thompson (who cannot be suspected of any sympathy for French philosophy), in ‘The Moral Economy of the English Crowd,’ who pointed out that the absence of any proposal for famine relief in a discussion of dearth and famine is the logical consequence of Smith’s insistence ‘that a famine has never arisen from any other cause but the violence of government attempting, by improper means, to remedy the inconveniences of a dearth.’ To provide Smith’s text with what it lacks rather than explain the necessity of this lack is to distort its literal meaning and to impose on it meanings that not to be found within it.

Thorne grudgingly grants our chapter on (among other things) Smith's ‘Astronomy Essay,’ and what Thorne (a little misleadingly) calls Smith's ‘aesthetics’ a certain degree of validity. He concedes that there may be some good lessons there (for example, on wonder), and then proceeds to ignore them. The full phrase concerning wonder is Smith’s own: ‘the pleasing wonder of ignorance.’ We offer two ways to read this line, and admit that there may be others, but deriving from this line the idea that wonder is a ‘menace’ or that it ‘can easily kill us’ or ‘drive us mad,’ as Thorne does, is not one of them. Ignorance can be pleasurable insofar as it prompts us on to error correction, or it can be pleasurable because it allows us to remain in a state of ignorance without having to undertake the work of knowledge. In either case, for Smith, it is the ‘surprise’ that constitutes the ‘threat’ Thorne finds intriguing. The ‘wonder’ does the kind of philosophical bridging that ends up with ‘admiration.’ There emerges a three-part sequence, the end of which is to produce a sense of stability that both narrows and extends the way knowledge is produced. We called this narrowing and extending by its modern name of writing within the disciplines, and wanted to provide a history of disciplinary division that would also reveal how reading makes things absent. We did not provide an account of Smithian ‘aesthetics,’ because (to his credit) he did not obey the law of disciplines (which were then still in formation). When Thorne says ‘and yet’ there is some value in The Other Adam Smith, and when he applauds our ‘reading much else’ in addition to Smith's available work, he evokes the conundrum of interpretation that we wanted to elucidate by examining Smith’s account of the formation of disciplines, and his method of interpretation. This conundrum is the result of the interruption of habitual ideas, and the challenge the acquisition of knowledge poses to an orthodoxy that must recover from the shock of the unexpected. In both instances, a new ‘tallying of numbers’ should push us beyond the too simple divisions between old and new, good and bad. We do not ask readers to choose between ‘system or anti-system,’ as Thorne insists; such an alternative only masks the alternatives within the notion of system itself, the antagonistic versions of system that populated eighteenth-century philosophy, existing as much within as between philosophers and their oeuvres. There are no ‘Scottish Enlighteners … subjected to A-B coding’ in The Other Adam Smith, as is alleged.

The definitive opposition of the old and new Smiths which, for Thorne, is unsurpassable, cannot make intelligible the irreducible contradictions and discontinuities within his texts: on the contrary, each side claims to present the real Smith, that is, a set of logically consistent postulates with which the texts must be reconciled. Some intractable passages, like the account of the invisible hand in the Theory of Moral Sentiments that has required what Spinoza called an act of textual extortion to be made compatible with the new Smith, must be shown to mean the opposite of what they say. Most, however, are simply overlooked and over time become invisible and unreadable. An interesting case in point involves chapter one of part I, ‘Of Sympathy.’ According to Google Scholar, approximately 40,000 books and articles in which this very brief chapter is discussed have appeared since 2000. Further, a cursory reading of a random sample taken from this number suggests that Smith’s opening sentence on sympathy is frequently cited in whole or in part: ‘How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.’ It is then all the more striking to note that the statement qualifying the notion of sympathy five sentences later has received little critical attention despite the fact that it cries out for interpretation: ‘Though our brother is upon the rack, as long as we ourselves are at our ease, our senses will never inform us of what he suffers.’ This strange sentence raises or should raise many questions. Why brother? Why a rack? How can we know that we do not know from sense experience what our brother suffers? This sentence, in contrast to that quoted above, is cited approximately 200 times and thus enters the discussion of sympathy in approximately 0.5 % of the scholarly publications of same period. Smith’s work is in fact filled with remarkable passages that remain un- or under-interrogated, while the same few passages continue to occupy the attention of commentators, distorting and simplifying the real complexity of The Theory of Moral Sentiments and the Wealth of Nations.

