PHILOSOPHY

The Moral Philosophy of Adam Smith

Roger Cloet, Member on 3 July, 2001

Adam Smith lived from 1723 to 1790. He was born in Kirkaldy, in Fife. He was appointed to the Chair of Moral Philosophy in Glasgow in 1752, at the age of 29. His best known book: An Inquiry into the Nature and Causes of the Wealth on Nations was first published postulated by Isaac Newton. It is expected that such a law will automatically cause redress of the imbalance between supply and demand of any commodities, including the provision of labour with the necessary skills. Yet he is not blind to the apparent need for status to influence how certain people will carry out their labours.

He seems to imply that honesty can only be bought with the right remuneration and that it is not a natural attribute of humanity. The striking impression one gets on reading this book is that there is hardly such a thing as free will.

He is regarded as the father of the discipline of economics, and set about showing how many human actions are interrelated. It is his exhaustive thoroughness that has left a lasting impression. His arguments and conclusions are still used in the formulation of modern politics, albeit in a somewhat selective manner. He attempted to show that, like it or not, the market is a self-regulating machine, even though its effects were not the same under different circumstances. The economy is seen as a dehumanised process, governed by the way humanity functions, in spite of itself. His approach seems to be deeply pessimistic and is based on the firm conviction that self interest, of a very narrow kind, is the only motivation that relates how nations and individuals behave.

His opinions on the way that human society develops are by today's standards rather simplistic, though such is the imbalance in our education that many outdated preconceptions persist. It was said of him that he set out to show `how from being a savage, man rose to be a Scotchman'. The application of disciplined reasoning was considered to be the only device, available to us, which could expose the structure of the mechanism governing human behaviour. In his attempt to be truly exhaustive in identifying every behavioural reaction he repeatedly interprets that what is seen to happen is the `natural', consequence of whatever action preceded it.

The term `law', in `natural law', has a specifically physical meaning to him. He does not seem to contemplate the possibility that when closely argued as he does, these may not be immutable, like those that are seen to `regulate' the interactions of planets. He does not contemplate the possibility that such laws may be incomplete interpretations of observed, temporarily related, events, and consequently do not in themselves affect, or modify, the behaviour of the objects which are said to be subjected to the law.

Ideas about people of other lands were more likely to be based on travellers' tales than investigative study. The view, apparently accepted at the time, was that societies progressed naturally through four stages -from hunting, to shepherding, to farming, and finally to commercial economies.

This implied that `evolution', or more properly a promotion through these four stages, improved societies as a whole. Their ways of life also became embedded in the personalities of the members of these societies. Hence social environmental conditions were seen to create individuals who were adapted to their circumstances and could only be improved by the ministrations of superior peoples. Thus the `more advanced' Western World was considered to have created a superior kind of people who were then in a position to `help' their inferiors to attain the same elevated condition.

This stratification of humanity also applied within our own culture, in which the lower orders were equally considered to be incapable of improving themselves.

We should recall that Darwin's theory of evolution did not see the light of day for another three-quarters of a century, and was preceded by the ideas of Lamarck. It allowed the comfortable view that the peoples who were then being intensively colonised, were at a more primitive evolutionary stage than ourselves, and benefited from being offered an opportunity to accelerate their evolution.

We should not feel too superior about the perception that understanding the evolution theory is now much better. The last war was fought by people who were convinced there were `untermenschen' who were a polluting presence in our midst. Who would argue too much that we have abandoned the notion that we are threatened by an invasion of lesser beings, often considered mostly coloured these days.

It is remarkable that, in spite of Darwin, and the effect of many confirmatory studies, such views remain widely held to this day. Marxism, which made a similar analysis of society, though with the added `benefit' of the theory of adaptive development, later attempted to give nature a helping hand, by creating the environmental conditions of a co-operative society. Even this egalitarian society needed a class of superior theoreticians who could show the right way to think.

We condemn them when we see how the application took it to its logical ultimate conclusion, i.e. in such horrors as the Holocaust, or the updated versions of Ethnic Cleansing.

Because we have seen, and still see, a failure of the application of neatly formulated doctrines, there is a temptation to abandon all attempts at planning our futures, and rely on the workings of `natural laws'. Unfortunately, or perhaps it is fortunately, we are bound to fail to agree on the interpretation of what these `laws' are. We know that ours is the right one, and a pox on those who do not agree. We know that our nation has uniquely evolved to be superior to the others.

Smith, in the Introduction to The Wealth on Nations, sets the scene of the accepted opinions of his time (p.8 para 3):

Among the savage nations of hunters and fishers, every individual who is able to work, is more or less employed in useful labour, and endeavours to provide, as well as he can, for himself, or such of his family or tribe as are either too old, or too young, or too infirm. Such nations, however are so miserably poor, that, for mere want, they are frequently reduced, or at least think themselves reduced, to the necessity sometimes of directly destroying, and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger, or to be devoured by wild beasts.

People's desire to feed their families is frustrated by sheer poverty, which is seen as an inevitable consequence of their inferior condition. They may be inclined to be considerate but cannot do so, presumably because the `law' does not work for them.

The condition of the savages is seen to contrast sharply with ours The above quotation continues:

Among civilised and thriving nations, on the contrary, though a great number of people do not labour at all, many of whom consume the produce of ten times, frequently of a hundred times more labour than the greater part of those who work; yet the produce of the whole labour of the society is so great, that all are often abundantly supplied...

We are evidently so efficient and successful that some of us can afford to be profligate. This was thought to be due to the rather novel discovery at the time of industrial development (p.11):

The greatest improvement in the productive powers of labour, and the greater part of the skills, dexterity, and judgement with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.

On the face of it, it would seem to be desirable to create the most congenial conditions to encourage this process, but Adam Smith is not in favour of over-arching organisations because he is convinced that simple self interest will always rectify the over or under supply of skills and production. His reasoning is that it was not until this practice came into use that the nations became rapidly more wealthy. This is subject to the natural order that controls society. First, setting the scene of the natural world, he writes (p.80):

Every species of animal naturally multiplies in proportion to the means of their subsistence, and no species can ever multiply beyond it. But in civilised society it is only among the inferior ranks of people that the scantiness of subsistence can set limits to the further multiplication of the human species; and it can do so in no other way than by destroying a great part of the children which their fruitful marriages produce.

The liberal reward of labour, by enabling them to provide better for their children, and consequently to bring up a greater number, tends to widen and extend those limits. It does this as near as possible in proportion to the demand for labour. This encourages the marriage and the multiplication of labourers. If the rewards are less than needed for this purpose: the deficiency of hands would soon rise the level of rewards. If at any time there are too many, the excessive availability would soon lower it. In this way the demand for men, like any other commodity, regulates the production of men.

We clearly, by some superior good fortune graduated into the most advance social structure, and that only shortly before he came to describe it. He generously concedes that (p.78):

Servants, labourers and workmen make up the far greater part of every political society. No society can surely be flourishing and happy, of which the far greater parts are poor and miserable.

But since this introduces an element that is not controlled by `natural law' he needs also to add:

Though their marriages are generally more fruitful than those of people of fashion, a smaller proportion of their children arrive at maturity.

Otherwise the self-rectifying law would not function. For the law to be a `natural law' it should be applicable wherever human society exists, but, as ever, there are exceptions. It does not seem to function everywhere in the same way (pp70- 72):

China has long been one of the richest, that is, one of the most fertile, best cultivated, most industrious, and most populous countries in the world. It had perhaps, even long before his (Marco Polo's) time, acquired that full complement of riches which the nature of its laws and institutions permits it to acquire.

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