Thorne himself, clearly bothered by our acknowledgement of Smith’s silence on the issue of what would today be called the endogenous failure of the grain market, failure that cannot be attributed to external government interference, attempts to paper over the gap in the text, by insisting that Smith’s unstated solution was or should have been a market solution. In fact, Smith has no practical solution, but instead uses theory to explain away famine as mere appearance, an illusion arising from fear and ignorance: the unerring immanent rationality of the market means that famine cannot be the result of the market’s autonomous and self-regulating operation. Dearth, a situation in which many people are weakened by hunger but where mortality rates have not risen significantly, becomes famine only when the state attempts through various means to increase the availability of food to the affected populations. This does not mean that Smith denied the economy’s moral mission: after all, if one wants to feed the hungry there is no more efficient means of distributing food to those who need it than the unregulated market (that is, there is no alternative). Thorne seems to think that this moral meaning separates Smith from the amoral, if not immoral, sentiments of those responsible for constructing the bad old Adam Smith. But this is not the case: Von Mises and Hayek repeatedly argued in their many and highly repetitive works that socialism (which they defined differently in response to the specific enemy they faced: pre-war social democracy, the post-war socialism of Red Vienna, or Bolshevism after the Russian revolution) was not simply wrong but could not work. They argued that capitalism, in the form of the private property of the means of production and the unfettered market, was the best of all possible economic worlds in moral terms: the market would supply the needs of the poor far more efficiently than any form of charity (not to mention the government handouts mass movements ‘extorted’ from cowardly leaders). More importantly, there was no alternative to the unhampered market but ruin, devastation and famine.

For Smith and his French predecessors, certain phenomena vulgarly understood as evils (Smith’s ‘inconveniencies’) had to be permitted, insofar as they played in an essential role in the system that would insure the best outcome in the production and distribution of necessities. To use the language of Leibniz’s Theodicy, they were evils required for the emergence of a perfection greater than what it would be without them. Those who, out of fear and ignorance (Smith) or envy (Von Mises and Hayek), would try to banish these evils before they have done their work could only make things worse precisely for those in need. It is this concern that led Von Mises to devote a section of Human Action to a refutation of Anton Menger’s The Right to Whole Labor of Man, particularly Menger’s argument that there must be a legal and enforceable right to existence for civil and political rights to possess any other than a symbolic meaning. Such a right, to Von Mises, could only lead to an infringement of the immutable laws that make the market the providential design it is, disrupting its hidden order and inhibiting, if not destroying, its efficiency. He was horrified that states would allow ‘the mass’ emboldened by its numbers to demand that the state prevent their starvation by seizing the food that belongs to the merchant, by artificially undercutting market prices through subsidies, or by compelling merchants to sell at a rate below the market price. This what we might call the messianic supplement to what is typically the providential conception of market equilibrium: the appearance of disorder and dysfunction are in fact signs of the prosperity to come and whose coming (which cannot be hastened) is delayed by any attempt to circumvent the natural laws of the market. Let us recall that Smith argued that the mobs that plundered the storehouses of grain merchants seeking to relieve their hunger and malnutrition were not simply wrong for violating the property rights of the rightful owners of the grain. More importantly, their failure to observe the immutable laws of the market expressed their inability to identify and act upon their own self-interest, unlike even the most ignorant of the grain merchants.

Smith’s silence on famine relief is thus not simply the silence of an unstated assumption but is determined by two fundamental and entirely fictitious guarantees that allow him to dismiss the problem of starvation in those places, like France and England, in which only government interference could bring about mass hunger or famine. The first is his theory of the determination of wages. Wages rise and fall according to the law of supply and demand: is it not possible that they could fall so low that the labourer could no longer purchase what is necessary to his continued existence? Smith’s answer is no; wages can never fall below the level of what is necessary to secure the subsistence of the labourer, which forms an absolute floor of wages. Smith’s argument, vague and evasive as it is, is neither historical nor based on empirical evidence. It represents a providentialism that would today be called functionalist: for the market to deprive itself of the labour on which it thrives would amount to its self-destruction and it always acts to promote its own growth. The corollary of this argument is that for laborers to impose through the violence that commands Smith’s attention a rise in wages beyond the market price of labour would be to undermine the profit-driven expansion of the economy that will alone insure an ever-rising wage.

Smith’s second fictitious guarantee, articulated against the background of food riots, concerns the notoriously unstable price of food. If permitted to rise, prices preserve and increase the food supply: they are the most effective form of rationing. The ‘inconvenience’ of dearth is thus necessary to insure an adequate supply of food. His argument that famine is simply not possible under the regime of the unregulated market serves to deprive the food riots not only of any legitimacy, but even of rationality. The mob’s failure to understand the intricate workings of the market leads it to plunder storehouses or simply to impose price reductions by force, just as a century earlier mobs demanded the execution of witches. A market solution to the market crisis had been tried with disastrous results in pre-Revolutionary France (as Smith knew from Turgot). The idea that the market knows best how to ration food and does so through rising prices which must be allowed to rise as high as they need to go entailed considerable risk for the people and they knew it. Few accepted the assurance that constant hunger and growing weakness were not really signs of incipient famine, but a temporary shortage that the action of the market left to its own devices would address. They knew from experience that it might take a week, a month or more for supply to respond to demand and that the notion that people could survive through judicious rationing of what the market permitted them to buy was a myth. As Turgot, on the basis of his own observations, cautioned Hume: it is an absurdity to think that a day’s supply of food allotted by the market to a family of five can be stretched to feed six or more for more than a few days.

            It should be clear that denying the possibility of famine and defending the rational necessity of a rise in prices, no matter what the effect of that rise on significant part of the population, cannot be understood as a proposal for famine relief. The fact that Smith chose a rhetorical strategy different from that of the physiocrat Roubaud who explicitly demanded the immunisation of grain merchants and the protection of their lawful property in the face of the deadly hunger he had the honesty to admit was very real, does not change the fact that their positions were nearly identical in practice. Moreover, our discussion of the ‘unfortunate man’ who is abandoned by law and allowed to starve is not a reference to Agamben. It is a direct citation from Roubaud writing two centuries before Agamben. The new Adam Smith acknowledges the limits of the market, perhaps even the possibility of its failure. Here it is Thorne, not us, who has adopted the position of ‘the old Adam.’

Moreover, for Thorne, as well as for liberal historians such as Emma Rothschild, the conflict that defined the eighteenth century was that between the aristocratic defenders of feudal privileges, labour guilds and the wage and price controls imposed by an absolutist state, and a freedom loving bourgeoisie whose drive for the free movement of labour, wages and prices enlisted the support of the toiling classes. We should note, however, that this same historical moment was described in very different terms by Marx: for him it was the world of primitive accumulation in which tenants and laborers were indeed set free, but from their ties to the land (and thus subsistence). They were what Marx calls Vogelfrei, a medieval German penalty that placed the offender outside the protection of law, like a bird set free without protection or care to be devoured by whatever predator it encountered. The experience of the French revolution showed that the rural and urban masses rejected the freedoms demanded by the partisans of market rationality at least as much as the restrictions imposed by the old order: allowing the market to increase prices as much and for as long as it took for an adjustment of the ratio of supply to demand had been tried and proved in practice to be the road to hunger and destitution. In the eighteenth century, it was the people, ‘le petit peuple,’ who were the agents of anti-market price controls and grain distribution; the state acted, if and when it did, out of fear of their revolt. It was they who subordinated the property rights necessary to the market to the more elemental right to subsistence, as the draft constitution of 1793 showed. It offered a version of the enforceable right to subsistence that Von Mises would denounce as ruinous to the operation of the market: Les secours publics sont une dette sacrée. La société doit la subsistance aux citoyens malheureux, soit en leur procurant du travail, soit en assurant les moyens d'exister à ceux qui sont hors d'état de travailler (Article 21).

This is what is recognised in neither the old nor the new Smiths. Throughout his works, there appears at critical points another dynamic, irreducible to the opposition between the absolutist state and its feudal allies and an emergent bourgeois order, each with the values and norms proper to it: the dynamic set into motion by the independent mass struggles of rural and urban laborers. Surely it is obvious that their protests aimed to impose limits on increases in the price of food and other necessities, and not to free the market from its feudal or mercantilist chains to allow prices to rise as they will. Just as obviously, for Smith, these revolts were driven by fear and ignorance, that is, superstition, and remained a permanent threat to market rationality. Further, he described the resistance that exists even at the level of the individual labourer: the first chapter of the Wealth of Nations outlines the dystopian level of surveillance and control over the body of the worker made possible by new forms of production that assemble ever greater number of labourers into a single space and that through the management of time and motion restrict the worker’s physical actions to a degree never before seen. Here, Smith shows the way that resistance precedes and provokes the forms of subjection necessary to the free market. The fact that he conceives this resistance only negatively as an object of fear, does nothing to change the fact that he granted a place to the mobile vulgus (or mob) on the stage of history. This is a point of convergence between Smith and Spinoza: both recognized and feared, if to different degrees, the power of the masses or multitude to preserve or destroy political and economic systems.

Smith allows us to see in the fear he expresses the power of what E.P. Thompson in his work on eighteenth-century food riots describes in rich detail: the knowledge and intelligence that accompanied the physical power of the labouring masses. In a different register, Hume identified the threat as ‘the many latent claims … of popular principles.’ We emphasise the word ‘many’ to point out that such ‘popular principles’ were neither unified nor without paradox and contradiction. This is why otherness as such is so hard to identify. For partisans of the old and new Smith alike, including Thorne, the depictions of resistance and revolt against the unhampered market in food or the physical demands of the division of labour as Smith imagines it, the ‘shocking violence’ of workers whose wages have been adjusted to market levels, placing an adequate supply of food beyond their reach, are invisible or, if noticed at all, declared the epiphenomena of Smith’s theory. For us, these movements, or the argument he carries on with them, are at the centre of Smith’s corpus, a centre that continues to be absent only to who refuse to see it.

 

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